SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 21, 1997 (July 21, 1997)
NEXTEL COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-19656 36-3939651
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
1505 Farm Credit Drive, Suite 100, McLean, Virginia 22102
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (703) 394-3000
(Former name or former address, if changed since last report)
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Item 5. Other Events.
Preferred Stock Issuance
On July 21, 1997, Nextel Communications, Inc. ("Nextel") announced that it
had completed the sale of 500,000 shares of 13% Series D Exchangeable Preferred
Stock (the "Preferred Stock") with a liquidation preference of $1,000 per share.
Dividends on the 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 Preferred Stock. The 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 Preferred Stock may be redeemed on or prior to July 15, 2000, in whole or in
part at the option of Nextel, in certain circumstances at 113% of the
liquidation preference plus accrued and unpaid dividends from the proceeds of
one or more sales of Nextel common stock. The 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 circumstance sooner, into Nextel
subordinated debentures.
The shares of Preferred Stock were issued in a private placement
transaction and have not been registered with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933 (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 Preferred
Stock, Nextel has agreed to use its best effort to file with the Commission and
cause to become effective a registration statement with respect to a registered
offer to exchange the then outstanding 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 consummated prior to specified dates, the dividend accrual
rate applicable to the Preferred Stock will increase by specified amounts until
the Exchange Offer is consummated or certain other requirements are met.
Terms of the Preferred Stock are set forth in the Certificate of
Designation attached to this Current Report as Exhibit 4.1, which is
incorporated herein by reference, and the description of the terms of the
Preferred Stock included herein is qualified by reference to such
Certificate of Designation.
Net cash proceeds from the sale of the Preferred Stock of approximately
$482,000,000 will be used by Nextel to implement its previously disclosed
business plan that contemplates an accelerated and expanded deployment of its
digital wireless communications networks in its domestic markets during 1997 and
1998. Nextel's receipt of such net proceeds will also satisfy certain conditions
contained in the indentures relating to Nextel's five outstanding issues of
Senior Redeemable Discount Notes (as such indentures have been amended to date)
to permit Nextel to obtain access to each of the funding sources currently
contemplated to be used by Nextel to meet the funding requirements associated
with its business plan as described in Nextel's Current Report on Form 8-K dated
and filed with the Commission on July 9, 1997.
On July 21, 1997, Nextel issued a press release announcing the sale of
Preferred Stock. A copy of such press release is attached to this Current Report
as Exhibit 99.1.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(A) Financial Statements of Business Acquired.
Not applicable.
(B) Pro Forma Financial Information.
Not applicable.
(C) Exhibits
Exhibit No. Exhibit Description
4.1 Certificate of Designation of the Powers,
Preferences and Relative, Participating, Optional
and Other Special Rights of 13% Series D
Exchangeable Preferred Stock and Qualifications,
Limitations and Restrictions Thereof
99.1 Press Release, dated July 21, 1997
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NEXTEL COMMUNICATIONS, INC.
Date: July 21, 1997 By: /s/Thomas J. Sidman
Thomas J. Sidman
Vice President and General Counsel
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Exhibit No. Exhibit Description
4.1 Certificate of Designation of the Powers,
Preferences and Relative, Participating, Optional
and Other Special Rights of 13% Series D
Exchangeable Preferred Stock and Qualifications,
Limitations and Restrictions Thereof
99.1 Press Release, dated July 21, 1997
EXHIBIT 4.1
NEXTEL COMMUNICATIONS, INC.
CERTIFICATE OF DESIGNATION OF THE POWERS,
PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL AND OTHER SPECIAL RIGHTS
OF 13% SERIES D EXCHANGEABLE
PREFERRED STOCK AND QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS THEREOF
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
Nextel Communications, Inc., a corporation organized and existing under
the General Corporation Law of the State of Delaware (the "Company"), does
hereby certify that, pursuant to authority conferred upon the board of directors
of the Company (or any committee of such board of directors, the "Board of
Directors") by its Restated Certificate of Incorporation, as amended
(hereinafter referred to as the "Certificate of Incorporation"), and pursuant to
the provisions of Section 151 of the General Corporation Law of the State of
Delaware, said Board of Directors with full power and authority to act on behalf
of the Board of Directors, at a meeting held on July 16, 1997, duly approved and
adopted the following resolution (the "Resolution"):
RESOLVED, that, pursuant to the authority vested in the Board of Directors
by its Certificate of Incorporation, the Board of Directors does hereby
create, authorize and provide for the issue of 13% Series D Exchangeable
Preferred Stock, par value $0.01 per share, with a liquidation preference of
$1,000 per share, consisting of 1,600,000 shares, having the designations,
voting power, preferences and relative, participating, optional and other
special rights, qualifications, limitations and restrictions thereof that are
set forth in the Certificate of Incorporation and in this Resolution as follows
(the terms used herein, unless otherwise defined herein, are used herein as
defined in paragraph (n) hereof):
(a) DESIGNATION. There is hereby created out of the authorized and
unissued shares of preferred stock of the Company a series of preferred
stock designated as the "13% Series D Exchangeable Preferred Stock". The number
of shares constituting such series shall be 1,600,000 shares of 13% Series D
Exchangeable Preferred Stock, consisting of an initial issuance of 500,000
shares of 13% Series D Exchangeable Preferred Stock (the "Original Preferred
Stock"), plus registered shares of 13% Series D Exchangeable Preferred Stock
which may be issued in the Preferred Stock Exchange Offer (the "Exchange
Preferred Stock" and, together with the Original Preferred Stock, the "Preferred
Stock") plus additional
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shares of Preferred Stock which may be issued to pay dividends on the
Preferred Stock if the Company elects to pay dividends in additional shares of
Preferred Stock. The liquidation preference of the Preferred Stock shall be
$1,000 per share.
(b) RANK. The Preferred Stock shall, with respect to dividend
distributions and distributions upon the liquidation, winding-up and
dissolution of the Company, rank: (i) senior to (A) all classes of common stock
of the Company and to (B) each other class of capital stock or series of
preferred stock (other than the Class C Preferred Stock) hereafter created by
the Board of Directors, the terms of which do not expressly provide that it
ranks senior to or on a parity with the Preferred Stock as to dividend
distributions and distributions upon the liquidation, winding-up and dissolution
of the Company (collectively referred to herein, together with all classes of
common stock of the Company, as the "Junior Securities"); (ii) on a parity with
(A) the Class A Preferred Stock (except with respect to the Special Payments (as
defined in this paragraph (b)), the Class B Preferred Stock (except with respect
to the Special Payments (as defined in this paragraph (b)) and the Class C
Preferred Stock; and (B) any class of capital stock or series of preferred stock
hereafter created by the Board of Directors, the terms of which expressly
provide that such class or series will rank on a parity with the Preferred Stock
as to dividend distributions and distributions upon the liquidation, winding-up
and dissolution of the Company (collectively referred to as "Parity
Securities"); (iii) junior with respect to the dividend accruals and payments on
the Class A Preferred Stock and the $25,000,000 cash payment on the Class B
Preferred Stock, which are required under the terms of the Class A Preferred
Stock and the Class B Preferred Stock as in effect on the date of this
Certificate of Designation upon certain occurrences (such payments and dividend
rights of the Class A Preferred Stock and the Class B Preferred Stock, the
"Special Payments"); and (iv) subject to Preferred Stockholder Approval Rights
(as defined in subparagraph (f)(ii)(A)), junior to each class of capital stock
or series of preferred stock hereafter created by the Board of Directors, the
terms of which have been approved by the Holders of the Preferred Stock in
accordance with subparagraph (f)(ii) hereof and which expressly provide that
such class or series will rank senior to the Preferred Stock as to dividend
distributions and distributions upon liquidation, winding-up and dissolution of
the Company (collectively referred to as "Senior Securities").
(c) DIVIDENDS. (i) Beginning on the Closing Date, the Holders of the
outstanding shares of Preferred Stock shall be entitled to receive, when,
as and if declared by the Board of Directors, out of funds legally available
therefor, dividends on each share of Preferred Stock at a rate per annum equal
to 13% of the liquidation preference per share of Preferred Stock, payable
quarterly. All dividends shall be cumulative, whether or not earned or declared,
on a daily basis from the date of issuance of the applicable shares of the
Preferred Stock and shall be payable quarterly in arrears on each Dividend
Payment Date, commencing on the first Dividend Payment Date after the Closing
Date. On and before July 15, 2002, the Company may pay dividends, at its option,
in cash or in additional fully paid and nonassessable shares of Preferred Stock
having an aggregate liquidation preference
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3
equal to the amount of such dividends. After July 15, 2002, dividends may
be paid only in cash. If any dividend (or portion thereof) payable on any
Dividend Payment Date after July 15, 2002 is not declared or paid in full in
cash on such Dividend Payment Date, the amount of such dividend that is payable
and that is not paid in cash on such date will accrue interest at the dividend
rate then applicable to the Preferred Stock, compounding quarterly, until
declared and paid in full. Each distribution in the form of a dividend (whether
in cash or in additional shares of Preferred Stock) shall be payable to Holders
of record as they appear on the stock books of the Company on such record date,
not less than 10 nor more than 60 days preceding the relevant Dividend Payment
Date, as shall be fixed by the Board of Directors. Dividends shall cease to
accumulate in respect of shares of the Preferred Stock on the Mandatory Exchange
Date (as defined in paragraph (g)(i)(A) hereof) or on the date of their earlier
redemption unless the Company shall have failed to issue the appropriate
aggregate principal amount of Exchange Debentures in respect of the Preferred
Stock on the Mandatory Exchange Date or shall have failed to pay the relevant
redemption price on the date fixed for redemption.
(ii) Notwithstanding anything else provided herein, if the Company fails
to consummate a Preferred Stock Exchange Offer in accordance with the
Registration Rights Agreement dated the Closing Date on or prior to six months
after the Closing Date, the dividend rate on the Preferred Stock will increase
0.5% per annum to 13.5% per annum of liquidation preference per share of
Preferred Stock from January 21, 1998 (and if the Preferred Stock Exchange Offer
is not consummated on or prior to nine months after the Closing Date, the
dividend rate on the Preferred Stock will increase an additional 0.5% per annum
to 14% per annum of liquidation preference per share of Preferred Stock from
April 21, 1998), payable in additional shares of Preferred Stock quarterly in
arrears on each Dividend Payment Date, commencing April 15, 1998 until (i) such
Preferred Stock Exchange Offer is consummated, (ii) a shelf registration
statement with respect to resales of the Preferred Stock is declared effective
in accordance with the Registration Rights Agreement dated the Closing Date or
(iii) the Preferred Stock becomes freely tradeable without registration under
the Securities Act, provided that, at such time upon the request of any Holder
of the Preferred Stock, the Company shall deliver to such Holder certificates
evidencing such Holder's Preferred Stock without the legends restricting the
transfer thereof.
(iii) All dividends paid with respect to shares of the Preferred Stock
pursuant to paragraph (c)(i) hereof shall be paid pro rata to the Holders
entitled thereto.
(iv) Nothing herein contained shall in any way or under any
circumstances be construed or deemed to require the Board of Directors to
declare, or the Company to pay or set apart for payment, any dividends on
shares of the Preferred Stock at any time.
(v) Dividends on account of arrears for any past Dividend Period and
dividends in connection with any optional redemption pursuant to paragraph
(e)(i) hereof may
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be declared and paid at any time, without reference to any regular Dividend
Payment Date, to Holders of record on such date, not more than 45 days
prior to the payment thereof, as may be fixed by the Board of Directors.
(vi) Other than any amount constituting Special Payments, no full
dividends shall be declared by the Board of Directors or paid or funds set
apart for payment of dividends by the Company on any Parity Securities for any
period unless full cumulative dividends shall have been or contemporaneously are
declared and paid in full, or declared and (in the case of dividends payable in
cash) a sum in cash set apart sufficient for such payment on the Preferred Stock
for all Dividend Periods terminating on or prior to the date of payment of such
full dividends on such Parity Securities. The making of Special Payments shall
not, in and of itself, require that any dividend be declared or any dividend or
other amount be paid or accrued in respect of the Preferred Stock. Except as
noted in the case of Special Payments, if any dividends are not paid in full, as
aforesaid, upon the shares of the Preferred Stock and any other Parity
Securities, all dividends declared upon shares of the Preferred Stock and any
other Parity Securities shall be declared PRO RATA so that the amount of
dividends declared per share on the Preferred Stock and such Parity Securities
shall in all cases bear to each other the same ratio that accrued dividends per
share on the Preferred Stock and such Parity Securities bear to each other.
(vii) (A) Holders of shares of Preferred Stock shall be entitled to
receive the dividends provided for in paragraph (c)(i) hereof in preference to
and in priority over any dividends upon any of the Junior Securities.
(B) So long as any shares of Preferred Stock are outstanding, the Company
shall not declare, pay or set apart for payment any dividend on any of the
Junior Securities or make any payment on account of, or set apart for payment
money for a sinking or other similar fund for, the purchase, redemption or other
retirement of any of the Junior Securities or any warrants, rights, calls or
options exercisable for or convertible into any of the Junior Securities (other
than the repurchase, redemption or other acquisition or retirement for value of
Junior Securities (and any warrants, rights, calls or options exercisable for or
convertible into such Junior Securities) permitted under clause (II) of the
second paragraph in subparagraph (m)(2) hereof, provided that such Junior
Securities may only be repurchased, redeemed or otherwise acquired or retired
either in exchange for Junior Securities or upon the termination, retirement,
death or disability of such employee, consultant or advisor), or make any
distribution in respect thereof, either directly or indirectly, and whether in
cash, obligations or shares of the Company or other property (other than
distributions or dividends in Junior Securities to the holders of Junior
Securities) and shall not permit any corporation or other entity directly or
indirectly controlled by the Company to purchase or redeem any of the Junior
Securities or any such warrants, rights, calls or options, unless full
cumulative dividends determined in accordance herewith have been paid in full on
the Preferred Stock.
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5
(C) So long as any shares of the Preferred Stock are outstanding, the
Company shall not make any payment on account of, or set apart for payment
money for a sinking or other similar fund for, the purchase, redemption or other
retirement of any of the Parity Securities or any warrants, rights, calls or
options exercisable for or convertible into any of the Parity Securities, and
shall not permit any corporation or other entity directly or indirectly
controlled by the Company to purchase or redeem any of the Parity Securities or
any such warrants, rights, calls or options, unless the dividends determined in
accordance herewith on the Preferred Stock have been paid in full.
(viii) Dividends payable on shares of the Preferred Stock for any period
less than a year shall be computed on the basis of a 360-day year of 12
30-day months and the actual number of days elapsed in the period for which
dividends are payable. If any Dividend Payment Date occurs on a day that is not
a Business Day, any accrued dividends otherwise payable on such Dividend Payment
Date shall be paid on the next succeeding Business Day.
(d) LIQUIDATION PREFERENCE. Upon any voluntary or involuntary liquidation,
dissolution or winding-up of the affairs of the Company, Holders of
Preferred Stock then outstanding shall be entitled to be paid, out of the assets
of the Company available for distribution to its stockholders, $1,000 per share
of Preferred Stock, plus an amount in cash equal to accumulated and unpaid
dividends thereon to the date fixed for liquidation, dissolution or winding-up
(including an amount equal to a prorated dividend for the period from the last
Dividend Payment Date to the date fixed for liquidation, dissolution or
winding-up), before any payment shall be made on or any assets distributed to
the holders of any of the Junior Securities, including, without limitation,
common stock of the Company. However, neither the merger, consolidation or sale
of all or substantially all of the assets of the Company shall be deemed to be a
liquidation, dissolution or winding-up of the Company. If, upon any voluntary or
involuntary liquidation, dissolution or winding-up of the Company, the amounts
payable with respect to the Preferred Stock and all other Parity Securities are
not paid in full, the holders of the Preferred Stock and the Parity Securities
shall share equally and ratably (subject to the preference of the Holders of
Class A Preferred Stock and Class B Preferred Stock to receive any Special
Payments then due and not paid in full) in any distribution of assets of the
Company in proportion to the full liquidation preference and accumulated and
unpaid dividends to which each is entitled. After payment of the full amount of
the liquidation preference and accumulated and unpaid dividends to which they
are entitled, the Holders of Preferred Stock shall not be entitled to any
further participation in any distribution of assets of the Company.
(e) REDEMPTION. (i) OPTIONAL REDEMPTION. (A) The Preferred Stock may be
redeemed (subject to the restrictions described in this paragraph (e),
contractual and other restrictions with respect thereto and the legal
availability of funds therefor) at any time after December 15, 2005 (the
"Optional Redemption Date"), at the Company's option, in whole or
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6
in part, in the manner provided in subparagraph (e)(iii), at a redemption
price equal to the amount of the liquidation preference thereof, plus an amount
equal to all accumulated and unpaid dividends (including an amount in cash equal
to a prorated dividend for the period from the dividend payment date immediately
prior to the redemption date to the redemption date); PROVIDED, HOWEVER, that in
the event that the Existing Senior Notes are repurchased, redeemed or repaid in
full prior to the Optional Redemption Date, the Preferred Stock may be redeemed
(subject to the restrictions described in this paragraph (e), contractual and
other restrictions thereto and to the legal availability of funds therefor) at
any time on or after July 15, 2002, at the Company's option, in whole or in
part, in the manner provided in subparagraph (e)(iii), at the redemption prices
(expressed as a percentage of the liquidation preference thereof) set forth
below, plus an amount in cash equal to all accumulated and unpaid dividends
(including an amount in cash equal to a prorated dividend for the period from
the Dividend Payment Date immediately prior to the Redemption Date to the
Redemption Date), if redeemed during the 12-month period beginning July 15 of
each of the years set forth below.
YEAR PERCENTAGE
2002 .............................................. 106.500%
2003 .............................................. 103.250%
2004 and thereafter ................................ 100.000%
PROVIDED that no optional redemption pursuant to this subparagraph
(e)(i)(A) shall be authorized or made unless prior thereto full unpaid
cumulative dividends for all Dividend Periods terminating on or prior to the
Redemption Date, and for an amount equal to a prorated dividend on the Preferred
Stock to be redeemed for the period from the Dividend Payment Date immediately
prior to the Redemption Date to the Redemption Date, shall have been, or
immediately prior to the Redemption Date are, declared and paid in cash or
declared and a sum set apart sufficient for such cash payment on the Redemption
Date on such Preferred Stock.
(B) In addition, on or prior to July 15, 2000, in the event that the
Existing Senior Notes are repurchased, redeemed or repaid in full (subject
to the restrictions described in this paragraph (e), contractual and other
restrictions with respect thereto and to the legal availability of funds
therefor), the Company may redeem shares of Preferred Stock having an aggregate
liquidation preference of up to 35% of the aggregate liquidation preference of
all Preferred Stock originally issued on the Closing Date, at a redemption price
equal to 113% of the liquidation preference, plus an amount in cash equal to a
prorated dividend for the period from the Dividend Payment Date immediately
prior to the Redemption Date to the Redemption Date (subject to the right of
Holders of Preferred Stock on relevant record dates to receive dividends due on
relevant Dividend Payment Dates), with the proceeds of any sale of its common
stock; PROVIDED that such redemption occurs within 180 days after consummation
of such sale, and PROVIDED FURTHER that no optional redemption pursuant to this
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subparagraph (e)(i)(B) shall be authorized or made unless prior thereto full
unpaid cumulative dividends for all Dividend Periods terminating on or prior to
the Redemption Date and for an amount equal to a prorated dividend for the
period from the Dividend Payment Date immediately prior to the Redemption Date
to the Redemption Date shall have been, or immediately prior to the Redemption
Notice are, declared and paid in full in cash or declared and a sum set apart
sufficient for such payment in full in cash on the Redemption Date on the
outstanding shares of the Preferred Stock.
(C) In the event of a redemption pursuant to paragraph (e)(i) hereof of
only a portion of the then outstanding shares of the Preferred Stock, the
Company shall effect such redemption as it determines, PRO RATA according to the
number of shares held by each Holder of Preferred Stock, PROVIDED that the
Company may redeem such shares held by any Holder of fewer than 100 shares of
Preferred Stock without regard to such PRO RATA redemption requirement, or by
lot, in each case, as may be determined by the Company in its sole discretion.
(ii) MANDATORY REDEMPTION. On July 15, 2009, the Company shall redeem from
any source of funds legally available therefor, in the manner provided in
paragraph (e)(iii) hereof, all of the shares of the Preferred Stock then
outstanding at a redemption price equal to 100% of the liquidation preference
per share, plus, without duplication, an amount in cash equal to all accumulated
and unpaid dividends per share (including an amount equal to a prorated dividend
for the period from the Dividend Payment Date immediately prior to the
Redemption Date to the Redemption Date).
(iii) PROCEDURES FOR REDEMPTION. (A) At least 30 days and not more than
60 days prior to the date fixed for any redemption of the Preferred Stock,
written notice (the "Redemption Notice") shall be given by first-class mail,
postage prepaid, to each Holder of record on the record date fixed for such
redemption of the Preferred Stock at such Holder's address as the same appears
on the stock register of the Company, provided that no failure to give such
notice nor any deficiency therein shall affect the validity of the procedure for
the redemption of any shares of Preferred Stock to be redeemed except as to the
Holder or Holders to whom the Company has failed to give said notice or except
as to the Holder or Holders whose notice was defective. The Redemption Notice
shall state:
(1) whether the redemption is pursuant to subparagraph (e)(i)(A),
(e)(i)(B) or (e)(ii) hereof;
(2) the redemption price;
(3) whether all or less than all the outstanding shares of the Preferred
Stock are to be redeemed and the total number of shares of the Preferred
Stock being redeemed;
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8
(4) the number of shares of Preferred Stock held, as of the appropriate
record date, by the Holder that the Company intends to redeem;
(5) the date fixed for redemption;
(6) that the Holder is to surrender to the Company, at the place or
places where certificates for shares of Preferred Stock are to be
surrendered for redemption, in the manner and at the price designated, his
certificate or certificates representing the shares of Preferred Stock to be
redeemed; and
(7) that dividends on the shares of the Preferred Stock to be redeemed
shall cease to accrue on such Redemption Date unless the Company defaults in
the payment of the redemption price.
(B) Each Holder of Preferred Stock shall surrender the certificate or
certificates representing such shares of Preferred Stock to the Company,
duly endorsed, in the manner and at the place designated in the Redemption
Notice and on the Redemption Date. The full redemption price for such shares of
Preferred Stock shall be payable in cash to the Person whose name appears on
such certificate or certificates as the owner thereof, and each surrendered
certificate shall be canceled and retired. In the event that less than all of
the shares represented by any such certificate are redeemed, a new certificate
shall be issued representing the unredeemed shares.
(C) Unless the Company defaults in the payment in full of the applicable
redemption price, dividends on the Preferred Stock called for redemption
shall cease to accumulate on the Redemption Date, and the Holders of such
redeemed shares shall cease to have any further rights with respect thereto from
and after the Redemption Date, other than the right to receive the redemption
price, without interest.
(f) VOTING RIGHTS. (i) The Holders of shares of the Preferred Stock,
except as otherwise required under Delaware law or as set forth in
paragraphs (f)(ii), (f)(iii) and (f)(iv) hereof, shall not be entitled or
permitted to vote on any matter required or permitted to be voted upon by the
stockholders of the Company.
(ii) (A) So long as any shares of the Preferred Stock are outstanding,
the Company shall not authorize any class of Senior Securities without the
affirmative vote or, notwithstanding any contrary provision of the Amended and
Restated By-Laws of the Company (the "By-Laws"), written consent of Holders of
at least a majority of the outstanding shares of Preferred Stock, voting or
consenting, as the case may be, separately as one class, given in person or by
proxy, either in writing or by resolution adopted at an annual or special
meeting, except that, without the approval of Holders of the Preferred Stock,
the Company may issue shares of Senior Securities (1) in respect of any
dividend or
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9
payment obligations that constitute Special Payments or (2) in exchange
for, or the proceeds of which are used to redeem or repurchase, any or all
shares of Preferred Stock then outstanding or Debt of the Company (such approval
rights, herein referred to as "Preferred Stockholder Approval Rights"); PROVIDED
that, solely in the case of Senior Securities issued in exchange for, or the
proceeds of which are used to redeem or repurchase, less than all shares of
Preferred Stock then outstanding, (a) the aggregate liquidation preference of
such Senior Securities shall not exceed the aggregate liquidation preference of,
premium and accrued and unpaid dividends on, and expenses in connection with the
refinancing of, the shares of Preferred Stock so exchanged, redeemed or
repurchased, (b) such Senior Securities shall not be Redeemable Stock and (c)
such Senior Securities shall not be entitled to the payment of cash dividends
prior to July 15, 2002.
(B) So long as any shares of the Preferred Stock are outstanding, the
Company shall not amend this Certificate of Designation so as to affect
adversely the specified rights (including, without limitations, the covenants
described in paragraph (m)), preferences, privileges or voting rights of Holders
of shares of Preferred Stock, or to authorize the issuance of any additional
shares of Preferred Stock, without the affirmative vote or, notwithstanding any
contrary provisions of the By-Laws, written consent of Holders of at least a
majority of the outstanding shares of Preferred Stock, voting or consenting, as
the case may be, separately as one class, given in person or by proxy, either in
writing or by resolution adopted at an annual or special meeting. The Holders of
at least a majority of the outstanding shares of Preferred Stock, voting or
consenting, as the case may be, separately as one class, whether voting in
person or by proxy, either in writing or by resolution adopted at an annual or
special meeting, may waive compliance with any provision of this Certificate of
Designation.
(C) Except as set forth in subparagraph (f)(ii)(B) hereof, (1) the
creation, authorization or issuance of any shares of any Junior Securities,
Parity Securities or Senior Securities, or (2) the increase or decrease in the
amount of authorized capital stock of any class, including any preferred stock,
shall not require the consent of Holders of Preferred Stock and shall not,
unless not complying with subparagraph (f)(ii)(B) hereof, be deemed to affect
adversely the rights, preferences, privileges or voting rights of Holders of
shares of Preferred Stock.
(iii) (A) If (1) dividends on the Preferred Stock are in arrears and
unpaid (and if, after July 15, 2002, such dividends are not paid in cash)
for four consecutive quarterly periods or six quarterly periods (whether or not
consecutive) (each, a "Dividend Default"); or (2) the Company fails to discharge
any redemption obligation with respect to the Preferred Stock (each, a
"Redemption Default"); or (3) the Company fails to make an Offer to Purchase
(and to complete such purchase) following a Change of Control, if such Offer to
Purchase is required to be made pursuant to paragraph (h) hereof (each, a
"Change of Control Default"); or (4) the Company breaches or violates one of the
provisions set forth
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10
in paragraph (m) hereof and the breach or violation continues for a period
of 60 consecutive days or more after notice thereof to the Company by Holders of
25% or more of the outstanding shares of the Preferred Stock then outstanding
(each, a "Restriction Default"); or (5) the Company fails to pay when due
(subject to any applicable grace period) the principal of, or if there is an
acceleration of, any Debt of the Company or any Restricted Subsidiary having an
outstanding principal amount of at least $25 million, individually or in the
aggregate (each, a "Default Payment"), then the number of directors constituting
the Board of Directors shall be adjusted to permit the Holders of the majority
of the then outstanding shares of Preferred Stock, voting separately as one
class, to elect two directors. For the purpose of determining the number of
quarterly periods for which accrued dividends have not been paid, any accrued
and unpaid dividend that is subsequently paid shall not be treated as unpaid.
Each event described in clauses (1), (2), (3), (4) and (5) of this subparagraph
(f)(iii)(A) is a "Voting Rights Triggering Event." Within 15 days of the time
the Company becomes aware of the occurrence of any default referred to in clause
(4) or (5) of this subparagraph (f)(iii)(A), the Company shall give written
notice thereof to the Holders.
(B) The right of the Holders of Preferred Stock voting separately as one
class to elect two directors as described in subparagraph (f)(iii)(A) shall
continue until such time as (1) in the event such right arises due to a Dividend
Default, all accumulated dividends that are in arrears on the Preferred Stock
and that gave rise to such Dividend Default are paid in full (and, in the case
of dividends payable after July 15, 2002, paid in cash); and (2) in the event
such right arises due to a Redemption Default, a Change of Control Default, a
Restriction Default or a Payment Default, the Company remedies any such failure,
breach or default, at which time the term of any directors elected pursuant to
subparagraph (f)(iii)(A) hereof shall terminate and the number of directors
constituting the board of directors shall be reduced to the number necessary to
reflect the termination of the right of the Holders of the Preferred Stock to
elect directors, subject always to the same provisions for the renewal and
divestment of such special voting rights in the case of any future Voting Rights
Triggering Event. At any time after voting power to elect directors shall have
become vested and be continuing in the Holders of shares of the Preferred Stock
pursuant to subparagraph (f)(iii)(A) hereof, or if vacancies shall exist in the
offices of directors elected by the Holders of shares of the Preferred Stock, a
proper officer of the Company may, and upon the written request of the Holders
of record of at least 25% of the shares of Preferred Stock then outstanding
addressed to the Secretary of the Company shall, call a special meeting of the
Holders of Preferred Stock, for the purpose of electing the directors which such
Holders are entitled to elect. If such meeting shall not be called by the proper
officer of the Company within 30 days after personal service of said written
request upon the Secretary of the Company, or within 30 days after mailing the
same within the United States by certified mail, addressed to the Secretary of
the Company at its principal executive offices, then the Holders of record of at
least 25% of the outstanding shares of the Preferred Stock may designate in
writing one of their number to call such meeting at the expense of the Company,
and such meeting may be called by the Person so designated upon
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11
the notice required for the annual meetings of stockholders of the Company
and shall be held at the place for holding the annual meetings of stockholders
or such other place in the United States as shall be designated in such notice.
Notwithstanding the provisions of this subparagraph (f)(iii)(B), no such special
meeting shall be called if any such request is received less than 40 days before
the date fixed for the next ensuing annual or special meeting of stockholders of
the Company. Any Holder of shares of the Preferred Stock so designated shall
have, and the Company shall provide, access to the lists of Holders of shares of
the Preferred Stock for purposes of calling a meeting pursuant to the provisions
of this subparagraph (f)(iii)(B).
(C) At any meeting held for the purpose of electing directors at which the
Holders of Preferred Stock shall have the right, voting separately as one
class, to elect directors as aforesaid, the presence in person or by proxy of
the Holders of at least a majority of the outstanding Preferred Stock shall be
required to constitute a quorum of such Preferred Stock.
(D) Any vacancy occurring in the office of a director elected by the
Holders of the Preferred Stock may be filled by the remaining director
elected by such Holders unless and until such vacancy shall be filled by such
Holders.
(iv) In any case in which the Holders of shares of the Preferred Stock
shall be entitled to vote pursuant to this paragraph (f) or pursuant to
Delaware law, each Holder of shares of the Preferred Stock shall be entitled to
one vote for each share of Preferred Stock held. Any action that may be taken
hereunder by the Holders of the Preferred Stock at a meeting may be taken by
written consent of a majority of the Holders of such Preferred Stock.
(g) EXCHANGE. (i) REQUIREMENTS. (A) The Company may, at the sole option of
the Board of Directors (subject to the legal availability of funds
therefor), at any time after the Optional Redemption Date, or at any time prior
to the Optional Redemption Date in the event all Existing Senior Notes are
repurchased, redeemed or repaid in full, exchange all, but not less than all, of
the outstanding shares of Preferred Stock, including any shares of Preferred
Stock issued as payment for dividends, into Exchange Debentures, subject to the
conditions set forth in this subparagraph (g)(i)(A). In order to effect such
exchange, the Company shall (a) if necessary to satisfy the condition set forth
in clause (II) of this subparagraph (g)(i)(A) based upon the written advice of
counsel to the Company, file a registration statement with the Commission
relating to the exchange, and (b) if a registration statement is filed with the
Commission pursuant to clause (a), use its best efforts to cause such
registration statement to be declared effective as soon as practicable by the
Commission unless the opinion referred to in clause (II) of this subparagraph
(g)(i)(A) shall have been subsequently delivered. In order to effectuate such
exchange, the Company shall send a written notice (the "Exchange Notice") of
exchange by mail to each Holder of record
SS_NYL2/174036 8
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12
of shares of Preferred Stock, which notice shall state: (v) that the
Company is exchanging the Preferred Stock into Exchange Debentures pursuant to
this Certificate of Designation; (w) the date fixed for exchange (the "Mandatory
Exchange Date"), which date shall not be less than 15 days nor more than 60 days
following the date on which the Exchange Notice is mailed (except as provided in
the last sentence of this subparagraph (g)(i)(A)); (x) that the Holder is to
surrender to the Company, at the place or places where certificates for shares
of Preferred Stock are to be surrendered for exchange, in the manner designated
in the Exchange Notice, such Holder's certificate or certificates representing
the shares of Preferred Stock to be exchanged; (y) that dividends on the shares
of Preferred Stock to be exchanged shall cease to accrue on the Mandatory
Exchange Date whether or not certificates for shares of Preferred Stock are
surrendered for exchange on the Mandatory Exchange Date unless the Company shall
default in the delivery of Exchange Debentures; and (z) that interest on the
Exchange Debentures shall accrue from the Mandatory Exchange Date whether or not
certificates for shares of Preferred Stock are surrendered for exchange on the
Mandatory Exchange Date. On the Mandatory Exchange Date, if the conditions set
forth in clauses (I) through (VI) of this subparagraph (g)(i)(A) are satisfied,
the Company shall issue Exchange Debentures in exchange for the Preferred Stock
as provided in subparagraph (g)(ii)(A), provided that on the Mandatory Exchange
Date: (I) there shall be legally available funds sufficient therefor (including,
without limitation, legally available funds sufficient therefor under Sections
160 and 170 (or any successor provisions) of the Delaware General Corporation
Law); (II) either (x) a registration statement relating to the Exchange
Debentures shall have been declared effective under the Securities Act of 1933,
as amended (the "Securities Act") prior to such exchange and shall continue to
be in effect on the Mandatory Exchange Date or (y) (i) the Company shall have
obtained a written opinion of counsel that an exemption from the registration
requirements of the Securities Act is available for such exchange and that upon
receipt of such Exchange Debentures pursuant to such exchange made in accordance
with such exemption, each Holder that is not an Affiliate of the Company will
not be subject to any restrictions imposed by the Securities Act upon the resale
thereof and (ii) such exemption is relied upon by the Company for such exchange;
(III) the Exchange Indenture shall have been duly executed by the Company and
the trustee thereunder (the "Trustee") with irrevocable instructions to
authenticate the Exchange Debentures necessary for such exchange, (IV) the
Exchange Indenture and the Trustee shall have been qualified under the Trust
Indenture Act of 1939, as amended; (V) immediately after giving effect to such
exchange, no Default or Event of Default (each as defined in the Exchange
Indenture) would exist under the Exchange Indenture; and (VI) the Company shall
have delivered to the Trustee a written opinion of counsel, dated the date of
the exchange, regarding the satisfaction of the conditions set forth in clauses
(I), (II), (III) and (IV). In the event that the issuance of the Exchange
Debentures is not permitted on the Mandatory Exchange Date or any of the
conditions set forth in clauses (I) through (VI) of the preceding sentence are
not satisfied on the Mandatory Exchange Date, the Company shall use its best
efforts to satisfy such conditions and effect such exchange as soon as
practicable.
SS_NYL2/174036 8
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13
(B) Upon any exchange pursuant to subparagraph (g)(i)(A) hereof, the
Holders of outstanding shares of Preferred Stock shall be entitled to
receive a principal amount of Exchange Debentures for shares of Preferred Stock,
the liquidation preference of which, plus the amount of accumulated and unpaid
dividends (including a prorated dividend for the period from the immediately
preceding Dividend Payment Date to the Mandatory Exchange Date) with respect to
which, equals such amount; PROVIDED that the Company at its option may pay cash
for any or all accrued and unpaid dividends in lieu of issuing Exchange
Debentures in respect of such dividends.
(ii) PROCEDURE FOR EXCHANGE. (A) On or before the Mandatory Exchange Date,
each Holder of Preferred Stock shall surrender the certificate or
certificates representing such shares of Preferred Stock, in the manner and at
the place designated in the Exchange Notice. The Company shall cause the
Exchange Debentures to be executed on the Mandatory Exchange Date and, upon
surrender in accordance with the Exchange Notice of the certificates for any
shares of Preferred Stock so exchanged (properly endorsed or assigned for
transfer, if the notice shall so state), such shares shall be exchanged by the
Company into Exchange Debentures. The Company shall pay interest on the Exchange
Debentures at the rate and on the dates described in the Memorandum.
(B) If notice has been mailed as aforesaid, and if before the Mandatory
Exchange Date (1) the Exchange Indenture shall have been duly executed and
delivered by the Company and the Trustee and (2) all Exchange Debentures
necessary for such exchange shall have been duly executed by the Company and
delivered to the Trustee with irrevocable instructions to authenticate the
Exchange Debentures necessary for such exchange, then dividends will cease to
accrue on the Preferred Stock on and after the Mandatory Exchange Date and the
rights of the Holders of shares of the Preferred Stock as stockholders of the
Company shall cease on and after the Mandatory Exchange Date (except the right
to receive Exchange Debentures), and the Person or Persons entitled to receive
the Exchange Debentures issuable upon exchange shall be treated for all purposes
as the registered Holder or Holders of such Exchange Debentures as of the
Mandatory Exchange Date.
(h) CHANGE OF CONTROL. (i) Upon the occurrence of a Change of Control, the
Company shall be required (subject to any contractual and other
restrictions with respect thereto existing on the Closing Date and the legal
availability of funds therefor) to make an Offer to Purchase to each Holder of
shares of Preferred Stock to repurchase all or any part of such Holder's shares
of Preferred Stock at a cash purchase price equal to 101% of the liquidation
preference thereof, plus accrued and unpaid dividends (if any) to the date of
purchase (the "Change of Control Payment").
(ii) Within 30 days following any Change of Control, the Company shall
mail a notice to such Holder stating: (A) that the Offer to Purchase is
being made pursuant to this Certificate of Designation and that, to the extent
lawful, all shares of Preferred Stock
SS_NYL2/174036 8
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14
tendered will be accepted for payment; (B) the purchase price and the
purchase date, which shall be no earlier than 30 days nor later than 40 days
from the date such notice is mailed (the "Change of Control Payment Date"); (C)
that any shares of Preferred Stock not tendered will continue to accrue
dividends in accordance with the terms of this Certificate of Designation; (D)
that, unless the Company defaults in the payment of the Change of Control
Payment, all shares of Preferred Stock accepted for payment pursuant to the
Offer to Purchase shall cease to accrue dividends on and after the Change of
Control Payment Date and all rights of the Holders of such Preferred Stock shall
terminate on and after the Change of Control Date; and (E) a description of the
procedures to be followed by such Holder in order to have its shares of
Preferred Stock repurchased.
(iii) On the Change of Control Payment Date, (A) the Company shall, to the
extent lawful, (1) accept for payment shares of Preferred Stock tendered
pursuant to the Offer to Purchase and (2) promptly mail to each Holder of shares
of Preferred Stock so accepted payment in an amount equal to the Change of
Control Payment for such shares and (B) unless the Company defaults in the
payment for the shares of Preferred Stock tendered pursuant to the Offer to
Purchase, dividends shall cease to accrue with respect to the shares of
Preferred Stock tendered and all rights of Holders of such tendered shares shall
terminate, except for the right to receive payment therefor, on the Change of
Control Payment Date. The Company shall publicly announce the results of the
Offer to Purchase on or as soon as practicable after the Change of Control
Payment Date.
(iv) The Company shall comply with Rule 14e-1 under the Exchange Act and
any securities laws and regulations to the extent such laws and regulations are
applicable to the repurchase of shares of the Preferred Stock in connection
with a Change of Control.
(i) CONVERSION OR EXCHANGE. The Holders of shares of Preferred Stock
shall not have any rights hereunder to convert such shares into or exchange
such shares for shares of any other class or classes or of any other series of
any class or classes of Capital Stock of the Company.
(j) PREEMPTIVE RIGHTS. No shares of Preferred Stock shall have any rights
of preemption whatsoever as to any securities of the Company, or any warrants,
rights or options issued or granted with respect thereto, regardless of how
such securities or such warrants, rights or options may be designated, issued or
granted.
(k) REISSUANCE OF PREFERRED STOCK. Shares of Preferred Stock that have
been issued and reacquired in any manner, including shares purchased or
redeemed or exchanged, shall (upon compliance with any applicable provisions of
the laws of Delaware) have the status of authorized but unissued shares of
preferred stock of the Company undesignated as to series and may be designated
or redesignated and issued or reissued, as
SS_NYL2/174036 8
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15
the case may be, as part of any series of preferred stock of the Company,
PROVIDED that any issuance of such shares as Preferred Stock must be in
compliance with the terms hereof.
(l) BUSINESS DAY. If any payment, redemption or exchange shall be
required by the terms hereof to be made on a day that is not a Business Day,
such payment, redemption or exchange shall be made on the immediately
succeeding Business Day.
(m) CERTAIN ADDITIONAL PROVISIONS.(1) LIMITATION ON CONSOLIDATED DEBT.
The Company shall not, and shall not permit any Restricted Subsidiary to,
Incur any Debt (including Acquired Debt), other than Permitted Debt, unless (i)
with respect to Debt Incurred under this clause (i), the Debt so Incurred and
outstanding is in an aggregate principal amount that does not exceed 2.25 times,
with respect to Capital Stock sales after June 1, 1997 and on or prior to March
31, 1998, or 2.00 times, with respect to Capital Stock sales after March 31,
1998, the aggregate amount of net cash proceeds (or 80% of the Fair Market Value
of property other than cash) received by the Company after June 1, 1997 from the
issuance and sale (other than to a Restricted Subsidiary) of shares of its
Capital Stock (other than the Preferred Stock and Redeemable Stock), or any
options, warrants or other rights to purchase such Capital Stock (other than
Redeemable Stock), other than (x) proceeds applied for use as a Directed
Investment (unless such designation has been revoked by the Board of Directors
and the Company either abandons its plans to make such Investment or is able to
make such Investment pursuant to subparagraph (m)(2) (other than as a Directed
Investment)) and (y) proceeds which have been included in the computation of the
amounts available for Restricted Payments pursuant to clause (c)(2) of
subparagraph (m)(2), to the extent the inclusion thereof was necessary to allow
a subsequent Restricted Payment to be made, or (ii) on the date of such
Incurrence, after giving effect to the Incurrence of such Debt (or Acquired
Debt) and the receipt and application of the net proceeds thereof (and, if the
net proceeds of such new Debt are used to acquire a Person that becomes a
Restricted Subsidiary or an operating business of the Company or a Restricted
Subsidiary, to all terms of such acquisition) on a PRO FORMA basis, the
Operating Cash Flow to Consolidated Interest Expense Ratio would equal or exceed
1.75 to 1.
(2) LIMITATION ON RESTRICTED PAYMENTS. The Company shall not, directly or
indirectly:
(i) declare or pay any dividend on, or make any distribution to the
holders of, any Junior Securities (other than dividends or distributions
payable solely in its Junior Securities (other than Redeemable Stock) or in
options, warrants or other rights to purchase Junior Securities (other than
Redeemable Stock));
(ii) purchase, redeem or otherwise acquire or retire for value, or permit
any Restricted Subsidiary to, directly or indirectly, purchase, redeem or
otherwise acquire or retire for value (other than value consisting solely of
Junior Securities of
SS_NYL2/174036 8
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16
the Company that are not Redeemable Stock or options, warrants or other
rights to acquire Junior Securities that are not Redeemable Stock), any
Junior Securities of the Company (including options, warrants or other
rights to acquire Junior Securities); or
(iii) make, or permit any Restricted Subsidiary, directly or indirectly,
to make, any Investment (other than any Permitted Investment) in any Person
(other than in a Restricted Subsidiary or a Person that becomes a Restricted
Subsidiary as a result of such Investment);
(each of the foregoing actions set forth in clauses (i) through (iii), other
than any such action that is a Permitted Investment or a Permitted Distribution,
being referred to as a "Restricted Payment") unless, at the time of such
Restricted Payment, and after giving effect thereto:
(a) no Default shall have occurred and be continuing;
(b) except with respect to Investments, after giving effect, on a PRO
FORMA basis, to such Restricted Payment and the Incurrence of any Debt the net
proceeds of which are used to finance such Restricted Payment, the Consolidated
Debt to Annualized Operating Cash Flow Ratio would not have exceeded 7.0 to 1;
and
(c) after giving effect to such Restricted Payment on a PRO FORMA basis,
the aggregate amount of all Restricted Payments made on or after February 15,
1994 shall not exceed:
(1) 50% of the Consolidated Net Income (or, in the case of a
Consolidated Net Loss, minus 100% of such deficit) of the Company for the
period (taken as one accounting period) from April 1, 1994 to the last day
of the last fiscal quarter preceding the date of the proposed Restricted
Payment, plus
(2) the aggregate net proceeds, including the fair market value of
property other than cash (as determined by the Board of Directors, whose
good faith determination shall be conclusive and evidenced by a Board
Resolution), received by the Company from the issuance and sale (other
than to a Restricted Subsidiary) after February 15, 1994 of its Junior
Securities (other than Redeemable Stock), or any options, warrants or
other rights to purchase such Junior Securities (other than Redeemable
Stock), and from the issuance and sale, prior to the Closing Date, of the
Class A Preferred Stock and the Class B Preferred Stock, other than (x)
(except for purposes of determining whether an Investment under clause
(iii) above is permitted) Junior Securities or options, warrants or other
rights to purchase Junior Securities (or shares issuable upon exercise
thereof) issued or sold in the PowerFone Merger, Questar/AMI Share
Exchanges, Motorola Business Acquisition and NTT transactions described in
the Company's prospectus, dated February 9, 1994, relating to the
SS_NYL2/174036 8
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17
Company's Senior Redeemable Discount Notes due 2004, and (y) Capital Stock
or options, warrants or other rights to purchase Capital Stock (or
shares issuable upon exercise thereof), the proceeds of the issuance of
which is used (A) to make a Directed Investment (unless such designation
has been revoked by the Board of Directors and the Company is able to make
such Investment pursuant to this subparagraph (m)(2) (other than as a
Directed Investment)) or (B) to Incur Debt under clause (i) of
subparagraph (m)(1) (unless and until the amount of any such Debt (I) is
treated as newly issued Debt and could be Incurred in accordance with
subparagraph (m)(1) (other than under clause (i) thereof) or (II) has been
repaid or refinanced with the proceeds of Debt Incurred in accordance with
subparagraph (m)(1) (other than under clause (i) thereof) or (III) has
otherwise been repaid), plus
(3) the aggregate net proceeds, including the fair market value of
property other than cash (as determined by the Board of Directors, whose
good faith determination shall be conclusive and evidenced by a Board
Resolution), received by the Company from the issuance or sale (other than
to a Restricted Subsidiary) after February 15, 1994 of any Junior
Securities of the Company (other than Redeemable Stock), or any options,
warrants or other rights to purchase such Junior Securities (other
than Redeemable Stock), upon the conversion of, or exchange for, Debt of
the Company or a Restricted Subsidiary.
The foregoing limitations in this subparagraph (m)(2) do not limit or
restrict the making of any Permitted Distribution, Permitted Investment or
Directed Investment, and none of a Permitted Distribution, Permitted Investment
or Directed Investment shall be counted as a Restricted Payment for purposes of
clause (c) above. In addition, the foregoing limitations do not prevent the
Company from (I) paying a dividend on Junior Securities of the Company within 60
days after the declaration thereof if, on the date when the dividend was
declared, the Company could have paid such dividend in accordance with the
provisions of the Certificate of Designation, (II) repurchasing Junior
Securities of the Company (including options, warrants or other rights to
acquire such Junior Securities) from employees or former employees of the
Company or any Subsidiary thereof for consideration not to exceed $500,000 in
the aggregate in any fiscal year (with repurchases pursuant to this clause (II)
not being counted as Restricted Payments for purposes of clause (c) above) or
(III) the repurchase, redemption or other acquisition for value of Junior
Securities of the Company to the extent necessary to prevent the loss or secure
the renewal or reinstatement of any license or franchise held by the Company or
any of its Subsidiaries from any governmental agency; or (IV) Investments in
Unrestricted Subsidiary Funding Company so long as (x) such Investments are
invested in McCaw International Ltd. and (y) McCaw International Ltd. is a
Subsidiary of the Company.
Notwithstanding the foregoing limitations in this subparagraph (m)(2), the
Company shall be permitted to make any Investment in a Person that is not
(either before or after
SS_NYL2/174036 8
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18
giving effect thereto) a Subsidiary of the Company, PROVIDED that,
immediately after giving effect thereto the amount equal to (a) the aggregate
amount of all Investments made pursuant to this paragraph minus (b) all cash
received by the Company or any Restricted Subsidiary from the sale, transfer or
other disposition to a Person that is not a Subsidiary of the Company of any
such Investment (or portion thereof) included in such aggregate amount (with the
amount of cash to be counted for this purpose not to exceed the amount of such
Investment (or portion thereof) so included), shall not exceed the greater of
(i) $250 million and (ii) 2% of the Total Market Value of Equity of the Company
as of such time. For purposes of determining the aggregate amount of Investments
referred to in clause (a), the amount of any Investment shall be deemed to equal
the cash portion thereof plus the fair market value of any non-cash portion
thereof (to the extent such portion constitutes an Investment) at the time such
Investment is made, as determined by the Board of Directors (whose good faith
determination shall be conclusive and evidenced by a Board Resolution).
Notwithstanding the foregoing, no Investment in a Person that immediately
thereafter would be a Restricted Subsidiary shall be a Restricted Payment.
In addition, if any Person in which an Investment is made, which Investment
constitutes a Restricted Payment when made, thereafter becomes a Restricted
Subsidiary, all such Investments previously made in such Person shall no longer
be counted as Restricted Payments for purposes of calculating the aggregate
amount of Restricted Payments pursuant to clause (c) of the third preceding
paragraph or the aggregate amount of Investments pursuant to clause (a) of the
immediately preceding paragraph, in each case to the extent such Investments
would otherwise be so counted.
For purposes of clause (c)(3) above, the net proceeds received by the
Company from the issuance or sale of its Junior Securities either upon the
conversion of, or exchange for, Debt of the Company or any Restricted Subsidiary
shall be deemed to be an amount equal to (a) the sum of (i) the principal amount
or accreted value (whichever is less) of such Debt on the date of such
conversion or exchange and (ii) the additional cash consideration, if any,
received by the Company upon such conversion or exchange, less any payment on
account of fractional shares, minus (b) all expenses incurred in connection with
such issuance or sale. In addition, for purposes of clause (c)(3) above, the net
proceeds received by the Company from the issuance or sale of its Junior
Securities upon the exercise of any options or warrants of the Company or any
Restricted Subsidiary shall be deemed to be an amount equal to (a) the
additional cash consideration, if any, received by the Company upon such
exercise, minus (b) all expenses incurred in connection with such issuance or
sale.
For purposes of this subparagraph (m)(2), if a particular Restricted
Payment involves a non-cash payment, including a distribution of assets,
then such Restricted Payment shall be deemed to be an amount equal to the cash
portion of such Restricted Payment, if any, plus an amount equal to the fair
market value of the non-cash portion of such Restricted Payment,
SS_NYL2/174036 8
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19
as determined by the Board of Directors (whose good faith determination shall
be conclusive and evidenced by a Board Resolution).
(3) RESTRICTED SUBSIDIARIES. The Company shall not designate any
Restricted Subsidiary as an Unrestricted Subsidiary, and shall not itself,
and shall not permit any Restricted Subsidiary to, sell, convey, transfer or
otherwise dispose of any assets, other than in the ordinary course of business,
to any Unrestricted Subsidiary or any Person that becomes an Unrestricted
Subsidiary as part of such transaction, unless, after giving effect to any such
action, the assets (not including any assets so sold, conveyed, transferred or
otherwise disposed of, other than in the ordinary course of business, to any
Unrestricted Subsidiary or any Person that becomes an Unrestricted Subsidiary as
part of such transaction) and business of the Company and its remaining
Restricted Subsidiaries generated at least 90% of Digital Mobile-SMR Operating
Cash Flow in the fiscal quarter of the Company most recently completed prior to
the date of such action.
The Board of Directors may designate any existing Unrestricted Subsidiary
or any Person that is about to become a Subsidiary of the Company as a
Restricted Subsidiary if, after giving effect to such action (and, if such
designation is made in connection with the acquisition of a Person or an
operating business that is about to become a Subsidiary of the Company, after
giving effect to all terms of such acquisition) on a pro forma basis, on the
date of such action, the Debt of such Unrestricted Subsidiary outstanding
immediately prior to such designation would have been permitted to be Incurred
(and shall be deemed to have been Incurred) for all purposes of this Certificate
of Designation.
Subject to the second preceding paragraph and compliance with subparagraph
(m)(2), the Board of Directors may designate any Restricted Subsidiary as an
Unrestricted Subsidiary.
The designation by the Board of Directors of a Restricted Subsidiary as an
Unrestricted Subsidiary shall, for all purposes of subparagraph (m)(2)
(including clause (b) thereof), be deemed to be a Restricted Payment of an
amount equal to the fair market value of the Company's ownership interest in
such Subsidiary (including, without duplication, such indirect ownership
interest in all Subsidiaries of such Subsidiary), as determined by the Board of
Directors in good faith and evidenced by a Board Resolution.
Notwithstanding the foregoing provisions of this subparagraph (m)(3), the
Board of Directors may not designate a Subsidiary of the Company to be an
Unrestricted Subsidiary if, after such designation, (a) the Company or any of
its other Restricted Subsidiaries (i) provides credit support for, or a
Guarantee of, any Debt of such Subsidiary (including any undertaking, agreement
or instrument evidencing such Debt) or (ii) is directly or indirectly liable for
any Debt of such Subsidiary, (b) a default with respect to any Debt of such
Subsidiary (including any right which the holders thereof may have to take
enforcement
SS_NYL2/174036 8
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20
action against such Subsidiary) would permit (upon notice, lapse of time or
both) any holder of any other Debt of the Company or any Restricted
Subsidiary to declare a default on such other Debt or cause the payment thereof
to be accelerated or payable prior to its final scheduled maturity or (c) such
Subsidiary owns any Capital Stock of, or owns or holds any Lien on any property
of, any Restricted Subsidiary which is not a Subsidiary of the Subsidiary to be
so designated.
The Board of Directors, from time to time, may designate any Person that
is about to become a Subsidiary of the Company as an Unrestricted
Subsidiary, and may designate any newly-created Subsidiary as an Unrestricted
Subsidiary, if at the time such Subsidiary is created it contains no assets
(other than such DE MINIMIS amount of assets then required by law for the
formation of corporations) and no Debt. Subsidiaries of the Company that are not
designated by the Board of Directors as Restricted or Unrestricted Subsidiaries
shall be deemed to be Restricted Subsidiaries. Notwithstanding any provisions of
this subparagraph (m)(3), all Subsidiaries of an Unrestricted Subsidiary shall
be Unrestricted Subsidiaries. The Board of Directors shall not change the
designation of a Subsidiary of the Company more than twice in any period of five
years.
(4) TRANSACTIONS WITH AFFILIATES. The Company shall not, and shall not
permit any Restricted Subsidiary to, directly or indirectly, enter into any
transaction (including the purchase, sale, lease or exchange of any property or
the rendering of any service) or series of related transactions with any
Affiliate of the Company on terms that are less favorable to the Company or such
Restricted Subsidiary, as the case may be, than those which might be obtained at
the time of such transaction from a Person that is not such an Affiliate;
PROVIDED, HOWEVER, that this subparagraph (m)(4) shall not limit, or be
applicable to, (i) any transaction between Unrestricted Subsidiaries not
involving the Company or any Restricted Subsidiary, (ii) any transaction between
the Company and any Restricted Subsidiary or between Restricted Subsidiaries or
(iii) any Permitted Transactions. In addition, any transaction or series of
related transactions, other than Permitted Transactions, between the Company or
any Restricted Subsidiary and any Affiliate of the Company (other than a
Restricted Subsidiary) involving an aggregate consideration of $5 million or
more must be approved in good faith by a majority of the Company's Disinterested
Directors (of which there must be at least one) and evidenced by a Board
Resolution. For purposes of this subparagraph (m)(4), any transaction or series
of related transactions between the Company or any Restricted Subsidiary and an
Affiliate of the Company that is approved by a majority of the Disinterested
Directors (of which there must be at least one) and evidenced by a Board
Resolution shall be deemed to be on terms as favorable as those that might be
obtained at the time of such transaction (or series of transactions) from a
Person that is not such an Affiliate and thus shall be permitted under this
subparagraph (m)(4).
(5) ACTIVITIES OF THE COMPANY AND RESTRICTED SUBSIDIARIES. The Company
shall not, and shall not permit any Restricted Subsidiary to, engage in any
business other
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than the telecommunications business and related activities and services,
including such businesses, activities and services as the Company and the
Restricted Subsidiaries are engaged in on the Closing Date.
(6) PROVISION OF FINANCIAL INFORMATION. Whether or not the Company is
subject to Section 13(a) or 15(d) of the Exchange Act, or any successor
provision thereto, the Company shall file with the Commission the annual
reports, quarterly reports and other documents which the Company would have been
required to file with the Commission pursuant to such Section 13(a) or 15(d) or
any successor provision thereto if the Company were subject thereto, such
documents to be filed with the Commission on or prior to the respective dates
(the "Required Filing Dates") by which the Company would have been required to
file them. The Company shall also in any event (a) within 15 days of each
Required Filing Date (i) transmit by mail to all Holders at their registered
addresses, without cost to such Holders, and (ii) file with the Transfer Agent
copies of the annual reports, quarterly reports and other documents which the
Company would have been required to file with the Commission pursuant to Section
13(a) or 15(d) of the Exchange Act or any successor provisions thereto if the
Company were subject thereto and (b) if filing such documents by the Company
with the Commission is not permitted under the Exchange Act, promptly upon
written request supply copies of such documents to any prospective Holder. The
Transfer Agent's receipt of such reports, information and documents shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein.
(7) SENIOR SUBORDINATED DEBT. So long as any Preferred Stock is
outstanding, the Company shall not Incur any Debt, other than the Exchange
Debentures, that is expressly made subordinated in right of payment to any
Senior Debt (as defined in the Exchange Indenture) unless such Debt, by its
terms and by the terms of any agreement or instrument pursuant to which such
Debt is outstanding, is expressly made pari passu with, or subordinate in right
of payment to, the Exchange Debentures pursuant to provisions substantially
similar to those contained in the Exchange Indenture; PROVIDED that the
foregoing limitations shall not apply to distinctions between categories of
Senior Debt that exist by reason of any Liens or Guarantees arising or created
in respect of some but not all Senior Debt.
(8) MERGER, SALE OF ASSETS, ETC. The Company (x) shall not, in any
transaction or series of related transactions, merge or consolidate with or
into, or sell, assign, convey, transfer, lease or otherwise dispose of its
properties and assets substantially as an entirety to, any Person, and (y) shall
not permit any of its Restricted Subsidiaries to enter into any such transaction
or series of transactions if such transaction or series of transactions, in the
aggregate, would result in a sale, assignment, conveyance, transfer, lease or
other disposition of the properties and assets of the Company and its Restricted
Subsidiaries, taken as a whole, substantially as an entirety to any Person,
unless, in each case
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(x) or (y), at the time and after giving effect thereto (i) either: (A) if
the transaction or series of transactions is a consolidation of the Company with
or a merger of the Company with or into any other Person, the Company shall be
the surviving Person of such merger or consolidation, or (B) the Person formed
by any consolidation with or merger with or into the Company, or to which the
properties and assets of the Company or the Company and its Restricted
Subsidiaries, taken as a whole, as the case may be, substantially as an entirety
are sold, assigned, conveyed, leased or otherwise transferred (any such
surviving Person or transferee Person referred to in this clause (B) being the
"Surviving Entity"), shall be a corporation, partnership or trust organized and
existing under the laws of the United States of America, any state thereof or
the District of Columbia and the Preferred Stock shall be converted into or
exchanged for and shall become shares of such Surviving Entity having in respect
of such Surviving Entity substantially the same powers, preferences and relative
participating, optional or other special rights and the qualifications,
limitations or restrictions thereon that the Preferred Stock had immediately
prior to such transaction, and (ii) immediately before and immediately after
giving effect to such transaction or series of transactions on a pro forma basis
(including any Debt Incurred or anticipated to be Incurred in connection with or
in respect of such transaction or series of transactions), no Default shall have
occurred and be continuing, and (iii) the Consolidated Net Worth of the Company
or the Surviving Entity, as the case may be, shall be equal to or greater than
that of the Company immediately prior to such transaction or series of
transactions; PROVIDED, HOWEVER, that the foregoing requirements shall not apply
to any transaction or series of transactions involving the sale, assignment,
conveyance, transfer, lease or other disposition of the properties and assets by
any Restricted Subsidiary to any other Restricted Subsidiary, or the merger or
consolidation of any Restricted Subsidiary with or into any other Restricted
Subsidiary.
In connection with any consolidation, merger, sale, assignment, conveyance,
transfer, lease or other disposition contemplated by the foregoing
provisions, the Company shall deliver, or cause to be delivered, to the Transfer
Agent, an Officers' Certificate, stating that such consolidation, merger, sale,
assignment, conveyance, transfer, lease or other disposition complies with the
requirements of this Certificate of Designation, and an opinion of counsel that
the conditions of this subparagraph (m)(8) have been complied with. Each such
Officers' Certificate shall set forth the manner of determination of the
Consolidated Net Worth in accordance with clause (iii) of the preceding
paragraph.
For all purposes of the Certificate of Designation and the Preferred Stock
(including the provisions described in the two immediately preceding
paragraphs and subparagraphs (m)(1) and (m)(3)), Subsidiaries of any Surviving
Entity shall, upon such transaction or series of transactions, become Restricted
Subsidiaries or Unrestricted Subsidiaries as provided pursuant to subparagraph
(m)(3) and all Debt of the Surviving Entity and its Subsidiaries that was not
Debt of the Company and its Subsidiaries immediately prior to such
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23
transaction or series of transactions shall be deemed to have been
Incurred upon such transaction or series of transactions.
(n) DEFINITIONS. As used in this Certificate of Designation, the following
terms shall have the following meanings (with terms defined in the singular
having comparable meanings when used in the plural and vice versa), unless the
context otherwise requires. Whenever this Certificate of Designation requires
that a particular ratio or amount be calculated with respect to a specified
period after giving effect to certain transactions or events on a pro forma
basis, such calculation shall be made as if the transactions or events occurred
on the first day of such period, unless otherwise specified. All accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles (whether or not such is
indicated herein) and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as are
generally accepted at the date of such computation.
"Acquired Debt" means Debt of a Person existing at the time such Person
becomes a Restricted Subsidiary or assumed by the Company or a Restricted
Subsidiary in connection with the acquisition of assets from such Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such Person. "Affiliate" shall be deemed to include, but only for
purposes of subparagraph (m)(4) and without limiting the application of the
preceding sentence for the purpose of such or any other purpose, any Person
owning, directly or indirectly, (i) 10% or more of the Company's outstanding
common stock or (ii) securities having 10% or more of the total voting power of
the Company's Voting Stock. For the purposes of this definition, "control" when
used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. No
individual shall be deemed to be controlled by or under common control with any
specified Person solely by virtue of his or her status as an employee or officer
of such specified Person or of any other Person controlled by or under common
control with such specified Person.
"Annualized Operating Cash Flow" means, for any fiscal quarter, the
Operating Cash Flow for such fiscal quarter multiplied by four.
"Average Life" means, at any date of determination with respect to any
Debt, the quotient obtained by dividing (i) the sum of the products of (a)
the number of years from such date of determination to the dates of each
successive scheduled principal payment of
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24
such Debt and (b) the amount of such principal payment by (ii) the sum of all
such principal payments.
"Beneficial Owner" means a beneficial owner as defined in Rules 13d-3 and
13d-5 under the Exchange Act (or any successor rules), including the provision
of such Rules that a person shall be deemed to have beneficial ownership of all
securities that such person has a right to acquire within 60 days, PROVIDED
that a person shall not be deemed a beneficial owner of, or to own beneficially,
any securities if such beneficial ownership (1) arises solely as a result of a
revocable proxy delivered in response to a proxy or consent solicitation made
pursuant to, and in accordance with, the Exchange Act and the applicable rules
and regulations thereunder and (2) is not also then reportable on Schedule 13D
(or any successor schedule) under the Exchange Act.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors (unless the context specifically requires that such resolution be
adopted by a majority of the Disinterested Directors, in which case by a
majority of such directors) and to be in full force and effect on the date of
such certification and delivered to the Transfer Agent.
"Business Day" means any day except a Saturday or Sunday or other day on
which commercial banks in The City of New York are required or authorized by
law or other governmental action to be closed.
"Capital Lease Obligations" of any Person means the obligations to pay
rent or other amounts under lease of (or other Debt arrangements conveying
the right to use) real or personal property of such Person which are required to
be classified and accounted for as a capital lease or a liability on the face of
a balance sheet of such Person determined in accordance with generally accepted
accounting principles and the amount of such obligations shall be the
capitalized amount thereof in accordance with generally accepted accounting
principles and the stated maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon
which such lease may be terminated by the lessee without payment of a penalty.
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of stock of, or other
ownership interests in, such Person.
"Change of Control" means the occurrence of any of the following events:
(a) any person (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act and the regulations thereunder) is or becomes the
Beneficial Owner, directly or indirectly, of more than 50% of the total
Voting Stock or Total Common
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25
Equity of the Company; PROVIDED that no Change of Control shall be deemed
to occur pursuant to this clause (a) (x) if the person is a corporation
with outstanding debt securities having a maturity at original issuance of
at least one year and if such debt securities are rated Investment Grade
by S&P or Moody's for a period of at least 90 consecutive days, beginning
on the date of such event (which period will be extended up to 90
additional days for as long as the rating of such debt securities is under
publicly announced consideration for possible downgrading by the
applicable rating agency), or (y) if the person is a corporation (1) that
is not, and does not have any outstanding debt securities that are, rated
by S&P, Moody's or any other rating agency of national standing at any
time during a period of 90 consecutive days beginning on the date of such
event (which period will be extended up to an additional 90 days for as
long as any such rating agency has publicly announced that such
corporation or debt thereof will be rated), unless after such date but
during such period debt securities of such corporation having a maturity
at original issuance of at least one year are rated Investment Grade by
S&P or Moody's and remain so rated for the remainder of the period
referred to in clause (x) above and (2) that, when determined as of the
Trading Day immediately before and the Trading Day immediately after the
date of such event, has Total Common Equity of at least $10 billion
(PROVIDED that, solely for the purpose of calculating Total Common Equity
as of such later Trading Day, the average Closing Price of the Common
Stock of such person shall be deemed to equal the Closing Price of such
Common Stock on such later Trading Day, subject to the last sentence of
the definition of "Total Common Equity"); or
(b) the Company consolidates with, or merges with or into, another Person
or sells, assigns, conveys, transfers, leases or otherwise disposes of all
or substantially all of its assets to any Person, or any Person
consolidates with, or merges with or into, the Company, in any such event
pursuant to a transaction in which the outstanding Voting Stock of the
Company is converted into or exchanged for cash, securities or other
property, other than any such transaction where (i) the outstanding Voting
Stock of the Company is converted into or exchanged for (1) Voting Stock
(other than Redeemable Stock) of the surviving or transferee Person or (2)
cash, securities and other property in an amount which could be paid by
the Company as a Restricted Payment under the Exchange Indenture and (ii)
immediately after such transaction no person (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act and the regulations
thereunder) is the Beneficial Owner, directly or indirectly, of more than
50% of the total Voting Stock or Total Common Equity of the surviving or
transferee Person; PROVIDED that no Change of Control shall be deemed to
occur pursuant to this clause (b), (x) if the surviving or transferee
Person or the person referred to in clause (b)(ii) is a corporation with
outstanding debt securities having a maturity at original issuance of at
least one year and if such debt securities are rated Investment Grade by
S&P or Moody's for a period of at least 90
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26
consecutive days, beginning on the date of such event (which period will
be extended up to 90 additional days for as long as the rating of such
debt securities is under publicly announced consideration for possible
downgrading by the applicable rating agency), or (y) if the surviving or
transferee Person or such other person is a corporation (1) that is not,
and does not have any outstanding debt securities that are, rated by S&P,
Moody's or any other rating agency of national standing at any time during
a period of 90 consecutive days beginning on the date of such event (which
period will be extended up to an additional 90 days for as long as any
such rating agency has publicly announced that such corporation or debt
thereof will be rated), unless after such date but during such period debt
securities of such corporation having a maturity at original issuance of
at least one year are rated Investment Grade by S&P or Moody's and remain
so rated for the remainder of the period referred to in clause (x) above
and (2) that, when determined as of the Trading Day immediately before and
the Trading Day immediately after the date of such event, has Total Common
Equity of at least $10 billion (PROVIDED that, solely for the purpose of
calculating Total Common Equity as of such later Trading Day, the average
Closing Price of the Common Stock of such person shall be deemed to equal
the Closing Price of such Common Stock on such later Trading Day, subject
to the last sentence of the definition of "Total Common Equity"); or
(c) during any consecutive two-year period, individuals who at the
beginning of such period constituted the Board of Directors (together with
any directors who are members of the Board of Directors on the date hereof
and any new directors whose election by such Board of Directors or whose
nomination for election by the stockholders of the Company was approved by
a vote of 66 2/3% of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors then in office.
Any event that would constitute a Change of Control pursuant to clause (a)
or (b) above (i) but for the proviso thereto shall not be deemed to be a
Change of Control until such time (if any) as the conditions described in such
proviso cease to have been met and (ii) if and to the extent resulting from any
restructuring transaction or any sale or assignment of all or substantially all
of the assets and liabilities of the Company to, or merger or consolidation of
the Company with, any Person (any such transaction, a "Restructuring
Transaction") effected at substantially the same time as and in connection with
any of the Permitted Transactions described in clause (i) of the definition of
the term "Permitted Transactions" shall not constitute a Change of Control so
long as the Persons who, immediately prior to the closing of such Restructuring
Transaction and the particular Permitted Transaction being consummated at
substantially the same time and in connection therewith (the "Restructuring
Closing"), were the Beneficial Owners, directly or indirectly, of more than 50%
of the total Voting Stock and more than 50% of the Total Common Equity
SS_NYL2/174036 8
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27
of the Company would remain, immediately after such Restructuring Closing
(and after taking into account all issuances of securities in such Restructuring
Transaction and related Permitted Transaction), the Beneficial Owners, directly
or indirectly, of more than 50% of the total Voting Stock and more than 50% of
the Total Common Equity of the Company (or the surviving transferee Person, as
the case may be); provided that, immediately after any transaction or
combination of transactions described in this clause (ii), no person (as such
term is used in Sections 13(d) and 14(a) of the Exchange Act and the regulations
thereunder) is the ultimate Beneficial Owner of more than 50% of the total
Voting Stock or more than 50% of the Total Common Equity of the Company (or the
surviving transferee Person, as the case may be) unless such person (as so
defined) was the Beneficial Owner of more than 50% of the total Voting Stock and
more than 50% of the Total Common Equity of the Company immediately before such
transaction or combination of transactions. Notwithstanding anything to the
contrary contained in this Certificate of Designation, no Change of Control
shall be deemed to occur under this Certificate of Designation until the earlier
of the day after (x) the Optional Redemption Date (as defined in subparagraph
(e)(i)(A)) and (y) the date all Existing Senior Notes are repurchased, redeemed
or repaid in full, and if any Existing Senior Notes are outstanding at the time
of an occurrence of an event set forth in (a), (b) or (c) above, such occurrence
shall not be deemed to be a Change of Control under this Certificate of
Designation until such Existing Senior Notes are repurchased, redeemed or repaid
in full, in which case the day after the date on which all Existing Senior Notes
are so repaid, redeemed or repurchased will be deemed to be the date on which
such Change of Control occurred.
"Class A Preferred Stock" means 26,941,933 shares of Class A Convertible
Redeemable Preferred Stock, par value $.01 per share, of the Company.
"Class B Preferred Stock" means 82 shares of Class B Convertible Preferred
Stock, par value $.01 per share, of the Company.
"Class C Preferred Stock" means 26,941,933 shares of Class C Convertible
Redeemable Preferred Stock, par value $.01 per share, of the Company.
"Closing Date" means the date on which the Original Preferred Stock is
originally issued under this Certificate of Designation.
"Closing Price" on any Trading Day with respect to the per share price of
any shares of Capital Stock means the last reported sale price regular way or,
in case no such reported sale takes place on such day, the average of the
reported closing bid and asked prices regular way, in either case on the New
York Stock Exchange or, if such shares of Capital Stock are not listed or
admitted to trading on such exchange, on the principal national securities
exchange on which such shares are listed or admitted to trading or, if not
listed or admitted to trading on any national securities exchange, on the Nasdaq
Stock Market or, if such shares
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28
are not listed or admitted to trading on any national securities exchange
or quoted on the Nasdaq Stock Market but the issuer is a Foreign Issuer (as
defined in Rule 3b-4(b) under the Exchange Act) and the principal securities
exchange on which such shares are listed or admitted to trading is a Designated
Offshore Securities Market (as defined in Rule 902(a) under the Securities Act),
the average of the reported closing bid and asked prices regular way on such
principal exchange, or, if such shares are not listed or admitted to trading on
any national securities exchange or quoted on the Nasdaq Stock Market and the
issuer and principal securities exchange do not meet such requirements, the
average of the closing bid and asked prices in the over-the-counter market as
furnished by any New York Stock Exchange member firm of national standing that
is selected from time to time by the Company for that purpose.
"Commission" means the Securities and Exchange Commission.
"Common Stock" of any Person means Capital Stock of such Person that does
not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
"Consolidated Adjusted Net Income" and "Consolidated Adjusted Net Loss"
mean, for any period, the net income or net loss, as the case may be, of the
Company and its Restricted Subsidiaries for such period, all as determined on a
Consolidated basis in accordance with generally accepted accounting principles,
adjusted, to the extent included in calculating such net income or net loss, as
the case may be, by excluding without duplication (a) any after-tax gain or loss
attributable to the sale, conversion or other disposition of assets other than
in the ordinary course of business, (b) any after-tax gains resulting from the
write-up of assets and any loss resulting from the write-down of assets, (c) any
after-tax gain or loss on the repurchase or redemption of any securities
(including in connection with the early retirement or defeasance of any Debt),
(d) any foreign exchange gain or loss, (e) all payments in respect of dividends
on shares of Preferred Capital Stock of the Company, (f) any other
extraordinary, non-recurring or unusual items incurred by the Company or any of
its Restricted Subsidiaries, (g) the net income (or loss) of any Person acquired
by the Company or any Restricted Subsidiary in a pooling-of-interests
transaction for any period prior to the date of such transaction and (h) all
income or losses of Unrestricted Subsidiaries and Persons (other than
Subsidiaries) accounted for by the Company using the equity method of accounting
except, in the case of any such income, to the extent of dividends, interest or
other cash distributions received directly or indirectly from any such
Unrestricted Subsidiary or Person.
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29
"Consolidated Adjusted Net Income (Loss)" means, for any period, the
Company's Consolidated Adjusted Net Income or Consolidated Adjusted Net Loss
for such period, as applicable.
"Consolidated Debt to Annualized Operating Cash Flow Ratio" means, as at
any date of determination, the ratio of (i) the aggregate amount of Debt of the
Company and the Restricted Subsidiaries on a Consolidated basis outstanding as
at the date of determination to (ii) the Annualized Operating Cash Flow of the
Company for the most recently completed fiscal quarter of the Company.
"Consolidated Interest Expense" of any Person means, for any period, the
aggregate interest expense and fees and other financing costs in respect of Debt
(including amortization of original issue discount and non-cash interest
payments and accruals), the interest component in respect of Capital Lease
Obligations and any deferred payment obligations of such Person and its
Subsidiaries, determined on a consolidated basis in accordance with generally
accepted accounting principles and all commissions, discounts, other fees and
charges owed with respect to letters of credit and bankers' acceptance financing
and net costs (including amortizations of discounts) associated with interest
rate swap and similar agreements and with foreign currency hedge, exchange and
similar agreements and the amount of dividends paid in respect of Redeemable
Stock.
"Consolidated Net Income" and "Consolidated Net Loss" mean, for any period,
the net income or net loss, as the case may be, of the Company and its
Restricted Subsidiaries for such period, all as determined on a Consolidated
basis in accordance with generally accepted accounting principles, adjusted, to
the extent included in calculating such net income or net loss, as the case may
be, by excluding without duplication (a) any after-tax gain or loss attributable
to the sale, conversion or other disposition of assets other than in the
ordinary course of business, (b) any after-tax gains resulting from the write-up
of assets and any loss resulting from the write-down of assets, (c) any
after-tax gain or loss on the repurchase or redemption of any securities
(including in connection with the early retirement or defeasance of any Debt),
(d) any foreign exchange gain or loss, (e) all payments in respect of dividends
on shares of Preferred Capital Stock of the Company, (f) any other
extraordinary, non-recurring or unusual items incurred by the Company or any of
its Restricted Subsidiaries, (g) the net income (or loss) of any Person acquired
by the Company or any Restricted Subsidiary in a pooling-of-interests
transaction for any period prior to the date of such transaction, (h) all income
or losses of Unrestricted Subsidiaries and Persons (other than Subsidiaries)
accounted for by the Company using the equity method of accounting except, in
the case of any such income, to the extent of dividends, interest or other cash
distributions received directly or indirectly from any such Unrestricted
Subsidiary or Person and (i) the net income (but not net loss) of any Restricted
Subsidiary which is subject to restrictions which prevent the payment of
dividends or the making of distributions to the Company but only to the extent
of such restrictions.
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30
"Consolidated Net Income (Loss)" means, for any period, the Company's
Consolidated Net Income or Consolidated Net Loss for such period, as applicable.
"Consolidated Net Worth" of any Person means the consolidated stockholders'
equity of such Person, determined on a consolidated basis in accordance with
generally accepted accounting principles, less amounts attributable to
Redeemable Stock of such Person; PROVIDED that, with respect to the Company, no
effect shall be given to adjustments following the Closing Date to the
accounting books and records of the Company in accordance with Accounting
Principles Board Opinions Nos. 16 and 17 (or successor opinions thereto) or
otherwise resulting from the acquisition of control of the Company by another
Person.
"Consolidation" means the consolidation of the accounts of each of the
Restricted Subsidiaries with those of the Company, if and to the extent that the
accounts of each such Restricted Subsidiary would normally be consolidated with
those of the Company in accordance with generally accepted accounting
principles; PROVIDED, HOWEVER, that "Consolidation" shall not include
consolidation of the accounts of any Unrestricted Subsidiary, but the interest
of the Company or any Restricted Subsidiary in any Unrestricted Subsidiary shall
be accounted for as an investment. The term "Consolidated" has a correlative
meaning.
"Credit Facility" means any credit facility (whether a term or revolving
type) of the type customarily entered into with banks, between the Company
and/or any of its Restricted Subsidiaries, on the one hand, and any banks or
other lenders, on the other hand (and any renewals, refundings, extensions or
replacements of any such credit facility), which credit facility is designated
by the Company as a "Credit Facility" for purposes of this Certificate of
Designation, and shall include all such credit facilities in existence on the
Closing Date whether or not so designated, to the extent that the aggregate
principal balance of Debt that is Incurred and outstanding under all Credit
Facilities at any time does not exceed $2,500,000,000.
"Debt" means (without duplication), with respect to any Person, whether
recourse is to all or a portion of the assets of such Person and whether or not
contingent, (i) every obligation of such Person for money borrowed, (ii) every
obligation of such Person evidenced by bonds, debentures, notes or other similar
instruments, including obligations Incurred in connection with the acquisition
of property, assets or businesses, (iii) every reimbursement obligation of such
Person with respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person, (iv) every obligation of such
Person issued or assumed as the deferred purchase price of property or services
(but excluding trade accounts payable or accrued liabilities arising in the
ordinary course of business which are not overdue or which are being contested
in good faith), (v) every Capital Lease Obligation of such Person, (vi) the
maximum fixed redemption or repurchase price of Redeemable Stock of such Person
at the time of determination plus accrued but unpaid
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dividends, (vii) every obligation of such Person under interest rate swap
or similar agreements or foreign currency hedge, exchange or similar agreements
of such Person, and (viii) every obligation of the type referred to in clauses
(i) through (vii) of another Person and all dividends of another Person the
payment of which, in either case, such Person has Guaranteed or is responsible
or liable, directly or indirectly, as obligor, Guarantor or otherwise. The
amount of Debt of any Person issued with original issue discount is the face
amount of such Debt less the unamortized portion of the original issue discount
of such Debt at the time of its issuance as determined in conformity with
generally accepted accounting principles, and money borrowed at the time of the
Incurrence of any Debt in order to pre-fund the payment of interest on such Debt
shall be deemed not to be "Debt."
"Default" means any event that is, or after notice or passage of time, or
both, would be, a Voting Rights Triggering Event.
"Digital Mobile" means a radio communications system that employs digital
technology with a multi-site configuration that will permit frequency reuse as
described in the Memorandum.
"Digital Mobile-SMR Operating Cash Flow" means, for any fiscal quarter,
(i) the net income or loss, as the case may be, of the Company and its
Restricted Subsidiaries from its Digital Mobile and Specialized Mobile Radio
businesses and related activities and services for such fiscal quarter, plus
(ii) depreciation and amortization charged with respect thereto for such fiscal
quarter, all as determined on a Consolidated basis in accordance with generally
accepted accounting principles, adjusted, to the extent included in calculating
such net income or loss, by excluding (a) any after-tax gain or loss
attributable to the sale, conversion or other disposition of assets other than
in the ordinary course of business, (b) any gains resulting from the write-up of
assets and any loss resulting from the write-down of assets, (c) any gain or
loss on the repurchase or redemption of any securities (including in connection
with the early retirement or defeasance of any Debt), (d) any foreign exchange
gain or loss, (e) any other extraordinary, non-recurring or unusual items and
(f) all income or losses of Persons (other than Subsidiaries) accounted for by
the Company using the equity method of accounting, except, in the case of any
such income, to the extent of dividends, interest or other cash distributions
received directly or indirectly from any such Person, plus (iii) all amounts
deducted in calculating net income or loss for such fiscal quarter in respect of
interest expense and other financing costs and all income taxes, whether or not
deferred, applicable to such fiscal quarter, all as determined on a Consolidated
basis in accordance with generally accepted accounting principles.
"Directed Investment" by the Company or any of its Restricted Subsidiaries
means any Investment for which the cash or property used for such Investment is
received by the Company from the issuance and sale (other than to a Restricted
Subsidiary) on or after June 1, 1997 of shares of its Capital Stock (other than
the Preferred Stock and Redeemable
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32
Stock), or any options, warrants or other rights to purchase such Capital
Stock (other than Redeemable Stock) designated by the Board of Directors as a
"Directed Investment" to be used for one or more specified investments in the
telecommunications business (including related activities and services) and is
so designated and used at any time within 365 days after the receipt thereof;
PROVIDED that the aggregate amount of any such Directed Investments may not at
any time exceed fifty percent (50%) of the aggregate amount of such cash or
property received by the Company on or after June 1, 1997 from any such issuance
and sale or capital contribution; and PROVIDED FURTHER that any proceeds from
any such issuance or sale may not be used for such an Investment if such
proceeds were, prior to being designated for use as a Directed Investment, (x)
used to make a Restricted Payment or (y) used as the basis for the Incurrence of
Debt under clause (i) of subparagraph (m)(1) unless and until the amount of any
such Debt (I) is treated as newly issued Debt and could be Incurred in
accordance with subparagraph (m)(1) (other than under clause (i) thereof) or
(II) has been repaid or refinanced with the proceeds of Debt Incurred in
accordance with subparagraph (m)(1) (other than under clause (i) thereof) or
(III) has otherwise been repaid and, in the circumstances described in clauses
(I) and (II), the Company delivers to the Transfer Agent a certificate
confirming that the requirements of such clauses have been met.
"Disinterested Director" means, with respect to any proposed transaction
between the Company and an Affiliate thereof, a member of the Board of Directors
who is not an officer or employee of the Company, would not be a party to, or
have a financial interest in, such transaction and is not an officer, director
or employee of, and does not have a financial interest in, such Affiliate. For
purposes of this definition, no person would be deemed not to be a Disinterested
Director solely because such person holds Capital Stock of the Company.
"Dividend Payment Date" means January 15, April 15, July 15 and October 15
of each year.
"Dividend Period" means the dividend period commencing on each January 15,
April 15, July 15, and October 15 and ending on the day before the following
Dividend Payment Date; PROVIDED, HOWEVER, that the first such Dividend Period
shall commence on the Closing Date.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Debentures" means the Company's Senior Subordinated Debentures
due 2009 issued pursuant to the Exchange Indenture.
"Exchange Indenture" means the indenture for the Exchange Debentures, the
form of which is on file at the principal executive offices of the Company and
terms of which may be modified to the extent the corresponding terms in the
Preferred Stock have been modified in accordance with this Certificate of
Designation.
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"Existing Senior Note Indentures" means the indentures relating to the
Existing Senior Notes.
"Existing Senior Notes" means the Company's $525,855,000 principal amount
at maturity of 11 1/2% Senior Redeemable Discount Notes Due 2003, $1,126,435,000
principal amount at maturity of 9 3/4% Senior Redeemable Discount Notes Due
2004, $541,830,000 principal amount at maturity of 12 1/4% Senior Redeemable
Discount Notes Due 2004, $111,165,000 principal amount at maturity of 10 1/4%
Senior Redeemable Discount Notes Due 2005 and $409,876,000 principal amount at
maturity of 10_% Senior Redeemable Discount Notes Due 2004.
"Fair Market Value" means, for purposes of clause (i) of subparagraph
(m)(1), the price that would be paid in an arm's-length transaction between an
informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy, as determined in good faith by the
Board of Directors, whose determination shall be conclusive if evidenced by a
Board Resolution; PROVIDED that (x) the Fair Market Value of any security
registered under the Exchange Act shall be the average of the closing prices,
regular way, of such security for the 20 consecutive trading days immediately
preceding the sale of Capital Stock and (y) in the event the aggregate Fair
Market Value of any other property received by the Company exceeds $10 million,
the Fair Market Value of such property shall be determined by a nationally
recognized investment banking firm and set forth in their written opinion which
shall be delivered to the Transfer Agent.
"Guarantee" by any Person means any obligation, contingent or otherwise, of
such Person guaranteeing any Debt of any other Person (the "primary obligor") in
any manner, whether directly or indirectly, and including any obligation of such
Person, (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or to purchase (or to advance or supply funds for the
purchase of) any security for the payment of such Debt, (ii) to purchase
property, securities or services for the purpose of assuring the holder of such
Debt of the payment of such Debt, or (iii) to maintain working capital, equity
capital or other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Debt (and "Guaranteed",
"Guaranteeing" and "Guarantor" shall have meanings correlative to the
foregoing); PROVIDED, HOWEVER, that the Guarantee by any Person shall not
include endorsements by such Person for collection or deposit, in either case,
in the ordinary course of business.
"Holder" means a holder of shares of Preferred Stock.
"Incur" means, with respect to any Debt or other obligation of any Person,
to create, issue, incur (by conversion, exchange or otherwise), assume (pursuant
to a merger, consolidation, acquisition or other transaction), Guarantee or
otherwise become liable in respect of such Debt or other obligation or the
recording, as required pursuant to generally
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34
accepted accounting principles or otherwise, of any such Debt or other
obligation on the balance sheet of such Person (and "Incurrence" and "Incurred",
shall have meanings correlative to the foregoing); PROVIDED, HOWEVER, that a
change in generally accepted accounting principles that results in an obligation
of such Person that exists at such time becoming Debt shall not be deemed an
Incurrence of such Debt; PROVIDED FURTHER, HOWEVER, that the accretion of
original issue discount on Debt shall not be deemed to be an Incurrence of Debt.
Debt otherwise Incurred by a Person before it becomes a Subsidiary of the
Company shall be deemed to have been Incurred at the time it becomes such a
Subsidiary.
"Investment" by any Person means any direct or indirect loan, advance or
other extension of credit or capital contribution to (by means of transfers of
cash or other property to others or payments for property or services for the
account or use of others, or otherwise), or purchase or acquisition of Capital
Stock, bonds, notes, debentures or other securities or evidence of Debt issued
by, any other Person or the designation of a Subsidiary as an Unrestricted
Subsidiary; PROVIDED that a transaction will not be an Investment to the extent
it involves (i) the issuance or sale by the Company of its Capital Stock (other
than Redeemable Stock), including options, warrants or other rights to acquire
such Capital Stock (other than Redeemable Stock) or (ii) a transfer, assignment
or contribution by the Company of shares of Capital Stock (or any options,
warrants or rights to acquire Capital Stock), or all or substantially all of the
assets of, any Unrestricted Subsidiary of the Company to another Unrestricted
Subsidiary of the Company.
"Investment Grade" means a rating of at least BBB-, in the case of S&P, or
Baa3, in the case of Moody's.
"Licenses" means SMR licenses granted by the Federal Communications
Commission that entitle the holder to use the radio channels covered thereby,
subject to compliance with FCC rules and regulations, in connection with its SMR
business.
"Lien" means, with respect to any property or assets, any mortgage or deed
of trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien, charge, easement, encumbrance, preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
on or with respect to such property or assets (including any conditional sale or
other title retention agreement having substantially the same economic effect as
any of the foregoing).
"Marketable Securities" means: (1) securities either issued directly or
fully guaranteed or insured by the government of the United States of America or
any agency or instrumentality thereof having maturities of not more than six
months; (2) time deposits and certificates of deposit, having maturities of not
more than six months from the date of deposit, of any domestic commercial bank
having capital and surplus in excess of $500 million and having outstanding
long-term debt rated A or better (or the equivalent thereof) by
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35
S&P or Aaa or better (or the equivalent thereof) by Moody's; and (3)
commercial paper rated A-1 or the equivalent thereof by S&P or P-1 or the
equivalent thereof by Moody's, and in each case maturing within six months.
"Memorandum" means the offering memorandum dated July 16, 1997 in
connection with the offering of the Preferred Stock.
"Moody's" means Moody's Investors Service, Inc. or, if Moody's Investors
Service, Inc. shall cease rating debt securities having a maturity at original
issuance of at least one year and such ratings business shall have been
transferred to a successor Person, such successor Person; PROVIDED, HOWEVER,
that if Moody's Investors Service, Inc. ceases rating debt securities having a
maturity at original issuance of at least one year and its ratings business with
respect thereto shall not have been transferred to any successor Person, then
"Moody's" shall mean any other national recognized rating agency (other than
S&P) that rates debt securities having a maturity at original issuance of at
least one year and that shall have been designated by the Company by a written
notice given to the Transfer Agent.
"Offer to Purchase" means a written offer (the "Offer") sent by the Company
by first class mail, postage prepaid, to each Holder at his registered address
on the date of the Offer offering to purchase up to the liquidation preference
of Preferred Stock specified in such Offer at the purchase price specified in
such Offer (as determined pursuant to this Certificate of Designation). Unless
otherwise required by applicable law, the Offer shall specify an expiration date
(the "Expiration Date") of the Offer to Purchase which shall be, subject to any
contrary requirements of applicable law, not less than 30 days or more than
60 days after the date of such Offer and a settlement date (the "Purchase Date")
for purchase of shares of Preferred Stock within three Business Days after the
Expiration Date. The Company shall notify the Transfer Agent at least 15 days
(or such shorter period as is acceptable to the Transfer Agent) prior to the
mailing of the Offer of the Company's obligation to make an Offer to Purchase,
and the Offer shall be mailed by the Company or, at the Company's request, by
the Transfer Agent, in the name and at the expense of the Company. The Offer
shall contain information concerning the business of the Company and its
Subsidiaries which, at a minimum, shall include (i) the most recent annual and
quarterly financial statements and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" contained in the documents
required to be filed with the Transfer Agent pursuant to this Certificate of
Designation (which requirements may be satisfied by delivery of such documents
together with the Offer), (ii) a description of material developments in the
Company's business subsequent to the date of the latest of such financial
statements referred to in clause (i) (including a description of the events
requiring the Company to make the Offer to Purchase), (iii) if required under
applicable law, PRO FORMA financial information concerning, among other things,
the Offer to Purchase and the events requiring the Company to make the Offer to
Purchase and (iv) any other information required by applicable law to be
included therein. The Offer shall contain all instructions and materials
necessary to
SS_NYL2/174036 8
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36
enable such Holders to tender their shares of Preferred Stock pursuant to
the Offer to Purchase. The Offer shall also state: (1) the section of this
Certificate of Designation pursuant to which the Offer to Purchase is being
made; (2) the Expiration Date and the Purchase Date; (3) the aggregate
liquidation preference of the outstanding shares of Preferred Stock offered to
be purchased by the Company pursuant to the Offer to Purchase (the "Purchase
Amount"); (4) the purchase price to be paid by the Company for each $1,000
aggregate liquidation preference of Preferred Stock accepted for payment (as
specified pursuant to this Certificate of Designation) (the "Purchase Price");
(5) the Holder may tender all or any portion of the Preferred Stock registered
in the name of such Holder and that any portion of Preferred Stock tendered must
be tendered in an integral multiple of $1,000 of liquidation preference; (6) the
place or places where the shares of Preferred Stock are to be surrendered for
tender pursuant to the Offer to Purchase; (7) that dividends on any shares of
Preferred Stock not tendered or tendered but not purchased by the Company
pursuant to the Offer to Purchase will continue to accrue; (8) that on the
Purchase Date the Purchase Price will become due and payable upon each share of
Preferred Stock or being accepted for payment pursuant to the Offer to Purchase;
(9) that each Holder electing to tender shares of Preferred Stock pursuant to
the Offer to Purchase will be required to surrender such Preferred Stock at the
place or places specified in the Offer prior to the close of business on the
Expiration Date (such Preferred Stock being, if the Company or the Transfer
Agent so requires, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Transfer Agent duly
executed by, the Holder thereof or his attorney duly authorized in writing);
(10) that Holders will be entitled to withdraw all or any portion of the
Preferred Stock tendered if the Company (or its Paying Agent) receives, not
later than the close of business on the Expiration Date, a facsimile
transmission or letter setting forth the name of the Holder, the liquidation
preference of the Preferred Stock the Holder tendered, the certificate number of
the Preferred Stock the Holder tendered and a statement that such Holder is
withdrawing all or a portion of his tender; (11) that the Company shall purchase
all such shares of Preferred Stock duly tendered and not withdrawn pursuant to
the Offer to Purchase; and (12) that in the case of any Holder whose shares of
Preferred Stock are purchased only in part, the Company shall execute, and the
Transfer Agent shall countersign and deliver to the Holder of such Preferred
Stock without service charge, new shares of Preferred Stock of any authorized
denomination as requested by such Holder, in an aggregate liquidation preference
equal to and in exchange for the unpurchased portion of the aggregate
liquidation preference of the Preferred Stock so tendered. Any Offer to Purchase
shall be governed by and effected in accordance with the Offer for such Offer to
Purchase.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the President or a Vice President, and the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Company.
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"Operating Cash Flow" means, for any fiscal quarter, (i) the Company's
Consolidated Adjusted Net Income (Loss) plus depreciation and amortization in
respect thereof for such fiscal quarter, plus (ii) all amounts deducted in
calculating Consolidated Adjusted Net Income (Loss) for such fiscal quarter in
respect of interest expense and other financing costs, including dividends paid
in respect of Redeemable Stock, and all income taxes, whether or not deferred,
applicable to such income period, all as determined on a Consolidated basis in
accordance with generally accepted accounting principles. For purposes of
calculating Operating Cash Flow for the fiscal quarter most recently completed
prior to any date on which an action is taken that requires a calculation of the
Operating Cash Flow to Consolidated Interest Expense Ratio or Consolidated Debt
to Annualized Cash Flow Ratio, (1) any Person that is a Restricted Subsidiary on
such date (or would become a Restricted Subsidiary in connection with the
transaction that requires the determination of such ratio) will be deemed to
have been a Restricted Subsidiary at all times during such fiscal quarter, (2)
any Person that is not a Restricted Subsidiary on such date (or would cease to
be a Restricted Subsidiary in connection with the transaction that requires the
determination of such ratio) will be deemed not to have been a Restricted
Subsidiary at any time during such fiscal quarter and (3) if the Company or any
Restricted Subsidiary shall have in any manner acquired (including through
commencement of activities constituting such operating business) or disposed
(including through termination or discontinuance of activities constituting such
operating business) of any operating business during or subsequent to the most
recently completed fiscal quarter, such calculation will be made on a PRO FORMA
basis on the assumption that such acquisition or disposition had been completed
on the first day of such completed fiscal quarter.
"Operating Cash Flow to Consolidated Interest Expense Ratio" means, as at
any date of determination, the ratio of (i) the Operating Cash Flow of the
Company for the most recently completed fiscal quarter of the Company to (ii)
the Consolidated Interest Expense of the Company and its Restricted Subsidiaries
for the most recently completed fiscal quarter of the Company.
"Permitted Debt" means: (i) any Debt (including Guarantees thereof)
outstanding on the Closing Date and any accretion of original issue discount and
accrual of interest with respect to such Debt; (ii) any Debt outstanding under a
Credit Facility; (iii) any Vendor Financing Debt or any other Debt Incurred to
finance the cost (including the cost of design, development, construction,
improvement, installation or integration) of equipment, inventory or network
assets acquired by the Company or any of its Restricted Subsidiaries after the
Closing Date; (iv) Debt (A) to the Company or (B) to any Restricted Subsidiary;
PROVIDED that any event which results in any such Restricted Subsidiary ceasing
to be a Restricted Subsidiary or any subsequent transfer of such Debt (other
than to the Company or another Restricted Subsidiary) shall be deemed, in each
case, to constitute an Incurrence of such Debt not permitted by this clause
(iv); (v) Debt (A) in respect of performance, surety or appeal bonds provided in
the ordinary course of business, (B) under foreign currency hedge,
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interest rate swap or similar agreements; PROVIDED that such agreements (a)
are designed solely to protect the Company or its Restricted Subsidiaries
against fluctuations in foreign currency exchange rates or interest rates and
(b) do not increase the Debt of the obligor outstanding at any time other than
as a result of fluctuations in foreign currency exchange rates or interest rates
or by reason of fees, indemnities and compensation payable thereunder; and (C)
arising from agreements providing for indemnification, adjustment of purchase
price or similar obligations, or from Guarantees or letters of credit, surety
bonds or performance bonds securing any obligations of the Company or any
Restricted Subsidiary pursuant to such agreements, in any case Incurred in
connection with the disposition of any business, assets or Restricted Subsidiary
(other than Guarantees of Debt Incurred by any Person acquiring all or any
portion of such business, assets or Restricted Subsidiary for the purpose of
financing such acquisition), in a principal amount not to exceed the gross
proceeds actually received by the Company or any Restricted Subsidiary in
connection with such disposition; (vi) renewals, refundings or extensions of any
Debt referred to in clause (i) or (iii) above or Incurred pursuant to clause
(ii) of subparagraph (m)(1) and any renewals, refundings or extensions thereof,
plus (A) the amount of any premium reasonably determined by the Company as
necessary to accomplish such renewal, refunding or extension and (B) such other
fees and expenses of the Company reasonably incurred in connection with the
renewal, refunding or extension, PROVIDED that such renewal, refunding or
extension shall constitute Permitted Debt only (a) to the extent that it does
not result in an increase in the aggregate principal amount (or, if such Debt
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the maturity thereof, in an amount
not greater than such lesser amount) of such Debt (except as permitted by clause
(A) or (B) above), and (b) to the extent such renewed, refunded or extended Debt
does not mature prior to the Stated Maturity or have a mandatory redemption date
prior to the mandatory redemption date of the Debt being renewed, refunded or
extended or have an Average Life shorter than the remaining Average Life of the
Debt being renewed, refunded or extended; and (vii) Debt payable solely in, or
mandatorily convertible into, Capital Stock (other than Redeemable Stock) of the
Company; (viii) Debt (in addition to Debt permitted under clauses (i) through
(vii) above) in an aggregate principal amount outstanding at any time not to
exceed $950 million.
"Permitted Distribution" of a Person means the redemption, repurchase,
defeasance or other acquisition or retirement for value of Junior Securities of
the Company, in exchange for (including any such exchange pursuant to the
exercise of a conversion right or privilege in connection with which cash is
paid in lieu of the issuance of fractional shares or scrip), or out of the
proceeds of a substantially concurrent issue and sale (other than to a
Restricted Subsidiary) of Junior Securities of the Company (other than
Redeemable Stock).
"Permitted Investment" means any Investment in Marketable Securities.
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39
"Permitted Transaction" means (i) any transaction pursuant to agreements
(whether or not definitive, and regardless of whether binding or non-binding)
existing on the Closing Date and described in or incorporated by reference into
the Memorandum and (ii) any transaction or transactions with any vendor or
vendors of property or materials used in the telecommunications business
(including related activities and services) of the Company or any Restricted
Subsidiary, provided (x) such transactions are in the ordinary course of
business and (y) such vendor does not beneficially own more than 50% of the
voting power of the Voting Stock of the Company.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Preferred Capital Stock," as applied to the Capital Stock of any Person,
means Capital Stock of such Person of any class or classes (however designated)
that ranks prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
"preferred stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of preferred or preference stock of such Person,
including, without limitation, the Preferred Stock.
"Preferred Stock Exchange Offer" means each registered offer to exchange
the Preferred Stock for Exchange Preferred Stock.
"Redeemable Stock" of any Person means any Capital Stock of such Person
that by its terms or otherwise is (i) required to be redeemed prior to the
mandatory redemption date of the Preferred Stock, (ii) redeemable at the option
of the holder thereof at any time prior to the mandatory redemption date of the
Preferred Stock or (iii) convertible into or exchangeable for Capital Stock
referred to in clause (i) or (ii) above or Debt having a scheduled maturity
prior to the mandatory redemption date of the Preferred Stock; PROVIDED that any
Capital Stock that would not constitute Redeemable Stock but for provisions
thereof giving holders thereof the right to require such Person to repurchase or
redeem such Capital Stock upon the occurrence of a "change of control" occurring
prior to the mandatory redemption date of the Preferred Stock shall not
constitute Redeemable Stock if the "change of control" provisions as applicable
to such Capital Stock are no more favorable to the holders of such Capital Stock
than the provisions contained in paragraph (h) and such Capital Stock
specifically provides that such Person will not repurchase or redeem any such
stock pursuant to such provision prior to the Company's repurchase of such
shares of Preferred Stock as are required to be repurchased pursuant to
paragraph (h).
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"Redemption Date" with respect to any shares of Preferred Stock, means the
date on which such shares of Preferred Stock are redeemed by the Company.
"Restricted Subsidiary" means any Subsidiary of the Company, whether
existing on the Closing Date or created subsequent thereto, designated from time
to time by the Board of Directors as (or otherwise deemed to be) a "Restricted
Subsidiary" in accordance with subparagraph (m)(3).
"S&P" means Standard & Poor's Ratings Services or, if Standard & Poor's
Ratings Services shall cease rating debt securities having a maturity at
original issuance of at least one year and such ratings business shall have been
transferred to a successor Person, such successor Person; PROVIDED, HOWEVER,
that if Standard & Poor's Ratings Services ceases rating debt securities having
a maturity at original issuance of at least one year and its ratings business
with respect thereto shall not have been transferred to any successor Person,
then "S&P" shall mean any other nationally recognized rating agency (other than
Moody's) that rates debt securities having a maturity at original issuance of at
least one year and that shall have been designated by the Company by a written
notice given to the Transfer Agent.
"Specialized Mobile Radio" or "SMR" means a mobile radio communications
system that is operated as described in the Memorandum.
"Stated Maturity", when used with respect to any Debt security or any
installment of interest thereon, means the date specified in such Debt security
as the fixed date on which the principal of such Debt security or such
installment of interest is due and payable.
"Subsidiary" of any Person means (i) a corporation more than 50% of the
outstanding Voting Stock of which is owned, directly or indirectly, by such
Person or by one or more other Subsidiaries of such Person or by such Person and
one or more Subsidiaries thereof or (ii) any other Person (other than a
corporation) in which such Person, or one or more other Subsidiaries of such
Person or such Person and one or more other Subsidiaries thereof, directly or
indirectly, has at least a majority ownership and power to direct the policies,
management and affairs thereof.
"Total Common Equity" of any Person means, as of any day of determination
(and as modified for purposes of the definition of "Change of Control"), the
product of (i) the aggregate number of outstanding primary shares of Common
Stock of such Person on such day (which shall not include any options or
warrants on, or securities convertible or exchangeable into, shares of Common
Stock of such Person) and (ii) the average Closing Price of such Common Stock
over the 20 consecutive Trading Days immediately preceding such day. If no such
Closing Price exists with respect to shares of any such class, the value of such
shares for purposes of clause (ii) of the preceding sentence shall be determined
by the Board of Directors in good faith and evidenced by a Board Resolution.
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"Total Market Value of Equity" of the Company means, as of any day of
determination, the sum of (1) the product of (i) the aggregate number of
outstanding primary shares of Common Stock of the Company on such day (which
shall not include any options or warrants on, or securities convertible or
exchangeable into, shares of Common Stock of the Company) and (ii) the average
Closing Price of such Common Stock over the 20 consecutive Trading Days
immediately preceding such day, plus (2) the liquidation value of any
outstanding shares of Preferred Capital Stock of the Company on such day. If no
such Closing Price exists with respect to shares of any such class, the value of
such shares for purposes of clause (ii) of the preceding sentence shall be
determined by the Board of Directors in good faith and evidenced by a Board
Resolution.
"Trading Day" with respect to a securities exchange or automated quotation
system means a day on which such exchange or system is open for a full day of
trading.
"Transfer Agent" means First Chicago Trust Company of New York.
"Unrestricted Subsidiary" means Unrestricted Subsidiary Finance Company and
any other Subsidiary that is not a Restricted Subsidiary and includes any
Restricted Subsidiary that becomes an Unrestricted Subsidiary in accordance with
subparagraph (m)(3).
"Vendor Financing Debt" means any Debt owed to (i) a vendor or supplier of
any property or materials used by the Company or its Restricted Subsidiaries in
their telecommunications business, (ii) any Affiliate of such a vendor or
supplier, (iii) any assignee of such a vendor, supplier or Affiliate of such a
vendor or supplier, or (iv) a bank or other financial institution that has
financed or refinanced the purchase of such property or materials from such a
vendor, supplier, Affiliate of such a vendor or supplier or assignee of such a
vendor or supplier; PROVIDED that the aggregate amount of such Debt does not
exceed the sum of (w) the purchase price of such property or materials
(including transportation, installation, warranty and testing charges, as well
as applicable taxes paid, in respect of such property or materials), (x) the
cost of design, development, site acquisition and construction, (y) any interest
or other financing costs accruing or otherwise payable in respect of the
foregoing, and (z) the cost of any services provided by such vendor, supplier or
Affiliate of such vendor or supplier.
"Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such Person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
"Wholly Owned Restricted Subsidiary" of the Company means a Restricted
Subsidiary all of the outstanding Capital Stock of which (other than directors'
qualifying shares) shall at
SS_NYL2/174036 8
<PAGE>
42
the time be owned by the Company or by one or more Wholly Owned Restricted
Subsidiaries or by the Company and one or more Wholly Owned Restricted
Subsidiaries.
(o). TRANSFER AND LEGENDING OF SHARES. (i) No transfer of shares of the
Preferred Stock shall be effective until such transfer is registered on the
books of the Company. Until registered under the Securities Act, the expiration
of the time period referred to in Rule 144(k) (as then in effect) under the
Securities Act from the Closing Date, or the Company and the holder of such
shares otherwise agree, all shares of Preferred Stock other than the Exchange
Preferred Stock shall bear the following legend:
THIS PREFERRED STOCK HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
PREFERRED STOCK IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S
UNDER THE SECURITIES ACT, OR (C) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) or (7) OF REGULATION D
UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR"), (2)
AGREES THAT IT WILL NOT, WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF
THIS PREFERRED STOCK, RESELL OR OTHERWISE TRANSFER THIS PREFERRED STOCK
EXCEPT (A) TO NEXTEL COMMUNICATIONS, INC. OR ANY SUBSIDIARY THEREOF, (B)
TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION
IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE), (E) INSIDE THE UNITES STATES TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRANSFER AGENT A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS PREFERRED
STOCK (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRANSFER AGENT)
AND IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE LIQUIDATION
PREFERENCE OF PREFERRED STOCK AT THE TIME OF TRANSFER OF LESS THAN
$100,000, AN OPINION OF COUNSEL ACCEPTABLE TO NEXTEL COMMUNICATIONS, INC.
THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT
SS_NYL2/174036 8
<PAGE>
43
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS PREFERRED
STOCK IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
IN CONNECTION WITH ANY TRANSFER OF THIS PREFERRED STOCK WITHIN THE TIME
PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET
FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND
SUBMIT THIS CERTIFICATE TO THE TRANSFER AGENT. IF THE PROPOSED TRANSFEREE
IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE TRANSFER AGENT AND NEXTEL COMMUNICATIONS, INC.
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF
THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE
CERTIFICATE OF DESIGNATION CONTAINS A PROVISION REQUIRING THE TRANSFER
AGENT TO REFUSE TO REGISTER ANY TRANSFER OF THIS PREFERRED STOCK IN
VIOLATION OF THE FOREGOING RESTRICTIONS.
(ii) The Transfer Agent shall refuse to register any attempted
transfer of shares of Original Preferred Stock not in compliance with this
paragraph (o).
(iii) At any time after 40 days following the Closing Date, upon
receipt by the Transfer Agent and the Company of a certificate
substantially in the form of Exhibit A hereto, the Transfer Agent shall
authenticate and deliver one or more shares of unlegended Preferred Stock
in the place of the legended Preferred Stock.
(iv) In connection with proposed transfers of Original Preferred
Stock described in Exhibit B or Exhibit C, the Transfer Agent or the
Company may require the transferor or transferee, as the case may be,
to deliver the appropriate letter attached hereto as Exhibits B or C.
Each holder of Original Preferred Stock shall notify the Company or the
Transfer Agent in the event of any transfer by such holder of any shares
of Original Preferred Stock to a foreign transferee.
SS_NYL2/174036 8
<PAGE>
44
IN WITNESS WHEREOF, Nextel Communications, Inc. has caused this
Certificate of Designation to be executed in its corporate name by Steven
Shindler, its Vice President and attested by Ried Zulager, its Secretary, this
18th day of July, 1997.
NEXTEL COMMUNICATIONS, INC.
By: /s/ Steven Shindler
Name: Steven Shindler
Title: Vice President
Attest:
By: /s/ Ried Zulager
Name: Ried Zulager
Title: Secretary
[corporate seal]
SS_NYL2/174036 8
<PAGE>
EXHIBIT A
Form of Certificate as to
Completion of Distribution and
Termination of Restricted Period
__________________, ____
First Chicago Trust Company of New York
525 Washington Boulevard
Jersey City, NJ 07310
Attention:
Re: Nextel Communications, Inc.
(the "Company") Series D
Exchangeable Preferred
Stock (the "Securities")
Dear Ladies and Gentlemen:
This letter relates to ___ shares of Securities represented by the
attached Certificate (the "Legended Certificate") which bears a legend
outlining restrictions upon transfer of such Legended Certificate. Pursuant to
paragraph (o) of the Certificate of Designation (the "Certificate of
Designation") filed with the Secretary of State of the State of Delaware on July
18, 1997 relating to the Securities, we hereby certify that we are a person
outside the United States to whom the Securities could be transferred in
accordance with Rule 904 of Regulation S promulgated under the U.S. Securities
Act of 1933, as amended. Accordingly, you are hereby requested to exchange the
legended certificate for an unlegended certificate representing an identical
number of shares of Securities, all in the manner provided for in the
Certificate of Designation.
SS_NYL2/174036 8
<PAGE>
A-2
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate
have the meanings set forth in Regulation S.
Very truly yours,
[Name of Holder]
By:
Authorized Signature
SS_NYL2/174036 8
<PAGE>
EXHIBIT B
Form of Certificate to Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
_______________, ____
First Chicago Trust Company of New York
525 Washington Boulevard
Jersey City, NJ 07310
Attention:
Re: Nextel Communications, Inc.
(the "Company") Series D
Exchangeable Preferred
Stock (the "Securities")
Dear Ladies and Gentlemen:
In connection with our proposed purchase of ___ shares of the Securities,
we confirm that:
1. We understand that any subsequent transfer of the Securities is
subject to certain restrictions and conditions set forth in the
Certificate of Designation relating to the Securities (the
"Certificate of Designation") and the undersigned agrees to be bound
by, and not to resell, pledge or otherwise transfer the Securities
except in compliance with, such restrictions and conditions and the
Securities Act of 1933, as amended (the "Securities Act").
2 We understand that the offer and sale of the Securities have not
been registered under the Securities Act, and that the Securities
may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any
accounts for which we are acting as hereinafter stated, that if
we should sell any Securities, we will do so only (A to the
Company or any subsidiary thereof, (B) in accordance with Rule
144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) inside the United States to an
institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the
SS_NYL2/174036 8
<PAGE>
B-2
Securities Act) that, prior to such transfer, furnishes to you a signed
letter substantially in the form of this letter and, if such transfer is in
respect of an aggregate liquidation preference of the Securities at the
time of transfer of less than $100,000, an opinion of counsel
acceptable to the Company that such transfer is in compliance
with the Securities Act pursuant to an effective registration
statement under the Securities Act, (D) outside the United States in
accordance with Rule 904 of Regulation S under the Securities Act or (E)
pursuant to the exemption from registration provided by Rule 144 under
the Securities Act, and we further agree to provide to any person
purchasing any of the Securities from us a notice advising such purchaser
that resales of the Securities are restricted as stated herein.
3. We understand that, on any proposed resale of any Securities,
we will be required to furnish to you and the Company such
certifications, legal opinions and other information as you and
the Company may reasonably require to confirm that the proposed
sale complies with the foregoing restrictions. We further
understand that the Securities purchased by us will bear a legend
to the effect set out in paragraph 2.
4. We are an institutional "accredited investor" and have such
knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of our investment
in the Securities, and we and any accounts for which we are
acting are each able to bear the economic risk of our or its
investment.
5. We are acquiring the Securities purchased by us for our
own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we
exercise sole investment discretion.
SS_NYL2/174036 8
<PAGE>
B-3
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
Very truly yours,
[Name of Holder]
By:
Authorized Signature
SS_NYL2/174036 8
<PAGE>
EXHIBIT C
Form of Certificate to Be Delivered
in Connection with Transfers
Pursuant to Regulation S
_______________, _____
First Chicago Trust Company of New York
525 Washington Boulevard
Jersey City, NJ 07310
Attention:
Re: Nextel Communications, Inc.
(the "Company") Series D
Exchangeable Preferred
Stock (the "Securities")
Dear Ladies and Gentlemen:
In connection with our proposed sale of ____ shares of the Securities, we
confirm that such sale has been effected pursuant to and in accordance with
Regulation S under the Securities Act of 1933, as amended (the "Securities
Act"), and, accordingly, we represent that:
(1) the offer of the Securities was not made to a person in the
United States;
(2) either (a) at the time the buy order was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we
nor any person acting on our behalf knows that the transaction has
been pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(b) or Rule 904(b)
of Regulation S, as applicable; and
SS_NYL2/174036 8
<PAGE>
C-2
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.
In addition, if the sale is made during a restricted period and the provisions
of Rule 903(c)(2) or (3) or Rule 904(c)(1) of Regulation S are applicable
thereto, we confirm that such sale has been made in accordance with the
applicable provisions of Rule 903(c)(2) or (3) or Rule 904(c)(1), as the case
may be.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Holder]
By:
Authorized Signature
SS_NYL2/174036 8
EXHIBIT 99.1
[LOGO] Nextel Communications, Inc.
1505 Farm Credit Drive
For Immediate Release McLean, VA 22102
703 394-3000
Contacts:
Investor Relations:
Paul Blalock (703) 394-3500
Media:
Ben Banta (703) 394-3573
Nextel Successfully Completes $500 Million Private Placement
McLEAN, Va. - July 21, 1997 - Nextel Communications, Inc., (NASDAQ: NXTL) today
announced that it has completed a private placement of $500 million of 13%
Series D Exchangeable Preferred Stock. The size of the offering was increased
from 350,000 shares to 500,000 shares and will be used to fund the continued
buildout of the Nextel National Network.
"We are encouraged by the support of the financial community as evidenced by the
oversubscription and increase in the size of the offering. These funds will
enable our accelerated buildout to continue and will ensure the availability of
the financial resources necessary to finance our strong growth," said Steve
Shindler, chief financial officer for Nextel.
The Series D Exchangeable Preferred Stock is subject to mandatory redemption in
2009 and is optionally redeemable for cash and exchangeable into subordinated
debt at Nextel's option in certain circumstances. Dividends accrue at an annual
rate of 13% of the $1,000 per share liquidation preference and are cumulative
from the date of issuance, payable quarterly in cash or at the option of Nextel
prior to July 15, 2002, in additional shares of preferred stock. The Preferred
Stock has not been registered under the Securities Act of 1933 and may not be
offered or sold in the United States absent an effective registration statement
or an applicable exemption from the registration requirements of the Securities
Act.
Nextel Communications, Inc., based in McLean, Va., is the nation's leading
provider of fully integrated wireless communications and has built the largest
guaranteed all-digital wireless network in the United States. Nextel plans to
cover 85 percent of where America's population lives or works by the end of
1998. To learn more about Nextel and our services, visit our website at
http://www.nextel.com.
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