EXHIBIT 10.2
AMENDMENT NO. 1
TO
MASTER PURCHASE AGREEMENT
BETWEEN
WESTERN WIRELESS CORPORATION
AND
NORTEL NETWORKS INC.
This Amendment No. 1 is made effective as of the 1st day of January, 2001
("Effective Date No. 1"), by and between Nortel Networks Inc. ("Nortel
Networks") and Western Wireless Corporation ("Company").
WHEREAS, Nortel Networks and Company entered into a Master Purchase Agreement
dated July 15, 1999 ("Agreement") for the sale and/or license and procurement of
various Nortel Networks products and services; and,
WHEREAS, Nortel Networks and Company now wish to amend the Agreement to, among
other things, provide for the purchase by Company of certain CDMA products and
services for purposes of a CDMA IS-95 overlay to Company's existing AMPS/TDMA
network in certain Company markets, an increase to the existing volume
commitment by Company and a revision to the pricing structure, as further
described herein.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
Nortel Networks and Company agree to amend the Agreement as follows:
1. Unless otherwise defined, capitalized terms herein shall have the same
meaning as in the Agreement.
2. Amend Article 1 (Definitions) as follows:
(a) Add the following new Section 1.25 and renumber the remaining
Sections accordingly:
"1.25 'SECONDARY TERM' shall mean that portion of the Term (as
defined in Section 13.1 herein) commencing on Effective
Date No. 1 and ending on July 14, 2002."
(b) Amend Section 1.36 (Volume Commitment) by deleting the words "two
hundred million dollars ($200,000,000)" and substituting the
words "two hundred thirty-five million dollars ($235,000,000)".
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3. Amend Article 2 (Scope of Agreement) as follows:
(a) Delete Section 2.5 in its entirety and replace it with the
following:
"2.5 The parties acknowledge and agree that, as of Effective Date
No. 1, Company has achieved a total of seventy million
dollars ($70,000,000) against the Volume Commitment, leaving
an outstanding balance of one hundred sixty-five million
dollars ($165,000,000) (i.e., Volume Commitment of
$235,000,000 less $70,000,000 equals $165,000,000)
('Incremental Volume Commitment')."
(b) Add the following new Section 2.6 and renumber the remaining
Section accordingly:
"2.6 Company agrees to order Nortel Networks' Products and
Services during the Secondary Term in an amount totaling
not less than the Incremental Volume Commitment. To
achieve such Incremental Volume Commitment, Company shall
order Products and Services in such amounts as to meet
cumulative volume targets (each a "Volume Target") of: (i)
ninety million dollars ($90,000,000) in Orders placed
during the first twelve (12) month period of the Secondary
Term ("First Period") and (ii) seventy-five million
dollars ($75,000,000) in Orders placed during the
subsequent six (6) month period of the Secondary Term
("Second Period").
2.6.1 In the event Company fails to meet either of the
aforementioned Volume Targets during the Secondary Term,
then upon the ending date of the First Period or Second
Period, as applicable, Company shall remit to Nortel
Networks the difference between: (a) the amount which
Company would otherwise have paid with respect to the
Products ordered by Company during the First Period or
Second Period, as applicable, if the discounts set forth
below had been applied to such Orders during such period
(in lieu of the discounts set forth in Supplemental Terms
Annex A.1, Schedule 1, Section 3.0 attached hereto and
incorporated herein) and (b) the amount actually paid by
Company with respect to the Products ordered by Company
during the First Period or Second Period, as applicable,
(which amounts reflect the discount schedule set forth in
Supplemental Terms Annex A.1, Schedule 1, Section 3.0).
The amount of the remittance described herein shall be
invoiced at the end of the First Period or Second Period,
as applicable, and shall be paid within thirty (30) days
of such invoice.
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Category First Period Second Period
-------- ------------ -------------
Switch Hardware (MTX) 57% 58%
CDMA BSC Hardware 44% 45%
CDMA BSC Software 52% 53%
CDMA BTS Hardware 58% 59%
CDMA Radio (per carrier) 57% 58%
CDMA EVRC Software 44% 45%
PDSN 22% 23%
1XRTT BSC Software 44% 45%
1XRTT Data Enabler Software 52% 53%
(per carrier)
1XRTT Voice Enabler Software 52% 53%
(per carrier)
1XRTT Data Enabler RTU 52% 53%
(per data ESEL)
1XRTT Radio (per carrier) 58% 59%
TDMA Cell Site Hardware 52% 53%
Radio/PA 62% 63%
TDMA Hardware 57% 58%
Cooperative Advertising 1% 1.5%
Any Orders cancelled by Company pursuant to Section 7.1
herein shall not accrue towards fulfillment of the
Incremental Volume Commitment."
4. Amend Article 15 (Cooperative Advertising) by deleting the first sentence
in its entirety and replacing it with the following:
"Subject to Section 2.5 of the Agreement, in consideration of Company's
Volume Commitment, Nortel Networks shall, commencing with the Effective
Date of the Agreement and for the remainder of the Term, reimburse Company
fifty percent (50%) of the actual net cost paid by Company for that portion
of advertising which contains specific reference to Nortel Networks'
Products or for "Programs" as set forth in Exhibit C of this Agreement,
which such advertising and/or Programs comply with Nortel Networks'
standard trademark and advertising guidelines and have been approved by
Nortel Networks (which approval shall not be unreasonably withheld or
delayed) for the purposes of payment of such cooperative advertising fees,
up to a total amount equal to two and one-half percent (2-1/2%) of the net
amount of all Company's purchases solely for Products (i.e., exclusive of
Services) under the Agreement ("Cooperative Advertising Funds"); provided,
however, that such amount shall (i) be paid to Company on a quarterly basis
and (ii) shall be substantiated by invoices reasonably detailing
advertising or other Program costs paid by Company."
5. Amend "Supplemental Terms Annex A.1 (800 MHz AMPS/TDMA Wireless Products)"
by deleting it in its entirety and replacing it with the new "Supplemental
Terms Annex
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A.1 (800MHz AMPS/TDMA and 800 MHz CDMA Wireless Products)", attached
hereto and incorporated herein as Exhibit A.
6. Except as specifically modified by this Amendment No. 1, the Agreement
in all other respects shall continue in full force and effect.
IN WITNESS WHEREOF, the parties have caused this Amendment No. 1 to be signed by
their duly authorized representatives effective as of the date first set forth
above.
WESTERN WIRELESS CORPORATION NORTEL NETWORKS INC.
By: Xxxxx Xxxxx By: Xxxx Xxxxxxxxx
--------------------------------- ---------------------------------
Name: Xxxxx Xxxxx Name: Xxxx Xxxxxxxxx
------------------------------- -------------------------------
(Type/Print) (Type/Print)
Title: Sr. Vice President Title: Vice President
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Date: May 16, 2001 Date: May 16, 2001
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