SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 5, 1996 (June 5, 1996)
-------------------------------
NEXTEL COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-19656 36-3939651
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
201 ROUTE 17 NORTH, RUTHERFORD, NJ 07070
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (201) 438-1400
-----------------------------
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
ITEM 5. OTHER EVENTS.
Nextel Communications, Inc. ("Nextel") and Motorola, Inc. ("Motorola")
have entered into Amendment 004 to Enhanced Specialized Mobile Radio System
Purchase Agreement (the "Fourth Amendment"), which amends the existing equipment
purchase agreements between Nextel and Motorola first entered into in 1991 (as
amended, the "Equipment Purchase Agreements"). The Fourth Amendment establishes
payment terms for all purchases made by Nextel under the Equipment Purchase
Agreements and confirms certain warranty coverages and commencement dates for
system infrastructure equipment and software. The Fourth Amendment also provides
assurances by Motorola regarding access to vendor financing by Nextel for
purchases of Motorola equipment under the Equipment Purchase Agreements. A copy
of the Fourth Amendment is attached to this Current Report as Exhibit 99.1,
which is incorporated herein by reference, and the description contained herein
is qualified in its entirety by reference thereto.
Nextel and Motorola have reached an understanding regarding certain
basic terms of the financing arrangements expected to be associated with the
Company's nationwide deployment of its advanced mobile communications systems
employing digital technology ("Digital Mobile" networks). Nextel and Motorola
have agreed in principle to make the existing financing facility totaling
$685,000,000, previously extended by Motorola to Nextel, available to Nextel for
purchases on a nationwide basis. The existing financing facility is currently
available for purchases in selected Nextel markets. The expanded financing
availability would be paired with an expansion of the collateral pool securing
the financing facility to encompass Nextel's nationwide Digital Mobile networks.
Motorola has agreed to share this expanded collateral pool ratably, with other
prospective lenders who may provide financing to Nextel in the future, up to a
maximum of $2,000,000,000. Nextel's public indentures contain provisions that
may operate to limit Nextel's ability to incur debt beyond certain amounts,
characterized as "permitted debt" under such indentures. The parties contemplate
negotiating and entering into a definitive agreement implementing the concepts
and approach summarized herein.
On June 17, 1996, Nextel announced that it had placed an order of more
than $100,000,000 for Motorola's enhanced iDEN infrastructure equipment and
handsets. The equipment order was described in a Press Release issued by Nextel
on June 17, 1996, a copy of which is attached to this Current Report as Exhibit
99.2 and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(A) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
Not applicable.
(B) PRO FORMA FINANCIAL INFORMATION.
Not applicable.
(C) EXHIBITS.
Exhibit No. Exhibit Description
99.1 - Amendment 004 to Enhanced Specialized Mobile Radio System
Purchase Agreement, dated as of April 28, 1996, between
Nextel Communications, Inc. and Motorola, Inc.*
99.2 - Press Release issued June 17, 1996.
------------
* Confidential portions of this exhibit have been omitted and
filed separately with the Securities and Exchange Commission.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NEXTEL COMMUNICATIONS, INC.
Date: July 5, 1996 By: THOMAS J. SIDMAN
----------------------------------
Thomas J. Sidman
Vice President and General Counsel
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit Description
99.1 - Amendment 004 to Enhanced Specialized Mobile Radio System Purchase
Agreement, dated as of April 28, 1996, between Nextel
Communications, Inc. and Motorola, Inc.*
99.2 - Press Release issued June 17, 1996.
- ------------
* Confidential portions of this exhibit have been omitted and filed separately
with the Securities and Exchange Commission.
AMENDMENT 004
TO
ENHANCED SPECIALIZED MOBILE RADIO SYSTEM
PURCHASE AGREEMENT
BETWEEN
MOTOROLA, INC.
AND
NEXTEL COMMUNICATIONS, INC.
This Amendment, dated as of the 28th day of April, 1996 is between Motorola,
Inc., a Delaware Corporation ("Motorola"), and Nextel Communications, Inc., a
Delaware Corporation ("Nextel"), and amends the Enhanced Specialized Mobile
Radio System Equipment Purchase Agreement dated as of November 4, 1991 as
heretofore amended ("Agreement").
BACKGROUND
WHEREAS, Nextel and Motorola wish to confirm that the definition of the terms
"Conditional Acceptance" and "Final Acceptance" (i) for purposes of the Original
Markets (as defined herein) shall be as set forth in Amendment 003 (as defined
below) and (ii) for all other purposes, shall be as set forth in this Amendment;
WHEREAS, Nextel and Motorola desire to add and/or change certain defined terms
used in the Agreement, as amended hereby, including, without limitation, CSO,
MSO, RSO, system and system expansion as defined herein, Other Equipment, Other
Services, Other Software, ATP-Conditional Acceptance and ATP-Final Acceptance;
WHEREAS, Nextel and Motorola desire to establish payment terms for all purchases
made by Nextel under the Agreement, as amended hereby, to confirm certain
warranty coverages (including commencement dates) for system infrastructure
equipment and software, and also to confirm the relationship intended by the
parties regarding assurance for Nextel of access to vendor financing for the
purchase of Motorola equipment on or after the date hereof in respect of
purchases made by Nextel under the Agreement, as amended hereby.
NOW THEREFORE, in consideration of their mutual promises the parties agree as
follows.
EFFECTIVE DATE AND TERM
This Amendment 004 shall become effective on April 28, 1996. The Agreement,
including the Appendices and Exhibits incorporated therein by reference shall
remain in full force and effect except to the extent expressly amended hereby.
APPENDICES
The Appendices to this Amendment are incorporated herein by reference as
follows:
Appendix I: Systems and System Expansions Governed by the Terms
and Conditions of the Agreement, as amended by Amendment
003, and Their Corresponding Conditional and Final
Acceptance Dates, dated April 28, 1996.
Appendix II: Motorola/Nextel Payment Terms Amendment 003 to the
Enhanced Specialized Mobile Radio System Purchase
Agreement dated as of ***.
Appendix III: Systems and System Expansions that achieved Conditional
and/or Final Acceptance in the month of ***
and their corresponding Warranty Start Dates, dated
April 28, 1996.
Appendix IV: System and System Expansion Acceptance Criteria, dated
April 28, 1996.
Appendix V: Standard Minimum Equipment Delivery Times, dated April
28, 1996.
Appendix VI: Implementation and Redeployment Schedule Signatories,
dated April 28, 1996.
OPERATIONAL UNDERSTANDINGS
The providing by Nextel of digital wireless communications to meet the changing
market needs in a given Area requires that the make up of the equipment and/or
services designated for, and located in that Area, be ongoing and continually
enhanced, such that Nextel has the opportunity to meet its continuing business
goals. These understandings are not intended to modify, expand, or change, in
any way, the warranties provided under the Agreement, as amended from time to
time.
In order to support the goals of Nextel in a given Area, a series of projects
must be implemented from time to time as required. These projects will range in
scope from the construction and installation of a grouping of equipment,
hardware, and software to allow Nextel to provide initial digital wireless
communication services in an Area, to enhancements and expansion of that initial
grouping, to the procurement and provision of stand alone equipment, software,
and services.
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
Projects in a given Area are separate and distinct, although they may be subject
to adjustments or revisions as contemplated herein prior to completion, provided
that such adjustments or revisions do not affect the Implementation Schedule.
Such projects may be based on, among other things, the amount of Motorola
provided services included and the relative technical complexity of the project.
They are categorized into system and system expansions of the types defined
herein and into the definitions of "Other Equipment", "Other Services" and
"Other Software", stated below.
Each system or system expansion project undertaken for a given Area shall be
governed by a specific beginning and completion date. Such projects shall
include the agreement by both parties as to the project requirements, make up of
goods and/or services to be provided, and a specific implementation schedule
defining in detail the required activities of both Motorola and Nextel, and the
time frame in which it is anticipated in the Implementation Schedule that they
will be accomplished.
Each project may stand alone or may build on previous projects in a given Area.
All such projects in a particular Area, taken in total, represent the state and
level of Nextel capabilities to provide integrated digital communication
services in such Area at a given point in time.
I. PURCHASES GOVERNED BY THE TERMS AND CONDITIONS OF AMENDMENT OO3
1.1 The *** (such market
areas being referred to collectively as the "Original Markets") Change Orders
specifically set forth in Appendix I shall be governed by the definitions of
Conditional and Final Acceptance and the Payment Terms as set forth in that
certain Amendment 003 to Enhanced Specialized Mobile Radio System Purchase
Agreement dated as of *** , a true and correct copy, together with the
attachments thereto, is annexed as Appendix II to this Amendment ("Amendment
003").
1.2 The systems and system expansions in ***
have achieved Conditional and Final Acceptance in accordance
with the requirements as set forth in Amendment 003 as shown in Appendix I. The
systems and system expansions (if any) in *** and the related Change Orders
specifically set forth in Appendix I shall be deemed to have achieved the
requirements of Conditional and Final Acceptance as set forth in Amendment 003
on the respective dates shown in Appendix I.
The hardware and software warranty period for hardware and software included in
any of the Change Orders and related to any of the systems and system expansions
in *** commenced as of the date of
Conditional Acceptance, as shown in Appendix I.
The hardware warranty period for hardware included in any of the Change Orders
and related to any of the systems in *** commenced as of the
date of completion of the Acceptance Test Plan (ATP). The software warranty for
software included in any of the Change Orders and related to any of the systems
in *** commenced as of the date of Conditional Acceptance, as
shown in Appendix I. The hardware warranty period for hardware included in any
of the Change Orders related to the system in *** commenced as of *** , as
shown in Appendix I. The software warranty period for software included in any
of the Change Orders related to the system in *** commenced as of *** ,
as shown on Appendix I.
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
The final invoice associated with Final Acceptance for the systems in ***
have been submitted to Nextel on *** .
Payments shall be due net thirty (30) days from the date of invoice. However,
payment of such invoices are subject to the availability of financing as
provided in Article VII herein.
1.3 Except as provided for above, the following portions of Amendment 003 -
Section 1.0, "Systems Covered by Extended Payment Terms, Section 2.0, "Payment
Terms", Section 3.0, "Conditional and Final Acceptance", and Section 4.0,
"Warranty" - each are hereby superseded.
II. PURCHASES GOVERNED BY AMENDMENT 004
2.1 Except for the Change Orders specifically set forth in Appendix I, which
shall be governed and controlled exclusively as provided in Article 1 above, the
Terms and Conditions as set forth in this Amendment 004 shall apply, as of the
Effective Date, to all systems and system expansions of the type defined herein,
as well as Other Equipment, Other Services, and Other Software under the
Agreement, as amended hereby.
III. DEFINITIONS
Capitalized terms used herein and not otherwise defined in this Amendment shall
have the meanings ascribed to them in the Agreement.
3.1 The term "Conditional and Final Acceptance" as set forth in the Definitions
Section of the Agreement is deleted and replaced in its entirety by the
following defined terms:
3.1.1 "ATP-Conditional Acceptance" for a system or system expansion shall
occur at the completion of Conditional ATP as defined in Appendix IV to
Amendment 004 (or such modifications or replacements of Appendix IV,
either with reference to a particular instance or set of circumstances or
generally, as Nextel and Motorola may mutually agree upon from time to
time in writing). For the purposes of this Amendment, those Systems or
System Expansions that, prior to the Effective Date of this Amendment,
have passed ATP, shall be deemed to have achieved ATP-Conditional
Acceptance.
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
3.1.2 The parties acknowledge that, prior to or contemporaneous with the
periods during which testing to establish ATP-Conditional Acceptance is
being conducted, paying customers will be using the relevant system or
system expansion to assist Nextel in identifying and performing necessary
corrections or adjustments involving the system or system expansion, to
provide feedback on system or system expansion utilization, and otherwise
to serve as a test population and focus group in preparation for a
full-scale commercial launch of the relevant system or system expansion.
3.1.2.1 Therefore, until the Scheduled Completion Date (as defined
below) of ATP-Conditional Acceptance, Motorola shall perform
ATP-Conditional Acceptance, testing procedures, subject to and
predicated on the following:
1) Nextel shall; i) place the system or system expansion in
the appropriate condition (i.e. system/system expansion
lockdown); necessary to permit such testing to be conducted at
all reasonable times in accordance with a schedule to be
mutually agreed to by the parties; ii) make the equipment,
data, and facilities required for completion of
ATP-Conditional Acceptance testing available to Motorola in
accordance with such approved schedule; and iii) provide free
access, ingress and egress to Nextel facilities as reasonably
required to perform ATP-Conditional Acceptance in accordance
with such approved schedule;
2) The criteria used to achieve ATP-Conditional Acceptance
shall include only that criteria as defined in Appendix IV to
Amendment 004 of the Agreement, except as Nextel and Motorola
otherwise mutually agree; and
3) The conduct of ATP-Conditional Acceptance testing
procedures shall not preclude Nextel from initiating limited
commercial use on the relevant system or system expansion
prior to the relevant Scheduled Completion Date, so long as
such limited commercial use does not involve either a number
of subscriber units or a service reliability commitment that
would be expected to result in delay and/or expense to
Motorola in conducting and/or completing ATP-Conditional
Acceptance testing procedures in accordance with the relevant
Scheduled Completion Date.
3.1.2.2 In the event that the completion of ATP-Conditional
Acceptance with respect to a system or system expansion is delayed
beyond the relevant Scheduled Completion Date of ATP-Conditional
Acceptance and such delays are the result of Nextel's actions, or
failure to act or is due to circumstances within its reasonable
control, including but not limited to, the loading of subscriber
units onto the system or system expansion in excess of a level
consistent with or having a service reliability commitment
inconsistent with, the limited commercial use anticipated to occur
prior to achievement of ATP Conditional Acceptance, then Motorola
shall be granted an additional *** grace period after
such Scheduled Completion Date in which to complete ATP-Conditional
Acceptance. During this *** period, Nextel and
Motorola each shall take actions necessary for, or refrain from
taking actions detrimental to the conduct and completion of
ATP-Conditional Acceptance testing procedures, subject to and
predicated on the requirements set forth in Section 3.1.2.1 above.
3.1.2.2.1 In the event that at the end of such ***
grace period ATP-Conditional Acceptance of the relevant system
or system has not been achieved, and such occurrence is the
result of Nextel's actions, or failure to act or is due to
circumstances within its reasonable control, then
ATP-Conditional Acceptance shall be deemed granted at the
completion of the *** grace period.
3.1.2.3 In the event that the completion of ATP-Conditional
Acceptance with respect to a system or system expansion is delayed
beyond the scheduled completion date of ATP-Conditional Acceptance
and such delays are the result of Motorola's actions or failures to
act or is due to circumstances within Motorola's reasonable control,
then as of the Scheduled Completion Date of ATP-Conditional
Acceptance, Motorola shall be granted an additional ***
grace period in which to complete ATP-Conditional Acceptance. During
this *** grace period, Nextel and Motorola each shall
take actions necessary for, or refrain from taking actions
detrimental to the conduct and completion of ATP-Conditional
Acceptance testing procedures, subject to and predicated on the
requirements set forth in Section 3.1.2.1 above.
3.1.2.3.1 In the event that at the end of such ***
grace period ATP-Conditional Acceptance of the relevant system
or system expansion has not been achieved and such occurrence
is the result of Motorola's actions, or failure to act or is
due to circumstances within Motorola's reasonable control,
Motorola shall be permitted to continue to perform
ATP-Conditional Acceptance, subject to the requirements set
forth in Section 3.1.2.1 above, with the scheduling, during
off peak hours as a minimum, of such access times and related
activities to be proposed by Nextel, subject to Motorola's
approval (which shall not be unreasonably withheld).
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
3.1.2.4 For purposes of this Article 3,
The term "Scheduled Completion Date" shall mean the date scheduled
for achievement of ATP-Conditional Acceptance as reflected in the
original Implementation Schedule in effect with respect to a
particular system or system expansion, that Implementation Schedule
as modified only by (i) delays in such scheduled date that are not
caused by action or failures to act of either or both of Nextel or
Motorola or circumstances within the reasonable control of either of
them and (ii) such other delays, regardless of cause, that Nextel
and Motorola mutually agree in writing will result in an intended
extension of the relevant Scheduled Completion Date (it being
understood that adoption of a new Implementation Schedule reflecting
such delays, unless it expressly evidences an intention to extend
such Scheduled Completion Date will not satisfy this clause (ii).
3.1.2.5 "ATP-Final Acceptance" for a system or system expansion shall
occur upon (i) substantially all Punchlist items have been resolved and
(ii) completion of the Final ATP as defined in Appendix IV to Amendment
004 (or such modifications or replacements of Appendix IV either with
reference to a particular instance or set of circumstances or generally,
as Nextel and Motorola may mutually agree upon from time to time in
writing).
3.2 The Agreement is hereby amended by attaching thereto, as new Appendix IV,
respectively, the version of Appendix IV attached hereto and by substituting in
the Agreement the term "ATP - Conditional Acceptance" for the term "Conditional
Acceptance" wherever it appears and by substituting the term "ATP - Final
Acceptance" for the term "Final Acceptance" wherever it appears.
3.3 The term "System" as set forth in the Definitions Section of the Agreement
is hereby deleted and replaced in its entirety by the definitions stated below:
3.3.1. iDEN 6:1 System
An "iDEN 6:1 System" shall be defined as a specified grouping of
equipment, software and related services ordered by Nextel from Motorola
for the construction of a Digital Mobile network to provide mobile
integrated services for an Area utilizing the basic iDEN technology
platform, including the six-time-slot TDMA technology.
The specified grouping shall be ordered, delivered, installed and
acceptance tested in accordance with the defined Preliminary and/or
Detailed Implementation Schedule(s) mutually agreed to between the
parties, and shall include all of the following items, that are scheduled
for delivery to Nextel prior to the commencement date of acceptance
testing defined in the relevant Implementation Schedule for such iDEN 6:1
System:
a) FNE Equipment (to include, as appropriate, MSO, CSO or RSO
equipment and/or modifications and the related EBTS sites and
equipment, to the extent ordered for installation in and reasonably
identified with the Digital Mobile network to be constructed in a
specific Area), software and other products supplied by or through
Motorola, excluding Subscriber Units, essential to compliance with
the Performance Specifications or otherwise reasonably necessary to
the achievement of ATP-Conditional Acceptance by the relevant iDEN
6:1 System; and
b) Motorola supplied services relating to the above equipment,
software and other products, including but not limited to:
MSO, RSO or CSO install, as appropriate to the FNE Equipment
ordered;
MSO, RSO or CSO integration, optimization and ATP activities
(except those to be performed at Motorola cost), as
appropriate to the FNE Equipment ordered;
Motorola provided engineering and Program Management which
Motorola furnishes in order to perform their installation,
integration, optimizations and ATP activities of a MSO, RSO or
CSO;
EBTS integration and optimization services and the Motorola
provided engineering and Program Management which Motorola
furnishes in order to perform their integration of EBTS sites
(except those to be performed at Motorola cost).
The parties acknowledge that Motorola must supply services as defined in
sub-paragraph (b) above, in conjunction with a grouping of equipment and
software defined in sub-paragraph (a) above, in order to be defined as an
iDEN 6:1 System.
The parties acknowledge that an iDEN 6:1 System may be subject to
alteration or revision during the design and/or build out phase to address
particular opportunities or difficulties reasonably expected to be
encountered in the construction of a Digital Mobile Network. The parties
further acknowledge that so long as such alterations, revisions or similar
matters do not adversely affect the project scope and/or schedule, such
alterations, revisions or similar matters (together with related
equipment, service and software orders or change orders) shall be deemed
to constitute the originally defined and specified iDEN 6:1 System in
question.
The parties also recognize that Nextel may procure services other than
those outlined in sub-paragraph (b) above, from qualified third parties or
from within Nextel's employee ranks, and that such internal or third party
service arrangements, provided in connection with Motorola supplied
equipment, software and related services, are consistent with the
definition of an iDEN 6:1 System provided that such services comply with
Motorola published installation and engineering standards.
If the acceptance testing of such iDEN 6:1 System does not result in
achievement of ATP-Conditional Acceptance, and if such failure is the
result of Motorola's actions or failure to act or is due to circumstances
within its reasonable control, then the additional items of equipment,
software and related services which are required to be provided by
Motorola for such iDEN 6:1 System to achieve ATP-Conditional Acceptance
also shall be deemed to be a part of, and governed by the terms of the
originally defined and specified iDEN 6:1 System in question.
3.3.2 First Stage Reconfigured iDEN 3:1 System
A First Stage Reconfigured iDEN 3:1 System shall be defined in the same
manner and according to the same principles and intent as an iDEN 6:1
System except that it shall utilize and incorporate the First Stage
Reconfigured iDEN technology platform defined in the *** .
3.3.3 Stage 1A Reconfigured iDEN 3:1 System
A Stage 1A Reconfigured iDEN 3:1 System shall be defined in the same
manner and according to the same principles and intent as an iDEN 6:1
System except that it shall utilize and incorporate the Stage 1A
Reconfigured iDEN technology platform, defined in the *** .
3.3.4 iDEN 6:1 System Expansion
An "iDEN 6:1 System Expansion" shall be defined as a specified grouping of
equipment, software and related services ordered by Nextel from Motorola
utilizing the basic iDEN technology platform, and purchased as a single
order or a group of related orders which are received by Motorola from
Nextel within a *** period from the date on which Motorola
received the first of such related orders from Nextel, unless otherwise
mutually agreed to, and having an aggregate purchase price of at least
$*** . The specific grouping shall be ordered for the modification of
the existing design of, or any increase in the capabilities or capacities
of, and constructed in, around, or adjacent to, an existing iDEN 6:1
System.
The specified grouping shall be ordered, delivered, installed and
acceptance tested in accordance with the defined Preliminary and/or
Detailed Implementation Schedule(s) mutually agreed to between the
parties, and shall include all of the following items, that are scheduled
for delivery to Nextel prior to the commencement date of acceptance
testing defined in the relevant Implementation Schedule for such iDEN 6:1
System Expansion:
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
a) FNE Equipment (to include, as appropriate, MSO, CSO or RSO
equipment and/or modifications and the related EBTS sites and
equipment, to the extent ordered for installation in and reasonably
identified with the Digital Mobile network that is the subject of
such iDEN 6:1 System Expansion), software and other products
supplied by or through Motorola, excluding Subscriber units,
essential to compliance with the Performance Specifications or
otherwise reasonably necessary to the achievement of ATP -
Conditional Acceptance by the relevant iDEN 6:1 System Expansion;
and
b) Motorola supplied services relating to the above equipment,
software and other products, including but not limited to:
MSO, RSO or CSO install, as appropriate to the FNE Equipment
ordered;
MSO, RSO or CSO integration, optimization and ATP activities,
(except those to be performed at Motorola cost), as
appropriate to the FNE Equipment ordered;
Motorola provided engineering and Program Management which
Motorola furnishes in order to perform their installation,
integration, optimizations and ATP activities of a MSO, RSO or
CSO;
EBTS integration and optimization services and the Motorola
provided engineering and Program Management which Motorola
furnishes in order to perform their integration of EBTS sites
(except those to be performed at Motorola cost).
The parties acknowledge that Motorola must supply services as defined in
sub-paragraph (b) above, in conjunction with a grouping of equipment and
software defined in sub-paragraph (a) above, in order to be defined as an
iDEN 6:1 System Expansion.
The parties acknowledge that an iDEN 6:1 System Expansion may be subject
to alteration or revision during the design and/or build out phase to
address particular opportunities or difficulties reasonably expected to be
encountered in the construction of a Digital Mobile Network. The parties
further acknowledge that so long as such alterations, revisions or similar
matters do not adversely affect the project scope and/or schedule, such
alterations, revisions or similar matters (together with related
equipment, service and software orders or change orders) shall be deemed
to constitute the originally defined and specified iDEN 6:1 System
Expansion in question.
The parties also recognize that Nextel may procure services other than
those outlined in sub-paragraph (b) above, from qualified third parties or
from within Nextel's employee ranks, and that such internal or third party
service arrangements, provided in connection with Motorola supplied
equipment, software and related services, are consistent with the
definition of an iDEN 6:1 System Expansion provided that such services
comply with Motorola published installation and engineering standards.
If the acceptance testing of such iDEN 6:1 System Expansion does not
result in achievement of ATP-Conditional Acceptance, and if such failure
is the result of Motorola's actions or failure to act or is due to
circumstances within its reasonable control, then the additional items of
equipment, software and related services which are required to be provided
by Motorola for such iDEN 6:1 System Expansion to achieve ATP-Conditional
Acceptance also shall be deemed to be a part of, and governed by the terms
of the originally defined and specified iDEN 6:1 System Expansion in
question.
3.3.5 iDEN 6:1 to First Stage Reconfigured iDEN 3:1 System Expansion
An iDEN 6:1 to First Stage Reconfigured iDEN 3:1 System Expansion shall be
defined in the same manner and according to the same principles and intent
as an iDEN 6:1 System Expansion except that it shall utilize and
incorporate the First Stage Reconfigured iDEN technology platform defined
in the *** .
This expansion shall include the provision by Motorola of the software
upgrades as defined in the *** and as priced under the Agreement, to allow
the system to be upgraded from the basic iDEN platform to First Stage
Reconfigured iDEN.
3.3.6 First Stage to Stage 1A Reconfigured iDEN 3:1 System Expansion
A First Stage to Stage 1A Reconfigured iDEN 3:1 System Expansion shall be
defined in the same manner and according to the same principles and intent
as an iDEN 6:1 System Expansion except that it shall utilize and
incorporate the Stage 1A Reconfigured iDEN technology platform defined in
the *** .
This expansion shall include the provision by Motorola of the software
upgrades as defined in the *** and as priced under the Agreement, to allow
the system to be upgraded from the First Stage Reconfigured iDEN platform
to Stage 1A Reconfigured iDEN.
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
3.3.7 iDEN 6:1 to Stage 1A Reconfigured iDEN 3:1 System Expansion
An iDEN 6:1 to Stage 1A Reconfigured iDEN 3:1 System Expansion shall be
defined in the same manner and in accordance with the same principles and
intent as an iDEN 6:1 System Expansion except that it shall utilize and
incorporate the Stage 1A Reconfigured iDEN technology platform defined in
the *** .
This expansion shall include the provision by Motorola of the software
upgrades as defined in the *** and as priced under the Agreement, to allow
the system to be upgraded from the basic iDEN platform to Stage 1A
Reconfigured iDEN.
3.3.8 First Stage Reconfigured iDEN 3:1 System Expansion
A First Stage Reconfigured iDEN 3:1 System Expansion shall be defined in
the same manner and in accordance with the same principles and intent as
an iDEN 6:1 System Expansion except that it shall utilize the existing
First Stage Reconfigured iDEN technology platform previously incorporated
into the system being expanded.
3.3.9 Stage 1A Reconfigured iDEN 3:1 System Expansion
A Stage 1A Reconfigured iDEN 3:1 System Expansion shall be defined in the
same manner and in accordance with the same principles and intent as an
iDEN 6:1 System Expansion except that it shall utilize the existing Stage
1A Reconfigured iDEN technology platform previously incorporated into the
system being expanded.
3.4 The following new defined terms are hereby added to the Definitions Section
of the Agreement:
CSO
A CSO shall be defined as a Collocated Switching Office that consists of
the DAP, MPS, BSC, and OMC equipment that is generally collocated with,
and shares an ESMR Switch (with or without an HLR).
Implementation Schedule
An Implementation Schedule is a binding written agreement between the
parties and is defined as that schedule, mutually agreed to between
Motorola and Nextel, defining the set of Motorola and Nextel tasks and
their associated time frames required to implement a specific system or
system expansion of the types defined herein. Said schedule shall consist
of a Preliminary Implementation Schedule except as superseded by a
Detailed Implementation Schedule. The Preliminary Implementation Schedule
and Detailed Implementation Schedule shall be developed and updated in
accordance with the requirements as defined in Article IV of Amendment.
004. The Preliminary Implementation Schedule shall define the project
start date, major project milestone completion dates, equipment and
software delivery dates, and the project acceptance and completion date.
The contents of the Detailed Implementation Schedule shall include to the
extent appropriate and (based on the complexity of the system or system
expansion being implemented) the required start and end dates for, but not
limited to: system design and review, site acquisition, site preparation,
telephone (T1) service, Nextel provided services, Motorola provided
services, network planning, ordering of equipment, delivery of equipment,
installation and optimization, acceptance testing, and project completion.
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
MSO
An MSO shall be defined as a Mobile Switching Office that consists of the
ESMR Switch (with or without an HLR), and the DAP, MPS, BSC, and OMC
equipment.
Non Site Equipment
Non-Site Equipment is defined as any Motorola manufactured and third party
manufactured equipment, supplied through Motorola, that is integral to the
operation of system and/or system expansion, including but not limited to,
the MSC, SMS, DAP, MPS, BSC, and OMC, and is located at an MSO, CSO, or
RSO complex.
Other Equipment
Other Equipment shall be defined as any products supplied by or through
Motorola under the Agreement that is not included as part of a system or
system expansion of the types defined herein, excluding System
Engineering, Other Software, Other Services, and Subscriber Units.
Other Services
Other Services shall be defined as services supplied by Motorola under the
Agreement that are not included as part of a system or system expansion of
the types defined herein.
Other Software
Other Software shall be defined as software supplied by or through
Motorola under the Agreement that is not included as part of a system or
system expansion of the types defined herein, excluding System Engineering
and Other Services.
RSO
An RSO shall be defined as a Remote Switching Office that consists of the
DAP, MPS, BSC, and OMC equipment that is generally remotely located to,
but shares an existing ESMR Switch (with or without an HLR).
Site Equipment
Site Equipment is defined as Motorola manufactured EBTS equipment and
third party manufactured equipment, supplied through Motorola that is
associated with and integral to the operation of an EBTS Site.
IV. IMPLEMENTATION
4.1 The Preliminary Implementation Schedule associated with a particular system
or system expansion of the types defined in the Agreement shall be developed and
prepared by Nextel, taking in account the standard minimum equipment delivery
times as stated in Appendix V to this Amendment 004 (following good faith
consultation with Motorola) and shall be submitted by Nextel to Motorola
together with the initial order submitted by Nextel to Motorola that constitutes
all or part of such system or system expansion of the types defined herein.
Motorola's acceptance of such order as evidenced by a Motorola order
acknowledgment shall conclusively signify Motorola's agreement to such
Preliminary Implementation Schedule.
4.2 Motorola and Nextel shall, within *** of the date of Motorola's
acceptance of an order of a system or system expansion of the types defined in
the Agreement and agreement to the related Preliminary Implementation Schedule,
mutually agree in writing to a Detailed Implementation Schedule applicable to
said system or system expansion, provided that to the extent the parties are
unable to reach mutual agreement on all or part of such a Detailed
Implementation schedule, the relevant provisions of the Preliminary
Implementation Schedule shall remain in effect and control.
4.3 The Implementation Schedule shall be a binding written commitment on the
part of both parties and shall be mutually revised from time to time, as
required. All agreed to changes or modifications to the project scope and/or
schedule shall be reflected in writing and incorporated into a revised
Implementation Schedule. The revised Implementation Schedule shall be dated and
shall incorporate all project additions, deletions, extensions, and compressions
incorporated into the project since the previously agreed to Implementation
schedule. In the event that the parties fail to agree on the terms of the
requested changes or modifications then the terms and scope of the
Implementation Schedule in force at the time of the request, shall govern.
4.4 To be valid and effective, each Detailed Implementation Schedule and revised
Implementation Schedule must be approved in writing (i) for Nextel, by any of
the persons identified in the Schedule captioned "Equipment Agreement -
Authorized Nextel Signatories" and delivered to Motorola, and (ii) for Motorola,
by any of the persons identified in the Schedule captioned "Equipment Agreement
- - Authorized Motorola Signatories" and delivered to Nextel. Both Schedules are
contained in Appendix VI, "Implementation and Redeployment Schedule
Signatories", dated April 28, 1996, to this Amendment 004. It is understood that
Nextel and/or Motorola may add, delete or substitute persons to their respective
Schedules by delivering a revised written Schedule, reflecting such additions,
deletions or substitutions, to the other party (so long as such revised Schedule
is approved by any of the persons on the prior version thereof).
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
V. REDEPLOYMENT OF EQUIPMENT
Nextel and Motorola acknowledge the desirability of allowing Nextel sufficient
flexibility to deploy equipment where needed to meet its legitimate business
needs, and for Motorola to anticipate predictable payment schedules.
In furtherance of such objectives, the parties agree as follows:
5.1 When submitting an original order to Motorola, Nextel shall indicate the
existing or proposed system or system expansion and corresponding Digital Mobile
network and Area to which such order relates;
5.1.1 If Nextel wishes to redeploy any equipment, software or other
products ordered from Motorola under the Agreement ("Ordered Items") and,
at or prior to the time of such proposed redeployment, Nextel has fully
paid the purchase price of such Ordered Items to Motorola, then (a) so
long as such Ordered Items are not Financed Items (as defined in Section
5.3.3 below), such redeployment may occur as Nextel shall determine and
(b) in the case of such Ordered Items that are Financed Items, subject to
compliance with Section 5.3.2 below, such redeployment may occur as Nextel
shall determine, and in either such case, the warranty terms applicable to
such Ordered Items shall be the same as those applicable to such Ordered
Items prior to such proposed redeployment.
5.2 In all circumstances to which Section 5.1.1 is not applicable Nextel shall
have the flexibility, upon the receipt of written notice by Motorola, to
redeploy Ordered Items in accordance with and subject to the following:
5.2.1 Non-Site Equipment Redeployment
5.2.1.1 Other Equipment to System/System Expansion
In the event, the relevant Ordered Items being redeployed constitute
Non-Site Equipment and were originally ordered as Other Equipment or
Other Software, then such Ordered Items may be redeployed by Nextel
as indicated in the relevant written redeployment notice, upon or
after Motorola's receipt of such written notice. Payment and
warranty terms of such Ordered Items shall be governed under the
payment and warranty terms for Other Equipment and/or Other
Software, contained herein, as originally ordered and the original
order shall be deemed retroactively modified to conform to such
indicated redeployment.
5.2.1.2 System/System Expansion to System/System Expansion
In the event the relevant Ordered Items being redeployed constitute
Non-Site Equipment and were originally ordered as part of a system
or system expansion, then, upon receipt by Motorola of a written
redeployment notice Motorola shall give Nextel, as promptly as
reasonably practicable in the circumstances (which Motorola shall
attempt to accomplish within *** ), a written summary in
reasonable detail of those charges and expenses that Motorola
reasonably expects to incur assuming such proposed redeployment
occurs. It is expressly acknowledged and agreed that such charges
and expenses may include (if appropriate in the relevant
circumstances); (i) those arising from Motorola's payment and other
obligations to third party suppliers; (ii) those arising from
required modifications to the warranty terms applicable to such
redeployed Ordered Items and; (iii) those arising from reasonably
anticipated delays or deferrals of payments scheduled to be made
with respect to the original system or system expansion from which
such Ordered Items are to be redeployed. Such charges and expenses
may be reduced or offset, in whole or in part, by factors associated
with such proposed redeployment that may be reasonably expected to
result in benefits to Motorola, which may include (if appropriate in
the relevant circumstances) reductions or avoidance of costs or
increases in the amount, or acceleration of the receipt, of payments
made to Motorola.
Promptly after Nextel's receipt of such written summary from
Motorola, Nextel and Motorola shall commence good faith negotiations
(which in all events shall be pursued for at least *** ) to
attempt to reach mutual agreement on the payment or other
arrangements (to the extent appropriate in the relevant
circumstances ) that should be adopted to make Motorola whole in
light of such proposed redeployment, on the appropriate changes to
be made in accordance with Article IV to the Implementation
Schedules then in effect, both in the system or system expansion
from which and to which such Ordered Items are proposed to be
redeployed, and on such other matters (if any) that may be
implicated by such proposed redeployment.
To the extent such mutual agreement is reached, the topics covered
thereby shall be governed by the terms of such mutual agreement,
which the parties shall promptly reduce to writing and which shall
be considered an amendment that supersedes any different or
conflicting terms of the Agreement that otherwise would be
applicable to such redeployment.
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
If Nextel and Motorola have not reached such mutual agreement on all
topics relevant to such proposed redeployment for any reason
(including, without limitation, Nextel's failure to receive the
written summary from Motorola contemplated above) within ***
days after Motorola's receipt of the relevant written redeployment
notice from Nextel then, the parties agree to escalate such
disagreement to; (i) for Motorola: the Vice President and General
Manager, iDEN World Wide Infrastructure Division and; (ii) for
Nextel: the Chief Operating Officer, or their respective designee,
for final negotiation and resolution (Escalation Procedure).
In the event the parties fail to reach an agreement within ***
of the commencement of this Escalation Procedure,
then, upon receipt by Motorola from Nextel of a written agreement
providing that Nextel shall take such actions with respect to such
proposed redeployment as may subsequently be determined to be
appropriate, either by mutual agreement of the parties or at the
conclusion of the relevant Dispute Resolution (as defined below),
such proposed redeployment may then occur and all topics relating
thereto as to which the parties have not reached mutual agreement
shall thereafter (at the request of either party) be submitted and
resolved in accordance with the process set forth in Section 33,
Disputes and Dispute Resolution, of the Agreement (such process a
"Dispute Resolution"). Upon the conclusion of the relevant Dispute
Resolution, in accordance with Section 33 of the Agreement, each of
the parties shall promptly take such actions (including making any
required payments and entering into any amended Implementation
Plans) as have been found to be appropriate by such Dispute
Resolution.
Unless the parties mutually agree or the relevant Dispute Resolution
should determine otherwise, payments for Ordered Items so redeployed
shall be made in accordance with the system or system expansion
payment terms contained in Section 6.1 below, and warranty shall
commence in accordance with the system or system expansion warranty
terms contained in Section 8.1 below, as these terms apply to the
system or system expansion into which such redeployed Ordered Items
are incorporated.
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
5.2.2 Site Equipment Redeployment
5.2.2.1 Site Equipment Redeployment at least *** Prior to
Scheduled Ship
If a written redeployment notice relating to Ordered Items
constituting Site Equipment is received by Motorola at least ***
before the scheduled date for shipment by Motorola of such Ordered
Items, then such Ordered Items shall be redeployed and payment shall
be made in accordance with the system or system expansion payment
terms contained in Section 6.1 herein , and the warranty terms
applicable to such Ordered Items shall be the system or system
expansion warranty terms contained in Section 8.1 herein, both as
these terms apply to the system or system expansion into which such
redeployed Ordered Items are incorporated.
5.2.2.2 Site Equipment Redeployment Less Than *** Prior to
Scheduled Ship
5.2.2.2.1 If a written redeployment notice relating to Ordered
Items constituting Site Equipment is received by Motorola less
than *** before the scheduled date for shipment by
Motorola of the relevant Ordered Items, and such Ordered Items
were originally ordered as part of a system or system
expansion, then such Ordered Items shall be redeployed and
payment shall be made in accordance with system or system
expansion payment terms contained in Section 6.1 herein, and
the warranty terms applicable to such Ordered Items shall be
the system or system expansion warranty terms contained in
Section 8.1 herein, except that ATP - Conditional Acceptance
with respect to such redeployed Ordered Items shall be deemed
to have occurred and been granted *** after their
original Shipment Date and ATP - Final Acceptance with respect
to such redeployed Ordered Items shall be deemed to have
occurred and been granted *** after their
original Shipment Date (or, in each case, if earlier, the date
on which the system or system expansion incorporating such
redeployed Ordered Items actually achieves ATP - Conditional
Acceptance or ATP - Final Acceptance, as the case may be, but
in no event earlier than the date on which such redeployment
occurs in the case of Ordered Items being redeployed to a
system or system expansion that already has achieved ATP -
Conditional Acceptance and/or ATP - Final Acceptance).
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
5.2.2.2.2 If a written redeployment notice relating to Ordered
Items constituting Site Equipment is received by Motorola,
less than *** before the scheduled date for shipment by
Motorola of the relevant Ordered Items, and such Ordered Items
were originally ordered as Other Equipment and/or Other
Software, then such Ordered Items shall be redeployed and the
payment and warranty terms of such Ordered Items shall be
governed under the payment and warranty terms for Other
Equipment and/or Other Software, contained herein, as
originally ordered and the original order shall be deemed
retroactively modified to conform to such indicated
redeployment.
5.3 Finance Terms of Redeployed Equipment
5.3.1 If such Ordered Items are not Financed Items (as defined below),
then with respect to the "Motorola/Northern Telecom Finance Agreements"
defined below, such Ordered Items may be redeployed from a Digital Mobile
network in any Area to any other Digital Mobile Network in any other Area.
5.3.2 If such Ordered Items are Financed Items (as defined below), then,
with respect to the "Motorola/Northern Telecom Finance Agreements" defined
below, such Ordered Items may be redeployed (1) to any Area as to which
Motorola/Northern Telecom Finance Agreements are in place, so long as the
conditions to borrowing thereunder are then satisfied and sufficient
financing remains available to permit the full purchase price of such
Ordered Items to be financed and (2) in circumstances other than those
described in the preceding clause (1), as consented to by Motorola; and in
either such case, Motorola and Nextel shall take all appropriate action to
re-allocate between or among the affected Areas (or as they otherwise may
agree) the amount of the outstanding borrowings associated with such
redeployed Ordered Items and;
5.3.3 For purposes of this Amendment, the term "Motorola/Northern Telecom
Finance Agreements " means those certain separate Financing and Security
Agreements entered into as of November 1, 1991 by and between Motorola,
Nextel and each of Smart SMR of California, Inc., Smart SMR of New York,
Inc. Smart SMR of Illinois, Inc. and Smart SMR of Texas, Inc.
(collectively, the "Smart SMR Subs"), respectively, the Financing and
Security Agreement entered into as of July 28, 1995 by and between
Motorola, Nextel and OneComm Corporation N.A. and the separate Financing
and Security Agreements entered into as of November 1, 1991 by and between
Northern Telecom Finance Corporation, Nextel and the Smart SMR Subs, in
each case as amended from time to time in accordance with their respective
terms and the term "Financed Items" means Ordered Items that either at the
time of their purchase were acquired with funds provided pursuant to the
Motorola/Northern Telecom Finance Agreements or were acquired initially
for cash and subsequently such initial cash purchases was refinanced with
funds provided pursuant to the Motorola/Northern Telecom Finance
Agreements.
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
5.4 The foregoing provisions of this Article V are not intended to apply to
particular circumstances where the parties have reached, or have indicated an
intention to reach, a separate agreement (such as, by way of example and not
limitation, the special arrangements under discussion between the parties
relating to a potential limited implementation of a Reconfigured iDEN 3:1
System).
VI. PAYMENT TERMS
6.1 Section 8.2 of the Agreement is deleted and replaced in its entirety with
the Payment Terms as defined below:
8.2 Payment Terms
Payment Terms for the systems or system expansions of the types defined
herein, shall be as follows:
*** of total order price upon receipt of order.
*** of total order price upon Equipment shipment, invoiced monthly.
*** of total order price upon achievement of ATP - Conditional
Acceptance of a system or system expansion.
*** of total order price upon achievement of ATP - Final Acceptance
of a system or system expansion.
Notwithstanding the above, if Nextel intentionally delays the
implementation of a system or system expansion of the types defined
herein, then ATP-Conditional Acceptance shall be deemed to be granted
*** after the implementation date set forth in the
Implementation Schedule for such system or system expansion and all
payments associated with ATP-Conditional acceptance shall be due and
payable as of this date. ATP-Final Acceptance shall be deemed to be
granted *** after the the implementation date set forth in
the Implementation Schedule for such system or system expansion and all
payments associated with ATP-Final Acceptance shall be due and payable as
of this date.
Other Equipment Payment Terms shall be as follows:
100% of Other Equipment price upon shipment.
Other Software Payment Terms shall be as follows:
100% of Other Software price upon shipment.
Other Services Payment Terms shall be as follows:
Invoices will be issued monthly for Other Services completed.
All invoices due net thirty (30) days from date of invoice.
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
VII. ACCESS TO FINANCING
Nextel and Motorola agree that, as of the date of this Amendment payment is due
with respect to Conditional and Final Acceptance Certificates signed on ***
for prior purchases made by Nextel under the Agreement. Motorola agrees to make
available (including, if required, waiving any and all terms and conditions that
otherwise would preclude the availability of) sufficient financing under the
equipment financing agreements in place between Motorola and Nextel to enable
Nextel to make all payments with respect to the Conditional and Final Acceptance
Certificates signed on ***, when due and payable to Motorola.
VIII. WARRANTY
8.1 Except with respect to hardware and software warranties relating to Systems
and System Expansions in the Original Markets, which are separately addressed
pursuant to Article 1 above, the commencement of hardware and software warranty
and the warranty term as stated in the third paragraph of Section 10.1.5 and in
Section 10.2.1 of the Agreement are modified as follows:
Warranty Start Date for the systems or system expansions of the types
defined herein, shall be as follows:
FNE Equipment warranty, software warranty, SMP and on site
maintenance (if on site maintenance is ordered), with respect to all
hardware and software components installed or included in the
relevant system or system expansion, as appropriate, at or prior to
the date on which such system or system expansion achieves
ATP-Conditional Acceptance shall commence upon such relevant
ATP-Conditional Acceptance date.
Notwithstanding the above, if Nextel intentionally delays the
implementation of a system or system expansion of the types defined
herein, then ATP-Conditional Acceptance shall be deemed to be granted
*** after the implementation date set forth in the
Implementation Schedule for such system or system expansion and all
warranties shall commence as of this date.
Other Equipment Warranty Start Date
Other Equipment warranty and any associated software warranty shall
commence upon the date of shipment of the Other Equipment plus ***
days.
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
Other Software Warranty Start Date
Other Software warranty and SMP shall commence upon the date of
shipment of the Other Software plus *** days.
Warranty Term
The length of all warranties shall be as identified in the various
Change Order Exhibit A's or purchase orders associated with each
system and system expansion of the types defined herein, Other
Equipment or Other Software order; provided that any changes to a
system or system expansion warranty shall not be effective unless
agreed to in writing by a Nextel and a Motorola authorized
signatory; further provided that in the case of all systems and
system expansions identified by an asterisk (*) in Appendix III to
this Amendment 004, the warranty termination date shall be the later
of; (i) the normal termination date or; (ii) the date on which the
ATP-Final Acceptance is achieved with respect to the relevant system
or system expansion.
Repetitive or Service Affecting Failure Warranty
In the event a module (board) is documented to have systemic
failures during it's warranty period, and such failures are not due
to inappropriate use, such Module shall be replaced by Motorola at
no additional charge. Any such replaced Module shall be warranted
for the balance of the originally provided Module warranty period,
and delivery shall be subject to normal manufacturing and/or
subcontractor lead times.
In the event a module is documented, during the system warranty
period, to have been the root cause of a substantial service
affecting system failure, the warranty of such system shall be
extended by a period equal to the period for which the system had
been out of service.
Nextel shall notify Motorola in writing within ***
days of such failures, and such notification shall include
appropriate documentation.
8.2 Motorola has provided Nextel a revised warranty/board repair proposal that
takes into account the flexibility Nextel is intended to have to move equipment
between Nextel locations.
IX. CONDITIONAL AND FINAL ACCEPTANCE ACHIEVED
9.1 The systems and system expansions defined in Appendix III, were agreed to
have achieved Conditional and/or Final Acceptance as of the dates indicated in
Appendix III. Said agreements were reached between Motorola and Nextel as of
*** . The start of warranty for these systems and system expansions is
defined in Appendix III.
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
X. AGREEMENT CONTINUES IN EFFECT
10.1 The Agreement shall remain in full force and effect except as expressly
amended hereby.
IN WITNESS WHEREOF, this Amendment has been executed and delivered by the
parties set forth below.
NEXTEL COMMUNICATIONS, INC. MOTOROLA, INC.
By: /s/ DANIEL F. AKERSON By: /s/ ROBERT L. BARNETT
Title: CHAIRMAN & CEO Title: CORP. V.P. - iDEN
Date: April 28, 1996 Date: April 28, 1996
<PAGE>
Appendix I
Systems and System Expansions Governed by the Terms and Conditions of
Amendment 003, and the Their Corresponding Conditional and Final Acceptance
Achievement Date
Dated: April 28, 1996
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
System Change Order ATP Date Conditional Final
Acceptance Acceptance Date
Date
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
***
- ------------------------------------------------------------------------------------------------
</TABLE>
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
Appendix II
Motorola/Nextel Payment Terms Amendment 003 to the Enhanced
Specialized Mobile Radio System Purchase Agreement
dated as of *** .
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
AMENDMENT 003
TO
ENHANCED SPECIALIZED MOBILE RADIO SYSTEM
PURCHASE AGREEMENT
BETWEEN
MOTOROLA, INC.
AND
NEXTEL, INC.
This Amendment, dated as of the *** is between Motorola,
Inc., a Delaware Corporation, ("Motorola") and NEXTEL Communications, Inc., a
Delaware Corporation, ("Nextel") and amends the Enhanced Specialized Mobile
Radio System Equipment Purchase Agreement dated as of November 4, 1991 as
heretofore amended ("Purchase Agreement").
BACKGROUND
WHEREAS, Nextel and Motorola have agreed, based on Motorola letter dated ***
, R. Severns to B McAuley, reference Conditional and Final Acceptance
Payment Terms, to modify the Conditional and Final Acceptance Terms, Warranty
Terms, and Payment Terms for all existing Systems, New Systems, MSO Expansions,
and Expansion in Sites and Equipment incorporated into the subject Agreement.
NOW THEREFORE, in consideration of their mutual promises the parties agree as
follows.
EFFECTIVE DATE
This Agreement shall become effective on *** .
APPENDICES
The Appendices to this Agreement are incorporated herein by reference and are as
follows:
ATTACHMENT 1: Minimum number of units in service, by city size and
service type to reach conditional and final
acceptance, dated ***
ATTACHMENT 2: Market revenue (which is 90% of Nextel's Rate Plan)
by month using conditional acceptance criteria,
dated ***.
1.0 SYSTEMS COVERED BY EXTENDED PAYMENT TERMS
1.1 The Extended Payment Term set out in Section 2.1 apply to the
following *** Systems owned or expected to be owned by Nextel:
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
System/Location
***
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
The Extended Payment Terms related to OneComm Corporation ("OneComm") or Dial
Page, Inc. ("Dial Page") (or the affiliates of either) systems assume they have
merged or otherwise been acquired by Nextel. This Agreement shall have no effect
on the systems owned by OneComm or Dial Page prior to such merger. however, upon
the completion of these mergers or acquisitions, the agreements specified herein
shall apply to all orders of OneComm and Dial Page or the affiliates of either.
2.0 PAYMENT TERMS
Section 8.2 of the Purchase Agreement is deleted and replaced in its entirety
with the Payment Terms as defined below.
2.1 Payment Terms for the Systems described in Section 1.1 shall
be as follows:
*** of total Contract price upon receipt of order.
*** of total Contract price upon equipment shipment,
invoiced monthly.
*** of total Contract price upon Conditional Acceptance.
*** of total Contract price upon Final Acceptance.
The Payment Terms described above apply to payments due to Motorola for
Systems defined in Section 1.1 after the Effective Date of this
Agreement including any/all Conditional or Final Acceptance Payments
which have not yet been made for these Systems. No adjustments will be
made for payments already made to Motorola before the Effective Date.
2.2 Payment Terms for New Systems and MSO Expansions shall be as
follows:
2.2.1 Until Conditional Acceptance as defined in this
Agreement, is achieved for any total of *** of the *** Systems
defined in Section 1.1, Payment Terms for New Systems and MSO Expansions shall
be:
*** of total Contract price upon receipt of order.
*** of total Contract price upon equipment shipment,
invoiced monthly.
*** of total Contract price upon Conditional Acceptance.
*** of total Contract price upon Final Acceptance.
2.2.2 Upon achievement of Conditional Acceptance as defined in
this Agreement, for any total of *** of the *** Systems defined
in Section 1.1, Payment Terms for New Systems and MSO Expansions shall be:
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
*** of total Contract price upon receipt of order.
*** of total Contract price upon equipment shipment,
invoiced monthly.
*** of total Contract price upon Conditional Acceptance.
*** of total Contract price upon Final Acceptance.
These payment terms are subject to reconfirmation and discussion on
*** if new facts concerning general industry payment term practice
are noted.
2.2.3 Upon achievement of Conditional Acceptance as defined in
this Agreement, for any total of *** of the *** Systems defined
in Section 1.1, the Payment Terms defined in Section 2.2.2 shall apply
retroactively to all New Systems and MSO Expansions, originally ordered under
the Payment Terms stated in Section 2.2.1.
Nextel shall pay Motorola all additional amounts due under the
new payment terms within *** of receipt by Motorola of
Conditional Acceptance of the fifth of the Systems set out in
Section 1.1.
2.3 Payment Terms for Expansions in Sites or Equipment shall be as
follows:
2.3.1 Until Conditional Acceptance, as defined in this
Agreement, is achieved for any total of *** of the *** Systems
defined in Section 1.1, Payment Terms for Expansions in Sites or Equipment to
any of the Systems described in Section 1.1 shall be:
*** of total Contract price upon receipt of order.
*** of total Contract price upon equipment shipment,
invoiced monthly.
*** of total Contract price upon completion of Site
install and Site ATP or, if the Site is not
constructed, no later than sixty(60) days from date
of equipment shipment.
*** of total Contract price upon resolution of Site ATP
Punch List or, if the Site is not constructed, no
later than 90 days from date of equipment shipment.
These payment terms are subject to reconfirmation and discussion on 9/1/95
if new facts concerning general industry payment term practice are noted.
2.3.2 Upon achievement of Conditional Acceptance, as defined
in this Agreement, for any total of *** of the *** Systems
defined in Section 1.1, Payment Terms for Expansions in Sites or Equipment to
any of the Systems described in Section 1.1 and all future Expansions in Sites
or Equipment to any System shall be:
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
Equipment: 100% of equipment price, net thirty (30) days from
equipment receipt.
Services/System Integration: *** of services price upon
receipt of Order.
*** of services price upon
completion of installation.
2.3.3 Upon achievement of Conditional Acceptance as defined in
this Agreement, for any total of *** of the ***
Systems defined in Section 1.1, the Payment Terms defined in
Section 2.3.2 shall apply retroactively to all Expansions in
Sites or Equipment, originally ordered under the Payment Terms
stated in Section 2.3.1. Nextel shall pay Motorola all
additional amounts due under the new payment terms within
*** of receipt by Motorola of Conditional Acceptance of the
*** of the Systems set out in Section 1.1.
3.0 CONDITIONAL AND FINAL ACCEPTANCE
The definition of Conditional and Final Acceptance as contained in the
Definitions Section of the Purchase Agreement is deleted and replaced in its
entirety as stated below.
3.1 Conditional and Final Acceptance for the Systems defined in Section
1.1 shall be achieved upon the occurrence of both, (i) the first achievement of
the *** ,
as defined in Attachment 1 to this Agreement, and (ii) by the first achievement
of *** , as stated in Attachment 2 to
the Agreement. The figures as contained in Attachment 2, dated *** , shall
be updated and modified as stated below.
The per subscriber revenue figures and the total Market revenue by month figures
contained in Attachment 2 are based on certain business case assumptions made by
Nextel as of *** and that the figures in Attachment 2 dated ***
represent achievement of *** of the planned Nextel rates.
Nextel shall submit to Motorola and the parties shall mutually review, on a
monthly basis, ***
. In the event that
these ***
, then Motorola and Nextel agree to be reasonable in negotiating,
***
to substitute into Attachment 2. Any such new figures shall then be the criteria
used to obtain Conditional and Final Acceptance for all Systems defined in
Section 1.1 that have not previously obtained Conditional and/or Final
Acceptance.
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
Negotiations of new figures as stated above , shall be based on Nextel's ***
, and on comparisons to the industry and market experience of
**** . Comparisons may be made on industry/market information
resources, including but not limited to:
***
The models for this comparison will be as mutually agreed.
3.2 Conditional and Final Acceptance for New Systems and MSO Expansions
(beyond the Systems defined in Section 1.1) shall occur only after Conditional
Acceptance as defined in Section 3.1 has occurred for the Systems in
*** . Upon achievement of Conditional
Acceptance of these *** Systems, Conditional Acceptance for New Systems and
MSO Expansions shall occur at the earlier of: (i) Nextel placing the New System
of MSO Expansion into Commercial Service or (ii) completion of the Final ATP for
said New System or MSO Expansion. Final Acceptance shall occur and be evidenced
by a notice signed by Nextel when substantially all Punch List items have been
resolved.
3.3 Conditional Acceptance for Expansions in Sites or Equipment shall
occur upon completion of the Site installation and Site ATP, or, if the Site is
not constructed, no later than *** from the date of equipment
shipment. Final Acceptance shall occur upon resolution of substantially all of
the Site ATP Punch List items or, if the Site is not constructed, no later than
*** from the date of equipment shipment.
4.0 WARRANTY
The commencement of hardware and software warranty as stated in Sections 10.1.5
and 10.2.1 of the Purchase Agreement are modified as follows:
4.1 The hardware and software warranty period for the Systems in
*** shall commence upon achievement of
Conditional Acceptance as defined in Section 3.1, for those Systems.
4.2 The hardware warranty for the Systems defined in Section 1.1
(except the Systems in *** ) shall commence
upon completion of the of the ***. The software warranty shall commence upon
achievement of Conditional Acceptance as defined in Section 3.1.
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
4.3 The hardware warranty for New Systems and MSO Expansions shall
commence upon completion of the ATP. The software warranty shall commence upon
achievement of *** as defined in Section 3.2.
4.4 The hardware and software warranty for Expansion in Sites and
Equipment shall commence as follows:
4.4.1 Until Conditional Acceptance as defined in this
Agreement, is achieved for any total of *** of the *** Systems
defined in Section 1.1, hardware and software warranty for Expansions in Sites
or Equipment shall commence upon achievement of Conditional Acceptance, defined
in Section 3.3, as completion of the Site installation and Site ATP, or, if the
Site is not constructed, no later than *** days from the date of
equipment shipment.
4.4.2 Upon achievement of Conditional Acceptance as defined in
this Agreement, for any total of *** of the *** Systems defined
in Section 1.1, hardware warranty for Expansions in Sites or Equipment shall
occur upon receipt of equipment. Software warranty shall commence upon
Conditional Acceptance as defined in Section 3.3
5.0 AGREEMENT CONTINUES IN EFFECT
The Purchase Agreement shall remain in full force and effect except as expressly
amended hereby.
IN WITNESS WHEREOF, this Amendment has been executed and delivered by the
parties set forth below.
NEXTEL, INC. MOTOROLA, INC.
By By
Title Title
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
Attachment 1
MINIMUM NUMBER OF UNITS IN SERVICE, BY CITY SIZE AND SERVICE TYPE TO REACH
CONDITIONAL AND FINAL ACCEPTANCE
CITIES UP CITIES 1 CITIES 2.5 CITIES
TO MILLION TO 2.5 MILLION OVER
1 MILLION MILLION IN TO 5 MILLION 5 MILLION
IN POPULATION IN POPULATION IN
POPULATION POPULATION
***
DISPATCH *** *** *** ***
MULTI-SERVICE *** *** *** ***
TOTAL *** *** *** ***
***
DISPATCH *** *** *** ***
MULTI-SERVICE *** *** *** ***
TOTAL *** *** *** ***
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
Attachment 2
Motorola Confidential Proprietary
LAND MOBILE PRODUCTS SECTOR
MIRS INFRASTRUCTURE NORTH AMERICA
MARKET REVENUE BY MONTH
USING CONDITIONAL ACCEPTANCE CRITERIA
<TABLE>
<CAPTION>
TOTAL MARKET
MARKET POPS DISPATCH MULTI-SERV WT/AVG/SUBS REV./MONTH
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
***
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
TOTAL ***
- --------------------------------------------------------------------------------------------
</TABLE>
***
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
Appendix III
Systems and System Expansions that achieved Conditional
and/or Final Acceptance in the month of ***
and their corresponding Warranty Start Dates
Dated: April 28, 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
SystemConditional (CA) or Final Change Order ATP Warranty Conditional Final
Acceptance (FA) Achieved Date Start Date Acceptance Acceptance
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
***
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
Appendix IV
System and System Expansion Acceptance Criteria
Dated: April 28, 1996
This Appendix IV to Amendment 004 of the Agreement defines the Conditional and
Final Acceptance terms and criteria applicable to systems and system expansions
under the Agreement.
1.0 Acceptance Prior to the Effective Date
1.1 The requirements set forth in Section 9 of the Agreement and Exhibit C
thereto remain in full force and effect for all systems and/or system expansions
that completed performance of their respective Acceptance Test Plans (ATP) prior
to the Effective Date of Amendment 004. For the purposes of Amendment 004,
completion of the performance of the ATP in accordance with Section 9 of the
Agreement and Exhibit C, thereto, for any such system or system expansion, shall
be deemed to have satisfied the requirement of ATP-Conditional Acceptance
defined in Amendment 004, for said system or system expansion.
1.2 ATP-Final Acceptance as defined in Amendment 004 for a system or system
expansion shall be deemed to be satisfied upon: (i) the resolution of
substantially all Punchlist Items for each respective system or system expansion
and; (ii) the completion of the system/subsystem performance measurements during
stated performance period as defined under Section 4.0, ATP-Final Acceptance,
below. Said performance period shall commence upon the completion of the ATP, as
defined in the preceding paragraph, except as follows:
a) For the systems and system expansions in
*** , to which Motorola and Nextel
have, on ***, formally executed Conditional Acceptance Certificates,
said performance period shall be deemed to have commenced ***
prior to ***. For this ***
shall be gathered and analyzed
in accordance with Section 4.2, below. If no failures are found as a
result of this analysis, the *** performance period shall be
deemed satisfied and complete. In the event the analysis of the
*** reveals a failure of the
specific system or system expansion, then the performance period shall be
deemed to have commenced on *** . In which case, Motorola shall
re-conduct the required *** in
accordance with, and for, the performance period stated in Section 4.2,
below.
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
b) The systems and system expansions in ***
have achieved Conditional and Final Acceptance
in accordance with the requirements as set forth in Amendment 003, as
shown in Appendix I to Amendment 004.
c) The systems and system expansions (if any) in *** and the related
Change Orders specifically set forth in Appendix I to Amendment 004 shall
be deemed to have achieved the requirements of Conditional and Final
Acceptance as set forth in Amendment 003 on the respective dates shown in
Appendix I to Amendment 004.
2.0 Acceptance after the Effective Date
Acceptance of all systems and system expansions that have not satisfied the
requirements of Section 1.0, above, as of the Effective Date of this Amendment,
shall be governed by the requirements set forth below:
2.1 The requirements set forth in Section 9 to the Agreement is superseded by
the following:
Motorola shall conduct acceptance test procedures in accordance with Section
3.0, ATP-Conditional Acceptance and Section 4.0, ATP-Final Acceptance, below,
and which shall be contained in the Acceptance Test Plan (ATP) for each system
or system expansion.
The ATP shall be based on a ***
maintained by Motorola. The *** shall be updated by Motorola to encompass
acceptance test procedures for newly developed equipment and software as part of
the software general release process and shall reflect the then current
acceptance test procedures available. Any modifications to the *** shall be
mutually agreed to prior to incorporation of said modifications.
The scope of the ATP required to achieve ATP-Conditional Acceptance and
ATP-Final Acceptance for each specific system or system expansion shall be
identified and mutually agreed to, prior to acceptance of an order. The specific
system or system expansion ATP shall contain only those test procedures required
to test the equipment, software, and the associated features ordered. The
schedule for performance of the ATP shall be included in the Preliminary and
Detailed Implementation Schedule for the specific system or system expansion in
accordance with Article IV of Amendment 004.
Motorola shall supply to Nextel, no later than *** prior to the
scheduled commencement of ATP-Conditional Acceptance or ATP-Final Acceptance, as
applicable, the specific required test procedures for ATP-Conditional and
ATP-Final Acceptance. Nextel shall have *** following receipt of
said test procedures to review and comment on the content of the test
procedures.
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
Only those features and items of equipment and software supplied by Motorola in
accordance with the definitions of system and system expansion contained herein,
and installed by Motorola, or installed by Nextel in accordance with Motorola
published installation and engineering standards and in accordance with the
standards set forth in Exhibit D to the Agreement, shall be included in and
tested under the ATP for a system or system expansion.
Individual site tests and the switch test shall be performed in accordance with
the ATP as soon as the individual sites and switch are completed. The system
test in accordance with the ATP shall be performed as soon as the switch and
site tests are completed. These tests shall take place even if all the Sites are
not operational if such Sites are not available due to Nextel's failure to
perform its applicable obligations in accordance with the Implementation
Schedule ("Unavailable Sites"). If such Sites are not available due to
Motorola's failure to perform its applicable obligations in accordance with the
Implementation Schedule, such tests shall be delayed until the affected Sites
become operational.
The areas served by the Unavailable Sites shall not be included in the System
Test. When the Unavailable Sites are completed, the Site Test shall be completed
for any Unavailable Sites. The existence of Unavailable Sites shall not delay
ATP-Conditional or ATP-Final Acceptance as long as the other items necessary for
ATP-Conditional or ATP-Final Acceptance are complete .
Nextel may order additional testing above and beyond the specific acceptance
test procedures defined in Sections 3.0 and 4.0 below, and included by mutual
agreement into the ATP for a system or system expansion of the types defined
herein. The additional test procedures to be performed and the price thereof,
shall be identified and mutually agreed to, prior to acceptance of an order. The
completion of these additional test procedures shall be outside the scope of the
system or system expansion ATP and shall not be apart of, nor a precedent to,
ATP- Conditional Acceptance or ATP-Final Acceptance of a system or system
expansion.
The acceptance test procedures as defined in Sections 3.0 and 4.0 shall not
include, and shall be separate and distinct from any software testing developed
and executed in conjunction with, and required to achieve, general release of
software under the Software Maintenance Program (SMP) of the Agreement.
2.2 The requirements set forth in the following sections of Exhibit C to the
Agreement are superseded by Section 3.0, ATP-Conditional Acceptance and Section
4.0, ATP-Final Acceptance, below:
Section 1.3.1, ***
Section 1.3.3, ***
Section 1.3.4, ***
Section 5, ***
Section 6, ***
Section 7, ***
Section 8, ***
3.0 ATP Conditional Acceptance Test Procedures
3.1 The ATP Conditional Acceptance is comprised of *** sections to
verify (system or, sub-system, as appropriate) performance and functionality.
The defined ***
and *** to the new systems or system expansion are described
below. The test sections include:
***
3.2 ***
3.2.1 The *** shall evaluate the implementation
of system *** elements developed by Motorola utilizing specific
information provided by Nextel. The test shall ensure new system elements are
properly provisioned prior to *** . The system
unique database may consist of the following *** elements, but the final
system configuration will dictate the database requirements.
a. *** . Verify the *** by generating *** and ***
on each *** for each *** to include *** services.
b. *** . The *** tests shall
include the confirmation of *** on all site ***
provisioned for *** on all site ***
provisioned for *** .
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
3.3 ***
3.3.1 *** will be the evaluation of ***
installations against established Motorola standards. It will follow
installation of each site when power is available to each site and all radio
equipment is installed and hooked up. It will ensure that all Motorola-supplied
equipment is present, properly installed, and connected with other site
equipment.
3.4 ***
3.4.1 *** shall confirm the ***
between the *** and the *** equipment.
3.5 ***
3.5.1 *** will confirm the operation of primary and
***
. These functions include, but are not limited to, **
, and making
*** on the system.
3.6 ***
3.6.1 *** will be conducted to evaluate the system
readiness for *** . The test methodology will be to simulate use of
the system by the *** teams as the end user is expected to use the
system. The purpose of this test is to identify ***
3.6.1.1 *** . The *** will be conducted over
mutually determined . The system must be "frozen" or "locked-down" (no
performance affecting changes) during . These plus the
*** system performance
*** . This test is anticipated to have a duration ***
A statistically significant number of data
points will be ***
The scheduling of the *** for a new system
will be mutually agreed upon by Motorola and Nextel and included in the
Implementation Schedule. The *** data and results will be shared equally
between Motorola and Nextel. The *** data will be used
to measure the acceptance of the system under test as noted below.
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
3.6.1.2 Since the purpose of this test is to validate ***
of software, the
*** should be planned such that only *** meeting the ***
criteria of the
Purchase Agreement Exhibit B2, Sections 1.1.1.4 and 1.1.1.6 are utilized for
*** . *** which fall below these criteria will be excluded
from analysis for *** purposes. However, it is
understood that Nextel may wish to examine this data further for analysis of
*** .
3.6.1.3 ***
Statistics will
be derived from this data and used as the basis for ***
. ***
. Excluding
Nextel design and implementation issues, ***
For a system expansion, the baseline established prior to the system expansion,
as discussed in Section 3.6.1.1, will be used as the threshold. No ***
, in
*** performance when comparing pre-installation test results with
post-installation test results, will be a criteria for successful completion of
the test.
3.6.1. 4 *** . The *** to be used during the
testing will be agreed to by Motorola and Nextel. The considerations will be the
latest commercially available *** available ***
. The test
shall not be delayed by the unavailability of the preferred *** . The
*** teams may *** a *** , but this will not increase the overall
number of *** teams. ***
3.6.1. 5 *** . The *** will be
the same for all *** tests. The ***
will be that specified in an appendix to the *** .
3.6.1. 6 Motorola *** for this *** , and
all *** . Post-processing will be provided by
Motorola.
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
3.7 ***
3.7.1 *** the achievement
of specified performance metrics (new systems) or the maintenance of existing
system baseline performance metrics (system expansions). Concurrent with the
*** , the system statistics will be
gathered to evaluate changes in overall performance of the system before and
after installation of the new infrastructure hardware. A defined group of system
and subsystem performance parameters will be ***
. These parameters will be chosen to
match the normal management metrics supported by the current infrastructure
software release. The parameters gathered will ***
3.7.1.1 The performance measures for baselining the system statistics were
proposed by Motorola in ***
testing conducted in *** . The
methodology for ***
3.8 *** Criteria
3.8.1 *** criteria of individual tests included within the ATP Conditional
Acceptance will be included within the detailed test procedures delivered by
Motorola to Nextel as defined in Section 2.1 above. *** criteria
identified in the ATP-Conditional Acceptance test procedures will be based on
the specifications contained in ***
3.9 Special consideration for systems expansions. The tests stated in sections
1.0 to 3.0, above, apply to the acceptance testing for a system. The ATP for a
system expansion may contain a subset of these tests which will be dependent
upon the scope of the system expansion.
3.10 ***
a. Motorola shall perform the ATP as described in this Appendix
IV. ATP-Conditional Acceptance shall not be delayed because of
*** . Upon completion of the
performance of the ATP, a Punchlist shall be mutually
developed within *** . In addition a ***
shall commence immediately following successful
completion of the ATP-Conditional Acceptance test procedures,
to allow Nextel to operate the System to determine if
additional failures are found as a result of Motorola products
failure to operate as specified.
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
b. Testing conducted during the ***
shall be witnessed by Motorola, and the results, including
failures, must be reproducible and documented by Nextel to be
included in the Punchlist. This testing shall be limited to
the testing of the Motorola published product specifications
and the System infrastructure functionality as described in
Exhibits B-1 and B-2 to the Agreement. The testing shall
specifically exclude testing of ***
c. *** to be included in the ATP Punch-
list must be ** during the
*** and, upon mutual agreement, placed on
the Punchlist within the *** . Upon
agreement on what is on the Punchlist, Nextel shall endorse
the Motorola provided letter of acceptance signifying occur-
rence of ATP-Conditional Acceptance. When all Punchlist items
are substantially resolved, and all ATP-Final Acceptance tests
in section 4.0 of this Appendix have been passed, ATP-Final
Acceptance shall be granted. Such approval shall not be
unreasonably withheld. ATP-Final Acceptance shall be evidenced
by a notice signed by Nextel.
4.0 ATP-Final Acceptance Test Procedures
4.1 ATP-Final Acceptance of system or system expansion shall be preceded by
successful completion of all ATP-Conditional Acceptance testing as defined by
the ATP-Conditional Acceptance test procedures. During the ATP-Conditional
Acceptance a Punchlist may be created identifying deficiencies in the
installation of the system or system expansion. ATP-Final Acceptance testing
period begins at the completion of ATP-Conditional Acceptance. ATP-Final
Acceptance shall be achieved when substantially all Punchlist items have been
resolved and the test procedures defined in this Section 4.0 have been
completed.
The ATP-Final Acceptance is comprised of ***
. The defined
***
is described below. The test
section includes:
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
4.2 ***
4.2.1 The ***
will begin *** after successful completion of
ATP-Conditional Acceptance and proceed for ***
4.2.2 *** shall be analyzed at the end of each ***
. At the completion of the ***
, the ***
immediately begin. In the event a problem is found during the performance period
and/or a failure is observed, as a result of the analysis, at the end of
*** and such problem or
failure is determined to be a Motorola controlled caused problem or failure, a
plan of resolution will be developed by Motorola and Motorola shall take all
appropriate actions to correct such problem or failure. In the event the
severity of such problem or failure is of such significance or magnitude that
Nextel is prevented from or determines
in which such problem or failure
occurred shall resume upon correction of the problem or failure by Motorola.
Upon the completion of the ***
shall be analyzed and if no failures are found as a result of the
analysis, ***
or if a failure is found and determined to
be a Nextel caused failure, said failure shall be eliminated from the analysis,
and *** shall be deemed completed and
the *** defined in this Section 4.2 shall
be deemed satisfied and completed.
In the event a failure is found at the end of the ***
, and it is determined to be a Motorola controlled caused
failure, Motorola shall correct such failure (together with failures not
corrected from the ***
. Upon completion of a
*** controlled caused failures
found, the ***
shall be deemed completed
and the *** defined in this Section 4.2
shall be deemed satisfied and completed.
4.2.3 *** . ***
will
commence immediately following the successful completion of ATP-Conditional
Acceptance.
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
4.2.4 To allow Motorola to perform the required analysis, Nextel shall make
available to Motorola, ***
the *** In
the event Nextel fails to make the results available to Motorola at the stated
time, ***
4.3 ***
4.3.1 *** shall include ***
a) ***
b) over the *** criteria
as Section 3.6, above;
c) ***
d) ***
e) ***
f) ***
4.3.2 The *** during *** shall commence
*** and shall be
performed during *** , at the frequency stated
in 4.3.1 (a), above.
4.3.3 In accordance with the criteria stated in Section 3.6, above, each ***
shall be analyzed. If the analysis results ***
, the root causes of the *** and
*** . If any test points are determined to have
failed for causes other than Motorola's system-specific hardware integration,
installation, or commissioning, such as but not limited to new sites improperly
integrated into the system by other than Motorola, these points will be
***
. If the *** ,
then all Motorola controlled root causes found to be associated with the
analysis shall be corrected by Motorola and ***
. ***
, a Motorola caused
failure is found, Motorola shall correct such failure and the ***
will be re-performed until no Motorola caused failures are found. Upon
completion of the *** with no *** , the
*** defined in this Section 4.3 shall be deemed
satisfied and completed.
*** , the baseline established prior to the *** ,
as discussed in Section 3.6.1.1, will be used as the threshold. No ***
, based on the criteria contained in this Section 4.3.3,
*** when comparing *** with
*** results, will be a criteria for successful completion of
the test.
4.3.4 *** . ***
will commence immediately
following the successful completion of *** , and will
proceed for *** stated in 4.3.1 (a)
above.
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
Appendix V
Standard Minimum Equipment Delivery Times
Dated: April 28, 1996
STANDARD STANDARD
PRODUCTS DELIVERY TIMES DELIVERY TIMES
(Without Forecast) (With Forecast)
MSO
MSO Equipment: *** ***
BSC Equipment: *** ***
EBTS Sites: *** ***
*** ***
MSO and EBTS ANCILLARY
Surge Protectors: *** ***
DC Power Rectifiers: *** ***
Battery Systems: *** ***
Antennas, Tower Amps., TX
Line: *** ***
Towers, Buildings: *** ***
Power Systems: *** ***
Packaged Systems
Delivery time quoted upon request
Standard delivery time is from the time Motorola receives an Order to when
equipment will ship from vendor. Prior to receipt of Order, standard delivery
time is subject to change without notice. Once an Order is received, the
delivery time quoted for such Order shall remain valid and firm, for the Order
received.
*** CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.
<PAGE>
Appendix VI
Implementation and Redeployment Schedule Signatories
Dated: April 28, 1996
Schedule: Equipment Agreement - Authorized Motorola Signatories Schedule
Authorized Motorola Signatories for Implementation and Redeployment Schedules
and Schedule Changes and Warranty Changes:
For approval of all regional activities, the office of Vice President &
Director of Customer Operations, Nextel, shall have signatory authority.
For approval of Western region activities, the office of Regional Project
Director Western Markets, shall have signatory authority;
For approval of Midwest region activities, the office of Regional
Director, Midwest Markets, shall have signatory authority;
For approval of Eastern/Southern region activities, the office of Regional
Director, Eastern/Southern Markets, shall have signatory authority;
Such Authorized Signatories List may be revised to reflect deletions, additions,
or substitutions as provided in Section 4.4 of Amendment 004 to the Agreement.
Schedule: Equipment Agreement - Authorized Nextel Signatories Schedule
Authorized Nextel Signatories for Implementation and Redeployment Schedules and
Schedule Changes and Warranty Changes:
Tim Donahue, President and Chief Operating Officer
Steve Shindler, Senior Vice President and Chief Financial Officer
Barry West, Senior Vice President and Chief Technology Officer
Such Authorized Signatories List may be revised to reflect deletions, additions,
or substitutions as provided in Section 4.4 of Amendment 004 to the Agreement.
NEWS RELEASE
For Immediate Release Contact: Paul Blalock (201) 531-5200
Bob Ratliffe (206) 979-4254
NEXTEL PLACES IDEN(TM) ORDER FROM MOTOROLA
-- PREPARES FOR COMMERCIAL DEPLOYMENT OF NEXT GENERATION OF
TECHNOLOGY BOTH DOMESTICALLY AND INTERNATIONALLY --
McLEAN, VA - June 17, 1996 - Nextel Communications, Inc. (NASDAQ: CALL)
announced today it's placing an order of slightly more than $100 million for
Motorola's enhanced iDEN technology that the company has been testing in several
markets over the last six months.
The completely digital technology is the first that goes beyond cellular to
combine enhanced quality voice communications with instant conferencing, paging,
short messaging service and future data capabilities into one handset.
"Motorola has made great progress improving the voice quality of iDEN, and we
are very encouraged by what our own testing and our customers responses have
shown," said Nextel Chairman and CEO Daniel Akerson. "While we have not
completed our testing, we are cautiously optimistic that we can deploy this
technology throughout our domestic and international systems and make a real
difference in the wireless marketplace."
"We have come a long way in this business over the last twelve months, building
a first class team of technical, marketing and operations professionals,"
Akerson said. "It appears to us that Motorola is delivering on their technology
promises as well. This product has improved audio quality, spectrum efficiency
and the enhanced feature sets that customers want."
Also included in the order for infrastructure equipment was an order for 100,000
new compact handsets, which Motorola calls the i360 and which Nextel will market
as the "PowerFone(R)." Pilot pricing for the fully featured, smaller, digital
unit is approximately $400, which does not include various trade-in allowances
and further cost-reduction opportunities. Pricing for service in Nextel's
initial Chicago pilot are competitive with today's cellular pricing, but with
the additional features of instant conferencing, text messaging and voice mail
included. Also, in a separate memorandum of understanding, Motorola has agreed
to make available to Nextel on more flexible terms, the existing equipment and
infrastructure credit facility totaling $685 million available for purchases
Nextel intends to make on a nationwide basis.
Nextel is the nation's leading provider of fully integrated wireless
communications with the largest geographic footprint of any single wireless
carrier in North America. The company is focused on providing business
telecommunications customers the ability to stay in touch with wireless services
that go beyond cellular by combining the power of voice communications with
instant conferencing, messaging and future data capabilities into a single
handset to maximize productivity, security and convenience for every customer.
# # #
iDEN is a trademark of Motorola, Inc.
PowerFone is a registered trademark of Nextel Communications, Inc.
