exv10w1w3



 


*CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.



Exhibit 10.1.3




AMENDMENT ONE TO THE

TERM SHEET FOR SUBSCRIBER UNITS AND SERVICES AGREEMENT BETWEEN NEXTEL

COMMUNICATIONS, INC. AND MOTOROLA, INC.



     This Amendment to the Term Sheet for Subscriber Units and Services
(“Amendment”) is entered into this 31st day of March, 2004 and shall be deemed
effective as of January 1, 2004 (“Effective Date”) between MOTOROLA, INC., a
Delaware corporation, by and through its Global Telecom Solutions Sector, with
offices at 8000 West Sunrise Boulevard, Plantation, FL 33322 (“Motorola”),
and, NEXTEL COMMUNICATIONS, INC., a Delaware corporation, with offices at 2001
Edmund Halley Drive, Reston, VA 20191 (“Nextel”); (Motorola and Nextel to be
collectively referred to as the “Parties” and each a “Party”).



     WHEREAS, Motorola and Nextel entered into the Term Sheet for Subscriber
Units and Services dated as of the 31st day of December 2003 (the “Handset Term
Sheet”); and



     WHEREAS, Motorola and Nextel wish to make certain amendments to the
Handset Term Sheet to reflect agreement to certain business terms intended to
be effective prior to execution of a master sales agreement;



     NOW, THEREFORE, in consideration of the promises and mutual obligations
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby mutually acknowledged, Motorola and Nextel
agree as follows:



	 	 	 	 	 	 	 
	1.	 	General
	 
	 	 	 	 	 	 
	

	 	 	1.1	 	 	Except as set forth herein, all capitalized terms not defined
herein shall have the meanings given to them in the Handset Term
Sheet.
	 
	 	 	 	 	 	 
	

	 	 	1.2	 	 	All references are to sections in the Handset Term Sheet.
	 
	 	 	 	 	 	 
	

	 	 	1.3	 	 	Unless otherwise stated, all references to Nextel include its
wholly owned subsidiary Boost LLC.
	 
	 	 	 	 	 	 
	2.	 	Additional Terms and Conditions
	 
	 	 	 	 	 	 
	 	 	Motorola and Nextel agree that the following provisions shall be added to
the Agreement:







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*CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.



	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	12.	 	 	2004 Volume Rebate Incentive Program for Handsets
	 
	 	 	 	 	 	 	 	 
	 	 	 	12.1	 	 	Nextel is to receive [*] incentive rebates in accordance with
Section 12.4 below once Motorola’s Handset Sales (defined in Section
12.2 below) to Nextel [*]. This 2004 volume rebate incentive shall
not be applicable to future calendar years except as agreed to in
writing by the Parties.
	 
	 	 	 	 	 	 	 	 
	 	 	 	12.2	 	 	Handset Sales is defined as the handset pricing as invoiced
to Nextel less co-op or other new and/or incremental rebates,
promotions, (including but not limited to monies received by Nextel
pursuant to Section 15) discounts or price adjustments (including
but not limited to all Efficiency Curve Price Adjustments pursuant
to Section 2.6). Notwithstanding the foregoing, Purchase Advance
credits applied to invoiced prices pursuant to Section 2.5 will not
be subtracted from the invoiced price for purposes of calculating
the Handset Sales.
	 
	 	 	 	 	 	 	 	 
	 	 	 	12.3	 	 	Except as set forth below, all handset models are eligible
for the 2004 [*] rebate incentive program unless otherwise agreed
by the Parties from time to time. Items excluded from the
calculation of Handset Sales are data devices (such as the [*], the
special non-cancelable order of [*] transceiver only units for
Service & Repair [*] to be delivered to Nextel between [*],
specialty items, returned items, items passed through at cost, SIM
card, Nextel specified collateral/packaging items, all associated
pick fees, and customer provided third party products. Handset
shipments excluded from the Handset Sales calculation are
soft-launch units, seed stock units, appearance models, units
re-sold or shipped to another carrier or any other units as are
mutually agreed upon in writing by the Parties. Payment of all
earned rebates will coincide with December invoicing transactions
scheduled for settlement in January 2005.
	 
	 	 	 	 	 	 	 	 
	 	 	 	12.4	 	 	In the Period, the
[*] rebate incentive amounts for handsets will be earned in accordance with the following:
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	[*]
	 
	 	 	 	 	 	 	 	 
	 	 	 	12.5	 	 	In order to receive full payment for the Handset Sales
achieved, Nextel must purchase a minimum of [*] of combined Value
Added Distribution (VAD) services and accessory product purchases
during the Period. If Nextel does not achieve the minimum [*] spend
on combined VAD services and accessories during the Period, the
Handset Sales calculation will be reduced by the difference between
the actual VAD and accessory spend and the minimum spend. This
reduction to the Handset Sales calculation will not be made to the
extent a missed VAD and accessory spend amount is caused by (i)
Motorola’s failure to achieve the VAD service level as agreed to by
the Parties in the VAD agreement dated May







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*CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.



	 	 	 	 	 	 	 	 	 
	
	 	 	 	 	 	31, 2001 or (ii)
Motorola’s failure to deliver accessory products in accordance with
Motorola’s purchase forecast commitments.

	 
	 	 	 	 	 	 	 	 
	 	 	 	12.6	 	 	In the event that Motorola fails to timely deliver shipments
against unit orders placed by Nextel which are in accordance with
Lead Time Forecast (LTF) and purchase guidelines, Motorola agrees to
provide the rebates that would have been earned had the shipments
been timely delivered.
	 
	 	 	 	 	 	 	 	 
	 	 	 	12.7	 	 	As a further condition of any rebate payments under this
volume rebate incentive program, Nextel agrees that it will provide
Motorola reports of total monthly inventory levels (retail,
warehouse and Nextel owned handsets in transit) retroactive to
January 1, 2004 at the same time the Monthly Purchase Forecast is
due and providing information by product model and product model
derivatives (ex: color, limited edition).
	 
	 	 	 	 	 	 	 	 
	 	 	 	12.8	 	 	Nextel agrees that its average inventory for iDEN handsets
(i.e., retail, warehouse, and Nextel owned handsets in transit)
during the last three months of the Period [*] will not exceed [*]
units, except as the Parties mutually agree is reasonable due to
market and business conditions.
	 
	 	 	 	 	 	 	 	 
	 	 	 	13.	 	 	2004 Bonus Co-operative Advertising Program
	 
	 	 	 	 	 	 	 	 
	 	 	 	13.1	 	 	In addition to the Co-operative Advertising Program described
in Section 2.2, Motorola agrees to make available to Nextel a bonus
co-op amount up to a maximum of [*] for reimbursement of certain
promotional media expenses pursuant to the conditions set forth
below.
	 
	 	 	 	 	 	 	 	 
	 	 	 	13.2	 	 	Motorola reimbursement of any Nextel Eligible Promotional
Media, as defined in Section 13.3 below, is strictly conditioned
upon Nextel purchasing from Motorola during the calendar year 2004
handset purchases equal or exceeding, in terms of units, mix, and
revenue purchases, the purchase forecast submitted by Nextel to
Motorola on December 24, 2003.
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	If Nextel does not achieve the minimum purchases defined by the
December 24 handset purchase forecast, the [*] available bonus
co-op funding will be reduced according to the following schedule:
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	[*]
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	For the schedule above, revenue and eligible handsets are defined
in sections 12.2 and 12.3 respectively of this Amendment.
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	In the event that Motorola fails to timely deliver shipments
against unit orders placed by Nextel which are in accordance with
Lead Time Forecast







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*CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.



	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	(LTF) and purchase guidelines, the amount of
bonus co-op funding available will be that amount that would have
been available had the shipments been timely delivered.

	 
	 	 	 	 	 	 	 	 
	 	 	 	13.3	 	 	Subject to satisfaction of the condition set forth in 13.2
above, if Nextel expends a minimum amount of [*] in Eligible
Promotional Media, as defined below, during the calendar year 2004,
Motorola will reimburse Nextel for that expense up to the amount
indicated as available in the table in Section 13.2. Eligible
Promotional Media is defined as media that (i) includes reference to
the Motorola name under the same eligibility requirements currently
in effect for the Co-op Advertising Program described in Section
2.2, (ii) is served through radio, print, collateral, and
television, and (iii) includes an offer by Nextel to sell Nextel
service and a Motorola manufactured phone.
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	In the event that Nextel expends less than the minimum amount of
[*] in Eligible Promotional Media [*], the amount of reimbursement
by Motorola will be reduced in the same proportion that the
shortfall of such actual expense is to [*]. For example, [*].
	 
	 	 	 	13.4	 	 	Motorola will make the bonus co-op payment to Nextel in
monthly installments PROVIDED that the handset sales are being
earned at a rate that will achieve the amount stated in Section
13.2, with payment due to Nextel on the monthly wire the following
month. Due to the agreement date, the January and February payment
will be due on the March wire. Nextel agrees to achieve a minimum
quarterly cumulative 2004 spend to the following schedule:
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	      *      March 31, 2004: [*].
	
	 	 	 	 	 	      *      June 30, 2004: [*].
	
	 	 	 	 	 	     
*      September 30, 2004: [*].
	
	 	 	 	 	 	     
*      December 31, 2004: [*].
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	If the minimum quarterly cumulative spend is not achieved by the
dates set forth above, Motorola’s obligation for any future
monthly payments is postponed until the month following
achievement of the cumulative spend. In no event will Motorola’s
payment obligation under this Section 13 exceed [*] in any calendar
quarter of 2004.
	 
	 	 	 	 	 	 	 	 
	 	 	 	13.5	 	 	Nextel will provide documentation support in the form of a
quarterly presentation outlining promotional media spend by media
type and Nextel Region. The presentation will be delivered to
Motorola by the 1st week of the 2nd month following the end of each
quarter (e.g., first quarter ends March 31, and the quarterly
presentation is due by May 7). In the event that Nextel does not
achieve the quarterly minimum spend and monthly payment is
suspended, Nextel may submit documentation supporting







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*CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.



	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	achievement of
the minimum spend outside of the quarterly process in order to
resume the payment process.
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	If requested, advertising invoices will be provided within 75 days
of the end of the quarter. Invoices are not required in order for
Nextel to qualify for payment; however, in the event that the
total spend of submitted invoices results in an overpayment from
Motorola to Nextel in any quarter, the subsequent monthly wire
will be reduced by the amount of overpayment and Motorola will not
be required to pay the next quarterly installment of the funding
until such time as Nextel provides invoices that support the next
quarterly payment.
	 
	 	 	 	 	 	 	 	 
	 	 	 	13.6	 	 	Nextel agrees to include the visual copy “Phones by Motorola”
on its Promotional television ads in 2004, starting by April 1, 2004
and continuing through December 31, 2004. “Promotional” refers only
to those television ads that directly offer for sale Nextel service
and a Motorola manufactured phone. At its discretion, Nextel may
continue to offer the Motorola visual copy “Phones by Motorola”
after December 31, 2004 in Promotional television ads. Nextel
agrees that its use of the visual copy “Phones by Motorola” will
comply with Motorola branding requirements communicated to Nextel in
writing prior to the execution of this Term Sheet Amendment. In the
event Motorola notifies Nextel of additional branding requirements
for television ads subsequent to the execution of this Term Sheet,
Nextel agrees to implement such requirements if commercially
reasonable.







	 	 	 
	3.

	 	Ratification
	 
	 	 
	

	 	Except as specifically stated in this Amendment, the Handset Term Sheet
is, in all other respects, ratified, confirmed and continues in full
force and effect.
	 
	 	 
	4.

	 	Authority
	 
	 	 
	

	 	Each party hereto represents and warrants that: (i) it has obtained all
necessary and requisite approvals, consents and authorizations of third
parties and governmental authorities to enter into this Amendment and to
perform and carry out its obligations hereunder; (ii) the persons
executing this Amendment on behalf of each party have express authority
to do so, and, in so doing, to bind the party thereto; (iii) the
execution, delivery, and performance of this Amendment does not violate
any provision of any bylaw, charter, regulation, or any other governing
authority of the party; and, (iv) the execution, delivery and
performance of this Amendment has been duly authorized by all necessary
partnership or corporate action and this Amendment is a valid and binding
obligation of such party, enforceable in accordance with its terms.







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*CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.



IN WITNESS WHEREOF, Motorola and Nextel have entered into this Amendment as of
the Effective Date first written above.



	 	 	 	 	 	 	 	 	 	 	 
	 
	MOTOROLA INC.	 	NEXTEL COMMUNICATIONS INC.
	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	/s/	 	Adrian Nemcek	 	By:	 	/s/	 	Brian Meadows
	
	 	 	 	
	 	 	 	 	 	

	 
	Name:
	 	 	 	Adrian Nemcek	 	Name:	 	 	 	Brain Meadows
	
	 	 	 	
	 	 	 	 	 	

	 
	Title:
	 	 	 	President & Executive VP - CTSS	 	Title:	 	 	 	Senior Vice President
	
	 	 	 	
	 	 	 	 	 	









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