exv10w1



 





Exhibit 10.1




CONFIDENTIAL TREATMENT REQUESTED



Confidential material has been separately filed with the Securities and Exchange Commission under
an application for confidential treatment. Terms for which confidential treatment has been
requested have been omitted and marked with an asterisk [*].




AMENDMENT NUMBER THREE TO THE

SUBSCRIBER UNIT PURCHASE AGREEMENT FOR NII HOLDINGS INC.



This Amendment Number Three to the Subscriber Unit Purchase Agreement (the “Amendment”) will be
deemed effective as of the date of the last signature to this Amendment (“Effective Date”) between
MOTOROLA, INC. a Delaware corporation, by and through its Mobile Devices Business, with offices at
8000 West Sunrise Boulevard, Plantation, Florida 33322 USA (hereinafter “Seller” or “Motorola”),
and NII HOLDINGS, INC, a company formed under the laws of Delaware, with a place of business at
10700 Parkridge Boulevard, Suite 600, Reston, Virginia 20191 (hereinafter “Buyer” or “NIHD”,
formerly known as NIIH under the Agreement). Capitalized terms used herein but not otherwise
defined herein shall have the same meanings given to such terms in the Agreement.





	 	 	 	WHEREAS, the Parties have entered into a Subscriber Unit Purchase Agreement dated January
1, 2005, (the “Agreement”) as heretofore amended, modified, supplemented or otherwise
revised:
	 
	 	 	 	NOW, THEREFORE, in consideration of the promises and mutual obligations contained herein
and for other good and valuable consideration, the receipt and sufficiency of which are
hereby mutually acknowledged, Motorola and NIHD agree as follows:






	1.	 	GENERAL






	 	1.1	 	Except as otherwise specifically stated herein, all references to Sections are to
sections in the Agreement.
	 
	 	1.2	 	This Amendment supersedes in its entirety the “Agreement in Principle” document
signed by NIHD and Motorola on July 25, 2006.





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	2.	 	AGREEMENT AMENDMENTS
	 
	 	 	Motorola and NIHD agree that the following sections of the Agreement are amended to read as
follows:






	 	a.	 	The Initial Term of the Agreement, as contained in the introductory section of the
Agreement, and thereafter renewed to December 31, 2006 per Amendment Number Two will now
be amended to be a fixed term agreement ending on December 31, 2011, unless otherwise
extended by mutual written agreement of the Parties as described in Section 10 herein.
	 
	 	b.	 	Section 2 of the Agreement “Pricing” is deleted in its entirety and replaced with the
following:
	 
	 	 	 	“2. PRICING, UNIT VOLUME, AND PORTFOLIO MIX
	 
	 	 	 	PRICING






	 	2.1	 	This entire Section 2 “Pricing, Unit Volume, and Portfolio Mix” does not
apply to or supersede the 2006 Subscriber Unit Pricing and Terms set forth in
Amendment Two of this Agreement and which continue in full force and effect through
December 31, 2006.
	 
	 	2.2.	 	Total Kit Prices (“Kit Price”) for Products require firm and non-cancelable
orders within 10 days after Buyer’s Delivery to Seller of its Monthly Purchase
Forecast (as defined in Section 4 of the Agreement). Kit Prices are defined as the
total sum of (a) an individual subscriber unit base package price set forth in
Appendix A, (b) any specific feature adders selected by NIHD, (c) in-kit accessory or
accessory upgrades requested by NIHD, (d) non-standard packaging or collateral
requested by NIHD, or (e) unique requirements specifically requested by NIHD for a
given jurisdiction or territory where the NII Affiliates operate, such as
manufacturing locations (“Unique Market Adders”) (other than those described in
numerals (b), (c) and (d) above). Applicable minimum purchase commitments or other
similar terms may be added to Appendix A from time to time by mutual agreement of the
Parties. In order for the Kit Prices, distributed periodically by Motorola to be
applicable, the purchase orders submitted to Seller must reference this Agreement, or
be submitted electronically pursuant to the Motorola On-line Website Terms of Use
attached hereto as Appendix C. The Parties acknowledge that the base package price
and the adder components of the total Kit Price represent the fixed and determinable
pricing for each applicable Product in the given year.
	 
	 	2.3	 	The Parties agree to enter into annual negotiations to establish Product base
package prices, portfolio mix commitments and [*] Margin based on a defined portfolio
of Products during the third quarter of each calendar year to become effective the
first day of January of the following calendar year.







 




			
	*	 	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.




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	 	2.4	 	Notwithstanding anything to the contrary herein, except for iDEN
WIMAX/multimode Products, base package prices of Products (prior to any Unique Market
Adders adjustments or adjustments for NIHD requested features, accessory, packaging,
or collateral adders) negotiated annually will not be higher than the base package
price paid by NIHD the prior year for the same model Product, provided that the
portfolio mix commitment is substantially the same or better than the previous year
unless Motorola has changed the tier classification of a then existing model and has
not offered a comparable replacement model in that tier.
	 
	 	 	 	In addition to, and notwithstanding, the preceding paragraph, the base package prices
of Products being offered to NIHD on an annual basis shall not be [*] than [*] of the
base package prices being offered to [*] for the same subscriber unit model (i.e. an
i830 domestic model is considered the same as an i830 NII model for purposes of this
Agreement).
	 
	 	 	 	Unique Market Adders shall not be applicable for the year 2007. Thereafter, the
Unique Market Adders shall be limited to a specific percentage of the base package
price of the affected Products as follows: [*].
	 
	 	 	 	When and if Unique Market Adders become applicable, Motorola will set forth the
business reasons supporting the applicability of Unique Market Adders on a case by
case basis. In the event that Unique Market Adders become applicable in any given
year, the [*] for the affected Products becomes [*].






	 	 	 	UNIT VOLUME






	 	2.5	 	NIHD commits to purchasing the minimum annual unit volume of fully kitted
Products, shipped with Motorola designated in-kit standard items contained in the
Motorola pricing menu, as contained in Table 1 below (“Purchase
Commitments”): [*]
	 
	 	2.6	 	The parties agree that NIHD purchases of iDEN Transceiver Only Products
(defined as a subscriber unit less the battery door, battery, charger, SIM card,
collateral, and packaging shipped in bulk) may be counted towards fulfillment of the
annual Purchase Commitments set forth in Table 1 above, up to a maximum of [*] of the
total Purchase Commitment for each year. Both Parties agree that there may be terms
and conditions applicable to Products that are not fully-kitted which will be
negotiated on an annual basis separately from the terms and conditions applicable to
the fully-kitted Products.







 




			
	*	 	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.




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	 	2.7	 	By mutual agreement, the Parties may agree to extend the definition of
Products to include subscriber units that do not incorporate the iDEN technology. For
the year 2011, NIHD purchases under the Agreement of
subscriber units based on a technology other than iDEN may be counted towards
fulfillment of the year 2011 Purchase Commitment.
	 
	 	2.8	 	EQUITABLE ADJUSTMENTS
	 
	 	 	 	Base package prices in each given year will be conditioned on NIHD meeting its overall
Purchase Commitments set forth on Table 1 of Section 2.5 hereof. If, in any given year,
NIHD fails to meet its Purchase Commitments, NIHD shall pay Motorola, as “equitable
adjustments” an amount equal to [*]. Motorola hereby acknowledges and agrees that these
equitable adjustments are its sole and exclusive remedy for any failure by NIHD of
meeting its Purchase Commitments under Section 2.5 hereof for any given year that
equitable adjustments are applicable. Motorola reserves all remedies at law or in
equity for NIHD’s failure to meet Purchase Commitment in subsequent years in which
equitable adjustments do not apply.






	 	d.	 	Section 10 of the Agreement. “Term and Termination” is deleted in its entirety and
replaced with the following:
	 
	 	 	 	“10. TERM AND TERMINATION






	 	10.1	 	Unless this Agreement is superseded by a new Agreement, or otherwise
terminated pursuant to the terms contained herein, the term of this Agreement shall be
through December 31, 2011. Notwithstanding the foregoing, any specific provisions or
terms under any Appendix to this Agreement may provide for a shorter duration than the
Term, such as the Appendix A (Subscriber Unit Pricing and Terms) which is initially
valid for the first year of the Term and amended annually. However, until a new
annual agreement on pricing and terms is reached, the then current Appendix A with its
previously agreed upon pricing and terms will be extended on a month by month basis.
	 
	 	10.2	 	Either party has the right to terminate this Agreement if the other party
fails to perform or breaches any of its material obligations hereunder, if such
non-performance or breach is not remedied within thirty (30) days after written notice
is given to the defaulting party.
	 
	 	10.3	 	Either party may terminate this Agreement, if the other party assigns this
Agreement or any of its rights hereunder in violation of Section 25.4 below.







 




			
	*	 	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.




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	 	10.4	 	Termination of this Agreement, howsoever caused, will not terminate Buyer’s
liability to pay for any Products previously delivered to Buyer in accordance with the
terms hereunder.






	 	e.	 	Section 13 of the Agreement. “Marketing and Promotional Program” is deleted in its
entirety from the main body of the Agreement and will be addressed on an annual basis in
Appendix A.






	3.	 	ADDITIONAL TERMS AND CONDITIONS
	 
	 	 	Motorola and NIHD agree that the following new provisions shall be added to the Subscriber Unit
Purchase Agreement:






	 	26.	 	MANUFACTURING






	 	26.1	 	With respect to any Products for which Motorola is the sole-source
supplier to NIHD, Motorola will maintain sufficient manufacturing capacity within
Motorola’s manufacturing resources (including its contract manufacturers) to
supply those Products to NIHD in order for NIHD to meet its forecasts and updated
forecasts during the Term of the Agreement, subject to the terms in 26.3 and 26.4
below.
	 
	 	26.2	 	Motorola will not be considered delinquent or in breach of the above
manufacturing capacity obligations for a Product if NIHD fails to provide a
forecast of Product requirements per the forecast and order guidelines as
contained in Sections 1 and 4 of this Agreement.
	 
	 	26.3	 	During the Term of this Agreement, Motorola will supply Products to
NII Affiliates in Brazil, Argentina, and Chile from Jaguariuna, Brazil, and will
supply Product to Mexico from Penang, Malaysia, PROVIDED that the following
minimum annual volumes are committed to: [*]
	 
	 	26.4	 	In the event Motorola, without the agreement of NIHD, provides
Products to NII Affiliates that are not in accordance with the above and NII
Affiliates have made the minimum volume commitments in the preceding year as
required in Section 26.3 hereof, Motorola will pay [*]. This payment by Motorola
will be the sole and exclusive remedy to NIHD and NII Affiliates for breach of
this Section 26.4. Notwithstanding, this Section 26.4 shall in no way affect or
relieve Motorola from any of its obligations under Sections 15 and 18 of the
Agreement.







 




			
	*	 	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.




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	 	27.	 	PRODUCT DEVELOPMENT
	 
	 	 	 	Motorola will maintain a development funding program for the iDEN technology
platform and Products in order to continue to maintain a competitive portfolio of
subscriber units. Such development funding shall consist of not less than [*].
Additionally, in the event that the funding described in the preceding sentence is
not enough to support the development of additional specific Products and or
features requested by NIHD, then Motorola will present to NIHD alternative funding
arrangements. Motorola further agrees to make good faith efforts to evaluate any
new Products or features requested by NIHD and to determine if they could be
commercially made available within the requested timeframes or at a reasonably
competitive price. Notwithstanding the above, Motorola agrees that all investments
in the Development Program will be made in good faith and that it will use its
commercially reasonable efforts in the development of new Products or new features
or capabilities for the Products.






	 	28.	 	NO ACCESS TO BOOKS AND RECORDS






	 	28.1	 	Nothing in this Agreement, implied or otherwise, provides NIHD the
right to access Motorola’s books, records, documents, facilities, procedures or
other Motorola confidential information without prior written consent. Any such
written consent will be at the sole discretion of Motorola and under conditions
necessary to protect Motorola confidential information including but not limited
to allowing access only (i) to specifically identified information; (ii) at a
specifically identified facility or location; (iii) by an agreed upon independent
third party bound by an agreement of confidentiality with Motorola; and (iv)
during reasonable business hours.
	 
	 	28.2	 	Upon written request of NIHD, Motorola will provide a letter from an
authorized officer of Motorola confirming that Motorola is in compliance with its
obligations under this Agreement.






	 	29.	 	iDEN RESOURCE COMMITMENT
	 
	 	 	 	Motorola commits to maintaining knowledgeable resources at senior levels dedicated
to iDEN and NIHD until the later of (a) such time as Motorola ceases to support the
iDEN technology platform as outlined in Section 30, or (b) the expiration of the
Term of the Agreement.






	 	30.	 	ADEQUATE PRODUCT SUPPLY COMMITMENT [ * ] FOR HAVE MADE PRODUCTS







 




			
	*	 	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.




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	 	30.1	 	Motorola will make available to NIHD Products and spare parts for the
Products either directly or through third-parties during the Term. Motorola agrees to
provide NIHD with at least 120 days advance notice of its intention to discontinue
supplying Products to NIHD (the “End of Sale Notice Period”). Within 60 days of the
End of Sale Notice Period, NIHD shall provide Motorola a final and non-cancellable
purchase order for Products to be delivered during the subsequent 12 months or the
Term, whichever is shorter. Motorola shall not be obligated to honor any additional
purchase orders from NIHD after such final purchase order has been received.
	 
	 	30.2	 	If at any time prior to the end of the Term, (a) Motorola elects to stop
supplying Products to NIHD for reasons unrelated to NIHD’s material breach of this
Agreement, NIHD’s decision to no longer purchase Products, or events specified in
Section 10.3 attributable to NIHD, or (b) in the event NIHD terminates Motorola for
default pursuant to Section 10.2 for material failure to provide Products, then
Motorola will make arrangements through third parties for the uninterrupted supply of
Products to NIHD during the Term of this Agreement.
	 
	 	30.3	 	[*]
	 
	 	30.4	 	[*]
	 
	 	31.	 	END OF LIFE
	 
	 	31.1	 	Motorola will provide written notification to NIHD of its intent to
discontinue the manufacture of any Subscriber Unit Model at least one hundred and
fifty (150) days prior to the last date of scheduled manufacture of such Subscriber
Unit (the “End of Life Date” or “EOL Date”).
	 
	 	31.2	 	Within sixty days (60) after Motorola has provided written notification to
NIHD of its intent to discontinue the manufacture of any Subscriber Unit model, NIHD
shall provide a written commitment to purchase a specific quantity of the Subscriber
Unit model to be discontinued (“EOL Quantity”), in advance of the EOL Date of that
Subscriber Unit model. NIHD shall continue to place Purchase Orders for the
discontinued Subscriber Unit Model in accordance with the established forecast and
purchase order process, which over the remaining life of the Product shall equal the
EOL Quantity. All Purchase Orders shall be placed no later than thirty (30) days
prior to the End of Life Date. Such final Purchase Orders shall include a delivery
schedule not to exceed thirty (30) days after the End of Life Date.







 




			
	*	 	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.




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	 	31.3	 	Once NIHD has provided Motorola with the EOL Quantity commitment, no additional
quantities of such Subscriber Unit model will be available unless mutually agreed to by
the Parties. NIHD will be responsible for purchasing the EOL Quantity or in providing
Motorola with mutually acceptable remedies to offset Motorola’s financial loss.






	 	4.	 	RATIFICATION
	 
	 	 	 	Except as specifically stated in this Amendment, the Subscriber Unit Purchase Agreement is, in
all other respects, ratified, confirmed and continues in full force and effect.
	 
	 	5.	 	AUTHORITY
	 
	 	 	 	Each party hereto represents and warrants that: (i) it has obtained all necessary and requisite
approvals, consents and authorizations of third parties and governmental authorities to enter
into this Amendment and to perform and carry out its obligations hereunder; (ii) the persons
executing this Amendment on behalf of each party have express authority to do so, and, in so
doing, to bind the party thereto; (iii) the execution, delivery, and performance of this
Amendment does not violate any provision of any bylaw. Charter, regulation, or any other
governing authority of the party; and, (iv) the execution, delivery and performance of this
Amendment has been duly authorized by all necessary partnership or corporate action and this
Amendment is valid and binding obligation of such party, enforceable in accordance with its
terms.




IN WITNESS WHEREOF, MOTOROLA and NII HOLDINGS, INC have caused this Amendment to be fully executed
and effective as of the last date set forth below.




	 	 	 	 	 	 	 	 	 	 	 
	NII HOLDINGS, INC.	 	 	 	MOTOROLA, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ 	 	 	 	By:	 	/s/ 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Name:

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	Date:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 






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