10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

(Mark One)

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2003

Or

[   ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ____________ to ______________

Commission File Number 000-28160

WESTERN WIRELESS CORPORATION

(Exact name of registrant as specified in its charter)

Washington	91-1638901
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

3650 131st Avenue S.E.
Bellevue, Washington	98006
(Address of principal executive offices)	(Zip Code)

(425) 586-8700

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes [X]  No [   ]

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).  Yes [X]  No [   ]

     Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Title	Shares Outstanding as of August 5, 2003
Class A Common Stock, no par value		72,539,887
Class B Common Stock, no par value		6,792,721

1

TABLE OF CONTENTS

		Condensed Consolidated Balance Sheets
		Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
		Condensed Consolidated Statements of Cash Flows
		Notes to Condensed Consolidated Financial Statements
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. Quantitative and Qualitative Disclosures about Market Risk
	Item 4. Controls and Procedures
PART II — OTHER INFORMATION
	Item 1. Legal Proceedings
	Item 2. Changes in Securities and Use of Proceeds
	Item 3. Defaults upon Senior Securities
	Item 4. Submission of Matters to a Vote of Security Holders
	Item 5. Other Information
	Item 6. Exhibits and Reports On Form 8-K
SIGNATURES
EXHIBIT INDEX
EXHIBIT 10.36
EXHIBIT 10.37
EXHIBIT 10.38
EXHIBIT 12.1
EXHIBIT 31.1
EXHIBIT 31.2
EXHIBIT 32.1
EXHIBIT 32.2

Western Wireless Corporation
Form 10-Q
For the Quarter Ended June 30, 2003

Table of Contents

			Page
PART I - FINANCIAL INFORMATION
	Item 1.	Financial Statements
		Condensed Consolidated Balance Sheets as of June 30, 2003 and December 31, 2002	3
		Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2003 and June 30, 2002	4
		Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2003 and June 30, 2002	5
		Notes to Condensed Consolidated Financial Statements	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	34
	Item 4.	Controls and Procedures	36
PART II - OTHER INFORMATION
	Item 1.	Legal Proceedings	37
	Item 2.	Changes in Securities and Use of Proceeds	37
	Item 3.	Defaults Upon Senior Securities	37
	Item 4.	Submission of Matters to a Vote of Security Holders	37
	Item 5.	Other Information	38
	Item 6.	Exhibits and Reports on Form 8-K	38
	Signatures		40
	Exhibit Index		41

2

WESTERN WIRELESS CORPORATION
Condensed Consolidated Balance Sheets
(Dollars in thousands)

			June 30,			December 31,
			2003			2002
			(Unaudited)
ASSETS
Current assets:
	Cash and cash equivalents		$	252,698		$	62,429
	Accounts receivable, net of allowance for doubtful accounts of $26,294 and $22,059, respectively			189,726			159,976
	Inventory			18,658			24,461
	Marketable securities			11,910			10,270
	Prepaid expenses and other current assets			40,586			43,078
		Total current assets		513,578			300,214
Property and equipment, net of accumulated depreciation of $874,631 and $739,437, respectively				835,819			855,595
Licensing costs and other intangible assets, net of accumulated amortization of $29,089 and $23,838, respectively				1,159,355			1,163,399
Investments in and advances to unconsolidated affiliates				7,401			41,284
Other assets				41,955			38,484
			$	2,558,108		$	2,398,976
LIABILITIES AND NET CAPITAL DEFICIENCY
Current liabilities:
	Accounts payable		$	70,599		$	59,363
	Accrued liabilities and other			193,185			185,920
	Construction accounts payable			22,779			30,543
	Current portion of long-term debt			263,469			144,196
		Total current liabilities		550,032			420,022
Long-term debt, net of current portion				2,318,939			2,321,955
Deferred income taxes				130,532			120,687
		Total liabilities		2,999,503			2,862,664
Minority interests in consolidated subsidiaries				20,746			22,749
Commitments and contingencies (Note 4)
Net capital deficiency:
	Preferred stock, no par value, 50,000,000 shares authorized; no shares issued and outstanding
	Common stock, no par value, 300,000,000 shares authorized;
	Class A, 72,496,211 and 72,229,605 shares issued and outstanding, respectively
	Class B, 6,792,721 and 6,774,724 shares issued and outstanding, respectively			670,769			669,072
	Deferred compensation			(168	)		(39	)
	Accumulated other comprehensive loss			(22,549	)		(26,513	)
	Deficit			(1,110,193	)		(1,128,957	)
		Total net capital deficiency		(462,141	)		(486,437	)
			$	2,558,108		$	2,398,976

See accompanying notes to condensed consolidated financial statements.

3

WESTERN WIRELESS CORPORATION
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
(Dollars in thousands, except per share data)
(Unaudited)

				Three months ended June 30,						Six months ended June 30,
				2003			2002			2003			2002
Revenues:
	Subscriber revenues			$	263,903		$	198,215		$	497,227		$	391,409
	Roamer revenues				64,190			64,192			126,268			125,055
	Fixed line revenues				14,640			13,383			29,691			26,999
	Equipment sales				13,233			12,535			26,276			26,204
	Other revenues				3,266			2,524			6,944			5,608
		Total revenues			359,232			290,849			686,406			575,275
Operating expenses:
	Cost of service (exclusive of depreciation included below)				104,846			90,434			199,481			178,182
	Cost of equipment sales				37,124			27,638			69,785			53,881
	General and administrative				62,211			48,983			120,316			108,085
	Sales and marketing				50,851			45,643			98,315			84,754
	Depreciation and amortization				71,365			57,382			136,937			117,821
	Asset dispositions							7,556			7,640			7,556
		Total operating expenses			326,397			277,636			632,474			550,279
Other income (expense):
	Interest and financing expense, net				(37,439	)		(39,002	)		(75,918	)		(78,009	)
	Equity in net income of unconsolidated affiliates, net of tax				1,702			841			645			2,488
	Gain on sale of Croatian joint venture				40,519						40,519
	Other, net				7,802			(2,529	)		6,778			1,636
		Total other income (expense)			12,584			(40,690	)		(27,976	)		(73,885	)
Minority interests in net loss of consolidated subsidiaries					1,651			2,590			4,043			5,825
Income (loss) from continuing operations before provision for income taxes					47,070			(24,887	)		29,999			(43,064	)
Provision for income taxes					(6,745	)		(5,055	)		(11,235	)		(108,988	)
Income (loss) from continuing operations					40,325			(29,942	)		18,764			(152,052	)
Income from discontinued operations								2,565						4,027
		Net income (loss)		$	40,325		$	(27,377	)	$	18,764		$	(148,025	)
Basic income (loss) per share:
	Continuing operations			$	0.51		$	(0.38	)	$	0.24		$	(1.93	)
	Discontinued operations							0.03						0.05
Basic income (loss) per share				$	0.51		$	(0.35	)	$	0.24		$	(1.88	)
Diluted income (loss) per share:
	Continuing operations			$	0.49		$	(0.38	)	$	0.24		$	(1.93	)
	Discontinued operations							0.03						0.05
Diluted income (loss) per share				$	0.49		$	(0.35	)	$	0.24		$	(1.88	)
Weighted average shares outstanding:
	Basic				79,246,000			78,969,000			79,220,000			78,940,000
	Diluted				82,348,000			78,969,000			79,801,000			78,940,000
Comprehensive income (loss):
	Net income (loss)			$	40,325		$	(27,377	)	$	18,764		$	(148,025	)
	Unrealized income (loss) on marketable securities:
		Reclassification adjustment			75						151
		Unrealized holding gain (loss)			2,426			(1,657	)		1,892			(2,753	)
			Net unrealized gain (loss)		2,501			(1,657	)		2,043			(2,753	)
	Foreign currency translation				897			11,275			948			6,766
	Unrealized gain (loss) on hedges				(344	)		(3,765	)		973			(1,672	)
Total comprehensive income (loss)				$	43,379		$	(21,524	)	$	22,728		$	(145,684	)

See accompanying notes to condensed consolidated financial statements.

4

WESTERN WIRELESS CORPORATION
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)

			Six months ended June 30,
			2003			2002
Operating activities:
	Net income (loss)		$	18,764		$	(148,025	)
	Adjustments to reconcile net income (loss) to net cash provided by operating activities:
		Discontinued operations					(4,027	)
		Gain on sale of Croatian joint venture		(40,519	)
		Depreciation and amortization		138,722			119,847
		Deferred income taxes		9,845			107,778
		Asset dispositions		7,640			7,556
		Equity in net loss of unconsolidated affiliates		(645	)		(2,488	)
		Minority interests in net loss of consolidated subsidiaries		(4,043	)		(5,825	)
		Adjustment of interest rate hedges to fair market value		(4,739	)		(811	)
		Non cash interest		5,384			2,577
		Other, net		(2,259	)		2,481
		Changes in operating assets and liabilities		6,475			12,621
		Net cash provided by operating activities		134,625			91,684
Investing activities:
	Purchase of property and equipment			(99,839	)		(158,258	)
	Additions to licensing costs and other intangible assets			(3,779	)		(5,602	)
	Proceeds from sale of Croatian joint venture			69,630
	Receipts from (investments in) unconsolidated subsidiaries			3,540			(722	)
	Slovenian Credit Facility collateralization			(522	)		(18,655	)
	Other, net			(334	)
		Net cash used in investing activities		(31,304	)		(183,237	)
Financing activities:
	Additions to long-term debt			139,504			141,826
	Repayment of long-term debt			(55,960	)		(57,484	)
	Other, net			437			1,085
		Net cash provided by financing activities		83,981			85,427
Effect of exchange rate changes on cash				2,967			2,406
Change in cash and cash equivalents				190,269			(3,720	)
Cash and cash equivalents, beginning of period				62,429			45,083
Cash and cash equivalents, end of period			$	252,698		$	41,363

See accompanying notes to condensed consolidated financial statements.

5

Western Wireless Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)

1.     Organization:

     Western Wireless Corporation (“Western Wireless,” “the Company,” “we,” “our” and “us”) provides wireless communications services in the United States principally through the ownership and operation of cellular systems. We provide cellular operations primarily in rural areas in 19 western states under the CellularONE® and Western Wireless® brand names.

     The Company owns approximately 98% of Western Wireless International Holding Corporation (“WWI”) which, through consolidated subsidiaries and equity investments, is a provider of wireless and other communications services worldwide.

     The condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) that permit reduced disclosures for interim periods. The condensed consolidated balance sheet as of December 31, 2002, has been derived from audited financial statements. The unaudited interim condensed consolidated financial statements dated June 30, 2003 and 2002, are presented herein, and reflect all adjustments, which are, in the opinion of management, necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented. Results of operations for interim periods presented herein are not necessarily indicative of results of operations for the entire year. For further information, refer to our annual audited financial statements and footnotes thereto contained in the Company’s Form 10-K for the year ended December 31, 2002.

2.     Summary of Significant Accounting Policies:

Supplemental Cash Flow Disclosure:

     Cash paid for interest was $80.1 million and $77.8 million for the six months ended June 30, 2003 and 2002, respectively. Cash paid for taxes was $1.4 million and $1.2 million for the six months ended June 30, 2003 and 2002, respectively.

Reclassifications:

     Certain amounts in prior years’ financial statements have been reclassified to conform to the 2003 presentation.

Principles of Consolidation:

     The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and its affiliate investments in which we have a greater than 50% interest. All affiliate investments in which we have a non-controlling interest, but have significant influence, are accounted for using the equity method. All significant intercompany accounts and transactions have been eliminated. As of June 30, 2003, we consolidate six of WWI’s operating entities; Slovenia, Austria, Ireland, Bolivia, Haiti and Ghana.

     U.S. headquarter functions of WWI and majority owned European, South American and Caribbean consolidated subsidiaries are recorded as of the date of the financial statements. Our consolidated Ghanaian entity and entities accounted for using the equity method are presented on a one-quarter lag. We believe presenting financial information on a one-quarter lag for certain entities is necessary to provide adequate time to convert the results into United States generally accepted accounting principles (“GAAP”) and ensure quality and accurate information to the users of our financial statements.

6

Western Wireless Corporation
Notes to Condensed Consolidated Financial Statements (continued)
(Unaudited)

Long-Lived Assets:

     On January 1, 2003, we adopted Statement of Financial Accounting Standards (“SFAS”) No. 143, “Accounting for Asset Retirement Obligations” (“SFAS No. 143”). This statement relates to the costs of closing facilities and removing assets. SFAS No. 143 requires entities to record the fair value of a legal liability for an asset retirement obligation (“ARO”) in the period it is incurred if a reasonable estimate of fair value can be made. This cost is initially capitalized and amortized over the remaining life of the underlying asset. Once the obligation is ultimately settled, any difference between the final cost and the recorded liability is recognized as a gain or loss on disposition. For us, an ARO includes those costs associated with removing component equipment that is subject to retirement from cell sites that reside upon leased property, predominantly concrete footings.

     We believe that based on the current state of wireless technology and foreseeable developments in this technology, we will need to retain our current cell sites and other facilities in order to sustain our business into the foreseeable future. Most of our leases provide for multiple renewal periods and we expect to renegotiate extensions of our leases beyond the original lease term and current renewal periods. We cannot currently estimate the range of settlement dates, and believe a likely settlement date would be one that extends past the original lease terms. Our cell sites in urban areas required extensive zoning and permitting approvals that have value to the landlord and significantly reduce the likelihood that a landlord would elect to change the use of this property. Further, our rural cell sites are in locations where it is very unlikely a landlord would elect to enforce any remediation obligation since the cell site represents the best use of this property. We do not have sufficient historical experience to determine the probability of enforcement of the remediation for either urban or rural cell sites and believe the most likely probability of enforcement is close to zero. Accordingly, we believe our ARO is insignificant.

Derivative Financial Instruments:

     In February 2003, we entered into interest rate swaps with a total notional value of $296 million. The interest rate swaps were entered into as hedges of the fair value of $100 million of the 10 1/2% Senior Subordinated Notes due June 2006 (the “2006 Notes”) and all of the 10 1/2% Senior Subordinated Notes due February 2007 (the “2007 Notes”). The interest rate swaps expire on the 2006 and 2007 Notes’ respective maturity dates. On a quarterly basis, we will pay a floating rate of interest equal to the three month LIBOR plus a fixed margin, ranging from 7.45% to 7.75%, and receive fixed rate payments of 10.50% in return semi-annually. The fair value of the interest rate swaps was $4.0 million as of June 30, 2003 and is classified as other long-term debt in our condensed consolidated balance sheet.

     The terms of the interest rate swap agreements and the 2006 Notes and 2007 Notes are such that effectiveness can be measured using the short-cut method defined in SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS No. 133”). These interest rate swap agreements had no impact on results of operations for the six months ended June 30, 2003.

     We are currently evaluating these interest rate swap agreements and the financial impacts resulting from the retirement of the 2006 Notes and the 2007 Notes (see Note 3). If we chose to keep the interest rate swaps in place, they will no longer qualify for hedge accounting under SFAS No. 133 and we will recognize a gain of approximately $4 million in the third quarter of 2003 based on the fair market value of the swaps at June 30, 2003. If we chose to cancel the swaps, we will recognize a loss of up to $2 million, net, based on certain contractual cancellation fees offset by the fair market value of the swaps at June 30, 2003.

7

Western Wireless Corporation
Notes to Condensed Consolidated Financial Statements (continued)
(Unaudited)

Stock-Based Compensation Plans:

     In December 2002, we adopted SFAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure” (“SFAS No. 148”), which amends SFAS No. 123, “Accounting for Stock-Based Compensation” (“SFAS No. 123”). As permitted under SFAS No. 148, we have elected to continue to follow the intrinsic value method under Accounting Principles Board (“APB”) No. 25, “Accounting for Stock Issued to Employees,” in accounting for our stock-based compensation plans. The following table illustrates the effect on our net income (loss), basic income (loss) per share and diluted income (loss) per share if we had applied the fair value recognition provisions of SFAS No. 123 to our stock-based compensation plans:

		Three months ended June 30,						Six months ended June 30,
		2003			2002			2003			2002
		(Dollars in thousands, except per share data)
Net income (loss):
	As reported	$	40,325		$	(27,377	)	$	18,764		$	(148,025	)
	Deduct: stock-based compensation expense determined under fair value based method for all awards		(1,319	)		(2,460	)		(2,554	)		(4,517	)
	Pro forma net income (loss)	$	39,006		$	(29,837	)	$	16,210		$	(152,542	)
Basic income (loss) per share:
	As reported	$	0.51		$	(0.35	)	$	0.24		$	(1.88	)
	Pro forma	$	0.49		$	(0.38	)	$	0.20		$	(1.93	)
Diluted income (loss) per share:
	As reported	$	0.49		$	(0.35	)	$	0.24		$	(1.88	)
	Pro forma	$	0.47		$	(0.38	)	$	0.20		$	(1.93	)

     The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model using the following weighted average assumptions:

	2003			2002
Weighted average risk free interest rates		4.1	%		5.0	%
Expected dividend yield		0.0	%		0.0	%
Expected volatility		75	%		66	%
Expected lives (in years)		7.5			7.5

     The Black-Scholes option pricing model requires the input of highly subjective assumptions and does not necessarily provide a reliable measure of fair value.

Recently Issued Accounting Standards:

     In May 2003, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 150 “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity” (“SFAS No. 150”), which establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. SFAS No. 150 requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances), many of which were previously classified as equity. SFAS No. 150 is effective for us for financial instruments entered into or modified after May 31, 2003 and for fiscal periods beginning after June 15, 2003 for existing

8

Western Wireless Corporation
Notes to Condensed Consolidated Financial Statements (continued)
(Unaudited)

financial instruments. We adopted the provisions of SFAS No. 150 effective July 1, 2003 which had no impact on our financial position or results of operations.

     In April 2003, the FASB issued SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities” (“SFAS No. 149”), which amends and clarifies the accounting guidance on derivative instruments and hedging activities that fall within the scope of SFAS No. 133. SFAS No. 149 also amends certain other existing pronouncements to provide more uniform reporting of contracts that are derivatives in their entirety or that contain embedded derivatives that warrant separate accounting. SFAS No. 149 is effective for us on a prospective basis for contracts entered into or modified and for hedging relationships designated for fiscal periods beginning after June 30, 2003. We adopted the provisions of SFAS No. 149 effective July 1, 2003 on a prospective basis which will have no material effect on our financial position or results of operations.

     In January 2003, the FASB issued Financial Interpretation (“FIN”) No. 46, “Consolidation of Variable Interest Entities” (“FIN No. 46”). The objective of FIN No. 46 is to improve financial reporting by companies involved with variable interest entities (“VIE”). Prior to FIN No. 46, a company generally included another entity in its consolidated financial statements only if that company controlled the entity through voting interests. FIN No. 46 requires a variable interest entity to be consolidated by a company if that company is either subject to a majority of the risk of loss from the variable interest entity’s activities, entitled to receive a majority of the entity’s residual returns or both. The consolidation requirements of FIN No. 46 apply immediately to variable interest entities created after January 31, 2003. The consolidation requirements apply to currently existing entities in the first fiscal year or interim period beginning after June 15, 2003. Certain disclosure requirements apply to all financial statements issued after January 31, 2003 regardless of when the variable interest entity was established. We adopted the provisions of FIN No. 46 effective January 31, 2003 for new or revised agreements and adopted the provisions of FIN No 46 for existing agreements on July 1, 2003. The adoption of FIN No. 46 had no material effect on our financial position or results of operations.

     In October 2002, the FASB reached a consensus on Emerging Issues Task Force (“EITF”) Issue No. 00-21, “Revenue Arrangements with Multiple Deliverables” (“EITF No. 00-21”). EITF No. 00-21 addresses arrangements with multiple deliverables specifying how the arrangement consideration should be measured, whether the arrangement should be divided into separate units of accounting and how the arrangement should be allocated among the separate units of accounting. EITF No. 00-21 is applicable to an arrangement in which some, but not all of its deliverables are within the scope of other existing higher-level authoritative literature that does not provide guidance with respect to determining separate units of accounting. EITF No. 00-21 indicates a need for Staff Accounting Bulletin (“SAB”) No. 101, “Revenue Recognition in Financial Statements” (“SAB No. 101”), to be modified. EITF No. 00-21 is effective for revenue arrangements entered into in fiscal periods beginning after June 15, 2003. We adopted the provisions of EITF No. 00-21 effective July 1, 2003 on a prospective basis which will have no material effect on our financial position or results of operations.

9

Western Wireless Corporation
Notes to Condensed Consolidated Financial Statements (continued)
(Unaudited)

3.     Long-Term Debt:

		June 30,			December 31,
		2003			2002
		(Dollars in thousands)
Credit Facility:
	Revolvers	$	675,000		$	700,000
	Term Loans		1,072,000			1,100,000
10½% Senior Subordinated Notes Due 2006			187,050			187,050
10½% Senior Subordinated Notes Due 2007			196,000			196,000
4.625% Convertible Subordinated Notes Due 2023			115,000
tele.ring Term Loan			182,941			151,976
Slovenian Credit Facility			85,993			71,391
Bolivian Bridge Loan			34,700			34,700
Other			33,724			25,034
			2,582,408			2,466,151
Less current portion			(263,469	)		(144,196	)
		$	2,318,939		$	2,321,955

     The aggregate amounts of principal maturities as of June 30, 2003, are as follows:

		(Dollars in thousands)
Six months ending December 31, 2003		$	177,172
Year ending December 31,
	2004		165,826
	2005		321,345
	2006		648,143
	2007		504,922
	2008		645,000
	Thereafter		120,000
		$	2,582,408

Credit Facility:

     At June 30, 2003, we had a $2.1 billion credit facility with a consortium of lenders (the “Credit Facility”) consisting of: (i) a $500 million term loan (“Term Loan A”); (ii) a $600 million term loan (“Term Loan B”); and (iii) two $500 million revolving loans (“Revolver A” and “Revolver B”).

     In July 2003, we amended the Credit Facility. With the amendment we reduced the commitment under Revolver A to $350 million and prepaid: (i) $150 million under Term Loan A; (ii) $100 million under Term Loan B; and (iii) $150 million under Revolver B. The commitment reduction in Revolver A and each such prepayment was applied to the earliest maturities first. In addition, among other modifications, we modified certain quarterly financial covenants and included a new covenant requiring our domestic operations to maintain a minimum ratio of annualized operating cash flow to senior secured indebtedness. The amendment will also require us to make mandatory prepayments from excess cash flow and from certain proceeds of certain indebtedness. In 2004, based on current assumptions, we may be required to prepay the Credit Facility between $40 million and $60 million in excess cash flow. These prepayments will not effect the amount available under Revolver A. The amended Credit Facility further limits the amount we are permitted to invest in our international subsidiaries from January 1, 2003 to $100 million plus certain other amounts received by us or our

10

Western Wireless Corporation
Notes to Condensed Consolidated Financial Statements (continued)
(Unaudited)

domestic subsidiaries from our international subsidiaries. Our applicable margin under Revolver A, Revolver B and Term Loan A, based upon our leverage ratio, has been increased to a range of 1.625% to 2.25% for Eurodollar advances and 0.625% to 1.25% for prime rate advances. The applicable margin for Term Loan B increased to 3.25% for Eurodollar advances and 2.25% for prime rate advances.

10½% Senior Subordinated Notes Due 2006 and 2007:

     At June 30, 2003 we had outstanding $187.1 million and $196.0 million of 10½% Senior Subordinated Notes due 2006 and 2007, respectively (the “2006 Notes” and the “2007 Notes”). On July 17, 2003 the Bank of New York, as trustee, notified holders of the 2006 Notes and the 2007 Notes that we have elected to redeem the entire principal amount of the 2006 Notes and 2007 Notes together with accrued interest on August 18, 2003. The redemption price for the 2006 Notes is 101.75% and the redemption price for the 2007 Notes is 103.5%. We will record an aggregate loss on the early redemption of the 2006 Notes and the 2007 Notes of approximately $14 million in the third quarter of 2003.

9.25% Senior Notes Due 2013:

     In July 2003, we issued $600 million of 9.25% Senior Notes due 2013 (the “2013 Notes”) at par. Interest is payable semi-annually. We may redeem the 2013 Notes at our option at any time on or after July 15, 2008, in whole or from time to time in part, at specified redemption prices, plus accrued and unpaid interest. In addition, on or before July 15, 2008, we may redeem any of the 2013 Notes at our option at any time, in whole, or from time to time in part, at a redemption price equal to the greater of (i) 100% of the principal amount of the notes being redeemed or (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the notes being redeemed discounted to the date of redemption at a specified rate. The 2013 Notes contain certain covenants that, among other things, limit our ability to incur additional indebtedness, make certain asset dispositions, make restricted payments, issue capital stock of certain wholly-owned subsidiaries and enter into certain mergers, sales or combinations. The 2013 Notes are unsecured and will rank equally in right of payment to all existing and future senior unsecured obligations of ours. Additionally, the 2013 Notes will rank senior in right of payment to all existing and future subordinated obligations including the 2006 Notes, 2007 Notes and the 2023 Notes (see below).

4.625% Convertible Subordinated Notes Due 2023:

     In June 2003, we issued $115 million of 4.625% Convertible Subordinated Notes due 2023 (the “2023 Notes”) at par. Interest is payable semi-annually. The 2023 Notes are convertible into Class A common stock at a per share price of $15.456, subject to adjustment, at any time or, at our option, an equivalent amount of cash in lieu of shares of common stock. In addition, holders may require that we repurchase all or a portion of the 2023 Notes on June 15, 2013 and June 15, 2018 at par plus accrued interest payable in cash or Class A common stock, at our option. Between June 18, 2006 and June 18, 2010, we may redeem in whole or in part the 2023 Notes in cash at par plus accrued interest plus a make whole amount equal to the present value of the remaining scheduled interest payments through and including June 15, 2010, subject to the closing sales price of our common stock exceeding the conversion price by 150% for 20 trading days in any consecutive 30 day trading period immediately prior to notification of redemption. Between June 18, 2010 and June 18, 2013, we may redeem in cash at par plus accrued interest all or a portion of the 2023 Notes subject to the closing sales price of our common stock exceeding the conversion price by 125% for 20 trading days in any consecutive 30 day trading period immediately prior to notification of redemption. After June 18, 2013, the 2023 Notes are redeemable at par plus accrued interest. The 2023 Notes are subordinate in right of payment to the Credit Facility, the 2013 Notes and all indebtedness and other liabilities of our subsidiaries.

11

Western Wireless Corporation
Notes to Condensed Consolidated Financial Statements (continued)
(Unaudited)

Slovenian Credit Facility:

     In April 2002, Western Wireless International d.o.o. (“Vega”) entered into a credit facility agreement (the “Slovenian Credit Facility”) with a consortium of banks to provide funding for the implementation and expansion of Vega’s network in Slovenia. The Slovenian Credit Facility contains certain borrowing conditions and restrictive covenants, including: minimum subscribers; population coverage; certain cash flow requirements; minimum contributed capital; and debt service coverage. Western Wireless International Corporation (“WWIC”), a subsidiary of WWI, has guaranteed the Slovenian Credit Facility. Additionally, WWIC has agreed not to sell or dispose of any majority owned subsidiary without the approval of the Slovenian lenders. In May 2003, WWI contributed an additional $2.9 million in equity to Vega as a result of Vega’s revenue shortfalls during the three months ended March 31, 2003. As of June 30, 2003, Vega is not in compliance with certain covenants, including its network coverage, minimum service revenue and minimum subscriber covenants. As a result, WWI and the participating banks are negotiating, and have substantially agreed to, all material terms of an amended credit facility. Under the terms of the drafted amendment, the following changes to the terms of the Slovenian Credit Facility will be made: (i) all undrawn commitments will be cancelled; (ii) substantially all of Vega’s operating and financial covenants will be eliminated; (iii) WWIC will guarantee the loan and WWIC will agree to financial and other covenants; (iv) balances of approximately $21.4 million in collateral accounts supporting the existing loan will be utilized to pay down principal; and (v) the repayment schedule for outstanding borrowings will remain unchanged. We have obtained a waiver of certain covenants through August 28, 2003. So long as the amendment process is moving forward in an acceptable manner, we believe that no action to accelerate the loans under the Slovenian Credit Facility will be taken. Based on the facts, we have presented the Slovenian Credit Facility in the current portion of long-term debt as required by U.S. GAAP. Once the amendment is in place, the long-term portion of the Slovenian Credit Facility will be classified as long-term based on the original maturities schedule. However, there can be no assurance that the participating banks will grant the amendment. In the event Vega does not obtain the amendment, the outstanding balance under the Slovenian Credit Facility could become payable upon demand. As of June 30, 2003, Vega had $86.0 million outstanding under the Slovenian Credit Facility.

Bolivian Bridge Loan:

     In October 2000, NuevaTel, S.A. (“NuevaTel”), a subsidiary of WWI, entered into a bridge loan facility (“Bolivian Bridge Loan”) to provide funding for the build-out and implementation of NuevaTel’s network in Bolivia. WWI has guaranteed its pro rata share (71.5%), based upon its ownership interest in NuevaTel, of the Bolivian Bridge Loan. The loan was originally scheduled to mature in its entirety in October 2002. Currently, the maturity date of the Bolivian Bridge Loan has been extended to August 19, 2003 and may be extended to September 30, 2003 at the sole discretion of the lender. Minimum net worth and capitalization covenants have also been extended. In March 2003, the Overseas Private Investment Corporation (“OPIC”) approved a $50 million loan guarantee for the refinancing of the Bolivian Bridge Loan (“Bolivian Refinancing”). The final terms of the Bolivian Refinancing are still being negotiated with prospective lenders. We expect, but there can be no assurance, the Bolivian Bridge Loan will be refinanced in the third quarter of 2003 at which time WWIC will be required to provide $11.6 million as cash collateral for a letter of credit in favor of OPIC until such time as NuevaTel satisfies certain financial and other conditions. Until the Bolivian Refinancing is finalized, we intend to seek additional extensions of the Bolivian Bridge Loan maturity date, but there can be no assurance that any necessary extension will be granted or that the Bolivian Refinancing will be consummated. As of June 30, 2003, the outstanding amount under the Bolivian Bridge Loan was $34.7 million and the facility was fully drawn.

12

Western Wireless Corporation
Notes to Condensed Consolidated Financial Statements (continued)
(Unaudited)

Use of Proceeds:

     Subsequent to the end of the quarter, we used the proceeds from the 2013 Notes, the 2023 Notes and the sale of our minority interest in VIP-Net GSM d.o.o. (“VIP-Net”, see Note 6) to prepay $400 million of the Credit Facility, applied to earliest maturities first, as provided for under the Credit Facility amendment. The remainder of the proceeds will be used to redeem the 2006 Notes and 2007 Notes, as discussed above.

     The following represents the aggregate amounts of principal maturities taking the previously mentioned transactions into consideration:

		(Dollars in thousands)
Six months ending December 31, 2003		$	124,172
Year ending December 31,
	2004		9,826
	2005		215,345
	2006		455,093
	2007		302,922
	2008		572,000
	Thereafter		720,000
		$	2,399,358

4. Commitments and Contingencies:

Shelf Registration Statement:

     In April 2003, we filed a Form S-3 as a shelf registration statement (the “Shelf Registration Statement”) with the SEC. In addition, we have agreed to file a shelf registration statement with the SEC to register the resale of the 2023 Notes and the shares of Class A common stock issuable upon their conversion. In the event certain registration defaults relating to the filing, effectiveness or availability of that shelf registration statement exist, then for the first 90-day period that such default exists the annual rate of interest on the 2023 Notes will increase by 0.25%. For any additional days that such a registration default exists, the annual rate of interest on the 2023 Notes will increase by 0.50%. We have also agreed to file a registration statement pursuant to which we will either offer to exchange the 2013 Notes for substantially similar notes that are registered or, in certain circumstances, register the resale of the 2013 Notes. In the event certain registration defaults relating to the filing, effectiveness or availability of the registration statement exist, then for each 90-day period that such default exists the annual rate of interest on the 2013 Notes will increase by 0.25% to a maximum of 1.00%. We intend to file additional registration statements as well as use the Shelf Registration Statement to effect these registrations.

Ghana:

     Under the terms of the Ghana license, Western Telesystems Ghana Ltd. (“Westel”) was required to meet certain customer levels and build-out requirements by February 2002. Westel was unable to meet the required customer levels due to the inability of the regulator to provide spectrum and enforce interconnection with the incumbent telephone company, and all development has been stifled. The National Communication Authority of Ghana (“NCA”) has assessed a penalty claim of $71 million for not meeting these build-out requirements. Westel has contested this fine on the basis that the government and the NCA failed to deliver the key commitments of spectrum and interconnection and does not believe the enforcement of these penalties is probable, but there can be no assurance to that effect. WWC’s net investment in Westel at June 30, 2003 was approximately $5.0 million.

13

Western Wireless Corporation
Notes to Condensed Consolidated Financial Statements (continued)
(Unaudited)

Haiti:

     In accordance with the Rights Agreements entered into in September 1998 by WWI with two of the shareholders of Communication Cellulaire d’ Haiti, S.A. (“COMCEL”), WWI’s Haitian subsidiary, these two minority shareholders have the right to elect that WWI purchase all of their shares at fair market value, as defined in the agreements, within the 30 day period after COMCEL’s issuance of its December 31, 2003 financial statements. Island Cellular LLC, a limited liability company organized under the laws of New York, and High Ridge Holdings, Inc., a Delaware corporation, own a 20% and 4% interest, respectively, in COMCEL at June 30, 2003. If WWI and the two shareholders cannot agree on a fair market valuation of COMCEL, all of the shares of COMCEL may be sold to a third party.

5. Income (Loss) Per Common Share:

     Statement of Financial Accounting Standards No. 128, “Earnings Per Share,” requires two presentations of income per share – “basic” and “diluted.”

     Basic income (loss) per share is calculated using the weighted average number of shares of outstanding stock during the period. Diluted income (loss) per common share incorporates the incremental shares issuable upon the assumed exercise of stock options and upon the assumed conversion of our 2023 Notes in 2003 as if conversion to common shares had occurred at the issue date. For those years presented with net losses, the options outstanding are antidilutive, thus basic and diluted loss per share are equal. Dilutive weighted average shares issuable upon the exercise of stock options, which were not included in the calculation, were 50,000 and 334,000 for the three months and six months ended June 30, 2002, respectively, because they were antidilutive. As of June 30, 2003, 1,141,000 shares issuable upon the assumed conversion of our 2023 Notes could potentially dilute earnings per share in the future but were excluded from the calculation of diluted earnings per common share for the six months ended June 30, 2003 because they were antidilutive.

14

Western Wireless Corporation
Notes to Condensed Consolidated Financial Statements (continued)
(Unaudited)

     The following table sets forth the computation of basic and diluted income (loss) per share:

			Three months ended June 30,					Six months ended June 30,
			2003		2002			2003		2002
			(Dollars in thousands, except per share data)
Numerator:
	Income (loss) from continuing operations		$	40,325	$	(29,942	)	$	18,764	$	(152,052	)
	Income from discontinued operations					2,565					4,027
Net income (loss) — basic				40,325		(27,377	)		18,764		(148,025	)
	Interest and financing expense of 2023 Notes			284
Net income (loss) — diluted			$	40,609	$	(27,377	)	$	18,764	$	(148,025	)
Denominator:
	Weighted average shares:
		Basic		79,246,000		78,969,000			79,220,000		78,940,000
	Effect of dilutive shares:
		Stock options		833,000					581,000
		2023 Notes		2,269,000
	Weighted average shares:
		Diluted		82,348,000		78,969,000			79,801,000		78,940,000
Basic income (loss) per share:
	Continuing operations		$	0.51	$	(0.38	)	$	0.24	$	(1.93	)
	Discontinued operations					0.03					0.05
Basic income (loss) per share			$	0.51	$	(0.35	)	$	0.24	$	(1.88	)
Diluted income (loss) per share:
	Continuing operations		$	0.49	$	(0.38	)	$	0.24	$	(1.93	)
	Discontinued operations					0.03					0.05
Diluted income (loss) per share			$	0.49	$	(0.35	)	$	0.24	$	(1.88	)

6. Acquisitions and Dispositions:

Croatia Disposition:

     In October 1998, VIP-Net was formed as a joint venture between WWI, Mobilkom Austria (“Mobilkom”) and four other partners in Austria and Croatia. In June 2003, WWI sold its 19% minority ownership interest in VIP-Net to Mobilkom for $69.6 million in cash, which included repayment of a loan to WWI. Additionally, Mobilkom assumed WWI’s portion of the guarantee of VIP-Net’s credit facility, which was secured by WWI’s shares of VIP-Net. This transaction resulted in a gain on sale of $40.5 million.

15

Western Wireless Corporation
Notes to Condensed Consolidated Financial Statements (continued)
(Unaudited)

Arizona 6 Disposition:

     In May 2003, we signed an asset purchase agreement to sell the assets and license for our Arizona 6 Rural Service Area (“RSA”) for $22.8 million in cash. The sales price of this RSA reflects that future cash flows will be less than the carrying value of the license. Accordingly, we recorded an impairment related to this RSA during the first quarter of 2003 of $7.6 million which is included in asset dispositions in our consolidated statement of operations. General market prices along with the sales price of this RSA still support our aggregate license valuation and do not indicate any broader impairment issue. We do not anticipate any further impact to our statement of operations related to this disposition. We expect this transaction to close during the third quarter of 2003.

PCS Licenses Acquisition:

     In May 2003, we entered into an agreement with T-Mobile USA, Inc. (“TMO”) in which we are receiving certain domestic FCC licenses for a nominal amount of cash and have agreed to provide discounted GSM roaming services through 2013. TMO is considered a related party by us as our Chairman of the Board, Director and Chief Executive Officer is also the Chairman of the Board and a Director of TMO. We expect this transaction to close during the third quarter of 2003.

7. Segment Information:

     Our operations are overseen by domestic and international management teams, each reporting to the Chief Executive Officer of the Company. Domestically, we mainly provide cellular services in rural markets in the western United States. Our international operations consist mainly of consolidated subsidiaries and operating entities throughout the world providing predominately wireless services. Certain centralized back office costs and assets benefit all of our operations. These costs are allocated to both segments in a manner which reflects the relative time devoted to each of the segments.

16

Western Wireless Corporation
Notes to Condensed Consolidated Financial Statements (continued)
(Unaudited)

     The domestic cellular operations comprise the majority of our total revenues, expenses and total assets as presented in the table below:

		Domestic		International
		Operations		Operations			Consolidated
		(Dollars in thousands)
Three months ended June 30, 2003
	Total revenues	$	239,777	$	119,455		$	359,232
	Depreciation and amortization expense		54,527		16,838			71,365
	Interest and financing expense, net		22,252		15,187			37,439
	Adjusted EBITDA(1)		105,044		(844	)		104,200
	Total capital expenditures		33,700		14,391			48,091
Six months ended June 30, 2003
	Total revenues	$	461,254	$	225,152		$	686,406
	Depreciation and amortization expense		104,630		32,307			136,937
	Asset dispositions		7,640					7,640
	Interest and financing expense, net		46,032		29,886			75,918
	Adjusted EBITDA(1)		202,892		(4,383	)		198,509
	Total capital expenditures		64,305		35,534			99,839
At June 30, 2003
	Total assets	$	1,951,517	$	606,591		$	2,558,108

		Domestic		International
		Operations		Operations			Consolidated
		(Dollars in thousands)
Three months ended June 30, 2002
	Total revenues	$	222,591	$	68,258		$	290,849
	Depreciation and amortization expense		47,130		10,252			57,382
	Asset dispositions		7,556					7,556
	Interest and financing expense, net		28,031		10,971			39,002
	Adjusted EBITDA(1)		91,969		(13,818	)		78,151
	Total capital expenditures		30,468		49,781			80,249
Six months ended June 30, 2002
	Total revenues	$	433,868	$	141,407		$	575,275
	Depreciation and amortization expense		96,692		21,129			117,821
	Asset dispositions		7,556					7,556
	Interest and financing expense, net		57,035		20,974			78,009
	Adjusted EBITDA(1)		176,856		(26,483	)		150,373
	Total capital expenditures		65,743		92,515			158,258
At June 30, 2002
	Total assets	$	1,817,741	$	566,767		$	2,384,508

⁽¹⁾ Adjusted EBITDA

     EBITDA, which the Company has in the past also referred to as cash flow, is a non-GAAP financial measure generally defined as net income (loss) before interest, taxes, depreciation and amortization. However, when the Company uses the non-GAAP financial measure EBITDA it further excludes the following items: (i) asset dispositions; (ii) stock-based compensation; (iii) equity in net (income) loss of unconsolidated affiliates, net of tax and other, net; (iv) (gain) loss on sale of Croatian joint venture; (v) minority interests in net loss of consolidated subsidiaries; and (vi) income from discontinued operations. Accordingly, the Company has revised the title “EBITDA” that it has used in the past to “Adjusted EBITDA.” Each of the items excluded from Adjusted EBITDA referenced above is presented in the Company’s Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

17

Western Wireless Corporation
Notes to Condensed Consolidated Financial Statements (continued)
(Unaudited)

     Other companies in the wireless industry may define Adjusted EBITDA in a different manner or present other varying financial measures, and, accordingly, the Company’s presentation may not be comparable to other similarly titled measures of other companies. The Company’s calculation of Adjusted EBITDA is also not directly comparable to EBIT (earnings before interest and taxes) or EBITDA.

     The Company views Adjusted EBITDA as an operating performance measure and as such, believes that the GAAP financial measure most directly comparable to Adjusted EBITDA is net income (loss). The Company has presented Adjusted EBITDA because this financial measure, in combination with other financial measures, is an integral part of the Company’s internal reporting system utilized by management to assess and evaluate the performance of its business. Adjusted EBITDA is also considered a significant performance measure. It is used by management as a measurement of the Company’s success in obtaining, retaining and servicing customers by reflecting the Company’s ability to generate subscriber revenue while providing a high level of customer service in a cost effective manner. The components of Adjusted EBITDA include the key revenue and expense items for which our operating managers are responsible and upon which the Company evaluates their performance.

     Adjusted EBITDA is consistent with certain financial measures used in the Company’s Credit Facility and 2013 Notes. Such financial measures are key components of several negative covenants including, among others, the limitation on incurrence of indebtedness, the limitations on investments and acquisitions and the limitation on distributions and dividends.

     Adjusted EBITDA should not be construed as an alternative to net income (loss), as determined in accordance with GAAP, as an alternative to cash flows from operating activities, as determined in accordance with GAAP, or as a measure of liquidity. The Company believes Adjusted EBITDA is useful to investors as a means to evaluate the Company’s operating performance prior to financing costs, deferred tax charges, non-cash depreciation and amortization expense and certain other non-cash charges. Although Adjusted EBITDA may be defined differently by other companies in the wireless industry, the Company believes that Adjusted EBITDA provides some commonality of measurement in analyzing operating performance of companies in the wireless industry.

18

Western Wireless Corporation
Notes to Condensed Consolidated Financial Statements (continued)
(Unaudited)

     A reconciliation of Net Income (Loss) to Adjusted EBITDA is included in the following table:

			Three months ended June 30,
			2003									2002
			Domestic			International			Consolidated			Domestic		International			Consolidated
Net income (loss)			$	22,994		$	17,331		$	40,325		$	1,004	$	(28,381	)	$	(27,377	)
	Depreciation and amortization			54,527			16,838			71,365			47,130		10,252			57,382
	Asset dispositions												7,556					7,556
	Stock-based compensation
	Interest and financing expense, net			22,252			15,187			37,439			28,031		10,971			39,002
	Equity in net (income) loss of unconsolidated
		affiliates, net of tax and other, net		(2,339	)		(7,165	)		(9,504	)		4,010		(2,322	)		1,688
	(Gain) loss on sale of Croatian joint venture			1,574			(42,093	)		(40,519	)
	Minority interests in net loss of consolidated
		subsidiaries					(1,651	)		(1,651	)				(2,590	)		(2,590	)
	Provision for income taxes			6,036			709			6,745			4,238		817			5,055
	Income from discontinued operations														(2,565	)		(2,565	)
	Adjusted EBITDA		$	105,044		$	(844	)	$	104,200		$	91,969	$	(13,818	)	$	78,151

			Six months ended June 30,
			2003									2002
			Domestic			International			Consolidated			Domestic			International			Consolidated
Net income (loss)			$	37,523		$	(18,759	)	$	18,764		$	(90,419	)	$	(57,606	)	$	(148,025	)
	Depreciation and amortization			104,630			32,307			136,937			96,692			21,129			117,821
	Asset dispositions			7,640						7,640			7,556						7,556
	Stock-based compensation
	Interest and financing expense, net			46,032			29,886			75,918			57,035			20,974			78,009
	Equity in net (income) loss of unconsolidated
		affiliates, net of tax and other, net		(4,352	)		(3,071	)		(7,423	)		(1,786	)		(2,338	)		(4,124	)
	(Gain) loss on sale of Croatian joint venture			1,574			(42,093	)		(40,519	)
	Minority interests in net loss of consolidated
		subsidiaries					(4,043	)		(4,043	)					(5,825	)		(5,825	)
	Provision for income taxes			9,845			1,390			11,235			107,778			1,210			108,988
	Income from discontinued operations															(4,027	)		(4,027	)
	Adjusted EBITDA		$	202,892		$	(4,383	)	$	198,509		$	176,856		$	(26,483	)	$	150,373

19

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     Cautionary statement for purposes of the “Safe Harbor” provisions of the Private Litigation Reform Act of 1995. Statements contained herein that are not based on historical fact, including without limitation statements containing the words “believes,” “may,” “will,” “estimate,” “continue,” “anticipates,” “intends,” “expects” and words of similar import, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions, nationally, internationally and in the regions and countries in which Western Wireless Corporation operates; demographic changes; technology changes; increased competition; changes in business strategy or development plans; the high leverage of the Company and our ability to access capital markets; the ability to attract and retain qualified personnel; existing governmental regulations and changes in, or the failure to comply with, governmental regulations; our ability to acquire and the cost of acquiring additional spectrum licenses; product liability and other claims asserted against the Company; and other factors included elsewhere in this report, in the Company’s filed public offering prospectuses or its reports filed with the Securities and Exchange Commission, including, without limitation, those described under the caption, “Risk Factors,” contained in our Form 10-K for the year ended December 31, 2002.

     Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future results, events or developments.

     Unless the context requires otherwise, “Western Wireless,” “the Company,” “we,” “our” and “us” include us and our subsidiaries.

     The following discussion and analysis is based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The discussion and analysis should be read in conjunction with our consolidated financial statements and notes thereto and other financial information included herein and in our Form 10-K for the year ended December 31, 2002. The preparation of our financial statements requires management to make estimates and judgments that affect the reported amount of assets, liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting periods. Estimates are used when accounting for certain items such as subscriber and roamer revenues, interconnect costs, incollect expense, allowance for doubtful accounts, long-lived assets, intangible assets, investments in unconsolidated affiliates, stock-based compensation plans, income taxes and contingencies. We base our estimates on historical experience, and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from our estimates due to changing conditions or the validity of our assumptions.

Overview

     We provide wireless communications services in 19 western states under the CELLULARONE^® and Western Wireless^® brand names principally through the ownership and operation of cellular wireless systems. The operations are primarily in rural areas due to our belief that there are certain strategic advantages to operating in these areas. We provide wireless services in 18 Metropolitan Service Areas (“MSA”) and 88 Rural Service Areas (“RSA”). Additionally, we own 10 MHz personal communication services (“PCS”) licenses for three Basic Trading Areas.

20

     Historically, we have provided analog service to our customers and have deployed Time Division Multiple Access (“TDMA”) digital voice channels throughout our network to support our roaming partners. During 2001 we began deploying Code Division Multiple Access (“CDMA”) throughout our network, which allows us to economically expand the minutes of use (“MOU”) available to our customers and introduce a wide range of consumer-based wireless internet-related services. At June 30, 2003, we covered approximately 55% of our licensed population with CDMA digital technology. In 2003, we announced our intention to offer Global System for Mobile Communications/General Packet Radio Service (“GSM”) services to our roaming partners.

     We own approximately 98% of Western Wireless International Holding Corporation (“WWI”). The balance is owned by the President of WWI who is also an Executive Vice President of the Company. WWI, through its consolidated subsidiaries and equity investments, is a provider of wireless communications services in eight countries. WWI owns controlling interests in six of these countries: Slovenia, Austria, Ireland, Bolivia, Haiti and Ghana. These six entities are consolidated into our financial results. Operations in Côte d’Ivoire and Georgia are accounted for using the equity method. In the fourth quarter of 2002, WWI sold its majority ownership interest in its Icelandic subsidiary and wrote off its investment in Côte d’Ivoire. In the second quarter of 2003, WWI sold its minority interest in its Croatian joint venture, VIP-Net GSM d.o.o. (“VIP-Net”).

     U.S. headquarter functions of WWI and majority owned European, South American and Caribbean consolidated subsidiaries are recorded as of the date of the financial statements. Our consolidated Ghanaian entity and entities accounted for using the equity method are presented on a one-quarter lag.

     Results of Domestic Operations for the Three and Six Months Ended June 30, 2003 and 2002

     We had 1,231,200 domestic subscribers at June 30, 2003. This represents an increase of 15,100 and 33,400 compared to March 31, 2003 and December 31, 2002, respectively. We had 1,165,300 domestic subscribers at June 30, 2002. This represented an increase of 5,800 and a decrease of 11,200 compared to March 31, 2002 and December 31, 2001, respectively.

     The following table sets forth certain financial data as it relates to our domestic operations:

			Three months ended June 30,				Six months ended June 30,
			2003		2002		2003		2002
					(Dollars in thousands)
Revenues:
	Subscriber revenues		$	173,886	$	151,999	$	336,253	$	297,677
	Roamer revenues			54,704		58,841		102,883		111,851
	Equipment sales			10,648		10,463		20,464		20,888
	Other revenues			539		1,288		1,654		3,452
		Total revenues	$	239,777	$	222,591	$	461,254	$	433,868
Operating expenses:
Cost of service			$	43,344	$	46,157	$	82,729	$	90,491
Cost of equipment sales				22,231		19,302		41,129		37,732
General and administrative				40,575		34,947		79,552		72,835
Sales and marketing				28,583		30,216		54,952		55,954
Depreciation and amortization				54,527		47,130		104,630		96,692
Asset dispositions						7,556		7,640		7,556
		Total operating expenses	$	189,260	$	185,308	$	370,632	$	361,260
Adjusted EBITDA			$	105,044	$	91,969	$	202,892	$	176,856

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     For the definition of Adjusted EBITDA, and the reconciliation of Adjusted EBITDA, which is a non-GAAP financial measure, to net income (loss), the most directly comparable GAAP financial measure, see “Adjustments to Reconcile Net Income (Loss) to Adjusted EBITDA.”

Domestic Revenues

     The increase in subscriber revenues for the three and six month periods ended June 30, 2003, compared to the same periods one year ago, was due partly to an increase in average revenue per unit (“ARPU” defined as subscriber revenues divided by average subscribers) and due partly to growth in subscribers. ARPU was $47.37 for the three months ended June 30, 2003, a $3.78, or 8.7%, increase from $43.59 for the three months ended June 30, 2002. ARPU was $46.14 for the six months ended June 30, 2003, a $3.77, or 8.9%, increase from $42.37 for the six months ended June 30, 2002. The increase in ARPU was due to many factors including the receipt of federal universal service fund payments as an Eligible Telecommunications Carrier for certain of our traditional mobile services customers which contributed $1.88 and $2.00 to the increase in ARPU for the three and six months ended June 30, 2003, respectively. In addition, we continued to focus on attracting and retaining customers with rate plans that provide more features and included minutes at a higher average recurring access charge. Further, in May 2003, we began charging $0.97 per month to our subscribers to recover the cost of certain unfunded government mandates such as wireless number portability and enhanced 911. We expect these combined factors will result in higher ARPU in 2003 as compared to 2002. We expect to continue to receive universal fund payments for certain mobile subscribers who reside in areas for which we are eligible to receive such payments, but we can provide no long-term assurances that federal universal service fund payments will continue at the current level, if at all.

     The decrease in roamer revenue for the three and six months ended June 30, 2003, compared to the same periods a year ago was primarily due to a decrease in the rates charged between carriers partially offset by an increase in roaming traffic on our network. In March 2002, we extended our TDMA roaming agreement with AT&T Wireless Services, Inc. (“AT&T Wireless”), our largest roaming partner. This extension became effective June 16, 2002 and remains in effect until June 15, 2006. In the first year, the extended agreement provided for lower per minute rates compared to the contractual rates that expired June 15, 2002. The extended agreement also provides for slight rate decreases charged to AT&T Wireless in both the second and third year of the agreement. Additionally, in April 2002, we signed new roaming agreements with Verizon Wireless Corporation (“Verizon”) and Cingular Wireless (“Cingular”) effective through March and April 2005, respectively. In May 2003, we announced the signing of additional long-term roaming agreements with T-Mobile USA, Inc. through 2013 and Cingular through 2008 to provide GSM services to their customers utilizing our network. Further, in July 2003, we announced the signing of an additional GSM long-term roaming agreement with AT&T Wireless through 2006. We expect to begin offering GSM roaming services in the fourth quarter of 2003. Although certain of our existing roamer contracts contain year-over-year contractual rate decreases, we expect the new GSM roaming agreements along with growth in volume from existing roamer partners to hold roamer revenues for the second half of 2003 constant compared to the second half of 2002.

Domestic Operating Expenses

     The decrease in cost of service for the three and six month periods ended June 30, 2003, compared to the same periods one year ago, was due primarily to a decrease in interconnection costs. In addition, we experienced decreased off-network roaming costs for our customers as a result of lower contractual rates contained in our new roaming agreements. These savings were partially offset by increased costs associated with supporting growth in the number of subscriber and roamer minutes of use (“MOU”). Domestic cost of service per MOU decreased to $0.022 per MOU for the three months ended June 30, 2003 and $0.023 per MOU for the six months ended June 30, 2003, compared to $0.032 per MOU for the three months ended June 30, 2002 and $0.034 per MOU for the six months ended June 30, 2002. The decrease in domestic cost of service per MOU was due mainly to lower interconnect rates and the decrease in off-network roaming costs as discussed above. In addition, we continued to see decreases in the fixed cost

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components of cost of service on a per minute basis. We expect cost of service dollars to increase in future quarters as a result of: (i) a growing subscriber base; (ii) an increase in other carriers’ customers roaming on our network; and (iii) an increase in rate plans that include larger home calling areas. Domestic cost of service per MOU is expected to decrease slightly for 2003 compared to 2002 as economies of scale continue to be realized.

     Cost of equipment sales increased for the three and six month periods ended June 30, 2003 compared to the same periods one year ago. The increase was the result of an increase in the volume of handsets sold partially offset by a decrease in the average per unit cost of handsets sold. For the remainder of 2003, we expect that regulatory and technological requirements, along with demand for feature rich handsets, will increase our per unit cost of handsets as compared to 2002. Although subscribers generally are responsible for purchasing or otherwise obtaining their own handsets, we have historically sold handsets below cost to respond to competition and general industry practice. We expect to continue to do so in the future.

     General and administrative costs increased for the three and six month periods ended June 30, 2003 compared to the same periods one year ago. The year-over-year increase was a result of an increase in bad debt expense and a larger subscriber base. Our domestic general and administrative monthly cost per average subscriber for the three months ended June 30, 2003 increased to $11.05 compared to $10.02 for the three months ended June 30, 2002. Our domestic general and administrative monthly cost per average subscriber for the six months ended June 30, 2003 increased to $10.92 compared to $10.37 for the six months ended June 30, 2002. We anticipate our domestic general and administrative monthly cost per average subscriber will increase slightly in 2003 as compared to 2002. The anticipated slight year-over-year increase on a per subscriber basis is due mainly to a year-over-year increase in bad debt expense.

     Sales and marketing costs decreased slightly for the three and six month periods ended June 30, 2003, compared to the same periods one year ago due primarily to a decrease in cost per gross subscriber addition partially offset by an increase in the number of gross subscriber additions. Cost per gross subscriber addition (determined by dividing the sum of sales and marketing costs and cost of equipment sales, reduced by equipment sales, by the number of gross subscriber additions for the period) decreased to $395 for the three months ended June 30, 2003 compared to $445 for the three months ended June 30, 2002. For the six months ended June 30, 2003, cost per gross subscriber addition decreased to $390 compared to $449 for the six months ended June 30, 2002. We include digital handset subsidies incurred in retaining existing subscribers in subscriber acquisition costs. These retention costs had a $68 and $53 impact on cost per gross subscriber addition for the three months ended June 30, 2003 and 2002, respectively, and a $61 and $50 impact on cost per gross subscriber addition for the six months ended June 30, 2003 and 2002, respectively. We expect cost per gross subscriber addition, including the loss on equipment sales, to decrease in 2003 as compared to 2002 as we continue to shift to a more variable cost structure.

     The increase in depreciation and amortization expense for the three and six months ended June 30, 2003, compared to the same periods in 2002, was mainly attributable to the growth of domestic wireless communication system assets.

     The asset dispositions loss for the six months ended June 30, 2003 resulted from recording a $7.6 million impairment charge related to the pending sale of one of our RSAs. The sales price of this RSA reflects that future cash flows will be less than the carrying value of the license. Accordingly, we recorded an impairment related to this RSA during the first quarter of 2003 of $7.6 million which is included in asset dispositions in our condensed consolidated statement of operations. We expect this transaction to close during the third quarter of 2003 and do not anticipate any further impact to our financial results related to this disposition.

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     The asset dispositions loss for the three and six months ended June 30, 2002 resulted from the implementation of our strategy to dispose of certain minor domestic non-core assets. In conjunction with these efforts, we recognized a charge in the second quarter of 2002 of approximately $7.6 million related to the disposition of certain of our paging assets.

Domestic Adjusted EBITDA

     Domestic Adjusted EBITDA (refer to definition at “Adjustments to Reconcile Net Income (Loss) to Adjusted EBITDA”) increased for the three and six months ended June 30, 2003, compared to the three and six months ended June 30, 2002. The increase for the three and six months ended June 30, 2003 compared to the same periods in 2002 was the result of an increase in revenues in conjunction with decreases in cost of service and sales and marketing expenses. These items were partially offset by increases in cost of equipment sales and general and administrative expenses. Management expects domestic Adjusted EBITDA to increase at a moderate pace in 2003.

     Results of International Operations for the Three and Six Months Ended June 30, 2003 and 2002

     Our international consolidated operations offer postpaid and prepaid mobile services in Austria, Ireland, Slovenia, Bolivia and Haiti and fixed line service mainly in Austria. We had 902,100 consolidated international customers at June 30, 2003. This represented an increase of 65,700 and 160,800, or 8% and 22%, compared to March 31, 2003 and December 31, 2002, respectively. We had 579,500 consolidated international customers at June 30, 2002. This represented an increase of 54,500 and 88,400, or 10% and 18%, compared to March 31, 2002 and December 31, 2001, respectively. As of June 30, 2003 and 2002, approximately 62% and 69%, respectively, of our consolidated international customers were prepaid customers. As of June 30, 2003, we had 165,700 fixed lines. This represented a decrease of 5,900 and 10,200, or 3% and 6%, compared to March 31, 2003 and December 31, 2002, respectively.

     The following table sets forth certain financial data as it relates to our international operations:

			Three months ended June 30,						Six months ended June 30,
			2003			2002			2003			2002
						(Dollars in thousands)
Revenues:
	Subscriber revenues		$	90,017		$	46,216		$	160,974		$	93,732
	Roamer revenues			9,486			5,351			23,385			13,204
	Fixed line revenues			14,640			13,383			29,691			26,999
	Equipment sales			2,585			2,072			5,812			5,316
	Other revenues			2,727			1,236			5,290			2,156
		Total revenues	$	119,455		$	68,258		$	225,152		$	141,407
Operating expenses:
	Cost of service		$	61,502		$	44,277		$	116,752		$	87,691
	Cost of equipment sales			14,893			8,336			28,656			16,149
	General and administrative			21,636			14,036			40,764			35,250
	Sales and marketing			22,268			15,427			43,363			28,800
	Depreciation and amortization			16,838			10,252			32,307			21,129
		Total operating expenses	$	137,137		$	92,328		$	261,842		$	189,019
Adjusted EBITDA			$	(844	)	$	(13,818	)	$	(4,383	)	$	(26,483	)

     For the definition of Adjusted EBITDA, and the reconciliation of Adjusted EBITDA, which is a non-GAAP financial measure, to net income (loss), the most directly comparable GAAP financial measure, see “Adjustments to Reconcile Net Income (Loss) to Adjusted EBITDA.”

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     Because WWI has operations in Austria, Ireland and Slovenia in which the functional currency is the euro, or is linked to the euro, fluctuations in exchange rates may have a significant impact on its financial results of operations. The results of operations for the three and six months ended June 30, 2003, reflect the effect of a 19% and 18%, respectively, appreciation of the euro as compared to the U.S. dollar, compared to the same periods in 2002, which had a comparable positive impact on revenues and a negative impact on operating expenses. Such European subsidiaries, in aggregate, represented 85% and 87% of total international segment revenues and operating expenses, respectively, for the three months ended June 30, 2003. Such European subsidiaries represented 85% and 88% of total international segment revenues and operating expenses, respectively, for the six months ended June 30, 2003. Fluctuations in exchange rates have less effect on local operating results, however, because WWI conducts business primarily in the currencies of the countries in which they operate. Management cannot predict future fluctuations in currency exchange rates, and accordingly cannot predict the potential impact of any such fluctuations on WWI’s results of operations.

International Revenues

     The increase in subscriber revenues for the three and six months ended June 30, 2003, compared to the same periods in 2002, was mainly due to an increase in the number of subscribers across all of our markets and the strengthening of the euro as compared to the U.S. dollar. Management anticipates continued growth in subscriber revenues throughout the remainder of 2003, exclusive of changes in currency exchange rates, as we add international subscribers and focus on growing ARPU.

     The increase in roamer revenues for the three and six months ended June 30, 2003, compared to the same periods in 2002, was primarily due to expanded coverage in key tourist areas in Austria and throughout Ireland and the strengthening of the euro as compared to the U.S. dollar. Management expects roamer revenues to increase, exclusive of currency exchange rates, throughout the remainder of 2003 as compared to the same period in 2002 as WWI expands its European coverage.

     Fixed line revenues increased for the three and six months ended June 30, 2003, compared to the same periods in 2002, mainly because of the strengthening of the euro as compared to the U.S. dollar, which offset an actual decline in fixed line revenue in the local currency caused by a decline in the number of subscribers, mainly in Austria.

     Equipment sales remained consistent for the three and six months ended June 30, 2003, compared to the same periods in 2002, primarily due to selling more handsets at a lower average price per handset.

     Other revenues increased for the three and six months ended June 30, 2003, compared to the same periods in 2002, mainly as a result of the launch of long distance services in Bolivia in August 2002 and increased international long-distance usage in Ghana.

International Operating Expenses

     Operating expenses represent the expenses incurred by our consolidated international markets and headquarters administration in the United States.

     Cost of service increased for the three and six months ended June 30, 2003, as compared to the same periods in 2002. This was due primarily to an increase in the number of subscribers across all of our markets and the strengthening of the euro as compared to the U.S. dollar. On a per average international subscriber basis, monthly cost of service was $23.58 and $26.72 for the three months ended June 30, 2003 and 2002, respectively. On a per average international subscriber basis, average monthly cost of service was $23.68 and $27.30 for the six

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months ended June 30, 2003 and 2002, respectively. These decreases are mainly due to increased cost efficiencies as a result of a growing subscriber base, partially offset by the strengthening of the euro to the U.S. dollar which increased cost of service on a per average international subscriber basis by $5.54 and $5.43 for the three and six month periods ended June 30, 2003, respectively, as compared to the same periods in 2002. Management expects cost of service dollars to increase for the remainder of 2003, as compared to the same period in 2002, due to a growing subscriber base, but continue to decline on a per average international subscriber basis, exclusive of changes in currency exchange rates, due to increased cost efficiencies.

     Cost of equipment sales increased for the three and six months ended June 30, 2003, compared to the same periods in 2002, mainly due to an increase in gross subscriber additions across all our markets. Although subscribers generally are responsible for purchasing or otherwise obtaining their own handset, WWI has historically sold handsets below cost to respond to competition and general industry practice and expects to continue to do so in the future.

     General and administrative costs increased for the three and six months ended June 30, 2003 compared to the same periods in 2002, due primarily to an increase in the number of subscribers across the majority of our markets and the strengthening of the euro as compared to the U.S. dollar. On a per average international subscriber basis, general and administrative monthly cost decreased to $8.30 and $8.27 for the three and six months ended June 30, 2003, respectively as compared to $8.47 and $10.97 for the three and six months ended June 30, 2002, respectively. These decreases were mainly due to increased cost efficiencies, partially offset by the strengthening of the euro to the U.S. dollar which increased general and administrative monthly cost on a per international subscriber basis by $1.34 and $1.65 for the three and six months ended June 30, 2003, respectively, as compared to the same periods in 2002. Management expects general and administrative dollars to increase throughout the remainder of 2003, as compared to 2002, as a result of a growing subscriber base, but decline on a per international subscriber basis, exclusive of changes in currency exchange rates, due to increased cost efficiencies.

     Sales and marketing costs increased for the three and six months ended June 30, 2003 compared to the same periods in 2002 primarily due to increased sales and promotion expenses, mainly in Austria, and the strengthening of the euro as compared to the U.S. dollar. International cost per gross subscriber addition (determined by dividing the sum of sales and marketing costs and cost of equipment sales, reduced by equipment sales, by the number of gross subscriber additions for the period) increased to $194.54 for the three months ended June 30, 2003 from $192.02 for the three months ended June 30, 2002. This year-over-year increase is primarily due to the strengthening of the euro as compared to the U.S. dollar partially offset by reduced sales costs in Ireland and Slovenia. International cost per gross subscriber addition decreased to $186.10 for the six months ended June 30, 2003 from $193.45 for the six months ended June 30, 2002. This year-over-year decrease is primarily due to reduced sales costs in Ireland and Slovenia partially offset by strengthening of the euro as compared to the U.S. dollar. The strengthening of the euro increased cost per gross addition by $40.21 and $37.25 for the three and six months ended June 30, 2003, respectively, as compared to the same periods in 2002. Management expects sales and marketing costs, including equipment subsidies, to increase for the remainder of 2003, as compared to the same period in 2002, due to a higher number of gross additions.

     Depreciation and amortization expense increased for the three and six months ended June 30, 2003 compared to the same periods in 2002, primarily due to network expansion in our European markets and the strengthening of the euro as compared to the U.S. dollar. As WWI continues to add wireless infrastructure to service its growing international subscriber base, management anticipates depreciation and amortization will increase in future periods.

International Adjusted EBITDA

     Adjusted EBITDA (refer to definition at “Adjustments to Reconcile Net Income (Loss) to Adjusted EBITDA”) for our international consolidated subsidiaries improved for the three and six months ended June 30, 2003, compared to the

26

same periods in 2002, due to revenue growth and cost efficiencies in existing markets. We expect international Adjusted EBITDA to improve throughout the remainder of 2003 as compared to the same period in 2002 as a result of continued subscriber growth and cost efficiencies in existing markets.

Adjustments to Reconcile Net Income (Loss) to Adjusted EBITDA

     EBITDA, which the Company has in the past also referred to as cash flow, is a non-GAAP financial measure generally defined as net income (loss) before interest, taxes, depreciation and amortization. However, when the Company uses the non-GAAP financial measure EBITDA it further excludes the following items: (i) asset dispositions; (ii) stock-based compensation; (iii) equity in net (income) loss of unconsolidated affiliates, net of tax and other, net; (iv) (gain) loss on sale of Croatian joint venture; (v) minority interests in net loss of consolidated subsidiaries; and (vi) income from discontinued operations. Accordingly, the Company has revised the title “EBITDA” that it has used in the past to “Adjusted EBITDA.” Each of the items excluded from Adjusted EBITDA referenced above is presented in the Company’s Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

     Other companies in the wireless industry may define Adjusted EBITDA in a different manner or present other varying financial measures, and, accordingly, the Company’s presentation may not be comparable to other similarly titled measures of other companies. The Company’s calculation of Adjusted EBITDA is also not directly comparable to EBIT (earnings before interest and taxes) or EBITDA.

     The Company views Adjusted EBITDA as an operating performance measure and as such, believes that the GAAP financial measure most directly comparable to Adjusted EBITDA is net income (loss). The Company has presented Adjusted EBITDA because this financial measure, in combination with other financial measures, is an integral part of the Company’s internal reporting system utilized by management to assess and evaluate the performance of its business. Adjusted EBITDA is also considered a significant performance measure. It is used by management as a measurement of the Company’s success in obtaining, retaining and servicing customers by reflecting the Company’s ability to generate subscriber revenue while providing a high level of customer service in a cost effective manner. The components of Adjusted EBITDA include the key revenue and expense items for which our operating managers are responsible and upon which the Company evaluates their performance.

     Adjusted EBITDA is consistent with certain financial measures used in the Company’s Credit Facility and 2013 Notes. Such financial measures are key components of several negative covenants including, among others, the limitation on incurrence of indebtedness, the limitations on investments and acquisitions and the limitation on distributions and dividends.

     Adjusted EBITDA should not be construed as an alternative to net income (loss), as determined in accordance with GAAP, as an alternative to cash flows from operating activities, as determined in accordance with GAAP, or as a measure of liquidity. The Company believes Adjusted EBITDA is useful to investors as a means to evaluate the Company’s operating performance prior to financing costs, deferred tax charges, non-cash depreciation and amortization expense and certain other non-cash charges. Although Adjusted EBITDA may be defined differently by other companies in the wireless industry, the Company believes that Adjusted EBITDA provides some commonality of measurement in analyzing operating performance of companies in the wireless industry.

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     A reconciliation of Net Income (Loss) to Adjusted EBITDA is included in the following table:

		Three months ended June 30,
		2003									2002
		Domestic			International			Consolidated			Domestic		International			Consolidated
Net income (loss)		$	22,994		$	17,331		$	40,325		$	1,004	$	(28,381	)	$	(27,377	)
	Depreciation and amortization		54,527			16,838			71,365			47,130		10,252			57,382
	Asset dispositions											7,556					7,556
	Stock-based compensation
	Interest and financing expense, net		22,252			15,187			37,439			28,031		10,971			39,002
	Equity in net (income) loss of unconsolidated affiliates, net of tax and other, net		(2,339	)		(7,165	)		(9,504	)		4,010		(2,322	)		1,688
	(Gain) loss on sale of Croatian joint venture		1,574			(42,093	)		(40,519	)
	Minority interests in net loss of consolidated subsidiaries					(1,651	)		(1,651	)				(2,590	)		(2,590	)
	Provision for income taxes		6,036			709			6,745			4,238		817			5,055
	Income from discontinued operations													(2,565	)		(2,565	)
	Adjusted EBITDA	$	105,044		$	(844	)	$	104,200		$	91,969	$	(13,818	)	$	78,151

		Six months ended June 30,
		2003									2002
		Domestic			International			Consolidated			Domestic			International			Consolidated
Net income (loss)		$	37,523		$	(18,759	)	$	18,764		$	(90,419	)	$	(57,606	)	$	(148,025	)
	Depreciation and amortization		104,630			32,307			136,937			96,692			21,129			117,821
	Asset dispositions		7,640						7,640			7,556						7,556
	Stock-based compensation
	Interest and financing expense, net		46,032			29,886			75,918			57,035			20,974			78,009
	Equity in net (income) loss of unconsolidated affiliates, net of tax and other, net		(4,352	)		(3,071	)		(7,423	)		(1,786	)		(2,338	)		(4,124	)
	(Gain) loss on sale of Croatian joint venture		1,574			(42,093	)		(40,519	)
	Minority interests in net loss of consolidated subsidiaries					(4,043	)		(4,043	)					(5,825	)		(5,825	)
	Provision for income taxes		9,845			1,390			11,235			107,778			1,210			108,988
	Income from discontinued operations														(4,027	)		(4,027	)
	Adjusted EBITDA	$	202,892		$	(4,383	)	$	198,509		$	176,856		$	(26,483	)	$	150,373

Consolidated Other Income (Expense)

     Consolidated interest and financing expense, net decreased to $37.4 million and $75.9 million for the three and six months ended June 30, 2003, from $39.0 million and $78.0 million for the same periods one year ago. The decrease was primarily due to a reduction of our weighted average interest rate partially offset by a slight increase in our average debt balance. For the three months ended June 30, 2003 and 2002, the domestic weighted average interest rate paid to third parties was 6.0% and 6.7%, respectively. For the six months ended June 30, 2003 and 2002, the domestic weighted average interest rate paid to third parties was 6.1% and 6.7%, respectively. For the three months ended June 30, 2003 and 2002, the consolidated international weighted average interest rates paid to third parties by WWI was 6.7% and 6.6%, respectively. For the six months ended June 30, 2003 and 2002, the consolidated international weighted average interest rates paid to third parties by WWI was 6.9% and 6.6%, respectively. We anticipate consolidated interest and financing expense to increase for the remainder of 2003 as compared to 2002 due to the restructuring and refinancing of our existing domestic financing arrangements (for further discussion see “Consolidated Liquidity and Capital Resources”). This restructuring will result in a higher domestic weighted average interest rate partially offset by a decrease in our average debt balance.

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     In the second quarter of 2003, we recognized a $40.5 million gain related to the sale of WWI’s investment in VIP-Net in Croatia. Our proceeds were $69.6 million.

Provision for Income Taxes

     For the six months ended June 30, 2003, compared to the same period in 2002, the provision for income taxes has decreased $97.8 million. In connection with the adoption of Statement of Financial Accounting Standards (“SFAS”) No. 142 “Goodwill and Other Intangible Assets”, for the six months ended June 30, 2002, we incurred a deferred income tax provision of approximately $107.8 million mainly to increase the valuation allowance related to our net operating loss (“NOL”) carryforwards. This charge included $96.9 million as the initial effect as of January 1, 2002. We have significant deferred tax liabilities related to our domestic licenses. Historically, we did not need a valuation allowance for the portion of our NOL carryforward equal to the amount of license amortization expected to occur during the NOL carryforward period. Since we ceased amortizing domestic licenses on January 1, 2002 for book purposes and we can no longer estimate the amount, if any, of deferred tax liabilities related to our domestic licenses, which will reverse during the NOL carryforward period, we have increased the valuation allowance accordingly. Subsequent to January 1, 2002, we continue to amortize our domestic licenses for federal income tax purposes, but as previously discussed, domestic license costs are no longer amortized for book purposes. The ongoing difference between book and tax amortization resulted in an additional deferred income tax provision of approximately $10.9 million for the six months ended June 30, 2002. The continuing deferred income tax provision resulted from growth in our deferred tax liability that cannot be estimated to reverse during our NOL carryforward period. This adjustment reflected tax accounting requirements and was not based on any changes to our business model, future prospects, the value of our licenses or our assessment of the likelihood of utilizing the tax NOL carryforwards on a cash tax basis in the future. Deferred income taxes represented a non-cash charge and were not currently paid or payable and accordingly there was no impact on interim cash flows from operating, investing or financing activities. We will continue to evaluate the need for this valuation allowance for accounting purposes to determine if we should reverse all or part of the allowance in the future.

     For the three and six months ended June 30, 2003, the ongoing difference between book and tax amortization resulted in an additional domestic deferred income tax provision of approximately $6.0 million and $9.8 million, respectively. For the three months ended June 30, 2003, this was comprised of a $6.0 million deferred income tax provision. For the six months ended June 30, 2003, this was comprised of $12.3 million as a deferred income tax provision partially offset by a $2.5 million decrease to the deferred income tax provision. The decrease in the deferred income tax provision was related to reversing the cumulative deferred income tax provision associated with the impairment charge reflected in asset dispositions.

Consolidated Loss from Continuing Operations

     For the three months ended June 30, 2003, on a consolidated basis, the $70.3 million improvement in the income (loss) from continuing operations resulted mainly from those items discussed in the “Domestic Adjusted EBITDA” and “International Adjusted EBITDA” sections above along with the gain on sale of the Croatian joint venture.

Total Discontinued Operations

     Total discontinued operations for the three and six months ended June 30, 2002 represented net income of $2.6 million and $4.0 million, respectively, from TAL, our Icelandic subsidiary. TAL was sold by us in November 2002.

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Consolidated Liquidity and Capital Resources

     At June 30, 2003 we had a $2.1 billion credit facility with a consortium of lenders (the “Credit Facility”) consisting of: (i) a $500 million term loan (“Term Loan A”); (ii) a $600 million term loan (“Term Loan B”); and (iii) two $500 million revolving loans (“Revolver A” and “Revolver B”).

     In July 2003, we amended the Credit Facility. With the amendment we reduced the commitment under Revolver A to $350 million and prepaid: (i) $150 million under Term Loan A; (ii) $100 million under Term Loan B; and (iii) $150 million under Revolver B. The commitment reduction in Revolver A and each such prepayment was applied to the earliest maturities first. In addition, among other modifications, we modified certain quarterly financial covenants and included a new covenant requiring our domestic operations to maintain a minimum ratio of annualized operating cash flow to senior secured indebtedness. The amendment will also require us to make mandatory prepayments from excess cash flow and from certain proceeds of certain indebtedness. In 2004, based on current assumptions, we may be required to prepay the Credit Facility between $40 million and $60 million in excess cash flow. These prepayments will not effect the amount available under Revolver A. The amended Credit Facility further limits the amount we are permitted to invest in our international subsidiaries from January 1, 2003 to $100 million plus certain other amounts received by us or our domestic subsidiaries from our international subsidiaries. Our applicable margin under Revolver A, Revolver B and Term Loan A, based upon our leverage ratio, has been increased to a range of 1.625% to 2.25% for Eurodollar advances and 0.625% to 1.25% for prime rate advances. The applicable margin for Term Loan B increased to 3.25% for Eurodollar advances and 2.25% for prime rate advances. At August 1, 2003, we had $125 million available to borrow under the amended Credit Facility.

     At June 30, 2003 we had outstanding $187.1 million and $196.0 million of 101/2% Senior Subordinated Notes due 2006 and 2007, respectively (the “2006 Notes” and the “2007 Notes”). On July 17, 2003 the Bank of New York, as trustee, notified holders of the 2006 Notes and the 2007 Notes that we have elected to redeem the entire principal amount of the 2006 Notes and 2007 Notes together with accrued interest on August 18, 2003. The redemption price for the 2006 Notes is 101.75% and the redemption price for the 2007 Notes is 103.5%. We will record an aggregate loss on the early redemption of the 2006 Notes and the 2007 Notes of approximately $14 million in the third quarter of 2003.

     In July 2003, we issued $600 million of 9.25% Senior Notes due 2013 (the “2013 Notes”) at par. Interest is payable semi-annually. We may redeem the 2013 Notes at our option at any time on or after July 15, 2008, in whole or from time to time in part, at specified redemption prices, plus accrued and unpaid interest. In addition, on or before July 15, 2008, we may redeem any of the 2013 Notes at our option at any time, in whole, or from time to time in part, at a redemption price equal to the greater of (i) 100% of the principal amount of the notes being redeemed or (ii) the sum of the present value of the remaining scheduled payments of principal and interest on the notes being redeemed discounted to the date of redemption at a specified rate. The 2013 Notes contain certain covenants that, among other things, limit our ability to incur additional indebtedness, make certain asset dispositions, make restricted payments, issue capital stock of certain wholly-owned subsidiaries and enter into certain mergers, sales or combinations.

     In June 2003, we issued $115 million of 4.625% Convertible Subordinated Notes due 2023 (the “2023 Notes”) at par. Interest is payable semi-annually. The 2023 Notes are convertible into Class A common stock at a per share price of $15.456, subject to adjustment, at any time or, at our option, an equivalent amount of cash in lieu of shares of common stock. In addition, holders may require that we repurchase all or a portion of the 2023 Notes on June 15, 2013 and June 15, 2018 at par plus accrued interest payable in cash or Class A common stock, at our option. Between June 18, 2006 and June 18, 2010, we may redeem in whole or in part the 2023 Notes in cash at par plus accrued interest plus a make whole amount equal to the present value of the remaining scheduled interest payments through and including June 15, 2010, subject to the closing sales price of our common stock exceeding the conversion price by 150% for 20 trading days in

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any consecutive 30 day trading period immediately prior to notification of redemption. Between June 18, 2010 and June 18, 2013, we may redeem in cash at par plus accrued interest all or a portion of the 2023 Notes subject to the closing sales price of our common stock exceeding the conversion price by 125% for 20 trading days in any consecutive 30 day trading period immediately prior to notification of redemption. After June 18, 2013, the 2023 Notes are redeemable at par plus accrued interest.

     In April 2002, Western Wireless International d.o.o. (“Vega”) entered into a credit facility agreement (the “Slovenian Credit Facility”) with a consortium of banks to provide funding for the implementation and expansion of Vega’s network in Slovenia. The Slovenian Credit Facility contains certain borrowing conditions and restrictive covenants, including: minimum subscribers; population coverage; certain cash flow requirements; minimum contributed capital; and debt service coverage. Western Wireless International Corporation (“WWIC”), a subsidiary of WWI, has guaranteed the Slovenian Credit Facility. Additionally, WWIC has agreed not to sell or dispose of any majority owned subsidiary without the approval of the Slovenian lenders. In May 2003, WWI contributed an additional $2.9 million in equity to Vega as a result of Vega’s revenue shortfalls during the three months ended March 31, 2003. As of June 30, 2003, Vega is not in compliance with certain covenants, including its network coverage, minimum service revenue and minimum subscriber covenants. As a result, WWI and the participating banks are negotiating, and have substantially agreed to, all material terms of an amended credit facility. Under the terms of the drafted amendment, the following changes to the terms of the Slovenian Credit Facility will be made: (i) all undrawn commitments will be cancelled; (ii) substantially all of Vega’s operating and financial covenants will be eliminated; (iii) WWIC will guarantee the loan and WWIC will agree to financial and other covenants; (iv) balances of approximately $21.4 million in collateral accounts supporting the existing loan will be utilized to pay down principal; and (v) the repayment schedule for outstanding borrowings will remain unchanged. We have obtained a waiver of certain covenants through August 28, 2003. So long as the amendment process is moving forward in an acceptable manner, we believe that no action to accelerate the loans under the Slovenian Credit Facility will be taken. Based on the facts, we have presented the Slovenian Credit Facility in the current portion of long-term debt as required by U.S. GAAP. Once the amendment is in place, the long-term portion of the Slovenian Credit Facility will be classified as long-term based on the original maturities schedule. However, there can be no assurance that the participating banks will grant the amendment. In the event Vega does not obtain the amendment, the outstanding balance under the Slovenian Credit Facility could become payable upon demand. As of June 30, 2003, Vega had $86.0 million outstanding under the Slovenian Credit Facility.

     In October 2000, NuevaTel, S.A. (“NuevaTel”), a subsidiary of WWI, entered into a bridge loan facility (“Bolivian Bridge Loan”) to provide funding for the build-out and implementation of NuevaTel’s network in Bolivia. WWI has guaranteed its pro rata share (71.5%), based upon its ownership interest in NuevaTel, of the Bolivian Bridge Loan. The loan was originally scheduled to mature in its entirety in October 2002. Currently, the maturity date of the Bolivian Bridge Loan has been extended to August 19, 2003 and may be extended to September 30, 2003 at the sole discretion of the lender. Minimum net worth and capitalization covenants have also been extended. In March 2003, the Overseas Private Investment Corporation (“OPIC”) approved a $50 million loan guarantee for the refinancing of the Bolivian Bridge Loan (“Bolivian Refinancing”). The final terms of the Bolivian Refinancing are still being negotiated with prospective lenders. We expect, but there can be no assurance, the Bolivian Bridge Loan will be refinanced in the third quarter of 2003 at which time WWIC will be required to provide $11.6 million as cash collateral for a letter of credit in favor of OPIC until such time as NuevaTel satisfies certain financial and other conditions. Until the Bolivian Refinancing is finalized, we intend to seek additional extensions of the Bolivian Bridge Loan maturity date, but there can be no assurance that any necessary extension will be granted or that the Bolivian Refinancing will be consummated. As of June 30, 2003, the outstanding amount under the Bolivian Bridge Loan was $34.7 million and the facility was fully drawn.

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     tele.ring has a 185 million euro term loan facility (the “tele.ring Term Loan”). As of June 30, 2003, $198.7 million, including accrued interest, was outstanding under the tele.ring Term Loan and 25 million euro was available to borrow.

     The maturities of our aggregate long-term debt, including that due within one year and classified as current are:

			Six
			months
			ending												There-
	Total		2003		2004		2005		2006		2007		2008		after
	(Dollars in millions)
Domestic	$	2,254.3	$	53.1	$	156.1	$	256.1	$	519.1	$	504.9	$	645.0	$	120.0
International		328.1		124.1		9.7		65.3		129.0		0.0		0.0		0.0
Total	$	2,582.4	$	177.2	$	165.8	$	321.4	$	648.1	$	504.9	$	645.0	$	120.0

     Subsequent to the end of the quarter, we used the proceeds from the 2013 Notes, the 2023 Notes and the sale of our minority interest in VIP-Net GSM d.o.o. to prepay $400 million of the Credit Facility, applied to earliest maturities first, as provided for under the Credit Facility amendment. The remainder of the proceeds will be used to redeem the 2006 Notes and 2007 Notes, as previously discussed. The following table represents the aggregate amounts of principal maturities taking the previously mentioned transactions into consideration:

			Six
			months
			ending												There-
	Total		2003		2004		2005		2006		2007		2008		after
	(Dollars in millions)
Domestic	$	2,071.3	$	0.1	$	0.1	$	150.1	$	326.1	$	302.9	$	572.0	$	720.0
International		328.1		124.1		9.7		65.3		129.0		0.0		0.0		0.0
Total	$	2,399.4	$	124.2	$	9.8	$	215.4	$	455.1	$	302.9	$	572.0	$	720.0

     None of our international loan facilities have recourse to Western Wireless Corporation. As previously discussed, WWI and/or certain of its subsidiaries have severally guaranteed the Bolivian Bridge Loan and the Slovenian Credit Facility.

     Our domestic business plans include capital expenditures during 2003. Our projected capital expenditures for 2003 are estimated to be $168 million. The increase is due to additional network infrastructure needed to support GSM roaming agreements offset by lower than anticipated prices for CDMA equipment. For the remainder of 2003 we anticipate spending approximately $105 million in capital expenditures for the continued improvements to our domestic network and back office infrastructure.

     For 2003, WWI’s business plans include funding for capital expenditures and operating losses. Current business plans estimate that WWI entities will spend approximately $45 million for capital expenditures during the remainder of 2003. WWI plans to fund these needs through local foreign borrowings, including the tele.ring Term Loan, the Bolivian Refinancing, and contributions and advances from Western Wireless. It is anticipated that the net contributions and advances for the remainder of 2003 from Western Wireless will be approximately $25 million.

     We believe that domestic and international operating cash flow and available international loan facilities will be adequate to fund our remaining 2003 domestic and international capital expenditures and working capital requirements. For the remainder of 2003, our domestic business plans do not indicate a need to borrow under the Credit Facility, even though borrowing capacity exists. Our domestic and international operating cash flow is

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dependent upon, among other things: (i) the amount of revenue we are able to generate from our customers; (ii) the amount of operating expenses required to provide our services; (iii) the cost of acquiring and retaining customers; and (iv) our ability to grow our customer base. In order to comply with debt covenants contained in the Credit Facility and the 2013 Notes or in the event an amendment is not granted to us under the Slovenian Credit Facility, or we are unable to complete the Bolivian Refinancing, we may be required to curtail capital spending, reduce expenses, or otherwise modify our planned operations and/or seek additional debt or equity at the domestic or international level and/or restructure or refinance our existing financing arrangements.

     Our ability to raise additional capital, if necessary, is subject to a variety of factors, including: (i) the commercial success of our operations; (ii) the volatility and demand of the capital markets; (iii) conditions in the economy generally and the telecommunications industry specifically; and (iv) other factors we cannot presently predict with certainty. There can be no assurance that such funds will be available on acceptable terms, if at all.

     In April 2003, we filed a Form S-3 as a shelf registration statement (the “Shelf Registration Statement”) with the SEC. In addition, we have agreed to file a shelf registration statement with the SEC to register the resale of the 2023 Notes and the shares of Class A common stock issuable upon their conversion. In the event certain registration defaults relating to the filing, effectiveness or availability of that shelf registration statement exist, then for the first 90-day period that such default exists the annual rate of interest on the 2023 Notes will increase by 0.25%. For any additional days that such a registration default exists, the annual rate of interest on the 2023 Notes will increase by 0.50%. We have also agreed to file a registration statement pursuant to which we will either offer to exchange the 2013 Notes for substantially similar notes that are registered or, in certain circumstances, register the resale of the 2013 Notes. In the event certain registration defaults relating to the filing, effectiveness or availability of the registration statement exist, then for each 90-day period that such default exists the annual rate of interest on the 2013 Notes will increase by 0.25% to a maximum of 1.00%. We intend to file additional registration statements as well as use the Shelf Registration Statement to effect these registrations.

     Net cash provided by operating activities was $134.6 million for the six months ended June 30, 2003. Adjustments to the $18.8 million net income to reconcile to net cash provided by operating activities included: (i) $138.7 million of depreciation and amortization; (ii) $9.8 million in deferred income taxes; (iii) $40.5 million gain on sale of Croatian joint venture; and (iv) $7.6 million for loss on asset dispositions. Net cash provided by operating activities was $91.7 million for the six months ended June 30, 2002.

     Net cash used in investing activities was $31.3 million for the six months ended June 30, 2003. Investing activities for the period consisted primarily of (i) $99.8 million in purchases of property and equipment, of which $35.5 million was related to WWI, and; (ii) $69.6 million in proceeds from sale of Croatian joint venture. Net cash used in investing activities was $183.2 million for the six months ended June 30, 2002.

     Net cash provided by financing activities was $84.0 million for the six months ended June 30, 2003. Financing activities for such period consisted primarily of additions to long-term debt of $139.5 million and repayments of long-term debt amounting to $56.0 million. Net cash provided by financing activities was $85.4 million for the six months ended June 30, 2002.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market Risk Management

     We are exposed to various market financial risks, including changes in interest rates, fair value of debt and foreign currency rates. As part of our risk management program, we utilize interest rate caps, swaps and collars to hedge a portion of our variable rate interest risk.

Interest Rate Risk

     Our domestic operations have variable rate debt that, at June 30, 2003 and 2002, had an outstanding balance of $2.0 billion and $1.8 billion, respectively. The fair value of such debt approximates the carrying value. At June 30, 2003 and 2002, of this variable rate debt, $1.0 billion and $0.7 billion were hedged using interest rate caps, swaps and collars, respectively. These caps, swaps and collars expire at various dates between September 2003 and March 2006. The hedges in effect at June 30, 2003, fixed LIBOR between 1.30% and 7.75%. At June 30, 2002, these hedges fixed LIBOR between 4.91% and 7.75%. Based on our domestic unhedged variable rate obligations outstanding at June 30, 2003 and 2002, a hypothetical increase or decrease of 10% in the LIBOR rate would have increased or decreased our domestic interest expense for the six month periods then ended by approximately $0.6 million and $1.2 million, respectively.

     In 2003, our domestic operations entered into interest rate swaps with a total notional value of $296 million which convert fixed rate debt to variable rate debt. The interest rate swaps qualify as hedges of the fair value of $100 million of the 10-1/2% Senior Subordinated Notes due June 2006 (the “2006 Notes”) and all of the 10-1/2% Senior Subordinated Notes due February 2007 (the “2007 Notes”). The interest rate swaps expire on the 2006 Notes and 2007 Notes respective maturity dates and are callable at the option of the issuer. We will pay a floating rate of interest equal to the three month LIBOR plus a fixed spread, ranging from 7.45% to 7.75%, and receive fixed rate payments of 10.50% in return. The fair value of the interest rate swaps were $4.0 million at June 30, 2003. Assuming a hypothetical increase or decrease of 10% in interest rates, the fair value of the interest rate swaps and 2006 Notes and 2007 Notes would have changed by approximately $1.7 million at June 30, 2003.

     Our international operations also have variable rate debt that, at June 30, 2003 and 2002, had an outstanding balance of approximately $305.4 million and $166.9 million, respectively. The fair value of such debt approximates the carrying value at June 30, 2003. Of this variable rate debt, $44.6 million is hedged at June 30, 2003 using an interest rate swap, which fixes EURIBOR at 4.94% through November 2009. Based on WWI’s unhedged variable rate obligations outstanding at June 30, 2003 and 2002 a hypothetical increase or decrease of 10% in the weighted average variable interest rate would have increased or decreased our international interest expense for the six month periods then ended by approximately $0.4 million and $0.2 million, respectively. The potential increases or decreases discussed above are based on certain simplifying assumptions, including a constant level of variable rate debt for all maturities and an immediate, across-the-board increase or decrease in the level of interest rates with no other subsequent changes for the remainder of the period.

Foreign Currency Risk

     Currently, 13% of our total international segment revenues is denominated in U.S. dollars. Certain of our international subsidiaries have functional currencies other than the U.S. dollar and their assets and liabilities are translated into U.S. dollars at exchange rates in effect at the balance sheet date. Income and expense items are translated at the average exchange rates prevailing during the period. A 10% appreciation in the U.S. dollar would have resulted in an approximately $4.4 million and $4.0 million decrease in loss from continuing operations before provision for income taxes during the six months ended June 30, 2003 and 2002, respectively. A change in such loss

34

would have resulted from applying a different exchange rate to translate and revalue the financial statements of our international subsidiaries with functional currencies other than the U.S. dollar.

     Our Slovenian operations, whose functional currency is the Slovenian Tolar, had variable rate debt, including accrued interest, of approximately $77.4 million and $43.4 million, at June 30, 2003 and 2002, respectively, denominated and repayable in euros. Our Austrian operations, whose functional currency is the euro, had variable rate debt, including accrued interest, of approximately $198.7 million and $93.6 million, at June 30, 2003 and 2002, respectively, denominated and repayable in euros. A 10% appreciation in the euro as compared to the Slovenian Tolar would have resulted in approximately $7.4 million and $4.0 million increase in loss from continuing operations before provision for income taxes during the six month periods ended June 30, 2003 and 2002, respectively. A change in such loss would have been the result of an unrealized foreign exchange loss. A 10% appreciation in the euro and Slovenian Tolar as compared to the U.S. dollar would have resulted in approximately $31.8 million increase in debt outstanding at June 30, 2003 and an approximately $15.2 million increase in debt outstanding at June 30, 2002, with an offsetting currency translation adjustment.

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Item 4. Controls and Procedures

(A)     Evaluation of Disclosure Controls and Procedures

     As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chairman and Chief Executive Officer along with our Executive Vice President and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon that evaluation, our Chairman and Chief Executive Officer and Executive Vice President and Chief Financial Officer concluded that our disclosure controls and procedures are effective in timely alerting them to material information relating to us (including our consolidated subsidiaries) required to be included in our periodic SEC filings.

(B)     Changes in Internal Control over Financial Reporting

     There have been no changes in internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially effect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

     There are no material, pending legal proceedings to which we or any of our subsidiaries is a party or of which any of their property is subject which, if adversely decided, would have a material adverse effect on the Company.

     In May 2003, the Federal Communications Commission (the “FCC”) released a Notice of Apparent Liability for Forfeiture proposing that we be held liable for a $200,000 fine for allegedly failing to comply with the FCC’s environmental rules by not obtaining proper authorization prior to constructing and operating an antenna tower in North Dakota. We are contesting this proposed finding and are currently assessing any other options available to us. We believe the final outcome with the FCC will not have a material impact on our financial position, results of operations or cash flows.

Item 2. Changes in Securities and Use of Proceeds

     In June 2003, we issued and sold $115 million of 4.625% Convertible Subordinated Notes due 2023 (the “2023 Notes”) in a private placement to Qualified Institutional Buyers (as such term is defined in the Securities Act) in reliance on Rule 144A of the Securities Act. Citigroup Global Markets Inc., J.P. Morgan Securities, Inc. and Wachovia Securities, Inc. were the initial purchasers of the 2023 Notes. The discount to the initial purchasers was 2.75%, or $3,126,500, resulting in net proceeds to us of $111,837,500 (before deducting offering expenses payable by us). The 2023 Notes are convertible into Class A common stock at a per share price of $15.456, subject to adjustment, at any time or, at our option, an equivalent amount of cash in lieu of shares of common stock.

Item 3. Defaults upon Senior Securities

     None.

Item 4. Submission of Matters to a Vote of Security Holders

     The Annual Meeting of Shareholders was held on May 29, 2003. The following matters were voted upon at the meeting and received the number of votes indicated:

1. To elect eight directors to serve until the Annual Meeting of Shareholders for 2003 and until their respective successors are elected and qualified.

	For		Withheld
John W. Stanton		127,366,160		7,377,780
John L. Bunce		132,644,378		2,099,562
Mitchell R. Cohen		132,817,152		1,926,788
Daniel J. Evans		133,102,309		1,641,631
Theresa E. Gillespie		127,340,602		7,403,338
Jonathan M. Nelson		132,727,633		2,016,307
Mikal J. Thomsen		126,994,278		7,749,662
Peter H. van Oppen		132,513,238		2,230,702

2. To ratify the selection of PricewaterhouseCoopers LLP as our independent auditors for 2002 and 2003.

For:	133,842,531
Against:	888,123
Abstain:	13,287

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3. To amend the Western Wireless Corporation 1994 Management Incentive Stock Option Plan to increase the number of shares available for issuance there under by 2,500,000 shares.

For:	133,433,544
Against:	1,280,052
Abstain:	30,344

Item 5. Other Information

     None.

Item 6. Exhibits and Reports On Form 8-K

(a) Exhibit Description

Exhibit	Description
4.5	Western Wireless Corporation hereby agrees to furnish the Securities and Exchange Commission, upon its request, a copy of any instrument which defines the rights of holders of long-term debt of Western Wireless Corporation and all of its subsidiaries for which consolidated or unconsolidated financial statements are required to be filed, and which does not exceed 10% of the total assets of Western Wireless Corporation and its subsidiaries on a consolidated basis.
10.36	Western Wireless Corporation Executive Restricted Stock Plan, as amended through May 2003
10.37	Master Purchase and License Agreement between Western Wireless Corporation and Nortel Networks, Inc. dated July 16, 2003
10.38	First Amendment to Loan Agreement, dated as of July 9, 2003 relating to the Loan Agreement, dated as of April 25, 2000
12.1	Computation of Ratio of Earnings to Fixed Charges.
31.1	Certification of John W. Stanton, Chairman and Chief Executive Officer of Western Wireless Corporation, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a))
31.2	Certification of M. Wayne Wisehart, Executive Vice President and Chief Financial Officer of Western Wireless Corporation, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a))
32.1	Certification of John W. Stanton, Chairman and Chief Executive Officer of Western Wireless Corporation, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)
32.2	Certification of M. Wayne Wisehart, Executive Vice President and Chief Financial Officer of Western Wireless Corporation, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

(b)	Reports on Form 8-K
	A Form 8-K was filed on April 14, 2003 for the purpose of reporting, under Item 5, a reconciliation of certain non-GAAP financial measures with the most directly comparable financial measures calculated in accordance with GAAP previously disclosed by the Company for the year ended December 31, 2002.
	A Form 8-K was furnished on May 1, 2003 and amended on May 2, 2003 on Form 8-K/A, for the purpose of reporting, under Items 9 and 12, the Company’s financial and operating results for the quarter ended March 31, 2003.
	A Form 8-K was filed on June 4, 2003 for the purpose of reporting, under Item 5, the sale of the Company’s 19% interest in VIP-Net d.o.o., a Croatian wireless operator.

38

A Form 8-K was filed on June 6, 2003 for the purpose of reporting, under Item 5, completion of the Company’s offering of $100 million Convertible Subordinated Notes due 2023.

A Form 8-K was filed on June 16, 2003 for the purpose of reporting, under Item 5, completion of the sale of an additional $15 million principal amount of the $100 million Convertible Subordinated Notes due 2023.

A Form 8-K was filed on June 25, 2003 for the purpose of reporting, under Item 5, completion of the sale of the Company’s 19% interest in VIP-Net d.o.o, a Croatian wireless operator.

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Western Wireless Corporation

By:	/s/ M. WAYNE WISEHART	By:	/s/ SCOTT SOLEY
	M. Wayne Wisehart		Scott Soley
	Executive Vice President and		Vice President and Controller
	Chief Financial Officer		(Chief Accounting Officer)

Dated: August 8, 2003

40

EXHIBIT INDEX

Exhibit	Description
4.5	Western Wireless Corporation hereby agrees to furnish the Securities and Exchange Commission, upon its request, a copy of any instrument which defines the rights of holders of long-term debt of Western Wireless Corporation and all of its subsidiaries for which consolidated or unconsolidated financial statements are required to be filed, and which does not exceed 10% of the total assets of Western Wireless Corporation and its subsidiaries on a consolidated basis.
10.36	Western Wireless Corporation Executive Restricted Stock Plan, as amended through May 2003
10.37	Master Purchase and License Agreement between Western Wireless Corporation and Nortel Networks, Inc. dated July 16, 2003
10.38	First Amendment to Loan Agreement, dated as of July 9, 2003 relating to the Loan Agreement, dated as of April 25, 2000
12.1	Computation of Ratio of Earnings to Fixed Charges
31.1	Certification of John W. Stanton, Chairman and Chief Executive Officer of Western Wireless Corporation, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a))
31.2	Certification of M. Wayne Wisehart, Executive Vice President and Chief Financial Officer of Western Wireless Corporation, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a))
32.1	Certification of John W. Stanton, Chairman and Chief Executive Officer of Western Wireless Corporation, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)
32.2	Certification of M. Wayne Wisehart, Executive Vice President and Chief Financial Officer of Western Wireless Corporation, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

41 EX-10.36 3 v91789exv10w36.txt EXHIBIT 10.36 EXHIBIT 10.36 WESTERN WIRELESS CORPORATION EXECUTIVE RESTRICTED STOCK PLAN ADOPTED BY THE BOARD: JANUARY 1, 1997 ADOPTED BY THE SHAREHOLDERS: MAY 21, 1997 AMENDED BY THE SHAREHOLDERS: MAY 29, 2003 TERM: JANUARY 1, 1997 TO DECEMBER 31, 2006 1. PURPOSE. This Executive Restricted Stock Plan (this "Plan") allows Western Wireless Corporation (the "Company") to grant stock bonuses or sell stock to its key officers and employees, and is intended to promote the interests of the Company and its shareholders by aligning the interests of the Company executives with Company shareholders. The stock to be issued pursuant to this Plan will be Restricted Stock, as defined in 3 below, and as such will be subject to certain restrictions, described herein, that are imposed to promote the purposes hereof. 2. ADOPTION AND ADMINISTRATION OF PLAN. This Plan shall become effective as of January 1, 1997 and shall remain in effect until December 31, 2006 unless sooner terminated as herein provided. Adoption of this Plan and any issuances of Restricted Stock hereunder prior to the annual meeting of the shareholders of the Company held during calendar year 1997 are subject to approval of the Plan by shareholders at such time. This Plan shall be administered by the Company's Board of Directors (the "Board"), provided that the Board may delegate its administrative responsibilities hereunder to a committee of not less than three directors who shall administer this Plan in the name of the Board (the "Committee"). As used hereafter herein, the term "Committee" shall refer to the Board if no Committee then exists or is then designated. So long as the Company is a reporting company under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), each member of the Committee who participates in administration must be a "Non-Employee Director" as that term is defined in Rule 16b(3) promulgated by the Securities and Exchange Commission pursuant to the Exchange Act. All members of the Committee shall also be "outside directors" within the meaning of section 162(m) ("Section 162(m)") of the Internal Revenue Code of 1986, as amended. The Committee shall have full power and authority to (i) administer and interpret this Plan, (ii) make all grants, offers, bonuses, and awards hereunder and (iii) adopt, from time to time, such guidelines, rules, regulations, agreements, and instruments for the administration of this Plan as the Committee deems necessary or advisable. Such powers include, but are not limited to (subject to the specific limitations described herein), authority to determine the employees to be issued Restricted Stock under this Plan, to determine the size, type, and applicable restrictions, performance criteria, terms and conditions of issuances to be made to such employees, to determine a time when issuances will occur, and to authorize issuances to eligible employees. The Committee shall have absolute discretion in any determination of whether any particular performance goal in any grant has been achieved or restriction has lapsed. The Committee shall prepare guidelines for notification to holders of Restricted Stock with performance based restrictions as to whether any such performance criteria have been met, and upon determination that the criteria have been met the Committee shall have the obligation to deliver written confirmation of the same to each holder of Restricted Stock within 30 days following achievement of the performance goal. The Committee shall also establish a mechanism to allow the removal of restrictive legends promptly after the achievement of the applicable performance criteria. The Committee's interpretations of this Plan, and all actions taken and determinations made by the Committee concerning any matter arising under or with respect to this Plan or any issuances of Restricted Stock pursuant to this Plan, shall be final, binding, and conclusive on all interested parties, including the Company, its shareholders, and all former, present, and future employees of the Company. At such time as the Company is not subject to the reporting requirements of the Exchange Act, the Committee may delegate some or all of its power and authority hereunder to the Chairman or Chief Executive Officer of the Company, such delegation to be subject to such terms and conditions as the Committee in its discretion shall determine. Such delegation of authority may be contained in guidelines, rules, and regulations adopted by the Board from time to time with respect to this Plan. The Committee may, as to questions of accounting, rely conclusively upon any determinations made by independent public accountants of the Company. 3. STOCK SUBJECT TO PLAN. There is hereby established a reserve (the "Reserve"), out of the Company's authorized but unissued stock, of 1,300,000 shares of the Company's Class A Common Stock, no par value per share (the "Restricted Stock"), for issuance under this Plan. As grants, offers, bonuses and awards are made, the Reserve shall be reduced by the number of shares of Restricted Stock issued. Any shares of Restricted Stock that are forfeited by the holder shall be added back to the Reserve. Any shares with respect to which restrictions have lapsed shall not be eligible to be added back to the Reserve. If the shares of Class A Common Stock of the Company should, as a result of a stock split, stock dividend, combination of shares, or any other change or exchange for other securities by reclassification, reorganization, redesignation, merger, consolidation, recapitalization or otherwise, be increased or decreased or changed into, or exchanged for, a different number or kind of shares of stock or other securities of the Company or of another corporation, the number of shares of Restricted Stock then remaining in the Reserve shall be appropriately adjusted to reflect such action. If any such adjustment shall result in a fractional share, such fraction shall be disregarded. Upon the issuance of shares of Restricted Stock pursuant to this Plan, the Reserve will be reduced by the number of shares issued. Notwithstanding any other provision hereof, no single employee may at any single time receive a grant, offer, bonus, or award of Restricted Stock in excess of 33.33 percent of the shares of Restricted Stock remaining at such time in the Reserve. 4. ELIGIBILITY. The Committee will designate, from time to time, key executives of the Company or any of its subsidiaries, parents or affiliates (including officers and directors of the Company), engaged in activities which further the Company's objectives, who will be eligible to obtain shares under this Plan and the number of shares of Restricted Stock of the Company to be issued to each. In selecting the persons to whom offers to obtain shares hereunder will be made and in determining the number of shares to be offered, the Committee will consider the position and responsibilities of such persons, the value of their services to the Company or its subsidiaries, and such other factors as the Committee deems pertinent. 5. RIGHTS TO RESTRICTED STOCK. (a) Restricted Stock Offers. After the Committee has determined to offer a person the right to obtain Restricted Stock under this Plan, it will advise the offeree in writing of the offer's terms, including the number of shares which such person will be entitled to obtain, the price per share, if any, and any other terms, conditions, and restrictions relating thereto (the "Restricted Stock Offer"). This notice will also provide that such person has 15 days from the date of the Restricted Stock Offer to accept the offer in the manner set forth in the Restricted Stock Offer. The form by which the Restricted Stock Offer will be made is attached hereto and incorporated herein as Exhibit A, and the same may be amended from time-to-time at the discretion of the Committee. The Committee may also, in the exercise of its discretion, extend the Restricted Stock Offer's acceptance or effective term. Subject to this Plan's express provisions, the Committee may make any such Restricted Stock Offer subject to any terms and conditions it establishes, and the Restricted Stock Offers made to different persons, or to the same person at different times, may be subject to terms, conditions and restrictions which differ from each other. (b) Special Performance Awards. In connection with any Restricted Stock Offer to any one of the five most highly compensated officers of the Company, in order to comply with limitations imposed by Section 162(m) while retaining the flexibility to ensure that executive compensation is tied to performance and reward executives consistent with the Company's compensation philosophy, all or part of the shares covered by a Restricted Stock Offer may be designated as a Special Performance Award, as to which the restrictions on shares so designated shall only be removed and the shares shall only become freely tradable by the holder thereof if certain pre-established performance goals are met during a specified 2 performance period as set by the Committee. Restrictions on shares subject to a Special Performance Award granted to any individual whose compensation from the company is covered by Section 162(m) of the Code shall be removed only after the Committee certifies in writing that the performance goals have been met. The Committee shall establish Performance Periods of any duration or with respect to any criteria, which may overlap and which may differ for each executive, but shall not exceed ten years. Prior to the end of 90 days following the commencement of each Performance Period, the Committee shall establish specific and objective performance goals for the Performance Period and a specific formula in connection with such performance goals for the removal of restrictions. The performance goals shall be based on one of more of the following performance measures, or other specific measures determined from time to time by the Committee: growth; financial results; and quality, productivity and efficiency. (i) Growth shall be measured in terms of increases one or more of the following: number of license areas served, number of subscribers, and revenue. Customer growth shall be measured in terms of one or more of the following: number of new customers; number of net new customers; revenue per new customer; and level of customer churn. (ii) Financial results shall be measured in terms of one or more of the following relating to the Company as a whole or a particular operating unit: operating cash flow; free cash flow; cash operating income (Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA")); net income; earnings per share; total stockholder return; and relative stockholder return. (iii) Quality, productivity and efficiency shall be measured in terms of one or more of the following: customer and employee satisfaction; quantitative measures of system and customer service performance; and the cost of acquiring and cost of serving customers. 6. TERMS OF RESTRICTED STOCK OFFERS. (a) Price. The Committee will determine if there is to be a purchase price of the shares being offered under this Plan, and if so shall set the price. If there is no purchase price, the Restricted Stock Offer will be treated as a Restricted Stock bonus. Whether or not there is a purchase price, the offeree must accept the offer in a timely manner to receive the offered Restricted Stock. The purchase price, if any, must be paid in full, in cash or certified or bank check, at the Company's principal office before the offer expires, for the Restricted Stock Offer's acceptance to be effective. The date upon which the Restricted Stock Offer is finally accepted and the purchase price, if any, is paid is sometimes hereinafter called the "Closing Date." (b) Restrictions. By accepting the Restricted Stock under this Plan being offered to him or her, an offeree agrees and consents to all terms, conditions, and restrictions contained in the Restricted Stock Offer and to the following (unless the Restricted Stock Offer by its terms indicates the following shall not apply): (i) Any transfer or purported transfer made by a purchaser of shares under this Plan, except at the times and in the manner specified herein and in the Restricted Stock Offer, will be null and void and the Company shall not recognize or give effect to such transfer on its books and records or recognize the person or persons to whom such proposed transfer has been made as the legal or beneficial holder of those shares. (ii) Notwithstanding anything in this Plan to the contrary, upon the death of a holder of shares of Restricted Stock subject to this Plan, such shares may be conveyed by will or by the laws of descent and distribution, subject to the provisions of this Plan and to applicable provisions of any other Agreement by which the Company may be bound. Any successor in interest to the holder in such event may not further convey, transfer, encumber or otherwise dispose of such shares except as provided herein. 3 (iii) Certificates representing shares which are subject to this Plan will bear the following legend, in addition to such other legends as counsel to the Company may deem appropriate: RESTRICTED SHARES "The shares represented by this certificate are restricted and subject to (i) all terms, conditions, and restrictions of the Western Wireless Corporation Executive Restricted Stock Plan, and (ii) the terms of the Restricted Stock Offer pursuant to which the shares represented hereby were originally issued, copies of which are on file and available for inspection during normal business hours at the principal offices of Western Wireless Corporation." 7. EVENTS OF RESALE. If any of the following events ("Events of Resale") occurs or, having occurred, continues in effect, on or before the date all restrictions in this Plan or in the Restricted Stock Offer have lapsed with respect to particular shares of Restricted Stock, the holder will sell to the Company and the Company will purchase from the holder all the Restricted Stock obtained by the holder under this Plan that remains subject to such restrictions. With respect to any shares of Restricted Stock to which the restrictions herein or in the Restricted Stock Offer no longer apply, this provision shall not apply. The price per share in the case of Restricted Stock subject hereto shall equal the original price paid by the holder for such shares, and if there is no purchase price, then without payment therefore: (a) if the employment of the offeree by the Company or its subsidiaries is terminated other than by reason of the offeree's death or permanent and total disability (as defined in the Company's 1994 Management Incentive Stock Option Plan); (b) if an offeree who is not an employee, having been nominated as a director of the Company, fails or refuses to stand for election or, if elected, to serve as such or resigns as a director; or (c) if the offeree receives shares of Restricted Stock subject to any other Event of Resale in the Restricted Stock Offer, and such Event of Resale Occurs. Within 30 days after such an occurrence, the Company, by notice to the holder, will state that an Event of Resale has occurred and will specify a date not less than five, and not more than ten, days from the date of such notice to consummate the purchase and sale of such shares at the Company's principal office. At the closing, the holder will deliver to the Company certificates representing all of the shares purchased hereunder, and duly endorsed with all necessary transfer stamps affixed. Upon the receipt of such share certificates, the Company will deliver to the holder a check in the amount of the purchase price, if any. If the holder fails to deliver the share certificates to the Company at the closing, the Company may deposit the purchase price, if any, with the Secretary of the Company, and thereafter the shares will be deemed to have been transferred to the Company and the holder, despite the holder's failure to deliver the share certificates, will have no further rights derived from such shares as a stockholder of the Company. In this event, the Secretary of the Company will continue to hold the purchase price, if any, for such shares and will make payment thereof, without interest, upon delivery of the share certificates to the Company, accompanied by the appropriate endorsements. 8. EXPENSES. The Company will pay all expenses and costs in connection with the administration of this Plan. 9. NO PRIOR RIGHT OF OFFER. 4 Nothing in this Plan will be deemed to give any director, officer, or employee, or such individual's legal representatives or assigns, or any other person or entity claiming under or through such individual, any contractual or other right to participate in the benefits of this Plan. 10. INDEMNIFICATION OF THE COMMITTEE. In addition to such other rights or indemnification as they may have, the Company will indemnify members of the Committee against all costs and expenses reasonably incurred by them or any of them in connection with: any action, suit, or proceeding to which they or any of them may be a party by reason of any action taken, or failure to act, under or in connection with this Plan or any award granted pursuant thereto and against all amounts paid by them in settlement thereof (provided such settlement is approved by legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any action, suit or proceeding; provided that upon institution of any such action, suit, or proceeding, the person desiring indemnification gives the Company an opportunity, at its own expense, to handle and defend the same. 11. AMENDMENT AND TERMINATION OF PLAN; AMENDMENT OF TERMS OF GRANTS The Board may at any time terminate or extend this Plan, or modify this Plan as it deems advisable; provided, that any amendment or extension required by Section 162(m) to be approved by the Shareholders shall be effective subject to such approval within twelve months of adoption by the Board. No termination or amendment of this Plan shall, without the consent of any person affected thereby, modify or in any way affect any right or obligation created prior to such termination or amendment. The Board may amend the terms and conditions of outstanding Restricted Stock Offers or Restricted Stock, provided, however, that (i) no such amendment would be adverse to the holders thereof, and (ii) the amended terms would be permitted under this Plan. Subject to the provisions of Section 162(m) as applicable, in the event of (i) any change in the business or condition of the Company, including any change in connection with mergers, reorganizations, separations, or other transaction to which Section 424(a) of the Code would apply if applicable, or (ii) or in the event of any changed circumstances in the duties and/or responsibilities of any employee holding Restricted Stock when restrictions are specific to performance of duties or responsibilities that have changed, the Committee shall have discretion as to adjustment or removal of any or all restrictions of any Restricted Stock, and in the event thereof any adjustments by the Committee of restrictions shall attempt to as closely as possible establish restrictions that have the same intent and effect as the original performance based restrictions. 12. LIABILITY OF COMPANY. The Company's liability under this Plan and any sale made hereunder is limited to the obligations set forth with respect to such sale and nothing in this Plan will be construed to impose any liability on the Company in favor of the purchaser with respect to any loss, cost, or expense which the purchaser may incur in connection with, or arising out of, any transaction in connection therewith. 13. NO AGREEMENT TO EMPLOY. Nothing in this Plan will be construed to constitute, or evidence, an agreement or understanding, express or implied, by the Company to employ or retain the purchaser for any specific period of time. 14. PURCHASE AGREEMENT. Any Restricted Stock Offer made hereunder, as accepted, may be embodied in a Restricted Stock Agreement containing such terms and conditions, not inconsistent with this Plan, as will, in the opinion of the Committee and counsel for the Company, be necessary or desirable to protect the Company. For all purposes thereafter, the Restricted Stock Agreement will be the Restricted Stock Offer as referenced herein. 15. FEDERAL INCOME TAX CONSEQUENCES. 5 The federal income tax consequences of a person's acquisition of Restricted Stock pursuant to this Plan are complex and subject to change. The following discussion, which has been prepared by the law firm of Preston Gates & Ellis LLP, counsel to the Company, is only a summary of the general rules applicable at the time of adoption of this Plan by the Board to the acquisition of stock subject to restrictions that are linked to the continued performance of services. It is based on the Internal Revenue Code of 1986, as amended (the "Code), the Regulations promulgated thereunder, and judicial and administrative interpretations thereof, all as currently in effect. These laws, Regulations and interpretations are subject to change, potentially retroactively. Further, a person's particular situation may be such that some variation of these general rules would apply. ACCORDINGLY, IT IS STRONGLY RECOMMENDED THAT EACH PERSON WHO MAY RECEIVE RESTRICTED STOCK PURSUANT TO THIS PLAN CONSULT WITH HIS OR HER OWN TAX ADVISOR REGARDING THE IMPLICATIONS OF THE RECEIPT OF RESTRICTED STOCK AND THE FILING OF A SECTION 83(B) ELECTION. Generally, a person who receives Restricted Stock who is an employee, officer or director of the Company, or otherwise provides services to the Company (a "Restricted Stock Holder") will be treated as receiving stock that is subject to a "substantial risk of forfeiture" for federal income tax purposes. This is because the Restricted Stock is subject to redemption by the Company if a Restricted Stock Holder's employment terminates under certain circumstances and may be unsaleable by the Restricted Stock Holder unless certain other events occur, such as the achievement of particular personal or Company performance goals. As a result, a Restricted Stock Holder will not be subject to tax, as a general matter, on his or her acquisition of the Restricted Stock but will be subject to federal income tax at such time as such Restricted Stock vests (i.e., is, in whole or in part, no longer subject to a redemption right on the part of the Company or the other restrictions on sale). At that time, a Restricted Stock Holder will recognize ordinary compensation income per share in an amount equal to the difference between what he or she paid for the share of Restricted Stock and the value of such share at such later time. Such compensation income is subject to federal income tax withholding as well as to Social Security (FICA) taxes and unemployment taxes. If a Restricted Stock Holder makes an election under Section 83(b) of the Code, however, a different result will apply. If this election is properly filed, then an acquired share of Restricted Stock will no longer be treated as property subject to a "substantial risk of forfeiture" for federal income tax purposes. As a result, a Restricted Stock Holder will recognize as compensation income at the time of receipt of the Restricted Stock any excess of the value of the Restricted Stock over the amount paid for such Restricted Stock. If the election is properly made, any gain subsequently realized on a sale of Restricted Stock shares would constitute capital gain, not subject to federal income tax withholding, FICA taxes or unemployment taxes. If an Event of Resale takes place and if an amount is included in the income of the Restricted Stock Holder as a result of a Section 83(b) election, the Restricted Stock Holder will not recognize a loss on the resale of the Restricted Stock to the Company (even though an amount was included in the income of the Restricted Stock Holders as a result of the Section 83(b) election). AN ELECTION UNDER SECTION 83(B) OF THE CODE MUST BE FILED WITH THE INTERNAL REVENUE SERVICE AND DELIVERED TO THE EMPLOYER OF A RESTRICTED STOCK HOLDER WITHIN THIRTY (30) DAYS AFTER THE DATE ON WHICH A RESTRICTED STOCK HOLDER RECEIVES THE APPLICABLE RESTRICTED STOCK. A FORM OF A SECTION 83(B) ELECTION IS AVAILABLE FROM THE COMPANY'S SECRETARY. 16. NOTICES. Any notice or other communication required or permitted to be made or given hereunder will be sufficiently made or given if sent by certified mail or other personal delivery service addressed to the offeree or holder at such individual's address as set forth in the Company's regular books and records and, if to the Company, addressed to it at its principal office. 6 EX-10.37 4 v91789exv10w37.txt EXHIBIT 10.37 EXHIBIT 10.37 MASTER PURCHASE AND LICENSE AGREEMENT THIS MASTER PURCHASE AND LICENSE AGREEMENT (the "Agreement") is made as of the 16th day of July, 2003 by and between Western Wireless Corporation ("Customer") and Nortel Networks Inc. ("Nortel Networks"). In consideration of the premises and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: ARTICLE 1 DEFINITIONS: CONSTRUCTION 1.1 As used in this Agreement, the following terms shall have the following meanings: (a) Acceptance (or Accepted) means, with respect to items of Equipment and Software (or a portion of a System), the earlier to occur of (i) the date upon which the applicable items of Equipment and Software (or portion of a System) have successfully completed and passed all of the applicable Acceptance Tests in accordance with Article 6, and (ii) the date upon which the In-Service Date has occurred with respect to the applicable items of Equipment and Software (or portion of a System), and with respect only to Furnish Only Equipment and Software, thirty (30) days following the applicable ship date; provided, however, that with respect to any items of Equipment and Software set forth in the first accepted Purchase Order for a New Technology, Acceptance shall occur on the earlier to occur of (A) the date upon which the applicable items of Equipment and Software have successfully completed and passed all of the applicable Acceptance Tests in accordance with Article 6, and (B) the date upon Confidential Information which (1) the In-Service Date has occurred with respect to the applicable items of Equipment and Software, and (2) such items are operating materially in accordance with the applicable Specifications; (b) Affiliate means, with respect to any person or entity, any other person or entity that, either directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with such person or entity. As used in this Agreement, "control" shall mean possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person or entity, whether through the ownership of voting securities, by contract or otherwise; (c) Agreement means this Agreement, all Attachments hereto and all appendices or attachments to the Attachments, as such may be amended from time to time; (d) Business Day means any day on which banks and foreign exchange markets are open for the transaction of business in New York, New York; (e) Documentation means all Nortel Networks documentation, whether in written or electronic form, which sets forth Specifications or operations and maintenance procedures for a System, Equipment or Software. All Documentation delivered to Customer shall be delivered in CD-ROM format and shall also be available to Customer in web-based format; (f) Effective Date means July 16, 2003; provided, however, that as set forth in Section 2.1 hereof, the Purchase Orders for the Initial Order issued by Customer and accepted by Nortel Networks prior to the date of this Agreement shall be subject to 2 all of the terms and conditions of this Agreement to the same extent as if such Purchase Orders had been issued after the Effective Date. (g) Equipment means all of the hardware, components and parts thereof purchased pursuant to this Agreement, including all of the hardware, components and parts comprising the Initial Order and all Expansions. During the Term of this Agreement, Nortel Networks shall make available to Customer all wireless telecommunications hardware, components and parts as Nortel Networks or its Affiliates may manufacture or have manufactured and which telecommunications hardware, components and parts are made available by Nortel Networks or its Affiliates and which Nortel Networks' makes generally available to its customers in the Territory. For purposes of this Agreement, the term "Equipment" shall include OEM Equipment and Reseller Equipment unless specifically stated otherwise; (h) Expansion means the Equipment, Software, Installation and other Services purchased under this Agreement for addition to or improvement of an existing system; (i) Furnish Only means Equipment and/or Software (as applicable) for which Customer shall be responsible for installation; (j) Initial Order means the Equipment, Software and Services initially ordered by Customer hereunder, as more fully described in Attachments A (which sets forth the Initial GSM Order) and Attachment B (which sets forth the New CDMA Initial Order). The Initial Order does not include Expansions to a System; (k) In-Service means the provision by a System, portion thereof or item of Equipment or Software of commercial telecommunications services to 3 Customer's subscribers. The date the System, portion thereof or item of Equipment or Software is actually placed In-Service shall be referred to as the "In-Service Date" for such System, portion thereof or item of Equipment or Software; (l) Installation (including its usage in the verb form "Install") means the complete performance and supervision by Nortel Networks of all installation of Equipment and Software for which Installation is ordered. Installation, where applicable, shall include interconnection of the Equipment at the main distribution frame of the System ("MDF") to circuits provided by Customer to the Public Switched Telephone Network ("PSTN") and the interconnection (either land-line or microwave) at the MDF between the switch Equipment and each cell site or base station location; (m) New Technology means any type of telecommunications Equipment or Software which Customer has not previously purchased or licensed from Nortel Networks under this Agreement. For purposes of clarification, GSM shall not be considered to be a New Technology, but EDGE and EVDO shall each be deemed to be a New Technology. (n) OEM Equipment means equipment or software, other than Reseller Items, which is sold or licensed by an entity other than Nortel Networks, including Affiliates of Nortel Networks, but for which Nortel Networks has the right to resell such equipment or transfer the right-to-use such software and which is sold or licensed to Customer pursuant to this Agreement. For purposes of this Agreement, the term "Equipment" shall include OEM Equipment unless specifically stated otherwise; 4 (o) Purchase Order means any purchase order issued by Customer to Nortel Networks pursuant to this Agreement or any document that the parties mutually agree upon as the vehicle for procuring Equipment, Software and Services hereunder; (p) Regulatory Claim means any enforcement or other action by any state or federal regulatory body or bodies, including the FCC, solely as such action relates to the failure of such Equipment, Software or System to perform in accordance with the applicable Specifications and such failure was due to the acts or omissions of Nortel Networks in violation of the terms and obligations of this Agreement. "Regulatory Claim" shall not include any such enforcement or similar action with respect to regulatory or other governmental requirements that were not in effect on the date the Purchase Order for the applicable Equipment or Software was accepted by Nortel Networks or arising from Customer's failure to install or have installed changes, revisions or updates by Nortel Networks that would have prevented such performance failure. (q) Reseller Items means equipment or software which (i) is labeled with the brand and/or trademark of an entity other than any brand or trademark owned or licensed by Nortel Networks or any Affiliate of Nortel Networks, (ii) is not integrated into or with Nortel Networks' Equipment, and (iii) is sold or licensed by an entity other than Nortel Networks or its Affiliates, but for which Nortel Networks has the right to resell such equipment or transfer the right-to-use such software and which is sold or licensed to Customer pursuant to this Agreement. (r) Services means those services mutually agreed upon to be provided by Nortel Networks to Customer hereunder. Services shall include all 5 Installation services, training, maintenance, repair and replacement services, warranty services, Acceptance Testing services, project management services and any other services provided by Nortel Networks to Customer pursuant to this Agreement. Nortel Networks shall make available to Customer all Services offered by Nortel Networks or its Affiliates that Nortel Networks makes generally available to its customers in the Territory; (s) Software means all computer software licensed by Customer pursuant to this Agreement which is necessary for the use, operation and maintenance of a System or item of Equipment so that such System or Equipment meets, and operates in accordance with, the Specifications, and includes computer programs contained on a magnetic tape, in a semiconductor device, or in another memory device or system memory consisting of hardwired logic instructions which manipulate data in central processors, control input-output operations, and error diagnostic and recovery routines, and instruction sequences in machine-readable code that control call processing, peripheral equipment, and administration and maintenance functions as well as associated Documentation used to describe, maintain, and use the programs. Software includes Software Updates and Software Releases. Nortel Networks shall make available to Customer all Software offered by Nortel Networks or its Affiliates that Nortel Networks makes generally available to its customers in the Territory; (t) Software Releases means the periodic "left of the decimal point" updates which contain problem fixes, new features and functionality and/or enhancements for which Customer is granted a right-to-use pursuant to this Agreement, but shall not include Software Updates; 6 (u) Software Updates means the "right of the decimal point" corrections, updates or enhancements issued by Nortel Networks to add additional features or functionality to the System or Equipment or to correct defects in the Software, which defects affect service to subscribers, data collection as it relates to billing, administration or maintenance. Software Updates do not include Software Releases; (v) Specifications means the specifications and performance standards of a System, Equipment, Software or any portion or component thereof as set forth in the Documentation or as set forth in any other document published by Nortel Networks (other than customer brochures or other marketing materials) which contains technical specifications or performance standards for Nortel Networks' Equipment, Software or Systems. Specifications also include any specifications and performance standards delivered to Customer by Nortel Networks in the future, whether they relate to a System, Equipment or Software; provided, however, that no future specifications or performance standards delivered with respect to Equipment or Software for which Purchase Orders have been accepted hereunder shall reduce, diminish or otherwise adversely impact the specifications or performance standards that existed at the time the applicable Purchase Order was delivered by Customer to Nortel Networks hereunder; (w) Statement of Work means a document mutually agreed upon by the parties in conjunction with a Purchase Order which describes the Services to be performed with respect to such Purchase Order. A Statement of Work shall include the date on which such Services are to be completed and such other relevant terms and conditions as the parties may mutually agree upon; 7 (x) System means a configuration of Equipment and Software comprising the complete wireless telecommunications system purchased by Customer from Nortel Networks hereunder, including the Initial Order and all Expansions thereto. The term "System" has a developmental element and thus refers to all configurations of the System at each particular time in its development from the Initial Order through its final configuration at the end of the Term; (y) Territory means the United States of America and all U.S. territories; (z) Volume Commitment means the aggregate amount of Equipment, Software and Services Customer commits to purchase/license during the Term. The Volume Commitment for the Term of this Agreement shall be ninety million dollars ($90,000,000). The aggregate amount of Equipment, Software and Services purchased/licensed by Customer hereunder shall be determined by using the price paid by Customer to Nortel Networks for such after all applicable discounts (including volume discounts), reductions or rebates are applied, but shall not include sales tax or handling, insurance and freight charges. (aa) Warranty Period means (i) with respect to an item of Equipment, a period of two (2) years from the applicable ship date of such item of Equipment and (ii) with respect to an item of Software, a period of two (2) years from the applicable ship date (or, if Nortel Networks is downloading the Software directly onto Customer's System, the date such download occurs) of such Software; provided, however, that with respect to Software Updates only, such warranty period shall be ninety (90) days from the applicable ship date or download date; 8 1.2 The following terms are defined elsewhere in this Agreement in the Sections indicated:

TERM SECTION ---- ------- "Acceptance Tests" 6.1 "Customer CTO" 11.4 "Change Order" 16.1 "Disclosing Party" 18.1 "Force Majeure Events" 10.1 "Information" 18.1 "In-Service Date" 1.1 "MDF" 1.1 "Property Rights" 15.1 "PSTN" 1.1 "Receiving Party" 18.1 "Term" 2.10 "Third Party Engineer" 38.4

1.3 Unless the context otherwise requires, the terms defined in this Article 1 shall have the meanings herein specified for all purposes of this Agreement, applicable to both the singular and plural forms of any of the terms defined herein. When a reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the construction, meaning or interpretation of this Agreement. Whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation". The use of any gender herein shall be deemed to include the neuter, masculine and feminine genders wherever necessary or appropriate. ARTICLE 2 SCOPE OF AGREEMENT; ORDERS 2.1 Customer hereby agrees to purchase from Nortel Networks, and Nortel Networks hereby agrees to furnish, deliver, Install, sell and/or license (on a right-to-use 9 basis) to Customer in accordance with the time schedules set forth in the applicable Purchase Orders (which Purchase Orders have been accepted by Nortel Networks pursuant to Section 2.9), the Equipment, Software and Services comprising the Initial Order described in Attachments A and B. The Purchase Orders for the Initial Order issued by Customer and accepted by Nortel Networks prior to the date of this Agreement shall be subject to all of the terms and conditions of this Agreement to the same extent as if such Purchase Orders had been issued after the date hereof. In addition to the Initial Order, Customer has the right to purchase from Nortel Networks hereunder, and Nortel Networks agrees to furnish, deliver, Install, sell and/or license (on a right-to-use basis) to Customer, such additional Expansions, Equipment, Software and Services as, when and if ordered by Customer during the Term of this Agreement, and the terms and conditions of this Agreement shall apply to such purchases. 2.2 If Customer is enrolled in any Nortel Networks electronic commerce program, Customer agrees to comply with the terms of such program. Customer and Nortel Networks agree that all electronic Purchase Orders issued are equivalent to a written Purchase Order, are governed by the terms and conditions of this Agreement and that in the event of any conflict between this Agreement and the information contained in Customer's or Nortel Networks' electronic commerce website, this Agreement governs. Customer shall be responsible for the use and protection of all electronic commerce passcodes provided by Nortel Networks and agrees that all Purchase Orders submitted using such passcodes are valid and binding Purchase Orders authorized by Customer. Nortel Networks shall have no liability to Customer due to Customer's failure to access 10 Customer's or Nortel Networks' electronic commerce website or errors or failures relating to its operation. 2.3 Except pursuant to Nortel Networks' repair and replacement services or as may be mutually agreed to in writing by the parties, all Equipment and Software provided to Customer hereunder shall be new, and Nortel Networks shall not sell or deliver to Customer any used or refurbished Equipment. Customer represents and warrants that it is buying Equipment, Software and/or Services for its own internal use and not for resale. However, Customer may resell Equipment after internal use. 2.4 Nortel Networks hereby agrees to provide, as, when and if ordered by Customer, the Service and Support Plan and other services set forth in Attachment C. 2.5 This Agreement shall constitute a binding agreement on the part of Customer to purchase from Nortel Networks the Initial Order described in Attachments A and B (as such Attachments may be modified from time to time by Change Orders in accordance with the terms of this Agreement); provided, however, that the parties acknowledge and agree that the aggregate amount of base stations and cell sites purchased by Customer pursuant to Purchase Orders for the Initial Order issued by it to Nortel Networks may vary upwards or downwards by up to twenty (20%) percent from the amounts set forth in Attachments A and B. Purchase Orders submitted to Nortel Networks for the Initial Order and any Expansions shall reference this Agreement and include the quantity, price, Nortel Networks' quotation number (if any) and billing instructions, installation location(s), requested delivery dates, requested commencement dates for Services, the Statement of Work (if any) and any other special instructions. Where Customer desires the assistance of Nortel Networks in determining which 11 Equipment, Software and/or Services are required for an Expansion to a System, Customer shall submit to Nortel Networks the information necessary for the furnishing by Nortel Networks of a proposal. Nortel Networks shall, within fifteen (15) Business Days thereafter, submit to Customer a proposal including pricing, lead times and other information as may be requested by Customer. If such proposal is acceptable to Customer, Customer shall submit to Nortel Networks a Purchase Order therefor, and Customer and Nortel Networks shall be responsible for the successful completion of their respective items in accordance with such proposal. Any such proposal shall contain provisions relating to the respective responsibilities of Customer and Nortel Networks as the parties shall mutually agree in writing. If Customer rejects a proposal for Services submitted by Nortel Networks under this Section 2.5, Customer may elect to perform such Services itself or to have such Services performed on its behalf by a subcontractor of Customer and, subject to Section 11.3, the warranties set forth in this Agreement shall not be affected. 2.6 Unless otherwise mutually agreed to in writing, the prices and delivery lead times for Equipment, Software and Services ordered pursuant to Purchase Orders shall be in accordance in all respects with the terms and conditions of this Agreement (including all Attachments hereto which contain all discounts, incentives and delivery lead times being offered by Nortel Networks to Customer). 2.7 The parties may mutually agree upon Statements of Work in conjunction with Purchase Orders delivered by Customer and accepted by Nortel Networks in accordance with this Article 2. Each of Nortel Networks and Customer shall perform their respective responsibilities as set forth in any such Statements of Work. If any 12 Statement of Work fails to set forth any responsibility which is required for a System or any Equipment or Software to operate in accordance with the Specifications, the parties undertake to promptly discuss and agree as to which party shall be responsible for the performance of such responsibilities and the price, if any, to be paid to Nortel Networks and the time schedules of such performance. There are no design, engineering, Installation, management or other fees payable to Nortel Networks for any services to be rendered by Nortel Networks pursuant to any Statement of Work or this Agreement except for the fees which are expressly provided for in this Agreement, the applicable Purchase Order (and Statement of Work, if any) or any applicable Change Orders. 2.8 Delivery locations may be changed by Customer up to thirty (30) days prior to shipment without additional payment or penalty, unless otherwise mutually agreed. 2.9 Nortel Networks agrees to confirm receipt of each such Purchase Order and all Purchase Orders for forecasted Equipment, Software and Services, as provided in Article 13, that are within Nortel Networks' standard delivery lead times as set forth in Attachment F, shall automatically be accepted unless the terms of the Purchase Order do not conform in all material respects to this Agreement or if the Purchase Order is incomplete in a material respect; provided, however, that Nortel Networks shall promptly notify Customer in writing of any non-conforming or incomplete Purchase Order within five (5) Business Days of receipt thereof. All Purchase Orders shall be sent to Nortel Networks at the address identified by Nortel Networks. Should Nortel Networks receive a Purchase Order with lead times that are shorter than Nortel Networks' standard lead times (and, prior to or contemporaneously with the issuance of such Purchase Order, 13 verbal notification from Customer that such Purchase Order contains such shorter lead times), Nortel Networks shall promptly indicate in writing (either by e-mail or fax) to Customer whether such shortened lead times are acceptable. If Nortel Networks shall deem a shortened lead time unacceptable, the parties hereto shall endeavor in good faith to agree upon lead times that are mutually acceptable, but in no case shall such lead times be longer than the standard lead times existing on the date such Purchase Order was initially received by Nortel Networks. The agreed upon (or standard) lead times shall be calculated as commencing upon the date on which Nortel Networks confirms receipt of the applicable Purchase Order. Should Nortel Networks not notify Customer of its non-acceptance of a shortened lead time within ten (10) days of its receipt of the Purchase Order containing the shortened lead time (and so long as Customer provided Nortel Networks with the proper verbal notification specified in this Section 2.9), such Purchase Order shall be deemed accepted without amendment and without any further confirmatory action by either party. 2.10 This Agreement shall be effective as of the Effective Date and shall terminate on the third anniversary of the Effective Date or on such earlier date on which this Agreement may be terminated in accordance with its terms, except as to those provisions which by their express terms survive such termination. Nortel Networks and Customer shall be bound to fulfill any obligations in respect of Purchase Orders delivered and accepted hereunder in accordance with the terms of this Agreement to the extent such obligations have not been so fulfilled on the termination date of this Agreement. The period from the Effective Date of this Agreement to the third anniversary thereof or such 14 earlier date of termination pursuant to the terms hereof shall be hereinafter referred to as the "Term." 2.11 With respect to GSM equipment and software purchased for each of the GSM roamer markets specifically set forth on Attachment H hereto (and not with respect to any other markets or technology), Customer shall, during the Term, make Nortel Networks its exclusive supplier for GSM equipment and software; provided, however, that notwithstanding such exclusivity arrangement, Customer may purchase from entities other than Nortel Networks any product (whether equipment or software) having a material functionality or feature which is not available from Nortel Networks, unless Nortel Networks can provide such functionality or feature at a comparable price through another reasonable solution. The exclusivity set forth in this Section 2.11 shall terminate in the event that Nortel Networks is in breach under any material term of this Agreement and such breach has not been cured within the time periods set forth in Section 22. 2.12 With respect to the types of CDMA equipment and software purchased as part of the Initial Order (and not with respect to any other types of CDMA equipment and software, including EVDO equipment and software), Customer shall, during the Term, make Nortel Networks its exclusive supplier for such equipment and software purchased for each of the new CDMA markets specifically set forth on Attachment B; provided, however, that notwithstanding such exclusivity arrangement, Customer may purchase from entities other than Nortel Networks any product (whether equipment or software) having a material functionality or feature which is not available from Nortel Networks, unless Nortel Networks can provide such functionality or feature at a comparable price through another reasonable solution. The exclusivity set forth in this Section 2.12 shall 15 terminate in the event that Nortel Networks is in breach under any material term of this Agreement and such breach has not been cured within the time periods set forth in Section 22. 2.13 Customer shall issue Purchase Orders for, and take delivery of, an aggregate amount of Equipment, Software and Services during the Term equal to or greater than the Volume Commitment. In the event that at the end of the Term Customer has failed to issue such Purchase Orders for, and take delivery of, an aggregate amount of Equipment, Software and Services equal to or greater than the Volume Commitment, then Customer shall pay liquidated damages to Nortel Networks in the amount of [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] of the portion of the Volume Commitment that remains unfulfilled at the end of the Term; provided, however, that in no event shall the amount paid by Customer pursuant to this Section 2.13 exceed [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]. Such amount shall be due and payable within thirty (30) days following the date of Nortel Networks' invoice therefor, which invoice shall be accompanied by a detailed list of the Purchase Orders accepted hereunder during the Term and the aggregate net purchase price associated with each such Purchase Order. 16 ARTICLE 3 CONTRACT PRICES The purchase prices for all Equipment, Software and Services ordered during the Term shall be (a) the unit prices set forth in Attachments A, B and C subject to all applicable discounts and incentives set forth therein, or (b) for Equipment, Software or Services which is not listed in Attachment A, B or C the price quoted by Nortel Networks; provided, however, that in no case during the Term shall any prices be greater than the prices made generally made available by Nortel Networks' to its customers in its then-current price book at the time of ordering by Customer, less all applicable discounts and incentives set forth in this Agreement (including Attachments A, B and C) which are applicable to items in the same category of Equipment, Software or Services. ARTICLE 4 TERMS OF PAYmENT 4.1 One hundred percent (100%) of the prices for the Equipment and Software ordered by Customer hereunder shall be due and payable by Customer within thirty (30) days following invoice therefor, such invoice to be issued by Nortel Networks to Customer upon shipment of the applicable Equipment and/or Software; provided, however, that with respect to items of Equipment and Software which comprise the initial Purchase Order for a New Technology, the aggregate price of such Equipment and Software shall be paid by Customer as follows: (a) [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] of the aggregate price of all such Equipment and Software shall be due and payable to Nortel 17 Networks within thirty (30) days following invoice therefor, such invoice to be issued upon shipment of the applicable Equipment and Software; and (b) [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] of the aggregate price of all such Equipment and Software shall be due and payable within thirty (30) days following invoice therefor, such invoice to be issued upon the Acceptance of such Equipment and Software. 4.2 The price for the Installation Services ordered by Customer with respect to items of Equipment and Software being provided as part of the Initial Order shall be paid by Customer as follows: (a) [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] of the aggregate price for such Installation shall be due and payable to Nortel Networks within thirty (30) days following invoice therefor, such invoice to be issued upon shipment of the applicable Equipment and Software: and (b) [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] of the aggregate price for such Installation shall be due and payable within thirty (30) days following invoice therefor, such invoice to be issued upon the Acceptance of the applicable Equipment and Software. 4.3 Other than as set forth in Section 4.2, [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND 18 EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] of the price of all Services performed by Nortel Networks hereunder shall be due and payable by Customer within thirty (30) days following invoice therefor, such invoice to be issued by Nortel Networks to Customer (i) upon completion of the applicable Services, (ii) monthly with respect to Services that extend beyond a month, or (iii) in accordance with the mutually agreed upon milestones set forth in the applicable Statement of Work, if such Statement of Work sets forth such milestones. 4.4 All transportation charges (including freight and insurance) from factory to Installation site or other agreed location shall be determined in accordance with a "Zone Schedule" to be mutually agreed upon by the parties and attached hereto as Attachment J within thirty (30) days of the Effective Date. Such "Zone Schedule" shall set forth the transportation charges Customer shall pay with respect to items of Equipment and Software shipped between one Zone in the Territory and another Zone in the Territory. Until such time as the Zone Schedule is agreed upon, Nortel Networks shall charge Customer for transportation charges at the same rates that Nortel Networks charges its customers generally. Such transportation charges shall be due and payable by Customer within thirty (30) days following invoice therefor such invoice to be issued upon shipment of the applicable Equipment and Software. 4.5 In connection with the payments for Equipment and Software, Nortel Networks must submit and deliver to Customer original commercial invoices that include the description of the Equipment and Software and their prices, duly itemized, which 19 prices must correspond to the prices set forth in either Attachment A or B, the applicable Purchase Order or the applicable price quotation made by Nortel Networks to Customer. 4.6 All amounts payable under this Agreement which are past due over thirty (30) days (except to the extent they are being disputed in good faith) shall bear interest from their due date at the rate of one and one-half percent (1.5%) per month, or such lesser rate as may be the maximum permissible rate under applicable law. If Customer notifies Nortel Networks of any disputed amounts within twenty-one (21) days from the date of the applicable invoice, such disputed amounts shall not be subject to such interest. 4.7 Customer may pay any invoiced amount, less a discount of [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT], if payment is made by Customer within ten (10) days of its receipt of the applicable invoice. Such early payment discount shall be applied against the net invoiced amount (i.e. after all applicable discounts and credits have been applied). 4.8 In the event that Customer activates Software features for which additional license fees are applicable, or in the event that Customer triggers any applicable milestones (such as numbers of subscribers) for which additional license fees are applicable, then Customer shall have a period of thirty (30) days from the date of such activation or trigger to make any applicable payments to Nortel Networks. Nortel Networks shall have the right, upon at least two (2) Business Days' advance notice to Customer, to conduct a remote audit of the Software installed on the System in order to determine which features Customer has activated. Such audit shall be conducted in such 20 a manner as to cause no interference with, or degredation of, the performance of the System and at such time of day as Customer shall designate upon receipt of the advance notice. Nortel Networks shall have the right to conduct such audit no more than two (2) times per calendar year. ARTICLE 5 DELIVERY, TITLE AND RISK OF LOSS 5.1 Subject to (a) any modifications thereto permitted pursuant to this Article 5, (b) any delays caused solely by Customer by reason of its breach of its obligations under this Agreement, or (c) any delays excused pursuant to Article 10, Nortel Networks shall deliver and/or Install all Equipment, Software and Services in accordance with the terms (including the delivery and/or Installation dates set forth therein) of the applicable Purchase Order and Statement of Work (if applicable), or in accordance with the schedule mutually agreed to between Customer and Nortel Networks with respect to such Equipment, Software and Services. 5.2 For delivery of Equipment shipped to Customer from outside of the United States, Nortel Networks shall be responsible for arranging and prepaying the cost of transportation and insurance pursuant to its delivery obligations under this Agreement, and Customer shall pay to Nortel Networks the transportation charges, insurance and freight based on the Zone Schedule mutually agreed upon by the parties. In the event that Customer desires to designate its own carrier to perform delivery of Equipment shipped to Customer from outside of the United States, then Customer shall give at least sixty (60) days' prior written notice to Nortel Networks of such. From the date designated in such notice until such time as Customer provides Nortel Networks at least sixty (60) days' notice that it desires Nortel Networks to resume such responsibilities (which such 21 resumption of responsibilities shall not occur before the expiration of a six (6) month period from the date on which Customer's designated carrier began making deliveries hereunder), Customer shall be responsible for arranging and paying all transportation charges, insurance and freight and Nortel Networks shall coordinate with the transportation company designated by Customer for the pick up of the Equipment. In such case, Customer shall provide its designated carrier's information to Nortel Networks on each applicable Purchase Order. 5.3 For delivery of Equipment shipped to Customer from within the United States, Nortel Networks shall be responsible for arranging and paying all transportation charges, insurance and freight and shall coordinate with its transportation company for the pick up of the Equipment and delivery to the installation site or designated warehouse. In the event that Customer desires to designate its own carrier to perform delivery of Equipment shipped to Customer from within the United States, then Customer shall give at least sixty (60) days' prior written notice to Nortel Networks of such. From the date designated in such notice until such time as Customer provides Nortel Networks at least sixty (60) days' notice that it desires Nortel Networks to resume such responsibilities (which such resumption of responsibilities shall not occur before the expiration of a six (6) month period from the date on which Customer's designated carrier began making deliveries hereunder), Customer shall be responsible for arranging and paying all transportation charges, insurance and freight and Nortel Networks shall coordinate with the transportation company designated by Customer for the pick up of the Equipment. In such case, Customer shall provide its designated carrier's information to Nortel Networks on each applicable Purchase Order. 22 5.4 Intentionally Omitted. 5.5 Title to, and risk of loss for, each item of Equipment shall pass to Customer upon shipment of such item of Equipment. If there is loss or damage to the Equipment or Software after risk of loss passes to Customer, Nortel Networks shall, if ordered by Customer, deliver replacement Equipment or Software as promptly as practicable and Customer shall pay for the same in accordance with the terms and conditions of this Agreement, including prices. Except as provided in Section 5.7, Nortel Networks shall convey good and clear title to the Equipment, free and clear of all liens, suits, charges, claims, liabilities, restrictions and encumbrances of any nature or kind whatsoever, other than any lien or encumbrance which arises solely out of the actions of Customer, its employees, agents or subcontractors. Nothing in this Article 5 shall, during the period a party has the risk of loss with respect to an item, relieve the other party of responsibility for loss or damage to such item which results from the acts or omissions of such other party or such other party's employees or agents. 5.6 Nortel Networks hereby represents and warrants to Customer that it has all necessary approvals, authorizations and licenses required for it to perform all of its duties and obligations hereunder. 5.7 Until receipt of the applicable amounts due from Customer to Nortel Networks with respect to an item of Equipment or Software sold to Customer hereunder, Customer grants to Nortel Networks a continuing purchase money security interest in such item of Equipment sold and/or Software licensed under this Agreement. Customer shall reasonably cooperate with Nortel Networks in preserving and protecting such purchase money security interest. Customer authorizes Nortel Networks to file financing 23 or continuation statements, including amendments thereto, relating to each item of Equipment and Software without the signature of Customer where permitted by law. ARTICLE 6 TESTING AND ACCEPTANCE 6.1 Nortel Networks shall Install (where contracted to do so) all Equipment and Software to be ready for Acceptance Tests no later than the scheduled In-Service Date in accordance with the applicable Purchase Order. Upon completion of Installation of the Equipment and Software or portions thereof, Nortel Networks shall test the Equipment and Software in accordance with the Acceptance Test Plan ("Acceptance Tests") attached as part of the applicable Statement of Work. 6.2 Acceptance Tests will be conducted on the Equipment and Software to demonstrate that each item of Equipment and Software comprising a part of the System, as Installed, will operate in accordance with the Specifications. 6.3 Nortel Networks shall notify Customer at least five (5) days before the date on which the Acceptance Tests shall be conducted. If Customer or its representative does not attend the Acceptance Tests, Nortel Networks shall proceed with the tests and immediately forward the test results (including actual test sequences, deviations, and retests necessary to obtain successful conclusion) to Customer. If Customer or its representative (which representative shall be bound by all confidentiality requirements applicable to Customer) attends the Acceptance Tests, Nortel Networks and Customer or its representative shall jointly conduct the Acceptance Tests and shall each sign the form provided as part of the test procedure. If the Equipment or Software does not fulfill all of the requirements of the applicable Acceptance Tests and such failure is a result of any breach of any provision or obligation of Nortel Networks under this Agreement or is 24 caused by any item of Equipment or Software, or any Service, provided by Nortel Networks, Nortel Networks shall, at its sole expense, correct the defects as soon as practicable. The Acceptance Tests (or so much of them as necessary) shall be recommenced immediately after such correction in accordance with this Section 6.3. Upon successful completion of the applicable Acceptance Tests, Nortel Networks shall submit to Customer written notice thereof along with Acceptance forms certifying all of the test results and stating that all of the applicable Equipment and/or Software has been Accepted in accordance with all of the requirements of this Agreement and that the same performs in accordance with the Specifications. Customer shall sign or reject such Acceptance forms within five (5) Business Days of receipt thereof to signify that the Equipment and/or Software is Accepted or is not Accepted. In the absence of a notice of rejection given in good faith within such five (5) Business Day period, such Equipment and/or Software shall be deemed Accepted. Any notice of rejection shall be given in writing to Nortel Networks' project manager. If there is a dispute as to whether the Equipment and/or Software has passed the applicable Acceptance Tests, the parties shall use reasonable best efforts (which shall include escalation of such dispute to a senior management level) to resolve the dispute as soon as practicable or it shall be submitted to the Third Party Engineer pursuant to Article 38. 6.4 Customer shall not unreasonably withhold Acceptance. Minor deficiencies recorded in the test results or minor shortages which would not affect service to subscribers, data collection regarding billing, administration, maintenance or the commercial operation of the Equipment, Software or the System or create a safety hazard for personnel shall not postpone the issuance of Acceptance forms pursuant to this Article 25 6, but Nortel Networks shall remain obligated to perform in the manner described in this Agreement. ARTICLE 7 DELAY AND PENALTIES 7.1 If due to the fault or negligence (regardless of the severity level of negligence) of Nortel Networks, (a) Acceptance (with respect to items of Equipment and Software for which Nortel Networks is performing Installation) or delivery (with respect to Furnish Only items of Equipment and Software for which Nortel Networks is responsible for transportation) does not occur with respect to any of the items comprising the September 30, 2003 portion of the Initial Order (designated as the Phase I items in Attachment D) or the December 31, 2003 portion of the Initial Order (designated as the Phase II items in Attachment D)(collectively, "Critical Items") on the scheduled date for Acceptance or delivery (as applicable) thereof as set forth in Attachment D (as such date may be amended by Change Orders pursuant to the terms of this Agreement), then Customer shall be entitled to, and Nortel Networks shall pay to Customer, liquidated damages in accordance with Section 7.2; provided, however that such liquidated damages shall only accrue during such delay of Acceptance or delivery, and shall not be payable to Customer unless, due to the fault or negligence (regardless of the severity level of negligence) of Nortel Networks the Critical Items have not been Accepted and placed In-Service on or before September 30, 2003 or December 31, 2003, as applicable, at which time all of the accrued but unpaid liquidated damages payable by Seller to Customer under this Article 7 shall be immediately due and payable. 7.2 (a) The parties agree that damages for delay are difficult to calculate accurately and therefore agree to fix, as liquidated damages (and not as a penalty), an 26 amount equal to [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] per week of delay up to a cumulative maximum amount of [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] of the aggregate net purchase price (calculated in accordance with Attachment A or the applicable Purchase Order, and including Installation costs, if applicable, but not including the Executive Discount described in Attachment A) of those items of Equipment and/or software which were delayed. In the event that the delay of Acceptance or delivery (as applicable) of a Critical Item, prevents or materially affects the operation of other items of Equipment or Software which are part of the Initial Order, then Customer's right to receive liquidated damages shall apply to such other Equipment and Software as well. (b) Liquidated damages will be provided to Customer as credits towards the future purchase of GSM, TDMA and CDMA Equipment and Software ("Product Credits") which may be applied to up to twenty-five percent (25%) of any future Purchase Orders for Equipment or Software until such Product Credits have been used in full. Any such Product Credits must be utilized during the Term. (c) Customer will inform Nortel Networks of the imposition of the liquidated damages in writing. Within thirty (30) calendar days following the date on which Nortel Networks is so informed, Nortel Networks shall be obligated to issue to Customer Product Credits in the amount of such liquidated damages except to the extent 27 they have been contested in good faith by Nortel Networks within such thirty (30) day period. 7.3 It is expressly agreed that the liquidated damages provided in this Article 7 and their payment do not extinguish or relieve the performance of any of the obligations Nortel Networks is required to perform hereunder, which obligations shall continue in full force and effect until fully performed in accordance with the terms hereof. Liquidated damages under this Article 7 shall be Customer's exclusive remedy for delay by Nortel Networks in delivery or Acceptance, as applicable, of the Critical Items. 7.4 In the event that there are any delays in the performance by Nortel Networks under this Agreement (whether or not such delays will result in liquidated damages under this Article 7) then, upon notification by Customer of such delays, Nortel Networks shall use commercially reasonable efforts to assign additional personnel, reallocate resources, expedite deliveries and take such other actions as may be required to eliminate such delay. ARTICLE 8 TRAINING Nortel Networks will provide training to Customer's personnel within the Territory in the operation and maintenance of the Equipment as set forth in Attachment E. ARTICLE 9 DOCUMENTATION Nortel Networks will furnish Customer, at no additional cost to Customer, one CD-ROM copy of all Documentation required by Customer for the Equipment, Software and Services purchased hereunder. In addition, such Documentation shall be available to Customer in web based format. Nortel Networks represents that the Documentation, in 28 conjunction with any applicable training, is all that is reasonably necessary for Customer to use, maintain and operate the Equipment, Software and System purchased by Customer pursuant to this Agreement. ARTICLE 10 FORCE MAJEURE 10.1 Unless preventable by the timely and proper performance of their respective obligations under this Agreement, neither Nortel Networks nor Customer will be liable for non-performance or defective or late performance of any of their obligations hereunder to the extent and for such periods of time as such non-performance, defective performance or late performance is attributable to acts of God, war (declared or undeclared), unforeseeable acts (including failure to act) of any governmental authority (de jure or de facto), riots, revolutions, fire, floods, explosions, sabotage, nuclear incidents, earthquakes, hurricanes, sinkholes, epidemics, strikes, delays of suppliers or subcontractors for the same causes if no equivalent sources for such supplies or services are readily available, or other similar causes beyond the reasonable control of a party (collectively, "Force Majeure Events"). 10.2 In the event that either of the parties wishes to claim excusable delay by reason of a Force Majeure Event, it shall state it in writing to the other party within five (5) Business Days (or such longer period as may be reasonable as a result of the Force Majeure Event) following the date on which its occurrence was known, accompanied by reasonable evidence of the Force Majeure Event and a statement of the impact such Force Majeure Event has had or is expected to have upon such party and its ability to perform its obligations hereunder. 29 10.3 If the Force Majeure Event continues for more than thirty (30) consecutive days, or it is proven that it will continue for more than such thirty (30) day period, the parties shall upon written request of either party meet to try to determine an appropriate action, remedy or solution to the problems caused by such delay. ARTICLE 11 WARRANTIES, REMEDIES: LIMITATIONS: DISCLAIMERS 11.1 (a) Nortel Networks warrants that during the applicable Warranty Period the Equipment, excluding Reseller Items, furnished under this Agreement shall be free from defects in materials and workmanship, and shall meet all of the functional and performance criteria (including the interworking of all Nortel Networks supplied Equipment and Software) set out in and otherwise conform to all of the applicable portions of the Specifications, and that all of the Services furnished by Nortel Networks under this Agreement shall be performed with due care and skill in a professional and workmanlike manner. Any and all claims for breach of this warranty are conclusively deemed waived unless made in writing (or orally with prompt confirmation in writing) during the appropriate Warranty Period. Where Equipment or any part thereof is repaired or replaced under the warranties contained herein, the repaired or replaced item shall be warranted for the balance of the original Warranty Period or a period of ninety (90) days from the date of repair or replacement whichever is longer. Except as provided in the preceding sentence, performance of Nortel Networks' warranty obligations shall not extend the Warranty Period. (b) If defects in materials or workmanship or nonconformity with the performance Specifications appear within the Warranty Period, Nortel Networks' sole obligation and Customer's exclusive remedy under this warranty are limited to the 30 prompt replacement or repair, at Nortel Networks' option and own expense, of the defective components of the Equipment, or the correction of the faulty Services furnished by Nortel Networks hereunder. Such repair or replacement includes materials, labor and services. In the event Nortel Networks is unable to correct faulty Services, the sole remedy of Customer shall be to recover the applicable portion of the compensation paid to Nortel Networks for such Services. Customer shall bear the risk of loss and damage and all transportation costs for defective Equipment shipped to Nortel Networks and Nortel Networks shall bear the risk of loss and damage and all transportation costs for replacement Equipment shipped to Customer. Good title to defective or replacement Equipment shall pass to Nortel Networks or Customer, as appropriate, upon receipt thereof. 11.2 Nortel Networks warrants that, provided the Software is not altered by Customer, and provided the Software is used in conjunction with Equipment purchased under this Agreement and such Equipment has been maintained and utilized in accordance with Nortel Networks' recommended maintenance procedures (as set forth in the Documentation) and the Software license set forth in Attachment G hereof, the Software, excluding Reseller Items, shall function during the Warranty Period in all material respects in accordance with all of Nortel Networks' Specifications for the Software. In the event the Software fails to so perform or conform, Customer's exclusive remedy under this warranty shall be to require Nortel Networks to promptly correct such failure and such remedy is conditioned upon Nortel Networks' receiving written notice within the Warranty Period (or oral notice promptly confirmed in writing) of such failure. The correction of any Software failures shall not extend the Software Warranty Period. 31 11.3 Nortel Networks' obligations under this Article 11 shall not apply to (i) Equipment or components thereof such as fuses and bulbs that are normally consumed in operation, or have a normal life inherently shorter than the Warranty Period; (ii) defects that are solely attributable to improper storage, installation, use, maintenance or repair by Customer (including operation of the Equipment outside the environmental parameters defined in the Specifications); (iii) improper operation of Equipment with hardware not authorized by Nortel Networks (or reasonably contemplated by Nortel Networks) to be used with such Equipment, or use of the Equipment with any improperly operating hardware or equipment, if such defect is caused by such hardware or such improperly operating hardware or equipment; (iv) Equipment or components thereof that, due to no fault of Nortel Networks, have been subjected to any other kind of misuse or detrimental exposure or have been involved in an accident, fire, explosion, Act of God, or has otherwise been damaged for any reason not attributable to Nortel Networks, or (v) any defects attributable solely to the improper alteration, repair, installation or relocation by any party other than Nortel Networks or Nortel Networks' agents. For purposes of clause (v) above Equipment shall not be deemed to have been "installed" by another party if all that has been done to such Equipment is the routine plug-in of the components in accordance with the Northern Telecom Practices and Procedures guidelines. 11.4 (a) (i) If, during the Warranty Period set forth in Section 11.1, Customer experiences failures of electronic circuit board components, RBS subassemblies or other Equipment (which other Equipment may be deinstalled and reinstalled by Customer in the ordinary course of business) which the Chief Technical Officer of Customer (hereinafter the "Customer CTO") reasonably believes to be 32 excessive, (1) the Customer CTO shall bring such failures to the attention of Nortel Networks by giving written notice to Nortel Networks under Section 35.1 hereof, (2) both Customer and Nortel Networks shall, without undue delay, investigate the cause of such failures, and (3) where, within a reasonable period not to exceed one (1) week, it cannot be clearly determined that the cause of such failure is properly attributable to Customer, Nortel Networks shall, without charge to Customer, supply to Customer additional spare boards, subassemblies or such other Equipment of each type so depleted, as necessary to maintain an adequate emergency replacement stock, until implementation of a permanent remedy. (ii) Upon implementation of a permanent remedy, all excess boards, subassemblies or other Equipment supplied by Nortel Networks to Customer under Section 11.4(a)(i) shall be returned to Nortel Networks, and all in-service and spare stock boards, subassemblies and other equipment which are the subject of the corrections contemplated by this Section 11.4(a)(ii) shall be either, at the option of Nortel Networks, promptly repaired or replaced at no charge to Customer, in accordance with an agreed schedule. (b) If, during the Warranty Period set forth in Section 11.1, Customer experiences failures of Equipment (other than electronic circuit board components, RBS subassemblies or other Equipment which may be deinstalled and reinstalled by Customer in the ordinary course of business), which Customer CTO reasonably believes to be excessive, Nortel Networks shall give priority to the remedy of the cause of the failures (and in accordance with the response, workaround and cure times set forth in Attachment C). During the period prior to the implementation of a permanent remedy, Nortel 33 Networks agrees to negotiate in good faith for adjustments in warranties and freight payments commensurate with the effect upon Customer caused by such failures and to make adjustments as are mutually agreed upon by Customer and Nortel Networks. 11.5 In no event shall Nortel Networks be required to provide support for any version of Software that is (a) with respect to Software supporting GSM, CDMA or TDMA technology, more than two (2) versions behind the then current version of Software that Nortel Networks is generally offering to its customers and (b) with respect to Software supporting any other technology, more than one (1) version behind the then current version of Software that Nortel Networks is generally offering to its customers. 11.6 If any Equipment or Software is rendered inoperative as a result of a natural or other disaster, Nortel Networks will make all reasonable efforts to promptly supply or help locate backup or replacement Equipment or Software for Customer, by using reasonable efforts to waive any delivery schedule priorities and to make replacement Equipment or Software available from the facility then producing such products, or from inventory. 11.7 Nortel Networks response times, workaround times and cure periods for all warranty related repairs for the System, Equipment and Software are set forth in Attachment C hereto. Such times are based upon the severity level of the applicable defect, as set forth therein. 11.8 It is the intention of the parties that any defects in materials or workmanship or nonconformity with the performance Specifications in the System, Equipment or Software shall be corrected as promptly as practicable regardless of fault, and in this regard, Nortel Networks agrees to use commercially reasonable efforts to 34 work with and cooperate with Customer and any other manufacturer, vendor or contractor to correct any such defect or nonconformity to the extent that Nortel Networks has the capacity to do so. Nortel Networks shall, at Customer's request, provide reasonable assistance to Customer in determining the cause of such defect or nonconformity and recommend the appropriate action. Nortel Networks shall, upon its receipt of a request for assistance hereunder from Customer, use commercially reasonable efforts to correct any such defect or nonconformity in a System, item of Equipment or Software or any other equipment or software (whether or not such defect or nonconformity is the responsibility of Nortel Networks) as promptly as practicable and bill Customer for such. If Customer and Nortel Networks disagree as to the cause of the defect or nonconformity or the action to be taken, then, at Customer's written request, Nortel Networks shall nevertheless correct such defect or nonconformity (whether or not such defect or nonconformity is the responsibility of Nortel Networks) as promptly as practicable and generate a bill to Customer for such. The parties shall thereafter negotiate in good faith to determine the party responsible for such defect or nonconformity, and if they are unable to resolve such dispute, such dispute shall be submitted to a Third Party Engineer in accordance with Article 38. Nothing contained in this Section 11.8 shall require Nortel Networks to repair or modify any equipment purchased by Customer from any third party unless Nortel Networks has the ability to do so. 11.9 Subject to Section 11.3, Customer may at any time acquire equipment and software from a source other than Nortel Networks, and such equipment and software 35 may be interconnected with the Equipment and Software without affecting the warranties contained in this Article 11. 11.10 With respect to Reseller Items, in lieu of the warranties set forth herein Reseller Items shall have the warranties given to Nortel Networks by the third parties supplying such Reseller Items to Nortel Networks and such warranties shall inure, to the extent applicable or permitted, to the benefit of Customer, and Customer shall have the right to enforce such warranties directly with the third party providing the applicable Reseller Item to Nortel Networks or, if Customer is not permitted to enforce such warranty directly through Nortel Networks. 11.11 THE WARRANTIES AND REMEDIES SET FORTH IN THIS ARTICLE 11 CONSTITUTE THE ONLY WARRANTIES (OTHER THAN THE WARRANTIES AS TO TITLE CONTAINED IN SECTION 5.5) WITH RESPECT TO THE EQUIPMENT, SOFTWARE AND SERVICES PROVIDED BY NORTEL NETWORKS PURSUANT TO THIS AGREEMENT, AND CUSTOMER'S EXCLUSIVE REMEDIES IN THE EVENT SUCH WARRANTIES ARE BREACHED. THEY ARE IN LIEU OF ALL OTHER WARRANTIES WRITTEN OR ORAL, STATUTORY, EXPRESSED OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE WARRANTY OF MERCHANTABILITY AND THE WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. ARTICLE 12 INDEMNIFICATION; LIMITATION OF LIABILITY 12.1 Subject to Section 12.5, Nortel Networks shall be responsible for and agrees to indemnify and hold harmless Customer and its Affiliates, officers, employees and subcontractors (each, a "Customer Indemnified Party" and collectively the 36 "Customer Indemnified Parties") from, and shall defend the Customer Indemnified Parties against, all third party losses, claims, demands, damages and causes of action (including reasonable legal fees and expenses) relating to bodily injury to persons, including death, or loss or damage to tangible property which was caused by any negligence or willful misconduct of Nortel Networks or its Affiliates, officers, agents, representatives, employees, suppliers or subcontractors in the course of the performance of Nortel Networks' obligations pursuant to this Agreement. Nortel Networks will defend, at its own expense, including reasonable attorneys' fees, any Regulatory Claim brought against Customer (other than those resulting or arising out of the use of Reseller Items supplied hereunder) and shall pay all fines or penalties that may be assessed or levied by the applicable governmental authority for noncompliance with respect to such Regulatory Claim or as are agreed to by Nortel Networks in settlement of such Regulatory Claim. All such losses, claims, demands, and damages, or fines or penalties shall be paid directly by Nortel Networks. Notwithstanding anything to the contrary contained in this Agreement, the Customer Indemnified Parties shall have the right, in their sole discretion, to implead, interplead or otherwise cause Nortel Networks to be added as a party to any action or proceeding brought against a Customer Indemnified Party relating to any matter or thing for which such Customer Indemnified Party is entitled to indemnification pursuant to this Section 12.1 and, if in any such proceeding Nortel Networks is found to be liable, Nortel Networks shall be responsible for all liabilities and damages assessed against it in any such proceeding or action. 12.2 Subject to Section 12.5, Customer shall be responsible for and agrees to indemnify and hold harmless Nortel Networks and its Affiliates, officers, employees and 37 subcontractors (each, a "Nortel Indemnified Party" and collectively, the "Nortel Indemnified Parties) from, and shall defend the Nortel Indemnified Parties against, all third party losses, claims, demands, damages and causes of action (including reasonable legal fees and expenses) relating to bodily injury to persons, including death, or loss or damage to tangible property which was caused by any negligence or willful misconduct of Customer or its Affiliates, officers, agents, employees, representatives or its subcontractors in the course of the performance of Customer's obligations pursuant to this Agreement. All such losses, claims, demands, and damages shall be paid directly by Customer. Notwithstanding anything to the contrary contained in this Agreement, the Nortel Indemnified Parties shall have the right, in their sole discretion, to implead, interplead or otherwise cause Customer to be added as a party to any action or proceeding brought against a Nortel Indemnified Party relating to any matter or thing for which such Nortel Indemnified Party is entitled to indemnification pursuant to this Section 12.2 and, if in any such proceeding Customer is found to be liable, Customer shall be responsible for all liabilities and damages assessed against it in any such proceeding or action. 12.3 With respect to the indemnification provided by either Customer or Nortel Networks in accordance with Sections 12.1 and 12.2 above, the Customer Indemnified Party and the Nortel Indemnified Party, as applicable, shall (a) give Customer or Nortel Networks, as applicable, prompt written notice of any such loss, claim, demand, damage or cause of action or Regulatory Claim; provided, however, that a failure to give such prompt notice shall not affect the indemnification to be provided hereunder except to the extent that Customer or Nortel Networks, as applicable, shall have been actually prejudiced as a result of such failure, (b) allow Customer or Nortel, as applicable, to 38 control the defense and all related settlement negotiations; provided, however, that Customer shall be entitled to control of the defense or settlement of any Regulatory Claim with respect to matters that do not involve monetary damages (with reasonable participation by Nortel Networks, at its own cost and expense), and shall have the right to settle or compromise any Regulatory Claim to the extent that it involves anything other than money damages without the prior consent of Nortel Networks, and (c) reasonably cooperate with Customer or Nortel Networks, as applicable, in such defense and any related settlement negotiations; provided however, that the applicable Customer Indemnified Party or Nortel Indemnified Party shall be reimbursed by Customer or Nortel Networks, as applicable, for its actual, reasonable, out-of-pocket costs for such reasonable cooperation. 12.4 Except as provided in, or for liabilities arising under, Articles 7, 15 and 19 and Section 12.1 with respect to bodily injury and damage to tangible property, or for claims regarding title to Equipment or Software, the total liability of Nortel Networks under this Agreement, including its Affiliates, officers, employees, agents, representatives, shareholders, subcontractors or suppliers, for claims of any kind for any loss or damage, whether in contract, warranty, indemnification, tort (including negligence), strict liability or otherwise, arising out of or connected with, or resulting from the performance or non-performance of this Agreement shall not (i) in respect of any loss or damage to Customer's tangible property exceed [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] per event or series of related events, and (ii) in 39 respect of all other losses or damage exceed in the aggregate [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]. 12.5 NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, BUT SUBJECT TO LIQUIDATED DAMAGES EXPRESSLY PROVIDED FOR IN ARTICLE 7, IN NO EVENT, WHETHER AS A RESULT OF BREACH OF CONTRACT, INDEMNIFICATION, WARRANTY, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHERWISE, SHALL NORTEL NETWORKS OR CUSTOMER BE LIABLE TO THE OTHER FOR (A) DAMAGES BASED ON ANY THIRD PARTY CLAIM, EXCEPT AS EXPRESSLY PROVIDED IN SECTIONS 12.1 AND 12.2 AND ARTICLE 15 OR THIRD PARTY CLAIMS WHICH ARE STRICT LIABILITY BY OPERATION OF LAW, (B) LOSS OF, OR DAMAGE TO, THE OTHER PARTY'S RECORDS, FILES OR DATA, OR (C) ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, INDIRECT OR EXEMPLARY DAMAGES OF ANY NATURE WHATSOEVER OR LOSS OF PROFITS OR REVENUES OF SUCH OTHER PARTY BEFORE OR AFTER ACCEPTANCE. THE LIMITATIONS SET FORTH IN THIS SECTION 12.5 SHALL NOT BE APPLICABLE TO A BREACH BY EITHER PARTY OF ITS OBLIGATIONS UNDER ARTICLE 18 OR CUSTOMER'S BREACH OF THE SOFTWARE RIGHT-TO-USE SET FORTH IN ATTACHMENT G. THE LIMITATIONS SET FORTH IN THIS SECTION 12.5 SHALL ALSO NOT BE APPLICABLE IN THE EVENT NORTEL NETWORKS BREACHES ARTICLE 15 TO THE EXTENT THAT, IF A 40 COURT OF COMPETENT JURISDICTION ENJOINS CUSTOMER FROM USING EQUIPMENT AND/OR SOFTWARE THAT IS THE SUBJECT OF A CLAIM UNDER ARTICLE 15, NORTEL NETWORKS SHALL BE LIABLE TO CUSTOMER FOR THE LOST PROFITS ASSOCIATED WITH THE REVENUE (OR, IF CUSTOMER IS NOT PROFITABLE, [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] OF SUCH REVENUE) THAT CUSTOMER WOULD HAVE RECEIVED FROM THE PROVISION OF ITS TELECOMMUNICATIONS SERVICES TO ITS CUSTOMERS IF SUCH INJUNCTION HAD NOT OCCURRED, WITH NORTEL NETWORKS' TOTAL LIABILITY UNDER THIS AGREEMENT FOR LOST PROFITS (OR REVENUE, AS APPLICABLE) AS PROVIDED FOR IN THIS SENTENCE NOT TO EXCEED IN THE AGGREGATE [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]. SUCH [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] CAP SHALL NOT BE APPLICABLE IN ANY WAY TO NORTEL NETWORKS' INDEMNIFICATION REQUIREMENTS UNDER ARTICLE 15 HEREOF, INCLUDING ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, INDIRECT OR EXEMPLARY DAMAGES OF ANY NATURE WHATSOEVER OR LOSS OF PROFITS OR REVENUES (WHICH ARE AWARDED BY FINAL COURT 41 JUDGMENT OR DECREE, OR AGREED UPON BY NORTEL NETWORKS IN SETTLEMENT OF ANY APPLICABLE PROPERTY RIGHTS SUIT OR CLAIM) OF ANY THIRD PARTY MAKING A PROPERTY RIGHTS CLAIM THEREUNDER. ARTICLE 13 FORECAST Customer shall, at least fifteen (15) days prior to the start of each calendar quarter, submit to Nortel Networks a good faith, consolidated, non-binding forecast of the applicable items that Customer anticipates purchasing or licensing over the next six (6) months. In addition to the type, quantity and cumulative dollar amounts, the parties shall mutually agree upon additional information to be included in such forecast. ARTICLE 14 SERVICE AND SUPPORT PLAN Nortel Networks shall make available to Customer, as, when and if ordered by Customer, for a period of three (3) years after expiration of the Term, a Service and Support Plan. The terms of the Service and Support Plan during the Term are attached hereto as Attachment C. The terms of the Service and Support Plan for the three (3) year period after the expiration of the Term shall be no less favorable to Customer than the terms of the Service and Support Plans made generally available to Nortel Networks' customers at such time. The prices for the Service and Support Plan during the Term are set forth in Attachment C and are no less favorable to Customer than Nortel Networks' current standard rates. ARTICLE 15 PATENT INDEMNITY 15.1 Nortel Networks will defend, at its own expense, all suits and claims made or brought by a third party against Customer and/or its Affiliates, wherever such suit or 42 claim is commenced or asserted, for infringement or violation of any patent, trademark, copyright, trade secret, or other tangible or intangible property rights of any kind whatsoever (collectively, "Property Rights") of such third party, covering, or alleged to cover, the Equipment, Software, or the System or any component thereof, excluding Reseller Items, or the use thereof in the Territory, in the form furnished or as subsequently modified by Nortel Networks (and not modified by Customer or any other person without the written consent of Nortel Networks), and Nortel Networks will pay all sums, including attorneys' fees and expenses and other costs which, by final judgment or decree, or in settlement of any such suit or claim, may be assessed against Customer or its Affiliates on account of such infringement or violation, provided (a) Nortel Networks shall be given prompt written notice of all claims of any such infringement or violation and of any suits or claims brought or threatened against Customer or its Affiliates of which Customer or such Affiliate has express knowledge; provided that a failure to give such prompt notice shall not affect the indemnification to be provided hereunder except to the extent that Nortel Networks shall have been actually prejudiced as a result of such failure; (b) Nortel Networks shall be given full authority to assume the sole defense thereof through its own counsel at its own cost and expense and to compromise or settle any suits or claims so far as this may be done without prejudice to the right of Customer to continue the use, as contemplated, of the Equipment, Software or the System or any component thereof so furnished, subject to Section 15.2; (c) Customer shall cooperate fully with Nortel Networks in the defense of such suit or claims and provide Nortel Networks such assistance as Nortel Networks may reasonably require in connection therewith; provided, however, that Customer shall be reimbursed by Nortel Networks for 43 its actual, reasonable, out-of-pocket costs for such reasonable cooperation; and (d) use of such Equipment, Software, System or component was at all times within the Territory. 15.2 If in any such suit so defended all or any part of the Equipment, Software, or the System or any component thereof is held to constitute an infringement or violation of any third party's Property Rights, or if in respect of any claim of infringement or violation Nortel Networks deems it advisable to do so, Nortel Networks shall, at its sole option and expense, use its commercially reasonable best efforts to take one or more of the following actions: (a) procure the right for Customer to continue the use of the same without interruption, (b) replace the same with non-infringing Equipment or Software or components (which Equipment, Software or components shall be equivalent as to form, fit and function) with as minimal interruption of use as is practicable (and any such interruption shall not be during Customer's peak hours) provided that such replacement shall not adversely impair the System, Equipment or Software from performing in accordance with all material performance Specifications, or (c) modify such Equipment or Software or component so as to be non-infringing Equipment or Software or components with as minimal interruption of use as is practicable (and any such interruption shall not be during Customer's peak hours) provided that the modified non-infringing Equipment or Software or components shall not adversely impair the System, Equipment or Software from performing in accordance with all material performance Specifications. In the event that, despite Nortel Networks' commercially reasonable best efforts, none of subsections (a), (b) or (c) can be performed by it, then Nortel Networks shall have the right to take back the infringing item(s) and give Customer a credit equal to Customer's net aggregate purchase price for such item(s), if such return occurs during the 44 Term and, commencing upon the first day after the expiration of the Term, less depreciation of twenty (20%) percent of such purchase price for each year of use thereof after expiration of the Term. To the extent that the return of any such infringing item in accordance with the previous sentence prevents or adversely impairs Customer's use or operation of other items of Equipment or Software, Customer's right to receive a credit shall apply to the net aggregate purchase price of such other items, less depreciation, if applicable, as well. 15.3 The indemnity provided in this Article 15 shall not extend to infringement of Property Rights to the extent that such infringement arises from (a) modifications made to Equipment or Software by Nortel Networks in order to adhere to special Equipment or Software design requests, specifications or instructions of Customer but only if such alleged infringement would not have resulted from Nortel Networks' design prior to Customer's requested modification, (b) use of the Equipment, Software or System or any component thereof in a manner or for a purpose not stated in the Specifications or in a manner or for a purpose not reasonably contemplated by Nortel, (c) use of the Equipment, Software or System in combination with any other equipment or software not supplied by Nortel Networks hereunder, (d) the incorporation of components not manufactured or provided by Nortel Networks into the Equipment or Software, (e) Customer originated modifications to the Equipment or Software (unless expressly permitted by Nortel Networks in writing), or (f) Customer's failure to install or have installed changes, revisions or updates required to be installed by Nortel Networks in order to prevent such infringement. 45 15.4 Nortel Networks' Property Rights indemnification responsibilities under this Article 15 shall not be applicable to Reseller Items provided to Customer pursuant to this Agreement. With respect to Reseller Items, any Property Rights indemnification provided to Nortel Networks by the third party vendor supplying the applicable Reseller Item shall inure, to the extent applicable or permitted, to the benefit of Customer, and Customer shall have the right to enforce such indemnification directly with the third party providing the applicable Reseller Item to Nortel Networks (or, if Customer is not permitted to enforce such indemnification directly, Nortel Networks shall enforce such indemnification on behalf of Customer). 15.5 The preceding represents Customer's sole and exclusive remedy regarding any claim of infringement or violation of Property Rights. ARTICLE 16 CHANGE ORDERS; ORDER CANCELLATION 16.1 The terms and conditions of any Purchase Order, including the provisions of the applicable Statement of Work, may be amended by mutually agreed Change Orders ("Change Orders"). Each Change Order must be in writing, must identify the changes to be made and must be signed by the duly authorized representatives of each of Nortel Networks and Customer. 16.2 Unless otherwise expressly agreed in a written document signed by both parties hereto, any Purchase Order, acknowledgment form or other form issued by Customer or Nortel Networks containing terms and conditions of sale shall not have the effect of modifying the terms and conditions of this Agreement, notwithstanding any act of Customer and payment therefor, and all deliveries and Installation of goods and 46 performance of services by Nortel Networks shall be deemed to be only upon the terms and conditions of this Agreement. 16.3 Customer, upon at least twenty-one (21) days prior notice to Nortel Networks, may issue "holds" on Purchase Orders or suspend performance under this Agreement, in whole or in part, at no additional cost to Customer except as otherwise provided in this Section 16.3. If Customer issues a hold or suspends performance for a period longer than ten (10) Business Days, Customer will compensate Nortel Networks for any actual, reasonable, out-of-pocket costs incurred by Nortel Networks due to such hold or suspension after such ten (10) Business Day period. If any Purchase Order is placed on hold or is suspended for a period of ninety (90) days or greater, it shall be deemed automatically cancelled and shall be subject to the payment of any cancellation fees as set forth below. In the event that Customer suspends performance, Customer and Nortel Networks will mutually agree on a date to reconvene such performance or if Customer does not elect to reconvene such performance, Nortel Networks shall invoice Customer for Services actually performed and Customer shall pay such invoice in accordance with Article 4. 16.4 Customer may cancel any Purchase Order or portion thereof prior to the shipment of the items comprising such Purchase Order or portion thereof. No cancellation fee shall be payable by Customer with respect to Purchase Orders for CDMA, TDMA, AMPS and GSM Software. With respect to the cancellation of Purchase Orders for Equipment that has been engineered or customized by Nortel Networks specifically for Customer's use or operation, Customer shall pay Nortel Networks a cancellation fee based upon the number of days prior to the scheduled shipping date that 47 Nortel Networks receives the cancellation notice from Customer. Such cancellation fee shall be in accordance with the following table:

============================================================================================== Percentage of Aggregate Price to be Paid as Date of Cancellation Notice Cancellation Fee - ---------------------------------------------------------------------------------------------- 29 days to 1 day prior to shipment [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] 59 days to 30 days prior to shipment [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] 90 days to 60 days prior to shipment [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] - ---------------------------------------------------------------------------------------------- 91 days or greater prior to shipment [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY ==============================================================================================

48 - ---------------------------------------------------------------------------------------------- WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] ============================================================================================== Purchase Orders for Equipment which is not engineered or customized by Nortel Networks specifically for Customer's use or operation (including non-engineered BTS' and cell sites) may be cancelled at no cost to Customer. Notwithstanding anything to the contrary contained in this Article 16, Purchase Orders issued with respect to the Initial Order shall be firm and non-cancelable under this Article 16. Any cancellation fees due to Nortel Networks pursuant to this Section 16.4 shall be invoiced by Nortel Networks to Customer upon receipt by Nortel Networks of the applicable cancellation notice. The payment by Customer of such cancellation fees as described in this Section 16.4 shall be Nortel Networks' sole remedy and Customer's sole obligation for the cancellation of Purchase Orders by Customer. ARTICLE 17 SOFTWARE RIGHT-TO-USE 17.1 The rights and obligations of Customer and Nortel Networks with respect to the Software Right-to-Use are contained in this Agreement and in the Software Right-To-Use Agreement attached hereto as Attachment G. Nortel Networks represents that the Software licensed by Customer hereunder is all of the Software which Customer shall require to provide the features and functionality set forth in the Specifications for such Software, and that Customer shall not be required to license additional Software in order to realize the benefit of such features and functionality, with the exception of Software prerequisites identified in the Documentation or unless otherwise indicated in a written 49 proposal or quotation provided to Customer prior to the issuance of the applicable Purchase Order for the applicable Software. 17.2 In addition to the rights and obligations described in Section 17.1, Nortel Networks agrees to the following: (a) If TDMA, CDMA, GSM or AMPS Software or any part thereof is lost or damaged (other than due to the fault of Customer) before being Accepted or put In-Service, Nortel Networks will promptly replace it at no additional cost to Customer. Any such Software lost or damaged after Acceptance or due to the fault of Customer shall be replaced by Nortel Networks at a charge to Customer equal to Nortel Networks' actual cost for gathering such Software. Any Software which is not TDMA, CDMA, GSM or AMPS Software, or which is a Reseller Item, that is lost or damaged for any reason shall be replaced by Nortel Networks at a charge to Customer equal to Nortel Networks' actual cost for gathering such Software. (b) If Nortel Networks modifies and/or changes the Software to permit additional features and such features are made generally available to its customers in the Territory, such Software will promptly be made available to Customer at Nortel Networks' then current price for such features, less applicable discounts and incentives as provided in Attachments A and B. ARTICLE 18 NON-DISCLOSURE OF TECHNICAL INFORMATION AND PROPRIETARY RIGHTS 18.1 Either party (hereafter the "Disclosing Party") may disclose to the other party (hereafter the "Receiving Party") information which the Disclosing Party considers proprietary and confidential. Accordingly, with respect to any confidential or proprietary specifications, drawings, sketches, models, samples, tools, technical information, 50 confidential business information or data which is furnished by the Disclosing Party to the Receiving Party in contemplation of or under this Agreement (hereinafter "Information"), the Receiving Party shall treat such Information as confidential information with the same degree of care as the Receiving Party affords to confidential information of its own of a similar nature. 18.2 The provisions of this Article 18 shall not apply to any Information which (a) is or shall become publicly available without fault on the part of the Receiving Party; (b) is already known by the Receiving Party prior to receipt from the Disclosing Party (so long as such Information was rightfully obtained and is not subject to any other confidentiality agreement); (c) is rightfully obtained by the Receiving Party from third parties without restrictions; (d) the Receiving Party is required by law or by a governmental authority or agency to disclose such Information, or (e) is independently developed by a Receiving Party without any direct or indirect use of such Information. 18.3 In the event that the Receiving Party becomes obligated to disclose Information pursuant to an order of any governmental or other authority, the Receiving Party shall advise the Disclosing Party and, if requested by the Disclosing Party and at the Disclosing Party's sole cost and expense, seek a protective order or other appropriate remedy that will permit the Receiving Party to avoid such disclosure. In the event that such protective order or other remedy is not obtained, the Receiving Party will disclose only that portion of the Information as it is obligated to disclose pursuant to such order, and will use all reasonable efforts, at the Disclosing Party's sole cost and expense, to obtain assurances that confidential treatment will be accorded to any Information so disclosed. 51 18.4 The provisions of this Article 18 shall survive the expiration or termination of this Agreement. ARTICLE 19 TAXES Customer shall be responsible for the payment of all sales taxes and Software license fee taxes payable in the Territory arising pursuant to this Agreement. Nortel Networks shall be responsible for all other taxes payable to or imposed by the government of the Territory (or any state, locality or subdivision thereof), including, without limitation, any tax on its income, revenue or gross receipts in respect of payments made by Customer to Nortel Networks under this Agreement and any tax relating to franchise, license, occupation, other real or personal property, payroll, unemployment and social security taxes and fees. Any party making payments of taxes on behalf of the other party shall provide the other party with suitable tax receipts confirming that tax payments have been made on such other party's behalf. Notwithstanding anything to the contrary contained herein, neither Customer nor Nortel Networks shall be responsible for the payment of taxes which are the responsibility of the other party under this Article 19. ARTICLE 20 INTENTIONALLY OMITTED ARTICLE 21 INSURANCE 21.1 Except where Customer designates its own carrier to perform delivery, Nortel Networks shall maintain and keep in force, on behalf of Customer and until delivery of the applicable items, risk insurance, in form and substance in accordance with industry standards, covering the System and all Equipment delivered to Customer, and 52 shall, upon request, furnish Customer with proof (in the form of Certificates of Insurance) that such insurance has been obtained and is in force. 21.2 Nortel Networks shall at all times during the Term carry insurance with limits not less than the limits described as follows: (a) Employer's General Liability - Limits $1,000,000 per occurrence. (b) Comprehensive General Public Liability: $2,000,000 single limit bodily injury and property damage combined; such coverage shall include a broad form liability rider, completed operations coverage rider and contractual liability rider. (c) An umbrella policy with $4,000,000 single limit bodily injury and property damage combined. (d) Worker's Compensation (Statutory limits in the Territory or subdivision thereof in which this Agreement is to be performed). 21.3 Customer shall be named as an additional insured with respect only to the operations of Nortel Networks under the insurance required in Sections 21.2(b) and (c), and as loss payee, as its interests may appear, under the insurance required by Section 21.1. Nortel Networks shall provide to Customer within fifteen (15) days of the date hereof a certificate of insurance consistent with this Article 21. Such policies shall be carried and maintained during the Term and if Nortel Networks fails to renew, cancels or terminates any of such policies during the Term of this Agreement, Nortel Networks will provide written notice thereof to Customer as promptly as practicable. 21.4 Notwithstanding the requirements as to insurance to be carried, the insolvency, bankruptcy, or failure of any insurance company carrying insurance for Nortel Networks, or failure of any such insurance company to pay claims accruing, or the 53 failure of Nortel Networks to obtain any such insurance, shall not be held to waive any of the provisions of this Agreement or relieve Nortel Networks from any obligations under this Agreement. ARTICLE 22 TERMINATION AND DEFAULT 22.1 Prior to the shipment of the applicable items of Equipment or Software, or the performance of the applicable Service(s), Customer may, without prejudice to any of Customer's rights accrued prior to the date of termination, at its option and upon written notice to Nortel Networks, signed by a person duly authorized by Customer, terminate any Purchase Order or portion thereof, without penalty, in the event that Nortel Networks is in default under any material term of such Purchase Order (or the applicable Statement of Work, if any) or this Agreement (as such material term pertains to the applicable Purchase Order) and an action to correct such default is not commenced by Nortel Networks within thirty (30) days after its receipt of written notice thereof from Customer and such default is not thereafter cured within forty-five (45) days after commencement of correction by Nortel Networks, unless Nortel Networks cannot complete such cure within such period for reasons beyond its control and Nortel Networks is continuing to diligently pursue the cure, in which case such default must be cured no later than ninety (90) days after Nortel Networks' original receipt of written notice from Customer under this Section 22.1. 22.2 Customer, without prejudice to any of Customer's rights accrued prior to the date of termination, may, at its option and upon written notice to Nortel Networks, signed by a person duly authorized by Customer, terminate this Agreement, without penalty, in the event that Nortel Networks is in default under any material term of this 54 Agreement and an action to correct such default is not commenced by Nortel Networks within thirty (30) days after its receipt of written notice thereof from Customer and such default is not thereafter cured within forty-five (45) days after commencement of correction by Nortel Networks, unless Nortel Networks cannot complete such cure within such period for reasons beyond its control and Nortel Networks is continuing to diligently pursue the cure, in which case such default must be cured no later than ninety (90) days after Nortel Networks' original receipt of written notice from Customer under this Section 22.2. Customer, without prejudice to any of Customer's rights accrued prior to the date of termination, may, upon written notice to Nortel Networks signed by a person duly authorized by Customer, also terminate this Agreement at its option, without penalty to Customer (i) if Nortel Networks (a) applies for or consents to the appointment of, or the taking of possession by a receiver, custodian, trustee, or liquidator of itself or of all or a substantial part of its property, (b) makes a general assignment for the benefit of its creditors, (c) commences a voluntary proceeding under any bankruptcy code or under any other law relating to the relief from creditors generally, or (d) fails to contest in a timely or appropriate manner, or acquiesces in writing to, any petition filed against it in an involuntary proceeding under any bankruptcy code or under any other law relating to the relief from creditors generally or any application for the appointment of a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property, or its liquidation, reorganization, dissolution, or winding-up. 22.3 In the event of non-payment by Customer within twenty (20) days after Customer's receipt of written notice from Nortel Networks of overdue amounts owed by Customer to Nortel Networks hereunder, Nortel Networks, without prejudice to any of 55 Nortel Networks' rights accrued prior to such action, may, at its option and upon written notice to Customer, signed by a person duly authorized by Nortel Networks, suspend its performance (including shipment and performance of applicable Services) with respect to such Purchase Order and all pending Purchase Orders or terminate the applicable Purchase Order and Nortel Networks shall additionally have the right either to refuse or accept additional Purchase Orders after the date of such notice or to require payment terms other than those set forth in this Agreement prior to the acceptance of additional Purchase Orders. Amounts which have not been paid by Customer because they are the subject of a good faith dispute shall not be considered to be an instance of non-payment and shall not be subject to the provisions of this Section 22.3. 22.4 Nortel Networks, without prejudice to any of Nortel Networks' rights accrued prior to the date of termination, may, at its option and upon written notice to Customer, signed by a person duly authorized by Nortel Networks, terminate this Agreement without any obligation to deliver any Equipment, Software or Services not yet delivered by it to Customer, in the event that Customer is in default under any material term of this Agreement (other than with respect to overdue amounts, which shall be governed by Section 22.3) and an action to correct such default is not commenced by Customer within thirty (30) days after receipt of written notice thereof from Nortel Networks and such default is not thereafter cured within forty-five (45) days after commencement of correction by Customer, unless Customer cannot complete such cure within such period for reasons beyond its control and Customer is continuing to diligently pursue the cure, in which case such default must be cured no later than ninety (90) days after Customer's original receipt of written notice from Nortel Networks under this 56 Section 22.3. Nortel Networks, without prejudice to any of Nortel Networks' rights accrued prior to the date of termination, may, upon written notice to Customer signed by a person duly authorized by Nortel Networks, also terminate this Agreement without any obligation to deliver Equipment, Software or Services not yet delivered in the event that Customer: (a) applies for or consents to the appointment of, or the taking of possession by a receiver, custodian, trustee, or liquidator of itself or of all or a substantial part of its property, (b) makes a general assignment for the benefit of its creditors, (c) commences a voluntary proceeding under any bankruptcy code or under any other law relating to relief from creditors generally or (d) fails to contest in a timely or appropriate manner, or acquiesces in writing to, any petition filed against it in an involuntary proceeding under any bankruptcy code or under any other law relating to relief from creditors generally, or any application for the appointment of a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property, or its liquidation, reorganization, dissolution, or winding-up. 22.5 If Customer or Nortel Networks terminates this Agreement, Nortel Networks' obligations hereunder with respect to Equipment and Software already delivered, installed and not returned (including the provision of related Services), and Customer's obligations with respect to Equipment and Software not returned (and Services properly performed), shall continue in full force and effect. ARTICLE 23 INTENTIONALLY OMITTED ARTICLE 24 CONTINUITY FOR SUPPLY OR REPLACEMENT 24.1 For a period of (i) at least [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE 57 COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] years following the purchase of any item of CDMA or GSM Equipment, and (ii) [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] years following the purchase of any item of Equipment other than CDMA or GSM Equipment, Nortel Networks shall make available for sale to Customer at its then current prices (and, during the Term of this Agreement, subject to applicable discounts as set forth in Attachments A and B), replacement and expansion parts for such Equipment or their "form, fit and function" equivalent, which shall include spare parts and modules for regular maintenance and repair and to allow for channel expansion and cell splitting (up to the design limits of the Equipment) which is compatible with the System sold hereunder. 24.2 Nortel Networks may at any time cease production or purchase, as the case may be, of any item of Equipment or Software (or component thereof) so long as Nortel Networks maintains a sufficient inventory of such Equipment, Software or component thereof to meet its obligations pursuant to Section 24.1 above. In the event that such discontinuance of production or purchase is in anticipation of migration to new generation Equipment which is not compatible with that purchased by Customer hereunder, Nortel Networks shall notify Customer of its intent to discontinue production or purchase, as the case may be, sufficiently in advance of final production run or purchase to allow Customer to purchase such additional items of such Equipment, Software or components thereof as it may desire for inclusion in such final production 58 run. With respect to Reseller Items, Nortel Networks shall use commercially reasonable efforts to meet the terms and conditions of this Section 24.2. 24.3 Nortel Networks warrants that it will use commercially reasonable efforts to ensure that all new CDMA or GSM Equipment or Software designed to serve the same or substantially the same purpose in the System as the existing Equipment and Software ("Alternative Product") shall interconnect to and operate as part of the CDMA or GSM System, as applicable, without requiring a change-out or replacement of such System or the Equipment that comprises such System. This warranty shall (a) apply for three years after generally availability of any version of the applicable Equipment or the applicable Software Release within the Territory, (b) not apply to Reseller Items, and (c) not apply if Nortel Networks offers another existing or new product providing the same or substantially the same functionality as the Alternative Product such that Customer is not forced to upgrade its existing CDMA or GSM Equipment. ARTICLE 25 SHIPPING 25.1 Nortel Networks shall also take the following actions in connection with the Equipment, Software and Services provided by it hereunder: (a) At no additional charge, package Equipment and Software in a suitable manner in accordance with Nortel Networks' usual standards and methods and provide protection against damage during shipment, handling and storage in dry, unheated quarters. Should any law or regulation applicable in the Territory require packaging of Equipment or Software in a manner that is not in accordance with Nortel Networks' standard packaging methods, Nortel Networks shall comply with all such applicable laws and regulations and Customer shall pay to Nortel Networks any 59 additional costs and expenses reasonably incurred by Nortel Networks in complying with such laws or regulations. (b) Inform Customer of the dates of shipping of the goods to the Installation site or other mutually agreed upon delivery location. Nortel Networks shall send to Customer concurrently with shipment, the original copies of (i) commercial invoices; and (ii) the packing slip setting forth the contents of the boxes shipped. ARTICLE 26 WORK RULES AND SUBCONTRACTORS 26.1 The employees, agents, representatives or subcontractors of Nortel Networks shall, while on any Installation site, comply with all applicable laws and regulations, as well as Customer's or any landlord's reasonable plant regulations, which apply to the Installation. Any employee, agent, representative or subcontractor of Nortel Networks failing to comply shall be refused admittance to that Installation site, and must be replaced by Nortel Networks within one (1) week from date of non-admittance. 26.2 If Customer has any reasonable objection to any subcontractor of Nortel Networks, Customer shall promptly advise Nortel Networks of such objection and Nortel Networks shall in good faith consider such objection and Nortel Networks shall promptly meet with Customer to discuss such objection, will consider in good faith such objection and, in its reasonable discretion after such consultation, will take any steps or actions (including replacing any of its subcontractors with another subcontractor acceptable to Customer) as may be necessary in order to eliminate any such objection Customer may have. 26.3 Nortel Networks expressly certifies that its employees, workers, agents, representatives and subcontractors and their workers and other personnel employed in the 60 performance of this Agreement by Nortel Networks are the employees, workers, agents, representatives and subcontractors and the personnel of Nortel Networks, and not of Customer. 26.4 Nortel Networks shall not permit such employees, agents, representatives or subcontractors to interfere with the normal functioning and security of the work and other facilities of Customer or of other persons at the Installation locations. Customer may request Nortel Networks to cause its employees, agents, representatives or subcontractors to wear visible identification in any of the Installation locations. In general, Nortel Networks, its agents, employees, representatives or subcontractors are obliged to comply with all reasonable rules, regulations and procedures of security adopted by Customer. Upon completion of Installation, Nortel Networks shall promptly remove all of its tools, excess equipment and the like and deliver the sites clean and in good condition suitable for normal utilization provided that Customer shall grant Nortel Networks reasonable access to such sites for such removal and clean-up. 26.5 Nortel Networks shall be responsible for the supervision and direction of all work performed by its subcontractors hereunder using Nortel Networks' professional skill and attention. Nortel Networks shall be responsible for all construction means, methods, techniques, sequences, and procedures, and safety precautions and programs in connection with such work, and shall be responsible for coordinating all portions of all work performed by its subcontractors. No assignment by Nortel Networks to its subcontractors of its rights, duties, obligations or liabilities hereunder shall relieve Nortel Networks of any of the duties, liabilities or obligations owed by Nortel Networks hereunder to the Customer. Nortel Networks is solely responsible for any payments or 61 reimbursement of expenses owed to any subcontractor for any services performed by such subcontractor in accordance with the terms of this Agreement and shall make all such payments on a timely basis. Nortel Networks hereby acknowledges and agrees that Customer has no responsibility, obligation or liability to any of Nortel Networks' subcontractors hereunder and that no subcontractor has any right to impose a lien or security interest with respect to any Equipment furnished to Customer hereunder or any Installation Services provided to Customer hereunder. The duties, obligations, liabilities and responsibilities of Nortel Networks under this Agreement shall continue in full force and effect and shall not be limited, modified, affected or reduced in the event of the termination, cancellation or suspension of any agreement between Nortel Networks and any of its subcontractors or as a result of any default, breach or violation on the part of Nortel Networks or any of its subcontractors under any agreement or arrangement between Nortel Networks and any such subcontractor. ARTICLE 27 ADDITIONAL OBLIGATIONS 27.1 Each of the parties shall perform all of its obligations under this Agreement in a timely fashion in accordance with the schedule set forth in the applicable Purchase Order (as accepted by Nortel Networks in accordance with Article 2) or Statement of Work, or as otherwise agreed to in writing. 27.2 (a) Customer shall provide Nortel Networks with all information reasonably requested from Customer which Customer has in its possession, which is necessary for Nortel Networks to perform, or cause to be performed, its obligations under this Agreement. Such information shall be provided upon reasonable notice in a form reasonably specified by Nortel Networks. 62 (b) Nortel Networks shall provide Customer with all information reasonably requested from Nortel Networks which Nortel Networks has in its possession, which is necessary for Customer to perform, or cause to be performed, its obligations under this Agreement. Such information shall be provided upon reasonable notice in a form reasonably specified by Customer. 27.3 Customer shall provide, at its own cost, commercially reasonable security measures required for safeguarding the storage areas for Equipment delivered and the sites where Installation activities are to be performed. This security shall be provided from the start of Installation at each site until Acceptance. 27.4 All tools required for Installation shall be shipped to the Installation sites at the sole cost and expense of Nortel Networks. 27.5 In order to facilitate Installation, Customer shall: (a) Allow all Nortel Networks personnel employed in the Installation to have access to the Installation sites at all reasonable hours to the same extent Customer would have access (Customer shall use reasonable efforts, but shall be under no obligation, to obtain 24 hour access), and permit the use by such personnel of all routes, roadways, ramps, keys, lock combinations and e-cards under the control of Customer when such use is reasonably necessary for the proper carrying out of the Installation; (b) Use reasonable efforts to ensure, to the reasonable satisfaction of Nortel Networks, that personnel carrying out activities at the Installation sites who are not employed by Nortel Networks or its subcontractors do not interfere with the progress of the Installation, 63 (c) Ensure that air-conditioning equipment is operating satisfactorily within the ranges set forth in Nortel Networks' Specifications, (d) Ensure that all transmission and remote end facilities (other than interconnections) that are the responsibility of Customer and are necessary for the testing of the System, are operational and ready for the aforesaid tests when required for each portion of the work; (e) Ensure that the switch and cell site or base station locations are ready and available when required for the commencement of Installation; (f) Provide electric current facilities for the Equipment, including suitable electrical outlets for soldering irons, hand-lamps and power tools, in the rooms in which the work is to be performed; (g) Provide suitable floor space to allow Equipment to be uprighted and placed in position and all necessary openings and ducts for cable and conductors in floors, walls and partitions at the sites; (h) Provide suitable and easily accessible floor space during the progress of the work for secure storage of major items of Equipment closely adjacent to where they will be used, for administrative purposes and for storage of tools and other property of Nortel Networks; and (i) Perform all of its obligations as set forth in any applicable Purchase Order, Statement of Work or as otherwise agreed to by the parties in writing. ARTICLE 28 GOVERNMENTAL COMPLIANCE; INDUSTRY STANDARDS; INTERCONNECT 28.1 In the performance of this Agreement, Nortel Networks shall comply with the provisions of all of the laws of the Territory and applicable local laws, rules, 64 regulations and codes in all respects applicable to safety matters or otherwise relating to the manufacture, delivery and Installation of the Equipment and Software and shall obtain the necessary type approvals required in the Territory for the Equipment and Software. At Customer's request, Nortel Networks shall promptly furnish Customer with evidence that such type approvals have been obtained and are in force. 28.2 Any licenses or permits required by any governing authority of the Territory relating to the use of the Equipment and Software in a specific locality shall be the sole responsibility of Customer. At the request of Nortel Networks, Customer shall provide Nortel Networks with any such licenses or permits, or furnish Nortel Networks with evidence that such licenses or permits have been obtained and are in force. 28.3 Nortel Networks shall perform Installation work ordered hereunder so as to cause no unreasonable interference with or obstruction to lands and thoroughfares or rights of way on or near which the Installation work may be performed. If repairs (or, if repairs are not feasible, new construction) are required in order to repair or replace facilities damaged by Nortel Networks due to its negligence, the actual, reasonable costs of such repairs or new construction shall be at Nortel Networks' cost and expense, to the extent that Nortel Networks' negligence caused such damage. Customer shall be responsible for site acquisition and for obtaining all necessary easements, rights of way and access to, and building permits for, each cell site, base station and switch location and microwave location. 28.4 Compatibility Information is the technical information, including Software interfaces (but excluding source code and internal system interfaces), required to permit the design of hardware and/or software that is functionally interconnectable with the 65 Equipment and Software supplied by Nortel Networks hereunder. Nortel Networks shall reasonably cooperate with third parties as Customer may request, subject to any appropriate confidentiality or other agreements, in order to facilitate such interconnection. 28.5 During the Term and for a period of [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] years after expiration of the Term, Nortel Networks shall provide to Customer that Compatibility Information, if currently available and subject to the confidentiality provisions of this Agreement and such other restrictions as Nortel Networks may reasonably request, which gives Customer the necessary technical information and interconnection information to interface with the System as specified in Section 28.4 above. Customer shall have the right to disclose such Compatibility Information to third parties (subject to appropriate non-disclosure agreements approved by Nortel Networks, which approval shall not be unreasonably withheld or delayed), whose equipment and/or software will be interconnected with the System, Equipment or Software or who will be developing interfaces in order to accomplish interconnectability as described in Section 28.4 above. Nortel Networks agrees, at the request of Customer, to reasonably cooperate with Customer or any third party to permit and accomplish such interconnection. Nortel Networks agrees to provide Customer, as promptly as reasonably practicable, advance notice of any new, or changes in the existing, interface specifications and upon completion of such new, or changed, specifications to provide such to Customer, subject to Sections 28.4 and this 28.5. 66 ARTICLE 29 COOPERATIVE ADVERTISING 29.1 Nortel Networks shall, commencing with the Effective Date and during the Term, reimburse Customer for [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] of Customer's actual, reasonable, out-of-pocket costs incurred by Customer with respect to its cooperative marketing programs which contain specific references to Nortel Networks and which are in accordance with Attachment I. The amount reimbursed by Nortel Networks to Customer during the Term and in accordance with this Article 29 shall be capped at an amount equal to [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] the aggregate net purchase price paid for the Equipment, Software and Services purchased by Customer hereunder (but excluding all GSM Equipment, Software and Services). Such amount shall be paid to Customer following accrual thereof and in accordance with Attachment I within thirty (30) days of the end of each calendar quarter, and Nortel Networks shall provide to Customer access to an online statement setting forth Nortel Networks' calculations of Customer's accrued cooperative advertising funds as well as the amounts already utilized by Customer for cooperative advertising programs under this Article 29. Customer shall provide Nortel Networks with copies of invoices reasonably detailing its expenditures with respect to such programs. 67 29.2 The parties agree that under the Master Purchase Agreement, dated July 15, 1999, between Customer and Nortel Networks, as amended, Customer had remaining at the end of the Term a balance of accrued but unused cooperative advertising funds. The parties further agree that such unused funds shall continue to be available to Customer under this Agreement in accordance with Attachment I; provided, however, that Customer may only utilize such remaining funds to be reimbursed for fifty percent [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] of its actual, reasonable, out-of-pocket costs incurred by Customer with respect to cooperative marketing programs for which Customer receives invoices dated on or prior to December 31, 2003. ARTICLE 30 ASSIGNMENT 30.1 Customer may assign this Agreement to any third party without the prior written consent of Nortel Networks, to (a) any entity resulting from a merger, consolidation or other reorganization to which Customer is a party, or (b) any entity to which Customer transfers all or substantially all of the assets of Customer existing at such time. Customer shall not be entitled to assign this Agreement without the consent of Nortel Networks (i) to an entity which intends to use the Equipment or Software outside of the Territory, (ii) to any competitor of Nortel Networks directly or indirectly engaged in the manufacture and/or sale of wireless telecommunications infrastructure equipment, or (iii) if Customer is in material breach under the Agreement. Customer agrees to provide Nortel Networks with prompt written notice after any such assignment. 68 30.2 Customer shall have the right, without the prior written consent of Nortel Networks, to transfer Nortel Networks' Software Right-to-Use (as set forth in Attachment G), it being understood and agreed that no additional Software fees shall be due unless such Software would have been subject to continuing fees if it had been retained by Customer) to any purchaser, transferee or assignee of the FCC license and associated system in a market for which Customer has purchased or licensed Equipment and Software, so long as such purchaser, transferee or assignee (a) agrees in writing to be bound by the terms and conditions of such Right-to-Use, (b) does not intend to use such Equipment and Software outside of the Territory, (c) is not a competitor of Nortel Networks directly or indirectly engaged in the manufacture and/or sale of wireless telecommunications infrastructure equipment, and (d) is not in material breach of any agreement with Nortel Networks. Customer shall provide Nortel Networks prior written notice of such assignment. In the event of any such sale, transfer or assignment, Nortel Networks agrees to negotiate in good faith with any assignee with respect to the balance of any warranty covering the assigned Equipment or Software. 30.3 Customer shall have the right to assign this Agreement, or all or any part of its rights or obligations hereunder, to its parent and to any Affiliate of Customer without recourse to Customer, provided that Nortel Networks approves the financial status of such Affiliate, such approval by Nortel Networks not to be unreasonably withheld or delayed. Customer shall not be entitled to assign this Agreement without the consent of Nortel Networks, or all or any part of its rights or obligations hereunder, (i) to an Affiliate which intends to use the Equipment or Software outside of the Territory, (ii) to any competitor of Nortel Networks directly or indirectly engaged in the manufacture 69 and sale of wireless telecommunications infrastructure equipment, (iii) if such Affiliate is in material breach under the Agreement, and (iv) unless Customer has given Nortel Networks prior written notice of such assignment. 30.4 Nortel Networks shall not assign this Agreement or any interest in any funds that may be due to Nortel Networks hereunder without the prior written consent of Customer, except to Nortel Networks Limited, any wholly owned subsidiary of Nortel Networks or Nortel Networks Limited, or to the successor corporation in connection with a merger of Nortel Networks or Nortel Networks Limited or a sale of all or substantially all of the assets of Nortel Networks or Nortel Networks Limited to any other entity; provided, however, that any such assignment to a wholly owned subsidiary of Nortel Networks or Nortel Networks Limited shall not relieve Nortel Networks of its obligations under this Agreement. 30.5 Customer hereby consents to the sale by Nortel Networks of Nortel Networks' right to receive any monies ("Receivables") so long as Nortel Networks advises Customer of such sale, including the name of the entity to which the Receivables were sold, as promptly as reasonably practicable, but in no event longer than 20 days after such sale. Customer grants permission for Nortel Networks to disclose the provisions of this Agreement (subject to appropriate non-disclosure agreements) to purchasers and prospective purchasers of Receivables, or their Affiliates and others with a present or prospective financial interest in such Receivables, and their respective agents, attorneys, auditors, rating agencies and other advisors. 70 ARTICLE 31 AUTHORITY 31.1 Customer represents and warrants that (a) all necessary approvals and authority for Customer to enter into this Agreement and bind Customer have been obtained, (b) the person executing this Agreement on behalf of Customer has express authority to do so and, in so doing, to bind Customer hereto, (c) the execution of this Agreement by Customer and the consummation of the transactions contemplated hereby do not violate any provision any by-law, charter, regulation or any other instrument governing the authority of Customer and (d) the execution, delivery and performance of this Agreement by Customer, and the purchase of the System and the Equipment and Right-to-Use Software by Customer and the use thereof by Customer will not violate any agreement, document, instrument, order, judgment or law binding upon Customer or any of its property. Customer shall furnish Nortel Networks with such documents as Nortel Networks may reasonably request showing proof of authority in accordance with this Article 31. 31.2 Nortel Networks represents and warrants that (a) all necessary approvals and authority for Nortel Networks to enter into this Agreement and bind Nortel Networks have been obtained, (b) the person executing this Agreement on behalf of Nortel Networks has express authority to do so and, in so doing, to bind Nortel Networks hereto, (c) the execution of this Agreement by Nortel Networks and the consummation of the transactions contemplated hereby do not violate any provision of any by-law, charter, regulation, or any other instrument governing the authority of Nortel Networks, (d) Nortel Networks has all necessary licenses, agreements, personal property rights and other authorizations and consents necessary to enter into this Agreement and consummate 71 the transactions contemplated hereby and to sell and Install (other than such licenses and authorizations required to be obtained by Customer pursuant to the express provisions of this Agreement) the System and the Equipment, license the Software and provide all of the Services to Customer, (e) the execution, delivery and performance of this Agreement by Nortel Networks, and the purchase of the System, and the Equipment and Right-to-Use Software from Nortel Networks by Customer, and the use thereof by Customer will not violate any agreement, document, instrument, order, judgment or law binding upon Nortel Networks or any of its property, (f) the execution of this Agreement by Nortel Networks and the consummation of the transactions contemplated hereby by Nortel Networks does not, nor will the use of the System, Equipment or Software by Customer in the Territory, violate any patent, trademark, copyright or other property rights of others; provided, however, that Customer's sole remedies for any breach of this clause 31.2(f) shall be those set forth in Article 15; and (g) the execution of this Agreement by Nortel Networks and the consummation of the transactions contemplated hereby by Nortel Networks does not, nor will the use of the System, Equipment or Software by Customer in the Territory, violate any document, agreement or instrument binding upon Nortel Networks or its property. Nortel Networks shall furnish Customer with such documents as Customer may reasonably require showing proof of authority in accordance with this Article 31. ARTICLE 32 ADVERTISING RESTRICTIONS 32.1 Neither party shall publicly advertise or, except as required by law, publish information concerning the entry into, execution, or delivery of this Agreement, 72 its nature, or the terms and conditions hereof, without the other party's prior written consent, which consent shall not be unreasonably withheld or delayed. 32.2 Neither party shall use either orally or in writing the other party's name, or that of its shareholders, the parent corporations of the shareholders, or any subsidiary or any Affiliate of the shareholders or their parents, in connection with any public advertising, promotion, publicity or representation without the other party's prior written consent, which consent shall not be unreasonably withheld or delayed. 32.3 Notwithstanding the foregoing, Customer and Nortel Networks agree to jointly prepare a press release announcing certain aspects of this Agreement, including that the purchases during the Term could total approximately ninety million dollars ($90,000,000) and the types of Equipment and Software being purchased by Customer hereunder. Such press release shall be completed for release by Nortel Networks no later than July 31, 2003. ARTICLE 33 ENTIRETY OF AGREEMENT: NO ORAL CHANGE This Agreement and the Attachments referenced herein constitute the entire Agreement between the parties with respect to the subject matter hereof. It supersedes all proposals, oral or written, all previous negotiations, and all other communications and agreements (including the Memorandum of Agreement, dated March 21, 2003) between the parties with respect to the subject matter hereof. No modifications, alterations, or waivers of any provisions herein contained shall be binding on the parties hereto unless evidenced in writing by an amendment signed by duly authorized representatives of Nortel Networks and Customer. Notwithstanding this Article 33, Sections B.1, B.2 and C.2 of the Memorandum of Agreement, dated June 27, 2002, between Customer and 73 Nortel Networks shall remain in full force and effect, including the product credits available to Customer as set forth therein. ARTICLE 34 NO WAIVER The failure of either party to insist, in any one or more instances, upon performance of any of the terms, covenants or conditions of this Agreement, or to exercise any right hereunder, shall not be construed as a waiver or relinquishment of the future performance of any such terms, covenants, or conditions or the future exercise of such right, and the obligation of the other party with respect to such future performance shall continue in full force and effect. ARTICLE 35 NOTICES 35.1 Any legal notice required to be given by one of the parties to the other hereunder shall be given when forwarded by prepaid registered or certified first class airmail, postage and fees prepaid, or by telegram, telecopy or hand delivery to the other party at the following addresses and telecopier numbers: If to Nortel Networks: Nortel Networks Mailstop D17/03/0F2 4010 E. Chapel Hill Nelson Highway Research Triangle Park, NC 27709 Telephone : 919-997-4425 Telecopier: 919-997-4495 Attention: Joy Croom If to Customer: Western Wireless Corporation 3650 131st Avenue SE, Suite 400 Bellevue, WA 98006 Telephone: (425) 586-8700 Telecopier: (425) 586-8102 Attn: Chief Operating Officer 74 with a copy to: Western Wireless Corporation 3650 131st Avenue SE, Suite 400 Bellevue, WA 98006 Telephone: (425) 586-8700 Telecopier: (425) 586-8040 Attn: Legal Department and to: Friedman Kaplan Seiler & Adelman LLP 1633 Broadway, 46th Floor New York, New York 10022 Telephone : (212) 833-1100 Telecopier: (212) 833-1250 Attention: Barry A. Adelman, Esq. and such notices shall be deemed to have been received ten (10) Business Days after mailing if forwarded by mail, and upon receipt if forwarded by telegram, telecopy or hand. 35.2 Other notices required to be given by one of the parties to the other hereunder shall be given when forwarded by prepaid registered or certified first class airmail, postage and fees prepaid, or by telegram, electronically, telecopy or hand delivery to the persons designated by the other party at the addresses and telecopier numbers provided by such other party. 35.3 The aforementioned addresses or telecopy numbers of either party may be changed at any time by giving fifteen (15) days prior written notice to the other party in accordance with the foregoing. 75 ARTICLE 36 ATTACHMENTS AND INCORPORATIONS 36.1 Attachments A through J hereto are hereby incorporated by reference herein, and made a part of this Agreement with the same force and effect as though set forth in their entirety. 36.2 In the event of any conflict or inconsistency among the provisions of this Agreement and the documents attached and incorporated herein, such shall be resolved, by giving precedence to this Agreement and thereafter to the Attachments. ARTICLE 37 HEADINGS The headings given to the Articles herein are inserted only for convenience and are in no way to be construed as part of this Agreement or as a limitation of the scope of the particular Article to which the title refers. ARTICLE 38 GOVERNING LAW - ARBITRATION 38.1 THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA APPLICABLE TO CONTRACTS MADE AND TO BE ENTIRELY PERFORMED THEREIN. 38.2 Subject to Section 38.3(b), and any provisions regarding equitable relief contained herein, any dispute regarding any right, obligation, duty or liability which may arise between the parties under this Agreement which cannot be settled between them, shall be settled in accordance with this Article 38. Any such dispute shall be formally commenced upon the sending of written notice from one party to the other specifying the 76 nature of such dispute and requesting the escalation of such dispute in accordance with this Article 38. After the giving of such notice (and the receipt thereof by the other party), each of the parties shall appoint a representative from its senior management team and such appointed representatives shall meet and negotiate in good faith in order to resolve such dispute. The location, form, frequency, duration and conclusion of any such negotiations shall be left to the discretion of the appointed representatives; provided, however, that each of the parties shall have the right to submit such dispute to arbitration in accordance with Section 38.3 below if such negotiations are still ongoing after the expiration of sixty (60) days from the date the initial notice was given (unless the parties mutually agree to extend such time period). The representatives may, by mutual agreement, elect to utilize alternative dispute resolution procedures (including mediation) in order to assist in the negotiations. Such negotiations (and all correspondence relating thereto) between the representatives shall not be admissible in any arbitration proceeding commenced in accordance with this Article 38 unless otherwise expressly agreed upon in writing by each of Customer and Nortel Networks; provided, however, that documents identified in, referred to in or provided in conjunction with any such correspondence between the representatives (other than documents prepared solely for purposes of the negotiations) shall not be subject to the preceding restriction on admissibility and may be admitted into evidence in any such arbitration proceeding. 38.3 (a) In the event that a dispute is submitted to arbitration in accordance with this Article 38, such dispute shall then be settled by arbitration in accordance with the Rules of Arbitration of the American Arbitration Association (AAA) in New York, New York, by three (3) arbitrators, one (1) to be appointed by each party and the third to 77 be selected by the arbitrators appointed by the parties (provided that, if the two (2) arbitrators appointed by the parties hereto cannot agree on the third arbitrator, the third arbitrator shall be selected by the President of the AAA) and shall be conducted in accordance with such Rules. Any fees charged by the arbitrators or the AAA for arbitration services shall be shared equally by Nortel Networks and Customer. (b) This Article 38 shall not be applicable to any matters relating to either party's intellectual property rights (including Article 15 hereof), misuse of Information (as set forth in Article 18) or enforcement of the Software Right-to-Use set forth in Attachment G and neither party shall be obligated to arbitrate such matters. (c) The award of any arbitration shall be final, nonappealable, conclusive and binding on the parties hereto. (d) The arbitrators may award any legal or equitable remedy, but if specific remedies or limitations on remedies are provided for in this Agreement, they shall enforce such remedies or limitations on remedies. The arbitration award may, at the discretion of the arbitrators, include an award of attorneys' fees, and the amount of such fees, to the prevailing party. Judgment upon any arbitration award may be entered and enforced in any court of competent jurisdiction. (e) Either party to an arbitration hereunder may bring an action for injunctive relief against the other party if such action is necessary to preserve jurisdiction of the arbitrators or to maintain status quo pending the arbitrators' decision. Any such action commenced pursuant to this Section 38.3 shall be discontinued upon assumption of jurisdiction by the arbitrators and their opportunity to consider the request for equitable relief pending final decision in the arbitration. 78 38.4 If there is a disagreement under Section 6.3 or 11.8 of this Agreement which, in accordance with the terms of such Section 6.3 or 11.8, requires a Third Party Engineer, the parties will attempt to negotiate a solution as soon as possible, and such negotiations shall commence no later than three (3) days after written notification by either party of such disagreement. If no solution can be reached, the parties shall select a third party engineer ("Third Party Engineer") (whose fees and expenses will be shared equally by the parties) who will, after conducting such investigation as he/she deems necessary, within five (5) days, render a decision in the matter. If the parties are unable to agree on the selection of the Third Party Engineer, the Third Party Engineer will be selected by the then President of the Institute of Electrical & Electronics Engineers of the United States. The Third Party Engineer's decision shall be final, conclusive and binding and neither party shall appeal or otherwise contest it. 38.5 Subject to Sections 38.3 and 38.4, each party hereby expressly submits to the exclusive jurisdiction of all courts sitting in New York, New York, in connection with any claim or dispute arising under this Agreement, and agrees that any process or notice of motion or other application to any of such courts or a judge thereof may be served upon each party within or without such court's jurisdiction by registered mail or by personal service, at the address of such party specified herein (or at such other address as such party shall specify by a prior notice in writing to the other), provided a reasonable time for appearance is allowed. Each party hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement brought in any court sitting in New York, New York, and hereby further irrevocably waives any claim that any such 79 suit, action or proceeding brought in any such court has been brought in an inconvenient forum. ARTICLE 39 SEVERABILITY Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law but, if any provision of this Agreement shall be held to be prohibited or invalid in any jurisdiction, the remaining provisions of this Agreement shall remain in full force and effect and such prohibited or invalid provision shall remain in effect in any jurisdiction in which it is not prohibited or invalid. ARTICLE 40 PARTIES ARE NOT PARTNERS Nothing in this Agreement shall be deemed to create, nor shall either of the parties hereto hold itself out to be, the agent, representative, joint venturer, employee or partner of the other party or to have any powers to bind the other party. ARTICLE 41 DAYS Any reference in this Agreement to days shall be deemed to refer to consecutive calendar days and not Business Days (unless otherwise expressly stated) and is not exclusive of holidays. ARTICLE 42 counterparts This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement. 80 IN WITNESS WHEREOF the parties hereto have executed this Master Purchase and License Agreement as of the date first above written. 81 NORTEL NETWORKS INC. By:______________________________________ Name: Title WESTERN WIRELESS CORPORATION Federal Tax ID #91-1638901 By:______________________________________ Name: Title: 82 MASTER PURCHASE AND LICENSE AGREEMENT BETWEEN WESTERN WIRELESS CORPORATION AND NORTEL NETWORKS INC. Contract No. 21876 Confidential Information Attachment A GSM Equipment and Software Attachment B CDMA Equipment and Software Attachment C Extended Service and Support Plan Attachment D Schedule for Critical Items Attachment E Training Attachment F Standard Lead Times Attachment G Software Right-To-Use Agreement Attachment H GSM Roamer Markets Attachment I Cooperative Marketing Attachment J Zone Schedule of Shipping Prices (to be added within 30 days) [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] Confidential Information TABLE OF CONTENTS ARTICLE 1 - DEFINITIONS, CONSTRUCTION ................................................ 1 ARTICLE 2 - SCOPE OF AGREEMENT; ORDERS ............................................... 10 ARTICLE 3 - CONTRACT PRICES .......................................................... 16 ARTICLE 4 - TERMS OF PAYMENT ......................................................... 17 ARTICLE 5 - DELIVERY, TITLE AND RISK OF LOSS ......................................... 20 ARTICLE 6 - TESTING AND ACCEPTANCE ................................................... 23 ARTICLE 7 - DELAY AND PENALTIES ...................................................... 25 ARTICLE 8 - TRAINING ................................................................. 27 ARTICLE 9 - DOCUMENTATION ............................................................ 27 ARTICLE 10 - FORCE MAJEURE ........................................................... 28 ARTICLE 11 - WARRANTIES, REMEDIES: LIMITATIONS: DISCLAIMERS .......................... 29 ARTICLE 12 - INDEMNIFICATION; LIMITATION OF LIABILITY ................................ 35 ARTICLE 13 - FORECAST ................................................................ 40 ARTICLE 14 - SERVICE AND SUPPORT PLAN ................................................ 40 ARTICLE 15 - PATENT INDEMNITY ........................................................ 41 ARTICLE 16 - CHANGE ORDERS; ORDER CANCELLATION ....................................... 44 ARTICLE 17 - SOFTWARE RIGHT-TO-USE ................................................... 47 ARTICLE 18 - NON-DISCLOSURE OF TECHNICAL INFORMATION AND PROPRIETARY RIGHTS .......... 48 ARTICLE 19 - TAXES ................................................................... 49 ARTICLE 20 - INTENTIONALLY OMITTED ................................................... 50 ARTICLE 21 - INSURANCE ............................................................... 50 ARTICLE 22 - TERMINATION AND DEFAULT ................................................. 51 ARTICLE 23 - INTENTIONALLY OMITTED ................................................... 55 ARTICLE 24 - CONTINUITY FOR SUPPLY OR REPLACEMENT .................................... 55 ARTICLE 25 - SHIPPING ................................................................ 56 ARTICLE 26 - WORK RULES AND SUBCONTRACTORS ........................................... 57 ARTICLE 27 - ADDITIONAL OBLIGATIONS .................................................. 59 ARTICLE 28 - GOVERNMENTAL COMPLIANCE; INDUSTRY STANDARDS; INTERCONNECT ............... 62 ARTICLE 29 - COOPERATIVE ADVERTISING ................................................. 64 Confidential Information ARTICLE 30 - ASSIGNMENT ................................................... 65 ARTICLE 31 - AUTHORITY .................................................... 67 ARTICLE 32 - ADVERTISING RESTRICTIONS ..................................... 69 ARTICLE 33 - ENTIRETY OF AGREEMENT: NO ORAL CHANGE ........................ 70 ARTICLE 34 - NO WAIVER .................................................... 70 ARTICLE 35 - NOTICES ...................................................... 71 ARTICLE 36 - ATTACHMENTS AND INCORPORATIONS ............................... 72 ARTICLE 37 - HEADINGS ..................................................... 73 ARTICLE 38 - GOVERNING LAW; ARBITRATION ................................... 73 ARTICLE 39 - SEVERABILITY ................................................. 76 ARTICLE 40 - PARTIES ARE NOT PARTNERS ..................................... 77 ARTICLE 41 - DAYS ......................................................... 77 ARTICLE 42 - COUNTERPARTS ................................................. 77 Confidential Information EX-10.38 5 v91789exv10w38.txt EXHIBIT 10.38 EXHIBIT 10.38 FIRST AMENDMENT TO LOAN AGREEMENT THIS FIRST AMENDMENT TO LOAN AGREEMENT, made as of July 9, 2003 (the "Amendment"), is entered into by and among Western Wireless Corporation, a Washington corporation, as Borrower (the "Borrower"), and the financial institutions whose names appear as Lenders on the signature pages hereof. WITNESSETH: WHEREAS, the Borrower and Toronto Dominion (Texas), Inc., as Administrative Agent (the "Administrative Agent"), are parties to that certain Loan Agreement dated as of April 25, 2000 (the "Agreement"), together with the Lenders, the Arranger, the Co-Documentation Agents, the Co-Syndication Agents, the Managing Agents and the Co-Agents (each as defined in the Agreement); and WHEREAS, the Borrower has requested that the Lenders agree to amend the Agreement as more fully set forth herein; NOW, THEREFORE, for and in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree that all capitalized terms used herein shall have the meanings ascribed thereto in the Agreement except as otherwise defined or limited herein, and further agree as follows: 1. Effective Date of this First Amendment. This Amendment shall be effective, without any other action by the parties hereto, immediately upon the full satisfaction or waiver of all of the conditions precedent to the effectiveness of this Amendment set forth in Section 22 hereof. If all of such conditions precedent have not been satisfied or waived by August 31, 2003, this Amendment shall automatically terminate and be of no force or effect whatsoever, and the Agreement shall remain in full force and effect in accordance with its terms. 2. Amendments to Article 1. (a) The following defined terms contained in Article 1 of the Agreement are hereby modified and amended as follows: (i) "Revolving A Commitment" is hereby modified and amended by deleting the reference therein to "$500,000,000" and replacing it with "$350,000,000"; and (ii) "Subordinated Debt" is hereby modified and amended by (x) adding "and Section 7.17" to the end of the list of Sections of the Agreement appearing at the end of clause (b)(i) thereof and (y) deleting the text appearing in clause (b)(iv) and replacing it with the following: "such subordinated Indebtedness for Money Borrowed shall contain no covenants or provisions more restrictive, taken as a whole, on the Borrower and its Subsidiaries than the more restrictive of those contained herein or in the indentures for the Senior Subordinated Notes; and" (b) The following new definition shall be added immediately following the definition of "Event of Default", which new definition shall read in its entirety as follows: "'Excess Cash Flow' shall mean, for any fiscal year, based on the audited financial statements for such fiscal year required to be provided under Section 6.2 hereof, the remainder, if any, without duplication, of (a) the Operating Cash Flow for such fiscal year minus (b) the sum of the following: (i) Capital Expenditures by the Borrower and its Restricted Subsidiaries during such fiscal year; (ii) cash taxes paid by the Borrower and its Restricted Subsidiaries during such fiscal year; and (iii) Pro Forma Debt Service for the fiscal year in which such prepayment is required to be made pursuant to Section 2.15(a) hereof. (c) The following new definition shall be added immediately following the definition of "Fee Letters", which new definition shall read in its entirety as follows: "'First Amendment Effective Date' shall mean the date on which that certain First Amendment to Loan Agreement, made as of July 9, 2003, between the Borrower and the Lenders party thereto, becomes effective in accordance with its terms." (d) The following new definitions shall be added immediately following the definition of "Senior Debt", which new definitions shall read in their entirety as follows: "'Senior Secured Debt' shall mean Indebtedness for Money Borrowed of the Borrower evidenced by this Agreement or any of the other Loan Documents." "'Senior Secured Debt Leverage Ratio' shall mean, as of the end of any fiscal quarter, the ratio of Senior Secured Debt to Annualized Operating Cash Flow." (e) The following new definition shall be added immediately following the definition of "Senior Subordinated Notes", which new definition shall read in its entirety as follows: "'Senior Unsecured Debt' shall mean senior Indebtedness for Money Borrowed of the Borrower, unsecured with respect to the Borrower and its Restricted Subsidiaries, subject to the following: (i) the Borrower shall, in a certificate provided on the date of incurrence of such senior Indebtedness for Money Borrowed, demonstrate its current and projected pro forma compliance (giving effect to the incurrence of such senior 2 Indebtedness for Money Borrowed) with Sections 7.8, 7.9, 7.10, 7.11 and 7.17; (ii) there shall be no repayment of the principal amount of such senior Indebtedness for Money Borrowed including any sinking fund payments or other principal payments until at least one year and one day after the Maturity Date; (iii) the final maturity of such senior Indebtedness for Money Borrowed must be at least one year and one day after the Maturity Date; and (iv) such senior Indebtedness for Money Borrowed shall contain no covenants or provisions more restrictive, taken as a whole, on the Borrower and its Subsidiaries than the more restrictive of those contained herein or in the indentures for the Senior Subordinated Notes." 3. Amendments to Section 2.3. Section 2.3(f) of the Agreement ("Applicable Margin") is hereby modified and amended by: (a) deleting the table in subsection (f)(i) and replacing it with the following table:

Base Rate Advance Eurodollar Advance Leverage Ratio Applicable Margin Applicable Margin -------------- ----------------- ------------------ Greater than 5.00 but less than or equal to 6.00 1.250% 2.250% Greater than 4.00 but less than or equal to 5.00 1.000% 2.000% Less than or equal to 4.00 0.625% 1.625%

; and (b) amending and restating subsection (f)(ii) to read in its entirety as follows: "(ii) With respect to Term B Loans, the Applicable Margin for Eurodollar Advances shall be 3.25% per annum and the Applicable Margin for Base Rate Advances shall be 2.25% per annum." 4. Addition of New Section 2.15. There shall be added a new Section 2.15 immediately following Section 2.14, which new Section 2.15 shall read in its entirety as follows: "Section 2.15. Mandatory Prepayments from Excess Cash Flow and from Certain Incurrences of Indebtedness for Money Borrowed. 3 (a) Excess Cash Flow. In addition to the scheduled repayments provided for in Section 2.4 hereof, on or prior to April 30, 2004, and on or prior to each April 30 thereafter during the term of this Agreement, the Borrower shall prepay the Loans in an amount equal to fifty percent (50%) of Excess Cash Flow for the most recently completed fiscal year. (b) Certain Incurrences of Indebtedness. In addition to the scheduled repayments provided for in Section 2.4 hereof, the Borrower shall prepay the Loans in an amount equal to sixty percent (60%) of the Net Proceeds received after the First Amendment Effective Date from any Indebtedness for Money Borrowed incurred by the Borrower pursuant to Section 7.1 hereof, except for Indebtedness for Money Borrowed (i) permitted by Section 7.1(a), (b), (d), (f), (g), (h) and (i); (ii) incurred in connection with any Investments or Acquisitions permitted under Section 7.6 hereof, including any Indebtedness assumed by the Borrower or its Restricted Subsidiaries in connection with such Investment or Acquisition, to the extent that upon consummation of any such Investment or Acquisition such Net Proceeds were invested in, or used to acquire, Restricted Subsidiaries (it being understood and agreed that in the event 60% of such Net Proceeds are used to prepay the Loans pursuant to this Section 2.15(b), the balance of such Net Proceeds may be used, to the extent permitted by this Agreement, to make Investments or Acquisitions without any obligation to make Investments in or to acquire Restricted Subsidiaries pursuant to this clause (ii)); (iii) incurred at any time that the Leverage Ratio as of the end of the immediately preceding fiscal quarter (after giving pro forma effect to such incurrence of Indebtedness) is less than 4.0 to 1.0; or (iv) incurred by reason of any issuance by the Borrower of debt securities in a public offering or a private placement between June 1, 2003 and the first anniversary of the First Amendment Effective Date in an amount up to the aggregate of (x) $400,000,000 and (y) an additional $400,000,000 so long as the Borrower redeems, repurchases or refinances all of the Senior Subordinated Notes prior to the first anniversary of the First Amendment Effective Date. (c) Application of Prepayments. Any prepayment pursuant to this Section 2.15 shall be applied in accordance with Section 2.6(b) of this Agreement." 5. Amendment to Section 5.14(a)(iii). Section 5.14(a)(iii) of the Agreement is hereby modified and amended by adding "and Section 7.17" to the end of the list of Sections of the Agreement appearing therein. 4 6. Amendment to Section 6.3(a)(ii). Section 6.3(a)(ii) of the Agreement is hereby modified and amended by adding "and Section 7.17" to the end of the list of Sections of the Agreement appearing therein. 7. Amendment to Section 7.1. Section 7.1 of the Agreement ("Indebtedness of the Borrower and its Restricted Subsidiaries") is hereby modified and amended by deleting subsection (c) thereof and replacing it with the following: "(c) Senior Unsecured Debt;" 8. Amendment to Section 7.4(a). The last sentence of Section 7.4(a) of the Agreement is hereby modified and amended by adding "and Section 7.17" to the end of the list of Sections of the Agreement appearing therein. 9. Amendments to Section 7.6(b). Section 7.6(b) of the Agreement ("Acquisitions") is hereby modified and amended by: (a) amending and restating Section 7.6(b)(i)(C) to read in its entirety as follows: "(C) the Borrower and its Restricted Subsidiaries may make Investments in Unrestricted Subsidiaries (I) that were made prior to January 1, 2003 in accordance with this Agreement (as then in effect) and (II) on or after January 1, 2003, in an amount not to exceed (without duplication) (x) $100,000,000 in the aggregate plus (y) any dividends or distributions, or repayments of loans or advances, paid by an Unrestricted Subsidiary and received by the Borrower or its Restricted Subsidiaries after January 1, 2003 plus (z) the Net Proceeds from the sale or disposition of an Unrestricted Subsidiary or of the assets of an Unrestricted Subsidiary to the extent received by the Borrower or its Restricted Subsidiaries after January 1, 2003." ; and (b) modifying and amending Section 7.6(b)(ii)(A) by adding "and Section 7.17" to the end of the list of Sections of the Agreement appearing therein. 10. Amendments to Section 7.7. Section 7.7 of the Agreement ("Restricted Payments and Purchases") is hereby modified and amended by: (a) (i) deleting the reference to "6.50 to 1.00" in Section 7.7(a) and replacing it with "4.00 to 1.00" and (ii) adding "and Section 7.17" to the end of the list of Sections of the Agreement appearing in Section 7.7(a); (b) (i) deleting the reference to "6.50 to 1.00" in Section 7.7(b) and replacing it with "4.00 to 1.00" and (ii) adding "and Section 7.17" to the end of the list of Sections of the Agreement appearing in Section 7.7(b); 5 (c) deleting the text of subsection (d) thereof and replacing it with "Intentionally Omitted"; and (d) deleting the text of subsection (f) thereof and replacing it with the following: "The Borrower may redeem, repurchase or refinance the Senior Subordinated Notes, including the payment of any fees or other costs incurred in connection therewith." 11. Amendment to Section 7.8. Section 7.8 of the Agreement ("Ratio of Operating Cash Flow to Cash Interest Expense") is hereby modified and amended by deleting the period "March 31, 2003 and thereafter" and replacing it with "March 31, 2003 through December 31, 2005", and adding the following at the end of the table: "March 31, 2006 and thereafter 2.50 to 1.00" 12. Amendment to Section 7.9. Section 7.9 of the Agreement ("Fixed Charge Coverage Ratio") is hereby modified and amended by deleting "1.10 to 1.00" and replacing it with "1.00 to 1.00". 13. Amendment to Section 7.11. Section 7.11 of the Agreement ("Annualized Operating Cash Flow to Pro Forma Debt Service Ratio") is hereby modified and amended by deleting "March 31, 2003 and thereafter 1.50 to 1.00" and replacing it with the following at the end of the table: "March 31, 2003 through June 30, 2004 1.25 to 1.00 September 30, 2004 and thereafter 1.00 to 1.00" 14. Addition of New Section 7.17. There shall be added a new Section 7.17 immediately following Section 7.16, which new Section 7.17 shall read in its entirety as follows: "Section 7.17. Senior Secured Debt Leverage Ratio. The Borrower shall not at any time permit the Senior Secured Debt Leverage Ratio to exceed the ratio set forth below for any fiscal quarter ending during the periods indicated below:

Period Senior Secured Debt Leverage Ratio ------ ---------------------------------- September 30, 2003 through December 31, 2005 4.00 to 1.00 March 31, 2006 and thereafter 3.50 to 1.00"

15. Notice of Reduction of Revolving A Commitment. In accordance with Section 2.7 of the Agreement, the Borrower hereby gives notice to the Administrative Agent of its cancellation of a portion of the Revolving A Commitment in an aggregate amount of $150 million. 6 16. Covenant Regarding Certain Net Proceeds. The Net Proceeds of any issuance by the Borrower of debt securities in a public offering or a private placement between June 1, 2003 and the first anniversary of the effective date of this Amendment, including, without limitation, the Net Proceeds from the issuance by the Borrower of its 4.625% Convertible Subordinated Notes due 2023, in excess of $400,000,000 shall be used reasonably promptly to redeem, repurchase or refinance the Senior Subordinated Notes; provided, however, that in the event such Net Proceeds are in excess of $800,000,000, the Borrower shall apply sixty percent (60%) of such Net Proceeds in excess of $800,000,000 to make additional prepayments on the Term Loans and Revolving B Loans (such prepayments to be applied in accordance with Section 2.6(b) of the Agreement). 17. Application of Prepayments. (a) The parties hereto agree that notwithstanding Section 2.6(b) of the Agreement (i) the prepayment of the Term A Loans, Term B Loans and Revolving B Loans in the aggregate amount of $400 million contemplated by Section 22(iii) of this Amendment shall be applied only to the Term A Loans, the Term B Loans and the Revolving B Loans, such prepayment to be applied (x) to the Term A Loans, the Term B Loans and the Revolving B Loans as follows: Term A Loans $150 million Term B Loans $100 million Revolving B Loans $150 million and (y) in the order of the maturities thereof, and (ii) the reduction in the Revolving A Commitment in the amount of $150 million contemplated by Section 15 of this Amendment shall be applied to the Revolving A Commitment in the order of maturity thereof and the respective Revolving A Commitment of each Lender shall be reduced in accordance with the Agreement to give effect to such reduction. (b) For the avoidance of doubt, such repayments of the Term A Loans, the Term B Loans and the Revolving B Loans to be made by the Borrower pursuant to this Amendment shall be applied in the order of maturities set forth in Sections 2.4(b), (c) and (d) of the Agreement (i.e., to earliest maturities first), and Section 2.4 of the Agreement shall not be modified or amended by this Amendment. In addition, for the avoidance of doubt, the reduction in the Revolving A Commitment in the amount of $150 million contemplated by Section 15 of this Amendment shall be applied to the Revolving A Commitment in the order of maturity thereof set forth in Section 2.4(a) of the Agreement (i.e., to earliest maturities first), and accordingly the Revolving A Commitment shall be reduced by the amount set forth in the table below as of the applicable calendar quarter end, in accordance with such Section 2.4(a), as follows: 7

Amount of Revolving A Quarter Ending Commitment to be Reduced - -------------- ------------------------ March 31, 2003 $12,500,000 June 30, 2003 $12,500,000 June 30, 2005 $12,500,000 September 30, 2005 $31,250,000 December 31, 2005 $31,250,000 March 31, 2006 $31,250,000 June 30, 2006 $31,250,000 September 30, 2006 $31,250,000 December 31, 2006 $31,250,000 March 31, 2007 $25,000,000 June 30, 2007 $25,000,000 September 30, 2007 $25,000,000 December 31, 2007 $25,000,000 March 31, 2008 $25,000,000

18. Waiver in Connection with Refinancing of Senior Subordinated Notes. Notwithstanding anything to the contrary contained in the Agreement, any Indebtedness incurred by the Borrower for the purpose of redeeming, repurchasing or refinancing the Senior Subordinated Notes as contemplated by this Amendment shall be disregarded for purposes of compliance with the covenants contained in Sections 7.8 through 7.11 and Section 7.17 of the Agreement (including, without limitation, in connection with any Performance Certificate required to be delivered with respect to such covenants), and no Default or Event of Default shall be deemed to have occurred or be continuing resulting from a violation of such covenants caused by such incurrence so long as such redemption, repurchase or refinancing is effected and consummated within 60 days of such incurrence. 19. No Other Amendment or Waiver. Except for the amendments set forth herein, the text of the Agreement and all other Loan Documents shall remain unchanged and in full force and effect. The Borrower hereby (i) confirms and agrees that each Loan Document to which it is a party is, and shall continue to be, in full force and effect and is hereby ratified and confirmed in all respects and (ii) confirms and agrees that to the extent that any Loan Document purports to grant to the Lenders or the Administrative Agent a security interest in or lien on, any collateral as security for the Obligations of the Borrower from time to time existing in respect of the Agreement and the Loan Documents, such security interest or lien is hereby ratified and confirmed in all respects. 20. Representations and Warranties. The Borrower hereby represents and warrants in favor of the other parties hereto as follows: 8 (i) each representation and warranty set forth in Article 4 of the Agreement is, to the extent required to be repeated pursuant to Section 4.2 of the Agreement on the date of an Advance, hereby repeated and affirmed as true and correct in all material respects on and as of the date hereof, after giving effect to any updates to information provided to the Lenders pursuant to the Agreement, as if made on and as of the date hereof; (ii) the Borrower has the power, corporate or otherwise, and has taken all necessary action to authorize, execute, deliver and perform this Amendment (and the Agreement as amended hereby) in accordance with its terms, and to consummate the transactions contemplated hereby; (iii) this Amendment has been duly authorized, validly executed and delivered by one or more Authorized Signatories of the Borrower and is (and the Agreement as amended hereby is) the legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, subject, as to enforcement of remedies, to the following qualifications: (i) an order of specific performance and an injunction are discretionary remedies and, in particular, may not be available where damages are considered an adequate remedy at law, (ii) enforcement may be limited by bankruptcy, insolvency, liquidation, reorganization, reconstruction and other similar laws affecting enforcement of creditors' rights generally (insofar as any such law relates to the bankruptcy, insolvency or similar event of the Borrower) and (iii) enforcement may be subject to general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law) and may be limited by public policies that may affect the enforcement of certain rights or remedies provided for in this Amendment; (iv) the execution and delivery of this Amendment and performance by the Borrower of its Obligations under this Amendment (and the Agreement as amended hereby), do not and will not: (A) require any consent or approval, governmental or otherwise, not already obtained, (B) violate any Applicable Law applicable to the Borrower or any Subsidiary of the Borrower, (C) conflict with, result in a breach of, or constitute a default under the organizational documents of the Borrower or any Subsidiary of the Borrower or under any material indenture, agreement or other instrument to which the Borrower or any of its Subsidiaries is a party or by which any of them or their properties may be bound, (D) conflict with, result in a breach of, or constitute a default or violation of, the terms and conditions of any of the material Licenses or (E) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by the Borrower or any of its Subsidiaries, except for Permitted Liens; and (v) before and immediately after giving effect to this Amendment, no event exists, or would result from this Amendment, that constitutes a Default or an Event of Default. 9 21. Documents Delivered by the Borrower. The following documents shall be delivered by the Borrower to the Administrative Agent concurrently with the execution of this Amendment: (i) duly executed Amendment signed by the Borrower; (ii) loan certificate, in substantially the form of Exhibit M to the Agreement, from the Borrower together with: (A) certificates of good standing for the Borrower issued by the Secretary of State or similar state official for the state in which such Borrower is organized and (B) a true, complete and correct copy of the appropriate authorizing resolutions of such Borrower, authorizing such Borrower to execute, deliver and perform this Amendment, as certified by the Secretary of the Borrower; (iii) certificate of a duly authorized officer of the Borrower, dated the date of this Amendment, as to the truth and correctness in all material respects of the representations and warranties contained in Section 20 hereof; (iv) legal opinion of Friedman Kaplan Seiler & Adelman LLP, special counsel to the Borrower, dated the date of this Amendment, addressed to the Agents and the Lenders, in form and substances satisfactory to the Administrative Agent and its counsel; (v) that certain engagement letter with FTI Consulting, Inc. in connection with this Amendment, duly executed by the Borrower; and (vi) such other documents and instruments as may be requested by the Administrative Agent. 22. Conditions Precedent to Effectiveness of Amendment. The effectiveness of this Amendment is subject to the prior fulfillment of each of the following conditions: (i) the Administrative Agent shall have received, on behalf of the Lenders consenting to the terms and provisions of this Amendment, an amendment fee equal to [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] of such Lenders' Revolving A Commitment and outstanding Revolving B Loans and Term Loans, after giving effect to the reduction of the Revolving A Commitment contemplated by Section 15 hereof and the prepayments contemplated by Section 17 hereof (such amount to be allocated according to their respective commitment ratios), payable to such Lenders which have executed this Amendment on or before July 9, 2003; (ii) the Administrative Agent shall have received, on behalf of the Lenders consenting to the terms and provisions of this Amendment, an 10 amendment fee equal to [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] of such Lenders' Revolving A Commitment and outstanding Revolving B Loans and Term Loans, after giving effect to the reduction of the Revolving A Commitment contemplated by Section 15 hereof and the prepayments contemplated by Section 17 hereof (such amount to be allocated according to their respective commitment ratios), payable to such Lenders which have executed this Amendment after July 9, 2003 but on or before July 15, 2003; (iii) the Term Loans and the Revolving B Loan shall have been prepaid in the amount of $400,000,000, such amount to be applied to the Term A Loans, Term B Loans and Revolving B Loans in the order of maturity (i.e., to earliest maturities first) as follows: Term A Loans $150 million Term B Loans $100 million Revolving B Loans $150 million; and (iv) the Majority Lenders shall have executed and delivered this Amendment. 23. Counterparts. This Amendment may be executed in multiple counterparts, each of which shall be deemed to be an original and all of which, taken together, shall constitute one and the same agreement. 24. Governing Law. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN NEW YORK. 25. Loan Document. This Amendment shall be deemed to be a Loan Document for all purposes. Each Loan Document shall on the effective date of this Amendment be deemed without any further action by any Person to be amended to the extent necessary to reflect the amendments set forth herein. 26. Severability. Each provision of this Amendment shall be considered separable and if for any reason any provision or provisions are determined to be non-binding, invalid, unenforceable or illegal in any respect, such non-binding provision or such invalidity, unenforceability or illegality shall not affect any other provisions of the Agreement or of this Amendment, which other provisions shall remain in full force and effect in accordance with their terms. 11 [SIGNATURES ON FOLLOWING PAGES] 12 IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized officers or representatives to execute and deliver this Amendment as of the day and year first above written. BORROWER: WESTERN WIRELESS CORPORATION By: _______________________________ Name: _______________________________ Title: _______________________________ Attest: _______________________________ Name: _______________________________ Title: _______________________________ 13 NAME OF LENDER: ________________________________________ By:_____________________________________ Name:___________________________________ Title:__________________________________ Date Delivered:________________________ [Lender's Signature Page to First Amendment to Loan Agreement] 14 EX-12.1 6 v91789exv12w1.txt EXHIBIT 12.1 Exhibit 12.1 WESTERN WIRELESS CORPORATION COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (Dollars in thousands)

SIX MONTHS ENDED YEAR ENDED DECEMBER 31, JUNE 30, ------------------------------------------------------ -------- 1998 1999 2000 2001 2002 2003 -------- -------- -------- --------- --------- -------- Income (loss) from continuing operations before provision for income taxes and cumulative change in accounting principle $(13,359) $(48,121) $ 65,406 $(143,564) $ (92,050) $ 29,999 Adjust for: Minority interests in net loss of consolidated subsidiaries (479) (1,610) (2,058) (18,967) (8,408) (4,043) Equity in net (income) loss of unconsolidated affiliates, net of tax 4,746 14,529 (658) 7,772 (4,219) (645) -------- -------- -------- --------- --------- -------- Income (loss) from continuing operations before provision for income taxes, cumulative change in accounting principles, minority interests in consolidated subsidiaries and income (loss) from equity investees (9,092) (35,202) 62,690 (154,759) (104,677) 25,311 Add: Fixed Charges 92,227 99,993 152,229 163,353 158,791 76,068 Amortisation of capitalized interest -- -- -- 125 425 306 Deduct Interest capitalized -- -- -- (1,500) (2,100) (150) Minority interest in pre-tax income of subsidiaries that have not incurred fixed charges -- -- 488 (616) (104) 4,810 -------- -------- -------- --------- --------- -------- Earnings $ 83,135 $ 64,791 $215,407 $ 6,603 $ 52,335 $106,345 ======== ======== ======== ========= ========= ======== Fixed Charges: Interest and financing expense, net $ 92,227 $ 99,993 $152,229 $ 161,853 $ 156,691 $ 75,918 Interest capitalized -- -- -- 1,500 2,100 150 -------- -------- -------- --------- --------- -------- Fixed charges $ 92,227 $ 99,993 $152,229 $ 163,353 $ 158,791 $ 76,068 ======== ======== ======== ========= ========= ======== Ratio of earnings to fixed charges 0.90 0.65 1.42 0.04 0.33 1.40 ======== ======== ======== ========= ========= ======== Deficiency of earnings to cover fixed charges $ (9,092) $(35,202) $ -- $(156,750) $(106,456) $ -- ======== ======== ======== ========= ========= ========

EX-31.1 7 v91789exv31w1.txt EXHIBIT 31.1 CERTIFICATION EXHIBIT 31.1 I, John W. Stanton, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Western Wireless Corporation. 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have: (a) designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. By: /s/ JOHN W. STANTON ------------------------------------ John W. Stanton Chairman and Chief Executive Officer Dated: August 8, 2003 EX-31.2 8 v91789exv31w2.txt EXHIBIT 31.2 CERTIFICATION EXHIBIT 31.2 I, M. Wayne Wisehart, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Western Wireless Corporation. 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have: (a) designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. By: /s/ M. WAYNE WISEHART ------------------------------------ M. Wayne Wisehart Executive Vice President and Chief Financial Officer Dated: August 8, 2003 EX-32.1 9 v91789exv32w1.txt EXHIBIT 32.1 CERTIFICATION EXHIBIT 32.1 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officer of Western Wireless Corporation, a Washington corporation (the "Company"), does hereby certify, to such officer's knowledge, that: The Quarterly Report on Form 10-Q for the quarter ended June 30, 2003 (the "Form 10-Q") of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: August 8, 2003 By: /s/ JOHN W. STANTON ------------------------------------ John W. Stanton Chairman and Chief Executive Officer The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code). EX-32.2 10 v91789exv32w2.txt EXHIBIT 32.2 CERTIFICATION EXHIBIT 32.2 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officer of Western Wireless Corporation, a Washington corporation (the "Company"), does hereby certify, to such officer's knowledge, that: The Quarterly Report on Form 10-Q for the quarter ended June 30, 2003 (the "Form 10-Q") of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: August 8, 2003 By: /s/ M. WAYNE WISEHART ------------------------------------ M. Wayne Wisehart Executive Vice President and Chief Financial Officer The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code). -----END PRIVACY-ENHANCED MESSAGE-----

EX-10.36

                                                                   EXHIBIT 10.36

                          WESTERN WIRELESS CORPORATION
                         EXECUTIVE RESTRICTED STOCK PLAN

                      ADOPTED BY THE BOARD: JANUARY 1, 1997
                    ADOPTED BY THE SHAREHOLDERS: MAY 21, 1997
                    AMENDED BY THE SHAREHOLDERS: MAY 29, 2003
                   TERM: JANUARY 1, 1997 TO DECEMBER 31, 2006

1. PURPOSE.

         This Executive Restricted Stock Plan (this "Plan") allows Western
Wireless Corporation (the "Company") to grant stock bonuses or sell stock to its
key officers and employees, and is intended to promote the interests of the
Company and its shareholders by aligning the interests of the Company executives
with Company shareholders. The stock to be issued pursuant to this Plan will be
Restricted Stock, as defined in 3 below, and as such will be subject to certain
restrictions, described herein, that are imposed to promote the purposes hereof.

2. ADOPTION AND ADMINISTRATION OF PLAN.

         This Plan shall become effective as of January 1, 1997 and shall remain
in effect until December 31, 2006 unless sooner terminated as herein provided.
Adoption of this Plan and any issuances of Restricted Stock hereunder prior to
the annual meeting of the shareholders of the Company held during calendar year
1997 are subject to approval of the Plan by shareholders at such time.

         This Plan shall be administered by the Company's Board of Directors
(the "Board"), provided that the Board may delegate its administrative
responsibilities hereunder to a committee of not less than three directors who
shall administer this Plan in the name of the Board (the "Committee"). As used
hereafter herein, the term "Committee" shall refer to the Board if no Committee
then exists or is then designated. So long as the Company is a reporting company
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), each
member of the Committee who participates in administration must be a
"Non-Employee Director" as that term is defined in Rule 16b(3) promulgated by
the Securities and Exchange Commission pursuant to the Exchange Act. All members
of the Committee shall also be "outside directors" within the meaning of section
162(m) ("Section 162(m)") of the Internal Revenue Code of 1986, as amended. The
Committee shall have full power and authority to (i) administer and interpret
this Plan, (ii) make all grants, offers, bonuses, and awards hereunder and (iii)
adopt, from time to time, such guidelines, rules, regulations, agreements, and
instruments for the administration of this Plan as the Committee deems necessary
or advisable. Such powers include, but are not limited to (subject to the
specific limitations described herein), authority to determine the employees to
be issued Restricted Stock under this Plan, to determine the size, type, and
applicable restrictions, performance criteria, terms and conditions of issuances
to be made to such employees, to determine a time when issuances will occur, and
to authorize issuances to eligible employees. The Committee shall have absolute
discretion in any determination of whether any particular performance goal in
any grant has been achieved or restriction has lapsed. The Committee shall
prepare guidelines for notification to holders of Restricted Stock with
performance based restrictions as to whether any such performance criteria have
been met, and upon determination that the criteria have been met the Committee
shall have the obligation to deliver written confirmation of the same to each
holder of Restricted Stock within 30 days following achievement of the
performance goal. The Committee shall also establish a mechanism to allow the
removal of restrictive legends promptly after the achievement of the applicable
performance criteria.

         The Committee's interpretations of this Plan, and all actions taken and
determinations made by the Committee concerning any matter arising under or with
respect to this Plan or any issuances of Restricted Stock pursuant to this Plan,
shall be final, binding, and conclusive on all interested parties, including the
Company, its shareholders, and all former, present, and future employees of the
Company. At such time as the Company is not subject to the reporting
requirements of the Exchange Act, the Committee may delegate some or all of its
power and authority hereunder to the Chairman or Chief Executive Officer of the
Company, such delegation to be subject to such terms and conditions as the
Committee in its discretion

shall determine. Such delegation of authority may be contained in guidelines,
rules, and regulations adopted by the Board from time to time with respect to
this Plan. The Committee may, as to questions of accounting, rely conclusively
upon any determinations made by independent public accountants of the Company.

3. STOCK SUBJECT TO PLAN.

         There is hereby established a reserve (the "Reserve"), out of the
Company's authorized but unissued stock, of 1,300,000 shares of the Company's
Class A Common Stock, no par value per share (the "Restricted Stock"), for
issuance under this Plan. As grants, offers, bonuses and awards are made, the
Reserve shall be reduced by the number of shares of Restricted Stock issued. Any
shares of Restricted Stock that are forfeited by the holder shall be added back
to the Reserve. Any shares with respect to which restrictions have lapsed shall
not be eligible to be added back to the Reserve. If the shares of Class A Common
Stock of the Company should, as a result of a stock split, stock dividend,
combination of shares, or any other change or exchange for other securities by
reclassification, reorganization, redesignation, merger, consolidation,
recapitalization or otherwise, be increased or decreased or changed into, or
exchanged for, a different number or kind of shares of stock or other securities
of the Company or of another corporation, the number of shares of Restricted
Stock then remaining in the Reserve shall be appropriately adjusted to reflect
such action. If any such adjustment shall result in a fractional share, such
fraction shall be disregarded. Upon the issuance of shares of Restricted Stock
pursuant to this Plan, the Reserve will be reduced by the number of shares
issued. Notwithstanding any other provision hereof, no single employee may at
any single time receive a grant, offer, bonus, or award of Restricted Stock in
excess of 33.33 percent of the shares of Restricted Stock remaining at such time
in the Reserve.

4. ELIGIBILITY.

         The Committee will designate, from time to time, key executives of the
Company or any of its subsidiaries, parents or affiliates (including officers
and directors of the Company), engaged in activities which further the Company's
objectives, who will be eligible to obtain shares under this Plan and the number
of shares of Restricted Stock of the Company to be issued to each. In selecting
the persons to whom offers to obtain shares hereunder will be made and in
determining the number of shares to be offered, the Committee will consider the
position and responsibilities of such persons, the value of their services to
the Company or its subsidiaries, and such other factors as the Committee deems
pertinent.

5. RIGHTS TO RESTRICTED STOCK.

         (a) Restricted Stock Offers. After the Committee has determined to
offer a person the right to obtain Restricted Stock under this Plan, it will
advise the offeree in writing of the offer's terms, including the number of
shares which such person will be entitled to obtain, the price per share, if
any, and any other terms, conditions, and restrictions relating thereto (the
"Restricted Stock Offer"). This notice will also provide that such person has 15
days from the date of the Restricted Stock Offer to accept the offer in the
manner set forth in the Restricted Stock Offer. The form by which the Restricted
Stock Offer will be made is attached hereto and incorporated herein as Exhibit
A, and the same may be amended from time-to-time at the discretion of the
Committee. The Committee may also, in the exercise of its discretion, extend the
Restricted Stock Offer's acceptance or effective term. Subject to this Plan's
express provisions, the Committee may make any such Restricted Stock Offer
subject to any terms and conditions it establishes, and the Restricted Stock
Offers made to different persons, or to the same person at different times, may
be subject to terms, conditions and restrictions which differ from each other.

         (b) Special Performance Awards. In connection with any Restricted Stock
Offer to any one of the five most highly compensated officers of the Company, in
order to comply with limitations imposed by Section 162(m) while retaining the
flexibility to ensure that executive compensation is tied to performance and
reward executives consistent with the Company's compensation philosophy, all or
part of the shares covered by a Restricted Stock Offer may be designated as a
Special Performance Award, as to which the restrictions on shares so designated
shall only be removed and the shares shall only become freely tradable by the
holder thereof if certain pre-established performance goals are met during a
specified

                                       2

performance period as set by the Committee. Restrictions on shares subject to a
Special Performance Award granted to any individual whose compensation from the
company is covered by Section 162(m) of the Code shall be removed only after the
Committee certifies in writing that the performance goals have been met.

         The Committee shall establish Performance Periods of any duration or
with respect to any criteria, which may overlap and which may differ for each
executive, but shall not exceed ten years. Prior to the end of 90 days following
the commencement of each Performance Period, the Committee shall establish
specific and objective performance goals for the Performance Period and a
specific formula in connection with such performance goals for the removal of
restrictions. The performance goals shall be based on one of more of the
following performance measures, or other specific measures determined from time
to time by the Committee: growth; financial results; and quality, productivity
and efficiency.

         (i) Growth shall be measured in terms of increases one or more of the
following: number of license areas served, number of subscribers, and revenue.
Customer growth shall be measured in terms of one or more of the following:
number of new customers; number of net new customers; revenue per new customer;
and level of customer churn.

         (ii) Financial results shall be measured in terms of one or more of the
following relating to the Company as a whole or a particular operating unit:
operating cash flow; free cash flow; cash operating income (Earnings Before
Interest, Taxes, Depreciation and Amortization ("EBITDA")); net income; earnings
per share; total stockholder return; and relative stockholder return.

         (iii) Quality, productivity and efficiency shall be measured in terms
of one or more of the following: customer and employee satisfaction;
quantitative measures of system and customer service performance; and the cost
of acquiring and cost of serving customers.

6. TERMS OF RESTRICTED STOCK OFFERS.

         (a) Price. The Committee will determine if there is to be a purchase
price of the shares being offered under this Plan, and if so shall set the
price. If there is no purchase price, the Restricted Stock Offer will be treated
as a Restricted Stock bonus. Whether or not there is a purchase price, the
offeree must accept the offer in a timely manner to receive the offered
Restricted Stock. The purchase price, if any, must be paid in full, in cash or
certified or bank check, at the Company's principal office before the offer
expires, for the Restricted Stock Offer's acceptance to be effective. The date
upon which the Restricted Stock Offer is finally accepted and the purchase
price, if any, is paid is sometimes hereinafter called the "Closing Date."

         (b) Restrictions. By accepting the Restricted Stock under this Plan
being offered to him or her, an offeree agrees and consents to all terms,
conditions, and restrictions contained in the Restricted Stock Offer and to the
following (unless the Restricted Stock Offer by its terms indicates the
following shall not apply):

                  (i) Any transfer or purported transfer made by a purchaser of
shares under this Plan, except at the times and in the manner specified herein
and in the Restricted Stock Offer, will be null and void and the Company shall
not recognize or give effect to such transfer on its books and records or
recognize the person or persons to whom such proposed transfer has been made as
the legal or beneficial holder of those shares.

                  (ii) Notwithstanding anything in this Plan to the contrary,
upon the death of a holder of shares of Restricted Stock subject to this Plan,
such shares may be conveyed by will or by the laws of descent and distribution,
subject to the provisions of this Plan and to applicable provisions of any other
Agreement by which the Company may be bound. Any successor in interest to the
holder in such event may not further convey, transfer, encumber or otherwise
dispose of such shares except as provided herein.

                                       3

                  (iii) Certificates representing shares which are subject to
this Plan will bear the following legend, in addition to such other legends as
counsel to the Company may deem appropriate:

                                RESTRICTED SHARES

                  "The shares represented by this certificate are restricted and
                  subject to (i) all terms, conditions, and restrictions of the
                  Western Wireless Corporation Executive Restricted Stock Plan,
                  and (ii) the terms of the Restricted Stock Offer pursuant to
                  which the shares represented hereby were originally issued,
                  copies of which are on file and available for inspection
                  during normal business hours at the principal offices of
                  Western Wireless Corporation."

7. EVENTS OF RESALE.

         If any of the following events ("Events of Resale") occurs or, having
occurred, continues in effect, on or before the date all restrictions in this
Plan or in the Restricted Stock Offer have lapsed with respect to particular
shares of Restricted Stock, the holder will sell to the Company and the Company
will purchase from the holder all the Restricted Stock obtained by the holder
under this Plan that remains subject to such restrictions. With respect to any
shares of Restricted Stock to which the restrictions herein or in the Restricted
Stock Offer no longer apply, this provision shall not apply. The price per share
in the case of Restricted Stock subject hereto shall equal the original price
paid by the holder for such shares, and if there is no purchase price, then
without payment therefore:

         (a) if the employment of the offeree by the Company or its subsidiaries
is terminated other than by reason of the offeree's death or permanent and total
disability (as defined in the Company's 1994 Management Incentive Stock Option
Plan);

         (b) if an offeree who is not an employee, having been nominated as a
director of the Company, fails or refuses to stand for election or, if elected,
to serve as such or resigns as a director; or

         (c) if the offeree receives shares of Restricted Stock subject to any
other Event of Resale in the Restricted Stock Offer, and such Event of Resale
Occurs.

         Within 30 days after such an occurrence, the Company, by notice to the
holder, will state that an Event of Resale has occurred and will specify a date
not less than five, and not more than ten, days from the date of such notice to
consummate the purchase and sale of such shares at the Company's principal
office. At the closing, the holder will deliver to the Company certificates
representing all of the shares purchased hereunder, and duly endorsed with all
necessary transfer stamps affixed. Upon the receipt of such share certificates,
the Company will deliver to the holder a check in the amount of the purchase
price, if any. If the holder fails to deliver the share certificates to the
Company at the closing, the Company may deposit the purchase price, if any, with
the Secretary of the Company, and thereafter the shares will be deemed to have
been transferred to the Company and the holder, despite the holder's failure to
deliver the share certificates, will have no further rights derived from such
shares as a stockholder of the Company. In this event, the Secretary of the
Company will continue to hold the purchase price, if any, for such shares and
will make payment thereof, without interest, upon delivery of the share
certificates to the Company, accompanied by the appropriate endorsements.

8. EXPENSES.

         The Company will pay all expenses and costs in connection with the
administration of this Plan.

9. NO PRIOR RIGHT OF OFFER.

                                       4

         Nothing in this Plan will be deemed to give any director, officer, or
employee, or such individual's legal representatives or assigns, or any other
person or entity claiming under or through such individual, any contractual or
other right to participate in the benefits of this Plan.

10. INDEMNIFICATION OF THE COMMITTEE.

         In addition to such other rights or indemnification as they may have,
the Company will indemnify members of the Committee against all costs and
expenses reasonably incurred by them or any of them in connection with: any
action, suit, or proceeding to which they or any of them may be a party by
reason of any action taken, or failure to act, under or in connection with this
Plan or any award granted pursuant thereto and against all amounts paid by them
in settlement thereof (provided such settlement is approved by legal counsel
selected by the Company) or paid by them in satisfaction of a judgment in any
action, suit or proceeding; provided that upon institution of any such action,
suit, or proceeding, the person desiring indemnification gives the Company an
opportunity, at its own expense, to handle and defend the same.

11. AMENDMENT AND TERMINATION OF PLAN; AMENDMENT OF TERMS OF GRANTS

         The Board may at any time terminate or extend this Plan, or modify this
Plan as it deems advisable; provided, that any amendment or extension required
by Section 162(m) to be approved by the Shareholders shall be effective subject
to such approval within twelve months of adoption by the Board. No termination
or amendment of this Plan shall, without the consent of any person affected
thereby, modify or in any way affect any right or obligation created prior to
such termination or amendment. The Board may amend the terms and conditions of
outstanding Restricted Stock Offers or Restricted Stock, provided, however, that
(i) no such amendment would be adverse to the holders thereof, and (ii) the
amended terms would be permitted under this Plan.

         Subject to the provisions of Section 162(m) as applicable, in the event
of (i) any change in the business or condition of the Company, including any
change in connection with mergers, reorganizations, separations, or other
transaction to which Section 424(a) of the Code would apply if applicable, or
(ii) or in the event of any changed circumstances in the duties and/or
responsibilities of any employee holding Restricted Stock when restrictions are
specific to performance of duties or responsibilities that have changed, the
Committee shall have discretion as to adjustment or removal of any or all
restrictions of any Restricted Stock, and in the event thereof any adjustments
by the Committee of restrictions shall attempt to as closely as possible
establish restrictions that have the same intent and effect as the original
performance based restrictions.

12. LIABILITY OF COMPANY.

         The Company's liability under this Plan and any sale made hereunder is
limited to the obligations set forth with respect to such sale and nothing in
this Plan will be construed to impose any liability on the Company in favor of
the purchaser with respect to any loss, cost, or expense which the purchaser may
incur in connection with, or arising out of, any transaction in connection
therewith.

13. NO AGREEMENT TO EMPLOY.

         Nothing in this Plan will be construed to constitute, or evidence, an
agreement or understanding, express or implied, by the Company to employ or
retain the purchaser for any specific period of time.

14. PURCHASE AGREEMENT.

         Any Restricted Stock Offer made hereunder, as accepted, may be embodied
in a Restricted Stock Agreement containing such terms and conditions, not
inconsistent with this Plan, as will, in the opinion of the Committee and
counsel for the Company, be necessary or desirable to protect the Company. For
all purposes thereafter, the Restricted Stock Agreement will be the Restricted
Stock Offer as referenced herein.

15. FEDERAL INCOME TAX CONSEQUENCES.

                                       5

         The federal income tax consequences of a person's acquisition of
Restricted Stock pursuant to this Plan are complex and subject to change. The
following discussion, which has been prepared by the law firm of Preston Gates &
Ellis LLP, counsel to the Company, is only a summary of the general rules
applicable at the time of adoption of this Plan by the Board to the acquisition
of stock subject to restrictions that are linked to the continued performance of
services. It is based on the Internal Revenue Code of 1986, as amended (the
"Code), the Regulations promulgated thereunder, and judicial and administrative
interpretations thereof, all as currently in effect. These laws, Regulations and
interpretations are subject to change, potentially retroactively. Further, a
person's particular situation may be such that some variation of these general
rules would apply. ACCORDINGLY, IT IS STRONGLY RECOMMENDED THAT EACH PERSON WHO
MAY RECEIVE RESTRICTED STOCK PURSUANT TO THIS PLAN CONSULT WITH HIS OR HER OWN
TAX ADVISOR REGARDING THE IMPLICATIONS OF THE RECEIPT OF RESTRICTED STOCK AND
THE FILING OF A SECTION 83(B) ELECTION.

         Generally, a person who receives Restricted Stock who is an employee,
officer or director of the Company, or otherwise provides services to the
Company (a "Restricted Stock Holder") will be treated as receiving stock that is
subject to a "substantial risk of forfeiture" for federal income tax purposes.
This is because the Restricted Stock is subject to redemption by the Company if
a Restricted Stock Holder's employment terminates under certain circumstances
and may be unsaleable by the Restricted Stock Holder unless certain other events
occur, such as the achievement of particular personal or Company performance
goals. As a result, a Restricted Stock Holder will not be subject to tax, as a
general matter, on his or her acquisition of the Restricted Stock but will be
subject to federal income tax at such time as such Restricted Stock vests (i.e.,
is, in whole or in part, no longer subject to a redemption right on the part of
the Company or the other restrictions on sale). At that time, a Restricted Stock
Holder will recognize ordinary compensation income per share in an amount equal
to the difference between what he or she paid for the share of Restricted Stock
and the value of such share at such later time. Such compensation income is
subject to federal income tax withholding as well as to Social Security (FICA)
taxes and unemployment taxes.

         If a Restricted Stock Holder makes an election under Section 83(b) of
the Code, however, a different result will apply. If this election is properly
filed, then an acquired share of Restricted Stock will no longer be treated as
property subject to a "substantial risk of forfeiture" for federal income tax
purposes. As a result, a Restricted Stock Holder will recognize as compensation
income at the time of receipt of the Restricted Stock any excess of the value of
the Restricted Stock over the amount paid for such Restricted Stock. If the
election is properly made, any gain subsequently realized on a sale of
Restricted Stock shares would constitute capital gain, not subject to federal
income tax withholding, FICA taxes or unemployment taxes. If an Event of Resale
takes place and if an amount is included in the income of the Restricted Stock
Holder as a result of a Section 83(b) election, the Restricted Stock Holder will
not recognize a loss on the resale of the Restricted Stock to the Company (even
though an amount was included in the income of the Restricted Stock Holders as a
result of the Section 83(b) election).

         AN ELECTION UNDER SECTION 83(B) OF THE CODE MUST BE FILED WITH THE
INTERNAL REVENUE SERVICE AND DELIVERED TO THE EMPLOYER OF A RESTRICTED STOCK
HOLDER WITHIN THIRTY (30) DAYS AFTER THE DATE ON WHICH A RESTRICTED STOCK HOLDER
RECEIVES THE APPLICABLE RESTRICTED STOCK. A FORM OF A SECTION 83(B) ELECTION IS
AVAILABLE FROM THE COMPANY'S SECRETARY.

16. NOTICES.

         Any notice or other communication required or permitted to be made or
given hereunder will be sufficiently made or given if sent by certified mail or
other personal delivery service addressed to the offeree or holder at such
individual's address as set forth in the Company's regular books and records
and, if to the Company, addressed to it at its principal office.

                                       6

EX-10.37

                                                                   EXHIBIT 10.37

                      MASTER PURCHASE AND LICENSE AGREEMENT

         THIS MASTER PURCHASE AND LICENSE AGREEMENT (the "Agreement") is made as
of the 16th day of July, 2003 by and between Western Wireless Corporation
("Customer") and Nortel Networks Inc. ("Nortel Networks").

         In consideration of the premises and for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

                                    ARTICLE 1

                            DEFINITIONS: CONSTRUCTION

         1.1      As used in this Agreement, the following terms shall have the
following meanings:

                  (a)      Acceptance (or Accepted) means, with respect to items
of Equipment and Software (or a portion of a System), the earlier to occur of
(i) the date upon which the applicable items of Equipment and Software (or
portion of a System) have successfully completed and passed all of the
applicable Acceptance Tests in accordance with Article 6, and (ii) the date upon
which the In-Service Date has occurred with respect to the applicable items of
Equipment and Software (or portion of a System), and with respect only to
Furnish Only Equipment and Software, thirty (30) days following the applicable
ship date; provided, however, that with respect to any items of Equipment and
Software set forth in the first accepted Purchase Order for a New Technology,
Acceptance shall occur on the earlier to occur of (A) the date upon which the
applicable items of Equipment and Software have successfully completed and
passed all of the applicable Acceptance Tests in accordance with Article 6, and
(B) the date upon

Confidential Information



which (1) the In-Service Date has occurred with respect to the applicable items
of Equipment and Software, and (2) such items are operating materially in
accordance with the applicable Specifications;

                  (b)      Affiliate means, with respect to any person or
entity, any other person or entity that, either directly or indirectly through
one or more intermediaries, controls, is controlled by, or is under common
control with such person or entity. As used in this Agreement, "control" shall
mean possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a person or entity, whether through
the ownership of voting securities, by contract or otherwise;

                  (c)      Agreement means this Agreement, all Attachments
hereto and all appendices or attachments to the Attachments, as such may be
amended from time to time;

                  (d)      Business Day means any day on which banks and foreign
exchange markets are open for the transaction of business in New York, New York;

                  (e)      Documentation means all Nortel Networks
documentation, whether in written or electronic form, which sets forth
Specifications or operations and maintenance procedures for a System, Equipment
or Software. All Documentation delivered to Customer shall be delivered in
CD-ROM format and shall also be available to Customer in web-based format;

                  (f)      Effective Date means July 16, 2003; provided,
however, that as set forth in Section 2.1 hereof, the Purchase Orders for the
Initial Order issued by Customer and accepted by Nortel Networks prior to the
date of this Agreement shall be subject to

                                       2



all of the terms and conditions of this Agreement to the same extent as if such
Purchase Orders had been issued after the Effective Date.

                  (g)      Equipment means all of the hardware, components and
parts thereof purchased pursuant to this Agreement, including all of the
hardware, components and parts comprising the Initial Order and all Expansions.
During the Term of this Agreement, Nortel Networks shall make available to
Customer all wireless telecommunications hardware, components and parts as
Nortel Networks or its Affiliates may manufacture or have manufactured and which
telecommunications hardware, components and parts are made available by Nortel
Networks or its Affiliates and which Nortel Networks' makes generally available
to its customers in the Territory. For purposes of this Agreement, the term
"Equipment" shall include OEM Equipment and Reseller Equipment unless
specifically stated otherwise;

                  (h)      Expansion means the Equipment, Software, Installation
and other Services purchased under this Agreement for addition to or improvement
of an existing system;

                  (i)      Furnish Only means Equipment and/or Software (as
applicable) for which Customer shall be responsible for installation;

                  (j)      Initial Order means the Equipment, Software and
Services initially ordered by Customer hereunder, as more fully described in
Attachments A (which sets forth the Initial GSM Order) and Attachment B (which
sets forth the New CDMA Initial Order). The Initial Order does not include
Expansions to a System;

                  (k)      In-Service means the provision by a System, portion
thereof or item of Equipment or Software of commercial telecommunications
services to

                                       3



Customer's subscribers. The date the System, portion thereof or item of
Equipment or Software is actually placed In-Service shall be referred to as the
"In-Service Date" for such System, portion thereof or item of Equipment or
Software;

                  (l)      Installation (including its usage in the verb form
"Install") means the complete performance and supervision by Nortel Networks of
all installation of Equipment and Software for which Installation is ordered.
Installation, where applicable, shall include interconnection of the Equipment
at the main distribution frame of the System ("MDF") to circuits provided by
Customer to the Public Switched Telephone Network ("PSTN") and the
interconnection (either land-line or microwave) at the MDF between the switch
Equipment and each cell site or base station location;

                  (m)      New Technology means any type of telecommunications
Equipment or Software which Customer has not previously purchased or licensed
from Nortel Networks under this Agreement. For purposes of clarification, GSM
shall not be considered to be a New Technology, but EDGE and EVDO shall each be
deemed to be a New Technology.

                  (n)      OEM Equipment means equipment or software, other than
Reseller Items, which is sold or licensed by an entity other than Nortel
Networks, including Affiliates of Nortel Networks, but for which Nortel Networks
has the right to resell such equipment or transfer the right-to-use such
software and which is sold or licensed to Customer pursuant to this Agreement.
For purposes of this Agreement, the term "Equipment" shall include OEM Equipment
unless specifically stated otherwise;

                                       4



                  (o)      Purchase Order means any purchase order issued by
Customer to Nortel Networks pursuant to this Agreement or any document that the
parties mutually agree upon as the vehicle for procuring Equipment, Software and
Services hereunder;

                  (p)      Regulatory Claim means any enforcement or other
action by any state or federal regulatory body or bodies, including the FCC,
solely as such action relates to the failure of such Equipment, Software or
System to perform in accordance with the applicable Specifications and such
failure was due to the acts or omissions of Nortel Networks in violation of the
terms and obligations of this Agreement. "Regulatory Claim" shall not include
any such enforcement or similar action with respect to regulatory or other
governmental requirements that were not in effect on the date the Purchase Order
for the applicable Equipment or Software was accepted by Nortel Networks or
arising from Customer's failure to install or have installed changes, revisions
or updates by Nortel Networks that would have prevented such performance
failure.

                  (q)      Reseller Items means equipment or software which (i)
is labeled with the brand and/or trademark of an entity other than any brand or
trademark owned or licensed by Nortel Networks or any Affiliate of Nortel
Networks, (ii) is not integrated into or with Nortel Networks' Equipment, and
(iii) is sold or licensed by an entity other than Nortel Networks or its
Affiliates, but for which Nortel Networks has the right to resell such equipment
or transfer the right-to-use such software and which is sold or licensed to
Customer pursuant to this Agreement.

                  (r)      Services means those services mutually agreed upon to
be provided by Nortel Networks to Customer hereunder. Services shall include all

                                       5



Installation services, training, maintenance, repair and replacement services,
warranty services, Acceptance Testing services, project management services and
any other services provided by Nortel Networks to Customer pursuant to this
Agreement. Nortel Networks shall make available to Customer all Services offered
by Nortel Networks or its Affiliates that Nortel Networks makes generally
available to its customers in the Territory;

                  (s)      Software means all computer software licensed by
Customer pursuant to this Agreement which is necessary for the use, operation
and maintenance of a System or item of Equipment so that such System or
Equipment meets, and operates in accordance with, the Specifications, and
includes computer programs contained on a magnetic tape, in a semiconductor
device, or in another memory device or system memory consisting of hardwired
logic instructions which manipulate data in central processors, control
input-output operations, and error diagnostic and recovery routines, and
instruction sequences in machine-readable code that control call processing,
peripheral equipment, and administration and maintenance functions as well as
associated Documentation used to describe, maintain, and use the programs.
Software includes Software Updates and Software Releases. Nortel Networks shall
make available to Customer all Software offered by Nortel Networks or its
Affiliates that Nortel Networks makes generally available to its customers in
the Territory;

                  (t)      Software Releases means the periodic "left of the
decimal point" updates which contain problem fixes, new features and
functionality and/or enhancements for which Customer is granted a right-to-use
pursuant to this Agreement, but shall not include Software Updates;

                                       6



                  (u)      Software Updates means the "right of the decimal
point" corrections, updates or enhancements issued by Nortel Networks to add
additional features or functionality to the System or Equipment or to correct
defects in the Software, which defects affect service to subscribers, data
collection as it relates to billing, administration or maintenance. Software
Updates do not include Software Releases;

                  (v)      Specifications means the specifications and
performance standards of a System, Equipment, Software or any portion or
component thereof as set forth in the Documentation or as set forth in any other
document published by Nortel Networks (other than customer brochures or other
marketing materials) which contains technical specifications or performance
standards for Nortel Networks' Equipment, Software or Systems. Specifications
also include any specifications and performance standards delivered to Customer
by Nortel Networks in the future, whether they relate to a System, Equipment or
Software; provided, however, that no future specifications or performance
standards delivered with respect to Equipment or Software for which Purchase
Orders have been accepted hereunder shall reduce, diminish or otherwise
adversely impact the specifications or performance standards that existed at the
time the applicable Purchase Order was delivered by Customer to Nortel Networks
hereunder;

                  (w)      Statement of Work means a document mutually agreed
upon by the parties in conjunction with a Purchase Order which describes the
Services to be performed with respect to such Purchase Order. A Statement of
Work shall include the date on which such Services are to be completed and such
other relevant terms and conditions as the parties may mutually agree upon;

                                       7



                  (x)      System means a configuration of Equipment and
Software comprising the complete wireless telecommunications system purchased by
Customer from Nortel Networks hereunder, including the Initial Order and all
Expansions thereto. The term "System" has a developmental element and thus
refers to all configurations of the System at each particular time in its
development from the Initial Order through its final configuration at the end of
the Term;

                  (y)      Territory means the United States of America and all
U.S. territories;

                  (z)      Volume Commitment means the aggregate amount of
Equipment, Software and Services Customer commits to purchase/license during the
Term. The Volume Commitment for the Term of this Agreement shall be ninety
million dollars ($90,000,000). The aggregate amount of Equipment, Software and
Services purchased/licensed by Customer hereunder shall be determined by using
the price paid by Customer to Nortel Networks for such after all applicable
discounts (including volume discounts), reductions or rebates are applied, but
shall not include sales tax or handling, insurance and freight charges.

                  (aa)     Warranty Period means (i) with respect to an item of
Equipment, a period of two (2) years from the applicable ship date of such item
of Equipment and (ii) with respect to an item of Software, a period of two (2)
years from the applicable ship date (or, if Nortel Networks is downloading the
Software directly onto Customer's System, the date such download occurs) of such
Software; provided, however, that with respect to Software Updates only, such
warranty period shall be ninety (90) days from the applicable ship date or
download date;

                                       8



         1.2      The following terms are defined elsewhere in this Agreement in
the Sections indicated:



          TERM                         SECTION
          ----                         -------
                                    
"Acceptance Tests"                       6.1
"Customer CTO"                          11.4
"Change Order"                          16.1
"Disclosing Party"                      18.1
"Force Majeure Events"                  10.1
"Information"                           18.1
"In-Service Date"                        1.1
"MDF" 1.1 "Property Rights"             15.1
"PSTN"                                   1.1
"Receiving Party"                       18.1
"Term"                                  2.10
"Third Party Engineer"                  38.4


         1.3      Unless the context otherwise requires, the terms defined in
this Article 1 shall have the meanings herein specified for all purposes of this
Agreement, applicable to both the singular and plural forms of any of the terms
defined herein. When a reference is made in this Agreement to a Section, such
reference shall be to a Section of this Agreement unless otherwise indicated.
The headings contained in this Agreement are for reference purposes only and
shall not affect in any way the construction, meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation". The use of any gender herein shall be deemed to include the neuter,
masculine and feminine genders wherever necessary or appropriate.

                                   ARTICLE 2

                           SCOPE OF AGREEMENT; ORDERS

         2.1      Customer hereby agrees to purchase from Nortel Networks, and
Nortel Networks hereby agrees to furnish, deliver, Install, sell and/or license
(on a right-to-use

                                       9



basis) to Customer in accordance with the time schedules set forth in the
applicable Purchase Orders (which Purchase Orders have been accepted by Nortel
Networks pursuant to Section 2.9), the Equipment, Software and Services
comprising the Initial Order described in Attachments A and B. The Purchase
Orders for the Initial Order issued by Customer and accepted by Nortel Networks
prior to the date of this Agreement shall be subject to all of the terms and
conditions of this Agreement to the same extent as if such Purchase Orders had
been issued after the date hereof. In addition to the Initial Order, Customer
has the right to purchase from Nortel Networks hereunder, and Nortel Networks
agrees to furnish, deliver, Install, sell and/or license (on a right-to-use
basis) to Customer, such additional Expansions, Equipment, Software and Services
as, when and if ordered by Customer during the Term of this Agreement, and the
terms and conditions of this Agreement shall apply to such purchases.

         2.2      If Customer is enrolled in any Nortel Networks electronic
commerce program, Customer agrees to comply with the terms of such program.
Customer and Nortel Networks agree that all electronic Purchase Orders issued
are equivalent to a written Purchase Order, are governed by the terms and
conditions of this Agreement and that in the event of any conflict between this
Agreement and the information contained in Customer's or Nortel Networks'
electronic commerce website, this Agreement governs. Customer shall be
responsible for the use and protection of all electronic commerce passcodes
provided by Nortel Networks and agrees that all Purchase Orders submitted using
such passcodes are valid and binding Purchase Orders authorized by Customer.
Nortel Networks shall have no liability to Customer due to Customer's failure to
access

                                       10



Customer's or Nortel Networks' electronic commerce website or errors or failures
relating to its operation.

         2.3      Except pursuant to Nortel Networks' repair and replacement
services or as may be mutually agreed to in writing by the parties, all
Equipment and Software provided to Customer hereunder shall be new, and Nortel
Networks shall not sell or deliver to Customer any used or refurbished
Equipment. Customer represents and warrants that it is buying Equipment,
Software and/or Services for its own internal use and not for resale. However,
Customer may resell Equipment after internal use.

         2.4      Nortel Networks hereby agrees to provide, as, when and if
ordered by Customer, the Service and Support Plan and other services set forth
in Attachment C.

         2.5      This Agreement shall constitute a binding agreement on the
part of Customer to purchase from Nortel Networks the Initial Order described in
Attachments A and B (as such Attachments may be modified from time to time by
Change Orders in accordance with the terms of this Agreement); provided,
however, that the parties acknowledge and agree that the aggregate amount of
base stations and cell sites purchased by Customer pursuant to Purchase Orders
for the Initial Order issued by it to Nortel Networks may vary upwards or
downwards by up to twenty (20%) percent from the amounts set forth in
Attachments A and B. Purchase Orders submitted to Nortel Networks for the
Initial Order and any Expansions shall reference this Agreement and include the
quantity, price, Nortel Networks' quotation number (if any) and billing
instructions, installation location(s), requested delivery dates, requested
commencement dates for Services, the Statement of Work (if any) and any other
special instructions. Where Customer desires the assistance of Nortel Networks
in determining which

                                       11



Equipment, Software and/or Services are required for an Expansion to a System,
Customer shall submit to Nortel Networks the information necessary for the
furnishing by Nortel Networks of a proposal. Nortel Networks shall, within
fifteen (15) Business Days thereafter, submit to Customer a proposal including
pricing, lead times and other information as may be requested by Customer. If
such proposal is acceptable to Customer, Customer shall submit to Nortel
Networks a Purchase Order therefor, and Customer and Nortel Networks shall be
responsible for the successful completion of their respective items in
accordance with such proposal. Any such proposal shall contain provisions
relating to the respective responsibilities of Customer and Nortel Networks as
the parties shall mutually agree in writing. If Customer rejects a proposal for
Services submitted by Nortel Networks under this Section 2.5, Customer may elect
to perform such Services itself or to have such Services performed on its behalf
by a subcontractor of Customer and, subject to Section 11.3, the warranties set
forth in this Agreement shall not be affected.

         2.6      Unless otherwise mutually agreed to in writing, the prices and
delivery lead times for Equipment, Software and Services ordered pursuant to
Purchase Orders shall be in accordance in all respects with the terms and
conditions of this Agreement (including all Attachments hereto which contain all
discounts, incentives and delivery lead times being offered by Nortel Networks
to Customer).

         2.7      The parties may mutually agree upon Statements of Work in
conjunction with Purchase Orders delivered by Customer and accepted by Nortel
Networks in accordance with this Article 2. Each of Nortel Networks and Customer
shall perform their respective responsibilities as set forth in any such
Statements of Work. If any

                                       12



Statement of Work fails to set forth any responsibility which is required for a
System or any Equipment or Software to operate in accordance with the
Specifications, the parties undertake to promptly discuss and agree as to which
party shall be responsible for the performance of such responsibilities and the
price, if any, to be paid to Nortel Networks and the time schedules of such
performance. There are no design, engineering, Installation, management or other
fees payable to Nortel Networks for any services to be rendered by Nortel
Networks pursuant to any Statement of Work or this Agreement except for the fees
which are expressly provided for in this Agreement, the applicable Purchase
Order (and Statement of Work, if any) or any applicable Change Orders.

         2.8      Delivery locations may be changed by Customer up to thirty
(30) days prior to shipment without additional payment or penalty, unless
otherwise mutually agreed.

         2.9      Nortel Networks agrees to confirm receipt of each such
Purchase Order and all Purchase Orders for forecasted Equipment, Software and
Services, as provided in Article 13, that are within Nortel Networks' standard
delivery lead times as set forth in Attachment F, shall automatically be
accepted unless the terms of the Purchase Order do not conform in all material
respects to this Agreement or if the Purchase Order is incomplete in a material
respect; provided, however, that Nortel Networks shall promptly notify Customer
in writing of any non-conforming or incomplete Purchase Order within five (5)
Business Days of receipt thereof. All Purchase Orders shall be sent to Nortel
Networks at the address identified by Nortel Networks. Should Nortel Networks
receive a Purchase Order with lead times that are shorter than Nortel Networks'
standard lead times (and, prior to or contemporaneously with the issuance of
such Purchase Order,

                                       13



verbal notification from Customer that such Purchase Order contains such shorter
lead times), Nortel Networks shall promptly indicate in writing (either by
e-mail or fax) to Customer whether such shortened lead times are acceptable. If
Nortel Networks shall deem a shortened lead time unacceptable, the parties
hereto shall endeavor in good faith to agree upon lead times that are mutually
acceptable, but in no case shall such lead times be longer than the standard
lead times existing on the date such Purchase Order was initially received by
Nortel Networks. The agreed upon (or standard) lead times shall be calculated as
commencing upon the date on which Nortel Networks confirms receipt of the
applicable Purchase Order. Should Nortel Networks not notify Customer of its
non-acceptance of a shortened lead time within ten (10) days of its receipt of
the Purchase Order containing the shortened lead time (and so long as Customer
provided Nortel Networks with the proper verbal notification specified in this
Section 2.9), such Purchase Order shall be deemed accepted without amendment and
without any further confirmatory action by either party.

         2.10     This Agreement shall be effective as of the Effective Date and
shall terminate on the third anniversary of the Effective Date or on such
earlier date on which this Agreement may be terminated in accordance with its
terms, except as to those provisions which by their express terms survive such
termination. Nortel Networks and Customer shall be bound to fulfill any
obligations in respect of Purchase Orders delivered and accepted hereunder in
accordance with the terms of this Agreement to the extent such obligations have
not been so fulfilled on the termination date of this Agreement. The period from
the Effective Date of this Agreement to the third anniversary thereof or such

                                       14



earlier date of termination pursuant to the terms hereof shall be hereinafter
referred to as the "Term."

         2.11     With respect to GSM equipment and software purchased for each
of the GSM roamer markets specifically set forth on Attachment H hereto (and not
with respect to any other markets or technology), Customer shall, during the
Term, make Nortel Networks its exclusive supplier for GSM equipment and
software; provided, however, that notwithstanding such exclusivity arrangement,
Customer may purchase from entities other than Nortel Networks any product
(whether equipment or software) having a material functionality or feature which
is not available from Nortel Networks, unless Nortel Networks can provide such
functionality or feature at a comparable price through another reasonable
solution. The exclusivity set forth in this Section 2.11 shall terminate in the
event that Nortel Networks is in breach under any material term of this
Agreement and such breach has not been cured within the time periods set forth
in Section 22.

         2.12     With respect to the types of CDMA equipment and software
purchased as part of the Initial Order (and not with respect to any other types
of CDMA equipment and software, including EVDO equipment and software), Customer
shall, during the Term, make Nortel Networks its exclusive supplier for such
equipment and software purchased for each of the new CDMA markets specifically
set forth on Attachment B; provided, however, that notwithstanding such
exclusivity arrangement, Customer may purchase from entities other than Nortel
Networks any product (whether equipment or software) having a material
functionality or feature which is not available from Nortel Networks, unless
Nortel Networks can provide such functionality or feature at a comparable price
through another reasonable solution. The exclusivity set forth in this Section
2.12 shall

                                       15



terminate in the event that Nortel Networks is in breach under any material term
of this Agreement and such breach has not been cured within the time periods set
forth in Section 22.

         2.13     Customer shall issue Purchase Orders for, and take delivery
of, an aggregate amount of Equipment, Software and Services during the Term
equal to or greater than the Volume Commitment. In the event that at the end of
the Term Customer has failed to issue such Purchase Orders for, and take
delivery of, an aggregate amount of Equipment, Software and Services equal to or
greater than the Volume Commitment, then Customer shall pay liquidated damages
to Nortel Networks in the amount of [CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] of the portion of the Volume Commitment that remains
unfulfilled at the end of the Term; provided, however, that in no event shall
the amount paid by Customer pursuant to this Section 2.13 exceed [CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]. Such amount shall
be due and payable within thirty (30) days following the date of Nortel
Networks' invoice therefor, which invoice shall be accompanied by a detailed
list of the Purchase Orders accepted hereunder during the Term and the aggregate
net purchase price associated with each such Purchase Order.

                                       16



                                    ARTICLE 3
                                 CONTRACT PRICES

         The purchase prices for all Equipment, Software and Services ordered
during the Term shall be (a) the unit prices set forth in Attachments A, B and C
subject to all applicable discounts and incentives set forth therein, or (b) for
Equipment, Software or Services which is not listed in Attachment A, B or C the
price quoted by Nortel Networks; provided, however, that in no case during the
Term shall any prices be greater than the prices made generally made available
by Nortel Networks' to its customers in its then-current price book at the time
of ordering by Customer, less all applicable discounts and incentives set forth
in this Agreement (including Attachments A, B and C) which are applicable to
items in the same category of Equipment, Software or Services.

                                   ARTICLE 4
                                TERMS OF PAYmENT

         4.1      One hundred percent (100%) of the prices for the Equipment and
Software ordered by Customer hereunder shall be due and payable by Customer
within thirty (30) days following invoice therefor, such invoice to be issued by
Nortel Networks to Customer upon shipment of the applicable Equipment and/or
Software; provided, however, that with respect to items of Equipment and
Software which comprise the initial Purchase Order for a New Technology, the
aggregate price of such Equipment and Software shall be paid by Customer as
follows:

                  (a)      [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] of the aggregate price of all such Equipment and
Software shall be due and payable to Nortel

                                       17



Networks within thirty (30) days following invoice therefor, such invoice to be
issued upon shipment of the applicable Equipment and Software; and

                  (b)      [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] of the aggregate price of all such Equipment and
Software shall be due and payable within thirty (30) days following invoice
therefor, such invoice to be issued upon the Acceptance of such Equipment and
Software.

         4.2      The price for the Installation Services ordered by Customer
with respect to items of Equipment and Software being provided as part of the
Initial Order shall be paid by Customer as follows: (a) [CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] of the aggregate price for
such Installation shall be due and payable to Nortel Networks within thirty (30)
days following invoice therefor, such invoice to be issued upon shipment of the
applicable Equipment and Software: and (b) [CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT] of the aggregate price for such Installation
shall be due and payable within thirty (30) days following invoice therefor,
such invoice to be issued upon the Acceptance of the applicable Equipment and
Software.

         4.3      Other than as set forth in Section 4.2, [CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND

                                       18



EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] of the
price of all Services performed by Nortel Networks hereunder shall be due and
payable by Customer within thirty (30) days following invoice therefor, such
invoice to be issued by Nortel Networks to Customer (i) upon completion of the
applicable Services, (ii) monthly with respect to Services that extend beyond a
month, or (iii) in accordance with the mutually agreed upon milestones set forth
in the applicable Statement of Work, if such Statement of Work sets forth such
milestones.

         4.4      All transportation charges (including freight and insurance)
from factory to Installation site or other agreed location shall be determined
in accordance with a "Zone Schedule" to be mutually agreed upon by the parties
and attached hereto as Attachment J within thirty (30) days of the Effective
Date. Such "Zone Schedule" shall set forth the transportation charges Customer
shall pay with respect to items of Equipment and Software shipped between one
Zone in the Territory and another Zone in the Territory. Until such time as the
Zone Schedule is agreed upon, Nortel Networks shall charge Customer for
transportation charges at the same rates that Nortel Networks charges its
customers generally. Such transportation charges shall be due and payable by
Customer within thirty (30) days following invoice therefor such invoice to be
issued upon shipment of the applicable Equipment and Software.

         4.5      In connection with the payments for Equipment and Software,
Nortel Networks must submit and deliver to Customer original commercial invoices
that include the description of the Equipment and Software and their prices,
duly itemized, which

                                       19



prices must correspond to the prices set forth in either Attachment A or B, the
applicable Purchase Order or the applicable price quotation made by Nortel
Networks to Customer.

         4.6      All amounts payable under this Agreement which are past due
over thirty (30) days (except to the extent they are being disputed in good
faith) shall bear interest from their due date at the rate of one and one-half
percent (1.5%) per month, or such lesser rate as may be the maximum permissible
rate under applicable law. If Customer notifies Nortel Networks of any disputed
amounts within twenty-one (21) days from the date of the applicable invoice,
such disputed amounts shall not be subject to such interest.

         4.7      Customer may pay any invoiced amount, less a discount of
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT], if
payment is made by Customer within ten (10) days of its receipt of the
applicable invoice. Such early payment discount shall be applied against the net
invoiced amount (i.e. after all applicable discounts and credits have been
applied).

         4.8      In the event that Customer activates Software features for
which additional license fees are applicable, or in the event that Customer
triggers any applicable milestones (such as numbers of subscribers) for which
additional license fees are applicable, then Customer shall have a period of
thirty (30) days from the date of such activation or trigger to make any
applicable payments to Nortel Networks. Nortel Networks shall have the right,
upon at least two (2) Business Days' advance notice to Customer, to conduct a
remote audit of the Software installed on the System in order to determine which
features Customer has activated. Such audit shall be conducted in such

                                       20



a manner as to cause no interference with, or degredation of, the performance of
the System and at such time of day as Customer shall designate upon receipt of
the advance notice. Nortel Networks shall have the right to conduct such audit
no more than two (2) times per calendar year.

                                   ARTICLE 5
                        DELIVERY, TITLE AND RISK OF LOSS

         5.1      Subject to (a) any modifications thereto permitted pursuant to
this Article 5, (b) any delays caused solely by Customer by reason of its breach
of its obligations under this Agreement, or (c) any delays excused pursuant to
Article 10, Nortel Networks shall deliver and/or Install all Equipment, Software
and Services in accordance with the terms (including the delivery and/or
Installation dates set forth therein) of the applicable Purchase Order and
Statement of Work (if applicable), or in accordance with the schedule mutually
agreed to between Customer and Nortel Networks with respect to such Equipment,
Software and Services.

         5.2      For delivery of Equipment shipped to Customer from outside of
the United States, Nortel Networks shall be responsible for arranging and
prepaying the cost of transportation and insurance pursuant to its delivery
obligations under this Agreement, and Customer shall pay to Nortel Networks the
transportation charges, insurance and freight based on the Zone Schedule
mutually agreed upon by the parties. In the event that Customer desires to
designate its own carrier to perform delivery of Equipment shipped to Customer
from outside of the United States, then Customer shall give at least sixty (60)
days' prior written notice to Nortel Networks of such. From the date designated
in such notice until such time as Customer provides Nortel Networks at least
sixty (60) days' notice that it desires Nortel Networks to resume such
responsibilities (which such

                                       21



resumption of responsibilities shall not occur before the expiration of a six
(6) month period from the date on which Customer's designated carrier began
making deliveries hereunder), Customer shall be responsible for arranging and
paying all transportation charges, insurance and freight and Nortel Networks
shall coordinate with the transportation company designated by Customer for the
pick up of the Equipment. In such case, Customer shall provide its designated
carrier's information to Nortel Networks on each applicable Purchase Order.

         5.3      For delivery of Equipment shipped to Customer from within the
United States, Nortel Networks shall be responsible for arranging and paying all
transportation charges, insurance and freight and shall coordinate with its
transportation company for the pick up of the Equipment and delivery to the
installation site or designated warehouse. In the event that Customer desires to
designate its own carrier to perform delivery of Equipment shipped to Customer
from within the United States, then Customer shall give at least sixty (60)
days' prior written notice to Nortel Networks of such. From the date designated
in such notice until such time as Customer provides Nortel Networks at least
sixty (60) days' notice that it desires Nortel Networks to resume such
responsibilities (which such resumption of responsibilities shall not occur
before the expiration of a six (6) month period from the date on which
Customer's designated carrier began making deliveries hereunder), Customer shall
be responsible for arranging and paying all transportation charges, insurance
and freight and Nortel Networks shall coordinate with the transportation company
designated by Customer for the pick up of the Equipment. In such case, Customer
shall provide its designated carrier's information to Nortel Networks on each
applicable Purchase Order.

                                       22



         5.4      Intentionally Omitted.

         5.5      Title to, and risk of loss for, each item of Equipment shall
pass to Customer upon shipment of such item of Equipment. If there is loss or
damage to the Equipment or Software after risk of loss passes to Customer,
Nortel Networks shall, if ordered by Customer, deliver replacement Equipment or
Software as promptly as practicable and Customer shall pay for the same in
accordance with the terms and conditions of this Agreement, including prices.
Except as provided in Section 5.7, Nortel Networks shall convey good and clear
title to the Equipment, free and clear of all liens, suits, charges, claims,
liabilities, restrictions and encumbrances of any nature or kind whatsoever,
other than any lien or encumbrance which arises solely out of the actions of
Customer, its employees, agents or subcontractors. Nothing in this Article 5
shall, during the period a party has the risk of loss with respect to an item,
relieve the other party of responsibility for loss or damage to such item which
results from the acts or omissions of such other party or such other party's
employees or agents.

         5.6      Nortel Networks hereby represents and warrants to Customer
that it has all necessary approvals, authorizations and licenses required for it
to perform all of its duties and obligations hereunder.

         5.7      Until receipt of the applicable amounts due from Customer to
Nortel Networks with respect to an item of Equipment or Software sold to
Customer hereunder, Customer grants to Nortel Networks a continuing purchase
money security interest in such item of Equipment sold and/or Software licensed
under this Agreement. Customer shall reasonably cooperate with Nortel Networks
in preserving and protecting such purchase money security interest. Customer
authorizes Nortel Networks to file financing

                                       23



or continuation statements, including amendments thereto, relating to each item
of Equipment and Software without the signature of Customer where permitted by
law.

                                   ARTICLE 6

                             TESTING AND ACCEPTANCE

         6.1      Nortel Networks shall Install (where contracted to do so) all
Equipment and Software to be ready for Acceptance Tests no later than the
scheduled In-Service Date in accordance with the applicable Purchase Order. Upon
completion of Installation of the Equipment and Software or portions thereof,
Nortel Networks shall test the Equipment and Software in accordance with the
Acceptance Test Plan ("Acceptance Tests") attached as part of the applicable
Statement of Work.

         6.2      Acceptance Tests will be conducted on the Equipment and
Software to demonstrate that each item of Equipment and Software comprising a
part of the System, as Installed, will operate in accordance with the
Specifications.

         6.3      Nortel Networks shall notify Customer at least five (5) days
before the date on which the Acceptance Tests shall be conducted. If Customer or
its representative does not attend the Acceptance Tests, Nortel Networks shall
proceed with the tests and immediately forward the test results (including
actual test sequences, deviations, and retests necessary to obtain successful
conclusion) to Customer. If Customer or its representative (which representative
shall be bound by all confidentiality requirements applicable to Customer)
attends the Acceptance Tests, Nortel Networks and Customer or its representative
shall jointly conduct the Acceptance Tests and shall each sign the form provided
as part of the test procedure. If the Equipment or Software does not fulfill all
of the requirements of the applicable Acceptance Tests and such failure is a
result of any breach of any provision or obligation of Nortel Networks under
this Agreement or is

                                       24



caused by any item of Equipment or Software, or any Service, provided by Nortel
Networks, Nortel Networks shall, at its sole expense, correct the defects as
soon as practicable. The Acceptance Tests (or so much of them as necessary)
shall be recommenced immediately after such correction in accordance with this
Section 6.3. Upon successful completion of the applicable Acceptance Tests,
Nortel Networks shall submit to Customer written notice thereof along with
Acceptance forms certifying all of the test results and stating that all of the
applicable Equipment and/or Software has been Accepted in accordance with all of
the requirements of this Agreement and that the same performs in accordance with
the Specifications. Customer shall sign or reject such Acceptance forms within
five (5) Business Days of receipt thereof to signify that the Equipment and/or
Software is Accepted or is not Accepted. In the absence of a notice of rejection
given in good faith within such five (5) Business Day period, such Equipment
and/or Software shall be deemed Accepted. Any notice of rejection shall be given
in writing to Nortel Networks' project manager. If there is a dispute as to
whether the Equipment and/or Software has passed the applicable Acceptance
Tests, the parties shall use reasonable best efforts (which shall include
escalation of such dispute to a senior management level) to resolve the dispute
as soon as practicable or it shall be submitted to the Third Party Engineer
pursuant to Article 38.

         6.4      Customer shall not unreasonably withhold Acceptance. Minor
deficiencies recorded in the test results or minor shortages which would not
affect service to subscribers, data collection regarding billing,
administration, maintenance or the commercial operation of the Equipment,
Software or the System or create a safety hazard for personnel shall not
postpone the issuance of Acceptance forms pursuant to this Article

                                       25



6, but Nortel Networks shall remain obligated to perform in the manner described
in this Agreement.

                                    ARTICLE 7
                               DELAY AND PENALTIES

         7.1      If due to the fault or negligence (regardless of the severity
level of negligence) of Nortel Networks, (a) Acceptance (with respect to items
of Equipment and Software for which Nortel Networks is performing Installation)
or delivery (with respect to Furnish Only items of Equipment and Software for
which Nortel Networks is responsible for transportation) does not occur with
respect to any of the items comprising the September 30, 2003 portion of the
Initial Order (designated as the Phase I items in Attachment D) or the December
31, 2003 portion of the Initial Order (designated as the Phase II items in
Attachment D)(collectively, "Critical Items") on the scheduled date for
Acceptance or delivery (as applicable) thereof as set forth in Attachment D (as
such date may be amended by Change Orders pursuant to the terms of this
Agreement), then Customer shall be entitled to, and Nortel Networks shall pay to
Customer, liquidated damages in accordance with Section 7.2; provided, however
that such liquidated damages shall only accrue during such delay of Acceptance
or delivery, and shall not be payable to Customer unless, due to the fault or
negligence (regardless of the severity level of negligence) of Nortel Networks
the Critical Items have not been Accepted and placed In-Service on or before
September 30, 2003 or December 31, 2003, as applicable, at which time all of the
accrued but unpaid liquidated damages payable by Seller to Customer under this
Article 7 shall be immediately due and payable.

         7.2      (a)      The parties agree that damages for delay are
difficult to calculate accurately and therefore agree to fix, as liquidated
damages (and not as a penalty), an

                                       26



amount equal to [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT] per week of delay up to a cumulative maximum amount of [CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] of the aggregate
net purchase price (calculated in accordance with Attachment A or the applicable
Purchase Order, and including Installation costs, if applicable, but not
including the Executive Discount described in Attachment A) of those items of
Equipment and/or software which were delayed. In the event that the delay of
Acceptance or delivery (as applicable) of a Critical Item, prevents or
materially affects the operation of other items of Equipment or Software which
are part of the Initial Order, then Customer's right to receive liquidated
damages shall apply to such other Equipment and Software as well.

                  (b)      Liquidated damages will be provided to Customer as
credits towards the future purchase of GSM, TDMA and CDMA Equipment and Software
("Product Credits") which may be applied to up to twenty-five percent (25%) of
any future Purchase Orders for Equipment or Software until such Product Credits
have been used in full. Any such Product Credits must be utilized during the
Term.

                  (c)      Customer will inform Nortel Networks of the
imposition of the liquidated damages in writing. Within thirty (30) calendar
days following the date on which Nortel Networks is so informed, Nortel Networks
shall be obligated to issue to Customer Product Credits in the amount of such
liquidated damages except to the extent

                                       27



they have been contested in good faith by Nortel Networks within such thirty
(30) day period.

         7.3      It is expressly agreed that the liquidated damages provided in
this Article 7 and their payment do not extinguish or relieve the performance of
any of the obligations Nortel Networks is required to perform hereunder, which
obligations shall continue in full force and effect until fully performed in
accordance with the terms hereof. Liquidated damages under this Article 7 shall
be Customer's exclusive remedy for delay by Nortel Networks in delivery or
Acceptance, as applicable, of the Critical Items.

         7.4      In the event that there are any delays in the performance by
Nortel Networks under this Agreement (whether or not such delays will result in
liquidated damages under this Article 7) then, upon notification by Customer of
such delays, Nortel Networks shall use commercially reasonable efforts to assign
additional personnel, reallocate resources, expedite deliveries and take such
other actions as may be required to eliminate such delay.

                                    ARTICLE 8
                                    TRAINING

                  Nortel Networks will provide training to Customer's personnel
within the Territory in the operation and maintenance of the Equipment as set
forth in Attachment E.

                                   ARTICLE 9
                                  DOCUMENTATION

         Nortel Networks will furnish Customer, at no additional cost to
Customer, one CD-ROM copy of all Documentation required by Customer for the
Equipment, Software and Services purchased hereunder. In addition, such
Documentation shall be available to Customer in web based format. Nortel
Networks represents that the Documentation, in

                                       28



conjunction with any applicable training, is all that is reasonably necessary
for Customer to use, maintain and operate the Equipment, Software and System
purchased by Customer pursuant to this Agreement.

                                   ARTICLE 10
                                  FORCE MAJEURE

         10.1     Unless preventable by the timely and proper performance of
their respective obligations under this Agreement, neither Nortel Networks nor
Customer will be liable for non-performance or defective or late performance of
any of their obligations hereunder to the extent and for such periods of time as
such non-performance, defective performance or late performance is attributable
to acts of God, war (declared or undeclared), unforeseeable acts (including
failure to act) of any governmental authority (de jure or de facto), riots,
revolutions, fire, floods, explosions, sabotage, nuclear incidents, earthquakes,
hurricanes, sinkholes, epidemics, strikes, delays of suppliers or subcontractors
for the same causes if no equivalent sources for such supplies or services are
readily available, or other similar causes beyond the reasonable control of a
party (collectively, "Force Majeure Events").

         10.2     In the event that either of the parties wishes to claim
excusable delay by reason of a Force Majeure Event, it shall state it in writing
to the other party within five (5) Business Days (or such longer period as may
be reasonable as a result of the Force Majeure Event) following the date on
which its occurrence was known, accompanied by reasonable evidence of the Force
Majeure Event and a statement of the impact such Force Majeure Event has had or
is expected to have upon such party and its ability to perform its obligations
hereunder.

                                       29



         10.3     If the Force Majeure Event continues for more than thirty (30)
consecutive days, or it is proven that it will continue for more than such
thirty (30) day period, the parties shall upon written request of either party
meet to try to determine an appropriate action, remedy or solution to the
problems caused by such delay.

                                   ARTICLE 11
                 WARRANTIES, REMEDIES: LIMITATIONS: DISCLAIMERS

         11.1     (a)      Nortel Networks warrants that during the applicable
Warranty Period the Equipment, excluding Reseller Items, furnished under this
Agreement shall be free from defects in materials and workmanship, and shall
meet all of the functional and performance criteria (including the interworking
of all Nortel Networks supplied Equipment and Software) set out in and otherwise
conform to all of the applicable portions of the Specifications, and that all of
the Services furnished by Nortel Networks under this Agreement shall be
performed with due care and skill in a professional and workmanlike manner. Any
and all claims for breach of this warranty are conclusively deemed waived unless
made in writing (or orally with prompt confirmation in writing) during the
appropriate Warranty Period. Where Equipment or any part thereof is repaired or
replaced under the warranties contained herein, the repaired or replaced item
shall be warranted for the balance of the original Warranty Period or a period
of ninety (90) days from the date of repair or replacement whichever is longer.
Except as provided in the preceding sentence, performance of Nortel Networks'
warranty obligations shall not extend the Warranty Period.

                  (b)      If defects in materials or workmanship or
nonconformity with the performance Specifications appear within the Warranty
Period, Nortel Networks' sole obligation and Customer's exclusive remedy under
this warranty are limited to the

                                       30



prompt replacement or repair, at Nortel Networks' option and own expense, of the
defective components of the Equipment, or the correction of the faulty Services
furnished by Nortel Networks hereunder. Such repair or replacement includes
materials, labor and services. In the event Nortel Networks is unable to correct
faulty Services, the sole remedy of Customer shall be to recover the applicable
portion of the compensation paid to Nortel Networks for such Services. Customer
shall bear the risk of loss and damage and all transportation costs for
defective Equipment shipped to Nortel Networks and Nortel Networks shall bear
the risk of loss and damage and all transportation costs for replacement
Equipment shipped to Customer. Good title to defective or replacement Equipment
shall pass to Nortel Networks or Customer, as appropriate, upon receipt thereof.

         11.2     Nortel Networks warrants that, provided the Software is not
altered by Customer, and provided the Software is used in conjunction with
Equipment purchased under this Agreement and such Equipment has been maintained
and utilized in accordance with Nortel Networks' recommended maintenance
procedures (as set forth in the Documentation) and the Software license set
forth in Attachment G hereof, the Software, excluding Reseller Items, shall
function during the Warranty Period in all material respects in accordance with
all of Nortel Networks' Specifications for the Software. In the event the
Software fails to so perform or conform, Customer's exclusive remedy under this
warranty shall be to require Nortel Networks to promptly correct such failure
and such remedy is conditioned upon Nortel Networks' receiving written notice
within the Warranty Period (or oral notice promptly confirmed in writing) of
such failure. The correction of any Software failures shall not extend the
Software Warranty Period.

                                       31



         11.3     Nortel Networks' obligations under this Article 11 shall not
apply to (i) Equipment or components thereof such as fuses and bulbs that are
normally consumed in operation, or have a normal life inherently shorter than
the Warranty Period; (ii) defects that are solely attributable to improper
storage, installation, use, maintenance or repair by Customer (including
operation of the Equipment outside the environmental parameters defined in the
Specifications); (iii) improper operation of Equipment with hardware not
authorized by Nortel Networks (or reasonably contemplated by Nortel Networks) to
be used with such Equipment, or use of the Equipment with any improperly
operating hardware or equipment, if such defect is caused by such hardware or
such improperly operating hardware or equipment; (iv) Equipment or components
thereof that, due to no fault of Nortel Networks, have been subjected to any
other kind of misuse or detrimental exposure or have been involved in an
accident, fire, explosion, Act of God, or has otherwise been damaged for any
reason not attributable to Nortel Networks, or (v) any defects attributable
solely to the improper alteration, repair, installation or relocation by any
party other than Nortel Networks or Nortel Networks' agents. For purposes of
clause (v) above Equipment shall not be deemed to have been "installed" by
another party if all that has been done to such Equipment is the routine plug-in
of the components in accordance with the Northern Telecom Practices and
Procedures guidelines.

         11.4     (a)      (i)      If, during the Warranty Period set forth in
Section 11.1, Customer experiences failures of electronic circuit board
components, RBS subassemblies or other Equipment (which other Equipment may be
deinstalled and reinstalled by Customer in the ordinary course of business)
which the Chief Technical Officer of Customer (hereinafter the "Customer CTO")
reasonably believes to be

                                       32



excessive, (1) the Customer CTO shall bring such failures to the attention of
Nortel Networks by giving written notice to Nortel Networks under Section 35.1
hereof, (2) both Customer and Nortel Networks shall, without undue delay,
investigate the cause of such failures, and (3) where, within a reasonable
period not to exceed one (1) week, it cannot be clearly determined that the
cause of such failure is properly attributable to Customer, Nortel Networks
shall, without charge to Customer, supply to Customer additional spare boards,
subassemblies or such other Equipment of each type so depleted, as necessary to
maintain an adequate emergency replacement stock, until implementation of a
permanent remedy.

                           (ii)     Upon implementation of a permanent remedy,
all excess boards, subassemblies or other Equipment supplied by Nortel Networks
to Customer under Section 11.4(a)(i) shall be returned to Nortel Networks, and
all in-service and spare stock boards, subassemblies and other equipment which
are the subject of the corrections contemplated by this Section 11.4(a)(ii)
shall be either, at the option of Nortel Networks, promptly repaired or replaced
at no charge to Customer, in accordance with an agreed schedule.

                  (b)      If, during the Warranty Period set forth in Section
11.1, Customer experiences failures of Equipment (other than electronic circuit
board components, RBS subassemblies or other Equipment which may be deinstalled
and reinstalled by Customer in the ordinary course of business), which Customer
CTO reasonably believes to be excessive, Nortel Networks shall give priority to
the remedy of the cause of the failures (and in accordance with the response,
workaround and cure times set forth in Attachment C). During the period prior to
the implementation of a permanent remedy, Nortel

                                       33



Networks agrees to negotiate in good faith for adjustments in warranties and
freight payments commensurate with the effect upon Customer caused by such
failures and to make adjustments as are mutually agreed upon by Customer and
Nortel Networks.

         11.5     In no event shall Nortel Networks be required to provide
support for any version of Software that is (a) with respect to Software
supporting GSM, CDMA or TDMA technology, more than two (2) versions behind the
then current version of Software that Nortel Networks is generally offering to
its customers and (b) with respect to Software supporting any other technology,
more than one (1) version behind the then current version of Software that
Nortel Networks is generally offering to its customers.

         11.6     If any Equipment or Software is rendered inoperative as a
result of a natural or other disaster, Nortel Networks will make all reasonable
efforts to promptly supply or help locate backup or replacement Equipment or
Software for Customer, by using reasonable efforts to waive any delivery
schedule priorities and to make replacement Equipment or Software available from
the facility then producing such products, or from inventory.

         11.7     Nortel Networks response times, workaround times and cure
periods for all warranty related repairs for the System, Equipment and Software
are set forth in Attachment C hereto. Such times are based upon the severity
level of the applicable defect, as set forth therein.

         11.8     It is the intention of the parties that any defects in
materials or workmanship or nonconformity with the performance Specifications in
the System, Equipment or Software shall be corrected as promptly as practicable
regardless of fault, and in this regard, Nortel Networks agrees to use
commercially reasonable efforts to

                                       34



work with and cooperate with Customer and any other manufacturer, vendor or
contractor to correct any such defect or nonconformity to the extent that Nortel
Networks has the capacity to do so. Nortel Networks shall, at Customer's
request, provide reasonable assistance to Customer in determining the cause of
such defect or nonconformity and recommend the appropriate action. Nortel
Networks shall, upon its receipt of a request for assistance hereunder from
Customer, use commercially reasonable efforts to correct any such defect or
nonconformity in a System, item of Equipment or Software or any other equipment
or software (whether or not such defect or nonconformity is the responsibility
of Nortel Networks) as promptly as practicable and bill Customer for such. If
Customer and Nortel Networks disagree as to the cause of the defect or
nonconformity or the action to be taken, then, at Customer's written request,
Nortel Networks shall nevertheless correct such defect or nonconformity (whether
or not such defect or nonconformity is the responsibility of Nortel Networks) as
promptly as practicable and generate a bill to Customer for such. The parties
shall thereafter negotiate in good faith to determine the party responsible for
such defect or nonconformity, and if they are unable to resolve such dispute,
such dispute shall be submitted to a Third Party Engineer in accordance with
Article 38. Nothing contained in this Section 11.8 shall require Nortel Networks
to repair or modify any equipment purchased by Customer from any third party
unless Nortel Networks has the ability to do so.

         11.9     Subject to Section 11.3, Customer may at any time acquire
equipment and software from a source other than Nortel Networks, and such
equipment and software

                                       35



may be interconnected with the Equipment and Software without affecting the
warranties contained in this Article 11.

         11.10    With respect to Reseller Items, in lieu of the warranties set
forth herein Reseller Items shall have the warranties given to Nortel Networks
by the third parties supplying such Reseller Items to Nortel Networks and such
warranties shall inure, to the extent applicable or permitted, to the benefit of
Customer, and Customer shall have the right to enforce such warranties directly
with the third party providing the applicable Reseller Item to Nortel Networks
or, if Customer is not permitted to enforce such warranty directly through
Nortel Networks.

         11.11    THE WARRANTIES AND REMEDIES SET FORTH IN THIS ARTICLE 11
CONSTITUTE THE ONLY WARRANTIES (OTHER THAN THE WARRANTIES AS TO TITLE CONTAINED
IN SECTION 5.5) WITH RESPECT TO THE EQUIPMENT, SOFTWARE AND SERVICES PROVIDED BY
NORTEL NETWORKS PURSUANT TO THIS AGREEMENT, AND CUSTOMER'S EXCLUSIVE REMEDIES IN
THE EVENT SUCH WARRANTIES ARE BREACHED. THEY ARE IN LIEU OF ALL OTHER WARRANTIES
WRITTEN OR ORAL, STATUTORY, EXPRESSED OR IMPLIED, INCLUDING, WITHOUT LIMITATION,
THE WARRANTY OF MERCHANTABILITY AND THE WARRANTY OF FITNESS FOR A PARTICULAR
PURPOSE.

                                   ARTICLE 12
                    INDEMNIFICATION; LIMITATION OF LIABILITY

         12.1     Subject to Section 12.5, Nortel Networks shall be responsible
for and agrees to indemnify and hold harmless Customer and its Affiliates,
officers, employees and subcontractors (each, a "Customer Indemnified Party" and
collectively the

                                       36



"Customer Indemnified Parties") from, and shall defend the Customer Indemnified
Parties against, all third party losses, claims, demands, damages and causes of
action (including reasonable legal fees and expenses) relating to bodily injury
to persons, including death, or loss or damage to tangible property which was
caused by any negligence or willful misconduct of Nortel Networks or its
Affiliates, officers, agents, representatives, employees, suppliers or
subcontractors in the course of the performance of Nortel Networks' obligations
pursuant to this Agreement. Nortel Networks will defend, at its own expense,
including reasonable attorneys' fees, any Regulatory Claim brought against
Customer (other than those resulting or arising out of the use of Reseller Items
supplied hereunder) and shall pay all fines or penalties that may be assessed or
levied by the applicable governmental authority for noncompliance with respect
to such Regulatory Claim or as are agreed to by Nortel Networks in settlement of
such Regulatory Claim. All such losses, claims, demands, and damages, or fines
or penalties shall be paid directly by Nortel Networks. Notwithstanding anything
to the contrary contained in this Agreement, the Customer Indemnified Parties
shall have the right, in their sole discretion, to implead, interplead or
otherwise cause Nortel Networks to be added as a party to any action or
proceeding brought against a Customer Indemnified Party relating to any matter
or thing for which such Customer Indemnified Party is entitled to
indemnification pursuant to this Section 12.1 and, if in any such proceeding
Nortel Networks is found to be liable, Nortel Networks shall be responsible for
all liabilities and damages assessed against it in any such proceeding or
action.

         12.2     Subject to Section 12.5, Customer shall be responsible for and
agrees to indemnify and hold harmless Nortel Networks and its Affiliates,
officers, employees and

                                       37



subcontractors (each, a "Nortel Indemnified Party" and collectively, the
"Nortel Indemnified Parties) from, and shall defend the Nortel Indemnified
Parties against, all third party losses, claims, demands, damages and causes of
action (including reasonable legal fees and expenses) relating to bodily injury
to persons, including death, or loss or damage to tangible property which was
caused by any negligence or willful misconduct of Customer or its Affiliates,
officers, agents, employees, representatives or its subcontractors in the course
of the performance of Customer's obligations pursuant to this Agreement. All
such losses, claims, demands, and damages shall be paid directly by Customer.
Notwithstanding anything to the contrary contained in this Agreement, the Nortel
Indemnified Parties shall have the right, in their sole discretion, to implead,
interplead or otherwise cause Customer to be added as a party to any action or
proceeding brought against a Nortel Indemnified Party relating to any matter or
thing for which such Nortel Indemnified Party is entitled to indemnification
pursuant to this Section 12.2 and, if in any such proceeding Customer is found
to be liable, Customer shall be responsible for all liabilities and damages
assessed against it in any such proceeding or action.

         12.3     With respect to the indemnification provided by either
Customer or Nortel Networks in accordance with Sections 12.1 and 12.2 above, the
Customer Indemnified Party and the Nortel Indemnified Party, as applicable,
shall (a) give Customer or Nortel Networks, as applicable, prompt written notice
of any such loss, claim, demand, damage or cause of action or Regulatory Claim;
provided, however, that a failure to give such prompt notice shall not affect
the indemnification to be provided hereunder except to the extent that Customer
or Nortel Networks, as applicable, shall have been actually prejudiced as a
result of such failure, (b) allow Customer or Nortel, as applicable, to

                                       38



control the defense and all related settlement negotiations; provided, however,
that Customer shall be entitled to control of the defense or settlement of any
Regulatory Claim with respect to matters that do not involve monetary damages
(with reasonable participation by Nortel Networks, at its own cost and expense),
and shall have the right to settle or compromise any Regulatory Claim to the
extent that it involves anything other than money damages without the prior
consent of Nortel Networks, and (c) reasonably cooperate with Customer or Nortel
Networks, as applicable, in such defense and any related settlement
negotiations; provided however, that the applicable Customer Indemnified Party
or Nortel Indemnified Party shall be reimbursed by Customer or Nortel Networks,
as applicable, for its actual, reasonable, out-of-pocket costs for such
reasonable cooperation.

         12.4     Except as provided in, or for liabilities arising under,
Articles 7, 15 and 19 and Section 12.1 with respect to bodily injury and damage
to tangible property, or for claims regarding title to Equipment or Software,
the total liability of Nortel Networks under this Agreement, including its
Affiliates, officers, employees, agents, representatives, shareholders,
subcontractors or suppliers, for claims of any kind for any loss or damage,
whether in contract, warranty, indemnification, tort (including negligence),
strict liability or otherwise, arising out of or connected with, or resulting
from the performance or non-performance of this Agreement shall not (i) in
respect of any loss or damage to Customer's tangible property exceed
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] per event
or series of related events, and (ii) in

                                       39



respect of all other losses or damage exceed in the aggregate [CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT].

         12.5     NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
AGREEMENT, BUT SUBJECT TO LIQUIDATED DAMAGES EXPRESSLY PROVIDED FOR IN ARTICLE
7, IN NO EVENT, WHETHER AS A RESULT OF BREACH OF CONTRACT, INDEMNIFICATION,
WARRANTY, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHERWISE, SHALL
NORTEL NETWORKS OR CUSTOMER BE LIABLE TO THE OTHER FOR (A) DAMAGES BASED ON ANY
THIRD PARTY CLAIM, EXCEPT AS EXPRESSLY PROVIDED IN SECTIONS 12.1 AND 12.2 AND
ARTICLE 15 OR THIRD PARTY CLAIMS WHICH ARE STRICT LIABILITY BY OPERATION OF LAW,
(B) LOSS OF, OR DAMAGE TO, THE OTHER PARTY'S RECORDS, FILES OR DATA, OR (C) ANY
SPECIAL, CONSEQUENTIAL, INCIDENTAL, INDIRECT OR EXEMPLARY DAMAGES OF ANY NATURE
WHATSOEVER OR LOSS OF PROFITS OR REVENUES OF SUCH OTHER PARTY BEFORE OR AFTER
ACCEPTANCE. THE LIMITATIONS SET FORTH IN THIS SECTION 12.5 SHALL NOT BE
APPLICABLE TO A BREACH BY EITHER PARTY OF ITS OBLIGATIONS UNDER ARTICLE 18 OR
CUSTOMER'S BREACH OF THE SOFTWARE RIGHT-TO-USE SET FORTH IN ATTACHMENT G. THE
LIMITATIONS SET FORTH IN THIS SECTION 12.5 SHALL ALSO NOT BE APPLICABLE IN THE
EVENT NORTEL NETWORKS BREACHES ARTICLE 15 TO THE EXTENT THAT, IF A

                                       40



COURT OF COMPETENT JURISDICTION ENJOINS CUSTOMER FROM USING EQUIPMENT AND/OR
SOFTWARE THAT IS THE SUBJECT OF A CLAIM UNDER ARTICLE 15, NORTEL NETWORKS SHALL
BE LIABLE TO CUSTOMER FOR THE LOST PROFITS ASSOCIATED WITH THE REVENUE (OR, IF
CUSTOMER IS NOT PROFITABLE, [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] OF SUCH REVENUE) THAT CUSTOMER WOULD HAVE RECEIVED FROM
THE PROVISION OF ITS TELECOMMUNICATIONS SERVICES TO ITS CUSTOMERS IF SUCH
INJUNCTION HAD NOT OCCURRED, WITH NORTEL NETWORKS' TOTAL LIABILITY UNDER THIS
AGREEMENT FOR LOST PROFITS (OR REVENUE, AS APPLICABLE) AS PROVIDED FOR IN THIS
SENTENCE NOT TO EXCEED IN THE AGGREGATE [CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]. SUCH [CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] CAP SHALL NOT BE APPLICABLE IN ANY WAY TO NORTEL
NETWORKS' INDEMNIFICATION REQUIREMENTS UNDER ARTICLE 15 HEREOF, INCLUDING ANY
SPECIAL, CONSEQUENTIAL, INCIDENTAL, INDIRECT OR EXEMPLARY DAMAGES OF ANY NATURE
WHATSOEVER OR LOSS OF PROFITS OR REVENUES (WHICH ARE AWARDED BY FINAL COURT

                                       41



JUDGMENT OR DECREE, OR AGREED UPON BY NORTEL NETWORKS IN SETTLEMENT OF ANY
APPLICABLE PROPERTY RIGHTS SUIT OR CLAIM) OF ANY THIRD PARTY MAKING A PROPERTY
RIGHTS CLAIM THEREUNDER.

                                   ARTICLE 13
                                    FORECAST

         Customer shall, at least fifteen (15) days prior to the start of each
calendar quarter, submit to Nortel Networks a good faith, consolidated,
non-binding forecast of the applicable items that Customer anticipates
purchasing or licensing over the next six (6) months. In addition to the type,
quantity and cumulative dollar amounts, the parties shall mutually agree upon
additional information to be included in such forecast.

                                   ARTICLE 14
                            SERVICE AND SUPPORT PLAN

         Nortel Networks shall make available to Customer, as, when and if
ordered by Customer, for a period of three (3) years after expiration of the
Term, a Service and Support Plan. The terms of the Service and Support Plan
during the Term are attached hereto as Attachment C. The terms of the Service
and Support Plan for the three (3) year period after the expiration of the Term
shall be no less favorable to Customer than the terms of the Service and Support
Plans made generally available to Nortel Networks' customers at such time. The
prices for the Service and Support Plan during the Term are set forth in
Attachment C and are no less favorable to Customer than Nortel Networks' current
standard rates.

                                   ARTICLE 15
                                PATENT INDEMNITY

         15.1     Nortel Networks will defend, at its own expense, all suits and
claims made or brought by a third party against Customer and/or its Affiliates,
wherever such suit or

                                       42



claim is commenced or asserted, for infringement or violation of any patent,
trademark, copyright, trade secret, or other tangible or intangible property
rights of any kind whatsoever (collectively, "Property Rights") of such third
party, covering, or alleged to cover, the Equipment, Software, or the System or
any component thereof, excluding Reseller Items, or the use thereof in the
Territory, in the form furnished or as subsequently modified by Nortel Networks
(and not modified by Customer or any other person without the written consent of
Nortel Networks), and Nortel Networks will pay all sums, including attorneys'
fees and expenses and other costs which, by final judgment or decree, or in
settlement of any such suit or claim, may be assessed against Customer or its
Affiliates on account of such infringement or violation, provided (a) Nortel
Networks shall be given prompt written notice of all claims of any such
infringement or violation and of any suits or claims brought or threatened
against Customer or its Affiliates of which Customer or such Affiliate has
express knowledge; provided that a failure to give such prompt notice shall not
affect the indemnification to be provided hereunder except to the extent that
Nortel Networks shall have been actually prejudiced as a result of such failure;
(b) Nortel Networks shall be given full authority to assume the sole defense
thereof through its own counsel at its own cost and expense and to compromise or
settle any suits or claims so far as this may be done without prejudice to the
right of Customer to continue the use, as contemplated, of the Equipment,
Software or the System or any component thereof so furnished, subject to Section
15.2; (c) Customer shall cooperate fully with Nortel Networks in the defense of
such suit or claims and provide Nortel Networks such assistance as Nortel
Networks may reasonably require in connection therewith; provided, however, that
Customer shall be reimbursed by Nortel Networks for

                                       43



its actual, reasonable, out-of-pocket costs for such reasonable cooperation; and
(d) use of such Equipment, Software, System or component was at all times within
the Territory.

         15.2     If in any such suit so defended all or any part of the
Equipment, Software, or the System or any component thereof is held to
constitute an infringement or violation of any third party's Property Rights, or
if in respect of any claim of infringement or violation Nortel Networks deems it
advisable to do so, Nortel Networks shall, at its sole option and expense, use
its commercially reasonable best efforts to take one or more of the following
actions: (a) procure the right for Customer to continue the use of the same
without interruption, (b) replace the same with non-infringing Equipment or
Software or components (which Equipment, Software or components shall be
equivalent as to form, fit and function) with as minimal interruption of use as
is practicable (and any such interruption shall not be during Customer's peak
hours) provided that such replacement shall not adversely impair the System,
Equipment or Software from performing in accordance with all material
performance Specifications, or (c) modify such Equipment or Software or
component so as to be non-infringing Equipment or Software or components with as
minimal interruption of use as is practicable (and any such interruption shall
not be during Customer's peak hours) provided that the modified non-infringing
Equipment or Software or components shall not adversely impair the System,
Equipment or Software from performing in accordance with all material
performance Specifications. In the event that, despite Nortel Networks'
commercially reasonable best efforts, none of subsections (a), (b) or (c) can be
performed by it, then Nortel Networks shall have the right to take back the
infringing item(s) and give Customer a credit equal to Customer's net aggregate
purchase price for such item(s), if such return occurs during the

                                       44



Term and, commencing upon the first day after the expiration of the Term, less
depreciation of twenty (20%) percent of such purchase price for each year of use
thereof after expiration of the Term. To the extent that the return of any such
infringing item in accordance with the previous sentence prevents or adversely
impairs Customer's use or operation of other items of Equipment or Software,
Customer's right to receive a credit shall apply to the net aggregate purchase
price of such other items, less depreciation, if applicable, as well.

         15.3     The indemnity provided in this Article 15 shall not extend to
infringement of Property Rights to the extent that such infringement arises from
(a) modifications made to Equipment or Software by Nortel Networks in order to
adhere to special Equipment or Software design requests, specifications or
instructions of Customer but only if such alleged infringement would not have
resulted from Nortel Networks' design prior to Customer's requested
modification, (b) use of the Equipment, Software or System or any component
thereof in a manner or for a purpose not stated in the Specifications or in a
manner or for a purpose not reasonably contemplated by Nortel, (c) use of the
Equipment, Software or System in combination with any other equipment or
software not supplied by Nortel Networks hereunder, (d) the incorporation of
components not manufactured or provided by Nortel Networks into the Equipment or
Software, (e) Customer originated modifications to the Equipment or Software
(unless expressly permitted by Nortel Networks in writing), or (f) Customer's
failure to install or have installed changes, revisions or updates required to
be installed by Nortel Networks in order to prevent such infringement.

                                       45



         15.4     Nortel Networks' Property Rights indemnification
responsibilities under this Article 15 shall not be applicable to Reseller Items
provided to Customer pursuant to this Agreement. With respect to Reseller Items,
any Property Rights indemnification provided to Nortel Networks by the third
party vendor supplying the applicable Reseller Item shall inure, to the extent
applicable or permitted, to the benefit of Customer, and Customer shall have the
right to enforce such indemnification directly with the third party providing
the applicable Reseller Item to Nortel Networks (or, if Customer is not
permitted to enforce such indemnification directly, Nortel Networks shall
enforce such indemnification on behalf of Customer).

         15.5     The preceding represents Customer's sole and exclusive remedy
regarding any claim of infringement or violation of Property Rights.

                                   ARTICLE 16
                        CHANGE ORDERS; ORDER CANCELLATION

         16.1     The terms and conditions of any Purchase Order, including the
provisions of the applicable Statement of Work, may be amended by mutually
agreed Change Orders ("Change Orders"). Each Change Order must be in writing,
must identify the changes to be made and must be signed by the duly authorized
representatives of each of Nortel Networks and Customer.

         16.2     Unless otherwise expressly agreed in a written document signed
by both parties hereto, any Purchase Order, acknowledgment form or other form
issued by Customer or Nortel Networks containing terms and conditions of sale
shall not have the effect of modifying the terms and conditions of this
Agreement, notwithstanding any act of Customer and payment therefor, and all
deliveries and Installation of goods and

                                       46



performance of services by Nortel Networks shall be deemed to be only upon the
terms and conditions of this Agreement.

         16.3     Customer, upon at least twenty-one (21) days prior notice to
Nortel Networks, may issue "holds" on Purchase Orders or suspend performance
under this Agreement, in whole or in part, at no additional cost to Customer
except as otherwise provided in this Section 16.3. If Customer issues a hold or
suspends performance for a period longer than ten (10) Business Days, Customer
will compensate Nortel Networks for any actual, reasonable, out-of-pocket costs
incurred by Nortel Networks due to such hold or suspension after such ten (10)
Business Day period. If any Purchase Order is placed on hold or is suspended for
a period of ninety (90) days or greater, it shall be deemed automatically
cancelled and shall be subject to the payment of any cancellation fees as set
forth below. In the event that Customer suspends performance, Customer and
Nortel Networks will mutually agree on a date to reconvene such performance or
if Customer does not elect to reconvene such performance, Nortel Networks shall
invoice Customer for Services actually performed and Customer shall pay such
invoice in accordance with Article 4.

         16.4     Customer may cancel any Purchase Order or portion thereof
prior to the shipment of the items comprising such Purchase Order or portion
thereof. No cancellation fee shall be payable by Customer with respect to
Purchase Orders for CDMA, TDMA, AMPS and GSM Software. With respect to the
cancellation of Purchase Orders for Equipment that has been engineered or
customized by Nortel Networks specifically for Customer's use or operation,
Customer shall pay Nortel Networks a cancellation fee based upon the number of
days prior to the scheduled shipping date that

                                       47



Nortel Networks receives the cancellation notice from Customer. Such
cancellation fee shall be in accordance with the following table:



==============================================================================================
                                              Percentage of Aggregate Price to be Paid as
  Date of Cancellation Notice                               Cancellation Fee
- ----------------------------------------------------------------------------------------------
                                       
29 days to 1 day prior to shipment        [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
                                          WITH THE SECURITIES AND EXCHANGE COMMISSION
                                          PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]

59 days to 30 days prior to shipment      [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
                                          WITH THE SECURITIES AND EXCHANGE COMMISSION
                                          PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]

90 days to 60 days prior to shipment      [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
                                          WITH THE SECURITIES AND EXCHANGE COMMISSION
                                          PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
- ----------------------------------------------------------------------------------------------
91 days or greater prior to shipment      [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY
==============================================================================================


                                       48




- ----------------------------------------------------------------------------------------------
                                       
                                          WITH THE SECURITIES AND EXCHANGE COMMISSION
                                          PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
==============================================================================================


         Purchase Orders for Equipment which is not engineered or customized by
Nortel Networks specifically for Customer's use or operation (including
non-engineered BTS' and cell sites) may be cancelled at no cost to Customer.

         Notwithstanding anything to the contrary contained in this Article 16,
Purchase Orders issued with respect to the Initial Order shall be firm and
non-cancelable under this Article 16. Any cancellation fees due to Nortel
Networks pursuant to this Section 16.4 shall be invoiced by Nortel Networks to
Customer upon receipt by Nortel Networks of the applicable cancellation notice.
The payment by Customer of such cancellation fees as described in this Section
16.4 shall be Nortel Networks' sole remedy and Customer's sole obligation for
the cancellation of Purchase Orders by Customer.

                                   ARTICLE 17
                              SOFTWARE RIGHT-TO-USE

         17.1     The rights and obligations of Customer and Nortel Networks
with respect to the Software Right-to-Use are contained in this Agreement and in
the Software Right-To-Use Agreement attached hereto as Attachment G. Nortel
Networks represents that the Software licensed by Customer hereunder is all of
the Software which Customer shall require to provide the features and
functionality set forth in the Specifications for such Software, and that
Customer shall not be required to license additional Software in order to
realize the benefit of such features and functionality, with the exception of
Software prerequisites identified in the Documentation or unless otherwise
indicated in a written

                                       49



proposal or quotation provided to Customer prior to the issuance of the
applicable Purchase Order for the applicable Software.

         17.2     In addition to the rights and obligations described in Section
17.1, Nortel Networks agrees to the following:

                  (a)      If TDMA, CDMA, GSM or AMPS Software or any part
thereof is lost or damaged (other than due to the fault of Customer) before
being Accepted or put In-Service, Nortel Networks will promptly replace it at no
additional cost to Customer. Any such Software lost or damaged after Acceptance
or due to the fault of Customer shall be replaced by Nortel Networks at a charge
to Customer equal to Nortel Networks' actual cost for gathering such Software.
Any Software which is not TDMA, CDMA, GSM or AMPS Software, or which is a
Reseller Item, that is lost or damaged for any reason shall be replaced by
Nortel Networks at a charge to Customer equal to Nortel Networks' actual cost
for gathering such Software.

                  (b)      If Nortel Networks modifies and/or changes the
Software to permit additional features and such features are made generally
available to its customers in the Territory, such Software will promptly be made
available to Customer at Nortel Networks' then current price for such features,
less applicable discounts and incentives as provided in Attachments A and B.

                                   ARTICLE 18
                           NON-DISCLOSURE OF TECHNICAL
                       INFORMATION AND PROPRIETARY RIGHTS

         18.1     Either party (hereafter the "Disclosing Party") may disclose
to the other party (hereafter the "Receiving Party") information which the
Disclosing Party considers proprietary and confidential. Accordingly, with
respect to any confidential or proprietary specifications, drawings, sketches,
models, samples, tools, technical information,

                                       50



confidential business information or data which is furnished by the Disclosing
Party to the Receiving Party in contemplation of or under this Agreement
(hereinafter "Information"), the Receiving Party shall treat such Information as
confidential information with the same degree of care as the Receiving Party
affords to confidential information of its own of a similar nature.

         18.2     The provisions of this Article 18 shall not apply to any
Information which (a) is or shall become publicly available without fault on the
part of the Receiving Party; (b) is already known by the Receiving Party prior
to receipt from the Disclosing Party (so long as such Information was rightfully
obtained and is not subject to any other confidentiality agreement); (c) is
rightfully obtained by the Receiving Party from third parties without
restrictions; (d) the Receiving Party is required by law or by a governmental
authority or agency to disclose such Information, or (e) is independently
developed by a Receiving Party without any direct or indirect use of such
Information.

         18.3     In the event that the Receiving Party becomes obligated to
disclose Information pursuant to an order of any governmental or other
authority, the Receiving Party shall advise the Disclosing Party and, if
requested by the Disclosing Party and at the Disclosing Party's sole cost and
expense, seek a protective order or other appropriate remedy that will permit
the Receiving Party to avoid such disclosure. In the event that such protective
order or other remedy is not obtained, the Receiving Party will disclose only
that portion of the Information as it is obligated to disclose pursuant to such
order, and will use all reasonable efforts, at the Disclosing Party's sole cost
and expense, to obtain assurances that confidential treatment will be accorded
to any Information so disclosed.

                                       51



         18.4     The provisions of this Article 18 shall survive the expiration
or termination of this Agreement.

                                   ARTICLE 19
                                      TAXES

         Customer shall be responsible for the payment of all sales taxes and
Software license fee taxes payable in the Territory arising pursuant to this
Agreement. Nortel Networks shall be responsible for all other taxes payable to
or imposed by the government of the Territory (or any state, locality or
subdivision thereof), including, without limitation, any tax on its income,
revenue or gross receipts in respect of payments made by Customer to Nortel
Networks under this Agreement and any tax relating to franchise, license,
occupation, other real or personal property, payroll, unemployment and social
security taxes and fees. Any party making payments of taxes on behalf of the
other party shall provide the other party with suitable tax receipts confirming
that tax payments have been made on such other party's behalf. Notwithstanding
anything to the contrary contained herein, neither Customer nor Nortel Networks
shall be responsible for the payment of taxes which are the responsibility of
the other party under this Article 19.

                                   ARTICLE 20
                              INTENTIONALLY OMITTED

                                   ARTICLE 21
                                    INSURANCE

         21.1     Except where Customer designates its own carrier to perform
delivery, Nortel Networks shall maintain and keep in force, on behalf of
Customer and until delivery of the applicable items, risk insurance, in form and
substance in accordance with industry standards, covering the System and all
Equipment delivered to Customer, and

                                       52



shall, upon request, furnish Customer with proof (in the form of Certificates of
Insurance) that such insurance has been obtained and is in force.

         21.2     Nortel Networks shall at all times during the Term carry
insurance with limits not less than the limits described as follows:

                  (a)      Employer's General Liability - Limits $1,000,000 per
occurrence.

                  (b)      Comprehensive General Public Liability: $2,000,000
single limit bodily injury and property damage combined; such coverage shall
include a broad form liability rider, completed operations coverage rider and
contractual liability rider.

                  (c)      An umbrella policy with $4,000,000 single limit
bodily injury and property damage combined.

                  (d)      Worker's Compensation (Statutory limits in the
Territory or subdivision thereof in which this Agreement is to be performed).

         21.3     Customer shall be named as an additional insured with respect
only to the operations of Nortel Networks under the insurance required in
Sections 21.2(b) and (c), and as loss payee, as its interests may appear, under
the insurance required by Section 21.1. Nortel Networks shall provide to
Customer within fifteen (15) days of the date hereof a certificate of insurance
consistent with this Article 21. Such policies shall be carried and maintained
during the Term and if Nortel Networks fails to renew, cancels or terminates any
of such policies during the Term of this Agreement, Nortel Networks will provide
written notice thereof to Customer as promptly as practicable.

         21.4     Notwithstanding the requirements as to insurance to be
carried, the insolvency, bankruptcy, or failure of any insurance company
carrying insurance for Nortel Networks, or failure of any such insurance company
to pay claims accruing, or the

                                       53



failure of Nortel Networks to obtain any such insurance, shall not be held to
waive any of the provisions of this Agreement or relieve Nortel Networks from
any obligations under this Agreement.

                                   ARTICLE 22
                             TERMINATION AND DEFAULT

         22.1     Prior to the shipment of the applicable items of Equipment or
Software, or the performance of the applicable Service(s), Customer may, without
prejudice to any of Customer's rights accrued prior to the date of termination,
at its option and upon written notice to Nortel Networks, signed by a person
duly authorized by Customer, terminate any Purchase Order or portion thereof,
without penalty, in the event that Nortel Networks is in default under any
material term of such Purchase Order (or the applicable Statement of Work, if
any) or this Agreement (as such material term pertains to the applicable
Purchase Order) and an action to correct such default is not commenced by Nortel
Networks within thirty (30) days after its receipt of written notice thereof
from Customer and such default is not thereafter cured within forty-five (45)
days after commencement of correction by Nortel Networks, unless Nortel Networks
cannot complete such cure within such period for reasons beyond its control and
Nortel Networks is continuing to diligently pursue the cure, in which case such
default must be cured no later than ninety (90) days after Nortel Networks'
original receipt of written notice from Customer under this Section 22.1.

         22.2     Customer, without prejudice to any of Customer's rights
accrued prior to the date of termination, may, at its option and upon written
notice to Nortel Networks, signed by a person duly authorized by Customer,
terminate this Agreement, without penalty, in the event that Nortel Networks is
in default under any material term of this

                                       54



Agreement and an action to correct such default is not commenced by Nortel
Networks within thirty (30) days after its receipt of written notice thereof
from Customer and such default is not thereafter cured within forty-five (45)
days after commencement of correction by Nortel Networks, unless Nortel Networks
cannot complete such cure within such period for reasons beyond its control and
Nortel Networks is continuing to diligently pursue the cure, in which case such
default must be cured no later than ninety (90) days after Nortel Networks'
original receipt of written notice from Customer under this Section 22.2.
Customer, without prejudice to any of Customer's rights accrued prior to the
date of termination, may, upon written notice to Nortel Networks signed by a
person duly authorized by Customer, also terminate this Agreement at its option,
without penalty to Customer (i) if Nortel Networks (a) applies for or consents
to the appointment of, or the taking of possession by a receiver, custodian,
trustee, or liquidator of itself or of all or a substantial part of its
property, (b) makes a general assignment for the benefit of its creditors, (c)
commences a voluntary proceeding under any bankruptcy code or under any other
law relating to the relief from creditors generally, or (d) fails to contest in
a timely or appropriate manner, or acquiesces in writing to, any petition filed
against it in an involuntary proceeding under any bankruptcy code or under any
other law relating to the relief from creditors generally or any application for
the appointment of a receiver, custodian, trustee or liquidator of itself or of
all or a substantial part of its property, or its liquidation, reorganization,
dissolution, or winding-up.

         22.3     In the event of non-payment by Customer within twenty (20)
days after Customer's receipt of written notice from Nortel Networks of overdue
amounts owed by Customer to Nortel Networks hereunder, Nortel Networks, without
prejudice to any of

                                       55



Nortel Networks' rights accrued prior to such action, may, at its option and
upon written notice to Customer, signed by a person duly authorized by Nortel
Networks, suspend its performance (including shipment and performance of
applicable Services) with respect to such Purchase Order and all pending
Purchase Orders or terminate the applicable Purchase Order and Nortel Networks
shall additionally have the right either to refuse or accept additional Purchase
Orders after the date of such notice or to require payment terms other than
those set forth in this Agreement prior to the acceptance of additional Purchase
Orders. Amounts which have not been paid by Customer because they are the
subject of a good faith dispute shall not be considered to be an instance of
non-payment and shall not be subject to the provisions of this Section 22.3.

         22.4     Nortel Networks, without prejudice to any of Nortel Networks'
rights accrued prior to the date of termination, may, at its option and upon
written notice to Customer, signed by a person duly authorized by Nortel
Networks, terminate this Agreement without any obligation to deliver any
Equipment, Software or Services not yet delivered by it to Customer, in the
event that Customer is in default under any material term of this Agreement
(other than with respect to overdue amounts, which shall be governed by Section
22.3) and an action to correct such default is not commenced by Customer within
thirty (30) days after receipt of written notice thereof from Nortel Networks
and such default is not thereafter cured within forty-five (45) days after
commencement of correction by Customer, unless Customer cannot complete such
cure within such period for reasons beyond its control and Customer is
continuing to diligently pursue the cure, in which case such default must be
cured no later than ninety (90) days after Customer's original receipt of
written notice from Nortel Networks under this

                                       56



Section 22.3. Nortel Networks, without prejudice to any of Nortel Networks'
rights accrued prior to the date of termination, may, upon written notice to
Customer signed by a person duly authorized by Nortel Networks, also terminate
this Agreement without any obligation to deliver Equipment, Software or Services
not yet delivered in the event that Customer: (a) applies for or consents to the
appointment of, or the taking of possession by a receiver, custodian, trustee,
or liquidator of itself or of all or a substantial part of its property, (b)
makes a general assignment for the benefit of its creditors, (c) commences a
voluntary proceeding under any bankruptcy code or under any other law relating
to relief from creditors generally or (d) fails to contest in a timely or
appropriate manner, or acquiesces in writing to, any petition filed against it
in an involuntary proceeding under any bankruptcy code or under any other law
relating to relief from creditors generally, or any application for the
appointment of a receiver, custodian, trustee or liquidator of itself or of all
or a substantial part of its property, or its liquidation, reorganization,
dissolution, or winding-up.

         22.5     If Customer or Nortel Networks terminates this Agreement,
Nortel Networks' obligations hereunder with respect to Equipment and Software
already delivered, installed and not returned (including the provision of
related Services), and Customer's obligations with respect to Equipment and
Software not returned (and Services properly performed), shall continue in full
force and effect.

                                   ARTICLE 23
                              INTENTIONALLY OMITTED

                                   ARTICLE 24
                      CONTINUITY FOR SUPPLY OR REPLACEMENT

         24.1     For a period of (i) at least [CONFIDENTIAL MATERIAL OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE

                                       57



COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] years following the
purchase of any item of CDMA or GSM Equipment, and (ii) [CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] years following the purchase
of any item of Equipment other than CDMA or GSM Equipment, Nortel Networks shall
make available for sale to Customer at its then current prices (and, during the
Term of this Agreement, subject to applicable discounts as set forth in
Attachments A and B), replacement and expansion parts for such Equipment or
their "form, fit and function" equivalent, which shall include spare parts and
modules for regular maintenance and repair and to allow for channel expansion
and cell splitting (up to the design limits of the Equipment) which is
compatible with the System sold hereunder.

         24.2     Nortel Networks may at any time cease production or purchase,
as the case may be, of any item of Equipment or Software (or component thereof)
so long as Nortel Networks maintains a sufficient inventory of such Equipment,
Software or component thereof to meet its obligations pursuant to Section 24.1
above. In the event that such discontinuance of production or purchase is in
anticipation of migration to new generation Equipment which is not compatible
with that purchased by Customer hereunder, Nortel Networks shall notify Customer
of its intent to discontinue production or purchase, as the case may be,
sufficiently in advance of final production run or purchase to allow Customer to
purchase such additional items of such Equipment, Software or components thereof
as it may desire for inclusion in such final production

                                       58



run. With respect to Reseller Items, Nortel Networks shall use commercially
reasonable efforts to meet the terms and conditions of this Section 24.2.

         24.3     Nortel Networks warrants that it will use commercially
reasonable efforts to ensure that all new CDMA or GSM Equipment or Software
designed to serve the same or substantially the same purpose in the System as
the existing Equipment and Software ("Alternative Product") shall interconnect
to and operate as part of the CDMA or GSM System, as applicable, without
requiring a change-out or replacement of such System or the Equipment that
comprises such System. This warranty shall (a) apply for three years after
generally availability of any version of the applicable Equipment or the
applicable Software Release within the Territory, (b) not apply to Reseller
Items, and (c) not apply if Nortel Networks offers another existing or new
product providing the same or substantially the same functionality as the
Alternative Product such that Customer is not forced to upgrade its existing
CDMA or GSM Equipment.

                                   ARTICLE 25
                                    SHIPPING

         25.1     Nortel Networks shall also take the following actions in
connection with the Equipment, Software and Services provided by it hereunder:

                  (a)      At no additional charge, package Equipment and
Software in a suitable manner in accordance with Nortel Networks' usual
standards and methods and provide protection against damage during shipment,
handling and storage in dry, unheated quarters. Should any law or regulation
applicable in the Territory require packaging of Equipment or Software in a
manner that is not in accordance with Nortel Networks' standard packaging
methods, Nortel Networks shall comply with all such applicable laws and
regulations and Customer shall pay to Nortel Networks any

                                       59



additional costs and expenses reasonably incurred by Nortel Networks in
complying with such laws or regulations.

                  (b)      Inform Customer of the dates of shipping of the goods
to the Installation site or other mutually agreed upon delivery location. Nortel
Networks shall send to Customer concurrently with shipment, the original copies
of (i) commercial invoices; and (ii) the packing slip setting forth the contents
of the boxes shipped.

                                   ARTICLE 26
                         WORK RULES AND SUBCONTRACTORS

         26.1     The employees, agents, representatives or subcontractors of
Nortel Networks shall, while on any Installation site, comply with all
applicable laws and regulations, as well as Customer's or any landlord's
reasonable plant regulations, which apply to the Installation. Any employee,
agent, representative or subcontractor of Nortel Networks failing to comply
shall be refused admittance to that Installation site, and must be replaced by
Nortel Networks within one (1) week from date of non-admittance.

         26.2     If Customer has any reasonable objection to any subcontractor
of Nortel Networks, Customer shall promptly advise Nortel Networks of such
objection and Nortel Networks shall in good faith consider such objection and
Nortel Networks shall promptly meet with Customer to discuss such objection,
will consider in good faith such objection and, in its reasonable discretion
after such consultation, will take any steps or actions (including replacing any
of its subcontractors with another subcontractor acceptable to Customer) as may
be necessary in order to eliminate any such objection Customer may have.

         26.3     Nortel Networks expressly certifies that its employees,
workers, agents, representatives and subcontractors and their workers and other
personnel employed in the

                                       60



performance of this Agreement by Nortel Networks are the employees, workers,
agents, representatives and subcontractors and the personnel of Nortel Networks,
and not of Customer.

         26.4     Nortel Networks shall not permit such employees, agents,
representatives or subcontractors to interfere with the normal functioning and
security of the work and other facilities of Customer or of other persons at the
Installation locations. Customer may request Nortel Networks to cause its
employees, agents, representatives or subcontractors to wear visible
identification in any of the Installation locations. In general, Nortel
Networks, its agents, employees, representatives or subcontractors are obliged
to comply with all reasonable rules, regulations and procedures of security
adopted by Customer. Upon completion of Installation, Nortel Networks shall
promptly remove all of its tools, excess equipment and the like and deliver the
sites clean and in good condition suitable for normal utilization provided that
Customer shall grant Nortel Networks reasonable access to such sites for such
removal and clean-up.

         26.5     Nortel Networks shall be responsible for the supervision and
direction of all work performed by its subcontractors hereunder using Nortel
Networks' professional skill and attention. Nortel Networks shall be responsible
for all construction means, methods, techniques, sequences, and procedures, and
safety precautions and programs in connection with such work, and shall be
responsible for coordinating all portions of all work performed by its
subcontractors. No assignment by Nortel Networks to its subcontractors of its
rights, duties, obligations or liabilities hereunder shall relieve Nortel
Networks of any of the duties, liabilities or obligations owed by Nortel
Networks hereunder to the Customer. Nortel Networks is solely responsible for
any payments or

                                       61



reimbursement of expenses owed to any subcontractor for any services performed
by such subcontractor in accordance with the terms of this Agreement and shall
make all such payments on a timely basis. Nortel Networks hereby acknowledges
and agrees that Customer has no responsibility, obligation or liability to any
of Nortel Networks' subcontractors hereunder and that no subcontractor has any
right to impose a lien or security interest with respect to any Equipment
furnished to Customer hereunder or any Installation Services provided to
Customer hereunder. The duties, obligations, liabilities and responsibilities of
Nortel Networks under this Agreement shall continue in full force and effect and
shall not be limited, modified, affected or reduced in the event of the
termination, cancellation or suspension of any agreement between Nortel Networks
and any of its subcontractors or as a result of any default, breach or violation
on the part of Nortel Networks or any of its subcontractors under any agreement
or arrangement between Nortel Networks and any such subcontractor.

                                   ARTICLE 27
                             ADDITIONAL OBLIGATIONS

         27.1     Each of the parties shall perform all of its obligations under
this Agreement in a timely fashion in accordance with the schedule set forth in
the applicable Purchase Order (as accepted by Nortel Networks in accordance with
Article 2) or Statement of Work, or as otherwise agreed to in writing.

         27.2     (a)      Customer shall provide Nortel Networks with all
information reasonably requested from Customer which Customer has in its
possession, which is necessary for Nortel Networks to perform, or cause to be
performed, its obligations under this Agreement. Such information shall be
provided upon reasonable notice in a form reasonably specified by Nortel
Networks.

                                       62



                  (b)      Nortel Networks shall provide Customer with all
information reasonably requested from Nortel Networks which Nortel Networks has
in its possession, which is necessary for Customer to perform, or cause to be
performed, its obligations under this Agreement. Such information shall be
provided upon reasonable notice in a form reasonably specified by Customer.

         27.3     Customer shall provide, at its own cost, commercially
reasonable security measures required for safeguarding the storage areas for
Equipment delivered and the sites where Installation activities are to be
performed. This security shall be provided from the start of Installation at
each site until Acceptance.

         27.4     All tools required for Installation shall be shipped to the
Installation sites at the sole cost and expense of Nortel Networks.

         27.5     In order to facilitate Installation, Customer shall:

                  (a)      Allow all Nortel Networks personnel employed in the
Installation to have access to the Installation sites at all reasonable hours to
the same extent Customer would have access (Customer shall use reasonable
efforts, but shall be under no obligation, to obtain 24 hour access), and permit
the use by such personnel of all routes, roadways, ramps, keys, lock
combinations and e-cards under the control of Customer when such use is
reasonably necessary for the proper carrying out of the Installation;

                  (b)      Use reasonable efforts to ensure, to the reasonable
satisfaction of Nortel Networks, that personnel carrying out activities at the
Installation sites who are not employed by Nortel Networks or its subcontractors
do not interfere with the progress of the Installation,

                                       63



                  (c)      Ensure that air-conditioning equipment is operating
satisfactorily within the ranges set forth in Nortel Networks' Specifications,

                  (d)      Ensure that all transmission and remote end
facilities (other than interconnections) that are the responsibility of Customer
and are necessary for the testing of the System, are operational and ready for
the aforesaid tests when required for each portion of the work;

                  (e)      Ensure that the switch and cell site or base station
locations are ready and available when required for the commencement of
Installation;

                  (f)      Provide electric current facilities for the
Equipment, including suitable electrical outlets for soldering irons, hand-lamps
and power tools, in the rooms in which the work is to be performed;

                  (g)      Provide suitable floor space to allow Equipment to be
uprighted and placed in position and all necessary openings and ducts for cable
and conductors in floors, walls and partitions at the sites;

                  (h)      Provide suitable and easily accessible floor space
during the progress of the work for secure storage of major items of Equipment
closely adjacent to where they will be used, for administrative purposes and for
storage of tools and other property of Nortel Networks; and

                  (i)      Perform all of its obligations as set forth in any
applicable Purchase Order, Statement of Work or as otherwise agreed to by the
parties in writing.

                                   ARTICLE 28
                        GOVERNMENTAL COMPLIANCE; INDUSTRY
                             STANDARDS; INTERCONNECT

         28.1     In the performance of this Agreement, Nortel Networks shall
comply with the provisions of all of the laws of the Territory and applicable
local laws, rules,

                                       64



regulations and codes in all respects applicable to safety matters or otherwise
relating to the manufacture, delivery and Installation of the Equipment and
Software and shall obtain the necessary type approvals required in the Territory
for the Equipment and Software. At Customer's request, Nortel Networks shall
promptly furnish Customer with evidence that such type approvals have been
obtained and are in force.

         28.2     Any licenses or permits required by any governing authority of
the Territory relating to the use of the Equipment and Software in a specific
locality shall be the sole responsibility of Customer. At the request of Nortel
Networks, Customer shall provide Nortel Networks with any such licenses or
permits, or furnish Nortel Networks with evidence that such licenses or permits
have been obtained and are in force.

         28.3     Nortel Networks shall perform Installation work ordered
hereunder so as to cause no unreasonable interference with or obstruction to
lands and thoroughfares or rights of way on or near which the Installation work
may be performed. If repairs (or, if repairs are not feasible, new construction)
are required in order to repair or replace facilities damaged by Nortel Networks
due to its negligence, the actual, reasonable costs of such repairs or new
construction shall be at Nortel Networks' cost and expense, to the extent that
Nortel Networks' negligence caused such damage. Customer shall be responsible
for site acquisition and for obtaining all necessary easements, rights of way
and access to, and building permits for, each cell site, base station and switch
location and microwave location.

         28.4     Compatibility Information is the technical information,
including Software interfaces (but excluding source code and internal system
interfaces), required to permit the design of hardware and/or software that is
functionally interconnectable with the

                                       65



Equipment and Software supplied by Nortel Networks hereunder. Nortel Networks
shall reasonably cooperate with third parties as Customer may request, subject
to any appropriate confidentiality or other agreements, in order to facilitate
such interconnection.

         28.5     During the Term and for a period of [CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] years after expiration of the
Term, Nortel Networks shall provide to Customer that Compatibility Information,
if currently available and subject to the confidentiality provisions of this
Agreement and such other restrictions as Nortel Networks may reasonably request,
which gives Customer the necessary technical information and interconnection
information to interface with the System as specified in Section 28.4 above.
Customer shall have the right to disclose such Compatibility Information to
third parties (subject to appropriate non-disclosure agreements approved by
Nortel Networks, which approval shall not be unreasonably withheld or delayed),
whose equipment and/or software will be interconnected with the System,
Equipment or Software or who will be developing interfaces in order to
accomplish interconnectability as described in Section 28.4 above. Nortel
Networks agrees, at the request of Customer, to reasonably cooperate with
Customer or any third party to permit and accomplish such interconnection.
Nortel Networks agrees to provide Customer, as promptly as reasonably
practicable, advance notice of any new, or changes in the existing, interface
specifications and upon completion of such new, or changed, specifications to
provide such to Customer, subject to Sections 28.4 and this 28.5.

                                       66



                                   ARTICLE 29
                             COOPERATIVE ADVERTISING

         29.1     Nortel Networks shall, commencing with the Effective Date and
during the Term, reimburse Customer for [CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] of Customer's actual, reasonable, out-of-pocket costs
incurred by Customer with respect to its cooperative marketing programs which
contain specific references to Nortel Networks and which are in accordance with
Attachment I. The amount reimbursed by Nortel Networks to Customer during the
Term and in accordance with this Article 29 shall be capped at an amount equal
to [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] the
aggregate net purchase price paid for the Equipment, Software and Services
purchased by Customer hereunder (but excluding all GSM Equipment, Software and
Services). Such amount shall be paid to Customer following accrual thereof and
in accordance with Attachment I within thirty (30) days of the end of each
calendar quarter, and Nortel Networks shall provide to Customer access to an
online statement setting forth Nortel Networks' calculations of Customer's
accrued cooperative advertising funds as well as the amounts already utilized by
Customer for cooperative advertising programs under this Article 29. Customer
shall provide Nortel Networks with copies of invoices reasonably detailing its
expenditures with respect to such programs.

                                       67



         29.2     The parties agree that under the Master Purchase Agreement,
dated July 15, 1999, between Customer and Nortel Networks, as amended, Customer
had remaining at the end of the Term a balance of accrued but unused cooperative
advertising funds. The parties further agree that such unused funds shall
continue to be available to Customer under this Agreement in accordance with
Attachment I; provided, however, that Customer may only utilize such remaining
funds to be reimbursed for fifty percent [CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT] of its actual, reasonable, out-of-pocket
costs incurred by Customer with respect to cooperative marketing programs for
which Customer receives invoices dated on or prior to December 31, 2003.

                                   ARTICLE 30
                                   ASSIGNMENT

         30.1     Customer may assign this Agreement to any third party without
the prior written consent of Nortel Networks, to (a) any entity resulting from a
merger, consolidation or other reorganization to which Customer is a party, or
(b) any entity to which Customer transfers all or substantially all of the
assets of Customer existing at such time. Customer shall not be entitled to
assign this Agreement without the consent of Nortel Networks (i) to an entity
which intends to use the Equipment or Software outside of the Territory, (ii) to
any competitor of Nortel Networks directly or indirectly engaged in the
manufacture and/or sale of wireless telecommunications infrastructure equipment,
or (iii) if Customer is in material breach under the Agreement. Customer agrees
to provide Nortel Networks with prompt written notice after any such assignment.

                                       68



         30.2     Customer shall have the right, without the prior written
consent of Nortel Networks, to transfer Nortel Networks' Software Right-to-Use
(as set forth in Attachment G), it being understood and agreed that no
additional Software fees shall be due unless such Software would have been
subject to continuing fees if it had been retained by Customer) to any
purchaser, transferee or assignee of the FCC license and associated system in a
market for which Customer has purchased or licensed Equipment and Software, so
long as such purchaser, transferee or assignee (a) agrees in writing to be bound
by the terms and conditions of such Right-to-Use, (b) does not intend to use
such Equipment and Software outside of the Territory, (c) is not a competitor of
Nortel Networks directly or indirectly engaged in the manufacture and/or sale of
wireless telecommunications infrastructure equipment, and (d) is not in material
breach of any agreement with Nortel Networks. Customer shall provide Nortel
Networks prior written notice of such assignment. In the event of any such sale,
transfer or assignment, Nortel Networks agrees to negotiate in good faith with
any assignee with respect to the balance of any warranty covering the assigned
Equipment or Software.

         30.3     Customer shall have the right to assign this Agreement, or all
or any part of its rights or obligations hereunder, to its parent and to any
Affiliate of Customer without recourse to Customer, provided that Nortel
Networks approves the financial status of such Affiliate, such approval by
Nortel Networks not to be unreasonably withheld or delayed. Customer shall not
be entitled to assign this Agreement without the consent of Nortel Networks, or
all or any part of its rights or obligations hereunder, (i) to an Affiliate
which intends to use the Equipment or Software outside of the Territory, (ii) to
any competitor of Nortel Networks directly or indirectly engaged in the
manufacture

                                       69



and sale of wireless telecommunications infrastructure equipment, (iii) if such
Affiliate is in material breach under the Agreement, and (iv) unless Customer
has given Nortel Networks prior written notice of such assignment.

         30.4     Nortel Networks shall not assign this Agreement or any
interest in any funds that may be due to Nortel Networks hereunder without the
prior written consent of Customer, except to Nortel Networks Limited, any wholly
owned subsidiary of Nortel Networks or Nortel Networks Limited, or to the
successor corporation in connection with a merger of Nortel Networks or Nortel
Networks Limited or a sale of all or substantially all of the assets of Nortel
Networks or Nortel Networks Limited to any other entity; provided, however, that
any such assignment to a wholly owned subsidiary of Nortel Networks or Nortel
Networks Limited shall not relieve Nortel Networks of its obligations under this
Agreement.

         30.5     Customer hereby consents to the sale by Nortel Networks of
Nortel Networks' right to receive any monies ("Receivables") so long as Nortel
Networks advises Customer of such sale, including the name of the entity to
which the Receivables were sold, as promptly as reasonably practicable, but in
no event longer than 20 days after such sale. Customer grants permission for
Nortel Networks to disclose the provisions of this Agreement (subject to
appropriate non-disclosure agreements) to purchasers and prospective purchasers
of Receivables, or their Affiliates and others with a present or prospective
financial interest in such Receivables, and their respective agents, attorneys,
auditors, rating agencies and other advisors.

                                       70



                                   ARTICLE 31
                                    AUTHORITY

         31.1     Customer represents and warrants that (a) all necessary
approvals and authority for Customer to enter into this Agreement and bind
Customer have been obtained, (b) the person executing this Agreement on behalf
of Customer has express authority to do so and, in so doing, to bind Customer
hereto, (c) the execution of this Agreement by Customer and the consummation of
the transactions contemplated hereby do not violate any provision any by-law,
charter, regulation or any other instrument governing the authority of Customer
and (d) the execution, delivery and performance of this Agreement by Customer,
and the purchase of the System and the Equipment and Right-to-Use Software by
Customer and the use thereof by Customer will not violate any agreement,
document, instrument, order, judgment or law binding upon Customer or any of its
property. Customer shall furnish Nortel Networks with such documents as Nortel
Networks may reasonably request showing proof of authority in accordance with
this Article 31.

         31.2     Nortel Networks represents and warrants that (a) all necessary
approvals and authority for Nortel Networks to enter into this Agreement and
bind Nortel Networks have been obtained, (b) the person executing this Agreement
on behalf of Nortel Networks has express authority to do so and, in so doing, to
bind Nortel Networks hereto, (c) the execution of this Agreement by Nortel
Networks and the consummation of the transactions contemplated hereby do not
violate any provision of any by-law, charter, regulation, or any other
instrument governing the authority of Nortel Networks, (d) Nortel Networks has
all necessary licenses, agreements, personal property rights and other
authorizations and consents necessary to enter into this Agreement and
consummate

                                       71



the transactions contemplated hereby and to sell and Install (other than such
licenses and authorizations required to be obtained by Customer pursuant to the
express provisions of this Agreement) the System and the Equipment, license the
Software and provide all of the Services to Customer, (e) the execution,
delivery and performance of this Agreement by Nortel Networks, and the purchase
of the System, and the Equipment and Right-to-Use Software from Nortel Networks
by Customer, and the use thereof by Customer will not violate any agreement,
document, instrument, order, judgment or law binding upon Nortel Networks or any
of its property, (f) the execution of this Agreement by Nortel Networks and the
consummation of the transactions contemplated hereby by Nortel Networks does
not, nor will the use of the System, Equipment or Software by Customer in the
Territory, violate any patent, trademark, copyright or other property rights of
others; provided, however, that Customer's sole remedies for any breach of this
clause 31.2(f) shall be those set forth in Article 15; and (g) the execution of
this Agreement by Nortel Networks and the consummation of the transactions
contemplated hereby by Nortel Networks does not, nor will the use of the System,
Equipment or Software by Customer in the Territory, violate any document,
agreement or instrument binding upon Nortel Networks or its property. Nortel
Networks shall furnish Customer with such documents as Customer may reasonably
require showing proof of authority in accordance with this Article 31.

                                   ARTICLE 32
                            ADVERTISING RESTRICTIONS

         32.1     Neither party shall publicly advertise or, except as required
by law, publish information concerning the entry into, execution, or delivery of
this Agreement,

                                       72



its nature, or the terms and conditions hereof, without the other party's prior
written consent, which consent shall not be unreasonably withheld or delayed.

         32.2     Neither party shall use either orally or in writing the other
party's name, or that of its shareholders, the parent corporations of the
shareholders, or any subsidiary or any Affiliate of the shareholders or their
parents, in connection with any public advertising, promotion, publicity or
representation without the other party's prior written consent, which consent
shall not be unreasonably withheld or delayed.

         32.3     Notwithstanding the foregoing, Customer and Nortel Networks
agree to jointly prepare a press release announcing certain aspects of this
Agreement, including that the purchases during the Term could total
approximately ninety million dollars ($90,000,000) and the types of Equipment
and Software being purchased by Customer hereunder. Such press release shall be
completed for release by Nortel Networks no later than July 31, 2003.

                                   ARTICLE 33
                      ENTIRETY OF AGREEMENT: NO ORAL CHANGE

         This Agreement and the Attachments referenced herein constitute the
entire Agreement between the parties with respect to the subject matter hereof.
It supersedes all proposals, oral or written, all previous negotiations, and all
other communications and agreements (including the Memorandum of Agreement,
dated March 21, 2003) between the parties with respect to the subject matter
hereof. No modifications, alterations, or waivers of any provisions herein
contained shall be binding on the parties hereto unless evidenced in writing by
an amendment signed by duly authorized representatives of Nortel Networks and
Customer. Notwithstanding this Article 33, Sections B.1, B.2 and C.2 of the
Memorandum of Agreement, dated June 27, 2002, between Customer and

                                       73



Nortel Networks shall remain in full force and effect, including the product
credits available to Customer as set forth therein.

                                   ARTICLE 34
                                    NO WAIVER

                  The failure of either party to insist, in any one or more
instances, upon performance of any of the terms, covenants or conditions of this
Agreement, or to exercise any right hereunder, shall not be construed as a
waiver or relinquishment of the future performance of any such terms, covenants,
or conditions or the future exercise of such right, and the obligation of the
other party with respect to such future performance shall continue in full force
and effect.

                                   ARTICLE 35
                                     NOTICES

         35.1     Any legal notice required to be given by one of the parties to
the other hereunder shall be given when forwarded by prepaid registered or
certified first class airmail, postage and fees prepaid, or by telegram,
telecopy or hand delivery to the other party at the following addresses and
telecopier numbers: If to Nortel Networks:

                           Nortel Networks
                           Mailstop D17/03/0F2
                           4010 E. Chapel Hill Nelson Highway
                           Research Triangle Park, NC 27709
                           Telephone : 919-997-4425
                           Telecopier: 919-997-4495
                           Attention: Joy Croom

If to Customer:

                           Western Wireless Corporation
                           3650 131st Avenue SE, Suite 400
                           Bellevue, WA 98006
                           Telephone: (425) 586-8700
                           Telecopier: (425) 586-8102
                           Attn: Chief Operating Officer

                                       74



with a copy to:

                           Western Wireless Corporation
                           3650 131st Avenue SE, Suite 400
                           Bellevue, WA 98006
                           Telephone: (425) 586-8700
                           Telecopier: (425) 586-8040
                           Attn: Legal Department

and to:

                           Friedman Kaplan Seiler & Adelman LLP
                           1633 Broadway, 46th Floor
                           New York, New York 10022
                           Telephone : (212) 833-1100
                           Telecopier: (212) 833-1250
                           Attention: Barry A. Adelman, Esq.

and such notices shall be deemed to have been received ten (10) Business Days
after mailing if forwarded by mail, and upon receipt if forwarded by telegram,
telecopy or hand.

         35.2     Other notices required to be given by one of the parties to
the other hereunder shall be given when forwarded by prepaid registered or
certified first class airmail, postage and fees prepaid, or by telegram,
electronically, telecopy or hand delivery to the persons designated by the other
party at the addresses and telecopier numbers provided by such other party.

         35.3     The aforementioned addresses or telecopy numbers of either
party may be changed at any time by giving fifteen (15) days prior written
notice to the other party in accordance with the foregoing.

                                       75



                                   ARTICLE 36
                         ATTACHMENTS AND INCORPORATIONS

         36.1     Attachments A through J hereto are hereby incorporated by
reference herein, and made a part of this Agreement with the same force and
effect as though set forth in their entirety.

         36.2     In the event of any conflict or inconsistency among the
provisions of this Agreement and the documents attached and incorporated herein,
such shall be resolved, by giving precedence to this Agreement and thereafter to
the Attachments.

                                   ARTICLE 37
                                    HEADINGS

                  The headings given to the Articles herein are inserted only
for convenience and are in no way to be construed as part of this Agreement or
as a limitation of the scope of the particular Article to which the title
refers.

                                   ARTICLE 38
                           GOVERNING LAW - ARBITRATION

         38.1     THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA
APPLICABLE TO CONTRACTS MADE AND TO BE ENTIRELY PERFORMED THEREIN.

         38.2     Subject to Section 38.3(b), and any provisions regarding
equitable relief contained herein, any dispute regarding any right, obligation,
duty or liability which may arise between the parties under this Agreement which
cannot be settled between them, shall be settled in accordance with this Article
38. Any such dispute shall be formally commenced upon the sending of written
notice from one party to the other specifying the

                                       76



nature of such dispute and requesting the escalation of such dispute in
accordance with this Article 38. After the giving of such notice (and the
receipt thereof by the other party), each of the parties shall appoint a
representative from its senior management team and such appointed
representatives shall meet and negotiate in good faith in order to resolve such
dispute. The location, form, frequency, duration and conclusion of any such
negotiations shall be left to the discretion of the appointed representatives;
provided, however, that each of the parties shall have the right to submit such
dispute to arbitration in accordance with Section 38.3 below if such
negotiations are still ongoing after the expiration of sixty (60) days from the
date the initial notice was given (unless the parties mutually agree to extend
such time period). The representatives may, by mutual agreement, elect to
utilize alternative dispute resolution procedures (including mediation) in order
to assist in the negotiations. Such negotiations (and all correspondence
relating thereto) between the representatives shall not be admissible in any
arbitration proceeding commenced in accordance with this Article 38 unless
otherwise expressly agreed upon in writing by each of Customer and Nortel
Networks; provided, however, that documents identified in, referred to in or
provided in conjunction with any such correspondence between the representatives
(other than documents prepared solely for purposes of the negotiations) shall
not be subject to the preceding restriction on admissibility and may be admitted
into evidence in any such arbitration proceeding.

         38.3     (a)      In the event that a dispute is submitted to
arbitration in accordance with this Article 38, such dispute shall then be
settled by arbitration in accordance with the Rules of Arbitration of the
American Arbitration Association (AAA) in New York, New York, by three (3)
arbitrators, one (1) to be appointed by each party and the third to

                                       77



be selected by the arbitrators appointed by the parties (provided that, if the
two (2) arbitrators appointed by the parties hereto cannot agree on the third
arbitrator, the third arbitrator shall be selected by the President of the AAA)
and shall be conducted in accordance with such Rules. Any fees charged by the
arbitrators or the AAA for arbitration services shall be shared equally by
Nortel Networks and Customer.

                  (b)      This Article 38 shall not be applicable to any
matters relating to either party's intellectual property rights (including
Article 15 hereof), misuse of Information (as set forth in Article 18) or
enforcement of the Software Right-to-Use set forth in Attachment G and neither
party shall be obligated to arbitrate such matters.

                  (c)      The award of any arbitration shall be final,
nonappealable, conclusive and binding on the parties hereto.

                  (d)      The arbitrators may award any legal or equitable
remedy, but if specific remedies or limitations on remedies are provided for in
this Agreement, they shall enforce such remedies or limitations on remedies. The
arbitration award may, at the discretion of the arbitrators, include an award of
attorneys' fees, and the amount of such fees, to the prevailing party. Judgment
upon any arbitration award may be entered and enforced in any court of competent
jurisdiction.

                  (e)      Either party to an arbitration hereunder may bring an
action for injunctive relief against the other party if such action is necessary
to preserve jurisdiction of the arbitrators or to maintain status quo pending
the arbitrators' decision. Any such action commenced pursuant to this Section
38.3 shall be discontinued upon assumption of jurisdiction by the arbitrators
and their opportunity to consider the request for equitable relief pending final
decision in the arbitration.

                                       78



         38.4     If there is a disagreement under Section 6.3 or 11.8 of this
Agreement which, in accordance with the terms of such Section 6.3 or 11.8,
requires a Third Party Engineer, the parties will attempt to negotiate a
solution as soon as possible, and such negotiations shall commence no later than
three (3) days after written notification by either party of such disagreement.
If no solution can be reached, the parties shall select a third party engineer
("Third Party Engineer") (whose fees and expenses will be shared equally by the
parties) who will, after conducting such investigation as he/she deems
necessary, within five (5) days, render a decision in the matter. If the parties
are unable to agree on the selection of the Third Party Engineer, the Third
Party Engineer will be selected by the then President of the Institute of
Electrical & Electronics Engineers of the United States. The Third Party
Engineer's decision shall be final, conclusive and binding and neither party
shall appeal or otherwise contest it.

         38.5     Subject to Sections 38.3 and 38.4, each party hereby expressly
submits to the exclusive jurisdiction of all courts sitting in New York, New
York, in connection with any claim or dispute arising under this Agreement, and
agrees that any process or notice of motion or other application to any of such
courts or a judge thereof may be served upon each party within or without such
court's jurisdiction by registered mail or by personal service, at the address
of such party specified herein (or at such other address as such party shall
specify by a prior notice in writing to the other), provided a reasonable time
for appearance is allowed. Each party hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement brought in any court
sitting in New York, New York, and hereby further irrevocably waives any claim
that any such

                                       79



suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.

                                   ARTICLE 39
                                  SEVERABILITY

         Whenever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law
but, if any provision of this Agreement shall be held to be prohibited or
invalid in any jurisdiction, the remaining provisions of this Agreement shall
remain in full force and effect and such prohibited or invalid provision shall
remain in effect in any jurisdiction in which it is not prohibited or invalid.

                                   ARTICLE 40
                            PARTIES ARE NOT PARTNERS

                  Nothing in this Agreement shall be deemed to create, nor shall
either of the parties hereto hold itself out to be, the agent, representative,
joint venturer, employee or partner of the other party or to have any powers to
bind the other party.

                                   ARTICLE 41
                                      DAYS

         Any reference in this Agreement to days shall be deemed to refer to
consecutive calendar days and not Business Days (unless otherwise expressly
stated) and is not exclusive of holidays.

                                   ARTICLE 42
                                  counterparts

         This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute but one and the same agreement.

                                       80



                  IN WITNESS WHEREOF the parties hereto have executed this
Master Purchase and License Agreement as of the date first above written.

                                       81



                                       NORTEL NETWORKS INC.
                                       By:______________________________________
                                       Name:
                                       Title

                                       WESTERN WIRELESS CORPORATION
                                       Federal Tax ID #91-1638901

                                       By:______________________________________
                                       Name:
                                       Title:

                                       82



                      MASTER PURCHASE AND LICENSE AGREEMENT

                                     BETWEEN

                          WESTERN WIRELESS CORPORATION

                                       AND

                              NORTEL NETWORKS INC.

                               Contract No. 21876

Confidential Information



                    
Attachment A           GSM Equipment and Software
Attachment B           CDMA Equipment and Software
Attachment C           Extended Service and Support Plan
Attachment D           Schedule for Critical Items
Attachment E           Training
Attachment F           Standard Lead Times
Attachment G           Software Right-To-Use Agreement
Attachment H           GSM Roamer Markets
Attachment I           Cooperative Marketing
Attachment J           Zone Schedule of Shipping Prices (to be added within 30
                       days)



[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]

Confidential Information



                                TABLE OF CONTENTS

                                                                                      
ARTICLE 1 - DEFINITIONS, CONSTRUCTION ................................................    1
ARTICLE 2 - SCOPE OF AGREEMENT; ORDERS ...............................................   10
ARTICLE 3 - CONTRACT PRICES ..........................................................   16
ARTICLE 4 - TERMS OF PAYMENT .........................................................   17
ARTICLE 5 - DELIVERY, TITLE AND RISK OF LOSS .........................................   20
ARTICLE 6 - TESTING AND ACCEPTANCE ...................................................   23
ARTICLE 7 - DELAY AND PENALTIES ......................................................   25
ARTICLE 8 - TRAINING .................................................................   27
ARTICLE 9 - DOCUMENTATION ............................................................   27
ARTICLE 10 - FORCE MAJEURE ...........................................................   28
ARTICLE 11 - WARRANTIES, REMEDIES: LIMITATIONS: DISCLAIMERS ..........................   29
ARTICLE 12 - INDEMNIFICATION; LIMITATION OF LIABILITY ................................   35
ARTICLE 13 - FORECAST ................................................................   40
ARTICLE 14 - SERVICE AND SUPPORT PLAN ................................................   40
ARTICLE 15 - PATENT INDEMNITY ........................................................   41
ARTICLE 16 - CHANGE ORDERS; ORDER CANCELLATION .......................................   44
ARTICLE 17 - SOFTWARE RIGHT-TO-USE ...................................................   47
ARTICLE 18 - NON-DISCLOSURE OF TECHNICAL INFORMATION AND PROPRIETARY RIGHTS ..........   48
ARTICLE 19 - TAXES ...................................................................   49
ARTICLE 20 - INTENTIONALLY OMITTED ...................................................   50
ARTICLE 21 - INSURANCE ...............................................................   50
ARTICLE 22 - TERMINATION AND DEFAULT .................................................   51
ARTICLE 23 - INTENTIONALLY OMITTED ...................................................   55
ARTICLE 24 - CONTINUITY FOR SUPPLY OR REPLACEMENT ....................................   55
ARTICLE 25 - SHIPPING ................................................................   56
ARTICLE 26 - WORK RULES AND SUBCONTRACTORS ...........................................   57
ARTICLE 27 - ADDITIONAL OBLIGATIONS ..................................................   59
ARTICLE 28 - GOVERNMENTAL COMPLIANCE; INDUSTRY STANDARDS; INTERCONNECT ...............   62
ARTICLE 29 - COOPERATIVE ADVERTISING .................................................   64



Confidential Information



                                                                           
ARTICLE 30 - ASSIGNMENT ...................................................   65
ARTICLE 31 - AUTHORITY ....................................................   67
ARTICLE 32 - ADVERTISING RESTRICTIONS .....................................   69
ARTICLE 33 - ENTIRETY OF AGREEMENT: NO ORAL CHANGE ........................   70
ARTICLE 34 - NO WAIVER ....................................................   70
ARTICLE 35 - NOTICES ......................................................   71
ARTICLE 36 - ATTACHMENTS AND INCORPORATIONS ...............................   72
ARTICLE 37 - HEADINGS .....................................................   73
ARTICLE 38 - GOVERNING LAW; ARBITRATION ...................................   73
ARTICLE 39 - SEVERABILITY .................................................   76
ARTICLE 40 - PARTIES ARE NOT PARTNERS .....................................   77
ARTICLE 41 - DAYS .........................................................   77
ARTICLE 42 - COUNTERPARTS .................................................   77



Confidential Information

EX-10.38

                                                                   EXHIBIT 10.38

                                 FIRST AMENDMENT
                                TO LOAN AGREEMENT

         THIS FIRST AMENDMENT TO LOAN AGREEMENT, made as of July 9, 2003 (the
"Amendment"), is entered into by and among Western Wireless Corporation, a
Washington corporation, as Borrower (the "Borrower"), and the financial
institutions whose names appear as Lenders on the signature pages hereof.

                                   WITNESSETH:

         WHEREAS, the Borrower and Toronto Dominion (Texas), Inc., as
Administrative Agent (the "Administrative Agent"), are parties to that certain
Loan Agreement dated as of April 25, 2000 (the "Agreement"), together with the
Lenders, the Arranger, the Co-Documentation Agents, the Co-Syndication Agents,
the Managing Agents and the Co-Agents (each as defined in the Agreement); and

         WHEREAS, the Borrower has requested that the Lenders agree to amend the
Agreement as more fully set forth herein;

         NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the parties agree that all
capitalized terms used herein shall have the meanings ascribed thereto in the
Agreement except as otherwise defined or limited herein, and further agree as
follows:

         1.       Effective Date of this First Amendment. This Amendment shall
be effective, without any other action by the parties hereto, immediately upon
the full satisfaction or waiver of all of the conditions precedent to the
effectiveness of this Amendment set forth in Section 22 hereof. If all of such
conditions precedent have not been satisfied or waived by August 31, 2003, this
Amendment shall automatically terminate and be of no force or effect whatsoever,
and the Agreement shall remain in full force and effect in accordance with its
terms.

         2.       Amendments to Article 1.

                  (a)      The following defined terms contained in Article 1 of
the Agreement are hereby modified and amended as follows:

                           (i)      "Revolving A Commitment" is hereby modified
                  and amended by deleting the reference therein to
                  "$500,000,000" and replacing it with "$350,000,000"; and

                           (ii)     "Subordinated Debt" is hereby modified and
                  amended by (x) adding "and Section 7.17" to the end of the
                  list of Sections of the Agreement appearing at the end of
                  clause (b)(i) thereof and (y) deleting the text appearing in
                  clause (b)(iv) and replacing it with the following:



                  "such subordinated Indebtedness for Money Borrowed shall
                  contain no covenants or provisions more restrictive, taken as
                  a whole, on the Borrower and its Subsidiaries than the more
                  restrictive of those contained herein or in the indentures for
                  the Senior Subordinated Notes; and"

                  (b)      The following new definition shall be added
immediately following the definition of "Event of Default", which new definition
shall read in its entirety as follows:

                  "'Excess Cash Flow' shall mean, for any fiscal year, based on
                  the audited financial statements for such fiscal year required
                  to be provided under Section 6.2 hereof, the remainder, if
                  any, without duplication, of (a) the Operating Cash Flow for
                  such fiscal year minus (b) the sum of the following: (i)
                  Capital Expenditures by the Borrower and its Restricted
                  Subsidiaries during such fiscal year; (ii) cash taxes paid by
                  the Borrower and its Restricted Subsidiaries during such
                  fiscal year; and (iii) Pro Forma Debt Service for the fiscal
                  year in which such prepayment is required to be made pursuant
                  to Section 2.15(a) hereof.

                  (c)      The following new definition shall be added
immediately following the definition of "Fee Letters", which new definition
shall read in its entirety as follows:

                  "'First Amendment Effective Date' shall mean the date on which
                  that certain First Amendment to Loan Agreement, made as of
                  July 9, 2003, between the Borrower and the Lenders party
                  thereto, becomes effective in accordance with its terms."

                  (d)      The following new definitions shall be added
immediately following the definition of "Senior Debt", which new definitions
shall read in their entirety as follows:

                   "'Senior Secured Debt' shall mean Indebtedness for Money
                  Borrowed of the Borrower evidenced by this Agreement or any of
                  the other Loan Documents."

                  "'Senior Secured Debt Leverage Ratio' shall mean, as of the
                  end of any fiscal quarter, the ratio of Senior Secured Debt to
                  Annualized Operating Cash Flow."

                  (e)      The following new definition shall be added
immediately following the definition of "Senior Subordinated Notes", which new
definition shall read in its entirety as follows:

                  "'Senior Unsecured Debt' shall mean senior Indebtedness for
                  Money Borrowed of the Borrower, unsecured with respect to the
                  Borrower and its Restricted Subsidiaries, subject to the
                  following: (i) the Borrower shall, in a certificate provided
                  on the date of incurrence of such senior Indebtedness for
                  Money Borrowed, demonstrate its current and projected pro
                  forma compliance (giving effect to the incurrence of such
                  senior

                                       2



                  Indebtedness for Money Borrowed) with Sections 7.8, 7.9, 7.10,
                  7.11 and 7.17; (ii) there shall be no repayment of the
                  principal amount of such senior Indebtedness for Money
                  Borrowed including any sinking fund payments or other
                  principal payments until at least one year and one day after
                  the Maturity Date; (iii) the final maturity of such senior
                  Indebtedness for Money Borrowed must be at least one year and
                  one day after the Maturity Date; and (iv) such senior
                  Indebtedness for Money Borrowed shall contain no covenants or
                  provisions more restrictive, taken as a whole, on the Borrower
                  and its Subsidiaries than the more restrictive of those
                  contained herein or in the indentures for the Senior
                  Subordinated Notes."

         3.       Amendments to Section 2.3. Section 2.3(f) of the Agreement
("Applicable Margin") is hereby modified and amended by:

                  (a)      deleting the table in subsection (f)(i) and replacing
it with the following table:



                                      Base Rate Advance          Eurodollar Advance
     Leverage Ratio                   Applicable Margin           Applicable Margin
     --------------                   -----------------          ------------------
                                                           
Greater than 5.00 but
less than or equal to 6.00                  1.250%                    2.250%
Greater than 4.00 but
less than or equal to 5.00                  1.000%                    2.000%
Less than or equal to
4.00                                        0.625%                    1.625%


         ; and

                  (b)      amending and restating subsection (f)(ii) to read in
its entirety as follows:

                           "(ii)    With respect to Term B Loans, the Applicable
                  Margin for Eurodollar Advances shall be 3.25% per annum and
                  the Applicable Margin for Base Rate Advances shall be 2.25%
                  per annum."

         4.       Addition of New Section 2.15. There shall be added a new
Section 2.15 immediately following Section 2.14, which new Section 2.15 shall
read in its entirety as follows:

                           "Section 2.15. Mandatory Prepayments from Excess Cash
                  Flow and from Certain Incurrences of Indebtedness for Money
                  Borrowed.

                                       3



                           (a)      Excess Cash Flow. In addition to the
                  scheduled repayments provided for in Section 2.4 hereof, on or
                  prior to April 30, 2004, and on or prior to each April 30
                  thereafter during the term of this Agreement, the Borrower
                  shall prepay the Loans in an amount equal to fifty percent
                  (50%) of Excess Cash Flow for the most recently completed
                  fiscal year.

                           (b)      Certain Incurrences of Indebtedness. In
                  addition to the scheduled repayments provided for in Section
                  2.4 hereof, the Borrower shall prepay the Loans in an amount
                  equal to sixty percent (60%) of the Net Proceeds received
                  after the First Amendment Effective Date from any Indebtedness
                  for Money Borrowed incurred by the Borrower pursuant to
                  Section 7.1 hereof, except for Indebtedness for Money Borrowed
                  (i) permitted by Section 7.1(a), (b), (d), (f), (g), (h) and
                  (i); (ii) incurred in connection with any Investments or
                  Acquisitions permitted under Section 7.6 hereof, including any
                  Indebtedness assumed by the Borrower or its Restricted
                  Subsidiaries in connection with such Investment or
                  Acquisition, to the extent that upon consummation of any such
                  Investment or Acquisition such Net Proceeds were invested in,
                  or used to acquire, Restricted Subsidiaries (it being
                  understood and agreed that in the event 60% of such Net
                  Proceeds are used to prepay the Loans pursuant to this Section
                  2.15(b), the balance of such Net Proceeds may be used, to the
                  extent permitted by this Agreement, to make Investments or
                  Acquisitions without any obligation to make Investments in or
                  to acquire Restricted Subsidiaries pursuant to this clause
                  (ii)); (iii) incurred at any time that the Leverage Ratio as
                  of the end of the immediately preceding fiscal quarter (after
                  giving pro forma effect to such incurrence of Indebtedness) is
                  less than 4.0 to 1.0; or (iv) incurred by reason of any
                  issuance by the Borrower of debt securities in a public
                  offering or a private placement between June 1, 2003 and the
                  first anniversary of the First Amendment Effective Date in an
                  amount up to the aggregate of (x) $400,000,000 and (y) an
                  additional $400,000,000 so long as the Borrower redeems,
                  repurchases or refinances all of the Senior Subordinated Notes
                  prior to the first anniversary of the First Amendment
                  Effective Date.

                           (c)      Application of Prepayments. Any prepayment
                  pursuant to this Section 2.15 shall be applied in accordance
                  with Section 2.6(b) of this Agreement."

         5.       Amendment to Section 5.14(a)(iii). Section 5.14(a)(iii) of the
Agreement is hereby modified and amended by adding "and Section 7.17" to the end
of the list of Sections of the Agreement appearing therein.

                                       4



         6.       Amendment to Section 6.3(a)(ii). Section 6.3(a)(ii) of the
Agreement is hereby modified and amended by adding "and Section 7.17" to the end
of the list of Sections of the Agreement appearing therein.

         7.       Amendment to Section 7.1. Section 7.1 of the Agreement
("Indebtedness of the Borrower and its Restricted Subsidiaries") is hereby
modified and amended by deleting subsection (c) thereof and replacing it with
the following:

                  "(c)     Senior Unsecured Debt;"

         8.       Amendment to Section 7.4(a). The last sentence of Section
7.4(a) of the Agreement is hereby modified and amended by adding "and Section
7.17" to the end of the list of Sections of the Agreement appearing therein.

         9.       Amendments to Section 7.6(b). Section 7.6(b) of the Agreement
("Acquisitions") is hereby modified and amended by:

                  (a)      amending and restating Section 7.6(b)(i)(C) to read
in its entirety as follows:

                           "(C)     the Borrower and its Restricted Subsidiaries
                  may make Investments in Unrestricted Subsidiaries (I) that
                  were made prior to January 1, 2003 in accordance with this
                  Agreement (as then in effect) and (II) on or after January 1,
                  2003, in an amount not to exceed (without duplication) (x)
                  $100,000,000 in the aggregate plus (y) any dividends or
                  distributions, or repayments of loans or advances, paid by an
                  Unrestricted Subsidiary and received by the Borrower or its
                  Restricted Subsidiaries after January 1, 2003 plus (z) the Net
                  Proceeds from the sale or disposition of an Unrestricted
                  Subsidiary or of the assets of an Unrestricted Subsidiary to
                  the extent received by the Borrower or its Restricted
                  Subsidiaries after January 1, 2003."

                  ; and

                  (b)      modifying and amending Section 7.6(b)(ii)(A) by
adding "and Section 7.17" to the end of the list of Sections of the Agreement
appearing therein.

         10.      Amendments to Section 7.7. Section 7.7 of the Agreement
("Restricted Payments and Purchases") is hereby modified and amended by:

                  (a)      (i) deleting the reference to "6.50 to 1.00" in
Section 7.7(a) and replacing it with "4.00 to 1.00" and (ii) adding "and Section
7.17" to the end of the list of Sections of the Agreement appearing in Section
7.7(a);

                  (b)      (i) deleting the reference to "6.50 to 1.00" in
Section 7.7(b) and replacing it with "4.00 to 1.00" and (ii) adding "and Section
7.17" to the end of the list of Sections of the Agreement appearing in Section
7.7(b);

                                       5



                  (c)      deleting the text of subsection (d) thereof and
replacing it with "Intentionally Omitted"; and

                  (d)      deleting the text of subsection (f) thereof and
replacing it with the following:

                  "The Borrower may redeem, repurchase or refinance the Senior
                  Subordinated Notes, including the payment of any fees or other
                  costs incurred in connection therewith."

         11.      Amendment to Section 7.8. Section 7.8 of the Agreement ("Ratio
of Operating Cash Flow to Cash Interest Expense") is hereby modified and amended
by deleting the period "March 31, 2003 and thereafter" and replacing it with
"March 31, 2003 through December 31, 2005", and adding the following at the end
of the table:

                  "March 31, 2006 and thereafter           2.50 to 1.00"

         12.      Amendment to Section 7.9. Section 7.9 of the Agreement ("Fixed
Charge Coverage Ratio") is hereby modified and amended by deleting "1.10 to
1.00" and replacing it with "1.00 to 1.00".

         13.      Amendment to Section 7.11. Section 7.11 of the Agreement
("Annualized Operating Cash Flow to Pro Forma Debt Service Ratio") is hereby
modified and amended by deleting "March 31, 2003 and thereafter 1.50 to 1.00"
and replacing it with the following at the end of the table:

                  "March 31, 2003 through June 30, 2004         1.25 to 1.00
                  September 30, 2004 and thereafter             1.00 to 1.00"

         14.      Addition of New Section 7.17. There shall be added a new
Section 7.17 immediately following Section 7.16, which new Section 7.17 shall
read in its entirety as follows:

                           "Section 7.17. Senior Secured Debt Leverage Ratio.
                  The Borrower shall not at any time permit the Senior Secured
                  Debt Leverage Ratio to exceed the ratio set forth below for
                  any fiscal quarter ending during the periods indicated below:



         Period                    Senior Secured Debt Leverage Ratio
         ------                    ----------------------------------
                                
September 30, 2003 through
December 31, 2005                           4.00 to 1.00
March 31, 2006 and thereafter               3.50 to 1.00"


         15.      Notice of Reduction of Revolving A Commitment. In accordance
with Section 2.7 of the Agreement, the Borrower hereby gives notice to the
Administrative Agent of its cancellation of a portion of the Revolving A
Commitment in an aggregate amount of $150 million.

                                       6



         16.      Covenant Regarding Certain Net Proceeds. The Net Proceeds of
any issuance by the Borrower of debt securities in a public offering or a
private placement between June 1, 2003 and the first anniversary of the
effective date of this Amendment, including, without limitation, the Net
Proceeds from the issuance by the Borrower of its 4.625% Convertible
Subordinated Notes due 2023, in excess of $400,000,000 shall be used reasonably
promptly to redeem, repurchase or refinance the Senior Subordinated Notes;
provided, however, that in the event such Net Proceeds are in excess of
$800,000,000, the Borrower shall apply sixty percent (60%) of such Net Proceeds
in excess of $800,000,000 to make additional prepayments on the Term Loans and
Revolving B Loans (such prepayments to be applied in accordance with Section
2.6(b) of the Agreement).

         17.      Application of Prepayments.

                  (a)      The parties hereto agree that notwithstanding Section
2.6(b) of the Agreement (i) the prepayment of the Term A Loans, Term B Loans and
Revolving B Loans in the aggregate amount of $400 million contemplated by
Section 22(iii) of this Amendment shall be applied only to the Term A Loans, the
Term B Loans and the Revolving B Loans, such prepayment to be applied (x) to the
Term A Loans, the Term B Loans and the Revolving B Loans as follows:

                  Term A Loans           $150 million
                  Term B Loans           $100 million
                  Revolving B Loans      $150 million

and (y) in the order of the maturities thereof, and (ii) the reduction in the
Revolving A Commitment in the amount of $150 million contemplated by Section 15
of this Amendment shall be applied to the Revolving A Commitment in the order of
maturity thereof and the respective Revolving A Commitment of each Lender shall
be reduced in accordance with the Agreement to give effect to such reduction.

                  (b)      For the avoidance of doubt, such repayments of the
Term A Loans, the Term B Loans and the Revolving B Loans to be made by the
Borrower pursuant to this Amendment shall be applied in the order of maturities
set forth in Sections 2.4(b), (c) and (d) of the Agreement (i.e., to earliest
maturities first), and Section 2.4 of the Agreement shall not be modified or
amended by this Amendment. In addition, for the avoidance of doubt, the
reduction in the Revolving A Commitment in the amount of $150 million
contemplated by Section 15 of this Amendment shall be applied to the Revolving A
Commitment in the order of maturity thereof set forth in Section 2.4(a) of the
Agreement (i.e., to earliest maturities first), and accordingly the Revolving A
Commitment shall be reduced by the amount set forth in the table below as of the
applicable calendar quarter end, in accordance with such Section 2.4(a), as
follows:

                                       7





                                                Amount of Revolving A
Quarter Ending                                 Commitment to be Reduced
- --------------                                 ------------------------
                                            
March 31, 2003                                       $12,500,000
June 30, 2003                                        $12,500,000
June 30, 2005                                        $12,500,000
September 30, 2005                                   $31,250,000
December 31, 2005                                    $31,250,000
March 31, 2006                                       $31,250,000
June 30, 2006                                        $31,250,000
September 30, 2006                                   $31,250,000
December 31, 2006                                    $31,250,000
March 31, 2007                                       $25,000,000
June 30, 2007                                        $25,000,000
September 30, 2007                                   $25,000,000
December 31, 2007                                    $25,000,000
March 31, 2008                                       $25,000,000


         18.      Waiver in Connection with Refinancing of Senior Subordinated
Notes. Notwithstanding anything to the contrary contained in the Agreement, any
Indebtedness incurred by the Borrower for the purpose of redeeming, repurchasing
or refinancing the Senior Subordinated Notes as contemplated by this Amendment
shall be disregarded for purposes of compliance with the covenants contained in
Sections 7.8 through 7.11 and Section 7.17 of the Agreement (including, without
limitation, in connection with any Performance Certificate required to be
delivered with respect to such covenants), and no Default or Event of Default
shall be deemed to have occurred or be continuing resulting from a violation of
such covenants caused by such incurrence so long as such redemption, repurchase
or refinancing is effected and consummated within 60 days of such incurrence.

         19.      No Other Amendment or Waiver. Except for the amendments set
forth herein, the text of the Agreement and all other Loan Documents shall
remain unchanged and in full force and effect. The Borrower hereby (i) confirms
and agrees that each Loan Document to which it is a party is, and shall continue
to be, in full force and effect and is hereby ratified and confirmed in all
respects and (ii) confirms and agrees that to the extent that any Loan Document
purports to grant to the Lenders or the Administrative Agent a security interest
in or lien on, any collateral as security for the Obligations of the Borrower
from time to time existing in respect of the Agreement and the Loan Documents,
such security interest or lien is hereby ratified and confirmed in all respects.

         20.      Representations and Warranties. The Borrower hereby represents
and warrants in favor of the other parties hereto as follows:

                                       8



                  (i)      each representation and warranty set forth in Article
         4 of the Agreement is, to the extent required to be repeated pursuant
         to Section 4.2 of the Agreement on the date of an Advance, hereby
         repeated and affirmed as true and correct in all material respects on
         and as of the date hereof, after giving effect to any updates to
         information provided to the Lenders pursuant to the Agreement, as if
         made on and as of the date hereof;

                  (ii)     the Borrower has the power, corporate or otherwise,
         and has taken all necessary action to authorize, execute, deliver and
         perform this Amendment (and the Agreement as amended hereby) in
         accordance with its terms, and to consummate the transactions
         contemplated hereby;

                  (iii)    this Amendment has been duly authorized, validly
         executed and delivered by one or more Authorized Signatories of the
         Borrower and is (and the Agreement as amended hereby is) the legal,
         valid and binding obligation of the Borrower, enforceable against the
         Borrower in accordance with its terms, subject, as to enforcement of
         remedies, to the following qualifications: (i) an order of specific
         performance and an injunction are discretionary remedies and, in
         particular, may not be available where damages are considered an
         adequate remedy at law, (ii) enforcement may be limited by bankruptcy,
         insolvency, liquidation, reorganization, reconstruction and other
         similar laws affecting enforcement of creditors' rights generally
         (insofar as any such law relates to the bankruptcy, insolvency or
         similar event of the Borrower) and (iii) enforcement may be subject to
         general principles of equity (regardless of whether such enforcement is
         considered in a proceeding in equity or at law) and may be limited by
         public policies that may affect the enforcement of certain rights or
         remedies provided for in this Amendment;

                  (iv)     the execution and delivery of this Amendment and
         performance by the Borrower of its Obligations under this Amendment
         (and the Agreement as amended hereby), do not and will not: (A) require
         any consent or approval, governmental or otherwise, not already
         obtained, (B) violate any Applicable Law applicable to the Borrower or
         any Subsidiary of the Borrower, (C) conflict with, result in a breach
         of, or constitute a default under the organizational documents of the
         Borrower or any Subsidiary of the Borrower or under any material
         indenture, agreement or other instrument to which the Borrower or any
         of its Subsidiaries is a party or by which any of them or their
         properties may be bound, (D) conflict with, result in a breach of, or
         constitute a default or violation of, the terms and conditions of any
         of the material Licenses or (E) result in or require the creation or
         imposition of any Lien upon or with respect to any property now owned
         or hereafter acquired by the Borrower or any of its Subsidiaries,
         except for Permitted Liens; and

                  (v)      before and immediately after giving effect to this
         Amendment, no event exists, or would result from this Amendment, that
         constitutes a Default or an Event of Default.

                                       9



         21.      Documents Delivered by the Borrower. The following documents
shall be delivered by the Borrower to the Administrative Agent concurrently with
the execution of this Amendment:

                           (i)      duly executed Amendment signed by the
                  Borrower;

                           (ii)     loan certificate, in substantially the form
                  of Exhibit M to the Agreement, from the Borrower together
                  with: (A) certificates of good standing for the Borrower
                  issued by the Secretary of State or similar state official for
                  the state in which such Borrower is organized and (B) a true,
                  complete and correct copy of the appropriate authorizing
                  resolutions of such Borrower, authorizing such Borrower to
                  execute, deliver and perform this Amendment, as certified by
                  the Secretary of the Borrower;

                           (iii)    certificate of a duly authorized officer of
                  the Borrower, dated the date of this Amendment, as to the
                  truth and correctness in all material respects of the
                  representations and warranties contained in Section 20 hereof;

                           (iv)     legal opinion of Friedman Kaplan Seiler &
                  Adelman LLP, special counsel to the Borrower, dated the date
                  of this Amendment, addressed to the Agents and the Lenders, in
                  form and substances satisfactory to the Administrative Agent
                  and its counsel;

                           (v)      that certain engagement letter with FTI
                  Consulting, Inc. in connection with this Amendment, duly
                  executed by the Borrower; and

                           (vi)     such other documents and instruments as may
                  be requested by the Administrative Agent.

         22.      Conditions Precedent to Effectiveness of Amendment. The
effectiveness of this Amendment is subject to the prior fulfillment of each of
the following conditions:

                           (i)      the Administrative Agent shall have
                  received, on behalf of the Lenders consenting to the terms and
                  provisions of this Amendment, an amendment fee equal to
                  [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
                  SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
                  CONFIDENTIAL TREATMENT] of such Lenders' Revolving A
                  Commitment and outstanding Revolving B Loans and Term Loans,
                  after giving effect to the reduction of the Revolving A
                  Commitment contemplated by Section 15 hereof and the
                  prepayments contemplated by Section 17 hereof (such amount to
                  be allocated according to their respective commitment ratios),
                  payable to such Lenders which have executed this Amendment on
                  or before July 9, 2003;

                           (ii)     the Administrative Agent shall have
                  received, on behalf of the Lenders consenting to the terms and
                  provisions of this Amendment, an

                                       10



                  amendment fee equal to [CONFIDENTIAL MATERIAL OMITTED AND
                  FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
                  PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] of such
                  Lenders' Revolving A Commitment and outstanding Revolving B
                  Loans and Term Loans, after giving effect to the reduction of
                  the Revolving A Commitment contemplated by Section 15 hereof
                  and the prepayments contemplated by Section 17 hereof (such
                  amount to be allocated according to their respective
                  commitment ratios), payable to such Lenders which have
                  executed this Amendment after July 9, 2003 but on or before
                  July 15, 2003;

                           (iii)    the Term Loans and the Revolving B Loan
                  shall have been prepaid in the amount of $400,000,000, such
                  amount to be applied to the Term A Loans, Term B Loans and
                  Revolving B Loans in the order of maturity (i.e., to earliest
                  maturities first) as follows:

                         Term A Loans                $150 million
                         Term B Loans                $100 million
                         Revolving B Loans           $150 million; and

                           (iv)     the Majority Lenders shall have executed and
                  delivered this Amendment.

         23.      Counterparts. This Amendment may be executed in multiple
counterparts, each of which shall be deemed to be an original and all of which,
taken together, shall constitute one and the same agreement.

         24.      Governing Law. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN NEW YORK.

         25.      Loan Document. This Amendment shall be deemed to be a Loan
Document for all purposes. Each Loan Document shall on the effective date of
this Amendment be deemed without any further action by any Person to be amended
to the extent necessary to reflect the amendments set forth herein.

         26.      Severability. Each provision of this Amendment shall be
considered separable and if for any reason any provision or provisions are
determined to be non-binding, invalid, unenforceable or illegal in any respect,
such non-binding provision or such invalidity, unenforceability or illegality
shall not affect any other provisions of the Agreement or of this Amendment,
which other provisions shall remain in full force and effect in accordance with
their terms.

                                       11



                         [SIGNATURES ON FOLLOWING PAGES]

                                       12



         IN WITNESS WHEREOF, the parties hereto have caused their respective
duly authorized officers or representatives to execute and deliver this
Amendment as of the day and year first above written.

BORROWER:                           WESTERN WIRELESS CORPORATION

                                    By:    _______________________________
                                    Name:  _______________________________
                                    Title: _______________________________

                                    Attest: _______________________________
                                    Name:   _______________________________
                                    Title:  _______________________________

                                       13



NAME OF LENDER:            ________________________________________

                           By:_____________________________________

                           Name:___________________________________

                           Title:__________________________________

Date Delivered:________________________

         [Lender's Signature Page to First Amendment to Loan Agreement]

                                       14

EX-12.1

                                                                    Exhibit 12.1

                          WESTERN WIRELESS CORPORATION
               COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
                             (Dollars in thousands)



                                                                                                                          SIX
                                                                                                                        MONTHS
                                                                                                                        ENDED
                                                                             YEAR ENDED DECEMBER 31,                   JUNE 30,
                                                              ------------------------------------------------------   --------
                                                                1998       1999       2000       2001        2002        2003
                                                              --------   --------   --------   ---------   ---------   --------
                                                                                                    
Income (loss) from continuing operations before provision
       for income taxes and cumulative change in accounting
       principle                                              $(13,359)  $(48,121)  $ 65,406   $(143,564)  $ (92,050)  $ 29,999
Adjust for:
       Minority interests in net loss of consolidated
       subsidiaries                                               (479)    (1,610)    (2,058)    (18,967)     (8,408)    (4,043)
       Equity in net (income) loss of unconsolidated
         affiliates, net of tax                                  4,746     14,529       (658)      7,772      (4,219)      (645)
                                                              --------   --------   --------   ---------   ---------   --------
Income (loss) from continuing operations before provision
       for income taxes, cumulative change in accounting
       principles, minority interests in consolidated
       subsidiaries and income (loss) from equity investees     (9,092)   (35,202)    62,690    (154,759)   (104,677)    25,311

Add:
       Fixed Charges                                            92,227     99,993    152,229     163,353     158,791     76,068
       Amortisation of capitalized interest                         --         --         --         125         425        306
Deduct
       Interest capitalized                                         --         --         --      (1,500)     (2,100)      (150)
       Minority interest in pre-tax income of subsidiaries
         that have not incurred fixed charges                       --         --        488        (616)       (104)     4,810
                                                              --------   --------   --------   ---------   ---------   --------
          Earnings                                            $ 83,135   $ 64,791   $215,407   $   6,603   $  52,335   $106,345
                                                              ========   ========   ========   =========   =========   ========
       Fixed Charges:
        Interest and financing expense, net                   $ 92,227   $ 99,993   $152,229   $ 161,853   $ 156,691   $ 75,918
        Interest capitalized                                        --         --         --       1,500       2,100        150
                                                              --------   --------   --------   ---------   ---------   --------
          Fixed charges                                       $ 92,227   $ 99,993   $152,229   $ 163,353   $ 158,791   $ 76,068
                                                              ========   ========   ========   =========   =========   ========
       Ratio of earnings to fixed charges                         0.90       0.65       1.42        0.04        0.33       1.40
                                                              ========   ========   ========   =========   =========   ========
       Deficiency of earnings to cover fixed charges          $ (9,092)  $(35,202)  $     --   $(156,750)  $(106,456)  $     --
                                                              ========   ========   ========   =========   =========   ========

EX-31.1

CERTIFICATION                                                       EXHIBIT 31.1

    I, John W. Stanton, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Western Wireless
      Corporation.

2.    Based on my knowledge, this quarterly report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this quarterly report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this quarterly report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the registrant as of, and for, the periods presented in this
      quarterly report;

4.    The registrant's other certifying officer and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
      and we have:

      (a)  designed such disclosure controls and procedures or caused such
           disclosure controls and procedures to be designed under our
           supervision, to ensure that material information relating to the
           registrant, including its consolidated subsidiaries, is made known to
           us by others within those entities, particularly during the period in
           which this quarterly report is being prepared;

      (b)  evaluated the effectiveness of the registrant's disclosure controls
           and procedures and presented in this quarterly report our conclusions
           about the effectiveness of the disclosure controls and procedures, as
           of the end of the period covered by this report based on such
           evaluation; and

      (c)  disclosed in this report any change in the registrant's internal
           control over financial reporting that occurred during the
           registrant's most recent fiscal quarter (the registrant's fourth
           fiscal quarter in the case of an annual report) that has materially
           affected, or is reasonably likely to materially affect, the
           registrant's internal control over financial reporting; and

5.    The registrant's other certifying officer and I have disclosed, based on
      our most recent evaluation of internal control over financial reporting,
      to the registrant's auditors and the audit committee of the registrant's
      board of directors (or persons performing the equivalent functions):

      a)   all significant deficiencies and material weaknesses in the design or
           operation of internal control over financial reporting which are
           reasonably likely to adversely affect the registrant's ability to
           record, process, summarize and report financial information; and

      b)   any fraud, whether or not material, that involves management or other
           employees who have a significant role in the registrant's internal
           control over financial reporting.

                                        By: /s/ JOHN W. STANTON
                                            ------------------------------------
                                            John W. Stanton
                                            Chairman and Chief Executive Officer

Dated:  August 8, 2003

EX-31.2

CERTIFICATION                                                       EXHIBIT 31.2

    I, M. Wayne Wisehart, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Western Wireless
      Corporation.

2.    Based on my knowledge, this quarterly report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this quarterly report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this quarterly report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the registrant as of, and for, the periods presented in this
      quarterly report;

4.    The registrant's other certifying officer and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
      and we have:

      (a)  designed such disclosure controls and procedures or caused such
           disclosure controls and procedures to be designed under our
           supervision, to ensure that material information relating to the
           registrant, including its consolidated subsidiaries, is made known to
           us by others within those entities, particularly during the period in
           which this quarterly report is being prepared;

      (b)  evaluated the effectiveness of the registrant's disclosure controls
           and procedures and presented in this quarterly report our conclusions
           about the effectiveness of the disclosure controls and procedures, as
           of the end of the period covered by this report based on such
           evaluation; and

      (c)  disclosed in this report any change in the registrant's internal
           control over financial reporting that occurred during the
           registrant's most recent fiscal quarter (the registrant's fourth
           fiscal quarter in the case of an annual report) that has materially
           affected, or is reasonably likely to materially affect, the
           registrant's internal control over financial reporting; and

5.    The registrant's other certifying officer and I have disclosed, based on
      our most recent evaluation of internal control over financial reporting,
      to the registrant's auditors and the audit committee of the registrant's
      board of directors (or persons performing the equivalent functions):

      a)   all significant deficiencies and material weaknesses in the design or
           operation of internal control over financial reporting which are
           reasonably likely to adversely affect the registrant's ability to
           record, process, summarize and report financial information; and

      b)   any fraud, whether or not material, that involves management or other
           employees who have a significant role in the registrant's internal
           control over financial reporting.

                                        By: /s/ M. WAYNE WISEHART
                                            ------------------------------------
                                            M. Wayne Wisehart
                                            Executive Vice President and
                                            Chief Financial Officer

Dated:  August 8, 2003

EX-32.1

CERTIFICATION                                                       EXHIBIT 32.1

            Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
                    (Subsections (a) and (b) of Section 1350,
                   Chapter 63 of Title 18, United States Code)

    Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a)
and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the
undersigned officer of Western Wireless Corporation, a Washington corporation
(the "Company"), does hereby certify, to such officer's knowledge, that:

    The Quarterly Report on Form 10-Q for the quarter ended June 30, 2003 (the
    "Form 10-Q") of the Company fully complies with the requirements of Section
    13(a) or 15(d) of the Securities Exchange Act of 1934 and information
    contained in the Form 10-Q fairly presents, in all material respects, the
    financial condition and results of operations of the Company.

Dated:  August 8, 2003

                                        By: /s/ JOHN W. STANTON
                                            ------------------------------------
                                            John W. Stanton
                                            Chairman and Chief Executive Officer

    The foregoing certification is being furnished solely pursuant to Section
906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350,
Chapter 63 of Title 18, United States Code).

EX-32.2

CERTIFICATION                                                       EXHIBIT 32.2

            Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
                    (Subsections (a) and (b) of Section 1350,
                   Chapter 63 of Title 18, United States Code)

    Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a)
and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the
undersigned officer of Western Wireless Corporation, a Washington corporation
(the "Company"), does hereby certify, to such officer's knowledge, that:

    The Quarterly Report on Form 10-Q for the quarter ended June 30, 2003 (the
    "Form 10-Q") of the Company fully complies with the requirements of Section
    13(a) or 15(d) of the Securities Exchange Act of 1934 and information
    contained in the Form 10-Q fairly presents, in all material respects, the
    financial condition and results of operations of the Company.

Dated:  August 8, 2003

                                        By: /s/ M. WAYNE WISEHART
                                            ------------------------------------
                                            M. Wayne Wisehart
                                            Executive Vice President and
                                            Chief Financial Officer

    The foregoing certification is being furnished solely pursuant to Section
906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350,
Chapter 63 of Title 18, United States Code).