Document:

exv10w1w21

 

Exhibit 10.1.21

*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.

AMENDMENT SEVEN 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 14th day of December, 2004 and shall be deemed effective as of the last date
signed below (“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 (i) the Term Sheet for Subscriber Units and Services
dated as of the 31st day of December 2003 (the “Handset Term Sheet”) and (ii) the iDEN
Infrastructure 5 Year Supply Agreement effective as of the 1st day of January, 1999
(“Infrastructure Agreement”);

     WHEREAS, Motorola and Nextel previously entered into the Extension Amendment to the
Infrastructure Agreement dated March 16, 2004, and effective as of January 1, 2004, which extended
the term of the agreements described in (i) and (ii) of the foregoing recital through the earlier
of December 31, 2004 or execution of a master sales agreement; and

     WHEREAS, Motorola and Nextel wish to make certain amendments to and extend the terms of 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. All references are to
sections in the Handset Term Sheet.
	 
	 	1.2  	Unless otherwise stated, all references to Nextel include its wholly owned
subsidiary Boost LLC.

2. Agreement Modifications

Motorola and Nextel agree that the following sections of the Agreement are modified to
read as follows:

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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.

	 	a.  	Section 1 “Term” is deleted in its entirety and replaced with the following:

“The term of this Handset Term Sheet is extended to December 31,
2007 or until the Parties execute a master sales/supply agreement that
includes a handset supplement. During the term of this Handset Term Sheet,
the Parties will conduct business pursuant to the terms and conditions stated
herein. The terms and conditions of the Handset Term Sheet will remain in
full force and effect unless their provisions specifically provide otherwise.”

	 	b.  	Section 2.2 “Co-Operative Advertising Program for the Term” is modified by
adding the following new subsection:

“Effective January 1, 2005, Motorola agrees to provide Nextel with a [*] Co-Op fund
based on the Base Package Price of Handset Units (excluding all “Limited Edition”,
“Special Edition”, “NASCAR”, and DBR models), transceiver only units, and data devices
purchased by Nextel through Motorola’s iDEN Subscriber Group and pursuant to
promotional guidelines previously agreed upon buy the Parties. For purposes of
calculating the [*] Co-Op fund, the Base Package price will exclude SIM Card, SIM Card
pick fees and any incremental Nextel specified collateral and associated pick fees.”

	 	c.  	Section 2.4.2 “Falcon Subscriber Unit Post-Paid Pricing” is deleted in its
entirety and replaced with the following:

“Section 2.4.2 Falcon Subscriber Unit Pricing and Terms

	 	1.  	The pricing for each of the “Falcon” Handset Units for 2005 is
specified in Exhibits B-3 (for Boost models) and B-4 (for all other Nextel models)
attached 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.  	Exhibit B-3 and Exhibit B-4 may be amended from time to time by
mutual agreement of the Parties by means of amendments, additions or supplemental
Subscriber Unit Price Sheets. For each Subscriber Unit model, the Subscriber Unit
Price Sheet will indicate whether the Subscriber Unit model is categorized as a
Low Tier, Mid Tier, High Tier, or Special Category Subscriber Unit model.
	 
	 	   	Unless agreed to otherwise, the Subscriber Unit Price Sheets will be submitted to
Nextel in Microsoft Excel Format (Office 2000 or newer) on a monthly basis no later
than the 15th day of every month, and contain the following Subscriber
Unit information:

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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.

	 	 	 	 	 	 	 	 	 
	 	 	Product Information:	 	 
	

	 	-
	 	Model Number	 	 	 	 
	 	 	-	 	Customer Options
	 	 	-	 	Transceiver-Only Model Number
	 	 	-	 	Transceiver-Only Customer Option
	 	 	-	 	Subscriber Unit Pricing
	 	 	-	 	Transceiver-Only Price
	 	 	-	 	Base Package Cost
	 	 	-	 	Package Adders, itemized breakdown including as a minimum:
	

	 	 	 	 	 	o	 	Batteries
	

	 	 	 	 	 	o
	 	Chargers
	

	 	 	 	 	 	o
	 	Options
	

	 	 	 	 	 	o
	 	Features
	

	 	 	 	 	 	o
	 	Packaging and Collateral
	

	 	-
	 	Total Package Cost with Adders
	

	 	 	 	 	 	 
	 	

	 	3.   	  Effective January 1st, 2005, Nextel and Motorola will jointly determine the
tier classification (High Tier, Mid Tier or Low Tier) for each new Subscriber Unit model
for the purposes of Efficiency Curve Price Adjustments (ECPAs).  Tier classification will
 be based on the following criteria or guidelines for Low Tier, Mid Tier and High Tier Subscriber Unit models (these definitions are not retroactive and therefore will not apply to
 Subscriber Unit models with Ship Acceptance Dates prior to January 1st, 2005, unless agreed
otherwise in writing by Nextel and Motorola): 

	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Subscriber Unit Portfolio Tiering Criteria	 
	 	Criteria (1)	 	 	LOW TIER	 	 	MID TIER	 	 	HIGH TIER	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	Main Display

	 	 	[*]
	 	 	[*]
	 	 	[*]	 
	 	External Display (Clams only)
	 	 	 	 	 	 	 	 	 	 
	 	Free Data Space/Memory
	 	 	 	 	 	 	 	 	 	 
	 	Camera (2)
	 	 	 	 	 	 	 	 	 	 
	 	Camera Flash (2)
	 	 	 	 	 	 	 	 	 	 
	 	Unique Mechanics
	 	 	 	 	 	 	 	 	 	 
	 	Others
	 	 	 	 	 	 	 	 	 	 
	 	Browser
	 	 	 	 	 	 	 	 	 	 
	 

	General Guiding Principles
	 
	(1)	 	Handset falls in the tier that meets the majority of the criteria. When there is
a tie, the order of the criteria listed above will be used to determine the tier.
	 
	(2)	 	Applicable only for handsets with camera.
	 
	(3)	 	These criteria are guidelines only. For new handsetsts being introduced, these
criteria will likely need to be reviewed at least every six-twelve
months and as new technology becomes available.
	 
	(4)	 	This tier classification does not apply to handsets that move down a tier after
reaching the limit of Efficiency Curve Price Adjustments.
	 
	(5)	 	These handset tier classifications are effective as of January 1, 2005.

	 	4.   	In addition to Low Tier, Mid Tier, and High Tier, a fourth tier
classification will be used for Special Category Subscriber Unit models. The
Parties shall mutually agree in writing on any Subscriber Units that fall into the
Special Category. Special Category Subscriber Unit models will typically include
Subscriber Units with the following characteristics: 

	 	-  	Low-volume or highly customized Subscriber Units that may or
may not be produced in limited production runs; 

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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.

	 	-  	Subscriber Units requiring unique logistics; 
	 
	 	-  	Subscriber Units with special pricing considerations or other
Subscriber Units as mutually agreed by Nextel and Motorola.
	 
	 	-  	This new Special Category shall be effective January 1st, 2005
and is not retroactive to Subscriber Unit models with Ship Acceptance dates
prior to January 1st, 2005, unless agreed otherwise in writing by Nextel and
Motorola.

On an annual basis, Nextel and Motorola will review the tiering criteria and the
general guiding principles set forth in the above table. Parties must mutually agree
in writing upon changes to the tiering criteria, the general guiding principles or
classification of Subscriber Unit models.

The categorization of models will be reflected on Exhibits B-3 and B-4 that will be
attached to this Amendment. As of January 1, 2005, Nextel and Motorola mutually
agree that a summary of the categorization is reflected as follows:

[*]

	 	d.  	Section 2.4.3 “Subscriber Equipment Unit Pre-Paid Pricing and Terms” is
modified by the addition of the following provisions:

	 	1.  	“Effective January 1, 2005, Pre-Paid Pricing and Terms as identified
in this Section 2.4.3 will no longer be applicable, and will be replaced by the
Pricing and Terms as defined in Section 2.4.2, except for the warranty terms
conditions associated with either pre-paid or post-paid phones which will remain
unchanged. Exhibit B-3 will contain Boost (previously “Pre-Paid”) models.
	 
	 	2.  	For the Subscriber Unit models described in Section 2.4.3 (Exhibit
B-1), the Subscriber Unit sales volumes accumulated prior to January 1, 2005 will
remain in the cumulative Subscriber Unit volumes of the Pre-Paid model as
described in Section 2.4.3. These handset volumes accumulated prior to January 1, 2005 do
not count towards Efficiency Curve Calculations.
	 
	 	3.  	All future applicable pricing changes will be included in updates to
Exhibit B-3 for Boost Subscriber Unit models and Exhibit B-4 for all
other Subscriber Unit models.”

	 	e.  	Section 2.6 “Efficiency Curve Price Adjustments” is deleted in its entirety
and replaced with the following:
	 
	 	   	“Section 2.6 Efficiency Curve Price Adjustments

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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.

	 	2.6.1  	The following price reductions or Efficiency Curve Price Adjustments
shall apply to Low-Tier, Mid-Tier, and High-Tier iDEN Subscriber Units purchased
by Nextel as identified in Exhibit B-3 and Exhibit B-4, excluding Special Category
Subscriber Units and Nextel sourced items (i.e., Subscriber Identity Module (SIM)
Cards, collateral pieces, and associated pick fees) (“Eligible Subscriber Units”).
The following Efficiency Curve Price Adjustment thresholds are effective January
1, 2005 and are not retroactive to any Efficiency Curve Price Adjustments that
occurred in 2004 (no retro-active impacts to the efficiency curve model).
Efficiency Curve Price Adjustment Thresholds for Eligible Subscriber Units:

	 	•   	A [*] percent [*] price reduction after every [*] Low-Tier (LT)
Eligible Subscriber Units (net of returns) shipped to Nextel, wherein
Low-Tier Subscriber Units are defined in Exhibit B-3 and Exhibit B-4.
	 
	 	-  	 A [*] percent [*] price reduction after every [*] Mid-Tier (MT)
Eligible Subscriber Units (net of returns) shipped to Nextel, wherein
Mid-Tier Subscriber Units are defined in Exhibit B-3 and Exhibit B-4.
	 
	 	-  	 A[*] percent [*] price reduction after every [*] High-Tier (HT)
Eligible Subscriber Units (net of returns) shipped to Nextel, wherein
High-Tier Subscriber Units are defined in Exhibit B-3 and Exhibit B-4.

	 	2.6.2  	The volumes of Subscriber Units purchased by Nextel are aggregated
by tier (not model), meaning that the Efficiency Curve Price Adjustments occur
each time the aggregate number of total Subscriber Units regardless of model
number shipped to Nextel is achieved in each of LT, MT, or HT. Only Subscriber
Unit models that have shipped at the time of an Efficiency Curve Price Adjustment
are eligible for the corresponding price reduction. Provided however that newly
introduced Subscriber Unit models shall not be eligible for an Efficiency Curve
Price Adjustment until [*] after the initial shipment to Nextel, Nextel Customers,
Nextel dealers or Nextel agents in Nextel’s distribution network; however,
purchases of those Subscriber
Units will still count toward the aggregate number of Subscriber Units in a
particular tier for the purposes of Efficiency Curve Price Adjustment
thresholds.
	 
	 	   	For example, if an eligible Mid-Tier Subscriber Unit model initially ships to
Nextel, Nextel Customers, Nextel dealers or Nextel agents in Nextel’s
distribution network on [*], the Subscriber Units are included in the count
toward the agreed upon eligible aggregate number of Mid-Tier units from [*].
However, if a mid-tier efficiency curve reduction occurs prior to [*] after the
initial shipment to Nextel, Nextel

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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.

Customers, Nextel dealers or Nextel agents
in Nextel’s distribution network, the model shall not be eligible for the
Efficiency Curve Price Adjustment. The model shall be eligible for subsequent
Mid Tier Efficiency Curve Price Adjustments when they occur.

	 	2.6.3  	Percentage price reductions shall be based on the Fully Kitted price
of the eligible Subscriber Units, as adjusted by any efficiency curve, and
benchmarking price reductions or PA application, including accessory upgrades and
feature options, but excluding Nextel sourced/selected items (i.e., SIM Cards,
collateral pieces, and associated pick fees). The Parties agree that in no event
will the application of Purchase Advance Price Adjustments reduce the [*]
subscriber Unit’s price below its benchmarked Base Package Price

	 	2.6.4  	Section is intentionally blank.

	 	2.6.5  	If a separate price adjustment is made pursuant to the Benchmarking
Process or Most Favored Nation (MFN) pricing adjustment provisions (subject to
Nextel’s concurrence) under this Agreement (“Interim Price Adjustment”), then that
product shall be excluded from the next subsequent Efficiency Curve Price
Adjustment, if the next Efficiency Curve occurs within [*] after the
aforementioned pricing adjustment. However, purchases of those Subscriber Units
shall still count towards the Efficiency Curve purchase thresholds.

	 	2.6.6  	Effective January 1, 2005, individual Subscriber Unit models will be
limited to:

	 	-  	[*] Efficiency Curve Price Adjustments per calendar
year.
	 
	 	-  	[*] Efficiency Curve Price Adjustments in a specific
Subscriber Unit model’s tier classification, then the Subscriber Unit
model drops down one tier classification.
	 
	 	-  	[*] Efficiency Curve Price Adjustments in the
Subscriber Unit model’s
lifetime.
	 
	 	Except as otherwise specified in Section 2.6.7, these limitations are not
retroactive to any Efficiency Curve Price Adjustments that occurred in 2004.
Any previous Efficiency Curve Price Adjustments that occurred for a specific
Subscriber Unit model do not count towards these limitations.

	 	2.6.7  	To address transitional issues resulting from the implementation of
new Subscriber Unit tier criteria definitions and guiding principles set forth
above, Nextel and Motorola agree that Subscriber Unit models that have already
received ECPAs prior to January 1, 2005 (“Prior ECPAs”) will be treated as
follows:

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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.

	 	-  	Prior ECPAs count toward lifetime
limitation of [*] ECPAs (i.e., carry-forward historical count for
purposes of lifetime allowable ECPAs)
	 
	 	-  	Prior ECPAs do not count toward the
limitation of [*] ECPAs in a specific tier classification (i.e.,
fresh start, do not carry-forward historical count for purposes of
per tier classification allowable ECPAs).
	 
	 	-  	Subscriber Units that were classified as
Mid-Tier Units in 2003 and 2004 and that will now be reclassified as
Low-Tier Units in 2005 [*], will become eligible for a Low-Tier ECPA
[*] after November 6, 2004 (i.e., May 6, 2005). If a Low-Tier ECPA
occurs prior to [*], these models will not qualify for the ECPA but
will be eligible for the subsequent Low-Tier ECPAs when they occur.

	 	2.6.8  	After a Subscriber Unit model has received [*] Efficiency Curve
Price Adjustments in a specific Subscriber Unit model’s tier classification, the
model will be reclassified to the next lower tier classification for purposes of
Efficiency Curve Price Adjustments and all of the model’s volume from then forward
will count towards the achievement of Efficiency Curve Price Adjustments in the
model’s new tier classification. All of the model’s previous unit volume
accumulated in the higher tier classification will remain in the cumulative unit
volumes of the higher tier.
	 
	 	2.6.9  	If a Subscriber Unit model is reclassified pursuant to Section 2.6.8
above, it will not be eligible for an Efficiency Curve Price Adjustment in its new
tier for a period of 6 months from the date it is reclassified and all of the
Subscriber Unit volume for the reclassified model will count in the new tier from
the date of the reclassification.
	 
	 	2.6.10  	The Parties agree to discuss Efficiency Curve Price Adjustments in good
faith when a specific Subscriber Unit misses an Efficiency Curve Price
Adjustment by less than thirty (30) days, especially in those cases where a
Subscriber Unit is Ship Acceptance delayed due to no material fault of Nextel.

	 	f.  	Section 2.7 “Benchmarking Process” is modified by adding the following new
subsection:
	 
	 	   	“Section 2.7.4 Implementation of 2004 Subscriber Unit Benchmarking
	 
	 	   	Nextel and Motorola have completed the 2004 Benchmarking process and, as a result,
Nextel and Motorola agree to implement pricing and/or promotional adjustments as
follows:

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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.

	 	1.  	With the exception of the [*], the pricing adjustments detailed in
Table A will be effective January 1, 2005. Except as stated and agreed in
paragraphs 2 and 5 (below), the purchase rebates (“Purchase Rebate(s)” or “PR(s)”)
for the [*] will be effective beginning with purchase orders submitted on or after
March 1, 2005 and will be made available to Nextel as cash rebates on Subscriber
Unit purchases. The cash rebates will be triggered by shipment of the Subscriber
Units from Motorola to Nextel, Nextel Customers, Nextel dealers or Nextel agents
in Nextel’s distribution network. These Purchase Rebates will be provided in the
form of cash rebates to Nextel on the Motorola monthly credit memo and in the
Rebate File for the month that the Subscriber Units are shipped to Nextel, Nextel
Customers, Nextel dealers, or Nextel agents in Nextel’s distribution network).
The Purchase Rebate amounts per Subscriber Unit shipped will be a calculated
amount based on a percentage reduction from the then current Pre-Benchmarking NTE
or BPP, net of any Efficiency Curve Price Adjustments. The percent reductions are
as specified below in Table A.

[*]

	 	2.  	For purposes of determining eligibility of the models for Efficiency
Curve Price Adjustments pursuant to Section 2.6.5, the models in Table A that were
initially Motorola Ship Accepted prior to September 1, 2004 and will be receiving
either a reduction in price (a Benchmark Price Adjustment) on January 1, 2005 per
Table A or PRs beginning with purchase orders submitted on or after March 1, 2005
per Table A will become eligible for ECPAs in 2005 [*] months after August 15,
2004 with the exception of the [*] will be eligible for ECPAs in 2005 [*] months
after November 6, 2004. However, to the extent that purchases exceed the
quantities indicated in Table B during the period between January 1, 2005 and
April 3, 2005, such incremental purchase quantities shall qualify and be eligible
for Purchase Rebates.
	 
	 	3.  	Intentionally Blank
	 
	 	4.  	So long as the [*] are generating Purchase Rebates as defined in this
section 2.7.4, the Efficiency Curve Price Adjustment will be applied to the then
current Pre-Benchmarking NTE or BPP, net of any Efficiency Curve Price
Adjustments. The Purchase Rebates shall be equal to the then current
Pre-Benchmarking NTE or BPP, net of any Efficiency Curve Price Adjustments, times
the aforementioned percentage reductions for each handset (as defined in Table A
of this section 2.7.4). Purchase Orders for the aforementioned handsets will be
placed by Nextel at the then current Pre-Benchmarking NTE or BPP, net of any
Efficiency Curve Price Adjustments.

	 	5.  	In the period between January 1, 2005 and April 3, 2005, Nextel
agrees to purchase Subscriber Units as set forth in Table B in quantities no less
than

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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.

the quantities indicated in Table B. Nextel agrees to submit non-cancelable
purchase orders for the total unit quantities indicated on Table B, by month and
by model, no later than the earlier of ten (10) business days from execution of
this Amendment 7 or January 1, 2005. To the extent that purchases exceed the
quantities indicated in Table B during the period between January 1, 2005 and
April 3, 2005, such incremental purchase quantities shall qualify and be eligible
for Purchase Rebates.

[*]

	 	6.  	Section Intentionally Left Blank
	 
	 	7.  	Provided that Nextel meets the purchase commitments set forth in
paragraph 5 (above), Motorola agrees to make available to Nextel various
manufacturer’s end user rebate programs totaling a combined maximum value not to
exceed [*], that will be available for use for Subscriber Units shipped between
April 4, 2005 and December 31, 2005 (the programs to be reasonably spread over the
period at Nextel’s discretion). The mix of programs to be similar to the mix of
programs in 2004, unless mutually agreed otherwise. The aforementioned
Manufacturer’s Rebate Programs will be designed to drive the volume and mix
requirements set forth in Table C. In the event that a Nextel commitment is not
met as specified in Table C (i.e. any shortfalls to minimums or excesses to
maximums), Nextel will reimburse to Motorola funds expended by Motorola pursuant
to this Section (Section 2.7.4, paragraph 7) on a pro-rata basis as specified in
Table C. In the event that a reimbursement is due to Motorola, such reimbursement
will be settled on the January 2006 wire (which includes shipments and activity
ending December 31, 2005). The Parties hereby agree that the dollar amounts
specified in Table C represent fair and reasonable approximation of the
reimbursement of dollar amounts that would be incurred by Motorola in the event
Nextel fails to meet its purchase commitment as set
forth in Table C and that such amounts do not constitute a penalty. The Subscriber
Roadmap shall be divided into two parts, the 2005 first half Subscriber Roadmap and
the 2005 second half Subscriber Roadmap. The Parties shall mutually agree to the
2005 first half Subscriber Roadmap by January 15, 2005 and the 2005 second half
Subscriber Roadmap by March 1, 2005. In the event that the Parties are unable to
reach final agreement on either the 2005 first half or 2005 second half Subscriber
Roadmap by the dates set forth above, then each Total Payment Cap contained in
Table C below shall be reduced by [*] for each failure. For example, if the
Parties are able reach agreement on the 2005 first half Subscriber Roadmap and
unable to agree to the 2005 second half Subscriber Roadmap by March 1, 2005 then
each Total Payment Cap below shall be reduced to [*]. The Subscriber Roadmap shall
include but not be limited to design and performance specifications, ship dates and
other items covered by the current MRD process and

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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.

supporting documentation. As
part of the 2005 Subscriber Roadmap process, the Parties must mutually agree to any
Subscriber Unit end of life decisions.

	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	TABLE C: Purchase Commitment for 2005
	 	 	 	 	# of Units Committed	 	 	Shortfall Payment	 	 	Total Payment	 
	 	Commitments	 	 	(min.)	 	 	per Unit	 	 	Cap	 
	 	Aggregate Volume

	 	 	[*]
	 	 	[*]
	 	 	[*]	 
	 	Minimum
	 	 	 	 	 	 	 	 	 	 
	 	Commitment
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	Excess Volume	 	 	 	 
	 	Commitments	 	 	# of Units Maximum	 	 	Payment Per Unit	 	 	Total Payment Cap	 
	 	Lower-End**Model

	 	 	[*]
	 	 	[*]
	 	 	[*]	 
	 	Maximum
	 	 	 	 	 	 	 	 	 	 
	 	Commitment
	 	 	 	 	 	 	 	 	 	 
	 

	*	 	[*], Nextel commits to purchase a total quantity of [*] Handset Units in
2005, otherwise the commitment is reduced to [*] Handset Units in 2005. Any
Subscriber Unit volume in excess of the Aggregate Volume Minimum Commitment ([*]
units as noted above) shall be added (unit for unit) to the Lower-End Model Maximum
Commitment [*]. For example, if Nextel exceeds the Aggregate Volume Minimum
Commitment by [*] units, then the Lower-End Model Maximum Commitment will be
increased by [*] units.
	 
	**	 	[*].

	 	g.  	Section 2.7.1 “Benchmarking Process Framework Overview” is modified by
replacing the words “Eligible Post-Paid Handset Unit” with the words “Eligible
Subscriber Unit”.
	 
	 	h.  	Section 2.7.1 “Benchmarking Process Framework Overview” is modified by
replacing its subsection 1 in its entirety with the following:
	 
	 	   	“1. Motorola and Nextel will provide relevant, non-confidential data, comparing
the wholesale price of the indicated Eligible Subscriber Unit model against one or
more appropriate, comparable handset models of similar features, functionality, and
form factor, sold during the same time frame under reasonably equivalent terms and
conditions (including unit volumes), in the same geographic market (the “Comparison
Group”). As part of the Benchmarking Process, the Parties will also consider
appropriate adjustments to the efficiency curve thresholds or percentage rate
adjustments for determining the Efficiency Curve Pricing Adjustment for the
respective tiers of phones.

	 	i.  	The following section is modified by adding a new subsection 5 as follows:

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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.

“5. After the Comparison Group has been selected and agreed upon by Nextel and
Motorola in accordance with the process set forth above for each Eligible Subscriber
Unit model (excluding Special Category Subscriber Units), the Parties will mutually
agree on an adjustment to the wholesale price of the Comparison Group Subscriber Units
in the Comparison Group to account for differences, including, but not limited to form
factor, features, displays, memory, data speed, multi-mode, cameras, media players,
antenna type, speakerphone, on-network walkie-talkie, non-iDEN RF connectivity
solutions, lens quality, finish, and degree of Mil-Spec. After the benchmarked
Subscriber Unit model wholesale pricing has been adjusted to account for the
aforementioned differences, the average wholesale price of the relevant Comparison
Group Subscriber Units shall be calculated and compared to the current Base Package
Price of the Eligible Subscriber Unit model.”

	 	j.  	Section 2.8 “Soft Launch Handsets for Initial Launch” is modified by
replacing the words “Eligible Post-Paid Handset Unit” with the words “Handsets Units”.

	 	3.  	Additional Terms and Conditions
	 
	 	   	Motorola and Nextel agree that the following provision will be added to the Handset Term
Sheet:
	 
	 	   	“Section 19 Volume Rebate Incentive (VRI) for 2005

	 	19.1  	Nextel is to receive volume incentive rebates in accordance with Section 19.4
below once the total revenue to Motorola for Motorola’s sales to Nextel, Nextel
Customers, Nextel dealers, or Nextel agents in Nextel’s distribution network for
Motorola handsets (defined in Section 19.2 below) exceeds [*] for January 1 through
December 31, 2005 (“the Period”). This 2005 volume
rebate incentive shall not be applicable to future calendar years except as agreed
to in writing by the Parties.
	 
	 	19.2  	Handset Sales is defined as the handset pricing as invoiced to Nextel less
co-op or other new and/or incremental rebates, promotions, 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.
	 
	 	19.3  	Except as set forth below, all handset models are eligible for the 2005
volume 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 iO1000, or the iM1100, but not the i30 Board product or the im240 products),
returned items, items passed through at

Nextel and Motorola Confidential

Page 11 of 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.

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 2006.

	 	19.4  	In the Period, the volume rebate incentive amounts for handsets will be
earned in accordance with the following:

	 	 	 	 	 
	Adjusted Handset
 Sales Range

	 	 	 	Rebate Earned
	 

	 	 	 	 
	>= [*]

	 	 
	 	[*] of sales in this range
	 
	 	 	 	 
	>= [*]

	 	 	 	[*] of sales in this range

	 	19.5  	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) at
the same time the Monthly Purchase Forecast is due and providing information by
product model and product model derivatives (ex: color, limited edition).

	 	19.6  	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 (October, November, and December 2005) will not exceed [*] units in order for
Nextel to be eligible for VRI, except as the Parties mutually
agree is reasonable due to market and business conditions.”

EXHIBITS

Exhibit B-3
     Boost Handset Model Pricing Menu

Exhibit B-4      Non-Boost Handset Model Pricing Menu

4. 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.

5. 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

Nextel and Motorola Confidential

Page 12 of 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.

0

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.

[next page is signature page]

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/ Charles F. Wright
	 	 	 	By:
	 	/s/ Brian Meadows
	 	 
	

	 	 
	 	 	 	 	 	 	 	 
	Name:

	 	Charles F. Wright
	 	 	 	Name:
	 	Brian Meadows	 	 
	Title:

	 	Senior Vice President
	 	 	 	Title:
	 	Senior Vice President	 	 

Nextel and Motorola Confidential

Page 13 of 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 B-3

Boost Handset Model Pricing Menu

[*]

Nextel and Motorola Confidential

Page 14 of 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 B-4

Boost Handset Model Pricing Menu

[*]

Nextel and Motorola Confidential

Page 15 of 15exv10w5

 

Exhibit 10.5

Executive Non-Compete Agreement

The following is a list of executive officers who have entered into an Executive Non-Compete
Agreement in the form attached as Exhibit 10 to the Form 10-Q for the quarter ended September 30,
1999. The number of shares of restricted stock issued under Section 4 of the agreement is as
follows:

	 	 	 	 	 
	Executive Officers	 	Shares*
	 
	 	 	 	 
	Gregg Bacchieri

	 	 	78,772	 
	Louis J. Freeh

	 	 	0	 
	Charles C. Krulak

	 	 	0	 
	John W. Scheflen

	 	 	66,960	 
	Richard K. Struthers

	 	 	78,772	 
	Kenneth A. Vecchione

	 	 	55,140	 

*Share numbers reflect stock splits.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00080-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00080-of-00352.parquet"}]]