Document:

exv10w1w2

 

Exhibit 10.1.2

*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.

TERM SHEET FOR SUBSCRIBER UNITS AND SERVICES

AGREEMENT BETWEEN

NEXTEL COMMUNICATIONS, INC.

AND

MOTOROLA, INC.

This term sheet agreement (“Term Sheet”) is between Nextel Communications, Inc.
(“Nextel”) and Motorola, Inc. (“Motorola”), collectively the “Parties”, for the
supply of iDEN Subscriber Units, iDEN Subscriber Unit Features (“ISUF”), and
Services. The Parties intend to enter into a final multi-year supply
agreement. It is the intent of the Parties that this Term Sheet expresses the
general basis for that multi-year supply agreement and that substantially
similar terms and conditions as stated herein will be incorporated into that
agreement. The terms and conditions contained herein are interim terms only,
and the parties agree that all terms and conditions whether or not included in
this Term Sheet shall be negotiated in good faith as part of the 2003-05
Agreement (as defined). [ * ] Additionally, during the term of this Term Sheet, the Parties will
conduct business consistent with the material terms and conditions stated
herein.

1

 

*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.

INDEX

	 	 	 	 	 	 	 	 	 
	1
	 	 	 	Term:	 	 	3	 
	2
	 	 	 	Financial Proposal and Terms:	 	 	3	 
	 
	 	2.1	 	2003 Promotional Programs:	 	 	3	 
	 
	 	2.2	 	Co-operative Advertising Program for the Term:	 	 	4	 
	 
	 	2.3	 	Planning and Forecasting:	 	 	4	 
	 
	 	2.4	 	Subscriber Equipment Unit Post-paid Pricing and Terms:	 	 	5	 
	 
	 	2.5	 	Purchase Advance
(“PA”) and Ongoing [ * ] PA Process:	 	 	6	 
	 
	 	2.6	 	“Efficiency Curve Price
Adjustments”:	 	 	10	 
	 
	 	2.7	 	Benchmarking Process	 	 	11	 
	 
	 	2.8	 	Soft Launch Handsets for Initial Launch:	 	 	11	 
	 
	 	2.9	 	Transceiver and DBR Pricing:	 	 	12	 
	 
	 	2.10	 	Upgrade Programs:	 	 	12	 
	 
	 	2.11	 	Tooling Costs:	 	 	12	 
	 
	 	2.12	 	Project Documentation Process
(“PDP”) Augmentation:	 	 	12	 
	3
	 	 	 	Intellectual Property:	 	 	12	 
	4
	 	 	 	[ * ]	 	 	12	 
	5
	 	 	 	Confidentiality	 	 	12	 
	6
	 	 	 	Purchase Terms and Conditions:	 	 	13	 
	7
	 	 	 	Additional Terms and Conditions:	 	 	13	 
	8
	 	 	 	Force Majeure	 	 	14	 
	9
	 	 	 	Survival of Terms:	 	 	14	 
	10
	 	 	 	Choice of Law and Dispute Resolution:	 	 	14	 
	11
	 	 	 	Limitation of Liability:	 	 	15	 

	 
	Exhibits

	 
	Exhibit A: [ * ] Platform Pricing Menu

	 
	Exhibit B-1: [ * ] Pre-Paid Pricing Menu

	 
	Exhibit B-2: [ * ] Post-Paid Pricing Menu

	 
	Exhibit C-1: Post-paid PA Projects and Payment Schedule

	 
	Exhibit C-2: Pre-paid (Boost) PA Projects and Payment Schedule

	 
	Exhibit C-3: ISUF Projects and Payment Milestones

	 
	Exhibit D: Product Terms and Conditions

	 
	Exhibit E: Transceiver and DBR Pricing

	 
	Exhibit F: Sample of the Application of Efficiency Curve and PA Price Adjustments

2

 

*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.

1 Term:

It is the intent of the Parties that this Term Sheet will be replaced and
superseded by a multi-year supply agreement for iDEN platform based subscriber
radios sold through Motorola’s iDEN Subscriber Group (“Handset Units”), which
will cover the minimum time period from 1/1/03 to 12/31/05 (“2003-05
Agreement”). The renewal terms of the multi-year supply agreement will be
addressed in the multi-year supply agreement. This Term Sheet will remain in
effect for 120 days from the date both Parties sign this Term Sheet (“Term
Sheet Effective Date”), or until the 2003-2005 supply agreement is executed by
the Parties, whichever occurs first. Parties will negotiate in good faith
during the 120-day period and may extend the Term Sheet by mutual agreement of
both parties.

In the event the 2003-05 Agreement is not reached within 120 days from the Term
Sheet Effective Date and the Term Sheet has not been extended by mutual
agreement of both Parties in writing, then from such point:

1) The Term Sheet will expire.

2) All Subscriber Unit pricing will return to the Not-to-Exceed Pricing as
indicated in Exhibits B-1 and B-2.

3) All PA payments that have not already been credited back to Nextel in
the form of PA Credits will be refunded to Nextel in full.

4) All outstanding orders (or partial orders outstanding) will be amended
by the Parties to reflect the appropriate Not-to-Exceed Pricing as
indicated in Exhibits B-1 and B-2.

5) The parties will work together to reconcile invoices and make
appropriate payment adjustments to reflect #1-4 above.

Finalization of the 2003-05 Agreement is contingent upon the Parties’
resolution of relationship issues currently being addressed by Senior
Management.

	2	 	Financial Proposal and Terms:
	 
	2.1	 	2003 Promotional Programs:
	 
	2.1.1	 	Platinum Partners and Platinum Partners Plus:
	 
	 	 	[*]
	 
	2.1.2	 	Coming In First:
	 
	 	 	[*]
	 
	2.1.3	 	Pre-Paid Programs:
	 
	 	 	During the term of the 2003-05 Agreement, Nextel will be eligible for the
reduced base package pricing for pre-paid Handset Units described in
Exhibit B-1, in accordance with the

3

 

*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.

	 	 	terms and conditions specified in the
section entitled “Subscriber Unit Pre-paid Pricing” below.
	 
	 	 	In addition, Motorola may from time to time offer additional pre-paid
handset promotional funding and programs, provided that Nextel’s post-paid
Handset Unit purchases [*].

[*]

	 	 	The 2003 programs outlined above in Table 2.1 will not extend beyond 2003.
	 
	 	 	Nextel and Motorola will meet at least three (3) months prior to the end
of each calendar year to review the current business conditions and
effectiveness of the Platinum Partners, Platinum Partners Plus, Volume
Rebate Incentive, and the Pre-paid/Boost programs, and to determine
appropriate promotional programs for the following contract year.
	 
	2.1.4	 	Boost Market Development Offer:
	 
	 	 	[*]
	 
	2.2	 	Co-operative Advertising Program for the Term:
	 
	 	 	[*]
	 
	2.3	 	Planning and Forecasting:
	 
	 	 	For planning and operational purposes, Nextel shall provide Motorola with
a detailed twelve month (12-month) rolling forecast as follows:

	1.	 	Nextel will submit “Monthly Purchase Forecast”
fourteen (14) days prior to the first (1st) day of each
upcoming month for warehouse orders and nine (9) days prior to
the first (1st) day of each upcoming month for Value Added
Distribution (VAD).

4

 

*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.

	2.	 	Monthly purchase orders will be released to
Motorola after the Monthly Purchase Forecast has been
submitted, or ten (10) to thirteen (13) days prior to the first
(1st) day of each upcoming month.
	 
	3.	 	Upon receipt and review of the Monthly Purchase
Forecast and purchase orders, Motorola will provide a written
response to Nextel within seven (7) days, confirming or
highlighting any key issues of the submitted Forecast.

	2.4	 	Subscriber Equipment Unit Post-paid Pricing and Terms:
	 
	2.4.1	 	[*] Subscriber Unit Post-Paid Pricing:
	 
	 	 	The pricing for [*] Handset Units is specified in Exhibit A. Nextel
and Motorola agree to periodically discuss joint cost savings
opportunities available to both Parties from the elimination of specific
handset models, process improvements, sourcing strategies, component
modifications, and warranty cost alternatives.
	 
	2.4.2	 	[*] Subscriber Unit Post-Paid Pricing:
	 
	 	 	The pricing for each of the “[*]” post-paid Handset Units is specified
in Exhibit B-2 and shall constitute the maximum Base Package price that
Motorola shall charge Nextel for the listed Handset Units (“Not to
Exceed,” or “NTE” price).
	 
	2.4.3	 	Subscriber Equipment Unit Pre-Paid Pricing and Terms:
	 
	 	 	The pricing of Nextel/Boost pre-paid Handset Units for 2004 will be as
specified in Exhibit B-1, and as may be amended, provided the following
two conditions are both satisfied:

1) For the term of the Agreement, the post-paid Handset Unit annual volume
purchases will be [*]

2) Volume and Mix Pricing Conditions, Commitments & Adjustments

a) Exhibit B-1 Pricing of Nextel/Boost pre-paid Handset Units for
2004 requires [*] Handset Units to be purchased in 2004 (January 1,
2004 through December 31, 2004); and

b) No greater than [*] of the pre-paid Handset Unit volume purchases
starting from July 1, 2004 through the remainder of the term of the
Agreement will consist of [*].

Furthermore, this clause is contingent upon Motorola meeting the
Ship Acceptance dates [*]

5

 

*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.

The Parties acknowledge
that the [*] may be changed
by mutual agreement to some other model and/or models [*], and in such case this clause would be appropriately modified
to reflect the mutually agreed upon changes. If any of the
aforementioned models, and/or their mutually agreed replacements,
have their Ship Acceptance dates delayed, unless the delays are
agreed to by both parties, the [*] mix requirement
will become effective in the same month that the Motorola Ship
Acceptance has been achieved for the last remaining product of the
aforementioned models or their substitutes, as may be agreed upon.

In the event any of the above stated conditions in items 1) and 2)
above are not satisfied, then the following conditions will apply:

I. If conditions set forth in Item 1) are not met by December 31,
2004, then all pre-paid handsets will be priced equivalent to [*],
adjusted for any Efficiency Curve Pricing Adjustments, PA credit
(per unit), or competitive benchmarking adjustment, for the
remainder of the term of the Agreement. With the exception of [*], in the event a comparable post-paid Handset unit
model does not exist [*], the base package price of
the pre-paid Handset Unit model will increase by [*] of the base
package price specified in Exhibit B-1 and all volumes of pre-paid
Handset Units will be included in the appropriate Efficiency Curve
calculations going forward. The pre-paid handsets will receive the
associated price reduction based on its tier classification.

II. If either of the conditions set forth in Item 2) are not met,
all pre-paid Handset Units will be priced equivalent to [*],
adjusted for any Efficiency Curve Pricing Adjustments, PA credit
(per unit), or competitive benchmarking adjustment for the remainder
of the term of the Agreement. With the exception of [*], in the event a comparable post-paid Handset unit model does
not exist [*], the base package price of the pre-paid
Handset Unit model will increase by [*] of the base package price
specified in Exhibit B-1 and all volumes of pre-paid Handset Units
will be included in the appropriate Efficiency Curve calculations
going forward. The price adjustment (via a debit memo) will be
applied retroactively to all pre-paid units shipped from [*],
2004. The pre-paid handsets will receive the associated price
reduction based on its tier classification.

	2.5	 	Purchase Advance (“PA”) and Ongoing Falcon PA Process:
	 
	 	 	For certain proposed products or features, Motorola will, at its sole
discretion, offer Nextel, including Boost, the option to purchase the
specified product or feature on special terms and conditions called the
“PA Model.” Under the PA Model, Nextel will pre-pay agreed amounts,

6

 

*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.

	 	 	pursuant to an agreed payment schedule, for specified finished products or
features to be delivered by Motorola as part of the agreed PA Model
project. Except as otherwise agreed in Section 2.5.3 below, all
pre-payments must be made according to the project’s milestone dates with
the final pre-payment being made on the project prior to a project’s
commercial release by Motorola (hereinafter “Ship Acceptance”) to be
eligible as an PA Model project.
	 
	 	 	The 2003-05 Agreement shall address the process applicable to the ISUF
projects.
	 
	2.5.1	 	PA Process
	 
	 	 	For each product or feature offered under the PA Model, Motorola will
provide the following information in the given timeframes to Nextel as
part of the Product Development Process
(“PDP”), and Nextel will participate and provide the following responses
as part of the PDP process.

1) MRD Draft to Nextel

	a)	 	Motorola to provide initial NTE pricing
to Nextel.
	 
	b)	 	Motorola to provide NTE PA total amount
and maximum time period over which product purchases by
Nextel will be eligible for the PA credit (“PA period”)
described below. In no event will the PA period be
greater than [*] from the Ship Acceptance date of
each specific model.
	 
	c)	 	Motorola to provide PA payment schedule
by quarter (Timing of payments may be subject to change).
	 
	d)	 	Nextel to provide initial feedback and
responses to Motorola

2) Review and Approval of MRD by Nextel.

	a)	 	Motorola to provide updated, if needed,
PA total amount, NTE pricing and PA period (considering
MRD draft inputs, comments, and responses from Nextel).
	 
	b)	 	Motorola to provide final PA payment
schedule by quarter (Timing of payments may be subject to
change).
	 
	c)	 	Nextel to provide approval of MRD
and/or feedback. Approval of the MRD signifies Nextel’s
agreement to proceed.

3) Schedule Baseline

	a)	 	Motorola to provide final PA payment
schedule by due date specified in Exhibits C-1 and C-2.
	 
	b)	 	The PA Model project schedule will
commence only upon receipt of the Nextel/Boost approval
signatures on MRD and pricing addendum for the project
and any PA payment(s) due prior to project commencement.
	 
	c)	 	The Parties agree to review the project
schedule progress for each PA Model project monthly, for
a period of [*] (i.e., a rolling
[*] quarter view), after commencement of the PA
Model

7

 

*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.

	 	 	project. The Parties will utilize the current PDP
and Subscriber Roadmap process as the forum for such
discussions.
	 
	d)	 	Motorola’s obligation to perform the
agreed project is contingent upon Nextel making scheduled
PA payments. Subject to Motorola’s written notification
to Nextel of late payment, Motorola will offer a 10
calendar day cure period for the PA payment to be made.
In the event that Nextel fails to make any PA payments
when due or within the cure period, Motorola reserves the
right to continue, postpone, substantially modify or
cancel any PA Model project, in whole or in part, for
which payment was not timely made without any further
liability whatsoever.
	 
	e)	 	In the event that a PA Model project is postponed,
substantially modified or canceled by Nextel, all PA Model
payments made up to that date for that PA Model project
will be forfeited by Nextel and, in the event the project
is continued and commercially released by Motorola, no PA
credits will be applied to the Nextel purchases of that
product or feature. In the event that a PA Model project is
materially delayed through no fault of Nextel, or Motorola
is in material breach of this Section 2.5, all PA payments
made up to that date for that PA Model project only will be
returned at Nextel’s discretion, without further liability
for that PA Model project whatsoever, and no PA credits
will be applied to the Nextel purchases of that product or
feature. For purposes of the above sentence, a material
delay will in no event be less than a period of [*] days.

Once the MRD has been approved, any modifications to projects, including
changes in schedules, must be submitted by Nextel to Motorola’s Change
Control Board (“CCB”) for review and evaluation, and will be effective
only upon mutual agreement of the Parties. Failure to approve a change
proposed by Nextel to the approved MRD does not constitute a material
breach on the part of Motorola with respect to that PA Model project. If
the PA Model does not meet the specifications as stated in the approved
MRD, the Parties will negotiate in good faith a mutually acceptable
solution.

2.5.2 PA Administration

For all PA Model projects, if Nextel makes the PA Model payments in full
for the respective PA Models, through PA Model Ship Acceptance, Motorola
will apply an account credit in an amount equal to the total PA Model
payments made for the respective PA Model projects, [*] against actual purchases of the PA Model
product or feature completed under that PA Model project. Until the PA
amount is exhausted for a specific PA Model project, the purchase price of
the unit on the Nextel purchase order to Motorola shall be as indicated on
the line entitled “BASE PACKAGE PRICE (*Feature/Accessory is included)” in
Exhibits B-1 and B-2. The applicable PA credit amount may be shown as a
line item on the purchase order. The net amount that will be due to
Motorola by Nextel for the respective models is indicated in Exhibits B-1
and B-2 on the line entitled “WITH PA CREDIT, BALANCE OF BASE PACKAGE
PRICE AMOUNT DUE AT SHIPMENT”. The PA Model account credit will be
allocated on the invoice for each Nextel purchase of the PA Model product
(“PA Credit”) until such time as all PA Model funds paid by Nextel for the
PA Model project have been exhausted or the PA period elapses, whichever

8

 

*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.

event occurs earlier. If the PA model payments are not fully exhausted
within the PA period, the portion of the PA model payment that has not
been exhausted is forfeited to Motorola [*]. PA payments and PA credits cannot
be redeemed for cash, are non-transferable, and PA payments made for one
product model or feature may not be applied toward the purchase of any
other product model or feature.

The Parties previously agreed to apply the PA Model to certain products
set forth in Exhibits C-1 and C-2 and certain payments related to
supplying ISUF as set forth in Exhibit C-3. Accordingly, no later than
January 10th 2004, Nextel will pay Motorola (via a special wire transfer)
the following PA Model payments and ISUF payments, as outlined in Exhibit
C-1, Exhibit C-2 and Exhibit C-3:

	a)	 	All of the
life-to-date 2002 and 2003 PA payments due for
completed project work on the following
[*] models: [*]. The
PA period for the products in exhibit C-1 and exhibit C-2 shall not
be greater than [*] months from the earlier of Ship
Acceptance date of each specific model [*].
	 
	b)	 	All of the
life-to-date ISUF payments due for completed
project work on the [*] and [*] features. All the ISUF
payments to Motorola as stated in Exhibit C-3
are non-refundable and no credit shall be
applied to product purchases.

Nextel further agrees to pay the remaining PA Model and ISUF payments as
outlined in Exhibits C-1, C-2 and C-3 via the Rebate File as the
respective milestones are completed.
For each ISUF project or feature, assuming that all ISUF payments are made
per project or feature, the sum of the ISUF payments for individual
features (as identified in Exhibit C-3) represent fees for an irrevocable
and perpetual right to use the feature with respect to iDEN subscriber
units sold by Motorola to Nextel under this Term Sheet.

2.5.3 Special Treatment of PA for [*] Handset Units

The [*] handsets have been shipped [*] prior to the signing
of the Term Sheet. The Parties mutually acknowledge that these models do
not represent the completed work product as specified in the executed MRDs
[*]. Motorola and Nextel agree to
recognize these Handset Unit models as PA Model projects. Accordingly,
the PA Model and Efficiency Curve structure will be implemented with the
initial shipments of

9

 

*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.

these Handset Units [*]. For these
handset models, Nextel shall make PA payments up through completion of the
respective “Beta” milestone as shown in Exhibit-C1. The final payment per
the “Ship Acceptance” milestone for these models shall be due no later
than 10 days after these handsets start shipping [*]. For each
PA Model project addressed by this Section 2.5.3, upon full payment of all
PA amounts up through completion of the respective “Beta” milestone set
forth in Exhibits C-1 and C-2, Motorola will begin to apply the associated
PA Model per unit credits to Nextel’s purchases of these [*] products
such that the amount due and payable for each purchase will equal the per
unit amount indicated on Exhibits B-1 and B-2 to this Term Sheet as “With
PA Credit, Balance of Base Package Price Amount Due at Shipment” (plus
applicable “Kit Adders”). In the event that such pending PA payments are
not made prior to January 10th 2004, no PA credit will apply to those
[*] products, and the amount due and payable for each purchase will
equal the Base Package Price per unit price indicated on Exhibits B-1 and
B-2. Accordingly, respective purchase orders, shipments, and invoices
will be reconciled and adjustments made thereto such that the net
corrected unit pricing and PA credits per unit for purchase orders,
shipments and invoices to date (starting with [*] shipments) will conform to Exhibits B-1 and B-2 (Base Package Price + “Kit
Adders” – 9% of Base Package Price). Other promotions, rebates, terms and
conditions outlined within this Term Sheet remain in effect. The Parties
mutually agree to:

	1.	 	Reconcile [*] shipments, invoices
and any required adjustments by December 30, 2003 and reconcile
December shipments, invoices and
any required adjustments by January 10, 2004. Motorola will issue
PA credits applicable to these products shipped September through
November 2003 on the January 2004 Rebate File, provided Nextel has
remitted all amounts in accordance with Section 2.5.2 a) above.
	 
	2.	 	After initial reconciliation, PA credits will be applied
to subsequent shipments in accordance with the PA methodology set
forth in Section 2.5.2 above.

Unless agreed in writing otherwise, in no event will a price reduction
pursuant to the PA Model occur for these Handset Units if the final PA
payment milestone due at Ship Acceptance has not been made by Nextel.

2.5.4 Additional PA Projects

It is the Parties’ intent that additional 2003 – 2004 [*] projects ([*]) will also proceed under the
PA Model, pursuant to the PA Model process set forth in Sections 2.5.1 and
2.5.2 above, and will be added to the appropriate respective Exhibits once the
details are agreed to by the Parties.

	2.6	 	“Efficiency Curve Price Adjustments”:
	 
	 	 	The following price reductions or Efficiency Curve Price Adjustments will
apply to iDEN [*] Handset Units purchased by Nextel,
excluding Limited Edition, Special

10

 

*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.

	 	 	Edition, NASCAR, and DBR models, and
excluding Nextel sourced/selected items (i.e. SIM Cards, collateral
pieces, and associated pick fees) (“Eligible [*] Handset Units”).
The Efficiency Curve Price Adjustments will apply to iDEN
[*] Handset
Units if the conditions under subparagraph 1) and 2) of the Section 2.4.3
(entitled “Subscriber Equipment Unit Pre-Paid Pricing and Terms”) are not
met.
	 
	 	 	     [*]
	 
	2.7	 	Benchmarking Process
	 
	2.7.1	 	Benchmarking Process Framework Overview
	 
	[*] 	 	
	 
	2.7.2	 	Pre-Ship Acceptance
	 
	 	 	Approximately sixty (60) days prior to Ship Acceptance of each new
Eligible Post-Paid Handset, the Parties will benchmark the new handset per
the Benchmarking Process set forth above. [*]
	 
	2.7.3	 	Post-Ship Acceptance
	 
	 	 	The Parties will perform the Benchmarking Process described above on an
annual basis during the month of [*] for those Eligible [*]
Handset models that have not undergone the benchmarking process within the
past [*]. The consolidation of the benchmarking activities
for the Eligible models is intended to reduce administrative impact.
	 
	 	 	In the event that the Parties mutually agree that market conditions
warrant an interim review, the Parties will perform such benchmarking
activities or engage in pricing review discussions on an exception basis.
Any Eligible [*] Handset Unit model that receives an Interim Price
Adjustment pursuant to the Benchmarking Process will be excluded from the
next subsequent Efficiency Curve Price Adjustment, however, purchases of
those units will still count toward the Efficiency Curve purchase
milestones
	 
	2.8	 	Soft Launch Handsets for Initial Launch:
	 
	 	 	Prior to each Eligible [*] Handset Unit or data device initial
launch, Motorola will provide Nextel with up to a [*] discount off of the
Base Package price on up to [*] units, to be negotiated by the Parties,
(typically a quantity of [*] units). The discount will be applied to the
“Total Package” price (i.e., “Fully Kitted” price which includes all
“Adders”), but

11

 

*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.

	 	 	excluding the SIM Card, SIM Card pick fees, and any
incremental customer specified collateral for handsets.
	 
	2.9	 	Transceiver and DBR Pricing:
	 
	 	 	See Exhibit E for Transceiver Only and DBR Pricing. Nextel agrees not to
repackage the Transceiver Only and DBR units as fully kitted phones.
Further conditions on use of Transceiver and DBR units to be included in
the multi-year agreement.
	 
	2.10	 	Upgrade Programs:
	 
	 	 	The Parties intend to explore the possibility of developing an upgrade
program, in particular with respect to [*] products.
	 
	2.11	 	Tooling Costs:
	 
	 	 	Motorola will pay for 2003 tooling costs associated with [*] products.
The 2003-05 Agreement will include appropriate provisions regarding future
tooling costs.
	 
	2.12	 	Project Documentation Process (“PDP”) Augmentation:
	 
	 	 	As part of the on-going PDP process, Nextel and Motorola will hold a
“Business Reconciliation Meeting” within five (5) business days of the
monthly PDP subscriber unit meeting, unless otherwise agreed to by the
parties. The purpose of this meeting will be to discuss and document
potential issues and financial impacts to handset pricing and PA funding
that may arise due to changes in product specifications, marketing
programs, or other discussions that occur during the monthly PDP
subscriber unit meeting.
	 
	3	 	Intellectual Property:
	 
	 	 	The parties agree to negotiate in good faith on terms and conditions
related to intellectual property rights for the definitive 2003-05
Agreement. However, during this Term Sheet and any extensions thereto, and
in the absence of an express written provision as to ownership of
intellectual property, the ownership of any intellectual property created
as a direct result of the fulfillment of the terms and conditions of this
Term Sheet shall be determined by application of law, and Nextel shall
have the normal non-exclusive royalty-free license, which is implied or
otherwise arises by operation of law, solely to use and sell to its
customers only those products sold by Motorola to Nextel under this Term
sheet. . No other licenses are granted directly or indirectly under this
Term Sheet by either Party.
	 
	4	 	[*]
	 
	5	 	Confidentiality
	 
	 	 	“Confidential Information” shall mean the terms, conditions, and pricing
of this Term Sheet and the content of any documents or information, which
is identified in writing as being confidential and which is acquired from
the other party in connection with this Term Sheet or the negotiations
between the Parties regarding the multi-year supply agreement that are

12

 

*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.

	 	 	contemplated by this Term Sheet. Each party shall copy and use any such
Confidential Information solely for the purpose of fulfilling their
respective obligations under this Term Sheet. The Parties agree not to
disclose any Confidential Information to any third party for any purpose
without prior written approval from the other Party, and shall not use any
Confidential Information for any purpose other than in furtherance of this
Term Sheet or as expressly permitted under the terms of the NDA applicable
to the information.
	 
	 	 	Each Party shall use its best efforts, but in no instance less than
reasonable care, to limit dissemination of Confidential Information
disclosed to it by the other Party to only its employees and agents who
have a strict need to know in the performance of the Party’s duties
hereunder, and not to disclose the Confidential Information of the other
Party to any third party without the other Party’s prior approval.
	 
	 	 	The Parties agree to take appropriate action, by instruction, agreement,
or otherwise, with any persons permitted access to the other’s
Confidential Information so as to assure that they will hold such
information in confidence as required in this Term Sheet.
	 
	 	 	The obligations imposed upon either party under this Section shall not
apply to information whether or not designated as “Confidential”: (i)
which is made public by the disclosing party; (ii) which the receiving
party can reasonably demonstrate is already in the possession of the
receiving party and not subject to an existing agreement of confidence;
(iii) which is received from a third party without restriction and without
breach of this Letter Agreement; (iv) which is independently developed by
the receiving party as evidenced by its records; (v) which the receiving
party is required to disclose pursuant to a valid order of a court or
other governmental body or any political subdivision thereof, provided,
however, that the recipient of the information shall first have given
notice to the disclosing party and made a reasonable effort to obtain a
protective order requiring that the information and/or documents so
disclosed be used only for the purposes for which the order was issued.
	 
	6	 	Purchase Terms and Conditions:
	 
	 	 	The Parties agree that the terms and conditions set forth in Exhibit D
attached hereto will apply to iDEN Platform based products, services or
features supplied to Nextel by Motorola under this Term Sheet and neither
Nextel’s purchase orders nor Motorola’s invoices shall change, alter or
add to the terms and conditions of Exhibit D or this Term Sheet in any
way. The parties shall negotiate in good faith more detailed purchase and
terms and conditions as part of the 2003-05 Supply Agreement.
	 
	7	 	Additional Terms and Conditions:
	 
	 	 	The Parties agree to include additional provisions, such as End of Life
Process, Value Added Distribution (VAD), Warranty Fulfillment (Pre-paid
and Post-paid) Service and Repair,

13

 

*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.

	 	 	Accessories, i58sr and i88 End of Life
Support (EOL) Support, and Advance Source Parts to the multi-year supply
agreement.

8 Force Majeure

Neither party shall be liable for delays in delivery or performance, or for
failure to manufacture, deliver or perform when caused by any of the following,
which are beyond reasonable control of the delayed party:

Acts of God, acts of the public enemy, acts or failures to act by the other
party, acts of civil or military authority, governmental priorities and
regulatory actions, strikes or other labor disturbances, hurricanes,
earthquakes, fires, floods, epidemics, embargoes, wars, riots, delays in
transportation, and loss or damage to goods in transit, or acts or failures to
act by the suppliers of the delayed party.

9 Survival of Terms:

“Confidentiality”, “Intellectual Property”, “Purchase Terms and Conditions”,
“Choice of Law and Dispute Resolution” and “Limitation of Liability” will
become binding upon signature of the last party signing below and will survive
the cancellation, termination or expiration of this Term Sheet.

10 Choice of Law and Dispute Resolution:

The validity, performance, and all matters relating to the effect of this Term
Sheet and any amendment hereto shall be governed by the laws of the state of
Illinois without regard to its conflicts of laws provisions.

Motorola and Nextel will attempt to settle any claim or controversy arising out
of this Term Sheet through consultation and negotiation in good faith and a
spirit of mutual cooperation. If those attempts fail, then, except for
disputes related to alleged patent, copyright, or trademark infringement, or
breach of confidentiality, the dispute will be mediated by a mutually
acceptable mediator to be chosen by Motorola and Nextel within thirty (30) days
after written notice by the other demanding mediation. Neither Party may
unreasonably withhold consent to the selection of a mediator, and Motorola and
Nextel will share the costs of the mediation equally. Venue for mediation
shall be the United States of America. By mutual agreement, however, the
parties may postpone mediation until they have each completed some specified but limited discovery about the
dispute. The Parties may also agree to replace mediation with some other form
of alternative dispute (ADR), such as neutral fact-finding or a mini-trial.

Any dispute which the Parties cannot resolve through negotiation, mediation, or
other form of ADR within four (4) months of the date of the initial demand for
it may then be submitted to the Federal District Court of Delaware for
resolution. The use of any ADR procedures will not be construed under the
doctrines of latches, waiver, or estoppel to affect adversely the rights of
either Party. And nothing in this section will prevent either party from
resorting to judicial proceedings if (a) good faith efforts to resolve the
dispute under these procedures have been unsuccessful or (b) interim relief
from a court is necessary to prevent serious and irreparable injury to one
party or to others.

14

 

*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.

11 Limitation of Liability:

NEITHER PARTY, WHETHER AS A RESULT OF BREACH OF AGREEMENT, WARRANTY, TORT
(INCLUDING WITHOUT LIMITATION NEGLIGENCE), PATENT INFRINGEMENT, COPYRIGHT
INFRINGEMENT, OR OTHERWISE, SHALL HAVE ANY LIABILITY FOR INCIDENTAL OR
CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOSS OF PROFIT OR
REVENUES, LOSS OF USE OF THE PRODUCTS OR ANY ASSOCIATED EQUIPMENT, COST OF
CAPITAL, COST OF SUBSTITUTE PRODUCTS, FACILITIES OR SERVICE, OR DOWNTIME COSTS
OR CLAIMS OF THIRD PARTIES TO THE FULL EXTENT SUCH MAY BE DISCLAIMED BY LAW.

	 	 	 	 	 	 	 
	Motorola, Inc.	 	Nextel Communications, Inc.
	 
	 	 	 	 	 	 
	By: /s/

	 	R. Amore	 	By: /s/	 	Paul Saleh
	

	
 
	 	 	
 

	 
	 	 	 	 	 	 
	(Authorized Signatory)	 	(Authorized Signatory)
	Title:

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	Date:
	 	December 23, 2003	 	Date:	 	December 31, 2003
	

	
 
	 	 	
 

15

 

*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 A

2003 iDEN Subscriber Group

[*] Platform Pricing Menu (Radio In-Kit Pricing Only)

[*]

 

 

*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 B-1

2003-2004 iDEN Subscriber Group

[*] Pre-Paid Models Pricing Menu as of 12-18-03

[*]

 

 

*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 B-2

iDEN Subscriber Group

[*] Postpaid Handset Pricing Menu as of 12-18-03

[*]

 

 

*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 C-1

Nextel Communications, Inc. (NCI)

Post-Paid Projects and Payment Milestones

[*]

 

 

*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 C-2

Nextel Communications, Inc. (NCI)

Boost NRA Projects and Payment Milestones (Total)

[*]

 

 

*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 C-3

Nextel Communications, Inc. (NCI)

ISUF Projects and Payment Milestones

[*]

 

 

*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 D

PRODUCT TERMS AND CONDITIONS OF SALE

	1.	 	Products and Prices. The Products and the prices therefore are as agreed
to by the Parties in the Agreement. This Agreement is for sales of
Products in the Agreement only and does not create any obligation on
Motorola with respect to any other products or services of Motorola’s iDEN
Subscriber Group or any other division, group or sector of Motorola.
	 
	2.	 	Orders. The only effect of any terms and conditions in Nextel’s orders
shall be to request the time and place of delivery and number of units to
be delivered, subject to Motorola’s acceptance, but they shall not change,
alter or add to the terms and conditions of the Agreement in any way.
	 
	3.	 	Deliveries. All deliveries are FOB Shipping Point. Title to the Products
and risk of loss will pass to Nextel at the Shipping Point. Delivery
dates are best estimates only. Motorola is not liable for any delays in
delivery for any reason. Motorola will ship Products to Nextel’s
designated locations in the United States.
	 
	4.	 	Payment. Motorola will invoice Nextel for the Products on or about the
date of shipment thereof. Payment of each invoiced amount is due within 30
days of the date of the invoice unless otherwise agreed by the Parties
hereto. Nextel may withhold any disputed amounts and the withholding of
such amounts shall not constitute a breach or default under this agreement
or any other agreement between the parties. Upon resolution of such
disputes, Nextel shall remit payment promptly, if any is due.
	 
	5.	 	Warranty. Motorola warrants each Product only to the original end user
in accordance with the Limited Warranty as stated in the Product’s Getting
Started Guide that is provided to the end user with each Product. Motorola
makes no other representation or warranty of any kind, express or implied.
MOTOROLA SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTY OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE.
	 
	6.	 	Incorporated Terms. The following terms and conditions set forth in
Attachment B to the Letter of Agreement between the Parties dated November
4, 1991 are hereby incorporated by reference: Sections 4, 6, and 8-18.
All references in these identified sections to “Letter Agreement” are
hereby replaced with “Agreement” and all references to “FCI” or “Buyer”
are hereby replaced with “Nextel”.

[END OF PRODUCT TERMS AND CONDITIONS OF SALE]

	Nextel/Motorola Supply Agreement Term Sheet	 	Exhibit D

 

 

*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.
U

EXHIBIT E

iDEN Subscriber Group

Transceiver & DBR Pricing

[*]

 

 

*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 F

Sample of the Application of Efficiency Curve and PA Price Adjustments

[*]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:

1

 

*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

2

 

*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

3

 

*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

4

 

*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.

5

 

*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
	
	 	 	 	
	 	 	 	 	 	

6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00066-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00066-of-00352.parquet"}]]