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Exhibit 10.1
NEXTEL/MOTOROLA AGREEMENT
March 27, 1997
The x x x Nextel Business Plan (the "Plan") presented to x x x
concluded with Pages 19 and 20. Page 19 of the Plan quantified Motorola Fixed
Network Equipment and Handsets for the x x x plus x x x . Page 20 of the
Plan offered Nextel suggested solutions toward accomplishing the Plan. This
document establishes the joint commitments and agreements between Motorola and
Nextel with respect to Nextel's desire to rapidly expand and grow its United
States business as well as establish international business operations.
Joint Commitments of Nextel and Motorola
A. Nextel agrees to place orders by x x x , and take delivery in x x x
of at least x x x , x x x , and x x x of Motorola iDEN
infrastructure and x x x Motorola iDEN subscriber units of which at
least x x x are to be x x x units. All infrastructure equipment
and subscriber units shipped to date in x x x prior to execution of
this agreement will count towards the overall purchased and shipped
commitments in x x x . Motorola will insure sufficient manufacturing
capacity to produce and ship the quantities of equipment and
subscriber units specified in this paragraph in x x x .
Purchase orders for infrastructure may be issued with generic
quantities of sites and base radios provided that 90 days prior to
shipment configurations are determined that are within (10% of exact
configurations which must be established 30 days prior to scheduled
shipment). Configurations for longer lead time items, such as x x x
and x x x , must be established based on normal manufacturing lead
times from Motorola vendors. The parties jointly commit to develop an
x x x throughout x x x and x x x .
It is understood that requirements to manufacture and ship subscriber
units will be x x x. However, the parties agree to establish a x x x
forecast for subscriber units so that units produced and shipped
within the beginning and end period of the short term step will be x x
x.
B. Nextel agrees to the x x x of iDEN technology for a period of x x x
in all x x x . Furthermore, Nextel agrees to place major
infrastructure orders with Motorola for shipments in x x x for x x
x and the x x x , and in x x x to place major infrastructure
orders with Motorola for x x x and x x x .
x x x CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION
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Nextel agrees to include Motorola Network Services as a partner in the
x x x opportunity, or buy out Network Services interests at fair
market value. Motorola and Nextel agree to use best efforts to arrive
at a fair market value agreement for Network Services interest in x x
x .
In consideration of Nextel's desire to aggressively enter the
integrated services business in international markets x x x,
Motorola's LMPS International Network Services Group and iDEN Group
will agree to meet quarterly with McCaw International to discuss plans
and opportunities where there may be mutual benefit and to give Nextel
appropriate notice prior to selling or transferring Motorola's owned
SMR channels to give McCaw International the opportunity to consider
purchase of such SMR channels.
Motorola will agree not to x x x rights to purchase or use x x x in
international markets (other than x x x and x x x where previously
granted rights expire in x x x ) or enter into other arrangements
that would prohibit Motorola from x x x to MIL for x x x such other
international markets. However, if MIL expresses no interest in
certain international markets where other customers have expressed
conditional firm interest in x x x , Motorola will entertain
specific customer requests to insure an equipment sale.
C. International Pricing
The following sets forth the basic framework for international pricing
on both infrastructure and subscriber purchases by McCaw International
(MIL) or its affiliates.
Infrastructure Pricing
- If MIL commits to x x x per year of aggregate net discounted
EBTS shipments in markets with either (i) x x x and x x x
or (ii) in markets with at least x x x , Motorola will match
x x x .
- Motorola will count x x x of net discounted EBTS shipments
up to x x x in value in non-controlled markets towards the
x x x annual commitment.
- If EBTS shipments in a calendar year are less than x x x ,
prices will be x x x higher than x x x . ( x x x )
- Installation/optimization and other unique costs will be
determined by country/project and billed separately.
x x x CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION
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Subscriber Pricing
- If MIL commits to x x x aggregate units per year of iDEN
subscriber shipments in markets with either (i) x x x and x
x x or (ii) in markets with at least x x x , Motorola will
x x x for subscriber products and accessories. The x x x
will not be applicable to international subscriber units
loading.
- If subscriber shipments are less than x x x per year,
prices for subscriber units and accessories will be x x x
higher than x x x . ( x x x )
- Type approval and other unique or additional costs associated
with doing business internationally will be determined by
country/project and billed separately.
In markets where MIL has less than x x x and x x x , prices for
both subscriber and infrastructure will be mutually negotiated
between the relevant parties.
D. Nextel agrees the x x x x x x program is a x x x program. x x
x of infrastructure and/or subscriber equipment is not permitted, nor
are international purchases counted toward the U.S. x x x in any
year.
E. Motorola will price its infrastructure at the appropriate x x x ( x
x x ) and the subscriber units per the x x x .
For years x x x and x x x , Motorola will agree to an
infrastructure x x x program. The x x x will be an infrastructure
x x x for each x x x , x x x and x x x subscriber unit x x x
onto x x x as described below. Motorola agrees that it will x x x
if, due to no fault of Nextel, it is unable to ship the minimum
infrastructure quantities specified for x x x and x x x in Section
A and on Page 18 of the Plan.
Year x x x Infrastructure x x x Program
x x x , x x x
Motorola will provide a x x x plus provide x x x (or x x
x if package other than x x x package is ordered) of x x x
respectively.
x x x CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION
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x x x unit volume counts toward x x x and x x x unit volume. x
x x does not qualify for any x x x . In the event the combined x x
x , x x x and x x x purchase and shipped volume exceeds x x x in
x x x thus qualifying for a x x x on all x x x , the x x x x x
x will also be x x x on all x x x .
x x x
Motorola expects Nextel to order a minimum of x x x x x x units
and will offer a x x x x x x up to these quantities and will
provide x x x of the applicable x x x (or x x x if package
ordered other than x x x package is ordered) for all units
purchased. After that volume, Motorola will increase the x x x x x
x by x x x to x x x for all units in excess of x x x . This x
x x increased x x x applies only to the x x x between x x x and
x x x . At x x x and above, a x x x , the x x x returns to x x
x .
1. An additional x x x of x x x is available for each one
percentage point increase in the x x x x x x .
2. Per Nextel's request, infrastructure x x x will begin with x x
x as of x x x and will continue through x x x . In order to
continue throughout the full year, the full infrastructure program
( x x x , x x x and x x x ) must be ordered by x x x for
shipment in x x x . If the commitment beyond the x x x
"Existing Plan" is not received by that time, then the x x x
beginning x x x will be reduced by x x x per x x x and x x
x . The x x x x x x will be eliminated completely.
During the year Motorola and Nextel recognize that business and
other considerations may affect the buildout commitment by Nextel.
As such, Motorola and Nextel will mutually agree to make x x x
adjustments to the above x x x if the x x x x x x .
In any event, a x x x x x x program will be available only if
the infrastructure volume exceeds Motorola's initial x x x
infrastructure plan of x x x , x x x and x x x .
x x x CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION
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3. The x x x will be x x x based upon the x x x , x x x and x x x
x x x onto x x x . Motorola will, at Nextel's option, issue an
infrastructure x x x for the amount of the x x x .
For purposes of determining the x x x and associated x x x in each
calendar month, the following procedure will be used:
x x x :
The x x x between x x x and x x x will be used to determine
the x x x amount. x x x is used as the starting date due to
sales activity carryover from x x x .
x x x :
The x x x between the last day of the prior month and last day
of the current month will determine the x x x amount.
x x x :
The x x x between the last day of x x x and x x x will
determine the x x x amount. The x x x date is used to
compensate for sales made in x x x that are not counted until x
x x .
The parties agree to develop mutually an acceptable auditable method
of determining the number of x x x during each payout period.
x x x Infrastructure x x x Program
In order for Nextel in the United States only to continue to receive x x x x
x x prices on x x x , x x x , and x x x in x x x as will be x x x ,
Nextel agrees to commit to purchase and accept shipment of x x x of
infrastructure equipment in the year x x x for both its domestic and
international markets plus commit to the purchase and shipment of x x x
subscriber units for the U.S. markets in the year x x x . Quantities of * **,
x x x , x x x and other equipment which total to an estimated cost of x x x
will be mutually agreed upon between the parties prior to the end of x x x .
In order to kick off the x x x x x x program, Nextel agrees to place
purchase orders for such equipment by x x x . Any x x x infrastructure
quantities that the parties mutually agree to ship in x x x will be x x x
towards the x x x infrastructure shipments commitment in x x x .
x x x CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION
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x x x , x x x , x x x
Motorola will provide a x x x x x x per x x x , * ** or x x x
purchased and x x x plus x x x of the applicable x x x (or x x
x if x x x package is ordered) for each unit type based on the
appropriate x x x price point of the x x x schedule.
The maximum x x x to be made in x x x will be capped at x
x x .
1. An additional x x x of x x x is available for each x x x
in the x x x x x x .
2. x x x will begin as of x x x and extend through x x x .
During the year Motorola and Nextel recognize that business
and other considerations may affect the buildout commitment by
Nextel. As such, Motorola and Nextel will mutually agree to
make x x x adjustments to the above x x x if the x x x
x x x commitments fall below the infrastructure commitment of
x x x in shipments and subscriber commitment of x x x .
3. The x x x will be x x x at the end of x x x based upon
the x x x , x x x , and x x x x x x onto x x x.
Motorola will, at Nextel's option, issue an infrastructure x
x x for the amount of the x x x .
For purposes of determining the x x x in each calendar
month, the following procedure will be used:
x x x :
The x x x x x x between x x x and x x x will be
used to determine the x x x amount.
x x x :
The x x x x x x between the x x x and x x x of
the x x x will determine the x x x amount.
x x x :
The x x x between the x x x and x x x will
determine the x x x amount.
x x x CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION
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The parties agree to develop a mutually acceptable auditable
method of determining the number of x x x x x x during
each payment period.
F. Antenna Site Rental
Motorola and Nextel agree to the following plan which will apply to
Nextel site contract payments valid through and including the x x x .
This pricing plan will supersede the existing master site agreement
pricing plans currently being negotiated between Motorola and Nextel
through the x x x . All other elements of the master site agreement
will remain in full force before and after x x x as stipulated in
the master agreement.
- A x x x discount from x x x on Motorola owned, leased
and managed x x x to be used by Nextel for x x x . ( x x
x additional discount to the x x x discount Nextel
already receives.)
- A x x x discount from x x x on Motorola owned x x x,
and a x x x discount from x x x on Motorola leased
and managed x x x to be used by Nextel for x x x.
- Where, Nextel assumes its required and incremental capital
improvements, fuel and utility costs on all sites.
- On Motorola managed or leased sites, Motorola will agree
to an annual rental increase percent x x x for a site.
Motorola will x x x .
- On Motorola owned sites, Motorola will agree at the time
of a lease renewal to CAP any increases in the x x x at
an amount that will not exceed the x x x for the x x x
.
G. Alternative Infrastructure and Subscriber Equipment Manufacturer
Arrangements
Section IV of the Second Amendment to Purchase Agreements dated April
4, 1995, established a concept of "Licensing" alternate supply sources
for both iDEN infrastructure and subscriber units. Nextel and
Motorola agree to update the agreement as promptly as practicable to
establish a revised framework of agreement for potential third party
iDEN infrastructure and subscriber equipment manufacturers.
x x x CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION
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H. x x x Market Opportunity
Motorola LMPS and Nextel personnel are actively addressing the
opportunity to provide an optimal solution for x x x . Motorola
believes opportunities of this type may be served through a proposed x
x x arrangement with Nextel. The parties agree to mutually work
together to establish such an arrangement.
I. Motorola (and Nextel) senior management tied to Nextel Performance
Motorola will tie its LMPS Senior Management and it is expected Nextel
will tie its Senior Management to a mutually agreed to set of Nextel
performance items, one-half on x x x and one-half on some combination
of X X X, X X X, x x x and x x x.
J. Nextel and Motorola agree that the contents of this agreement are
strictly confidential and that neither party will disclose any of the
contents without the mutual consent of the other party.
Agreed to:
MOTOROLA, INC. NEXTEL COMMUNICATIONS, INC.
Name /s/ Fred Wright Name /s/ Thomas J. Sidman
Date March 27, 1997 Date March 27, 1997
x x x CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION
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