<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 26, 1997
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
NEXTEL COMMUNICATIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 4812 36-3939651
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
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1505 FARM CREDIT DRIVE
MCLEAN, VIRGINIA 22102
(703) 394-3000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
THOMAS J. SIDMAN, ESQ.
VICE PRESIDENT AND GENERAL COUNSEL
NEXTEL COMMUNICATIONS, INC.
1505 FARM CREDIT DRIVE
MCLEAN, VIRGINIA 22102
(703) 394-3000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
Copies to:
KATHLEEN R. MCLAURIN, ESQ.
JONES, DAY, REAVIS & POGUE
2300 TRAMMELL CROW CENTER
2001 ROSS AVENUE
DALLAS, TEXAS 75201-2958
(214) 220-3939
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable following the effective date of this Registration Statement.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
------------------------
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
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=======================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED UNIT(1) PRICE(1) FEE
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<S> <C> <C> <C> <C>
10.65% Senior Redeemable Discount Notes
due 2007.............................. $840,000,000(2) $ 333.33(3) $280,000,000(3) $84,848.48(4)
=======================================================================================================================
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 of the Securities Act of 1933, as amended (the
"Securities Act").
(2) Represents the maximum amount of 10.65% Senior Redeemable Discount Notes due
2007 (the "Exchange Senior Notes") that may be issued pursuant to the
exchange offer described in this Registration Statement.
(3) Represents one-third of the $1,000 principal amount per unit of the
outstanding 10.65% Senior Redeemable Discount Notes due 2007 (the "Private
Notes") to be tendered to the Registrant (which has an accumulated capital
deficit) in exchange for the Exchange Senior Notes.
(4) The registration fee for the securities offered hereby, $84,848.48, is
calculated under Rule 457(f)(2) of the Securities Act as follows:
one-thirty-third ( 1/33) of one percent of $280,000,000, one third of the
principal amount of the outstanding Private Notes that may be tendered to
the Registrant (which has an accumulated capital deficit) in exchange for
Exchange Senior Notes.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
================================================================================
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION DATED NOVEMBER 26, 1997
NEXTEL COMMUNICATIONS, INC.
OFFER TO EXCHANGE
10.65% SENIOR REDEEMABLE DISCOUNT NOTES,
DUE SEPTEMBER 15, 2007
FOR
ANY AND ALL OUTSTANDING
10.65% SENIOR REDEEMABLE DISCOUNT NOTES,
DUE SEPTEMBER 15, 2007
------------------------
THE EXCHANGE OFFER
WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME
ON , 1998 UNLESS EXTENDED
------------------------
Nextel Communications, Inc., a Delaware corporation ("Nextel" or the
"Company"), hereby offers, upon the terms and subject to the conditions set
forth in this Prospectus and in the accompanying Letter of Transmittal (the
"Letter of Transmittal"), to exchange (the "Exchange Offer") its 10.65% Senior
Redeemable Discount Notes due September 15, 2007 (the "Exchange Senior Notes"),
which have been registered under the Securities Act of 1933, as amended (the
"Securities Act"), for an equal principal amount at maturity of its outstanding
10.65% Senior Redeemable Discount Notes due September 15, 2007 (the "Private
Notes"), of which $840,000,000 in principal amount at maturity was issued on
September 17, 1997 and is outstanding on the date hereof. See "The Exchange
Offer." The form and terms of the Exchange Senior Notes are identical in all
material respects to those of the Private Notes, except for certain transfer
restrictions and registration rights relating to the Private Notes and except
for certain interest provisions related to such registration rights. The
Exchange Senior Notes will evidence the same indebtedness as the Private Notes
(which they replace) and will be entitled to the benefits of an Indenture dated
as of September 17, 1997, governing the Private Notes and the Exchange Senior
Notes (the "Indenture"). The Exchange Senior Notes and the Private Notes are
sometimes referred to collectively as the "Notes."
The Exchange Senior Notes will mature on September 15, 2007. Cash interest
will not accrue on the Exchange Senior Notes prior to September 15, 2002 and
will be payable on March 15 and September 15 of each year, commencing March 15,
2003, at a rate of 10.65% per annum. See "Description of Exchange Senior Notes"
and "Certain United States Federal Income Tax Considerations." The Exchange
Senior Notes will be redeemable, at the option of the Company at any time, in
whole or in part, on or after September 15, 2002, at the redemption prices set
forth herein, plus accrued and unpaid interest, if any, to the date of
redemption. See "Description of Exchange Senior Notes -- Optional Redemption."
In addition, in the event of one or more sales by the Company prior to September
15, 2000 of at least $125,000,000 of its Capital Stock (as defined in
"Description of Exchange Senior Notes -- Certain Definitions"), up to a maximum
of 33 1/3% of the aggregate Accreted Value (as defined in "Description of
Exchange Senior Notes -- Certain Definitions") of outstanding Exchange Senior
Notes may be redeemed at the Company's option within 180 days after such sale
from the net cash proceeds thereof at 110.65% of such Accreted Value to the date
of redemption. Upon a Change of Control (as defined in "Description of Exchange
Senior Notes -- Certain Definitions"), the Company will be required to make an
offer to purchase the Exchange Senior Notes at 101% of the Accreted Value
thereof, or, in the case of any such repurchase on or after September 15, 2002,
101% of the principal amount thereof, plus accrued and unpaid interest, if any,
to the date of repurchase. There can be no assurance that the Company will have
the financial resources necessary to repurchase the Exchange Senior Notes upon a
Change of Control.
(continued on next page)
SEE "RISK FACTORS" COMMENCING ON PAGE 17 FOR CERTAIN INFORMATION THAT
SHOULD BE CONSIDERED IN CONNECTION WITH THE EXCHANGE OFFER.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
This Prospectus is dated , 1997
<PAGE> 3
The Exchange Senior Notes will be senior unsecured indebtedness of the
Company, will rank pari passu in right of payment with all unsubordinated,
unsecured indebtedness of the Company, and will be senior in right of payment to
all subordinated indebtedness of the Company. As of September 30, 1997, after
giving pro forma effect to certain transactions described herein, the Company
would have had approximately $2,924,582,000 of indebtedness outstanding
(excluding (i) indebtedness evidenced by the Private Notes, (ii) guaranties of
subsidiary indebtedness of $970,741,000 (such guaranty obligations would rank
pari passu in right of payment with the Exchange Senior Notes but the underlying
guaranteed indebtedness is assumed to be satisfied from the assets of the
primary obligors), and (iii) trade payables and other accrued liabilities) that
ranks pari passu in right of payment with the Exchange Senior Notes. The Company
is a holding company that conducts substantially all of its business through
subsidiaries. The Exchange Senior Notes will be obligations of the Company only,
and its operating subsidiaries will have no obligation to pay amounts due
pursuant to the Exchange Senior Notes. The Exchange Senior Notes will be
effectively subordinated to all liabilities of the Company's subsidiaries,
including trade payables and other accrued liabilities. As of September 30,
1997, after giving pro forma effect to certain transactions described herein,
the Company's subsidiaries would have had approximately $1,502,858,000 of
indebtedness outstanding, excluding trade payables and other accrued
liabilities. The Company and its subsidiaries are expected to incur substantial
additional indebtedness in the next several years. See "Risk Factors -- Risk
Factors Relating to Nextel -- Nextel to Require Additional Financing," "The
Exchange Offer," and "Description of Exchange Senior Notes."
The Company will accept for exchange any and all Private Notes that are
properly tendered in the Exchange Offer and not withdrawn prior to 5:00 p.m.,
New York City time, on , 1998, (such date if and as it may be
extended, the "Expiration Date"). Tenders of Private Notes may be withdrawn at
any time prior to 5:00 p.m., New York City time, on the Expiration Date. In the
event the Exchange Offer is terminated, the Private Notes not accepted for
exchange will be returned without expense to the tendering holders as promptly
as practicable. See "The Exchange Offer."
Based on a previous interpretation by the staff of the Securities and
Exchange Commission (the "Commission") set forth in no-action letters to third
parties, including "Exxon Capital Holdings Corporation" (available May 13,
1988), "Morgan Stanley & Co. Incorporated" (available June 5, 1991) (the "Morgan
Stanley Letter"), "Mary Kay Cosmetics, Inc." (available June 5, 1991), "Warnaco,
Inc." (available October 11, 1991), and "K-III Communications Corp." (available
May 14, 1993), the Company believes that the Exchange Senior Notes issued
pursuant to the Exchange Offer in exchange for the Private Notes may be offered
for resale, resold, and otherwise transferred by a holder thereof (other than
(i) a broker-dealer who purchased such Exchange Senior Notes directly from the
Company or (ii) a person that is an affiliate of the Company (within the meaning
of Rule 405 under the Securities Act)), without compliance with the registration
and prospectus delivery requirements of the Securities Act; provided, that the
holder is acquiring Exchange Senior Notes in the ordinary course of its business
and is not participating, does not intend to participate, and has no arrangement
or understanding with any person to participate, in the distribution of the
Exchange Senior Notes. Holders of Private Notes wishing to accept the Exchange
Offer must represent to the Company that such conditions have been met. Holders
of Private Notes who tender their Private Notes in the Exchange Offer with the
intention to participate in a distribution of the Exchange Senior Notes may not
rely upon the Morgan Stanley Letter or other similar letters.
Each broker-dealer that receives Exchange Senior Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Senior Notes. The
Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act, in connection with such
resales of Exchange Senior Notes received in exchange for Private Notes where
such Private Notes were acquired by such broker-dealer as a result of
market-making activities or other trading activities. Nextel has agreed, subject
to certain conditions, that, for a period of 90 days after the Expiration Date,
it will make this Prospectus available to any broker-dealer for use in
connection with any such resale. See "The Exchange Offer -- Resale of the
Exchange Senior Notes" and "Plan of Distribution."
Nextel believes that none of the registered holders of the Private Notes is
an affiliate (as such term is defined in Rule 405 under the Securities Act) of
Nextel. Prior to this Exchange Offer, there has been no public market for the
Private Notes. The Private Notes have traded on the Private Offerings, Resales
and Trading through Automated Linkages ("PORTAL") market. Nextel does not intend
to list the Exchange Senior Notes on any securities exchange. There can be no
assurance that an active market for the Exchange Senior Notes will develop. To
the extent that a market for the Exchange Senior Notes does develop, the market
value of the Exchange Senior Notes will depend on market conditions
<PAGE> 4
(including yields on alternative investments), general economic conditions,
Nextel's financial condition and other conditions. Such conditions may cause the
Exchange Senior Notes, to the extent actively traded, to trade at a significant
discount from their accreted value. Nextel has not entered into any arrangement
or understanding with any person to distribute the Exchange Senior Notes to be
received in the Exchange Offer.
Holders of Private Notes whose Private Notes are not tendered and accepted
in the Exchange Offer will continue to hold such Private Notes and will be
entitled to all the rights and preferences and subject to the limitations
applicable thereto under the Indenture. Following consummation of the Exchange
Offer, the holders of Private Notes will continue to be subject to the existing
restrictions upon transfer thereof, and the Company will have no further
obligation to such holders to provide for the registration under the Securities
Act of the Private Notes held by them.
The Company will not receive any proceeds from, and has agreed to bear all
registration expenses of, the Exchange Offer. No underwriter is being used in
connection with the Exchange Offer. See "The Exchange Offer -- Resale of the
Exchange Senior Notes."
<PAGE> 5
TABLE OF CONTENTS
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PAGE
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AVAILABLE INFORMATION................................................................. iii
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE..................................... iii
SUMMARY............................................................................... 1
RISK FACTORS.......................................................................... 17
THE EXCHANGE OFFER.................................................................... 35
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT...................................................................... 44
DESCRIPTION OF EXCHANGE SENIOR NOTES.................................................. 47
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS............................... 71
PLAN OF DISTRIBUTION.................................................................. 74
LEGAL MATTERS......................................................................... 75
EXPERTS............................................................................... 75
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ii
<PAGE> 6
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder (collectively, the "Exchange Act") and, in accordance therewith,
files reports, proxy statements, and other information with the Commission. The
reports, proxy statements, and other information filed by the Company with the
Commission can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Judiciary
Plaza, Washington, D.C. 20549, and at the Commission's Regional Offices at 7
World Trade Center, 13th Floor, New York, New York 10048, and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material also may be obtained by mail from the Public Reference Section of the
Commission, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. Additionally, the Commission maintains a Web site on the
Internet (located at http://www.sec.gov.) that contains reports, proxy and
information statements, and other information regarding registrants that file
electronically with the Commission.
The Company has filed with the Commission a Registration Statement on Form
S-4 (including the exhibits and amendments thereto, the "Registration
Statement") pursuant to the requirements of the Securities Act with respect to
the Exchange Senior Notes offered hereby. This Prospectus does not contain all
the information set forth in the Registration Statement, certain portions of
which are omitted in accordance with the rules and regulations of the Commission
and to which reference is hereby made. Statements made in this Prospectus as to
the contents of any contract, agreement, or other document referred to herein
are not necessarily complete. With respect to each such contract, agreement, or
other document filed or incorporated by reference as an exhibit to the
Registration Statement or as an exhibit to documents incorporated by reference
in this Prospectus (see "Incorporation of Certain Information By Reference"),
reference is made to the respective exhibit for a more complete description of
the matter involved, and each such statement shall be deemed qualified in its
entirety by such reference. Copies of the Registration Statement together with
exhibits may be inspected at the office of the Commission in Washington, D.C.
without charge, and copies thereof may be obtained therefrom upon payment of a
prescribed fee.
NO PERSONS HAVE BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL,
OR A SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES IN ANY JURISDICTION TO OR
FROM ANY PERSON TO WHOM IT IS NOT LAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION
IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
DISTRIBUTION OF SECURITIES MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE
AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE FACTS SET FORTH IN THIS
PROSPECTUS OR THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
THIS PROSPECTUS INCORPORATES CERTAIN DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. SUCH DOCUMENTS (OTHER THAN EXHIBITS TO
SUCH DOCUMENTS UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE)
ARE AVAILABLE WITHOUT CHARGE TO ANY PERSON TO WHOM THIS PROSPECTUS IS DELIVERED
UPON WRITTEN OR ORAL REQUEST. REQUESTS FOR SUCH DOCUMENTS SHOULD BE DIRECTED TO
NEXTEL COMMUNICATIONS, INC., 1505 FARM CREDIT DRIVE, MCLEAN, VIRGINIA 22102,
ATTENTION: INVESTOR RELATIONS, TELEPHONE: (703) 394-3500. IN ORDER TO ENSURE
TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY ,
1998.
The information in the following documents filed by the Company with the
Commission (File No. 0-19656) pursuant to the Exchange Act is incorporated by
reference in this Prospectus:
(i) Annual Report on Form 10-K for the year ended December 31, 1996
filed with the Commission on March 31, 1997;
(ii) Quarterly Reports on Form 10-Q for the quarters ended (a) March
31, 1997 dated and filed with the Commission on May 15, 1997, (b) June 30,
1997 dated and filed with the Commission on
iii
<PAGE> 7
August 12, 1997, and (c) September 30, 1997 dated and filed with the
Commission on November 14, 1997;
(iii) Current Reports on Form 8-K: (a) dated and filed with the
Commission on January 21, 1997, (b) dated and filed with the Commission on
February 7, 1997, (c) dated and filed with the Commission on March 18,
1997, (d) dated and filed with the Commission on April 15, 1997, (e) dated
June 2, 1997 and filed with the Commission on June 3, 1997, (f) dated and
filed with the Commission on June 17, 1997, (g) dated and filed with the
Commission on July 9, 1997, (h) dated and filed with the Commission on July
16, 1997, (i) dated July 21, 1997 and filed with the Commission on July 22,
1997, (j) dated and filed with the Commission on September 5, 1997, (k)
dated and filed with the Commission on September 9, 1997, (l) dated and
filed with the Commission on September 22, 1997 and (m) dated and filed
with the Commission on October 23, 1997; and
(iv) Proxy Statement, dated as of April 18, 1997, filed in definitive
form on April 21, 1997 with the Commission with respect to the information
required to be included herein by Items 401 (management), 402 (executive
compensation) and 404 (certain relationships and related transactions) of
Regulation S-K promulgated under the Securities Act and the Exchange Act.
All documents filed by Nextel pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the Exchange Offer shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing of
such documents.
Any statements made herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document that is also incorporated or deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The information relating to Nextel contained in this Prospectus should be
read together with the information in the documents incorporated by reference.
iv
<PAGE> 8
SUMMARY
The following summary should be read in conjunction with, and is qualified
in its entirety by, the more detailed information and financial statements,
including the notes thereto, included or incorporated by reference into this
Prospectus.
On July 28, 1995, NEXTEL Communications, Inc., a corporation organized
under the laws of the State of Delaware in 1987 ("Old Nextel"), was merged with
ESMR, Inc. ("ESMR"), until then a wholly owned subsidiary of Motorola, Inc.
("Motorola"). ESMR was the surviving corporation in the merger (the "Motorola
Transaction") and succeeded to Old Nextel's assets and liabilities. ESMR changed
its name to Nextel Communications, Inc., effective upon consummation of the
Motorola Transaction. References herein to Nextel for periods prior to July 28,
1995 refer to Old Nextel as the predecessor to the business and operations of
Nextel. Unless the context requires otherwise, references to Nextel are intended
to include Nextel Communications, Inc. and its consolidated subsidiaries.
Information contained herein gives effect to the acquisition of
approximately 1,220,000 shares of Nextel's Class A Common Stock, par value $.001
per share (the "Common Stock"), by Digital Radio L.L.C. (the "McCaw Investor")
on April 5, 1995, an additional acquisition of 8,163,265 shares of Nextel's
Class A Convertible Redeemable Preferred Stock, par value $.01 per share (the
"Class A Preferred Stock"), and 82 shares of Nextel's Class B Convertible
Preferred Stock, par value $.01 per share (the "Class B Preferred Stock"), by
the McCaw Investor and the consummation of related transactions on July 28, 1995
(the "McCaw Transaction"), the merger of OneComm Corporation ("OneComm") with
and into Nextel on July 28, 1995 (the "OneComm Transaction"), the consummation
of the Motorola Transaction on July 28, 1995, the merger of a subsidiary of
Nextel with American Mobile Systems Incorporated ("AMS") on July 31, 1995 (the
"AMS Transaction") and the merger of Dial Page, Inc. ("Dial Page") with and into
Nextel on January 30, 1996 (the "Dial Page Transaction").
THE COMPANY
OVERVIEW
Nextel's business consists principally of providing a wide array of digital
and analog wireless communications services to its customers in the United
States, in each case utilizing frequencies licensed to its subsidiaries by the
Federal Communications Commission ("FCC"). Nextel provides a differentiated
package of integrated digital wireless communications services under the Nextel
brand name to customers of the various networks constructed and operated by
Nextel's subsidiaries in and around major metropolitan population centers
throughout the country. Collectively, Nextel's operations constitute one of the
largest integrated wireless communications networks utilizing a single digital
transmission technology currently offering commercial service in the United
States. Through its digital and analog wireless communications networks, Nextel
is the leading provider of specialized mobile radio ("SMR") wireless
communications services in nearly all 48 states in the continental United States
and in Hawaii. Nextel has significant SMR spectrum holdings in and around every
major business and population center in the country, including all of the top 50
metropolitan market areas in the United States.
Nextel's operating revenues primarily arise from its digital and analog
wireless communications businesses in the United States, particularly the mobile
telephone service and two-way radio service and, to a lesser extent, from sales
and maintenance of related equipment. Nextel's business plans and efforts are to
a large extent directed toward replacing the remaining traditional analog SMR
systems that it currently operates with advanced mobile communications systems
employing digital technology with a multi-site configuration permitting
frequency reuse ("Digital Mobile networks"). A customer using Nextel's Digital
Mobile network is able to access mobile telephone services, two-way dispatch
(marketed as Nextel's Direct Connect(SM)service), paging and alphanumeric
short-messaging service, and in the future is expected to be able to access data
transmission. Nextel is implementing its Digital Mobile networks utilizing
digital technology developed by Motorola (such technology is referred to as the
"integrated Digital Enhanced Network" or "iDEN"). As of
1
<PAGE> 9
September 30, 1997, Nextel's Digital Mobile networks were operating in major
metropolitan market areas throughout the United States in which approximately
60% of the total United States population lives or works.
Prior to the second quarter of 1996, Nextel implemented its Digital Mobile
networks in its market areas using Motorola's first generation iDEN technology.
During that time frame, Nextel encountered certain technology and system
performance issues relating primarily to the voice transmission quality of the
mobile telephone service. In response to these issues, Nextel and Motorola took
action on several fronts to address system performance issues in general, and
voice transmission quality concerns in particular. See "Risk Factors -- Risk
Factors Relating to Nextel -- Implementation of Digital Mobile Networks Subject
to Risks of Developing Technology." Additionally, Nextel, together with
Motorola, in 1995 began pursuing a program directed toward the development and
deployment of modifications to the first generation iDEN technology platform,
which modifications were targeted specifically at improving the voice
transmission quality of the mobile telephone service. Nextel commenced the
full-scale commercial launch of its first Digital Mobile networks incorporating
the modified iDEN technology (referred to herein as "Reconfigured iDEN") in the
Chicago metropolitan market late in the third quarter of 1996 and has since
deployed the Reconfigured iDEN technology throughout its Digital Mobile
networks. To date, the Company's Digital Mobile network is operational in
markets in which approximately 60% of the United States population lives or
works, providing coverage in and around major metropolitan areas, including New
York, Los Angeles, Chicago, Washington, D.C., Atlanta, Boston, Denver, Detroit,
Dallas/Fort Worth, Houston, San Francisco, Miami/Fort Lauderdale, Tampa/St.
Petersburg, Orlando, Jacksonville, Pittsburgh, Cleveland, Columbus, Salt Lake
City/ Provo, Phoenix, Tucson, and Spokane. By the end of 1997, the Company plans
to expand network coverage to other major metropolitan areas, including
Cincinnati, Dayton, San Antonio, Austin and Charleston. Based on its current
plans and construction schedules, by the end of 1998, the Company expects that
its Digital Mobile network will be operational in markets in which approximately
85% of the United States population lives or works.
Since December 31, 1994, the number of subscriber units in service on
Nextel's Digital Mobile network has increased significantly, reflecting the
commencement of Digital Mobile network service in certain markets, increased
sales in markets in which Digital Mobile network services are provided, and, to
a limited extent, acquisitions. As a result, the number of subscriber units in
service on Nextel's Digital Mobile network increased from 13,500 at December 31,
1994, to 85,000 at December 31, 1995, to 300,300 at December 31, 1996, and to
946,600 at September 30, 1997. Nextel's business and marketing strategy for its
Digital Mobile networks continues to be based on, and reflect, a principal focus
on multi-service business users in its markets with Digital Mobile networks.
During 1996 and 1997, Nextel significantly expanded its business activities
to include operations and investments involving wireless communications service
providers outside of the United States that are conducted under or are
coordinated by or through Nextel International, Inc. (formerly known as McCaw
International, Ltd., "Nextel International"), an indirect, wholly owned
subsidiary of Nextel. With the exception of the equity interests held by Nextel
and by Nextel International in Clearnet Communications, Inc. ("Clearnet"), a
major provider of analog and digital SMR wireless communications services
throughout Canada, and the holder of one of the two nationwide 30 MHz personal
communications services ("PCS") licenses awarded in Canada, Nextel
International's subsidiaries or other entities in which Nextel International
holds equity or equivalent interests own and operate wireless communications
systems in Latin America and Asia. Nextel International's operating companies
currently provide a variety of analog or digital wireless communications
services in certain metropolitan areas in Argentina, Brazil, Mexico, the
Philippines, and Shanghai, China.
Nextel's principal executive and administrative facility is located at 1505
Farm Credit Drive, McLean, Virginia 22102, and its telephone number is (703)
394-3000.
BUSINESS PLAN
Nextel is implementing its revised business plan that contemplates an
accelerated deployment during 1997 and 1998 of the Reconfigured iDEN technology
platform throughout markets in the United States in
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<PAGE> 10
which the Company intends to establish Digital Mobile networks (including
primary connecting routes between certain markets) in its domestic markets
during 1997 and 1998. Nextel has estimated that system infrastructure and other
system capital costs to be incurred during the period from March 31, 1997
through the end of 1998 to implement the business plan would be approximately
$1.45 billion. Such estimate is based on a significant number of assumptions and
may be increased in connection with Nextel's development of its capital and
operating budgets for 1998 based, in part, on Nextel's experience in 1997,
including its rapid subscriber growth and increased demand for its services.
Nextel currently expects that the 1998 budgeting process will not be finalized
until late December 1997 or early 1998. See "Risk Factors -- Risk Factors
Relating to Nextel -- Nextel to Require Additional Financing." Nextel believes
that the implementation of the accelerated build-out contemplated by its
business plan will better position Nextel both to achieve its strategic
objectives relating to its U.S. operations and to prepare for emerging
competition in the wireless communications industry, especially from certain
current operators that, on their existing cellular frequencies or on PCS
frequencies, are in the process of converting their wireless communications
systems to digital technology formats and are moving to provide "nationwide
coverage" on the resulting systems. Furthermore, Nextel believes that, assuming
the Company successfully concludes its nationwide Digital Mobile network
build-out plan and develops a sufficient customer base in its markets, a
significant strategic advantage may exist in being "first to market,"
particularly in comparison to the new "entrepreneur block" PCS licensees and
other existing or potential regional wireless communications service providers
that may encounter significant financial and other challenges in replicating or
overtaking Nextel's industry position. Nextel already has taken a number of
significant steps to implement this business plan (including obtaining
modifications to certain terms contained in the Old Indentures (as defined
herein) to provide the flexibility required to assemble and utilize the
necessary financing for such business plan), and further actions currently are
underway to reach that objective. Nextel's ability to fully implement its
business plan will depend, among other things, on certain actions by third
parties, which cannot be assured. See "Risk Factors -- Risk Factors Relating to
Nextel -- Nextel to Require Additional Financing" and "-- Forward Looking
Statements."
RECENT DEVELOPMENTS
PCI Merger. Nextel entered into an Agreement of Merger and Plan of
Reorganization dated as of October 2, 1996, as amended, with Pittencrieff
Communications, Inc. ("PCI") providing for the merger of PCI with a wholly-owned
indirect subsidiary of Nextel. PCI has approximately 6,000 800 MHz SMR channels
covering a total population of over 27 million people, predominantly in the
states of Texas, Oklahoma, New Mexico, and Arizona. The closing of such merger
transaction occurred on November 12, 1997, resulting in the issuance (or
reservation for issuance) of approximately 6,235,000 shares of Common Stock.
October Notes Issuance. On October 22, 1997, Nextel completed the sale of
$1,129,100,000 principal amount at maturity of Senior Serial Redeemable Discount
Notes due 2007 (the "October Notes"). The issue price of the October Notes,
which mature on October 31, 2007, was $619.96 per $1,000 principal amount at
maturity (generating approximately $700,000,000 in aggregate gross proceeds),
representing a yield to maturity of 9.75% computed on a semi-annual bond
equivalent basis from the date of issuance. Nextel received approximately
$682,000,000 in net cash proceeds from the sale of the October Notes (the
"October Notes Proceeds"). Such proceeds may be used for general corporate
purposes, including principally either to refinance a portion of the
indebtedness outstanding under the Old Senior Notes (as defined herein) (which
the Company may effect through repurchases, by way of a tender offer, open
market or privately negotiated purchases, redemption of the Old Senior Notes
pursuant to their terms, or any combination thereof) or to refinance a portion
of the cost of implementing its business plan that otherwise would have been
funded by borrowings pursuant to the Bank Credit Facility, the Vendor Credit
Facility, and/or the Second Vendor Financing Agreement (each as defined herein).
Cash interest will not accrue on the October Notes prior to October 31,
2002 and will be payable on April 30 and October 31 of each year, commencing
April 30, 2003, at a rate of 9.75% per annum. The October Notes are redeemable,
at the option of Nextel at any time, in whole or in part, on or after October
31, 2002, at specified redemption prices plus accrued and unpaid interest. In
addition, in the event of one or more sales by
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<PAGE> 11
Nextel prior to October 31, 2000 of at least $125,000,000 of its capital stock,
a portion of the October Notes not to exceed a maximum of 33 1/3% of the
aggregate accreted value of the outstanding October Notes may be redeemed at
Nextel's option within 180 days after such sale from the net cash proceeds
thereof at 109.75% of such accreted value on the date of redemption. The October
Notes are senior unsecured indebtedness of Nextel and rank pari passu in right
of payment with all unsubordinated, unsecured indebtedness of Nextel, including
indebtedness evidenced by the Old Senior Notes and the Private Notes, and will
be senior in right of payment to all subordinated indebtedness of Nextel.
The October Notes were issued in a private placement transaction and have
not been registered with the Commission under the Securities Act and may not be
sold absent registration or an applicable exemption from the registration
requirements. In connection with the issuance of the October Notes, Nextel has
agreed to use its best efforts to file with the Commission and cause to become
effective a registration statement with respect to a registered offer to
exchange the then outstanding October Notes for notes of equal value that have
been registered pursuant to the Securities Act (the "October Notes Exchange
Offer"). In the event that the October Notes Exchange Offer is not consummated
prior to specified dates, additional incremental interest on the accreted value
of the October Notes will accrue until the October Notes Exchange Offer is
consummated or certain other requirements are met.
The terms of the October Notes are set forth in the related indenture (the
"October Indenture") which has been filed with the Commission and is
incorporated by reference herein.
Issuance of Private Notes. On September 17, 1997, Nextel completed the
sale of $840,000,000 in aggregate principal amount at maturity of the Private
Notes (together with the October Notes, the "New Senior Notes"). Nextel received
approximately $486,000,000 in net cash proceeds form the sale of the Private
Notes (the "Private Notes Proceeds"). Such proceeds were principally used to
repay a portion of the outstanding borrowings under the Bank and Vendor Credit
Facilities (as defined herein) with the remaining proceeds available for general
corporate purposes. The Company has filed the Registration Statement, of which
this Prospectus is a part, in satisfaction of certain obligations to exchange
the Private Notes for the Exchange Senior Notes which will have the same form
and terms as the Private Notes except that the Exchange Senior Notes will be
registered under the Securities Act and will not bear legends restricting the
transfer thereof. See "Description of Exchange Senior Notes." In the event that
the Exchange Offer is not consummated prior to specified dates, additional
incremental interest on the accreted value of the Private Notes will accrue
until the Exchange Offer is consummated or certain other requirements are met.
See "Risk Factors -- Risk Factors Related to Exchange Senior Notes and Exchange
Offer -- Failure to Exchange Private Notes."
The terms of the Notes are set forth in the Indenture which has been filed
with the Registration Statement and is incorporated by reference herein. The
Indenture and the October Indenture are referred to collectively as the "New
Indentures."
Additional Credit Facilities. Nextel, Nextel Finance Company, a wholly
owned subsidiary of Nextel ("NFC"), and certain subsidiaries of Nextel have
entered into definitive agreements which became effective on September 4, 1997
with respect to $500,000,000 in additional financing, increasing Nextel's total
secured financing capacity under its financing agreements to $2,500,000,000.
These agreements provided for (i) amendments to the existing secured credit
facility with certain banks (as so amended, the "Bank Credit Facility") pursuant
to which $250,000,000 in additional term loans (the "Additional Bank
Borrowings") were made to the Company, (ii) amendments to the existing secured
credit facility with Motorola, NTFC Capital Corporation and certain other
lenders (as so amended, the "Vendor Credit Facility") pursuant to which
$50,000,000 in additional term loans (the "Additional Vendor Borrowings") will
be made available to the Company, subject to the satisfaction or waiver of
applicable borrowing conditions, and (iii) a new credit facility pursuant to
which up to $200,000,000 in additional secured term loans (that are to be second
in ranking to the borrowings made pursuant to the Bank Credit Facility and the
Vendor Credit Facility) will be made available to the Company by Motorola
through March 31, 1999 (the "Second Secured Borrowings"), subject to the
satisfaction or waiver of applicable borrowing conditions. Borrowings under the
Bank Credit Facility and the Vendor Credit Facility (together, the "Bank and
Vendor Credit Facilities") are ratably
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<PAGE> 12
secured by liens on assets of Nextel's domestic operating subsidiaries. The
Second Secured Borrowings are secured (on a second priority basis) by the same
collateral package securing amounts outstanding under the Bank Credit Facility
and the Vendor Credit Facility.
Giving effect to these amendments and to the agreement relating to Second
Secured Borrowings (the "Second Vendor Financing Agreement"), the agreement
related to the Bank Credit Facility (the "Bank Credit Agreement") provides for
up to $1,905,000,000 of secured financing (consisting of a $1,085,000,000
revolving loan and $820,000,000 in term loans), the agreement related to the
Vendor Credit Facility (the "Vendor Credit Agreement") provides for up to
$395,000,000 of secured financing (consisting of a $195,000,000 revolving loan
and $200,000,000 in term loans), and the Second Vendor Financing Agreement
provides for up to $200,000,000 of Second Secured Borrowings, for a total of up
to $2,500,000,000 in secured financing. The indebtedness incurred upon issuance
of the October Notes may, under certain circumstances described elsewhere
herein, limit the Company's ability to incur indebtedness otherwise available
for incurrence pursuant to the Bank Credit Facility, the Vendor Credit Facility,
and/or the Second Vendor Financing Agreement. See "Risk Factors -- Risk Factors
Relating to Nextel -- Nextel to Require Additional Financing."
Exercise of First Motorola Option by McCaw Investor. On September 3, 1997,
the McCaw Investor acquired 2,000,000 shares of Common Stock from Motorola
pursuant to the exercise of an option granted by Motorola, at a per share price
of $15.50 (the "First Motorola Option"). The First Motorola Option was granted
to the McCaw Investor by Motorola in 1995 in connection with the consummation of
the McCaw Transaction.
Issuance of Series D Preferred Stock. On July 21, 1997, Nextel completed
the sale of 500,000 shares of its 13% Series D Exchangeable Preferred Stock (the
"Series D Preferred Stock") with a liquidation preference of $1,000 per share.
Nextel received approximately $482,000,000 in net cash proceeds from the sale of
the Series D Preferred Stock (the "Preferred Stock Proceeds").
Dividends on the Series D Preferred Stock accrue at an annual rate of 13%
of the liquidation preference, are cumulative from the date of issuance and are
payable quarterly in cash or, on or prior to July 15, 2002, at the sole option
of Nextel, in additional shares of Series D Preferred Stock. Nextel elected to
pay the first quarterly dividend on the Series D Preferred Stock in kind,
resulting in the issuance of an additional 15,167 shares of Series D Preferred
Stock on October 15, 1997. The Series D Preferred Stock is mandatorily
redeemable on July 15, 2009 at the liquidation preference plus accrued and
unpaid dividends, and is redeemable in whole or in part, at the option of
Nextel, at any time after December 15, 2005, at a price equal to the liquidation
preference plus accrued and unpaid dividends, and, in certain circumstances,
after July 15, 2002 at specified redemption prices. Up to 35% of the Series D
Preferred Stock may be redeemed on or prior to July 15, 2000, in whole or in
part, at the option of Nextel, in certain circumstances, at 113% of the
liquidation preference plus accrued and unpaid dividends from the proceeds of
one or more sales of Nextel Common Stock. The Series D Preferred Stock is also
exchangeable, in whole but not in part, at the option of Nextel, at any time
after December 15, 2005 and in certain circumstances sooner, into Nextel
subordinated debentures.
The shares of Series D Preferred Stock were initially issued in a private
placement transaction that was not registered with the Commission under the
Securities Act. On November 12, 1997, the Commission declared effective Nextel's
registration statement with respect to a registered offer to exchange the then
outstanding shares of Series D Preferred Stock for an equal number of shares of
13% Series D Exchangeable Preferred Stock that have been registered pursuant to
the Securities Act (the "Preferred Stock Exchange Offer"). In the event that the
Preferred Stock Exchange Offer is not consummated prior to specified dates, the
dividend accrual rate applicable to the Series D Preferred Stock will increase
by specified amounts until the Preferred Stock Exchange Offer is consummated or
certain other requirements are met.
Terms of the Series D Preferred Stock are set forth in the related
Certificate of Designation, which has been filed with the Commission and is
incorporated by reference herein.
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<PAGE> 13
Consent Solicitation. Under the terms of Nextel's five outstanding issues
of Senior Redeemable Discount Notes outstanding prior to 1997 (the "Old Senior
Notes"), issued pursuant to respective public indentures as in effect prior to
June 13, 1997 (the "Former Version Indentures"), Nextel and its subsidiaries
that are "restricted subsidiaries" for purposes of such indentures (the
"restricted subsidiaries") could not have incurred debt (other than certain
categories of "Permitted Debt" (as defined in such indentures)) unless certain
tests were met. Because such terms of the Former Version Indentures could have
had the effect of limiting Nextel's ability to borrow the funds necessary to
implement its business plan, Nextel sought the consent of the holders of the Old
Senior Notes to certain amendments to the Former Version Indentures pursuant to
a consent solicitation (the "Consent Solicitation"). On June 13, 1997, Nextel
obtained the consent of the requisite number of holders of the Old Senior Notes
to certain amendments and waivers to specific provisions of the Former Version
Indentures. Also on that date, Nextel and the trustee under such Former Version
Indentures executed supplemental indentures (the "Supplemental Indentures") to
each of the Former Version Indentures implementing such amendments and waivers.
The Former Version Indentures, as amended and modified by their respective
Supplemental Indentures, are referred to herein as the "Old Indentures" and are
referred to collectively with the New Indentures as the "Nextel Indentures." The
Old Senior Notes are referred to collectively with the New Senior Notes as the
"Nextel Notes." The amendments include, among other things, certain
modifications to the debt incurrence limitations of such indentures to allow
Nextel to incur additional indebtedness, by (i) increasing the amount of
permitted debt by $350,000,000 and providing additional flexibility to allocate
the total amount of permitted debt among the existing categories of permitted
debt, (ii) allowing Nextel to incur indebtedness in excess of such permitted
debt, in the period prior to January 1, 2000, based on the amount and timing of
any net cash proceeds received by Nextel from new equity issuances (such
proceeds of new equity issuances include the Preferred Stock Proceeds, but would
exclude equity funds from several identified sources, including most
significantly equity investment proceeds received from affiliates of Craig O.
McCaw ("Mr. McCaw") in connection with the exercise of the First Option (as
defined herein) and also the Subscription Proceeds (as defined herein) received
by Nextel), and (iii) making Nextel's ability to incur additional indebtedness
on and after January 1, 2000 a function of satisfaction of a new interest
coverage ratio test. See "Risk Factors -- Risk Factors Related to Nextel --
Nextel to Require Additional Financing." The Supplemental Indentures also
authorize Nextel to transfer to its unrestricted subsidiary group the equity
interest in Clearnet currently held directly by Nextel and implemented certain
technical amendments.
The foregoing statements relating to the Old Indentures are summaries of
the relevant provisions and do not purport to be complete. Where reference is
made to particular provisions of the Old Indentures, such provisions, including
the definitions of certain terms, are incorporated by reference as part of such
summaries, and are qualified in their entirety by such reference. Each of the
Former Version Indentures and the Supplemental Indentures has previously been
filed with the Commission, and each of the Former Version Indentures, as amended
and supplemented by the appropriate Supplemental Indenture, is incorporated by
reference herein.
In connection with the Consent Solicitation, Nextel made consent payments
totaling approximately $67,151,000 to validly consenting holders of the Old
Senior Notes (the "Consenting Holders"). On August 8, 1997, the Commission
declared effective Nextel's registration statement on Form S-3 relating to the
offering of approximately 4,161,000 shares of Common Stock exclusively to
Consenting Holders. Pursuant to such registration statement, Nextel offered such
Common Stock to the Consenting Holders at a per share cash price of $16.14.
Approximately 3,945,000 of the offered shares of Common Stock were subscribed
for by Consenting Holders for an aggregate purchase price of approximately
$63,700,000 (the "Subscription Proceeds").
McCaw Investor Option Exercise. In April 1997, Nextel and the McCaw
Investor reached a preliminary agreement (which was confirmed in definitive
agreements entered into in June 1997) pursuant to which the McCaw Investor
committed to exercise in full the outstanding option that was scheduled to
expire on July 28, 1997 (the "First Option") to purchase 15,000,000 shares of
Common Stock for an aggregate purchase price of $232,500,000 (the "McCaw Option
Proceeds"). The McCaw Investor exercised the First Option on July 28, 1997. In
connection with the foregoing, the McCaw Investor also agreed to provide up to
$50,000,000 in debt
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<PAGE> 14
financing (subject to certain conditions) to Nextel (the "McCaw Investor
Borrowings"). See "Risk Factors -- Risk Factors Relating to Nextel -- Nextel to
Require Additional Financing." At the present time, however, Nextel is not
taking steps to meet the conditions to access the McCaw Investor Borrowings.
On March 20, 1997, Nextel completed the purchase from an affiliate of
Comcast Corporation ("Comcast") of an option to acquire 25,000,000 shares of
Common Stock, at an exercise price of $16.00 per share (the "Comcast Option"),
for an aggregate purchase price of $25,000,000. In connection with the
agreements relating to the commitment to exercise the First Option, Nextel
reached an agreement with an affiliate of Mr. McCaw (such affiliate, the
"Purchaser"), pursuant to which the Purchaser acquired, for an aggregate
purchase price of $25,000,000, an option, in replacement of the Comcast Option,
to purchase, at any time through July 28, 1998, 25,000,000 shares of Common
Stock (the "New Option"), 15,000,000 shares of which are purchasable at an
exercise price of $16.00 per share and the remaining 10,000,000 shares of which
are purchasable at an exercise price of $18.00 per share. The New Option, and
any shares of Common Stock issued upon exercise thereof, are transferable
subject to certain limitations. In addition, one direct transferee of the
Purchaser will be entitled to designate one nominee for election to Nextel's
Board of Directors, provided that such transferee (i) has exercised the
transferred portion of the New Option and continues to own at least 10,000,000
shares of Common Stock obtained on such exercise, (ii) is not an affiliate of
Mr. McCaw, and (iii) does not hold a 5% or greater equity ownership interest in
any entity that provides terrestrial-based wireless communications services in
competition with Nextel in any of its markets. Shares issuable upon exercise of
the New Option will be entitled to certain demand and piggyback registration
rights, that would be assignable to transferees in certain circumstances. There
can be no assurance that the Purchaser or any transferee will elect to exercise
the New Option. See "Risk Factors -- Forward Looking Statements." The
arrangements pertinent to the New Option, the exercise of the First Option, and
the McCaw Investor Borrowings are set forth in definitive agreements entered
into among the relevant parties which definitive agreements have been filed with
the Commission and are incorporated herein by reference.
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<PAGE> 15
THE EXCHANGE OFFER
THE EXCHANGE OFFER......... The Company is offering, upon the terms and
conditions set forth herein and in the Letter of
Transmittal, to exchange Exchange Senior Notes for
an equal principal amount at maturity of Private
Notes that are properly tendered and accepted in
the Exchange Offer. The Company will issue Exchange
Senior Notes on or as promptly as practicable after
the Expiration Date. As of the date hereof,
$840,000,000 in principal amount at maturity of
Private Notes is outstanding. See "The Exchange
Offer."
RESALE OF EXCHANGE SENIOR
NOTES.................... Based on an interpretation by the staff of the
Commission set forth in no-action letters issued to
third parties, including "Exxon Capital Holdings
Corporation" (available May 13, 1988), the Morgan
Stanley Letter, "Mary Kay Cosmetics, Inc."
(available June 5, 1991), "Warnaco, Inc."
(available October 11, 1991), and "K-III
Communications Corp." (available May 14, 1993), the
Company believes that Exchange Senior Notes issued
pursuant to the Exchange Offer in exchange for
Private Notes may be offered for resale, resold, or
otherwise transferred by any holder thereof (other
than any such holder that is an "affiliate" of the
Company within the meaning of Rule 405 under the
Securities Act) without compliance with the
registration and prospectus delivery provisions of
the Securities Act, provided that such Exchange
Senior Notes are acquired in the ordinary course of
such holder's business and that such holder has no
arrangement or understanding with any person to
participate in the distribution of such Exchange
Senior Notes. Holders of Private Notes who tender
their Private Notes in the Exchange Offer with the
intention to participate in a distribution of the
Exchange Senior Notes may not rely upon the Morgan
Stanley Letter or other similar letters. In the
event that the Company's belief is inaccurate,
holders of Exchange Senior Notes who transfer
Exchange Senior Notes in violation of the
prospectus delivery provisions of the Securities
Act and without an exemption from registration
thereunder may incur liability thereunder. The
Company does not assume or indemnify holders
against such liability. The Exchange Offer is not
being made to, nor will Nextel accept surrenders
for exchange from, holders of Private Notes (i) in
any jurisdiction in which the Exchange Offer or the
acceptance thereof would not be in compliance with
the securities or blue sky laws of such
jurisdiction or (ii) if any holder is engaged or
intends to engage in a distribution of the Exchange
Senior Notes. Each broker-dealer that receives
Exchange Senior Notes for its own account in
exchange for Private Notes, where such Private
Notes were acquired by such broker-dealer as a
result of market-making activities or other trading
activities, must, among other things, acknowledge
that it will deliver a prospectus in connection
with any resale of such Exchange Senior Notes. The
Company has not entered into any arrangement or
understanding with any person to distribute the
Exchange Senior Notes to be received in the
Exchange Offer. See "The Exchange Offer -- Resale
of the Exchange Senior Notes" and "Plan of
Distribution."
TERMINATION OF CERTAIN
RIGHTS..................... The Private Notes were sold by the Company on
September 17, 1997 to Merrill Lynch, Pierce, Fenner
& Smith Incorporated, TD Securities (USA) Inc.,
Lehman Brothers Inc., Morgan Stanley & Co.
Incorporated, and NationsBanc Capital Markets, Inc.
(together, the "Initial
8
<PAGE> 16
Purchasers") pursuant to a Purchase Agreement,
dated September 10, 1997 (the "Purchase
Agreement"), by and among the Company and the
Initial Purchasers. Pursuant to the Purchase
Agreement, the Company and the Initial Purchasers
entered into the Registration Rights Agreement
dated September 17, 1997 (the "Registration Rights
Agreement"). All rights under the Registration
Rights Agreement accorded to holders of Private
Notes will terminate upon the consummation of the
Exchange Offer except with respect to the Company's
duty to keep the Registration Statement effective
until closing of the Exchange Offer and, subject to
certain conditions, for a period not to exceed 90
days after the Expiration Date, to provide copies
of the latest version of the Prospectus to any
broker-dealer that requests copies for use in
connection with resales of Exchange Senior Notes
acquired for its own account as a result of
market-making or other trading activities. See "The
Exchange Offer -- Termination of Certain Rights."
EXPIRATION DATE............ The Exchange Offer will expire at 5:00 p.m., New
York City time, on , 1998, unless
the Exchange Offer is extended by the Company in
its sole discretion, in which case the term
"Expiration Date" shall mean the latest date and
time to which the Exchange Offer is extended. See
"The Exchange Offer -- Expiration Date; Extensions;
Amendments."
CONDITIONS TO THE EXCHANGE
OFFER.................... The Company may terminate the Exchange Offer if it
determines that its ability to proceed with the
Exchange Offer would be materially impaired due to
any legal or governmental action, any new law,
statute, rule or regulation, any interpretation by
the staff of the Commission of any existing law,
statute, rule or regulation, or the failure to
obtain any necessary approvals of governmental
agencies or holders of Private Notes. The Company
does not expect any of the foregoing conditions to
occur, although there can be no assurance that such
conditions will not occur. See "The Exchange
Offer -- Conditions."
PROCEDURES FOR TENDERING
PRIVATE NOTES.............. Each holder of Private Notes wishing to accept the
Exchange Offer must complete, sign, and date the
Letter of Transmittal, or a facsimile thereof, in
accordance with the instructions contained herein
and therein, and mail or otherwise deliver such
Letter of Transmittal, or such facsimile, together
with such Private Notes and any other required
documentation to Harris Trust and Savings Bank, as
exchange agent (the "Exchange Agent"), at the
address set forth herein. By executing the Letter
of Transmittal, the holder will represent to and
agree with the Company that, among other things,
(i) the Exchange Senior Notes to be acquired by
such holder of Private Notes in connection with the
Exchange Offer are being acquired by such holder in
the ordinary course of its business, (ii) such
holder is not participating, does not intend to
participate and has no arrangement or understanding
with any person to participate in a distribution of
the Exchange Senior Notes, and (iii) such holder is
not an "affiliate," as defined in Rule 405 under
the Securities Act, of the Company. If the holder
is a broker-dealer that will receive Exchange
Senior Notes for its own account in exchange for
Private Notes that were acquired as a result of
market-making or other trading activities, such
holder will be required to acknowledge in the
Letter of Transmittal that
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<PAGE> 17
such holder will deliver a prospectus in connection
with any resale of such Exchange Senior Notes,
however, by so acknowledging and by delivering a
prospectus, such holder will not be deemed to admit
that it is an "underwriter" within the meaning of
the Securities Act. See "The Exchange
Offer -- Procedures for Tendering."
SPECIAL PROCEDURES FOR
BENEFICIAL OWNERS.......... Any beneficial owner whose Private Notes are
registered in the name of a broker, dealer,
commercial bank, trust company or other nominee and
who wishes to tender such Private Notes in the
Exchange Offer should contact such registered
holder promptly and instruct such registered holder
to tender on such beneficial owner's behalf. If
such beneficial owner wishes to tender on such
owner's own behalf, such owner must, prior to
completing and executing the Letter of Transmittal
and delivering such owner's Private Notes, either
make appropriate arrangements to register ownership
of the Private Notes in such owner's name or obtain
a properly completed bond power from the registered
holder. The transfer of registered ownership may
take considerable time and may not be able to be
completed prior to the Expiration Date. See "The
Exchange Offer -- Procedures for Tendering."
GUARANTEED DELIVERY
PROCEDURES............... Holders of Private Notes who wish to tender their
Private Notes and whose Private Notes are not
immediately available or who cannot deliver their
Private Notes, the Letter of Transmittal or any
other documentation required by the Letter of
Transmittal to the Exchange Agent prior to the
Expiration Date must tender their Private Notes
according to the guaranteed delivery procedures set
forth under "The Exchange Offer -- Guaranteed
Delivery Procedures."
ACCEPTANCE OF THE PRIVATE
NOTES AND DELIVERY OF THE
EXCHANGE SENIOR NOTES.... Upon consummation of the Exchange Offer, the
Company will accept for exchange any and all
Private Notes that are properly tendered and not
withdrawn in the Exchange Offer prior to 5:00 p.m.,
New York City time, on the Expiration Date. See
"The Exchange Offer -- Terms of the Exchange
Offer."
FEES AND EXPENSES.......... Nextel will not receive any proceeds from, and has
agreed to bear the expenses of, the Exchange Offer.
The Company will also pay certain transfer taxes
applicable to the Exchange Offer. See "The Exchange
Offer -- Fees and Expenses."
EFFECT OF NOT TENDERING
PRIVATE NOTES FOR
EXCHANGE................. Private Notes that are not tendered or that are not
properly tendered will, following the expiration of
the Exchange Offer, continue to be subject to the
existing restrictions upon transfer thereof. The
Company will have no further obligations to provide
for the registration under the Securities Act of
such Private Notes and such Private Notes will,
following the expiration of the Exchange Offer,
bear interest at the same rate and in the same
manner as the Exchange Senior Notes.
WITHDRAWAL RIGHTS.......... Tenders of Private Notes may be withdrawn at any
time prior to 5:00 p.m., New York City time, on the
Expiration Date. See "The Exchange
Offer -- Withdrawal of Tenders."
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<PAGE> 18
CERTAIN FEDERAL TAX
CONSIDERATIONS........... For a discussion of certain United States Federal
income tax considerations relating to the Exchange
Offer and the ownership and disposition of the
Exchange Senior Notes, see "Certain United States
Federal Income Tax Considerations."
EXCHANGE AGENT............. Harris Trust and Savings Bank is serving as the
Exchange Agent in connection with the Exchange
Offer. The address and telephone number of the
Exchange Agent are set forth in "The Exchange
Offer -- The Exchange Agent." Harris Trust and
Savings Bank also serves as trustee (the "Trustee")
under the Indenture.
11
<PAGE> 19
THE EXCHANGE SENIOR NOTES
NOTES OFFERED.............. $840,000,000 principal amount at maturity of 10.65%
Senior Redeemable Discount Notes due September 15,
2007.
MATURITY DATE.............. September 15, 2007
YIELD AND INTEREST......... 10.65% per annum (computed on a semi-annual bond
equivalent basis) calculated from September 17,
1997. Cash interest will not accrue on the Notes
prior to September 15, 2002 and will be payable
semi-annually on March 15 and September 15 of each
year (each an "Interest Payment Date"), commencing
March 15, 2003, at a rate of 10.65% per annum. Cash
interest on the Exchange Senior Notes shall accrue
from the most recent Interest Payment Date with
respect to the Private Notes to which interest was
paid or duly provided for, or if no interest has
been paid or duly provided for, from September 15,
2002. For Federal income tax purposes, holders of
the Notes will be required to include amounts in
gross income in advance of the receipt of the cash
payments to which the income is attributable. See
"Certain United States Federal Income Tax
Considerations."
OPTIONAL REDEMPTION........ On or after September 15, 2002, the Notes are
redeemable at the option of Nextel, in whole or in
part, at the redemption prices set forth herein,
plus accrued and unpaid interest, if any, to the
redemption date. In the event of one or more sales
by the Company prior to September 15, 2000 of at
least $125,000,000 of its Capital Stock (other than
Redeemable Stock) (each as defined in "Description
of Exchange Senior Notes") up to a maximum of
33 1/3% of the aggregate Accreted Value (as defined
in "Description of Exchange Senior Notes") of
outstanding Notes may be redeemed at the Company's
option within 180 days after such sale from the net
cash proceeds thereof at 110.65% of such Accreted
Value to the date of redemption. See "Description
of Exchange Senior Notes -- Optional Redemption."
RANKING.................... The Exchange Senior Notes will be senior unsecured
indebtedness of the Company, will rank pari passu
in right of payment with all unsubordinated,
unsecured indebtedness of the Company, and will be
senior in right of payment to all subordinated
indebtedness of the Company. As of September 30,
1997, after giving pro forma effect to certain
transactions described herein, the Company would
have had approximately $2,924,582,000 of
indebtedness outstanding (excluding (i)
indebtedness evidenced by the Private Notes, (ii)
guaranties of subsidiary indebtedness of
$970,741,000 (such guaranty obligations would rank
pari passu in right of payment with the Notes but
the underlying guaranteed indebtedness is assumed
to be satisfied from the assets of the primary
obligors), and (iii) trade payables and other
accrued liabilities) that ranks pari passu in right
of payment with the Exchange Senior Notes. The
Company is a holding company that conducts
substantially all of its business through
subsidiaries. The Notes will be obligations of the
Company only, and its operating subsidiaries will
have no obligation to pay amounts due pursuant to
the Notes. The Notes will be effectively
subordinated to all liabilities of the Company's
subsidiaries, including trade payables and other
accrued liabilities. As of September 30, 1997,
after giving pro forma effect to certain
transactions described herein, the Company's
subsidiaries would have had approxi-
12
<PAGE> 20
mately $1,502,858,000 of indebtedness outstanding,
excluding trade payables and other accrued
liabilities. The Company and its subsidiaries are
expected to incur substantial additional
indebtedness in the next several years. See "Risk
Factors -- Risk Factors Related to Exchange Senior
Notes and Exchange Offer; -- Dependence of Company
on Subsidiaries for Cash to Pay Interest on and for
Repayment of Notes; -- Effect of Holding Company
Structure; -- Effect of Substantial Existing and
Additional Indebtedness; Refinancing Risk."
ORIGINAL ISSUE DISCOUNT.... The Private Notes were issued with original issue
discount for United States Federal income tax
purposes. The Exchange Senior Notes should be
treated as a continuation of the Private Notes.
Consequently, holders of Exchange Senior Notes
generally will be required to include amounts in
advance of receipt of the cash payments to which
the income is attributable for United States
Federal income tax purposes. See "Certain United
States Federal Income Tax
Considerations -- Original Issue Discount."
CERTAIN COVENANTS.......... The Indenture contains certain covenants for the
benefit of the holders of the Notes which, among
other things, restrict the ability of the Company
and each Restricted Subsidiary (as defined in
"Description of Exchange Senior Notes -- Certain
Definitions") to: incur additional indebtedness;
pay dividends or make distributions in respect of
the Company's Capital Stock other than dividend,
penalty or other mandated payments on or in respect
of any class or series of the Company's currently
authorized and designated preferred stock; redeem,
repurchase, or make payments on any subordinated
Debt (as defined in "Description of Exchange Senior
Notes -- Certain Definitions") of the Company prior
to its scheduled maturity, repayment or sinking
fund payment, as applicable; make investments or
certain other restricted payments; enter into
transactions with affiliates; engage in any
business other than the telecommunications business
and related activities and services; or effect a
merger or consolidation or sale of all or
substantially all of its assets. Also, the Company
must provide certain annual and quarterly financial
information reports to the Trustee, to holders of
the Notes, and to the Commission. These limitations
will, however, be subject to important
qualifications and exceptions. See "Description of
Exchange Senior Notes -- Certain Covenants."
CHANGE OF CONTROL.......... Upon a Change of Control, the Company will be
required to make an offer to purchase the Notes at
a purchase price equal to 101% of the Accreted
Value thereof, or, in the case of any purchase date
on or after September 15, 2002, 101% of the
principal amount thereof, plus accrued and unpaid
interest, if any, to the date of purchase. There
can be no assurance that the Company will have
sufficient funds available at the time of any
Change of Control to make any required debt
repayment (including repurchases of the Notes). See
"Description of Exchange Senior Notes -- Change of
Control."
BOOK-ENTRY, DELIVERY
AND FORM................. It is expected that delivery of the Exchange Senior
Notes will be made in book-entry form. The Company
expects that Exchange Senior Notes exchanged for
Private Notes currently represented by a restricted
global senior notes certificate deposited with, or
on behalf of, The Depository Trust Company (the
"Depository" or "DTC") and registered in the
13
<PAGE> 21
name of Cede & Co., its nominee, will be
represented by global notes certificates and
deposited upon issuance with the Depository and
registered in its name or the name of its nominee.
Beneficial interests in the global notes
certificate representing the Exchange Senior Notes
will be shown on, and transfers thereof will be
effected through, records maintained by the
Depository and its participants.
For additional information regarding the Notes, see "Description of the
Exchange Senior Notes" and "Certain United States Federal Income Tax
Considerations."
NO CASH PROCEEDS TO THE COMPANY
The Company will not receive any proceeds from the issuance of the Exchange
Senior Notes offered hereby. The form and terms of the Exchange Senior Notes are
identical in all material respects to the form and terms of the Private Notes,
except as otherwise described herein under "The Exchange Offer; Terms of the
Exchange Offer." The Private Notes surrendered in exchange for Exchange Senior
Notes will be retired and canceled and cannot be reissued. Accordingly, issuance
of the Exchange Senior Notes will not result in any increase in the outstanding
indebtedness of the Company.
RISK FACTORS
For a discussion of certain factors that should be considered in evaluating
an investment in the Exchange Senior Notes, see "Risk Factors."
14
<PAGE> 22
SUMMARY FINANCIAL DATA
The summary financial data set forth below for the periods indicated should
be read in conjunction with the consolidated financial statements, related notes
and other financial information appearing in Nextel's Annual Report on Form 10-K
for the year ended December 31, 1996 and Nextel's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1997, incorporated herein by reference. The
financial information for the fiscal years ended March 31, 1993 and 1994, the
nine months ended December 31, 1994, and the years ended December 31, 1995 and
1996 have been derived from the audited consolidated financial statements of
Nextel. The report of Deloitte & Touche LLP, independent auditors, for the nine
months ended December 31, 1994 and the years ended December 31, 1995 and 1996
has been incorporated by reference. See "Experts." The financial information for
the nine months ended September 30, 1996 and 1997 is derived from the unaudited
financial statements of Nextel and, in the opinion of Nextel, includes all
adjustments, consisting only of normal recurring accruals, considered necessary
for the fair presentation of such information. The results of operations for
interim periods are not necessarily indicative of the results to be expected for
the full year. See "Incorporation of Certain Information By Reference."
<TABLE>
<CAPTION>
NINE MONTHS
FISCAL YEAR ENDED NINE MONTHS
ENDED DECEMBER YEAR ENDED ENDED
MARCH 31, 31, DECEMBER 31, SEPTEMBER 30,
------------------------ ----------- -------------------------- --------------------------
1993 1994 1994(1) 1995 1996 1996 1997
---------- ---------- ----------- ----------- ----------- ----------- -----------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT
DATA(2):
Revenues............... $ 53,002 $ 67,928 $ 74,857 $ 171,703 $ 332,938 $ 236,977 $ 463,838
Cost of operations..... 20,979 28,666 51,406 151,718 247,717 187,631 195,077
Selling, general and
administrative
expenses.............. 18,971 41,107 85,077 193,321 330,256 224,650 568,112
Expenses related to
corporate
reorganization(3)..... -- -- -- 17,372 -- -- --
Depreciation and
amortization.......... 25,942 58,398 94,147 236,178 400,831 291,698 361,757
---------- ---------- ----------- ----------- ----------- ----------- -----------
Operating loss......... (12,890) (60,243) (155,773) (426,886) (645,866) (467,002) (661,108)
Interest income
(expense), net........ 1,324 (18,101) (41,454) (89,509) (206,480) (147,571) (258,387)
Other income (expense),
net(4)(5)............. 924 3 33 (15,372) (10,866) -- 5,486
Income tax benefit..... 1,027 21,437 71,345 200,602 307,192 216,944 125,402
Series D Preferred
Stock Dividends....... -- -- -- -- -- -- (12,822)
---------- ---------- ----------- ----------- ----------- ----------- -----------
Net loss attributable
to common
stockholders.......... $ (9,615) $ (56,904) $ (125,849) $ (331,165) $ (556,020) $ (397,629) $ (801,429)
=========== =========== ============= ============= ============= ============= =============
Net loss per share
attributable to common
stockholders.......... $ (0.16) $ (0.73) $ (1.25) $ (2.31) $ (2.50) $ (1.80) $ (3.28)
Number of shares used
in computations(6).... 58,736,000 78,439,000 100,639,000 143,283,000 222,779,000 221,309,000 244,221,000
OTHER FINANCIAL DATA:
Ratio of earnings to
fixed charges and
Preferred Stock
dividends(7).......... -- -- -- -- -- -- --
</TABLE>
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1997
AS OF MARCH 31, AS OF DECEMBER 31, -----------------------------
----------------------- ---------------------------------------- PRO FORMA
1993 1994 1994 1995 1996 ACTUAL AS ADJUSTED(8)
-------- ---------- ---------- ---------- ---------- ---------- --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash
equivalents(9)........ $ 17,083 $ 483,483 $ 301,679 $ 340,826 $ 139,681 $ 475,370 $1,176,762
Marketable
securities(10)........ 14,768 426,113 172,313 68,443 5,012 87,924 87,924
Current assets......... 39,932 921,983 504,248 504,661 309,097 892,785 1,594,177
Intangible assets,
net................... 144,666 889,912 1,451,780 3,549,622 4,076,300 4,414,642 4,414,642
Total assets........... 33,557 2,229,832 2,918,985 5,547,256 6,472,439 8,462,029 9,181,421
Long-term debt(11)..... 55,024 1,113,268 1,193,096 1,687,829 2,783,041 4,229,765 4,929,762
Series D Preferred
Stock................. -- -- -- -- -- 512,822 512,822
Stockholders' equity
(12).................. 255,224 846,304 1,268,575 2,945,141 2,808,138 2,585,061 2,604,456
</TABLE>
(footnotes on following page)
15
<PAGE> 23
- ---------------
(1) Effective December 31, 1994, Nextel changed its fiscal year end from March
31 to December 31. Accordingly, the income statement data is presented for
the transition period from April 1, 1994 to December 31, 1994.
(2) See Note 2 to the Notes to Nextel's consolidated financial statements for
the year ended December 31, 1996 for a description of acquisitions.
(3) See Note 2 to the Notes to Nextel's consolidated financial statements for
the year ended December 31, 1996.
(4) Other expenses in 1995 include a $15,000,000 write-down of the investment
in Corporacion Mobilcom S.A. de C.V. ("Mobilcom") as a result of the
devaluation of the Mexican peso.
(5) Other expenses in 1996 and 1997 primarily reflect equity in the losses of
certain foreign investments accounted for under the equity method. (See
Note 2 to the Notes to Nextel's consolidated financial statements for the
year ended December 31, 1996.)
(6) Weighted average number of shares of Common Stock outstanding during the
respective periods.
(7) For the purpose of computing the ratio of earnings to fixed charges,
earnings consist of loss before income tax benefits, plus fixed charges,
plus loss attributable to minority interests less income (loss) from equity
method investments. Fixed charges consist of interest on all indebtedness,
amortization of debt expense and that portion of rental expense which the
Company believes to be representative of interest. The deficiency of
earnings to cover fixed charges for the fiscal years ended March 31, 1993
and 1994 was $12,800,000 and $86,100,000, respectively, for the nine months
ended December 31, 1994 was $218,500,000, for the years ended December 31,
1995 and 1996 was $562,800,000 and $884,900,000, respectively, and for the
nine months ended September 30, 1996 and 1997 was $637,357,000 and
$943,708,000, respectively.
(8) Gives pro forma effect to the receipt of (i) approximately $19,400,000
representing a portion of the Subscription Proceeds received after
September 30, 1997, and (ii) approximately $682,000,000 in October Notes
Proceeds as if they occurred on September 30, 1997. Such proceeds are
available for general corporate purposes. See "- Recent
Developments -- October Notes Issuance."
(9) Includes approximately $294,429,000 of cash and cash equivalents held by
Nextel International and its subsidiaries as of September 30, 1997 from the
offering of the 10-year discount notes (the "NI Notes") completed in March
1997, which are not available to fund any of the cash needs of Nextel's
domestic Digital Mobile and analog SMR businesses due to the restrictions
contained in the indenture related thereto (the "NI Indenture").
(10) Includes approximately $85,121,000 of marketable securities held by Nextel
International and its subsidiaries as of September 30, 1997 from the
offering of the NI Notes, which are not available to fund any of the cash
needs of Nextel's domestic Digital Mobile and analog SMR businesses due to
the restrictions contained in the NI Indenture.
(11) Excludes the current portions of long-term debt. See Note 6 to the Notes to
Nextel's consolidated financial statements for the year ended December 31,
1996.
(12) See Notes 10 and 11 to the Notes to Nextel's consolidated financial
statements for the year ended December 31, 1996.
16
<PAGE> 24
RISK FACTORS
An investment in the Exchange Senior Notes offered hereby involves a high
degree of risk. The specific factors set forth below, as well as the other
information included and incorporated by reference in this Prospectus, should be
considered when evaluating an investment in the Exchange Senior Notes. See also
"-- Forward Looking Statements."
RISK FACTORS RELATING TO NEXTEL
History of and Future Expectations of Losses and Negative Cash Flow
The activities of Nextel since its inception in 1987 have been concentrated
on the acquisition and operation of SMR businesses and the development of
Digital Mobile networks. Nextel has incurred net losses since its inception,
including net losses of approximately $556,020,000 for the year ended December
31, 1996 and approximately $788,607,000 for the nine months ended September 30,
1997. Nextel had an accumulated deficit totaling approximately $1,923,858,000 at
September 30, 1997. Nextel anticipates that it will continue to experience
significant net losses and significant negative net cash flow during the ongoing
start up phase of the Digital Mobile networks over the next several years.
Nextel's ability to arrange sufficient equity and/or debt financing or to
generate sufficient revenue to cover its operating and capital needs is subject
to a number of risks and contingencies. Accordingly, there can be no assurance
as to whether or when Nextel's operations will become profitable. See "-- Nextel
to Require Additional Financing" and "-- Forward Looking Statements."
Risks of Implementation of Digital Mobile Networks
The implementation of Digital Mobile networks involves systems design, site
procurement, construction, electronics installation, receipt of necessary FCC
and other regulatory approvals, channel recovery (freeing a certain number of
800 MHz frequencies from SMR analog traffic) and initial systems optimization
prior to commencing commercial service. Each stage can take from several weeks
to several months and involves various risks and contingencies, the outcome of
which cannot be predicted. There can be no assurance that Nextel will be able to
implement Digital Mobile networks (where such networks are not already in
commercial operation) in any particular market in accordance with its current
plans and schedules. See "-- Forward Looking Statements."
Implementation of Digital Mobile Networks Subject to Risks of Developing
Technology
Currently, there are three principal digital technology formats that are
being assessed or proposed for deployment or deployed currently by providers of
cellular telephone service or by certain entities that have been awarded PCS
licenses to provide wireless communications services in the United States. Such
formats are known as Time Division Multiple Access ("TDMA") digital transmission
technology, Code Division Multiple Access ("CDMA") digital transmission
technology and GSM-PCS, which is an updated, upbanded PCS version of the
TDMA-based digital technology format known as Global System for Mobile
Communications ("GSM"). Although TDMA, CDMA and GSM-PCS are digital transmission
technologies, and thus share certain basic characteristics and areas of contrast
to analog transmission technology, TDMA, CDMA and GSM-PCS are not compatible or
interchangeable with each other.
The Motorola proprietary first generation iDEN technology originally
incorporated in Nextel's Digital Mobile networks is known as "six-time slot
TDMA." Although based on the TDMA technology format, this first generation iDEN
technology differs in a number of significant respects from the TDMA technology
versions being assessed or deployed by cellular operators and PCS licensees in
the United States, which differences may have important consequences.
Additionally, unlike the three-time slot TDMA technology format being utilized
for the mobile telephone function in the Reconfigured iDEN technology platform
or the three-time slot TDMA technology format being utilized by certain cellular
providers, the first generation iDEN technology, as well as the "six-time slot
TDMA" technology utilized for the two-way dispatch function in the Reconfigured
iDEN technology platform, can carry up to six (rather than three) voice and/or
control paths per channel.
17
<PAGE> 25
Although Nextel believes that TDMA technology, on balance, is superior to
analog technology that is used in traditional SMR systems, the use of digital
technology in general involves certain performance trade-offs, for example, in
various characteristics affecting voice quality and fidelity. These trade-offs
have had and may in the future have an effect on customer acceptance of iDEN
technology. The use of six-time and three-time slot TDMA technology in
combination with Nextel's re-use of its licensed frequencies in a cellular-type
system design permits Nextel to utilize its current holdings of spectrum more
efficiently. Efficient utilization of spectrum is an important objective
generally because less spectrum is available in the SMR band than is or will be
licensed to each cellular and certain PCS operators in each market. Reconfigured
iDEN, which is designed to use three time slots per channel for the mobile
telephone service, results in a reduction in channel capacity compared to the
capacity achievable using first generation iDEN technology for mobile telephone
service.
Any difference that may from time to time exist between the technology
deployed in Nextel's Digital Mobile networks and competitive technologies then
deployed by other wireless communications service providers, such as analog,
CDMA, TDMA, GSM-PCS or other transmission technology formats that may be
developed in the future, may affect customer acceptance of the services offered
by Nextel. In the future, a digital transmission technology other than TDMA may
gain acceptance sufficient to adversely affect the resources devoted by third
parties to developing or improving TDMA-based technologies and the market
acceptance of TDMA-based technologies, such as iDEN. In addition, existing
digital cellular technology formats including cellular TDMA cannot currently be
utilized on Nextel's present SMR spectrum holdings. Accordingly, if any
improvements were to be made to such currently existing digital cellular
technology formats, the prospect of achievement of parallel improvements in the
TDMA-based iDEN technology presently utilized by Nextel is not certain. See
"-- Forward Looking Statements."
Customer acceptance of the services offered by Nextel will be affected not
only by technology-based differences, but also by the operational performance
and reliability of system transmissions on Nextel's Digital Mobile networks.
Nextel implemented Digital Mobile networks in its market areas using Motorola's
first generation iDEN technology prior to the second quarter of 1996. During
that time frame, Nextel encountered certain technology and system performance
issues with respect to system reliability (the percentage of time the system is
operating), system access (how often a user can gain access to the system) and
various characteristics affecting voice transmission quality of mobile telephone
services utilizing Nextel's Digital Mobile networks. Nextel provided discounts
and gave credits to customers in an effort to foster satisfactory customer
relations and delayed both its planned deployment of its Digital Mobile networks
and commencement of aggressive product and service marketing efforts pending
resolution of such system performance and voice quality issues. During this
period Nextel and Motorola also took actions to address system performance
issues in general, and voice transmission quality concerns in particular. These
actions consisted of efforts to enhance the performance of the first generation
iDEN networks in a number of areas that were believed to adversely affect system
performance, perceived voice transmission quality and customer satisfaction, and
included measures as diverse as improvements in system infrastructure and
subscriber equipment design and interaction, adjustments in cell site locations
and in radio frequency planning, development of enhanced network load and
traffic management and control systems, and development and deployment of more
sophisticated diagnostic and error correction software. These and other
measures, most of which can be categorized as systems optimization, are expected
to be ongoing activities connected with Nextel's operation of its Digital Mobile
networks. Moreover, Nextel expects that systems optimization, software loading,
and planned maintenance activities will be ongoing components of its operation
of the Digital Mobile networks that will periodically require the scheduled
turndown of selected subsystems in Nextel's Digital Mobile networks during
periods of very low system traffic, typically at night or on weekend days. See
"-- Forward Looking Statements."
Nextel's objectives in carrying out the initial phase of system development
and technology enhancements were to achieve satisfactory performance levels in
the areas of system reliability and system access. Nextel believes that its
existing Digital Mobile networks, as operated at September 30, 1997, were
demonstrating acceptable performance levels in these areas. Nextel also believes
that the successful national deployment throughout Nextel's Digital Mobile
networks of the Reconfigured iDEN technology, with its accompanying
18
<PAGE> 26
improvements in the voice quality of the mobile telephone service provided on
Nextel's Digital Mobile networks, should enable Nextel to aggressively market
such services as part of a competitive wireless communications services
alternative to existing cellular telephone and PCS wireless communications
services in its markets. See "-- Forward Looking Statements."
Motorola has advised Nextel that it contemplates continuing to install
software upgrades and Nextel anticipates it will continue to advise and consult
with Motorola concerning potential measures that could be taken to address any
issues concerning system performance and/or expressed customer satisfaction
levels as revealed by Nextel's continuing system testing and customer surveys.
To the extent Nextel's experience has been derived based on customers in its
markets employing the first generation iDEN technology, who are primarily
oriented to the two-way dispatch service, such experience should not necessarily
be regarded as an accurate predictor of Nextel's experience in the future,
particularly as Nextel continues to implement its planned nationwide roll-out of
the Reconfigured iDEN technology and as Nextel's customer base expands beyond
such group of initial customers. Any inability to address and resolve
satisfactorily performance issues that affect customer acceptance of Digital
Mobile network service could delay or adversely affect the successful
commercialization of the Digital Mobile networks and could adversely affect the
business and financial prospects of Nextel. If Nextel for any reason is unable
to implement Digital Mobile networks and provide service to its target customers
that is competitive with the services of other wireless communications
providers, Nextel would be unable, utilizing its existing analog SMR systems, to
provide mobile telephone services comparable to those provided by other wireless
communications services providers or to achieve significant further subscriber
growth. See "-- Forward Looking Statements."
Nextel anticipates that there will be an ongoing focus on systems and
technology optimization activities directed at achieving improvements in the
overall performance of the Digital Mobile networks and such technology
optimization activities will be a continuing component of normal Digital Mobile
network operation. Moreover, the satisfactory resolution of certain system
performance issues in a particular market or at a particular stage of operation
will not necessarily preclude the need to address those issues again, for
example, as a result of a significant increase in the number of subscribers
using the Digital Mobile networks, and future upgrades or modifications to the
Digital Mobile networks may have unexpected adverse effects on performance
issues previously addressed and resolved. Each of Motorola and Nextel believes,
however, that a large portion of the hardware and software adjustments developed
in the course of system development and technology optimization activities to
address particular issues, and the resulting system performance improvements
realized, should be applicable to similar issues in different markets.
Nevertheless, as is often the case in the deployment of wireless communications
networks, it should be expected that there will be market-specific
characteristics, such as local terrain, topography, the number of licensed
frequencies, the utilization of adjacent radio frequencies and other factors,
that will require customized optimization activities to address related system
performance issues successfully. See "-- Forward Looking Statements."
Pursuant to the second amendment to the existing equipment purchase
agreements between Nextel and Motorola entered into in connection with the McCaw
Transaction (the "Second Equipment Agreement Amendment"), Motorola agreed to use
its best efforts to develop, and Nextel agreed to implement, Reconfigured iDEN.
The Reconfigured iDEN development and deployment activities to date have
proceeded in a timely and satisfactory manner, and Nextel believes that the
Reconfigured iDEN development program contemplated by the Second Equipment
Agreement Amendment is substantially complete. However, no assurance can be
given that any further modifications or enhancements to the Reconfigured iDEN
technology will be developed successfully, or that any such modifications or
enhancements, if developed, would be deployed in Nextel's Digital Mobile
networks or, if deployed, would perform successfully. Moreover, no assurance can
be given that the Reconfigured iDEN technology, as it currently exists or as it
may be further modified or enhanced in the future, will satisfy customer
requirements, or that Nextel's mobile telephone services utilizing such
Reconfigured iDEN technology will be regarded as competitive in the wireless
communications services markets as such markets currently exist and as they are
expected to develop in the future. See "-- Forward Looking Statements."
19
<PAGE> 27
Nextel to Require Additional Financing
Nextel anticipates that, for the foreseeable future, it will be utilizing
significant amounts of its available cash for capital expenditures for the
construction of Digital Mobile networks, operating expenses relating both to the
Digital Mobile networks and to the analog SMR networks, potential acquisitions
(including the acquisition of rights to spectrum through the FCC's 800 MHz
spectrum auction process), debt service requirements and other general corporate
expenditures. Nextel anticipates that its cash utilization for capital
expenditures and other investing activities and operating losses will continue
to exceed its cash flows from operating activities over the next several years.
During fiscal year 1996, Nextel's average monthly cash utilization rate for
investing activities (principally attributable to capital expenditures for the
build-out of the Digital Mobile networks) was approximately $33,390,000, and its
average monthly operating losses (exclusive of non-cash items) was approximately
$20,400,000. Such average monthly amounts are not necessarily representative of
Nextel's anticipated experience in such areas and are expected to increase
during 1997 and 1998 in connection with the implementation of Nextel's business
plan and the related accelerated construction of its Digital Mobile networks.
During the ongoing start up phase of its Digital Mobile networks, Nextel expects
that it will need to utilize its existing cash and funding from outside sources
to meet its cash needs resulting from such activities and losses. Nextel's
aggregate cash, cash equivalents and marketable securities at September 30, 1997
totaled approximately $563,300,000 (however, approximately $379,600,000 of such
amount represents cash, cash equivalents and marketable securities held by
Nextel International and its subsidiaries, which items are not available to fund
any of the cash needs of Nextel's domestic Digital Mobile and analog SMR
businesses due to restrictions contained in the provisions of the NI Indenture).
The Company is currently implementing its business plan to accelerate and
expand the deployment of its Digital Mobile networks in domestic markets during
1997 and 1998. Nextel has estimated that the external funding required to meet
the cash needs of its domestic business activities during the period from March
31, 1997 through the end of 1998, including principally the funding of
anticipated capital expenditures and potential acquisitions (including potential
acquisitions of licenses in the FCC's 800 MHz spectrum auction) and operating
losses, will be approximately $2,500,000,000, which includes approximately
$1,450,000,000 of system infrastructure and other system capital costs expected
to be incurred during the period. Such estimates were based on a number of
significant assumptions. The Company currently is in the process of developing
its capital and operating budgets for 1998, and as part of such process will be
reviewing a number of such matters in light of its experience with respect to
the Digital Mobile system construction and commercialization efforts during
1997. Nextel currently expects that the 1998 budgeting process will not be
finalized until late December 1997 or early 1998. However, based on the results
of that process to date, the Company anticipates that both its aggregate
domestic business cash needs and its domestic capital expenditure requirements
will be in excess of those previously estimated amounts. Such expected increase
likely will be necessary to accommodate increased system capacity requirements
resulting from the Company's rapid subscriber growth (which exceeded the levels
of assumed growth used in developing the prior estimates) and increased demand
for the Company's wireless services and to make improvements to existing Digital
Mobile system infrastructure to expand and improve systems coverage and
performance to address competitive pressures faced by the Company. Because such
budgeting process is not yet completed, the Company is not currently able to
estimate the extent of the impact that these factors or any other factors may
have on its level of domestic system capital expenditures and/or overall
domestic financing requirements during 1998. See "-- Forward Looking
Statements."
To fully implement an accelerated deployment of its Digital Mobile networks
in the period between March 31, 1997 and December 31, 1998 as described under
"Summary -- The Company -- Business Plan," Nextel would need to obtain
additional amounts of debt or equity financing beyond that available under the
Bank and Vendor Credit Facilities and the Second Vendor Financing Agreement
currently in place. The Bank Credit Agreement currently provides for up to
$1,905,000,000 of secured financing, the Vendor Credit Agreement currently
provides for up to $395,000,000 of secured financing and the Second Vendor
Financing Agreement currently provides for up to $200,000,000 in Second Secured
Borrowings, for an aggregate availability of $2,500,000,000, subject in each
case to the satisfaction or waiver of applicable borrowing conditions. At
September 30, 1997, Nextel had drawn $820,000,000 of its available financing
under the Bank
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Credit Facility and had drawn $150,000,000 of its available financing under the
Vendor Credit Facility. Prior to September 30, 1997, Nextel applied the
aggregate of approximately $1,494,800,000 in Preferred Stock Proceeds, Private
Notes Proceeds, McCaw Option Proceeds, the portion of the Subscription Proceeds
received to such date, and the proceeds of the Additional Bank Borrowings to
repay a portion of the borrowings outstanding under the Bank and Vendor Credit
Facilities (to the extent the amounts so repaid would be available for future
borrowings thereunder) with the balance of such aggregate net proceeds remaining
available for general corporate purposes. Disregarding any limitations imposed
pursuant to the Old Indentures on the Company's ability to incur debt under the
Bank and Vendor Credit Facilities and/or the Second Vendor Financing Agreement
by reason of the indebtedness incurred upon issuance of the October Notes, as of
September 30, 1997, a total of $1,530,000,000 (giving effect to the repayment of
all revolving, but no term, loan amounts outstanding under the Bank and Vendor
Credit Facilities) of such $2,500,000,000 in aggregate availability would be
available for future borrowings by the Company. The remaining funds available
for borrowing under the Bank and Vendor Credit Facilities may be drawn upon
prior to the final maturity date of such facilities in 2003, although the amount
available under such facilities will be reduced to reflect scheduled
amortization commencing in 2001. The $200,000,000 in additional funds available
under the Second Vendor Financing Agreement may be drawn as term loans prior to
March 31, 1999 and will mature in 2003.
Nextel also has reached an understanding with Motorola regarding the terms
and conditions pursuant to which Nextel could access up to an additional
$200,000,000 in borrowings that would be required to be ratably secured on an
equal ranking with borrowings pursuant to the Bank Credit Agreement and the
Vendor Credit Agreement (the "Senior Secured Borrowings"). The availability of
the Senior Secured Borrowings is subject to a number of conditions, including
the unanimous approval of the secured parties under the Bank Credit Agreement
and the Vendor Credit Agreement. Nextel is not currently taking steps to meet
such additional conditions and, accordingly, Nextel has assumed for planning
purposes that none of the funds constituting the Senior Secured Borrowings will
be available during 1997 and 1998.
The availability of all of the above-described existing and additional
financing is subject to Nextel's satisfying certain requirements under the Old
Indentures, which require Nextel to issue new equity for cash as a condition to
obtaining access to all amounts not constituting "permitted debt" (as such term
is defined in the Old Indentures) under the Bank Credit Facility, the Vendor
Credit Facility, and the Second Vendor Financing Agreement referred to above.
Nextel's receipt of the $482,000,000 in Preferred Stock Proceeds and option and
warrant exercise proceeds in the period from June 1, 1997 (the "Exercise
Proceeds") enabled Nextel to issue the Private Notes and still have access to
the full $2,500,000,000 in funding available under the Bank Credit Facility, the
Vendor Credit Facility, and the Second Vendor Financing Agreement under the
limitations on indebtedness contained in the Old Indentures. However, under such
limitations the issuance of the October Notes will restrict the Company's
ability to access, on approximately a dollar for dollar basis, the amount of
additional funding that would be available under the Bank and Vendor Credit
Facilities and the Second Vendor Financing Agreement unless either (i) the
proceeds from the issuance of the October Notes are applied to refinance a
portion of the Old Senior Notes in accordance with the Old Indentures (in which
case the indebtedness under the October Notes, to the extent the proceeds
thereof are applied to effect such refinancing, would constitute "permitted
debt" under the Old Indentures that would not reduce the amounts available under
the Bank and Vendor Credit Facilities or the Second Vendor Financing Agreement)
or (ii) the Company issues additional equity for cash that would support the
incurrence of additional debt under the Old Indentures. In the event the
proceeds from the issuance of the October Notes are not applied to refinance a
portion of the Old Senior Notes, such proceeds may be utilized to meet the
Company's funding requirements for the implementation of its business plan to
replace a portion of the borrowings available under the Bank and Vendor Credit
Facilities and/or the Second Vendor Financing Agreement, to the extent such
borrowings would be limited by the Old Indentures.
To the extent any of the aforementioned proceeds from equity issuances or
financing arrangements are not available or are not sufficient to meet Nextel's
funding needs, it will be necessary for Nextel to obtain alternate sources of
financing. See "-- Forward Looking Statements." Subject to the determination of
the potential impact on financing requirements associated with an increase in
the Company's overall domestic
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<PAGE> 29
cash needs, including its domestic capital expenditures as described above, and
assuming (i) that Nextel secures access to all of the available funds under the
Bank Credit Facility, the Vendor Credit Facility, and the Second Vendor
Financing Agreement (or such funds are replaced with the October Notes Proceeds
as described above) and (ii) that the New Option is exercised and Nextel
receives the $420,000,000 in proceeds therefrom (the "New Option Proceeds"), the
Company believes that such amounts, coupled with the Company's available cash
and cash equivalents (including the Preferred Stock Proceeds, the McCaw Option
Proceeds, the Private Notes Proceeds and the Subscription Proceeds), will
provide funds that in the aggregate are expected to be sufficient to implement
the Company's business plan and meet the other currently anticipated cash needs
of its domestic business activities through the end of 1998. Thereafter, Nextel
may require substantial additional financing. See "-- Forward Looking
Statements."
The availability of borrowings pursuant to the Bank Credit Facility, the
Vendor Credit Facility, and the Second Vendor Financing Agreement is subject to
certain conditions, and there can be no assurance that such conditions will be
met. Moreover, there can be no assurance that the New Option will be exercised
and that Nextel will receive the proceeds therefrom, or that any of the other
outstanding options will be exercised. The Bank Credit Facility, the Vendor
Credit Facility, the Second Vendor Financing Agreement, the Nextel Indentures,
and the terms of the Certificate of Designation relating to the Series D
Preferred Stock contain and will continue to contain provisions that operate to
limit the amount of borrowings that may be incurred by Nextel. In addition,
Nextel's capital needs, and its ability to adequately address those needs
through debt or equity funding sources, are subject to a variety of factors that
cannot presently be predicted with certainty, such as the commercial success of
Nextel's Digital Mobile networks incorporating the Reconfigured iDEN technology,
the amount and timing of Nextel's capital expenditures and operating losses and
the market price of the Common Stock. See "-- Forward Looking Statements."
Nextel currently is aware of numerous factors and considerations, any one
or more of which could have a material effect on the timing and/or amount of the
future funding to be required by Nextel, but Nextel cannot currently quantify
with precision either the magnitude or the certainty of the effects associated
with any such factors. These factors include: (i) the 800 MHz spectrum auction
process (the bidding phase of which commenced on October 28, 1997), and the
amounts required to be bid to acquire any or all of the available spectrum
blocks in the major metropolitan market areas where Nextel currently operates,
or currently plans to operate, its Digital Mobile network and the amounts that
may be required to accomplish retuning or acquisition of 800 MHz incumbent
channels in spectrum blocks that may be acquired by Nextel in the 800 MHz
spectrum auction process; (ii) the uncertainty with respect to the success
and/or timing of the continuing development and deployment activities relating
to the Reconfigured iDEN technology format and, assuming successful and timely
completion of such efforts, the uncertainty with respect to the success of
commercial introduction and customer acceptance of Nextel's Digital Mobile
network services in new market areas using such technology; (iii) the potential
commercial opportunities and risks associated with implementation of Nextel's
accelerated business plan; and (iv) the net impact on Nextel's capital budget of
certain developments currently expected to increase capital needs (e.g., the
additional capital needed if Nextel acquires for cash additional spectrum in
certain markets to increase the capacity and/or efficiency of Nextel's operating
Digital Mobile networks in such markets, the additional capital needed for more
extensive construction of Digital Mobile networks in additional market areas
acquired or that may be acquired in the future and the expenditures associated
with analog SMR station construction requirements under the currently effective
FCC 800 MHz channel licensing approach) that may be offset (whether wholly or
partially) by other developments anticipated to (or to have the potential to)
reduce capital needs (e.g., co-location of antenna and/or transmitter sites with
other providers of wireless services in the relevant markets, reductions in
infrastructure and subscriber unit prices obtained from Motorola pursuant to the
Second Equipment Agreement Amendment and an agreement entered into on March 27,
1997, alternative and more economical means for increasing system capacity,
other than constructing additional cell sites and/or installing additional base
radios, such as use of so-called "smart antennas," mini-cells and software-
driven and/or system design performance enhancements). Many of the foregoing
involve elements wholly or partially beyond Nextel's control or influence. Other
considerations in addition to the factors identified above may significantly
affect Nextel's decisions to seek additional financing, including general
economic conditions, conditions in the telecommunications and/or wireless
communications industry and the feasibility and
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<PAGE> 30
attractiveness of structuring particular financings for specific purposes (e.g.,
separate capital-raising activities with respect to international activities and
opportunities). See "-- Forward Looking Statements."
Nextel has had and may in the future have discussions with third parties
regarding potential equity investments and debt financing arrangements to
satisfy actual or anticipated financing needs. Pursuant to the Motorola
Transaction, Nextel has agreed, under certain circumstances, not to grant
superior governance rights to any third-party investor without Motorola's
consent, which may make securing equity investments more difficult. The ability
of Nextel to incur additional indebtedness (including, in certain circumstances,
indebtedness incurred under the Bank Credit Agreement, the Vendor Credit
Agreement and/or the Second Vendor Financing Agreement) is and will be limited
by the terms of the Nextel Indentures, the Certificate of Designation relating
to the Series D Preferred Stock, the Bank Credit Agreement, the Vendor Credit
Agreement, and the Second Vendor Financing Agreement. The Bank Credit Agreement,
the Vendor Credit Agreement, and the Second Vendor Financing Agreement also
require Nextel and its relevant subsidiaries at specified times to maintain
compliance with certain financial covenants or ratios including certain
covenants and ratios specifically related to leverage.
At present, other than the existing equity or debt financing arrangements
that have been consummated and/or disclosed, Nextel has no commitments or
understandings with any third parties to obtain any material amount of
additional equity or debt financing. Moreover, no assurances can be made that
Nextel will be able to obtain any such additional financing in the amounts or at
the times such financing may be required, or that, if obtained, any such
financing would be on acceptable terms. Nextel also anticipates that it will
continue to experience significant operating losses and negative net cash flows
during the ongoing start up phase of the Digital Mobile networks over the next
several years. Accordingly, there can be no assurances as to whether or when the
operations of Nextel will become profitable. As a result of Nextel's anticipated
continuing losses, the uncertainty regarding the exercise of options and
warrants, the availability of financing under the Bank and Vendor Credit
Facilities and the Second Vendor Financing Agreement and the impact of
Reconfigured iDEN and other matters discussed above, there can be no assurance
that Nextel will have adequate capital to implement the nationwide build-out of
its Digital Mobile networks in accordance with its business plan. Failure to
obtain such financing could result in the delay or abandonment of some or all of
the Company's acquisition, development and expansion plans and expenditures,
which could have a material adverse effect on its business prospects and limit
the Company's ability to make payments of principal and interest on, the Notes,
or to make principal and interest payments on its other indebtedness, including
the amounts from time to time outstanding under the Bank and Vendor Credit
Facilities and the Second Vendor Financing Agreement, and amounts due on or in
respect of any or all of the Nextel Notes. See "-- Forward Looking Statements."
Success of Nextel is Dependent on its Ability to Compete
Nextel's success depends on its Digital Mobile networks' ability to compete
with other wireless communications systems in each relevant market and its
ability to successfully market integrated wireless communications services.
Nextel is continuing to focus its marketing efforts on attracting customers from
its previously identified targeted groups of potential subscribers, chiefly its
existing analog SMR subscribers and other business users, including current
users of multiple wireless communications services and those new users who may
be attracted to the combination of services made possible by its Digital Mobile
networks.
Following implementation of its Digital Mobile networks and completion of
related system optimization activities, Nextel's Digital Mobile networks will
compete with established and future wireless communications operators in its
efforts to attract customers, dealers and possibly resellers to its service in
each of the markets in which it operates a Digital Mobile network. Nextel
believes that following software upgrades and additional system optimization
efforts and equipment and technology enhancements that occurred during 1996 and
the commercial deployment of the Reconfigured iDEN technology, Nextel's Digital
Mobile networks will have the capacity, functionality and quality of service
necessary to be competitive with current wireless communications services in the
markets in which Nextel operates Digital Mobile networks. Nextel's ability to
compete effectively with other wireless communications service providers,
however, will depend on a number of factors, including the successful deployment
of the Reconfigured iDEN technology platform in its market areas, the
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<PAGE> 31
continued satisfactory performance of such technology, the establishment of
roaming service among such market areas and the development of cost effective
direct and indirect channels of distribution for its products and services.
Although Nextel has made significant progress in these areas to date, no
assurance can be given that such objectives will be achieved. See "-- Ability to
Manage Growth" and "-- Forward Looking Statements."
While Nextel believes that the mobile telephone service provided on its
Digital Mobile networks utilizing the Reconfigured iDEN technology is similar in
function to and achieves performance levels competitive with those being offered
by other current wireless communications services providers in Nextel's market
areas, there are (and will in certain cases continue to be) differences between
the services provided by Nextel and by cellular and/or PCS system operators and
the performance of their respective systems. As a result of these differences,
there can be no assurance that services provided on Nextel's Digital Mobile
networks will be competitive with those available from other providers of mobile
telephone services. As part of its marketing strategy, Nextel will continue to
emphasize the benefits to its customers of obtaining an integrated package of
services consisting of mobile telephone service, two-way dispatch, paging and
alphanumeric short-messaging service, and in the future, data transmission.
Neither PCS system operators nor cellular operators currently provide such
integrated services, but recent FCC rulings permit cellular operators to offer
two-way dispatch services. If either PCS system or cellular operators do provide
two-way dispatch services in the future, Nextel's competitive advantage from
using such a marketing strategy may be impaired.
Nextel currently offers its mobile telephone customers the ability to
"roam" among Nextel's existing Digital Mobile network market areas, which as of
September 30, 1997, represented coverage of areas in which approximately 60% of
the United States population lives or works. Accordingly, Nextel will not be
able to provide roaming service comparable to that currently available from
cellular operators, which have roaming agreements covering each other's markets
throughout the United States, unless and until nationwide Digital Mobile
networks build-out is substantially completed. Additionally, certain PCS
operators throughout the United States have announced their intention to
implement agreements to permit roaming among their markets. Moreover, the
cellular systems in each of Nextel's markets, as well as in the markets in which
Nextel expects to provide services in the future, have been operational for a
number of years, currently service a significant subscriber base and typically
have significantly greater financial and other resources than those available to
Nextel. As is true for cellular operators, the interconnection of subscriber
units with the public switched telephone network requires Nextel to purchase
certain exchange and inter-exchange services from telephone companies and
certain other common carriers.
Subscriber units on the Digital Mobile networks are not compatible with
cellular or PCS systems, and vice versa. This lack of interoperability may
impede Nextel's ability to attract cellular or PCS subscribers or those new
mobile telephone subscribers that desire the ability to access different service
providers in the same market. Nextel currently markets a multi-function
subscriber unit that is (and is likely to remain) significantly more expensive
than analog handsets and is (and is likely to remain) somewhat more expensive
than digital cellular or PCS handsets that do not incorporate a comparable
multi-function capability. Accordingly, the prices expected to be charged to
Nextel for the subscriber handsets to be used by Nextel's customers will be
higher than those charged to operators for analog cellular handsets and may be
higher than those charged to operators for digital cellular handsets. Nextel's
multi-function subscriber units, however, are competitively priced compared to
multi-function (mobile telephone service and alphanumeric short-text messaging)
digital cellular and PCS handsets. During the transition to digital technology,
certain participants in the United States cellular industry are offering
subscriber units with dual mode (analog and digital) compatibility.
Additionally, certain analog cellular system operators that directly or through
their affiliates also are constructing and operating digital PCS systems, have
announced their intention to make available to their customers dual mode/dual
band (800 MHz cellular/1900 MHz PCS) subscriber units, to combine the enhanced
feature set available on digital PCS systems within their digital service
coverage areas with the broader wireless coverage area available on the analog
cellular network. Nextel does not currently have comparable hybrid subscriber
units available to its customers.
There can be no assurances that existing analog SMR customers will be
willing to invest in new subscriber equipment necessary to migrate to the
Digital Mobile networks, nor can there be any assurance that
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a sufficient number of customers or potential customers of Nextel's Digital
Mobile systems will be willing to accept system coverage limitations as a
trade-off for the enhanced multi-function wireless communications package
provided by the Company on its nationwide network. Over the past several years
as the number of wireless communications providers in Nextel's market areas has
increased, the prices of such providers' wireless service offerings to customers
in those markets have generally been decreasing. The Company may encounter
further market pressures to reduce its service offering prices to respond to
particular short term, market specific situations (such as special introductory
pricing packages that may be offered by new providers launching their service in
a market) or to remain competitive in the event that wireless service providers
generally continue to reduce the prices charged to their customers. Moreover,
because many of the cellular operators and certain of the PCS operators in
Nextel's markets have substantially greater financial resources than Nextel,
such operators may be able to offer prospective customers equipment subsidies or
discounts that are substantially greater than those, if any, that could be
offered by Nextel and may be able to offer services to customers at prices that
are below prices that Nextel is able to offer for comparable services. Thus,
Nextel's ability to compete based on the price of subscriber units and service
offerings will be limited. Nextel cannot predict the competitive effect that any
of these factors, or any combination thereof, will have on Nextel. See
"-- Forward Looking Statements."
Cellular operators and certain PCS operators and entities that have been
awarded PCS licenses each control more spectrum than is allocated for SMR
service in each of the relevant market areas. Each cellular operator is licensed
to operate 25 MHz of spectrum and certain PCS licensees have been licensed for
30 MHz of spectrum in the markets in which they are licensed, while no more than
21.5 MHz is available in the 800 MHz band to all SMR systems, including Nextel's
systems, in those markets. The control of more spectrum gives cellular operators
and such PCS licensees the potential for more system capacity, and, therefore,
more subscribers, than SMR operators, including Nextel. Nextel believes that it
generally has adequate spectrum to provide the capacity needed on its Digital
Mobile networks currently and for the reasonably foreseeable future. See
"-- Forward Looking Statements."
Each of the markets in which Nextel's Digital Mobile networks operate or
will operate is serviced by multiple other wireless communications service
providers. In each of the markets where Nextel's Digital Mobile networks
operate, Nextel may compete with the two established cellular licensees in such
market and as many as six PCS licensees. The FCC has described PCS as a digital,
wireless communications system consisting of a variety of new mobile and
portable services and technologies, using small, lightweight units. PCS services
may include portable, two-way voice, and data services. A substantial number of
the entities that have been awarded PCS licenses are current cellular
communications service providers and joint ventures of current and potential
wireless communications service providers, many of which have financial
resources, subscriber bases and name recognition greater than Nextel. PCS
operators will likely compete with Nextel in providing some or all of the
services available through Nextel's Digital Mobile networks. Additionally,
Nextel expects that existing cellular service providers, some of which have been
operational for a number of years and have significantly greater financial and
technical resources, subscriber bases and name recognition than Nextel, will
continue to upgrade their systems to provide digital wireless communications
services competitive with Nextel's Digital Mobile networks. Nextel also expects
to face competition from other technologies and services developed and
introduced in the future. Nextel cannot predict how these technologies will
develop or what impact, if any, they will have on Nextel's ability to compete
for wireless communications services customers. See "-- Forward Looking
Statements."
The Company currently anticipates that it will rely more heavily on
indirect distribution channels to achieve greater market penetration for its
digital wireless service offerings. As the Company expands its retail subscriber
base through increased reliance on indirect distribution channels, the average
revenue per subscriber unit may decrease.
Ability to Manage Growth
As a result of the commencement of Digital Mobile network service in
certain markets and increased sales in markets in which Digital Mobile network
services are provided, and, to a limited extent, acquisitions,
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the number of subscriber units in service on Nextel's Digital Mobile network has
increased substantially over the past several years.
The ability of Nextel to continue to add increasing numbers of subscribers
on its Digital Mobile network is dependent on a variety of factors. Among the
more important of such factors is Nextel's ability to successfully plan for
additional system capacity in its market areas at levels adequate to accommodate
anticipated new subscribers and the related increases in system usage. One
important factor influencing system capacity is the amount of spectrum available
to Nextel in a particular market area. Although Nextel intends to continue to
pursue opportunities to acquire additional SMR spectrum in its market areas,
Nextel believes that its present holdings of 800 MHz spectrum are generally
adequate for the current and reasonably foreseeable operation of its Digital
Mobile network.
Additionally, Nextel requires that a sufficient quantity of cell sites,
system infrastructure equipment, and subscriber units, of the appropriate models
and types, be available to meet the demands and preferences of potential
subscribers to the Digital Mobile network. To date, Nextel has been able to
secure sufficient cell sites at appropriate locations in its markets to meet
planned system coverage and capacity targets, and also has been able to obtain
adequate quantities of base radios and other system infrastructure equipment
from Motorola and other suppliers, and adequate volumes and mix of subscriber
units and related accessories from Motorola, to meet subscriber and system
loading rates. Although Nextel does not currently foresee (based on, among other
factors, its scheduled system construction and expansion activities and its
anticipated rates of customer and service usage growth) any significant supply
problems in the near term, Motorola is the sole supplier of subscriber units and
certain system infrastructure equipment and most of the related equipment
required by the Company to construct and operate its Digital Mobile network, and
there can be no assurance that such supply problems or related issues will not
occur in the future.
Nextel's ability to successfully add customers on its Digital Mobile
network depends upon the adequacy and efficiency of its information systems,
business processes, and related support functions. Nextel relies on its own
fulfillment processes and related information system resources to accomplish
tasks necessary to initiate service for prospective customers, such as
identifying and provisioning from inventory appropriate subscriber units and
desired accessories, programming subscriber units to support desired functions
and features, registering subscriber units to appropriate authorized users of
the Digital Mobile network, and setting up appropriate customer accounts and
other billing records and data.
Due to the multiple wireless service offering packages and the need to
create customized applications (for instance, programming multiple talk groups
for the Direct Connect service), the length of time from customer order to
commencement of service (the "activation cycle") on the Digital Mobile network
has been longer than the activation cycle typically encountered for "off the
shelf" cellular and PCS wireless service offerings. The Company is continuing to
take steps to refine, improve, and scale-up its customer and service information
reporting, subscriber unit fulfillment, service activation, and billing systems
and processes to meet the increased demands that have been experienced as a
result of the increases in subscriber growth and Digital Mobile network wireless
systems and service utilization that have occurred and are currently anticipated
to continue. The Company also is exploring alternatives to shorten its Digital
Mobile network activation cycle, such as "pre-programming" subscriber units with
standardized talk groups and potential development with Motorola of an "over the
air" programming capability for digital subscriber units. Finally, the Company's
customer service functions must continue to improve the efficiency and speed of
their processes to adequately respond to the needs of a growing customer base on
the Digital Mobile network. Customer reliance on Nextel's customer service
functions may increase as more Digital Mobile network customers are added
through indirect distribution channels.
There can be no assurance that the back-office and support systems and
processes discussed above will achieve levels of capacity, or improvements in
speed and efficiency, sufficient to meet actual or anticipated customer and
network growth and demands, or will be able to do so on a timely basis. Any
inability of the Company to timely meet Digital Mobile network capacity needs,
to have access to suitable cell sites and infrastructure and subscriber
equipment in any one or more of its market areas, or to develop when and as
required improvements or expansions to its systems and processes adequate to
meet desired levels of customer
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<PAGE> 34
activation and demand for wireless services on the Digital Mobile network could
decrease or postpone subscriber growth, thereby adversely affecting Nextel's
revenues, business and prospects. See "-- Forward Looking Statements."
Reliance on One Principal Supplier in Implementation of Digital Mobile
Networks
Pursuant to existing equipment purchase agreements first entered into in
1991, as subsequently amended (such equipment purchase agreements, as amended,
being referred to herein as the "Equipment Purchase Agreements"), between Nextel
and Motorola, Motorola provides the iDEN infrastructure and subscriber handset
equipment to Nextel throughout its markets. Nextel expects that it will need to
rely on Motorola for the manufacture of a substantial portion of the equipment
necessary to construct its Digital Mobile networks and handset equipment for the
foreseeable future. The Equipment Purchase Agreements include a commitment from
Nextel to purchase from Motorola a significant amount of system infrastructure
equipment. Nextel has, among other things, agreed (subject to certain
conditions) to purchase and install iDEN equipment during the four-year and
six-year periods beginning on August 4, 1994 sufficient to cover 70% and 85%,
respectively, of the United States population. In addition, subject to the
applicable terms and conditions under the Second Equipment Agreement Amendment,
Nextel has agreed to deploy Reconfigured iDEN technology and, until August 4,
1999 and subject to certain conditions, to purchase from Motorola at least 50%
of the base radios Nextel purchases in any calendar year. See "-- Success of
Nextel is Dependent on its Ability to Compete" and "-- Forward Looking
Statements." Such commitments are in addition to amounts purchased from Motorola
or for which Nextel or companies acquired by Nextel had placed orders with
Motorola prior to August 4, 1994, which orders have become obligations of
Nextel.
The Second Equipment Agreement Amendment limits Nextel's ability to deploy
a "Switch in Technology" which, under the Second Equipment Agreement Amendment,
is defined to mean a decision by Nextel before August 4, 1999 to install and use
digital radio frequency technology as an alternative to iDEN on more than 25% of
its SMR channels in the 806-824 MHz band in one or more of its top 20 domestic
markets, or the utilization by Nextel of any of its SMR channels for voice
interconnect on certain United States cellular and/or PCS radio telephony
standards. Nextel may not implement such a Switch in Technology unless (i)
Nextel determines that the iDEN or Reconfigured iDEN equipment fails to meet
certain performance specifications established in the Second Equipment Agreement
Amendment, which failure materially adversely affects the commercial viability
of the technology to provide reliable services as intended by Motorola and
Nextel, and Motorola does not cure such failure within six months after
receiving notice thereof, or (ii) Nextel or the McCaw Investor offers to acquire
the remainder of Motorola's shares of Common Stock at a per share price of at
least 110% of the average of the closing prices of the Common Stock over the 30
trading days preceding the public announcement by Nextel of the decision to
implement such a Switch in Technology. In either case, if Motorola manufactures
(or elects to manufacture) the alternate technology Nextel elects to deploy,
Nextel must purchase 50% of its infrastructure requirements and 25% of its
subscriber equipment requirements from Motorola for three years, provided such
equipment is competitive in price and performance to the equipment utilizing or
incorporating such alternate technology then offered by other manufacturers.
It is expected that for the next few years of Digital Mobile network
operations by Nextel, Motorola and competing manufacturers who are licensed by
Motorola will be the only manufacturers of subscriber equipment that is
compatible with Nextel's Digital Mobile networks. The Equipment Purchase
Agreements between Nextel and Motorola first entered into in 1991, as
subsequently amended by, among others, the amendment entered into in connection
with the Motorola Transaction (the "Prior Equipment Agreement Amendment")
provide for the licensing by Motorola of interfaces relating to infrastructure
and subscriber equipment and of additional manufacturers for subscriber
equipment. In connection with the Second Equipment Agreement Amendment, Motorola
further agreed to negotiate to enter into licenses with at least one alternative
manufacturer of iDEN infrastructure equipment. Currently, however, there are no
arrangements in effect with any additional manufacturers to supply Nextel with
alternative sources for either iDEN system infrastructure or subscriber
equipment.
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Nextel's Prospects Are Dependent on Governmental Regulation
The licensing, operation, acquisition, and sale of Nextel's SMR businesses
are regulated by the FCC. FCC regulations have undergone significant changes
during the last three years and continue to evolve as new FCC rules and
regulations are adopted pursuant to the Omnibus Budget Reconciliation Act of
1993 and the Telecommunications Act of 1996. Nextel's ability to conduct its
business is dependent, in part, on its compliance with FCC rules and
regulations. Future changes in regulations or legislation affecting Digital
Mobile network service and Congress' and the FCC's recent allocation of
additional Commercial Mobile Radio Services spectrum could materially adversely
affect Nextel's business. See "-- Forward Looking Statements."
Nextel's Assets Primarily Consist of Intangible FCC Licenses
Nextel's assets consist primarily of intangible assets, principally FCC
licenses, the value of which will depend significantly upon the success of
Nextel's business and the growth of the SMR and wireless communications
industries in general. In the event of default on indebtedness or liquidation of
Nextel, there can be no assurance that the value of these assets will be
sufficient to satisfy its obligations. Nextel had a net tangible book value
deficit of approximately $1,829,581,000 as of September 30, 1997.
Nextel Susceptible to Control by Significant Stockholders
Based on securities ownership information relating to Nextel as of
September 30, 1997, giving effect to the November 1997 amended Schedule 13D
filings by Craig O. McCaw and Wendy P. McCaw, and giving effect (on such date)
to the conversion of the outstanding shares of Nextel's preferred stock and
Class B Non-Voting Common Stock, par value $0.001 per share (the "Non-Voting
Common Stock"), and the exercise in full of (i) two separate options held by the
McCaw Investor exercisable for periods of four and six years, respectively, from
July 28, 1995, to acquire an aggregate of up to 15,082,722 shares of Common
Stock at exercise prices ranging from $18.50 to $21.50 per share (the "McCaw
Options"), (ii) the option held by Eagle River, Inc., an affiliate of the McCaw
Investor ("Eagle River"), to purchase an aggregate of 1,000,000 shares of Common
Stock at an exercise price of $12.25, which option vests over a five-year period
from April 4, 1995 (the "Incentive Option"), (iii) the New Option issued to an
affiliate of Mr. McCaw to acquire 15,000,000 shares at $16.00 per share and
10,000,000 shares at $18.00 per share prior to July 29, 1998, (iv) the options
granted on July 28, 1995 to the McCaw Investor by Motorola to purchase up to
5,430,803 shares of Common Stock over a six-year period, and (v) a warrant held
by Motorola to purchase 2,890,000 shares of Common Stock, entities controlled by
the McCaw Investor would hold approximately 25.2% and Motorola would hold
approximately 15.6% of the Common Stock that would be outstanding as of such
date.
In connection with the consummation of the McCaw Transaction and pursuant
to the Securities Purchase Agreement dated as of April 4, 1995, as amended,
among Nextel, the McCaw Investor and Mr. McCaw (the "McCaw Securities Purchase
Agreement"), the McCaw Investor has the right to designate not less than 25% of
the Board of Directors of Nextel. Additionally, the McCaw Investor is entitled
to have a majority of the members of the Operations Committee of the Board of
Directors selected from the McCaw Investor's representatives on the Board of
Directors. The Operations Committee has the authority to formulate key aspects
of Nextel's business strategy, including decisions relating to the technology
used by Nextel (subject to existing equipment purchase agreements),
acquisitions, the creation and approval of operating and capital budgets and
marketing and strategic plans, approval of financing plans, endorsement of
nominees to the Board of Directors and committees thereof and nomination and
oversight of certain executive officers. As a result, based upon the McCaw
Investor's stock ownership position, as well as its ability to designate at
least 25% of the members of the Board of Directors and control the Operations
Committee, the McCaw Investor is in a position to exert significant influence
over Nextel's affairs. The Board of Directors retains the authority to override
actions taken or proposed to be taken by the Operations Committee, subject, in
certain circumstances, to certain financial consequences. The creation and
existence of the Operations Committee does not change the normal fiduciary
duties of the Board of Directors, including fiduciary duties in connection with
any proposal to override any action of or to terminate the Operations Committee,
whether or
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not such action would give rise to such financial consequences. Although
Motorola is entitled to nominate two directors to the Board of Directors,
presently only one person designated by Motorola is a Nextel director. Pursuant
to an amendment to the Agreement and Plan of Contribution and Merger dated as of
April 4, 1995, by and among Nextel, Motorola and certain subsidiaries of
Motorola (the "Motorola Amendment"), Motorola has agreed to support the
decisions and recommendations of the Operations Committee and to vote the shares
of Common Stock held by it accordingly, subject to (i) the right of any
Motorola-designated Nextel directors to vote in a manner consistent with their
fiduciary duties and (ii) the right of Motorola to vote its shares as it
determines necessary with respect to issues that conflict with Motorola's
corporate ethics or that present conflicts of interest, or in order to protect
the value or marketability of the shares of Common Stock held by it.
Based upon their respective ownership positions, if the McCaw Investor and
Motorola chose to act together, such parties could have a sufficient voting
interest in Nextel, among other things, to (i) exert effective control over the
approval of amendments to the Certificate of Incorporation, mergers, sales of
assets or other major corporate transactions as well as other matters submitted
for stockholder vote, (ii) defeat a takeover attempt, and (iii) otherwise
control whether particular matters are submitted for a vote of the stockholders
of Nextel. Although Motorola has made certain commitments as described in the
last sentence of the preceding paragraph, Nextel is not aware of any current
agreements among the McCaw Investor and Motorola with respect to the ownership
or voting of Common Stock and neither Motorola nor the McCaw Investor has
indicated to Nextel that it has any present intention to seek to exercise such
control. Pursuant to the McCaw Securities Purchase Agreement, the McCaw Investor
has agreed that it will not vote for any nominee to the Board of Directors other
than persons it is entitled to designate under the terms of the securities it
owns or of the McCaw Securities Purchase Agreement. Upon request of Nextel, the
McCaw Investor has also agreed to cause shares of Common Stock, the voting of
which is controlled by it or its affiliates, to be voted in a manner
proportionate to the votes of other holders of Common Stock in the election of
directors so designated by the Board of Directors.
Each of the McCaw Investor and Motorola has and (subject to the terms of
applicable agreements between such parties and Nextel) may have an investment or
interest in entities that provide wireless telecommunications services that
could potentially compete with Nextel. Under the McCaw Securities Purchase
Agreement, the McCaw Investor, Mr. McCaw and their Controlled Affiliates (as
defined in the McCaw Securities Purchase Agreement) may not, for a period of
time after consummation of the McCaw Transaction, participate in other two-way
terrestrial-based mobile wireless communications systems in the region that
includes any part of North America or South America unless such opportunities
have first been presented to and rejected by Nextel in accordance with the
provisions of the McCaw Securities Purchase Agreement. Such limitation is
subject to certain limited exceptions, including certain existing securities
holdings and relationships (and expressly including Mr. McCaw's investment in
AT&T Corp. ("AT&T") resulting from AT&T's acquisition of McCaw Cellular
Communications, Inc., which investment may not exceed 3% of the outstanding
stock of AT&T). Such restrictions terminate on the later to occur of July 28,
2000 or one year after the termination of the Operations Committee. See
"-- Potential Conflict of Interest Relationship with Motorola."
Commitments to Issue Additional Common Stock May Impair Ability to Raise
Capital
As indicated elsewhere in this Prospectus, Nextel has commitments, and from
time to time may enter into additional commitments, to issue a substantial
number of new shares of Common Stock. The shares that are subject to such
issuance commitments, to a large degree, either will be issued in registered
transactions and thus will be freely tradeable or will be subject to grants of
registration rights which, if and when exercised, would result in such shares
becoming freely tradeable. Nextel has also granted registration rights with
respect to a significant number of its outstanding shares, including shares of
Common Stock issuable upon conversion of securities issued in the Motorola
Transaction and the McCaw Transaction. The exercise of registration rights by
persons entitled thereto would permit such persons to sell such shares without
regard to the limitations of Rule 144 under the Securities Act. An increase in
the number of shares of Common Stock that
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will become available for sale in the public market may adversely affect the
market price of Common Stock and, as a result, could impair Nextel's ability to
raise additional capital through the sale of its equity securities.
Potential Conflict of Interest Relationship With Motorola
Motorola and its affiliates have and currently are engaged in wireless
communications businesses, and may in the future engage in additional such
businesses, which are or may be competitive with some or all of the services
offered by Nextel's Digital Mobile networks, although the Motorola Land Mobile
Products Sector ("Motorola LMPS") may not, prior to July 28, 1998, make use
(with certain limited exceptions) of the customer lists conveyed by Motorola to
ESMR in connection with the Motorola Transaction to solicit subscribers for any
800 MHz SMR commercial mobile voice business owned or managed by Motorola LMPS
in the continental United States. Pursuant to the Second Equipment Agreement
Amendment, Motorola has agreed that until July 1998, Motorola LMPS will not
solicit other iDEN customers and neither Motorola LMPS nor Motorola's credit
corporation subsidiary will make any equity investment in, or provide
equipment/vendor financing to, certain iDEN customers with respect to purchases
of iDEN equipment.
In light of the competitive posture of Motorola, Nextel and Motorola have
agreed that any information relating to Nextel's business plans and projections
will be used by Motorola only for purposes of ensuring compliance with Nextel's
obligations under the various equipment purchase agreements and financing
agreements between Nextel and Motorola. Motorola has designated one director to
the Board of Directors and, hence, such director has access to Nextel's business
plans subject to certain confidentiality restrictions.
Although Nextel believes that its equipment purchase and financing
relationship with Motorola has been structured to reflect the realities of
purchasing and borrowing from a competitor, there can be no assurance that the
potential conflict of interest will not adversely affect Nextel in the future.
Moreover, Motorola's role as a significant stockholder of Nextel, in addition to
its role as a major creditor and supplier, also creates potential conflicts of
interest, particularly with regard to significant transactions.
Concerns About Mobile Communications Health Risk May Affect Prospects of
Nextel
Allegations have been made, but not proven, that the use of portable mobile
communications devices may pose health risks due to radio frequency emissions
from such devices. Studies performed by wireless telephone equipment
manufacturers have investigated these allegations, and a major industry trade
association and certain governmental agencies have stated publicly that the use
of such phones poses no undue health risk. The actual or perceived risk of
mobile communications devices could adversely affect Nextel through a reduced
subscriber growth rate, a reduction in subscribers, reduced network usage per
subscriber or through reduced financing available to the mobile communications
industry.
RISK FACTORS RELATED TO EXCHANGE SENIOR NOTES AND EXCHANGE OFFER
Ability of Nextel to Pay Cash Interest and Other Cash Amounts in Respect of
the Notes
Cash interest will not accrue on the Notes prior to September 15, 2002 and
thereafter will be payable semi-annually on March 15 and September 15 of each
year, commencing March 15, 2003 at a rate of 10.65% per annum. The Bank and
Vendor Credit Facilities and the Second Vendor Financing Agreement limit the
amount of cash available to make dividends, loans, and cash distributions to
Nextel from Nextel's subsidiaries that operate Digital Mobile networks in
Nextel's domestic markets, and provisions contained in certain financing
arrangements to which Nextel International and its subsidiaries are parties
operate to restrict transfers of funds between Nextel International and its
subsidiaries and the Company, so that, while such restrictions are in place, any
profits generated by such subsidiaries will not be available to Nextel for,
among other purposes, payment of cash interest on the Notes. There can be no
assurance that Nextel's existing or future financing agreements will permit
Nextel to obtain access to sufficient sums to make cash interest payments when
required on the Notes. In the event that any of Nextel's financing agreements
limit Nextel's ability to pay cash interest on the Notes when required, Nextel
will need to refinance amounts outstanding under such agreements to make such
cash interest payments. There can be no assurance that Nextel will be able to
refinance amounts outstanding under such financing agreements. The failure of
Nextel to pay cash
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interest on the Notes when required could result in a Default (as defined
herein) under the Indenture, and also could result in parallel defaults under
the other Nextel Indentures and Nextel's other debt agreements, including the
agreements relating to the Bank and Vendor Credit Facilities and the Second
Vendor Financing Agreement. The successful implementation of Nextel's strategy,
including the accelerated roll out of the Digital Mobile networks, obtaining and
retaining a significant number of subscribers and increasing market share, and
achieving significant and sustained growth in the Company's revenues and
earnings from operations are necessary for the Company to be able to meet the
cash interest and other payment requirements in respect of its indebtedness,
including the Notes. There can be no assurance that the Company will be able to
successfully implement its strategy or that the Company will generate sufficient
cash flow to meet such cash interest and other payment requirements. If
sufficient funds to meet such cash interest and other payment requirements are
not generated by the Company's operations, Nextel may need to seek additional
financing or refinance some or all of its existing or future financing,
including the Notes. There can be no assurance that the Company will be able to
obtain such financing or refinancing on acceptable terms, or at all. See
"-- Dependence of Company on Subsidiaries for Cash to Pay Interest on and for
Repayment of Notes" and "Description of Exchange Senior Notes."
Dependence of Company on Subsidiaries for Cash to Pay Interest on and for
Repayment of the Notes
Because substantially all of the operations of the Company are conducted
through subsidiaries, the Company's cash flow and, consequently, its ability to
pay interest in cash and to service its debt, including the Notes, is dependent
upon the cash flow of its subsidiaries and the payment of funds by those
subsidiaries to Nextel in the form of loans, dividends or otherwise. The
subsidiaries are separate and distinct legal entities and will have no
obligation, contingent or otherwise, to pay any amounts due pursuant to the
terms of the Notes or to make cash available for such purpose. The Bank Credit
Agreement, the Vendor Credit Agreement, and the Second Vendor Financing
Agreement currently impose significant limits on, and are expected to continue
to significantly limit, the amount of cash available to pay dividends or make
loans and cash distributions to Nextel from Nextel's subsidiaries that operate
Digital Mobile networks in Nextel's market areas in the United States.
Similarly, the NI Indenture contains certain restrictive covenants that impose,
and financing arrangements to be entered into by Nextel International and the
entities in which Nextel International holds investments are expected to contain
certain restrictive covenants that impose, restrictions on dividends, loans,
advances, and other payments to Nextel by Nextel International and such
subsidiaries. Accordingly, while such limitations are in place, profits
generated by such subsidiaries may not be available to Nextel (whether in the
form of loans, dividends or otherwise) for, among other purposes, the payment of
cash interest on the Notes or any amounts due pursuant to the terms of the
Notes. The Notes and the Indenture permit the Company and its subsidiaries to
enter into financing arrangements in the future, which may impose restrictions
on dividends, loans, advances, and other payments by those subsidiaries. The
Bank Credit Agreement, the Vendor Credit Agreement, the Second Vendor Financing
Agreement, the Nextel Indentures, and the Certificate of Designation relating to
the Series D Preferred Stock each contain certain restrictive covenants
applicable to the Company and certain of its subsidiaries, such as a limitation
on debt that may be incurred by the Company and its restricted subsidiaries,
that may limit the Company's ability to borrow funds to pay any amounts due
pursuant to the Notes, which may operate to restrict or prohibit the payment of
amounts of cash interest or other amounts that the Company may be required to
pay on the Notes, even if sufficient funds for that purpose otherwise could be
borrowed by the Company. See "-- Effect of Substantial Existing and Additional
Indebtedness; Refinancing Risk."
Effect of Holding Company Structure
Because the Company is a holding company that conducts its business through
its subsidiaries, all existing and future liabilities of the Company's
subsidiaries, including borrowings under the Bank Credit Facility, the Vendor
Credit Facility, and the Second Vendor Financing Agreement, indebtedness
evidenced by the NI Notes and trade payables, will be effectively senior to the
Notes. As of September 30, 1997, the Company's subsidiaries had outstanding
indebtedness and trade payables and other accrued liabilities of approximately
$1,793,577,000. Borrowings under the Bank Credit Facility, the Vendor Credit
Facility, and the Second Vendor Financing Agreement are secured by liens on
assets of Nextel's restricted subsidiaries.
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Borrowings by Nextel International or its subsidiaries or affiliates under any
bank or vendor credit facilities that such entities may enter into from time to
time likewise may be secured by liens on assets of Nextel International or of
such subsidiaries and affiliates, and may be guaranteed by such entities as
well. See "-- Risk Factors Relating to Nextel -- Nextel to Require Additional
Financing."
The Notes and the Indenture permit the incurrence of additional
indebtedness by the Company and its subsidiaries. Additional indebtedness of the
Company may rank pari passu with or subordinate to the Notes, while additional
indebtedness of the subsidiaries effectively will rank senior to the Notes. The
Company's subsidiaries will have no obligation to pay amounts due under the
Notes. Earnings generated by any of the Company's subsidiaries, as well as the
existing assets of each such subsidiary, will be used by such subsidiary to
fulfill its own direct debt service requirements, particularly where the
collateral security mechanisms associated with the debt agreements of such
subsidiary may restrict its ability to pay dividends or to make loans, advances
or other distributions to the Company or where the debt of such subsidiary may
be secured by its assets. See "-- Dependence of Company on Subsidiaries for Cash
to Pay Interest on and for Repayment of Notes" and "-- Effect of Substantial
Existing and Additional Indebtedness; Refinancing Risk."
Effect of Substantial Existing and Additional Indebtedness; Refinancing Risk
At September 30, 1997, the Company had approximately $4,242,498,000 of
long-term debt, including current portion, of which approximately $2,725,801,000
is represented by the Old Senior Notes and the Private Notes. The October Notes,
at the date of their issuance, evidenced approximately $699,997,000 in long term
debt. The accretion of original issue discount on the Nextel Notes will cause an
increase in recorded liabilities from September 30, 1997 of approximately
$1,262,462,000. Cash interest payments will commence with respect to the Old
Senior Notes beginning in 1999. The Bank Credit Agreement, the Vendor Credit
Agreement, the Second Vendor Financing Agreement, the Certificate of Designation
relating to the Series D Preferred Stock, and the Nextel Indentures each limit,
but do not prohibit, the incurrence of additional indebtedness by the Company
and certain of its subsidiaries. The Company anticipates that it and its
subsidiaries will incur substantial additional indebtedness in the future in
connection with the construction of its Digital Mobile networks and funding cash
flow deficits, including additional borrowings pursuant to the terms of the Bank
Credit Facility, the Vendor Credit Facility, and the Second Vendor Financing
Agreement.
The level of the Company's and its subsidiaries' indebtedness could have
important consequences to the holders of the Notes, including the following: (i)
the debt service requirements of any additional indebtedness could make it more
difficult for the Company to make payments of cash interest and other amounts on
the Notes; (ii) a substantial portion of the Company's cash flow from
operations, if any, must be dedicated to the payment of principal and interest
on its indebtedness and other obligations, and will not be available for use in
its business; (iii) the level of indebtedness and related cash debt service
needs could limit the Company's flexibility in planning for, or reacting to,
changes in its business; (iv) the Company is expected to be more highly
leveraged than some of its competitors, which may place it at a competitive
disadvantage; and (v) the Company's high degree of indebtedness and related cash
debt service needs will make it more vulnerable in the event of a downturn in
its business.
The Old Senior Notes, the NI Notes, the Bank Credit Facility, the Vendor
Credit Facility, and the Second Secured Borrowings will mature prior to the
maturity of the Notes. In addition, cash interest on the Old Senior Notes must
be paid beginning in 1998, and cash dividends on the Series D Preferred Stock
must be paid beginning in 2002. The Company expects that it may be necessary to
refinance the Old Senior Notes, the NI Notes, the Bank Credit Facility, the
Vendor Credit Facility, and the Second Secured Borrowings at their respective
maturities. The Company's ability to refinance its indebtedness will depend,
among other factors, on its financial condition at the time of the refinancing,
the restrictions contained in the instruments governing its other indebtedness
then outstanding, and other factors beyond the Company's control, including
market conditions. There can be no assurance that the Company will be able to
refinance the Old Senior Notes, the NI Notes, the Bank Credit Facility, the
Vendor Credit Facility, or the Second Secured Borrowings. If the Old Senior
Notes, the NI Notes, the Bank Credit Facility, the Vendor Credit Facility, or
the Second Secured Borrowings cannot be refinanced, payments required to be made
on the Notes may be effectively prohibited, which in turn may cause a default
under the Notes and the Indenture, and under the Company's
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other outstanding indebtedness (including the Old Senior Notes, the October
Notes, the Old Indentures, and the October Indenture) and the Company may not,
in such circumstances, be able to meet its obligations on the Notes or under the
Indenture. In addition, the terms of the Indenture do not prohibit dividends,
penalties, or other mandated payments, including mandatory repurchases, on or of
the Company's preferred stock.
Original Issue Discount May Have Unfavorable Tax and Other Legal Consequences
for Holders of Exchange Senior Notes and the Company
The Private Notes were issued at a substantial discount from their
principal amount at maturity. The Exchange Senior Notes should be treated as a
continuation of the Private Notes. Consequently, holders of the Exchange Senior
Notes should be aware that, although cash interest will not accrue on the
Exchange Senior Notes prior to September 15, 2002, and there will be no periodic
payments of cash interest on the Exchange Senior Notes prior to March 15, 2003,
original issue discount will accrue from the issue date of the Private Notes and
will be includible as interest income periodically (including for periods ending
prior to September 15, 2002) in a holder's gross income for United States
Federal income tax purposes in advance of receipt of the cash payments to which
the income is attributable. See "Certain United States Federal Income Tax
Considerations" for a more detailed discussion of the United States Federal
income tax consequences to the holders of the Exchange Senior Notes regarding
the ownership and disposition of the Exchange Senior Notes.
If a bankruptcy case is commenced by or against Nextel under the United
States Bankruptcy Code after the issuance of the Exchange Senior Notes, the
claim of a holder of Exchange Senior Notes with respect to the principal amount
thereof may be limited to an amount equal to the sum of (i) the initial offering
price and (ii) that portion of the original issue discount which is not deemed
to constitute "unmatured interest" for purposes of the United States Bankruptcy
Code. Any original issue discount that was not amortized as of any such
bankruptcy filing would constitute "unmatured interest."
Absence of Public Market
The Exchange Senior Notes are a new issue of securities for which there is
currently no active trading market. If any such securities are traded after
their initial issuance, they may trade at a discount from their initial offering
price, depending upon the liquidity of such securities, the market for similar
securities, and other factors, including general economic conditions and the
financial condition, performance of, and prospects for the Company. The Private
Notes were sold pursuant to an exemption from registration under applicable
securities laws and are subject to certain transfer restrictions; accordingly,
no public trading market for the Private Notes has developed.
Failure to Exchange Private Notes
The Exchange Senior Notes will be issued in exchange for Private Notes only
after timely receipt by the Exchange Agent of such Private Notes, a properly
completed and duly executed Letter of Transmittal and all other required
documents. Therefore, holders of Private Notes desiring to tender such Private
Notes in exchange for Exchange Senior Notes should allow sufficient time to
ensure timely delivery. Neither the Exchange Agent nor the Company are under any
duty to give notification of defects or irregularities with respect to tenders
of Private Notes for exchange. Private Notes that are not tendered or that are
tendered but not accepted will, following consummation of the Exchange Offer,
continue to be subject to the existing restrictions upon transfer thereof and
will not retain any rights to registration. See "The Exchange Offer --
Consequences of Failure to Exchange." In addition, any holder of Private Notes
who tenders in the Exchange Offer for the purpose of participating in a
distribution of the Exchange Senior Notes will be required to comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction. Each broker-dealer who holds Private
Notes acquired for its own account as a result of market-making or other trading
activities and who receives Exchange Senior Notes for its own account in
exchange for such Private Notes pursuant to the Exchange Offer must acknowledge
that it will deliver a prospectus in connection with any resale of such Exchange
Senior Notes. To the extent that Private Notes are tendered and accepted in the
Exchange Offer, the trading market for untendered and tendered but unaccepted
shares of Private Notes could be adversely affected due to the limited number of
shares of Private Notes that
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are expected to remain outstanding following the Exchange Offer. See "Plan of
Distribution" and "The Exchange Offer."
Forward Looking Statements
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995: A number of the matters and subject areas discussed in the foregoing
"Risk Factors" section of this Prospectus that are not historical or current
facts deal with potential future circumstances and developments. The discussion
of such matters and subject areas is qualified by the inherent risks and
uncertainties surrounding future expectations generally, and also may materially
differ from Nextel's actual future experience involving any one or more of such
matters and subject areas. Nextel has attempted to identify, in context, certain
of the factors that it currently believes may cause actual future experience and
results to differ from Nextel's current expectations regarding the relevant
matter or subject area. The operation and results of Nextel's wireless
communications business also may be subject to the effect of other risks and
uncertainties in addition to the relevant qualifying factors identified
elsewhere in the foregoing "Risk Factors" section, including, but not limited
to, general economic conditions in the geographic areas and occupational market
segments that Nextel is targeting for its Digital Mobile network service, the
availability of adequate quantities of system infrastructure and subscriber
equipment and components to meet Nextel's service deployment and marketing plans
and customer demand, the success of efforts to improve and satisfactorily
address any issues relating to Digital Mobile system performance, the successful
nationwide deployment of the Reconfigured iDEN technology, the ability to
achieve market penetration and average subscriber revenue levels sufficient to
provide financial viability to the Digital Mobile network business, Nextel's
ability to timely and successfully accomplish required scale-up of its billing,
customer care and similar back-room operations to keep pace with customer growth
and increased system usage rates, access to sufficient debt or equity capital to
meet Nextel's operating and financing needs, the quality and price of similar or
comparable wireless communications services offered or to be offered by Nextel's
competitors, including providers of cellular and PCS service, future legislative
or regulatory actions relating to SMR services, other wireless communications
services or telecommunications generally and other risks and uncertainties
described from time to time in Nextel's reports filed with the Commission,
including the Annual Report on Form 10-K for the fiscal year ended December 31,
1996, and the Quarterly Reports on Form 10-Q for the quarters ended March 31,
1997, June 30, 1997, and September 30, 1997.
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THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
On September 17, 1997, the Company sold $840,000,000 in principal amount at
maturity of the Private Notes in a private placement through the Initial
Purchasers to a limited number of "Qualified Institutional Buyers" (as such term
is defined under the Securities Act) (collectively, the "Purchasers"). In
connection with the sale of the Private Notes, the Company and the Initial
Purchasers entered into the Registration Rights Agreement that requires the
Company, among other things, to use its best efforts to file with the Commission
a registration statement under the Securities Act covering the offer by the
Company to exchange all of the Private Notes for the Exchange Senior Notes and
to cause such registration statement to become effective under the Securities
Act. The Company is further obligated, upon the effectiveness of that
registration statement, to offer each Holder of the Private Notes the
opportunity to exchange such Private Notes for an equal principal amount at
maturity of Exchange Senior Notes. A copy of the Registration Rights Agreement
has been filed as an exhibit to the Registration Statement of which this
Prospectus is a part. Such Registration Statement has been filed with the
Commission, and the Exchange Offer is being made pursuant to the Registration
Rights Agreement to satisfy the Company's obligations thereunder. The term
"Holder" with respect to the Exchange Offer means any person in whose name
Private Notes are registered on the Company's books or any other person who has
obtained a properly completed assignment from the registered holder.
In order to participate in the Exchange Offer, a Holder must represent to
the Company, among other things, that (i) the Exchange Senior Notes acquired
pursuant to the Exchange Offer are being obtained in the ordinary course of
business of the person receiving such Exchange Senior Notes, whether or not such
person is the Holder, (ii) neither the Holder nor any such other person is
engaging in or intends to engage in a distribution of such Exchange Senior
Notes, (iii) neither the Holder nor any such other person has an arrangement or
understanding with any person to participate in the distribution of such
Exchange Senior Notes, and (iv) neither the Holder nor any such other person is
an "affiliate" (as defined in Rule 405 of the Securities Act) of the Company. In
exchange for properly tendered Private Notes, the Exchange Senior Notes will be
issued without a restrictive legend and may be reoffered and resold by the
Holder without restrictions or limitations under the Securities Act.
RESALE OF THE EXCHANGE SENIOR NOTES
Based on a previous interpretation by the staff of the Commission set forth
in no-action letters issued to third parties, including "Exxon Capital Holdings
Corporation" (available May 13, 1988), the Morgan Stanley Letter, "Mary Kay
Cosmetics, Inc." (available June 5, 1991), "Warnaco, Inc." (available October
11, 1991), and "K-III Communications Corp." (available May 14, 1993), the
Company believes that the Exchange Senior Notes issued pursuant to the Exchange
Offer may be offered for resale, resold, and otherwise transferred by any Holder
of such Exchange Senior Notes (other than any such Holder that is an "affiliate"
of the Company within the meaning of Rule 405 under the Securities Act) without
compliance with the registration and prospectus delivery provisions of the
Securities Act, provided that such Exchange Senior Notes are acquired in the
ordinary course of such Holder's business and such Holder has no arrangement or
understanding with any person to participate in the distribution of such
Exchange Senior Notes. Any Holder who tenders in the Exchange Offer with the
intention of participating in a distribution of the Exchange Senior Notes cannot
rely on such interpretation by the staff of the Commission as set forth in the
Morgan Stanley Letter and other similar letters and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with a secondary resale transaction. In the event that the Company's
belief regarding resale is inaccurate, Holders of the Exchange Senior Notes who
transfer Exchange Senior Notes in violation of the prospectus delivery
provisions of the Securities Act and without an exemption from registration
thereunder may incur liability thereunder. The Company does not assume or
indemnify Holders against such liability. The Exchange Offer is not being made
to, nor will the Company accept surrenders for exchange from, Holders of Private
Notes in any jurisdiction in which the Exchange Offer or the acceptance thereof
would not be in compliance with the securities or blue sky laws of such
jurisdiction. Each broker-
35
<PAGE> 43
dealer that receives Exchange Senior Notes for its own account in exchange for
Private Notes, where such Private Notes were acquired by such broker-dealer as a
result of market-making activities or other trading activities ("Participating
Broker-Dealers"), must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Senior Notes. In order to facilitate
the disposition of Exchange Senior Notes by Participating Broker-Dealers, the
Company has agreed, subject to certain conditions, to make this Prospectus, as
it may be amended or supplemented from time to time, available for delivery by
Participating Broker-Dealers to satisfy their prospectus delivery obligations
under the Securities Act. The Company is obligated to deal with only one entity
representing Participating Broker-Dealers (the "Representative"), which shall be
Merrill Lynch, Pierce, Fenner & Smith Incorporated unless it elects not to act
as the Representative. Accordingly, any Holder that is a Participating
Broker-Dealer must notify the Representative at the telephone number set forth
in the Letter of Transmittal and comply with the procedures for Participating
Brokers-Dealers. Among other things, the Representative is required to confirm
with the Company on a weekly basis that the Prospectus is available.
Accordingly, Participating Broker-Dealers will be required to confirm such
availability with the Representative on a weekly basis. Pursuant to the
Registration Rights Agreement, the Company is not required to amend or
supplement the Prospectus for a period exceeding 90 days after the Expiration
Date except in certain circumstances involving the suspension of the use thereof
by the Company. The Company has not entered into any arrangement or
understanding with any person to distribute the Exchange Senior Notes to be
received in the Exchange Offer. See "Plan of Distribution."
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this Prospectus
and in the Letter of Transmittal, the Company will accept any and all Private
Notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time,
on the Expiration Date.
As of the date of this Prospectus, $840,000,000 in principal amount at
maturity of the Private Notes are outstanding. This Prospectus, together with
the Letter of Transmittal, is being sent to all registered Holders of the
Private Notes on the date hereof. There will be no fixed record date for
determining registered holders of the Private Notes entitled to participate in
the Exchange Offer; however, Holders of the Private Notes must tender their
certificates therefor or cause their Private Notes to be tendered by book-entry
transfer prior to the Expiration Date to participate.
The form and terms of the Exchange Senior Notes will be the same as the
form and terms of the Private Notes except that the Exchange Senior Notes will
be registered under the Securities Act and hence will not bear legends
restricting the transfer thereof. Following consummation of the Exchange Offer,
all rights under the Registration Rights Agreement accorded to holders of
Private Notes, including the right to receive additional incremental interest on
the Private Notes to the extent and in the circumstances specified therein, will
terminate.
The Company intends to conduct the Exchange Offer in accordance with the
provisions of the Registration Rights Agreement and the applicable requirements
of the Securities Act and the rules and regulations of the Commission
thereunder. Private Notes that are not tendered for exchange under the Exchange
Offer will remain outstanding and will be entitled to the rights as set forth in
the Indenture. Any Private Notes not tendered for exchange will not retain any
rights under the Registration Rights Agreement and will remain subject to
certain transfer restrictions. See "-- Consequences of Failure to Exchange."
The Company shall be deemed to have accepted validly tendered Private Notes
when, as and if the Company shall have given oral or written notice thereof to
the Exchange Agent. The Exchange Agent will act as agent for the tendering
Holders for the purposes of receiving the Exchange Senior Notes from the
Company. If any tendered Private Notes are not accepted for exchange because of
an invalid tender, the occurrence of certain other events set forth herein, or
otherwise, certificates for any such unaccepted Private Notes will be returned
(or, in the case of Private Notes tendered by book-entry transfer, such
unaccepted Private Notes will be credited to an account maintained at the
Book-Entry Transfer Facility), without
36
<PAGE> 44
expense, to the tendering Holder thereof as promptly as practicable after the
Expiration Date. See "-- Procedures for Tendering."
Holders who tender Private Notes in the Exchange Offer will not be required
to pay brokerage commissions or fees or, subject to the instructions in the
Letter of Transmittal, transfer taxes with respect to the exchange pursuant to
the Exchange Offer. The Company will pay all charges and expenses, other than
certain applicable taxes described below, in connection with the Exchange Offer.
See "-- Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date," shall mean 5:00 p.m., New York City time on
, 1998, unless the Company, in its sole discretion, extends
the Exchange Offer, in which case the term "Expiration Date" shall mean the
latest date and time to which the Exchange Offer is extended.
In order to extend the Exchange Offer, the Company will notify the Exchange
Agent of any extension by oral or written notice prior to 9:00 a.m., New York
City time, on the next business day after the previously scheduled Expiration
Date and will make a public announcement thereof.
The Company reserves the right, in its sole discretion, (i) to delay
accepting any Private Notes, to extend the Exchange Offer or to terminate the
Exchange Offer if any of the conditions set forth below under "Conditions" shall
not have been satisfied by giving oral or written notice of such delay,
extension, or termination to the Exchange Agent or (ii) to amend the terms of
the Exchange Offer in any manner consistent with the Registration Rights
Agreement. Any such delay in acceptances, extension, termination, or amendment
will be followed as promptly as practicable by oral or written notice thereof to
the registered Holders. If the Exchange Offer is amended in a manner determined
by the Company to constitute a material change, the Company will promptly
disclose such amendment by means of a prospectus supplement that will be
distributed to the registered Holders, and the Company will extend the Exchange
Offer for a period of five to ten business days, depending upon the significance
of the amendment and the manner of disclosure to the registered Holders, if the
Exchange Offer would otherwise expire during such five to ten business day
period.
Without limiting the manner in which the Company may choose to make a
public announcement of any delay, extension, amendment, or termination of the
Exchange Offer, the Company shall have no obligation to publish, advertise, or
otherwise communicate any such public announcement, other than by making a
timely release to an appropriate news agency.
Upon satisfaction or waiver of all the conditions to the Exchange Offer,
the Company will accept, promptly after the Expiration Date, all Private Notes
properly tendered and will issue the Exchange Senior Notes promptly after
acceptance of the Private Notes. See "-- Conditions" below. For purposes of the
Exchange Offer, the Company shall be deemed to have accepted properly tendered
Private Notes for exchange when, as and if the Company shall have given oral or
written notice thereof to the Exchange Agent.
In all cases, issuance of the Exchange Senior Notes for Private Notes that
are accepted for exchange pursuant to the Exchange Offer will be made only after
timely receipt by the Exchange Agent of certificates for such Private Notes or a
timely Book-Entry Confirmation of such Private Notes into the Exchange Agent's
account at DTC, a properly completed and duly executed Letter of Transmittal,
and all other required documents; provided, however, that the Company reserves
the absolute right to waive any defects or irregularities in the tender or
conditions of the Exchange Offer. If any tendered Private Notes are not accepted
for any reason set forth in the terms and conditions of the Exchange Offer, the
Holder withdraws such previously tendered Private Notes, or if Private Notes are
submitted for a greater principal amount of Private Notes than the Holder
desires to exchange, then such unaccepted, withdrawn or portion of non-exchanged
Private Notes, as appropriate, will be returned as promptly as practicable after
the expiration or termination of the Exchange Offer (or, in the case of Private
Notes tendered by book-entry transfer, such unaccepted, withdrawn or portion of
non-exchanged Private Notes, as appropriate, will be credited to an account
maintained with DTC) without expense to the tendering Holder thereof.
37
<PAGE> 45
CONDITIONS
Notwithstanding any other term of the Exchange Offer, the Company will not
be required to exchange any Exchange Senior Notes for any Private Notes and may
terminate the Exchange Offer before the acceptance of any Private Notes for
exchange, if:
(i) any action or proceeding is instituted or threatened in any court
or by or before any governmental agency with respect to the Exchange Offer
which, in the Company's reasonable judgment, might materially impair the
ability of the Company to proceed with the Exchange Offer; or
(ii) any law, statute, rule or regulation is proposed, adopted or
enacted, or any interpretation of any existing law, statute, rule or
regulation is issued by the staff of the Commission, which, in the
Company's reasonable judgment, might materially impair the ability of the
Company to proceed with the Exchange Offer; or
(iii) any governmental approval or approval by Holders of the Private
Notes has not been obtained, which approval the Company shall, in its
reasonable judgment, deem necessary for the consummation of the Exchange
Offer as contemplated hereby.
If the Company determines in its sole discretion that any of these
conditions are not satisfied, the Company may (i) refuse to accept any Private
Notes and return all tendered Private Notes to the tendering Holders (or, in the
case of Private Notes tendered by book-entry transfer, credit such Private Notes
at an account maintained with DTC), (ii) extend the Exchange Offer and retain
all Private Notes tendered prior to the expiration of the Exchange Offer,
subject, however, to the rights of Holders who tendered such Private Notes to
withdraw their tendered Private Notes, or (iii) waive such unsatisfied
conditions with respect to the Exchange Offer and accept all properly tendered
Private Notes that have not been withdrawn. If such waiver constitutes a
material change to the Exchange Offer, the Company will promptly disclose such
waiver by means of a prospectus supplement that will be distributed to the
registered Holders, and the Company will extend the Exchange Offer for a period
of five to ten business days, depending upon the significance of the waiver and
the manner of disclosure to the registered Holders, if the Exchange Offer would
otherwise expire during such five to ten business day period.
PROCEDURES FOR TENDERING
To tender in the Exchange Offer, a Holder must complete, sign and date the
Letter of Transmittal, or facsimile thereof, have the signatures thereon
guaranteed if required by the Letter of Transmittal, and mail or otherwise
deliver such Letter of Transmittal or such facsimile to the Exchange Agent prior
to the Expiration Date. In addition, either (i) certificates for such Private
Notes must be received by the Exchange Agent along with the Letter of
Transmittal, or (ii) a timely confirmation of book-entry transfer (a "Book-Entry
Confirmation") of such Private Notes, if such procedure is available, into the
Exchange Agent's account at DTC pursuant to the procedure for book-entry
transfer described below must be received by the Exchange Agent prior to the
Expiration Date, or (iii) the Holder must comply with the guaranteed delivery
procedures described below. To be tendered effectively, the Letter of
Transmittal and other required documents must be received by the Exchange Agent
at the address set forth below under "Exchange Agent" prior to the Expiration
Date.
The tender by a Holder of Private Notes that is not withdrawn prior to the
Expiration Date will constitute an agreement between such Holder and the Company
in accordance with the terms and subject to the conditions set forth herein and
in the Letter of Transmittal.
THE METHOD OF DELIVERY OF PRIVATE NOTES AND THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK
OF THE HOLDER. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE
AN OVERNIGHT OR HAND DELIVERY SERVICE, PROPERLY INSURED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT
BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR PRIVATE NOTES SHOULD BE
SENT TO THE COMPANY. HOLDERS MAY
38
<PAGE> 46
REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES, OR
NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS.
Any beneficial owner whose Private Notes are registered in the name of a
broker, dealer, commercial bank, trust company, or other nominee and who wishes
to tender its Private Notes should contact the registered Holder promptly and
instruct such registered Holder to tender such Private Notes on such beneficial
owner's behalf. If such beneficial owner wishes to tender its Private Notes on
such owner's own behalf, such owner must, prior to completing and executing the
Letter of Transmittal and delivering such owner's Private Notes, either make
appropriate arrangements to register ownership of the Private Notes in such
owner's name or obtain a properly completed assignment from the registered
Holder. The transfer of registered ownership of Private Notes may take
considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by an Eligible Institution (as defined herein)
unless the Private Notes tendered pursuant thereto are tendered (i) by a
registered Holder who has not completed the box entitled "Special Payment
Instructions" or "Special Delivery Instructions" on the Letter of Transmittal or
(ii) for the account of an Eligible Institution. In the event that signatures on
a Letter of Transmittal or a notice of withdrawal, as the case may be, are
required to be guaranteed, such guarantor must be a member firm of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the U.S. or an "eligible guarantor institution" within the
meaning of Rule 17Ad-15 under the Exchange Act (each, an "Eligible
Institution").
If the Letter of Transmittal is signed by a person other than the
registered Holder of any Private Notes listed therein, such Private Notes must
be endorsed or accompanied by a properly completed bond power, signed by such
registered Holder as such registered Holder's name appears on such Private
Notes.
If the Letter of Transmittal or any Private Notes or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and unless waived by the Company,
evidence satisfactory to the Company of their authority to so act must be
submitted with the Letter of Transmittal.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Private Notes, and withdrawal of tendered
Private Notes will be determined by the Company in its sole discretion, which
determination will be final and binding. The Company reserves the absolute right
to reject any and all Private Notes not properly tendered or any Private Notes
the Company's acceptance of which would, in the opinion of counsel for the
Company, be unlawful. The Company also reserves the right to waive any defects,
irregularities, or conditions of tender as to particular Private Notes. The
Company's interpretation of the terms and conditions of the Exchange Offer
(including the instructions in the Letter of Transmittal) will be final and
binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Private Notes must be cured within such time as the
Company shall determine. Although the Company intends to notify Holders of
defects or irregularities with respect to tenders of Private Notes, none of the
Company, the Exchange Agent or any other person shall incur any liability for
failure to give such notification. Tenders of Private Notes will not be deemed
to have been made until such defects or irregularities have been cured or
waived. Any Private Notes received by the Exchange Agent that are not properly
tendered and as to which the defects or irregularities have not been cured or
waived will be returned by the Exchange Agent to the tendering Holders, unless
otherwise provided in the Letter of Transmittal, as soon as practicable
following the Expiration Date.
In addition, the Company reserves the right in its sole discretion, to
purchase or make offers for any Private Notes that remain outstanding subsequent
to the Expiration Date or, as set forth above under "-- Conditions," to
terminate the Exchange Offer and, to the extent permitted by applicable law and
the terms of its agreements relating to its outstanding indebtedness, purchase
Private Notes in the open market, in privately negotiated transactions or
otherwise. The terms of any such purchases or offers could differ from the terms
of the Exchange Offer.
39
<PAGE> 47
By tendering, each Holder will represent to the Company that, among other
things, (i) the Exchange Senior Notes acquired pursuant to the Exchange Offer
are being obtained in the ordinary course of business of the person receiving
such Exchange Senior Notes, whether or not such person is the Holder, (ii)
neither the Holder nor any such other person is engaging in or intends to engage
in a distribution of such Exchange Senior Notes, (iii) neither the Holder nor
any such other person has an arrangement or understanding with any person to
participate in the distribution of such Exchange Senior Notes, and (iv) neither
the Holder nor any such other person is an "affiliate" (as defined in Rule 405
of the Securities Act) of the Company. If the Holder is a Participating
Broker-Dealer that will receive Exchange Senior Notes for such Holder's own
account in exchange for Private Notes that were acquired as a result of
market-making activities or other trading activities, such Holder will be
required to acknowledge in the Letter of Transmittal that such Holder will
deliver a prospectus in connection with any resale of such Exchange Senior Notes
and otherwise agree to comply with the procedures described above under
"-- Resale of the Exchange Senior Notes"; however, by so acknowledging and
delivering a prospectus, such holder will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
In all cases, issuance of Exchange Senior Notes pursuant to the Exchange
Offer will be made only after timely receipt by the Exchange Agent of
certificates for such Private Notes or a timely Book-Entry Confirmation of such
Private Notes into the Exchange Agent's account at DTC, a properly completed and
duly executed Letter of Transmittal, and all other required documents. If any
tendered Private Notes are not accepted for any reason set forth in the terms
and conditions of the Exchange Offer or if Private Notes are submitted for a
greater principal amount of Private Notes than the Holder desires to exchange,
such unaccepted or portion of non-exchanged Private Notes will be returned as
promptly as practicable after the expiration or termination of the Exchange
Offer (or, in the case of Private Notes tendered by book-entry transfer into the
Exchange Agent's account at DTC pursuant to the book-entry transfer procedures
described below, such unaccepted or portion of non-exchanged Private Notes will
be credited to an account maintained with DTC) without expense to the tendering
Holder thereof.
BOOK-ENTRY TRANSFER
The Exchange Agent will make a request to establish an account with respect
to the Private Notes at DTC for the purposes of the Exchange Offer within two
business days after the date of this Prospectus, and any financial institution
that is a participant in DTC's systems may make book-entry delivery of Private
Notes by causing DTC to transfer such Private Notes into the Exchange Agent's
account at DTC in accordance with DTC's procedures for transfer. However,
although delivery of Private Notes may be effected through book-entry transfer
at DTC, the Letter of Transmittal or facsimile thereof, with any required
signature guarantees and any other required documents, must, in any case, be
transmitted to and received by the Exchange Agent at the address set forth below
under "Exchange Agent" on or prior to the Expiration Date (unless the Holder
complies with the guaranteed delivery procedures described below).
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Private Notes and (x) whose Private Notes
are not immediately available or (y) who cannot deliver their Private Notes, the
Letter of Transmittal, or any other required documents to the Exchange Agent
prior to the Expiration Date, may effect a tender if:
(i) The tender is made through an Eligible Institution;
(ii) Prior to the Expiration Date, the Exchange Agent receives from
such Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery substantially in the form provided by the Company (by
facsimile transmission, mail or hand delivery) setting forth the name and
address of the Holder, the certificate number(s) of such Private Notes and
the principal amount of Private Notes tendered and stating that the tender
is being made thereby and guaranteeing that, within three New York Stock
Exchange trading days after the Expiration Date, the Letter of Transmittal
(or facsimile thereof) together with the certificate(s) representing the
Private Notes in proper form for transfer or a Book-Entry
40
<PAGE> 48
Confirmation, as the case may be, and any other documents required by the
Letter of Transmittal will be deposited by the Eligible Institution with
the Exchange Agent; and
(iii) Such properly completed and executed Letter of Transmittal (or
facsimile thereof), as well as the certificate(s) representing all tendered
Private Notes in proper form for transfer and other documents required by
the Letter of Transmittal are received by the Exchange Agent within three
New York Stock Exchange trading days after the Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be
sent to Holders who wish to tender their Private Notes according to the
guaranteed delivery procedures set forth above.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Private Notes may be
withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration
Date.
To withdraw a tender of Private Notes in the Exchange Offer, a written or
facsimile transmission notice of withdrawal must be received by the Exchange
Agent at its address set forth herein prior to 5:00 p.m., New York City time, on
the Expiration Date. Any such notice of withdrawal must (i) specify the name of
the person having deposited the Private Notes to be withdrawn (the "Depositor"),
(ii) identify the Private Notes to be withdrawn (including the certificate
number(s)), (iii) be signed by the Holder in the same manner as the original
signature on the Letter of Transmittal by which such Private Notes were tendered
(including any required signature guarantees) or be accompanied by documents of
transfer sufficient to have the Exchange Agent register the transfer of such
Private Notes in the name of the person withdrawing the tender, and (iv) specify
the name in which any such Private Notes are to be registered, if different from
that of the Depositor. All questions as to the validity, form, and eligibility
(including time of receipt) of such notices will be determined by the Company,
whose determination shall be final and binding on all parties. Any Private Notes
so withdrawn will be deemed not to have been validly tendered for purposes of
the Exchange Offer, and no Exchange Senior Notes will be issued with respect
thereto unless the Private Notes so withdrawn are validly retendered. Any
Private Notes that have been tendered but that are not accepted for payment will
be returned to the Holder thereof (or, in the case of Private Notes tendered by
book-entry transfer, will be credited to an account maintained with DTC),
without cost to such Holder as soon as practicable after withdrawal, rejection
of tender or termination of the Exchange Offer. Properly withdrawn Private Notes
may be retendered by following one of the procedures described above under
"-- Procedures for Tendering" at any time prior to the Expiration Date.
TERMINATION OF CERTAIN RIGHTS
All rights under the Registration Rights Agreement accorded to Holders of
Private Notes will terminate upon the consummation of the Exchange Offer except
with respect to the Company's duty to keep the Registration Statement effective
until the closing of the Exchange Offer and, for a period not to exceed 90 days
after the Expiration Date, to provide copies of the latest version of this
Prospectus to any broker-dealer that requests copies of such Prospectus in the
Letter of Transmittal for use in connection with any resale by such
broker-dealer of Exchange Senior Notes received for its own account pursuant to
the Exchange Offer in exchange for Private Notes acquired for its own account as
a result of market-making or other trading activities, subject to the conditions
described above under "-- Resale of Exchange Senior Notes."
EXCHANGE AGENT
Harris Trust and Savings Bank has been appointed Exchange Agent for the
Exchange Offer. Questions and requests for assistance, requests for additional
copies of this Prospectus or the Letter of Transmittal, and
41
<PAGE> 49
requests for copies of the Notice of Guaranteed Delivery with respect to the
Private Notes should be addressed to the Exchange Agent as follows:
By Hand or Overnight Courier:
Harris Trust and Savings Bank
c/o Harris Trust Company of New York
88 Pine Street
19th Floor
New York, New York 10005
By Registered or Certified Mail:
Harris Trust and Savings Bank
c/o Harris Trust Company of New York
P.O. Box 1010
Wall Street Station
New York, New York 10268-1010
By Telephone (to confirm receipt of facsimile): (212) 701-7624
By Facsimile (for Eligible Institutions only): (212) 701-7636
FEES AND EXPENSES
The expenses of soliciting tenders in connection with the Exchange Offer
will be paid by the Company. The principal solicitation is being made by mail;
however, additional solicitation may be made by telecopier, telephone, or in
person by officers and regular employees of the Company and its affiliates.
The Company has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to broker-dealers or others
soliciting acceptances of the Exchange Offer. The Company, however, will pay the
Exchange Agent reasonable and customary fees for its services and will reimburse
it for its reasonable out-of-pocket expenses in connection therewith.
The cash expenses to be incurred in connection with the Exchange Offer will
be paid by the Company and are estimated in the aggregate to be approximately
$210,000. Such expenses include registration fees, fees and expenses of the
Exchange Agent, accounting and legal fees, and printing costs, among others.
The Company will pay all transfer taxes, if any, applicable to the exchange
of the Private Notes pursuant to the Exchange Offer. If, however, certificates
representing Private Notes not tendered or accepted for exchange are to be
delivered to, or are to be issued in the name of, any person other than the
registered Holder of Private Notes tendered, or, if tendered, the certificates
representing Private Notes are registered in the name of any person other than
the person signing the Letter of Transmittal, or if a transfer tax is imposed
for any reason other than the exchange of the Private Notes pursuant to the
Exchange Offer, then the amount of any such transfer taxes (whether imposed on
the registered Holder or any other persons) will be payable by the tendering
Holder. If satisfactory evidence of payment of such transfer taxes or exemption
therefrom is not submitted with the Letter of Transmittal, the amount of such
transfer taxes will be billed directly to such tendering Holder.
CONSEQUENCES OF FAILURE TO EXCHANGE
Participation in the Exchange Offer is voluntary. Holders of the Private
Notes are urged to consult their financial and tax advisors in making their own
decisions on what action to take.
Private Notes that are not exchanged for the Exchange Senior Notes pursuant
to the Exchange Offer will not retain any rights under the Registration Rights
Agreement and will remain "restricted securities" within the meaning of Rule
144(a)(3)(iv) of the Securities Act. Accordingly, such Private Notes may not be
offered, sold, pledged, or otherwise transferred except (i) to Nextel or any
subsidiary thereof, (ii) to a "qualified institutional buyer" within the meaning
of Rule 144A under the Securities Act purchasing for its own account or for the
account of a qualified institutional buyer in a transaction meeting the
requirements of Rule 144A, (iii) in an offshore transaction complying with Rule
904 of Regulation S under the Securities Act,
42
<PAGE> 50
(iv) pursuant to an exemption from registration under the Securities Act
provided by Rule 144 thereunder (if available), (v) to "institutional accredited
investors" in a transaction exempt from the registration requirements of the
Securities Act, or (vi) pursuant to an effective registration statement under
the Securities Act, and, in each case, in accordance with all other applicable
securities laws.
ACCOUNTING TREATMENT
For accounting purposes, the Company will recognize no gain or loss as a
result of the Exchange Offer. The Exchange Senior Notes will be recorded at the
same carrying value as the Private Notes, as reflected in the Company's
accounting records on the date of the exchange. The expenses of the Exchange
Offer will be amortized over the term of the Exchange Senior Notes.
TAX CONSEQUENCES
For a description of certain United States Federal income tax consequences
to holders of Private Notes tendering in the Exchange Offer, see "Certain United
States Federal Income Tax Consequences."
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<PAGE> 51
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of September 30, 1997 (the "Ownership
Date"), the amount and percentage of shares of each class of Nextel's capital
stock that are deemed under the rules of the Commission to be "beneficially
owned" by (i) each director of Nextel (except that the table reflects the
November 1997 amended Schedule 13D filings by Craig O. McCaw and Wendy P.
McCaw), (ii) the Chief Executive Officer and each of the four other most highly
compensated executive officers of Nextel for the year ended December 31, 1996,
who continued to be executive officers of Nextel at the Ownership Date, (iii)
all directors and executive officers of Nextel as a group and (iv) each person
or "group" (as such term is used in Section 13(d)(3) of the Exchange Act) known
by Nextel to be the beneficial owner of more than five percent of the
outstanding shares of each class of Nextel's capital stock.
<TABLE>
<CAPTION>
TITLE OF CLASS OF THE
COMPANY'S CAPITAL AMOUNT AND NATURE OF APPROXIMATE %
NAME OF BENEFICIAL OWNER STOCK BENEFICIAL OWNERSHIP(1) OF CLASS(2)
- ------------------------------------- --------------------- ----------------------- -------------
<S> <C> <C> <C>
Daniel F. Akerson.................... Class A Common Stock 200,000(3) *
Morgan E. O'Brien.................... Class A Common Stock 926,476(4) *
Keith J. Bane........................ Class A Common Stock --(5) *
Frank M. Drendel..................... Class A Common Stock 10,167(6) *
Timothy M. Donahue................... Class A Common Stock 76,000(7) *
William E. Conway, Jr................ Class A Common Stock 96,325(8) *
Craig O. McCaw....................... Class A Common Stock 77,658,786(9) 24.0
Keisuke Nakasaki..................... Class A Common Stock --(10) *
Masaaki Torimoto..................... Class A Common Stock --(11) *
Dennis M. Weibling................... Class A Common Stock 77,658,786(12) 24.0
Robert S. Foosaner................... Class A Common Stock 242,000(13) *
All directors and executive officers
as a group (18 persons)............ Class A Common Stock 79,476,221(14) 24.5
5% STOCKHOLDERS (NOT LISTED ABOVE)
Motorola, Inc. ...................... Class A Common Stock 58,890,000(15) 20.6
1303 East Algonquin Road Class B Common Stock 17,830,000 100.0
Schaumburg, Illinois 60196
Digital Radio, L.L.C. ............... Class A Common Stock 52,258,786(16) 17.5
Class A Preferred
2300 Carillon Point Stock 7,905,981 100.0
Class B Preferred
Kirkland, Washington 98033 Stock 82 100.0
Option Acquisition, L.L.C. .......... Class A Common Stock 25,000,000(17) 8.1
2300 Carillon Point
Kirkland, Washington 98033
Putnam Investments, Inc. ............ Class A Common Stock 15,340,145(18) 5.4
1 Post Office Square
Boston, Massachusetts 02109
Wendy P. McCaw....................... Class A Common Stock 14,824,937(19) 5.2
c/o Lasher, Holzapfal, Sperry &
Ebberson, PLLC
2600 Two Union Square
601 Union Street
Seattle, Washington 98101
</TABLE>
- ---------------
* Less than one percent (1%).
(1) Under the rules of the Commission, a person is deemed to be the beneficial
owner of a security if such person, directly or indirectly, has or shares
the power to vote or direct the voting of such security or the power to
dispose or direct the disposition of such security. A person is also deemed
to be a beneficial
(Footnotes continued on following page)
44
<PAGE> 52
owner of any securities if that person has the right to acquire beneficial
ownership within 60 days of the Ownership Date. Accordingly, more than one
person may be deemed to be a beneficial owner of the same securities.
Unless otherwise indicated by footnote, the named individuals have sole
voting and investment power with respect to the shares of Nextel's capital
stock beneficially owned.
(2) Represents the voting power of the number of shares of each of class of
capital stock beneficially owned as of the Ownership Date by each named
person or group, expressed as a percentage of (a) all shares of Nextel's
capital stock of the indicated class actually outstanding as of such date
(in the case of the Class A Common Stock, giving effect to the conversion
of Nextel's preferred stock and Nextel's Non-Voting Common Stock), plus (b)
all other shares of capital stock deemed outstanding as of such date
pursuant to Rule 13d-3(d)(1) under the Exchange Act.
(3) Includes 200,000 shares of Class A Common Stock obtainable as of the
Ownership Date or within 60 days thereafter by Mr. Akerson upon the
exercise of non-qualified stock options.
(4) Includes 553,477 shares of Class A Common Stock obtainable as of the
Ownership Date or within 60 days thereafter by Mr. O'Brien upon the
exercise of non-qualified stock options.
(5) Mr. Bane, who is Executive Vice President, and President Americas Region,
of Motorola, disclaims beneficial ownership of all securities of Nextel
held by Motorola. See note 15.
(6) Includes 1,667 shares of Class A Common Stock obtainable as of the
Ownership Date or within 60 days thereafter by Mr. Drendel upon the
exercise of non-qualified stock options.
(7) Includes 75,000 shares of Class A Common Stock obtainable as of the
Ownership Date or within 60 days thereafter by Mr. Donahue upon the
exercise of non-qualified stock options.
(8) Includes 1,667 shares of Class A Common Stock obtainable as of the
Ownership Date or within 60 days thereafter by Mr. Conway upon the exercise
of non-qualified stock options.
(9) Reflects the conversion of 257,284 shares of Class A Preferred Stock and
the transfer of 9,907,659 shares of Class A Common Stock and options to
purchase 4,917,278 shares of Class A Common Stock obtainable as of the
Ownership Date to Wendy P. McCaw pursuant to an agreement dated November 3,
1997, as reflected in an amendment to her Schedule 13D dated November 3,
1997 and in an amendment to the Schedule 13D of Mr. McCaw. Comprised of (i)
52,258,786 shares of Class A Common Stock beneficially owned by the McCaw
Investor, (ii) 400,000 shares of Class A Common Stock obtainable as of the
Ownership Date upon the exercise of a portion of the Incentive Option
granted to Eagle River, an affiliate of the McCaw Investor, and (iii)
25,000,000 shares of Class A Common Stock beneficially owned by Option
Acquisition, L.L.C. Mr. McCaw, who is an equity owner and controlling
person of the McCaw Investor and Option Acquisition, L.L.C., disclaims
beneficial ownership of all securities of Nextel held by the McCaw Investor
and Option Acquisition, L.L.C., except to the extent of his pecuniary
interest therein. See notes 16 and 17.
(10) Mr. Nakasaki, who is President and Chief Executive Officer of NTT America,
Inc., a subsidiary of Nippon Telegraph and Telephone Corporation ("NTT"),
disclaims beneficial ownership of all shares of Class A Common Stock held
by NTT. As of the Ownership Date, NTT held 1,532,959 shares of Class A
Common Stock.
(11) Mr. Torimoto, who is Vice President of Panasonic Communications and Systems
Company, disclaims beneficial ownership of all shares of Class A Common
Stock held by Matsushita Communication Industrial Co., Ltd. ("Matsushita").
As of the Ownership Date, Matsushita held 3,000,000 shares of Class A
Common Stock.
(12) Mr. Weibling, who is an officer of Option Acquisition, L.L.C. and President
of Eagle River, an affiliate of the McCaw Investor, disclaims beneficial
ownership of all securities of Nextel held by the McCaw Investor and by
Option Acquisition, L.L.C., except to the extent of his pecuniary interest
therein. See notes 16 and 17.
(13) Includes 192,000 shares of Class A Common Stock obtainable as of the
Ownership Date or within 60 days thereafter by Mr. Foosaner upon the
exercise of non-qualified stock options.
(Footnotes continued on following page)
45
<PAGE> 53
(14) Includes an aggregate of 1,243,061 shares of Class A Common Stock
obtainable as of the Ownership Date or within 60 days thereafter by
directors and executive officers as a group upon the exercise of non-
qualified stock options or other stock purchase rights. See also notes 15,
16, and 17.
(15) Assuming conversion of the Non-Voting Common Stock held by Motorola.
Comprised of (i) 38,170,000 shares of Class A Common Stock beneficially
owned by Motorola, (ii) 17,830,000 shares of Non-Voting Common Stock
beneficially owned by Motorola and (iii) 2,890,000 shares of Class A Common
Stock obtainable as of the Ownership Date or within 60 days thereafter upon
exercise of a warrant.
(16) Comprised of (i) 13,458,039 shares of Class A Common Stock beneficially
owned by the McCaw Investor, (ii) 15,082,722 shares of Class A Common Stock
obtainable as of the Ownership Date or within 60 days thereafter upon the
exercise of certain options and (iii) 23,718,025 shares of Class A Common
Stock, which represents the conversion of the 7,905,981 shares of Class A
Preferred Stock and the 82 shares of Nextel's Class B Preferred Stock held
by the McCaw Investor. Eagle River Investments, L.L.C., the manager of the
McCaw Investor, also reports beneficial ownership of the shares
beneficially owned by the McCaw Investor. Excludes 4,917,278 shares of
Class A Common Stock obtainable as of the Ownership Date upon the exercise
of certain options currently held by Wendy P. McCaw that the McCaw Investor
has the right to exercise in the event Wendy P. McCaw does not elect to
exercise such options. See note 19.
(17) Includes 25,000,000 shares of Class A Common Stock obtainable as of the
Ownership Date upon the exercise of the New Option.
(18) As reported in the most recent Schedule 13G filed by Putnam Investments,
Inc. ("Putnam"), Putnam does not have sole voting power over the shares of
Class A Common Stock beneficially owned by Putnam.
(19) Comprised of 9,907,659 shares of Class A Common Stock beneficially owned by
Wendy P. McCaw and 4,917,278 shares of Class A Common Stock obtainable as
of the Ownership Date or within 60 days thereafter upon the exercise of
certain options. Excludes 7,619,677 shares of Class A Common Stock
obtainable as of the Ownership Date upon the exercise of certain options
currently held by the McCaw Investor that Wendy P. McCaw has the right to
exercise in the event the McCaw Investor does not elect to exercise such
options. See note 16.
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<PAGE> 54
DESCRIPTION OF EXCHANGE SENIOR NOTES
The Private Notes were, and the Exchange Senior Notes will be, issued under
the Indenture, dated as of September 17, 1997, between the Company, as issuer,
and Harris Trust and Savings Bank, as Trustee. The form and terms of the
Exchange Senior Notes will be the same as the form and terms of the Private
Notes except that the Exchange Senior Notes will be registered under the
Securities Act and hence will not bear legends restricting the transfer thereof.
Following consummation of the Exchange Offer, all rights under the Registration
Rights Agreement accorded to holders of Private Notes, including the right to
receive additional incremental interest on the Private Notes, to the extent and
in the circumstances specified therein, will terminate. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"). The Notes are subject to all such terms, and holders of the Notes are
referred to the Indenture and the Trust Indenture Act for a statement of such
terms. The following summary of certain provisions of the Indenture does not
purport to be complete and is subject to, and is qualified in its entirety by
reference to, the Trust Indenture Act and to all of the provisions of the
Indenture, including the definitions of certain terms therein and those terms
made a part of the Indenture by reference to the Trust Indenture Act. A copy of
the Indenture has been filed as an exhibit to the Registration Statement of
which this Prospectus is a part.
CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in the
covenants and other provisions of the Exchange Senior Notes and Indenture.
Reference is made to the terms of the Exchange Senior Notes and Indenture for
the full definitions of all such terms as well as any other capitalized terms
used herein for which no definition is provided.
Whenever the Indenture requires that a particular ratio or amount be
calculated with respect to a specified period after giving effect to certain
transactions or events on a pro forma basis, such calculation will be made as if
the transactions or events occurred on the first day of such period, unless
otherwise specified. All accounting terms not otherwise defined in the Indenture
shall have the meanings ascribed to them in accordance with generally accepted
accounting principles (whether or not such is indicated in the Indenture) and,
except as otherwise expressly provided in the Indenture, the term "generally
accepted accounting principles," with respect to any computation required or
permitted by the Indenture shall mean such accounting principles as are
generally accepted at the date of such computation.
"Accreted Value" of any outstanding Note as of or to any date of
determination means an amount equal to the sum of (i) the issue price of such
Note as determined in accordance with Section 1273 of the Internal Revenue Code
of 1986, as amended (the "Code") (which issue price is the same for the Exchange
Senior Notes as the issue price of the Private Notes since the Exchange Senior
Notes should be treated as a continuation of the Private Notes for federal
income tax purposes) plus (ii) the aggregate of the portions of the original
issue discount (the excess of the amounts considered as part of the "stated
redemption price at maturity" of such Note within the meaning of Section
1273(a)(2) of the Code or any successor provisions, whether denominated as
principal or interest, over the issue price of such Note) that shall theretofore
have accrued pursuant to Section 1272 of the Code (without regard to Section
1272(a)(7) of the Code) from the date of issue of the Private Note (a) for each
six-month or shorter period ending March 15 or September 15 prior to the date of
determination (each a "Semi-Annual Accrual Date") and (b) for the shorter
period, if any, from the end of the immediately preceding six-month or shorter
period, as the case may be, to the date of determination, plus (iii) accrued and
unpaid interest to the date such Accreted Value is paid (without duplication of
any amount set forth in (ii) above), minus all amounts theretofore paid in
respect of such Note, which amounts are considered as part of the "stated
redemption price at maturity" of such Note within the meaning of Section
1273(a)(2) of the Code or any successor provisions (whether such amounts paid
were denominated principal or interest).
"Acquired Debt" means Debt of a Person existing at the time such Person
becomes a Restricted Subsidiary or assumed by the Company or a Restricted
Subsidiary in connection with the acquisition of assets from such Person.
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<PAGE> 55
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such Person. "Affiliate" shall be deemed to include, but only for
purposes of the "Transactions with Affiliates" covenant and without limiting the
application of the preceding sentence for the purpose of such or any other
section, any Person owning, directly or indirectly, (i) 10% or more of the
Company's outstanding Common Stock or (ii) securities having 10% or more of the
total voting power of the Company's Voting Stock. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing. No individual shall be deemed to be controlled by
or under common control with any specified Person solely by virtue of his or her
status as an employee or officer of such specified Person or of any other Person
controlled by or under common control with such specified Person.
"Annualized Operating Cash Flow" means, for any fiscal quarter, the
Operating Cash Flow for such fiscal quarter multiplied by four.
"Average Life" means, at any date of determination with respect to any
Debt, the quotient obtained by dividing (i) the sum of the products of (a) the
number of years from such date of determination to the dates of each successive
scheduled principal payment of such Debt and (b) the amount of such principal
payment by (ii) the sum of all such principal payments.
"Beneficial Owner" means a beneficial owner as defined in Rules 13d-3 and
13d-5 under the Exchange Act (or any successor rules), including the provision
of such Rules that a person shall be deemed to have beneficial ownership of all
securities that such person has a right to acquire within 60 days, provided that
a person shall not be deemed a beneficial owner of, or to own beneficially, any
securities if such beneficial ownership (i) arises solely as a result of a
revocable proxy delivered in response to a proxy or consent solicitation made
pursuant to, and in accordance with, the Exchange Act and the applicable rules
and regulations thereunder and (ii) is not also then reportable on Schedule 13D
(or any successor schedule) under the Exchange Act.
"Board of Directors" means the board of directors of the Company or any
duly authorized committee thereof.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors (unless the context specifically requires that such resolution be
adopted by a majority of the Disinterested Directors, in which case by a
majority of such directors) and to be in full force and effect on the date of
such certification and delivered to the Trustee.
"Capital Lease Obligations" of any Person means the obligations to pay rent
or other amounts under lease of (or other Debt arrangements conveying the right
to use) real or personal property of such Person which are required to be
classified and accounted for as a capital lease or a liability on the face of a
balance sheet of such Person determined in accordance with generally accepted
accounting principles, and the amount of such obligations shall be the
capitalized amount thereof in accordance with generally accepted accounting
principles, and the stated maturity thereof shall be the date of the last
payment of rent or any other amount due under such lease prior to the first date
upon which such lease may be terminated by the lessee without payment of a
penalty.
"Capital Stock" of any Person means any and all shares, interests,
participations, or other equivalents (however designated) of stock of, or other
ownership interests in, such Person.
"Change of Control" means the occurrence of any of the following events:
(i) any person (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act and the regulations thereunder) is or becomes the
Beneficial Owner, directly or indirectly, of more than 50% of the total
Voting Stock or Total Common Equity of the Company; provided that no Change
of Control shall be deemed to occur pursuant to this clause (i)(x) if the
person is a corporation with outstanding debt securities having a maturity
at original issuance of at least one year and if such debt securities are
48
<PAGE> 56
rated Investment Grade by S&P or Moody's for a period of at least 90
consecutive days, beginning on the date of such event (which period will be
extended up to 90 additional days for as long as the rating of such debt
securities is under publicly announced consideration for possible
downgrading by the applicable rating agency), or (y) if the person is a
corporation (1) that is not, and does not have any outstanding debt
securities that are, rated by S&P, Moody's, or any other rating agency of
national standing at any time during a period of 90 consecutive days
beginning on the date of such event (which period will be extended up to an
additional 90 days for as long as any such rating agency has publicly
announced that such corporation or debt thereof will be rated), unless
after such date but during such period debt securities of such corporation
having a maturity at original issuance of at least one year are rated
Investment Grade by S&P or Moody's and remain so rated for the remainder of
the period referred to in clause (x) above and (2) that, when determined as
of the Trading Day immediately before and the Trading Day immediately after
the date of such event, has Total Common Equity of at least $10 billion
(provided that, solely for the purpose of calculating Total Common Equity
as of such later Trading Day, the average Closing Price of the Common Stock
of such person shall be deemed to equal the Closing Price of such Common
Stock on such later Trading Day, subject to the last sentence of the
definition of "Total Common Equity"); or
(ii) the Company consolidates with, or merges with or into, another
Person or sells, assigns, conveys, transfers, leases, or otherwise disposes
of all or substantially all of its assets to any Person, or any Person
consolidates with, or merges with or into, the Company, in any such event
pursuant to a transaction in which the outstanding Voting Stock of the
Company is converted into or exchanged for cash, securities, or other
property, other than any such transaction where (a) the outstanding Voting
Stock of the Company is converted into or exchanged for (1) Voting Stock
(other than Redeemable Stock) of the surviving or transferee Person or (2)
cash, securities, and other property in an amount which could be paid by
the Company as a Restricted Payment under the Indenture and (b) immediately
after such transaction no person (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act and the regulations thereunder) is the
Beneficial Owner, directly or indirectly, of more than 50% of the total
Voting Stock or Total Common Equity of the surviving or transferee Person;
provided that no Change of Control shall be deemed to occur pursuant to
this clause (ii), (x) if the surviving or transferee Person or the person
referred to in clause (ii)(b) is a corporation with outstanding debt
securities having a maturity at original issuance of at least one year and
if such debt securities are rated Investment Grade by S&P or Moody's for a
period of at least 90 consecutive days, beginning on the date of such event
(which period will be extended up to 90 additional days for as long as the
rating of such debt securities is under publicly announced consideration
for possible downgrading by the applicable rating agency), or (y) if the
surviving or transferee Person or such other person is a corporation (1)
that is not, and does not have any outstanding debt securities that are,
rated by S&P, Moody's, or any other rating agency of national standing at
any time during a period of 90 consecutive days beginning on the date of
such event (which period will be extended up to an additional 90 days for
as long as any such rating agency has publicly announced that such
corporation or debt thereof will be rated), unless after such date but
during such period debt securities of such corporation having a maturity at
original issuance of at least one year, are rated Investment Grade by S&P
or Moody's and remain so rated for the remainder of the period referred to
in clause (x) above and (2) that, when determined as of the Trading Day
immediately before and the Trading Day immediately after the date of such
event, has Total Common Equity of at least $10 billion (provided that,
solely for the purpose of calculating Total Common Equity as of such later
Trading Day, the average Closing Price of the Common Stock of such person
shall be deemed to equal the Closing Price of such Common Stock on such
later Trading Day, subject to the last sentence of the definition of "Total
Common Equity"); or
(iii) during any consecutive two-year period, individuals who at the
beginning of such period constituted the Board of Directors (together with
any directors who are members of the Board of Directors on September 17,
1997, and any new directors whose election by such Board of Directors or
whose nomination for election by the stockholders of the Company was
approved by a vote of 66 2/3% of the directors then still in office who
were either directors at the beginning of such period or whose election
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<PAGE> 57
or nomination for election was previously so approved) cease for any reason
to constitute a majority of the Board of Directors then in office.
Any event that would constitute a Change of Control pursuant to clause (i)
or (ii) above (x) but for the proviso thereto shall not be deemed to be a Change
of Control until such time (if any) as the conditions described in such proviso
cease to have been met and (y) if and to the extent resulting from any
restructuring transaction or any sale or assignment of all or substantially all
of the assets and liabilities of the Company to, or merger or consolidation of
the Company with, any Person (any such transaction, a "Restructuring
Transaction") effected at substantially the same time as and in connection with
any of the Permitted Transactions described in clause (i) of the definition of
the term "Permitted Transactions" shall not constitute a Change of Control so
long as the Persons who, immediately prior to the closing of such Restructuring
Transaction and the particular Permitted Transaction being consummated at
substantially the same time and in connection therewith (the "Restructuring
Closing"), were the Beneficial Owners, directly or indirectly, of more than 50%
of the total Voting Stock and more than 50% of the Total Common Equity of the
Company would remain, immediately after such Restructuring Closing (and after
taking into account all issuances of securities in such Restructuring
Transaction and related Permitted Transaction), the Beneficial Owners, directly
or indirectly, of more than 50% of the total Voting Stock and more than 50% of
the Total Common Equity of the Company (or the surviving transferee Person, as
the case may be); provided that, immediately after any transaction or
combination of transactions described in this clause (y), no person (as such
term is used in Sections 13(d) and 14(a) of the Exchange Act and the regulations
thereunder) is the ultimate Beneficial Owner of more than 50% of the total
Voting Stock or more than 50% of the Total Common Equity of the Company (or the
surviving transferee Person, as the case may be) unless such person (as so
defined) was the Beneficial Owner of more than 50% of the total Voting Stock and
more than 50% of the Total Common Equity of the Company immediately before such
transaction or combination of transactions.
"Closing Date" means September 17, 1997, the date on which the Private
Notes were originally issued under the Indenture.
"Closing Price" on any Trading Day with respect to the per share price of
any shares of Capital Stock means the last reported sale price regular way or,
in case no such reported sale takes place on such day, the average of the
reported closing bid and asked prices regular way, in either case on the New
York Stock Exchange or, if such shares of Capital Stock are not listed or
admitted to trading on such exchange, on the principal national securities
exchange on which such shares are listed or admitted to trading or, if not
listed or admitted to trading on any national securities exchange, on the Nasdaq
Stock Market or, if such shares are not listed or admitted to trading on any
national securities exchange or quoted on the Nasdaq Stock Market but the issuer
is a Foreign Issuer (as defined in Rule 3b-4(b) under the Exchange Act) and the
principal securities exchange on which such shares are listed or admitted to
trading is a Designated Offshore Securities Market (as defined in Rule 902(a)
under the Securities Act), the average of the reported closing bid and asked
prices regular way on such principal exchange, or, if such shares are not listed
or admitted to trading on any national securities exchange or quoted on the
Nasdaq Stock Market and the issuer and principal securities exchange do not meet
such requirements, the average of the closing bid and asked prices in the
over-the-counter market as furnished by any New York Stock Exchange member firm
of national standing that is selected from time to time by the Company for that
purpose.
"Common Stock" of any Person means Capital Stock of such Person that does
not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
"Consolidated Adjusted Net Income" and "Consolidated Adjusted Net Loss"
mean, for any period, the net income or net loss, as the case may be, of the
Company and its Restricted Subsidiaries for such period, all as determined on a
Consolidated basis in accordance with generally accepted accounting principles,
adjusted, to the extent included in calculating such net income or net loss, as
the case may be, by excluding without duplication (i) any after-tax gain or loss
attributable to the sale, conversion, or other disposition of assets other
50
<PAGE> 58
than in the ordinary course of business, (ii) any after-tax gains resulting from
the write-up of assets and any loss resulting from the write-down of assets,
(iii) any after-tax gain or loss on the repurchase or redemption of any
securities (including in connection with the early retirement or defeasance of
any Debt), (iv) any foreign exchange gain or loss, (v) all payments in respect
of dividends on shares of Preferred Capital Stock of the Company, (vi) any other
extraordinary, non-recurring or unusual items incurred by the Company or any of
its Restricted Subsidiaries, (vii) the net income (or loss) of any Person
acquired by the Company or any Restricted Subsidiary in a pooling-of-interests
transaction for any period prior to the date of such transaction, and (viii) all
income or losses of Unrestricted Subsidiaries and Persons (other than
Subsidiaries) accounted for by the Company using the equity method of accounting
except, in the case of any such income, to the extent of dividends, interest, or
other cash distributions received directly or indirectly from any such
Unrestricted Subsidiary or Person.
"Consolidated Adjusted Net Income (Loss)" means, for any period, the
Company's Consolidated Adjusted Net Income or Consolidated Adjusted Net Loss for
such period, as applicable.
"Consolidated Debt to Annualized Operating Cash Flow Ratio" means, as at
any date of determination, the ratio of (i) the aggregate amount of Debt of the
Company and the Restricted Subsidiaries on a Consolidated basis outstanding as
at the date of determination to (ii) the Annualized Operating Cash Flow of the
Company for the most recently completed fiscal quarter of the Company.
"Consolidated Interest Expense" of any Person means, for any period, the
aggregate interest expense and fees and other financing costs in respect of Debt
(including amortization of original issue discount and non-cash interest
payments and accruals), the interest component in respect of Capital Lease
Obligations, and any deferred payment obligations of such Person and its
Restricted Subsidiaries, determined on a consolidated basis in accordance with
generally accepted accounting principles and all commissions, discounts, other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing and net costs (including amortizations of discounts) associated with
interest rate swap and similar agreements and with foreign currency hedge,
exchange, and similar agreements and the amount of dividends paid in respect of
Redeemable Stock.
"Consolidated Net Income" and "Consolidated Net Loss" mean, for any period,
the net income or net loss, as the case may be, of the Company and its
Restricted Subsidiaries for such period, all as determined on a Consolidated
basis in accordance with generally accepted accounting principles, adjusted, to
the extent included in calculating such net income or net loss, as the case may
be, by excluding without duplication (i) any after-tax gain or loss attributable
to the sale, conversion, or other disposition of assets other than in the
ordinary course of business, (ii) any after-tax gains resulting from the
write-up of assets and any loss resulting from the write-down of assets, (iii)
any after-tax gain or loss on the repurchase or redemption of any securities
(including in connection with the early retirement or defeasance of any Debt),
(iv) any foreign exchange gain or loss, (v) all payments in respect of dividends
on shares of Preferred Capital Stock of the Company, (vi) any other
extraordinary, non-recurring or unusual items incurred by the Company or any of
its Restricted Subsidiaries, (vii) the net income (or loss) of any Person
acquired by the Company or any Restricted Subsidiary in a pooling-of-interests
transaction for any period prior to the date of such transaction, (viii) all
income or losses of Unrestricted Subsidiaries and Persons (other than
Subsidiaries) accounted for by the Company using the equity method of accounting
except, in the case of any such income, to the extent of dividends, interest, or
other cash distributions received directly or indirectly from any such
Unrestricted Subsidiary or Person, and (ix) the net income (but not net loss) of
any Restricted Subsidiary which is subject to restrictions which prevent the
payment of dividends or the making of distributions to the Company but only to
the extent of such restrictions.
"Consolidated Net Income (Loss)" means, for any period, the Company's
Consolidated Net Income or Consolidated Net Loss for such period, as applicable.
"Consolidated Net Worth" of any Person means the consolidated stockholders'
equity of such Person, determined on a consolidated basis in accordance with
generally accepted accounting principles, less amounts attributable to
Redeemable Stock of such Person; provided that, with respect to the Company, no
effect shall be given to adjustments following the Closing Date to the
accounting books and records of the Company in
51
<PAGE> 59
accordance with Accounting Principles Board Opinions Nos. 16 and 17 (or
successor opinions thereto) or otherwise resulting from the acquisition of
control of the Company by another Person.
"Consolidation" means the consolidation of the accounts of each of the
Restricted Subsidiaries with those of the Company, if and to the extent that the
accounts of each such Restricted Subsidiary would normally be consolidated with
those of the Company in accordance with generally accepted accounting
principles; provided, however, that "Consolidation" shall not include
consolidation of the accounts of any Unrestricted Subsidiary, but the interest
of the Company or any Restricted Subsidiary in any Unrestricted Subsidiary shall
be accounted for as an investment. The term "Consolidated" has a correlative
meaning.
"Credit Facility" means any credit facility (whether a term or revolving
type) of the type customarily entered into with banks, between the Company
and/or any of its Restricted Subsidiaries, on the one hand, and any banks or
other lenders, on the other hand (and any renewals, refundings, extensions, or
replacements of any such credit facility), which credit facility is designated
by the Company as a "Credit Facility" for purposes of the Indenture, and shall
include all such credit facilities in existence on the Closing Date whether or
not so designated, to the extent that the aggregate principal balance of Debt
that is Incurred and outstanding under all Credit Facilities at any time does
not exceed $2.5 billion.
"Debt" means (without duplication), with respect to any Person, whether
recourse is to all or a portion of the assets of such Person and whether or not
contingent, (i) every obligation of such Person for money borrowed, (ii) every
obligation of such Person evidenced by bonds, debentures, notes, or other
similar instruments, including obligations Incurred in connection with the
acquisition of property, assets, or businesses, (iii) every reimbursement
obligation of such Person with respect to letters of credit, bankers'
acceptances, or similar facilities issued for the account of such Person, (iv)
every obligation of such Person issued or assumed as the deferred purchase price
of property or services (but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business which are not overdue or
which are being contested in good faith), (v) every Capital Lease Obligation of
such Person, (vi) the maximum fixed redemption or repurchase price of Redeemable
Stock of such Person at the time of determination plus accrued but unpaid
dividends, (vii) every obligation of such Person under interest rate swap or
similar agreements or foreign currency hedge, exchange, or similar agreements of
such Person, and (viii) every obligation of the type referred to in clauses (i)
through (vii) of another Person and all dividends of another Person the payment
of which, in either case, such Person has Guaranteed or is responsible or
liable, directly or indirectly, as obligor, Guarantor, or otherwise. The amount
of Debt of any Person issued with original issue discount is the face amount of
such Debt less the unamortized portion of the original issue discount of such
Debt at the time of its issuance as determined in conformity with generally
accepted accounting principles, and money borrowed at the time of the Incurrence
of any Debt in order to prefund the payment of interest on such Debt shall be
deemed not to be "Debt."
"Default" means an event that is, or after notice or passage of time, or
both, would be, an Event of Default.
"Digital Mobile" means a radio communications system that employs digital
technology with a multi-site configuration that will permit frequency reuse as
described in this Prospectus.
"Digital Mobile-SMR Operating Cash Flow" means, for any fiscal quarter, (i)
the net income or loss, as the case may be, of the Company and its Restricted
Subsidiaries from its Digital Mobile and Specialized Mobile Radio businesses and
related activities and services for such fiscal quarter, plus (ii) depreciation
and amortization charged with respect thereto for such fiscal quarter, all as
determined on a Consolidated basis in accordance with generally accepted
accounting principles, adjusted, to the extent included in calculating such net
income or loss, by excluding (a) any after-tax gain or loss attributable to the
sale, conversion, or other disposition of assets other than in the ordinary
course of business, (b) any gains resulting from the write-up of assets and any
loss resulting from the write-down of assets, (c) any gain or loss on the
repurchase or redemption of any securities (including in connection with the
early retirement or defeasance of any Debt), (d) any foreign exchange gain or
loss, (e) any other extraordinary, non-recurring or unusual items, and (f) all
income or losses of Persons (other than Subsidiaries) accounted for by the
Company using the equity method of accounting, except, in the case of any such
income, to the extent of dividends, interest, or other cash
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distributions received directly or indirectly from any such Person, plus (iii)
all amounts deducted in calculating net income or loss for such fiscal quarter
in respect of interest expense and other financing costs and all income taxes,
whether or not deferred, applicable to such fiscal quarter, all as determined on
a Consolidated basis in accordance with generally accepted accounting
principles.
"Directed Investment" by the Company or any of its Restricted Subsidiaries
means any Investment for which the cash or property used for such Investment is
received by the Company from the issuance and sale (other than to a Restricted
Subsidiary) on or after June 1, 1997 of shares of its Capital Stock (other than
the Exchangeable Preferred Stock and Redeemable Stock), or any options,
warrants, or other rights to purchase such Capital Stock (other than Redeemable
Stock) designated by the Board of Directors as a "Directed Investment" to be
used for one or more specified investments in the telecommunications business
(including related activities and services) and is so designated and used at any
time within 365 days after the receipt thereof; provided that the aggregate
amount of any such Directed Investments may not at any time exceed 50% of the
aggregate amount of such cash or property received by the Company on or after
June 1, 1997, from any such issuance and sale or capital contribution; and
provided further that any proceeds from any such issuance or sale may not be
used for such an Investment if such proceeds were, prior to being designated for
use as a Directed Investment, (x) used to make a Restricted Payment or (y) used
as the basis for the Incurrence of Debt under clause (i) of the "Limitation on
Consolidated Debt" covenant unless and until the amount of any such Debt (1) is
treated as newly issued Debt and could be Incurred in accordance with the
"Limitation on Consolidated Debt" covenant (other than under clause (i) thereof)
or (2) has been repaid or refinanced with the proceeds of Debt Incurred in
accordance with the "Limitation on Consolidated Debt" covenant (other than under
clause (i) thereof), or (3) has otherwise been repaid and, in the circumstances
described in clauses (1) and (2), the Company delivers to the Trustee a
certificate confirming that the requirements of such clauses have been met.
"Disinterested Director" means, with respect to any proposed transaction
between the Company and an Affiliate thereof, a member of the Board of Directors
who is not an officer or employee of the Company, would not be a party to, or
have a financial interest in, such transaction, and is not an officer, director,
or employee of, and does not have a financial interest in, such Affiliate. For
purposes of this definition, no person would be deemed not to be a Disinterested
Director solely because such person holds Capital Stock of the Company.
"Exchangeable Preferred Stock" means the 13% Series D Exchangeable
Redeemable Preferred Stock of the Company issued on July 21, 1997, and any
shares of Preferred Capital Stock issued in exchange therefor or as payment in
kind dividends thereon.
"Exchange Debenture Indenture" means an indenture (having terms and
conditions substantially as summarized in that certain Registration Statement
No. 333-39411 dated November 12, 1997), prepared in connection with the issuance
by the Company of shares of Exchangeable Preferred Stock, pursuant to which
certain exchange debentures may be issued by the Company in exchange for
outstanding shares of Exchangeable Preferred Stock.
"Fair Market Value" means, for purposes of clause (i) of the "Limitation on
Consolidated Debt" covenant, the price that would be paid in an arm's-length
transaction between an informed and willing seller under no compulsion to sell
and an informed and willing buyer under no compulsion to buy, as determined in
good faith by the Board of Directors, whose determination shall be conclusive if
evidenced by a Board Resolution; provided that (x) the Fair Market Value of any
security registered under the Exchange Act shall be the average of the closing
prices, regular way, of such security for the 20 consecutive trading days
immediately preceding the sale of Capital Stock and (y) in the event the
aggregate Fair Market Value of any other property received by the Company
exceeds $10 million, the Fair Market Value of such property shall be (1) so long
as such a Fair Market Value determination of such property is required to be
made pursuant to the Certificate of Designation for the Exchangeable Preferred
Stock or pursuant to the terms of the Exchange Debenture Indenture, the Fair
Market Value as so determined, which shall be set forth in an Officer's
Certificate delivered to the Trustee, and (2) otherwise, such Fair Market Value
shall be as determined in good faith by the Board of Directors, including a
majority of the Disinterested Directors who are then members of such Board of
Directors, which determination shall be conclusive if evidenced by a Board
Resolution.
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"Guarantee" by any Person means any obligation, contingent or otherwise, of
such Person guaranteeing any Debt of any other Person (the "primary obligor") in
any manner, whether directly or indirectly, and including any obligation of such
Person, (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or to purchase (or to advance or supply funds for the
purchase of) any security for the payment of such Debt, (ii) to purchase
property, securities, or services for the purpose of assuring the holder of such
Debt of the payment of such Debt, or (iii) to maintain working capital, equity
capital, or other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Debt (and "Guaranteed",
"Guaranteeing" and "Guarantor" shall have meanings correlative to the
foregoing); provided, however, that the Guarantee by any Person shall not
include endorsements by such Person for collection or deposit, in either case,
in the ordinary course of business.
"Holder" means a Person in whose name a Note is registered in the Security
Register.
"Incur" means, with respect to any Debt or other obligation of any Person,
to create, issue, incur (by conversion, exchange, or otherwise), assume
(pursuant to a merger, consolidation, acquisition, or other transaction),
Guarantee, or otherwise become liable in respect of such Debt or other
obligation, or the recording, as required pursuant to generally accepted
accounting principles or otherwise, of any such Debt or other obligation on the
balance sheet of such Person (and "Incurrence" and "Incurred", shall have
meanings correlative to the foregoing); provided, however, that a change in
generally accepted accounting principles that results in an obligation of such
Person that exists at such time becoming Debt shall not be deemed an Incurrence
of such Debt; provided further, however, that the accretion of original issue
discount on Debt shall not be deemed to be an Incurrence of Debt. Debt otherwise
Incurred by a Person before it becomes a Subsidiary of the Company shall be
deemed to have been Incurred at the time it becomes such a Subsidiary.
"Investment" by any Person means any direct or indirect loan, advance, or
other extension of credit or capital contribution to (by means of transfers of
cash or other property to others or payments for property or services for the
account or use of others, or otherwise), or purchase or acquisition of Capital
Stock, bonds, notes, debentures, or other securities or evidence of Debt issued
by, any other Person or the designation of a Subsidiary as an Unrestricted
Subsidiary; provided that a transaction will not be an Investment to the extent
it involves (i) the issuance or sale by the Company of its Capital Stock (other
than Redeemable Stock), including options, warrants, or other rights to acquire
such Capital Stock (other than Redeemable Stock) or (ii) a transfer, assignment,
or contribution by the Company of shares of Capital Stock (or any options,
warrants, or rights to acquire Capital Stock), or all or substantially all of
the assets of, any Unrestricted Subsidiary of the Company to another
Unrestricted Subsidiary of the Company.
"Investment Grade" means a rating of at least BBB -- , in the case of S&P,
or Baa3, in the case of Moody's.
"Licenses" means SMR licenses granted by the FCC that entitle the holder to
use the radio channels covered thereby, subject to compliance with FCC rules and
regulations, in connection with its SMR business.
"Lien" means, with respect to any property or assets, any mortgage or deed
of trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien, charge, easement, encumbrance, preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
on or with respect to such property or assets (including any conditional sale or
other title retention agreement having substantially the same economic effect as
any of the foregoing).
"Marketable Securities" means:
(i) securities either issued directly or fully guaranteed or insured
by the government of the United States of America or any agency or
instrumentality thereof having maturities of not more than six months;
(ii) time deposits and certificates of deposit, having maturities of
not more than six months from the date of deposit, of any domestic
commercial bank having capital and surplus in excess of $500 million and
having outstanding long-term debt rated A or better (or the equivalent
thereof) by S&P or Aaa or better (or the equivalent thereof) by Moody's;
and
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(iii) commercial paper rated A-1 or the equivalent thereof by S&P or
P-1 or the equivalent thereof by Moody's, and in each case maturing within
six months.
"Moody's" means Moody's Investors Service, Inc. or, if Moody's Investors
Service, Inc. shall cease rating debt securities having a maturity at original
issuance of at least one year and such ratings business shall have been
transferred to a successor Person, such successor Person; provided, however,
that if Moody's Investors Service, Inc. ceases rating debt securities having a
maturity at original issuance of at least one year and its ratings business with
respect thereto shall not have been transferred to any successor Person, then
"Moody's" shall mean any other national recognized rating agency (other than
S&P) that rates debt securities having a maturity at original issuance of at
least one year and that shall have been designated by the Company by a written
notice given to the Trustee.
"Offer to Purchase" means a written offer (the "Offer") sent by the Company
by first class mail, postage prepaid, to each Holder at his address appearing in
the security register maintained by the Trustee (the "Security Register") on the
date of the Offer offering to purchase the Notes at the purchase price specified
in such Offer (as determined pursuant to the Indenture). Unless otherwise
required by applicable law, the Offer shall specify an expiration date (the
"Expiration Date") of the Offer to Purchase which shall be, subject to any
contrary requirements of applicable law, not less than 30 days or more than 60
days after the date of such Offer and a settlement date (the "Purchase Date")
for purchase of Notes within five Business Days after the Expiration Date. The
Company shall notify the Trustee at least 15 days (or such shorter period as is
acceptable to the Trustee), prior to the mailing of the Offer of the Company's
obligation to make an Offer to Purchase, and the Offer shall be mailed by the
Company or, at the Company's request, by the Trustee, in the name and at the
expense of the Company. The Offer shall contain information concerning the
business of the Company and its Subsidiaries which, at a minimum, shall include
(i) the most recent annual and quarterly financial statements and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
contained in the documents required to be filed with the Trustee pursuant to the
Indenture, (which requirements may be satisfied by delivery of such documents
together with the Offer), (ii) a description of material developments in the
Company's business subsequent to the date of the latest of such financial
statements referred to in clause (i) (including a description of the events
requiring the Company to make the Offer to Purchase), (iii) if required under
applicable law, pro forma financial information concerning, among other things,
the Offer to Purchase and the events requiring the Company to make the Offer to
Purchase, and (iv) any other information required by applicable law to be
included therein. The Offer shall contain all instructions and materials
necessary to enable such holders to tender their Notes pursuant to the Offer to
Purchase. The Offer shall also state:
(i) the section of the Indenture pursuant to which the Offer to
Purchase is being made;
(ii) the Expiration Date and the Purchase Date;
(iii) the aggregate principal amount at Stated Maturity of the
outstanding Notes offered to be purchased by the Company pursuant to the
Offer to Purchase (the "Purchase Amount");
(iv) the purchase price to be paid by the Company for each $1,000
principal amount at Stated Maturity of Notes accepted for payment (as
specified pursuant to the Indenture) (the "Purchase Price");
(v) the Holder may tender all or any portion of the Notes registered
in the name of such Holder and that any portion of Notes tendered must be
tendered in an integral multiple of $1,000 of principal amount at Stated
Maturity;
(vi) the place or places where the Notes are to be surrendered for
tender pursuant to the Offer to Purchase;
(vii) that interest, if any, on any Notes not tendered or tendered but
not purchased by the Company pursuant to the Offer to Purchase will
continue to accrue;
(viii) that on the Purchase Date the Purchase Price will become due
and payable upon each Note being accepted for payment pursuant to the Offer
to Purchase;
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(ix) that each Holder electing to tender Notes pursuant to the Offer
to Purchase will be required to surrender such Notes at the place or places
specified in the Offer prior to the close of business on the Expiration
Date (such Notes being, if the Company or the Trustee so requires, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by the Holder
thereof or his attorney duly authorized in writing);
(x) that Holders will be entitled to withdraw all or any portion of
the Notes tendered if the Company (or its Paying Agent) receives, not later
than the close of business on the Expiration Date, a facsimile transmission
or letter setting forth the name of the Holder, the principal amount at
Stated Maturity of the Notes the Holder tendered, the certificate number of
the Notes the Holder tendered and a statement that such Holder is
withdrawing all or a portion of his tender;
(xi) that the Company shall purchase all such Notes duly tendered and
not withdrawn pursuant to the Offer to Purchase; and
(xii) that in the case of any Holder whose Notes are purchased only in
part, the Company shall execute, and the Trustee shall authenticate and
deliver to the Holder of such Notes without service charge, new Notes of
any authorized denomination as requested by such Holder, in an aggregate
principal amount at Stated Maturity equal to and in exchange for the
unpurchased portion of the aggregate principal amount at Stated Maturity of
the Notes so tendered.
Any Offer to Purchase shall be governed by and effected in accordance with
the Offer for such Offer to Purchase.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary, or an Assistant Secretary, of the Company, and
delivered to the Trustee.
"Operating Cash Flow" means, for any fiscal quarter, (i) the Company's
Consolidated Adjusted Net Income (Loss) plus depreciation and amortization in
respect thereof for such fiscal quarter, plus (ii) all amounts deducted in
calculating Consolidated Adjusted Net Income (Loss) for such fiscal quarter in
respect of interest expense and other financing costs, including dividends paid
in respect of Redeemable Stock, and all income taxes, whether or not deferred,
applicable to such income period, all as determined on a Consolidated basis in
accordance with generally accepted accounting principles. For purposes of
calculating Operating Cash Flow for the fiscal quarter most recently completed
prior to any date on which an action is taken that requires a calculation of the
Operating Cash Flow to Consolidated Interest Expense Ratio or Consolidated Debt
to Annualized Cash Flow Ratio, (x) any Person that is a Restricted Subsidiary on
such date (or would become a Restricted Subsidiary in connection with the
transaction that requires the determination of such ratio) will be deemed to
have been a Restricted Subsidiary at all times during such fiscal quarter, (y)
any Person that is not a Restricted Subsidiary on such date (or would cease to
be a Restricted Subsidiary in connection with the transaction that requires the
determination of such ratio) will be deemed not to have been a Restricted
Subsidiary at any time during such fiscal quarter, and (z) if the Company or any
Restricted Subsidiary shall have in any manner acquired (including through
commencement of activities constituting such operating business) or disposed
(including through termination or discontinuance of activities constituting such
operating business) of any operating business during or subsequent to the most
recently completed fiscal quarter, such calculation will be made on a pro forma
basis on the assumption that such acquisition or disposition had been completed
on the first day of such completed fiscal quarter.
"Operating Cash Flow to Consolidated Interest Expense Ratio" means, as at
any date of determination, the ratio of (i) the Operating Cash Flow of the
Company for the most recently completed fiscal quarter of the Company to (ii)
the Consolidated Interest Expense of the Company and its Restricted Subsidiaries
for the most recently completed fiscal quarter of the Company.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Notes on behalf of the
Company.
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"Permitted Debt" means:
(i) any Debt (including Guarantees thereof) outstanding on the Closing
Date (including the Notes) and any accretion of original issue discount and
accrual of interest with respect to such Debt;
(ii) any Debt outstanding under a Credit Facility;
(iii) any Vendor Financing Debt or any other Debt Incurred to finance
the cost (including the cost of design, development, construction,
improvement, installation, or integration) of equipment, inventory, or
network assets acquired by the Company or any of its Restricted
Subsidiaries after the Closing Date;
(iv) Debt (a) to the Company or (b) to any Restricted Subsidiary;
provided that any event which results in any such Restricted Subsidiary
ceasing to be a Restricted Subsidiary or any subsequent transfer of such
Debt (other than to the Company or another Restricted Subsidiary) shall be
deemed, in each case, to constitute an Incurrence of such Debt not
permitted by this clause (iv);
(v) Debt (a) in respect of performance, surety or appeal bonds
provided in the ordinary course of business, (b) under foreign currency
hedge, interest rate swap, or similar agreements; provided that such
agreements (x) are designed solely to protect the Company or its Restricted
Subsidiaries against fluctuations in foreign currency exchange rates or
interest rates and (y) do not increase the Debt of the obligor outstanding
at any time other than as a result of fluctuations in foreign currency
exchange rates or interest rates or by reason of fees, indemnities and
compensation payable thereunder; and (c) arising from agreements providing
for indemnification, adjustment of purchase price, or similar obligations,
or from Guarantees or letters of credit, surety bonds or performance bonds
securing any obligations of the Company or any Restricted Subsidiary
pursuant to such agreements, in any case Incurred in connection with the
disposition of any business, assets, or Restricted Subsidiary (other than
Guarantees of Debt Incurred by any Person acquiring all or any portion of
such business, assets, or Restricted Subsidiary for the purpose of
financing such acquisition), in a principal amount not to exceed the gross
proceeds actually received by the Company or any Restricted Subsidiary in
connection with such disposition;
(vi) renewals, refundings, or extensions of any Debt referred to in
clause (i) or (iii) above or Incurred pursuant to clause (ii) of the
"Limitation on Consolidated Debt" covenant and any renewals, refundings, or
extensions thereof, plus (x) the amount of any premium reasonably
determined by the Company as necessary to accomplish such renewal,
refunding, or extension and (y) such other fees and expenses of the Company
reasonably incurred in connection with the renewal, refunding, or
extension, provided that such renewal, refunding, or extension shall
constitute Permitted Debt only (a) to the extent that it does not result in
an increase in the aggregate principal amount (or, if such Debt provides
for an amount less than the principal amount thereof to be due and payable
upon a declaration of acceleration of the maturity thereof, in an amount
not greater than such lesser amount) of such Debt (except as permitted by
clause (x) or (y) above), and (b) to the extent such renewed, refunded, or
extended Debt does not have a mandatory redemption date prior to the
mandatory redemption date of the Debt being renewed, refunded, or extended
or have an Average Life shorter than the remaining Average Life of the Debt
being renewed, refunded or extended; and
(vii) Debt payable solely in, or mandatorily convertible into, Capital
Stock (other than Redeemable Stock) of the Company;
(viii) Debt (in addition to Debt permitted under clauses (i) through
(vii) above) in an aggregate principal amount outstanding at any time not
to exceed $450 million.
"Permitted Distribution" of a Person means (i) the exchange by such Person
of Capital Stock (other than Redeemable Stock) for outstanding Capital Stock;
(ii) the redemption, repurchase, defeasance, or other acquisition or retirement
for value of Debt of the Company that is subordinate in right of payment to the
Notes, in exchange for (including any such exchange pursuant to the exercise of
a conversion right or privilege in connection with which cash is paid in lieu of
the issuance of fractional shares or scrip), or out of the proceeds of a
substantially concurrent issue and sale (other than to a Restricted Subsidiary)
of, either (x) Capital Stock of the Company (other than Redeemable Stock) or (y)
Debt of the Company that is
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subordinate in right of payment to the Notes on subordination terms no less
favorable to the Holders of the Notes in their capacities as such than the
subordination terms (or other arrangement) applicable to the Debt that is
redeemed, repurchased, defeased, or otherwise acquired or retired for value,
provided that, in the case of this clause (y), such new Debt does not mature
prior to the Stated Maturity or have a mandatory redemption date prior to the
mandatory redemption date of the Debt being redeemed, repurchased, defeased, or
otherwise acquired or retired for value or have an Average Life shorter than the
remaining Average Life of the Debt being redeemed, repurchased, defeased, or
otherwise acquired or retired for value; and (iii) dividend, penalty, or other
mandated payments, including mandatory repurchases, on or in respect of any
class or series of the Company's Preferred Capital Stock that is authorized and
designated on the Closing Date (i.e., the Class A Preferred Stock, Class B
Preferred Stock, Class C Preferred Stock, and Exchangeable Preferred Stock of
the Company).
"Permitted Investment" means any Investment in Marketable Securities.
"Permitted Transaction" means (i) any transaction pursuant to agreements
(whether or not definitive, and regardless of whether binding or non-binding)
existing on the Closing Date and described in or incorporated by reference into
that certain Offering Memorandum, dated September 10, 1997, pursuant to which
the Private Notes were offered and (ii) any transaction or transactions with any
vendor or vendors of property or materials used in the telecommunications
business (including related activities and services) of the Company or any
Restricted Subsidiary, provided (x) such transactions are in the ordinary course
of business and (y) such vendor does not beneficially own more than 50% of the
voting power of the Voting Stock of the Company.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization, or government or any agency or political
subdivision thereof.
"Preferred Capital Stock," as applied to the Capital Stock of any Person,
means Capital Stock of such Person of any class or classes (however designated)
that ranks prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution, or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
"Redeemable Stock" of any Person means any Capital Stock of such Person
that by its terms or otherwise is (i) required to be redeemed prior to the
Stated Maturity of the Notes, (ii) redeemable at the option of the holder
thereof at any time prior to the Stated Maturity of the Notes, or (iii)
convertible into or exchangeable for Capital Stock referred to in clause (i) or
(ii) above or Debt having a scheduled maturity prior to the Stated Maturity of
the Notes; provided that any Capital Stock that would not constitute Redeemable
Stock but for provisions thereof giving holders thereof the right to require
such Person to repurchase or redeem such Capital Stock upon the occurrence of a
"change of control" occurring prior to the Stated Maturity of the Notes shall
not constitute Redeemable Stock if the "change of control" provisions applicable
to such Capital Stock are no more favorable to the holders of such Capital Stock
than the provisions contained in the "Change of Control" covenant described
herein and such Capital Stock specifically provides that such Person will not
repurchase or redeem any such stock pursuant to such provision prior to the
Company's repurchase of such Notes as are required to be repurchased pursuant to
the "Change of Control" covenant described below; and further provided that the
Exchangeable Preferred Stock of the Company shall not be considered to
constitute Redeemable Stock.
"Restricted Subsidiary" means any Subsidiary of the Company, whether
existing on the Closing Date or created subsequent thereto, designated from time
to time by the Board of Directors as (or otherwise deemed to be) a "Restricted
Subsidiary" in accordance with the "Restricted Subsidiaries" covenant described
below.
"S&P" means Standard & Poor's Ratings Services or, if Standard & Poor's
Ratings Services shall cease rating debt securities having a maturity at
original issuance of at least one year and such ratings business shall have been
transferred to a successor Person, such successor Person; provided, however,
that if Standard & Poor's Ratings Services ceases rating debt securities having
a maturity at original issuance of at least one year and its ratings business
with respect thereto shall not have been transferred to any successor Person,
then "S&P" shall mean any other nationally recognized rating agency (other than
Moody's) that rates debt
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securities having a maturity at original issuance of at least one year and that
shall have been designated by the Company by a written notice given to the
Trustee.
"Specialized Mobile Radio" or "SMR" means a mobile radio communications
system that is operated as described in this Registration Statement.
"Stated Maturity", when used with respect to any Debt security or any
installment of interest thereon, means the date specified in such Debt security
as the fixed date on which the principal of such Debt security or such
installment of interest is due and payable.
"Subsidiary" of any Person means (i) a corporation more than 50% of the
outstanding Voting Stock of which is owned, directly or indirectly, by such
Person or by one or more other Subsidiaries of such Person or by such Person and
one or more Subsidiaries thereof or (ii) any other Person (other than a
corporation) in which such Person, or one or more other Subsidiaries of such
Person or such Person and one or more other Subsidiaries thereof, directly or
indirectly, has at least a majority ownership and power to direct the policies,
management, and affairs thereof.
"Total Common Equity" of any Person means, as of any day of determination
(and as modified for purposes of the definition of "Change of Control"), the
product of (i) the aggregate number of outstanding primary shares of Common
Stock of such Person on such day (which shall not include any options or
warrants on, or securities convertible or exchangeable into, shares of Common
Stock of such Person) and (ii) the average Closing Price of such Common Stock
over the 20 consecutive Trading Days immediately preceding such day. If no such
Closing Price exists with respect to shares of any such class, the value of such
shares for purposes of clause (ii) of the preceding sentence shall be determined
by the Board of Directors in good faith and evidenced by a Board Resolution.
"Total Market Value of Equity" of the Company means, as of any day of
determination, the sum of (i) the product of (a) the aggregate number of
outstanding primary shares of Common Stock of the Company on such day (which
shall not include any options or warrants on, or securities convertible or
exchangeable into, shares of Common Stock of the Company) and (b) the average
Closing Price of such Common Stock over the 20 consecutive Trading Days
immediately preceding such day, plus (ii) the liquidation value of any
outstanding shares of Preferred Capital Stock of the Company on such day. If no
such Closing Price exists with respect to shares of any such class, the value of
such shares for purposes of clause (b) of the preceding sentence shall be
determined by the Board of Directors in good faith and evidenced by a Board
Resolution.
"Trading Day" with respect to a securities exchange or automated quotation
system means a day on which such exchange or system is open for a full day of
trading.
"Trustee" means the trustee under the Indenture.
"U.S. Government Obligation" means (i) any security which is (a) a direct
obligation of the United States of America for the payment of which the full
faith and credit of the United States of America is pledged or (b) an obligation
of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the payment of which is
unconditionally guaranteed as a full faith and credit obligation of the United
States of America, which, in either case, is not callable or redeemable at the
option of the issuer thereof, and (ii) any depository receipt issued by a bank
(as defined in the Securities Act) as custodian with respect to any U.S.
Government Obligation and held by such bank for the account of the holder of
such depository receipt, or with respect to any specific payment of principal of
or interest on any U.S. Government Obligation which is so specified and held,
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of principal or interest evidenced
by such depository receipt.
"Unrestricted Subsidiary" means Unrestricted Subsidiary Funding Company and
any other Subsidiary that is not a Restricted Subsidiary and includes any
Restricted Subsidiary that becomes an Unrestricted Subsidiary in accordance with
the "Restricted Subsidiaries" covenant described below.
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"Vendor Financing Debt" means any Debt owed to (i) a vendor or supplier of
any property or materials used by the Company or its Restricted Subsidiaries in
their telecommunications business, (ii) any Affiliate of such a vendor or
supplier, (iii) any assignee of such a vendor, supplier or Affiliate of such a
vendor or supplier, or (iv) a bank or other financial institution that has
financed or refinanced the purchase of such property or materials from such a
vendor, supplier, Affiliate of such a vendor or supplier, or assignee of such a
vendor or supplier; provided that the aggregate amount of such Debt does not
exceed the sum of (w) the purchase price of such property or materials
(including transportation, installation, warranty and testing charges, as well
as applicable taxes paid, in respect of such property or materials), (x) the
cost of design, development, site acquisition, and construction, (y) any
interest or other financing costs accruing or otherwise payable in respect of
the foregoing, and (z) the cost of any services provided by such vendor,
supplier or Affiliate of such vendor or supplier.
"Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such Person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
"Wholly Owned Restricted Subsidiary" of the Company means a Restricted
Subsidiary all of the outstanding Capital Stock of which (other than directors'
qualifying shares) shall at the time be owned by the Company or by one or more
Wholly Owned Restricted Subsidiaries or by the Company and one or more Wholly
Owned Restricted Subsidiaries.
PRINCIPAL, MATURITY AND INTEREST
The Exchange Senior Notes will be general, unsecured obligations of the
Company, will be limited in aggregate principal amount to $840,000,000 and will
mature on September 15, 2007. The Exchange Senior Notes will be issued in fully
registered form only in denominations of $1,000 and integral multiples thereof.
The Exchange Senior Notes will be senior unsecured obligations of the Company,
will rank pari passu in right of payment with all unsubordinated unsecured
indebtedness of the Company, including, without limitation, the indebtedness
evidenced by the Old Senior Notes, any Private Notes remaining outstanding after
the completion of the Exchange Offer, and the October Notes, and will be senior
to all subordinated obligations of the Company.
Principal of, premium, if any, and interest on the Notes will be payable,
and the Notes may be presented for registration of transfer or exchange, at the
office or agency of the Company maintained for such purpose in the Borough of
Manhattan, the City of New York. At the Company's option, but subject (if
applicable) to the procedures of the DTC as described in "-- Book-Entry;
Delivery and Form," interest, to the extent paid in cash, may be paid by check
mailed to the registered address of Holders of the Notes as shown on the
Security Register. No service charge will be made for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith. The
Trustee will initially act as Paying Agent and Registrar.
Cash interest will not accrue on the Notes prior to September 15, 2002 and
will be payable semi-annually in arrears on each Interest Payment Date,
commencing March 15, 2003, at a rate of 10.65% per annum, to Holders of record
of such Notes at the close of business on the March 1 and September 1 next
preceding the Interest Payment Date (each a "Regular Record Date"). Cash
interest will accrue from the most recent Interest Payment Date to which
interest has been paid or duly provided for or, if no interest has been paid or
duly provided for, from September 15, 2002. Cash interest will be computed on a
basis of a 360-day year of twelve 30-day months. Accretion of original issue
discount will be computed on a basis of a 360-day year of twelve 30-day months,
compounded semi-annually. Certain of the Company's existing debt agreements
restrict the ability of Nextel's subsidiaries to pay dividends to enable the
Company to pay interest on the Notes.
The Notes are not subject to any sinking fund.
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OPTIONAL REDEMPTION
The Notes may be redeemed at any time on or after September 15, 2002, at
the Company's option, in whole or in part, upon not less than 30 or more than 60
days' prior written notice mailed by first class mail to each Holder's last
address as it appears in the Security Register for the Notes, at the redemption
prices (expressed as a percentage of the principal amount at maturity thereof)
set forth below, plus an amount in cash equal to all accrued and unpaid interest
to the redemption date, if redeemed during the twelve-month period beginning
September 15 of each of the years set forth below.
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---------------------------------------------------------- ----------
<S> <C>
2002...................................................... 105.325%
2003...................................................... 102.663
2004 and thereafter....................................... 100.000
</TABLE>
In addition, on or prior to September 15, 2000, the Company may redeem
Notes having an aggregate principal amount of up to 33 1/3% of the aggregate
Accreted Value of the outstanding Notes at a redemption price equal to 110.65%
of the Accreted Value thereof to the redemption date, out of the net proceeds of
one or more sales of at least $125,000,000 of its Capital Stock (other than
Redeemable Stock), provided that such redemption occurs within 180 days after
consummation of such sale.
Selection
In the case of any partial redemption, selection of the Notes for
redemption will be made by the Trustee in compliance with the requirements of
the principal national securities exchange, if any, on which the Notes are
listed or, if the Notes are not listed on a national securities exchange, on a
pro rata basis, by lot or by such other method as the Trustee in its sole
discretion shall deem to be fair and appropriate; provided that no Notes of
$1,000 in principal amount or less shall be redeemed in part. If any Notes are
to be redeemed in part only, the notice of redemption relating to such Notes
shall state the portion of the principal amount thereof to be redeemed. A new
Note in principal amount equal to the unredeemed portion thereof will be issued
in the name of the Holder thereof upon cancellation of the original Note.
CHANGE OF CONTROL
Upon the occurrence of a Change of Control, the Company will be required to
make an Offer to Purchase to each Holder of Notes to repurchase all or any part
of such Holder's Notes at a cash purchase price equal to 101% of the Accreted
Value thereof on any purchase date prior to September 15, 2002 or 101% of the
principal amount thereof, plus accrued and unpaid interest to the date of
purchase on or after September 15, 2002 (the "Change of Control Payment"). The
Offer to Purchase must be made within 30 days following a Change of Control,
must remain open for at least 30 and not more than 60 days, and must comply with
the requirements of Rule 14e-1 under the Exchange Act and any other applicable
securities laws and regulations.
None of the provisions in the Indenture relating to a purchase upon a
Change of Control are waivable by the Board of Directors. The Company could, in
the future, enter into certain transactions, including certain recapitalizations
of the Company, that would not constitute a Change of Control, but would
increase the amount of indebtedness outstanding at such time. If a Change of
Control were to occur, the Company would be obligated to offer to purchase
outstanding shares of the Exchangeable Preferred Stock, as well as to purchase
all Debt which then would be entitled to receive a comparable offer to purchase
by reason of such Change of Control, in addition to making an offer to
repurchase the Notes. There can be no assurance that the Company would have
sufficient funds to pay the purchase price for all Notes that the Company would
be required to purchase if a Change of Control were to occur. In the event that
the Company were required to purchase the outstanding Notes pursuant to an Offer
to Purchase, the Company expects that it would need to seek third-party
financing to the extent it does not have available funds to meet its purchase
obligations. However, there can be no assurance that the Company would be able
to obtain such financing. In addition, the Company's ability to purchase the
Notes may be limited by other then-existing agreements.
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CERTAIN COVENANTS
Limitation on Consolidated Debt
The Company shall not, and shall not permit any Restricted Subsidiary to,
Incur any Debt (including Acquired Debt), other than Permitted Debt, unless (i)
with respect to Debt Incurred under this clause (i), the Debt so Incurred and
outstanding is in an aggregate principal amount that does not exceed 2.25 times,
with respect to Capital Stock sales after June 1, 1997, and on or prior to March
31, 1998, or 2.00 times, with respect to Capital Stock sales after March 31,
1998, the aggregate amount of net cash proceeds (or 80% of the Fair Market Value
of property other than cash) received by the Company after June 1, 1997, from
the issuance and sale (other than to a Restricted Subsidiary) of shares of its
Capital Stock (other than Redeemable Stock), or any options, warrants, or other
rights to purchase such Capital Stock (other than Redeemable Stock), other than
(x) proceeds applied for use as a Directed Investment (unless such designation
has been revoked by the Board of Directors and the Company either abandons its
plans to make such Investment or is able to make such Investment pursuant to the
"Limitation on Restricted Payments" covenant (other than as a Directed
Investment)) and (y) proceeds which have been included in the computation of the
amounts available for Restricted Payments pursuant to clause (c)(2) of the
"Limitation on Restricted Payments" covenant, to the extent the inclusion
thereof was necessary to allow a subsequent Restricted Payment to be made, or
(ii) on the date of such Incurrence, after giving effect to the Incurrence of
such Debt (or Acquired Debt) and the receipt and application of the net proceeds
thereof (and, if the net proceeds of such new Debt are used to acquire a Person
that becomes a Restricted Subsidiary or an operating business of the Company or
a Restricted Subsidiary, to all terms of such acquisition) on a pro forma basis,
the Operating Cash Flow to Consolidated Interest Expense Ratio would equal or
exceed 1.75 to 1.
Limitation on Restricted Payments
The Company shall not, directly or indirectly:
(i) declare or pay any dividend on, or make any distribution to the
holders of, any shares of its Capital Stock (other than dividends or
distributions payable solely in its Capital Stock (other than Redeemable
Stock) or in options, warrants, or other rights to purchase any such
Capital Stock (other than Redeemable Stock));
(ii) purchase, redeem, or otherwise acquire or retire for value, or
permit any Restricted Subsidiary to, directly or indirectly, purchase,
redeem, or otherwise acquire or retire for value (other than value
consisting solely of Capital Stock of the Company that is not Redeemable
Stock or options, warrants, or other rights to acquire such Capital Stock
that is not Redeemable Stock), any Capital Stock of the Company (including
options, warrants, or other rights to acquire such Capital Stock);
(iii) redeem, repurchase, defease, or otherwise acquire or retire for
value, or permit any Restricted Subsidiary to, directly or indirectly,
redeem, repurchase, defease or otherwise acquire or retire for value (other
than value consisting solely of Capital Stock of the Company that is not
Redeemable Stock or options, warrants or other rights to acquire such
Capital Stock that is not Redeemable Stock), prior to any scheduled
maturity, scheduled repayment or scheduled sinking fund payment, any Debt
that is subordinate (whether pursuant to its terms or by operation of law)
in right of payment to the Notes; or
(iv) make, or permit any Restricted Subsidiary, directly or
indirectly, to make, any Investment (other than any Permitted Investment)
in any Person (other than in a Restricted Subsidiary or a Person that
becomes a Restricted Subsidiary as a result of such Investment);
(each of the foregoing actions set forth in clauses (i) through (iv), other than
any such action that is a Permitted Investment or a Permitted Distribution,
being referred to as a "Restricted Payment") unless, at the time of such
Restricted Payment, and after giving effect thereto:
(a) no Default or Event of Default shall have occurred and be
continuing;
(b) except with respect to Investments, after giving effect, on a pro
forma basis, to such Restricted Payment and the Incurrence of any Debt the
net proceeds of which are used to finance such Restricted
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Payment, the Consolidated Debt to Annualized Operating Cash Flow Ratio
would not have exceeded 7.0 to 1; and
(c) after giving effect to such Restricted Payment on a pro forma
basis, the aggregate amount of all Restricted Payments made on or after
February 15, 1994, shall not exceed:
(1) 50% of the Consolidated Net Income (or, in the case of a
Consolidated Net Loss, minus 100% of such deficit) of the Company for
the period (taken as one accounting period) from April 1, 1994, to the
last day of the last fiscal quarter preceding the date of the proposed
Restricted Payment, plus
(2) the aggregate net proceeds, including the fair market value of
property other than cash (as determined by the Board of Directors, whose
good faith determination shall be conclusive and evidenced by a Board
Resolution), received by the Company from the issuance and sale (other
than to a Restricted Subsidiary) on or after February 15, 1994, of
shares of its Capital Stock (other than Redeemable Stock), or any
options, warrants or other rights to purchase such Capital Stock (other
than Redeemable Stock), other than (x) (except for purposes of
determining whether an Investment under clause (iv) above is permitted)
shares of Capital Stock or options, warrants, or other rights to
purchase Capital Stock (or shares issuable upon exercise thereof) issued
or sold in the PowerFone Merger, Questar/AMI Share Exchanges, Motorola
Transaction, and NTT transactions as defined and described in the
Company's prospectus, dated February 9, 1994, relating to the Company's
Senior Redeemable Discount Notes due 2004 and (y) shares of Capital
Stock or options, warrants, or other rights to purchase Capital Stock
(or shares issuable upon exercise thereof), the proceeds of the issuance
of which is used (A) to make a Directed Investment (unless such
designation has been revoked by the Board of Directors and the Company
is able to make such Investment pursuant to this "Limitation on
Restricted Payments" covenant (other than as a Directed Investment)) or
(B) to Incur Debt under clause (i) of the "Limitation on Consolidated
Debt" covenant (unless and until the amount of any such Debt (I) is
treated as newly issued Debt and could be Incurred in accordance with
the "Limitation on Consolidated Debt" covenant (other than under clause
(i) thereof) or (II) has been repaid or refinanced with the proceeds of
Debt Incurred in accordance with the "Limitation on Consolidated Debt"
covenant (other than under clause (i) thereof) or (III) has otherwise
been repaid), plus
(3) the aggregate net proceeds, including the fair market value of
property other than cash (as determined by the Board of Directors, whose
good faith determination shall be conclusive and evidenced by a Board
Resolution), received by the Company from the issuance or sale (other
than to a Restricted Subsidiary) after February 15, 1994, of any Capital
Stock of the Company (other than Redeemable Stock), or any options,
warrants, or other rights to purchase such Capital Stock (other than
Redeemable Stock), upon the conversion of, or exchange for, Debt of the
Company or a Restricted Subsidiary.
The foregoing limitations in this "Limitation on Restricted Payments"
covenant do not limit or restrict the making of any Permitted Distribution,
Permitted Investment, or Directed Investment, and none of a Permitted
Distribution, Permitted Investment, or Directed Investment shall be counted as a
Restricted Payment for purposes of clause (c) above. In addition, the foregoing
limitations do not prevent the Company from (I) paying a dividend on Capital
Stock of the Company within 60 days after the declaration thereof if, on the
date when the dividend was declared, the Company could have paid such dividend
in accordance with the provisions of the Indenture, (II) repurchasing Capital
Stock of the Company (including options, warrants, or other rights to acquire
such Capital Stock) from employees or former employees of the Company or any
Subsidiary thereof for consideration not to exceed $500,000 in the aggregate in
any fiscal year (with repurchases pursuant to this clause (II) not being counted
as Restricted Payments for purposes of clause (c) above) or (III) the
repurchase, redemption, or other acquisition for value of Capital Stock of the
Company to the extent necessary to prevent the loss or secure the renewal or
reinstatement of any license or franchise held by the Company or any of its
Subsidiaries from any governmental agency; or (IV) Investments in
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Unrestricted Subsidiary Funding Company so long as (x) such Investments are
invested in Nextel International and (y) Nextel International is a Subsidiary of
the Company.
Notwithstanding the foregoing limitations in this "Limitation on Restricted
Payments" covenant, the Company is permitted to make any Investment in a Person
that is not (either before or after giving effect thereto) a Subsidiary of the
Company, provided that, immediately after giving effect thereto, the amount
equal to (i) the aggregate amount of all Investments made pursuant to this
paragraph minus (ii) all cash received by the Company or any Restricted
Subsidiary from the sale, transfer or other disposition to a Person that is not
a Subsidiary of the Company of any such Investment (or portion thereof) included
in such aggregate amount (with the amount of cash to be counted for this purpose
not to exceed the amount of such Investment (or portion thereof) so included),
shall not exceed the greater of (x) $250 million and (y) 2% of the Total Market
Value of Equity of the Company as of such time. For purposes of determining the
aggregate amount of Investments referred to in clause (i), the amount of any
Investment shall be deemed to equal the cash portion thereof plus the fair
market value of any non-cash portion thereof (to the extent such portion
constitutes an Investment) at the time such Investment is made, as determined by
the Board of Directors (whose good faith determination shall be conclusive and
evidenced by a Board Resolution).
Notwithstanding the foregoing, no Investment in a Person that immediately
thereafter would be a Restricted Subsidiary shall be counted as a Restricted
Payment. In addition, if any Person in which an Investment is made, which
Investment constitutes a Restricted Payment when made, thereafter becomes a
Restricted Subsidiary, all such Investments previously made in such Person shall
no longer be counted as Restricted Payments for purposes of calculating the
aggregate amount of Restricted Payments pursuant to clause (c) of the third
preceding paragraph or the aggregate amount of Investments pursuant to clause
(i) of the immediately preceding paragraph, in each case to the extent such
Investments would otherwise be so counted.
For purposes of clause (c)(3) above, the net proceeds received by the
Company from the issuance or sale of its Capital Stock either upon the
conversion of, or exchange for, Debt of the Company or any Restricted Subsidiary
shall be deemed to be an amount equal to (i) the sum of (a) the principal amount
or accreted value (whichever is less) of such Debt on the date of such
conversion or exchange and (b) the additional cash consideration, if any,
received by the Company upon such conversion or exchange, less any payment on
account of fractional shares, minus (ii) all expenses incurred in connection
with such issuance or sale. In addition, for purposes of clause (c)(3) above,
the net proceeds received by the Company from the issuance or sale of its
Capital Stock upon the exercise of any options or warrants of the Company or any
Restricted Subsidiary shall be deemed to be an amount equal to (x) the
additional cash consideration, if any, received by the Company upon such
exercise, minus (y) all expenses incurred in connection with such issuance or
sale.
For purposes of this "Limitation on Restricted Payments" covenant, if a
particular Restricted Payment involves a noncash payment, including a
distribution of assets, then such Restricted Payment shall be deemed to be an
amount equal to the cash portion of such Restricted Payment, if any, plus an
amount equal to the fair market value of the non-cash portion of such Restricted
Payment, as determined by the Board of Directors (whose good faith determination
shall be conclusive and evidenced by a Board Resolution).
Restricted Subsidiaries
The Company shall not designate any Restricted Subsidiary as an
Unrestricted Subsidiary, and shall not itself, and shall not permit any
Restricted Subsidiary to, sell, convey, transfer, or otherwise dispose of any
assets, other than in the ordinary course of business, to any Unrestricted
Subsidiary or any Person that becomes an Unrestricted Subsidiary as part of such
transaction, unless, after giving effect to any such action, the assets (not
including any assets so sold, conveyed, transferred, or otherwise disposed of,
other than in the ordinary course of business, to any Unrestricted Subsidiary or
any Person that becomes an Unrestricted Subsidiary as part of such transaction)
and business of the Company and its remaining Restricted Subsidiaries generated
at least 90% of Digital Mobile-SMR Operating Cash Flow in the fiscal quarter of
the Company most recently completed prior to the date of such action.
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The Board of Directors may designate any existing Unrestricted Subsidiary
or any Person that is about to become a Subsidiary of the Company as a
Restricted Subsidiary if, after giving effect to such action (and, if such
designation is made in connection with the acquisition of a Person or an
operating business that is about to become a Subsidiary of the Company, after
giving effect to all terms of such acquisition) on a pro forma basis, on the
date of such action, the Debt, if any, of such Unrestricted Subsidiary or Person
outstanding immediately prior to such designation would have been permitted to
be Incurred (and shall be deemed to have been Incurred) for all purposes of the
Indenture.
Subject to the second preceding paragraph and compliance with the
"Limitation on Restricted Payments" covenant, the Board of Directors may
designate any Restricted Subsidiary as an Unrestricted Subsidiary.
The designation by the Board of Directors of a Restricted Subsidiary as an
Unrestricted Subsidiary shall, for all purposes of the "Limitation on Restricted
Payments" covenant (including clause (b) thereof), be deemed to be a Restricted
Payment of an amount equal to the fair market value of the Company's ownership
interest in such Subsidiary (including, without duplication, such indirect
ownership interest in all Subsidiaries of such Subsidiary), as determined by the
Board of Directors in good faith and evidenced by a Board Resolution.
Notwithstanding the foregoing provisions of this "Restricted Subsidiaries"
covenant, the Board of Directors may not designate a Subsidiary of the Company
to be an Unrestricted Subsidiary if, after such designation, (i) the Company or
any of its other Restricted Subsidiaries (a) provides credit support for, or a
Guarantee of, any Debt of such Subsidiary (including any undertaking, agreement,
or instrument evidencing such Debt) or (b) is directly or indirectly liable for
any Debt of such Subsidiary, (ii) a default with respect to any Debt of such
Subsidiary (including any right which the holders thereof may have to take
enforcement action against such Subsidiary) would permit (upon notice, lapse of
time or both) any holder of any other Debt of the Company or any Restricted
Subsidiary to declare a default on such other Debt or cause the payment thereof
to be accelerated or payable prior to its final scheduled maturity or (iii) such
Subsidiary owns any Capital Stock of, or owns or holds any Lien on any property
of, any Restricted Subsidiary which is not a Subsidiary of the Subsidiary to be
so designated.
The Board of Directors, from time to time, may designate any Person that is
about to become a Subsidiary of the Company as an Unrestricted Subsidiary, and
may designate any newly-created Subsidiary as an Unrestricted Subsidiary, if at
the time such Subsidiary is created it contains no assets (other than such de
minimis amount of assets then required by law for the formation of corporations)
and no Debt. Subsidiaries of the Company that are not designated by the Board of
Directors as Restricted or Unrestricted Subsidiaries shall be deemed to be
Restricted Subsidiaries. Notwithstanding any provisions of this "Restricted
Subsidiaries" covenant, all Subsidiaries of an Unrestricted Subsidiary shall be
Unrestricted Subsidiaries. The Board of Directors shall not change the
designation of a Subsidiary of the Company more than twice in any period of five
years.
Transactions with Affiliates
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, enter into any transaction (including the purchase,
sale, lease, or exchange of any property or the rendering of any service) or
series of related transactions with any Affiliate of the Company on terms that
are less favorable to the Company or such Restricted Subsidiary, as the case may
be, than those that might be obtained at the time of such transaction from a
Person that is not such an Affiliate; provided, however, that this "Transactions
with Affiliates" covenant shall not limit, or be applicable to, (i) any
transaction between Unrestricted Subsidiaries not involving the Company or any
Restricted Subsidiary, (ii) any transaction between the Company and any
Restricted Subsidiary or between Restricted Subsidiaries, or (iii) any Permitted
Transactions. In addition, any transaction or series of related transactions,
other than Permitted Transactions, between the Company or any Restricted
Subsidiary and any Affiliate of the Company (other than a Restricted Subsidiary)
involving an aggregate consideration of $5 million or more must be approved in
good faith by a majority of the Company's Disinterested Directors (of which
there must be at least one) and evidenced by a Board Resolution. For
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purposes of this "Transactions with Affiliates" covenant, any transaction or
series of related transactions between the Company or any Restricted Subsidiary
and an Affiliate of the Company that is approved by a majority of the
Disinterested Directors (of which there must be at least one) and evidenced by a
Board Resolution shall be deemed to be on terms as favorable as those that might
be obtained at the time of such transaction (or series of transactions) from a
Person that is not such an Affiliate and thus shall be permitted under this
"Transactions with Affiliates" covenant.
Activities of the Company and Restricted Subsidiaries
The Company shall not, and shall not permit any Restricted Subsidiary to,
engage in any business other than the telecommunications business and related
activities and services, including such businesses, activities, and services in
which the Company and the Restricted Subsidiaries were engaged on the Closing
Date.
Provision of Financial Information
Whether or not the Company is subject to Section 13(a) or 15(d) of the
Exchange Act, or any successor provision thereto, the Company shall file with
the Commission the annual reports, quarterly reports, and other documents which
the Company would have been required to file with the Commission pursuant to
such Section 13(a) or 15(d) or any successor provision thereto if the Company
were subject thereto, such documents to be filed with the Commission on or prior
to the respective dates (the "Required Filing Dates") by which the Company would
have been required to file them. The Company shall also in any event (i) within
15 days of each Required Filing Date (a) transmit by mail to all Holders, as
their names and addresses appear in the Security Register, without cost to such
Holders, and (b) file with the Trustee copies of the annual reports, quarterly
reports and other documents which the Company would have been required to file
with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act or
any successor provisions thereto if the Company were subject thereto and (ii) if
filing such documents by the Company with the Commission is not permitted under
the Exchange Act, promptly upon written request supply copies of such documents
to any prospective holder. The Trustee's receipt of such reports, information,
and documents shall not constitute constructive notice of any information
contained therein or determinable from information contained therein.
Merger, Sale of Assets, Etc.
The Company (x) shall not, in any transaction or series of related
transactions, merge or consolidate with or into, or sell, assign, convey,
transfer, lease, or otherwise dispose of its properties and assets substantially
as an entirety to, any Person, and (y) shall not permit any of its Restricted
Subsidiaries to enter into any such transaction or series of transactions if
such transaction or series of transactions, in the aggregate, would result in a
sale, assignment, conveyance, transfer, lease, or other disposition of the
properties and assets of the Company and its Restricted Subsidiaries, taken as a
whole, substantially as an entirety to any Person, unless, in each case (x) or
(y), at the time and after giving effect thereto (i) either: (a) if the
transaction or series of transactions is a consolidation of the Company with or
a merger of the Company with or into any other Person, the Company shall be the
surviving Person of such merger or consolidation, or (b) the Person formed by
any consolidation with or merger with or into the Company, or to which the
properties and assets of the Company or the Company and its Restricted
Subsidiaries, taken as a whole, as the case may be, substantially as an entirety
are sold, assigned, conveyed, leased, or otherwise transferred (any such
surviving Person or transferee Person referred to in this clause (b) being the
"Surviving Entity"), shall be a corporation, partnership, or trust organized and
existing under the laws of the United States of America, any state thereof, or
the District of Columbia and shall expressly assume by a supplemental indenture
executed and delivered to the Trustee, in form satisfactory to the Trustee, all
the obligations of the Company under the Notes and the Indenture and, in each
case, the Indenture, as so supplemented, shall remain in full force and effect,
and (ii) immediately before and immediately after giving effect to such
transaction or series of transactions on a pro forma basis (including any Debt
Incurred or anticipated to be Incurred in connection with or in respect of such
transaction or series of transactions), no Default or Event of Default shall
have occurred and be continuing, and (iii) the Consolidated Net Worth of the
Company or the Surviving Entity, as the case may be, shall be equal to or
greater than that of the Company immediately prior to such transaction or series
of transactions; provided,
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however, that the foregoing requirements shall not apply to any transaction or
series of transactions involving the sale, assignment, conveyance, transfer,
lease, or other disposition of the properties and assets by any Restricted
Subsidiary to any other Restricted Subsidiary, or the merger or consolidation of
any Restricted Subsidiary with or into any other Restricted Subsidiary.
In connection with any consolidation, merger, sale, assignment, conveyance,
transfer, lease, or other disposition contemplated by the foregoing provisions,
the Company shall deliver, or cause to be delivered, to the Trustee, in form and
substance reasonably satisfactory to the Trustee, an Officers' Certificate
stating that such consolidation, merger, sale, assignment, conveyance, transfer,
lease, or other disposition and the supplemental indenture in respect thereof
(required under clause (i)(b) of the preceding paragraph) comply with the
requirements of the Indenture and an opinion of counsel stating that the
conditions of the Indenture have been complied with. Each such Officers'
Certificate shall set forth the manner of determination of the Consolidated Net
Worth in accordance with clause (iii) of the preceding paragraph.
For all purposes of the Indenture and the Notes (including the provisions
described in the two immediately preceding paragraphs and the "Limitation on
Consolidated Debt" and "Restricted Subsidiaries" covenants), Subsidiaries of any
Surviving Entity will, upon such transaction or series of transactions, become
Restricted Subsidiaries or Unrestricted Subsidiaries as provided pursuant to the
"Restricted Subsidiaries" covenant, and all Debt of the Surviving Entity and its
Subsidiaries that was not Debt of the Company and its Subsidiaries immediately
prior to such transaction or series of transactions shall be deemed to have been
Incurred upon such transaction or series of transactions.
EVENTS OF DEFAULT
The following constitute Events of Default under the Indenture: (i) failure
to pay principal of (or premium, if any, on) any Note when due; (ii) failure to
pay any interest on any Note when due, continued for 30 days; (iii) default in
the payment of principal of, and premium and interest, if any, on Notes required
to be purchased pursuant to an Offer to Purchase as described under "Change of
Control" when due and payable, or failure to make an Offer to Purchase as
required thereunder; (iv) failure to perform or comply with the provisions
described under "Merger, Sale of Assets, Etc."; (v) failure to perform any other
covenant or agreement of the Company under the Indenture continued for 60 days
after written notice to the Company by the Trustee or Holders of at least 25% in
aggregate principal amount of the outstanding Notes; (vi) failure to pay when
due (subject to any applicable grace period) the principal of, or acceleration
of, any Debt of the Company or any Restricted Subsidiary having an outstanding
principal amount of at least $25,000,000, individually or in the aggregate;
(vii) the rendering of a final judgment or judgments against the Company or any
Restricted Subsidiary in an amount in excess of $25,000,000 which remains
undischarged or unstayed for a period of 60 days after the date on which the
right to appeal has expired; and (viii) certain events of bankruptcy,
insolvency, or reorganization affecting the Company or any Restricted
Subsidiary.
If an Event of Default (other than an Event of Default described in clause
(viii) above) shall occur and be continuing, either the Trustee or the Holders
of at least 25% in aggregate principal amount at Stated Maturity of the
outstanding Notes may accelerate the Accreted Value of all Notes; provided
however that after such acceleration, but before a judgment or decree based on
acceleration, the Holders of a majority in aggregate principal amount at Stated
Maturity of outstanding Notes may, under certain circumstances, rescind and
annul such acceleration if all Events of Default, other than the nonpayment of
the Accreted Value of the Notes, have been cured or waived as provided in the
Indenture. If an Event of Default specified in clause (viii) above occurs, the
Accreted Value of the outstanding Notes will ipso facto become immediately due
and payable without any declaration or other act on the part of the Trustee or
any Holder. For information as to waiver of defaults, see "Modification and
Waiver."
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the Trustee
will be under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the Holders, unless such Holders
shall have offered to the Trustee reasonable security or indemnity. Subject to
such provisions for the indemnification of the Trustee, the Holders of a
majority in aggregate principal amount at Stated Maturity of the outstanding
Notes
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will have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee.
No Holder of any Notes will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such Holder shall
have previously given to the Trustee written notice of a continuing Event of
Default and unless also the Holders of at least 25% in aggregate principal
amount at Stated Maturity of the outstanding Notes shall have made written
request, and offered reasonable security or indemnity, to the Trustee to
institute such proceeding as trustee, and the Trustee shall not have received
from the Holders of a majority in aggregate principal amount at Stated Maturity
of the outstanding Notes a direction inconsistent with such request and shall
have failed to institute such proceeding within 60 days. However, such
limitations do not apply to a suit instituted by a Holder of a Note for
enforcement of payment of the principal of, premium and interest, if any, on
such Note on or after the respective due dates expressed in such Note.
The Company will be required to furnish to the Trustee annually a statement
as to the performance by it of certain of its obligations under the Indenture
and as to any default in such performance.
DEFEASANCE AND COVENANT DEFEASANCE
The Company may elect, at its option at any time, to have the provisions of
the Indenture relating to defeasance and discharge of indebtedness or the
provisions relating to defeasance of certain restrictive covenants in the
Indenture, applied to the outstanding Notes (as a whole and not in part).
Defeasance and Discharge. The Indenture provides that, upon the Company's
exercise of its option to have the provisions relating to defeasance and
discharge applied to the outstanding Notes, the Company will be discharged from
all its obligations with respect to the Notes (except for certain obligations to
exchange or register the transfer of Notes, to replace stolen, lost, or
mutilated Notes, to maintain paying agencies, and to hold moneys for payment in
trust) upon the deposit in trust for the benefit of the Holders of such Notes of
money or U.S. Government Obligations, or both, which, through the payment of
principal and interest in respect thereof in accordance with their terms, will
provide money in an amount sufficient to pay the principal of and any
installment of interest on such Notes on the respective Stated Maturities
thereof in accordance with the terms of the Indenture and the Notes. Such
defeasance or discharge may occur only if, among other things, the Company has
delivered to the Trustee an opinion of counsel to the effect that the Company
has received from, or there has been published by, the Internal Revenue Service
(the "IRS") a ruling, or there has been a change in tax law, in either case to
the effect that Holders of such Notes will not recognize gain or loss for
Federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to Federal income tax on the same amount, in the
same manner, and at the same times as would have been the case if such deposit,
defeasance and discharge were not to occur.
Defeasance of Certain Covenants. The Indenture provides that, upon the
Company's exercise of its option to defease certain restrictive covenants
applied to the outstanding Notes, the Company may omit to comply with certain
restrictive covenants, including those described under "Covenants" and clause
(iii) under "Merger, Sale of Assets, Etc.," and the occurrence of certain Events
of Default, which are described above in clause (iv) (with respect to such
clause (iii)), clause (v) (with respect to such restrictive covenants), clause
(vi) and clause (vii) under "Events of Default," will be deemed not to be or
result in an Event of Default, in each case with respect to such Notes. The
Company, in order to exercise such option, will be required to deposit, in trust
for the benefit of the Holders of such Notes, money or U.S. Government
Obligations, or both, which, through the payment of principal and interest in
respect thereof in accordance with their terms, will provide money in an amount
sufficient to pay the principal of and any installment of interest on such Notes
on the respective Stated Maturities thereof in accordance with the terms of the
Indenture and the Notes. The Company will also be required, among other things,
to deliver to the Trustee an opinion of counsel to the effect that Holders of
such Notes will not recognize gain or loss for Federal income tax purposes as a
result of such deposit and defeasance of certain obligations and will be subject
to Federal income tax on the same amount, in the same manner, and at the same
times as would have been the case if such deposit and defeasance were not to
occur. In the event the Company exercised this option with respect to the
outstanding Notes and such
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Notes were declared due and payable prior to their Stated Maturity because of
the occurrence of any Event of Default or become payable on any redemption date
at the option of the Company, the amount of money and U.S. Government
Obligations so deposited in trust would be sufficient to pay amounts due on such
Notes at the time of their respective Stated Maturities, but may not be
sufficient to pay amounts due on such Notes upon such acceleration or
redemption. In such case, the Company would remain liable for such payments.
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company
and the Trustee with the consent of the Holders of not less than a majority in
aggregate principal amount at Stated Maturity of the outstanding Notes;
provided, however, that no such modification or amendment may, without the
consent of each Holder affected thereby, (i) change the Stated Maturity of the
principal of, or any installment of interest on, any Note, (ii) reduce the
principal amount of, premium, if any, or interest on, any Note, (iii) change the
place or currency of payment of principal or premium, if any, or interest on,
any Note, (iv) impair the right to institute suit for the enforcement of any
payment on or after the Stated Maturity (or, in the case of a redemption, on or
after the Redemption Date) of any Note, (v) reduce the above stated percentage
of outstanding Notes the consent of whose Holders is necessary to modify or
amend the Indenture, (vi) waive a default in the payment of principal of,
premium, if any, or interest on, the Notes, (vii) reduce the percentage of
aggregate principal amount of outstanding Notes the consent of whose Holders is
necessary for waiver of compliance with certain provisions of the Indenture or
for waiver of certain defaults, (viii) modify any provisions of the Indenture
relating to the calculation of Accreted Value of the Notes or (ix) following the
mailing of an Offer to Purchase, modify the provisions of the Indenture with
respect to such Offer to Purchase in a manner adverse to such Holders.
CONCERNING THE TRUSTEE
The Indenture provides that, except during the continuance of an Event of
Default, the Trustee performs only such duties as are specifically set forth in
the Indenture. If an Event of Default has occurred and is continuing, the
Trustee will exercise those rights and powers vested in it under such Indenture
and use the same degree of care and skill in its exercise of such rights and
powers as a prudent person would exercise under the circumstances in the conduct
of such person's own affairs.
The Indenture and provisions of the Trust Indenture Act, incorporated by
reference in the Indenture, contain limitations on the rights of the Trustee
thereunder, should it become a creditor of the Company, to obtain payment of
claims in certain cases or to realize on certain property received by it in
respect of any such claims, as security or otherwise. The Trustee is permitted
to engage in other transactions; provided, however, that if it acquires any
conflicting interest, it must eliminate such conflict or resign.
BOOK-ENTRY; DELIVERY AND FORM
The Exchange Senior Notes will initially be issued in the form of one
global certificate (the "Global Exchange Senior Note"). The Global Exchange
Senior Note will be deposited on the date of the consummation of the Exchange
Offer (the "Exchange Offer Closing Date") with or on behalf of DTC and
registered in the name of DTC or its nominee.
The Company understands that DTC is a limited purpose trust company
organized under the laws of the State of New York, a "banking organization"
within the meaning of New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the Uniform Commercial
Code, and a "Clearing Agency" registered pursuant to the provisions of Section
17A of the Exchange Act. DTC was created to hold securities for its participants
and facilitate the clearance and settlement of securities transactions between
participants through electronic book-entry changes in accounts of its
participants, thereby eliminating the need for physical movement of
certificates. Participants include securities brokers and dealers, banks, trust
companies, and clearing corporations and may include certain other
organizations. Indirect access to the DTC system is available to others such as
banks, brokers, dealers, and trust companies
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that clear through or maintain a custodial relationship with a participant,
either directly or indirectly ("indirect participants").
So long as DTC, or its nominee, is the registered owner or holder of the
Global Exchange Senior Note, DTC or such nominee, as the case may be, will be
considered the sole owner or holder of the Exchange Senior Notes represented by
such Global Exchange Senior Note for all purposes under the Indenture. The
Company understands that pursuant to procedures established by DTC (i) upon
deposit of the Global Exchange Senior Note, DTC will credit the accounts of
participants exchanging the Private Notes for Exchange Senior Notes in amounts
proportionate to the respective beneficial interests in the principal amount of
the Global Exchange Senior Note and (ii) ownership of the Exchange Senior Notes
evidenced by the Global Exchange Senior Note will be shown on, and the transfer
of ownership thereof will be effected only through, records maintained by DTC
(with respect to the interests of DTC's participants), DTC's participants and
DTC's indirect participants. No beneficial owner of an interest in the Global
Exchange Senior Note will be able to transfer that interest except in accordance
with DTC's applicable procedures, in addition to those provided for under the
Indenture.
Payments made with respect to the Global Exchange Senior Note will be made
to DTC or its nominee, as the case may be, as the registered owner thereof. The
Company will have no responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests in the
Global Exchange Senior Note or for maintaining, supervising, or reviewing any
records relating to such beneficial ownership interests.
The Company expects that DTC or its nominee, upon receipt of any payments
made with respect to the Global Exchange Senior Note, will credit participants'
accounts with payments in amounts proportionate to their respective beneficial
interests in the amount of such Global Exchange Senior Note as shown on the
records of DTC or its nominee. The Company also expects that payments by
participants to owners of beneficial interests in such Global Exchange Senior
Note held through such participants will be governed by standing instructions
and customary practices, as is now the case with securities held for the
accounts of customers registered in the names of nominees for such customers.
Such payments will be the responsibility of such participants.
Transfers between participants in DTC will be effected in the ordinary way
in accordance with DTC rules and will be settled in same-day funds.
Although DTC is expected to follow the foregoing procedures in order to
facilitate transfers of interests in the Global Exchange Senior Note among
participants of DTC, it is under no obligation to perform or continue to perform
such procedures, and such procedures may be discontinued at any time. The
Company will have no responsibility for the performance by DTC or its respective
participants or indirect participants of its respective obligations under the
rules and procedures governing their operations.
CERTIFICATED NOTES
If DTC is at any time unwilling or unable to continue as a depositary for
the Global Exchange Senior Note and a successor depositary is not appointed by
the Company within 90 days, the Company will issue a physical certificate for
such Notes ("Certificated Notes") in exchange for the Global Exchange Senior
Note. In addition, if there is an Event of Default under the Notes, DTC may
exchange the Global Exchange Senior Note for Certificated Notes and distribute
such Certificated Notes to its participants. Finally, beneficial owners whose
interests are represented by the Global Exchange Senior Note may request a
physical certificate.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following discussion is a summary of the principal United States
Federal income tax consequences of the Exchange Offer and the purchase,
ownership, and disposition of the Notes and does not purport to be a complete
analysis of all of the potential tax effects of such purchase, ownership, or
disposition. This summary deals only with Notes held as "capital assets" within
the meaning of Section 1221 of the Code by U.S. Holders (as defined herein). It
does not address all aspects of the United States Federal income tax
consequences of purchasing, holding, or disposing of the Notes that may be
relevant to a particular investor in the context of such investor's individual
investment circumstances or to investors in special situations, such as life
insurance companies, financial institutions, tax-exempt organizations, traders
or dealers in securities and currencies, persons holding Notes as a part of a
hedging or conversion transaction or a straddle, U.S. Holders whose "functional
currency" is not the United States dollar, or Non-U.S. Holders (as defined
herein). This summary also does not discuss tax consequences under state, local,
or foreign tax laws. Persons considering the purchase of the Notes should
consult their own tax advisors concerning the application of and the potential
changes in United States Federal income tax laws, as well as the laws of any
state, local, or foreign taxing jurisdiction, to their particular situation.
Furthermore, the discussion below is based upon the provisions of the Code and
existing and proposed Treasury regulations, administrative rulings, and judicial
decisions thereunder as of the date hereof, and such authorities may be
repealed, revoked, or modified, possibly with retroactive effect, so as to
result in United States Federal income tax consequences different from those
discussed below.
As used herein, a "U.S. Holder" means a beneficial owner that is a citizen
or resident of the United States, a corporation, partnership, or other entity
created or organized in or under the laws of the United States or any political
subdivision thereof, or an estate the income of which is subject to United
States Federal income taxation regardless of its source, or a trust over which a
court within the United States is able to exercise primary supervision and as to
which one or more United States fiduciaries have the authority to control all
substantial decisions. An individual may, subject to certain exceptions, be
deemed to be a resident (as opposed to a non-resident alien) of the United
States for certain purposes by virtue of being present in the United States on
at least 31 days in the calendar year and for an aggregate of at least 183 days
during a three-year period ending in the current calendar year (counting for
such purposes all of the days present in the current year, one-third of the days
present in the immediately preceding year, and one-sixth of the days present in
the second preceding year). A "Non-U.S. Holder" is a holder that is not a U.S.
Holder.
ALL PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS
REGARDING THE FEDERAL, STATE, LOCAL, AND FOREIGN TAX CONSEQUENCES OF THE
OWNERSHIP AND DISPOSITION OF THE NOTES.
THE EXCHANGE OF PRIVATE NOTES FOR EXCHANGE SENIOR NOTES
The exchange of Private Notes for Exchange Senior Notes should not be
treated as a taxable transaction for United States Federal income tax purposes
because the Exchange Senior Notes should not be considered to differ materially
in kind or extent from the Private Notes. Rather, the Exchange Senior Notes
received by a U.S. Holder of Private Notes should be treated as a continuation
of the Private Notes in the hands of such U.S. Holder. As a result, there should
be no material Federal income tax consequences to U.S. Holders exchanging
Private Notes for Exchange Senior Notes.
ORIGINAL ISSUE DISCOUNT
Because the Private Notes were issued at a discount from their "stated
redemption price at maturity," the Exchange Senior Notes will have original
issue discount ("OID") for Federal income tax purposes and U.S. Holders of
Exchange Senior Notes will be subject to special tax accounting rules, as
described in greater detail below. U.S. Holders of Exchange Senior Notes should
be aware that they generally must include OID in gross income for Federal income
tax purposes on an annual basis under a constant yield accrual method regardless
of their method of accounting. As a result, U.S. Holders will include OID in
income in advance of the receipt of cash attributable to such income. However,
U.S. Holders of Notes generally will not be required
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to include separately in income cash payments received on such notes, even if
denominated as interest, to the extent such payments do not constitute qualified
stated interest (as defined herein).
The amount of OID, if any, on a debt instrument is the excess of its
"stated redemption price at maturity" over its "issue price," subject to a
statutorily defined de minimis exception. The "stated redemption price at
maturity" of a debt instrument is the sum of its principal amount plus all other
payments required thereunder, other than payments of "qualified stated
interest." For this purpose, "qualified stated interest" generally means stated
interest that is unconditionally payable in cash or in property (other than the
debt instruments of the issuer), at least annually at a single fixed rate during
the entire term of the debt instrument that appropriately takes into account the
length of intervals between payments. Subject to the discussion set forth below
in respect of Nextel's option to redeem the Notes at a percentage of par plus
accrued interest after September 15, 2002, the interest payments on the Notes
will not constitute qualified stated interest, and thus will be included along
with principal in the stated redemption price at maturity of the Notes. As a
result, subject to such discussion, each Note will bear OID in an amount equal
to the excess of (i) the sum of its principal amount and all stated interest
payments, over (ii) its issue price. Because the Exchange Senior Notes should be
treated as a continuation of the Private Notes, the issue price of the Exchange
Senior Notes will be the first price to the public (excluding bond houses and
brokers) at which a substantial amount of Private Notes was sold.
The amount of OID includible in income by an initial U.S. Holder of a Note
is the sum of the "daily portions" of OID with respect to the Note for each day
during the taxable year or portion of the taxable year in which such U.S. Holder
holds such note ("accrued OID"). The daily portion is determined by allocating
to each day in any "accrual period" a pro rata portion of the OID allocable to
that accrual period. The "accrual period" for a Note may be of any length and
may vary in length over the term of the OID note, provided that each accrual
period is no longer than one year and each scheduled payment of principal or
interest occurs on the first day or final day of an accrual period. The amount
of OID allocable to any accrual period is an amount equal to the excess, if any,
of (i) the product of the Note's adjusted issue price at the beginning of such
accrual period and its yield to maturity (determined on the basis of compounding
at the close of each accrual period and properly adjusted for the length of the
accrual period) over (ii) the sum of any qualified stated interest allocable to
the accrual period. OID allocable to a final accrual period is the difference
between the amount payable at maturity (other than a payment of qualified stated
interest) and the adjusted issue price at the beginning of the final accrual
period. Special rules will apply for calculating OID for an initial short
accrual period. The "adjusted issue price" of a Note at the beginning of any
accrual period is equal to its issue price increased by the accrued OID for each
prior accrual period (determined without regard to the amortization of any
acquisition bond premium, as described below) and reduced by any payments made
on such note (other than qualified stated interest) on or before the first day
of the accrual period.
The Notes may be redeemed prior to their stated maturity at the option of
Nextel. For purposes of computing the yield of such instruments, Nextel will be
deemed to exercise or not exercise its option to redeem the Notes in a manner
that minimizes the yield on the Notes. It is not anticipated that Nextel's
ability to redeem prior to stated maturity would affect the yield of a Note.
OPTIONAL REDEMPTION
Nextel's option to redeem the Notes at any time on or after September 15,
2002 at a percentage of par plus accrued but unpaid interest would be treated as
a "call option" within the meaning of the income tax regulations. As a result,
Nextel would be presumed to exercise its option to redeem the Notes if, by
utilizing the date of exercise of the call option as the maturity date and the
amount for which the Notes could be redeemed in accordance with the terms of the
redemption feature, plus interest which, under the terms of the Notes, would
have been paid as of such redemption date, as the stated redemption price at
maturity, the yield on the Notes would be lower than such yield would be if the
option were not exercised.
If Nextel's option to redeem the Notes were presumed exercised on a given
date (the "Presumed Exercise Date"), the Notes would bear OID in an amount equal
to the excess of the amount for which the Notes could be redeemed on the
Presumed Exercise Date (the "Redemption Amount") plus interest which,
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under the terms of the Notes, would have been paid as of such redemption date,
over their issue price, and for purposes of calculating the current inclusion of
such OID, their yield would be computed on their issue date by treating the
Presumed Exercise Date as the maturity date of the Notes and the Redemption
Amount plus interest which, under the terms of the Notes, would have been paid
as of such redemption date, as their stated redemption price at maturity. If
Nextel's option to redeem the Notes were presumed exercised but were not
exercised in fact on the Presumed Exercise Date, the yield and maturity of the
Notes, solely for purposes of the accrual of OID, would be redetermined by
treating the Notes as if the option were exercised and new debt instruments were
issued on the Presumed Exercise Date for an amount of cash equal to the Notes'
adjusted issue price on the Presumed Exercise Date. In such case, although the
matter is not clear, it appears that any payment of stated interest due under
the Notes after the Presumed Exercise Date would represent qualified stated
interest (rather than OID). Qualified stated interest is includible by a U.S.
Holder as interest income in accordance with such U.S. Holder's regular method
of accounting.
In addition to the optional redemption described above, on or prior to
September 15, 2000 Nextel will have the right to redeem up to 33 1/3% in
aggregate Accreted Value of the outstanding Notes out of the net cash proceeds
of any one or more sales of at least $125,000,000 of its Capital Stock.
Furthermore, holders will have the right to tender Notes to Nextel for
redemption should Nextel experience a Change of Control and be required to make
an Offer to Purchase the Notes. Such optional redemption rights should not
affect, and will not be treated by Nextel as affecting, the determination of the
yield or maturity of the Notes. If Nextel exercises its right to redeem the
Notes using the proceeds of a sale of Common Stock, the United States Federal
income tax treatment of the redemption should be governed by the rules for
dispositions generally. See "-- Redemption, Sale or Exchange of Notes" below.
MARKET DISCOUNT ON NOTES
If a U.S. Holder acquires a Note for an amount less than its revised issue
price, the amount of the difference will be treated as "market discount" for
United States Federal income tax purposes, unless such difference is less than a
specified de minimis amount. The Code provides that, for these purposes, the
revised issue price of a Note generally equals its issue price, increased by the
amount of any OID that has accrued on the Note. Under the market discount rules,
a U.S. Holder will be required to treat any principal payment on a Note or any
gain on the sale, exchange, retirement or other disposition of a Note as
ordinary income to the extent of the market discount which has not previously
been included in income and is treated as having accrued on such Note at the
time of such payment or disposition. In addition, the U.S. Holder may be
required to defer, until the maturity of the Note or its earlier disposition in
a taxable transaction, the deduction of all or a portion of the interest expense
on any indebtedness incurred or continued to purchase or carry such Note.
Any market discount will be considered to accrue ratably during the period
from the date of acquisition to the maturity date of the Note, unless the U.S.
Holder elects to accrue on a constant interest method. A U.S. Holder of a Note
may elect to include market discount in income currently as it accrues (on
either a ratable or constant interest method), in which case the rule described
above regarding deferral of interest deductions will not apply. This election to
include market discount in income currently, once made, applies to all market
discount obligations acquired on or after the first taxable year to which the
election applies and may not be revoked without the consent of the IRS.
ACQUISITION PREMIUM; AMORTIZABLE BOND PREMIUM
A U.S. Holder that is treated as acquiring a Note for an amount that is
greater than its adjusted issue price but equal to or less than the sum of all
amounts payable on the Note after the purchase date, other than qualified stated
interest, will be considered to have purchased such Note at an "acquisition
premium." Under the acquisition premium rules, the amount of OID, if any, which
such U.S. Holder must include in its gross income with respect to such Note for
any taxable year will be reduced by the portion of such acquisition premium
properly allocable to such year.
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If immediately after the time a subsequent U.S. Holder acquires a Note, the
U.S. Holder's tax basis in any such Note exceeds the sum of all amounts payable
on the Note after the exchange date or purchase date, other than qualified
stated interest, such excess may constitute "premium" and such U.S. Holder will
not be required to include any OID in income. A U.S. Holder generally may elect
to amortize bond premium over the remaining term of the Note on a constant yield
method. The amount amortized in any year will be treated as a reduction of the
U.S. Holder's interest income, including OID, from the Note.
Bond premium on a Note held by a U.S. Holder that does not make such an
election will decrease the gain or increase the loss otherwise recognized on
disposition of the Note. The election to amortize bond premium on a constant
yield method, once made, applies to all debt obligations held or subsequently
acquired by the electing U.S. Holder on or after the first day of the first
taxable year to which the election applies and may not be revoked without the
consent of the IRS.
REDEMPTION, SALE OR EXCHANGE OF NOTES
In general, upon the redemption, sale, exchange, or retirement of a Note, a
U.S. Holder will recognize gain or loss equal to the difference between the
amount realized upon the redemption, sale, exchange, or retirement (less any
accrued qualified stated interest, not previously taken into account, which will
be taxable as such) and the adjusted tax basis of the Note. The adjusted tax
basis of a U.S. Holder in a Note will, in general, initially equal the cost of
the Note to such U.S. Holder, increased by OID and market discount previously
included in income by the U.S. Holder and reduced by any amortized premium and
any cash payments on the Note other than qualified stated interest received by
such U.S. Holder. Except with respect to accrued market discount, such gain or
loss will be either long-term or short-term capital gain depending on the U.S.
Holder's holding period for the Note at the time of redemption, sale, exchange,
or retirement of the Note.
INFORMATION REPORTING AND BACKUP WITHHOLDING
In general, information reporting requirements will apply to certain
payments of principal, interest, OID, and premium and to the proceeds of sales
of Notes made to U.S. Holders other than certain exempt recipients (such as
corporations). A 31% backup withholding tax will apply to such payments if the
U.S. Holder fails to provide a correct taxpayer identification number or
certification of exempt status or, with respect to certain payments, the U.S.
Holder fails to report in full dividend and interest income and the IRS notifies
the payor of such underreporting.
Any amounts withheld under the backup withholding rules will be allowed as
a credit against such U.S. Holder's United States Federal income tax liability
and may entitle such U.S. Holder to a refund, provided the required information
is furnished to the IRS.
PLAN OF DISTRIBUTION
The Exchange Senior Notes will be offered by Nextel to the holders of the
Private Notes in exchange for the Private Notes pursuant to the Exchange Offer.
Except as described below, a broker-dealer may not participate in the
Exchange Offer in connection with a distribution of the Exchange Senior Notes.
Each broker-dealer that receives Exchange Senior Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Senior Notes. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Senior Notes received
in exchange for Private Notes where such Private Notes were acquired as a result
of market-making activities or other trading activities. The Company has agreed
that for a period of 90 days after the Expiration Date, it will make this
Prospectus, as amended or supplemented, available to any broker-dealer for use
in connection with any such resale subject to the conditions described under
"The Exchange Offer -- Resale of Exchange Senior Notes."
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<PAGE> 82
The Company will not receive any proceeds from any sale of Exchange Senior
Notes by broker-dealers. Exchange Senior Notes received by broker-dealers for
their own account pursuant to the Exchange Offer may be sold from time to time
in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the Exchange Senior Notes or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices, or negotiated
prices. Any such resale may be made directly to purchasers or through brokers or
dealers who may receive compensation in the form of commissions or concessions
from any such broker-dealer and/or the purchasers of any such Exchange Senior
Notes. Any broker or dealer that participates in a distribution of such Exchange
Senior Notes may be deemed to be an "underwriter" within the meaning of the
Securities Act, and any profit on any such resale of Exchange Senior Notes and
any commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a prospectus
a broker-dealer will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act.
The Company has agreed to pay all expenses incident to the Exchange Offer
other than commissions or concessions of any brokers or dealers and expenses of
counsel for the holders of the Exchange Senior Notes and will indemnify the
holders of the Exchange Senior Notes (including any broker-dealers) against
certain liabilities, including liabilities under the Securities Act.
LEGAL MATTERS
The legality of the Exchange Senior Notes offered hereby will be passed
upon for Nextel by Jones, Day, Reavis & Pogue, Dallas, Texas.
EXPERTS
The consolidated financial statements and related financial statement
schedules of Nextel incorporated in this Prospectus by reference from Nextel's
Annual Report on Form 10-K for the year ended December 31, 1996, have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, and have been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
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<PAGE> 83
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Set forth below is a description of certain provisions of the Restated
Certificate of Incorporation, (the "Nextel Charter"), of Nextel Communications,
Inc. ("New Nextel," and, together with "Old Nextel," its predecessor corporation
of the same name, "Nextel"), the Amended and Restated By-laws of Nextel (the
"Nextel By-laws"), and the Delaware General Corporation Law (the "DGCL"). This
description is intended as a summary only and is qualified in its entirety by
reference to the Nextel Charter, the Nextel By-laws, and the DGCL.
Elimination of Liability in Certain Circumstances. The Nextel Charter
provides that, to the full extent provided by law, a director will not be
personally liable to Nextel or its stockholders for or with respect to any acts
or omissions in the performance of his or her duties as a director. The DGCL
provides that a corporation may limit or eliminate a director's personal
liability for monetary damages to the corporation or its stockholders, except
for liability (i) for any breach of the director's duty of loyalty to such
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) for
paying a dividend or approving a stock repurchase in violation of Section 174 of
the DGCL, or (iv) for any transaction from which the director derived an
improper personal benefit.
While Article 7 of the Nextel Charter provides directors with protection
from awards for monetary damages for breaches of the duty of care, it does not
eliminate the directors' duty of care. Accordingly, Article 7 will have no
effect on the availability of equitable remedies such as an injunction or
rescission based on a director's breach of the duty of care. The provisions of
Article 7 as described above apply to officers of Nextel only if they are
directors of Nextel and are acting in their capacity as directors, and does not
apply to officers of Nextel who are not directors.
Indemnification and Insurance. Under the DGCL, directors and officers as
well as other employees and individuals may be indemnified against expenses
(including attorneys' fees), judgments, fines, and amounts paid in settlement in
connection with specified actions, suits, or proceedings, whether civil,
criminal, administrative, or investigative (other than an action by or in the
right of the corporation as a derivative action) if they acted in good faith and
in a manner they reasonably believed to be in or not opposed to the best
interest of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe their conduct was unlawful.
Article 6 of the Nextel Charter and Article VII of the Nextel By-laws
provide to directors and officers indemnification to the full extent provided by
law, thereby affording the directors and officers of Nextel the protections
available to directors and officers of Delaware corporations. Article VII of the
Nextel By-laws also provides that expenses incurred by a person in defending a
civil or criminal action, suit, or proceeding by reason of the fact that he or
she is or was a director or officer shall be paid in advance of the final
disposition of such action, suit, or proceeding upon receipt of an undertaking
by or on behalf of such director or officer to repay such amount if it shall
ultimately be determined that he or she is not entitled to be indemnified by
Nextel as authorized by relevant Delaware law. Nextel has obtained directors and
officers liability insurance providing coverage to its directors and officers.
On September 12, 1991, the Board of Directors of Nextel unanimously adopted
resolutions authorizing Nextel to enter into an Indemnification Agreement (the
"Indemnification Agreement") with each director of Nextel. Nextel has entered
into an Indemnification Agreement with each of its directors and officers.
One of the purposes of the Indemnification Agreements is to attempt to
specify the extent to which persons entitled to indemnification thereunder (the
"Indemnitees") may receive indemnification under circumstances in which
indemnity would not otherwise be provided by the DGCL. Pursuant to the
Indemnification Agreements, an Indemnitee is entitled to indemnification as
provided by Section 145 of the DGCL and to indemnification for any amount which
the Indemnitee is or becomes legally obligated to pay relating to or arising out
of any claim made against such person because of any act, failure to act, or
neglect or
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<PAGE> 84
breach of duty, including any actual or alleged error, misstatement, or
misleading statement, which such person commits, suffers, permits, or acquiesces
in while acting in the Indemnitee's position with Nextel. The Indemnification
Agreements are in addition to and are not intended to limit any rights of
indemnification which are available under the Nextel Charter or the Nextel
By-laws, any policy of insurance or otherwise. Nextel is not required under the
Indemnification Agreements to make payments in excess of those expressly
provided for in the DGCL in connection with any claim against the Indemnitee:
(i) which results in a final, nonappealable order directing the Indemnitee
to pay a fine or similar governmental imposition which Nextel is
prohibited by applicable law from paying; or
(ii) based upon or attributable to the Indemnitee gaining in fact a
personal profit to which he was not legally entitled including, without
limitation, profits made from the purchase and sale by the Indemnitee of
equity securities of Nextel which are recoverable by Nextel pursuant to
Section 16(b) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and profits arising from transactions in publicly traded
securities of Nextel which were effected by the Indemnitee in violation
of Section 10(b) of the Exchange Act or Rule 10b-5 promulgated
thereunder.
In addition to the rights to indemnification specified therein, the
Indemnification Agreements are intended to increase the certainty of receipt by
the Indemnitee of the benefits to which he or she is entitled by providing
specific procedures relating to indemnification.
The Indemnification Agreements are also intended to provide increased
assurance of indemnification by prohibiting Nextel from adopting any amendment
to the Nextel Charter or the Nextel By-laws which would have the effect of
denying, diminishing or encumbering the Indemnitee's rights pursuant thereto or
to the DGCL or any other law as applied to any act or failure to act occurring
in whole or in part prior to the effective date of such amendment.
ITEM 21. EXHIBITS.
Pursuant to Item 601 of Regulation S-K, 17 C.F.R. sec. 229.601(b)(4)(iii)
(A), Nextel has excluded from Exhibit No. 4 instruments defining the rights of
holders of long-term debt with respect to debt that does not exceed 10% of the
total assets of Nextel. Nextel agrees to furnish copies of such instruments to
the Commission upon request.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- ---------------------------------------------------------------------------------------
<C> <C> <S>
4.1 -- Restated Certificate of Incorporation of Nextel (filed on July 31, 1995 as
Exhibits No. 4.1.1 and 4.1.2 to Nextel's Post-Effective Amendment No. 1 on Form
S-8 to Registration Statement No. 33-91716 on Form S-4 (the "Nextel S-8
Registration Statement") and incorporated herein by reference).
4.2 -- Amended and Restated By-laws of Nextel (filed on July 31, 1995 as Exhibit No. 4.2
to the Nextel S-8 Registration Statement and incorporated herein by reference).
4.3 -- Indenture between Old Nextel and The Bank of New York, as Trustee, dated August
15, 1993 (the "August Indenture") (filed on December 23, 1993 as Exhibit No. 4.13
to the Registration Statement on Form S-4 of the Company, No. 33-73388 and
incorporated herein by reference).
4.4 -- Form of Note issued pursuant to the August Indenture (included in Exhibit No.
4.3).
4.5 -- Indenture between Old Nextel and The Bank of New York, as Trustee, dated as of
February 15, 1994 (the "February Indenture") (filed on March 1, 1994 as Exhibit
No.4.1 to the Form 8-K Current Report of Old Nextel dated February 16, 1994 and
incorporated herein by reference).
4.6 -- Form of Note issued pursuant to the February Indenture (included in Exhibit No.
4.5).
4.7 -- Supplemental Indenture, dated as of June 30, 1995 to the August Indenture between
Old Nextel and The Bank of New York (filed on November 14, 1995 as Exhibit 4.1 to
the Quarterly Report on Form 10-Q of Nextel for the quarter ended September 30,
1995 and incorporated herein by reference).
</TABLE>
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<PAGE> 85
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- ---------------------------------------------------------------------------------------
<C> <C> <S>
4.8 -- Supplemental Indenture, dated as of June 30, 1995 to the February Indenture
between Old Nextel and The Bank of New York (filed on November 14, 1995 as Exhibit
4.2 to the Quarterly Report on Form 10-Q of Nextel for the quarter ended September
30, 1995 and incorporated herein by reference).
4.9 -- Second Supplemental Indenture, dated as of July 28, 1995 between ESMR (now known
as Nextel), as Successor by Merger to Old Nextel and The Bank of New York
(relating to the August Indenture) (filed on November 14, 1995 as Exhibit 4.3 to
the Quarterly Report on Form 10-Q of Nextel for the quarter ended September 30,
1995 and incorporated herein by reference).
4.10 -- Second Supplemental Indenture, dated as of July 28, 1995 between ESMR (now known
as Nextel), as Successor by Merger to Old Nextel and The Bank of New York
(relating to the February Indenture) (filed on November 14, 1995 as Exhibit 4.4 to
the Quarterly Report on Form 10-Q of Nextel for the quarter ended September 30,
1995 and incorporated herein by reference).
4.11 -- Third Supplemental Indenture, dated as of June 13, 1997 between Nextel and The
Bank of New York (relating to the August Indenture) (filed on June 17, 1997 as
Exhibit 4.1 to Nextel's Current Report on Form 8-K dated June 17, 1997 (the "June
17 Form 8-K") and incorporated herein by reference).
4.12 -- Third Supplemental Indenture, dated as of June 13, 1997 between Nextel and The
Bank of New York (relating to the February Indenture) (filed on June 17, 1997 as
Exhibit 4.2 to the June 17, Form 8-K and incorporated herein by reference).
4.13 -- Indenture for Senior Redeemable Discount Notes due 2004, dated as of January 13,
between OneComm (formerly called CenCall Communications Corp.) and The Bank of New
York (the "OneComm Indenture") (filed on June 7, 1995 as Exhibit No. 99.2 to Old
Nextel's Registration Statement No. 33-93182 on Form S-4 (the "OneComm S-4
Registration Statement") and incorporated herein by reference).
4.14 -- Form of Note issued pursuant to the OneComm Indenture (included in Exhibit 4.11).
4.15 -- Supplemental Indenture dated as of June 30, 1995 to the OneComm Indenture between
OneComm (formerly called CenCall Communications Corp.) and The Bank of New York
(filed on November 14, 1995 as Exhibit 10.12 to the Form 10-Q for the quarter
ended September 30, 1995 and incorporated herein by reference).
4.16 -- Second Supplemental Indenture dated as of July 28, 1995 between Nextel (formerly
known as ESMR, Inc.), as successor to OneComm, and The Bank of New York (relating
to the OneComm Indenture) (filed on November 14, 1995 as Exhibit 10.13 to the Form
10-Q for the quarter ended September 30, 1995 and incorporated herein by
reference).
4.17 -- Third Supplemental Indenture, dated as of June 13, 1997 between Nextel and The
Bank of New York (relating to the OneComm Indenture) (filed on June 17, 1997 as
Exhibit 4.5 to the June 17 Form 8-K and incorporated herein by reference).
4.18 -- Indenture for Senior Redeemable Discount Notes due 2004, dated as of April 25,
1994, between Dial Call and The Bank of New York (the "2004 Indenture") (filed on
June 7, 1995 as Exhibit 99.4 to the OneComm S-4 Registration Statement and
incorporated herein by reference).
4.19 -- Supplemental Indenture, dated as of August 7, 1995, to the 2004 Indenture between
Dial Call and The Bank of New York (filed on December 5, 1995 as Exhibit 99.3 to
Nextel's Registration Statement No. 33- 80021 on Form S-4 (the "Dial Page S-4
Registration Statement") and incorporated herein by reference).
4.20 -- Second Supplemental Indenture, dated as of January 30, 1996, to the 2004 Indenture
between Dial Page (as successor to Dial Call) and The Bank of New York (filed on
April 1, 1996 as Exhibit 4.26 to the Annual Report on Form 10-K of Nextel for the
year ended December 31, 1995 (the "1995 Form 10-K") and incorporated herein by
reference).
</TABLE>
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<PAGE> 86
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- ---------------------------------------------------------------------------------------
<C> <C> <S>
4.21 -- Third Supplemental Indenture, dated as of January 30, 1996, to the 2004 Indenture
between Nextel (as successor to Dial Page) and The Bank of New York (filed on
April 1, 1996 as Exhibit 4.27 to the 1995 Form 10-K and incorporated herein by
reference).
4.22 -- Fourth Supplemental Indenture, dated as of June 13, 1997 between Nextel and The
Bank of New York (relating to the 2004 Indenture) (filed on June 17, 1997 as
Exhibit 4.3 to the June 17 Form 8-K and incorporated herein by reference).
4.23 -- Indenture for Senior Discount Notes due 2005, dated as of December 22, 1993,
between Dial Call and The Bank of New York (the "2005 Indenture") (filed as
Exhibit 99.3 to the OneComm S-4 Registration Statement and incorporated herein by
reference).
4.24 -- Supplemental Indenture, dated as of April 15, 1994, to the 2005 Indenture between
Dial Call and The Bank of New York (filed on April 1, 1996 as Exhibit 4.29 to the
1995 Form 10-K and incorporated herein by reference).
4.25 -- Supplemental Indenture, dated as of June 30, 1995, to the 2005 Indenture between
Dial Call and The Bank of New York (filed on December 5, 1995 as Exhibit 99.4 to
the Dial Page S-4 Registration Statement and incorporated herein by reference).
4.26 -- Third Supplemental Indenture, dated as of January 30, 1996, to the 2005 Indenture
between Dial Page (as successor to Dial Call) and The Bank of New York (filed on
April 1, 1996 as Exhibit 4.31 to the 1995 Form 10-K and incorporated herein by
reference).
4.27 -- Fourth Supplemental Indenture, dated as of January 30, 1996, to the 2005 Indenture
between Nextel (as successor to Dial Page) and The Bank of New York (filed on
April 1, 1996 as Exhibit 4.32 to the 1995 Form 10-K and incorporated herein by
reference).
4.28 -- Fifth Supplemental Indenture, dated as of June 13, 1997 between Nextel and The
Bank of New York (relating to the 2005 Indenture) (filed on June 17, 1997 as
Exhibit 4.4 to the June 17 Form 8-K and incorporated herein by reference).
4.29 -- Indenture for Senior Discount Notes due 2007, dated as of March 6, 1997, between
McCaw International and The Bank of New York, as Trustee (the "McCaw Indenture")
(filed on March 31, 1997 as Exhibit 4.24 to Nextel's Annual Report on Form 10-K
for the year ended December 31, 1996 (the "1996 Form 10-K") and incorporated
herein by reference).
4.30 -- Form of Note issued pursuant to the McCaw Indenture (included in Exhibit 4.24).
4.31 -- Warrant Agreement, dated as of March 6, 1997, between McCaw International and The
Bank of New York (filed on March 31, 1997 as Exhibit 4.26 to the 1996 Form 10-K
and incorporated herein by reference).
4.32 -- Credit Agreement dated as of September 27, 1996 among Nextel, Nextel Finance
Company, the Restricted Companies party thereto, the Lenders party thereto,
Toronto-Dominion (Texas) Inc., as Administrative Agent, and The Chase Manhattan
Bank, as Collateral Agent (the "Bank Credit Agreement") (filed on October 1, 1996
as Exhibit 99.1 to Nextel's Current Report on Form 8-K dated September 27, 1996
(the "September 27 Form 8-K") and incorporated herein by reference).
4.33 -- Amendment No. 1 dated as of March 24, 1997 to the Bank Credit Agreement (filed on
July 9, 1997 as Exhibit 99.1 to Nextel's Current Report on Form 8-K dated July 9,
1997 (the "July 9 Form 8-K") and incorporated herein by reference).
4.34 -- Amended, Restated and Consolidated Credit Agreement dated as of September 27, 1996
among Nextel, NFC, the Restricted Companies party thereto and the Vendors party
thereto (the "Vendor Credit Agreement") (filed on October 1, 1996 as Exhibit 99.2
to the September 27 Form 8-K and incorporated herein by reference).
4.35 -- Amendment No. 1 dated as of March 24, 1997 to the Vendor Credit Agreement (filed
on July 9, 1997 as Exhibit 99.2 to the July 9 Form 8-K and incorporated herein by
reference)
4.36 -- Option Exercise and Lending Commitment Agreement by and between Nextel and Digital
Radio, L.L.C., dated as of June 16, 1997 (filed on July 9, 1997 as Exhibit 10.1 to
the July 9 Form 8-K and incorporated herein by reference).
</TABLE>
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<PAGE> 87
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- ---------------------------------------------------------------------------------------
<C> <C> <S>
4.37 -- Option Purchase Agreement by and among Nextel and Unrestricted Subsidiary Funding
Company and Option Acquisition, L.L.C., dated as of June 16, 1997 (filed on July
9, 1997 as Exhibit 10.3 to the July 9 Form 8-K and incorporated herein by
reference).
4.38 -- Option Agreement (First New Option) by and between Option Acquisition, L.L.C. and
Nextel, dated as of June 18, 1997 (filed on July 9, 1997 as Exhibit 10.4 to the
July 9 Form 8-K and incorporated herein by reference).
4.39 -- Option Agreement (Second New Option) by and between Option Acquisition, L.L.C. and
Nextel, dated as of June 18, 1997 (filed on July 9, 1997 as Exhibit 10.5 to the
July 9 Form 8-K and incorporated herein by reference).
4.40 -- Certificate of Designation for 13% Series D Exchangeable Preferred Stock (filed on
July 22, 1997 as Exhibit 4.1 to Nextel's Current Report on Form 8-K dated July 21,
1997 and incorporated herein by reference).
4.41 -- Amendment No. 2 dated as of June 3, 1997 to the Bank Credit Agreement (filed on
August 5, 1997 as Exhibit 4.41 to Nextel's Registration Statement No. 333-28461 on
Form S-3 (the "August S-3 Registration Statement") and incorporated herein by
reference).
4.42 -- Amendment No. 2 dated as of June 3, 1997 to the Vendor Credit Agreement (filed on
August 5, 1997 as Exhibit 4.42 to the August S-3 Registration Statement and
incorporated herein by reference).
4.43 -- Amendment No. 3 dated as of August 20, 1997, to the Bank Credit Agreement (filed
on September 5, 1997 as Exhibit 99.1 to Nextel's Current Report on Form 8-K dated
September 5, 1997 (the "September 5 Form 8-K) and incorporated herein by
reference).
4.44 -- Amendment No. 3 to the Vendor Credit Agreement, dated as of August 29, 1997,
amending the Vendor Credit Agreement (filed on September 5, 1997 as Exhibit 99.2
to the September 5 Form 8-K and incorporated herein by reference).
4.45 -- Second Secured Vendor Financing Agreement dated as of August 29, 1997, among
Nextel, Nextel Finance Company and the other Restricted Companies thereto and the
Vendor Lenders thereto (the "Second Vendor Financing Agreement") (filed as Exhibit
99.3 to the September 5 Form 8-K and incorporated herein by reference).
4.46 -- Amendment No. 4 dated as of September 10, 1997 to the Bank Credit Agreement (filed
on September 22, 1997 as Exhibit 4.2 to Nextel's Current Report on Form 8-K dated
September 22, 1997 (the "September 22 Form 8-K") and incorporated herein by
reference).
4.47 -- Amendment No. 4 dated as of September 10, 1997 to the Vendor Credit Agreement
(filed on September 22, 1997 as Exhibit 4.3 to the September 22 Form 8-K and
incorporated herein by reference).
4.48 -- Amendment No. 1 to the Second Vendor Financing Agreement dated as of September 10,
1997 (filed on September 22, 1997 as Exhibit 4.4 to the September 22 Form 8-K and
incorporated herein by reference).
*4.49 -- Indenture between Nextel and Harris Trust and Savings Bank, as Trustee, dated
September 17, 1997.
4.50 -- Form of Nextel's 13% Series D Exchangeable Preferred Stock Certificate (filed on
November 4, 1997 as Exhibit 4.50 to Nextel's Registration Statement No. 333-39411
on Form S-4 (the "Preferred Stock Registration Statement") and incorporated herein
by reference).
4.51 -- Registration Rights Agreement by and among Nextel, Morgan Stanley & Co.
Incorporated and Donaldson, Lufkin & Jenrette Securities Corporation dated July
21, 1997 (filed on November 4, 1997 as Exhibit 4.51 to the Preferred Stock
Registration Statement and incorporated herein by reference).
4.52 -- Form of Indenture related to the Exchange Debentures (the "Exchange Debenture
Indenture") (filed on November 4, 1997 as Exhibit 4.52 to the Preferred Stock
Registration Statement and incorporated herein by reference).
4.53 -- Form of Note to be issued pursuant to the Exchange Debenture Indenture (included
in Exhibit 4.52).
</TABLE>
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<PAGE> 88
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- ---------------------------------------------------------------------------------------
<C> <C> <S>
4.54 -- Indenture between Nextel and Harris Trust and Savings Bank, as Trustee, dated as
of October 22, 1997 (filed on October 23, 1997 as Exhibit 4.1 to Nextel's Current
Report on Form 8-K dated October 23, 1997 (the "October 23 Form 8-K") and
incorporated herein by reference).
4.55 -- Amendment No. 5 dated as of October 9, 1997 to the Bank Credit Agreement (filed on
October 23, 1997 as Exhibit 4.2 to the October 23 Form 8-K and incorporated herein
by reference).
4.56 -- Amendment No. 5 dated as of October 9, 1997 to the Vendor Credit Agreement (filed
on October 23, 1997 as Exhibit 4.3 to the October 23 Form 8-K and incorporated
herein by reference).
4.57 -- Amendment No. 2 dated as of October 9, 1997 to the Second Vendor Financing
Agreement (filed on October 23, 1997 as Exhibit 4.4 to the October 23 Form 8-K and
incorporated herein by reference).
*4.58 -- Registration Rights Agreement dated September 17, 1997 by and among Nextel,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, TD Securities (USA) Inc.,
Lehman Brothers Inc., and NationsBank Capital Markets, Inc.
*5 -- Form of opinion of Jones, Day, Reavis & Pogue as to the validity of the Exchange
Senior Notes.
*8 -- Form of opinion of Jones, Day, Reavis & Pogue regarding tax matters.
*12 -- Statement regarding computation of earnings to fixed charges.
23.1 -- Consent of Jones, Day, Reavis & Pogue (included in Exhibits 5 and 8).
*23.2 -- Consent of Deloitte & Touche LLP.
*24 -- Powers of Attorney.
*25 -- Statement of eligibility under the Trust Indenture Act of 1939 on Form T-1.
*99 -- Letter of Transmittal.
</TABLE>
- ---------------
* Filed herewith.
ITEM 22. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the registrant
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<PAGE> 89
pursuant to Sections 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such posteffective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(d) The undersigned registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Act.
(e) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
(f) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-7
<PAGE> 90
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of McLean, in the
Commonwealth of Virginia, on the 26th day of November, 1997.
NEXTEL COMMUNICATIONS, INC.
By: /S/ THOMAS J. SIDMAN
------------------------------------
THOMAS J. SIDMAN
VICE PRESIDENT AND GENERAL COUNSEL
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
NAME TITLE DATE
- ----------------------------------- ------------------------------------- ------------------
<C> <C> <S>
* Chairman of the Board,
- ----------------------------------- Chief Executive Officer and Director
DANIEL F. AKERSON (Principal Executive Officer)
* Vice President and Chief Financial
- ----------------------------------- Officer (Principal Financial Officer)
STEVEN M. SHINDLER
* Vice President and Controller
- ----------------------------------- (Principal Accounting Officer)
WILLIAM ARENDT
* Vice Chairman of the Board and
- ----------------------------------- Director
MORGAN E. O'BRIEN
* President, Chief Operating Officer
- ----------------------------------- and Director
TIMOTHY M. DONAHUE
* Director
- -----------------------------------
KEITH J. BANE
* Director
- -----------------------------------
CRAIG O. MCCAW
* Director
- -----------------------------------
KEISUKE NAKASAKI
* Director
- -----------------------------------
MASAAKI TORIMOTO
* Director
- -----------------------------------
DENNIS M. WEIBLING
* Director
- -----------------------------------
WILLIAM E. CONWAY, JR.
Director
- -----------------------------------
FRANK M. DRENDEL
/S/ THOMAS J. SIDMAN Attorney-in-fact November 26, 1997
- -----------------------------------
THOMAS J. SIDMAN
</TABLE>
II-8
<PAGE> 91
EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE
- ------- ------------------------------------------------------------------- ---------------
<C> <C> <S> <C>
4.1 -- Restated Certificate of Incorporation of Nextel (filed on July 31, Not applicable
1995 as Exhibits No. 4.1.1 and 4.1.2 to Nextel's Post-Effective
Amendment No. 1 on Form S-8 to Registration Statement No. 33-91716
on Form S-4 (the "Nextel S- 8 Registration Statement") and
incorporated herein by reference)
4.2 -- Amended and Restated By-laws of Nextel (filed on July 31, 1995 as Not applicable
Exhibit 4.2 to the Nextel S-8 Registration Statement and
incorporated herein by reference)
4.3 -- Indenture between Old Nextel and The Bank of New York, as Trustee, Not applicable
dated August 15, 1993 (the "August Indenture") (filed on December
23, 1993 as Exhibit No. 4.13 to the Registration Statement on Form
S-4 of the Company, No. 33-73388 and incorporated herein by
reference)
4.4 -- Form of Note issued pursuant to the August Indenture (included in Not applicable
Exhibit No. 4.3)
4.5 -- Indenture between Old Nextel and The Bank of New York, as Trustee, Not applicable
dated Not applicable as of February 15, 1994 (the "February
Indenture") (filed on March 1, 1994 as Exhibit No. 4.1 to the Form
8-K of Old Nextel dated February 16, 1994 and incorporated herein
by reference)
4.6 -- Form of Note issued pursuant to the February Indenture (included in Not applicable
Exhibit No. 4.5)
4.7 -- Supplemental Indenture, dated as of June 30, 1995 to the August Not applicable
Indenture Not applicable between Old Nextel and The Bank of New
York (filed on November 14, 1995 as Exhibit 4.1 to the Quarterly
Report on Form 10-Q of Nextel for the quarter ended September 30,
1995 and incorporated herein by reference)
4.8 -- Supplemental Indenture, dated as of June 30, 1995 to the February Not applicable
Not applicable Indenture between Old Nextel and The Bank of New
York (filed on November 14, 1995 as Exhibit 4.2 to the Quarterly
Report on Form 10-Q of Nextel for the quarter ended September 30,
1995 and incorporated herein by reference)
4.9 -- Second Supplemental Indenture, dated as of July 28, 1995 between Not applicable
ESMR Not applicable (now known as Nextel), as Successor by Merger
to Old Nextel and The Bank of New York (relating to the August
Indenture) (filed on November 14, 1995 as Exhibit 4.3 to the
Quarterly Report on Form 10-Q of Nextel for the quarter ended
September 30, 1995 and incorporated herein by reference)
4.10 -- Second Supplemental Indenture, dated as of July 28, 1995 between Not applicable
ESMR (now known as Nextel), as Successor by Merger to Old Nextel
and The Bank of New York (relating to the February Indenture)
(filed on November 14, 1995 as Exhibit 4.4 to the Quarterly Report
on Form 10-Q of Nextel for the quarter ended September 30, 1995 and
incorporated herein by reference)
4.11 -- Third Supplemental Indenture, dated as of June 13, 1997 between Not applicable
Nextel and The Bank of New York (relating to the August Indenture)
(filed on June 17, 1997 as Exhibit 4.1 to Nextel's Current Report
on Form 8-K dated June 17, 1997 (the "June 17 Form 8-K") and
incorporated herein by reference)
4.12 -- Third Supplemental Indenture, dated as of June 13, 1997 between Not applicable
Nextel and The Bank of New York (relating to the February
Indenture) (filed on June 17, 1997 as Exhibit 4.2 to the June 17,
Form 8-K and incorporated herein by reference)
</TABLE>
<PAGE> 92
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE
- ------- ------------------------------------------------------------------- ---------------
<C> <C> <S> <C>
4.13 -- Indenture for Senior Redeemable Discount Notes due 2004, dated as Not applicable
of January 13, 1994, between OneComm (formerly called CenCall
Communications Corp.) and The Bank of New York (the "OneComm
Indenture") (filed on June 7, 1995 as Exhibit No. 99.2 to Old
Nextel's Registration Statement No. 33-93182 on Form S-4 (the
"OneComm S-4 Registration Statement") and incorporated herein by
reference)
4.14 -- Form of Note issued pursuant to the OneComm Indenture (included in Not applicable
Exhibit 4.11)
4.15 -- Supplemental Indenture dated as of June 30, 1995 to the OneComm Not applicable
Indenture between OneComm (formerly called CenCall Communications
Corp.) and The Bank of New York (filed on November 14, 1995 as
Exhibit 10.12 to the Form 10-Q for the quarter ended September 30,
1995 and incorporated herein by reference)
4.16 -- Second Supplemental Indenture dated as of July 28, 1995 between Not applicable
Nextel (formerly known as ESMR, Inc.), as successor to OneComm, and
The Bank of New York (relating to the OneComm Indenture) (filed on
November 14, 1995 as Exhibit 10.13 to the Form 10-Q for the quarter
ended September 30, 1995 and incorporated herein by reference)
4.17 -- Third Supplemental Indenture, dated as of June 13, 1997 between Not applicable
Nextel Not applicable and The Bank of New York (relating to the
February Indenture) (filed on June 17, 1997 as Exhibit 4.2 to the
June 17, Form 8-K and incorporated herein by reference)
4.18 -- Indenture for Senior Redeemable Discount Notes due 2004, dated as Not applicable
of April 25, 1994, between Dial Call and The Bank of New York (the
"2004 Indenture") (filed on June 7, 1995 as Exhibit 99.4 to the
OneComm S-4 Registration Statement and incorporated herein by
reference)
4.19 -- Supplemental Indenture, dated as of August 7, 1995, to the 2004 Not applicable
Indenture between Dial Call and The Bank of New York (filed on
December 5, 1995 as Exhibit 99.3 to Nextel's Registration Statement
No. 33-80021 on Form S-4 (the "Dial Page S-4 Registration
Statement") and incorporated herein by reference)
4.20 -- Second Supplemental Indenture, dated as of January 30, 1996, to the Not applicable
2004 Indenture between Dial Page (as successor to Dial Call) and
The Bank of New York (filed on April 1, 1996 as Exhibit 4.26 to the
Annual Report on Form 10-K of Nextel for the year ended December
31, 1995 (the "1995 Form 10-K") and incorporated herein by
reference)
4.21 -- Third Supplemental Indenture, dated as of January 30, 1996, to the Not applicable
2004 Indenture between Nextel (as successor to Dial Page) and The
Bank of New York (filed on April 1, 1996 as Exhibit 4.27 to the
1995 Form 10-K and incorporated herein by reference)
4.22 -- Fourth Supplemental Indenture, dated as of June 13, 1997 between Not applicable
Nextel and The Bank of New York (relating to the 2004 Indenture)
(filed on June 17, 1997 as Exhibit 4.3 to the June 17 Form 8-K and
incorporated herein by reference)
4.23 -- Indenture for Senior Discount Notes due 2005, dated as of December Not applicable
22, 1993, between Dial Call and The Bank of New York (the "2005
Indenture") (filed as Exhibit 99.3 to the OneComm S-4 Registration
Statement and incorporated herein by reference)
4.24 -- Supplemental Indenture, dated as of April 15, 1994, to the 2005 Not applicable
Indenture between Dial Call and The Bank of New York (filed on
April 1, 1996 as Exhibit 4.29 to the 1995 Form 10-K and
incorporated herein by reference)
</TABLE>
<PAGE> 93
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE
- ------- ------------------------------------------------------------------- ---------------
<C> <C> <S> <C>
4.25 -- Supplemental Indenture, dated as of June 30, 1995, to the 2005 Not applicable
Indenture between Dial Call and The Bank of New York (filed on
December 5, 1995 as Exhibit 99.4 to the Dial Page S-4 Registration
Statement and incorporated herein by reference)
4.26 -- Third Supplemental Indenture, dated as of January 30, 1996, to the Not applicable
2005 Indenture between Dial Page (as successor to Dial Call) and
The Bank of New York (filed on April 1, 1996 as Exhibit 4.31 to the
1995 Form 10-K and incorporated herein by reference)
4.27 -- Fourth Supplemental Indenture, dated as of January 30, 1996, to the Not applicable
2005 Indenture between Nextel (as successor to Dial Page) and The
Bank of New York (filed on April 1, 1996 as Exhibit 4.32 to the
1995 Form 10-K and incorporated herein by reference)
4.28 -- Fifth Supplemental Indenture, dated as of June 13, 1997 between Not applicable
Nextel and The Bank of New York (relating to the 2005 Indenture)
(filed on June 17, 1997 as Exhibit 4.4 to the June 17 Form 8-K and
incorporated herein by reference)
4.29 -- Indenture for Senior Discount Notes due 2007, dated as of March 6, Not applicable
1997, between McCaw International and The Bank of New York, as
Trustee (the "McCaw Indenture") (filed on March 31, 1997 as Exhibit
4.24 to Nextel's Annual Report on Form 10-K for the year ended
December 31, 1996 (the "1996 Form 10-K") and incorporated herein by
reference)
4.30 -- Form of Note issued pursuant to the McCaw Indenture (included in
Exhibit 4.24)
4.31 -- Warrant Agreement, dated as of March 6, 1997, between McCaw Not applicable
International and The Bank of New York (filed on March 31, 1997 as
Exhibit 4.26 to the 1996 Form 10-K and incorporated herein by
reference)
4.32 -- Credit Agreement dated as of September 27, 1996 among Nextel, NFC, Not applicable
the Restricted Companies party thereto, the Lenders party thereto,
Toronto-Dominion (Texas) Inc., as Administrative Agent, and The
Chase Manhattan Bank, as Collateral Agent (the "Bank Credit
Agreement") (filed on October 1, 1996 as Exhibit 99.1 to Nextel's
Current Report on Form 8-K dated September 27, 1996 (the "September
27 Form 8-K") and incorporated herein by reference)
4.33 -- Amendment No. 1 dated as of March 24, 1997 to the Bank Credit Not applicable
Agreement (filed on July 9, 1997 as Exhibit 99.1 to Nextel's
Current Report on Form 8-K dated July 9, 1997 (the "July 9 Form
8-K") and incorporated herein by reference)
4.34 -- Amended, Restated and Consolidated Credit Agreement dated as of Not applicable
September 27, 1996 among Nextel, Nextel Finance Company, the
Restricted Companies party thereto and the Vendors party thereto
(the "Vendor Credit Agreement") (filed on October 1, 1996 as
Exhibit 99.2 to the September 27 Form 8-K and incorporated herein
by reference)
4.35 -- Amendment No. 1 dated as of March 24, 1997 to the Vendor Credit Not applicable
Agreement (filed on July 9, 1997 as Exhibit 99.2 to the July 9 Form
8-K and incorporated herein by reference)
4.36 -- Option Exercise and Lending Commitment Agreement by and between Not applicable
Nextel and Digital Radio, L.L.C., dated as of June 16, 1997 (filed
on July 9, 1997 as Exhibit 10.1 to the July 9 Form 8-K and
incorporated herein by reference)
4.37 -- Option Purchase Agreement by and among Nextel and Unrestricted Not applicable
Subsidiary Funding Company and Option Acquisition, L.L.C., dated as
of June 16, 1997 (filed on July 9, 1997 as Exhibit 10.3 to the July
9 Form 8-K and incorporated herein by reference)
</TABLE>
<PAGE> 94
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE
- ------- ------------------------------------------------------------------- ---------------
<C> <C> <S> <C>
4.38 -- Option Agreement (First New Option) by and between Option Not applicable
Acquisition, L.L.C. and Nextel, dated as of June 18, 1997 (filed on
July 9, 1997 as Exhibit 10.4 to the July 9 Form 8-K and
incorporated herein by reference)
4.39 -- Option Agreement (Second New Option) by and between Option Not applicable
Acquisition, L.L.C. and Nextel, dated as of June 18, 1997 (filed on
July 9, 1997 as Exhibit 10.4 to the July 9 Form 8-K and
incorporated herein by reference)
4.40 -- Certificate of Designation for 13% Series D Exchangeable Preferred Not applicable
Stock (filed on July 22, 1997 as Exhibit 4.1 to Nextel's Current
Report on Form 8-K dated July 21, 1997 and incorporated herein by
reference)
4.41 -- Amendment No. 2 dated as of June 3, 1997 to the Bank Credit Not applicable
Agreement (filed on August 5, 1997 as Exhibit 4.41 to Nextel's
Registration Statement No. 333-28461 on Form S-3 (the "August S-3
Registration Statement") and incorporated herein by reference)
4.42 -- Amendment No. 2 dated as of June 3, 1997 to the Vendor Credit Not applicable
Agreement (filed on August 5, 1997 as Exhibit 4.42 to the August
S-3 Registration Statement and incorporated herein by reference)
4.43 -- Amendment No. 3 dated as of August 20, 1997, to the Bank Credit Not applicable
Agreement (filed on September 5, 1997 as Exhibit 99.1 to Nextel's
Current Report on Form 8-K dated September 5, 1997 (the "September
5 Form 8-K") and incorporated herein by reference)
4.44 -- Amendment No. 3 dated as of August 29, 1997, to the Vendor Credit Not applicable
Agreement (filed on September 5, 1997 as Exhibit 99.2 to the
September 5 Form 8-K and incorporated herein by reference)
4.45 -- Second Secured Vendor Financing Agreement dated as of August 29, Not applicable
1997 among Nextel, Nextel Finance Company and the other Restricted
Companies thereto and the Vendor Lenders thereto (the "Second
Secured Vendor Financing Agreement") (filed as Exhibit 99.3 to the
September 5 Form 8-K and incorporated herein by reference)
4.46 -- Amendment No. 4 dated as of September 10, 1997 to the Bank Credit Not applicable
Agreement (filed on September 22, 1997, as Exhibit 4.2 to Nextel's
Current Report on Form 8-K dated September 22, 1997 (the "September
22 Form 8-K") and incorporated herein by reference)
4.47 -- Amendment No. 4 dated as of September 10, 1997 to the Vendor Credit Not applicable
Agreement (filed on September 22, 1997, as Exhibit 4.3 to the
September 22 Form 8-K and incorporated herein by reference)
4.48 -- Amendment No. 1 dated as of September 10, 1997 to the Second Vendor Not applicable
Financing Agreement (filed on September 22, 1997 as Exhibit 4.4 to
the September 22 Form 8-K and incorporated herein by reference)
*4.49 -- Indenture between Nextel and Harris Trust and Savings Bank, as
Trustee, dated September 17, 1997.
4.50 -- Form of Nextel's 13% Series D Exchangeable Preferred Stock Not applicable
Certificate (filed on November 4, 1997 as Exhibit 4.50 to Nextel's
Registration Statement No. 333-39411 on Form S-4 (the "Preferred
Stock Registration Statement) and incorporated herein by reference)
4.51 -- Registration Rights Agreement by and among Nextel, Morgan Stanley & Not applicable
Co. Incorporated and Donaldson, Lufkin & Jenrette Securities
Corporation dated July 21, 1997 (filed on November 4, 1997 as
Exhibit 4.51 to the Preferred Stock Registration Statement and
incorporated herein by reference)
4.52 -- Form of Indenture related to the Exchange Debentures (the "Exchange Not applicable
Debenture Indenture") (filed on November 4, 1997 as Exhibit 4.52 to
the Preferred Stock Registration Statement and incorporated herein
by reference)
</TABLE>
<PAGE> 95
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE
- ------- ------------------------------------------------------------------- ---------------
<C> <C> <S> <C>
4.53 -- Form of Note to be issued pursuant to the Exchange Debenture
Indenture (included in Exhibit 4.52).
4.54 -- Indenture between Nextel and Harris Trust and Savings Bank, as Not applicable
Trustee, dated as of October 22, 1997 (filed on October 23, 1997 as
Exhibit 4.1 to Nextel's Current Report on Form 8-K dated October
23, 1997 (the "October 23 Form 8-K") and incorporated herein by
reference)
4.55 -- Amendment No. 5 dated as of October 9, 1997 to the Bank Credit Not applicable
Agreement Not Applicable (filed on October 23, 1997 as Exhibit 4.2
to the October 23 Form 8-K and incorporated herein by reference)
4.56 -- Amendment No. 5 dated as of October 9, 1997 to the Vendor Credit Not applicable
Agreement (filed on October 23, 1997 as Exhibit 4.3 to the October
23 Form 8-K and incorporated herein by reference)
4.57 -- Amendment No. 2 dated as of October 9, 1997 to the Second Vendor Not applicable
Financing Agreement (filed on October 23, 1997 as Exhibit 4.4 to
the October 23 Form 8-K and incorporated herein by reference)
*4.58 -- Registration Rights Agreement dated September 17, 1997 by and among
Nextel, Merrill Lynch, Pierce, Fenner & Smith Incorporated, TD
Securities (USA) Inc., Lehman Brothers Inc., and NationsBank
Capital Markets, Inc.
*5 -- Form of opinion of Jones, Day, Reavis & Pogue as to the validity of
the Exchange Senior Notes.
*8 -- Form of opinion of Jones, Day, Reavis & Pogue regarding tax
matters.
*12 -- Statement regarding computation of earnings to fixed charges.
23.1 -- Consent of Jones, Day, Reavis & Pogue (included in Exhibits 5 and
8).
*23.2 -- Consent of Deloitte & Touche LLP.
*24 -- Powers of Attorney.
*25 -- Statement of eligibility under the Trust Indenture Act of 1939 on
Form T-1.
*99 -- Letter of Transmittal.
</TABLE>
- ---------------
* Filed herewith.
<PAGE> 1
EXHIBIT 4.49 "TIE SHEET"
Nextel Communications, Inc.
Reconciliation and tie between Trust Indenture Act
of 1939 and Indenture, dated as of September 17, 1997
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
- -------------- ---------
<S> <C>
Section 310(a)(1) ............................... 609
(a)(2) ............................... 609
(a)(3) ............................... Not Applicable
(a)(4) ............................... Not Applicable
(a)(5) ............................... 609
(b) ............................... 608, 610
Section 311(a) ............................... 613
(b) ............................... 613
(c) ............................... 613
Section 312(a) ............................... 701, 702
(b) ............................... 702(b)
(c) ............................... 702(c)
Section 313(a) ............................... 703
(b) ............................... 703
(c) ............................... 703
(d) ............................... 703(b)
Section 314(a)(1)-(3) ............................... 704
(a)(4) ............................... 1017
(b) ............................... Not Applicable
(c)(1) ............................... 102, 401, 1204
(c)(2) ............................... 102, 401, 1204
(c)(3) ............................... 1204
(d) ............................... Not Applicable
(e) ............................... 102
Section 315(a) ............................... 601
(b) ............................... 602
(c) ............................... 601
(d) ............................... 601
(e) ............................... 514
Section 316(a)(1)(A) ............................... 512
(a)(1)(B) ............................... 513
(a)(2) ............................... Not Applicable
(b) ............................... 508
(c) ............................... 104
Section 317(a)(1) ............................... 503
(a)(2) ............................... 504
(b) ............................... 1003
Section 318(a) ............................... 107
</TABLE>
Note: This reconciliation and tie shall not, for any purpose, be
deemed to be a part of the Indenture.
i
<PAGE> 2
EXHIBIT 4.49
Nextel Communications, Inc.
TO
Harris Trust and Savings Bank
Trustee
----------------
Indenture
Dated as of September 17, 1997
----------------
Senior Redeemable Discount Notes due 2007
<PAGE> 3
INDENTURE, dated as of September 17, 1997, between NEXTEL
Communications, Inc., a Delaware corporation (herein called the "Company"),
having its principal office at 1505 Farm Credit Dr., McLean, Virginia 22102 and
Harris Trust and Savings Bank, an Illinois banking corporation, as Trustee
(herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its Senior
Redeemable Discount Notes due 2007 of substantially the tenor and amount
hereinafter set forth, and to provide therefor the Company has duly authorized
the execution and delivery of this Indenture.
All things necessary to make the Securities, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities, as
follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. DEFINITIONS
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) whenever this Indenture requires that a particular ratio or amount
be calculated with respect to a specified period after giving effect to
certain transactions or events on a pro forma basis, such calculation will
be made as if
<PAGE> 4
the transactions or events occurred on the first day of such period, unless
otherwise specified herein, and all accounting terms not otherwise defined
herein have the meanings assigned to them in accordance with generally
accepted accounting principles (whether or not such is indicated herein),
and, except as otherwise herein expressly provided, the term "generally
accepted accounting principles" with respect to any computation required or
permitted hereunder shall mean such accounting principles as are generally
accepted at the date of such computation;
(4) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or Section, as the case may
be, of this Indenture;
(5) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision; and
(6) each reference herein to a rule or form of the Commission shall
mean such rule or form and any rule or form successor thereto, in each case
as amended from time to time.
Certain terms, used principally in Article Six, are defined in that
Article.
Whenever this Indenture requires that a particular ratio or amount be
calculated with respect to a specified period after giving effect to certain
transactions or events on a pro forma basis, such calculation shall be made as
if the transactions or events occurred on the first day of such period, unless
otherwise specified.
"Accreted Value" of any Outstanding Security as of or to any date of
determination means an amount equal to the sum of (i) the issue price of
such Security as determined in accordance with Section 1273 of the Code
plus (ii) the aggregate of the portions of the original issue discount (the
excess of the amounts considered as part of the "stated redemption price at
maturity" of such Security within the meaning of Section 1273(a)(2) of the
Code or any successor provisions, whether denominated as principal or
interest, over the issue price of such Security) that shall theretofore
have accrued pursuant to Section 1272 of the Code (without regard to
Section 1272(a)(7) of the Code) from the date of issue of such Security (a)
for each six-month or shorter period ending March 15 or September 15 prior
to the date of determination (each a "Semi-Annual Accrual Date") prior to
the date of determination and (b) for the shorter
2
<PAGE> 5
period, if any, from the immediately preceding Semi-Annual Accrual Date, to
the date of determination, plus (iii) accrued and unpaid interest to the
date such Accreted Value is paid (without duplication of any amount set
forth in (ii) above), minus all amounts theretofore paid in respect of such
Security, which amounts are considered as part of the "stated redemption
price at maturity" of such Security within the meaning of Section
1273(a)(2) of the Code or any successor provisions (whether such amounts
paid were denominated principal or interest).
"Acquired Debt" means Debt of a Person existing at the time such Person
becomes a Restricted Subsidiary or assumed by the Company or a Restricted
Subsidiary in connection with the acquisition of assets from such Person.
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such Person. "Affiliate" shall be deemed to include, but only
for purposes of Section 1011 and without limiting the application of the
preceding sentence for the purpose of such or any other Section, any Person
owning, directly or indirectly, (i) 10% or more of the Company's
outstanding common stock or (ii) securities having 10% or more of the total
voting power of the Company's Voting Stock. For the purposes of this
definition, "control" when used with respect to any specified Person means
the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing. No individual shall be deemed to be
controlled by or under common control with any specified Person solely by
virtue of his or her status as an employee or officer of such specified
Person or of any other Person controlled by or under common control with
such specified Person.
"Agent Members" has the meaning provided in Section 306(a).
"Annualized Operating Cash Flow" means, for any fiscal quarter, the
Operating Cash Flow for such fiscal quarter multiplied by four.
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<PAGE> 6
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 hereof to act on behalf of the Trustee to
authenticate Securities.
"Average Life" means, at any date of determination with respect to any
Debt, the quotient obtained by dividing (i) the sum of the products of (a)
the number of years from such date of determination to the dates of each
successive scheduled principal payment of such Debt and (b) the amount of
such principal payment by (ii) the sum of all such principal payments.
"Beneficial Owner" means a beneficial owner as defined in Rules 13d-3
and 13d-5 under the Exchange Act (or any successor rules), including the
provision of such Rules that a person shall be deemed to have beneficial
ownership of all securities that such person has a right to acquire within
60 days, provided that a person shall not be deemed a beneficial owner of,
or to own beneficially, any securities if such beneficial ownership (1)
arises solely as a result of a revocable proxy delivered in response to a
proxy or consent solicitation made pursuant to, and in accordance with, the
Exchange Act and the applicable rules and regulations thereunder and (2) is
not also then reportable on Schedule 13D (or any successor schedule) under
the Exchange Act.
"Board of Directors" means (i) whenever used in Sections 1009 through
1015, inclusive, the board of directors of the Company and (ii) whenever
used elsewhere herein, either the board of directors of the Company or any
duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors (unless the context specifically requires
that such resolution be adopted by a majority of the Disinterested
Directors, in which case by a majority of such directors) and to be in full
force and effect on the date of such certification and delivered to the
Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in the Borough of
Manhattan, The City of New York are authorized or obligated by law or
executive order to close.
"Capital Lease Obligations" of any Person means the obligations to pay
rent or other amounts under lease of (or other Debt arrangements conveying
the right to use) real or
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<PAGE> 7
personal property of such Person which are required to be classified and
accounted for as a capital lease or a liability on the face of a balance
sheet of such Person determined in accordance with generally accepted
accounting principles and the amount of such obligations shall be the
capitalized amount thereof in accordance with generally accepted accounting
principles and the stated maturity thereof shall be the date of the last
payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment
of a penalty.
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of stock of, or
other ownership interests in, such Person.
"Change of Control" means the occurrence of any of the following
events:
(a) any person (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act and the regulations thereunder) is or becomes the
Beneficial Owner, directly or indirectly, of more than 50% of the total
Voting Stock or Total Common Equity of the Company; provided that no
Change of Control shall be deemed to occur pursuant to this clause (a)
(x) if the person is a corporation with outstanding debt securities
having a maturity at original issuance of at least one year and if such
debt securities are rated Investment Grade by S&P or Moody's for a
period of at least 90 consecutive days, beginning on the date of such
event (which period will be extended up to 90 additional days for as
long as the rating of such debt securities is under publicly announced
consideration for possible downgrading by the applicable rating
agency), or (y) if the person is a corporation (1) that is not, and
does not have any outstanding debt securities that are, rated by S&P,
Moody's or any other rating agency of national standing at any time
during a period of 90 consecutive days beginning on the date of such
event (which period will be extended up to an additional 90 days for as
long as any such rating agency has publicly announced that such
corporation or debt thereof will be rated), unless after such date but
during such period debt securities of such corporation having a
maturity at original issuance of at least one year are rated Investment
Grade by S&P or Moody's and remain so rated for the remainder of the
period referred to in clause (x) above and (2) that, when determined as
of the Trading Day immediately before and the Trading Day immediately
5
<PAGE> 8
after the date of such event, has Total Common Equity of at least $10
billion (provided that, solely for the purpose of calculating Total
Common Equity as of such later Trading Day, the average Closing Price
of the Common Stock of such person shall be deemed to equal the Closing
Price of such Common Stock on such later Trading Day, subject to the
last sentence of the definition of "Total Common Equity"); or
(b) the Company consolidates with, or merges with or into, another
Person or sells, assigns, conveys, transfers, leases or otherwise
disposes of all or substantially all of its assets to any Person, or
any Person consolidates with, or merges with or into, the Company, in
any such event pursuant to a transaction in which the outstanding
Voting Stock of the Company is converted into or exchanged for cash,
securities or other property, other than any such transaction where (i)
the outstanding Voting Stock of the Company is converted into or
exchanged for (1) Voting Stock (other than Redeemable Stock) of the
surviving or transferee Person or (2) cash, securities and other
property in an amount which could be paid by the Company as a
Restricted Payment under this Indenture and (ii) immediately after such
transaction no person (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act and the regulations thereunder) is the Beneficial
Owner, directly or indirectly, of more than 50% of the total Voting
Stock or Total Common Equity of the surviving or transferee Person;
provided that no Change of Control shall be deemed to occur pursuant to
this clause (b), (x) if the surviving or transferee Person or the
person referred to in clause (b)(ii) is a corporation with outstanding
debt securities having a maturity at original issuance of at least one
year and if such debt securities are rated Investment Grade by S&P or
Moody's for a period of at least 90 consecutive days, beginning on the
date of such event (which period will be extended up to 90 additional
days for as long as the rating of such debt securities is under
publicly announced consideration for possible downgrading by the
applicable rating agency), or (y) if the surviving or transferee Person
or such other person is a corporation (1) that is not, and does not
have any outstanding debt securities that are, rated by S&P, Moody's or
any other rating agency of national standing at any time during a
period of 90 consecutive days beginning on the date of such event
(which period will be extended up to an additional 90 days for as long
as any such rating agency has publicly announced that such corporation
or debt thereof will be rated), unless after such date but
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<PAGE> 9
during such period debt securities of such corporation having a
maturity at original issuance of at least one year are rated Investment
Grade by S&P or Moody's and remain so rated for the remainder of the
period referred to in clause (x) above and (2) that, when determined as
of the Trading Day immediately before and the Trading Day immediately
after the date of such event, has Total Common Equity of at least $10
billion (provided that, solely for the purpose of calculating Total
Common Equity as of such later Trading Day, the average Closing Price
of the Common Stock of such person shall be deemed to equal the Closing
Price of such Common Stock on such later Trading Day, subject to the
last sentence of the definition of "Total Common Equity"); or
(c) during any consecutive two-year period, individuals who at the
beginning of such period constituted the Board of Directors (together
with any directors who are members of the Board of Directors on the
date hereof and any new directors whose election by such Board of
Directors or whose nomination for election by the stockholders of the
Company was approved by a vote of 66 2/3% of the directors then still
in office who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved)
cease for any reason to constitute a majority of the Board of Directors
then in office.
Any event that would constitute a Change of Control pursuant to clause
(a) or (b) above (i) but for the proviso thereto shall not be deemed to be
a Change of Control until such time (if any) as the conditions described in
such proviso cease to have been met and (ii) if and to the extent resulting
from any restructuring transaction or any sale or assignment of all or
substantially all of the assets and liabilities of the Company to, or
merger or consolidation of the Company with, any Person (any such
transaction, a "Restructuring Transaction") effected at substantially the
same time as and in connection with any of the Permitted Transactions
described in clause (i) of the definition of the term "Permitted
Transactions" shall not constitute a Change of Control so long as the
Persons who, immediately prior to the closing of such Restructuring
Transaction and the particular Permitted Transaction being consummated at
substantially the same time and in connection therewith (the "Restructuring
Closing"), were the Beneficial Owners, directly or indirectly, of more than
50% of the total Voting Stock and more than 50% of the Total Common Equity
of the Company would remain, immediately after such Restructuring
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<PAGE> 10
Closing (and after taking into account all issuances of securities in such
Restructuring Transaction and related Permitted Transaction), the
Beneficial Owners, directly or indirectly, of more than 50% of the total
Voting Stock and more than 50% of the Total Common Equity of the Company
(or the surviving transferee Person, as the case may be); provided that,
immediately after any transaction or combination of transactions described
in this clause (ii), no person (as such term is used in Sections 13(d) and
14(a) of the Exchange Act and the regulations thereunder) is the ultimate
Beneficial Owner of more than 50% of the total Voting Stock or more than
50% of the Total Common Equity of the Company (or the surviving transferee
Person, as the case may be) unless such person (as so defined) was the
Beneficial Owner of more than 50% of the total Voting Stock and more than
50% of the Total Common Equity of the Company immediately before such
transaction or combination of transactions.
"Closing Date" means the date on which the Securities are originally
issued hereunder.
"Closing Price" on any Trading Day with respect to the per share price
of any shares of Capital Stock means the last reported sale price regular
way or, in case no such reported sale takes place on such day, the average
of the reported closing bid and asked prices regular way, in either case on
the New York Stock Exchange or, if such shares of Capital Stock are not
listed or admitted to trading on such exchange, on the principal national
securities exchange on which such shares are listed or admitted to trading
or, if not listed or admitted to trading on any national securities
exchange, on the Nasdaq Stock Market or, if such shares are not listed or
admitted to trading on any national securities exchange or quoted on the
Nasdaq Stock Market but the issuer is a Foreign Issuer (as defined in Rule
3b-4(b) under the Exchange Act) and the principal securities exchange on
which such shares are listed or admitted to trading is a Designated
Offshore Securities Market (as defined in Rule 902(a) under the Securities
Act), the average of the reported closing bid and asked prices regular way
on such principal exchange, or, if such shares are not listed or admitted
to trading on any national securities exchange or quoted on the Nasdaq
Stock Market and the issuer and principal securities exchange do not meet
such requirements, the average of the closing bid and asked prices in the
over-the-counter market as furnished by any New York Stock Exchange member
firm of national standing that is selected from time to time by the Company
for that purpose.
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<PAGE> 11
"Code" means the Internal Revenue Code, as amended from time to time,
and the rules and regulations thereunder.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act,
then the body performing such duties at such time.
"Common Stock" of any Person means Capital Stock of such Person that
does not rank prior, as to the payment of dividends or as to the
distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up of such Person, to shares of Capital Stock of any
other class of such Person.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become
such pursuant to the applicable provisions of this Indenture and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its
President or a Vice President, and by its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Consolidated Adjusted Net Income" and "Consolidated Adjusted Net Loss"
mean, for any period, the net income or net loss, as the case may be, of
the Company and its Restricted Subsidiaries for such period, all as
determined on a Consolidated basis in accordance with generally accepted
accounting principles, adjusted, to the extent included in calculating
such net income or net loss, as the case may be, by excluding without
duplication (a) any after-tax gain or loss attributable to the sale,
conversion or other disposition of assets other than in the ordinary course
of business, (b) any after-tax gains resulting from the write-up of assets
and any loss resulting from the write-down of assets, (c) any after-tax
gain or loss on the repurchase or redemption of any securities (including
in connection with the early retirement or defeasance of any Debt), (d) any
foreign exchange gain or loss, (e) all payments in respect of dividends on
shares of Preferred Capital Stock of the Company, (f) any other
extraordinary, non-recurring or unusual items incurred by the Company or
any of its Restricted Subsidiaries, (g) the net income (or loss) of any
Person acquired by the Company or any
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<PAGE> 12
Restricted Subsidiary in a pooling-of-interests transaction for any period
prior to the date of such transaction and (h) all income or losses of
Unrestricted Subsidiaries and Persons (other than Subsidiaries) accounted
for by the Company using the equity method of accounting except, in the
case of any such income, to the extent of dividends, interest or other cash
distributions received directly or indirectly from any such Unrestricted
Subsidiary or Person.
"Consolidated Adjusted Net Income (Loss)" means, for any period, the
Company's Consolidated Adjusted Net Income or Consolidated Adjusted Net
Loss for such period, as applicable.
"Consolidated Debt to Annualized Operating Cash Flow Ratio" means, as
at any date of determination, the ratio of (i) the aggregate amount of Debt
of the Company and the Restricted Subsidiaries on a Consolidated basis
outstanding as at the date of determination to (ii) the Annualized
Operating Cash Flow of the Company for the most recently completed fiscal
quarter of the Company.
"Consolidated Interest Expense" of any Person means, for any period,
the aggregate interest expense and fees and other financing costs in
respect of Debt (including amortization of original issue discount and
non-cash interest payments and accruals), the interest component in respect
of Capital Lease Obligations and any deferred payment obligations of such
Person and its Restricted Subsidiaries, determined on a consolidated basis
in accordance with generally accepted accounting principles and all
commissions, discounts, other fees and charges owed with respect to letters
of credit and bankers' acceptance financing and net costs (including
amortizations of discounts) associated with interest rate swap and similar
agreements and with foreign currency hedge, exchange and similar agreements
and the amount of dividends paid in respect of Redeemable Stock.
"Consolidated Net Income" and "Consolidated Net Loss" mean, for any
period, the net income or net loss, as the case may be, of the Company and
its Restricted Subsidiaries for such period, all as determined on a
Consolidated basis in accordance with generally accepted accounting
principles, adjusted, to the extent included in calculating such net income
or net loss, as the case may be, by excluding without duplication (a) any
after-tax gain or loss attributable to the sale, conversion or other
disposition of assets other than in the ordinary course of business, (b)
any after-tax gains resulting from the write-up of assets and any loss
resulting from the write-down of assets, (c) any after-tax
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<PAGE> 13
gain or loss on the repurchase or redemption of any securities (including
in connection with the early retirement or defeasance of any Debt), (d) any
foreign exchange gain or loss, (e) all payments in respect of dividends on
shares of Preferred Capital Stock of the Company, (f) any other
extraordinary, non-recurring or unusual items incurred by the Company or
any of its Restricted Subsidiaries, (g) the net income (or loss) of any
Person acquired by the Company or any Restricted Subsidiary in a
pooling-of-interests transaction for any period prior to the date of such
transaction, (h) all income or losses of Unrestricted Subsidiaries and
Persons (other than Subsidiaries) accounted for by the Company using the
equity method of accounting except, in the case of any such income, to the
extent of dividends, interest or other cash distributions received directly
or indirectly from any such Unrestricted Subsidiary or Person and (i) the
net income (but not net loss) of any Restricted Subsidiary which is subject
to restrictions which prevent the payment of dividends or the making of
distributions to the Company but only to the extent of such restrictions.
"Consolidated Net Income (Loss)" means, for any period, the Company's
Consolidated Net Income or Consolidated Net Loss for such period, as
applicable.
"Consolidated Net Worth" of any Person means the consolidated
stockholders' equity of such Person, determined on a consolidated basis in
accordance with generally accepted accounting principles, less amounts
attributable to Redeemable Stock of such Person; provided that, with
respect to the Company, no effect shall be given to adjustments following
the Closing Date to the accounting books and records of the Company in
accordance with Accounting Principles Board Opinions Nos. 16 and 17 (or
successor opinions thereto) or otherwise resulting from the acquisition of
control of the Company by another Person.
"Consolidation" means the consolidation of the accounts of each of the
Restricted Subsidiaries with those of the Company, if and to the extent
that the accounts of each such Restricted Subsidiary would normally be
consolidated with those of the Company in accordance with generally
accepted accounting principles; provided, however, that "Consolidation"
shall not include consolidation of the accounts of any Unrestricted
Subsidiary, but the interest of the Company or any Restricted Subsidiary in
any Unrestricted Subsidiary shall be accounted for as an investment. The
term "Consolidated" has a correlative meaning.
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<PAGE> 14
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be
administered, which address as of the Closing Date is located at 311 West
Monroe Street, 12th Floor, Chicago, Illinois 60606, Attention: Indenture
Trust Division.
"Corporation" means a corporation, association, company, joint-stock
company or business trust.
"Covenant Defeasance" has the meaning specified in Section 1203.
"Credit Facility" means any credit facility (whether a term or
revolving type) of the type customarily entered into with banks, between
the Company and/or any of its Restricted Subsidiaries, on the one hand, and
any banks or other lenders, on the other hand (and any renewals,
refundings, extensions or replacements of any such credit facility), which
credit facility is designated by the Company as a "Credit Facility" for
purposes of this Indenture, as applicable, and shall include all such
credit facilities in existence on the Closing Date whether or not so
designated, to the extent that the aggregate principal balance of Debt that
is Incurred and outstanding under all Credit Facilities at any time does
not exceed $2.5 billion.
"Debt" means (without duplication), with respect to any Person, whether
recourse is to all or a portion of the assets of such Person and whether or
not contingent, (i) every obligation of such Person for money borrowed,
(ii) every obligation of such Person evidenced by bonds, debentures, notes
or other similar instruments, including obligations Incurred in connection
with the acquisition of property, assets or businesses, (iii) every
reimbursement obligation of such Person with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account of such
Person, (iv) every obligation of such Person issued or assumed as the
deferred purchase price of property or services (but excluding trade
accounts payable or accrued liabilities arising in the ordinary course of
business which are not overdue or which are being contested in good faith),
(v) every Capital Lease Obligation of such Person, (vi) the maximum fixed
redemption or repurchase price of Redeemable Stock of such Person at the
time of determination plus accrued but unpaid dividends, (vii) every
obligation of such Person under interest rate swap or similar agreements or
foreign currency hedge, exchange or similar agreements of such Person, and
(viii) every obligation of the type referred to in clauses (i) through
(vii) of another Person and all dividends of another Person the payment of
which, in
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<PAGE> 15
either case, such Person has Guaranteed or is responsible or liable,
directly or indirectly, as obligor, Guarantor or otherwise. The amount of
Debt of any Person issued with original issue discount is the face amount
of such Debt less the unamortized portion of the original issue discount of
such Debt at the time of its issuance as determined in conformity with
generally accepted accounting principles, and money borrowed at the time of
the Incurrence of any Debt in order to pre-fund the payment of interest on
such Debt shall be deemed not to be "Debt".
"Default" means an event that is, or after notice or passage of time,
or both, would be, an Event of Default.
"Default Amount" has the meaning specified in Section 502.
"Defaulted Interest" has the meaning specified in Section 309.
"Defeasance" has the meaning specified in Section 1202.
"Depository" shall mean The Depository Trust Company, as nominees and
their respective successors.
"Digital Mobile" means a radio communications system that employs
digital technology with a multi-site configuration that will permit
frequency reuse as described in the Memorandum.
"Digital Mobile-SMR Operating Cash Flow" means, for any fiscal quarter,
(i) the net income or loss, as the case may be, of the Company and its
Restricted Subsidiaries from its Digital Mobile and Specialized Mobile
Radio businesses and related activities and services for such fiscal
quarter, plus (ii) depreciation and amortization charged with respect
thereto for such fiscal quarter, all as determined on a Consolidated basis
in accordance with generally accepted accounting principles, adjusted, to
the extent included in calculating such net income or loss, by excluding
(a) any after-tax gain or loss attributable to the sale, conversion or
other disposition of assets other than in the ordinary course of business,
(b) any gains resulting from the write-up of assets and any loss resulting
from the write-down of assets, (c) any gain or loss on the repurchase or
redemption of any securities (including in connection with the early
retirement or defeasance of any Debt), (d) any foreign exchange gain or
loss, (e) any other extraordinary, non-recurring or unusual items and (f)
all income or losses of Persons (other than Subsidiaries) accounted for by
the Company using the equity method of
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<PAGE> 16
accounting, except, in the case of any such income, to the extent of
dividends, interest or other cash distributions received directly or
indirectly from any such Person, plus (iii) all amounts deducted in
calculating net income or loss for such fiscal quarter in respect of
interest expense and other financing costs and all income taxes, whether or
not deferred, applicable to such fiscal quarter, all as determined on a
Consolidated basis in accordance with generally accepted accounting
principles.
"Directed Investment" by the Company or any of its Restricted
Subsidiaries means any Investment for which the cash or property used for
such Investment is received by the Company from the issuance and sale
(other than to a Restricted Subsidiary) on or after June 1, 1997 of shares
of its Capital Stock (other than the Exchangeable Preferred Stock or
Redeemable Stock), or any options, warrants or other rights to purchase
such Capital Stock (other than Redeemable Stock) designated by the Board of
Directors as a "Directed Investment" to be used for one or more specified
investments in the telecommunications business (including related
activities and services) and is so designated and used at any time within
365 days after the receipt thereof; provided that the aggregate amount of
any such Directed Investments may not at any time exceed fifty percent
(50%) of the aggregate amount of such cash or property received by the
Company on or after June 1, 1997 from any such issuance and sale or capital
contribution; and provided further that any proceeds from any such issuance
or sale may not be used for such an Investment if such proceeds were, prior
to being designated for use as a Directed Investment, (x) used to make a
Restricted Payment or (y) used as the basis for the Incurrence of Debt
under clause (i) of Section 1008 unless and until the amount of any such
Debt (I) is treated as newly issued Debt and could be Incurred in
accordance with Section 1008 (other than under clause (i) thereof) or (II)
has been repaid or refinanced with the proceeds of Debt Incurred in
accordance with Section 1008 (other than under clause (i) thereof) or (III)
has otherwise been repaid and, in the circumstances described in clauses
(I) and (II), the Company delivers to the Trustee a certificate confirming
that the requirements of such clauses have been met.
"Disinterested Director" means, with respect to any proposed
transaction between the Company and an Affiliate thereof, a member of the
Board of Directors who is not an officer or employee of the Company, would
not be a party to, or have a financial interest in, such transaction and is
not an officer, director or employee of, and does not have a financial
interest in, such Affiliate. For purposes of this definition, no person
would be deemed not to be a
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<PAGE> 17
Disinterested Director solely because such person holds Capital Stock of
the Company.
"Exchange Securities" means any security of the Company containing
terms identical to the Securities initially issued hereunder (except that
such Securities shall have been registered under the Securities Act) that
are issued and exchanged for the Securities pursuant to the Registration
Rights Agreement.
"Exchangeable Preferred Stock" means the 13% Series D Exchangeable
Redeemable Preferred Stock of the Company issued on July 21,1997 and any
shares of Preferred Capital Stock issued in exchange therefor or as payment
in kind dividends thereon.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" refers to the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time.
"Exchange Debenture Indenture" means an indenture (having terms and
conditions substantially as summarized in that certain confidential
Offering Memorandum, dated July 16, 1997), prepared in connection with the
original issuance by the Company of shares of Exchangeable Preferred Stock,
pursuant to which certain exchange debentures may be issued by the Company
in exchange for outstanding shares of Exchangeable Preferred Stock.
"Expiration Date" has the meaning specified in the definition of Offer
to Purchase.
"Fair Market Value" means, for purposes of clause (i) of Section 1008,
the price that would be paid in an arm's-length transaction between an
informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy, as determined in good faith by
the Board of Directors, whose determination shall be conclusive if
evidenced by a Board Resolution; provided that (x) the Fair Market Value of
any security registered under the Exchange Act shall be the average of the
closing prices, regular way, of such security for the 20 consecutive
trading days immediately preceding the sale of Capital Stock and (y) in the
event the aggregate Fair Market Value of any other property received by the
Company exceeds $10 million, the Fair Market Value of such property shall
be: (i) so long as such a Fair Market Value determination of such property
is required to be made pursuant to the
15
<PAGE> 18
Certificate of Designation for the Exchangeable Preferred Stock or pursuant
to the terms of the Exchange Debenture Indenture, the Fair Market Value as
so determined, which shall be set forth in an Officer's Certificate
delivered to the Trustee, and (ii) otherwise, such Fair Market Value shall
be as determined in good faith by the Board of Directors, including a
majority of Disinterested Directors who then are members of such Board of
Directors, which determination shall be conclusive if evidenced by a Board
Resolution.
"FCC" means the Federal Communications Commission.
"Global Securities" has the meaning provided in Section 201.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person guaranteeing any Debt of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, and
including any obligation of such Person, (i) to purchase or pay (or advance
or supply funds for the purchase or payment of) such Debt or to purchase
(or to advance or supply funds for the purchase of) any security for the
payment of such Debt, (ii) to purchase property, securities or services for
the purpose of assuring the holder of such Debt of the payment of such
Debt, or (iii) to maintain working capital, equity capital or other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Debt (and "Guaranteed",
"Guaranteeing" and "Guarantor" shall have meanings correlative to the
foregoing); provided, however, that the Guarantee by any Person shall not
include endorsements by such Person for collection or deposit, in either
case, in the ordinary course of business.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Incur" means, with respect to any Debt or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise),
assume (pursuant to a merger, consolidation, acquisition or other
transaction), Guarantee or otherwise become liable in respect of such Debt
or other obligation or the recording, as required pursuant to generally
accepted accounting principles or otherwise, of any such Debt or other
obligation on the balance sheet of such Person (and "Incurrence" and
"Incurred", shall have meanings correlative to the foregoing); provided,
however, that a change in generally accepted accounting principles that
results in an obligation of such Person that exists at
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such time becoming Debt shall not be deemed an Incurrence of such Debt;
provided further, however, that the accretion of original issue discount on
Debt shall not be deemed to be an Incurrence of Debt. Debt otherwise
Incurred by a Person before it becomes a Subsidiary of the Company shall be
deemed to have been Incurred at the time it becomes such a Subsidiary.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions
hereof, including, for all purposes of this instrument and any such
supplemental indenture, the provisions of the Trust Indenture Act that are
deemed to be a part of and govern this instrument and any such supplemental
indenture, respectively.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3)
or (7) under the Securities Act.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Investment" by any Person means any direct or indirect loan, advance
or other extension of credit or capital contribution to (by means of
transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise), or purchase or
acquisition of Capital Stock, bonds, notes, debentures or other securities
or evidence of Debt issued by, any other Person or the designation of a
Subsidiary as an Unrestricted Subsidiary; provided that a transaction will
not be an Investment to the extent it involves (i) the issuance or sale by
the Company of its Capital Stock (other than Redeemable Stock), including
options, warrants or other rights to acquire such Capital Stock (other than
Redeemable Stock) or (ii) a transfer, assignment or contribution by the
Company of shares of Capital Stock (or any options, warrants or rights to
acquire Capital Stock), or all or substantially all of the assets of, any
Unrestricted Subsidiary of the Company to another Unrestricted Subsidiary
of the Company.
"Investment Grade" means a rating of at least BBB-, in the case of S&P,
or Baa3, in the case of Moody's.
"Licenses" means SMR licenses granted by the FCC that entitle the
holder to use the radio channels covered
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thereby, subject to compliance with FCC rules and regulations, in
connection with its SMR business.
"Lien" means, with respect to any property or assets, any mortgage or
deed of trust, pledge, hypothecation, assignment, deposit arrangement,
security interest, lien, charge, easement, encumbrance, preference,
priority or other security agreement or preferential arrangement of any
kind or nature whatsoever on or with respect to such property or assets
(including any conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing).
"Marketable Securities" means:
(1) securities either issued directly or fully guaranteed or insured by
the government of the United States of America or any agency or
instrumentality thereof having maturities of not more than six months;
(2) time deposits and certificates of deposit, having maturities of not
more than six months from the date of deposit, of any domestic commercial
bank having capital and surplus in excess of $500 million and having
outstanding long-term debt rated A or better (or the equivalent thereof) by
S&P or Aaa or better (or the equivalent thereof) by Moody's; and
(3) commercial paper rated A-1 or the equivalent thereof by S&P or P-1
or the equivalent thereof by Moody's, and in each case maturing within six
months.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption, offer to purchase or otherwise.
"Memorandum" means the offering memorandum dated September 10, 1997 in
connection with the offering of the Securities.
"Moody's" means Moody's Investors Service, Inc. or, if Moody's
Investors Service, Inc. shall cease rating debt securities having a
maturity at original issuance of at least one year and such ratings
business shall have been transferred to a successor Person, such successor
Person; provided, however, that if Moody's Investors Service, Inc. ceases
rating debt securities having a maturity at original issuance of at least
one year and its ratings business with
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<PAGE> 21
respect thereto shall not have been transferred to any successor Person,
then "Moody's" shall mean any other national recognized rating agency
(other than S&P) that rates debt securities having a maturity at original
issuance of at least one year and that shall have been designated by the
Company by a written notice given to the Trustee.
"Non-U.S. Person" means a person who is not a U.S. person as defined
in Regulation S.
"Notice of Default" means a written notice of the kind specified in
Section 501(5).
"Offer" has the meaning specified in the definition of Offer to
Purchase.
"Offer to Purchase" means a written offer (the "Offer") sent by the
Company by first class mail, postage prepaid, to each Holder at his address
appearing in the Security Register on the date of the Offer offering to
purchase up to the principal amount of Securities specified in such Offer
at the purchase price specified in such Offer (as determined pursuant to
this Indenture). Unless otherwise required by applicable law, the Offer
shall specify an expiration date (the "Expiration Date") of the Offer to
Purchase which shall be, subject to any contrary requirements of applicable
law, not less than 30 days or more than 60 days after the date of such
Offer and a settlement date (the "Purchase Date") for purchase of
Securities within five Business Days after the Expiration Date. The
Company shall notify the Trustee at least 15 days (or such shorter period
as is acceptable to the Trustee) prior to the mailing of the Offer of the
Company's obligation to make an Offer to Purchase, and the Offer shall be
mailed by the Company or, at the Company's request, by the Trustee in the
name and at the expense of the Company. The Offer shall contain
information concerning the business of the Company and its Subsidiaries
which, at a minimum, shall include (i) the most recent annual and quarterly
financial statements and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" contained in the documents required to
be filed with the Trustee pursuant to this Indenture (which requirements
may be satisfied by delivery of such documents together with the Offer),
(ii) a description of material developments in the Company's business
subsequent to the date of the latest of such financial statements referred
to in clause (i) (including a description of the events requiring the
Company to make the Offer to Purchase), (iii) if required under applicable
law, pro forma financial information concerning, among other things, the
Offer to Purchase and the events requiring the Company to make
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<PAGE> 22
the Offer to Purchase and (iv) any other information required by applicable
law to be included therein. The Offer shall contain all instructions and
materials necessary to enable such Holders to tender their Securities
pursuant to the Offer to Purchase. The Offer shall also state:
(1) the Section of this Indenture pursuant to which the Offer to
Purchase is being made;
(2) the Expiration Date and the Purchase Date;
(3) the aggregate principal amount at Stated Maturity of the
Outstanding Securities offered to be purchased by the Company pursuant
to the Offer to Purchase (the "Purchase Amount");
(4) the purchase price to be paid by the Company for each $1,000
aggregate principal amount at Stated Maturity of Securities accepted for
payment (as specified pursuant to this Indenture) (the "Purchase
Price");
(5) the Holder may tender all or any portion of the Securities
registered in the name of such Holder and that any portion of Securities
tendered must be tendered in an integral multiple of $1,000 of
principal amount at Stated Maturity;
(6) the place or places where the Securities are to be surrendered
for tender pursuant to the Offer to Purchase;
(7) that interest, if any, on any Securities not tendered or
tendered but not purchased by the Company pursuant to the Offer to
Purchase will continue to accrue;
(8) that on the Purchase Date the Purchase Price will become due
and payable upon each Security being accepted for payment pursuant to
the Offer to Purchase;
(9) that each Holder electing to tender Securities pursuant to the
Offer to Purchase will be required to surrender such Securities at the
place or places specified in the Offer prior to the close of business
on the Expiration Date (such Securities being, if the Company or
Trustee so requires, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing);
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<PAGE> 23
(10) that Holders will be entitled to withdraw all or any portion
of the Securities tendered if the Company (or its Paying Agent)
receives, not later than the close of business on the Expiration Date,
a facsimile transmission or letter setting forth the name of the
Holder, the principal amount at Stated Maturity of the Securities the
Holder tendered, the certificate number of the Securities the Holder
tendered and a statement that such Holder is withdrawing all or a
portion of his tender;
(11) that the Company shall purchase all such Securities duly
tendered and not withdrawn pursuant to the Offer to Purchase, unless
otherwise provided herein; and
(12) that in the case of any Holder whose Securities are purchased
only in part, the Company shall execute, and the Transfer Agent or
Trustee shall authenticate and deliver to the Holder of such Securities
without service charge, new Securities of any authorized denomination
as requested by such Holder, in an aggregate principal amount at Stated
Maturity equal to and in exchange for the unpurchased portion of the
aggregate principal amount at Stated Maturity of the Securities so
tendered.
Any Offer to Purchase shall be governed by and effected in accordance
with the Offer for such Offer to Purchase.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the President or a Vice President, and by the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary, of the
Company, and delivered to the Trustee. One of the officers signing an
Officers' Certificate given pursuant to Section 1017 shall be the principal
executive, financial or accounting officer of the Company.
"Operating Cash Flow" means, for any fiscal quarter, (i) the Company's
Consolidated Adjusted Net Income (Loss) plus depreciation and amortization
in respect thereof for such fiscal quarter, plus (ii) all amounts deducted
in calculating Consolidated Adjusted Net Income (Loss) for such fiscal
quarter in respect of interest expense and other financing costs, including
dividends paid in respect of Redeemable Stock, and all income taxes,
whether or not deferred, applicable to such income period, all as
determined on a Consolidated basis in accordance with generally accepted
accounting principles. For purposes of calculating Operating Cash Flow for
the fiscal quarter most
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<PAGE> 24
recently completed prior to any date on which an action is taken that
requires a calculation of the Operating Cash Flow to Consolidated Interest
Expense Ratio or Consolidated Debt to Annualized Operating Cash Flow Ratio,
(1) any Person that is a Restricted Subsidiary on such date (or would
become a Restricted Subsidiary in connection with the transaction that
requires the determination of such ratio) will be deemed to have been a
Restricted Subsidiary at all times during such fiscal quarter, (2) any
Person that is not a Restricted Subsidiary on such date (or would cease to
be a Restricted Subsidiary in connection with the transaction that requires
the determination of such ratio) will be deemed not to have been a
Restricted Subsidiary at any time during such fiscal quarter and (3) if the
Company or any Restricted Subsidiary shall have in any manner acquired
(including through commencement of activities constituting such operating
business) or disposed (including through termination or discontinuance of
activities constituting such operating business) of any operating business
during or subsequent to the most recently completed fiscal quarter, such
calculation will be made on a pro forma basis on the assumption that such
acquisition or disposition had been completed on the first day of such
completed fiscal quarter.
"Operating Cash Flow to Consolidated Interest Expense Ratio" means, as
at any date of determination, the ratio of (i) the Operating Cash Flow of
the Company for the most recently completed fiscal quarter of the Company
to (ii) the Consolidated Interest Expense of the Company and its Restricted
Subsidiaries for the most recently completed fiscal quarter of the Company.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities; provided that, if
such Securities are to be
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<PAGE> 25
redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has
been made;
(iii) Securities which have been paid pursuant to Section 308 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by a
bona fide purchaser in whose hands such Securities are valid
obligations of the Company; and
(iv) Securities as to which Defeasance has been effected pursuant
to Section 1202;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken
any request, demand, authorization, direction, notice, consent, waiver or
other action hereunder as of any date, Securities owned by the Company or
any other obligor upon the Securities or any Affiliate of the Company or of
such other obligor shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in
relying upon any such request, demand, authorization, direction, notice,
consent, waiver or other action, only Securities which the Trustee knows to
be so owned shall be so disregarded. Securities so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Securities and that the pledgee is not the Company
or any other obligor upon the Securities or any Affiliate of the Company or
of such other obligor.
"pari passu", when used with respect to the ranking of any Debt of any
Person in relation to other Debt of such Person, means that each such Debt
(a) either (i) is not subordinated in right of payment to any other Debt of
such Person or (ii) is subordinate in right of payment to the same Debt of
such Person as is the other and is so subordinate to the same extent and
(b) is not subordinate in right of payment to the other or to any Debt of
such Person as to which the other is not so subordinate.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf
of the Company.
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<PAGE> 26
"Permitted Debt" means:
(i) any Debt (including Guarantees thereof) outstanding on the
Closing Date (including the Securities) and any accretion of original
issue discount and accrual of interest with respect to such Debt;
(ii) any Debt outstanding under a Credit Facility;
(iii) any Vendor Financing Debt or any other Debt Incurred to
finance the cost (including the cost of design, development,
construction, improvement, installation or integration) of equipment,
inventory or network assets acquired by the Company or any of its
Restricted Subsidiaries after the Closing Date;
(iv) Debt (A) to the Company or (B) to any Restricted Subsidiary;
provided that any event which results in any such Restricted Subsidiary
ceasing to be a Restricted Subsidiary or any subsequent transfer of
such Debt (other than to the Company or another Restricted Subsidiary)
shall be deemed, in each case, to constitute an Incurrence of such Debt
not permitted by this clause (iv);
(v) Debt (A) in respect of performance, surety or appeal bonds
provided in the ordinary course of business, (B) under foreign currency
hedge, interest rate swap or similar agreements; provided that such
agreements (a) are designed solely to protect the Company or its
Restricted Subsidiaries against fluctuations in foreign currency
exchange rates or interest rates and (b) do not increase the Debt of
the obligor outstanding at any time other than as a result of
fluctuations in foreign currency exchange rates or interest rates or by
reason of fees, indemnities and compensation payable thereunder; and
(C) arising from agreements providing for indemnification, adjustment
of purchase price or similar obligations, or from Guarantees or letters
of credit, surety bonds or performance bonds securing any obligations
of the Company or any Restricted Subsidiary pursuant to such
agreements, in any case Incurred in connection with the disposition of
any business, assets or Restricted Subsidiary (other than Guarantees of
Debt Incurred by any Person acquiring all or any portion of such
business, assets or Restricted Subsidiary for the purpose of financing
such acquisition), in a principal amount not to exceed the gross
proceeds actually
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<PAGE> 27
received by the Company or any Restricted Subsidiary in connection with
such disposition;
(vi) renewals, refundings or extensions of any Debt referred to in
clause (i) or (iii) above or Incurred pursuant to clause (ii) of
Section 1008 and any renewals, refundings or extensions thereof, plus
(A) the amount of any premium reasonably determined by the Company as
necessary to accomplish such renewal, refunding or extension and (B)
such other fees and expenses of the Company reasonably incurred in
connection with the renewal, refunding or extension, provided that such
renewal, refunding or extension shall constitute Permitted Debt only
(a) to the extent that it does not result in an increase in the
aggregate principal amount (or, if such Debt provides for an amount
less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the maturity thereof, in an amount not
greater than such lesser amount) of such Debt (except as permitted by
clause (A) or (B) above), and (b) to the extent such renewed, refunded
or extended Debt does not have a mandatory redemption date prior to the
mandatory redemption date of the Debt being renewed, refunded or
extended or have an Average Life shorter than the remaining Average
Life of the Debt being renewed, refunded or extended; and
(vii) Debt payable solely in, or mandatorily convertible into,
Capital Stock (other than Redeemable Stock) of the Company;
(viii) Debt (in addition to Debt permitted under clauses (i)
through (vii) above) in an aggregate principal amount outstanding at
any time not to exceed $450 million.
"Permitted Distribution" of a Person means (x) the exchange by such
Person of Capital Stock (other than Redeemable Stock) for outstanding
Capital Stock; (y) the redemption, repurchase, defeasance or other
acquisition or retirement for value of Debt of the Company that is
subordinate in right of payment to the Securities, in exchange for
(including any such exchange pursuant to the exercise of a conversion right
or privilege in connection with which cash is paid in lieu of the issuance
of fractional shares or scrip), or out of the proceeds of a substantially
concurrent issue and sale (other than to a Restricted Subsidiary) of,
either (a) Capital Stock of the Company (other than Redeemable Stock) or
(b) Debt of the Company that is subordinate in right of payment to the
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Securities on subordination terms no less favorable to the Holders of the
Securities in their capacities as such than the subordination terms (or
other arrangement) applicable to the Debt that is redeemed, repurchased,
defeased or otherwise acquired or retired for value, provided that, in the
case of this clause (b), such new Debt does not mature prior to the Stated
Maturity or have a mandatory redemption date prior to the mandatory
redemption date of the Debt being redeemed, repurchased, defeased or
otherwise acquired or retired for value or have an Average Life shorter
than the remaining Average Life of the Debt being redeemed, repurchased,
defeased or otherwise acquired or retired for value; and (z) dividend,
penalty or other mandated payments, including mandatory repurchases, on or
in respect of any class or series of the Company's Preferred Capital Stock
that is authorized and designated on the Closing Date.
"Permitted Investment" means any Investment in Marketable Securities.
"Permitted Transaction" means (i) any transaction pursuant to
agreements (whether or not definitive, and regardless of whether binding or
non-binding) existing on the Closing Date and described in or incorporated
by reference into the Memorandum and (ii) any transaction or transactions
with any vendor or vendors of property or materials used in the
telecommunications business (including related activities and services) of
the Company or any Restricted Subsidiary, provided (x) such transactions
are in the ordinary course of business and (y) such vendor does not
beneficially own more than 50% of the voting power of the Voting Stock of
the Company.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by
such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 308 in exchange for or
in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed
to evidence the same debt as the mutilated, destroyed, lost or stolen
Security.
"Preferred Capital Stock" as applied to the Capital Stock of any
Person, means Capital Stock of such Person of any class or classes (however
designated) that ranks prior, as to the payment of dividends or as to the
distribution of
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<PAGE> 29
assets upon any voluntary or involuntary liquidation, dissolution or
winding up of such Person, to shares of Capital Stock of any other class of
such Person.
"Private Placement Legend" means the legend initially set forth on the
Securities in the form set forth in Section 205.
"Purchase Amount" has the meaning specified in the definition of Offer
to Purchase.
"Purchase Date" has the meaning specified in the definition of Offer to
Purchase.
"Purchase Price" has the meaning specified in the definition of Offer
to Purchase.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Record Expiration Date" has the meaning specified in Section 104.
"Redeemable Stock" of any Person means any Capital Stock of such
Person that by its terms or otherwise is (i) required to be redeemed prior
to the Stated Maturity of the Securities, (ii) redeemable at the option of
the holder thereof at any time prior to the Stated Maturity of the
Securities or (iii) convertible into or exchangeable for Capital Stock
referred to in clause (i) or (ii) above or Debt having a scheduled maturity
prior to the Stated Maturity of the Securities; provided that any Capital
Stock that would not constitute Redeemable Stock but for provisions thereof
giving holders thereof the right to require such Person to repurchase or
redeem such Capital Stock upon the occurrence of a "change of control"
occurring prior to the Stated Maturity of the Securities shall not
constitute Redeemable Stock if the "change of control" provisions
applicable to such Capital Stock are no more favorable to the holders of
such Capital Stock than the provisions contained in Section 1013 and such
Capital Stock specifically provides that such Person will not repurchase or
redeem any such stock pursuant to such provision prior to the Company's
repurchase of such Securities as are required to be repurchased pursuant to
Section 1013; and further provided that the Exchangeable Preferred Stock of
the Company shall not be considered to constitute Redeemable Stock.
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<PAGE> 30
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registration Rights Agreement" means the Registration Rights Agreement
dated the Closing Date, between the Company, Merrill Lynch, Pierce, Fenner
& Smith Incorporated, TD Securities (USA) Inc., Lehman Brothers Inc.,
Morgan Stanley & Co. Incorporated and NationsBanc Capital Markets, Inc.
"Registration Statement" means the Registration Statement as defined
and described in the Registration Rights Agreement.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the March 1 or September 1 (whether or not a Business Day), as
the case may be, next preceding such Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act.
"Restricted Payments" has the meaning specified in Section 1009.
"Restricted Subsidiary" means any Subsidiary of the Company, whether
existing on the Closing Date or created subsequent thereto, designated from
time to time by the Board of Directors as (or otherwise deemed to be) a
"Restricted Subsidiary" in accordance with Section 1010.
"Rule 144A" means Rule 144A under the Securities Act.
"S&P" means Standard & Poor's Ratings Services or, if Standard & Poor's
Ratings Services shall cease rating debt securities having a maturity at
original issuance of at least one year and such ratings business shall have
been transferred to a successor Person, such successor Person; provided,
however, that if Standard & Poor's Ratings Services ceases rating debt
securities having a maturity at original issuance of at least one year and
its ratings business with respect thereto shall not have been transferred
to any successor Person, then "S&P" shall mean any other nationally
recognized rating agency (other than Moody's) that rates debt securities
having a maturity at original issuance of at least one year and that shall
have
28
<PAGE> 31
been designated by the Company by a written notice given to the Trustee.
"Securities" means securities designated in the first paragraph of the
RECITALS OF THE COMPANY that are authenticated and delivered under this
Indenture. For all purposes of this Indenture, the term "Securities" shall
include the Securities issued on the Closing Date, any Exchange Securities
to be issued and exchanged for any Securities pursuant to the Registration
Rights Agreement and any other Securities issued after the Closing Date
under this Indenture. For purposes of this Indenture all Securities shall
vote together as one series of Securities under this Indenture.
"Securities Act" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Shelf Registration Statement" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 309.
"Specialized Mobile Radio" or "SMR" means a mobile radio communications
system that is operated as described in the Memorandum.
"Stated Maturity" when used with respect to any Debt security or any
installment of interest thereon, means the date specified in such Debt
security as the fixed date on which the principal of such Debt security or
such installment of interest is due and payable.
"Subsidiary" of any Person means (i) a corporation more than 50% of the
outstanding Voting Stock of which is owned, directly or indirectly, by such
Person or by one or more other Subsidiaries of such Person or by such
Person and one or more Subsidiaries thereof or (ii) any other Person (other
than a corporation) in which such Person, or one or more other Subsidiaries
of such Person or such Person and one or more other Subsidiaries thereof,
directly or indirectly, has at least a majority ownership and power to
direct the policies, management and affairs thereof.
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<PAGE> 32
"Total Common Equity" of any Person means, as of any day of
determination (and as modified for purposes of the definition of "Change of
Control"), the product of (i) the aggregate number of outstanding primary
shares of Common Stock of such Person on such day (which shall not include
any options or warrants on, or securities convertible or exchangeable into,
shares of Common Stock of such Person) and (ii) the average Closing Price
of such Common Stock over the 20 consecutive Trading Days immediately
preceding such day. If no such Closing Price exists with respect to shares
of any such class, the value of such shares for purposes of clause (ii) of
the preceding sentence shall be determined by the Board of Directors in
good faith and evidenced by a Board Resolution.
"Total Market Value of Equity" of the Company means, as of any day of
determination, the sum of (1) the product of (i) the aggregate number of
outstanding primary shares of Common Stock of the Company on such day
(which shall not include any options or warrants on, or securities
convertible or exchangeable into, shares of Common Stock of the Company)
and (ii) the average Closing Price of such Common Stock over the 20
consecutive Trading Days immediately preceding such day, plus (2) the
liquidation value of any outstanding shares of Preferred Capital Stock of
the Company on such day. If no such Closing Price exists with respect to
shares of any such class, the value of such shares for purposes of clause
(ii) of the preceding sentence shall be determined by the Board of
Directors in good faith and evidenced by a Board Resolution.
"Trading Day" with respect to a securities exchange or automated
quotation system means a day on which such exchange or system is open for a
full day of trading.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become
such pursuant to the applicable provisions of this Indenture, and
thereafter "Trustee" shall mean such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such
date, "Trust Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"U.S. Government Obligation" has the meaning specified in Section
1204.
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"Unrestricted Subsidiary" means Unrestricted Subsidiary Funding Company
and any other Subsidiary that is not a Restricted Subsidiary and includes
any Restricted Subsidiary that becomes an Unrestricted Subsidiary in
accordance with Section 1010.
"Vendor Financing Debt" means any Debt owed to (i) a vendor or supplier
of any property or materials used by the Company or its Restricted
Subsidiaries in their telecommunications business, (ii) any Affiliate of
such a vendor or supplier, (iii) any assignee of such a vendor, supplier or
Affiliate of such a vendor or supplier, or (iv) a bank or other financial
institution that has financed or refinanced the purchase of such property
or materials from such a vendor, supplier, Affiliate of such a vendor or
supplier or assignee of such a vendor or supplier; provided that the
aggregate amount of such Debt does not exceed the sum of (w) the purchase
price of such property or materials (including transportation,
installation, warranty and testing charges, as well as applicable taxes
paid, in respect of such property or materials), (x) the cost of design,
development, site acquisition and construction, (y) any interest or other
financing costs accruing or otherwise payable in respect of the foregoing,
and (z) the cost of any services provided by such vendor, supplier or
Affiliate of such vendor or supplier.
"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word
or words added before or after the title "vice president".
"Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons
performing similar functions) of such Person, whether at all times or only
so long as no senior class of securities has such voting power by reason of
any contingency.
"Wholly Owned Restricted Subsidiary" of the Company means a Restricted
Subsidiary all of the outstanding Capital Stock of which (other than
directors' qualifying shares) shall at the time be owned by the Company or
by one or more Wholly Owned Restricted Subsidiaries or by the Company and
one or more Wholly Owned Restricted Subsidiaries.
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture,
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the Company shall furnish to the Trustee such certificates and opinions as may
be required under the Trust Indenture Act. Each such certificate or opinion
shall be given in the form of an Officers' Certificate, if to be given by an
officer of the Company, or an Opinion of Counsel, if to be given by counsel,
and shall comply with the requirements of the Trust Indenture Act and any other
requirement set forth in this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel
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may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company
stating that the information with respect to such factual matters is in the
possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. ACTS OF HOLDERS; RECORD DATES
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or
of a writing appointing any such agent shall be sufficient for any purpose of
this Indenture and (subject to Section 601) conclusive in favor of the Trustee
and the Company, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by
a certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such
instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall
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bind every future Holder of the same Security and the Holder of every Security
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof in respect of anything done, omitted or suffered to be done by the
Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Security.
The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Indenture to be given or taken by Holders
of Securities, provided that the Company may not set a record date for, and the
provisions of this paragraph shall not apply with respect to, the giving or
making of any notice, declaration, request or direction referred to in the next
paragraph. If any record date is set pursuant to this paragraph, the Holders
of Outstanding Securities on such record date, and no other Holders, shall be
entitled to take the relevant action, whether or not such Holders remain
Holders after such record date; provided that no such action shall be effective
hereunder unless taken on or prior to the applicable Record Expiration Date by
Holders of the requisite principal amount of Outstanding Securities on such
record date; and provided, further, that for the purpose of determining whether
Holders of the requisite principal amount of such Securities have taken such
action, no Security shall be deemed to have been Outstanding on such record
date unless it is also Outstanding on the date such action is to become
effective. Nothing in this paragraph shall prevent the Company from setting a
new record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be canceled and of no effect),
nor shall anything in this paragraph be construed to render ineffective any
action taken by Holders of the requisite principal amount of Outstanding
Securities on the date such action is taken. Promptly after any record date is
set pursuant to this paragraph, the Company, at its own expense, shall cause
notice of such record date, the proposed action by Holders and the applicable
Record Expiration Date to be given to the Trustee in writing and to each Holder
of Securities in the manner set forth in Section 106.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to join in the
giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 502, (iii) any request to institute
proceedings referred to in Section 507(2) or (iv) any direction referred to in
Section 512. If any record date is set pursuant to this paragraph, the Holders
of Outstanding Securities on such record date, and no other Holders, shall be
entitled to join in such
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notice, declaration, request or direction, whether or not such Holders remain
Holders after such record date; provided that no such action shall be effective
hereunder unless taken on or prior to the applicable Record Expiration Date by
Holders of the requisite principal amount of Outstanding Securities on such
record date; and provided, further, that for the purpose of determining whether
Holders of the requisite principal amount of such Securities have taken such
action, no Security shall be deemed to have been Outstanding on such record
date unless it is also Outstanding on the date such action is to become
effective. Nothing in this paragraph shall be construed to prevent the Trustee
from setting a new record date for any action (whereupon the record date
previously set shall automatically and without any action by any Person be
canceled and of no effect), nor shall anything in this paragraph be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Securities on the date such action is taken. Promptly
after any record date is set pursuant to this paragraph, the Trustee, at the
Company's expense, shall cause notice of such record date, the matter(s) to be
submitted for potential action by Holders and the applicable Record Expiration
Date to be given to the Company in writing and to each Holder of Securities in
the manner set forth in Section 106.
With respect to any record date set pursuant to this Section, the party
hereto that sets such record date may designate any day as the "Record
Expiration Date" and from time to time may change the Record Expiration Date to
any earlier or later day, provided that no such change shall be effective
unless notice of the proposed new Record Expiration Date is given to the other
party hereto in writing, and to each Holder of Securities in the manner set
forth in Section 106, on or before the existing Record Expiration Date. If a
Record Expiration Date is not designated with respect to any record date set
pursuant to this Section, the party hereto that set such record date shall be
deemed to have initially designated the 180th day after such record date as the
Record Expiration Date with respect thereto, subject to its right to change the
Record Expiration Date as provided in this paragraph. Notwithstanding the
foregoing, no Record Expiration Date shall be later than the 180th day after
the applicable record date.
Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Security may do so with regard
to all or any part of the principal amount of such Security or by one or more
duly appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.
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SECTION 105. NOTICES, ETC., TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing and
mailed, first-class postage prepaid, to or with the Trustee at its
Corporate Trust Office, Attention: Indenture Trust Division, or
(2) the Company by the Trustee or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company addressed
to it at the address of its principal office specified in the first
paragraph of this instrument or at any other address previously furnished
in writing to the Trustee by the Company.
SECTION 106. NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders
is given by mail, neither the failure to mail such notice, nor any defect in
any notice so mailed, to any particular Holder shall affect the sufficiency of
such notice with respect to other Holders. Where this Indenture provides for
notice in any manner, such notice may be waived in writing by the Person
entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
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SECTION 107. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act that is required under such Act to be part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.
SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 109. SUCCESSORS AND ASSIGNS
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 110. SEPARABILITY CLAUSE
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111. BENEFITS OF INDENTURE
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders of Securities, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 112. GOVERNING LAW
This Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York.
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SECTION 113. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date, Purchase
Date or Stated Maturity of any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal (and premium, if any) need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect (including with respect to the accrual of interest) as if made on
the Interest Payment Date, Redemption Date or Purchase Date, or at the Stated
Maturity.
ARTICLE TWO
Security Forms
SECTION 201. FORMS GENERALLY.
The Securities and the Trustee's certificates of authentication shall
be in substantially the forms set forth in this Article, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution thereof.
Securities offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more permanent global Securities in registered
form, substantially in the form set forth in Section 202 (collectively, the
"Global Securities"), deposited with the Trustee, as custodian for the
Depository, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the Global Securities
may from time to time be increased or decreased by adjustments made on the
records of the Trustee as custodian for the Depository or its nominee, as
hereinafter provided.
Securities offered and sold in reliance on Regulation D under the
Securities Act shall be issued in the form of permanent certificated Securities
in registered form in substantially the form set forth in Section 202 (the
"Physical Securities"). Securities issued pursuant to Section 307 in exchange
for interests in the Global Securities shall be in the form of permanent
certificated Securities in registered form substantially in the form set forth
in Section 202 (the "Offshore Physical Securities").
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The definitive Securities shall be printed, lithographed or engraved or
produced by any combination of these methods on steel engraved borders or may
be produced in any other manner permitted by the rules of any securities
exchange on which the Securities may be listed, all as determined by the
officers executing such Securities, as evidenced by their execution of such
Securities.
SECTION 202. FORM OF FACE OF SECURITY
NEXTEL Communications, Inc.
Senior Redeemable Discount Notes due 2007
No. __________ $________
CUSIP NO.________
NEXTEL Communications, Inc., a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Company", which
term includes any successor Person under the Indenture hereinafter referred
to), for value received, hereby promises to pay to __________________, or
registered assigns, the principal sum of _____________________ Dollars on
September 15, 2007 and to pay interest thereon from September 15, 2002 or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually in arrears on March 15 and September 15 in each
year, commencing March 15, 2003 at the rate of 10.65% per annum, until the
principal hereof is paid or duly provided for, provided that any principal and
premium, and any such installment of interest, which is overdue shall bear
interest at the rate of 10.65% per annum (to the extent that the payment of
such interest shall be legally enforceable), from the dates such amounts are
due until they are paid or duly provided for, and such interest shall be
payable on demand. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the March 1 or September 1 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for will forthwith
cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Securities not less than 10 days prior to
such Special
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Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture.
The principal of this Security shall not bear or accrue interest until
September 15, 2002, except in the case of a default in payment of principal
upon acceleration, redemption or repurchase and, in such case, the overdue
principal and any overdue premium shall bear interest at the rate of 10.65% per
annum (to the extent that the payment of such interest shall be legally
enforceable), from the dates such amounts are due until they are paid or duly
provided for. Interest on any overdue principal or premium shall be payable on
demand. Any such interest on overdue principal or premium which is not paid on
demand shall bear interest at the rate of 10.65% per annum (to the extent that
the payment of such interest on interest shall be legally enforceable), from
the date of such demand until the amount so demanded is paid or duly provided
for, and such shall be payable on demand.
If an exchange offer registered under the Securities Act is not
consummated on or before March 15, 1998 in accordance with the terms of the
Registration Rights Agreement, interest (in addition to the accrual of original
issue discount during the period ending September 15, 2002 and in addition to
the interest otherwise due on the Securities after such date) will accrue from
March 15, 1998, at an annual rate of 0.5% of Accreted Value on the preceding
Semiannual Accrual Date on the Securities (and if such exchange offer is not
consummated before June 15, 1998, an additional incremental interest amount
will accrue from June 15, 1998 at an annual rate of 0.5% of Accreted Value on
the preceding Semiannual Accrual Date) payable in cash semiannually, in
arrears, on each March 15 and September 15, commencing March 15, 1998, until
the earlier of the date upon which (i) the exchange offer is consummated, (ii)
a Shelf Registration Statement with respect to all Registerable Securities (as
defined in the Registration Rights Agreement) is declared effective, or (iii)
the Securities become fully tradeable without registration under the Securities
Act, provided that upon the request of any Holder of the Securities, the
Company will deliver to such Holder certificates evidencing such Holder's
Securities without the Private Placement Legend. The Holder of this Security
is entitled to the benefits of such Registration Rights Agreement.
Payment of the principal of (and premium, if any) and any interest on
this Security will be made at the office or agency of the Company maintained
for that purpose in the Borough of Manhattan, The City of New York, in such
coin or currency of the United States of America as at the time of payment is
legal
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tender for payment of public and private debts; provided, however, that
at the option of the Company payment of interest may be made by check mailed to
the address of the Person entitled thereto as such address shall appear in the
Security Register.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
NEXTEL COMMUNICATIONS, INC.
[Seal]
By:
------------------------
Title:
Attest:
- -------------------------
Title:
SECTION 203. FORM OF REVERSE OF SECURITY
This Security is one of a duly authorized issue of Securities of the
Company designated as its Senior Redeemable Discount Notes due 2007 (herein
called the "Securities"), limited in aggregate principal amount at Stated
Maturity to $840,000,000, issued and to be issued under an Indenture, dated as
of September 17, 1997 (herein called the "Indenture", which term shall have the
meaning assigned to it in such instrument), between the Company and Harris
Trust and Savings Bank, as Trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture), and reference is hereby
made to the Indenture for a statement of the respective rights, limitations of
rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered.
The Securities may be redeemed at any time on or after September 15,
2002, at the Company's option, in whole or in part, upon not less than 30 nor
more than 60 days' prior written notice
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mailed by first class mail to each holder's last address as it appears in the
Security Register, at the Redemption Prices (expressed as a percentage of the
principal amount at maturity thereof) set forth below, plus an amount in cash
equal to all accrued and unpaid interest, if any, to the Redemption Date, if
redeemed during the 12-month period beginning September 15 of each of the years
set forth below.
Year Percentage
---- ----------
2002 105.325%
2003 102.663%
On or after September 15, 2004, the Company may redeem the Securities
at a Redemption Price equal to 100% of the principal amount thereof, together
in the case of any such redemption with accrued interest, if any, to the
Redemption Date, but interest installments whose Stated Maturity is on or prior
to such Redemption Date will be payable to the Holders of such Securities, or
one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.
In addition to any redemption provided for in the immediately preceding
paragraphs, in the event of the sale by the Company after the Closing Date and
prior to September 15, 2000 of its Capital Stock (other than Redeemable Stock)
in a single transaction or series of transactions for an aggregate purchase
price equal to or exceeding $125 million, up to a maximum of 33 1/3% of the
aggregate Accreted Value of the Outstanding Securities will, within 180 days of
such sale, at the option of the Company, upon not less than 30 nor more than 60
days' notice by mail, be redeemable from the net proceeds thereof (but only to
the extent such proceeds consist of cash or readily marketable cash equivalents
received in respect of the Company's Capital Stock so sold, in each case net of
all commissions, discounts, fees, expenses and taxes incurred in respect
thereof) at a Redemption Price equal to 110.65% of the Accreted Value of the
Securities to be redeemed to the Redemption Date.
For purposes of this Security and the Indenture, Accreted Value of any
Outstanding Security as of or to any date of determination means an amount
equal to the sum of (i) the issue price of such Security as determined in
accordance with Section 1273 of the Code plus (ii) the aggregate of the
portions of the original issue discount (the excess of the amounts considered
as part of the "stated redemption price at maturity" of such Security within
the meaning of Section 1273(a)(2) of the Code or any successor provisions,
whether denominated as principal or interest, over the issue price of such
Security) that shall theretofore have accrued pursuant to Section 1272 of the
Code (without regard to Section 1272(a)(7) of the Code) from
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the date of issue of such Security (a) for each six-month or shorter period
ending March 15 or September 15 prior to the date of determination and (b) for
the shorter period, if any, from the end of the immediately preceding six-month
or shorter period, as the case may be, to the date of determination, plus (iii)
accrued and unpaid interest to the date such Accreted Value is paid (without
duplication of any amount set forth in (ii) above), minus all amounts
theretofore paid in respect of such Security, which amounts are considered as
part of the "stated redemption price at maturity" of such Security within the
meaning of Section 1273(a)(2) of the Code or any successor provisions (whether
such amounts paid were denominated principal or interest).
The Securities do not have the benefit of any sinking fund obligations.
In the event of redemption, or purchase pursuant to an Offer to
Purchase, of this Security in part only, a new Security or Securities for
the unredeemed or unpurchased portion hereof will be issued in the name of the
Holder hereof upon the cancellation hereof.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Security or certain restrictive covenants and
Events of Default with respect to this Security, in each case upon compliance
with certain conditions set forth in the Indenture.
If an Event of Default shall occur and be continuing, there may be
declared due and payable the Default Amount of the Securities, in the manner
and with the effect provided in the Indenture. Prior to September 15, 2002,
the Default Amount in respect of this Security as of any particular date shall
equal the Accreted Value of this Security as of such date. On and after
September 15, 2002, the Default Amount in respect of this Security as of any
particular date shall equal 100% of the principal amount payable in respect of
this Security at the Stated Maturity hereof. Upon payment of (i) the Default
Amount so declared due and payable and any overdue installment of interest in
respect of this Security, (ii) any overdue principal or premium payable on
redemption or repurchase of this Security and (iii) as provided on the face
hereof, any interest on any overdue Default Amount, principal, premium or
interest in respect of this Security (to the extent that the payment of such
interest shall be legally enforceable), all of the Company's obligations in
respect of the payment of the principal of and any premium and interest on this
Security shall terminate.
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The Indenture provides that, subject to certain conditions, if a Change
of Control occurs, the Company shall be required to make an Offer to Purchase
for all of the Securities.
Unless the context otherwise requires, references herein to the
principal amount of any Security mean, as of any day, (i) with respect to any
portion thereof required hereunder to be redeemed or repurchased on any
redemption or repurchase date on or prior to such day, the amount due and
payable in respect of such portion upon such redemption or repurchase date
(excluding premium and interest), (ii) with respect to any portion thereof not
required to be so redeemed or repurchased, but which has been declared due and
payable prior to the Stated Maturity thereof as provided in the Indenture, the
Default Amount in respect of such portion as of such day and (iii) with respect
to any portion thereof not required so to be redeemed or repurchased and not so
declared due and payable, such portion of the principal amount of such Security
payable at Stated Maturity thereof.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of a
majority in aggregate principal amount at Stated Maturity of the Securities at
the time Outstanding. The Indenture also contains provisions permitting the
Holders of specified percentages in aggregate principal amount at Stated
Maturity of the Securities at the time Outstanding, on behalf of the Holders of
all the Securities, to waive compliance by the Company with certain provisions
of the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Security shall
be conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer hereof or
in exchange herefor or in lieu hereof, whether or not notation of such consent
or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee
or for any other remedy thereunder, unless such Holder shall have previously
given the Trustee written notice of a continuing Event of Default with respect
to the Securities, the Holders of not less than 25% in principal amount at
Stated Maturity of the Securities at the time Outstanding shall have made
written request to the Trustee to institute proceedings in respect of such
Event of Default as Trustee and offered the Trustee reasonable indemnity and
the Trustee shall not have received from the Holders of a majority in
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<PAGE> 47
principal amount at Stated Maturity of Securities at the time Outstanding a
direction inconsistent with such request, and shall have failed to institute
any such proceeding, for 60 days after receipt of such notice, request and
offer of indemnity. The foregoing shall not apply to certain suits described
in the Indenture, including any suit instituted by the Holder of this Security
for the enforcement of any payment of principal hereof or any premium or
interest hereon on or after the respective due dates expressed herein (or, in
the case of redemption, on or after the Redemption Date or, in the case of any
purchase of this Security required to be made pursuant to an Offer to Purchase,
on or after the Purchase Date.)
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any)
and interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed by,
the Holder hereof or his attorney duly authorized in writing, and thereupon one
or more new Securities, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Securities are
exchangeable for a like aggregate principal amount of Securities of like tenor
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for
all purposes, whether or not this Security be overdue, and neither the Company,
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<PAGE> 48
the Trustee nor any such agent shall be affected by notice to the contrary.
Interest on this Security shall be computed on the basis of a 360-day
year of twelve 30-day months.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
The Indenture and this Security shall be governed by and construed in
accordance with the laws of the State of New York.
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<PAGE> 49
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
- --------------------------------------------------------------------------------
Please print or typewrite name and address including zip code of assignee
- --------------------------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing ____________________________ attorney to transfer said Security on
the books of the Company with full power of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL SECURITIES OTHER THAN EXCHANGE SECURITIES
AND OFFSHORE PHYSICAL SECURITIES]
In connection with any transfer of this Security occurring prior to the
date which is the earlier of (i) the date the Shelf Registration Statement with
respect to resales of the Securities is declared effective or (ii) the end of
the period referred to in Rule 144(k) under the Securities Act, the undersigned
confirms that without utilizing any general solicitation or general advertising
that:
[Check One]
[ ] (a) this Security is being transferred in compliance with the exemption
from registration under the Securities Act of 1933, as amended,
provided by Rule 144A thereunder.
[ ] (b) this Security is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Security and the Indenture.
If none of the foregoing boxes is checked, the Trustee shall not be obligated to
register this Security in the name of any Person
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<PAGE> 50
other than the Holder hereof unless and until the conditions to any such
transfer of registration set forth herein and in Section 307 of the Indenture
shall have been satisfied.
Date:
---------------------- -------------------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as written upon the
face of the within-mentioned instrument in every
particular, without alteration or any change
whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
of 1933, as amended, and is aware that the sale to it is being made in reliance
on Rule 144A and acknowledges that it has received such information regarding
the Company as the undersigned has requested pursuant to Rule 144A or has
determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Date:
---------------------- -------------------------------------------------
NOTICE: To be executed by an executive officer.
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<PAGE> 51
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased in its entirety by
the Company pursuant to Section 1013 of the Indenture, check the box:
[ ]
If you want to elect to have only a part of the principal amount at
Stated Maturity of this Security purchased by the Company pursuant to Section
1013 of the Indenture, state the portion of such amount: $_________
Dated: Your Signature:
--------------------------
(Sign exactly as name appears
on the other side of this Security)
Signature Guarantee:
------------------------------------------------------------
(Signature must be guaranteed by a financial institution that is a member
of the Securities Transfer Agent Medallion Program ("STAMP"), the Stock Exchange
Medallion Program ("SEMP"), the New York Stock Exchange, Inc. Medallion
Signature Program ("MSP") or such other signature guarantee program as may be
determined by the Security Registrar in addition to, or in substitution for,
STAMP, SEMP or MSP, all in accordance with the Securities Exchange Act of 1934,
as amended.)
SECTION 204. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
Dated:
This is one of the Securities referred to in the within-mentioned
Indenture.
Harris Trust and Savings Bank,
as Trustee
By
----------------------------------------
Authorized Signatory
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<PAGE> 52
SECTION 205. RESTRICTIVE LEGENDS. Unless and until a Security is exchanged fo
an Exchange Security or sold in connection with an effective Shelf
Registration Statement pursuant to the Registration Rights Agreement, the Global
Securities and each Physical Security shall bear the following legend on the
reverse thereof:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), OR (B) IT IS NOT A
U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL
NOT, WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, RESELL OR
OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO NEXTEL COMMUNICATIONS, INC. OR
ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE), (E) AFTER REGISTRATION OR PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT
IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THIS SECURITY WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER
MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE
MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE
THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE
INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY
TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING RESTRICTIONS.
Each Global Security, whether or not an Exchange Security, shall also
bear the following legend on the reverse thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
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<PAGE> 53
TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO., OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN SECTION 307 OF THE INDENTURE.
ARTICLE THREE
The Securities
SECTION 301. TITLE AND TERMS.
The aggregate principal amount at Stated Maturity of Securities which
may be authenticated and delivered under this Indenture is limited to
$840,000,000, except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities pursuant to Section 304, 305, 308, 906 or 1108 or in connection with
an Offer to Purchase pursuant to Section 1013.
The Securities shall be known and designated as the "Senior Redeemable
Discount Notes due 2007" of the Company. Their Stated Maturity shall be
September 15, 2007 and they shall bear interest at the rate of 10.65% per
annum, from September 15, 2002 or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, as the case may be, payable
semi-annually on March 15 and September 15, commencing March 15, 2003 until the
principal thereof is paid or made available for payment.
The principal of (and premium, if any) and interest on the Securities
shall be payable at the office or agency of the Company in the Borough of
Manhattan, The City of New York maintained for such purpose and at any other
office or agency maintained by the Company for such purpose; provided, however,
that at the option of the Company payment of interest, may be made by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register.
The Company may be required to make an Offer to Purchase the Securities
as provided in Section 1013.
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<PAGE> 54
The Securities shall be redeemable as provided in Article Two and
Article Eleven.
The Securities shall be subject to Defeasance and/or Covenant
Defeasance as provided in Article Twelve.
SECTION 302. DENOMINATIONS.
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 principal amount and any integral
multiple thereof.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its President or one of its Vice Presidents, under its
corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the
Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities; and the Trustee in accordance
with such Company Order shall authenticate and deliver such Securities as in
this Indenture provided and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder.
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<PAGE> 55
SECTION 304. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at any office
or agency of the Company designated pursuant to Section 1002, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Securities the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of definitive Securities
of authorized denominations and of a like tenor. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 1002 being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is
hereby appointed "Security Registrar" for the purpose of registering Securities
and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at an
office or agency of the Company designated pursuant to Section 1002 for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denominations and of a like aggregate
principal amount and tenor. No such transfer shall be effected until, and such
transferee shall succeed to the rights of a Holder only upon, final acceptance
and registration of the
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<PAGE> 56
transfer by the Security Registrar in the Security Register. Prior to the
registration of any transfer by a Holder as provided herein, the Company, the
Trustee and any agent of the Company shall treat the person in whose name the
Security is registered as the owner thereof for all purposes whether or not the
Security shall be overdue, and neither the Company, the Trustee, nor any such
agent shall be affected by notice to the contrary. Furthermore, any Holder of
a Global Security shall, by acceptance of such Global Security, agree that
transfers of beneficial interests in such Global Security may be effected only
through a book entry system maintained by the Holder of such Global Security
(or its agent) and that ownership of a beneficial interest in the Security
shall be required to be reflected in a book entry.
At the option of the Holder, Securities may be exchanged for other
Securities (including an exchange of securities for Exchange Securities) of any
authorized denominations and of a like aggregate principal amount and tenor,
upon surrender of the Securities to be exchanged at such office or agency
provided, that no exchange of Securities for Exchange Securities shall occur
until a Registration Statement shall have been declared effective by the
Commission and that Securities that are exchanged for Exchange Securities
pursuant to such Registration Statement shall be canceled by the Trustee.
Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities which
the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906 or 1108 or in accordance with any Offer
to Purchase pursuant to Section 1013, and in any such case not involving any
transfer.
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<PAGE> 57
The Company shall not be required (i) to issue, register the transfer
of or exchange any Security during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities selected for redemption under Section 1104 and ending at the close
of business on the day of such mailing, or (ii) to register the transfer of or
exchange any Security so selected for redemption in whole or in part, except
the unredeemed portion of any Security being redeemed in part.
SECTION 306. BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITY.
(a) The Global Security initially shall (i) be registered in the name
of the Depository for such Global Security or the nominee of such Depository;
(ii) be delivered to the Trustee as custodian for such Depository; and (iii)
bear legends as set forth in Section 205.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository, or the Trustee as its custodian, or under the
Global Security and the Depository may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of such
Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by the Depository or impair, as between the
Depository and its Agent Members, the operation of customary practices
governing the exercise of the rights of a holder of any Security.
(b) Transfers of a Global Security shall be limited to transfers of
such Global Security in whole, but not in part, to the Depository, its
successors or their respective nominees. Interests of beneficial owners in a
Global Security may be transferred in accordance with the rules and procedures
of the Depository and the provisions of Section 307. In addition, Physical
Securities shall be transferred to all beneficial owners in exchange for their
beneficial interests in the Global Security, respectively, if (i) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for the Global Security, as the case may be, and a successor
depository is not appointed by the Company within 90 days of such notice, (ii)
an Event of Default has occurred and is continuing and the Security Registrar
has received a request therefor from the Depository or (iii) in accordance with
the rules and procedures of the Depository and the provisions of Section 307.
(c) In connection with any transfer of a portion of the beneficial
interests in the Global Security to beneficial owners
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<PAGE> 58
pursuant to paragraph (b) of this Section, the Security Registrar shall reflect
on the Security Register the date and a decrease in the principal amount of the
Global Security in an amount equal to the principal amount of the beneficial
interest in the Global Security to be transferred, and the Company shall
execute, and the Trustee shall authenticate and deliver, one or more Physical
Securities of like tenor and amount.
(d) In connection with the transfer of the entire Global Security to
beneficial owners pursuant to paragraph (b) of this Section, the Global
Security shall be deemed to be surrendered to the Trustee for cancellation, and
the Company shall execute, and the Trustee shall authenticate and deliver, to
each beneficial owner identified by the Depository in exchange for its
beneficial interest in the Global Security, an equal aggregate principal amount
of Physical Securities of authorized denominations.
(e) Any Physical Security delivered in exchange for an interest in the
Global Security pursuant to paragraph (b), (c) or (d) of this Section shall,
except as otherwise provided by paragraph (d) of Section 307 bear the legend
regarding transfer restrictions applicable to the Physical Securities set forth
in Section 205.
(f) The registered holder of a Global Security may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
SECTION 307. SPECIAL TRANSFER PROVISIONS.
Unless and until a Security is exchanged for an Exchange Security or
sold in connection with an effective Shelf Registration Statement pursuant to
the Registration Rights Agreement, the following provisions shall apply:
(a) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a Physical Security or
an interest in the Global Security to a QIB (excluding Non-U.S. Persons):
(i) If the Security to be transferred consists of (x) Physical
Securities, the Security Registrar shall register the transfer if such
transfer is being made by a proposed transferor who has checked the box
provided for on the form of security stating, or has otherwise advised the
Company and the Security Registrar in writing, that the sale has been made
in compliance with the provisions of Rule 144A, to a transferee who has
signed the certification provided for
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<PAGE> 59
on the form of Security stating, or has otherwise advised the Company and
the Security Registrar in writing, that it is purchasing the Security for
its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a QIB within the
meaning of Rule 144A, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as it has requested pursuant to Rule 144A
or has determined not to request such information and that it is aware that
the transferor is relying upon its foregoing representations in order to
claim the exemption from registration provided by Rule 144A or (y) an
interest in the Global Security, the transfer of such interest may be
effected only through the book entry system maintained by the Depository.
(ii) If the proposed transferee is an Agent Member, and the Security to
be transferred consists of Physical Securities, upon receipt by the
Security Registrar of the documents referred to in clause (i) and
instructions given in accordance with the Depository's and the Security
Registrar's procedures, the Security Registrar shall reflect in the
Security Register the date and an increase in the principal amount at
maturity of the Global Security in an amount equal to the principal amount
at maturity of the Physical Securities to be transferred, and the Trustee
shall cancel the Physical Securities so transferred.
(b) Transfers of Interests in Unlegended Offshore Physical Securities.
The following provisions shall apply with respect to any transfer of interests
in unlegended Offshore Physical Securities. The Security Registrar shall
register the transfer of any such Security without requiring any additional
certification.
(c) Transfers to Non-U.S. Persons at Any Time. The following
provisions shall apply with respect to any transfer of a Security to a Non-U.S.
Person:
(i) Prior to October 28, 1997, the Security Registrar shall register any
proposed transfer of a Security to a Non-U.S. Person upon receipt of a
certificate substantially in the form of Exhibit A hereto from the proposed
transferor.
(ii) On and after October 28, 1997, the Security Registrar shall
register any proposed transfer to any Non-U.S. Person if the Security to be
transferred is a Physical Security or an interest in the Global Security,
upon receipt of a certificate substantially in the form of Exhibit A from
the proposed transferor.
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(iii) If the proposed transferor is an Agent Member holding a
beneficial interest in the Global Security upon receipt by the Security
Registrar of (x) the documents, if any, required by paragraph (ii) and (y)
instructions in accordance with the Depository's and the Security
Registrar's procedures, the Security Registrar shall reflect in the
Security Register the date and a decrease in the principal amount at
maturity of the Global Security in an amount equal to the principal amount
at maturity of the beneficial interest in the Global Security to be
transferred, and the Company shall execute, and the Trustee shall
authenticate and deliver, one or more Offshore Physical Securities of like
tenor and amount.
(d) Private Placement Legend. Upon the transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the
Security Registrar shall deliver Securities that do not bear the Private
Placement Legend. Upon the transfer, exchange or replacement of securities
bearing the Private Placement Legend, the Security Registrar shall deliver only
Securities that bear the Private Placement Legend unless either (i) the
circumstances contemplated by paragraphs (a)(i)(x) or (d)(ii) of this Section
307 exist or (ii) there is delivered to the Trustee an Opinion of Counsel
reasonably satisfactory to the Company and the Trustee to the effect that
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act.
(e) General. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as
provided in this Indenture. The Security Registrar shall not register a
transfer of any Security unless such transfer complies with the restrictions on
transfer of such Security set forth in the Private Placement Legend and in this
Indenture. In connection with any transfer of Securities, each Holder agrees
by its acceptance of the Securities to furnish the Trustee or the Company such
certifications, legal opinions or other information as either of them may
reasonably require to confirm that such transfer is being made pursuant to an
exemption from, or a transaction not subject to, the registration requirements
of the Securities Act; provided that the Trustee shall not be required to
determine (but may rely on a determination made by the Company with respect to)
the sufficiency of any such certifications, legal opinions or other
information.
The Trustee shall retain copies of all letters, notices and other
written communications received pursuant to Section 306
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or this Section 307. The Company shall have the right to inspect and make
copies of all such letters, notices or other written communications at any
reasonable time upon the giving of reasonable written notice to the Trustee.
SECTION 308. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security and
(ii) such security or indemnity as may be required by them to save each of them
and any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of like tenor and principal amount and bearing a
number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
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SECTION 309. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities (or their respective Predecessor
Securities) are registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each Security and
the date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date
of the proposed payment, such money when deposited to be held in trust for
the benefit of the Persons entitled to such Defaulted Interest as in this
Clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be given to each Holder in the manner
specified in Section 106, not less than 10 days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Securities (or
their respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
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(2) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may
be required by such exchange, if, after notice given by the Company to the
Trustee of the proposed payment pursuant to this Clause, such manner of
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 310. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of (and premium, if
any) and (subject to Section 309) interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 311. CANCELLATION.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any Offer to Purchase pursuant to
Section 1013 shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly canceled by it. The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in
any manner whatsoever, and all Securities so delivered shall be promptly
canceled by the Trustee. No Securities shall be authenticated in lieu of or in
exchange for any Securities canceled as provided in this Section, except as
expressly permitted by this Indenture. All canceled Securities held by the
Trustee shall be disposed of as directed by a Company Order; provided, however,
that the Trustee shall not be required to destroy canceled Securities.
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SECTION 312. COMPUTATION OF INTEREST
Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.
SECTION 313. CUSIP NUMBERS.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption or repurchase as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Securities or as contained in any notice of a
redemption or repurchase and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption or
repurchase shall not be affected by any defect in or omission of such numbers.
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of Securities herein
expressly provided for), and the Trustee, on demand of and at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 308 and (ii)
Securities for whose payment money has theretofore been deposited in
trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee
for cancellation
(i) have become due and payable, or
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(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
the Company,
and the Company, in the case of (i), (ii) or (iii) above, has deposited
or caused to be deposited with the Trustee as trust funds in trust for
the purpose an amount sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to the
Trustee for cancellation, for principal (and premium, if any) and
interest to the date of such deposit (in the case of Securities which
have become due and payable) or to the Stated Maturity or Redemption
Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture pursuant
to this Article Four, the obligations of the Company to the Trustee under
Section 607, the obligations of the Trustee to any Authenticating Agent under
Section 614 and, if money shall have been deposited with the Trustee pursuant to
subclause (B) of Clause (1) of this Section, the obligations of the Trustee
under Section 402 and the last paragraph of Section 1003 shall survive.
SECTION 402. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as
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the Trustee may determine, to the Persons entitled thereto, of the principal
(and premium, if any) and interest for whose payment such money has been
deposited with the Trustee.
ARTICLE FIVE
Remedies
SECTION 501. EVENTS OF DEFAULT.
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(1) default in the payment of the principal of (or premium, if any, on)
any Security at its Maturity; or
(2) default in the payment of any interest upon any Security when it
becomes due and payable, and continuance of such default for a period of 30
days; or
(3) default, on the applicable Purchase Date, in the purchase of
Securities required to be purchased by the Company pursuant to an Offer to
Purchase as to which an Offer has been mailed to Holders or failure to make
an Offer to Purchase as required hereunder; or
(4) default in the performance, or breach, of Section 801; or
(5) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in this Section
specifically dealt with), and continuance of such default or breach for a
period of 60 days after there has been given, by registered or certified
mail, to the Company by the Trustee or to the Company and the Trustee by
the Holders of at least 25% in principal amount at Stated Maturity of the
Outstanding Securities a written notice specifying such default or breach
and requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder; or
(6) a default or defaults under any bond(s), debenture(s), note(s) or
other evidence(s) of Debt for money borrowed by the Company or any
Restricted Subsidiary (or under any mortgage(s), indenture(s) or
instrument(s) under
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which there may be issued or by which there may be secured or evidenced any
Debt for money borrowed by the Company or any Restricted Subsidiary)
having, individually or in the aggregate, a principal or similar amount
outstanding of at least $25,000,000, whether such Debt now exists or shall
hereafter be created, which default or defaults shall constitute a failure
to pay any portion of the principal or similar amount of such Debt when due
and payable after the expiration of any applicable grace period with
respect thereto or shall have resulted in such Debt becoming or being
declared due and payable; or
(7) a final judgment or final judgments for the payment of money are
entered against the Company or any Restricted Subsidiary in an aggregate
amount in excess of $25,000,000 by a court or courts of competent
jurisdiction, which judgments remain undischarged or unbonded for a period
(during which execution shall not be effectively stayed) of 60 days after
the right to appeal all such judgments has expired; or
(8) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company or any Restricted
Subsidiary in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other similar
law or (B) a decree or order adjudging the Company or any Restricted
Subsidiary a bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or composition of
or in respect of the Company or any Restricted Subsidiary under any
applicable Federal or State law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of
the Company or any Restricted Subsidiary or of any substantial part of the
property of the Company or any Restricted Subsidiary, or ordering the
winding up or liquidation of the affairs of the Company or any Restricted
Subsidiary, and the continuance of any such decree or order for relief or
any such other decree or order unstayed and in effect for a period of 60
consecutive days; or
(9) the commencement by the Company or any Restricted Subsidiary of a
voluntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by the Company or any Restricted Subsidiary to the entry of a
decree or order for relief in respect of the Company or any Restricted
Subsidiary in an involuntary case or proceeding under any applicable
Federal or State
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bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against the
Company or any Restricted Subsidiary, or the filing by the Company or any
Restricted Subsidiary of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State law, or the
consent by the Company or any Restricted Subsidiary to the filing of such
petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar official
of the Company or any Restricted Subsidiary or of any substantial part of
the property of the Company or any Restricted Subsidiary, or the making by
the Company or any Restricted Subsidiary of an assignment for the benefit
of creditors, or the admission by the Company or any Restricted Subsidiary
in writing of its inability to pay its debts generally as they become due,
or the taking of corporate action by the Company or any Restricted
Subsidiary in furtherance of any such action.
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default (other than an Event of Default
specified in Section 501(8) or (9)) occurs and is continuing, then and in every
such case the Trustee or the Holders of not less than 25% in principal amount
at Stated Maturity of the Outstanding Securities may declare the Default Amount
of all the Securities to be due and payable immediately, by a notice in writing
to the Company (and to the Trustee if given by Holders), and upon any such
declaration such Default Amount and any accrued interest shall become
immediately due and payable. If an Event of Default specified in Section
501(8) or (9) occurs, the Default Amount of and any accrued interest on the
Securities then Outstanding shall ipso facto become immediately due and payable
without any declaration or other Act on the part of the Trustee or any Holder.
Prior to September 15, 2002, the "Default Amount" in respect of any
particular Security as of any particular date shall equal the Accreted Value of
the Security as of such date. On and after September 15, 2002, the Default
Amount in respect of any particular Security as of any particular date shall
equal 100% of the principal amount payable in respect of the Security at the
Stated Maturity thereof.
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of a majority
in principal amount at Stated Maturity of the Outstanding Securities, by
written
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notice to the Company and the Trustee, may rescind and annul such declaration
and its consequences if
(1) the Company has paid or deposited with the Trustee a sum sufficient
to pay
(A) all overdue interest on all Securities (without duplication
of any amount thereof paid or deposited pursuant to Clause (B) or (C)
below),
(B) the principal of (and premium, if any, on) any Securities
which have become due otherwise than by such declaration of
acceleration (including any Securities required to have been purchased
on the Purchase Date pursuant to an Offer to Purchase made by the
Company) and, to the extent that payment of such interest is lawful,
interest thereon at the rate provided by the Securities (without
duplication of any amount thereof paid or deposited pursuant to Clause
(A) above or Clause (C) below),
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate provided by the Securities
(without duplication of any amount thereof paid or deposited pursuant
to Clause (A) or (B) above), and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
(2) all Events of Default, other than the non-payment of the principal
of Securities which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Unless the context otherwise requires, references in this Indenture to
the principal amount of any Security mean, as of any day, (i) with respect to
any portion thereof required thereunder to be redeemed or repurchased on any
redemption or repurchase date on or prior to such day, the amount due and
payable in respect of such portion upon such redemption or repurchase date
(excluding premium and interest), (ii) with respect to any portion thereof not
required to be so redeemed or repurchased, but which has been declared due and
payable prior to
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the Stated Maturity thereof, the Default Amount in respect of such portion as
of such day and (iii) with respect to any portion thereof not required so to be
redeemed or repurchased and not so declared due and payable, such portion of
the principal amount of such Security payable at Stated Maturity thereof.
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
The Company covenants that if
(1) default is made in the payment of any interest on any Security when
such interest becomes due and payable and such default continues for a
period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof or, with respect to any
Security required to have been purchased pursuant to an Offer to Purchase
made by the Company, at the Purchase Date thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of
the Holders of such Securities, the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest, and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal (and premium, if any) and on any overdue interest, at the rate
provided by the Securities, and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of any judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have
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claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any moneys
or other property payable or deliverable on any such claims and to distribute
the same; and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding is
hereby authorized by each Holder to make such payments to the Trustee and, in
the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under Section
607.
No provision of this Indenture shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding; provided,
however, that the Trustee may, on behalf of the Holders, vote for the election
of a trustee in bankruptcy or similar official and be a member of a creditors'
or other similar committee.
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto,
and any such proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 506. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any) or interest, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
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FIRST: To the payment of all amounts due the Trustee under Section 607;
and
SECOND: To the payment of the amounts then due and unpaid for principal
of (and premium, if any) and interest on the Securities in respect of which
or for the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and
payable on such Securities for principal (and premium, if any) and
interest, respectively.
SECTION 507. LIMITATION ON SUITS.
No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount at Stated
Maturity of the Outstanding Securities shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount at Stated Maturity of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
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SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND
INTEREST.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Section 309) interest on such Security on the respective Stated Maturities
expressed in such Security (or, in the case of redemption, on the Redemption
Date or in the case of an Offer to Purchase made by the Company and required to
be accepted as to such Security, on the Purchase Date) and to institute suit
for the enforcement of any such payment, and such rights shall not be impaired
without the consent of such Holder.
SECTION 509. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders
shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
SECTION 510. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 308, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
SECTION 511. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Security to
exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an
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acquiescence therein. Every right and remedy given by this Article or by
law to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
SECTION 512. CONTROL BY HOLDERS.
The Holders of a majority in principal amount at Stated Maturity of the
Outstanding Securities shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
SECTION 513. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount at Stated
Maturity of the Outstanding Securities may on behalf of the Holders of all the
Securities waive any past default hereunder and its consequences, except a
default
(1) in the payment of the principal of (or premium, if any) or interest
on any Security (including any Security which is required to have been
purchased pursuant to an Offer to Purchase which has been made by the
Company), or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 514. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit
to file an undertaking to
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pay the costs of such suit, and may assess costs against any such party
litigant, in the manner and to the extent provided in the Trust Indenture Act;
provided, that neither this Section nor the Trust Indenture Act shall be deemed
to authorize any court to require such an undertaking or to make such an
assessment in any suit instituted by the Company.
SECTION 515. WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any usury, stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage
of any such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been enacted.
ARTICLE SIX
The Trustee
SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES.
The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this Indenture
relating to the conduct or affecting the liability of or affording protection
to the Trustee shall be subject to the provisions of this Section.
SECTION 602. NOTICE OF DEFAULTS.
The Trustee shall give the Holders notice of any Default hereunder as
and to the extent provided by the Trust Indenture Act; provided, however, that
in the case of any Default of the character specified in Section 501(5), no
such notice to
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Holders shall be given until at least 30 days after the occurrence thereof.
SECTION 603. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the advice of such counsel
or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall
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determine to make such further inquiry or investigation, it shall be
entitled (subject to reasonable confidentiality arrangements as may be
proposed by the Company) to examine the books, records and premises of the
Company, personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
SECTION 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the
use or application by the Company of Securities or the proceeds thereof.
SECTION 605. MAY HOLD SECURITIES.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
SECTION 606. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
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SECTION 607. COMPENSATION AND REIMBURSEMENT.
The Company agrees:
(1) to pay to the Trustee from time to time such compensation as the
Company and the Trustee shall from time to time agree in writing for all
services rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an
express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
and all loss, damage, claim, liability or expense incurred without
negligence or bad faith on its part, including taxes (other than taxes
based upon, measured by or determined by the revenue or income of the
Trustee), arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
The Trustee shall have a lien prior to the Securities as to all
property and funds held by it hereunder for any amount owing to it pursuant to
this Section 607, except with respect to funds held in trust for the benefit of
the Holders of particular Securities.
When the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Section 501(8) or Section 501(9), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.
The provisions of this Section shall survive any termination of this
Indenture.
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SECTION 608. CONFLICTING INTERESTS.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
SECTION 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least $50,000,000 and its Corporate Trust
Office in Chicago, Illinois or the Borough of Manhattan, The City of New York.
If such Person publishes reports of condition at least annually, pursuant to
law or to the requirements of said supervising or examining authority, then for
the purposes of this Section and to the extent permitted by the Trust Indenture
Act, the combined capital and surplus of such Person shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.
SECTION 610. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time by giving written notice thereof
to the Company. If an instrument of acceptance by a successor Trustee in
accordance with the applicable requirements of Section 611 shall not have been
delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount at Stated Maturity of the Outstanding Securities,
delivered to the Trustee and to the Company. If an instrument of acceptance by
a successor Trustee in accordance with the applicable requirements of Section
611 shall not have been delivered to the Trustee within
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30 days after the giving of such notice of removal, the Trustee may petition
any court of competent jurisdiction for the appointment of a successor Trustee.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall
be appointed or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove
the Trustee, or (ii) subject to Section 514, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause,
the Company, by a Board Resolution, shall promptly appoint a successor Trustee.
If, within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of
the Holders of a majority in principal amount at Stated Maturity of the
Outstanding Securities delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of Section 611,
become the successor Trustee and supersede the successor Trustee appointed by
the Company. If no successor Trustee shall have been so appointed by the
Company or the Holders and accepted appointment in accordance with the
applicable requirements of Section 611, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.
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(f) The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee to all Holders in
the manner provided in Section 106. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.
SECTION 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee; but, on request of the Company or
the successor Trustee, such retiring Trustee shall, upon payment of its
charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder. Upon request of any such
successor Trustee, the Company shall execute any and all instruments for more
fully and certainly vesting in and confirming to such successor Trustee all
such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
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SECTION 613. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
SECTION 614. APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents which shall
be authorized to act on behalf of the Trustee to authenticate Securities issued
upon original issue and upon exchange, registration of transfer or partial
redemption or partial purchase or pursuant to Section 308, and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to the authentication
and delivery of Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a corporation organized and doing business under the laws of the
United States of America, any State thereof or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision or
examination by Federal or State authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Authenticating Agent
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time an Authenticating
Agent shall cease to be eligible in accordance with the provisions of this
Section, such Authenticating Agent shall resign immediately in the manner and
with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the
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execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 106, to all Holders as their
names and addresses appear in the Security Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder,
with like effect as if originally named as an Authenticating Agent. No
successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
If an appointment is made pursuant to this Section, the Securities may
have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:
This is one of the Securities described in the within-mentioned
Indenture.
Dated:
Harris Trust and Savings Bank,
as Trustee
By ,
---------------------------
As Authenticating Agent
By
---------------------------
Authorized Signatory
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ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not more than 15 days after each March 1 and
September 1, commencing March 1, 2003, a list, in such form as the Trustee
may reasonably require, of the names and addresses of the Holders as of
such Regular Record Date, and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
excluding from any such list names and addresses received by the Trustee in
its capacity as Security Registrar.
SECTION 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
any disclosure of information as to the names and addresses of Holders made
pursuant to the Trust Indenture Act.
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SECTION 703. REPORTS BY TRUSTEE.
(a) Within 60 days after January 15 of each year commencing January 15,
1998, the Trustee shall transmit to Holders such reports concerning the Trustee
and its actions under this Indenture as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange upon which the
Securities are listed, with the Commission and with the Company. The Company
will promptly notify the Trustee when the Securities are listed on any stock
exchange.
SECTION 704. REPORTS BY COMPANY.
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at
the times and in the manner provided pursuant to such Act; provided that any
such information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission. The Trustee's receipt of such reports, information and documents
shall not constitute constructive notice of any information contained therein
or determinable from information contained therein.
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. COMPANY MAY CONSOLIDATE, ETC. ONLY ON CERTAIN TERMS.
The Company (x) shall not, in any transaction or series of related
transactions, merge or consolidate with or into, or sell, assign, convey,
transfer, lease or otherwise dispose of its properties and assets substantially
as an entirety to, any Person, and (y) shall not permit any of its Restricted
Subsidiaries to enter into any such transaction or series of transactions if
such transaction or series of transactions, in the aggregate, would result in a
sale, assignment, conveyance, transfer, lease or other disposition of the
properties and assets of the Company and its Restricted Subsidiaries, taken as
a whole, substantially as an entirety to any Person, unless, in each case (x)
or (y), at the time and after giving effect thereto
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(i) either: (A) if the transaction or series of transactions is a
consolidation of the Company with or a merger of the Company with or into
any other Person, the Company shall be the surviving Person of such merger
or consolidation, or (B) the Person formed by any consolidation with or
merger with or into the Company, or to which the properties and assets of
the Company or the Company and its Restricted Subsidiaries, taken as a
whole, as the case may be, substantially as an entirety are sold, assigned,
conveyed, leased or otherwise transferred (any such surviving Person or
transferee Person referred to in this clause (B) being the "Surviving
Entity"), shall be a corporation, partnership or trust organized and
existing under the laws of the United States of America, any state thereof
or the District of Columbia and shall expressly assume by a supplemental
indenture executed and delivered to the Trustee, in form satisfactory to
the Trustee, all the obligations of the Company under the Securities and
this Indenture and, in each case, this Indenture, as so supplemented, shall
remain in full force and effect, and
(ii) immediately before and immediately after giving effect to such
transaction or series of transactions on a pro forma basis (including any
Debt Incurred or anticipated to be Incurred in connection with or in
respect of such transaction or series of transactions), no Default or
Event of Default shall have occurred and be continuing, and
(iii) the Consolidated Net Worth of the Company or the Surviving
Entity, as the case may be, shall be equal to or greater than that of the
Company immediately prior to such transaction or series of transactions;
provided, however, that the foregoing requirements shall not apply to any
transaction or series of transactions involving the sale, assignment,
conveyance, transfer, lease or other disposition of the properties and assets by
any Restricted Subsidiary to any other Restricted Subsidiary, or the merger or
consolidation of any Restricted Subsidiary with or into any other Restricted
Subsidiary.
In connection with any consolidation, merger, sale, assignment,
conveyance, transfer, lease or other disposition contemplated by the foregoing
provisions, the Company shall deliver, or cause to be delivered, to the
Trustee, in form and substance reasonably satisfactory to the Trustee, an
Officers' Certificate stating that such consolidation, merger, sale,
assignment, conveyance, transfer, lease or other disposition and the
supplemental indenture in respect thereof (required under clause (i)(B) of the
preceding paragraph) comply with the requirements of this Indenture and an
Opinion of Counsel that the
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deliveries required by this Article 8 have been complied with. Each such
Officers' Certificate shall set forth the manner of determination of the
Consolidated Net Worth in accordance with clause (iii) of the preceding
paragraph.
For all purposes of this Indenture and the Securities (including the
provisions described in the two immediately preceding paragraphs and Section
1008 and Section 1010, Subsidiaries of any Surviving Entity will, upon such
transaction or series of transactions, become Restricted Subsidiaries or
Unrestricted Subsidiaries as provided pursuant to Section 1010 and all Debt of
the Surviving Entity and its Subsidiaries that was not Debt of the Company and
its Subsidiaries immediately prior to such transaction or series of
transactions shall be deemed to have been Incurred upon such transaction or
series of transactions.
SECTION 802. SUCCESSOR SUBSTITUTED.
Upon any transaction or series of transactions that are of the type
described in clause (x) or (y) of, and are effected in accordance with, Section
801, the Surviving Entity shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such Surviving Entity had been named as the Company herein,
and thereafter, except in the case of a lease, the predecessor Person shall be
relieved of all obligations and covenants under this Indenture and the
Securities.
ARTICLE NINE
Supplemental Indentures
SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company herein and
in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company; or
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(3) to comply with any requirements of the Commission in order to
effect and maintain the qualification of this Indenture under the Trust
Indenture Act; or
(4) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture which shall not be inconsistent with
the provisions of this Indenture, provided such action pursuant to this
Clause (5) shall not adversely affect the interests of the Holders in any
material respect (as determined in good faith by the Board of Directors).
SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in
principal amount at Stated Maturity of the Outstanding Securities, by Act of
said Holders delivered to the Company and the Trustee, the Company, when
authorized by a Board Resolution, and the Trustee may enter into an indenture
or indentures supplemental hereto for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this
Indenture or of modifying in any manner the rights of the Holders under this
Indenture; provided, however, that no such supplemental indenture shall,
without the consent of the Holder of each Outstanding Security affected
thereby,
(1) change the Stated Maturity of the principal of, or any installment
of interest on, any Security, or reduce the principal amount thereof or the
rate of interest thereon or any premium payable thereon, or reduce the
Default Amount that would be due and payable on acceleration of the
Maturity thereof pursuant to Section 502, or change the place of payment
where, or the coin or currency in which, any Security or any premium or
interest thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity thereof
(or, in the case of redemption, on or after the Redemption Date or, in the
case of any Security required to be purchased pursuant to an Offer to
Purchase, on or after the applicable Purchase Date), or
(2) reduce the percentage in principal amount at Stated Maturity of the
Outstanding Securities, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
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(3) modify any of the provisions of this Section, Section 513 or
Section 1018, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby, or
(4) modify any provisions of this Indenture relating to the calculation
of Accreted Value, or
(5) following the mailing of an Offer with respect to an Offer to
Purchase pursuant to Section 1013, modify the provisions of this Indenture
with respect to such Offer to Purchase in a manner adverse to such Holder.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 601) shall be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture. The Trustee may, but shall not
be obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every
Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 905. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
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SECTION 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so
determine, new Securities so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities.
ARTICLE TEN
Covenants
SECTION 1001. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company will duly and punctually pay the principal of (and premium,
if any) and interest on the Securities in accordance with the terms of the
Securities and this Indenture.
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in the Borough of Manhattan, The City of New
York, an office or agency where Securities may be presented or surrendered for
payment, where Securities may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company shall fail to maintain
any such required office or agency or shall fail to furnish the Trustee with
the address thereof, such presentations, surrenders, notices and demands may be
made or served at the Corporate Trust Office of the Trustee, and the Company
hereby appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands. In the event any such notice or demands are
so made or served on the Trustee, the Trustee will promptly forward copies
thereof to the Company.
The Company may also from time to time designate one or more other
offices or agencies (in or outside the Borough of Manhattan, The City of New
York) where the Securities may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner
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relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York, for such purposes. The Company
will give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or
agency.
SECTION 1003. MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of (and premium, if any) or
interest on any of the Securities, segregate and hold in trust for the benefit
of the Persons entitled thereto a sum sufficient to pay the principal (and
premium, if any) or interest so becoming due until such sums shall be paid to
such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will,
prior to each due date of the principal of (and premium, if any) or interest on
any Securities, deposit with a Paying Agent a sum sufficient to pay the
principal (and premium, if any) or interest so becoming due, such sum to be
held as provided by the Trust Indenture Act, and (unless such Paying Agent is
the Trustee) the Company will promptly notify the Trustee of its action or
failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will: (i) comply with the provisions of the Trust Indenture
Act applicable to it as Paying Agent and (ii) during the continuance of any
default by the Company (or any other obligor upon the Securities) in the making
of any payment in respect of the Securities, upon the written request of the
Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent as such.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of
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the principal of (and premium, if any) or interest on any Security and
remaining unclaimed for two years after such principal (and premium, if any) or
interest has become due and payable shall be paid to the Company on Company
Request, or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of
the Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such repayment, may at the expense of the Company cause to be published
once, in a newspaper published in the English language, customarily published
on each Business Day and of general circulation in The City of New York, notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
SECTION 1004. EXISTENCE.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and material franchises; provided, however, that
the Company shall not be required to preserve any such right or franchise if
the Board of Directors in good faith shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company
and that the loss thereof is not disadvantageous in any material respect to the
Holders.
SECTION 1005. MAINTENANCE OF PROPERTIES.
The Company will cause all material properties used or useful in the
conduct of its business or the business of any Restricted Subsidiary to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such material properties
if such discontinuance is, as determined by the Board of Directors in good
faith, desirable in the conduct of its business or the business of any
Restricted Subsidiary and not disadvantageous in any material respect to the
Holders.
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SECTION 1006. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any of its
Restricted Subsidiaries or upon the income, profits or property of the Company
or any of its Restricted Subsidiaries, and (2) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Company or any of its Restricted Subsidiaries; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
SECTION 1007. MAINTENANCE OF INSURANCE.
The Company shall, and shall cause its Restricted Subsidiaries to, keep
at all times all of their properties which are of an insurable nature insured
against loss or damage with insurers believed by the Company to be responsible
to the extent that property of similar character is usually so insured by
corporations similarly situated and owning like properties in accordance with
good business practice. The Company shall, and shall cause its Restricted
Subsidiaries to, use the proceeds from any such insurance policy to repair,
replace or otherwise restore all material properties to which such proceeds
relate, provided, however, that the Company shall not be required to repair,
replace or otherwise restore any such material property if the Board of
Directors in good faith determines that such inaction is desirable in the
conduct of the business of the Company or any Restricted Subsidiary and not
disadvantageous in any material respect to the Holders.
SECTION 1008. LIMITATION ON CONSOLIDATED DEBT.
The Company shall not, and shall not permit any Restricted Subsidiary
to, Incur any Debt (including Acquired Debt), other than Permitted Debt, unless
(i) with respect to Debt Incurred under this clause (i), the Debt so Incurred
and outstanding is in an aggregate principal amount that does not exceed 2.25
times, with respect to Capital Stock sales after June 1, 1997 and on or prior
to March 31, 1998, or 2.00 times, with respect to Capital Stock sales after
March 31, 1998, the aggregate amount of net cash proceeds (or 80% of the Fair
Market Value of property other than cash) received by the Company after June 1,
1997 from the issuance and sale (other than to a Restricted Subsidiary) of
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shares of its Capital Stock (other than Redeemable Stock), or any options,
warrants or other rights to purchase such Capital Stock (other than Redeemable
Stock), other than (x) proceeds applied for use as a Directed Investment
(unless such designation has been revoked by the Board of Directors and the
Company either abandons its plans to make such Investment or is able to make
such Investment pursuant to Section 1009 (other than as a Directed Investment))
and (y) proceeds which have been included in the computation of the amounts
available for Restricted Payments pursuant to clause (c)(2) of Section 1009, to
the extent the inclusion thereof was necessary to allow a subsequent Restricted
Payment to be made, or (ii) on the date of such Incurrence, after giving effect
to the Incurrence of such Debt (or Acquired Debt) and the receipt and
application of the net proceeds thereof (and, if the net proceeds of such new
Debt are used to acquire a Person that becomes a Restricted Subsidiary or an
operating business of the Company or a Restricted Subsidiary, to all terms of
such acquisition) on a pro forma basis, the Operating Cash Flow to Consolidated
Interest Expense Ratio would equal or exceed 1.75 to 1.
SECTION 1009. LIMITATION ON RESTRICTED PAYMENTS.
The Company shall not, directly or indirectly:
(i) declare or pay any dividend on, or make any distribution to the
holders of, any shares of its Capital Stock (other than dividends or
distributions payable solely in its Capital Stock (other than Redeemable
Stock) or in options, warrants or other rights to purchase any such Capital
Stock (other than Redeemable Stock));
(ii) purchase, redeem or otherwise acquire or retire for value, or
permit any Restricted Subsidiary to, directly or indirectly, purchase,
redeem or otherwise acquire or retire for value (other than value
consisting solely of Capital Stock of the Company that is not Redeemable
Stock or options, warrants or other rights to acquire such Capital Stock
that is not Redeemable Stock), any Capital Stock of the Company (including
options, warrants or other rights to acquire such Capital Stock);
(iii) redeem, repurchase, defease or otherwise acquire or retire for
value, or permit any Restricted Subsidiary to, directly or indirectly,
redeem, repurchase, defease or otherwise acquire or retire for value (other
than value consisting solely of Capital Stock of the Company that is not
Redeemable Stock or options, warrants or other rights to acquire such
Capital Stock that is not Redeemable Stock), prior to any scheduled
maturity, scheduled repayment or
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scheduled sinking fund payment, any Debt that is subordinate (whether
pursuant to its terms or by operation of law) in right of payment to the
Securities; or
(iv) make, or permit any Restricted Subsidiary, directly or indirectly,
to make, any Investment (other than any Permitted Investment) in any Person
(other than in a Restricted Subsidiary or a Person that becomes a
Restricted Subsidiary as a result of such Investment);
(each of the foregoing actions set forth in clauses (i) through (iv), other
than any such action that is a Permitted Investment or a Permitted Distribution,
being referred to as a "Restricted Payment") unless, at the time of such
Restricted Payment, and after giving effect thereto:
(a) no Default or Event of Default shall have occurred and be
continuing;
(b) except with respect to Investments, after giving effect, on a pro
forma basis, to such Restricted Payment and the Incurrence of any Debt the
net proceeds of which are used to finance such Restricted Payment, the
Consolidated Debt to Annualized Operating Cash Flow Ratio would not have
exceeded 7.0 to 1; and
(c) after giving effect to such Restricted Payment on a pro forma
basis, the aggregate amount of all Restricted Payments made on or after
February 15, 1994 shall not exceed:
(1) 50% of the Consolidated Net Income (or, in the case of a
Consolidated Net Loss, minus 100% of such deficit) of the Company for
the period (taken as one accounting period) from April 1, 1994 to the
last day of the last fiscal quarter preceding the date of the proposed
Restricted Payment, plus
(2) the aggregate net proceeds, including the fair market value
of property other than cash (as determined by the Board of Directors,
whose good faith determination shall be conclusive and evidenced by a
Board Resolution), received by the Company from the issuance and sale
(other than to a Restricted Subsidiary) on or after February 15, 1994
of shares of its Capital Stock (other than Redeemable Stock), or any
options, warrants or other rights
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to purchase such Capital Stock (other than Redeemable Stock), other
than (x) (except for purposes of determining whether an Investment
under clause (iv) above is permitted) shares of Capital Stock or
options, warrants or other rights to purchase Capital Stock (or shares
issuable upon exercise thereof) issued or sold in the PowerFone Merger,
Questar/AMI Share Exchanges, Motorola Business Acquisition and NTT
transactions as defined and described in the Company's prospectus,
dated February 9, 1994, relating to the Company's Senior Redeemable
Discount Notes due 2004 and (y) shares of Capital Stock or options,
warrants or other rights to purchase Capital Stock (or shares issuable
upon exercise thereof), the proceeds of the issuance of which is used
(A) to make a Directed Investment (unless such designation has been
revoked by the Board of Directors and the Company is able to make such
Investment pursuant to this Section 1009 (other than as a Directed
Investment)) or (B) to Incur Debt under clause (i) of Section 1008
(unless and until the amount of any such Debt (I) is treated as newly
issued Debt and could be Incurred in accordance with the Section 1008
(other than under clause (i) thereof) or (II) has been repaid or
refinanced with the proceeds of Debt Incurred in accordance with
Section 1008 (other than under clause (i) thereof) or (III) has
otherwise been repaid), plus
(3) the aggregate net proceeds, including the fair market value
of property other than cash (as determined by the Board of Directors,
whose good faith determination shall be conclusive and evidenced by a
Board Resolution), received by the Company from the issuance or sale
(other than to a Restricted Subsidiary) after February 15, 1994 of any
Capital Stock of the Company (other than Redeemable Stock), or any
options, warrants or other rights to purchase such Capital Stock (other
than Redeemable Stock), upon the conversion of, or exchange for, Debt
of the Company or a Restricted Subsidiary.
The foregoing limitations in this Section 1009 do not limit or restrict
the making of any Permitted Distribution, Permitted Investment or Directed
Investment, and none of a Permitted Distribution, Permitted Investment or
Directed Investment shall be counted as a Restricted Payment for purposes of
clause (c) above. In addition, the foregoing limitations do not prevent the
Company from (I) paying a dividend on Capital Stock of the Company within 60
days after the declaration thereof if, on the date when the dividend was
declared, the Company could have paid such dividend in accordance with the
provisions of this Indenture, (II) repurchasing Capital Stock of the Company
(including options, warrants or other rights to acquire such Capital Stock)
from employees or former employees of the Company or any Subsidiary thereof for
consideration not to exceed
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$500,000 in the aggregate in any fiscal year (with repurchases pursuant to this
clause (II) not being counted as Restricted Payments for purposes of clause (c)
above) or (III) the repurchase, redemption or other acquisition for value of
Capital Stock of the Company to the extent necessary to prevent the loss or
secure the renewal or reinstatement of any license or franchise held by the
Company or any of its Subsidiaries from any governmental agency; or (IV)
Investments in Unrestricted Subsidiary Funding Company so long as (x) such
Investments are invested in McCaw International Ltd. and (y) McCaw
International Ltd. is a Subsidiary of the Company.
Notwithstanding the foregoing limitations in this Section 1009, the
Company will be permitted to make any Investment in a Person that is not
(either before or after giving effect thereto) a Subsidiary of the Company,
provided that, immediately after giving effect thereto, the amount equal to (a)
the aggregate amount of all Investments made pursuant to this paragraph minus
(b) all cash received by the Company or any Restricted Subsidiary from the
sale, transfer or other disposition to a Person that is not a Subsidiary of the
Company of any such Investment (or portion thereof) included in such aggregate
amount (with the amount of cash to be counted for this purpose not to exceed
the amount of such Investment (or portion thereof) so included), shall not
exceed the greater of (i) $250 million and (ii) 2% of the Total Market Value of
Equity of the Company as of such time. For purposes of determining the
aggregate amount of Investments referred to in clause (a), the amount of any
Investment shall be deemed to equal the cash portion thereof plus the fair
market value of any non-cash portion thereof (to the extent such portion
constitutes an Investment) at the time such Investment is made, as determined
by the Board of Directors (whose good faith determination shall be conclusive
and evidenced by a Board Resolution).
Notwithstanding the foregoing, no Investment in a Person that
immediately thereafter would be a Restricted Subsidiary will be a Restricted
Payment. In addition, if any Person in which an Investment is made, which
Investment constitutes a Restricted Payment when made, thereafter becomes a
Restricted Subsidiary, all such Investments previously made in such Person
shall no longer be counted as Restricted Payments for purposes of calculating
the aggregate amount of Restricted Payments pursuant to clause (c) of the third
preceding paragraph or the aggregate amount of Investments pursuant to clause
(a) of the immediately preceding paragraph, in each case to the extent such
Investments would otherwise be so counted.
For purposes of clause (c)(3) above, the net proceeds received by the
Company from the issuance or sale of its Capital Stock either upon the
conversion of, or exchange for, Debt of the
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Company or any Restricted Subsidiary shall be deemed to be an amount equal to
(a) the sum of (i) the principal amount or accreted value (whichever is less)
of such Debt on the date of such conversion or exchange and (ii) the additional
cash consideration, if any, received by the Company upon such conversion or
exchange, less any payment on account of fractional shares, minus (b) all
expenses incurred in connection with such issuance or sale. In addition, for
purposes of clause (c)(3) above, the net proceeds received by the Company from
the issuance or sale of its Capital Stock upon the exercise of any options or
warrants of the Company or any Restricted Subsidiary shall be deemed to be an
amount equal to (a) the additional cash consideration, if any, received by the
Company upon such exercise, minus (b) all expenses incurred in connection with
such issuance or sale.
For purposes of this Section 1009, if a particular Restricted Payment
involves a non-cash payment, including a distribution of assets, then such
Restricted Payment shall be deemed to be an amount equal to the cash portion of
such Restricted Payment, if any, plus an amount equal to the fair market value
of the non-cash portion of such Restricted Payment, as determined by the Board
of Directors (whose good faith determination shall be conclusive and evidenced
by a Board Resolution).
SECTION 1010. RESTRICTED SUBSIDIARIES.
The Company shall not designate any Restricted Subsidiary as an
Unrestricted Subsidiary, and shall not itself, and shall not permit any
Restricted Subsidiary to, sell, convey, transfer or otherwise dispose of any
assets, other than in the ordinary course of business, to any Unrestricted
Subsidiary or any Person that becomes an Unrestricted Subsidiary as part of
such transaction, unless, after giving effect to any such action, the assets
(not including any assets so sold, conveyed, transferred or otherwise disposed
of, other than in the ordinary course of business, to any Unrestricted
Subsidiary or any Person that becomes an Unrestricted Subsidiary as part of
such transaction) and business of the Company and its remaining Restricted
Subsidiaries generated at least 90% of Digital Mobile-SMR Operating Cash Flow
in the fiscal quarter of the Company most recently completed prior to the date
of such action.
The Board of Directors may designate any existing Unrestricted
Subsidiary or any Person that is about to become a Subsidiary of the Company as
a Restricted Subsidiary if, after giving effect to such action (and, if such
designation is made in connection with the acquisition of a Person or an
operating business that is about to become a Subsidiary of the Company,
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after giving effect to all terms of such acquisition) on a pro forma basis, on
the date of such action, the Debt, if any, of such Unrestricted Subsidiary or
Person outstanding immediately prior to such designation would have been
permitted to be Incurred (and shall be deemed to have been Incurred) for all
purposes of this Indenture.
Subject to the second preceding paragraph and compliance with Section
1009, the Board of Directors may designate any Restricted Subsidiary as an
Unrestricted Subsidiary.
The designation by the Board of Directors of a Restricted Subsidiary as
an Unrestricted Subsidiary shall, for all purposes of Section 1009 (including
clause (b) thereof), be deemed to be a Restricted Payment of an amount equal to
the fair market value of the Company's ownership interest in such Subsidiary
(including, without duplication, such indirect ownership interest in all
Subsidiaries of such Subsidiary), as determined by the Board of Directors in
good faith and evidenced by a Board Resolution.
Notwithstanding the foregoing provisions of this Section 1010, the
Board of Directors may not designate a Subsidiary of the Company to be an
Unrestricted Subsidiary if, after such designation, (a) the Company or any of
its other Restricted Subsidiaries (i) provides credit support for, or a
Guarantee of, any Debt of such Subsidiary (including any undertaking, agreement
or instrument evidencing such Debt) or (ii) is directly or indirectly liable
for any Debt of such Subsidiary, (b) a default with respect to any Debt of such
Subsidiary (including any right which the holders thereof may have to take
enforcement action against such Subsidiary) would permit (upon notice, lapse of
time or both) any holder of any other Debt of the Company or any Restricted
Subsidiary to declare a default on such other Debt or cause the payment thereof
to be accelerated or payable prior to its final scheduled maturity or (c) such
Subsidiary owns any Capital Stock of, or owns or holds any Lien on any property
of, any Restricted Subsidiary which is not a Subsidiary of the Subsidiary to be
so designated.
The Board of Directors, from time to time, may designate any Person
that is about to become a Subsidiary of the Company as an Unrestricted
Subsidiary, and may designate any newly-created Subsidiary as an Unrestricted
Subsidiary, if at the time such Subsidiary is created it contains no assets
(other than such de minimis amount of assets then required by law for the
formation of corporations) and no Debt. Subsidiaries of the Company that are
not designated by the Board of Directors as Restricted or Unrestricted
Subsidiaries shall be deemed to be Restricted Subsidiaries. Notwithstanding
any provisions of this Section 1010, all Subsidiaries of an Unrestricted
Subsidiary
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shall be Unrestricted Subsidiaries. The Board of Directors shall not change
the designation of a Subsidiary of the Company more than twice in any period of
five years.
SECTION 1011. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, enter into any transaction (including the purchase,
sale, lease or exchange of any property or the rendering of any service) or
series of related transactions with any Affiliate of the Company on terms that
are less favorable to the Company or such Restricted Subsidiary, as the case
may be, than those which might be obtained at the time of such transaction from
a Person that is not such an Affiliate; provided, however, that this Section
1011 shall not limit, or be applicable to, (i) any transaction between
Unrestricted Subsidiaries not involving the Company or any Restricted
Subsidiary, (ii) any transaction between the Company and any Restricted
Subsidiary or between Restricted Subsidiaries or (iii) any Permitted
Transactions. In addition, any transaction or series of related transactions,
other than Permitted Transactions, between the Company or any Restricted
Subsidiary and any Affiliate of the Company (other than a Restricted
Subsidiary) involving an aggregate consideration of $5 million or more must be
approved in good faith by a majority of the Company's Disinterested Directors
(of which there must be at least one) and evidenced by a Board Resolution. For
purposes of this Section 1011, any transaction or series of related
transactions between the Company or any Restricted Subsidiary and an Affiliate
of the Company that is approved by a majority of the Disinterested Directors
(of which there must be at least one) and evidenced by a Board Resolution shall
be deemed to be on terms as favorable as those that might be obtained at the
time of such transaction (or series of transactions) from a Person that is not
such an Affiliate and thus shall be permitted under this Section 1011.
SECTION 1012. [Intentionally Omitted]
SECTION 1013. CHANGE OF CONTROL.
Upon the occurrence of a Change of Control, the Company shall be
required to make an Offer to Purchase Outstanding Securities at a purchase
price in cash equal to 101% of the Accreted Value thereof on any Purchase Date
prior to September 15, 2002 or 101% of the principal amount thereof, plus
accrued and unpaid interest, if any, to any Purchase Date on and after
September 15, 2002. The Offer to Purchase must be made within 30
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days following a Change of Control, must remain open for at least 30 and not
more than 60 days and must comply with the requirements of Rule 14e-1 under the
Exchange Act and any other applicable securities laws and regulations.
SECTION 1014. [Intentionally Omitted]
SECTION 1015. ACTIVITIES OF THE COMPANY AND RESTRICTED SUBSIDIARIES.
The Company shall not, and shall not permit any Restricted Subsidiary
to, engage in any business other than the telecommunications business and
related activities and services, including such businesses, activities and
services as the Company and the Restricted Subsidiaries are engaged in on the
Closing Date.
SECTION 1016. PROVISION OF FINANCIAL INFORMATION.
Whether or not the Company is subject to Section 13(a) or 15(d) of the
Exchange Act, or any successor provision thereto, the Company shall file with
the Commission the annual reports, quarterly reports and other documents which
the Company would have been required to file with the Commission pursuant to
such Section 13(a) or 15(d) or any successor provision thereto if the Company
were subject thereto, such documents to be filed with the Commission on or
prior to the respective dates (the "Required Filing Dates") by which the
Company would have been required to file them. The Company shall also in any
event (a) within 15 days of each Required Filing Date (i) transmit by mail to
all Holders, as their names and addresses appear in the Security Register,
without cost to such Holders, and (ii) file with the Trustee copies of the
annual reports, quarterly reports and other documents which the Company would
have been required to file with the Commission pursuant to Section 13(a) or
15(d) of the Exchange Act or any successor provisions thereto if the Company
were subject thereto and (b) if filing such documents by the Company with the
Commission is not permitted under the Exchange Act, promptly upon written
request supply copies of such documents to any prospective Holder. The
Trustee's receipt of such reports, information and documents shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein.
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SECTION 1017. STATEMENT BY OFFICERS AS TO DEFAULT; COMPLIANCE CERTIFICATES.
(a) The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year of the Company ending after the date hereof an
Officers' Certificate, stating whether or not to the best knowledge of the
signers thereof the Company is in default in the performance and observance of
any of the terms, provisions and conditions of this Indenture (without regard
to any period of grace or requirement of notice provided hereunder), and if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.
(b) The Company shall deliver to the Trustee, as soon as possible and
in any event within 10 days after the Company becomes aware of the occurrence
of a Default or an Event of Default, an Officers' Certificate setting forth the
details of such Default or Event of Default, and the action which the Company
proposes to take with respect thereto.
SECTION 1018. WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Section 801, provided pursuant to Section
901(2) and set forth in Sections 1004 to 1016, inclusive, if before the time
for such compliance the Holders of at least a majority in principal amount at
Stated Maturity of the Outstanding Securities shall, by Act of such Holders,
either waive such compliance in such instance or generally waive compliance
with such covenant or condition, but no such waiver shall extend to or affect
such covenant or condition except to the extent so expressly waived, and, until
such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such covenant or condition shall remain
in full force and effect; provided, however, with respect to an Offer to
Purchase as to which an Offer has been mailed, no such waiver may be made or
shall be effective against any Holder tendering Securities pursuant to such
Offer, and the Company may not omit to comply with the terms of such Offer as
to such Holder.
SECTION 1019. COMPANY TO SUPPLY INFORMATION CONCERNING ORIGINAL ISSUE DISCOUNT.
The Company shall provide to the Trustee on a timely basis such
information as the Trustee requires to enable the Trustee to prepare and file
any form required to be submitted by
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the Company with the Internal Revenue Service and the Holders of the Securities
relating to original issue discount, including without limitation, Form
1099-OID or any successor form.
ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. RIGHT OF REDEMPTION.
The Securities may be redeemed at any time on or after September 15,
2002, at the Company's option, in whole or in part, upon not less that 30 or
more than 60 days' prior written notice mailed by first class mail to each
holder's last address as it appears in the Security Register, at the redemption
prices (expressed as a percentage of the principal amount thereof) set forth
below, plus an amount in cash equal to all accrued and unpaid interest to the
Redemption Date, if redeemed during the 12-month period beginning September 15
of each of the years set forth below.
YEAR PERCENTAGE
---- ----------
2002 105.325%
2003 102.663%
On or after September 15, 2004, the Company may redeem the Securities
at a Redemption Price equal to 100% of the principal amount thereof, together
in the case of any such redemption with accrued interest, if any, to the
Redemption Date, but interest installments whose Stated Maturity is on or prior
to such Redemption Date will be payable to the Holders of such Securities, or
one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates for the payment of such interest installments.
In addition to any redemption provided for in the immediately preceding
paragraphs, in the event of the sale by the Company after the Closing Date and
prior to September 15, 2000 of its Capital Stock (other than Redeemable Stock)
in a single transaction or series of transactions for an aggregate purchase
price equal to or exceeding $125 million, up to a maximum of 33 1/3% of the
aggregate Accreted Value of the Outstanding Securities will, within 180 days of
such sale, at the option of the Company, upon not less than 30 nor more than 60
days' notice by mail, be redeemable from the net proceeds thereof (but only to
the extent such proceeds consist of cash or readily marketable cash equivalents
received in respect of the Company's Capital Stock so sold, in each case net of
all commissions, discounts, fees, expenses and taxes incurred in respect
thereof) at a
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Redemption Price equal to 110.65% of the Accreted Value of the Securities to
be redeemed to the Redemption Date.
SECTION 1102. APPLICABILITY OF ARTICLE.
Redemption of Securities at the election of the Company, as permitted
by this Indenture and the provisions of the Securities, shall be made in
accordance with such provisions and this Article.
SECTION 1103. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Securities pursuant to
Section 1101 shall be evidenced by a Board Resolution. In case of any
redemption at the election of the Company pursuant to Section 1101, the Company
shall, at least 60 days prior to the Redemption Date fixed by the Company
(unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee of such Redemption Date and of the principal amount of Securities to be
redeemed.
SECTION 1104. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.
In the case of any partial redemption, selection of the Securities for
redemption will be made by the Trustee in compliance with the requirements of
the principal national securities exchange, if any, on which the Securities are
listed or, if the Securities are not listed on a national securities exchange,
on a pro rata basis, by lot or by such other method as the Trustee in its sole
discretion shall deem to be fair and appropriate; provided that no Security of
$1,000 in principal amount or less shall be redeemed in part.
The Trustee shall promptly notify the Company and each Security
Registrar in writing of the Securities selected for redemption and, in the case
of any Securities selected for partial redemption, the principal amount thereof
to be redeemed.
For all purposes of this Indenture and of the Securities, unless the
context otherwise requires, all provisions relating to the redemption of
Securities shall relate, in the case of any Securities redeemed or to be
redeemed only in part, to the portion of the principal amount of such
Securities which has been or is to be redeemed.
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SECTION 1105. NOTICE OF REDEMPTION.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register.
All notices of redemption shall state (including CUSIP number, if any):
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities are to be redeemed, the
identification (and, in the case of partial redemption, the principal
amounts) of the particular Securities to be redeemed, including CUSIP
Numbers,
(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and (i) that, in the
case of a Redemption Date on or after September 15, 2002, interest thereon
will cease to accrue on and after said Redemption Date and (ii) that, in
the case of a Redemption Date prior to September 15, 2002, the Accreted
Value thereof will not increase after said Redemption Date,
(5) the place or places where such Securities are to be surrendered for
payment of the Redemption Price, and
(6) if the redemption is being made pursuant to the provisions of the
Securities set forth in the third paragraph of Section 203, a brief
description of the nature and amount of Capital Stock sold by the Company,
the aggregate purchase price thereof and the net cash proceeds therefrom
available for such redemption, the date or dates on which such sale was
completed and the percentage of the aggregate Accreted Value of Outstanding
Securities being redeemed.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.
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SECTION 1106. DEPOSIT OF REDEMPTION PRICE.
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) any applicable accrued interest on, all
the Securities which are to be redeemed on that date.
SECTION 1107. SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and any applicable
accrued interest) such Securities shall not bear interest and the Accreted
Value of such Securities shall thereupon and thereafter conclusively be deemed
to be their Accreted Value determined on and as of such Redemption Date. Upon
surrender of any such Security for redemption in accordance with said notice,
such Security shall be paid by the Company at the Redemption Price, together
with any applicable accrued and unpaid interest to the Redemption Date;
provided, however, that installments of interest whose Stated Maturity is on or
prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and
the provisions of Section 309.
If any Security called for redemption in accordance with the election
of the Company made pursuant to Section 1101 shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate provided by the
Security.
SECTION 1108. SECURITIES REDEEMED IN PART.
Any Security which is to be redeemed only in part shall be surrendered
at an office or agency of the Company designated for that purpose pursuant to
Section 1002 (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Security without service charge,
a new Security or Securities, of any authorized denomination as requested by
such Holder, in
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aggregate principal amount at Stated Maturity equal to and in exchange for the
unredeemed portion of the principal amount at Stated Maturity of the Security
so surrendered.
ARTICLE TWELVE
Defeasance and Covenant Defeasance
SECTION 1201. COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE.
The Company may elect, at its option at any time, to have Section 1202
or Section 1203 applied to the Outstanding Securities (as a whole and not in
part) upon compliance with the conditions set forth below in this Article. Any
such election shall be evidenced by a Board Resolution.
SECTION 1202. DEFEASANCE AND DISCHARGE.
Upon the Company's exercise of its option to have this Section applied
to the Outstanding Securities (as a whole and not in part), the Company shall
be deemed to have been discharged from its obligations with respect to such
Securities as provided in this Section on and after the date the conditions set
forth in Section 1204 are satisfied (hereinafter called "Defeasance"), and
thereafter such Securities shall not be subject to redemption pursuant thereto.
For this purpose, such Defeasance means that the Company shall be deemed to
have paid and discharged the entire indebtedness represented by such Securities
and to have satisfied all its other obligations under such Securities and this
Indenture insofar as such Securities are concerned (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the
same), subject to the following which shall survive until otherwise terminated
or discharged hereunder: (1) the rights of Holders of such Securities to
receive, solely from the trust fund described in Section 1204 and as more fully
set forth in such Section, payments in respect of the principal of and any
premium and interest on such Securities when payments are due, (2) the
Company's obligations with respect to such Securities under Sections 304, 305,
308, 1002 and 1003, (3) the rights, powers, trusts, duties and immunities of
the Trustee hereunder and (4) this Article. Subject to compliance with this
Article, the Company may exercise its option to have this Section applied to
the Outstanding Securities (as a whole and not in part) notwithstanding the
prior exercise of its option to have Section 1203 applied to such Securities.
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SECTION 1203. COVENANT DEFEASANCE.
Upon the Company's exercise of its option to have this Section applied
to the Outstanding Securities (as a whole and not in part), (1) the Company
shall be released from its obligations under Section 801(iii), Sections 1005
through 1016, inclusive, and any covenant provided pursuant to Section 901(2)
and (2) the occurrence of any event specified in Section 501(4) (with respect
to Section 801(iii)), Section 501(5) (with respect to any of Sections 1005
through 1016, inclusive, and any such covenants provided pursuant to Section
901(2)), Section 501(6) or Section 501(7) shall be deemed not to be or result
in an Event of Default, in each case with respect to such Securities as
provided in this Section on and after the date the conditions set forth in
Section 1204 are satisfied (hereinafter called "Covenant Defeasance"). For
this purpose, such Covenant Defeasance means that, with respect to such
Securities, the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such specified
Section (to the extent so specified in the case of Sections 501(4) and 501(5)),
whether directly or indirectly by reason of any reference elsewhere herein to
any such Section or by reason of any reference in any such Section to any other
provision herein or in any other document, but the remainder of this Indenture
and such Securities shall be unaffected thereby.
SECTION 1204. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of Section
1202 or Section 1203 to the Outstanding Securities:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee which satisfies the
requirements contemplated by Section 609 and agrees to comply with the
provisions of this Article applicable to it) as trust funds in trust for
the purpose of making the following payments, specifically pledged as
security for, and dedicated solely to, the benefits of the Holders of such
Securities, (A) money in an amount, or (B) U.S. Government Obligations
which through the scheduled payment of principal and interest in respect
thereof in accordance with their terms will provide, not later than one day
before the due date of any payment, money in an amount, or (C) a
combination thereof, in each case sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or any such other
qualifying trustee) to pay and discharge, the principal of
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and any installment of interest on such Securities on the respective Stated
Maturities thereof, in accordance with the terms of this Indenture and such
Securities. As used herein, "U.S. Government Obligation" means (x) any
security which is (i) a direct obligation of the United States of America
for the payment of which the full faith and credit of the United States of
America is pledged or (ii) an obligation of a Person controlled or
supervised by and acting as an agency or instrumentality of the United
States of America the payment of which is unconditionally guaranteed as a
full faith and credit obligation by the United States of America, which, in
either case (i) or (ii), is not callable or redeemable at the option of the
issuer thereof, and (y) any depository receipt issued by a bank (as defined
in Section 3(a)(2) of the Securities Act) as custodian with respect to any
U.S. Government Obligation which is specified in Clause (x) above and held
by such bank for the account of the holder of such depository receipt, or
with respect to any specific payment of principal of or interest on any
U.S. Government Obligation which is so specified and held, provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt
from any amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal or interest evidenced by
such depository receipt.
(2) In the event of an election to have Section 1202 apply to the
Outstanding Securities, the Company shall have delivered to the Trustee an
Opinion of Counsel stating that (A) the Company has received from, or there
has been published by, the Internal Revenue Service a ruling or (B) since
the Closing Date there has been a change in the applicable Federal income
tax law, in either case (A) or (B) to the effect that, and based thereon
such opinion shall confirm that, the Holders of such Securities will not
recognize gain or loss for Federal income tax purposes as a result of the
deposit, Defeasance and discharge to be effected with respect to such
Securities and will be subject to Federal income tax on the same amount,
in the same manner and at the same times as would be the case if such
deposit, Defeasance and discharge were not to occur.
(3) In the event of an election to have Section 1203 apply to the
Outstanding Securities, the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that the Holders of such Securities will
not recognize gain or loss for Federal income tax purposes as a result of
the deposit and Covenant Defeasance to be effected with respect to such
Securities and will be subject to Federal income tax on the same amount, in
the same manner and at the same times
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as would be the case if such deposit and Covenant Defeasance were not to
occur.
(4) No Default with respect to the Outstanding Securities shall have
occurred and be continuing at the time of such deposit or, with regard to
any such event specified in Sections 501(8) and (9), at any time on or
prior to the 90th day after the date of such deposit (it being understood
that this condition shall not be deemed satisfied until after such 90th
day).
(5) Such Defeasance or Covenant Defeasance shall not cause the Trustee
to have a conflicting interest within the meaning of the Trust Indenture
Act (assuming all Securities are in default within the meaning of such
Act).
(6) Such Defeasance or Covenant Defeasance shall not result in a breach
or violation of, or constitute a default under, any other agreement or
instrument to which the Company is a party or by which it is bound.
(7) Such Defeasance or Covenant Defeasance shall not result in the
trust arising from such deposit constituting an investment company within
the meaning of the Investment Company Act unless such trust shall be
registered under such Act or exempt from registration thereunder.
(8) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have been
complied with.
SECTION 1205. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD IN
TRUST; MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of Section 1003, all
money and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee or other qualifying trustee (solely for purposes of
this Section and Section 1206, the Trustee and any such other trustee are
referred to collectively as the "Trustee") pursuant to Section 1204 in respect
of the Outstanding Securities shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any such Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities, of all sums due and to become due
thereon in respect of principal and any premium and interest, but money so held
in trust need not be segregated from other funds except to the extent required
by law.
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The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 1204 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of Outstanding Securities.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in Section 1204
which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect the Defeasance or Covenant Defeasance, as the case may be,
with respect to the Outstanding Securities.
SECTION 1206. REINSTATEMENT.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Securities by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the obligations under this
Indenture and such Securities from which the Company has been discharged or
released pursuant to Section 1202 or 1203 shall be revived and reinstated as
though no deposit had occurred pursuant to this Article with respect to such
Securities, until such time as the Trustee or Paying Agent is permitted to
apply all money held in trust pursuant to Section 1205 with respect to such
Securities in accordance with this Article; provided, however, that if the
Company makes any payment of principal of or any premium or interest on any
such Security following such reinstatement of its obligations, the Company
shall be subrogated to the rights (if any) of the Holders of such Securities to
receive such payment from the money so held in trust.
--------------------
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
NEXTEL COMMUNICATIONS, INC.
By: /s/ THOMAS J. SIDMAN
----------------------------------
Thomas J. Sidman
Title: Vice President
-------------------------------
Attest:
/s/ Gary D. Begeman
- -------------------------------
Gary D. Begeman, Assistant Secretary
HARRIS TRUST AND SAVINGS BANK, Trustee
By: /s/ Robert D. Fultz
----------------------------------
Robert D. Fultz
Title: Vice President
-------------------------------
Attest:
/s/ Dan Donovan
- -------------------------------
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EXHIBIT A
Form of Certificate to Be Delivered
in Connection with Transfers
Pursuant to Regulation S
_________ ___, _____
Harris Trust and Savings Bank
311 West Monroe Street
12th Floor
Chicago, Illinois 60606
Nextel Communications, Inc.
1505 Farm Credit Drive
McLean, Virginia 22102
Re: Nextel Communications, Inc. (the "Company")
10.65% Senior Discount Notes due 2007 (the "Notes")
Dear Sirs:
In connection with our proposed sale of U.S.$__________ aggregate
principal amount at stated maturity of the Notes, we confirm that such sale has
been effected pursuant to and in accordance with Regulation S under the
Securities Act of 1933, as amended, and accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) at the time the buy order was originated, the transferee was
outside the United States or we and any person acting on our behalf reasonably
believed that the transferee was outside the United States;
(3) no directed selling efforts have been made by us in the United
States in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act of 1933.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or
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legal proceedings or official inquiry with respect to the matters covered
hereby. Terms used in this certificate have the meanings set forth in
Regulation S.
Very truly yours,
[Name of Transferor]
By:
-------------------------------
Authorized Signature
112
<PAGE> 1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement")
is made and entered into September 17, 1997, between NEXTEL COMMUNICATIONS,
INC., a Delaware corporation (the "Company"), and MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED ("Merrill Lynch"), TD SECURITIES (USA) INC., LEHMAN
BROTHERS INC., MORGAN STANLEY & CO. INCORPORATED and NATIONSBANC CAPITAL
MARKETS, INC. (collectively, the "Initial Purchasers").
This Agreement is made pursuant to the Purchase
Agreement dated September 10, 1997, between the Company and the Initial
Purchasers (the "Purchase Agreement"), which provides for the sale by the
Company to the Initial Purchasers of an aggregate principal amount of
$840,000,000 of the Company's Senior Redeemable Discount Notes due 2007 (the
"Securities"). In order to induce the Initial Purchasers to enter into the
Purchase Agreement, the Company has agreed to provide to the Initial Purchasers
and their direct and indirect transferees the registration rights with respect
to the Securities set forth in this Agreement. The execution of this Agreement
is a condition to the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto
agree as follows:
1. Definitions.
As used in this Agreement, the following capitalized
defined terms shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as
amended from time to time.
"1934 Act" shall mean the Securities Exchange Act of
1934, as amended from time to time.
"Closing Date" shall mean the Closing Date as defined
in the Purchase Agreement.
"Company" shall have the meaning set forth in the
preamble and shall also include the Company's successors.
"Depositary" shall mean The Depository Trust Company,
or any other depositary appointed by the Company, provided,
however, that such depositary must have an address in the
Borough of Manhattan, in The City of New York.
"Exchange Offer" shall mean the exchange offer by the
Company of Exchange Securities for Registrable Securities
pursuant to section 2(a) hereof.
"Exchange Offer Registration" shall mean a
registration under the 1933 Act effected pursuant to Section
2(a) hereof.
<PAGE> 2
"Exchange Offer Registration Statement" shall mean an
exchange offer registration statement on Form S-4 (or, if
applicable, on another appropriate form) and all amendments
and supplements to such registration statement, in each case
including the Prospectus contained therein, all exhibits
thereto and all material incorporated by reference therein.
"Exchange Securities" shall mean securities issued by
the Company containing terms identical to the Securities
(except that such Exchange Securities shall bear no legend and
shall be free from restrictions on transfers), to be offered
to Holders of Securities in exchange for Securities pursuant
to the Exchange Offer.
"Holder" shall mean the Initial Purchasers, for so
long as they own any Registrable Securities, and each of their
successors, assigns and direct and indirect transferees who
become registered owners of Registrable Securities under the
Indenture; provided that for purposes of Sections 4 and 5 of
this Agreement, the term "Holder" shall include Participating
Broker-Dealers (as defined in Section 4(a)).
"Indenture" shall mean the Indenture relating to the
Securities, dated as of September 17, 1997, between the
Company and Harris Trust and Savings Bank, as trustee, as the
same may be amended, supplemented, waived or otherwise
modified from time to time in accordance with the terms
thereof.
"Initial Purchaser" or "Initial Purchasers" shall
have the meaning set forth in the preamble.
"Majority Holders" shall mean the Holders of a
majority of the aggregate principal amount at Stated Maturity
of outstanding Registrable Securities; provided that whenever
the consent or approval of Holders of a specified percentage
of Registrable Securities is required hereunder, Registrable
Securities held by the Company or any of its affiliates (as
such term is defined in Rule 405 under the 1933 Act) (other
than the Initial Purchasers or subsequent holders of
Registrable Securities if such subsequent holders are deemed
to be such affiliates solely by reason of their holding of
such Registrable Securities) shall not be counted in
determining whether such consent or approval was given by the
Holders of such required percentage or amount.
"Person" shall mean an individual, partnership,
corporation, trust or unincorporated organization, or a
government or agency or political subdivision thereof.
"Prospectus" shall mean the prospectus included in a
Registration Statement, including any preliminary prospectus,
and any such prospectus as amended or supplemented by any
prospectus supplement, including a prospectus supplement with
respect to the terms of the offering of any portion of the
Registrable Securities covered by a Shelf Registration
Statement, and by all other amendments and supplements to such
prospectus, and in each case including all material
incorporated by reference therein.
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<PAGE> 3
"Purchase Agreement" shall have the meaning set forth
in the preamble.
"Registrable Securities" shall mean the Securities;
provided, however, that the Securities shall cease to be
Registrable Securities (i) except in the case of the Initial
Purchasers to the extent of any unsold allotment and
Participating Broker-Dealers (as defined in section 4) to the
extent set forth in paragraph 4(a), upon the expiration date
of the Exchange Offer, (ii) when a Shelf Registration
Statement with respect to such Securities shall have been
declared effective under the 1933 Act and such Securities
shall have been disposed of pursuant to such Registration
Statement, (iii) when such Securities are saleable to the
public pursuant to Rule 144(k) (or any similar provision then
in force, but not Rule 144A) under the 1933 Act or (iv) when
such Securities shall have ceased to be outstanding.
"Registration Expenses" shall mean any and all
expenses incident to performance of or compliance by the
Company with this Agreement, including without limitation: (i)
all SEC, stock exchange or National Association of Securities
Dealers, Inc. registration and filing fees, (ii) all fees and
expenses incurred in connection with compliance with state
securities or blue sky laws (including reasonable fees and
disbursements of counsel for any Underwriters or Holders in
connection with blue sky qualification of any of the Exchange
Securities or Registrable Securities), (iii) all expenses of
any Persons in preparing or assisting in preparing, word
processing, printing and distributing any Registration
Statement, any Prospectus, any amendments or supplements
thereto, any underwriting agreements, securities sales
agreements and other documents relating to the performance of
and compliance with this Agreement, (iv) all rating agency
fees, if any, (v) the fees and disbursements of the Trustee,
(vi) the fees and disbursements of counsel for the Company
and, in the case of a Shelf Registration Statement, the fees
and disbursements of one counsel for the Holders (which
counsel shall be selected by the Majority Holders and which
counsel may also be counsel for the Initial Purchasers) and
(vii) the fees and disbursements of the independent public
accountants of the Company, including the expenses of any
special audits or "cold comfort" letters required by or
incident to such performance and compliance, but excluding
fees and expenses of counsel to the Underwriters (other than
fees and expenses set forth in clause (ii) above) or the
Holders and underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of
Registrable Securities by a Holder.
"Registration Statement" shall mean any registration
statement of the Company that covers any of the Exchange
Securities or Registrable Securities pursuant to the
provisions of this Agreement and all amendments and
supplements to any such Registration Statement, including
post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"SEC" shall mean the Securities and Exchange
Commission.
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<PAGE> 4
"Shelf Registration" shall mean a registration
effected pursuant to Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf"
registration statement of the Company which covers all of the
Registrable Securities (and may include other securities of
other Persons) on an appropriate form under Rule 415 under the
1933 Act, or any similar rule that may be adopted by the SEC,
and all amendments and supplements to such registration
statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits
thereto and all material incorporated by reference therein.
"Trustee" shall mean the trustee with respect to the
Securities under the Indenture.
"Underwriters" shall have the meaning set forth in
Section 3 hereof.
"Underwritten Registration" or "Underwritten
Offering" shall mean a registration in which Registrable
Securities are sold to an Underwriter for reoffering to the
public.
2. Registration Under the 1933 Act.
(a) To the extent not prohibited by any
applicable law or applicable interpretation of the Staff of the SEC, the
Company shall use its best efforts to cause to be filed an Exchange Offer
Registration Statement covering the offer by the Company to the Holders to
exchange all of the Registrable Securities for Exchange Securities and to have
such Registration Statement remain effective until the closing of the Exchange
Offer. The Company shall commence the Exchange Offer promptly after the
Exchange Offer Registration Statement has been declared effective by the SEC
and use its best efforts to have the Exchange Offer consummated not later than
60 days after such effective date. The Company shall commence the Exchange
Offer by mailing the related exchange offer Prospectus and accompanying
documents to each Holder stating, in addition to such other disclosures as are
required by applicable law:
(i) that the Exchange Offer is being made
pursuant to this Agreement and that all Registrable Securities
validly tendered will be accepted for exchange;
(ii) the dates of acceptance for exchange
(which shall be a period of at least 30 days from the date
such notice is mailed) (the "Exchange Dates");
(iii) that any Registrable Securities not
tendered will remain outstanding and shall continue to accrue
dividends at the initial rate borne by the Registrable
Securities and, other than Registrable Securities referred to
in Section 2(b) below, will not retain any rights under this
Agreement;
(iv) that Holders electing to have
Registrable Securities exchanged pursuant to the Exchange
Offer will be required to surrender such Registrable
Securities, together with the enclosed letters of transmittal,
to the institution and at the address (located in the
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<PAGE> 5
Borough of Manhattan, The City of New York) specified in the
notice prior to the close of business on the last Exchange
Date; and
(v) that Holders will be entitled to
withdraw their election, not later than the close of business
on the last Exchange Date, by sending to the institution and
at the address (located in the Borough of Manhattan, The City
of New York) specified in the notice a telegram, telex,
facsimile transmission or letter setting forth the name of
such Holder, the number of shares of Registrable Securities
delivered for exchange and a statement that such Holder is
withdrawing his election to have such Registrable Securities
exchanged.
As soon as practicable after the last Exchange Date,
the Company shall:
(i) accept for exchange Registrable
Securities or portions thereof tendered and not validly
withdrawn pursuant to the Exchange Offer; and
(ii) deliver, or cause to be delivered, to
the Trustee for cancellation all Registrable Securities or
portions thereof so accepted for exchange by the Company and
issue, and cause the Trustee to promptly countersign and
register and mail to each Holder, Exchange Securities with an
aggregate liquidation preference equal to the aggregate
liquidation preference of the Registrable Securities
surrendered by such Holder.
The Company shall use its best efforts to complete the Exchange Offer as
provided above and shall comply with the applicable requirements of the 1933
Act, the 1934 Act and other applicable laws and regulations in connection with
the Exchange Offer. The Company shall inform the Initial Purchasers of the
names and addresses of the Holders to whom the Exchange Offer is made, and the
Initial Purchasers shall have the right, subject to applicable law, to contact
such Holders and otherwise facilitate the tender of Registrable Securities in
the Exchange Offer.
(b) in the event that the Exchange Offer has
been completed and in the opinion of counsel for the Initial Purchasers a
Registration Statement must be filed and a Prospectus must be delivered by the
Initial Purchasers in connection with any offering or sale of Registrable
Securities held by them that constitute an unsold allotment, the Company shall
use its best efforts to cause to be filed as soon as practicable after such
determination, date or notice of such opinion of counsel is given to the
Company, as the case may be, a Shelf Registration Statement providing for the
sale by the Initial Purchasers of such Registrable Securities and to have such
Shelf Registration Statement declared effective by the SEC. The Initial
Purchasers shall sell out their unsold allotments before making sales of any
other Registrable Securities and the Initial Purchasers shall notify the
Company upon the sale of all of their unsold allotments. The Company agrees to
use its best efforts to keep the Shelf Registration Statement continuously
effective for the period referred to in Rule 144(k) or until all of the
Registrable Securities covered by the Shelf Registration Statement have been
sold pursuant to the Shelf Registration Statement. The Company further agrees
to supplement or amend the Shelf Registration Statement if required by the
rules, regulations or instructions applicable to the registration form used by
the Company for such Shelf Registration Statement or by the 1933 Act or by any
other rules and regulations
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thereunder for shelf registration or if reasonably requested by a Holder with
respect to information relating to such Holder, and to use its best efforts to
cause any such amendment to become effective and such Shelf Registration
Statement to become usable as soon as thereafter practicable. The Company
agrees to furnish to the Holders of Registrable Securities copies of any such
supplement or amendment promptly after its being used or filed with the SEC.
(c) The Company shall pay all Registration
Expenses in connection with the registration pursuant to Section 2(a) or
Section 2(b). Each Holder shall pay all underwriting discounts and commissions
and transfer taxes, if any, relating to the sale or disposition of such
Holder's Registrable Securities pursuant to the Shelf Registration Statement.
(d) An Exchange Offer Registration Statement
pursuant to Section 2(a) hereof or a Shelf Registration Statement pursuant to
Section 2(b) hereof will not be deemed to have become effective unless it has
been declared effective by the SEC; provided, however, that if, after it has
been declared effective, the offering of Registrable Securities pursuant to a
Shelf Registration Statement is interfered with by any stop order, injunction
or other order or requirement of the SEC or any other governmental agency or
court, such Registration Statement will be deemed not to have become effective
during the period of such interference until the offering of Registrable
Securities pursuant to such Registration Statement may legally resume. As
provided for in the Indenture, in the event the Exchange Offer is not
consummated on or prior to March 17, 1998, thereafter an additional incremental
interest amount will accrue at an annual rate of 0.5% of the Accreted Value of
the Securities as of the most recent Semi-Annual Accretion Date (as defined in
the Indenture), beginning on March 18, 1998, and, if the Exchange Offer is not
consummated on or prior to June 17, 1998, thereafter an additional incremental
interest amount will accrue at an annual rate of 0.5% of the Accreted Value of
the Securities as of the most recent Semi-Annual Accretion Date, beginning on
June 18, 1998, until the earlier of the date upon which (i) the Exchange Offer
is consummated, (ii) a Shelf Registration Statement with respect to all
Registrable Securities is declared effective or (iii) the Securities become
freely tradeable without registration under the 1933 Act; provided that, upon
the request of any Holder of the Securities, the Company will deliver to such
Holder certificates evidencing such Holder's Securities without the legends
restricting the transfer thereof.
(e) Without limiting the remedies available
to the Initial Purchasers and the Holders, the Company acknowledges that any
failure by the Company to comply with its obligations under Section 2(a) and
Section 2(b) hereof may result in material irreparable injury to the Initial
Purchasers or the Holders for which there is no adequate remedy at law, that it
will not be possible to measure damages for such injuries precisely and that,
in the event of any such failure, the Initial Purchasers or any Holder may
obtain such relief as may be required to specifically enforce the Company's
obligations under Section 2(a) and Section 2(b) hereof.
3. Registration Procedures.
In connection with the obligations of the Company
with respect to the Registration Statements pursuant to Section 2(a) and
Section 2(b) hereof, the Company shall as expeditiously as possible:
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(a) prepare and file with the SEC a Registration
Statement on the appropriate form under the 1933 Act, which form (x)
shall be selected by the Company and (y) shall, in the case of a Shelf
Registration, be available for the sale of the Registrable Securities
by the selling Holders thereof and (z) shall comply as to form in all
material respects with the requirements of the applicable form and
include all financial statements required by the SEC to be filed
therewith, and use its best efforts to cause such Registration
Statement to become effective and remain effective in accordance with
Section 2 hereof;
(b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be
necessary to keep such Registration Statement effective for the
applicable period and cause each Prospectus to be supplemented by any
required prospectus supplement and, as so supplemented, to be filed
pursuant to Rule 424 under the 1933 Act; to keep each Prospectus
current during the period described under Section 4(3) and Rule 174
under the 1933 Act that is applicable to transactions by brokers or
dealers with respect to the Registrable Securities or Exchange
Securities;
(c) in the case of a Shelf Registration, furnish to
each Holder of Registrable Securities, to counsel for the Initial
Purchasers, to counsel for the Holders and to each Underwriter of an
Underwritten Offering of Registrable Securities, if any, without
charge, as many copies of each Prospectus, including each preliminary
Prospectus, and any amendment or supplement thereto and such other
documents as such Holder or Underwriter may reasonably request, in
order to facilitate the public sale or other disposition of the
Registrable Securities; and the Company consents to the use of such
Prospectus and any amendment or supplement thereto in accordance with
applicable law by each of the selling Holders of Registrable Securities
and any such Underwriters in connection with the offering and sale of
the Registrable Securities covered by and in the manner described in
such Prospectus or any amendment or supplement thereto in accordance
with applicable law;
(d) use its best efforts to register or qualify the
Registrable Securities under all applicable state securities or "blue
sky" laws of such jurisdictions as any Holder of Registrable Securities
covered by a Registration Statement shall reasonably request in writing
by the time the applicable Registration Statement is declared effective
by the SEC, to cooperate with such Holder in connection with any
filings required to be made with the National Association of Securities
Dealers, Inc. and do any and all other acts and things which may be
reasonably necessary or advisable to enable such Holder to consummate
the disposition in each such jurisdiction of such Registrable
Securities owned by such Holder; provided, however, that the Company
shall not be required to (i) qualify as a foreign corporation or as a
dealer in securities in any jurisdiction where it would not otherwise
be required to qualify but for this Section 3(d), (ii) file any general
consent to service of process or (iii) subject itself to taxation in
any such jurisdiction if it is not so subject;
(e) in the case of a Shelf Registration, notify each
Holder of Registrable Securities, counsel for the Holders and counsel
for the Initial Purchasers promptly and, if
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<PAGE> 8
requested by any such Holder or counsel, confirm such advice in
writing (i) when a Registration Statement has become effective and when
any post-effective amendment thereto has been filed and becomes
effective, (ii) of any request by the SEC or any state securities
authority for amendments and supplements to a Registration Statement
and Prospectus or for additional information after the Registration
Statement has become effective, (iii) of the issuance by the SEC or any
state securities authority of any stop order suspending the
effectiveness of a Registration Statement or the initiation of any
proceedings for that purpose, (iv) if, between the effective date of a
Registration Statement and the closing of any sale of Registrable
Securities covered thereby, the representations and warranties of the
Company contained in any underwriting agreement, securities sales
agreement or other similar agreement, if any, relating to the offering
cease to be true and correct in all material respects or if the Company
receives any notification with respect to the suspension of the
qualification of the Registrable Securities for sale in any
jurisdiction or the initiation of any proceeding for such purpose, (v)
of the happening of any event during the period a Shelf Registration
Statement is effective which makes any statement made in such Shelf
Registration Statement or the related Prospectus untrue in any material
respect or which requires the making of any changes in such Shelf
Registration Statement or Prospectus in order to make the statements
therein not misleading and (vi) of any determination by the Company
that a post-effective amendment to a Registration Statement would be
appropriate;
(f) make every reasonable effort to obtain the
withdrawal of any order suspending the effectiveness of a Registration
Statement at the earliest possible moment and provide immediate notice
to each Holder of the withdrawal of any such order;
(g) in the case of a Shelf Registration, upon request,
furnish to each Holder of Registrable Securities, without charge, at
least one conformed copy of each Registration Statement and any
post-effective amendment thereto (without documents incorporated
therein by reference or exhibits thereto, unless requested);
(h) in the case of a Shelf Registration, cooperate
with the selling Holders of Registrable Securities to facilitate
the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any
restrictive legends and enable such Registrable Securities to be in
such denominations (consistent with the provisions of the Indenture)
and registered in such names as the selling Holders may reasonably
request at least two business days prior to the closing of any sale of
Registrable Securities;
(i) in the case of a Shelf Registration, upon the
occurrence of any event contemplated by Section 3(e)(v) hereof, use its
best efforts to prepare and file with the SEC a supplement or
post-effective amendment to a Registration Statement or the related
Prospectus or any document incorporated therein by reference or file
any other required document so that, as thereafter delivered to the
purchasers of the Registrable Securities, such Prospectus will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under
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<PAGE> 9
which they were made, not misleading. The Company agrees to
notify the Holders to suspend use of the Prospectus as promptly as
practicable after the occurrence of such an event, and the Holders
hereby agree to suspend use of the Prospectus until the Company has
amended or supplemented the Prospectus to correct such misstatement or
omission;
(j) a reasonable time prior to the filing of any
Registration Statement, any Prospectus, any amendment to a Registration
Statement or amendment or supplement to a Prospectus or any document
which is to be incorporated by reference into a Registration Statement
(other than filings pursuant to the 1934 Act) or a Prospectus after the
initial filing of a Registration Statement, provide copies of such
document to the Initial Purchasers and their counsel (and, in the case
of a Shelf Registration Statement, the Holders and their counsel) and
make such of the representatives of the Company as shall be reasonably
requested by the Initial Purchasers or their counsel (and, in the case
of a Shelf Registration Statement, the Holders or their counsel)
available for discussion of such document, and shall not at any time
file or make any amendment to the Registration Statement, any
Prospectus or any amendment of or supplement to a Registration
Statement or a Prospectus or any document which is to be incorporated
by reference into a Registration Statement (other than filings pursuant
to the 1934 Act) or a Prospectus, of which the Initial Purchasers and
their counsel (and, in the case of a Shelf Registration Statement, the
Holders and their counsel) shall not have previously been advised and
furnished a copy or to which the Initial Purchasers or their counsel
(and, in the case of a Shelf Registration Statement, the Holders or
their counsel) shall object;
(k) obtain a CUSIP number for all Exchange Securities
or Registrable Securities, as the case may be, not later than the
effective date of a Registration Statement;
(l) in the case of a Shelf Registration, make available
for inspection by a representative of the Holders of the Registrable
Securities, any Underwriter participating in any disposition pursuant
to such Shelf Registration Statement, and attorneys and accountants
designated by the Holders, at reasonable times and in a reasonable
manner, all financial and other records, pertinent documents and
properties of the Company, and cause the respective officers, directors
and employees of the Company to supply all information reasonably
requested by any such representative, Underwriter, attorney or
accountant in connection with a Shelf Registration Statement;
(m) in the case of a Shelf Registration, use its best
efforts to cause all Registrable Securities to be listed on any
securities exchange or any automated quotation system on which similar
securities issued by the Company are then listed if requested by the
Majority Holders, to the extent such Registrable Securities satisfy
applicable listing requirements;
(n) use its best efforts to cause the Exchange
Securities or Registrable Securities, as the case may be, to be rated
by two nationally recognized statistical rating organizations (as such
term is defined in Rule 436(g)(2) under the 1933 Act);
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<PAGE> 10
(o) if reasonably requested by any Holder of
Registrable Securities covered by a Registration Statement, (i)
promptly incorporate in a Prospectus supplement or post-effective
amendment such information with respect to such Holder as such Holder
reasonably requests to be included therein and (ii) make all required
filings of such Prospectus supplement or such post-effective amendment
as soon as the Company has received notification of the matters to be
incorporated in such filing; and
(p) in the case of a Shelf Registration, enter into
such customary agreements and take all such other actions in connection
therewith (including those requested by the Holders of a majority of
the Registrable Securities being sold) in order to expedite or
facilitate the disposition of such Registrable Securities including,
but not limited to, an Underwritten Offering and in such connection,
(i) to the extent possible, make such representations and warranties to
the Holders and any Underwriters of such Registrable Securities with
respect to the business of the Company and its subsidiaries, the
Registration Statement, Prospectus and documents incorporated by
reference or deemed incorporated by reference, if any, in each case, in
form, substance and scope as are customarily made by issuers to
underwriters in underwritten offerings and confirm the same if and when
requested, (ii) obtain opinions of counsel to the Company (which
counsel and opinions, in form, scope and substance, shall be reasonably
satisfactory to the Holders and such Underwriters and their respective
counsel) addressed to each selling Holder and Underwriter of
Registrable Securities, covering the matters customarily covered in
opinions requested in underwritten offerings, (iii) obtain "cold
comfort" letters from the independent certified public accountants of
the Company (and, if necessary, any other certified public accountant
of any subsidiary of the Company, or of any business acquired by the
Company for which financial statements and financial data are or are
required to be included in the Registration Statement) addressed to
each selling Holder and Underwriter of Registrable Securities, such
letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with
underwritten offerings, and (iv) deliver such documents and
certificates as may be reasonably requested by the Holders of a
majority of the Registrable Securities being sold or the Underwriters,
and which are customarily delivered in underwritten offerings, to
evidence the continued validity of the representations and warranties
of the Company made pursuant to clause (i) above and to evidence
compliance with any customary conditions contained in an underwriting
agreement.
In the case of a Shelf Registration Statement, the
Company may require each Holder of Registrable Securities to furnish to the
Company such information regarding the Holder and the proposed distribution by
such Holder of such Registrable Securities as the Company may from time to time
reasonably request in writing.
In the case of a Shelf Registration Statement,
each Holder agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3(e)(v) hereof, such
Holder will forthwith discontinue disposition of Registrable Securities
pursuant to a Registration Statement until such Holder's receipt of the copies
of the supplemented or amended Prospectus contemplated by Section 3(i) hereof,
and, if so directed by
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<PAGE> 11
the Company, such Holder will deliver to the Company (at its expense) all
copies in its possession, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice. The Company shall not suspend
the disposition of Registrable Securities pursuant to a Shelf Registration
Statement for more than an aggregate of 120 days during any 365 day period. If
the Company shall suspend the disposition of Registrable Securities pursuant to
a Shelf Registration Statement for more than an aggregate of 60 days during any
365 day period, then the Company shall pay each Holder of Registrable
Securities that are registered pursuant to the Shelf Registration Statement and
have not been sold pursuant thereto an illiquidity fee in an amount equal to
[one half] of one percent per annum (calculated at an annual rate for the
actual number of days of suspension in excess of 60 days in such 365 day
period) of the Accreted Value of such Registrable Securities held by such
Holder as of the most recent Semi-Annual Accretion Date.
The Holders of Registrable Securities covered by a
Shelf Registration Statement who desire to do so may sell such Registrable
Securities in an Underwritten Offering. In any such Underwritten Offering, the
investment banker or investment bankers and manager or managers (the
"Underwriters") that will administer the offering will be selected by the
Majority Holders of the Registrable Securities included in such offering.
4. Participation of Broker-Dealers in
Exchange Offer.
(a) The Staff of the SEC has taken the
position that any broker-dealer that receives Exchange Securities for its own
account in the Exchange Offer in exchange for Securities that were acquired by
such broker-dealer as a result of market-making or other trading activities (a
"Participating Broker-Dealer"), may be deemed to be an "underwriter" within the
meaning of the 1933 Act and must deliver a prospectus meeting the requirements
of the 1933 Act in connection with any resale of such Exchange Securities.
The Company understands that it is the Staff's
position that if the Prospectus contained in the Exchange Offer Registration
Statement includes a plan of distribution containing a statement to the above
effect and the means by which Participating Broker-Dealers may resell the
Exchange Securities, without naming the Participating Broker-Dealers or
specifying the amount of Exchange Securities owned by them, such Prospectus may
be delivered by Participating Broker-Dealers to satisfy their prospectus
delivery obligation under the 1933 Act in connection with resales of Exchange
Securities for their own accounts, so long as the Prospectus otherwise meets
the requirements of the 1933 Act.
(b) In light of the above, notwithstanding
the other provisions of this Agreement, the Company agrees that the provisions
of this Agreement as they relate to a Shelf Registration shall also apply to an
Exchange Offer Registration to the extent, and with such reasonable
modifications thereto as may be, reasonably requested by the Initial Purchasers
or by one or more Participating Broker-Dealers, in each case as provided in
clause (ii) below, in order to expedite or facilitate the disposition of any
Exchange Securities by Participating Broker-Dealers consistent with the
positions of the Staff recited in Section 4(a) above; provided that:
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<PAGE> 12
(i) the Company shall not be required to
amend or supplement the Prospectus contained in the Exchange
Offer Registration Statement, as would otherwise be
contemplated by Section 3(i) of this Agreement, for a period
exceeding 90 days after the last Exchange Date (as such period
may be extended pursuant to the penultimate paragraph of
Section 3 of this Agreement) and Participating Broker-Dealers
shall not be authorized by the Company to deliver and shall
not deliver such Prospectus after such period in connection
with the resales contemplated by this Section 4;
(ii) the application of the Shelf
Registration procedures set forth in Section 3 of this
Agreement to an Exchange Offer Registration, to the extent not
required by the positions of the Staff of the SEC or the 1933
Act and the rules and regulations thereunder, will be in
conformity with the reasonable request to the Company by the
Initial Purchasers or with the reasonable request in writing
to the Company by one or more broker-dealers who certify to
the Initial Purchasers and the Company in writing that they
anticipate that they will be Participating Broker-Dealers; and
provided further that, in connection with such application of
the Shelf Registration procedures set forth in Section 3 of
this Agreement to an Exchange Offer Registration, the Company
shall be obligated (x) to deal only with one entity
representing the Participating Broker-Dealers, which shall be
Merrill Lynch unless it elects not to act as such
representative and (y) to cause to be delivered only one, if
any, "cold comfort" letter with respect to the Prospectus in
the form existing on the last Exchange Date and with respect
to each subsequent amendment or supplement, if any, effected
during the period specified in clause (i) above; and
(iii) on a weekly basis, the representative of
the Participating Broker-Dealers will confirm with the Company
that the Shelf Registration Statement is available.
(c) The Initial Purchasers shall have no
liability to the Company or any Holder with respect to any request that it may
make pursuant to Section 4(b) above.
5. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold
harmless the Initial Purchasers, each Holder, each Participating Broker-Dealer,
each Underwriter and each Person, if any, who controls any Holder or
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
(i) against any and all loss, liability,
claim, damage and expense whatsoever, as incurred, arising
out of any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement (or any
amendment or supplement thereto) pursuant to which Exchange
Securities or Registrable Securities were registered under
the 1933 Act, including all documents incorporated therein by
reference, or the omission or alleged omission therefrom of a
material fact necessary to make the statements therein not
misleading, or arising out of any untrue statement or alleged
untrue statement of a material fact contained in any
Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact
necessary in order to make the
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<PAGE> 13
statements therein, in the light of the circumstances under
which they were made, not misleading;
(ii) against any and all loss, liability,
claim, damage and expense whatsoever, as incurred, to the
extent of the aggregate amount paid in settlement of any
litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of
any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission;
provided that (subject to Section 5(d) below) any such
settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever,
as incurred (including the fees and disbursements of counsel
chosen by any indemnified party), reasonably incurred in
investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever
based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any
such expense is not paid under subparagraph (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Initial Purchasers, such Holder or Underwriter expressly for use in a
Registration Statement (or any amendment thereto) or any Prospectus (or any
amendment or supplement thereto); provided, further, however, that the
foregoing indemnity agreement with respect to any prospectus shall not inure to
the benefit of any Initial Purchaser or Holder from whom the person asserting
any such losses, claims, damages or liabilities purchased Securities, or any
person controlling such Initial Purchaser or Holder, if a copy of the final
prospectus (as then amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) was not sent or given by or on behalf of
such Initial Purchaser or Holder to such person, if required by law so to have
been delivered, at or prior to the written confirmation of the sale of the
Securities to such person, and if the final prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses, claims,
damages or liabilities, unless such failure is the result of noncompliance by
the Company with Section 3(c) hereof.
(b) Each Holder severally, but not jointly,
agrees to indemnify and hold harmless the Company and the other selling
Holders, and each of their respective directors and officers, and each Person,
if any, who controls the Company or any other selling Holder within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any and
all loss, liability, claim, damage and expense to the same extent as described
in Section 5(a) hereof, as incurred, but only with respect to untrue statements
or omissions, or alleged untrue statements or omissions, made in the Shelf
Registration Statement (or any amendment thereto) or any Prospectus included
therein (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such Holder
expressly for use in the Shelf Registration Statement (or any amendment
thereto) or such Prospectus (or any amendment or supplement thereto); provided,
however, that no such Holder shall be liable for any
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<PAGE> 14
claims hereunder in excess of the amount of net proceeds received by such
Holder from the sale of Registrable Securities pursuant to such Shelf
Registration Statement.
(c) Each indemnified party shall give notice
as promptly as reasonably practicable to each indemnifying party of any action
commenced against it in respect of which indemnity may be sought hereunder, but
failure to so notify an indemnifying party shall not relieve such indemnifying
party from any liability hereunder to the extent it is not materially
prejudiced as a result thereof and in any event shall not relieve it from any
liability which it may have otherwise than on account of this indemnity
agreement. Upon request of the indemnified party, the indemnifying party shall
retain counsel reasonably satisfactory to the indemnified party to represent
the indemnified party. In any such proceeding, any indemnified party shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them,
in which case the indemnifying party shall pay the expenses of the separate
counsel of such indemnified party. In the case of parties indemnified pursuant
to Section 5(a) above, such counsel to the indemnified parties shall be
selected by Merrill Lynch, and, in the case of parties indemnified pursuant to
Section 5(b) above, such counsel to the indemnified parties shall be selected
by the Company. In no event shall the indemnifying party or parties be liable
for the fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written consent
of the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 5 (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii)
does not include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party; provided, that such
unconditional release may be subject to a parallel release of a claimant or
plaintiff by such indemnified party from all liability in respect of claims or
counterclaims asserted by such indemnified party arising out of the same
subject matter.
(d) If at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel, such indemnifying party agrees that it shall
be liable for any settlement of the nature contemplated by Section 5(a)(ii)
effected without its written consent if (i) such settlement is entered into
more than 45 days after receipt by such indemnifying party of the aforesaid
request, (ii) such indemnifying party shall have received notice of the terms
of such settlement at least 30 days prior to such settlement being entered into
and (iii) such indemnifying party shall not have reimbursed such indemnified
party in accordance with such request prior to the date of such settlement.
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<PAGE> 15
(e) If the indemnification provided for in
this Section 5 is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, in such
proportion as is appropriate to reflect the relative fault of the Company on
the one hand and the Holders and the Initial Purchasers on another hand in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative fault of the Company on the one hand
and the Holders and the Initial Purchasers on the other hand shall be
determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company, the
Holders or the Initial Purchasers and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company, the Holders and the Initial
Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section 5 were determined by pro rata allocation (even if the
Initial Purchasers were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable
considerations referred to above in this Section 5. The aggregate amount of
losses, liabilities, claims, damages and expenses incurred by an indemnified
party and referred to above in this Section 5 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged
untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 5,
no Initial Purchaser shall be required to contribute any amount in excess of
the amount by which the total price at which the Securities sold by it were
offered exceeds the amount of any damages which such Initial Purchaser has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
For purposes of this Section 5, each person, if
any, who controls an Initial Purchaser or Holder within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as such Initial Purchaser or Holder, and each director of the
Company, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company. The Initial Purchasers' respective
obligations to contribute pursuant to this Section 5 are several in proportion
to the principal amount of Securities set forth opposite their respective names
in Schedule I(a) to the Purchase Agreement and not joint.
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6. Miscellaneous.
(a) No Inconsistent Agreements. The Company
has not entered into, and on or after the date of this Agreement will not enter
into, any agreement which is inconsistent with the rights granted to the
Holders of Registrable Securities in this Agreement or otherwise conflicts with
the provisions hereof. The rights granted to the Holders hereunder do not in
any way conflict with and are not inconsistent with the rights granted to the
holders of the Company's other issued and outstanding securities under any such
agreements.
(b) Amendments and Waivers. The provisions
of this Agreement, including the provisions of this sentence, may not be
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given unless the Company has obtained the
written consent of Holders of at least a majority in aggregate principal amount
of the outstanding Registrable Securities affected by such amendment,
modification, supplement, waiver or consent; provided, however, that no
amendment, modification, supplement, waiver or consents to any departure from
the provisions of Section 5 hereof shall be effective as against any Holder of
Registrable Securities unless consented to in writing by such Holder.
(c) Notices. All notices and other
communications provided for or permitted hereunder shall be made in writing by
hand-delivery, registered first-class mail, telex, telecopier, or any courier
guaranteeing overnight delivery (i) if to a Holder, at the most current address
given by such Holder to the Company by means of a notice given in accordance
with the provisions of this Section 6(c), which address initially is, with
respect to the Initial Purchasers, the address set forth in the Purchase
Agreement; and (ii) if to the Company, initially at the Company's address set
forth in the Purchase Agreement and thereafter at such other address, notice of
which is given in accordance with the provisions of this Section 6(c).
All such notices and communications shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; two business days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt is
acknowledged, if telecopied; and on the next business day if timely delivered
to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands, or other
communications shall be concurrently delivered by the person giving the same to
the Trustee under the Indenture, at the address specified in such Indenture.
(d) Successors and Assigns. This Agreement
shall inure to the benefit of and be binding upon the successors, assigns and
transferees of each of the parties, including, without limitation and without
the need for an express assignment, subsequent Holders; provided that nothing
herein shall be deemed to permit any assignment, transfer or other disposition
of Registrable Securities in violation of the terms of the Purchase Agreement.
If any transferee of any Holder shall acquire Registrable Securities, in any
manner, whether by operation of law or otherwise, such Registrable Securities
shall be held subject to all of the terms of this Agreement, and by taking and
holding much Registrable Securities such person shall be conclusively deemed
16
<PAGE> 17
to have agreed to be bound by and to perform all of the terms and provisions of
this Agreement and such person shall be entitled to receive the benefits
hereof. The Initial Purchasers (in their capacity as Initial Purchasers) shall
have no liability or obligation to the Company with respect to any failure by a
Holder to comply with, or any breach by any Holder of, any of the obligations
of such Holder under this Agreement.
(e) Purchases and Sales of Securities. The
Company shall not, and shall use its best efforts to cause its affiliates (as
defined in Rule 405 under the 1933 Act) not to, purchase and then resell or
otherwise transfer any Securities.
(f) Third Party Beneficiary. The Holders
shall be third party beneficiaries to the agreements made hereunder between the
Company, on the one hand, and the Initial Purchasers, on the other hand, and
each Holder shall have the right to enforce such agreements directly to the
extent it deems such enforcement necessary or advisable to protect its rights
or the rights of Holders hereunder.
(g) Counterparts. This Agreement may be
executed in any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
(h) Headings. The headings in this
Agreement are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof.
(i) Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York.
(j) Severability. In the event that any one
or more of the provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
17
<PAGE> 18
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.
NEXTEL COMMUNICATIONS, INC.
By: /s/ STEVEN M. SHINDLER
-----------------------------
Name: Steven M. Shindler
Title: Vice President
Confirmed and accepted as of
the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
TD SECURITIES (USA) INC.
LEHMAN BROTHERS INC.
MORGAN STANLEY & CO. INCORPORATED
NATIONSBANC CAPITAL PARTNERS, INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ LISA CRAIG
---------------------------------
Name: Lisa Craig
Title: Vice President
18
<PAGE> 1
EXHIBIT 5
JONES, DAY, REAVIS & POGUE
2300 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201
214-220-3939
November __, 1997
Nextel Communications, Inc.
1505 Farm Credit Drive
McLean, Virginia 22102
Ladies and Gentlemen:
We are acting as counsel to Nextel Communications, Inc. (the
"Company"), a corporation organized under the laws of the State of Delaware, in
connection with the offer to exchange (the "Exchange Offer") one $1,000
principal amount at maturity of the Company's 10.65% Senior Redeemable Discount
Notes due September 15, 2007 (the Exchange Senior Notes") for each $1,000
principal amount at maturity of the Company's outstanding 10.65% Senior
Redeemable Discount Notes due September 15, 2007 (the "Private Notes"), and in
connection with the preparation of the prospectus (the "Prospectus") contained
in the registration statement on Form S-4 (the "Registration Statement") (No.
333-______) filed with the Securities and Exchange Commission by the Company
for the purpose of registering the Exchange Senior Notes under the Securities
Act of 1933, as amended (the "Act"). The Private Notes have been, and the
Exchange Senior Notes will be, issued pursuant to an Indenture, dated as of
September 17, 1997 (the "Indenture"), among the Company and Harris Trust and
Savings Bank, as Trustee. Unless otherwise defined herein, terms defined in the
Prospectus are used herein as defined therein.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such corporate records, agreements, documents, and
other instruments and such certificates or comparable documents of public
officials and representatives of the Company and have made such other and
further investigations as we have deemed relevant and necessary as a basis for
the opinion hereinafter set forth. In such examination, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified or photostatic
copies, and the authenticity of the originals of such latter documents.
Based on the foregoing, and subject to the qualifications and
limitations stated herein, we are of the opinion that, assuming the due
authorization, execution, and delivery by the Trustee of the Indenture, when
the Exchange Senior Notes, substantially in the form as set forth
<PAGE> 2
Jones, Day, Reavis & Pogue
Nextel Communications, Inc.
November __, 1997
Page 2
in an exhibit to the Indenture filed as Exhibit 4.49 to the Registration
Statement, have been duly executed by the Company and authenticated by the
Trustee in accordance with the Indenture and duly delivered in exchange for the
Private Notes in accordance with the Exchange Offer in the manner described in
the Registration Statement, the Exchange Senior Notes will constitute valid and
legally binding obligations of the Company enforceable in accordance with their
terms, except to the extent enforceability may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally and general equitable
principles (whether considered in a proceeding in equity or at law).
We hereby consent to the use of our name under the caption "Legal
Matters" in the Prospectus forming part of the Registration Statement and to
the filing of this opinion as Exhibit 5 to the Registration Statement.
Very truly yours,
JONES, DAY, REAVIS & POGUE
<PAGE> 1
EXHIBIT 8
JONES, DAY, REAVIS & POGUE
3500 SunTrust Plaza
303 Peachtree Street, N.E.
Atlanta, Georgia 30308
404-521-3939
November __, 1997
Nextel Communications, Inc.
1505 Farm Credit Drive
Suite 100
McLean, Virginia 22102
Re: Exchange Offer for 10.65% Senior Redeembable Discount Notes due
2007
Dear Sirs:
We have acted as counsel to Nextel Communications, Inc. in connection
with the Registration Statement on Form S-4, to which this opinion appears as
Exhibit 8, which includes the Prospectus of the Company relating to the
Exchange Offer (as such term is defined in the Prospectus). Unless otherwise
indicated, any capitalized terms used herein shall have the same meanings that
such terms have in the Prospectus.
On the basis of the foregoing and upon consideration of applicable law,
we are of the opinion that, subject to the qualifications stated therein, the
discussion of the Unites States federal income tax matters set forth under the
caption "Certain United States Federal Income Tax Considerations" in the
Prospectus contained in the Registration Statement summarizes the principal
United States federal income tax consequences relevant to the Exchange Offer
and to purchase, ownership and disposition of the Exchange Senior Notes.
We hereby consent to the filing with the Securities and Exchange
Commission of this opinion as an exhibit to the Registration Statement and to
the reference to this firm in the Prospectus constituting part of the
Registration Statement.
Very truly yours,
Jones, Day, Reavis & Pogue
<PAGE> 1
EXHIBIT 12
NEXTEL COMMUNICATIONS INC. AND SUBSIDIARIES
STATEMENT REGARDING COMPUTATION OF EARNINGS TO FIXED CHARGES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS NINE MONTHS
FISCAL YEAR ENDED ENDED YEAR ENDED ENDED
MARCH 31, DECEMBER 31, DECEMBER 31, SEPTEMBER 30,
1993 1994 1994 1995 1996 1996 1997
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Income from continuing
operations
before income tax benefit,
equity in unconsolidated $(10,642) $(78,341) $(197,194) $(531,767) $(852,041) $(614,573) $(907,983)
subsidiaries, and minority
interests
Add:
Interest Expense 396 11,790 69,491 115,034 227,495 165,524 279,901
Rental Expense 1,079 2,456 11,100 17,670 25,350 19,013 24,885
-------- -------- --------- --------- --------- --------- ---------
Earnings $ (9,167) $(64,095) $(116,603) $(399,063) $(599,196) $(430,036) $(603,197)
======== ======== ========= ========= ========= ========= =========
Fixed Charges:
Interest Expense $ 396 $ 11,790 $ 69,491 $ 115,034 $ 227,495 $ 165,524 $ 279,901
Rental Expense 1,079 2,456 11,100 17,670 25,350 19,013 24,885
Capitalized Interest 2,200 7,800 21,300 31,000 32,900 22,784 35,725
-------- -------- --------- --------- --------- --------- ---------
Fixed Charges $ 3,675 $ 22,046 $ 101,891 $ 163,704 $ 285,745 $ 207,321 $ 340,511
======== ======== ========= ========= ========= ========= =========
Deficiency of earnings to $ 12,842 $ 86,141 $ 218,494 $ 562,767 $ 884,941 $ 637,357 $ 943,708
fixed charges
</TABLE>
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Nextel Communications, Inc. on Form S-4 of our report dated March 20, 1997,
except for Note 13, as to which the date is March 27, 1997, appearing in the
Annual Report on Form 10-K of Nextel Communications, Inc. for the year ended
December 31, 1996, and to the references to us under the headings "Summary
Financial Data" and "Experts" in the Prospectus, which is part of this
Registration Statement.
DELOITTE & TOUCHE LLP
McLean, Virginia
November 25, 1997
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel Communications,
Inc., a Delaware corporation (the "Company"), which Company intends to file
with the Securities and Exchange Commission under the provisions of the
Securities Act of 1933 a Registration Statement on Form S-4 or other
appropriate form in connection with an exchange offer relating to the Company's
Senior Redeemable Discount Notes due 2007 does hereby constitute and appoint
Steven M. Shindler, Thomas D. Hickey, Gary D. Begeman and Thomas J. Sidman, and
each of them, each with full power to act without the other and with full power
of substitution and resubstitution, as attorneys or attorney to sign and file
in his or her name, place and stead, in any and all capacities, such
Registration Statement, any and all amendments and exhibits thereto, and any
and all other documents to be filed with the Securities and Exchange Commission
pertaining to or relating to such Registration Statement, or any other document
with any state securities commission or other regulatory authority with respect
to the securities covered by such Registration Statement, with full power and
authority to do and perform any and all acts and things whatsoever required and
necessary to be done, hereby ratifying and approving the acts of said attorneys
and each of them and any substitute or substitutes.
November 23, 1997
/s/ DANIEL F. AKERSON
--------------------------------
Daniel F. Akerson
Chairman of the Board, Director
and Chief Executive Officer
(Principal Executive Officer)
<PAGE> 2
EXHIBIT 24
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel Communications,
Inc., a Delaware corporation (the "Company"), which Company intends to file with
the Securities and Exchange Commission under the provisions of the Securities
Act of 1933 a Registration Statement on Form S-4 or other appropriate form in
connection with an exchange offer relating to the Company's Senior Redeemable
Discount Notes due 2007 does hereby constitute and appoint Steven M. Shindler,
Thomas D. Hickey, Gary D. Begeman and Thomas J. Sidman, and each of them, each
with full power to act without the other and with full power of substitution and
resubstitution, as attorneys or attorney to sign and file in his or her name,
place and stead, in any and all capacities, such Registration Statement, any and
all amendments and exhibits thereto, and any and all other documents to be filed
with the Securities and Exchange Commission pertaining to or relating to such
Registration Statement, or any other document with any state securities
commission or other regulatory authority with respect to the securities covered
by such Registration Statement, with full power and authority to do and perform
any and all acts and things whatsoever required and necessary to be done, hereby
ratifying and approving the acts of said attorneys and each of them and any
substitute or substitutes.
November 23, 1997
/s/ STEVEN M. SHINDLER
------------------------------
Steven M. Shindler
Vice President and
Chief Financial Officer
(Principal Financial Officer)
<PAGE> 3
EXHIBIT 24
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel Communications,
Inc., a Delaware corporation (the "Company"), which Company intends to file with
the Securities and Exchange Commission under the provisions of the Securities
Act of 1933 a Registration Statement on Form S-4 or other appropriate form in
connection with an exchange offer relating to the Company's Senior Redeemable
Discount Notes due 2007 does hereby constitute and appoint Steven M. Shindler,
Thomas D. Hickey, Gary D. Begeman and Thomas J. Sidman, and each of them, each
with full power to act without the other and with full power of substitution and
resubstitution, as attorneys or attorney to sign and file in his or her name,
place and stead, in any and all capacities, such Registration Statement, any and
all amendments and exhibits thereto, and any and all other documents to be filed
with the Securities and Exchange Commission pertaining to or relating to such
Registration Statement, or any other document with any state securities
commission or other regulatory authority with respect to the securities covered
by such Registration Statement, with full power and authority to do and perform
any and all acts and things whatsoever required and necessary to be done, hereby
ratifying and approving the acts of said attorneys and each of them and any
substitute or substitutes.
November 23, 1997
/s/ WILLIAM ARENDT
---------------------------------
William Arendt
Controller (Principal Accounting
Officer)
<PAGE> 4
EXHIBIT 24
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel Communications,
Inc., a Delaware corporation (the "Company"), which Company intends to file with
the Securities and Exchange Commission under the provisions of the Securities
Act of 1933 a Registration Statement on Form S-4 or other appropriate form in
connection with an exchange offer relating to the Company's Senior Redeemable
Discount Notes due 2007 does hereby constitute and appoint Steven M. Shindler,
Thomas D. Hickey, Gary D. Begeman and Thomas J. Sidman, and each of them, each
with full power to act without the other and with full power of substitution and
resubstitution, as attorneys or attorney to sign and file in his or her name,
place and stead, in any and all capacities, such Registration Statement, any and
all amendments and exhibits thereto, and any and all other documents to be filed
with the Securities and Exchange Commission pertaining to or relating to such
Registration Statement, or any other document with any state securities
commission or other regulatory authority with respect to the securities covered
by such Registration Statement, with full power and authority to do and perform
any and all acts and things whatsoever required and necessary to be done, hereby
ratifying and approving the acts of said attorneys and each of them and any
substitute or substitutes.
November 23, 1997
/s/ MORGAN E. O'BRIEN
---------------------------
Morgan E. O'Brien
Vice Chairman of the Board
and Director
<PAGE> 5
EXHIBIT 24
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel Communications,
Inc., a Delaware corporation (the "Company"), which Company intends to file with
the Securities and Exchange Commission under the provisions of the Securities
Act of 1933 a Registration Statement on Form S-4 or other appropriate form in
connection with an exchange offer relating to the Company's Senior Redeemable
Discount Notes due 2007 does hereby constitute and appoint Steven M. Shindler,
Thomas D. Hickey, Gary D. Begeman and Thomas J. Sidman, and each of them, each
with full power to act without the other and with full power of substitution and
resubstitution, as attorneys or attorney to sign and file in his or her name,
place and stead, in any and all capacities, such Registration Statement, any and
all amendments and exhibits thereto, and any and all other documents to be filed
with the Securities and Exchange Commission pertaining to or relating to such
Registration Statement, or any other document with any state securities
commission or other regulatory authority with respect to the securities covered
by such Registration Statement, with full power and authority to do and perform
any and all acts and things whatsoever required and necessary to be done, hereby
ratifying and approving the acts of said attorneys and each of them and any
substitute or substitutes.
November 23, 1997
/s/ TIMOTHY M. DONAHUE
------------------------------
Timothy M. Donahue
President and Chief Operating
Officer and Director
<PAGE> 6
EXHIBIT 24
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel Communications,
Inc., a Delaware corporation (the "Company"), which Company intends to file with
the Securities and Exchange Commission under the provisions of the Securities
Act of 1933 a Registration Statement on Form S-4 or other appropriate form in
connection with an exchange offer relating to the Company's Senior Redeemable
Discount Notes due 2007 does hereby constitute and appoint Steven M. Shindler,
Thomas D. Hickey, Gary D. Begeman and Thomas J. Sidman, and each of them, each
with full power to act without the other and with full power of substitution and
resubstitution, as attorneys or attorney to sign and file in his or her name,
place and stead, in any and all capacities, such Registration Statement, any and
all amendments and exhibits thereto, and any and all other documents to be filed
with the Securities and Exchange Commission pertaining to or relating to such
Registration Statement, or any other document with any state securities
commission or other regulatory authority with respect to the securities covered
by such Registration Statement, with full power and authority to do and perform
any and all acts and things whatsoever required and necessary to be done, hereby
ratifying and approving the acts of said attorneys and each of them and any
substitute or substitutes.
November 23, 1997
/s/ KEITH BANE
----------------------
Keith Bane
Director
<PAGE> 7
EXHIBIT 24
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel Communications,
Inc., a Delaware corporation (the "Company"), which Company intends to file with
the Securities and Exchange Commission under the provisions of the Securities
Act of 1933 a Registration Statement on Form S-4 or other appropriate form in
connection with an exchange offer relating to the Company's Senior Redeemable
Discount Notes due 2007 does hereby constitute and appoint Steven M. Shindler,
Thomas D. Hickey, Gary D. Begeman and Thomas J. Sidman, and each of them, each
with full power to act without the other and with full power of substitution and
resubstitution, as attorneys or attorney to sign and file in his or her name,
place and stead, in any and all capacities, such Registration Statement, any and
all amendments and exhibits thereto, and any and all other documents to be filed
with the Securities and Exchange Commission pertaining to or relating to such
Registration Statement, or any other document with any state securities
commission or other regulatory authority with respect to the securities covered
by such Registration Statement, with full power and authority to do and perform
any and all acts and things whatsoever required and necessary to be done, hereby
ratifying and approving the acts of said attorneys and each of them and any
substitute or substitutes.
November 23, 1997
/s/ WILLIAM E. CONWAY, JR.
------------------------------
William E. Conway, Jr.
Director
<PAGE> 8
EXHIBIT 24
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel Communications,
Inc., a Delaware corporation (the "Company"), which Company intends to file with
the Securities and Exchange Commission under the provisions of the Securities
Act of 1933 a Registration Statement on Form S-4 or other appropriate form in
connection with an exchange offer relating to the Company's Senior Redeemable
Discount Notes due 2007 does hereby constitute and appoint Steven M. Shindler,
Thomas D. Hickey, Gary D. Begeman and Thomas J. Sidman, and each of them, each
with full power to act without the other and with full power of substitution and
resubstitution, as attorneys or attorney to sign and file in his or her name,
place and stead, in any and all capacities, such Registration Statement, any and
all amendments and exhibits thereto, and any and all other documents to be filed
with the Securities and Exchange Commission pertaining to or relating to such
Registration Statement, or any other document with any state securities
commission or other regulatory authority with respect to the securities covered
by such Registration Statement, with full power and authority to do and perform
any and all acts and things whatsoever required and necessary to be done, hereby
ratifying and approving the acts of said attorneys and each of them and any
substitute or substitutes.
November 23, 1997
/s/ CRAIG O. MCCAW
-----------------------
Craig O. McCaw
Director
<PAGE> 9
EXHIBIT 24
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel Communications,
Inc., a Delaware corporation (the "Company"), which Company intends to file with
the Securities and Exchange Commission under the provisions of the Securities
Act of 1933 a Registration Statement on Form S-4 or other appropriate form in
connection with an exchange offer relating to the Company's Senior Redeemable
Discount Notes due 2007 does hereby constitute and appoint Steven M. Shindler,
Thomas D. Hickey, Gary D. Begeman and Thomas J. Sidman, and each of them, each
with full power to act without the other and with full power of substitution and
resubstitution, as attorneys or attorney to sign and file in his or her name,
place and stead, in any and all capacities, such Registration Statement, any and
all amendments and exhibits thereto, and any and all other documents to be filed
with the Securities and Exchange Commission pertaining to or relating to such
Registration Statement, or any other document with any state securities
commission or other regulatory authority with respect to the securities covered
by such Registration Statement, with full power and authority to do and perform
any and all acts and things whatsoever required and necessary to be done, hereby
ratifying and approving the acts of said attorneys and each of them and any
substitute or substitutes.
November 23, 1997
/s/ KEISUKE NAKASAKI
-------------------------
Keisuke Nakasaki
Director
<PAGE> 10
EXHIBIT 24
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel Communications,
Inc., a Delaware corporation (the "Company"), which Company intends to file with
the Securities and Exchange Commission under the provisions of the Securities
Act of 1933 a Registration Statement on Form S-4 or other appropriate form in
connection with an exchange offer relating to the Company's Senior Redeemable
Discount Notes due 2007 does hereby constitute and appoint Steven M. Shindler,
Thomas D. Hickey, Gary D. Begeman and Thomas J. Sidman, and each of them, each
with full power to act without the other and with full power of substitution and
resubstitution, as attorneys or attorney to sign and file in his or her name,
place and stead, in any and all capacities, such Registration Statement, any and
all amendments and exhibits thereto, and any and all other documents to be filed
with the Securities and Exchange Commission pertaining to or relating to such
Registration Statement, or any other document with any state securities
commission or other regulatory authority with respect to the securities covered
by such Registration Statement, with full power and authority to do and perform
any and all acts and things whatsoever required and necessary to be done, hereby
ratifying and approving the acts of said attorneys and each of them and any
substitute or substitutes.
November 23, 1997
/s/ MASAAKI TORIMOTO
-----------------------
Masaaki Torimoto
Director
<PAGE> 11
EXHIBIT 24
POWER OF ATTORNEY
NEXTEL COMMUNICATIONS, INC.
The undersigned, a director and/or officer of Nextel Communications,
Inc., a Delaware corporation (the "Company"), which Company intends to file with
the Securities and Exchange Commission under the provisions of the Securities
Act of 1933 a Registration Statement on Form S-4 or other appropriate form in
connection with an exchange offer relating to the Company's Senior Redeemable
Discount Notes due 2007 does hereby constitute and appoint Steven M. Shindler,
Thomas D. Hickey, Gary D. Begeman and Thomas J. Sidman, and each of them, each
with full power to act without the other and with full power of substitution and
resubstitution, as attorneys or attorney to sign and file in his or her name,
place and stead, in any and all capacities, such Registration Statement, any and
all amendments and exhibits thereto, and any and all other documents to be filed
with the Securities and Exchange Commission pertaining to or relating to such
Registration Statement, or any other document with any state securities
commission or other regulatory authority with respect to the securities covered
by such Registration Statement, with full power and authority to do and perform
any and all acts and things whatsoever required and necessary to be done, hereby
ratifying and approving the acts of said attorneys and each of them and any
substitute or substitutes.
November 23, 1997
/s/ DENNIS WEIBLING
-------------------------
Dennis Weibling
Director
<PAGE> 1
EXHIBIT 25
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-I
Statement of Eligibility
Under the Trust Indenture Act of 1939
of a Corporation Designated to Act as
Trustee
Check if an Application to Determine
Eligibility of a Trustee Pursuant to Section
305(b)(2)_________
HARRIS TRUST AND SAVINGS BANK
(Name of Trustee)
Illinois 23-1614034
(I.R.S. Employer
(State of Incorporation) Identification No.)
111 West Monroe Street, Chicago, Illinois 60603
(Address of principal executive offices)
Daniel G. Donovan, Harris Trust and Savings Bank,
111 West Monroe Street, Chicago, Illinois, 60603
312-461-2908
(Name address and telephone number for agent for service)
NEXTEL COMMUNICATIONS, INC.
(Name of Obligor)
Delaware 36-3939651
(I.R.S. Employer
(State of Incorporation) Identification No.)
1505 Farm Credit Drive
McLean, Virginia 22102
(Address of principal executive offices)
Senior Redeemable Discount Notes, Due 2007
(Title of indenture securities)
<PAGE> 2
1. GENERAL INFORMATION. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Commissioner of Banks and Trust Companies, State of
Illinois, Springfield, Illinois: Chicago Clearing House
Association, 164 West Jackson Boulevard, Chicago,
Illinois; Federal Deposit Insurance Corporation,
Washington. D.C.; The Board of Governors of the Federal
Reserve System, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust
powers.
Harris Trust and Savings Bank is authorized to exercise
corporate trust powers.
2. AFFILIATIONS WITH OBLIGOR. If the Obligor is an affiliate of the
Trustee, describe each such affiliation.
The Obligor is not an affiliate of the Trustee.
3. thru 15.
NO RESPONSE NECESSARY
16. LIST OF EXHIBITS.
1. A copy of the articles of association of the Trustee as
now in effect which includes the authority of the trustee
to commence business and to exercise corporate trust
powers.
A copy of the Certificate of Merger dated April 1, 1972
between Harris Trust and Savings Bank, HTS Bank and Harris
Bankcorp. Inc. which constitutes the articles of
association of the Trustee as now in effect and includes
the authority of the Trustee to commence business and to
exercise corporate trust powers was filed in connection
with the Registration Statement of Louisville Gas and
Electric Company, File No. 2-44295, and is incorporated
herein by reference.
2. A copy of the existing by-laws of the Trustee.
A copy of the existing by-laws of the Trustee was filed in
connection with the Registration Statement of Commercial
Federal Corporation, File No. 333-20711, and is
incorporated herein by reference.
3. The consents of the Trustee required by Section 321(b)
of the Act.
(included as Exhibit A on page 2 of this statement)
4. A copy of the latest report of condition of the Trustee
published pursuant to law or the requirements of its
supervising or examining authority.
(included as Exhibit B on page 3 of this statement)
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
HARRIS TRUST AND SAVINGS BANK, a corporation organized and existing under the
laws of the State of Illinois, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago, and State of Illinois, on the 20th day of November 1997.
HARRIS TRUST AND SAVINGS BANK
By: /s/ D.G. Donovan
-----------------------------
D.G. Donovan
Assistant Vice President
EXHIBIT A
The consents of the Trustee required by Section 321(b) of the Act.
Harris Trust and Savings Bank, as the Trustee herein named, hereby consents that
reports of examinations of said trustee by Federal and State authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
HARRIS TRUST AND SAVINGS BANK
By: /s/ D.G. Donovan
-----------------------------
D.G. Donovan
Assistant Vice President
2
<PAGE> 4
EXHIBIT B
Attached is a true and correct copy of the statement of condition of Harris
Trust and Savings Bank as of September 30, 1997, as published in accordance with
a call made by the State Banking Authority and by the Federal Reserve Bank of
the Seventh Reserve District.
[HARRIS BANK LOGO]
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60603
of Chicago, Illinois, And Foreign and Domestic Subsidiaries, at the close of
business on September 30, 1997, a state banking institution organized and
operating under the banking laws of this State and a member of the Federal
Reserve System. Published in accordance with a call made by the Commissioner of
Banks and Trust Companies of the State of Illinois and by the Federal Reserve
Bank of this District.
Bank's Transit Number 71000288
<TABLE>
<CAPTION>
ASSETS THOUSANDS
Cash and balances due from depository institutions: OF DOLLARS
<S> <C> <C>
Non-interest bearing balances and currency and coin ........... $1,188,709
Interest bearing balances ..................................... $550,173
Securities: ...................................................................
a. Held-to-maturity securities $0
b. Available-for-sale securities $3,685,983
Federal funds sold and securities purchased under agreements to resell i $396,400
Loans and lease financing receivables:
Loans and leases, net of unearned income ...................... $8,401,048
LESS: Allowance for loan and lease losses ..................... $107,180
-----------
Loans and leases, net of unearned income, allowance, and reserve
(item 4.a minus 4.b) .......................................... $8,293,868
Assets held in trading accounts ............................................... $98,368
Premises and fixed assets (including capitalized leases) ...................... $213,612
Other real estate owned ....................................................... $778
Investments in unconsolidated subsidiaries and associated companies ........... $86
Customer's liability to this bank on acceptances outstanding .................. $41,205
Intangible assets ............................................................. $283,839
Other assets .................................................................. $603,886
-----------
TOTAL ASSETS $15,356,907
===========
</TABLE>
3
<PAGE> 5
<TABLE>
<S> <C> <C>
LIABILITIES
Deposits:
In domestic offices ..................................................... $8,374,055
Non-interest bearing ............................................ $2,770,029
Interest bearing ................................................ $5,604,026
In foreign offices, Edge and Agreement Subsidiaries, and IBF's .......... $1,991,659
Non-interest bearing ............................................ $27,364
Interest bearing ................................................ $1,964,295
Federal funds purchased and securities sold under agreements to repurchase in
domestic offices of the bank and of its Edge and Agreement subsidiaries, and in
IBF's:
Federal funds purchased and securities sold under agreements to repurchase $2,549,328
Trading Liabilities 62,186
Other borrowed money:
a. With remaining maturity of one year or less ................................ $630,911
b. With remaining maturity of more than one year .............................. $0
Bank's liability on acceptances executed and outstanding....................... $41,205
Subordinated notes and debentures ............................................. $325,000
Other liabilities ............................................................. $132,188
-----------
TOTAL LIABILITIES $14,106,532
===========
EQUITY CAPITAL
Common stock .................................................................. $100,000
Surplus ....................................................................... $600,853
a. Undivided profits and capital reserves ..................................... $553,257
b. Set unrealized holding gains (losses) on available-for-sale securities...... ($3,735)
-----------
TOTAL EQUITY CAPITAL $1,250,375
===========
Total liabilities, limited-life preferred stock, and equity capital ............ $15,356,907
===========
</TABLE>
I. Pamela Piarowski, Vice President of the above-named bank, do
hereby declare that this Report of Condition has been prepared in conformance
with the instructions issued by the Board of Governors of the Federal Reserve
System and is true to the best of my knowledge and belief.
PAMELA PIAROWSKI
10/29/97
We, the undersigned directors, attest to the correctness of this
Report of Condition and declare that it has been examined by us and, to the best
of our knowledge and belief, has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System and
the Commissioner of Banks and Trust Companies of the State of Illinois and is
true and correct.
EDWARD W, LYMAN,
ALAN G. McNALLY,
JAMES J. GLASSER
Directors.
4
<PAGE> 1
LETTER OF TRANSMITTAL
OFFER TO EXCHANGE
10.65% SENIOR REDEEMABLE DISCOUNT NOTES,
DUE SEPTEMBER 15, 2007,
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
FOR ANY AND ALL OUTSTANDING
10.65% SENIOR REDEEMABLE DISCOUNT NOTES,
DUE SEPTEMBER 15, 2007
OF
NEXTEL COMMUNICATIONS, INC.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON , 1998 UNLESS EXTENDED (THE "EXPIRATION DATE").
Deliver to:
Harris Trust and Savings Bank, Exchange Agent
<TABLE>
<S> <C> <C>
BY REGISTERED OR CERTIFIED BY HAND OR OVERNIGHT DELIVERY: FACSIMILE TRANSMISSION NUMBER:
MAIL: (For Eligible Institutions
Only)
HARRIS TRUST AND SAVINGS BANK HARRIS TRUST AND SAVINGS BANK (212) 701-7636
c/o Harris Trust Company c/o Harris Trust Company Confirm Receipt of Facsimile
of New York of New York by Telephone:
P.O. Box 1010 19th Floor (212) 701-7624
88 Pine Street New York, NY 10005
Wall Street Station
New York, NY 10268-1010
</TABLE>
Delivery of this instrument to an address other than as set forth above or
transmission of instructions via a facsimile number other than the one listed
above will not constitute a valid delivery. The instructions accompanying this
Letter of Transmittal should be read carefully before this Letter of Transmittal
is completed. THIS INSTRUMENT SHOULD NOT BE DELIVERED TO THE COMPANY.
The undersigned acknowledges that the undersigned has received and reviewed
the Prospectus dated December , 1997 (the "Prospectus") of Nextel
Communications, Inc. (the "Company") and this Letter of Transmittal (the "Letter
of Transmittal"), which together constitute (i) the Company's offer (the
"Exchange Offer") to exchange $1,000 in principal amount at maturity of its
newly issued 10.65% Senior Redeemable Discount Notes due September 15, 2007 (the
"Exchange Senior Notes"), which have been registered under the Securities Act of
1933, as amended (the "Securities Act"), pursuant to a Registration Statement of
which the Prospectus is a part, for $1,000 in principal amount at maturity of
its outstanding 10.65% Senior Redeemable Discount Notes due September 15, 2007
(the "Private Notes"), of which $840,000,000 in principal amount at maturity are
issued and outstanding. Other capitalized terms used but not defined herein have
the meaning given to them in the Prospectus.
This Letter of Transmittal is to be completed by a Holder (as defined
herein) of Private Notes either (i) if certificates are to be forwarded herewith
or (ii) if a tender of certificates for Private Notes, if available, is to be
made by book-entry transfer to the account maintained by the Exchange Agent at
the Depository Trust Company (the "DTC") pursuant to the procedures set forth in
"The Exchange Offer -- Procedures for Tendering" section of the Prospectus.
Holders of Private Notes whose certificates are not immediately available, or
who are unable to deliver their certificates or confirmation of the book-entry
tender of their Private Notes into the Exchange Agent's account at DTC (a
"Book-Entry Confirmation") and all other documents required by this Letter of
Transmittal to the Exchange Agent on or prior to the Expiration Date, must
tender their Private Notes according to the guaranteed delivery procedures set
forth in "The
<PAGE> 2
Exchange Offer -- Guaranteed Delivery Procedures" section of the Prospectus. See
Instruction 1. Delivery of documents to DTC does not constitute delivery to the
Exchange Agent.
The term "Holder" with respect to the Exchange Offer means any person in
whose name Private Notes are registered on the books of the Company or any other
person who has obtained a properly completed bond power from the registered
Holder. The undersigned has completed, executed, and delivered this Letter of
Transmittal to indicate the action the undersigned desires to take with respect
to the Exchange Offer. Holders who wish to tender their Private Notes must
complete this Letter of Transmittal in its entirety.
PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE PROVIDING ANY
INFORMATION BELOW. THE INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL
MUST BE FOLLOWED. QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES
OF THE PROSPECTUS AND LETTER OF TRANSMITTAL SHOULD BE DIRECTED TO THE EXCHANGE
AGENT AT (212) 701-7624 OR AT ITS ADDRESS SET FORTH ABOVE.
List below the Private Notes to which this Letter of Transmittal relates.
DESCRIPTION OF PRIVATE NOTES
<TABLE>
<CAPTION>
NAME(S) AND ADDRESS(ES) AGGREGATE PRINCIPAL
OF REGISTERED HOLDERS AMOUNT OF PRIVATE NOTES PRINCIPAL AMOUNT
(PLEASE COMPLETE, IF REPRESENTED BY OF PRIVATE NOTES
BLANK) CERTIFICATE NUMBER(S) CERTIFICATE(S) TENDERED*
- ----------------------- ----------------------- ----------------------- -----------------------
<S> <C> <C> <C>
TOTAL
</TABLE>
- ---------------
* Unless indicated in the column labeled "Principal Amount of Private Notes
Tendered," any tendering Holder of Private Notes will be deemed to have
tendered the entire principal amount of Private Notes represented by the
column labeled "Aggregate Principal Amount of Private Notes Represented by
Certificate(s)."
If the space provided above is inadequate, list the certificate numbers and
principal amount of Private Notes on a separate signed schedule and affix the
list to this Letter of Transmittal.
[ ] CHECK HERE IF TENDERED PRIVATE NOTES ARE ENCLOSED HEREWITH.
[ ] CHECK HERE IF TENDERED PRIVATE NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND
COMPLETE THE FOLLOWING (FOR USE BY ELIGIBLE INSTITUTIONS (AS HEREINAFTER
DEFINED) ONLY):
Name of Tendering Institution:
-------------------------------------------------
Account Number:
----------------------------------------------------------------
Transaction Code Number:
-------------------------------------------------------
[ ] CHECK HERE IF TENDERED PRIVATE NOTES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY ENCLOSED HEREWITH AND COMPLETE THE FOLLOWING
(FOR USE BY ELIGIBLE INSTITUTIONS ONLY):
Name(s) of Registered Holder(s) of Private Notes:
------------------------------
- -------------------------------------------------------------------------------
2
<PAGE> 3
Date of Execution of Notice of Guaranteed Delivery:
----------------------------
Window Ticket Number (if available):
-------------------------------------------
Name of Institution that Guaranteed Delivery:
----------------------------------
Account Number (if delivered by book-entry transfer):
--------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(See Instructions 4, 5 and 6)
To be completed ONLY (i) if certificates for Private Notes not tendered, or
Exchange Senior Notes issued in exchange for Private Notes accepted for
exchange, are to be issued in the name of someone other than the undersigned, or
(ii) if Private Notes tendered by book-entry transfer that are not exchanged are
to be returned by credit to an account maintained at DTC.
Issue Certificate(s) to:
Name:
(PLEASE PRINT)
Address:
- ----------------------------------------------------
- ----------------------------------------------------
(INCLUDE ZIP CODE)
- ----------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NO.)
(COMPLETE SUBSTITUTE FORM W-9)
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 4, 5 and 6)
To be completed ONLY if certificates for Private Notes not tendered, or
Exchange Senior Notes issued in exchange for Private Notes accepted for
exchange, are to be sent to someone other than the undersigned, or to the
undersigned at an address other than that shown above.
Mail and deliver Certificate(s) to:
Name:
(PLEASE PRINT)
Address:
- ----------------------------------------------------
- ----------------------------------------------------
(INCLUDE ZIP CODE)
3
<PAGE> 4
Ladies and Gentlemen:
Subject to the terms and conditions of the Exchange Offer, the undersigned
hereby tenders to the Company the principal amount of Private Notes indicated
above. Subject to and effective upon the acceptance for exchange of the
principal amount of Private Notes tendered in accordance with this Letter of
Transmittal, the undersigned sells, assigns, and transfers to, or upon the order
of, the Company all right, title and interest in and to the Private Notes
tendered hereby. The undersigned hereby irrevocably constitutes and appoints the
Exchange Agent as its agent and attorney-in-fact (with full knowledge that the
Exchange Agent also acts as the agent of the Company) with respect to the
tendered Private Notes with full power of substitution to (i) deliver
certificates for such Private Notes, or transfer ownership of such Private Notes
on the account books maintained by DTC, to the Company and deliver all
accompanying evidences of transfer and authenticity to, or upon the order of,
the Company, and (ii) present such Private Notes for transfer on the books of
the Company and receive all benefits and otherwise exercise all rights of
beneficial ownership of such Private Notes, all in accordance with the terms of
the Exchange Offer. The power of attorney granted in this paragraph shall be
deemed to be irrevocable and coupled with an interest.
The undersigned hereby represents and warrants that he or she has full
power and authority to tender, sell, assign, and transfer the Private Notes
tendered hereby and that the Company will acquire good and unencumbered title
thereto, free and clear of all liens, restrictions, charges, and encumbrances
and not subject to any adverse claim, when the same are acquired by the Company.
The undersigned hereby further represents that (i) any Exchange Senior Notes
acquired in exchange for Private Notes tendered hereby will have been acquired
in the ordinary course of business of the person receiving such Exchange Senior
Notes, whether or not such person is the undersigned, (ii) neither the
undersigned nor any such other person is engaging in or intends to engage in a
distribution of the Exchange Senior Notes, (iii) neither the Holder nor any such
other person has an arrangement or understanding with any person to participate
in the distribution of such Exchange Senior Notes, and (iv) neither the Holder
nor any such other person is an "affiliate" (as defined in Rule 405 under the
Securities Act) of the Company.
The undersigned also acknowledges that this Exchange Offer is being made in
reliance upon interpretations contained in letters issued to third parties by
the staff of the Securities and Exchange Commission (the "SEC") that the
Exchange Senior Notes issued in exchange for the Private Notes pursuant to the
Exchange Offer may be offered for resale, resold, and otherwise transferred by
Holders thereof (other than any such Holder that is an "affiliate" of the
Company within the meaning of Rule 405 under the Securities Act), without
compliance with the registration and prospectus delivery provisions of the
Securities Act, provided that such Exchange Senior Notes are acquired in the
ordinary course of such Holder's business and such Holder is not engaging in and
does not intend to engage in a distribution of the Exchange Senior Notes and has
no arrangement or understanding with any person to participate in a distribution
of such Exchange Senior Notes. If the undersigned is not a broker-dealer, the
undersigned represents that it is not engaged in, and does not intend to engage
in, a distribution of Exchange Senior Notes. If the undersigned is a
broker-dealer that will receive Exchange Senior Notes for its own account in
exchange for Private Notes that were acquired as a result of market-making
activities or other trading activities (a "Participating Broker-Dealer"), it
acknowledges that it will deliver a prospectus in connection with any resale of
such Exchange Senior Notes; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. If the undersigned is a
Participating Broker-Dealer, it acknowledges that during the 90-day period
following the Expiration Date (or such longer applicable period if use of the
Prospectus has been suspended by the Company) it will contact counsel to the
Initial Purchasers at 212-859-8158 on a weekly basis to confirm the availability
of the Prospectus for delivery in connection with such resales.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Exchange Agent or the Company to be necessary or
desirable to complete the assignment, transfer, and purchase of the Private
Notes tendered hereby.
For purposes of the Exchange Offer, the Company shall be deemed to have
accepted validly tendered Private Notes when, as and if the Company has given
oral or written notice thereof to the Exchange Agent.
4
<PAGE> 5
If any tendered Private Notes are not accepted for exchange pursuant to the
Exchange Offer for any reason, certificates for any such unaccepted Private
Notes will be returned, without expense, to the undersigned at the address shown
below or at a different address as may be indicated herein under "Special
Delivery Instructions" or, in the case of Private Notes tendered by book-entry
transfer, such unaccepted Private Notes will be credited to an account at DTC,
as promptly as practicable after the Expiration Date.
All authority conferred or agreed to be conferred by this Letter of
Transmittal shall survive the death, incapacity or dissolution of the
undersigned, and every obligation of the undersigned under this Letter of
Transmittal shall be binding upon the undersigned's heirs, personal
representatives, successors, and assigns.
The undersigned understands that tenders of Private Notes pursuant to the
procedures described under the caption "The Exchange Offer -- Procedures for
Tendering" in the Prospectus and in the instructions hereto will constitute a
binding agreement between the undersigned and the Company upon the terms and
subject to the conditions of the Exchange Offer.
Unless otherwise indicated under "Special Issuance Instructions," please
issue the certificates representing the Exchange Senior Notes issued in exchange
for the Private Notes accepted for exchange and return any Private Notes not
tendered or not exchanged in the name(s) of the undersigned. Similarly, unless
otherwise indicated under "Special Delivery Instructions," please send the
certificates representing the Exchange Senior Notes issued in exchange for the
Private Notes accepted for exchange and any certificates for Private Notes not
tendered or not exchanged (and accompanying documents, as appropriate) to the
undersigned at the address shown below the undersigned's signature(s)). In the
event that both "Special Payment Instructions" and "Special Delivery
Instructions" are completed, please issue the certificates representing the
Exchange Senior Notes issued in exchange for the Private Notes accepted for
exchange in the name(s) of, and return any Private Notes not tendered or not
exchanged and send said certificates to, the person(s) so indicated. The
undersigned recognizes that the Company has no obligation pursuant to the
"Special Payment Instructions" and "Special Delivery Instructions" to transfer
any Private Notes from the name of the registered Holder(s) thereof if the
Company does not accept for exchange any of the Private Notes so tendered.
Holders of Private Notes who wish to tender their Private Notes and (i)
whose Private Notes are not immediately available, or (ii) who cannot deliver
their Private Notes, this Letter of Transmittal or any other documents required
hereby to the Exchange Agent prior to the Expiration Date (or who cannot comply
with the book-entry transfer procedures on a timely basis), may tender their
Private Notes according to the guaranteed delivery procedures set forth in the
Prospectus under the caption "The Exchange Offer -- Guaranteed Delivery
Procedures." See Instruction 1 regarding the completion of this Letter of
Transmittal.
5
<PAGE> 6
PLEASE SIGN HERE WHETHER OR NOT
PRIVATE NOTES ARE BEING PHYSICALLY TENDERED HEREBY
<TABLE>
<S> <C>
- ------------------------------------------- -------------------------------------------
(Date)
- ------------------------------------------- -------------------------------------------
Signature(s) of Registered Holder(s) (Date)
or Authorized Signatory
</TABLE>
Area Code and Telephone Number(s):
- ------------------------------------------
Tax Identification or Social Security Number(s):
- ------------------------------------------
The above lines must be signed by the registered Holder(s) of Private Notes
as their name(s) appear(s) on the certificate for the Private Notes or by
person(s) authorized to become registered Holder(s) by a properly completed bond
power from the registered Holder(s), a copy of which must be transmitted with
this Letter of Transmittal. If Private Notes to which this Letter of Transmittal
relates are held of record by two or more joint Holders, then all such Holders
must sign this Letter of Transmittal. If signature is by trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation or other
person acting in a fiduciary or representative capacity, then such person must
(i) set forth his or her full title below and (ii) unless waived by the Company,
submit evidence satisfactory to the Company of such person's authority so to
act. See Instruction 4 regarding the completion of this Letter of Transmittal.
<TABLE>
<S> <C>
Name(s): -----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
(Please Print)
Capacity:
-----------------------------------------------------------------------------------
Address:
===================================================================================
(Include Zip Code)
Signature(s) Guaranteed by an Eligible Institution (as hereinafter defined): (If
required by Instruction 4)
-----------------------------------------------------------------------------------
(Authorized Signature)
-----------------------------------------------------------------------------------
(Title)
-----------------------------------------------------------------------------------
(Name of Firm)
</TABLE>
Dated
- -------------------, 199
6
<PAGE> 7
PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW.
PAYER'S NAME: HARRIS TRUST AND SAVINGS BANK
<TABLE>
<CAPTION>
<S> <C> <C>
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX Social Security Number
FORM W-9 AT RIGHT AND CERTIFY BY SIGNING AND DATING -------------------------------------
BELOW. OR
-------------------------------------
Employer Identification Number
DEPARTMENT OF THE TREASURY PART 2 -- Check the box if you are exempt from backup withholding. [ ]
INTERNAL REVENUE SERVICE
CERTIFICATION -- Under the penalties of perjury, I certify that (1) the number shown on
this form is my correct taxpayer identification number (or I am waiting for a number to be
issued to me) and (2) I am not subject to backup withholding either because I have not been
notified by the Internal Revenue Service (the "IRS") that I am subject to backup
withholding as a result of a failure to report all interest or dividends or the IRS has
notified me that I am no longer subject to backup withholding. (You must cross out Item (2)
above if you have been notified by the IRS that you are subject to backup withholding
because of underreporting of interest or dividends on your return.)
PAYER'S REQUEST FOR
TAXPAYER IDENTIFICATION
NUMBER ("TIN")
CERTIFICATION
SIGNATURE DATE ____________________
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE OFFER. PLEASE
REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Center or Social Security Administration Office or (b) I intend
to mail or deliver an application in the near future. I understand that if I do
not provide a taxpayer identification number within sixty (60) days, 31% of all
reportable payments made to me thereafter will be withheld until I provide a
number.
===============================================================================
SIGNATURE DATE
7
<PAGE> 8
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND PRIVATE NOTES. The tendered
Private Notes or any confirmation of a book-entry transfer (a "Book-Entry
Confirmation"), as well as a properly completed and duly executed copy of this
Letter of Transmittal or facsimile hereof and any other documents required by
this Letter of Transmittal must be received by the Exchange Agent at its address
set forth herein prior to 5:00 p.m., New York City time, on the Expiration Date.
THE METHOD OF DELIVERY OF THE TENDERED PRIVATE NOTES, THIS LETTER OF TRANSMITTAL
AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND
RISK OF THE HOLDER AND, EXCEPT AS OTHERWISE PROVIDED BELOW, THE DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED OR CONFIRMED BY THE EXCHANGE AGENT.
INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT THE HOLDER USE AN OVERNIGHT
OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO LETTER OF
TRANSMITTAL OR PRIVATE NOTES SHOULD BE SENT TO THE COMPANY. HOLDERS MAY REQUEST
THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES, OR
NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS.
Holders who wish to tender their Private Notes and (i) whose Private Notes
are not immediately available, or (ii) who cannot deliver their Private Notes,
this Letter of Transmittal, or any other documents required hereby to the
Exchange Agent prior to the Expiration Date, or (iii) who are unable to complete
the procedure for book-entry transfer on a timely basis, must tender their
Private Notes according to the guaranteed delivery procedures set forth in the
Prospectus. Pursuant to such procedure: (i) such tender must be made by or
through an Eligible Institution; (ii) prior to the Expiration Date, the Exchange
Agent must have received from the Eligible Institution a properly completed and
duly executed Notice of Guaranteed Delivery (by facsimile transmission, mail or
hand delivery) setting forth the name and address of the Holder of the Private
Notes, the certificate number or numbers of such Private Notes and the aggregate
principal amount of Private Notes tendered, stating that the tender is being
made thereby and guaranteeing that, within three New York Stock Exchange trading
days after the Expiration Date, this Letter of Transmittal (or facsimile hereof)
together with the certificate(s) representing the Private Notes or a Book-Entry
Confirmation and any other required documents will be deposited by the Eligible
Institution (as hereinafter defined) with the Exchange Agent; and (iii) such
properly completed and executed Letter of Transmittal (or facsimile thereof), as
well as all other documents required by this Letter of Transmittal and the
certificate(s) representing all tendered Private Notes (or a Book-Entry
Confirmation) in proper form for transfer, must be received by the Exchange
Agent within three New York Stock Exchange trading days after the Expiration
Date, all as provided in the Prospectus under the caption "The Exchange
Offer -- Guaranteed Delivery Procedures." Any Holder of Private Notes who wishes
to tender his Private Notes pursuant to the guaranteed delivery procedures
described above must ensure that the Exchange Agent receives the Notice of
Guaranteed Delivery prior to 5:00 p.m., New York City time, on the Expiration
Date. Upon request of the Exchange Agent, a Notice of Guaranteed Delivery will
be sent to Holders who wish to tender their Private Notes according to the
guaranteed delivery procedures set forth above.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Private Notes, and withdrawal of tendered
Private Notes will be determined by the Company in its sole discretion, which
determination will be final and binding. The Company reserves the absolute right
to reject any and all Private Notes not properly tendered or any Private Notes
the Company's acceptance of which would, in the opinion of counsel for the
Company, be unlawful. The Company also reserves the right to waive any
irregularities or conditions of tender as to particular Private Notes. The
Company's interpretation of the terms and conditions of the Exchange Offer,
including the instructions in this Letter of Transmittal and those set forth in
the Prospectus under the caption "The Exchange Offer -- Conditions," shall be
final and binding on all parties. Unless waived, any defects or irregularities
in connection with tenders of Private Notes must be cured within such time as
the Company shall determine. Neither the Company, the Exchange Agent nor any
other person shall be under any duty to give notification of defects or
irregularities with respect to tenders of Private Notes, nor shall any of them
incur any liability for failure to give such notification. Tenders of Private
Notes will not be deemed to have been made until such defects or irregularities
have been cured or waived. Any Private Notes received by the Exchange Agent that
are not properly tendered and as to which the defects or irregularities have not
been cured or waived will be returned by the Exchange Agent to the tendering
Holders of Private Notes, unless otherwise provided in this Letter of
Transmittal, as soon as practicable following the Expiration Date.
2. TENDER BY HOLDER. Only a Holder of Private Notes may tender such
Private Notes in the Exchange Offer. Any beneficial holder of Private Notes who
is not the registered Holder and who wishes to tender should arrange with the
registered Holder to execute and deliver this Letter of Transmittal on his
behalf or must, prior to completing and executing this Letter of Transmittal and
delivering his Private Notes, either make appropriate arrangements to register
ownership of the Private Notes in such holder's name, or obtain a properly
completed bond power from the registered Holder. The transfer of registered
ownership of Private Notes may take considerable time.
8
<PAGE> 9
3. PARTIAL TENDERS. If less than the entire principal amount of Private
Notes represented by a certificate is tendered, the tendering Holder should fill
in the aggregate principal amount tendered in the third column of the box
entitled "Description of Private Notes" above. The entire principal amount of
Private Notes set forth on the certificate delivered to the Exchange Agent will
be deemed to have been tendered unless otherwise indicated. If the entire
principal amount of all Private Notes is not tendered, then a Private Notes
certificate for the principal amount of Private Notes not tendered and a
certificate or certificates representing Exchange Senior Notes issued in
exchange for any Private Notes accepted will be sent to the Holder at his or her
registered address, unless a different address is provided in the appropriate
box on this Letter of Transmittal, promptly after the Private Notes are accepted
for exchange, or in the case of Private Notes tendered by book-entry transfer,
such untendered Private Notes and Exchange Senior Notes issued in exchange for
any Private Notes accepted will be credited to accounts at DTC.
4. SIGNATURES ON THE LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURES. If this Letter of Transmittal (or facsimile hereof) is
signed by the record Holder(s) of the Private Notes tendered hereby, the
signature must correspond with the name(s) as written on the face of the Private
Notes without alteration, enlargement, or any change whatsoever.
If this Letter of Transmittal (or facsimile hereof) is signed by the
registered Holder or Holders of Private Notes tendered and the certificate or
certificates for Exchange Senior Notes issued in exchange therefor are to be
issued (or if certificates representing the principal amount of Private Notes
not tendered are to be reissued) to the registered Holder, the said Holder need
not and should not endorse any tendered Private Notes, nor provide a separate
bond power. In any other case, such Holder must either properly endorse the
Private Notes tendered or transmit a properly completed separate bond power with
this Letter of Transmittal, with the signatures on the endorsement or bond power
guaranteed by an Eligible Institution.
If this Letter of Transmittal (or facsimile hereof) is signed by a person
other than the registered Holder or Holders of any Private Notes listed, such
Private Notes must be endorsed or accompanied by appropriate bond powers, in
each case signed as the name of the registered Holder or Holders appears on the
Private Notes.
If this Letter of Transmittal (or facsimile hereof) or any Private Notes or
bond powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations, or others acting in a fiduciary or
representative capacity, such persons should so indicate when signing, and,
unless waived by the Company, evidence satisfactory to the Company of their
authority so to act must be submitted with this Letter of Transmittal.
Endorsements on Private Notes or signatures on bond powers required by this
Instruction 4 must be guaranteed by an Eligible Institution.
Except as otherwise provided below, all signatures on this Letter of
Transmittal must be guaranteed by a participant in a Recognized Signature
Guarantee Medallion Program (an "Eligible Institution"). Signatures on this
Letter of Transmittal need not be guaranteed if (i) this Letter of Transmittal
is signed by the registered Holder(s) of the Private Notes tendered herewith and
such Holder(s) have not completed the box set forth herein entitled "Special
Payment Instructions" or the box entitled "Special Delivery Instructions," or
(ii) if such Private Notes are tendered for the account of an Eligible
Institution.
5. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. Tendering Holders should
indicate, in the applicable box or boxes, the name and address to which Exchange
Senior Notes or substitute Private Notes for the principal amount of Private
Notes not tendered or not accepted for exchange are to be issued or sent, if
different from the name and address of the person signing this Letter of
Transmittal. In the case of issuance in a different name, the taxpayer
identification or social security number of the person named must also be
indicated.
6. TRANSFER TAXES. The Company will pay all transfer taxes, if any,
applicable to the exchange of Private Notes pursuant to the Exchange Offer. If,
however, certificates representing Exchange Senior Notes or Private Notes (for
any principal amount of Private Notes not tendered or accepted for exchange) are
to be delivered to, or are to be registered or issued in the name of, any person
other than the registered Holder of the Private Notes tendered hereby, or if
tendered Private Notes are registered in the name of any person other than the
person signing this Letter of Transmittal, or if a transfer tax is imposed for
any reason other than the exchange of Private Notes pursuant to the Exchange
Offer, then the amount of any such transfer taxes (whether imposed on the
registered Holder or on any other persons) will be payable by the tendering
Holder. If satisfactory evidence of payment of such taxes or exemption therefrom
is not submitted with this Letter of Transmittal, the amount of such transfer
taxes will be billed directly to such tendering Holder.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Private Notes listed in this Letter of
Transmittal.
7. FORM W-9. Any Holder who tenders his Private Notes is required to
provide the Exchange Agent with a correct Taxpayer Identification Number ("TIN")
on the Form W-9 which is enclosed herewith. If such Holder is an individual, the
TIN is his or her social security number. Failure to provide the information on
the Form W-9 may subject
9
<PAGE> 10
the surrendering Holder to 31% Federal income tax withholding on any payment
made to Holders of the Exchange Senior Notes. Exempt Holders (including, among
others, all corporations and certain foreign individuals) are not subject to
these backup withholding and reporting requirements. For additional information
in this regard, please refer to the enclosed Guidelines for Certification of TIN
on Substitute Form W-9. In order to satisfy the Exchange Agent that a foreign
individual qualifies as an exempt recipient, the Holder must submit a Form W-8,
signed under penalties of perjury, attesting to that individual's exempt status.
A Form W-8 may be obtained from the Exchange Agent.
8. WAIVER OF CONDITIONS. The Company reserves the absolute right to amend,
waive, or modify specified conditions in the Exchange Offer, set forth in the
Prospectus under the caption "The Exchange Offer -- Conditions," in the case of
any Private Notes tendered.
9. MUTILATED, LOST, STOLEN OR DESTROYED PRIVATE NOTES. Any tendering
Holder whose Private Notes have been mutilated, lost, stolen, or destroyed
should contact the Exchange Agent at the address indicated herein for further
instructions.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance and requests for additional copies of the Prospectus or this
Letter of Transmittal may be directed to the Exchange Agent at the address
specified in the Prospectus. Holders may also contact their broker, dealer,
commercial bank, trust company, or other nominee for assistance concerning the
Exchange Offer.
10
<PAGE> 11
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GUIDE THE
PAYER. -- Social Security Numbers have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer Identification Numbers have nine digits separated by
only one hyphen: i.e. 00-0000000. The table below will help determine the number
to give the payer.
<TABLE>
<S> <C> <C>
- ----------------------------------------------------- -----------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE THE SOCIAL SECURITY NUMBER OF --
- ----------------------------------------------------- -----------------------------------------------
1. An individual's account The individual
2. Two or more individuals (joint account) The actual owner of the account or, if combined
funds, any one of the individuals(1)
3. Custodian account of a minor (Uniform Gift to The minor(2)
Minors Act)
4. (a) The usual revocable savings trust account The grantor-trustee(1)
(grantor is also trustee)
(b) So-called trust account that is not a legal The actual owner(1)
or valid trust under State law
5. Sole proprietorship account The owner(3)
- ----------------------------------------------------- -----------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE THE EMPLOYER IDENTIFICATION NUMBER OF --
- ----------------------------------------------------- -----------------------------------------------
6. A valid trust, estate, or pension trust The legal entity (Do not furnish the
identifying number of the personal
representative or trustee unless the legal
entity itself is not designated in the account
title.)(4)
7. Corporate account The corporation
8. Religious, charitable, or educational The organization
organization account
9. Partnership The partnership
10. Association, club or other tax-exempt The organization
organization
11. A broker or registered nominee The broker or nominee
12. Account with the Department of Agriculture in The public entity
the name of a public entity (such as a State or
local government, school district, or prison)
that receives agricultural program payments
</TABLE>
- ------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's Social Security Number.
(3) Show the name of the owner. You may also enter your business name. You may
use your Social Security Number or Employer Identification Number.
(4) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
OBTAINING A NUMBER
If you don't have a Taxpayer Identification Number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
11
<PAGE> 12
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on broker transactions
include the following:
- A corporation.
- A financial institution.
- An organization exempt from tax under Section 501(a), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency or instrumentality thereof.
- A registered dealer in securities or commodities registered in the United
States or a possession of the United States.
- A real estate investment trust.
- A common trust fund operated by a bank under Section 584(a).
- An entity registered at all times under the Investment Company Act of
1940.
- A foreign central bank of issue.
- A person registered under the Investment Advisors Act of 1940 who
regularly acts as a broker.
PAYMENTS OF INTEREST NOT GENERALLY SUBJECT TO BACKUP WITHHOLDING INCLUDE THE
FOLLOWING:
- Payments to nonresident aliens subject to withholding under Section 1441.
- Payments to partnerships not engaged in a trade or business in the United
States and which have at least one nonresident partner.
- Payments made by certain foreign organizations.
Exempt payees described above should file Substitute Form W-9 to avoid possible
erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, SIGN AND
DATE THE FORM AND RETURN IT TO THE PAYER.
PRIVACY ACT NOTICE -- Section 6109 requires most recipients of dividend,
interest, or other payments to give Taxpayer Identification Numbers to payers
who must report the payments to the IRS. The IRS uses the numbers for
identification purposes. Payers must be given the numbers whether or not
recipients are required to file tax returns. Payers must generally withhold 31%
of taxable interest, dividend, and certain other payments to a payee who does
not furnish a Taxpayer Identification Number to a payer. Certain penalties may
also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER -- If you fail
to furnish your Taxpayer Identification Number to a payer, you are subject
to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING -- If you
make a false statement with no reasonable basis which results in no
imposition of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION -- Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE
IRS.
12
<PAGE> 13
(DO NOT WRITE IN SPACE BELOW)
<TABLE>
<CAPTION>
CERTIFICATE PRIVATE NOTES PRIVATE NOTES
SURRENDERED TENDERED ACCEPTED
<S> <C> <C>
- ------------------------------------------------
- ------------------------------------------------
- ------------------------------------------------
- ------------------------------------------------
</TABLE>
Delivery Prepared by:
Checked by:
Date:
13
<PAGE> 14
NOTICE OF GUARANTEED DELIVERY FOR
NEXTEL COMMUNICATIONS, INC.
This form or one substantially equivalent hereto must be used to accept the
Exchange Offer of Nextel Communications, Inc. (the "Company") made pursuant to
the Prospectus, dated , 1997 (the "Prospectus"), if certificates for
Private Notes of the Company are not immediately available or if the procedure
for book-entry transfer cannot be completed on a timely basis or time will not
permit all required documents to reach the Exchange Agent prior to 5:00 p.m, New
York City time, on the Expiration Date of the Exchange Offer. Such form may be
delivered or transmitted by facsimile transmission, mail, overnight courier or
hand delivery to Harris Trust and Savings Bank (the "Exchange Agent") as set
forth below. In addition, in order to utilize the guaranteed delivery procedure
to tender Private Notes pursuant to the Exchange Offer, a completed, signed and
dated Letter of Transmittal (or facsimile thereof) must also be received by the
Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date.
Capitalized terms not defined herein are defined in the Prospectus.
Deliver to:
Harris Trust and Savings Bank, Exchange Agent
<TABLE>
<S> <C> <C>
By Registered or Certified Mail: By Hand or Overnight Delivery: Facsimile Transmission Number:
(For Eligible Institutions
Only)
Harris Trust and Savings Bank Harris Trust and Savings Bank (212) 701-7636
c/o Harris Trust Company c/o Harris Trust Company Confirm Receipt of Facsimile
of New York of New York by Telephone:
P.O. Box 1010 88 Pine Street (212) 701-7624
Wall Street Station 19th Floor
New York, NY 10268-1010 New York, NY 10005
</TABLE>
Delivery of this instrument to an address other than as set forth above or
transmission of instructions via a facsimile number other than the one listed
above will not constitute a valid delivery.
14
<PAGE> 15
Ladies and Gentlemen:
Upon the terms and conditions set forth in the Prospectus and the
accompanying Letter of Transmittal, the undersigned hereby tenders to the
Company the principal amount of Private Notes set forth below, pursuant to the
guaranteed delivery procedures described in "The Exchange Offer -- Guaranteed
Delivery Procedures" section of the Prospectus. By so tendering, the undersigned
hereby does make, at and as of the date hereof, the representations and
warranties of a tendering Holder of Private Notes set forth in the Letter of
Transmittal.
<TABLE>
<S> <C>
Principal Amount of Private Notes If Private Notes will be delivered by
Tendered: book-entry transfer to the Depository
Trust Company, provide account number:
- ------------------------------------------ DTC Account Number
Certificate Nos. (if available):
- ------------------------------------------
Total Principal Amount Represented by
Private Notes Certificate(s):
- ------------------------------------------
</TABLE>
15
<PAGE> 16
- --------------------------------------------------------------------------------
ALL AUTHORITY HEREIN CONFERRED OR AGREED TO BE CONFERRED SHALL SURVIVE THE
DEATH OR INCAPACITY OF THE UNDERSIGNED AND EVERY OBLIGATION OF THE UNDERSIGNED
HEREUNDER SHALL BE BINDING UPON THE HEIRS, PERSONAL REPRESENTATIVES, SUCCESSORS,
AND ASSIGNS OF THE UNDERSIGNED.
- --------------------------------------------------------------------------------
PLEASE SIGN HERE
- ---------------------------------------- ------------------------------
(Date)
- ---------------------------------------- ------------------------------
Signature(s) of Registered Holder(s) (Date)
or Authorized Signatory
Area Code and Telephone Number:
------------------------------------
Must be signed by the Holder(s) of Private Notes as their name(s) appear(s)
on certificates for Private Notes or by person(s) authorized to become
registered Holder(s) by endorsement and documents transmitted with this Notice
of Guaranteed Delivery. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer, or other person acting in a fiduciary or
representative capacity, such person must set forth his or her full title below:
(Please print name(s) and addresses)
Name(s):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please Print)
Capacity:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)
16
<PAGE> 17
GUARANTEE
The undersigned, a member of a registered national securities exchange, or
a member of the National Association of Securities Dealers, Inc., or a
commercial bank or trust company having an officer or correspondent in the
United States, hereby guarantees that the certificates representing the
principal amount of Private Notes tendered hereby in proper form for transfer,
or timely confirmation of the book-entry transfer of such Private Notes into the
Exchange Agent's account at DTC pursuant to the procedures set forth in "The
Exchange Offer -- Guaranteed Delivery Procedures" section of the Prospectus,
together with a properly completed and duly executed Letter of Transmittal (or a
manually signed facsimile thereof) with any required signature guarantee and any
other documents required by the Letter of Transmittal, will be received by the
Exchange Agent at the address set forth above, within three New York Stock
Exchange trading days after the Expiration Date.
<TABLE>
<S> <C>
- --------------------------------------------- ---------------------------------------------
Name of Firm Authorized Signature
- --------------------------------------------- ---------------------------------------------
Address Title
Name:
- --------------------------------------------- ----------------------------------------
Zip Code (Please Type or Print)
Area Code and Telephone No. Dated:
------------------ ---------------------------------------
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR PRIVATE NOTES WITH THIS FORM. CERTIFICATES
FOR PRIVATE NOTES SHOULD ONLY BE SENT WITH YOUR LETTER OF TRANSMITTAL.
17
