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EXHIBIT 10.4. 7
AMENDMENT NO. 6
TO
SUPPLY AGREEMENT
BETWEEN
DOBSON COMMUNICATIONS CORPORATION
AND
NORTEL NETWORKS INC.,
(f/k/a NORTHERN TELECOM INC.)
This amendment is made effective as of the date last signed ("Effective Date
No. 6") by and between Dobson Communications Corporation, an Oklahoma
corporation, with offices at 13439 North Broadway Extension, Suite 200,
Oklahoma City, Oklahoma 73114 (hereinafter referred to as "Buyer") and
Nortel Networks Inc., (f/k/a "Northern Telecom Inc.") a Delaware corporation
with offices at 2350 Lakeside Blvd., Richardson, Texas 75082 (hereinafter
referred to as "Seller").
WHEREAS, Buyer and Seller entered into a Supply Agreement as of December 6,
1995, as amended ("Agreement"); and,
WHEREAS, Buyer and Seller now wish to further amend the Agreement to include,
among other things, an increase in Buyer's purchase commitment, increased
discounts from Seller, assurance of Seller's presence in future
Seller-equipped markets and provide Seller with a last-bid opportunity, all
as further described herein;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
Buyer and Seller agree to amend the Agreement as follows:
1. Replace all references to "Northern Telecom Inc." in the Agreement,
and its amendments, with "Nortel Networks Inc."
2. Increase the Buyer's purchase commitment by amending the last
sentence of Article 4 ("Price") (as amended in Section 3 of Amendment
No. 5), changing the dollar amount of "$120 million" to "two hundred
fifteen million dollars ($215,000,000), of which approximately
$78,000,000 has been purchased against the cumulative commitment prior
to this Amendment No. 6."
3. Amend Annex 1A "Extended Term Equipment and Services Pricing"
(Schedule A to Amendment No. 2, as last amended in Amendment No. 5), as
follows:
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(a) by deleting the amount "$5.00" and replacing it with "$4.00" in
Section 4.1
(b) by deleting the amount "$3,990" and replacing it with "$3,325",
and adding the words "for either 800 MHz or 1900 MHz radios.", at
the end of the sentence.
4. Amend the subsections of Section 5.2 of Annex 1A, as follows:
(a) Add the following language to the beginning of Subsection 5.2.1:
"Subject to changes to Subsection 5.2.1(a), below,"
(b) Change the level of "Discount off Seller's then-current List
Price" of the following items in Subsection 5.2.1(a), as indicated
below, effective as of the effective date of this Amendment No. 6:
<TABLE>
<CAPTION>
Description Discount off Seller's then-current List Price
----------- ---------------------------------------------
<S> <C>
Switch/TDMA Hardware 65%
Cell Site Hardware
(exclusive of
radios/amplifiers) 65%
(Note: This discount level applies to either 800 MHz or 1900MHz Equipment.)
</TABLE>
5. Add new Section 8.0 to Annex 1A, as follows:
"8.0 NORTEL NETWORKS EQUIPMENT IN NEWLY ACQUIRED MARKETS
In the event Buyer acquires markets in the future that contain
current MTX-Software based Seller's equipment, Buyer agrees that if it
replaces such equipment, it will do so with Nortel Networks' Equipment,
only"
6. Add new Section 9.0 to Annex 1A, as follows:
"9.0 LAST BID OPPORTUNITY
Subject to Section 9.1 below, and in the event Section 8.0 is not
applicable, in each and every case in which Buyer request Seller and
one or more other wireless infrastructure equipment vendors to provide
a bid or offer to sell with respect to Buyer's purchase of wireless
equipment, Buyer shall give Seller an opportunity to provide a last bid
or offer to sell such equipment after all other vendors have made their
bid(s) or offer(s) ("Last Bid"). Such Last Bid may be Seller's first
opportunity to bid or offer, or may be a bid or offer by Seller
subsequent to its first bid or offer.
At such time as no further bids or offers are being accepted by Buyer
from vendors other than Seller, Buyer shall notify Seller in writing,
with written receipt from Seller, that Seller may make its Last Bid.
Within twenty-four (24) hours after Seller's receipt of Last Bid notice
from Buyer, Seller shall either provide its Last Bid or provide Buyer
with written notice declining to make a Last Bid.
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Should Seller fail to respond to Buyer within twenty-four (24) hours
after notice of Last Bid, Buyer may deem that Seller has declined to
offer such Last Bid.
9.1 Buyer shall not be required to solicit any bid or offer from
Seller for the sale of wireless infrastructure equipment, nor shall
Buyer be required to accept a Last Bid as the winning bid or offer."
7. Amend Article I, Section 1.21 "Extended Term", (as amended by Amendment
No. 5), by deleting the words "ending December 31, 2002", and replacing
them with "ending three (3) years from the effective date of this
Amendment No. 6."
8. Amend Article 2, Scope, by adding the following Section 2.2:
"2.2 Buyer and Seller acknowledge and agree that Buyer's purchase
commitment may be fulfilled by purchases for the use of either
(i) Buyer, and its majority owned subsidiaries, as such are made
known to Seller in writing, with Buyer irrevocably accepting
responsibility for the performance of such subsidiaries, or
(ii) American Cellular Corporation ("ACC") and its majority owned
subsidiaries, as such are made known to Seller in writing, with
Buyer irrevocably accepting responsibility for the performance of
such subsidiaries, so long as Buyer or one of its majority owned
subsidiaries is the manager of ACC. In the event that Buyer, or
one of its such majority owned subsidiaries no longer is the
manager of ACC, and there remains an unfulfilled purchase
commitment under the Agreement, Buyer and Seller agree to assign
and allocate up to thirty three percent (33%) of the unfulfilled
commitment to ACC upon a new agreement between Seller and ACC
being entered into with substantially similar terms as then in
effect between Buyer and Seller, and upon ACC's written
acceptance of such assignment, to reduce Buyer's remaining
commitment by such assigned amount. A current listing of Buyer's
majority owned subsidiaries is provided at Attachment B, which
may be amended, as necessary, upon receipt of written
notification by Buyer."
9. Amend Article 2, Scope, by adding the following Section 2.3:
"2.3A Purchase Order submitted by a subsidiary of Buyer, as listed
in Schedule B to this Amendment No. 6, pursuant to the terms and
conditions of this Agreement, and which Seller has accepted,
constitutes a Contract between the subsidiary ordering and
Seller. As used herein, "Contract" shall mean an agreement for
the supply of Equipment and/or Services between (i) any such
subsidiary of Buyer and (ii) Seller, which comes into effect by
the acceptance of a Purchase Order pursuant to the provisions of
this Agreement, and which Contract shall be governed solely by
the terms and conditions of this Agreement; and each reference
to "Buyer" in this Agreement shall for such Contract mean the
ordering subsidiary. Buyer absolutely, irrevocably and
unconditionally guarantees the performance of every Buyer
subsidiary issuing Purchase Orders and/or otherwise acting
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under this Agreement and any Contract created thereby. Buyer
hereby expressly waives any other diligence, protest or notice
as well as any requirement that Seller exhaust any remedy or
right against such Buyer subsidiary."
10. Amend Annex 1A, "Extended Term Equipment and Services Pricing" of
Schedule A to Amendment No. 2, by adding the "Combined 1900 MHz and
800 MHz Pricing for OK-4 and OK-6 Markets" as Schedule A to this
Amendment No. 6.
11. Amend Schedule A to Amendment No. 5, Section 7.3, "Co-operative
Marketing Funds" as follows:
Delete Section 7.3 in its entirety and replace it with:
"7.3 CO-OPERATIVE MARKING FUNDS
7.3.1 For the purposes of this Section 7.3 only, beginning on
Effective Date No. 6, during each period as shown below, and
in consideration of the provision of co-operative marketing
funds by Seller ("Co-op Funds"), as hereinafter described,
Buyer agrees to submit Purchase Orders to Seller for Equipment
for a minimum of $40 million dollars in net Prices as set forth
in Amendment No. 5 for each calendar year, beginning on
Effective Date No. 6. Seller will submit Co-op Fund payments
based on the following schedule:
<TABLE>
<S> <C>
Period 1: Co-Op Funds Available
---------------------
Payment #1: (January 15, 2001) $1.5M
Payment #2: (April 15, 2001) $1.5M
Period 2:
Payment #3: (January 15, 2002) $1.5M
Payment #4: (April 15, 2002) $1.5M
Period 3:
Payment #5: (January 15, 2003) $1.5M
Payment #6: (April 15, 2003) $1.5M
</TABLE>
7.3.2 In the event Buyer does not fulfill each of its $40M per
calendar year commitments with Seller, as calculated from
Effective Date No. 6, Buyer will refund the amount of Co-op
Funds relative to the percentage of commitment not met, upon
Seller's request. Buyer shall take delivery of all Equipment
purchased in any period within twelve (12) months of Seller's
receipt of Buyer's Purchase Order therefore.
7.3.3 The total amount of Co-op Funds that Seller shall be obligated
to provide under this Agreement shall not exceed a total of three
million dollars ($3,000,000) for any designated period. Buyer
shall use all Co-op Funds
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solely for Buyer's marketing and/or advertising wherein Seller's
Equipment is featured and/or referenced.
7.3.4 As a condition to Seller providing Buyer with applicable Co-op
Funds, as set forth above, Buyer shall provide Seller with the
following: (i) payment in full for any invoices issued by Seller
for Purchase Orders received and accepted during the applicable
period which have become due; (ii) a written, detailed
description of Buyer's marketing and/or advertising plan for the
period immediately following the period used to calculate such
applicable Co-operative Marketing Funds; and (iii) a written
request for payment of such previously earned Co-operative
Marketing Funds."
12. Upon receipt by Seller of Buyer's irrevocable Purchase Order(s) for
the Equipment comprising the OK-4 and OK-6 1900 MHz and 800 MHz
Equipment, as provided at Schedule A to this Amendment No. 6, and upon
Seller receiving Buyer's proposal for the use of additional Co-op
Funds, Seller will pay Buyer an additional two million dollars ($2
million) in Co-op Funds over and above those provided for in Article 11
above, of this Amendment No. 6. Buyer will be required to notify Seller
three (3) weeks in advance of the desired payment date.
13. Except as specifically modified by Amendment Nos. 1 through 5, and
this Amendment No. 6, the Agreement in all other respects shall
continue in full force and effect.
IN WITNESS WHEREOF, the parties have caused this Amendment No. 6 to be signed
by their duly authorized representatives and effective as of the date first
set forth above.
DOBSON COMMUNICATIONS NORTEL NETWORKS INC.
CORPORATION
By: By:
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Name: G. Edward Evans Name: Tonya L. Lowe
Title: President & COO Title: Vice President, Marketing Operations
Date: 6-30-00 Date: 3/30/00
