<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 5, 1997
REGISTRATION NO. 333-28461
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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NEXTEL COMMUNICATIONS, INC.
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C>
DELAWARE 36-3939651
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
</TABLE>
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:
LISA A. STATER, ESQ.
JONES, DAY, REAVIS & POGUE
3500 ONE PEACHTREE CENTER
303 PEACHTREE STREET
ATLANTA, GEORGIA 30308
(404) 521-3939
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 pursuant
to dividend or interest reinvestment plans, check the following box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, 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 of 1933, please 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(c)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering: [ ]
------------------------
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
check the following box: [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SHARES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE(1) FEE(2)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Stock, Par Value $.001 Per
Share...................................... 4,161,442 shares $16.1364 $67,150,700 $20,349
=============================================================================================================================
</TABLE>
(1) Based upon the price at which shares of Class A Common Stock of the
registrant may be purchased and the maximum proceeds to be received by the
registrant.
(2) The registration fee for the securities offered hereby, $20,349, is
calculated as follows: one thirty-third of one percent of the product of
$16.1364, the price at which shares of Class A Common Stock may be
purchased, multiplied by 4,161,442, the number of shares to be registered. A
fee of $20,455 was previously paid.
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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.
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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 AUGUST 5, 1997
PROSPECTUS
NEXTEL COMMUNICATIONS, INC.
CLASS A COMMON STOCK,
PAR VALUE $.001 PER SHARE
---------------------
This Prospectus relates to the offering (the "Offering") of up to 4,161,442
shares (the "Shares") of Class A Common Stock, par value $.001 per share (the
"Common Stock"), of Nextel Communications, Inc. ("Nextel" or the "Company"). The
Shares are being offered exclusively to holders of Nextel's five outstanding
issues of Senior Redeemable Discount Notes (the "Nextel Notes") who validly
consented ("Consenting Holders") to certain amendments to the public indentures
(as amended through the date hereof the "Nextel Indentures") relating to the
Nextel Notes pursuant to the consent solicitation completed on June 13, 1997
(the "Consent Solicitation").
The offering price of the Shares was determined in part based upon
indications of interest by parties representing certain holders of Nextel Notes
to certain representatives of Nextel in conjunction with the Consent
Solicitation. The Shares are being offered exclusively to Consenting Holders
subject to the terms and conditions set forth herein and in the accompanying
form of subscription (the "Subscription Form"). In order to subscribe for
Shares, a Consenting Holder must properly complete and execute the Subscription
Form and tender the purchase price to the Bank of New York, as trustee (the
"Trustee") on behalf of the Company on or before , 1997 (such
date, including any extension thereof, the "Expiration Date"). A Consenting
Holder may subscribe only for the maximum number of whole Shares (rounded down
to the nearest whole share) purchasable for the aggregate consent payment (the
"Consent Payment") received by such Consenting Holder in connection with such
Consenting Holder's delivery of valid consents in the Consent Solicitation.
Consenting Holders who subscribe for Shares will be required to agree that such
Shares may not be transferred, subject to certain limited exceptions, prior to
January 1, 1998. See "Plan of Distribution."
The proceeds of the sale of the Shares will be used by Nextel for general
corporate purposes. See "Use of Proceeds."
The Common Stock is traded on the Nasdaq National Market (the "Nasdaq NM")
under the symbol "NXTL," and the closing sale price of the Common Stock on
August , 1997, as reported by the Nasdaq NM, was $ . See "Certain
Market Information."
SEE "RISK FACTORS," BEGINNING ON PAGE 7 OF THIS PROSPECTUS, FOR A
DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE
PURCHASERS OF THE SHARES OFFERED HEREBY.
The Offering is not contingent upon receipt of subscriptions for any
minimum number of Shares. The following table assumes that all holders of the
Nextel Notes are Consenting Holders and that all such Consenting Holders elect
to subscribe for Shares.
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OFFERING PRICE PROCEEDS TO COMPANY(1)
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<S> <C> <C>
Per Share.......................................... $16.1364(2) $16.1364
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Total.............................................. $67,150,700(3) $67,150,700
===================================================================================================================
</TABLE>
(1) Before deducting estimated expenses of $85,000 of the Offering.
(2) The offering price per share was calculated at an amount equal to 10/11 of
the arithmetic average of the closing bid and ask prices (but in neither
case being more than $0.25 greater or less than the actual last sale price)
for a share of Common Stock as reported on the Nasdaq NM for the consecutive
trading day period beginning on June 6, 1997, and ending on June 20, 1997.
See "Determination of Offering Price."
(3) The total offering price represents the aggregate Consent Payments paid to
Consenting Holders.
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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.
The Shares will be delivered to Consenting Holders who validly subscribe
therefor promptly following the Expiration Date.
The date of this Prospectus is , 1997.
<PAGE> 3
AVAILABLE INFORMATION
Nextel 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 Securities and
Exchange Commission (the "Commission"). The reports, proxy statements and other
information filed by Nextel 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, that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission and that is located at http://www.sec.gov.
Nextel has filed with the Commission a Registration Statement on Form S-3
(including the exhibits and amendments thereto, the "Registration Statement")
pursuant to the requirements of the Securities Act of 1933, as amended (the
"Securities Act") with respect to the Common Stock 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 NEXTEL. 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 NEXTEL 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 REGARDING NEXTEL 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.
The information in the following documents filed by Nextel with the
Commission (File No. 0-19656) pursuant to the Exchange Act is incorporated by
reference in this Prospectus:
(a) Annual Report on Form 10-K for the year ended December 31, 1996
filed with the Commission on March 31, 1997;
(b) Quarterly Report on Form 10-Q for the quarter ended March 31, 1997
dated and filed with the Commission on May 15, 1997;
(ii)
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(c) Current Reports on Form 8-K: (i) dated and filed with the
Commission on January 21, 1997, (ii) dated and filed with the Commission on
February 7, 1997, (iii) dated and filed with the Commission on March 18,
1997, (iv) dated and filed with the Commission on April 15, 1997, (v) dated
June 2, 1997, and filed with the Commission on June 3, 1997, (vi) dated and
filed with the Commission on June 17, 1997, (vii) dated and filed with the
Commission on July 9, 1997, (viii) dated and filed with the Commission on
July 16, 1997 and (ix) dated July 21, 1997 and filed with the Commission on
July 22, 1997;
(d) 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;
and
(e) Registration Statement on Form S-1, as amended, dated as of
January 27, 1992 (No. 33-43415), with respect to the information contained
under the heading "Description of Capital Stock" which was incorporated by
reference into the Registration Statement on Form 8-A, dated January 16,
1992.
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 Offering 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 which 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.
(iii)
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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 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").
A. 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 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 June 30, 1997, Nextel's Digital Mobile networks were
operating in major metropolitan market areas throughout the United States in
which approximately 50% of the total United States population lives or works.
1
<PAGE> 6
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 -- 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. Subsequently in
1996, Nextel commenced full-scale commercial launches of the Reconfigured iDEN
Digital Mobile networks in the Atlanta, Boston, Denver, Detroit and Las Vegas
metropolitan market areas, in each case accompanied by an aggressive regionally
focused marketing campaign. During the first half of 1997, Nextel commenced
commercial launches of its Reconfigured iDEN technology on the Nextel national
digital network throughout the Pacific Northwest, metropolitan Washington, D.C.
and in cities in North Carolina, New York, Maryland, Missouri, California,
Texas, Kansas, Oklahoma, Pennsylvania and Minnesota including Seattle, Portland,
Charlotte, Raleigh/Durham, Greensboro, Winston-Salem, New York, Baltimore, St.
Louis, Los Angeles, San Francisco, San Diego, Houston, Dallas/Fort Worth, Kansas
City, Wichita, Topeka, Oklahoma City, Tulsa, Philadelphia and Minneapolis/St.
Paul.
In January 1997, Nextel announced the introduction of its national digital
network and indicated that it will not charge roaming fees for its customers
traveling anywhere on the national digital network. Nextel's national digital
network will enable Nextel's mobile telephone customers to "roam" throughout the
markets covered by the network at the same airtime rate charged in their home
markets. As a result, the Nextel national Digital Mobile network provides the
same mobile telephone functionality and related features offered to customers in
their home markets and eliminates the complex dialing procedures, access fees
and higher per-minute airtime rates frequently encountered by "roaming"
customers of cellular providers. Additionally, Nextel announced a new billing
policy pursuant to which Nextel bills its mobile telephone service customers
based on the actual number of seconds of airtime used after the first minute, in
contrast to the common cellular industry practice of rounding all calls up to
the next minute.
Since December 31, 1994, the number of subscriber units in service on
Nextel's Digital Mobile network has increased substantially, reflecting
acquisitions, the commencement of Digital Mobile network service in certain
markets and increased sales in markets in which Digital Mobile network services
are provided. 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 624,400 at June 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 into early 1997, Nextel also significantly expanded its
operations and investments involving wireless communications service providers
outside the United States, which are conducted under or are coordinated by or
through McCaw International, Ltd. ("McCaw International"), an indirect, wholly
owned subsidiary of Nextel. With the exception of the equity interests held by
Nextel and by McCaw 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 personal
communications services ("PCS") licenses awarded in Canada, McCaw
International's subsidiaries or other entities in which McCaw International
holds equity or equivalent interests own and operate wireless communications
systems in Latin America and Asia. McCaw International's operating companies
currently provide a variety of analog or digital wireless communications
services (including analog SMR dispatch and interconnect, paging and
alphanumeric short-messaging and digital mobile telephone services) in certain
major metropolitan areas in Argentina, Brazil, Mexico, the Philippines and
Shanghai, China.
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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 recently revised business plan, which
contemplates an accelerated deployment during 1997 and 1998 of the Reconfigured
iDEN technology platform throughout markets in the United States in which the
Company intends to establish Digital Mobile networks (including primary
connecting routes between certain markets). Nextel estimates that system
infrastructure and other system capital costs to be incurred during the period
from March 31, 1997 through 1998 to implement the business plan would be
approximately $1.45 billion. See "Risk Factors -- 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. Nextel believes that 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, which may encounter
significant financial and other challenges in replicating or overtaking Nextel's
industry position assuming Nextel successfully concludes its nationwide Digital
Mobile network build-out plan and develops a sufficient customer base in its
markets. Although Nextel already has taken a number of significant steps in
anticipation of implementing this business plan (including obtaining
modifications to certain terms contained in the Nextel Indentures 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, several of the actions that must be taken to enable Nextel to
implement its business plan are dependent on certain actions by or responses
from third parties, which as yet have not been secured. See "Risk
Factors -- Nextel to Require Additional Financing" and "-- Forward Looking
Statements."
RECENT DEVELOPMENTS
Preferred Stock Issuance. On July 21, 1997, Nextel completed the sale of
500,000 shares of 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.
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. 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 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 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 Series D Preferred Stock, 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 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
"Exchange Offer"). In the event that the Exchange Offer is not
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<PAGE> 8
consummated prior to specified dates, the dividend accrual rate applicable to
the Series D Preferred Stock will increase by specified amounts until the
Exchange Offer is consummated or certain other requirements are met.
Terms of the Series D Preferred Stock are set forth in the Certificate of
Designation, which has been filed with the Commission, and is incorporated by
reference herein.
Consent Solicitation. Under the terms of the Nextel 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
Nextel Notes to certain amendments to the Former Version Indentures pursuant to
the Consent Solicitation. On June 13, 1997, Nextel obtained the consent of the
requisite number of holders of the Nextel 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 amendments
include, among other things, certain modifications to the debt incurrence
limitations of the Former Version 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 new equity issuances include the net cash
proceeds received by Nextel in connection with the issuance of the Series D
Preferred Stock, but would exclude equity funds from several currently
identified sources, including most significantly equity investment proceeds
received from affiliates of Craig O. McCaw in connection with the exercise of
the First Option (as defined below)), 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 -- Nextel to Require
Additional Financing." The Supplemental Indentures also authorize Nextel to
transfer to its unrestricted subsidiary group the approximate 17% equity
interest in Clearnet currently held directly by Nextel, which Nextel intends to
accomplish in the near future, and also implemented certain technical
amendments.
The foregoing statements relating to the Nextel Indentures are summaries of
the relevant provisions and do not purport to be complete. Where reference is
made to particular provisions of the Nextel 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.
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
Nextel's Common Stock for an aggregate purchase price of $232,500,000. 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
financing (subject to certain conditions) to Nextel (the "McCaw Investor
Borrowings"). See "Risk Factors -- 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
4
<PAGE> 9
agreements relating to the commitment to exercise the First Option, Nextel
reached an agreement with an affiliate of Craig O. 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 25,000,000 shares of Common Stock (the "New Option"), 15,000,000 of
which are purchasable at an exercise price of $16.00 per share and the remaining
10,000,000 of which are purchasable at an exercise price of $18.00 per share, at
any time through July 28, 1998. 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 party (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 Craig O. 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, which 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 by reference herein.
5
<PAGE> 10
B. SUMMARY FINANCIAL DATA
NEXTEL COMMUNICATIONS, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
The selected 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 March 31, 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 year ended December 31, 1996 has been incorporated herein by
reference. See "Experts." The financial information for the three months ended
March 31, 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>
FISCAL YEAR NINE MONTHS THREE MONTHS
ENDED ENDED YEAR ENDED ENDED
MARCH 31, DECEMBER 31, DECEMBER 31, MARCH 31,
------------------------- ------------ --------------------------- ---------------------------
1993 1994 1994(1) 1995 1996 1996 1997
----------- ----------- ------------ ------------ ------------ ------------ ------------
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA(2):
Revenues................. $ 53,002 $ 67,928 $ 74,857 $ 171,703 $ 332,938 $ 68,318 $ 110,676
Cost of operations....... 20,979 28,666 51,406 151,718 247,717 57,299 58,161
Selling, general and
administrative
expenses............... 18,971 41,107 85,077 193,321 330,256 65,289 132,376
Expenses related to
corporate
reorganization(3)...... -- -- -- 17,372 -- -- --
Depreciation and
amortization........... 25,942 58,398 94,147 236,178 400,831 92,674 110,203
----------- ----------- ------------ ------------ ------------ ------------ ------------
Operating loss........... (12,890) (60,243) (155,773) (426,886) (645,866) (146,944) (190,064)
Interest income
(expense), net......... 1,324 (18,101) (41,454) (89,509) (206,480) (42,796) (71,285)
Other income (expense),
net(4)(5).............. 924 3 33 (15,372) (10,866) -- 1,063
Income tax benefit....... 1,027 21,437 71,345 200,602 307,192 71,022 39,436
----------- ----------- ------------ ------------ ------------ ------------ ------------
Net loss................. $ (9,615) $ (56,904) $ (125,849) $ (331,165) $ (556,020) $ (118,718) $ (220,850)
=========== =========== ============ ============ ============ ============ ============
Net loss per share....... $ (0.16) $ (0.73) $ (1.25) $ (2.31) $ (2.50) $ (0.56) $ (0.93)
=========== =========== ============ ============ ============ ============ ============
Number of shares used in
computations(6)........ 58,736,000 78,439,000 100,639,000 143,283,000 222,779,000 213,653,000 237,496,000
=========== =========== ============ ============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
AS OF MARCH 31, AS OF DECEMBER 31, AS OF MARCH 31,
--------------------- ------------------------------------ -----------------------
1993 1994 1994 1995 1996 1996 1997
-------- ---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents(7)........... $ 17,083 $ 483,483 $ 301,679 $ 340,826 $ 139,681 $ 470,432 $ 638,215
Marketable securities.................. 14,768 426,113 172,313 68,443 5,012 26,276 5,102
Current assets......................... 39,932 921,983 504,248 504,661 309,097 600,587 856,686
Intangible assets, net................. 144,666 889,912 1,451,780 3,549,622 4,076,300 3,996,333 4,280,604
Total assets........................... 333,557 2,229,832 2,918,985 5,547,256 6,472,439 6,265,755 7,435,652
Long-term debt(8)...................... 55,024 1,113,268 1,193,096 1,687,829 2,783,041 2,128,243 3,720,427
Stockholders' equity(9)................ 255,224 846,304 1,268,575 2,945,141 2,808,138 3,208,049 2,779,177
</TABLE>
- ---------------
(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 a
description of acquisitions.
(3) See Note 2 to the Notes to Nextel's consolidated financial statements.
(4) Other expenses in 1995 include a $15,000,000 write-down of the investment in
Corporacion Mobilcom S.A. de C.V. as a result of the devaluation of the
Mexican peso.
(5) Other expenses in 1996 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.)
(6) Includes the weighted average number of shares of Common Stock outstanding
during the respective periods.
(7) Includes approximately $479,995,000 of cash and cash equivalents held by
McCaw International and its subsidiaries as of March 31, 1997, which are not
available, due to restrictions contained in the indenture related thereto
(the "MIL Indenture"), to fund any of the cash needs of Nextel's domestic
Digital Mobile and analog SMR businesses.
(8) Excludes the current portions of long-term debt. See Note 6 to the Notes to
Nextel's consolidated financial statements.
(9) See Notes 10 and 11 to the Notes to Nextel's consolidated financial
statements.
6
<PAGE> 11
RISK FACTORS
The following risk factors may affect the value of the Common Stock and
therefore should be considered by prospective investors, in conjunction with the
other information included and incorporated by reference in this Prospectus,
before making an investment decision. See also "-- Forward Looking Statements."
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 $556,020,000 and $331,165,000 for the years ended
December 31, 1996 and December 31, 1995, respectively, and $220,850,000 for the
quarter ended March 31, 1997. Nextel had an accumulated deficit totalling
$1,356,101,000 at March 31, 1997. Nextel anticipates that it will continue to
experience significant net losses and significant negative 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. One
such format is known as the Time Division Multiple Access ("TDMA") digital
transmission technology, a version of which, known as "three-time slot TDMA" has
been deployed by AT&T Wireless Services, Inc. ("AT&T Wireless," formerly McCaw
Cellular Communications, Inc. ("McCaw Cellular")), a subsidiary of AT&T, and by
Southwestern Bell Mobile Systems in certain of their cellular system markets,
and is expected to be deployed by certain other cellular operators. The second
principal format is known as the Code Division Multiple Access ("CDMA") digital
transmission technology which has been deployed by PrimeCo Personal
Communications, Bell Atlantic/Nynex Mobile Services and Sprint PCS in certain of
their PCS markets and is expected to be deployed by certain other cellular and
PCS operators. The third principal format, known as GSM-PCS, is an updated,
upbanded, PCS version of the TDMA-based digital technology format known as
Global System for Mobile Communications that has become the standard for digital
cellular technology in Europe. GSM-PCS has been deployed by American Personal
Communications, a subsidiary of Sprint Spectrum, L.P., in its Washington,
D.C./Baltimore metropolitan market and Bell South in certain of its PCS markets,
and is expected to be deployed by certain other PCS operators. 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
7
<PAGE> 12
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.
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
may 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. 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."
8
<PAGE> 13
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 (including both those utilizing the
Reconfigured iDEN technology and those continuing to use the first generation
iDEN technology), as operated at June 30, 1997, were demonstrating acceptable
performance levels in these areas. Nextel also believes that the successful
development and national deployment throughout Nextel's Digital Mobile networks
of the Reconfigured iDEN technology, with its accompanying 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 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 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
9
<PAGE> 14
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."
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 contemplated 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 March 31, 1997
totalled approximately $643,317,000 (however, approximately $479,995,000 of such
amount represents cash, cash equivalents and marketable securities held by McCaw
International and its subsidiaries, which items are not available, due to
restrictions contained in the provisions of the MIL Indenture, to fund any of
the cash needs of Nextel's domestic Digital Mobile and analog SMR businesses).
Nextel, Nextel Finance Company ("NFC"), and certain subsidiaries of Nextel
entered into definitive agreements, which became effective on September 30,
1996, with respect to a secured credit facility arranged by Chase Securities,
Inc., J.P. Morgan Securities, Inc. and Toronto-Dominion Securities (USA), Inc.
(the "Bank Credit Facility"). Concurrently therewith, Nextel, NFC and certain
subsidiaries of Nextel entered into definitive agreements, which also became
effective on September 30, 1996, with respect to the amendment, restatement and
consolidation of the previously existing financing arrangements with Motorola
and NTFC Capital Corporation ("NTFC") (the "Vendor Credit Facility"; and
collectively with the Bank Credit Facility, the "Bank and Vendor Credit
Facilities").
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 -- A. 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 currently in place. The Credit Agreement
relating to the Bank Credit Facility (the "Bank Credit Agreement") currently
provides for up to $1,655,000,000 of secured financing, consisting of a
$1,085,000,000 revolving loan and $570,000,000 in term loans. The Amended
Restated and Consolidated Credit Agreement relating to the Vendor Credit
Facility (the "Vendor Credit Agreement") currently provides for up to
$345,000,000 of secured financing, consisting of a $195,000,000 revolving loan
and $150,000,000 in term loans. Borrowings under the Bank Credit Facility and
the Vendor Credit Facility are ratably secured by liens on assets of the
restricted subsidiaries under the terms of the Nextel Indentures. At June 30,
1997, Nextel had drawn approximately $1,441,000,000 of its available financing
under the Bank Credit Facility, leaving an aggregate of approximately
$214,000,000 available for borrowing under such facility, and had drawn
$227,000,000 of its available financing under the Vendor Credit Facility,
leaving an aggregate of approximately $118,000,000 available for borrowing under
such facility, subject in each case to the satisfaction or waiver of applicable
borrowing conditions.
The Bank Credit Agreement contemplates that, with the consent of the
lenders holding a majority of the outstanding loans and available commitments
under the Bank Credit Agreement and the Vendor Credit Agreement, Nextel may
borrow up to an additional $250,000,000 (subject to certain limitations) under
the
10
<PAGE> 15
Bank Credit Facility (the "Additional Bank Borrowings"). Nextel and certain
lenders have entered into a commitment letter and a related term sheet dated
July 11, 1997 setting forth the terms and conditions on which Nextel could gain
access to the $250,000,000 in Additional Bank Borrowings. Such commitment letter
and related term sheet have been filed with the Commission, and are incorporated
by reference herein. The Bank Credit Agreement and the Vendor Credit Agreement
also contemplate that borrowings under the Vendor Credit Facility may be
increased by up to $50,000,000, subject to certain limitations (the "Additional
Vendor Borrowings"). The remaining funds available for borrowings under the Bank
and Vendor Credit Facilities (including, if successfully structured, the
increased amounts contemplated pursuant to the Additional Bank Borrowings and
the Additional Vendor Borrowings) 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.
Nextel has also reached an understanding with Motorola regarding the terms
and conditions pursuant to which Nextel could access up to an additional
$450,000,000 of equipment financing through Motorola (the "Additional Motorola
Financing") consisting of (i) $50,000,000 in Additional Vendor Borrowings, (ii)
up to $200,000,000 in secured borrowings (which could be drawn through March
1999 and only as a term loan) that are to be second in ranking to the borrowings
made pursuant to both the Vendor Credit Agreement and Nextel's existing Bank
Credit Agreement (the "Second Secured Borrowings") and (iii) 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 Vendor Credit Agreement and such
existing Bank Credit Agreement (the "Senior Secured Borrowings"). Availability
of the Additional Motorola Financing is subject to a number of conditions
including, among others, with respect to the Second Secured Borrowings, the
prior borrowing of all amounts available under the Vendor Credit Agreement
(including the $50,000,000 in Additional Vendor Borrowings pursuant thereto
described above) and under the Bank Credit Agreement (including, with respect to
the second $100,000,000 of the Second Secured Borrowings, the borrowing of
$250,000,000 in Additional Bank Borrowings pursuant to the Bank Credit Agreement
described above), Nextel's receipt of $232,500,000 in equity contributions from
the exercise of the First Option by the McCaw Investor (the "McCaw Option
Proceeds") (see "Summary -- A. The Company -- Recent Developments -- McCaw
Investor Option Exercise"), and the receipt of the approval of a majority of the
secured parties under the Vendor Credit Agreement and the Bank Credit Agreement.
The availability of the Senior Secured Borrowings is subject to a number of
additional 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 Company has obtained written commitments from the relevant lending
parties, and has obtained certain of the required consents and approvals of
third parties required to access the Additional Bank Borrowings, the Additional
Vendor Borrowings and the Second Secured Borrowings. Nextel and the relevant
lending parties contemplate negotiating and entering into appropriate definitive
agreements implementing the terms of the financing arrangements relating to the
Additional Bank Borrowings, the Additional Vendor Borrowings and the Second
Secured Borrowings, as described above, and Nextel is now or shortly will
commence seeking the remaining consents and approvals required to gain access to
such additional financing. The availability of all of such additional financing
is also subject to Nextel's satisfying certain requirements under the Nextel
Indentures, which require Nextel to issue new equity for cash as a condition to
obtaining access to all amounts not constituting "Permitted Indebtedness" (as
such term is defined in the Nextel Indentures) under the Bank Credit Facility
and the Vendor Credit Facility, the Additional Bank Borrowings, the Additional
Vendor Borrowings and the Second Secured Borrowings referred to above. Nextel's
receipt of the $482,000,000 in net cash proceeds from the issuance of the Series
D Preferred Stock (the "Preferred Stock Proceeds") is sufficient to enable
Nextel to access all such funding sources under the requirements of the Nextel
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." Assuming (i) that Nextel secures
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<PAGE> 16
access to all of the available funds under the Bank Credit Facility and the
Vendor Credit Facility, and enters into appropriate definitive agreements to
obtain access to the $250,000,000 in Additional Bank Borrowings and to the
$50,000,000 in Additional Vendor Borrowings, (ii) that Nextel can obtain access
to the $200,000,000 in Second Secured Borrowings and (iii) that the New Option
is exercised and Nextel receives the proceeds therefrom, the Company believes
that such amounts, coupled with the Company's available cash and cash
equivalents (including the Preferred Stock Proceeds and the McCaw Option
Proceeds), will provide funds that in the aggregate are expected to be
substantially sufficient to implement the Company's business plan and meet the
other 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 and the
Vendor Credit Facility is, and the availability of the Additional Bank
Borrowings, the Additional Vendor Borrowings and the Second Secured Borrowings,
if structured successfully, is expected to be, subject to certain conditions,
and there can be no assurance that such conditions will be met. Moreover, there
can be no assurance that the Additional Bank Borrowings, the Additional Vendor
Borrowings or the Second Secured Borrowings will be available, 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 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 timing of the anticipated
800 MHz spectrum auction process (which is currently scheduled to commence in
the fall of 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 cash
amounts received by Nextel in connection with the Offering, if any, assuming the
Offering is consummated; (iii) 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; (iv) the potential
commercial opportunities and risks associated with implementation of Nextel's
accelerated business plan; and (v) 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 a new 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
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<PAGE> 17
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 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 and/or under the Vendor
Credit Agreement) is and will be limited by the terms of the Nextel Indentures,
the Bank Credit Agreement, the Vendor Credit Agreement and the Certificate of
Designation relating to the Series D Preferred Stock. The Bank Credit Agreement
and the Vendor Credit 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 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, if successfully structured and established, under the Additional
Bank Borrowings, the Additional Vendor Borrowings and the Second Secured
Borrowings, 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. 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 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
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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
June 30, 1997 represented coverage of areas in which approximately 50% 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, PCS operators
throughout the United States are expected to have 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 and 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. 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.
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
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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 for the 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 acquisitions, the commencement of Digital Mobile network
service in certain markets and increased sales in markets in which Digital
Mobile network services are provided, 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
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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 system
infrastructure equipment and subscriber units 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. Nextel is currently taking
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 are expected to be associated
with anticipated increases in subscriber growth and Digital Mobile network
wireless systems and service utilization. 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 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 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.
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
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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, prior to
October 1, 1997 without Motorola's consent, 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. After
October 1, 1997, Nextel may not implement such a Switch in Technology unless (1)
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 (2) 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.
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 regulation 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
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can be no assurance that the value of these assets will be sufficient to satisfy
its obligations. Nextel had a negative net tangible book value of $1,268,000,000
as of December 31, 1996.
NEXTEL SUSCEPTIBLE TO CONTROL BY SIGNIFICANT STOCKHOLDERS
Based on securities ownership information relating to Nextel as of June 30,
1997, 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) the First Option on July 28, 1997, (ii) two additional 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 20,000,000
shares of Common Stock at exercise prices ranging from $18.50 to $21.50 per
share (such options, together with the First Option, the "McCaw Options"), (iii)
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"), (iv) the New Option issued to an affiliate of
Craig O. 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, (v) the options granted on
July 28, 1995 to the McCaw Investor by Motorola to purchase up to 9,000,000
shares of Common Stock over a six-year period (the "McCaw Investor/Motorola
Options") and (vi) a warrant held by Motorola to purchase 2,890,000 shares of
Common Stock, the McCaw Investor would hold approximately 30.3% and Motorola
would hold approximately 15.7% 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 Craig O. 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 (the "Nextel Board"). Additionally,
the McCaw Investor is entitled to have a majority of the members of the
Operations Committee of the Nextel Board selected from the McCaw Investor's
representatives on the Nextel Board. 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 Nextel Board 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 Nextel Board and control the
Operations Committee, the McCaw Investor is in a position to exert significant
influence over Nextel's affairs. The Nextel Board 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 Nextel Board, including fiduciary duties in connection
with any proposal to override any action of or to terminate the Operations
Committee, whether or not such action would give rise to such financial
consequences. Although Motorola is entitled to nominate two directors to the
Nextel Board, 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 (1) the right
of any Motorola-designated Nextel directors to vote in a manner consistent with
their fiduciary duties and (2) 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 (1) exert effective control over the
approval of amendments to Nextel's Restated Certificate of Incorporation, as
amended (the "Nextel Charter"), mergers, sales of assets or other major
corporate transactions as well as other matters submitted for stockholder vote,
(2) defeat a takeover attempt and (3) otherwise control whether particular
matters are submitted for a vote of the stockholders of Nextel. Although
Motorola has made certain
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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 Nextel Board 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 Nextel Board.
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, Craig O. 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 Craig O. McCaw's investment
in AT&T resulting from AT&T's acquisition of McCaw Cellular, 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."
POTENTIAL DILUTION FROM PENDING AND FUTURE TRANSACTIONS
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. Additionally, to incur debt in excess of permitted
debt levels prior to January 1, 2000, pursuant to the amendments to the Nextel
Indentures as described above (see "Summary -- A. The Company -- Recent
Developments -- Consent Solicitation"), Nextel would be required to issue new
equity.
As of June 30, 1997, there were approximately 266,553,585 shares of Common
Stock outstanding (assuming the conversion of the outstanding shares of Nextel's
Non-Voting Common Stock and Nextel's preferred stock), on a primary, rather than
a fully diluted, basis, and approximately 356,433,335 shares of Common Stock
would have been outstanding assuming the exercise of all options (including
employee options, warrants initially issued to Motorola to purchase 3,000,000
shares, the options to purchase an aggregate of 36,000,000 shares pursuant to
the McCaw Options and the Incentive Option and an aggregate of 25,000,000 shares
pursuant to the New Option), warrants and other existing rights to acquire
Common Stock outstanding on such date.
On April 29, 1996, the Commission declared effective Nextel's registration
statement on Form S-4, covering 10,000,000 shares of Common Stock, or warrants
to acquire such shares, which contemplates issuances from time to time on a
"shelf" basis in accordance with Rule 415(a)(1)(viii) promulgated under the
Securities Act in connection with acquisitions of other businesses, properties
or securities in business combination transactions. As of the date hereof,
Nextel has issued 186,621 shares of Common Stock pursuant to such registration
statement. In addition, Nextel has filed a registration statement on Form S-4
covering up to 9,221,523 shares of Common Stock in connection with the potential
acquisition of Pittencrieff Communications, Inc.
Pursuant to the McCaw Securities Purchase Agreement, the McCaw Investor was
granted anti-dilutive rights with respect to certain Nextel share issuances (the
"McCaw Purchase Right"). An increase in the
19
<PAGE> 24
number of shares of Common Stock that will become available for sale in the
public market may adversely affect the market price of Common Stock.
SHARES ELIGIBLE FOR FUTURE SALE
Existing holders of Common Stock generally may freely resell their shares
except to the extent that they are deemed to be affiliates of Nextel or certain
predecessor companies for purposes of Rule 144 or Rule 145 promulgated under the
Securities Act. Nextel has also granted registration rights with respect to a
significant number of its shares outstanding on a fully diluted basis, including
shares of Common Stock issuable upon conversion of securities issued in, or upon
exercise of options granted 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. An increase in the number of shares of Common Stock that will
become available for sale in the public market may adversely affect the market
price of Common Stock.
DIVIDEND POLICY LIMITS EXPECTATION OF FUTURE DIVIDENDS
Nextel has not paid any dividends on Common Stock and does not plan to pay
dividends on Common Stock for the foreseeable future. The Nextel Indentures, the
Bank Credit Agreement and the Vendor Credit Agreement presently prohibit, and
are expected to operate so as to continue to prohibit, Nextel from paying
dividends. In addition, the collateral security mechanisms and related
provisions associated with the Bank and Vendor Credit Facilities 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 markets. Accordingly, while such restrictions are in place, any profits
generated by such subsidiaries will not be available to Nextel for, among other
purposes, payment of dividends.
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 Nextel Board 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
20
<PAGE> 25
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.
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 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, 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 Report on Form 10-Q for the quarter ended March 31, 1997.
USE OF PROCEEDS
The net proceeds of the Offering, at an assumed public offering price of
$16.1364 per Share, are estimated to be approximately $67,065,700, after
deducting estimated expenses of the Offering, assuming that all Consenting
Holders elect to subscribe for Shares. There can be no assurance that any Shares
will be sold in the Offering. The Company intends to use the net proceeds of the
Offering for general corporate purposes.
21
<PAGE> 26
CERTAIN MARKET INFORMATION
The Common Stock is traded on the Nasdaq NM under the symbol "NXTL." Prior
to February 3, 1997, the Common Stock traded under the symbol "CALL." The table
below presents the quarterly high and low sale prices for the Common Stock as
furnished by The Nasdaq Stock Market for the periods indicated.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31: HIGH LOW
- ----------------------- ---- ---
<S> <C> <C>
1995
First Quarter............................................. $15.625 $ 9.375
Second Quarter............................................ 18.000 13.000
Third Quarter............................................. 21.750 14.000
Fourth Quarter............................................ 18.125 13.875
1996
First Quarter............................................. 18.875 13.500
Second Quarter............................................ 23.375 16.750
Third Quarter............................................. 20.250 14.375
Fourth Quarter............................................ 18.500 12.750
1997
First Quarter............................................. 15.750 12.875
Second Quarter............................................ 19.188 12.250
Third Quarter (through August , 1997)...................
</TABLE>
As of June 30, 1997, there were approximately 3,066 holders of record of
shares of Common Stock. As of June 30, 1997, there was one holder of record of
shares of Nextel Non-Voting Common Stock, for which there is no established
public trading market, but which under certain circumstances may be converted
into an identical number of shares of Common Stock.
22
<PAGE> 27
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of June 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, (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, (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 AMOUNT AND NATURE
THE COMPANY'S OF BENEFICIAL APPROXIMATE %
NAME OF BENEFICIAL OWNER CAPITAL STOCK OWNERSHIP(1) OF CLASS(2)
- ------------------------ ----------------- ----------------- -------------
<S> <C> <C> <C>
Daniel F. Akerson................... Class A Common Stock 200,000(3) *
Brian D. McAuley.................... Class A Common Stock 1,429,785(4) *
Morgan E. O'Brien................... Class A Common Stock 1,206,476(5) *
Keith J. Bane....................... Class A Common Stock 0(6) *
Robert Cooper....................... Class A Common Stock 50,000 *
Timothy M. Donahue.................. Class A Common Stock 76,000(7) *
William E. Conway, Jr............... Class A Common Stock 97,865(8) *
Craig O. McCaw...................... Class A Common Stock 92,483,723(9) 28.3%
Keisuke Nakasaki.................... Class A Common Stock 0(10) *
Masaaki Torimoto.................... Class A Common Stock 0(11) *
Dennis M. Weibling.................. Class A Common Stock 92,483,723(12) 28.3
Robert S. Foosaner.................. Class A Common Stock 242,000(13) *
All directors and executive officers
as a group (21 persons)........... Class A Common Stock 96,004,838(14) 29.2
5% Stockholders:
- ------------------------------------
Digital Radio, L.L.C................ Class A Common Stock 92,483,723(15) 28.3
2320 Carillon Point Class A Preferred
Stock 8,163,265 100.0
Kirkland, Washington 98033........ Class B Preferred
Stock 82 100.0
Motorola, Inc....................... Class A Common Stock 60,890,000(16) 22.6
1303 East Algonquin Road Class B Common Stock 17,830,000 100.0
Schaumburg, Illinois 60196
Putnam Investments, Inc............. Class A Common Stock 15,340,145(17) 5.8
1 P.O. Box Square
Boston, Massachusetts 02109
</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 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.
23
<PAGE> 28
(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 454,000 shares of Class A Common Stock obtainable as of the
Ownership Date or within 60 days thereafter by Mr. McAuley upon the
exercise of nonqualified stock options. Also includes ownership of 18,000
shares of Class A Common Stock that are held by Mr. McAuley's minor
children. Mr. McAuley resigned from the Company's Board of Directors and as
an executive officer of the Company as of January 8, 1997.
(5) 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 nonqualified stock options.
(6) 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 16.
(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) Mr. McCaw, who is an equity owner and controlling person of the McCaw
Investor, disclaims beneficial ownership of all securities of Nextel held
by the McCaw Investor, except to the extent of his pecuniary interest
therein. See note 15.
(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.
(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.
(12) Mr. Weibling, who is President of Eagle River, an affiliate of the McCaw
Investor, disclaims beneficial ownership of all securities of Nextel held
by the McCaw Investor, except to the extent of his pecuniary interest
therein. See note 15.
(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.
(14) Includes an aggregate of 1,651,894 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
and 16.
(15) Comprised of (i) 5,593,846 shares of Class A Common Stock beneficially
owned by the McCaw Investor, (ii) 35,000,000 shares of Class A Common Stock
obtainable as of the Ownership Date or within 60 days thereafter upon the
exercise of certain options, (iii) 400,000 shares of Class A Common Stock
obtainable as of the Ownership Date or within 60 days thereafter upon the
exercise of a portion of the Incentive Option granted to Eagle River, (iv)
24,489,877 shares of Class A Common Stock, which represents the conversion
of the 8,163,265 shares of Class A Preferred Stock and the 82 shares of
Nextel's Class B Preferred Stock held by the McCaw Investor, (v) 25,000,000
shares of Class A Common Stock issuable pursuant to the New Option issued
to an affiliate of Craig O. McCaw as of June 16, 1997 and (vi) 2,000,000
shares of Class A Common Stock issuable pursuant to an option issued to the
McCaw Investor by Motorola. See Note 16.
(16) Assuming conversion of the Non-Voting Common Stock held by Motorola.
Comprised of (i) 40,170,000 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. Motorola granted the McCaw Investor an option to
acquire 9,000,000 shares included herein, 2,000,000 shares of which are
purchaseable for a thirty day period commencing July 28, 1997. Does not
give effect to the potential exercise of such option.
(17) 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.
24
<PAGE> 29
DETERMINATION OF OFFERING PRICE
The offering price of the Shares, which was established in part based upon
indications of interest by parties representing certain holders of the Nextel
Notes to certain representatives of Nextel in conjunction with the Consent
Solicitation, was calculated at an amount equal to 10/11 of the arithmetic
average of the closing bid and ask prices (but in neither case being more than
$0.25 greater or less than the actual last sale price) for a share of Common
Stock as reported on the Nasdaq NM for the consecutive trading day period
beginning on June 6, 1997 and ending on June 20, 1997.
PLAN OF DISTRIBUTION
The Shares are offered exclusively to Consenting Holders subject to the
terms and conditions set forth herein and in the accompanying Subscription Form.
In order to subscribe for Shares, a Consenting Holder must properly complete and
execute the Subscription Form and tender the purchase price to the Company, all
in the manner contemplated therein and herein on or before the Expiration Date.
A Consenting Holder may subscribe only for the maximum number of Shares (rounded
down to the nearest whole share) purchasable for the aggregate Consent Payment
received by such holder as a result of the Consent Solicitation. Consenting
Holders who subscribe for Shares will be required to agree that such Shares may
not be transferred, subject to certain limited exceptions, prior to January 1,
1998 and to the placement of a legend to such effect on the certificates
representing such Shares.
Nextel reserves the right (i) to extend the Offering at any time or from
time to time and (ii) to amend, at any time prior to the Expiration Date, the
terms of the Offering (other than the purchase price per share) by oral or
written notice to the Trustee. Notice of any such extension of the Expiration
Date or amendment of the terms of the Offering shall be provided as promptly as
practicable to Consenting Holders in writing or by making a public announcement,
including, but not limited to, by press release to the Dow Jones News Service.
VALIDITY OF SHARES
The validity of the Shares offered hereby will be passed upon for Nextel by
Jones, Day, Reavis & Pogue, Atlanta, Georgia.
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.
25
<PAGE> 30
======================================================
NO DEALER, SALES PERSON, OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER OF
SECURITIES DESCRIBED HEREIN, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS 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 OTHER THAN THOSE SPECIFICALLY OFFERED HEREBY
OR OF ANY OF SUCH SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE AN OFFER OR SOLICITATION IN SUCH JURISDICTION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE TO ANY PERSON TO WHOM
THIS PROSPECTUS IS DELIVERED SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO ITS DATE.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. ii
Incorporation of Certain Information
by Reference........................ ii
Summary............................... 1
Risk Factors.......................... 7
Use of Proceeds....................... 21
Certain Market Information............ 22
Securities Ownership of Certain
Beneficial Owners and Management.... 23
Determination of Offering Price....... 25
Plan of Distribution.................. 25
Validity of Shares.................... 25
Experts............................... 25
</TABLE>
======================================================
======================================================
4,161,442 SHARES
CLASS A COMMON STOCK
NEXTEL COMMUNICATIONS, INC.
-------------------------
PROSPECTUS
-------------------------
AUGUST , 1997
======================================================
<PAGE> 31
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Estimated expenses in connection with the issuance and distribution of the
securities to be registered are as follows:
<TABLE>
<S> <C>
Registration Fee............................................ $20,455
Legal Fees and Expenses..................................... 40,000
Accounting Fees and Expenses................................ 20,000
Miscellaneous............................................... 4,545
-------
Total............................................. $85,000
=======
</TABLE>
All such expenses will be paid by Nextel.
ITEM 15. 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
II-1
<PAGE> 32
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 the directors other than its
three most recently elected directors, Daniel F. Akerson, Timothy M. Donahue and
William E. Conway, Jr.
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 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 16. 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).
</TABLE>
II-2
<PAGE> 33
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- -----------------------
<C> <C> <S>
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).
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, 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 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).
</TABLE>
II-3
<PAGE> 34
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- -----------------------
<C> <C> <S>
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).
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).
</TABLE>
II-4
<PAGE> 35
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- -----------------------
<C> <C> <S>
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 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).
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.
+4.42 -- Amendment No. 2 dated as of June 3, 1997 to the Vendor
Credit Agreement.
+5 -- Opinion of Jones, Day, Reavis & Pogue re validity.
23.1 -- Consent of Jones, Day, Reavis & Pogue (included in Exhibit
5).
+23.2 -- Consent of Deloitte & Touche LLP.
*24 -- Powers of Attorney
+99 -- Form of Subscription Form
</TABLE>
- ---------------
* Previously filed.
+ Filed herewith.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) 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 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.
(2) 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 Securities Act and will be governed by
the final adjudication of such issue.
II-5
<PAGE> 36
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this amendment to the
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
4th day of August, 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 amendment
to the registration statement has been signed below by the following persons in
the capacities and on the dates indicated:
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<C> <S> <C>
* Chairman of the Board, Chief
- ----------------------------------------------------- Executive Officer and
Daniel F. Akerson Director (Principal
Executive Officer)
* Vice President and Chief
- ----------------------------------------------------- Financial Officer (Principal
Steven M. Shindler Financial Officer)
* Vice President and Controller
- ----------------------------------------------------- (Principal Accounting
William G. Arendt Officer)
* 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
- -----------------------------------------------------
Robert Cooper
* Director
- -----------------------------------------------------
Craig O. McCaw
* Director
- -----------------------------------------------------
Keisuke Nakasaki
* Director
- -----------------------------------------------------
Masaaki Torimoto
* Director
- -----------------------------------------------------
Dennis M. Weibling
* Director
- -----------------------------------------------------
William E. Conway, Jr.
/s/ THOMAS J. SIDMAN Attorney-in-fact August 4, 1997
- -----------------------------------------------------
Thomas J. Sidman
</TABLE>
II-6
<PAGE> 37
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, 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).................................................. Not applicable
4.2 -- Amended and Restated By-laws of Nextel (filed on July 31,
1995 as Exhibit 4.2 to the Nextel S-8 Registration Statement
and incorporated herein by reference)....................... Not applicable
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).............. Not applicable
4.4 -- Form of Note issued pursuant to the August Indenture
(included in Exhibit No. 4.3)............................... Not applicable
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 of Old Nextel dated February 16, 1994 and
incorporated herein by reference)........................... Not applicable
4.6 -- Form of Note issued pursuant to the February Indenture
(included in Exhibit No. 4.5)............................... Not applicable
4.7 -- Supplemental Indenture, dated as of June 30, 1995 to the
August 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)....................... Not applicable
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).................................................. Not applicable
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).................................................. Not applicable
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).................................................. Not applicable
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)... Not applicable
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).................................................. Not applicable
</TABLE>
<PAGE> 38
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE
- ------- ----------------------- ----
<C> <C> <S> <C>
4.13 -- Indenture for Senior Redeemable Discount Notes due 2004,
dated as 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)........... Not applicable
4.14 -- Form of Note issued pursuant to the OneComm Indenture
(included in Exhibit 4.11).................................. Not applicable
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).................................................. Not applicable
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).................. Not applicable
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).................................................. Not applicable
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)........................... Not applicable
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).................................................. Not applicable
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)....................... Not applicable
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)............................................... Not applicable
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).................................................. Not applicable
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)............................................... Not applicable
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).................. Not applicable
</TABLE>
<PAGE> 39
<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 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).................................................. Not applicable
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)........................................ Not applicable
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)............................................... Not applicable
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).................................................. Not applicable
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)................ Not applicable
4.30 -- Form of Note issued pursuant to the McCaw Indenture
(included in Exhibit 4.24).................................. Not applicable
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)........................................ Not applicable
4.32 -- Credit Agreement dated as of September 27, 1996 among
Nextel, NFC, 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)................. Not applicable
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).... Not applicable
4.34 -- Amended, Restated and Consolidated Credit Agreement dated as
of 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)........................... Not applicable
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)... Not applicable
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)............ Not applicable
</TABLE>
<PAGE> 40
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE
- ------- ----------------------- ----
<C> <C> <S> <C>
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)........................... Not applicable
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)................... Not applicable
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)................... Not applicable
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)........................... Not applicable
+4.41 -- Amendment No. 2 dated as of June 3, 1997 to the Bank Credit
Agreement...................................................
+4.42 -- Amendment No. 2 dated as of June 3, 1997 to the Vendor
Credit Agreement............................................
+5 -- Opinion of Jones, Day, Reavis & Pogue re validity
23.1 -- Consent of Jones, Day, Reavis & Pogue (included in Exhibit
5)
+23.2 -- Consent of Deloitte & Touche LLP
*24 -- Powers of Attorney
+99 -- Form of Subscription Form
</TABLE>
- ---------------
* Previously filed.
+ Filed herewith.
<PAGE> 1
EXHIBIT 4.41
[Execution Copy]
AMENDMENT NO. 2 TO CREDIT AGREEMENT
AMENDMENT NO. 2 TO CREDIT AGREEMENT dated as of June 3, 1997
between NEXTEL COMMUNICATIONS, INC. ("NCI"); NEXTEL FINANCE COMPANY (the
"Borrower") and the other Restricted Companies listed on the signature pages
hereto under the caption "RESTRICTED COMPANIES" (individually, a "Restricted
Company" and, collectively, the "Restricted Companies"); and the Lenders listed
on the signature pages hereto under the caption "LENDERS" (individually, a
"Lender" and, collectively, the "Lenders").
NCI, the Restricted Companies, the Lenders, Toronto Dominion
(Texas) Inc., as Administrative Agent, and The Chase Manhattan Bank, as
Collateral Agent, are parties to a Credit Agreement dated as of September 27,
1996 (as modified and supplemented and in effect from time to time, the "Credit
Agreement"), providing, subject to the terms and conditions thereof, for
extensions of credit (by means of loans and letters of credit) to be made by the
Lenders to the Borrower in an aggregate principal or face amount not exceeding
$1,655,000,000 (which, in the circumstances contemplated by Section 7.01(f)
thereof, may be increased to $1,905,000,000). NCI, the Restricted Companies and
the Lenders wish to consent to certain amendments to the Public Note Indentures
and to the amendment of the Credit Agreement in certain respects, and
accordingly, the parties hereto hereby agree as follows:
Section 1. Definitions. Except as otherwise defined in this
Amendment No. 2 to Credit Agreement, terms defined in the Credit Agreement are
used herein as defined therein.
Section 2. Consent. Subject to the satisfaction of the
condition precedent specified in Section 4 below, but effective as of the date
hereof, the Lenders hereby consent to the execution and delivery between NCI and
the respective trustees party thereto of Supplements to the Public Note
Indentures described in, and substantially in the respective forms attached to,
the Consent Solicitation Statement dated as of April 14, 1997, as amended and
supplemented by a Supplemental Consent Solicitation Statement dated June 4, 1997
(such Supplemental Consent Solicitation Statement being herein called the
"Consent Solicitation Statement"), heretofore furnished by NCI (through the
Administrative Agent) to the Lenders.
Section 3. Amendment. Subject to the satisfaction of the
condition precedent specified in Section 4 below, but effective as of the date
hereof, Section 7.05 of the Credit Agreement shall be amended by (A) deleting
the word "and" at the end of clause (b) thereof, (B) inserting "; and" in lieu
of the period at the end of subclause (v) of clause (c) thereof and (C)
inserting the following new clause (d) at the end thereof to read as follows:
<PAGE> 2
"(d) at any time prior to June 30, 1997, the Restricted
Companies may make Restricted Payments, in cash, to NCI in an
aggregate amount up to but not exceeding an amount equal to the
aggregate of the "Consent Payments" as specified in the June 4, 1997,
version of the Consent Solicitation Statement (as defined in
Amendment No. 2 hereto) to be paid to the holders of the Public Notes
in connection with obtaining the consents of such holders to the
Supplements to the Public Note Indentures referred to in said
Amendment No. 2."
Section 4. Conditions Precedent. The consent set forth in
Section 2 hereof, and the amendment set forth in Section 3 hereof, shall become
effective, as of the date hereof, upon the execution and delivery of this
Amendment No. 2 to Credit Agreement by NCI, the Restricted Companies and the
Required Lenders.
For purposes hereof, the Lenders authorized to execute and
deliver this Amendment No. 2 shall be the Lenders party to the Credit Agreement
on the date of this Amendment No. 2 (as indicated on the Register at the close
of business in New York City on such date), regardless of whether any one or
more of such Lenders shall, by reason of an assignment of Loans or Commitments
permitted under Section 10.04 of the Credit Agreement, continue to be a party to
the Credit Agreement on the date the conditions specified in the preceding
paragraph are satisfied (and each Lender party to the Credit Agreement on the
date of this Amendment No. 2 undertakes to inform any Person that takes an
assignment of all or any portion of such Lender's Commitments or Loans of this
Amendment No. 2, and none of the other parties to the Credit Agreement shall
have any responsibility to so inform any such Person of this Amendment No. 2).
Section 5. Miscellaneous. Except as herein provided, the
Credit Agreement shall remain unchanged and in full force and effect. This
Amendment No. 2 to Credit Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
amendatory instrument and any of the parties hereto may execute this Amendment
No. 2 to Credit Agreement by signing any such counterpart. This Amendment No. 2
to Credit Agreement shall be governed by, and construed in accordance with, the
law of the State of New York.
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 2 to Credit Agreement to be duly executed and delivered as of the
day and year first above written.
NEXTEL COMMUNICATIONS, INC.
By /s/ A.J. Long
-------------------------------------
Name: A.J. Long
Title: V.P. & Treasurer
RESTRICTED COMPANIES
NEXTEL FINANCE COMPANY
(successor to
Fleet Call Corporation),
By /s/ A.J. Long
-------------------------------------
Name: A.J. Long
Title: V.P. & Treasurer
ADVANCED MOBILECOMM OF
NORTH CAROLINA, INC.
AIR LINK COMMUNICATIONS, INC.
(successor to TRS, Inc.)
AMERICAN MOBILE SYSTEMS, INC.
(successor to Saber Communications, Inc.)
DIAL CALL, INC.
DIAL DISTANCE, INC.
FC NEW YORK, INC. (successor to
Metrocom Trunked Radio Communication Systems, Inc.)
FCI 900, INC.
FLEET CALL OF TEXAS, INC. (successor
to FM Tower Company, Metrolink
Communications Corporation and National
Tower Trunking Systems, Inc.)
NEXTEL COMMUNICATIONS OF THE
MID-ATLANTIC, INC. (successor to
Dispatch Communications of Maryland, Inc.,
Dispatch Communications of Minnesota, Inc.,
<PAGE> 4
Dispatch Communications of New England, Inc.,
Dispatch Communications of Pennsylvania,Inc.)
NEXTEL LICENSE HOLDINGS 1, INC.
NEXTEL LICENSE HOLDINGS 2, INC.
(successor to Comqor, Inc.)
NEXTEL LICENSE HOLDINGS 3, INC.
(successor to Dial Call Arkansas, Inc.,
Custom Radio/Johnson Communications, Inc.,
Dial Call Florida, Inc., Dial Call
Kentucky, Inc., Dial Call Louisiana, Inc.,
Dial Call Texas, Inc., Dial Call
Virginia, Inc., Dial Call West Virginia, Inc.
and U.S. Digital, Inc.)
NEXTEL OF TEXAS, INC. (successor to
Fort Worth Communications, Inc.)
ONECOMM CORPORATION, N.A.
(successor to Airwave Communications Corp.
(Seattle), C-Call Corporation, Dispatch
Communications of Arizona, Inc., Fleet
Call of Utah, Inc., Fleet Call West, Inc., Mijac
Enterprises, Inc., Mobile Radio of Illinois,
Inc., Motorola SF, Inc., Nextel Hawaii
Acquisition Corp., Nextel Utah Acquisition Corp.,
Nextel Western Acquisition Corp., Powerfone, Inc.,
Smart SMR of Illinois, Inc., Shoreland
Communications, Inc. and Spectrum
Resources of the Midwest, Inc.)
POWERFONE HOLDINGS, INC.
(successor to
ESMR Sub, Inc.)
SAFETY NET, INC.
SMART SMR, INC.
SMART SMR OF CALIFORNIA, INC.
SMART SMR OF NEW YORK, INC.
<PAGE> 5
By /s/ A.J. Long
--------------------------------
Name: A.J. Long
Title: V.P. & Treasurer
FORT WORTH TRUNKED RADIO
LIMITED PARTNERSHIP
By Fort Worth Communications,
Inc., a General Partner
By /s/ A.J. Long
-----------------------------
Name: A.J. Long
Title: V.P. & Treasurer
<PAGE> 6
<TABLE>
<CAPTION>
LENDERS
-------
<S> <C>
THE CHASE MANHATTAN BANK MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Tracey A. Navin By /s/ Maria D. Kratsios
-------------------- ------------------------
Name: Tracey A. Navin Name: Maria D. Kratsios
Title: V.P. Title: Vice President
THE TORONTO-DOMINION BANK ABN AMRO BANK N.V.,
NEW YORK BRANCH
By /s/ Sophia D. Sgarabi By /s/ Frances OR Logan
----------------------- ------------------------
Name: Sophia D. Sgarabi Name: Frances OR Logan
Title: Mgr. Syndications & Title: Group Vice President
Credit Admin.
By /s/ Anne Schwalbenberg
------------------------
Name: Anne Schwalbenberg
Title: Vice President
AMARA - 2 FINANCE LTD. BANK OF AMERICA ILLINOIS
By /s/ Andrew Ian Wignall By /s/ Francis J. Griffin
----------------------- ------------------------
Name: Andrew Ian Wignall Name: Francis J. Griffin
Title: Director Title: Attorney in Fact
BANK OF MONTREAL THE BANK OF NOVA SCOTIA
By /s/ W.T. Calder By /s/ Vincent J. Fitzgerald, Jr.
------------------- ------------------------
Name: W.T. Calder Name: Vincent J. Fitzgerald, Jr.
Title: Director Title: Authorized Signatory
</TABLE>
<PAGE> 7
<TABLE>
<S> <C>
BANK OF TOKYO-MITSUBISHI BANKERS TRUST COMPANY
TRUST COMPANY
By /s/ John P. Judge By
------------------- ------------------------
Name: John P. Judge Name:
Title: VP and Co.-Head Title:
BANQUE PARIBAS BEAR STEARNS GOVERNMENT
SECURITIES, INC.
By /s/ Errol R. Antzis By /s/ Donald R. Mullen
------------------- ------------------------
Name: Errol R. Antzis Name: Donald R. Mullen
Title: Group V.P. Title: President
By /s/ William B. Schink
-------------------
Name: William B. Schink
Title: Vice President
BZW-BARCLAYS CAPTIVA FINANCE LTD.
By /s/ Andrew M. Wynn By /s/ John H. Cullinane
------------------- --------------------------
Name: Andrew M. Wynn Name: John H. Cullinane
Title: Managing Director Title: Director
CERES FINANCE LTD. CAPTIVA II FINANCE LTD.
By /s/ John H. Cullinane By /s/ John H. Cullinane
------------------- --------------------------
Name: John H. Cullinane Name: John H. Cullinane
Title: Director Title: Director
CHANG HWA COMMERCIAL BANK, LTD., CIBC INC.
NEW YORK BRANCH
By /s/ Wan-Tu Yeh By /s/ Cynthia McCahill
------------------- --------------------------
Name: Wan-Tu Yeh Name: Cynthia McCahill
Title: VP and General Manager Title: Director
</TABLE>
<PAGE> 8
<TABLE>
<S> <C>
CIBC WOOD GUNDY SECURITIES CORP. CITIBANK, N.A.
By /s/ Cynthia McCahill By /s/ Marjorie Rubin Harris
-------------------- ---------------------------
Name: Cynthia McCahill Name: Marjorie Rubin Harris
Title: Director Title: Attorney in Fact
COMMERZBANK AG, NEW YORK COOPERATIEVE CENTRALE
BRANCH RAIFFEISEN-BOERENLEENBANK
B.A., "RABOBANK NEDERLAND",
NEW YORK BRANCH A. B.
By /s/ Claudia Rost
-------------------- By /s/ Dana W. Hemenway
Name: Claudia Rost ----------------------------
Title: Assistant VP Name: Dana W. Hemenway
Title: VP
By /s/ G. Rod McWalters By /s/ Ian Reece
-------------------- ----------------------------
Name: G. Rod McWalters Name: Ian Reece
Title: VP Title: Sr. Credit Officer
CORESTATES BANK, N.A. CREDIT SUISSE FIRST BOSTON
By /s/ Lynae S. Young By /s/ Todd C. Morgan
--------------------- ----------------------------
Name: Lynae S. Young Name: Todd C. Morgan
Title: VP Title: VP
By /s/ Judith E. Smith
----------------------------
Name: Judith E. Smith
Title: Director
CYPRESS TREE INVESTMENT DLJ CAPITAL FUNDING, INC.
MANAGEMENT COMPANY, INC.
By By /s/ Stephen P. Hickey
--------------------- ----------------------------
Name: Name: Stephen P. Hickey
Title: Title: Managing Director
</TABLE>
<PAGE> 9
<TABLE>
<S> <C>
FIRST NATIONAL BANK OF BOSTON FLEET NATIONAL BANK
By /s/ Shepherd D. Rainie By /s/ Alexander G. Ivanov
----------------------- --------------------------
Name: Shepherd D. Rainie Name:Alexander G. Ivanov
Title: Director Title:Assistant Vice President
FUJI BANK, LTD. GOLDMAN SACHS CREDIT
PARTNERS L.P.
By /s/ Teiji Teramoto By /s/ John E. Urban
----------------------- --------------------------
Name: Teiji Teramto Name:John E. Urban
Title: VP & Manager Title:Authorized Signer
HELLER FINANCIAL, INC. INDOSUEZ CAPITAL ASSET ADVISORS
By By
----------------------- --------------------------
Name: Name:
Title: Title:
By
--------------------------
Name:
Title:
INDOSUEZ CAPITAL FUNDING II, LTD. INDOSUEZ CAPITAL FUNDING III, LTD.
By: Indosuez Capital as Portfolio Advisor By: Indosuez Capital as Portfolio Advisor
By /s/ Francoise Berthelot By /s/ Francoise Berthelot
------------------------ -------------------------
Name:Francoise Berthelot Name:Francoise Berthelot
Title:Vice President Title:Vice President
INDUSTRIAL BANK OF JAPAN, LIMITED ING BARING (U.S.) CAPITAL CORPORATION
By By
------------------------ -------------------------
Name: Name:
Title: Title:
</TABLE>
<PAGE> 10
<TABLE>
<S> <C>
KEYBANK NATIONAL ASSOCIATION KOREA FIRST BANK, LOS ANGELES
AGENCY
By By
----------------------- -------------------------
Name: Name:
Title: Title:
LEHMAN COMMERCIAL PAPER INC. LONG-TERM CREDIT BANK OF JAPAN,
LTD.
By By
----------------------- -------------------------
Name: Name
Title: Title
MERITA BANK LTD MEESPIERSON N.V.
By By /s/ John T. Connors
------------------------ ------------------------
Name: Name:John T. Connors
Title: Title:Executive V.P.
By
------------------------
Name:
Title:
MERRILL LYNCH DEBT STRATEGIES MERRILL LYNCH PRIME RATE
PORTFOLIO PORTFOLIO
By /s/ R. Douglas Henderson By /s/ R. Douglas Henderson
------------------------ --------------------------
Name:R. Douglas Henderson Name:R. Douglas Henderson
Title: Authorized Signatory Title:Authorized Signatory
</TABLE>
<PAGE> 11
<TABLE>
<S> <C>
MERRILL LYNCH SENIOR FLOATING THE MITSUBISHI TRUST AND BANKING
RATE FUND, INC. CORPORATION
By /s/ R. Douglas Henderson By
------------------------ --------------------------------
Name:R. Douglas Henderson Name:
Title:Authorized Signatory Title:
ML CBO IV CAYMAN LTD. MORGAN STANLEY SENIOR FUNDING, INC.
By /s/ James Dondero By
------------------------ --------------------------------
Name:James Dondero Name:
Title:President Title:
NATIONSBANK OF TEXAS, N.A. NIPPON CREDIT BANK, LTD.
By /s/ Jennifer Zydney By /s/ Barry S. Fein
------------------------ ---------------------------------
Name:Jennifer Zydney Name:Barry S. Fein
Title:V.P. Title:Asst. VP
OCTAGON CREDIT INVESTORS LOAN PNC BANK, NATIONAL ASSOCIATION
PORTFOLIO (A unit of The Chase
Manhattan Bank)
By /s/ Andrew D. Gordon By /s/ Thomas A. Partridge
------------------------- ---------------------------------
Name:Andrew D. Gordon Name:Thomas A. Partridge
Title:Managing Director Title:Asst. VP
PRIME INCOME TRUST RESTRUCTURED OBLIGATIONS BACKED
BY SENIOR ASSETS B.V.
By: Chancellor LGT Senior Secured
Management, Inc., as Portfolio Advisor
By By: /s/ Gregory L. Smith
------------------------- --------------------------------
Name: Name:Gregory L. Smith
Title: Title:Vice President
</TABLE>
<PAGE> 12
<TABLE>
<S> <C>
PROTECTIVE LIFE INSURANCE ROYAL BANK OF CANADA
COMPANY
ML CBO IV CAYMAN LTD.
By: Protective Asset Management L.L.C.
By /s/ James Dondero By /s/ John P. Page
-------------------------- -------------------------------
Name:James Dondero Name:John P. Page
Title:Authorized Signator Title:Sr. Manager
SENIOR HIGH INCOME PORTFOLIO, INC. STANDARD BANK OF LONDON
By By
--------------------------- --------------------------------
Name: Name:
Title: Title:
By
-------------------------------
Name:
Title:
STRATA FUNDING LTD. THE SUMITOMO BANK, LIMITED
NEW YORK BRANCH
By /s/ John H. Cullinane By /s/ John C. Kissinger
--------------------------- -------------------------------
Name:John H. Cullinane Name:John C. Kissinger
Title:Director Title:Joint General Manager
THE SUMITOMO TRUST & BANKING U.S. BANK OF WASHINGTON, N.A.
COMPANY LTD., NEW YORK BRANCH
By By /s/ Gary Egbert
--------------------------- ------------------------------
Name: Name:Gary Egbert
Title: Title: VP
---------------------------
Name:
Title:
</TABLE>
<PAGE> 13
VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By /s/ Jeffery W. Maillet
----------------------------
Name:Jeffery W. Maillet
Title: Sr. V.P. and Director
<PAGE> 1
EXHIBIT 4.42
[Execution Copy]
AMENDMENT NO. 2 TO VENDOR FINANCING AGREEMENT
AMENDMENT NO. 2 TO AMENDED, RESTATED AND CONSOLIDATED CREDIT
AGREEMENT dated as of June 3, 1997, between NEXTEL COMMUNICATIONS, INC. ("NCI");
NEXTEL FINANCE COMPANY (the "Borrower") and the other Restricted Companies
listed on the signature pages hereto under the caption "RESTRICTED COMPANIES"
(individually, a "Restricted Company" and, collectively, the "Restricted
Companies"); MOTOROLA, INC. ("Motorola"); and NTFC Capital Corporation ("NTFC
Capital" and, together with Motorola, the "Vendors").
NCI, the Restricted Companies and the Vendors are parties to
an Amended, Restated and Consolidated Credit Agreement dated as of September 27,
1996 (as modified and supplemented and in effect from time to time, the "Vendor
Financing Agreement"), providing, subject to the terms and conditions thereof,
for loans to be made by Motorola and NTFC Capital to the Borrower in an
aggregate principal amount not exceeding $345,000,000. NCI, the Restricted
Companies and the Vendors wish to consent to certain amendments to the Public
Note Indentures and to the amendment to the Vendor Financing Agreement in
certain respects, and accordingly, the parties hereto hereby agree as follows:
Section 1. Definitions. Except as otherwise defined in this
Amendment No. 2 to Amended, Restated and Consolidated Credit Agreement, terms
defined in the Vendor Financing Agreement are used herein as defined therein.
Section 2. Consent. Subject to the satisfaction of the
condition precedent specified in Section 4 below, but effective as of the date
hereof, the Vendors hereby consent to the execution and delivery between NCI and
the respective trustees party thereto of Supplements to the Public Note
Indentures described in, and substantially in the respective forms attached to,
the Consent Solicitation Statement dated as of April 14, 1997, as amended and
supplemented by a Supplemental Consent Solicitation Statement dated June 4, 1997
(such Supplemental Consent Solicitation Statement being herein called the
"Consent Solicitation Statement"), heretofore furnished by NCI to the Vendors.
Section 3. Amendments. Subject to the satisfaction of the
condition precedent specified in Section 4 below, but effective as of the date
hereof, Section 7.05 of the Vendor Financing Agreement shall be amended by (A)
deleting the word "and" at the end of clause (b) thereof, (B) inserting "; and"
in lieu of the period at the end of subclause (v) of clause (c) thereof and (C)
inserting the following new clause (d) at the end thereof to read as follows:
<PAGE> 2
"(d) at any time prior to June 30, 1997, the Restricted
Companies may make Restricted Payments, in cash, to NCI in an aggregate
amount up to but not exceeding an amount equal to the aggregate of the
"Consent Payments" as specified in the June 4, 1997, version of the
Consent Solicitation Statement (as defined in Amendment No. 2 hereto)
to be paid to the holders of the Public Notes in connection with
obtaining the consents of such holders to the Supplements to the Public
Note Indentures referred to in said Amendment No. 2."
Section 4. Conditions Precedent. The consent set forth in
Section 2 hereof, and the amendment set forth in Section 3 hereof, shall become
effective, as of the date hereof, upon the execution and delivery of this
Amendment No. 2 to Amended, Restated and Consolidated Credit Agreement by NCI,
the Restricted Companies and the Required Vendors.
Section 5. Miscellaneous. Except as herein provided, the
Vendor Financing Agreement shall remain unchanged and in full force and effect.
This Amendment No. 2 to Amended, Restated and Consolidated Credit Agreement may
be executed in any number of counterparts, all of which taken together shall
constitute one and the same amendatory instrument and any of the parties hereto
may execute this Amendment No. 2 to Amended, Restated and Consolidated Credit
Agreement by signing any such counterpart. This Amendment No. 2 to Amended,
Restated and Consolidated Credit Agreement shall be governed by, and construed
in accordance with, the law of the State of New York.
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 2 to Amended, Restated and Consolidated Credit Agreement to be
duly executed and delivered as of the day and year first above written.
NEXTEL COMMUNICATIONS, INC.
By /s/ A. J. Long
-----------------------
Name: A. J. Long
Title:VP & Treasurer
RESTRICTED COMPANIES
--------------------
NEXTEL FINANCE COMPANY
(successor to
Fleet Call Corporation)
By /s/ A.J. Long
-----------------------
Name: A.J. Long
Title:VP & Treasurer
ADVANCED MOBILECOMM OF
NORTH CAROLINA, INC.
AIR LINK COMMUNICATIONS, INC.
(successor to TRS, Inc.)
AMERICAN MOBILE SYSTEMS, INC.
(successor to Saber Communications, Inc.)
DIAL CALL, INC.
DIAL DISTANCE, INC.
FC NEW YORK, INC. (successor to
Metrocom Trunked Radio Communication
Systems, Inc.)
FCI 900, INC.
FLEET CALL OF TEXAS, INC. (successor
to FM Tower Company, Metrolink
Communications Corporation and National
Tower Trunking Systems, Inc.)
NEXTEL COMMUNICATIONS OF THE
MID-ATLANTIC, INC. (successor to
Dispatch Communications of Maryland,
Inc., Dispatch
<PAGE> 4
Communications of Minnesota, Inc.,
Dispatch Communications of
New England, Inc., Dispatch
Communications of Pennsylvania, Inc.)
NEXTEL LICENSE HOLDINGS 1, INC.
NEXTEL LICENSE HOLDINGS 2, INC.
(successor to Comqor, Inc.)
NEXTEL LICENSE HOLDINGS 3, INC.
(successor to Dial Call Arkansas, Inc.,
Custom Radio/Johnson Communications,
Inc., Dial Call Florida, Inc., Dial Call
Kentucky, Inc., Dial Call Louisiana,
Inc., Dial Call Texas, Inc., Dial Call
Virginia, Inc., Dial Call West Virginia,
Inc. and U.S. Digital, Inc.)
NEXTEL OF TEXAS, INC. (successor to
Fort Worth Communications, Inc.)
ONECOMM CORPORATION, N.A.
(successor to Airwave Communications
Corp. (Seattle), C-Call Corporation,
Dispatch Communications of Arizona, Inc.,
Fleet Call of Utah, Inc., Fleet Call
West, Inc., Mijac Enterprises, Inc.,
Mobile Radio of Illinois, Inc.,
Motorola SF, Inc., Nextel Hawaii
Acquisition Corp., Nextel Utah
Acquisition Corp., Nextel
Western Acquisition Corp., Powerfone,
Inc., Smart SMR of Illinois, Inc.,
Shoreland Resources of the Midwest, Inc.)
POWERFONE HOLDINGS, INC. (successor to
ESMR Sub, Inc.)
SAFETY NET, INC.
SMART SMR, INC.
SMART SMR OF CALIFORNIA, INC.
<PAGE> 5
SMART SMR OF NEW YORK, INC.
By /s/ A. J. Long
-----------------------
Name: A.J. Long
Title:VP & Treasurer
FORT WORTH TRUNKED RADIO
LIMITED PARTNERSHIP
By Fort Worth Communications,
Inc., a General Partner
By /s/ A. J. Long
-----------------------
Name: A. J. Long
Title:VP & Treasurer
MOTOROLA, INC.
By /s/ Daniel Coombes
-----------------------
Name: Daniel Coombes
Title:Corp. VP & GM
NTFC CAPITAL CORPORATION
By /s/ L.W. Middleton
-----------------------
Name: L.W. Middleton
Title: Secretary
<PAGE> 1
EXHIBIT 5
JONES, DAY, REAVIS & POGUE
3500 ONE PEACHTREE CENTER
303 PEACHTREE STREET
ATLANTA, GEORGIA 30308-3242
August 4, 1997
Nextel Communications, Inc.
1505 Farm Credit Drive
McLean, Virginia 22102
Gentlemen:
We have acted as counsel to Nextel Communications, Inc., a Delaware
corporation (the "Company"), in connection with the registration of 4,161,442
shares of Common Stock, $.001 par value per share, of the Company (the
"Shares"), to be issued by the Company pursuant to a Registration Statement on
Form S-3 (File No. 333-28461) (the "Registration Statement"), filed with the
Securities and Exchange Commission to which this opinion appears as Exhibit 5.
We have examined originals or certified or photostatic copies of such
records of the Company, certificates of officers of the Company, and public
officials and such other documents as we have deemed relevant or necessary as
the basis of the opinion set forth below in this letter. In such examination, we
have assumed the genuineness of all signatures, the conformity to original
documents submitted as certified or photostatic copies, and the authenticity of
originals of such latter documents. Based on the foregoing, we are of the
following opinion:
The Shares are duly authorized, and when issued by the Company in the
manner described in the Registration Statement, will be validly issued,
fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement and the reference to this Firm under the heading
"Validity of Shares" in the Prospectus constituting part of the Registration
Statement.
Sincerely,
/s/ JONES, DAY, REAVIS & POGUE
--------------------------------------
JONES, DAY, REAVIS & POGUE
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement No. 333-28461 of Nextel Communications, Inc. on Form S-3
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.
/s/ Deloitte & Touche LLP
McLean, Virginia
August 5, 1997
<PAGE> 1
EXHIBIT 99
SUBSCRIPTION FORM
IN RESPECT OF
SHARES OF CLASS A COMMON STOCK
OF
NEXTEL COMMUNICATIONS, INC.
PLEASE RETURN THIS SUBSCRIPTION FORM TO THE TRUSTEE:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Overnight Courier
By Mail: By Facsimile: or Hand:
The Bank of New York (212) 571-3080 The Bank of New York
101 Barclay Street (7 East) (originally executed 101 Barclay Street (7 East)
Reorganization Section Subscription Forms Reorganization Section
New York, New York 10286 must follow) Corporate Trust Services Window
Attention: Enrique Lopez New York, New York 10286
Confirmation Only: Attention: Enrique Lopez
(212) 815-2742
</TABLE>
ALL PROPERLY COMPLETED, EXECUTED AND DATED SUBSCRIPTION FORMS, TOGETHER
WITH PAYMENT FOR THE PURCHASE PRICE, MUST BE RECEIVED BY THE TRUSTEE PRIOR TO
5:00 P.M., EASTERN TIME, ON , 1997 (AS SUCH TIME AND DATE MAY BE
EXTENDED, THE "EXPIRATION DATE"). HOLDERS WHO DO NOT DELIVER A PROPERLY
COMPLETED AND EXECUTED SUBSCRIPTION FORM ON OR PRIOR TO THE EXPIRATION DATE WILL
NOT BE ENTITLED TO PURCHASE ANY SHARES OF CLASS A COMMON STOCK OF NEXTEL
COMMUNICATIONS, INC.
SUBSCRIPTION FORMS SHOULD NOT BE DELIVERED TO ANY PERSON OTHER THAN THE TRUSTEE.
This Subscription Form is being sent by Nextel Communications, Inc.
("NEXTEL") exclusively to holders of Nextel's five outstanding issues of Senior
Redeemable Discount Notes (the "NEXTEL NOTES") who validly consented
("CONSENTING HOLDERS") to certain amendments to the public indentures (the
"NEXTEL INDENTURES") relating to the Nextel Notes in connection with Nextel's
solicitation of consents to certain amendments and waivers to the Nextel
Indentures, which solicitation expired on June 13, 1997 (the "CONSENT
SOLICITATION"). In order to subscribe for shares of Class A Common Stock, par
value $.001 per share ("COMMON STOCK"), which are being offered (the "OFFERING")
pursuant to a Prospectus dated August , 1997 (the "PROSPECTUS"), a Consenting
Holder must complete this Subscription Form and tender the purchase price to the
Trustee prior to the Expiration Date. The purchase price payable in connection
with a subscription for Common Stock may be paid in cash or by certified check
payable to Nextel Communications, Inc., or by wire transfer of immediately
available funds to the account specified under "Method of Payment" hereinbelow.
A Consenting Holder may subscribe
<PAGE> 2
only for the maximum number of shares of Common Stock (rounded down to the
nearest whole share) purchasable for the aggregate consent payment (the "CONSENT
PAYMENT") received by such Consenting Holder in connection with the Consent
Solicitation. By executing and delivering this Subscription Form, the registered
holder of the Nextel Notes to which this Subscription Form relates, on behalf of
itself and any beneficial holders thereof, represents that it acknowledges and
agrees that Consenting Holders will be deemed to have agreed that the shares of
Common Stock subscribed for pursuant to this Subscription Form may not be
transferred prior to January 1, 1998 and that a legend will be placed on the
certificates representing such shares to the following effect:
"PURSUANT TO AN AGREEMENT BETWEEN THE REGISTERED
HOLDER OF THE SHARES OF CLASS A COMMON STOCK
REPRESENTED BY THIS CERTIFICATE AND NEXTEL
COMMUNICATIONS, INC., THE SHARES REPRESENTED HEREBY
MAY NOT BE TRANSFERRED PRIOR TO JANUARY 1, 1998
WITHOUT THE PRIOR CONSENT OF NEXTEL COMMUNICATIONS,
INC."
Consenting Holders who hold their Nextel Notes through an account with a
nominee should contact such nominee concerning the actions required for such
Consenting Holders to subscribe for shares of Common Stock.
SUBSCRIPTION
Subject to the terms and conditions set forth in the Prospectus and
herein, and effective upon acceptance of this Subscription Form by Nextel, the
undersigned hereby subscribes for that number of whole shares of Common Stock
(rounded down to the nearest whole share as indicated in the box below)
purchasable for the undersigned's aggregate Consent Payment, in the amount set
forth in the box below, at a purchase price of $16.1364 per share (with the
aggregate purchase price being rounded down to the nearest whole cent, as
indicated in the box below) (the "SUBSCRIPTION").
If the undersigned holds Nextel Notes as nominee for the account of
beneficial holders of such Nextel Notes who are Consenting Holders, the
undersigned hereby represents that it is subscribing for the maximum number of
shares of Common Stock purchasable for the Consent Payment received by each such
Consenting Holder on whose behalf this Subscription is made. The undersigned
acknowledges that it must comply with the other provisions set forth herein, and
complete or provide the other information required herein, to validly subscribe
for such shares.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to subscribe for shares of Common Stock on the terms
set forth herein. The undersigned shall, upon request, execute and deliver any
additional documents deemed by the Trustee or Nextel to be necessary or
desirable to perfect the undersigned's Subscription or evidence such power and
authority.
2
<PAGE> 3
Subscriptions by Consenting Holders that are DTC Participants and whose
Notes are registered in the name of Cede & Co. should be signed in the manner in
which the Consenting Holder's name appears on the position listing of Cede & Co.
with respect to the Notes. The Subscription is not a DTC eligible transaction,
and, therefore, the Subscription Form must be delivered, together with payment
of the applicable aggregate purchase price, to the Trustee, at its address set
forth on the cover of this Subscription Form.
The undersigned hereby agrees that it may not withdraw its Subscription
on or after 5:00 p.m., Eastern Time, on the Expiration Date, and that prior to
such time it will not withdraw its Subscription except by delivering written
notice of withdrawal to the Trustee at the address or facsimile number set forth
on the cover of this Subscription Form. The undersigned understands that unless
withdrawn prior to the Expiration Date, upon acceptance of this Subscription
Form by Nextel, this Subscription will constitute a binding agreement between
the undersigned and Nextel.
Nextel reserves the right (i) to extend the Offering at any time or from
time to time and (ii) to amend, at any time prior to the Expiration Date, the
terms of the Offering (other than the purchase price per share of Common Stock)
by oral or written notice to the Trustee. Notice of any such extension of the
Expiration Date or amendment of the terms of the Offering shall be provided as
promptly as practicable to Consenting Holders in writing or by making a public
announcement, including, but not limited to, by press release to the Dow Jones
New Service.
Properly completed and validly executed Subscription Forms will be
accepted as soon as practicable after the Expiration Date and shares of Common
Stock validly subscribed for will be issued as promptly as practicable
thereafter.
The undersigned acknowledges and agrees, on behalf of itself and any
beneficial owners of Nextel Notes for whom the undersigned is nominee, that the
shares of Common Stock subscribed for by the undersigned pursuant hereto may not
be transferred prior to January 1, 1998 and acknowledges that the certificates
representing such shares will bear a legend to such effect.
All authority conferred or agreed to be conferred hereby will survive the
death, incapacity, dissolution or liquidation of the undersigned, and every
obligation of the undersigned hereunder will be binding upon the undersigned's
heirs, personal representatives, successors and assigns.
By executing this Subscription Form, the undersigned acknowledges receipt
of the Prospectus and understands that the shares the undersigned will receive
are being offered pursuant to the terms set forth herein and in the Prospectus.
All questions as to the validity, form, eligibility, receipt and
revocation of any Subscription Form will be resolved by Nextel, whose
determination shall be final and binding. Nextel reserves the right to waive any
defects, irregularities or conditions of delivery as to a particular
Subscription Form. Unless waived, all such defects or irregularities must be
cured prior to the Expiration Date. None of Nextel, the Trustee and any other
person is under any duty to give notification of any such defects or
irregularities, nor will any of them incur any liability for failure to give
such notification. Subscription
3
<PAGE> 4
Forms will not be deemed to have been properly delivered until all defects and
irregularities have been cured or waived. Nextel's interpretation of the terms
and conditions of the Offering is conclusive and binding.
4
<PAGE> 5
BOX 1
NAME AND ADDRESS OF REGISTERED HOLDER OR DTC PARTICIPANT
AND DTC PARTICIPANT NUMBER (IF PARTY HOLDS AS DTC PARTICIPANT):
---------------------------------------------
---------------------------------------------
---------------------------------------------
NEXTEL NOTES OWNED BY THE CONSENTING HOLDER:
<TABLE>
<CAPTION>
AGGREGATE
PRINCIPAL
AGGREGATE PRINCIPAL AMOUNT
AMOUNT OF NOTES HELD ISSUE OF NOTES OF NOTES HELD BY
CONSENTING
HOLDERS
SUBSCRIBING FOR
SHARES
<S> <C> <C>
11.50% Senior Redeemable Discount Notes Due 2003,
originally issued by Nextel Communications, Inc.
$ ------------------ (CUSIP No. 65332V AA1) $---------------
9.75% Senior Redeemable Discount Notes Due 2004,
originally issued by Nextel Communications, Inc.
$ ------------------ (CUSIP No. 65332V AB9) $---------------
12.25% Senior Redeemable Discount Notes Due 2004,
originally issued by Dial Call Communications, Inc.
$ ------------------ (CUSIP No. 25246P AC9) $---------------
10.25% Senior Redeemable Discount Notes Due 2005,
originally issued by Dial Call Communications, Inc.
$ ------------------ (CUSIP No. 25246P AE5) $---------------
10.125% Senior Redeemable Discount Notes Due 2004,
originally issued by CenCall Communications Corp.
$ ------------------ (CUSIP No. 151297 AB4) $---------------
AGGREGATE PAYMENT TENDERED HEREWITH AGGREGATE NUMBER OF SHARES SUBSCRIBED FOR
(ROUNDED DOWN TO THE NEAREST WHOLE CENT) (ROUNDED DOWN TO THE NEAREST WHOLE SHARE)
$ ________________ ________ Shares
- --------------------------------------------------------------------------------------------------
METHOD OF PAYMENT
[ ] Certified check enclosed, payable to [ ________ ]
[ ] By wire transfer of immediately available funds to the following account:
[ ________ ]
</TABLE>
5
<PAGE> 6
BOX 2
IMPORTANT -- READ CAREFULLY
Consenting Holder(s) must execute this Subscription Form exactly as their
name(s) appear(s) on the register of Nextel Notes in respect of which the
undersigned Consenting Holder received the Consent Payment. In the event Nextel
Notes are held by Authorized DTC Participant(s), such Authorized DTC
Participant(s) must execute this Subscription Form exactly as their name(s) are
registered with DTC. If the Nextel Notes are held of record by two or more joint
registered Consenting Holders, all such Consenting Holders must sign this
Subscription Form. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, such person should so indicate when
signing and must submit proper evidence satisfactory to Nextel of such person's
authority so to act.
SIGN HERE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Signature of Holder(s)
Dated:
-----------------------------------------------------------------------
Name(s):
-----------------------------------------------------------------------
-----------------------------------------------------------------------
(Please Print)
Capacity:
-----------------------------------------------------------------------
Address:
-----------------------------------------------------------------------
-----------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone No.: ( )
-----------------------------------------------------------------------
Tax Identification or Social Security No.:
--------------------------------------
6
<PAGE> 7
DELIVERY INSTRUCTIONS
Subject to the terms and conditions set forth in the Prospectus and
herein, Nextel will issue and deliver to each Consenting Holder who delivers a
properly completed and executed Subscription Form, together with the applicable
aggregate purchase price therefor, to the Trustee on or prior to the Expiration
Date (provided such subscription is not withdrawn), the maximum number of shares
of Common Stock (rounded down to the nearest whole share) purchasable, at a
price of $16.1364 per share, for the aggregate Consent Payment received by such
Consenting Holder in connection with such Consenting Holder's delivery of valid
consents. Such delivery will be made only to Consenting Holders whose properly
completed and executed Subscription Forms are received by the Trustee, together
with the applicable aggregate purchase price therefor, prior to 5:00 p.m.,
Eastern Time, on the Expiration Date. Consenting Holders whose properly
completed and executed Subscription Forms are not received, or whose applicable
aggregate purchase price is not received, prior to such time will NOT be
entitled to subscribe for such shares. The method of delivery of all documents,
including properly completed and executed Subscription Forms, and any permitted
method of payment of the applicable aggregate purchase price, is at the election
and risk of the Consenting Holder.
In order for a Subscription for shares of Common Stock to be valid and
effective, a Subscription Form must be properly completed, executed and timely
received by the Trustee, together with the applicable aggregate purchase price
therefor. Subscriptions by Consenting Holders that are DTC Participants and
whose Notes are registered in the name of Cede & Co. should be signed in the
manner in which the Consenting Holder's name appears on the position listing of
Cede & Co. with respect to the Notes. The Subscription is not a DTC eligible
transaction, and, therefore, the Subscription Form must be delivered, together
with payment of the applicable aggregate purchase price, to the Trustee, at its
address set forth on the cover of this Subscription Form.
7
<PAGE> 8
Shares of Common Stock subscribed for will be delivered by the Trustee,
on behalf of Nextel, to the Consenting Holder at its address as it appears in
Box 2 of this Subscription Form. If the Consenting Holder desires that such
shares be delivered to another address, please so indicate in Box 3 below.
BOX 3
SPECIAL DELIVERY INSTRUCTIONS
To be completed ONLY if the shares of Common Stock are to be delivered to
the Consenting Holder at an address other than that indicated in Box 2 hereof.
Deliver Shares of Common Stock to the Consenting Holder at the following
address:
Name:
---------------------------------------------------------------------------
(PLEASE PRINT)
Address:
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
8
