Exhibit 10.14
"AMENDMENT AGREEMENT NO. 1"
This Amendment Agreement No. 1 to the FWA PLA, dated as of September 15, 2003
(the "Amendment Agreement No.1"), is entered into among Nortel Networks Limited
("NNL"), Nortel Networks de Mexico, S.A. de C.V. ("NN Mexico" and, together with
NNL, "Nortel Networks"), and Axtel, S.A. de C.V. (the "Customer").
WHEREAS, the parties entered into a Purchase and License Agreement for FWA
equipment, dated as of March 20, 2003 (the "FWA PLA"), regarding the supply of
telecommunications transmission equipment and related services from Nortel
Networks to the Customer;
WHEREAS, the Customer wants to increase the purchase volume of FWA Equipment (as
defined in section 2.1.2 of Annex D of the FWA PLA) as set forth in this
Amendment Agreement No. 1;
WHEREAS, the parties want to amend the FWA PLA exclusively in connection to the
incremental volume for the supply of FWA Equipment and the payment terms
applicable to said incremental volume as set forth in this Amendment Agreement
No. 1;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. The parties hereby agree that under the FWA PLA, the Customer may purchase
additional FWA Equipment beyond the minimum purchase commitment established
in Annex H of the FWA PLA; in accordance with the foregoing, the Customer
will purchase the FWA Equipment (the "Incremental FWA Equipment") specified
in Attachment A to this Amendment Agreement No.1 (hereinafter Attachment
"A") by placing incremental Purchase Orders as scheduled in Attachment "A"
(hereinafter the "Incremental Orders"). Pursuant the terms set forth in
Section 18.4 of the FWA PLA, the Parties hereby agree that such Incremental
FWA Equipment will have special payment and delivery terms, which are set
forth in the Attachment "A" of this Amendment Agreement No. 1, therefore,
the Parties agree that all the terms and conditions of the FWA PLA shall
apply to the Incremental Orders except for those specific delivery and
payment terms referenced in the Attachment A.
1.1. Incremental Orders for Incremental FWA Equipment shall only be placed
and/or accepted within a given year after all Purchase Orders for the Total
Annual Minimum Commitment of the FWA PLA for that year have been placed.
1.2. All FWA Equipment Purchase Orders shall clearly state their reference
to; a) Orders corresponding to Annex H Purchase Commitment of the FWA
PLA, b) Purchases within the original context of the FWA PLA or c) Orders
corresponding to the specific conditions of this Amendment Agreement No. 1.
2. The parties hereby agree that the payment terms specified in Attachment A
will apply exclusively for the Incremental Orders specified in Attachment
A; provided, however, that the Customer: (a) complies with the Purchase
Commitment established in Annex H; and (b) places the Incremental Orders
according to the schedule specified in Attachment A.
3. The parties hereby agree that if the Customer fails to place the
Incremental Orders as described in Attachment A and/or fails to meet the
payment schedule for the Incremental FWA Equipment as described in
Attachment A; this agreement will loose all force and effect fifteen (15)
working days after written notification has been provided to the Customer
by Nortel Networks, unless Customer cures such breach in the fifteen (15)
working days period; and:
(i) all the original terms and conditions established in the FWA PLA for
the purchase of FWA Equipment will apply.
(ii) Nortel Networks will not reimburse the payment of the one-time
capacity charge specified in section 7 below to the Customer.
(iii) Nortel Networks will procure from the payments made by Customer to
Nortel Networks for the Incremental FWA Equipment, all the proven and
confirmed expenses and costs incurred as well as a reasonable
provision for all likely future expenses and costs to be incurred by
Nortel Networks in its efforts to achieve the delivery profile in
Attachment A (the "Special Expenses"), provided that such expenses and
costs incurred to date shall be proved by Nortel Networks to the
Customer by the production of a third party invoice and provided that
a list explaining the provision for future expenses and costs shall be
provided by Nortel Networks.
(iv) Nortel Networks shall, at its sole discretion, deliver to Customer the
Incremental FWA Equipment paid and guaranteed by Customer, which can
be manufactured by Nortel Networks after taking the Special Expenses
mentioned in section (iii) above or return the outstanding balance
after taking the Special Expenses mentioned in section (iii), in such
event, Nortel Networks shall return to Customer such outstanding
balance in a period no longer than 180 days after the cure period
mentioned in this Section 3.
(v) After the return of the outstanding balance mentioned in section iv),
Nortel Networks will procure from the provision mentioned in section
iii) all further proven and confirmed expenses and costs incurred,
Page 2
provided that such expenses and costs incurred shall be proved by
Nortel Networks to the Customer by the provision of a third party
invoice. Nortel Networks shall return the outstanding balance of the
provision mentioned in section iii) in a period no longer than 365
days after the cure period mentioned in section 3.
4. All Incremental Orders shall reference this Amendment Agreement No. 1 and
shall comply with the Order Procedure specified in Annex E of the FWA PLA.
Except as provided in section 3 above, all Incremental Orders are totally
binding and non-cancelable.
5. Any change to the Incremental Orders shall be made pursuant the terms set
forth in Section 2.7 of the FWA PLA.
6. Nortel Networks shall make reasonable commercial efforts to deliver the
Incremental FWA Equipment in accordance with the delivery schedule set
forth in Attachment A of this Amendment Agreement No.1. Delivery locations
shall be as per Annex E of the FWA PLA.
7. In exchange of Nortel Networks' considerations set forth in Sections 8 and
9 below, and in order to facilitate the Incremental FWA Equipment delivery
profile outlined in Attachment A, the Customer shall pay Nortel Networks a
one-time non-reimbursable capacity charge of six hundred thousand dollars
of the United States of America (US$600.000) in three installments as per
the payment schedule defined in Attachment A. If after paying the first or
first and second of the three installments the Customer fails to make the
outstanding installment(s), the RSS delivery profile shall reduce to a
volume of no more than 5,000 units per month from April 2004 and the
installment(s) already paid will be forfeited.
8. Nortel Networks hereby waives the requirement specified in Annex H Section
1 f) for Customer to purchase 50,000 compact RSS brackets.
9. Nortel Networks will make available to Customer at no charge approx. 4,000
RPCUs currently at a third party repair facility in Mexico. These units
require an unknown level of repair to return them to a usable state. Nortel
Networks will make these units available "as is" with no warranty and
accepts no liability for their current or future performance. Customer will
be responsible for all repair costs associated with returning these units
to a functional state, disposal costs for units deemed unrecoverable,
transportation costs associated with relocating these units to Customer's
premise and any storage charges incurred from September 15th 2003 until
these units are relocated to a Customer premise
10. This Amendment Agreement applies solely to the Incremental Orders as
defined in Attachment A and shall terminate on completion of the delivery
of
Page 3
the Incremental FWA Equipment ordered. This Amendment creates no precedent
for any future agreements or amendments with respect to the supply of FWA
Equipment or Service.
12. Except as otherwise provided in this Amendment Agreement, the FWA PLA shall
remain in full force and effect, including all terms and conditions in
connection to the supply of FWA Equipment.
13. Capitalized terms used in this Amendment Agreement shall have the meaning
ascribed to those terms in the FWA PLA.
IN WITNESS WHEREOF, this Amendment Agreement was signed as of the date first
above written.
AXTEL, S.A. DE C.V. NORTEL NETWORKS LIMITED
By:________________________________ By:__________________________
Name: Alberto de Villasante Herbert Name:
Title: Legal Representative Title:
NORTEL NETWORKS DE MEXICO,
S.A. DE C.V.
By:__________________________
Name:
Title:
Page 4
Axtel FWA Ammendment - Change Order Attachment A (1/2)
Dis-
creet %
Incr. Incre- $ Cash/ Cash/
Order mental Price/ PO LC on LC
# Orders Unit Units Value PO Cash with PO Date LC or Cash
- -----------------------------------------------------------------------------------------------------------------------------------
No. 1a* 500 x F2 356.14 500 $178,070.00 100% 70% $124,649.00 Sep-03 30% $53,421.00
No. 2 8k x F2 381.14 8,000 $3,049,120.00 100% 70% $2,134,384.00 Feb-04 30% $914,736.00
No. 3 6.5k x F2 381.14 6,500 $2,477,410.00 100% 70% $1,734,187.00 Apr-04 30% $743,223.00
No. 4 2.5k x F5 570.77 2,500 $1,426,925.00 100% 70% $998,847.50 Sep-03 30% $428,077.50
No. 5 2.5k x F5 570.77 2,500 $1,426,925.00 100% 70% $998,847.50 Mar-04 30% $428,077.50
No. 6 5k x F2 381.14 5,000 $1,905,700.00 100% 70% $1,333,990.00 Jan-04 30% $571,710.00
No. 7 3k x F2 381.14 3,000 $1,143,420.00 100% 70% $800,394.00 May-04 30% $343,026.00
No. 7a* 2k x F2 356.14 2,000 $712,280.00 100% 70% $498,596.00 30% $213,684.00
No. 8* 5k x F2 356.14 5,000 $1,780,700.00 100% 70% $1,246,490.00 Jul-04 30% $534,210.00
No. 9 114 x TBM-CD 2,369.68 114 $270,143.90 50% 50% $135,071.95 Sep-03 0% $0.00
No. 10 18 x TPM 4,897.54 18 $88,155.75 50% 50% $44,077.88 Sep-03 0% $0.00
No. 11 18 x TMU 8,259.12 18 $148,664.10 50% 50% $74,332.05 Sep-03 0% $0.00
No. 12 26 x TPM-PD 7,692.00 26 $199,992.00 100% 70% $139,994.40 Feb-04 30% $59,997.60
No. 13 42 x TPM 4,897.54 42 $205,696.75 50% 50% $102,848.38 Oct-03 0% $0.00
No. 14 42 x TMU 8,259.12 42 $346,882.90 50% 50% $173,441.45 Oct-03 0% $0.00
Can- No. 15 54 x TPM 4,897.54 54 $264,467.25 50% 50% $132,233.63 Dec-03 0% $0.00
celled No. 16 54 x TMU 8,259.12 54 $445,992.30 50% 50% $222,996.15 Dec-03 0% $0.00
No. 17 30 x PD Upgrade 40,384.63 30 $1,211,538.75 100% 70% $848,077.13 Jan-04 30% $363,461.63
No. 18 2 x 27b RBS 212,017.55 2 $424,035.10 100% 70% $296,824.57 Sep-03 30% $127,210.53
No. 19 3 x 27b RBS 212,017.55 3 $636,052.65 100% 70% $445,236.86 Oct-03 30% $190,815.80
No. 20 3 x 27b RBS 212,017.55 3 $636,052.65 100% 70% $445,236.86 Nov-03 30% $190,815.80
No. 21 4 x 27b RBS 212,017.55 4 $848,070.20 100% 70% $593,649.14 Dec-03 30% $254,421.06
No. 22 3 x 18b RBS 137,136.62 3 $411,409.86 100% 70% $287,986.90 Sep-03 30% $123,422.96
No. 23 1 x 18b RBS 137,136.62 1 $137,136.62 100% 70% $95,995.63 Oct-03 30% $41,140.99
No. 24 3 x 18b RBS 137,136.62 3 $411,409.86 100% 70% $287,986.90 Nov-03 30% $123,422.96
No. 25 1 x 18b RBS 137,136.62 1 $137,136.62 100% 70% $95,995.63 Dec-03 30% $41,140.99
No. 26 10 x PD Upgrade 40,384.63 10 $403,846.25 100% 70% $282,692.38 Jan-04 30% $121,153.88
No. 27 7 x PD Upgrade 40,384.63 7 $282,692.38 100% 70% $197,884.66 Feb-04 30% $84,807.71
Can- No. 28 5 x 27b RBS 212,017.55 5 $1,060,087.75 100% 70% $742,061.43 Jan-04 30% $318,026.33
celled
Can-
celled No. 29 3 x 27b RBS 212,017.55 3 $636,052.65 100% 70% $445,236.86 Feb-04 30% $190,815.80
Can-
celled No. 30 2 x 18b RBS 137,136.62 2 $274,273.24 100% 70% $191,991.27 Feb-04 30% $82,281.97
Can-
celled No. 31 2 x 18b RBS 137,136.62 2 $274,273.24 100% 70% $191,991.27 Mar-04 30% $82,281.97
No. 32 Incr Capacity 600,000.00 1 $600,000.00 50% 50% $300,000.00 Sep-03 0% $0.00
New
Order No. 33 TMU's 9,910.94 13 $128,842.22 100% 70% $90,189.55 Dec-03 30% $38,652.67
New
Order No. 34 18b RBS
(1 TPM & No Ant) 103,648.92 1 $103,648.92 100% 70% $72,554.24 Jan-04 30% $31,094.68
New
Order No. 35 27b RBS
(2 TPM & No Ant)
- replaces
PO # 28 164,234.76 5 $821,173.80 100% 70% $574,821.66 Jan-04 30% $246,352.14
New
Order No. 36 27b RBS
(2 TPM & No Ant)
- replaces
PO# 29 164,234.76 3 $492,704.28 100% 70% $344,893.00 Feb-04 30% $147,811.28
New
Order No. 37 18b RBS
(1 TPM & No Ant)
- replaces
PO# 30 103,648.92 3 $310,946.76 100% 70% $217,662.73 Feb-04 30% $93,284.03
New
Order No. 38 18b RBS
(1 TPM & No Ant)
- replaces
PO# 31 103,648.92 3 $310,946.76 100% 70% $217,662.73 Mar-04 30% $93,284.03
New
Order No. 39 TBM - CD's 2,843.62 21 $59,716.02 100% 70% $41,801.21 Jan-04 30% $17,914.81
New
Order No. 40 TPM - PD's 7,692.31 10 $76,923.10 100% 70% $53,846.17 Feb-04 30% $23,076.93
New
Order No. 41 27b RBS
(2 TPM &
No Ant) 164,234.76 1 $164,234.76 100% 70% $114,964.33 Mar-04 30% $49,270.43
New
Order No. 42 TMU's 9,910.94 14 $138,753.16 100% 70% $97,127.21 Feb-04 30% $41,625.95
Ref 5k F2 Q4 Min
Order 381.14 5,000 $1,905,700.00 100% 70% $1,333,990.00 Sep-03 30% $571,710.00
Ref 5k F5 '03
Min Order 570.77 5,000 $2,853,850.00 100% 70% $1,997,695.00 Dec-03 30% $856,155.00
Ref '04 Min Order
Q1&2 381.14 10,000 $3,811,400.00 100% 70% $2,667,980.00 Var 30% $1,143,420.00
Ref* '04 Min Order
Q3&4 356.14 10,000 $3,561,400.00 100% 70% $2,492,980.00 Var 30% $1,068,420.00
PO Placement, Acceptance & Delivery Schedule
----------------------------------------------------
2003 2004
----------------------------------------------------
Incr. $k Cash/ $
Order LC on Cash on
# Acceptance Delivery Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
- -----------------------------------------------------------------------------------------------------------------------
No. 1 $2,858,550.00 P&A
No. 1a* $178,070.00 P&A
No. 2 $3,049,120.00 P A
No. 3 $2,477,410.00 P A
No. 4 $1,426,925.00 P&A
No. 5 $1,426,925.00 P A
No. 6 $1,905,700.00 P A
No. 7 $1,143,420.00 P A
No. 7a* $712,280.00
No. 8* $1,780,700.00 P A
No. 9 $135,071.95 $135,071.95 P&A D
No. 10 $44,077.88 $44,077.88 P&A D
No. 11 $74,332.05 $74,332.05 P&A D
No. 12 $199,992.00 P A
No. 13 $102,848.38 $102,848.38 P A D
No. 14 $173,441.45 $173,441.45 P A D
Can- No. 15 $132,233.63 $132,233.63 P A D
celled No. 16 $222,996.15 $222,996.15 P A D
No. 17 $1,211,538.75 P A
No. 18 $424,035.10 P&A
No. 19 $636,052.65 P A
No. 20 $636,052.65 P A
No. 21 $848,070.20 P A
No. 22 $411,409.86 P&A
No. 23 $137,136.62 P A
No. 24 $411,409.86 P A
No. 25 $137,136.62 P A
No. 26 $403,846.25 P A
No. 27 $282,692.38 P A
Can- No. 28 $1,060,087.75 P A
celled
Can-
celled No. 29 $636,052.65 P A
Can-
celled No. 30 $274,273.24 P A
Can-
celled No. 31 $274,273.24 P A
No. 32 $300,000.00 $300,000.00 P&A D1 D2
New
Order No. 33 $128,842.22 P&A
New
Order No. 34 $103,648.92 P A
New
Order No. 35 $821,173.80 P A
New
Order No. 36 $492,704.28 P A
New
Order No. 37 $310,946.76 P A
New
Order No. 38 $310,946.76 P A
New
Order No. 39 $59,716.02 P A
New
Order No. 40 $76,923.10 P A
New
Order No. 41 $164,234.76 P A
New
Order No. 42 $138,753.16 P A
Ref $1,905,700.00 A
Ref $2,853,850.00 A
Ref $3,811,400.00 P A A
Ref* $3,561,400.00 P A A
Cash/LC Schedule
---------------------------------------------------------------------------------
2003 2004
---------------------------------------------------------------------------------
Incr.
Order Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
# $k $k $k $k $k $k $k $k $k $k $k $k $k
- ------------------------------------------------------------------------------------------------------
No. 1 2,859
No. 1a* 178
No. 2 3,049
No. 3 2,477
No. 4 1,427
No. 5 1,427
No. 6 1,906
No. 7 1,143
No. 7a* 712
No. 8* 1,781
No. 9 135 135
No. 10 44 44
No. 11 74 74
No. 12 200
No. 13 103 103
No. 14 173 173
Can- No. 15 0 0
celled
No. 16 223 223
No. 17 1,212
No. 18 424
No. 19 636
No. 20 636
No. 21 848
No. 22 411
No. 23 137
No. 24 411
No. 25 137
No. 26 404
No. 27 283
Can- No. 28 0
celled
Can-
celled No. 29 0
Can-
celled No. 30 0
Can-
celled No. 31 0
No. 32 300 150 150
New
Order No. 33 129 0
New
Order No. 34 104
New
Order No. 35 821
New
Order No. 36 493
New
Order No. 37 311
New
Order No. 38 311
New
Order No. 39 60
New
Order No. 40 77
New
Order No. 41 164
New
Order No. 42 139
- --------------------------------------------------------------------------------------------------------
Sub-Total Cash
- Incremental
RSS & all RBS 5,852 1,049 1,301 1,763 4,506 4,774 2,052 2,477 1,856 0 1,781 0 0
--------------------------------------------------------------------------------------
Ref 1,906
Ref 2,854
Ref 1,906 1,906
Ref* 1,781 1,781
- --------------------------------------------------------------------------------------------------------
Total Cash Due
on 15th 7,758 1,049 1,301 4,617 6,411 4,774 3,958 2,477 1,856 1,781 1,781 0 1,781
- --------------------------------------------------------------------------------------------------------
2003 14,726 2004 24,818
------ ----------
Total 39,544
----------
Legend: P = Place Order Document
A = Activate Order with Pre-Payment (pursuant the payment terms set forth in this Ammendment)
D = Deferred Payment
Incremental Orders and associated payments are due on the 15th day of the month indicated.
Order numbers marked with a star * include volume over 35,000 units in that year and are plannmed to receive a discount of
Further incremental RSS Order activated (paid) during year 2004 shall have a discount of $25 per unit. (Not applicable to the
2005 Minimum Orders)
The four RSS orders shown at the bottom of this list are Minimum Order Quantity orders and are only shown here for reference.
The Order No. 17 for 30 PD Upgrades includes Axtel's 2004 Annual Minimum Commitment of base station units set forth in the FWA
PLA.
Dollar amounts are rounded and indicative. P.O.s to reflect actual amounts.
Purchase Orders 4500051784 (No. 15), 4500051798 (No. 28), 4500051799 (No. 29), 4500051800 (No. 30) and 4500051801 (No. 31)
are cancelled as per this Change Order dated Dec 5th, 2003
Axtel FWA Ammendment - Attachment A (2/2)
Dis-
creet
Incr. Incre- PO Placement & Acceptance
Order mental 2003 2004
# Orders Units Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
- ------------------------------------------------------------------------------------------------------------------------
No. 1 to 8 F2 37,500
F5 5,000
Cummulative F2
Cummulative F5
No. 9 114 x TBM-CD 114 P & A D
No. 10 18 x TPM 18 P & A D
No. 11 18 x TMU 18 P & A D
No. 12 26 x TPM-PD 26 P A
No. 13 42 x TPM 42 P A D
No. 14 42 x TMU 42 P A D
Can-
celled No. 15 54 x TPM 54 P C
No. 16 54 x TMU 54 P A D
No. 17 30 x PD Upgrade 30 P A
No. 18 2 x 27b RBS 2 P & A
No. 19 3 x 27b RBS 3 P A
No. 20 3 x 27b RBS 3 P A
No. 21 4 x 27b RBS 4 P A
No. 22 3 x 18b RBS 3 P & A
No. 23 1 x 18b RBS 1 P A
No. 24 3 x 18b RBS 3 P A
No. 25 1 x 18b RBS 1 P A
No. 26 10 x PD Upgrade 10 P A
No. 27 7 x PD Upgrade 7 P A
Can-
celled No. 28 5 x 27b RBS 5 P C
Can-
celled No. 29 3 x 27b RBS 3 P C
Can-
celled No. 30 2 x 18b RBS 2 P C
Can-
celled No. 31 2 x 18b RBS 2 P C
New
Order No. 33 TMU's 13 P & A
New
Order No. 34 18b RBS (1 TPM &
No Ant) 1 P A
New
Order No. 35 27b RBS (2 TPM &
No Ant) 5 P A
New
Order No. 36 27b RBS (2 TPM &
No Ant) 3 P A
New
Order No. 37 18b RBS (1 TPM &
No Ant) 3 P A
New
Order No. 38 18b RBS (1 TPM &
No Ant) 3 P A
New
Order No. 39 TBM - CD's 21 P A
New
Order No. 40 TPM - PD's 10 P A
New
Order No. 41 27b RBS (1 TPM &
No Ant) 1 P A
New
Order No. 42 TMU's 14 P A
Delivery Schedule Including Minimum Order Quantities
- -----------------------------------------------------------------------------------------------------------------------------
2003 2004 2005*
- -----------------------------------------------------------------------------------------------------------------------------
Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
- -----------------------------------------------------------------------------------------------------------------------------
No. 1 to 8 1000 2000 2000 1000 2000 3000 4000 5000 6000 6000 6000 6000 6000 5000 6000 5000 11500
1000 1000 1000 1000 1000 1000 2000 1000 1000
F2
F5
Cummulative F2 1000 3000 5000 6000 8000 11000 15000 20000 26000 32000 38000 44000 50000 55000 61000 66000 77500
Cummulative F5 1000 2000 3000 4000 5000 6000 8000 9000 10000 10000
No. 9 60 54
No. 10 18
No. 11 18
No. 12 5 6 15
No. 13 42
No. 14 41
Can-
celled No. 15 0
No. 16 54
No. 17 7 8 12 3
No. 18 2
No. 19 3
No. 20 3
No. 21 4
No. 22 3
No. 23 1
No. 24 3
No. 25 1
No. 26 2 8
No. 27 7
Can-
celled No. 28 0
Can-
celled No. 29 0
Can-
celled No. 30 0
Can-
celled No. 31 0
New
Order No. 33 13
New
Order No. 34 1
New
Order No. 35 5
New
Order No. 36 3
New
Order No. 37 3
New
Order No. 38 3
New
Order No. 39 21
New
Order No. 40 10
New
Order No. 41 1
New
Order No. 42 14
- ------------------------------------------------------------------------------------------------------
Legend: P = Place Order Document
A = Activate Order with Pre-Payment (pursuant the payment terms set forth in this Ammendment)
D = Deferred Payment
*Note: Volume shown in 2005 reflect likely Orders on Hand as of Jan 1 2005 given
this delivery schedule and the acceptance of all outstanding POs due by
that date.