Document:

exv10w21

 

Exhibit 10.21

STANDSTILL AGREEMENT

     This STANDSTILL AGREEMENT (this “Agreement”) is made and entered
into as of this 12th day of November, 2002, by and between NEXTEL
COMMUNICATIONS, INC., a Delaware corporation (“NCI”); NII HOLDINGS,
INC., a Delaware corporation (“NII”); and MACKAY SHIELDS LLC
(“Mackay”) and MERRILL LYNCH BOND FUND, INC. HIGH INCOME PORTFOLIO
(“Merrill”).

RECITALS

	A.	 	NII and NII Holdings (Delaware), Inc., a Delaware corporation (“NII
Delaware”), are each debtors in cases pending under chapter 11 of
Title 11 of the United States Code in the United States Bankruptcy Court
for the District of Delaware (the “Bankruptcy Court”), which cases
are being jointly administered and have been assigned Case No. 02-11505
(MFW).
	 
	B.	 	Pursuant to the terms of the Joint Plan of Reorganization (the
“Plan”) of NII and NII Delaware, as filed on June 14, 2002 with the
Bankruptcy Court and as thereafter amended and revised, Reorganized NII
(as defined in the Plan) will be authorized to issue shares of Common
Stock, par value $0.001 per share (the “NII Common Stock”), and NCI
will own up to forty-four and fifty-four hundredths percent (44.54%) of
such NII Common Stock. The NII Common Stock, together with any other
equity securities of NII (other than Reorganized NII’s Special Director
Preferred Stock, par value one dollar ($1.00) per share) having the power
to elect one or more members of the board of directors of NII, is referred
to herein as “NII Voting Stock.”
	 
	C.	 	It is a condition precedent to the consummation of the transactions
contemplated by the Plan that the parties shall have entered into and
agreed to be bound by the terms of this Agreement.

AGREEMENT

                   1.      Defined Terms. In addition to other terms defined in this
Agreement, for purposes of this Agreement, the following terms shall have the
meanings indicated below.

                             (a)      “Affiliate” shall have the same meaning given to the term in
Rule 12b-2 promulgated under the Securities Exchange Act of 1934 (the
“Exchange Act”) as in effect on the date of this Agreement, except that
(i) none of Motorola Credit Corporation, Motorola, Inc. nor any of their
subsidiaries shall be deemed an “Affiliate” of NCI or NII for purposes of this
Agreement, and (ii) neither NII nor any of its subsidiaries shall be deemed an
“Affiliate” of NCI or any of its subsidiaries for purposes of this Agreement.

                             (b)      “Backstopping Noteholders” means each of:

                                             (1)      Mackay, its Affiliates and controlled investment funds; and

                                             (2)      Merrill, its Affiliates and controlled investment funds.

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                         (c)      “Beneficial Owner” A person or entity shall be deemed to be a
“Beneficial Owner” of, or to “Beneficially Own,” shares of a particular class
or series of NII Voting Stock in accordance with the meaning given to such term
in Rule 13d-3 promulgated under the Exchange Act as in effect on the date of
this Agreement.

                         (d)      “Derivative Securities” shall mean (i) all shares of debt or
equity securities that are convertible into or exchangeable for shares of a
particular class or series of NII Voting Stock and (ii) all options, warrants
and other rights to acquire shares of a particular class or series of NII
Voting Stock, whether directly or indirectly, and all options, warrants and
rights to acquire other securities convertible into or exchangeable for shares
of such class or series of NII Voting Stock.

                         (e)      “Fully Diluted Basis” shall mean that the calculation of the
percentage of aggregate Beneficial Ownership of any person or entity of shares
of a particular class or series of NII Voting Stock shall be performed as if
all outstanding Derivative Securities have been fully converted, exchanged or
exercised, as the case may be, into such class or series of NII Voting Stock.

                         (f)      “New NII Notes” means the 13% Senior Secured Discount Notes due
2009 to be issued by NII Holdings (Cayman), Ltd. in connection with the Plan.

               2.      Standstill.

                         (a)      Neither NCI nor any of its Affiliates shall, without the prior
affirmative vote of a majority of the members of the Board of Directors of NII
who are not Affiliates of NCI, directly or indirectly, acquire or offer to
acquire, by purchase or otherwise, shares of any class or series of NII Voting
Stock or Derivative Securities if the effect of such acquisition would be to
increase NCI and its Affiliates’ aggregate Beneficial Ownership of such class
or series of NII Voting Stock on a Fully Diluted Basis to an amount exceeding
forty-nine and nine-tenths percent (49.9%) of the total number of outstanding
shares of such class or series of NII Voting Stock on a Fully Diluted Basis,
excluding those shares held in an individual capacity by an officer or director
of NCI or any of its Affiliates (with respect to each class or series of NII
Voting Stock, the “Standstill Percentage”). Notwithstanding the
foregoing, NCI and its Affiliates shall not be obligated to dispose of NII
Voting Stock or Derivative Securities if the aggregate percentage of the
relevant class or series of NII Voting Stock Beneficially Owned, on a Fully
Diluted Basis, by NCI and its Affiliates is increased as a result of action
taken by any person other than NCI or any of its Affiliates; provided however,
that NCI and its Affiliates will cast all votes in respect of such shares in
excess of the Standstill Percentage in the same proportions as votes are cast
for such class or series of NII Voting Stock by stockholders of NII other than
NCI and its Affiliates.

                         (b)      Neither NCI nor any of its Affiliates shall be deemed to have breached
this Agreement if (i) NCI or any Affiliate inadvertently and in good faith
acquires shares of any class or series of NII Voting Stock so as to cause the
aggregate Beneficial Ownership of such class or series of NII Voting Stock on a
Fully Diluted Basis of NCI and its Affiliates to exceed the Standstill
Percentage (e.g., where such acquisition could not have reasonably been
expected to exceed the Standstill Percentage); and (ii) (A) as soon as
practicable after learning that the

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Standstill Percentage has been exceeded (which may be a minimum of six
months to avoid liability under Section 16(b) of the Exchange Act, as amended
from time to time), NCI and/or its Affiliates divest a sufficient number of
shares of such class or series of NII Voting Stock so as to result in NCI and
its Affiliates’ aggregate Beneficial Ownership of such class or series of NII
Voting Stock on a Fully Diluted Basis to be equal to or less than the
Standstill Percentage of such class or series; or (B) NCI and its Affiliates
cast all votes in respect of such shares in excess of the Standstill Percentage
in the same proportions as votes are cast for such class or series of NII
Voting Stock by stockholders of NII other than NCI and its Affiliates.

               3.      Limitation on Repurchases of NII Voting Stock. During the term
of this Agreement, NII shall not (a) issue shares of any class or series of
NII Voting Stock or Derivative Securities to NCI or any of its Affiliates; (b)
purchase shares of any class or series of NII Voting Stock or Derivative
Securities; or (c) take any other action in such a manner that would cause NCI
and its Affiliates’ aggregate Beneficial Ownership of any class or series of
NII Voting Stock on a Fully Diluted Basis to exceed the Standstill Percentage.

               4.      Director Limitation. During the term of this Agreement, NCI and
its controlled Affiliates shall not nominate to the Board of Directors of NII,
nor shall they vote shares of NII Voting Stock in favor of the election to the
Board of Directors of NII, any person that is an Affiliate of NCI if the
election of such person to the Board of Directors of NII would result in NII
having more than two Affiliates of NCI as directors of NII. NCI further agrees
that at any time during the term of this Agreement that more than two
Affiliates of NCI are directors of NII, it will use its reasonable efforts to
cause such directors to resign to the extent necessary to reduce the number of
directors of NII that are Affiliates of NCI to two.

               5.      Termination.

                         (a)      This Agreement will terminate at such time as (i) all of the New NII
Notes have been paid in full or otherwise cancelled or extinguished and (ii)
the Backstopping Noteholders collectively hold less than 5% of the NII Voting
Stock calculated on a fully diluted basis.

                         (b)      A Backstopping Noteholder will terminate as a party to this Agreement
when such Backstopping Noteholder no longer holds (i) any New NII Notes and
(ii) 5% or more of the NII Voting Stock calculated on a fully diluted basis.

                         (c)      All Backstopping Noteholders will terminate as parties to this
Agreement at such time as the Backstopping Noteholders collectively hold less
than (i) $10,000,000 in aggregate principal amount of New NII Notes and (ii) 5%
of the NII Voting Stock calculated on a fully diluted basis.

               6.      General.

                         (a)      Without prejudice to the rights and remedies otherwise available to
NII, NII shall be entitled to equitable relief by way of injunction if NCI or
its Affiliates breach or threaten to breach any of the provisions of this
Agreement.

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                         (b)      The validity and interpretation of this Agreement shall be governed
by, and construed and enforced in accordance with, the laws of the State of
Delaware applicable to agreements made and to be fully performed therein
(excluding the conflicts of laws rules).

                         (c)      The benefits of this Agreement shall inure to the respective
successors and assigns of NCI and NII and the obligations and liabilities
assumed in this Agreement by NCI and NII shall be binding upon their respective
successors and assigns. The benefits of this Agreement may not be assigned by
any Backstopping Noteholder.

                         (d)      This Agreement embodies the entire agreement and understanding of the
parties hereto and supersedes any and all prior agreements, arrangements and
understandings relating to the matters provided for herein. No alteration,
waiver (other than as provided in Section 2 hereof), amendment, change or
supplement (each, an “Amendment”) hereto shall be binding or effective
unless the same is set forth in writing and signed by (i) NCI, (ii) NII and
(iii) if, at the time of such Amendment, (A) all three Backstopping Noteholders
are parties to this Agreement, not less than two of the three Backstopping
Noteholders or (B) two of the three Backstopping Noteholders remain parties to
this Agreement, not less than one of the two remaining Backstopping
Noteholders. If only one of the three Backstopping Noteholders is a party to
this Agreement at the time of such Amendment, the consent of such Backstopping
Noteholder will not be required for any Amendment approved in writing by both
NII and NCI.

                         (e)      For the convenience of the parties, any number of counterparts of this
Agreement may be executed by the parties hereto. Each such counterpart shall
be and shall be deemed to be, an original instrument, but all such counterparts
taken together shall constitute one and the same Agreement. The parties agree
that facsimile signatures to this Agreement shall be accepted as originals for
all purposes under this Agreement.

[Remainder of Page Blank – Signature Pages Follow]

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     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first written above.

	 	NEXTEL COMMUNICATIONS, INC.
	 
	 	 
	 
	 	By:  /s/ Leonard J. Kennedy
	 
	 	 	
	 
	 	
Name:  Leonard J. Kennedy

Title:  Senior Vice President and General Counsel	 

 

 

	 	NII HOLDINGS, INC.
	 
	 	 
	 
	 	By:  /s/ Robert J. Gilker
	 
	 	 	
	 
	 	
Name:  Robert J. Gilker

Title:  Vice President and General Counsel	 

 

 

	 	MACKAY SHIELDS LLC
	 
	 	 
	 
	 	By:  /s/ Donald E. Morgan III
	 
	 	 	
	 
	 	
Name:  Donald E. Morgan III

Title:  Senior Managing Director	 

 

 

	 	
MERRILL LYNCH BOND FUND, INC. HIGH INCOME
PORTFOLIO
	 
	 	 
	 
	 	By:  /s/ B. Daniel Evans
	 
	 	 	
	 
	 	
Name:  B. Daniel Evans

Title:  Authorized Signatory<PAGE>

                                                                    EXHIBIT 10.1

AGREEMENT IN PRINCIPLE TO FORM POWERXCELL BATTERIES INC., AN ADVANCED BATTERY
TECHNOLOGY COMPANY

GOALS

1.1      To create a world class battery company (PowerXcell Batteries Inc.) and
         development team with access to international companies using and
         distributing batteries, and focused in the near term on opportunities
         for hybrid electric and mini-hybrid (42 volt) electric vehicle
         applications.

1.2      To develop and commercialize the advanced performance battery
         technology concepts currently under development by Power Technology
         Inc. (PWTC) in conjunction with BC Research (BCR) as soon as possible.

1.3      To finance the company from private placements, strategic partners and
         government incentive programs.

1.4      To add other contingent advanced battery and energy storage system
         technologies presently at the conceptual development stage at BCR.

PREREQUISITES

2.1      To attract and optimise Canadian government funding and tax credits
         etc. PowerXcell will be a Canadian private corporation allowing for
         possible eligibility as a CCPC after financing.

2.2      To attract private venture capital as soon as possible, PWTC's
         technology will be licenced to PowerXcell with as few restrictions as
         possible, and PowerXcell will have the following characteristics:

         (a)      an IP position based on proven concepts which will be
                  satisfied through a licence for PWTC's technology;

         (b)      a strong commercialisation strategy and a clear focus on an
                  emerging market which PowerXcell could dominate in and this
                  will be for hybrid and automotive applications of the future;

         (c)      immediate revenue opportunities which will be through
                  military, marine and other special power applications where
                  the technology will be proven on a batch production basis; and

         (d)      a strong management and technical team with a solid network in
                  the industry and market sectors which will be contributed
                  initially mainly by BCR and PWTC either directly or through
                  contract arrangements;

SCOPE OF AGREEMENT

3.1      The existing PWTC advanced lightweight lead acid battery technology
         will be exclusively and unconditionally licensed to PowerXcell except
         as limited by prior obligations entered into by PWTC or as further
         restricted in Section 5.

3.2      BCR will licence certain battery technologies presently at the concept
         stage to PowerXcell under the same restrictions.

3.3      PowerXcell will be held initially 35% by BCR and 65% by Power
         Technology Canada Inc. (PTC) to satisfy the eligibility requirements of
         Canadian federal technology programs.

3.4      BCR and PTC will ensure that PowerXcell establishes a competent
         management team and Board of Directors capable of commercializing the
         technology successfully. PTC and BCR will initially each nominate a
         Board member for a 5 member board that is structured towards TSX
         compliance, and until such time as the Board decides otherwise, the
         President of PowerXcell shall be a Board member.

3.5      BCR and PTC will develop a viable business plan and marketing strategy
         PowerXcell which will address all available markets including, the
         selection of an initial focus on accessible niche markets plus a larger
         market requiring the advantages of the core technology and other
         technologies offered to PowerXcell by its principals.

3.6      BCR will provide under contract technical support required for current
         PWTC initiatives and also provide technical resources under contract to
         PowerXcell. PowerXcell will have the right to source work outside BCR.

3.7      BCR and PTC will work together with the management of PowerXcell to
         ensure that PowerXcell is adequately financed with the goal of securing
         government and private financing of at least $5 million within 12
         months.

3.8      BCR will provide management and technical resources to assist the
         President of PowerXcell in securing financing. The cost of the
         President and associated support will be the responsibility of BCR
         until such time as PowerXcell has financing in place.

3.9      This Agreement in Principle is subject to the approval of the Board of
         Directors of both parties within 30 days and shall define the terms and
         conditions of the final agreement between the parties changed only as
         agreed, or to the extent that further clarification is required.

<PAGE>

FINANCIAL OBLIGATIONS OF PARTIES

4.1      BCR and PTC will each be responsible for their own costs until
         completion of an initial financing at which time those personnel key to
         PowerXcell operations will be offered employment in PowerXcell and
         other personnel will continue to be involved only through BCR and PTC
         contracts.

4.2      Any financial obligations between BCR and PWTC must be settled prior to
         concluding the final agreement to establish PowerXcell and any
         outstanding balance will be converted to a convertible loan to
         PowerXcell.

TERMS AND CONDITIONS OF PWTC LICENCE

5.1  The licence will be exclusive and royalty-free restricted only
     geographically to North and South America with the right to sub-licence.

5.2  PowerXcell shall have an option to licence for all other geographic areas.

5.3  Should PowerXcell work with PWTC to licence the technology to third parties
     not within the scope of existing licences held by PowerXcell, then
     PowerXcell shall receive 25% of all royalties, licence fees and other
     revenues accruing to PWTC.

5.4  PowerXcell shall pay to PWTC an annual licence fee of $120,000 USD for
     three years, payable in equal monthly installments, except that this
     licence fee shall only be payable to the extent that the working capital of
     PowerXcell exceed $1 million USD. This licence fee shall provide for
     PowerXcell to receive marketing efforts and technical direction from key
     Directors of PWTC.

5.5  Any improvements to the technology, proprietary information or business
     relationships developed or established by PowerXcell (Improvements) shall
     be the exclusive property of PowerXcell except in the case of item 5.3
     whereby PowerXcell benefits from a third party licence and in such case the
     Improvements will be shared jointly. Should any other third party wish to
     exploit any advances made by PowerXcell, negotiations must be made with
     PowerXcell directly.

5.6  PTC and BCR shall have no claim or rights to PowerXcell's technologies
     except via their ownership in PowerXcell.

5.7  Provided that the conditions in Item 4.2 are met, PWTC will receive a
     payment equivalent to $6,000 CAD upon signing of the final agreement.

IN WITNESS WHEREOF of the parties have duly executed this Agreement in Principle
the 30'th day of October, 2002:

For Power Technologies Inc.

/s/ Lee Balak
--------------------------------
Authorized Signatory
LEE BALAK, DIRECTOR

FOR B.C. RESEARCH INC.

/s/ James Hill
--------------------------------
Authorized Signatory
JAMES HILL, PRESIDENT

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