SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 16, 1997 (July 11, 1997)
NEXTEL COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-19656 36-3939651
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
1505 Farm Credit Drive, Suite 100, McLean, Virginia 22102
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (703) 394-3000
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events.
Additional Bank Financing Commitment
Nextel Finance Company ("NFC"), a wholly owned subsidiary of Nextel
Communications, Inc. ("Nextel") has reached an agreement dated July 11,
1997 with Barclays Bank PLC, The Chase Manhattan Bank, Morgan Guaranty Trust
Company of New York, NationsBank of Texas, N.A. and the Toronto-Dominion Bank
with respect to an additional credit facility in the amount of $250 million (the
"Additional Bank Borrowings") on terms described in the commitment letter (and
the Summary of Terms and Conditions attached as Exhibit A thereto) attached to
this Current Report as Exhibit 99.1, which information is incorporated herein by
reference. The Additional Bank Borrowings will be additional secured borrowings
pursuant to NFC's existing secured bank credit facility, which became effective
on September 30, 1996 (the "Bank Credit Facility'). NFC's access to the
Additional Bank Borrowings is subject to the receipt of certain required
consents and approvals of third parties, to the negotiation of definitive
agreements and the satisfaction of certain conditions including the receipt of
net cash proceeds from equity issuances sufficient to to permit the incurrence
of the Additional Bank Borrowings pursuant to the terms of the Indentures
relating to Nextel's five outstanding issues of Senior Redeemable Discount
Notes. NFC and the lenders contemplate negotiating and entering into appropriate
definitive agreements implementing the terms of the financing arrangements as
described above, and Nextel is now or shortly will commence seeking the
remaining consents and approvals required to gain access to the Additional Bank
Borrowings. There can be no assurance that Nextel will be able to reach
definitive agreements with, or obtain all necessary consents of, third parties
to allow Nextel to access the Additional Bank Borrowings, or, if such agreements
are reached, that the terms of such financing will be as contemplated in Exhibit
99.1.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(A) Financial Statements of Business Acquired.
Not applicable.
(B) Pro Forma Financial Information.
Not applicable.
(C) Exhibits
Exhibit No. Exhibit Description
99.1 Nextel Finance Company Tranche E Commitment Letter,
dated July 11, 1997, with related Summary of Terms and
Conditions
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NEXTEL COMMUNICATIONS, INC.
Date: July 16, 1997 By: /s/Thomas J. Sidman
Thomas J. Sidman
Vice President and General Counsel
<PAGE>
Exhibit No. Exhibit Description
99.1 Nextel Finance Company Tranche E Commitment Letter,
dated July 11, 1997, with related Summary of Terms and
Conditions
EXHIBIT 99.1
BARCLAYS BANK PLC
THE CHASE MANHATTAN BANK
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
NATIONSBANK OF TEXAS, N.A.
THE TORONTO-DOMINION BANK
July 11, 1997
Nextel Finance Company
Tranche E Facility
Commitment Letter
Nextel Finance Company
1505 Farm Credit Drive
Suite 100
McLean, Virginia 22102
Attention: Steven Shindler
Vice President and Chief
Financial Officer
Ladies and Gentlemen:
You have advised Barclays Bank PLC ("Barclays"), BZW, the investment
banking division of Barclays ("BZW"), The Chase Manhattan Bank ("Chase"),
Chase Securities Inc. ("CSI"), Morgan Guaranty Trust Company of New York
("Morgan"), J.P. Morgan Securities Inc. ("JPMSI"), NationsBank of Texas, N.A.
("NationsBank"), NationsBanc Capital Markets, Inc. ("NCMI"), The
Toronto-Dominion Bank ("Toronto Dominion" and, together with Barclays, Chase,
Morgan and NationsBank, the "Initial Lenders") and TD Securities (USA), Inc.
("TDSI" and, together with BZW, CSI, JPMSI and NCMI, the "Arrangers") that
Nextel Finance Company (the "Borrower"), a Delaware corporation and a
wholly-owned subsidiary of Nextel Communications, Inc. ("NCI"), wishes to have
made available to it the additional credit facility in the amount of
$250,000,000 contemplated by Section 7.01(f) of the Credit Agreement dated as of
September 27, 1996 (as modified and supplemented and in effect on the date
hereof, the "Credit Agreement") between the Borrower, the Restricted Companies
named therein, the lenders named therein, Toronto Dominion (Texas) Inc., as
Administrative Agent, and Chase, as Collateral Agent,
BII\82140_6
<PAGE>
2
and designated "Tranche E Loans" under the Credit Agreement (capitalized
terms used in this Commitment Letter that are defined in the Credit Agreement
are used herein as so defined). Such additional credit facility is herein called
the "Tranche E Facility". The proceeds of the Tranche E Facility will be used
for working capital and other general corporate purposes (including capital
expenditures) and, at the Borrower's election, to repay a portion of the
Revolving Credit Loans under the Credit Agreement and the "Tranche B Loans"
under and as defined in the Vendor Financing Agreement. In that connection, you
have requested that the Arrangers agree to structure, arrange and syndicate the
Tranche E Facility, and that each of the Initial Lenders commit to provide a
portion of the Tranche E Facility.
The Arrangers are pleased to advise you that they are willing to act as
the exclusive advisors and arrangers for the Tranche E Facility.
Furthermore, each of the Initial Lenders is pleased to advise you of its
respective commitment to provide up to $50,000,000 of the Tranche E
Facility, in each case upon the terms and subject to the conditions set forth or
referred to in this commitment letter (the "Commitment Letter"), in the Summary
of Terms and Conditions attached hereto as Exhibit A (the "Term Sheet") and in
the Fee Letter referred to below. The Initial Lenders shall be relieved of their
obligation to provide the Tranche E Facility to the extent that you accept the
offers of Lenders other than the Initial Lenders to provide a portion of the
Tranche E Facility that the Initial Lenders have offered to commit to provide.
It is agreed that the Arrangers will act as the sole and exclusive
advisors and arrangers, for the Tranche E Facility, and each will, in such
capacities, perform the duties and exercise the authority customarily performed
and exercised by them in such roles. You agree that no other agents, co-agents
or arrangers will be appointed, no other titles will be awarded and no
compensation (other than that expressly contemplated by the Term Sheet and the
Fee Letter referred to below) will be paid in connection with the Tranche E
Facility unless you and we shall so agree.
We intend to syndicate the Tranche E Facility (including, in our
discretion, all or part of the respective commitments hereunder of the
Initial Lenders) to a group of financial institutions (together with the Initial
Lenders, the "Lenders") identified by us and approved by you. The Arrangers
intend to commence syndication efforts promptly upon the execution of this
Commitment Letter, and you agree actively to assist the Arrangers in completing
a syndication satisfactory to them and to you. Such assistance shall include (a)
your using commercially reasonable efforts to ensure that the syndication
efforts benefit materially from your existing lending relationships, (b) direct
contact between senior management and advisors of the Borrower and the proposed
Lenders, (c) assistance in the preparation of a Confidential Information
Memorandum and other marketing materials to be used in connection with the
syndication and (d) the hosting, with the Arrangers, of one or more meetings of
prospective Lenders. As required by Section 7.01(f) of the Credit Agreement,
each of the Lenders party to the Credit Agreement will be afforded an
opportunity to offer to participate in the commitments to make Tranche E Loans
under the Credit Agreement (it being understood that no such Lender, except for
the Initial Lenders to
<PAGE>
3
the extent of their respective commitments herein, shall be obligated to offer
to so participate in such commitments).
Subject to the requirements of the last sentence of the preceding
paragraph, the Arrangers, in consultation with you, will manage all aspects
of the syndication, including decisions as to the selection of institutions to
be approached and when they will be approached, when their commitments will be
accepted, which institutions will participate, the allocations of the
commitments among the Lenders and the amount and distribution of fees among the
Lenders. To assist the Arrangers in its syndication efforts, you agree promptly
to prepare and provide to the Arrangers and the Initial Lenders all information
with respect to the Borrower and the transactions contemplated hereby, including
all financial information and projections (the "Projections"), as we may
reasonably request in connection with the arrangement and syndication of the
Tranche E Facility. You hereby represent and covenant that (a) all information
other than the Projections (the "Information") that has been or will be made
available to any of the Initial Lenders or the Arrangers by you or any of your
representatives does not or will not, when furnished, contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements contained therein not materially misleading in light of
the circumstances under which such statements are made and (b) the Projections
that have been or will be made available to any of the Initial Lenders or the
Arrangers by you or any of your representatives have been or will be prepared in
good faith based upon reasonable assumptions. You understand that in arranging
and syndicating the Tranche E Facility we may use and rely on the Information
and Projections without independent verification thereof. The Arrangers and the
Initial Lenders agree that the provisions of Section 10.12 of the Credit
Agreement with respect to the confidential treatment of information shall be
applicable to the Information and the Projections.
As consideration for the respective commitments hereunder of the Initial
Lenders and the agreements of the Arrangers to perform the services described
herein, you agree to pay and to cause the Borrower to pay to each of the
Initial Lenders the nonrefundable fees set forth in the Fee Letter dated the
date hereof and delivered herewith (the "Fee Letter").
The commitment hereunder of each of the Initial Lenders and the agreement
of each Arranger to perform the services described herein are subject to
(a) there not occurring or becoming known to us any material adverse condition
or material adverse change in or affecting the business, operations, property,
condition (financial or otherwise) or prospects of the Borrower and its
subsidiaries, taken as a whole, (b) our not becoming aware after the date hereof
of any information or other matter affecting the Borrower or the transactions
contemplated hereby which is inconsistent in a material and adverse manner with
any such information or other matter disclosed to us prior to the date hereof,
(c) there not having occurred a material disruption of or material adverse
change in financial, banking or capital market conditions that, in our judgment,
could materially impair the syndication of the Tranche E Facility, (d) our
satisfaction that prior to and during the syndication of the Tranche E Facility
there shall be no competing offering, placement or arrangement of any debt
securities or bank financing by or on behalf of you, the Borrower or any of your
<PAGE>
4
controlled affiliates other than (i) any offering or placement of equity
securities by NCI, (ii) any offering, placement or arrangement of any bank or
equipment financing by McCaw International, Ltd. or its controlled affiliates,
or (iii) any offering, placement or syndication by Motorola or NTFC of loans or
interests in loans pursuant to (A) the Vendor Financing Agreement, (B) an
increase of the "Tranche A Loans" under and as defined in the Vendor Financing
Agreement in an amount equal to $50,000,000, or (C) the junior secured facility
under the Vendor Financing Agreement referred to in the Term Sheet in the amount
of $200,000,000, (e) the negotiation, execution and delivery on or before August
16, 1997 of definitive documentation with respect to the Tranche E Facility
satisfactory to the Initial Lenders and their counsel, (f) the other conditions
set forth or referred to in the Term Sheet, (g) the payment when due of the fees
or other compensation provided for by the Fee Letter, and (h) the satisfaction
of all of the conditions to each Initial Lender's obligations set forth herein
or in the Term Sheet. The terms and conditions of the commitments hereunder of
the Initial Lenders and of the Tranche E Facility are not limited to those set
forth herein and in the Term Sheet. Those matters that are not covered by the
provisions hereof and of the Term Sheet are subject to the approval and
agreement of the Initial Lenders, the Arrangers and the Borrower.
You agree (a) to indemnify and hold harmless the Initial Lenders, the
Arrangers, their affiliates and theirrespective officers, directors,
employees, advisors, and agents (each, an "indemnified person") from and against
any and all losses, claims, damages, liabilities and related expenses
(collectively "Recoveries") to which any such indemnified person may become
subject arising out of or in connection with this Commitment Letter, the Tranche
E Facility, the use of the proceeds thereof, the transactions contemplated
hereby or any related transaction or any claim, litigation, investigation or
proceeding relating to any of the foregoing, regardless of whether any
indemnified person is a party thereto, and to reimburse each indemnified person
upon demand for any legal or other expenses incurred in connection with
investigating or defending any of the foregoing, provided that the foregoing
indemnity will not, as to any indemnified person, apply to Recoveries to the
extent (i) they are found by a final, non-appealable judgment of a court to
arise from the willful misconduct or gross negligence of such indemnified person
or (ii) they arise from a settlement with respect to which you have admitted
liability or from an admission of liability on the part of the indemnified party
in either case entered into without your prior written consent, which shall not
be unreasonably withheld or delayed, and (b) to reimburse the Initial Lenders,
the Arrangers and their affiliates on demand for all out-of-pocket expenses
(including due diligence expenses, syndication expenses, travel expenses, and
reasonable fees, charges and disbursements of counsel) incurred in connection
with the Tranche E Facility and any related documentation (including this
Commitment Letter, the Term Sheet, the Fee Letter and the definitive financing
documentation) or the administration, amendment, modification or waiver thereof.
No indemnified person shall be liable for any indirect or consequential damages
in connection with its activities related to the Tranche E Facility.
This Commitment Letter shall not be assignable by you without the prior
written consent of each of the Initial Lenders and the Arrangers (and any
purported assignment without such consent shall be null and void), is intended
to be solely for the benefit of the parties hereto and is not intended to
confer any benefits upon, or create any
<PAGE>
5
rights in favor of, any person other than the parties hereto. This Commitment
Letter, including the Term Sheet, may not be amended or waived except by an
instrument in writing signed by each of you, the Initial Lenders and the
Arrangers. This Commitment Letter may be executed in any number of counterparts,
each of which shall be an original, and all of which, when taken together, shall
constitute one agreement. Delivery of an executed signature page of this
Commitment Letter by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof. This Commitment Letter and the Fee Letter
are the only agreements that have been entered into among us with respect to the
Tranche E Facility and set forth the entire understanding of the parties with
respect thereto. This Commitment Letter shall be governed by, and construed in
accordance with, the laws of the State of New York.
This Commitment Letter is delivered to you on the understanding that
neither this Commitment Letter, the Term Sheet or the Fee Letter nor any of
their terms or substance shall be disclosed, directly or indirectly, to any
other person except (a) to your officers, agents and advisors who are directly
involved in the consideration of this matter or (b) as may be compelled in a
judicial or administrative proceeding or as otherwise required by law (in which
case you agree to inform us promptly thereof), provided, that the foregoing
restrictions shall cease to apply (except in respect of the Fee Letter and its
terms and substance) after this Commitment Letter has been accepted by you, and
the Initial Lenders and the Arrangers hereby consent to NCI's public
announcement of the existence of this Commitment Letter in, and the inclusion of
a copy of this Commitment Letter and of the related Term Sheet as an exhibit to,
reports that NCI is required to file with the Securities and Exchange
Commission.
The compensation, reimbursement, indemnification and confidentiality
provisions contained herein and in the Fee Letter shall remain in full force
and effect regardless of whether definitive financing documentation shall be
executed and delivered and notwithstanding the termination of this Commitment
Letter or the respective commitments hereunder of the Initial Lenders
hereunder, except, in the case of such compensation and reimbursement
provisions only, if such termination is made by the Initial Lenders in
violation of the provisions of this Commitment Letter.
The Initial Lenders and the Arrangers shall have the right to review and
approve all public announcements and filings relating to the Tranche E Facility
that refer to the Initial Lenders, the other Lenders or the Arrangers before
they are made or filed.
The obligations of the Initial Lenders and the Arrangers hereunder are
several and not joint.
If the foregoing correctly sets forth our agreement, please indicate your
acceptance of the terms hereof and of the Term Sheet and the Fee Letter by
returning to us executed counterparts hereof and of the Fee Letter, not later
than 5:00 p.m., New York City time, on July 16, 1997. The respective
commitments of the Initial Lenders and the agreements of the Arrangers herein
will expire at such time in the event that the Initial
<PAGE>
6
Lenders have not received such executed counterparts in accordance with the
immediately preceding sentence.
The Initial Lenders and the Arrangers are pleased to have been given the
opportunity to assist you in connection with this important financing.
Very truly yours,
BARCLAYS BANK PLC BZW, the investment banking
division of Barclays
Bank PLC
By:/s/J.K. Downey By: /s/J.K. Downey
Name: J.K. Downey Name: J.K. Downey
Title Associate Director Title: Associate Director
THE CHASE MANHATTAN BANK CHASE SECURITIES INC.
By:/s/Tracey A. Navin By:/s/James R. Kuster
Name: Tracey A. Navin Name: James R. Kuster
Title: Vice President Title: Managing Director
MORGAN GUARANTY TRUST J.P. MORGAN SECURITIES INC.
COMPANY OF NEW YORK
By:/s/Maria D. Kratsios By:/s/David A. Nass, Jr.
Name: Maria D. Kratsios Name: David A. Nass, Jr.
Title: Vice President Title: Vice President
<PAGE>
7
NATIONSBANK OF TEXAS, N.A. NATIONSBANC CAPITAL
MARKETS, INC.
By:/s/Jennifer Zydney By:/s/Thomas W. Okel
Name: Jennifer Zydney Name: Thomas W. Okel
Title: Vice President Title: Senior Vice President
THE TORONTO-DOMINION BANK TD SECURITIES (USA), INC.
By:/s/M. Bandzierz By: /s/M. Bandzierz
Name: Michael Bandzierz Name: Michael Bandzierz
Title Managing Director Title: Managing Director
Accepted and agreed to
as of the date first
written above by:
NEXTEL FINANCE COMPANY
By:/s/Steven M. Shindler
Name: Steven M. Shindler
Title: Vice President
<PAGE>
EXHIBIT A
NEXTEL FINANCE COMPANY
SUMMARY OF TERMS AND CONDITIONS
July 11, 1997
Terms defined in the Commitment Letter to which these Summary Terms and
Conditions are attached are used herein as defined therein. These Summary Terms
and Conditions are intended to set forth the provisions of the Credit Agreement
that are to be modified in order to implement the Tranche E Facility
contemplated by said Commitment Letter, and are not intended to restate any of
the other provisions of the Credit Agreement.
Borrower: Nextel Finance Company ("Nextel" or the "Borrower")
Arrangers: BZW, the investment banking division of Barclays
Bank PLC, Chase Securities Inc., J.P. Morgan
Securities Inc., NationsBanc Capital Markets, Inc.,
and TD Securities (USA), Inc.
Lenders: Syndicate of banks acceptable to the Borrower and
the Arrangers.
Tranche E Facility: A $250,000,000 Senior Secured Single-Draw Term Loan
(to be drawn in full not later than August 16,
1997).
Maturity: June 30, 2003.
Purpose: For working capital and other general corporate
purposes (including capital expenditures) and, at
Borrower's option, to repay a portion of the
Revolving Credit Loans under the Credit Agreement
and the Tranche B Loans, under the Vendor Financing
Agreement.
Availability: The full amount of the Tranche E Facility will be
available at closing, subject to compliance with
conditions precedent to drawdown.
Closing: No later than August 16, 1997.
Repayment: The Tranche E Facility shall amortize quarterly
beginning in March 31, 2001 as follows:
<PAGE>
-2-
Annual Repayment
Period Amount
2001 1%
2002 1%
2003 98%
The final installment (payable on June 30, 2003)
will be in an amount equal to 97.75% of the amount
of the Tranche E Facility.
Prepayment: OPTIONAL
Prepayments are permitted without penalty at the
option of Nextel, subject to applicable notice
provisions. Nextel shall bear any unwinding costs
associated with early breakage of LIBOR contracts.
MANDATORY Required in a manner consistent with the
treatment of Tranche D Term Loans under the Credit
Agreement.
Rates of Interest: At the Borrower's option, any advance under the
Tranche E Facility will be available at Base Rate
plus 2% or LIBOR plus 3%
BASE RATE OPTIONS: Interest shall be at the
greater of i) the Administrative Agent's Prime
Rate or ii) the Federal Funds Rate plus 1/2 of 1%.
Interest shall be payable quarterly in arrears and
calculated on basis of a 365/6-day year (360-day
year in the event the Base Rate is determined with
reference to the Federal Funds Rate).
LIBOR OPTION: Interest shall be determined for
periods of 1, 2, 3, 6, or 12 months the latter
subject to availability. Interest shall be paid at
the end of each Interest Period or quarterly in
arrears, whichever is earlier, and will be
calculated on the basis of a 360 day year. LIBOR
shall be adjusted for Regulation D reserve
requirements.
Post-Default Interest: 2% over the greater of the Base Rate plus the
Applicable Margin or the applicable LIBOR
Rate plus the Applicable Margin, upon the
occurrence of specified defaults.
<PAGE>
-3-
Security: Equal and ratable with all obligations under the
Credit Agreement.
Guarantees: Identical to the guarantees of existing obligations
under the Credit Agreement
Conditions Precedent
to Drawdown: Including but not limited to the following:
i) Execution and delivery of an Amendment to the
Credit Agreement mutually satisfactory to the
parties;
ii) Favorable legal opinion from counsel for the
Borrower and its Subsidiaries;
iii) Favorable legal opinion from counsel for the
Arrangers; and
iv) Truth of representations and absence of
defaults.
Representations and
Warranties: As presently set forth in the Credit Agreement.
Documentation: The Credit Agreement will be amended as follows:
i) PRO RATA DRAWING REQUIREMENT - Amend Section
5.02(d) of the Credit Agreement to eliminate
this requirement.
ii) MINIMUM CAPITAL CONTRIBUTION - Section 6.12
of the Credit Agreement will be revised to
require cumulative capital contributions as
follows:
Date Amount
7/31/97 $ 232MM
7/31/98 $ 550MM
12/31/99 $1,100MM
iii) INDEBTEDNESS BASKET - Amend Section 7.01 of
the Credit Agreement to increase the
permitted Indebtedness basket to include a
$200MM junior secured facility that is
second in ranking to
<PAGE>
-4-
borrowings pursuant to the Credit Agreement
and the Vendor Financing Agreement (the
"Second Secured Borrowings") to be provided
by Motorola upon terms and conditions
satisfactory to the Majority Lenders. It is
contemplated that such Majority Lender
approval will be sought in conjunction
with the approvals of the Lenders of the
amendment to the Credit Agreement described
herein.
iv) ACQUISITION BASKETS - Section 7.04(vii)(A)
and 7.04(viii)(A) of the Credit Agreement
will be combined into one $275MM basket,
with the test period restarted to commence
on the date of the Amendment.
v) INTERCREDITOR AGREEMENT AMENDMENTS - amend
the Intercreditor and Collateral Agency
Agreement to establish terms relating to the
subordination of Motorola's security
interest with respect to the Second Secured
Borrowings.
vi) OTHER AMENDMENTS - Other miscellaneous
amendments including amendments to permit
certain intercompany mergers and asset
transfers currently subject to restrictions
under the Credit Agreement and to designate
all Loans and Commitments under the Credit
Agreement, as amended, as the "Credit
Facility" for purposes of NCI's public note
indentures.
General: Nextel shall be responsible for reasonable fees of
the Arrangers' counsel in preparation of
documentation and for any reasonable out of pocket
expenses.
Counsel to the
Arrangers: Milbank, Tweed, Hadley & McCloy
Expenses: The Borrower shall reimburse the Arrangers for all
reasonable out-of-pocket expenses (including
reasonable fees and expenses of outside
counsel for the Arrangers, including FCC Counsel)
incurred by them in the negotiation, syndication
and execution of the Tranche E Facility. Such
expenses shall be reimbursed by the
<PAGE>
-5-
Borrower upon presentation of a statement of
account, regardless of whether the transaction
contemplated is actually completed or the loan
documents are signed.
