UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 2)*
NEXTLINK COMMUNICATIONS, INC.
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(Name of Issuer)
CLASS A COMMON STOCK, PAR VALUE $0.02 PER SHARE
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(Title of Class of Securities)
65333H707
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(CUSIP Number)
FRIED, FRANK, HARRIS, FORSTMANN LITTLE & CO. SUBORDINATED
SHRIVER & JACOBSON DEBT & EQUITY MANAGEMENT BUYOUT
ONE NEW YORK PLAZA PARTNERSHIP-VII, L.P.
NEW YORK, NY 10004 FORSTMANN LITTLE & CO. EQUITY
ATTN: ROBERT C. SCHWENKEL, ESQ. PARTNERSHIP-VI, L.P.
(212) 859-8000 FL FUND, L.P.
C/O FORSTMANN LITTLE & CO.
767 FIFTH AVENUE
NEW YORK, NY 10153
ATTN: WINSTON W. HUTCHINS
(212) 355-5656
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
JUNE 14, 2000
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or
240.13(g), check the following box.
NOTE: Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See ss.240.13d-7 for
other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of the
Act (however, see the Notes).
<PAGE>
SCHEDULE 13D
CUSIP No. 65333H707
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
FORSTMANN LITTLE & CO. SUBORDINATED DEBT AND EQUITY MANAGEMENT BUYOUT
PARTNERSHIP-VII, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
NUMBER OF 7 SOLE VOTING POWER
SHARES 26,976,283**
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 0
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 26,976,283**
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
26,976,283**
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.7%
14 TYPE OF REPORTING PERSON*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
** Section 8(a)(i) of the Certificate of Designation of the Powers,
Preferences and Relative, Participating, Optional and Other Special
Rights of Series C Cumulative Convertible Participating Preferred Stock
(the "Series C Preferred") and Qualifications, Limitations and
Restrictions Thereof (the "Series C Certificate of Designation") sets
forth a formula for determining the number of shares of Class A Common
Stock issuable, as at any date, upon conversion of the Series C
Preferred. The number of shares referred to in items 7, 9 and 11 above
was calculated in accordance with such formula assuming that the
Conversion Price and the Net Realizable FMV (each such term as defined
in the Series C Certificate of Designation) equal $31.625. Section
8(a)(i) of the Form of Series G Certificate of Designation sets forth a
formula for determining the number of shares of Class A Common Stock
issuable, as at any date, upon conversion of the Series G Preferred.
The number of shares referred to in items 7, 9 and 11 above was
calculated in accordance with such formula assuming that the Conversion
Price and the Net Realizable FMV (each such term as defined in the Form
of Series G Certificate of Designation) equal $31.625.
<PAGE>
SCHEDULE 13D
CUSIP No. 65333H707
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
FORSTMANN LITTLE & CO. EQUITY PARTNERSHIP-VI, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
NUMBER OF 7 SOLE VOTING POWER
SHARES 12,525,754**
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 0
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 12,525,754**
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
12,525,754**
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.7%
14 TYPE OF REPORTING PERSON*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
** Section 8(a)(i) of the Certificate of Designation of the Powers,
Preferences and Relative, Participating, Optional and Other Special
Rights of Series D Convertible Participating Preferred Stock (the
"Series D Preferred") and Qualifications, Limitations and Restrictions
Thereof (the "Series D Certificate of Designation") sets forth a
formula for determining the number of shares of Class A Common Stock
issuable, as at any date, upon conversion of the Series D Preferred.
The number of shares referred to in items 7, 9 and 11 above was
calculated in accordance with such formula assuming that the Conversion
Price and the Net Realizable FMV (each such term as defined in the
Series D Certificate of Designation) equal $31.625. Section 8(a)(i) of
the Form of Series H Certificate of Designation sets forth a formula
for determining the number of shares of Class A Common Stock issuable,
as at any date, upon conversion of the Series H Preferred. The number
of shares referred to in items 7, 9 and 11 above was calculated in
accordance with such formula assuming that the Conversion Price and the
Net Realizable FMV (each such term as defined in the Form of Series H
Certificate of Designation) equal $31.625.
<PAGE>
SCHEDULE 13D
CUSIP No. 65333H707
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
FL FUND, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
NUMBER OF 7 SOLE VOTING POWER
SHARES 23,651**
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 0
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 23,651**
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
23,651**
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0%
14 TYPE OF REPORTING PERSON*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
** Section 8(a)(i) of the Series D Certificate of Designation sets forth a
formula for determining the number of shares of Class A Common Stock
issuable, as at any date, upon conversion of the Series D Preferred.
The number of shares referred to in items 7, 9 and 11 above was
calculated in accordance with such formula assuming that the Conversion
Price and the Net Realizable FMV (each such term as defined in the
Series D Certificate of Designation) equal $31.625. Section 8(a)(i) of
the Form of Series H Certificate of Designation sets forth a formula
for determining the number of shares of Class A Common Stock issuable,
as at any date, upon conversion of the Series H Preferred. The number
of shares referred to in items 7, 9 and 11 above was calculated in
accordance with such formula assuming that the Conversion Price and the
Net Realizable FMV (each such term as defined in the Form of Series H
Certificate of Designation) equal $31.625.
<PAGE>
ITEM 3. Source and Amount of Funds or Other Consideration
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Item 3 is hereby amended to add the following:
As more fully described in Item 6 below, on June 14, 2000, the FL
Partnerships entered into an agreement to purchase from NEXTLINK (i) an
aggregate of 268,750 shares of NEXTLINK's Series G Preferred Stock, par
value $.01 per share (the "Series G Preferred") for an aggregate purchase
price of $269,406,250, and (ii) an aggregate of 131,250 shares of
NEXTLINK's Series H Preferred Stock, par value $.01 per share (the "Series
H Preferred") for an aggregate purchase price of $132,343,750. As of June
15, 2000, the shares of Series G Preferred and Series H Preferred to be
purchased by the FL Partnerships would be convertible into 12,648,219
shares of Common Stock.
The FL Partnerships will obtain the funds required to purchase the Series G
Preferred and Series H Preferred from capital contributions made by the
partners of each of the FL Partnerships.
ITEM 5. Interest in Securities of the Issuer
------------------------------------
Item 5 is hereby amended as follows:
The following information is as of June 15, 2000:
(i) MBO-VII:
(a) Amount Beneficially Owned:
MBO-VII directly owns 584,375 shares of Series C Preferred,
which are convertible into 18,478,260 shares of Common Stock, assuming the
conversion of all Preferred Stock pursuant to Section 8(a)(i) of the
Certificate of Designation of the Powers, Preferences and Relative,
Participating, Optional and Other Special Rights of the Series C Preferred
(the "Series C Certificate of Designation"), which sets forth a formula for
determining the number of shares of Class A Common Stock issuable, as at
any date, upon conversion of the Series C Preferred. The number of shares
of Common Stock referred to above was calculated in accordance with such
formula assuming that the Conversion Price and the Net Realizable FMV (each
such term as defined in the Series C Certificate of Designation) equal
$31.625.
MBO-VII directly beneficially owns pursuant to the June Stock
Purchase Agreement (as defined below) 268,750 shares of Series G Preferred,
which will be convertible into 8,498,023 shares of Common Stock, assuming
the conversion of all Series G Preferred and Series H Preferred pursuant to
Section 8(a)(i) of the Form of Series G Certificate of Designation (as
defined below) which sets forth a formula for determining the number of
shares of Class A Common Stock issuable, as at any date, upon conversion of
the Series G Preferred. The number of shares of Common Stock referred to
above was calculated in accordance with such formula assuming that the
Conversion Price and the Net Realizable FMV (each such term as defined in
the Form of Series G Certificate of Designation) equal $31.625.
FLC XXXIII Partnership ("FLC XXXIII"), a New York general partnership
having its principal business office at the address set forth in response
to Item 2(b) of this statement, is the general partner of MBO-VII. Theodore
J. Forstmann, Nicholas C. Forstmann, Sandra J. Horbach, Thomas H. Lister,
Winston W. Hutchins, S. Joshua Lewis, Jamie C. Nicholls (each a United
States citizen with his or her principal place of business being at the
address set forth in response to Item 2(b) of this statement), and Tywana
LLC, a North Carolina limited liability company having its principal
business office at 201 North Tryon Street, Suite 2450, Charlotte, N.C.
28202, are the general partners of FLC XXXIII. Mr. Lewis does not have any
voting or investment power with respect to the shares of Series C Preferred
beneficially owned by MBO-VII; and, accordingly, Mr. Lewis is not deemed to
be the beneficial owner of these shares.
The shares of Series C Preferred and Series G Preferred
beneficially owned by MBO-VII as calculated above are convertible into
approximately 9.7% of the Common Stock outstanding, based on calculations
made in accordance with Rule 13d-3(d) of the Securities and Exchange Act of
1934, as amended, and there being 252,392,786 shares of Common Stock
outstanding as of June 15, 2000, based on a representation and warranty of
NEXTLINK in the June Stock Purchase Agreement and after giving effect to a
stock dividend paid by NEXTLINK on June 15, 2000 (the "Stock Dividend") in
which NEXTLINK paid a one-for-one stock dividend to each share of Common
Stock which was issued and outstanding on June 1, 2000.
(b) Assuming conversion of all shares of Series C Preferred and
Series G Preferred beneficially owned by MBO-VII, number of shares as to
which MBO-VII has:
(i) sole power to vote or to direct the vote -
26,976,283.
(ii) shared power to vote or to direct the vote -- None.
(iii) sole power to dispose or to direct the disposition of
- 26,976,283.
(iv) shared power to dispose or to direct the disposition
of -- None.
(ii) Equity-VI:
(a) Amount Beneficially Owned:
Equity-VI directly owns 265,075 shares of Series D Preferred,
which are convertible into 8,381,818 shares of Common Stock, assuming the
conversion of all Preferred Stock pursuant to Section 8(a)(i) of the
Certificate of Designation of the Powers, Preferences and Relative,
Participating, Optional and Other Special Rights of the Series D Preferred
(the "Series D Certificate of Designation"), which sets forth a formula for
determining the number of shares of Class A Common Stock issuable, as at
any date, upon conversion of the Series D Preferred. The number of shares
of Common Stock referred to above was calculated in accordance with such
formula assuming that the Conversion Price and the Net Realizable FMV (each
such term as defined in the Series D Certificate of Designation) equal
$31.625.
Equity-VI beneficially owns, pursuant to the June Stock Purchase
Agreement, 131,052 shares of Series H Preferred, which will be convertible
into 4,143,936 shares of Common Stock, assuming the conversion of all
Series H Preferred and Series G Preferred pursuant to Section 8(a)(i) of
the Form of Series H Certificate of Designation (as defined below), which
sets forth a formula for determining the number of shares of Class A Common
Stock issuable, as at any date, upon conversion of the Series H Preferred.
The number of shares of Common Stock referred to above was calculated in
accordance with such formula assuming that the Conversion Price and the Net
Realizable FMV (each such term as defined in the Form of Series H
Certificate of Designation) equal $31.625.
FLC XXXII Partnership, L.P. ("FLC XXXII"), a New York limited
partnership having its principal business office at the address set forth
in response to Item 2(b) of this statement, is the general partner of
Equity-VI. Theodore J. Forstmann, Nicholas C. Forstmann, Sandra J. Horbach,
Thomas H. Lister, Winston W. Hutchins, S. Joshua Lewis, Jamie C. Nicholls
(each a United States citizen with his or her principal place of business
being at the address set forth in response to Item 2(b) of this statement),
and Tywana LLC, a North Carolina limited liability company having its
principal business office at the address set forth in Item 5(i)(a) of this
statement, are the general partners of FLC XXXII. Mr. Lewis does not have
any voting or investment power with respect to the shares of Series D
Preferred beneficially owned by Equity-VI; and, accordingly, Mr. Lewis is
not deemed to be the beneficial owner of these shares.
The shares of Series D Preferred and Series H Preferred
beneficially owned by Equity-VI as calculated above are convertible into
approximately 4.7% of the Common Stock outstanding, based on calculations
made in accordance with Rule 13d-3(d) of the Exchange Act and there being
252,392,786 shares of Common Stock outstanding as of June 15, 2000, based
on a representation and warranty of NEXTLINK in the June Stock Purchase
Agreement and after giving effect to the Stock Dividend.
(b) Assuming conversion of all shares of Series D Preferred and
Series H Preferred beneficially owned by Equity-VI, number
of shares as to which Equity-VI has:
(i) sole power to vote or to direct the vote -
12,525,754.
(ii) shared power to vote or to direct the vote -- None.
(iii) sole power to dispose or to direct the disposition of
- 12,525,754.
(iv) shared power to dispose or to direct the disposition
of -- None.
(iii) FL Fund:
(a) Amount Beneficially Owned:
FL Fund directly owns 550 shares of Series D Preferred, which
are convertible into 17,391 shares of Common Stock, assuming the conversion
of all Preferred Stock pursuant to Section 8(a)(i) of the Series D
Certificate of Designation, which sets forth a formula for determining the
number of shares of Class A Common Stock issuable, as at any date, upon
conversion of the Series D Preferred. The number of shares of Common Stock
referred to above was calculated in accordance with such formula assuming
that the Conversion Price and the Net Realizable FMV (each such term as
defined in the Series D Certificate of Designation) equal $31.625.
FL Fund beneficially owns, pursuant to the June Stock Purchase
Agreement, 198 shares of Series H Preferred, which will be convertible into
6,260 shares of Common Stock, assuming the conversion of all Series H
Preferred and Series G Preferred pursuant to Section 8(a)(i) of the Form of
Series H Certificate of Designation, which sets forth a formula for
determining the number of shares of Class A Common Stock issuable, as at
any date, upon conversion of the Series H Preferred. The number of shares
of Common Stock referred to above was calculated in accordance with such
formula assuming that the Conversion Price and the Net Realizable FMV (each
such term as defined in the Form of Series H Certificate of Designation)
equal $31.625.
FLC XXXI Partnership, L.P. ("FLC XXXI"), a New York limited
partnership having its principal business office at the address set forth
in response to Item 2(b) of this statement, is the general partner of FL
Fund. FLC XXIX Partnership, L.P. ("FLC XXIX"), a New York limited
partnership, and FLC XXXIII are the general partners of FLC XXXI. Theodore
J. Forstmann, Nicholas C. Forstmann, Sandra J. Horbach, Thomas H. Lister,
Winston W. Hutchins, S. Joshua Lewis, Jamie C. Nicholls (each a United
States citizen with his or her principal place of business being at the
address set forth in response to Item 2(b) of this statement), and Tywana
LLC, a North Carolina limited liability company having its principal
business office at the address set forth in Item 5(i)(a) of this statement,
are the general partners of each of FLCXXIX and FLC XXXIII. Mr. Lewis does
not have any voting or investment power with respect to the shares of
Series D Preferred beneficially owned by FL Fund; and, accordingly, Mr.
Lewis is not deemed to be the beneficial owner of these shares.
The shares of Series D Preferred and Series H Preferred
beneficially owned by FL Fund as calculated above are convertible into less
than 0.1% of the Common Stock outstanding, based on calculations made in
accordance with Rule 13d-3(d) of the Exchange Act and there being
252,392,786 shares of Common Stock outstanding as of June 15, 2000, based
on a representation and warranty of NEXTLINK in the June Stock Purchase
Agreement and after giving effect to the Stock Dividend.
(b) Assuming conversion of all shares of Series D Preferred and
Series H Preferred beneficially owned by FL Fund, number of shares as to
which FL Fund has:
(i) sole power to vote or to direct the vote - 23,651.
(ii) shared power to vote or to direct the vote -- None.
(iii) sole power to dispose or to direct the disposition of
- 23,651.
(iv) shared power to dispose or to direct the disposition
of -- None.
(iv) Except as set forth above, neither MBO-VII, Equity-VI or FL
Fund nor, to the knowledge of MBO-VII, Equity-VI or FL Fund, any person
identified in Schedule I, beneficially owns any shares of Common Stock or
has effected any transactions in shares of Common Stock during the
preceding 60 days.
(v) The right to receive dividends on, and proceeds from the
sale of, the shares of Common Stock beneficially owned by the FL
Partnerships is governed by the limited partnership agreements of each such
entities, and such dividends or proceeds may be distributed with respect to
numerous general and limited partnership interests.
ITEM 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer
-------------------------------------------------------------
Item 6 is hereby amended to replace the ultimate paragraph thereof with the
following:
June Stock Purchase Agreement
-----------------------------
Pursuant to the Stock Purchase Agreement (the "June Stock
Purchase Agreement"), dated as of June 14, 2000, by and among NEXTLINK and
the FL Partnerships, MBO-VII has agreed to acquire 268,750 shares of Series
G Preferred for an aggregate purchase price of $269,406,250, Equity-VI has
agreed to acquire 131,052 shares of Series H Preferred for an aggregate
purchase price of $132,143,750 and FL Fund has agreed to acquire 198 shares
of Series H Preferred for an aggregate purchase price of $200,000;
provided, however, that the FL Partnerships may reallocate between
themselves, at any time prior to the Closing Date (as defined below), the
number of shares of Series G Preferred and Series H Preferred each will
purchase.
The closing of the June Stock Purchase Agreement (the "Closing
Date") will occur on the fifth business day (but no earlier than June 30,
2000) following the satisfaction or waiver of the closing conditions (the
"Closing Conditions") specified in the June Stock Purchase Agreement. The
Closing Conditions include, without limitation: (a) expiration of any
waiting period required by the Hart-Scott-Rodino Antitrust Improvements Act
of 1976 as a condition to all parties' closing obligations; (b) the
execution and delivery by NEXTLINK of an amended and restated registration
rights agreement (the "Form of Amended and Restated Registration Rights
Agreement") in the form of Exhibit 5.2(d) to the June Stock Purchase
Agreement, the filing of the Certificate of Designation of the Powers,
Preferences and Relative, Participating, Optional and Other Special Rights
of Series G Cumulative Convertible Participating Preferred Stock and
Qualifications, Limitations and Restrictions Thereof (the "Form of Series G
Certificate of Designation") in the form of Exhibit 2.2(a) to the June
Stock Purchase Agreement, the filing of the Certificate of Designation of
the Powers, Preferences and Relative, Participating, Optional and Other
Special Rights of Series H Convertible Participating Preferred Stock and
Qualifications, Limitations and Restrictions Thereof (the "Form of Series H
Certificate of Designation") in the form of Exhibit 2.2(b) to the June
Stock Purchase Agreement, the acquisition by NEXTLINK of all of the
outstanding equity interests in Internext, LLC on the terms set forth in
the Amended and Restated Agreement and Plan of Merger and Share Exchange
Agreement dated as of May 10, 2000 relating to the Concentric merger (the
"Concentric Merger Agreement"), the absence of any event, circumstances,
condition, fact, effect, or other matter which has had or would reasonably
be expected to have a material adverse effect on the business, assets,
financial condition, prospects, or results of operations of NEXTLINK and
its subsidiaries taken as a whole (including Concentric if the Concentric
merger is consummated) or on the ability of NEXTLINK and its subsidiaries
to perform on a timely basis any material obligation under the June Stock
Purchase Agreement or to consummate the transactions contemplated
thereunder (other than an occurrence arising solely out of any event,
circumstances, condition, fact, effect, or other matter with respect to the
consummation or failure to consummate the Concentric merger, the failure to
obtain shareholder approval of the Concentric merger or the termination of
the Concentric Merger Agreement), and the absence of any material
disruption of or material adverse change in financial, banking or capital
market conditions as conditions to the closing obligations of the FL
Partnerships; and (c) other customary closing conditions as conditions to
the closing obligations of some or all of the parties.
Standstill Provisions. Pursuant to the June Stock Purchase
Agreement, until the earlier of January 20, 2005 or the occurrence of
certain events, the FL Partnerships may not, subject to certain exceptions,
(i) acquire or become the beneficial owner of or obtain any rights in
respect of any capital stock of NEXTLINK (other than shares of Common Stock
issuable upon conversion of the Series C Preferred, Series D Preferred,
Series G Preferred and Series H Preferred), (ii) solicit proxies or become
a "participant" in a "solicitation" (as such terms are defined in
Regulation 14A under the Exchange Act) of proxies with respect to any
voting securities of NEXTLINK, (iii) initiate or become a participant in
any stockholder proposal or election contest with respect to NEXTLINK or
induce others to initiate the same, (iv) propose, solicit or participate in
the solicitation of any person to acquire NEXTLINK or a substantial portion
of its assets or more than 5% of its outstanding capital stock, or (v) join
in or in any way participate in a pooling agreement or other arrangement
with respect to NEXTLINK's voting securities.
Lock-Up Provisions. Pursuant to the June Stock Purchase
Agreement, until the earliest of (a) January 20, 2001, (b) the occurrence
of certain changes of control with respect to NEXTLINK or (c) the breach by
NEXTLINK in any material respect of any covenant or agreement contained in
the June Stock Purchase Agreement or any other agreement or document
delivered in connection with the June Stock Purchase Agreement or the Stock
Purchase Agreement or any other agreement or document delivered in
connection with the Stock Purchase Agreement (such earliest date, a "June
Termination Event"), the FL Partnerships may not, subject to certain
exceptions, sell, transfer, assign, convey or otherwise dispose of any of
the Series G Preferred, Series H Preferred or shares of Common Stock
issuable upon conversion thereof. In addition, the FL Partnerships agreed
that they may not exercise any conversion rights with respect to the Series
G Preferred and Series H Preferred until the occurrence of a June
Termination Event. Nothing contained in the June Stock Purchase Agreement,
however, will be deemed to limit the ability of the limited partners in the
FL Partnerships from transferring, directly or indirectly, their limited
partnership interests in the FL Partnerships or the general partners of the
FL Partnerships from transferring, directly or indirectly, up to 15% of the
equity interests in the FL Partnerships at any time or from time to time.
In addition, the FL Partnerships may not, prior to January 20, 2005,
without the prior written consent of NEXTLINK, transfer any of the Series G
Preferred or Series H Preferred to any person that is engaged in a business
that competes with any business conducted by NEXTLINK on the date of the
proposed transfer.
Right of First Purchase. Pursuant to the June Stock Purchase
Agreement, NEXTLINK granted to the FL Partnerships a right of first
purchase with respect to certain issuances by NEXTLINK of Senior Capital
Stock. If NEXTLINK proposes to issue any Senior Capital Stock, with certain
exceptions, NEXTLINK must first make an offering of such Senior Capital
Stock to each of MBO-VII, Equity-VI and FL Fund. Each of the FL
Partnerships, in turn, may elect to purchase all but not less than all of
such Senior Capital Stock. The conversion price of any such Senior Capital
Stock to which an FL Partnership's right of election applies and which is
convertible into shares of Common Stock will be an amount per share no more
than 115% of the closing sales price of the Common Stock on the NASDAQ
National Market System on the date the FL Partnerships elect to purchase
all such Senior Capital Stock, unless the FL Partnerships waive such right.
Such rights of first purchase of the holders of Series G Preferred and
Series H Preferred are exercisable pro rata with the rights of first
purchase of the holders of Series C Preferred and Series D Preferred. If
any holder of Series C Preferred, Series D Preferred, Series G Preferred or
Series H Preferred does not elect to purchase its pro rata portion of such
Senior Capital Stock, the other holders of such preferred series shall have
the right to purchase all, but not less than all, of such shares not so
purchased. In the event no other holder elects to purchase all, but not
less than all, of such shares not so purchased, then no holder of such
preferred series shall have any right of first purchase with respect to
such issuance of Senior Capital Stock.
Dividends. Pursuant to the June Stock Purchase Agreement,
NEXTLINK agreed that it will pay cash dividends on the Series G Preferred
in an amount equal to $55.814 per share per annum on a current basis so
long as it is not precluded from doing so under (a) its debt instruments,
(b) the terms of the 14% Senior Preferred Shares and the 6-1/2% Preferred
Shares, (c) Delaware law or any other laws applicable to NEXTLINK or (d)
any contracts, agreements, understandings or commitments to which NEXTLINK
is a party or by which NEXTLINK or any of its properties may be bound. In
furtherance thereof, NEXTLINK agreed to use its reasonable best efforts to
pay such dividends, including, without limitation, paying any
payment-in-kind dividends required to be paid to permit the payments of
such cash dividends, using its reasonable best efforts to refrain from
entering into any agreements which would preclude such payments, to seek a
waiver under any agreements which would prevent such payments at any time
and to take whatever actions are necessary, including revaluing assets, to
create surplus for the purpose of paying such dividends.
The foregoing descriptions of the June Stock Purchase Agreement
are not intended to be complete and are qualified in their entirety by the
complete text of the June Stock Purchase Agreement, which is incorporated
herein by reference. The June Stock Purchase Agreement is filed as Exhibit
7 hereto.
Registration Rights Agreement
-----------------------------
In connection with the purchase of shares of Series G Preferred
and Series H Preferred under the June Stock Purchase Agreement, NEXTLINK
and the FL Partnerships will enter into the Form of Amended and Restated
Registration Rights Agreement, which will amend and restate the
Registration Rights Agreement. Pursuant to the Form of Amended and Restated
Registration Rights Agreement, NEXTLINK will grant to the FL Partnerships
five demand rights to cause NEXTLINK to register under the Securities Act,
all or part of the Registrable Securities (as defined below) held by the FL
Partnerships. NEXTLINK has the right to delay any such registration once in
any six-month period for a reasonable period of time (but not exceeding 60
days) under certain circumstances. If the FL Partnerships request that
NEXTLINK effect a registration of Registrable Securities by means of a
Shelf Registration Statement, NEXTLINK will, at its cost, use its
reasonable best efforts to keep such Shelf Registration Statement
continuously effective in order to permit the prospectus forming part
thereof to be usable by the FL Partnerships until such time as all the
Registrable Securities covered by such Shelf Registration Statement have
been sold pursuant to such Shelf Registration Statement or cease to be
outstanding.
In addition, if NEXTLINK proposes to register any of its
securities for the account of any other stockholder (other than in
connection with an employee benefit plan, dividend reinvestment plan,
merger or consolidation or incidental to an issuance of securities under
Rule 144A under the Securities Act), the FL Partnerships may require
NEXTLINK to include all or a portion of their Registrable Securities in
such registration, subject to certain priorities among them and to certain
limitations. All expenses incurred in connection with such registrations
(other than underwriting discounts and commissions) will be borne by
NEXTLINK.
"Registrable Securities" means (i) any shares of Common Stock
issued or issuable upon the conversion of any Series C Preferred, Series D
Preferred, Series G Preferred or Series H Preferred held by the FL
Partnerships and (ii) any shares of Common Stock issued with respect to the
Common Stock referred to in clause (i) by way of a stock dividend, stock
split or reverse stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or otherwise.
The foregoing description of the Form of Amended and Restated
Registration Rights Agreement is not intended to be complete and is
qualified in its entirety by the complete text of the Form of Amended and
Restated Registration Rights Agreement, all of which is incorporated herein
by reference. The Form of Amended and Restated Registration Rights
Agreement is filed as Exhibit 8 hereto.
Form of Series G Certificate of Designation
-------------------------------------------
Rank. Under the Form of Series G Certificate of Designation, the
Series G Preferred and the Series H Preferred each will, with respect to
dividend rights and rights on liquidation and dissolution, rank (i) senior
to the 6-1/2% Preferred Shares and all classes of capital stock or series
of preferred stock of NEXTLINK established by the Board of Directors, the
terms of which do not expressly provide that such class or series ranks
senior to, or on a parity with, the Series G Preferred and Series H
Preferred (collectively referred to, together with all classes of Common
Stock, as "Junior Securities"), (ii) on a parity with the Series C
Preferred, the Series D Preferred and each class of capital stock of
NEXTLINK or series of preferred stock of NEXTLINK established by the Board
of Directors after the filing of the Form of Series G Certificate of
Designation, the terms of which expressly provide that such class or series
will rank on a parity with the Series G Preferred and Series H Preferred as
to dividend rights and rights on liquidation, winding-up and dissolution
(collectively referred to as "Parity Securities"); and (iii) junior as to
the 14% Senior Preferred Shares, the Corporation's Series E Redeemable
Exchangeable Preferred Stock, par value $0.01 per share, and to each class
of capital stock or series of preferred stock of NEXTLINK established by
the Board of Directors after the filing of the Form of Series G Certificate
of Designation, the terms of which expressly provide that such class or
series will rank senior to the Series G Preferred and Series H Preferred as
to dividend rights and rights on liquidation, winding-up and dissolution of
NEXTLINK (collectively referred to as "Senior Securities"). The Form of
Series G Certificate of Designation and the Form of Series H Certificate of
Designation each provide that the relative powers, rights and preferences
of the Series G Preferred and Series H Preferred vis-a-vis the other are
determined as set forth in the Form of Series G Certificate of Designation
and the Form of Series H Certificate of Designation. Pursuant to the Form
of Series G Certificate of Designation, the creation, authorization or
issuance by NEXTLINK of any Parity Securities or any Senior Securities
shall require the affirmative vote or written consent of holders of a
majority of the outstanding shares of the Series G Preferred, except for
Senior Securities issued in accordance with paragraph (f)(ii) of the
Certificate of Designation of the 14% Senior Preferred Shares as in effect
on December 3, 1999.
Dividends. The Form of Series G Certificate of Designation
provides that on the Closing Date NEXTLINK shall pay the holders of Series G
Preferred, on a pro rata basis, a regularly scheduled cash dividend in the
aggregate amount of $4,040,889. Thereafter, the holders of Series G
Preferred will be entitled to receive with respect to each share of Series
G Preferred, when and if declared by the Board of Directors, out of funds
legally available for the payment of dividends, dividends in an amount
equal to $55.814 per annum in cash. Such dividends will be cumulative from
the date of issuance of the Series G Preferred (the "Series G Issue Date")
and will be payable quarterly in arrears. In addition, so long as any
shares of Series G Preferred are outstanding, if NEXTLINK pays a dividend
in cash, securities or other property on the Common Stock, then each share
of Series G Preferred will be entitled to receive an amount equal to the
Series G Per Share Participation Amount. The "Series G Per Share
Participation Amount" means, as at any date, 37.5% of the amount of
dividends that would be paid with respect to the Series G Preferred and
Series H Preferred taken together if converted into Common Stock on the
date established as the record date with respect to such dividend on the
Common Stock divided by the number of shares of Series G Preferred then
outstanding.
Liquidation. In the event of any liquidation, dissolution or
winding-up of NEXTLINK, after payment or distribution of the assets of
NEXTLINK is made to or set apart for the holders of Senior Securities, and
before any payment or distribution of the assets of NEXTLINK may be made to
or set apart for the holders of Junior Securities, the holders of the
shares of Series G Preferred and Series H Preferred taken together will be
entitled to receive an amount in cash equal to the greater of (x) the
aggregate Liquidation Preferences (as defined below) of the shares of
Series G Preferred and Series H Preferred as of the date of liquidation, or
(y) the aggregate amount that would have been received with respect to the
shares of Series G Preferred and Series H Preferred if such stock had been
converted to Common Stock immediately prior to such liquidation,
dissolution or winding-up. If, upon any liquidation, dissolution or
winding-up of NEXTLINK, the assets of NEXTLINK, or proceeds thereof, are
insufficient to pay in full the amounts under clause (x) of the preceding
sentence and liquidating payments on all Parity Securities, then such
assets, or proceeds thereof, will be distributed among the shares of Series
G Preferred and the Series H Preferred taken together and all such other
Parity Securities ratably in accordance with the respective amounts that
would be payable on such shares of Series G Preferred and Series H
Preferred and any such other Parity Securities if all amounts payable
thereon were paid in full. The amount distributable under clause (i) to the
Series G Preferred and Series H Preferred taken together, will first be
distributed to the Series G Preferred until it has received an amount equal
to the aggregate Preference Amounts (as defined in the Form Series G
Certificate of Designation) of all Series G Preferred outstanding as of the
date of liquidation and thereafter 37.5% to the Series G Preferred and
62.5% to the Series H Preferred. If, upon any liquidation, dissolution or
winding-up of NEXTLINK, the assets of NEXTLINK, or proceeds thereof,
distributable to the Series G Preferred and Series H Preferred taken
together are sufficient to pay in full the amounts under clause (x) of the
first sentence of this paragraph then such amount will first be distributed
to the Series G Preferred until it has received an amount equal to the
aggregate Preference Amounts (as defined in the Form of Series G
Certificate of Designation) of all Series G Preferred outstanding as of the
date of liquidation and thereafter 37.5% to the Series G Preferred and
62.5% to the Series H Preferred.
"Liquidation Preference" with respect to a share of Series G
Preferred means, as at any date, the sum of $1000.00 plus an amount
generally equal to any accrued and unpaid dividends with respect to such
share through such date.
Redemption. The Series G Preferred will not be redeemable by
NEXTLINK prior to the later of (i) the fifth anniversary of the Series G
Issue Date and (ii) the date on which NEXTLINK has redeemed indefeasibly or
defeased in full its obligations in respect of its 12-1/2% Senior Notes due
April 15, 2006 or defeased the covenants applicable thereto in accordance
with their terms (such later date, the "Series G Redemption Trigger Date").
On and after the Series G Redemption Trigger Date, subject to the holders'
conversion rights (as described below), to the extent NEXTLINK has funds
legally available for such payment, NEXTLINK may redeem at its option
shares of Series G Preferred, at any time, at a redemption price equal to
the Series G Liquidation Preference as of the date fixed for redemption;
provided, however, that NEXTLINK will only be entitled to redeem the Series
G Preferred if the Series H Preferred is also redeemed on a proportional
basis based on the percentage of each class of shares outstanding at the
same time. In addition, to the extent NEXTLINK has funds legally available
therefor, during the 180-day period commencing on the tenth anniversary of
the Series G Issue Date, the holders of the Series G Preferred will have
the right to cause NEXTLINK to redeem at any time outstanding shares of
Series G Preferred at a redemption price in cash equal to the Series G
Liquidation Preference (the "Series G Mandatory Redemption Obligation").
Conversion. Under the Form of Series G Certificate of
Designation, the holders of shares of Series G Preferred will have the
right, generally, at any time, to convert any or all outstanding shares of
Series G Preferred into fully paid and non-assessable shares of Common
Stock; provided that upon the exercise by any holder of Series G Preferred
of the conversion option, a proportional amount, based on the percentage of
each class of shares outstanding, of the Series H Preferred will
automatically convert. The outstanding shares of Series G Preferred and
Series H Preferred taken together will be convertible into a number of
shares of Common Stock (the "Series G Aggregate Conversion Shares") equal
to the aggregate Liquidation Preferences of the shares of Series G
Preferred and Series H Preferred as of the date of conversion divided by
$31.625, subject to certain adjustments. The Series G Preferred outstanding
as at any date will be convertible into a number of shares of Common Stock
equal to the sum of (i) the aggregate Preference Amounts (as defined in the
Form of Series G Certificate of Designation) with respect to all
outstanding shares of Series G Preferred divided by the Net Realizable FMV
(as defined in the Series G Certificate of Designation) of a share of
Common Stock at the time of conversion plus (ii) .375 times the excess, if
any, of the Series G Aggregate Conversion Shares over the number determined
pursuant to clause (i).
Voting Rights. Pursuant to the Form of Series G Certificate of
Designation, the holders of record of shares of Series G Preferred are
entitled to vote on an as-converted basis with the Common Stock as a single
class on all matters presented to the holders of Common Stock for vote,
with certain exceptions. The Form of Series G Certificate of Designation
provides that so long as the holders of the outstanding shares of Series C
Preferred, voting together as a single class, shall be entitled to
designate the Series C Designee for election to the Board of Directors, the
holders of the outstanding shares of Series G Preferred shall not be
entitled to designate any directors for election to the Board of Directors,
and that from and after the date the holders of Series C Preferred are no
longer entitled to designate the Series C Designee, the holders of the
outstanding shares of Series G Preferred voting together as a single class,
shall be entitled to designate the Series G Designee for election to the
Board of Directors and shall have the exclusive right to vote for the
election of such designee to the Board of Directors. The Form of Series G
Certificate of Designation provides that, the foregoing right of the
holders of Series G Preferred to designate and elect the Series G Designee
shall cease immediately upon less than 40% of the aggregate number of
shares of Series C Preferred issued on the original date of issuance of the
Series C Preferred, Series D Preferred issued on the original date of
issuance of the Series D Preferred, Series G Preferred issued on the
original date of issuance of the Series G Preferred and Series H Preferred
issued on the original date of issuance of the Series H Preferred (such
aggregate number of shares of Series C Preferred, Series D Preferred,
Series G Preferred and Series H Preferred being referred to as the "Total
Preferred Shares") being outstanding, whereupon the total number of
directors then constituting the whole Board of Directors shall be
automatically be decreased by one, and the term of office of such Series G
Designee shall terminate. The Form of Series G Certificate of Designation
provides that, for so long as, and only for so long as, (i) less than 40%
of the Total Preferred Shares are outstanding, (ii) no shares of Series C
Preferred issued on the original date of issuance of the Series C Preferred
are outstanding, and (iii) any shares of Series G Preferred issued on the
original date of issuance of the Series G Preferred are outstanding, the
holders of the outstanding shares of Series G Preferred shall be entitled
to designate one board observer (the "Series G Board Observer"). The
foregoing right to designate the Series G Board Observer shall cease, and
the observation rights of the Series G Board Observer shall automatically
terminate, immediately upon there being no outstanding shares of Series G
Preferred. If six quarterly dividends payable on the Series G Preferred
have not been paid in full, NEXTLINK fails to discharge its Series G
Mandatory Redemption Obligation, or if NEXTLINK issues Parity Securities or
Senior Securities without the requisite consents of the holders of Series G
Preferred, the total number of directors then constituting the whole Board
automatically will be increased by one and the holders of outstanding
shares of Series G Preferred will be entitled to elect one additional
director to serve on the Board, provided the holders of the Series C
Preferred are not then entitled to elect an additional director pursuant to
similar provisions in the Series C Certificate of Designation. Whenever all
arrears in dividends have been paid or declared and set apart for payment
or NEXTLINK fulfills its Series G Mandatory Redemption Obligation, the
right of the holders of Series G Preferred to elect the additional
director, if any, will cease.
Change of Control Put. Pursuant to the Series G Certificate of
Designation, within thirty days of a Change of Control (as defined in the
Form of Series G Certificate of Designation), NEXTLINK must notify the
holders of the Series G Preferred of such occurrence and must make an offer
(the "Series G Offer to Purchase") to each holder of shares of Series G
Preferred to repurchase such holder's shares of Series G Preferred at a
price per share in cash equal to 101% of the Series G Liquidation
Preference plus, without duplication, an amount in cash equal to all
accumulated and unpaid dividends per share. If any holders of Series G
Preferred tender their shares pursuant to the Series G Offer to Purchase,
NEXTLINK will be required to purchase a proportional amount of the Series H
Preferred. Notwithstanding anything to the contrary described above,
NEXTLINK will not repurchase or redeem any stock pursuant to the Series G
Offer to Purchase until it has repurchased or repaid all outstanding debt
obligations pursuant to rights triggered pursuant to the terms thereof
resulting from the Change of Control (as defined in the Form of Series G
Certificate of Designation) in question.
The foregoing description of the Form of Series G Certificate of
Designation is not intended to be complete and is qualified in its entirety
by the complete text of the Form of Series G Certificate of Designation,
all of which is incorporated herein by reference. The Form of Series G
Certificate of Designation is filed as Exhibit 9 hereto.
Form of Series H Certificate of Designation
-------------------------------------------
Rank. Under the Form of Series H Certificate of Designation, the
Series H Preferred and the Series G Preferred each will, with respect to
dividend rights and rights on liquidation and dissolution, rank (i) senior
to the 6-1/2% Preferred Shares and all classes of capital stock or series
of preferred stock of NEXTLINK established by the Board of Directors, the
terms of which do not expressly provide that such class or series ranks
senior to, or on a parity with, the Series H Preferred and Series G
Preferred (collectively referred to, together with all classes of Common
Stock, as "Junior Securities"), (ii) on a parity with the Series C
Preferred, the Series D Preferred and each class of capital stock of
NEXTLINK or series of preferred stock of NEXTLINK established by the Board
of Directors after the filing of the Form of Series H Certificate of
Designation, the terms of which expressly provide that such class or series
will rank on a parity with the Series H Preferred and Series G Preferred as
to dividend rights and rights on liquidation, winding-up and dissolution
(collectively referred to as "Parity Securities"); and (iii) junior as to
the 14% Senior Preferred Shares, the Corporation's Series E Redeemable
Exchangeable Preferred Stock, par value $0.01 per share, and to each class
of capital stock or series of preferred stock of NEXTLINK established by
the Board of Directors after the filing of the Form of Series H Certificate
of Designation, the terms of which expressly provide that such class or
series will rank senior to the Series H Preferred and Series G Preferred as
to dividend rights and rights on liquidation, winding-up and dissolution of
NEXTLINK (collectively referred to as "Senior Securities"). Pursuant to the
Form of Series H Certificate of Designation, the creation, authorization or
issuance by NEXTLINK of any Parity Securities or any Senior Securities
shall require the affirmative vote or written consent of holders of a
majority of the outstanding shares of the Series H Preferred, except for
Senior Securities issued in accordance with paragraph (f)(ii) of the
Certificate of Designation of the 14% Senior Preferred Shares as in effect
on December 3, 1999.
Dividends. So long as any shares of Series H Preferred are
outstanding, if NEXTLINK pays a dividend in cash, securities or other
property on the Common Stock, then each share of Series H Preferred will be
entitled (with certain exceptions) to receive an amount equal to the Series
H Per Share Participation Amount. The "Series H Per Share Participation
Amount" means, as at any date, 62.5% of the amount of dividends that would
be paid with respect to the Series H Preferred and Series G Preferred taken
together if converted into Common Stock on the date established as the
record date with respect to such dividend on the Common Stock divided by
the number of shares of Series H Preferred then outstanding.
Liquidation. In the event of any liquidation, dissolution or
winding-up of NEXTLINK, after payment or distribution of the assets of
NEXTLINK is made to or set apart for the holders of Senior Securities, and
before any payment or distribution of the assets of NEXTLINK may be made to
or set apart for the holders of Junior Securities, the holders of the
shares of Series H Preferred and Series G Preferred taken together will be
entitled to receive an amount in cash equal to the greater of (x) the
aggregate Liquidation Preferences (as defined below) of the shares of
Series H Preferred and Series G Preferred as of the date of liquidation, or
(y) the aggregate amount that would have been received with respect to the
shares of Series H Preferred and Series G Preferred if such stock had been
converted to Common Stock immediately prior to such liquidation,
dissolution or winding-up. If, upon any liquidation, dissolution or
winding-up of NEXTLINK, the assets of NEXTLINK, or proceeds thereof, are
insufficient to pay in full the amounts under clause (x) of the preceding
sentence and liquidating payments on all Parity Securities, then such
assets, or proceeds thereof, will (i) be distributed among the shares of
Series H Preferred and the Series G Preferred taken together and all such
other Parity Securities ratably in accordance with the respective amounts
that would be payable on such shares of Series H Preferred and Series G
Preferred and any such other Parity Securities if all amounts payable
thereon were paid in full and (ii) the amount distributable under clause
(i) to the Series H Preferred and Series G Preferred taken together, will
first be distributed to the Series G Preferred until it has received an
amount equal to the aggregate Preference Amounts (as defined in the Form of
Series G Certificate of Designation) of all Series G Preferred outstanding
as of the date of liquidation and thereafter 37.5% to the Series G
Preferred and 62.5% to the Series H Preferred. If, upon any liquidation,
dissolution or winding-up of NEXTLINK, the assets of NEXTLINK, or proceeds
thereof, distributable to the Series H Preferred and Series G Preferred
taken together are sufficient to pay in full the amounts under clause (x)
of the first sentence of this paragraph then such amount will first be
distributed to the Series G Preferred until it has received an amount equal
to the aggregate Preference Amounts (as defined in the Form of Series G
Certificate of Designation) of all Series G Preferred outstanding as of the
date of liquidation and thereafter 37.5% to the Series G Preferred and
62.5% to the Series H Preferred.
"Liquidation Preference" with respect to a share of Series H
Preferred means, as at any date, the sum of $1000.00 plus an amount
generally equal to any accrued and unpaid dividends with respect to such
share through such date.
Redemption. The Series H Preferred will not be redeemable by
NEXTLINK prior to the later of (i) the fifth anniversary of the Series H
Issue Date and (ii) the date on which NEXTLINK has redeemed indefeasibly or
defeased in full its obligations in respect of its 12-1/2% Senior Notes due
April 15, 2006 or defeased the covenants applicable thereto in accordance
with their terms (such later date, the "Series H Redemption Trigger Date").
On and after the Series H Redemption Trigger Date, subject to the holders'
conversion rights (as described below), to the extent NEXTLINK has funds
legally available for such payment, NEXTLINK may redeem at its option
shares of Series H Preferred, at any time, at a redemption price equal to
the Series H Liquidation Preference as of the date fixed for redemption;
provided, however, that NEXTLINK will only be entitled to redeem the Series
H Preferred if the Series G Preferred is also redeemed on a proportional
basis based on the percentage of each class of shares outstanding at the
same time. In addition, to the extent NEXTLINK has funds legally available
therefor, during the 180-day period commencing on the tenth anniversary of
the Series H Issue Date, the holders of the Series H Preferred will have
the right to cause NEXTLINK to redeem at any time outstanding shares of
Series H Preferred at a redemption price in cash equal to the Series H
Liquidation Preference (the "Series H Mandatory Redemption Obligation").
Conversion. Under the Form of Series H Certificate of
Designation, the holders of shares of Series H Preferred will have the
right, generally, at any time, to convert any or all outstanding shares of
Series H Preferred into fully paid and non-assessable shares of Common
Stock; provided that upon the exercise by any holder of Series H Preferred
of the conversion option, a proportional amount, based on the percentage of
each class of shares outstanding, of the Series G Preferred will
automatically convert. The outstanding shares of Series H Preferred and
Series G Preferred taken together will be convertible into a number of
shares of Common Stock (the "Series H Aggregate Conversion Shares") equal
to the aggregate Liquidation Preferences (as defined in each of the Form of
Series G Certificate of Designation and the Form of Series H Certificate of
Designation) of the shares of Series H Preferred and Series G Preferred as
of the date of conversion divided by $31.625, subject to certain
adjustments. The Series H Preferred outstanding as at any date will be
convertible into a number of shares of Common Stock equal to the sum of (i)
the aggregate Preference Amounts (as defined in the Form of Series H
Certificate of Designation) with respect to all outstanding shares of
Series H Preferred divided by the Net Realizable FMV (as defined in the
Form of Series H Certificate of Designation) of a share of Common Stock at
the time of conversion plus (ii) .375 times the excess, if any, of the
Series H Aggregate Conversion Shares over the number determined pursuant to
clause (i).
Voting Rights. Pursuant to the Form of Series H Certificate of
Designation, the holders of record of shares of Series H Preferred are
entitled to vote on an as-converted basis with the Common Stock as a single
class on all matters presented to the holders of Common Stock for vote,
with certain exceptions. The Form of Series H Certificate of Designation
provides that so long as the holders of the outstanding shares of Series D
Preferred, voting together as a single class, shall be entitled to
designate the Series D Designee for election to the Board of Directors, the
holders of the outstanding shares of Series H Preferred shall not be
entitled to designate any directors for election to the Board of Directors,
and that from and after the date the holders of Series D Preferred are no
longer entitled to designate the Series D Designee, the holders of the
outstanding shares of Series H Preferred voting together as a single class,
shall be entitled to designate the Series H Designee for election to the
Board of Directors and shall have the exclusive right to vote for the
election of such designee to the Board of Directors. The Form of Series H
Certificate of Designation provides that, the foregoing right to designate
and elect the Series H Designee shall cease immediately upon less than 20%
of the Total Preferred Shares being outstanding, whereupon the total number
of directors then constituting the whole Board of Directors shall be
automatically be decreased by one, and the term of office of such Series H
Designee shall terminate. The Form of Series H Certificate of Designation
provides that, for so long as, and only for so long as, (i) less than 20%
of the Total Preferred Shares are outstanding, (ii) no shares of Series D
Preferred issued on the original date of issuance of the Series D Preferred
are outstanding, and (iii) any shares of Series H Preferred outstanding on
the date of issuance of the Series H Preferred are outstanding, the holders
of the outstanding shares of Series H Preferred shall be entitled to
designate one board observer (the "Series H Board Observer"). The foregoing
right to designate the Series H Board Observer shall cease, and the
observation rights of the Series H Board Observer shall automatically
terminate, immediately upon there being no outstanding shares of Series H
Preferred. If NEXTLINK fails to discharge its Series H Mandatory Redemption
Obligation or if it issues Parity Securities or Senior Securities without
the requisite consents of the holders of Series H Preferred, the total
number of directors then constituting the whole Board automatically will be
increased by one and the holders of outstanding shares of Series H
Preferred, will be entitled to elect one additional director to serve on
the Board, provided the holders of the Series D Preferred are not then
entitled to elect an additional director pursuant to similar provisions in
the Series D Certificate of Designation. Whenever NEXTLINK fulfills its
Series H Mandatory Redemption Obligation, the right of the holders of
shares of Series H Preferred to elect the additional director, if any, will
cease.
Change of Control Put. Pursuant to the Series G Certificate of
Designation, within thirty days of a Change of Control (as defined in the
Form of Series G Certificate of Designation), NEXTLINK must notify the
holders of the Series G Preferred of such occurrence and must make an offer
(the "Series G Offer to Purchase") to each holder of shares of Series G
Preferred to repurchase such holder's shares of Series G Preferred at a
price per share in cash equal to 101% of the Series G Liquidation
Preference plus, without duplication, an amount in cash equal to all
accumulated and unpaid dividends per share. If any holders of Series G
Preferred tender their shares pursuant to the Series G Offer to Purchase,
NEXTLINK will be required to purchase a proportional amount of the Series H
Preferred. Notwithstanding anything to the contrary described above,
NEXTLINK will not repurchase or redeem any stock pursuant to the Series G
Offer to Purchase until it has repurchased or repaid all outstanding debt
obligations pursuant to rights triggered pursuant to the terms thereof
resulting from the Change of Control (as defined in the Form of Series G
Certificate of Designation) in question.
The foregoing description of the Form of Series H Certificate of
Designation is not intended to be complete and is qualified in its entirety
by the complete text of the Form of Series H Certificate of Designation,
all of which is incorporated herein by reference. The Form of Series H
Certificate of Designation is filed as Exhibit 10 hereto.
Agreement and Waiver
--------------------
Pursuant to the Agreement and Waiver (the "Agreement and
Waiver"), dated as of June 14, 2000, by and among NEXTLINK and the FL
Partnerships, the (1) the FL Partnerships agreed to modify the right of
first purchase set forth in Section 4.14 of the Stock Purchase Agreement to
provide for the pro rata exercise of such right as set forth in Section
4.14 of the June Stock Purchase Agreement and to waive such right to permit
the sale of the Series G Preferred and the Series H Preferred pursuant to
the June Stock Purchase Agreement; (2) the FL Partnerships agreed to waive
their rights under Section 4.17 of the Stock Purchase Agreement with
respect to the LHP Share Exchange (as defined in the June Stock Purchase
Agreement) and the other transactions contemplated under the Concentric
Merger Agreement; (3) the FL Partnerships consented, effective as of the
Closing Date, to the amendment and restatement of the Registration Rights
Agreement in the form of the Form of Amended and Restated Registration
Rights Agreement; (4) the FL Partnerships agreed to clarify certain rights
with respect to conversion price adjustments under the Series C Certificate
of Designation and the Series D Certificate of Designation; (5) the FL
Partnerships and NEXTLINK agreed to adjust the conversion price of each of
the Series C Preferred and the Series D Preferred to $31.625 effective upon
the effectiveness of the Stock Dividend and to waive any other conversion
price adjustments under the Series C Certificate of Designation or Series D
Certificate of Designation with respect to the Stock Dividend; and (6) the
FL Partnerships agreed to vote (a) all shares of Series C Preferred, during
such time as the holders of Series C Preferred are not entitled to
designate the Series C Designee, but the holders of Series G Preferred are
entitled to designate the Series C Designee, and (b) all shares of Series D
Preferred, during such time as the holders of Series D Preferred are not
entitled to designate the Series D Designee, but the holders of Series H
Preferred are entitled to designate the Series D Designee, in each case, in
accordance with the recommendation of the Board of Directors of NEXTLINK.
The Agreement and Waiver provides that it shall be binding on all
successors, assigns and transferees of shares of Series C Preferred and
Series D Preferred.
The foregoing description of the Agreement and Waiver is not
intended to be complete and is qualified in its entirety by the complete
text of the Agreement and Waiver, all of which is incorporated herein by
reference. The Agreement and Waiver is filed as Exhibit 11 hereto.
Except as set forth or incorporated by reference herein, neither
MBO-VII, Equity-VI or FL Fund nor, to the knowledge of MBO-VII, Equity-VI
or FL Fund, any person identified in Schedule I, has any contracts,
arrangements, understandings or relationships (legal or otherwise) with any
person with respect to any securities of NEXTLINK.
ITEM 7. Material to be Filed as Exhibits
--------------------------------
Item 7 is hereby amended as follows:
1. Stock Purchase Agreement, dated December 7, 1999, among NEXTLINK,
MBO-VII and Equity-VI.*
2. Registration Rights Agreement, dated as of January 20, 2000, among
NEXTLINK, MBO-VII and Equity-VI.*
3. Certificate of Designation of the Powers, Preferences and Relative,
Participating, Optional and Other Special Rights of Series C
Cumulative Convertible Participating Preferred Stock and
Qualifications, Limitations and Restrictions Thereof.*
4. Certificate of Designation of the Powers, Preferences and Relative,
Participating, Optional and Other Special Rights of Series D
Convertible Participating Preferred Stock and Qualifications,
Limitations and Restrictions Thereof.*
5. Assignment and Assumption Agreement, dated January 19, 2000, between
Equity-VI and FL Fund.*
6. Joint Filing Agreement.*
7. Stock Purchase Agreement, dated as of June 14, 2000, among NEXTLINK,
MBO-VII and Equity-VI.
8. Form of Amended and Restated Registration Rights Agreement to be
entered into among NEXTLINK, MBO-VII, Equity-VI and FL Fund.
9. Form of Certificate of Designation of the Powers, Preferences and
Relative, Participating, Optional and Other Special Rights of the
Series G Cumulative Convertible Participating Preferred Stock and
Qualifications, Limitations and Restrictions Thereof.
10. Form of Certificate of Designation of the Powers, Preferences and
Relative, Participating, Optional and Other Special Rights of Series G
Convertible Participating Preferred Stock and Qualifications,
Limitations and Restrictions Thereof.
11. Agreement and Waiver, dated as of June 14, 2000, among NEXTLINK,
MBO-VII, Equity-VI and FL Fund.
--------
* Previously filed.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge
and belief, I certify that the information set forth in this statement is
true, complete and correct.
Dated: June 16, 2000
FORSTMANN LITTLE & CO. SUBORDINATED
DEBT AND EQUITY MANAGEMENT BUYOUT
PARTNERSHIP-VII, L.P.
By: FLC XXXIII Partnership
its general partner
By: /s/ S. Joshua Lewis
-------------------------------
S. Joshua Lewis,
a general partner
FORSTMANN LITTLE & CO. EQUITY
PARTNERSHIP-VI, L.P.
By: FLC XXXII Partnership, L.P.
its general partner
By: /s/ S. Joshua Lewis
-------------------------------
S. Joshua Lewis,
a general partner
FL FUND, L.P.
By: FLC XXXI Partnership, L.P.
its general partner
By: FLC XXIX Partnership, L.P.
a general partner
By: /s/ S. Joshua Lewis
-------------------------------
S. Joshua Lewis,
a general partner
<PAGE>
Schedule I
----------
FLC XXXIII Partnership:
General Partner of
MBO-VII
-------
FLC XXXIII Partnership, a New York general partnership ("FLC XXXIII"),
is the general partner of MBO-VII. Its purpose is to act as general partner
of MBO-VII and other limited partnerships affiliated with MBO-VII. The
address of the principal office of FLC XXXIII is c/o Forstmann Little &
Co., 767 Fifth Avenue, New York, NY 10153.
Partners of
FLC XXXIII
----------
The following are the general partners of FLC XXXIII, the general
partner of MBO-VII. All of the persons listed below are general partners of
partnerships affiliated with Forstmann Little & Co., a private investment
firm. With the exception of Tywana LLC, the business address of each is 767
Fifth Avenue, New York, NY 10153 and each is a citizen of the United
States. Tywana LLC is a North Carolina limited liability company having its
principal business office at 201 North Tryon Street, Suite 2450, Charlotte,
N.C. 28202.
Theodore J. Forstmann
Nicholas C. Forstmann
Sandra J. Horbach
Winston W. Hutchins
Thomas H. Lister
Tywana LLC
S. Joshua Lewis
Jamie C. Nicholls
FLC XXXII Partnership, L.P.:
General Partner of
Equity-VI
---------
FLC XXXII Partnership, L.P., a New York limited partnership ("FLC
XXXII"), is the general partner of Equity-VI. Its purpose is to act as
general partner of Equity-VI and other limited partnerships affiliated with
Equity-VI. The address of the principal office of Equity-VI is c/o
Forstmann Little & Co., 767 Fifth Avenue, New York, NY 10153.
General Partners of
FLC XXXII
---------
The following are the general partners of FLC XXXII, the general
partner of Equity-VI. All of the persons listed below are general partners
of partnerships affiliated with Forstmann Little & Co., a private
investment firm. With the exception of Tywana LLC, the business address of
each is 767 Fifth Avenue, New York, NY 10153 and each is a citizen of the
United States. Tywana LLC is a North Carolina limited liability company
having its principal business office at 201 North Tryon Street, Suite 2450,
Charlotte, N.C. 28202.
Theodore J. Forstmann
Nicholas C. Forstmann
Sandra J. Horbach
Thomas H. Lister
Winston W. Hutchins
Tywana LLC
S. Joshua Lewis
Jamie C. Nicholls
FLC XXXI Partnership, L.P.:
General Partner of
FL Fund
-------
FLC XXXI Partnership, L.P., a New York limited partnership ("FLC
XXXI"), is the general partner of FL Fund. Its purpose is to act as general
partner of FL Fund and other limited partnerships affiliated with FL Fund.
The address of the principal office of FL Fund is c/o Forstmann Little &
Co., 767 Fifth Avenue, New York, NY 10153.
General Partners of
FLC XXXI
--------
FLC XXIX Partnership, L.P., a New York limited partnership ("FLC XXIX"),
and FLC XXXIII are the general partners of FLC XXXI, the general partner of
FL Fund. Their purpose is to act as general partner of FLC XXXI and other
limited partnerships affiliated with FLC XXXI. The address of the principal
office of each of FLC XXIX and FLC XXXIII is c/o Forstmann Little & Co.,
767 Fifth Avenue, New York, NY 10153.
General Partners of
FLC XXIX and FLC XXXIII
-----------------------
The following are the general partners of FLC XXIX and FLC XXXIII, the
general partners of FLC XXXI. All of the persons listed below are general
partners of partnerships affiliated with Forstmann Little & Co., a private
investment firm. With the exception of Tywana LLC, the business address of
each is 767 Fifth Avenue, New York, NY 10153 and each is a citizen of the
United States. Tywana LLC is a North Carolina limited liability company
having its principal business office at 201 North Tryon Street, Suite 2450,
Charlotte, N.C. 28202.
Theodore J. Forstmann
Nicholas C. Forstmann
Sandra J. Horbach
Thomas H. Lister
Winston W. Hutchins
Tywana LLC
S. Joshua Lewis
Jamie C. Nicholls
