<PAGE> 1
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 0-19656
NEXTEL COMMUNICATIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 36-3939651
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
2001 EDMUND HALLEY DRIVE, RESTON, 20191
VIRGINIA (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES)
</TABLE>
Registrant's telephone number, including area code: (703) 433-4000
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days:
Yes X No ___
Indicate the number of shares outstanding of each of issuer's classes of common
stock as of the latest practicable date:
<TABLE>
<CAPTION>
NUMBER OF SHARES OUTSTANDING
TITLE OF CLASS ON OCTOBER 29, 1999
- - -------------- ----------------------------
<S> <C>
Class A Common Stock, $0.001 par value 315,595,665
Class B Non-Voting Common Stock, $0.001 par value 17,830,000
</TABLE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
<PAGE> 2
NEXTEL COMMUNICATIONS, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C> <C> <C>
PART I FINANCIAL INFORMATION.
Item 1. Financial Statements -- Unaudited.
Condensed Consolidated Balance Sheets --
As of September 30, 1999 and December 31, 1998............ 3
Condensed Consolidated Statements of Operations and
Comprehensive Loss -- For the Nine Months Ended September
30, 1999 and 1998......................................... 4
Condensed Consolidated Statements of Operations and
Comprehensive Loss -- For the Three Months Ended September
30, 1999 and 1998......................................... 5
Condensed Consolidated Statement of Changes in Stockholders'
Equity -- For the Nine Months Ended September 30, 1999.... 6
Condensed Consolidated Statements of Cash Flows -- For the
Nine Months Ended September 30, 1999 and 1998............. 7
Notes to Condensed Consolidated Financial Statements........ 8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 14
Item 3. Quantitative and Qualitative Disclosures About Market
Risk...................................................... 29
PART II OTHER INFORMATION.
Item 1. Legal Proceedings........................................... 31
Item 2. Changes in Securities....................................... 31
Item 6. Exhibits and Reports on Form 8-K............................ 31
</TABLE>
<PAGE> 3
PART I
ITEM 1. FINANCIAL STATEMENTS -- UNAUDITED.
NEXTEL COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 1999 AND DECEMBER 31, 1998
(DOLLARS IN MILLIONS)
UNAUDITED
<TABLE>
<CAPTION>
1999 1998
------- -------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents (of which $78 and $121 is
restricted)............................................ $ 1,379 $ 321
Accounts and notes receivable, less allowance for doubtful
accounts of $73 and $63................................ 554 443
Subscriber unit and accessory inventory................... 76 63
Assets held for sale...................................... -- 132
Prepaid expenses and other................................ 60 93
------- -------
Total current assets.............................. 2,069 1,052
PROPERTY, PLANT AND EQUIPMENT, net of accumulated
depreciation of $1,753 and $1,202......................... 5,597 4,915
INTANGIBLE ASSETS, net of accumulated amortization of $979
and $917.................................................. 4,610 4,937
INVESTMENTS AND OTHER ASSETS................................ 881 669
------- -------
$13,157 $11,573
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable.......................................... $ 678 $ 636
Accrued expenses and other................................ 836 537
Current portion of long-term debt and finance
obligation............................................. 28 9
------- -------
Total current liabilities......................... 1,542 1,182
LONG-TERM DEBT.............................................. 8,444 7,710
FINANCE OBLIGATION (NOTE 2)................................. 547 --
DEFERRED INCOME TAXES....................................... 756 771
OTHER....................................................... 69 73
------- -------
Total liabilities................................. 11,358 9,736
------- -------
CONTINGENCIES (NOTE 4)
MINORITY INTEREST........................................... 25 29
MANDATORILY REDEEMABLE PREFERRED STOCK (NOTE 5)............. 1,720 1,578
STOCKHOLDERS' EQUITY
Preferred stock, Class A convertible redeemable, 7,905,981
shares issued and outstanding.......................... 291 291
Preferred stock, Class B convertible, 82 shares issued and
outstanding............................................ -- --
Common stock, Class A, 315,451,507 and 272,087,322 shares
issued, 315,065,052 and 271,386,227 shares
outstanding............................................ -- --
Common stock, Class B, non-voting convertible, 17,830,000
shares issued and outstanding.......................... -- --
Paid-in capital........................................... 5,303 4,379
Accumulated deficit....................................... (5,420) (4,401)
Treasury stock, at cost, 386,455 and 701,095 shares....... (8) (13)
Deferred compensation, net................................ (21) (2)
Accumulated other comprehensive loss...................... (91) (24)
------- -------
Total stockholders' equity........................ 54 230
------- -------
$13,157 $11,573
======= =======
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
<PAGE> 4
NEXTEL COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
UNAUDITED
<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
OPERATING REVENUES.......................................... $ 2,346 $ 1,255
-------- --------
OPERATING EXPENSES
Cost of revenues.......................................... 504 371
Selling, general and administrative....................... 1,523 1,101
Depreciation and amortization............................. 732 583
-------- --------
2,759 2,055
-------- --------
OPERATING LOSS.............................................. (413) (800)
-------- --------
OTHER INCOME (EXPENSE)
Interest expense.......................................... (627) (468)
Interest income........................................... 28 29
Other, net................................................ (32) (37)
-------- --------
(631) (476)
-------- --------
LOSS BEFORE INCOME TAX BENEFIT AND EXTRAORDINARY ITEM....... (1,044) (1,276)
INCOME TAX BENEFIT.......................................... 25 128
-------- --------
LOSS BEFORE EXTRAORDINARY ITEM.............................. (1,019) (1,148)
EXTRAORDINARY ITEM -- LOSS ON EARLY RETIREMENT OF DEBT, NET
OF INCOME TAX OF $0....................................... -- (133)
-------- --------
NET LOSS.................................................... (1,019) (1,281)
MANDATORILY REDEEMABLE PREFERRED STOCK DIVIDENDS............ (142) (107)
-------- --------
LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS.................... $ (1,161) $ (1,388)
======== ========
LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS, BASIC
AND DILUTED:
Loss before extraordinary item attributable to common
stockholders........................................... $ (3.78) $ (4.56)
Extraordinary item........................................ -- (0.48)
-------- --------
$ (3.78) $ (5.04)
======== ========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (IN
THOUSANDS)................................................ 307,286 275,584
======== ========
COMPREHENSIVE LOSS, NET OF INCOME TAX
Net loss.................................................. $ (1,019) $ (1,281)
Unrealized gain (loss) on available-for-sale securities... 54 (25)
Foreign currency translation adjustment................... (121) (16)
-------- --------
COMPREHENSIVE LOSS.......................................... $ (1,086) $ (1,322)
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
<PAGE> 5
NEXTEL COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
UNAUDITED
<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
OPERATING REVENUES.......................................... $ 889 $ 506
-------- --------
OPERATING EXPENSES
Cost of revenues.......................................... 175 142
Selling, general and administrative....................... 539 404
Depreciation and amortization............................. 261 204
-------- --------
975 750
-------- --------
OPERATING LOSS.............................................. (86) (244)
-------- --------
OTHER INCOME (EXPENSE)
Interest expense.......................................... (220) (171)
Interest income........................................... 16 8
Other, net................................................ (30) (40)
-------- --------
(234) (203)
-------- --------
LOSS BEFORE INCOME TAX BENEFIT.............................. (320) (447)
INCOME TAX BENEFIT.......................................... 8 45
-------- --------
NET LOSS.................................................... (312) (402)
MANDATORILY REDEEMABLE PREFERRED STOCK DIVIDENDS............ (49) (40)
-------- --------
LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS.................... $ (361) $ (442)
======== ========
LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS, BASIC
AND DILUTED............................................... $ (1.10) $ (1.56)
======== ========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (IN
THOUSANDS)................................................ 327,266 282,691
======== ========
COMPREHENSIVE LOSS, NET OF INCOME TAX
Net loss.................................................. $ (312) $ (402)
Unrealized gain (loss) on available-for-sale securities... 25 (18)
Foreign currency translation adjustment................... (11) (7)
-------- --------
COMPREHENSIVE LOSS.......................................... $ (298) $ (427)
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
5
<PAGE> 6
NEXTEL COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(DOLLARS IN MILLIONS)
UNAUDITED
<TABLE>
<CAPTION>
CLASS B
CLASS A PREFERRED CLASS A CLASS B
PREFERRED STOCK STOCK COMMON STOCK COMMON STOCK
------------------ --------------- -------------------- ------------------- PAID-IN
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT CAPITAL
--------- ------ ------ ------ ----------- ------ ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1999....... 7,905,981 $291 82 $ -- 272,087,322 $ -- 17,830,000 $ -- $4,379
Issuance of common stock due
to:
Exercise of options and
warrants................. 26,697,518 -- 433
Employee stock purchase
plan..................... --
Cash investment (Note 2)... 16,666,667 -- 600
Deferred compensation, net... 33
Unrealized gain on
available-for-sale
securities, net of income
tax........................
Foreign currency translation
adjustment.................
Mandatorily redeemable
preferred stock
dividends.................. (142)
Other........................
Net loss.....................
--------- ---- -- ---- ----------- ---- ---------- ---- ------
BALANCE, SEPTEMBER 30, 1999.... 7,905,981 $291 82 $ -- 315,451,507 $ -- 17,830,000 $ -- $5,303
========= ==== == ==== =========== ==== ========== ==== ======
<CAPTION>
ACCUMULATED OTHER
COMPREHENSIVE
(LOSS) INCOME
-------------------------
TREASURY STOCK UNREALIZED CUMULATIVE
ACCUMULATED ----------------- DEFERRED GAIN ON TRANSLATION
DEFICIT SHARES AMOUNT COMPENSATION INVESTMENTS ADJUSTMENT TOTAL
----------- -------- ------ ------------ ----------- ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1999....... $(4,401) 701,095 $(13) $ (2) $-- $ (24) $ 230
Issuance of common stock due
to:
Exercise of options and
warrants................. 433
Employee stock purchase
plan..................... (357,459) 7 7
Cash investment (Note 2)... 600
Deferred compensation, net... (19) 14
Unrealized gain on
available-for-sale
securities, net of income
tax........................ 54 54
Foreign currency translation
adjustment................. (121) (121)
Mandatorily redeemable
preferred stock
dividends.................. (142)
Other........................ 42,819 (2) (2)
Net loss..................... (1,019) (1,019)
------- -------- ---- ---- --- ----- -------
BALANCE, SEPTEMBER 30, 1999.... $(5,420) 386,455 $ (8) $(21) $54 $(145) $ 54
======= ======== ==== ==== === ===== =======
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
6
<PAGE> 7
NEXTEL COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(DOLLARS IN MILLIONS)
UNAUDITED
<TABLE>
<CAPTION>
1999 1998
------- -------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.................................................. $(1,019) $(1,281)
Adjustments to reconcile net loss to net cash used in
operating activities:
Amortization of deferred financing costs and accretion
of senior redeemable notes............................ 311 364
Depreciation and amortization.......................... 732 583
Provision for losses on accounts receivable............ 110 52
Deferred income tax benefit............................ (25) (128)
Extraordinary loss on retirement of debt............... -- 133
Net foreign currency transaction loss (gain)........... 61 (7)
Gain on sale of equity in joint venture................ (70) --
Loss from unconsolidated equity investments............ 49 6
Loss on interest rate protection agreement............. -- 47
Other, net............................................. 23 30
Change in assets and liabilities, net of effects from
acquisitions:
Accounts and notes receivable........................ (230) (196)
Subscriber unit and accessory inventory.............. (21) 1
Other assets......................................... 12 (29)
Accounts payable, accrued expenses and other......... 31 125
------- -------
Net cash used in operating activities............. (36) (300)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (Note 1)............................. (1,075) (1,760)
Proceeds from sale of assets.............................. 290 --
Payments for acquisitions and purchase of licenses, net of
cash acquired.......................................... (58) (349)
Other investments in and advances to affiliates........... (37) (175)
Purchases of marketable securities........................ (1) (98)
Proceeds from maturities and sales of marketable
securities............................................. -- 176
------- -------
Net cash used in investing activities............. (881) (2,206)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of stock and exercise of stock options, warrants and
other.................................................. 1,033 28
Issuance of debt securities............................... 600 1,401
Proceeds from finance obligation.......................... 575 --
Borrowings under long-term credit facilities.............. 233 1,052
Repayments under long-term credit facilities.............. -- (972)
Revolving line of credit (repayments) borrowings, net..... (423) 1,064
Repayments under finance obligation....................... (10) --
Other long-term debt repayments, net...................... (13) (6)
Deferred financing costs.................................. (33) (90)
Capital contributions from minority stockholders.......... 13 10
Issuance of mandatorily redeemable preferred stock........ -- 750
Retirement of debt securities............................. -- (741)
------- -------
Net cash provided by financing activities......... 1,975 2,496
------- -------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS........ 1,058 (10)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD.............. 321 302
------- -------
CASH AND CASH EQUIVALENTS, END OF PERIOD.................... $ 1,379 $ 292
======= =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest.................................... $ 255 $ 107
======= =======
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
7
<PAGE> 8
NEXTEL COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
NOTE 1 -- BASIS OF PRESENTATION.
Our unaudited condensed consolidated financial statements have been
prepared under the rules and regulations of the Securities and Exchange
Commission and reflect all adjustments that are necessary for a fair
presentation of the results for the interim periods. All adjustments made were
normal recurring accruals.
You should read the condensed consolidated financial statements in
conjunction with the consolidated financial statements and notes contained in
our Annual Report on Form 10-K for the year ended December 31, 1998, and Nextel
International, Inc.'s Annual Report on Form 10-K for the year ended December 31,
1998, for matters related to the operations of Nextel International, Inc., an
indirect, substantially wholly-owned subsidiary of Nextel and its subsidiaries.
You should not expect the results of operations of interim periods to be an
indication of the results for a full year.
RECLASSIFICATIONS. Certain prior period amounts have been reclassified to
conform to our current year presentation.
SUPPLEMENTAL CASH FLOW INFORMATION. During the nine-month periods ended
September 30, 1999 and 1998, we incurred capital expenditures of $1,347 million
(including an increase of $272 million in amounts that were accrued and unpaid
or financed) and $1,726 million (excluding a decrease of $34 million in amounts
accrued and unpaid or financed), respectively.
For the nine-month periods ended September 30, 1999 and 1998, total
interest costs were $656 million and $510 million, respectively, of which $29
million and $42 million were capitalized.
REVENUE RECOGNITION. We refer to the handset device on which we deliver
services as a subscriber unit. We recognize revenue for airtime and other
services over the period earned, net of credits and adjustments and recognize
revenue from sales of subscriber units and accessories when the subscriber units
and accessories are delivered. The costs of customer discounts and rebates are
recorded when the related revenues are recognized. We establish an allowance for
doubtful accounts sufficient to cover probable losses.
DIGITAL SUBSCRIBER UNIT AND ACCESSORY SALES AND RELATED COSTS. The loss
generated from the sale of the subscriber units used in our digital mobile
network primarily results from our subsidy of digital subscriber units and
accessories and represents marketing costs. Consolidated digital subscriber unit
and accessory sales and the related cost of sales, including current period
order fulfillment and installation related expenses and write downs of digital
subscriber unit inventory and related accessories for shrinkage and
obsolescence, are classified within selling, general and administrative expenses
as follows (dollars in millions):
<TABLE>
<CAPTION>
NINE MONTHS THREE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------- -------------
1999 1998 1999 1998
----- ----- ----- ----
<S> <C> <C> <C> <C>
Subscriber unit and accessory sales...................... $ 349 $ 308 $ 121 $126
Cost of subscriber unit and accessory sales.............. 659 502 236 192
----- ----- ----- ----
$(310) $(194) $(115) $(66)
===== ===== ===== ====
</TABLE>
INTANGIBLE ASSETS. As a result of customer acceptance and support of the
financial community which became specifically apparent in the fourth quarter of
1997, we increased the amortization period from 20 years to 40 years for all of
our domestic Federal Communications Commission licenses and excess of purchase
price over the fair value of net assets acquired (goodwill) related to all
domestic acquisitions. Licenses and the excess of purchase price over the fair
value of net assets acquired related to our international operations are
amortized on a straight-line basis over 20 years.
8
<PAGE> 9
We amortize customer lists over their expected useful lives, which is
generally 3 years for our digital customer base and up to 10 years for our
analog customer base, reflecting the relatively greater stability of our analog
customers. Other intangible assets with useful lives of up to 20 years include
non-compete agreements which are amortized over the lives of the related
agreements, generally 2 to 5 years; favorable leases which are amortized over 2
to 3 years; and trademarks which are amortized over 10 years for international
operations and 20 years for domestic operations.
RESTRICTED CASH AND CASH EQUIVALENTS. At September 30, 1999 and December
31, 1998, approximately $78 million and $121 million, respectively, in cash and
cash equivalents held by Nextel International were not available to fund any of
the cash needs of our domestic business due to restrictions contained in Nextel
International's financing agreements.
NEW ACCOUNTING PRONOUNCEMENTS. In June 1998, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No. 133,
"Accounting for Derivative Instruments and Hedging Activities," which
establishes accounting and reporting standards for derivative instruments
(including certain derivatives embedded in other contracts) and for hedging
activities by requiring that all derivatives be recognized on the balance sheet
and measured at fair value. In June 1999, the FASB issued SFAS No. 137,
"Deferral of the Effective Date of FASB Statement No. 133 -- an Amendment of
FASB Statement No. 133," which deferred the effective date for us until January
1, 2001. We are in the process of evaluating the potential impact of this
standard on our financial position and results of operations.
NOTE 2 -- SIGNIFICANT TRANSACTIONS AND DEVELOPMENTS.
NEXTEL PARTNERS TRANSACTIONS. On January 29, 1999, along with Nextel
Partners, Inc. and certain other parties, including Motorola, Inc. and Eagle
River Investments, L.L.C., an affiliate of Mr. Craig O. McCaw, one of our
principal stockholders, we entered into definitive agreements relating to the
capitalization, governance, financing and operation of Nextel Partners. Nextel
Partners is constructing and operating a digital wireless system utilizing the
technology developed by Motorola employed in our national network. In connection
with this transaction, we sold assets, and have received regulatory approval to
transfer certain Federal Communications Commission licenses, to Nextel Partners.
In exchange, Nextel Partners issued to us equity representing about a 29% voting
interest in Nextel Partners and having an agreed value of $131 million and paid
us about $132 million in cash related to the assets sold and the reimbursement
of costs and net operating expenses. The net book value of the assets sold was
classified as assets held for sale as of December 31, 1998. On September 9,
1999, pursuant to the definitive agreements, Nextel Partners exercised its
option to acquire certain additional territories and assets from us and related
Federal Communications Commission licenses (which we are in the process of
transferring), and we received an aggregate consideration of about $19 million
consisting of approximately $10 million in cash and $9 million in equity. Also
on September 9, 1999, we made an additional $13 million cash equity investment
in Nextel Partners to avoid dilution of our 29% voting interest.
The agreements with Nextel Partners establish certain circumstances in
which Nextel Partners will have the option to acquire certain additional
territories and related Federal Communications Commission licenses from us. In
addition, the definitive agreements also establish certain circumstances in
which we will have the right or the obligation to purchase the remaining equity
interests in Nextel Partners at specified prices. The investment in Nextel
Partners is accounted for by the equity method.
TOWERS TRANSACTIONS. On April 20, 1999, Nextel and some of our
subsidiaries and SpectraSite Holdings, Inc. and some of its subsidiaries
consummated agreements under which we transferred specified telecommunications
towers and related assets to SpectraSite, which were then leased back to us. In
the transaction, we received $560 million in cash, which we reflected as a
finance obligation on our balance sheet at that time, and received about an 18%
ownership interest in SpectraSite, which has since been reduced to about 16% as
of September 30, 1999 as a result of the issuance of additional shares by
SpectraSite. In connection with the transaction, we entered into an exclusive
agreement for SpectraSite to construct additional towers in the United States to
support expansion of the digital networks of Nextel and Nextel Partners. During
the third quarter of 1999, we received $15 million for the sale of additional
towers (then leased back to us), resulting in
9
<PAGE> 10
a corresponding increase in the finance obligation. Due to our continuing
involvement related to our ownership interest in SpectraSite, these
sale-leaseback transactions are accounted for by the financing method.
MICROSOFT TRANSACTION. On May 27, 1999, Microsoft Corporation purchased
about 16.7 million shares of our common stock for an aggregate cash investment
of $600 million, representing a per share price of $36.00. The agreements
related to the transaction establish certain transfer restrictions that apply to
the shares purchased by Microsoft and include an investor standstill provision.
Additionally, we agreed to provide specified registration rights that apply to
those shares. In connection with this transaction, we also entered into
agreements under which Microsoft is to provide certain portal services and
related assistance in connection with our Nextel Online(SM) service offering.
NEXTBAND TRANSACTION. On June 3, 1999, we sold our 50% interest in
NEXTBAND Communications, L.L.C. to NEXTLINK Communications, Inc. for $138
million in cash and recognized a gain of $70 million, which is included in other
income (expense) in our statement of operations.
MCCAW INVESTOR OPTION EXERCISE. On July 28, 1999, Digital Radio L.L.C., an
entity controlled by Craig O. McCaw, exercised in full its option to purchase 15
million shares of our Class A common stock for an aggregate cash purchase price
of $278 million.
10
<PAGE> 11
NOTE 3 -- LONG-TERM DEBT.
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
------------- ------------
(DOLLARS IN MILLIONS)
<S> <C> <C>
11.5% SENIOR REDEEMABLE DISCOUNT NOTES DUE 2003,
net of unamortized discount of $0........................... $ 36 $ 36
9.75% SENIOR REDEEMABLE DISCOUNT NOTES DUE 2004,
net of unamortized discount of $0 and $13................. 1,127 1,114
10.125% SENIOR REDEEMABLE DISCOUNT NOTES DUE 2004,
net of unamortized discount of $57 and $67................ 352 342
12.25% SENIOR REDEEMABLE DISCOUNT NOTES DUE 2004,
net of unamortized discount of $1 and $1.................. 8 8
10.25% SENIOR REDEEMABLE DISCOUNT NOTES DUE 2005,
net of unamortized discount of $21 and $22................ 94 93
13.0% SENIOR REDEEMABLE DISCOUNT NOTES DUE 2007,
(issued by Nextel International), net of unamortized
discount of $274 and $337................................. 677 614
10.65% SENIOR REDEEMABLE DISCOUNT NOTES DUE 2007,
net of unamortized discount of $222 and $268.............. 618 572
9.75% SENIOR SERIAL REDEEMABLE DISCOUNT NOTES DUE 2007,
net of unamortized discount of $287 and $345.............. 842 784
4.75% CONVERTIBLE SENIOR NOTES DUE 2007..................... 600 --
9.95% SENIOR SERIAL REDEEMABLE DISCOUNT NOTES DUE 2008,
net of unamortized discount of $453 and $536.............. 1,174 1,091
12.125% SENIOR REDEEMABLE DISCOUNT NOTES DUE 2008,
(issued by Nextel International), net of unamortized
discount of $249 and $289................................. 481 441
12.0% SENIOR SERIAL REDEEMABLE NOTES DUE 2008,
net of unamortized discount of $4 and $4.................. 296 296
BANK CREDIT FACILITY, interest payable quarterly at an
adjusted rate calculated based either on the prime rate or
LIBOR (6.94% to 9.06% -- 1999;
7.06% to 10.50% -- 1998).................................. 1,795 2,118
NEXTEL INTERNATIONAL VENDOR CREDIT FACILITIES, interest
payable semiannually at 2.50% over the prime rate (10.28%
to 10.50% -- 1999; 10.25% to 11.00% -- 1998).............. 242 111
NEXTEL ARGENTINA BANK CREDIT FACILITY, interest payable
quarterly at an adjusted rate calculated based either on
the prime rate or LIBOR (8.75% to 9.50% -- 1999 and
1998)..................................................... 100 83
OTHER....................................................... 5 16
------ ------
8,447 7,719
Less current portion...................................... (3) (9)
------ ------
$8,444 $7,710
====== ======
</TABLE>
CONVERTIBLE NOTES OFFERING. In June 1999, we completed the sale of $600
million in principal amount of our 4.75% Convertible Senior Notes due 2007,
generating approximately $588 million in net cash proceeds. Cash interest is
payable semi-annually on January 1 and July 1 of each year commencing on January
1, 2000. The notes are convertible at the option of the holders into common
stock at any time after the date of original issuance and prior to redemption,
repurchase or maturity at a conversion price of $47.308 per share, subject to
adjustment. The notes are redeemable at any time on or after July 6, 2002 at
specified redemption prices plus accrued interest. The notes are senior
unsecured indebtedness of Nextel and rank equal in right of payment with all our
other unsubordinated, unsecured indebtedness.
MOTOROLA INTERNATIONAL FINANCING. On February 4, 1999, Nextel
International and Motorola Credit Corporation entered into definitive agreements
providing for $225 million in secured financings. The loans
11
<PAGE> 12
under this facility will be repaid in eight equal semi-annual installments
beginning June 30, 2001, will mature December 31, 2004 and bear interest at
variable rates based on either the U.S. prime rate or the London Interbank
Offered Rate. The facility is secured by, among other things, a pledge of the
shares of stock of some of Nextel International's direct and indirect
subsidiaries. The availability of borrowings under this facility is subject to
the satisfaction or waiver of certain applicable borrowing conditions.
NOTE 4 -- CONTINGENCIES.
See Part II, Item 1. "Legal Proceedings" for a discussion of certain
lawsuits and other legal matters.
NOTE 5 -- MANDATORILY REDEEMABLE PREFERRED STOCK.
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
------------- ------------
(DOLLARS IN MILLIONS)
<S> <C> <C>
SERIES D EXCHANGEABLE PREFERRED STOCK MANDATORILY REDEEMABLE
2009,
13% cumulative annual dividend; 644,432 and 585,473 shares
issued; 644,419 and 585,460 shares outstanding, stated at
liquidation value........................................... $ 662 $ 601
SERIES E EXCHANGEABLE PREFERRED STOCK MANDATORILY REDEEMABLE
2010,
11.125% cumulative annual dividend; 885,251 and 815,314
shares issued; 885,236 and 815,299 shares outstanding,
stated at liquidation value............................... 897 827
ZERO COUPON CONVERTIBLE PREFERRED STOCK MANDATORILY
REDEEMABLE 2013,
no dividend; convertible into 5,761,764 shares of Class A
Common Stock; 591,308 shares issued and outstanding;
stated at fair value when issued plus accretion of
liquidation preference at 9.25% compounded quarterly...... 161 150
------ ------
$1,720 $1,578
====== ======
</TABLE>
NOTE 6 -- SEGMENT REPORTING.
We operate in two business segments: domestic and international. These
reportable segments are strategic business units that are in different phases of
development that we manage and have financed separately based on the fundamental
differences in their operations. We evaluate performance of these segments and
allocate resources to them based on earnings (losses) before interest, taxes,
depreciation and amortization and other non-recurring charges (EBITDA).
12
<PAGE> 13
<TABLE>
<CAPTION>
DOMESTIC INTERNATIONAL CONSOLIDATED DOMESTIC INTERNATIONAL CONSOLIDATED
-------- ------------- ------------ -------- ------------- ------------
) (DOLLARS IN MILLIONS
<S> <C> <C> <C> <C> <C> <C>
FOR THE NINE MONTHS ENDED FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 SEPTEMBER 30, 1998
--------------------------------------- ---------------------------------------
Operating revenues............. $ 2,277 $ 69 $ 2,346 $ 1,228 $ 27 $ 1,255
======= ====== ======= ======= ====== =======
EBITDA......................... $ 447 $ (128) $ 319 $ (141) $ (76) $ (217)
Depreciation and 651 81 732 550 33 583
amortization.................
Interest expense............... (499) (128) (627) (393) (75) (468)
Interest income................ 23 5 28 14 15 29
Other income (expense), net.... 34 (66) (32) (42) 5 (37)
------- ------ ------- ------- ------ -------
Loss before income tax benefit
and
extraordinary item........... $ (646) $ (398) $(1,044) $(1,112) $ (164) $(1,276)
======= ====== ======= ======= ====== =======
Capital expenditures........... $ 1,224 $ 123 $ 1,347 $ 1,428 $ 298 $ 1,726
======= ====== ======= ======= ====== =======
FOR THE THREE MONTHS ENDED FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 1999 SEPTEMBER 30, 1998
--------------------------------------- ---------------------------------------
Operating revenues............. $ 862 $ 27 $ 889 $ 497 $ 9 $ 506
======= ====== ======= ======= ====== =======
EBITDA......................... $ 210 $ (35) $ 175 $ 7 $ (47) $ (40)
Depreciation and 232 29 261 191 13 204
amortization.................
Interest expense............... (174) (46) (220) (140) (31) (171)
Interest income................ 14 2 16 3 5 8
Other income (expense), net.... (8) (22) (30) (46) 6 (40)
------- ------ ------- ------- ------ -------
Loss before income tax benefit
and
extraordinary item........... $ (190) $ (130) $ (320) $ (367) $ (80) $ (447)
======= ====== ======= ======= ====== =======
AS OF SEPTEMBER 30, 1999 AS OF DECEMBER 31, 1998
--------------------------------------- ---------------------------------------
Property, plant and equipment, $ 5,093 $ 504 $ 5,597 $ 4,384 $ 531 $ 4,915
net..........................
======= ====== ======= ======= ====== =======
Identifiable assets............ $11,662 $1,495 $13,157 $ 9,972 $1,601 $11,573
======= ====== ======= ======= ====== =======
</TABLE>
NOTE 7 -- SUBSEQUENT EVENTS.
Subsequent to September 30, 1999, we completed the following transactions,
each of which are more fully discussed in "Item 2. Management's Discussion and
Analysis of Financial Condition and Results of Operations -- C. Post Third
Quarter Transactions and Developments."
EQUITY OFFERING. On November 5, 1999, we completed the public offering and
sale of 33,781,785 shares of our Class A common stock (including 3,781,785
shares issued upon exercise in full of the underwriters' over-allotment option)
at a price of $83.8125 per share. All of the shares sold were offered by Nextel.
We received net proceeds of approximately $2.75 billion from the offering.
NEW BANK FINANCING. Effective on November 12, 1999, we entered into
definitive agreements which increased our total secured financing capacity under
our bank financing agreement to $5.0 billion, the borrowing of which is subject
to the satisfaction or waiver of applicable borrowing conditions.
DEBT ISSUANCE. On November 12, 1999, we completed a private placement of
$2.0 billion in principal at maturity of 9.375% Senior Serial Redeemable Notes
due 2009, yielding approximately $1.96 billion in net cash proceeds.
13
<PAGE> 14
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
A. OVERVIEW.
The following discussion of our condensed consolidated financial condition
and results of operations for the nine- and three-month periods ended September
30, 1999 and 1998, and significant factors that could affect our prospective
financial condition and results of operations, should also be read in
conjunction with our 1998 Annual Report on Form 10-K. Additional information
regarding our international operations is available in Nextel International's
1998 Annual Report on Form 10-K.
We provide a wide array of digital wireless communications services
throughout our domestic markets. We offer a differentiated, integrated package
of digital wireless communications services under the Nextel brand name,
primarily to business users. Our digital mobile network constitutes one of the
largest integrated wireless communications systems utilizing a single
transmission technology in the United States.
As of September 30, 1999:
- we provided service to about 4,050,900 digital subscriber units in the
United States, adding about 458,000 net subscriber units during the
quarter; and
- our digital network or the compatible digital network of Nextel
Partners, Inc., a joint venture in which we are a participant, was
operational in areas in and around 92 of the top 100 metropolitan
statistical areas in the United States.
We have announced our plans to offer our customers access to new digital
two-way mobile data and Internet connectivity services. Three new handsets
developed and manufactured by Motorola, the i1000plus(TM), the i500plus(TM) and
the i700plus(TM) have been introduced since May 1999. These new handsets are
expected to be the first in a product line that incorporates micro-browsers and
wireless Internet capability, which is planned to be combined with other mobile
data applications to be used in connection with our planned wireless data
service offering. We have begun testing the underlying technology for these
services in several U.S. markets and currently plan to commercially launch the
wireless data service offering in mid-2000. See, "H. Our Forward Looking
Statements Are Subject to a Variety of Factors that Could Cause Actual Results
to Differ Materially From Current Beliefs."
In addition to our domestic operations, we have ownership interests in
international wireless companies through our subsidiary, Nextel International,
Inc. The subsidiaries of Nextel International, or other entities in which Nextel
International holds equity or equivalent interests, own and operate wireless
communications systems in and around various major metropolitan market areas in
Latin America, Asia and Canada. Along with Nextel International, we provide
service in ten of the world's 25 largest cities.
B. THIRD QUARTER TRANSACTIONS AND DEVELOPMENTS.
1. MCCAW INVESTOR OPTION EXERCISES. On July 28, 1999, Digital Radio
L.L.C., an entity controlled by Craig O. McCaw, exercised in full its option to
purchase 15 million shares of our Class A common stock for an aggregate cash
purchase price of $278 million.
2. ACTIVITIES INVOLVING NEXTWAVE. On August 12, 1999, we announced that we
had reached agreement with the United States Department of Justice and the
Federal Communications Commission concerning the terms and conditions that would
apply to the resolution of the claims of the United States Government asserted
against NextWave Personal Communications, Inc. and some of its affiliates in the
context of a plan of reorganization for the NextWave entities contemplated to be
proposed and sponsored by us. Information concerning these arrangements and
copies of the agreement and related term sheet between us and the United States
Government are included in our Current Reports on Form 8-K dated and filed with
the Securities and Exchange Commission on August 12, 1999 and August 18, 1999.
NextWave Personal Communications, Inc. and its affiliates hold personal
communications services spectrum licenses granted by the Federal Communications
Commission. In June 1998, NextWave sought protection by commencing a voluntary
bankruptcy proceeding.
14
<PAGE> 15
Since reaching that agreement, we have engaged in negotiations with
representatives of the creditor and equity groups of the NextWave entities and
representatives of the Department of Justice and the Federal Communications
Commission regarding a potential Nextel-sponsored plan of reorganization. We
have not yet reached an agreement with these parties in interest, and we cannot
predict whether or when we will do so. Even if such agreement were to be
reached, any plan of reorganization that ultimately may be developed and
sponsored by us would be subject to various conditions to its successful
implementation, including consideration and approval of that plan in the
NextWave bankruptcy proceedings and the receipt of all required regulatory
approvals, consents and waivers. We do not intend to update our disclosures
concerning this matter unless and until we determine that future developments,
if any, warrant such updating disclosures or we determine that we are required
to do so to comply with disclosure obligations under applicable laws. See, "H.
Our Forward Looking Statements Are Subject to a Variety of Factors that Could
Cause Actual Results to Differ Materially From Current Beliefs."
3. MANAGEMENT CHANGES. On July 17, 1999, Timothy M. Donahue, formerly our
President and Chief Operating Officer, succeeded Daniel F. Akerson as our Chief
Executive Officer. Mr. Akerson stepped down from his position at Nextel to
become Co-Chairman of Eagle River, Inc., an entity controlled by Craig O. McCaw.
Mr. Akerson continues to serve as Chairman of our board of directors and also as
a member of the operations committee of the board. On September 22, 1999, Mr.
Akerson became Chairman and Chief Executive Officer of NEXTLINK Communications,
Inc., a publicly held competitive local exchange carrier controlled by Mr.
McCaw. NEXTLINK has significant fiber optic network capacity currently under
construction nationwide and significant holdings of local multipoint
distribution system fixed wireless spectrum in many metropolitan markets in the
United States.
C. POST THIRD QUARTER TRANSACTIONS AND DEVELOPMENTS.
1. EQUITY OFFERING. On November 5, 1999, we completed the public offering
and sale of 33,781,785 shares of our Class A common stock (including 3,781,785
shares issued upon exercise in full of the underwriters' over-allotment option)
at a price of $83.8125 per share. All of the shares sold were offered by Nextel.
We received net proceeds of approximately $2.75 billion from the offering.
2. NEW BANK FINANCING. Nextel, Nextel Finance Company, and certain other
subsidiaries of Nextel entered into definitive agreements effective on November
12, 1999, with respect to an amended and restated secured bank credit facility
that provides for up to $5.0 billion of secured financing, consisting of a $1.5
billion revolving loan and $3.5 billion in term loans. The maturity date of the
$1.5 billion revolving loan and a $1.7 billion portion of the term loans is
December 31, 2007. The remaining $1.8 billion in term loans mature in equal $900
million portions on June 30, 2008, and December 31, 2008. The maturity dates of
the loans can accelerate if our credit ratings are below specified levels and
the aggregate amount of specified debt obligations that mature before June 30,
2009, and the redemption price of redeemable stock that is mandatorily
redeemable before June 30, 2009, exceed specified amounts. Loans under the bank
credit facility bear interest payable quarterly, at variable rates calculated
based on either the prime rate or LIBOR.
Nextel contemplates accessing the bank credit facility and the proceeds of
the equity offering described above to finance investments and acquisitions, to
fund capital expenditures, and for working capital and other general corporate
purposes. Borrowings under the bank credit facility are secured by liens on
assets of our domestic subsidiaries that are "restricted" subsidiaries under the
terms of our indentures relating to our various outstanding issues of senior
discount notes. Certain of those indentures contain provisions that may limit
the amount of borrowings available under the bank credit facility in specified
circumstances.
3. DEBT ISSUANCE. On November 12, 1999, we completed the issuance and sale
in a private placement of $2.0 billion in principal of 9.375% Senior Serial
Redeemable Notes due 2009, generating about $1.96 billion in net proceeds. Cash
interest on these notes will be payable on May 15 and November 15 of each year,
commencing May 15, 2000, at a rate of 9.375% per annum. The notes are redeemable
at the option of Nextel, in whole or in part, at any time on or after November
15, 2004, at specified redemption prices. The
15
<PAGE> 16
notes are senior unsecured indebtedness of Nextel and rank equal in right of
payment with all our other unsubordinated, unsecured indebtedness. We intend to
use a portion of the net proceeds to repurchase or redeem our outstanding public
notes originally issued prior to 1997.
4. BOARD DEVELOPMENTS. On October 15, 1999, Mr. Keisuke Nakasaki resigned
from his position on our board of directors, reducing the board's size to nine.
Mr. Nakasaki had occupied his position on the board as result of rights granted
to an affiliate of Nippon Telegraph and Telephone Corp. in connection with and
linked to that affiliate's equity investment in Nextel. The contractual rights
to representation on our board may continue in effect for some time under the
terms of the relevant agreement. Nippon Telegraph and Telephone Corp. has
advised us that it does not intend to exercise those rights by designating a
replacement for Mr. Nakasaki to our board.
D. RESULTS OF OPERATIONS.
The following discussion compares our consolidated financial condition and
results of operations for the nine- and three-month periods ended September 30,
1999 and 1998, and significant factors that could affect our prospective
financial condition and results of operations.
1. OPERATING REVENUES.
<TABLE>
<CAPTION>
INCREASE/
% OF % OF (DECREASE) FROM
CONSOLIDATED CONSOLIDATED PREVIOUS YEAR
SEPTEMBER 30, OPERATING SEPTEMBER 30, OPERATING -----------------
1999 REVENUES 1998 REVENUES DOLLARS PERCENT
------------- ------------ ------------- ------------ ------- -------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
NINE MONTHS ENDED
Operating revenues.............. $2,346 100% $1,255 100% $1,091 87%
Domestic...................... 2,277 97% 1,228 98% 1,049 85%
International................. 69 3% 27 2% 42 156%
THREE MONTHS ENDED
Operating revenues.............. 889 100% 506 100% 383 76%
Domestic...................... 862 97% 497 98% 365 73%
International................. 27 3% 9 2% 18 200%
</TABLE>
Consolidated operating revenues include service revenues, which consist
primarily of charges for airtime usage and monthly network access fees from
providing mobile wireless services. Domestic operating revenues increased for
the nine- and three-month periods ending September 30, 1999 principally as a
result of a 68% increase in end-of-period domestic digital subscriber units in
service from about 2,417,400 at September 30, 1998 to about 4,050,900 at
September 30, 1999. In addition, we saw an increase in minutes of use per
digital subscriber unit along with an increase in the average monthly revenue
per digital subscriber unit from about $70 during the third quarter of 1998 to
about $74 during the third quarter of 1999. The growth in digital subscriber
units in service is the result of a number of factors, principally:
- the increased number of indirect distribution channels;
- expanded network coverage and capacity;
- differentiated products and services including instant conferencing
capabilities;
- increased consumer awareness and acceptance of wireless communications;
and
- pricing plans targeted at particular market segments.
International operating revenues increased primarily as a result of an
increase in end-of-period digital subscriber units in service from September 30,
1998 to September 30, 1999. This increase resulted from the launch of digital
services in major markets in Brazil, Argentina, and Mexico in the second half of
1998.
16
<PAGE> 17
2. COST OF REVENUES.
<TABLE>
<CAPTION>
INCREASE/
% OF % OF (DECREASE) FROM
CONSOLIDATED CONSOLIDATED PREVIOUS YEAR
SEPTEMBER 30, OPERATING SEPTEMBER 30, OPERATING -----------------
1999 REVENUES 1998 REVENUES DOLLARS PERCENT
------------- ------------ ------------- ------------ ------- -------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
NINE MONTHS ENDED
Cost of revenues................ $504 21% $371 30% $133 36%
Domestic...................... 474 20% 358 29% 116 32%
International................. 30 1% 13 1% 17 131%
THREE MONTHS ENDED
Cost of revenues................ 175 20% 142 28% 33 23%
Domestic...................... 163 18% 136 27% 27 20%
International................. 12 2% 6 1% 6 100%
</TABLE>
Cost of revenues consists primarily of network operating costs and
interconnection fees assessed by local exchange carriers. In the nine- and
three-month periods ended September 30, 1999, domestic cost of revenues
increased from the nine- and three-month periods ended September 30, 1998,
primarily as a result of a 44% increase in the number of digital switches in
service and a 31% increase in digital cell sites and related equipment deployed
by us from September 30, 1998 to September 30, 1999, as well as increases in
airtime usage. Increased airtime usage resulted from increased subscribers and
increased interconnect minutes of use per subscriber. Domestic cost of revenues
as a percentage of consolidated operating revenues decreased due to the
economies of scale achieved as a result of increases in system usage and digital
subscriber units placed in service during 1999 and the last quarter of 1998.
The increase in international cost of revenues from the nine- and
three-month periods ended September 30, 1998 to those ended September 30, 1999
is attributable primarily to the increase in the number of cell sites and
switches placed in service from September 30, 1998 to September 30, 1999, as
well as increases in international expenses associated with increased airtime
usage. International cost of revenues, such as site rental and
telecommunications expenses, are expected to increase as additional cell sites
and switches are placed into service and additional markets are launched. See,
"H. Our Forward Looking Statements Are Subject to a Variety of Factors that
Could Cause Actual Results to Differ Materially From Current Beliefs."
3. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.
<TABLE>
<CAPTION>
INCREASE/
% OF % OF (DECREASE) FROM
CONSOLIDATED CONSOLIDATED PREVIOUS YEAR
SEPTEMBER 30, OPERATING SEPTEMBER 30, OPERATING -----------------
1999 REVENUES 1998 REVENUES DOLLARS PERCENT
------------- ------------ ------------- ------------ ------- -------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
NINE MONTHS ENDED
Selling, general and
administrative................ $1,523 65% $1,101 88% $422 38%
Selling and marketing......... 930 40% 692 55% 238 34%
General and administrative.... 593 25% 409 33% 184 45%
THREE MONTHS ENDED
Selling, general and
administrative................ 539 61% 404 80% 135 33%
Selling and marketing......... 329 37% 251 50% 78 31%
General and administrative.... 210 24% 153 30% 57 37%
</TABLE>
The increase in selling, general and administrative expenses consisted of
an increase in domestic expenses of $345 million and an increase in
international expenses of $77 million for the nine-month period ended September
30, 1999 from the comparable 1998 period. For the three-month period ended
September 30, 1999
17
<PAGE> 18
as compared to the three-month period ended September 30, 1998, the increase is
attributable almost entirely to an increase in domestic expenses.
The increase in selling and marketing expenses in the nine- and three-month
periods ended September 30, 1999 from the comparable 1998 periods consists
primarily of increased costs incurred in connection with higher consolidated
sales of digital subscriber units including:
- $116 million and $49 million, respectively, of increased losses
generated from increased consolidated sales of digital subscriber units
and related accessories (including losses of $15 million and $2 million
relating to international digital subscriber unit sales);
- $83 million and $30 million, respectively, of increased domestic
commissions and residuals earned by indirect dealers and distributors as
a result of increased digital subscriber unit sales through, and
increased reliance on, indirect distribution channels; and
- $29 million of increased advertising and marketing expenses for the
nine-month period ended September 30, 1999 from international operations
due to aggressive marketing campaigns directed at increasing customer
awareness of digital services and an increase in the size of the
international sales force to achieve this expansion.
The increase in general and administrative expenses during the nine- and
three-month periods ended September 30, 1999 from the comparable 1998 periods is
primarily attributable to the following:
- $83 million and $33 million, respectively, of increased domestic
expenses related to billing, collection and customer care activities as
a result of a larger customer base;
- $68 million and $27 million, respectively, of increased domestic
personnel, facilities and general corporate expenses primarily
reflecting increased staffing for back-office activities required to
serve the larger customer base; and
- $33 million of increased international general and administrative
expenses during the nine-month period ended September 30, 1999, incurred
to support the growth in our international markets, including $26
million of bad debt expenses resulting from a concerted program
initiated in the first quarter of 1999 to aggressively review and take
action on outstanding accounts of delinquent paying customers. As a
result of these initiatives, bad debt expense decreased $8 million from
$15 million for the quarter ended June 30, 1999 to about $7 million for
the quarter ended September 30, 1999.
The aggregate amount of selling, general and administrative expenses are
expected to increase both domestically and internationally as a result of a
number of factors, including but not limited to:
- continuing aggressive marketing campaigns;
- increasing sales and marketing, customer care and back-office support
staffing; and
- increasing aggregate amounts of subsidies as we sell additional digital
subscriber units and related accessories, although we do not anticipate
the total cost per customer added to increase.
See, "H. Our Forward Looking Statements Are Subject to a Variety of Factors
that Could Cause Actual Results to Differ Materially From Current Beliefs."
18
<PAGE> 19
4. DEPRECIATION AND AMORTIZATION.
<TABLE>
<CAPTION>
INCREASE/
% OF % OF (DECREASE) FROM
CONSOLIDATED CONSOLIDATED PREVIOUS YEAR
SEPTEMBER 30, OPERATING SEPTEMBER 30, OPERATING -----------------
1999 REVENUES 1998 REVENUES DOLLARS PERCENT
------------- ------------ ------------- ------------ ------- -------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
NINE MONTHS ENDED
Depreciation and amortization... $732 31% $583 46% $149 26%
THREE MONTHS ENDED
Depreciation and amortization... 261 29% 204 40% 57 28%
</TABLE>
Depreciation and amortization increased primarily due to depreciation as a
result of placing into service additional cell sites and switches both in
existing domestic markets (primarily to expand the coverage and capacity of our
digital mobile network) and in existing and new international markets launched
in the second half of 1998. System assets relating to the development and
expansion of the digital mobile networks, both domestically and internationally,
represent the largest portion of capital expenditures during the period.
Depreciation begins upon commencement of placing the system assets into service
in the relevant markets.
Beginning in the fourth quarter of 1997, we extended the amortization
period applicable to our Federal Communications Commissions licenses and certain
goodwill from 20 years to 40 years. We believe that some events occurred
throughout 1997 and became specifically apparent during the fourth quarter of
1997 that supported the extension of the useful lives of both the Federal
Communications Commissions licenses and goodwill. These events provided specific
evidence that our long-term business plan was more likely to be achieved,
resulting in the ability to economically utilize these assets over a longer
period (i.e., 40 years) than was originally foreseeable. Specifically, our
technology was modified throughout 1995, 1996 and 1997 to resolve concerns
regarding the performance our wireless technology experienced when the
technology was initially deployed. The new product and digital technology became
firmly established in October 1997 when we reached 1 million digital subscriber
units in service and noted increases in average revenue per unit. Further, we
raised substantial capital during 1996 and 1997 enhancing our ability to
complete the network build-out in accordance with our business plan. The
combination of our proven technology, customer acceptance and financial support
have allowed us to build our network and provide substantially more than the
minimal level of service necessary to assure the renewal of our Federal
Communications Commissions licenses. The majority of our Federal Communications
Commissions licenses have been obtained through business acquisitions. Our
experience is that the value attributed to the net assets acquired in these
business acquisitions, excluding the Federal Communications Commission licenses,
and liabilities assumed is generally small, reflecting the less significant
value we attach to such net assets and liabilities. Accordingly, the purchase
price offered to the seller reflects primarily the value of the licenses
acquired. Any resulting goodwill is amortized over the same life as our Federal
Communications Commission licenses because we believe the two are closely
related and provide benefits to us over the same periods. Therefore, we extended
the life of goodwill to coincide to the life of the licenses.
19
<PAGE> 20
5. SEGMENT EARNINGS (LOSSES), INTEREST EXPENSE, INTEREST INCOME AND OTHER.
<TABLE>
<CAPTION>
INCREASE/
% OF % OF (DECREASE) FROM
CONSOLIDATED CONSOLIDATED PREVIOUS YEAR
SEPTEMBER 30, OPERATING SEPTEMBER 30, OPERATING -----------------
1999 REVENUES 1998 REVENUES DOLLARS PERCENT
------------- ------------ ------------- ------------ ------- -------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
NINE MONTHS ENDED
Segment earnings (losses)..... $ 319 14% $ (217) (17)% $ 536 (247)%
Interest expense.............. 627 27% 468 37% 159 34%
Interest income............... 28 1% 29 2% (1) (3)%
Other, net:
Realized gain on sale of
investment............... 70 3% -- -- 70 NM
Foreign currency transaction
gain (loss).............. (61) (3)% 7 1% (68) NM
Equity in losses of
subsidiaries............. (49) (2)% (6) -- (43) NM
Other income (expense),
net...................... 8 -- (38) (3)% 46 NM
Income tax benefit............ 25 1% 128 10% (103) (80)%
Loss attributable to common
stockholders................ 1,161 49% 1,388 111% (227) (16)%
THREE MONTHS ENDED
Segment earnings (losses)..... 175 20% (40) (8)% 215 NM
Interest expense.............. 220 25% 171 34% 49 29%
Interest income............... 16 2% 8 2% 8 100%
Other, net:
Foreign currency transaction
gain (loss).............. (15) (2)% 7 1% (22) NM
Equity in losses of
subsidiaries............. (18) (2)% (4) (1)% (14) NM
Other income (expense),
net...................... 3 -- (43) (8)% 46 NM
Income tax benefit............ 8 1% 45 9% (37) (82)%
Loss attributable to common
stockholders................ 361 41% 442 87% (81) (18)%
NM-Not Meaningful
</TABLE>
We define segment earnings as earnings (losses) before interest, taxes,
depreciation and amortization and other non-recurring charges. Domestic segment
earnings are expected to grow due to an increasing customer base and decreasing
operating expenses as a percentage of revenues due to the economies of scale
achieved as a result of increases in system usage. We expect international
segment losses to continue while we are building out our digital systems and
expanding our presence in our international markets. See, "H. Our Forward
Looking Statements Are Subject to a Variety of Factors that Could Cause Actual
Results to Differ Materially From Current Beliefs."
Domestic segment earnings were $447 million and $210 million for the nine-
and three-months ended September 30, 1999, compared to segment losses of $141
million and segment earnings of $7 million for the nine- and three-months ended
September 30, 1998. International segment losses were $128 million and $35
million for the nine- and three-months ended September 30, 1999, compared to
segment losses of $76 million and $47 million for the nine- and three-months
ended September 30, 1998. Based on the current stage of development of each of
our reportable segments, most of our operating revenues and identifiable assets
pertain to our domestic operations, while most of our segment losses are related
to our international operations.
The increase in interest expense for the nine months ended September 30,
1999 from the comparable 1998 periods resulted from Nextel's issuance of senior
redeemable notes during November of 1998 and June of 1999, as well as a higher
average level of borrowings under our bank credit agreement and Nextel
International's bank and vendor credit facilities. The increase was partially
offset by a decrease in the weighted
20
<PAGE> 21
average interest rate on the total outstanding debt which was a result of the
refinancing of the domestic vendor credit facility during March of 1998 and the
retirement of a portion of two series of senior redeemable discount notes during
April of 1998.
A $70 million gain was recognized in 1999 on the sale of our 50% ownership
interest in NEXTBAND Communications, L.L.C. The increase in the foreign currency
transaction loss for the nine- and three-month periods ended September 30, 1999
is due primarily to the devaluation of the Brazilian real relative to the U.S.
dollar during 1999. The increase in equity in losses of subsidiaries is
primarily due to our equity method investments in Nextel Partners and Infocom
Communications Network, Inc., a Philippine company.
We recorded an income tax benefit of $25 million (an effective tax rate of
2%) in 1999, compared to $128 million (an effective tax rate of 10%) in 1998.
The change in the effective tax rate primarily resulted from a change in the tax
law which extended the net operating loss carryforward period from 15 to 20
years for losses generated in or after 1998. In certain circumstances, Statement
of Financial Accounting Standards No. 109, "Accounting for Income Taxes," limits
the recognition of income tax benefits for net operating losses to the amount of
deferred tax liabilities that are expected to reverse within the statutory
carryforward period. The financial statement limitation on the recognition of
income tax benefits for net operating losses will not have an impact on our
ability to utilize our net operating losses for income tax purposes.
E. LIQUIDITY AND CAPITAL RESOURCES.
We had net losses attributable to common stockholders of $361 million and
$442 million for the three-month periods ended September 30, 1999 and 1998,
respectively, and $1,161 million and $1,388 million for the nine-month periods
ended September 30, 1999 and 1998, respectively. The operating expenses and
capital expenditures associated with developing, enhancing and operating the
digital mobile network have more than offset our operating revenues. Our
operating expenses, debt service obligations and anticipated capital
expenditures are expected to continue to more than offset operating revenues for
the next several years. We have consistently used external sources of funds,
primarily from equity issuances and debt incurrences, to fund operations,
capital expenditures, acquisitions and other non-operating needs. For the next
several years, we intend to use our existing cash and investments, earnings
before interest, taxes, depreciation and amortization from our domestic
operations and externally generated funds from debt and equity sources (as
discussed below) to cover our currently anticipated future needs, including
funding requirements related to the design, implementation and operation of our
domestic digital mobile network. See, "H. Our Forward Looking Statements Are
Subject to a Variety of Factors that Could Cause Actual Results to Differ
Materially From Current Beliefs."
CASH FLOWS
Working capital increased by $657 million to $527 million at September 30,
1999 compared to a working capital deficit of $130 million at December 31, 1998.
During May, June, and July 1999, we received $600 million for an equity
investment from Microsoft, $588 million in net proceeds from the issuance of
debt securities, and $278 million from the Digital Radio option exercise. We
used these proceeds primarily to pay down $423 million of the revolving line of
credit component of our domestic bank credit facility and to fund operations.
Net cash used in operating activities of $36 million for the nine months
ended September 30, 1999 improved by $264 million compared to net cash used in
operating activities of $300 million for the nine months ended September 30,
1998. The decrease in net cash used by operating activities consisted of a
domestic decrease of $271 million offset slightly by an increase in cash used in
international operations of $7 million. The improvement in the cash used by
operating activities reflects increasing operating revenues and improved
domestic operating results coupled with strengthened cost controls.
Capital expenditures to fund the continued expansion of our digital mobile
network continue to represent the largest use of our funds for investing
activities. Net cash used in investing activities for the nine-month period
ended September 30, 1999 decreased $1,325 million compared to the same period in
1998 primarily due to the $685 million decrease in cash paid for capital
expenditures, the receipt of $270 million related to the
21
<PAGE> 22
sale of our interest in NEXTBAND Communications, L.L.C, a joint venture, and the
sale of assets to Nextel Partners and reimbursement of costs and operating
expenses by Nextel Partners. Cash payments for capital expenditures totaled
$1,075 million for the nine months ended September 30, 1999 and $1,760 million
for the nine-month period ended September 30, 1998, including $110 million and
$291 million in capital expenditures for international operations for the nine
months ended September 30, 1999 and 1998, respectively. While domestic capital
spending decreased for the nine-month period ended September 30, 1999 compared
to the same 1998 period due to a number of factors, this level of capital
expenditures is not expected to be indicative of the fourth quarter of 1999,
during which the rate of capital spending is expected to increase. In addition,
to the extent capital expenditures currently planned for the remainder of 1999
are not carried out on their anticipated schedule, those expenditures would be
carried over to early 2000. See, "H. Our Forward Looking Statements Are Subject
to a Variety of Factors that Could Cause Actual Results to Differ Materially
From Current Beliefs."
Net cash provided by financing activities for the nine months ended
September 30, 1999 consisted primarily of $588 million in net proceeds from the
issuance of debt securities, $600 million in proceeds from the Microsoft
investment, $575 million in proceeds from SpectraSite Holdings, Inc. in
connection with the transfer of specified telecommunications towers in the
second quarter of 1999 along with subsequent tower sales in the third quarter of
1999 and $433 million in proceeds from the exercise of stock options and
warrants, offset by the net repayment of $423 million of our domestic bank
credit facility.
F. FUTURE CAPITAL NEEDS AND RESOURCES.
We anticipate that, for the foreseeable future, we will be utilizing
significant amounts of our available cash flows for:
- capital expenditures for the construction and enhancement of the digital
mobile network, both domestically and internationally;
- operating expenses relating to our digital mobile network, both
domestically and internationally;
- potential acquisitions including any negotiated acquisitions of spectrum
from third parties and any future Federal Communications Commission
auctions of spectrum;
- debt service requirements; and
- other general corporate expenditures.
We anticipate that our cash utilization for capital expenditures and other
investing activities will continue to exceed our positive cash flows from
domestic operating activities through the remainder of 1999 and into 2000, as we
build out, expand and enhance our digital mobile network. See, "H. Our Forward
Looking Statements Are Subject to a Variety of Factors that Could Cause Actual
Results to Differ Materially From Current Beliefs."
Nextel's domestic bank credit agreement, as amended, currently provides
total secured financing capacity of up to $5.0 billion, subject to the
satisfaction or waiver of applicable borrowing conditions. This facility
consists of a $1.5 billion revolving loan and $3.5 billion in term loans that
mature over a period from December 31, 2007 to December 31, 2008. At September
30, 1999, we had drawn $1.8 billion of our available financing under the bank
credit agreement as in effect prior to its amendment and restatement in November
1999. As of November 12, 1999, we had $2.7 billion of debt outstanding under the
amended and restated bank credit agreement. Amounts outstanding under the bank
credit agreement are secured by liens on assets of some of our domestic
subsidiaries and bear interest payable quarterly at an adjustable rate
calculated based either on the prime rate or LIBOR. The maturity dates of the
loans can accelerate if our credit ratings are below specified levels and the
aggregate amount of specified debt obligations that mature before June 30, 2009,
and the redemption price of redeemable stock that is mandatorily redeemable
before June 30, 2009, exceed specified amounts.
As of September 30, 1999, approximately $138 million has been borrowed by
Nextel International under its equipment financing facility with Motorola Credit
Corporation, leaving approximately $91 million available for future borrowings
under such facility to finance the purchase from Motorola Inc. of equipment and
related services (approximately $4 million of the $138 million borrowed relates
to financed accrued interest and does not decrease the borrowing availability).
Additionally, as of September 30, 1999, approximately $104 million
22
<PAGE> 23
has been borrowed by McCaw International (Brazil) Ltd. under their vendor
financing agreement with Motorola Credit Corporation, leaving approximately $21
million available for future borrowings to finance the purchase from Motorola
Inc. of equipment and related services. As of September 30, 1999, Nextel
Argentina S.R.L. had borrowed $100 million pursuant to its original bank credit
facility (representing all amounts available) and had not borrowed any of the
$50 million in incremental term loans that are available under that facility as
a result of amendments entered into in May 1999 and can be used to fund
purchases of qualifying equipment and services.
Finally, in addition to the financing sources described above, Nextel
received approximately $2.75 billion in net proceeds from the sale of 33,781,785
shares of Class A common stock completed on November 5, 1999 as well as
approximately $1.96 billion in net proceeds from the November issuance of 9.375%
Senior Serial Redeemable Notes due 2009 completed on November 12, 1999.
Nextel and Nextel International each are currently in the early stages of
developing their detailed business plans and related budgets for calendar year
2000. These processes, and the resulting detailed business plans and related
budgets, are not likely to be finalized until late 1999 or early 2000. Moreover,
any such plans and budgets that are developed and finalized by Nextel and Nextel
International may later be revised by them in light of competitive factors in
the relevant markets, new business opportunities, including additional spectrum
acquisitions and other strategic or opportunistic transactions or investments,
prevailing conditions in domestic and international debt and equity capital
markets and the actual operating results and apparent prospects of their
respective businesses.
Currently, Nextel expects to increase the level of domestic and
international capital expenditures in the remainder of 1999 and during 2000.
This increase is expected to be driven by several factors, including:
- the contemplated expansion of digital mobile network coverage around
most major domestic and selected international market areas;
- the contemplated construction of additional cell sites to increase
system capacity and improve system quality, and the installation of
related switching equipment, in the existing core market coverage areas
of Nextel and Nextel International, including the installation of system
infrastructure and cell sites sufficient to meet expected increases in
system demand four to six months ahead of anticipated growth;
- the carrying over of certain planned system capital expenditures from
1999 to early 2000; and
- the installation of system capital hardware and software items in
connection with the planned initial commercial launch of the wireless
data service offering nationwide in 2000.
Taking such anticipated capital expenditures into account in both the
Nextel and Nextel International organizations, including an assumption that the
bulk of Nextel International's funding needs for calendar year 2000 will be
satisfied with funds invested or advanced by Nextel, and factoring in
anticipated operating cash flow performance of the existing and planned wireless
businesses, both domestic and international, Nextel believes that it will be
able to fully fund both its and Nextel International's operations through
calendar year 2000. This conclusion is premised on the availability of funds
from the following sources:
- consolidated cash on hand as of September 30, 1999 of approximately $1.4
billion;
- the availability of approximately $3.2 billion of incremental funding
over the amounts outstanding as of September 30, 1999 under Nextel's
domestic bank credit facility amended and restated in November 1999;
- the availability of the funding under Nextel International's funding
agreements described above;
- the proceeds of the public offering of 33,781,785 shares of our Class A
common stock of approximately $2.8 billion; and
- the net proceeds remaining from the November 1999 debt issuance, if any,
following the repurchase or redemption of all of our outstanding public
notes originally issued prior to 1997.
23
<PAGE> 24
If Nextel's and/or Nextel International's business plans change, or if
economic conditions in either of their markets generally or competitive
practices in the mobile wireless telecommunications industry change materially
from those currently prevailing or from those now anticipated in the next
calendar year, or if other presently unexpected circumstances are encountered
that have a material effect on the cash flow and/or profitability of the
domestic or international mobile wireless businesses conducted by Nextel and/or
Nextel International, the anticipated cash needs of those businesses, and the
conclusions as to the adequacy of the available sources, each also could change
significantly. Finally, the above estimates and conclusions specifically exclude
the activities involving NextWave and the impact of any significant acquisition
transaction, or the pursuit of any significant new business opportunity not now
contemplated, by Nextel or Nextel International in the periods referenced above.
Any such acquisition or new business opportunity could involve significant
additional funding needs in excess of the identified currently available
sources, and thus could require Nextel and/or Nextel International to raise
additional equity and/or debt funding to meet those needs.
The availability of borrowings pursuant to the domestic bank credit
facility and Nextel International's financing agreements is subject to certain
conditions and limitations, and we cannot provide assurance that those
conditions will continue to be met. The instruments relating to our financing
arrangements and preferred stock contain provisions that operate to limit the
amount of borrowings that we may incur. The terms of the domestic bank credit
facility and Nextel International's financing agreements also require us and our
subsidiaries at specified times to maintain compliance with certain operating
and financial covenants or ratios, including certain covenants and ratios
specifically related to leverage, which become more stringent over time. In
addition, our capital needs, and our ability to adequately address those needs
through debt or equity funding sources, are subject to a variety of factors that
cannot presently be predicted with certainty, for example, the commercial
success of our domestic and international digital mobile networks, the amount
and timing of our capital expenditures and operating losses, the availability
and volatility of the equity and debt markets, and the market price of our
common stock. See, "H. Our Forward Looking Statements Are Subject to a Variety
of Factors that Could Cause Actual Results to Differ Materially From Current
Beliefs."
We have had and may in the future have discussions with third parties
regarding potential equity investments and debt financing arrangements to
satisfy actual or anticipated financing needs. At present, other than the
existing equity or debt financing arrangements that have been consummated and/or
are disclosed herein, we have no legally binding commitments or understandings
with any third parties to obtain any material amount of equity or debt
financing. Under the terms of the agreements between us and Motorola pursuant to
which we acquired substantially all of Motorola's domestic 800 MHz specialized
mobile radio licenses in 1995, we have agreed, under certain circumstances, not
to grant superior governance rights to any third-party investor without
Motorola's consent which may make securing certain strategic equity investments
more difficult. In this connection, the recent investment by Microsoft did not
involve granting any superior governance rights. Our ability to incur additional
indebtedness, including, in certain circumstances, indebtedness incurred under
our domestic bank credit agreement, is and will be limited by the terms of our
financing agreements and the terms of some series of our outstanding preferred
stock.
G. YEAR 2000 READINESS.
We are close to completion and evaluation of implementing Year 2000
readiness solutions on our computer systems. Such Year 2000 readiness efforts
are designed to identify, address and resolve issues that may be created by
computer programs written using two digits rather than four to define the
applicable year. Any of our computer programs that have date-sensitive software
may recognize a date using "00" as the year 1900 rather than the year 2000. This
inability to recognize dates could result in a system failure or miscalculations
that result in disruptions of operations, including, among other things, a
temporary inability to process transactions, send invoices or engage in similar
normal business activities.
1. STATE OF READINESS.
We have had a program in place since February 1998 to address Year 2000
readiness issues in our critical business areas related to products, networks,
information management systems, non-information systems with embedded
technology, suppliers and customers. Our Year 2000 readiness goal focuses on our
ability to perform our critical business functions and to process information in
an unambiguous manner under various
24
<PAGE> 25
date conditions. These functions rely on our critical Information Technology
("IT") and non-IT systems and their supporting network elements. These critical
systems and network elements have been divided into two major categories: our
core business systems and network infrastructure systems and support functions
with high customer impact and our secondary business systems with low customer
impact.
To ensure the continued progress and success in managing all of our
systems' Year 2000 readiness requirements, a special steering committee that
includes members of senior management responsible for our information technology
and network systems was formed to oversee this effort. Internal employees, as
well as outside contractors, staff our Year 2000 readiness program. Members
include employees across functional and divisional departments who are
responsible for assisting in the identification, assessment and remediation of
Year 2000 readiness challenges. In addition, the representatives from some of
the material third parties identified below participate in this project.
During the course of developing our Year 2000 readiness solutions we
identified five phases that define the status of our progress toward Year 2000
readiness. The five phases are:
1. Awareness -- locating, listing and prioritizing specific technology
used in our operations that is potentially subject to Year 2000
readiness related challenges;
2. Assessment -- determining the level of risk of Year 2000 readiness
challenges that exist on our systems through inquiry, research and
testing;
3. Remediation -- determining and resolving Year 2000 readiness related
challenges identified in previous phases through replacement, upgrade or
repair and planning for the scheduled implementation of the selected
Year 2000 ready resolution;
4. Testing -- evaluating and reviewing results to monitor and assess
completeness of the manipulation of dates and date-related data on IT
and non-IT systems, including those of material third parties; and
5. Implementation -- installing and integrating the application of Year
2000 ready resolutions by replacement, upgrade or repair of IT and
non-IT systems, including those of material third parties.
OUR CORE BUSINESS SYSTEMS AND NETWORK INFRASTRUCTURE
As of September 30, 1999, our core business systems and network
infrastructure and support systems successfully passed integrated testing in a
Year 2000 environment. The purpose of that test was to confirm the Year 2000
readiness of our essential system elements that are integrated with our digital
mobile network and that are necessary to enable us to add subscriber units to
the digital mobile network, to provide the currently available and planned
wireless communications services on our network, and to correctly bill our
customers for those services.
The core business systems and network infrastructure systems and
operational functions that were tested include:
- new customer account set-up and modifications;
- activation and provisioning of new phones and implementation of
modifications in existing customers' service plans;
- processing of calls and other mobile communication services (including
interconnect, voicemail, short message service, and private and group
dispatch services);
- collection and rating of call data for billing purposes; and
- customer bill generation.
These integrated systems were tested by applying certain date specific
sequences to determine their functionality in a Year 2000 environment. These
tests specifically involved testing both Year 2000 transition and leap-year
transition. These integrated systems tests were conducted in a laboratory
setting which simulated Nextel's network configuration, core business systems
and handsets. Based on this testing, we believe that these systems will perform
normally during and after the transition into the Year 2000.
25
<PAGE> 26
OUR SECONDARY BUSINESS SYSTEMS
These systems are mostly internal to Nextel with little or no direct impact
on our customers and include items like payroll, benefits management and
low-level facility issues.
The majority of these secondary systems have passed Year 2000 readiness
testing and have been successfully implemented into the Nextel environment.
However, some of these systems are completing the Testing or Implementation
phases of our Year 2000 readiness program. All remaining secondary systems are
expected to be tested and implemented by the end of November 1999.
THIRD PARTY YEAR 2000 COMPLIANCE
Our ability to reach our Year 2000 readiness goal depends and will continue
to depend on the efforts of significant third-party vendors, suppliers,
subcontractors and business partners. We monitor the progress of these third
parties towards Year 2000 readiness. We regularly contact and attempt to obtain
from these third parties relevant details and schedules concerning their
contemplated development of Year 2000 ready applications for utilization in our
domestic and international operations and systems. Specifically, we rely on
services and products offered by the following significant third parties:
MOTOROLA, supplies our system infrastructure and subscriber handset units.
Motorola has informed us that all subscriber unit models manufactured after June
1, 1998 are Year 2000 ready. All other digital subscriber units are Year 2000
ready with the exception of the short message service feature on those phones,
which is not expected to cause a material disruption in our service offerings.
With regard to the digital mobile network, Motorola has indicated that the
following system infrastructure components are Year 2000 ready:
- critical call and data processing systems for the digital mobile network
have passed Year 2000 readiness testing;
- Nortel switches and CISCO routers have passed Year 2000 readiness
testing appropriate for our use; and
- voice mail system components have passed Year 2000 readiness testing.
We believe that our testing of our core business systems and network
infrastructure has confirmed the Year 2000 readiness of these system
infrastructure components.
MOTOROLA COMMUNICATIONS ISRAEL LTD., which provides the provisioning
systems for Nextel International, has notified Nextel that its software is Year
2000 ready. We believe that our testing of our core business systems and network
infrastructure systems and operational support functions confirm these systems'
Year 2000 readiness.
INTERNATIONAL TELECOMMUNICATIONS DATA SYSTEMS, INC. ("ITDS"), is the
software vendor for our domestic order entry and provisioning systems, as well
as our domestic billing information systems. ITDS informed us that the software
that operates our domestic order entry and provisioning systems, as well as the
software used for our domestic billing capabilities has successfully performed
under various Year 2000 date conditions. We believe that our testing of our core
business systems and network infrastructure systems and operational support
functions confirm these systems' Year 2000 readiness.
LHS GROUP, INC. ("LHS"), is the software vendor for Nextel International's
billing information systems. LHS informed us that the software currently in use
in Nextel International's systems that supports the billing processes is Year
2000 ready in conjunction with recommended upgrades. Nextel International has
completed the necessary upgrades and it has tested successfully.
VANTIVE CORPORATION ("VANTIVE"), provides information systems used in our
customer care function and provides order entry systems for Nextel
International. Vantive provided information to us that it has successfully
tested the Year 2000 readiness of the software that has been used to develop
Year 2000 ready customer care systems for domestic operations and order entry
systems for Nextel International's operations.
ORACLE CORPORATION ("ORACLE"), provides us with information systems,
development tools and database management software that supports our human
resources and financial functions. Oracle has advised us that the software that
supports our human resources and financial functions is Year 2000 ready in
conjunction with recommended upgrades. We have completed and successfully tested
these upgrades for our domestic
26
<PAGE> 27
operations. Nextel International has installed these upgrades, and testing is
significantly underway and should be completed by the end of November 1999.
HEWLETT-PACKARD, INC., supplies us with computer hardware, such as monitors
and peripherals, and UNIX operating systems. Hewlett-Packard has provided us
with sufficient information to make all of the Hewlett-Packard software and
hardware supplied products Year 2000 ready. We are currently making significant
progress toward applying all of these Year 2000 solutions, and this effort is
scheduled to be completed by the end of November 1999.
2. THE COSTS TO ADDRESS OUR YEAR 2000 READINESS CHALLENGES.
Based on information developed to date as a result of our assessment
efforts, we believe that the costs of modifying, upgrading or replacing our
systems and equipment will not have a material effect on our liquidity, our
financial condition or the results of operations. As of September 30, 1999, our
year-to-date spending, both domestically and internationally, is approximately
$15 million. We currently estimate that our domestic and international
expenditures in connection with these efforts will not exceed $45 million. To
date, we have not deferred any significant projects, goals or objectives
relating to our domestic and international operations as a result of
implementing our Year 2000 readiness efforts.
3. THE RISKS OF OUR YEAR 2000 READINESS CHALLENGES.
Although our core business systems and network infrastructure and support
systems components have tested successfully under Year 2000 date conditions in
tests conducted in a laboratory setting, there is still some risk to our service
and systems. Any failure by third parties which have a material relationship
with us to achieve full Year 2000 readiness may be a potential risk if such
failure were to adversely impact the ability of such third parties to provide
any products or services that are critical to our operations. In addition, where
we cannot validate that technology provided by remaining vendors, suppliers, and
other material third parties is Year 2000 ready, we have obtained assurances
from these material third parties that their systems are or will be Year 2000
ready. If these material third parties fail to appropriately address their own
Year 2000 readiness challenges, there could be a materially adverse effect on
our financial condition and results of operations. These risks include, but are
not limited to:
- inability of subscribers to make or receive phone calls;
- inability of sites, switches and other interfaces to accurately record
call details of subscriber phone calls; and
- inability of billing systems to accurately report and bill subscribers
for phone usage.
Other risks associated with our inability or that of material third parties
to deploy Year 2000 ready solutions in a timely and successful manner may
involve or result in conditions that could preclude us from:
- deploying an alternative technology that is Year 2000 ready;
- implementing commercial launches in new markets or introducing new
services in existing markets;
- pursuing additional business opportunities; and
- obtaining equity or debt financing.
Significantly, we cannot independently assess the impact of Year 2000
readiness challenges, activities and programs involving operators of public
switched telecommunications networks or other service providers, for example,
electric utilities. We therefore must rely on public switched telecommunications
networks and utility providers' estimates of their own Year 2000 readiness and
the status of their related compliance activities and programs in our own Year
2000 readiness assessment process. Because our systems are interconnected with
and dependent on public switched telecommunications networks and are dependent
upon the systems of other service providers, any disruption of operations in the
computer programs of such public switched telecommunications networks or service
providers would likely have an impact on our systems. Moreover, there can be no
assurance that such impact will not have a materially adverse effect on our
operations.
Finally, in assessing our Year 2000 readiness exposure associated with our
international operations, we have considered that certain operators of public
switched telecommunications networks or other service
27
<PAGE> 28
providers and operations located in foreign countries may not be at the same
level of awareness or assessment of the Year 2000 readiness challenges and
remedial measures as their United States counterparts. These factors, to the
extent present with respect to our international operations, may result in
delays in identifying Year 2000 readiness challenges and a lag in implementing
remediation efforts as compared with our domestic operations. In the event our
international affiliates and their own material third parties fail to address
their Year 2000 readiness challenges, in a timely manner, our international
operations could experience material disruptions.
4. OUR CONTINGENCY PLANS.
While our integrated testing on our core business systems was successful in
tests conducted in a laboratory setting, we have developed guidelines for
addressing Year 2000 readiness business contingency plans for external and
internal systems should it be determined that contingency plans are necessary.
Our contingency planning process focuses on the major components of our core
business system and network and has as its primary goal the minimization of
customer impact events resulting from the Year 2000 transition. Final
preparation of our contingency plans is underway, which establishes the
framework and logistic strategy for executing our contingency plans, if
required. These plans are designed to support our core business in the event of
an unexpected Year 2000 related complication. These plans are being developed by
representatives from all areas of our business, and are being coordinated and
compiled by our Year 2000 Program Management Office group.
H. OUR FORWARD LOOKING STATEMENTS ARE SUBJECT TO A VARIETY OF FACTORS THAT
COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM CURRENT BELIEFS.
"SAFE HARBOR" STATEMENTS UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995. A number of the statements made in the foregoing "Management's
Discussion and Analysis of Financial Condition and Results of Operations" are
not historical or current facts, but deal with potential future circumstances
and developments. Those statements are qualified by the inherent risks and
uncertainties surrounding expectations generally, and also may materially differ
from actual future experience involving any one or more of these matters and
subject areas. We have attempted to identify, in context, some of the factors
that we currently believe may cause actual future experience and results to
differ from current expectations regarding the relevant matter or subject area.
The operation and results of our wireless communications business also may be
subject to the effect of other risks and uncertainties in addition to the
relevant qualifying factors identified in the foregoing "Management's Discussion
and Analysis of Financial Condition and Results of Operations" section,
including, but not limited to:
- general economic conditions in the geographic areas and occupational
market segments that we are targeting for our digital mobile network
service;
- the availability of adequate quantities of system infrastructure and
subscriber equipment and components to meet service deployment and
marketing plans and customer demand;
- the success of efforts to improve and satisfactorily address any issues
relating to our digital mobile network performance;
- the continued successful performance of the technology being deployed in
our various market areas;
- the ability to achieve market penetration and average subscriber revenue
levels sufficient to provide financial viability to our digital mobile
network business;
- our ability to timely and successfully accomplish required scale-up of
our billing, collection, customer care and similar back-room operations
to keep pace with customer growth, increased system usage rates and
growth in levels of accounts receivable being generated by the digital
mobile network customer base;
- access to sufficient debt or equity capital to meet operating and
financing needs;
- the quality and price of similar or comparable wireless communications
services offered or to be offered by our competitors, including
providers of cellular and personal communication services;
28
<PAGE> 29
- the ability to successfully develop or obtain from third parties and
implement Year 2000 readiness solutions in systems that are critical to
our business operations;
- future legislation or regulatory actions relating to specialized mobile
radio services, other wireless communications services or
telecommunications generally; and
- other risks and uncertainties described from time to time in our reports
filed with the Commission including our Annual Report on Form 10-K for
the year ended December 31, 1998 and, our Quarterly Reports on Form 10-Q
for the quarters ended March 31, 1999 and June 30, 1999 and, with
specific reference to risk factors relating to international operations
in Nextel International, Inc.'s reports filed with the Commission,
including Nextel International's Annual Report on Form 10-K for the year
ended December 31, 1998 and its Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1999, June 30, 1999, and September 30, 1999.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We use mandatorily redeemable preferred stock, senior notes, and bank and
vendor credit facilities to finance our operations. These on-balance sheet
financial instruments expose us to interest rate risk. Our primary interest rate
risk exposure results from changes in LIBOR or the prime rate which are used to
determine the interest rates that are applicable to borrowings under our bank
and vendor credit agreements. We use off-balance sheet derivative financial
instruments, including interest rate swap and collar agreements, to partially
hedge interest rate exposure associated with on-balance sheet financial
instruments. All of our derivative financial instrument transactions are entered
into for non-trading purposes. The terms and characteristics of the derivative
financial instruments are matched with the existing on-balance sheet financial
instruments and do not constitute speculative or leveraged positions independent
of these exposures.
Nextel International's revenues are denominated in foreign currencies while
a significant portion of its operations are financed through senior redeemable
discount notes and bank and vendor credit facilities which are denominated in
United States dollars. Accordingly, fluctuations in exchange rates relative to
the United States dollar, primarily those related to the Brazilian real, Mexican
peso and Argentinean peso, expose us to foreign currency exchange rate risk. In
the near term, our foreign currency exchange rate exposure associated with the
repayment of Nextel International's debt obligations is limited since the terms
of the senior redeemable discount notes and bank and vendor credit facilities do
not require significant principal payments until after 1999. Accordingly, as of
September 30, 1999, Nextel International has not established any hedge or risk
reduction strategies related to its foreign currency exchange rate exposure.
Nextel International holds an available-for-sale investment in the common
stock of Clearnet Communications, Inc., a publicly traded company that had a
fair value of $151 million as of September 30, 1999. In accordance with
Statement of Financial Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities," this investment is recorded at its market value in
our financial statements. Negative fluctuations in Clearnet's stock price expose
us to equity price risk. A 10% decline in the stock price would result in a $15
million decrease in the fair value of Nextel International's investment in
Clearnet.
The information below summarizes our sensitivity to market risks associated
with fluctuations in interest rates and foreign currency exchange rates as of
September 30, 1999 in United States dollars. To the extent that our financial
instruments expose us to interest rate and foreign currency exchange risk, these
instruments are presented within each market risk category in the table below.
The table presents principal cash flows and related interest rates by year of
maturity for our mandatorily redeemable preferred stock, senior notes, and bank
and vendor credit facilities in effect at September 30, 1999 and, in the case of
the mandatorily redeemable preferred stock and senior notes, excludes the
potential exercise of the relevant redemption features. The cash flows related
to the variable portion of interest rate swaps are determined by dealers using
valuation models that estimate the future level of interest rates, with
consideration of the applicable yield curve as of September 30, 1999. For
interest rate swaps and collars, the table presents notional amounts and the
related reference interest rates by year of maturity. Fair values included
herein have been determined based on: (1) quoted market prices for mandatorily
redeemable preferred stock and senior notes; (2) the carrying value for the bank
and vendor credit facilities at September 30, 1999 as interest rates are reset
periodically; and (3) estimates obtained from dealers to settle interest rate
swap and collar agreements.
29
<PAGE> 30
Descriptions of our mandatorily redeemable preferred stock, senior notes, bank
and vendor credit facilities, and interest rate risk management agreements are
contained in Notes 8, 9 and 12 to the consolidated financial statements
contained in our 1998 Annual Report on Form 10-K and should be read in
conjunction with the following table. The increase in the total and fair values
of our mandatorily redeemable preferred stock, long-term debt, and interest rate
swaps and collars as compared to December 31, 1998 reflect the June 1999
issuance of convertible notes and the changes in the applicable market
conditions.
<TABLE>
<CAPTION>
YEAR OF MATURITY
---------------------------------------------
1999 2000 2001 2002 2003 THEREAFTER TOTAL FAIR VALUE
---- ---- ---- ---- ---- ---------- ------- ----------
(U.S. DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
I. INTEREST RATE SENSITIVITY
MANDATORILY REDEEMABLE PREFERRED STOCK AND LONG-TERM DEBT:
Fixed Rate.............................................. -- -- -- -- $36 $10,674 $10,710 $12,702
Average Interest Rate................................... -- -- -- -- 12% 11% 11%
Variable Rate........................................... -- $31 $105 $149 229 1,626 2,140 2,140
Average Interest Rate................................... -- 10% 9% 9% 9% 9% 9%
INTEREST RATE SWAPS:
Variable to Fixed....................................... -- -- 200 -- 100 570 870 (52)
Average Pay Rate........................................ -- -- 5% -- 6% 8% 7%
Average Receive Rate.................................... -- -- 5% -- 5% 5% 5%
Variable to Variable.................................... -- 50 100 -- 400 -- 550 2
Average Pay Rate........................................ -- 5% 5% -- 5% -- 5%
Average Receive Rate.................................... -- 5% 6% -- 5% -- 5%
INTEREST RATE COLLARS:
Collars................................................. -- -- -- -- 200 -- 200 --
Average Cap............................................. -- -- -- -- 7% -- 7%
Average Floor........................................... -- -- -- -- 4% -- 4%
II. FOREIGN EXCHANGE RATE SENSITIVITY
LONG-TERM DEBT:
Fixed Rate.............................................. -- -- -- -- -- 1,681 1,681 919
Average Interest Rate................................... -- -- -- -- -- 13% 13%
Variable Rate........................................... -- 31 75 86 116 37 345 345
Average Interest Rate................................... -- 10% 10% 10% 10% 10% 10%
</TABLE>
30
<PAGE> 31
PART II
ITEM 1. LEGAL PROCEEDINGS.
Nextel is involved in certain legal proceedings that are described in our
1998 Annual Report on Form 10-K. During the three months ended September 30,
1999, there were no material changes in the status of or developments regarding
those legal proceedings other than as discussed below.
On October 25, 1999, Nextel entered into an agreement pursuant to which the
lawsuit titled Charles Dascal v. Morgan O'Brien, Becker, Gurman, Lukas, Meyers,
O'Brien and McGowan, P.C. and Nextel Communications, Inc. was resolved. The
terms of such settlement will not have a material effect on Nextel's financial
condition, results of operations, or liquidity.
ITEM 2. CHANGES IN SECURITIES.
(a) Inapplicable.
(b) Inapplicable.
(c) On July 28, 1999, the Digital Radio L.L.C. exercised in full its
option to purchase 15 million shares of our Class A common stock for
an aggregate purchase price of $278 million. The foregoing transaction
was effected pursuant to the exemption of Section 4(2) of the
Securities Act in reliance upon representations of the relevant
purchaser and its agreement to resell such securities only pursuant to
a registration statement or in a transaction exempt from the
registration requirements of such act.
On September 23, 1999, Nextel issued 2,039 shares of its Class A common
stock as liquidated damages for failure to register timely 591,308
shares of the Zero Coupon Convertible Preferred Stock due 2013. The
issuance of common stock was exempt from the registration requirements
of the Securities Act of 1933 pursuant to Section 4(2) of the
Securities Act.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) List of Exhibits.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
- - ------- -------------------
<S> <C>
4.1 Indenture, dated as of November 12, 1999, by and between
Nextel Communications, Inc. and Harris Trust and Savings
Bank, as Trustee, relating to Nextel's 9.375% Senior Serial
Redeemable Notes due 2009.
4.2 Registration Rights Agreement, dated as of November 12,
1999, by and between Nextel Communications, Inc. and
Goldman, Sachs & Co., as representative of the several
initial purchasers.
4.3 Amended and Restated Credit Agreement, dated as of November
9, 1999, among Nextel Communications, Inc., Nextel Finance
Company and the other Restricted Companies party thereto,
the Lenders party thereto, Toronto Dominion (Texas) Inc., as
Administrative Agent and The Chase Manhattan Bank, as
Collateral Agent.
10.1 Master Site Lease Agreement between Nextel of New York, Inc.
Nextel Communications of the Mid-Atlantic, Inc., Nextel
South Corp., Nextel of Texas, Inc. Nextel West Corp., and
Nextel of California, Inc. and Tower Asset Sub Inc. and
Landlord Parties As Defined Therein (filed on April 29, 1999
as Exhibit 10.33 to the Registration Statement No. 333-67043
on Form S-4 (the "SpectraSite Holdings S-4 Registration
Statement") and incorporated herein by reference)
</TABLE>
31
<PAGE> 32
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
- - ------- -------------------
<S> <C>
10.2 Master Site Commitment Agreement between Nextel
Communications, Inc., Nextel of New York, Inc., Nextel
Communications of the Mid-Atlantic, Inc., Nextel South
Corp., Nextel of Texas, Inc., Nextel West Corp., Nextel of
California, Inc., Tower Parent Corp., SpectraSite Holdings,
Inc. and Tower Asset Sub Inc. (filed on April 29, 1999 as
Exhibit 10.34 to the SpectraSite Holdings S-4 Registration
Statement and incorporated herein by reference)
10.3 Nextel Communications, Inc. Amended and Restated Incentive
Equity Plan (as amended and restated as of July 14, 1999)
27* Financial Data Schedule
</TABLE>
- - ---------------
* Submitted only with the electronic filing of this document with the Commission
pursuant to Regulation S-T under the Securities Act.
(b) Reports on Form 8-K.
(i) Current Report on Form 8-K dated August 10, 1999 and filed on
August 12, 1999 with the Commission reporting under Item 5 the
announcement of Nextel's agreement with the United States
Department of Justice and the Federal Communications Commission
concerning matters relating to NextWave Personal Communications,
Inc.
(ii) Current Report on Form 8-K dated August 10, 1999 and filed on
August 18, 1999 with the Commission reporting under Item 5 the
terms of the term sheet and related agreements with the United
States Department of Justice and the Federal Communications
Commission related to the potential acquisition of spectrum from
NextWave Personal Communications, Inc.
32
<PAGE> 33
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 thereunto duly authorized.
NEXTEL COMMUNICATIONS, INC.
Date: November 15, 1999
WILLIAM G. ARENDT
By:
--------------------------------------
William G. Arendt
Vice President and Controller
(Principal Accounting Officer)
33
<PAGE> 34
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
- - ------- -------------------
<S> <C>
4.1 Indenture, dated as of November 12, 1999, by and between
Nextel Communications, Inc. and Harris Trust and Savings
Bank, as Trustee, relating to Nextel's 9.375% Senior Serial
Redeemable Notes due 2009.
4.2 Registration Rights Agreement, dated as of November 12,
1999, by and between Nextel Communications, Inc. and
Goldman, Sachs & Co., as representative of the several
initial purchasers.
4.3 Amended and Restated Credit Agreement, dated as of November
9, 1999, among Nextel Communications, Inc., Nextel Finance
Company and the other Restricted Companies party thereto,
the Lenders party thereto, Toronto Dominion (Texas) Inc., as
Administrative Agent and The Chase Manhattan Bank, as
Collateral Agent.
10.1 Master Site Lease Agreement between Nextel of New York, Inc.
Nextel Communications of the Mid-Atlantic, Inc., Nextel
South Corp., Nextel of Texas, Inc. Nextel West Corp., and
Nextel of California, Inc. and Tower Asset Sub Inc. and
Landlord Parties As Defined Therein (filed on April 29, 1999
as Exhibit 10.33 to the Registration Statement No. 333-67043
on Form S-4 (the "SpectraSite Holdings S-4 Registration
Statement") and incorporated herein by reference)
10.2 Master Site Commitment Agreement between Nextel
Communications, Inc., Nextel of New York, Inc., Nextel
Communications of the Mid-Atlantic, Inc., Nextel South
Corp., Nextel of Texas, Inc., Nextel West Corp., Nextel of
California, Inc., Tower Parent Corp., SpectraSite Holdings,
Inc. and Tower Asset Sub Inc. (filed on April 29, 1999 as
Exhibit 10.34 to the SpectraSite Holdings S-4 Registration
Statement and incorporated herein by reference)
10.3 Nextel Communications, Inc. Amended and Restated Incentive
Equity Plan (as amended and restated as of July 14, 1999)
27* Financial Data Schedule
</TABLE>
- - ---------------
* Submitted only with the electronic filing of this document with the Commission
pursuant to Regulation S-T under the Securities Act.
34
<PAGE> 1
Exhibit 4.1
Nextel Communications, Inc.
to
Harris Trust and Savings Bank
Trustee
----------------
Indenture
Dated as of November 12, 1999
----------------
9.375% Senior Serial Redeemable Notes due 2009
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
RECITALS OF THE COMPANY.......................................................................................................1
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions.....................................................................................................1
Acquired Debt...............................................................................................2
Act.........................................................................................................2
Affiliate...................................................................................................2
Agent Members...............................................................................................2
Annualized Operating Cash Flow..............................................................................3
Authenticating Agent........................................................................................3
Average Life................................................................................................3
Beneficial Owner............................................................................................3
Board of Directors..........................................................................................3
Board Resolution............................................................................................3
Business Day................................................................................................3
Capital Lease Obligations...................................................................................3
Capital Stock...............................................................................................4
Change of Control...........................................................................................4
Closing Date................................................................................................6
Closing Price...............................................................................................6
Code........................................................................................................6
Commission .................................................................................................6
Common Stock................................................................................................7
Company.....................................................................................................7
Company Request.............................................................................................7
Company Order...............................................................................................7
Consolidated Adjusted Net Income............................................................................7
Consolidated Adjusted Net Loss..............................................................................7
Consolidated Adjusted Net Income (Loss).....................................................................7
Consolidated Debt to Annualized Operating Cash Flow
Ratio............................................................................................7
Consolidated Interest Expense...............................................................................7
Consolidated Net Income.....................................................................................8
Consolidated Net Loss.......................................................................................8
Consolidated Net Income (Loss)..............................................................................8
Consolidated Net Worth......................................................................................8
Consolidation...............................................................................................9
Corporate Trust Office......................................................................................9
Corporation.................................................................................................9
</TABLE>
-ii-
<PAGE> 3
<TABLE>
<S> <C> <C>
Covenant Defeasance......................................................................................9
Credit Facility..........................................................................................9
Debt.....................................................................................................9
Default.................................................................................................10
Default Amount..........................................................................................10
Defaulted Interest......................................................................................10
Defeasance .............................................................................................10
Depository .............................................................................................10
Digital Mobile..........................................................................................10
Digital Mobile-SMR Operating Cash Flow..................................................................10
Directed Investment.....................................................................................10
Disinterested Director..................................................................................11
Event of Default........................................................................................11
Exchange Securities.....................................................................................11
Exchange Act............................................................................................11
Expiration Date.........................................................................................11
Fair Market Value.......................................................................................11
FCC.....................................................................................................12
February Indenture......................................................................................12
Global Securities.......................................................................................12
Guarantee...............................................................................................12
Holder..................................................................................................12
Incur...................................................................................................12
Indenture...............................................................................................13
Institutional Accredited Investor.......................................................................13
Interest Payment Date...................................................................................13
Investment .............................................................................................13
Investment Grade........................................................................................13
Licenses................................................................................................13
Lien....................................................................................................13
Marketable Securities...................................................................................14
Maturity................................................................................................14
Moody's.................................................................................................14
Non-U.S. Person.........................................................................................14
Notice of Default.......................................................................................14
November 1998 Indenture.................................................................................14
November 1998 Notes.....................................................................................14
October Indenture.......................................................................................15
October Notes...........................................................................................15
Offer...................................................................................................15
Offer to Purchase.......................................................................................15
Offering Circular.......................................................................................17
Officers' Certificate...................................................................................17
Offshore Global Securities..............................................................................17
Offshore Physical Securities............................................................................17
Operating Cash Flow.....................................................................................17
Operating Cash Flow to Consolidated Interest Expense
Ratio.......................................................................................17
</TABLE>
-iii-
<PAGE> 4
<TABLE>
<S> <C> <C>
Opinion of Counsel......................................................................................18
Outstanding.............................................................................................18
pari passu .............................................................................................18
Paying Agent............................................................................................19
Permitted Debt..........................................................................................19
Permitted Distribution..................................................................................20
Permitted Investment....................................................................................21
Permitted Transaction...................................................................................21
Person .................................................................................................21
Predecessor Security....................................................................................21
Preferred Capital Stock.................................................................................21
Private Placement Legend................................................................................21
Purchase Amount.........................................................................................21
Purchase Date...........................................................................................21
Purchase Price..........................................................................................21
QIB.....................................................................................................21
Record Expiration Date..................................................................................21
Redeemable Stock........................................................................................21
Redemption Date.........................................................................................22
Redemption Price........................................................................................22
Registration Rights Agreement...........................................................................22
Registration Statement..................................................................................22
Regular Record Date.....................................................................................22
Regulation S............................................................................................22
Required Consent........................................................................................22
Restricted Payments.....................................................................................23
Restricted Subsidiary...................................................................................23
Rule 144A...............................................................................................23
S&P.....................................................................................................23
Securities..............................................................................................23
Securities Act..........................................................................................23
Security Register.......................................................................................23
September Indenture.....................................................................................24
September Notes.........................................................................................24
Series D Debenture Indenture............................................................................24
Series D Preferred Stock................................................................................24
Series E Debenture Indenture............................................................................24
Series E Preferred Stock................................................................................24
Shelf Registration Statement............................................................................24
Special Record Date.....................................................................................24
Specialized Mobile Radio................................................................................24
Stated Maturity.........................................................................................24
Subsidiary .............................................................................................24
Total Common Equity.....................................................................................25
Total Market Value of Equity............................................................................25
Trading Day.............................................................................................25
Trustee.................................................................................................25
Trust Indenture Act.....................................................................................25
</TABLE>
-iv-
<PAGE> 5
<TABLE>
<S> <C> <C>
U.S. Global Securities..................................................................................25
U.S. Government Obligation..............................................................................25
U.S. Physical Securities................................................................................25
Unrestricted Subsidiary.................................................................................26
Vendor Financing Debt...................................................................................26
Vice President..........................................................................................26
Voting Stock............................................................................................26
Wholly Owned Restricted Subsidiary......................................................................26
Zero Coupon Preferred Stock.............................................................................26
SECTION 102. Compliance Certificates and Opinions.........................................................................26
SECTION 103. Form of Documents Delivered to Trustee.......................................................................27
SECTION 104. Acts of Holders; Record Dates................................................................................27
SECTION 105. Notices, Etc., to Trustee and Company........................................................................29
SECTION 106. Notice to Holders; Waiver....................................................................................30
SECTION 107. Conflict with Trust Indenture Act............................................................................30
SECTION 108. Effect of Headings and Table of Contents.....................................................................31
SECTION 109. Successors and Assigns.......................................................................................31
SECTION 110. Separability Clause..........................................................................................31
SECTION 111. Benefits of Indenture........................................................................................31
SECTION 112. Governing Law................................................................................................31
SECTION 113. Legal Holidays...............................................................................................31
SECTION 114. No Recourse Against Others...................................................................................31
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally..............................................................................................32
SECTION 202. Form of Face of Security.....................................................................................33
SECTION 203. Form of Reverse of Security..................................................................................35
SECTION 204. Form of Trustee's Certificate of Authentication..............................................................41
</TABLE>
-v-
<PAGE> 6
<TABLE>
<S> <C>
SECTION 205. Restrictive Legends..........................................................................................41
ARTICLE THREE
The Securities
SECTION 301. Title and Terms..............................................................................................42
SECTION 302. Denominations................................................................................................43
SECTION 303. Execution, Authentication, Delivery and Dating...............................................................43
SECTION 304. Temporary Securities.........................................................................................43
SECTION 305. Registration, Registration of Transfer and Exchange..........................................................44
SECTION 306. Book-Entry Provisions for Global Security....................................................................45
SECTION 307. Special Transfer Provisions..................................................................................46
SECTION 308. Mutilated, Destroyed, Lost and Stolen Securities.............................................................49
SECTION 309. Payment of Interest; Interest Rights Preserved...............................................................50
SECTION 310. Persons Deemed Owners........................................................................................51
SECTION 311. Cancellation.................................................................................................51
SECTION 312. Computation of Interest......................................................................................51
SECTION 313. CUSIP, CINS and ISIN Numbers.................................................................................51
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture......................................................................52
SECTION 402. Application of Trust Money...................................................................................53
ARTICLE FIVE
Remedies
SECTION 501. Events of Default............................................................................................53
SECTION 502. Acceleration of Maturity; Rescission and Annulment...........................................................55
</TABLE>
-vi-
<PAGE> 7
<TABLE>
<S> <C>
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee...................................................................................................56
SECTION 504. Trustee May File Proofs of Claim.............................................................................57
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities................................................................................................57
SECTION 506. Application of Money Collected...............................................................................57
SECTION 507. Limitation on Suits..........................................................................................58
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest......................................................................................59
SECTION 509. Restoration of Rights and Remedies...........................................................................59
SECTION 510. Rights and Remedies Cumulative...............................................................................59
SECTION 511. Delay or Omission Not Waiver.................................................................................59
SECTION 512. Control by Holders...........................................................................................60
SECTION 513. Waiver of Past Defaults......................................................................................60
SECTION 514. Undertaking for Costs........................................................................................60
SECTION 515. Waiver of Stay or Extension Laws.............................................................................61
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities .........................................................................61
SECTION 602. Notice of Defaults...........................................................................................61
SECTION 603. Certain Rights of Trustee....................................................................................61
SECTION 604. Trustee Not Responsible for Recitals or Issuance of
Securities................................................................................................62
SECTION 605. Trustee May Hold Securities..................................................................................62
SECTION 606. Money Held in Trust..........................................................................................63
SECTION 607. Compensation and Reimbursement...............................................................................63
</TABLE>
-vii-
<PAGE> 8
<TABLE>
<S> <C>
SECTION 608. Conflicting Interests........................................................................................64
SECTION 609. Corporate Trustee Required; Eligibility......................................................................64
SECTION 610. Resignation and Removal; Appointment of Successor............................................................64
SECTION 611. Acceptance of Appointment by Successor.......................................................................65
SECTION 612. Merger, Conversion, Consolidation or Succession to
Business..................................................................................................66
SECTION 613. Preferential Collection of Claims Against Company............................................................66
SECTION 614. Appointment of Authenticating Agent .........................................................................66
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee Names and Addresses of
Holders...................................................................................................68
SECTION 702. Preservation of Information; Communications to Holders.......................................................68
SECTION 703. Reports by Trustee...........................................................................................69
SECTION 704. Reports by Company...........................................................................................69
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. Company May Consolidate, Etc.................................................................................69
SECTION 802. Successor Substituted........................................................................................71
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without Consent of Holders...........................................................71
SECTION 902. Supplemental Indentures with Consent of Holders..............................................................72
SECTION 903. Execution of Supplemental Indentures.........................................................................72
SECTION 904. Effect of Supplemental Indentures............................................................................73
</TABLE>
-viii-
<PAGE> 9
<TABLE>
<S> <C>
SECTION 905. Conformity with Trust Indenture Act..........................................................................73
SECTION 906. Reference in Securities to Supplemental Indentures...........................................................73
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal, Premium and Interest...................................................................73
SECTION 1002. Maintenance of Office or Agency..............................................................................73
SECTION 1003. Money for Security Payments to be Held in Trust..............................................................74
SECTION 1004. Existence....................................................................................................75
SECTION 1005. Maintenance of Properties....................................................................................75
SECTION 1006. Payment of Taxes and Other Claims............................................................................75
SECTION 1007. Maintenance of Insurance.....................................................................................76
SECTION 1008. Limitation on Consolidated Debt..............................................................................76
SECTION 1009. Limitation on Restricted Payments............................................................................76
SECTION 1010. Restricted Subsidiaries......................................................................................80
SECTION 1011. Transactions with Affiliates.................................................................................81
SECTION 1012. [Intentionally Omitted]......................................................................................81
SECTION 1013. Change of Control............................................................................................81
SECTION 1014. [Intentionally Omitted]......................................................................................82
SECTION 1015. Activities of the Company and Restricted Subsidiaries.......................................................82
SECTION 1016. Provision of Financial Information..........................................................................82
SECTION 1017. Statement by Officers as to Default; Compliance
Certificates..............................................................................................82
SECTION 1018. Waiver of Certain Covenants.................................................................................83
</TABLE>
-ix-
<PAGE> 10
ARTICLE ELEVEN
<TABLE>
<S> <C>
Redemption of Securities
SECTION 1101. Right of Redemption.........................................................................................83
SECTION 1102. Applicability of Article....................................................................................84
SECTION 1103. Election to Redeem; Notice to Trustee.......................................................................84
SECTION 1104. Selection by Trustee of Securities to Be Redeemed...........................................................84
SECTION 1105. Notice of Redemption........................................................................................85
SECTION 1106. Deposit of Redemption Price.................................................................................85
SECTION 1107. Securities Payable on Redemption Date.......................................................................86
SECTION 1108. Securities Redeemed in Part.................................................................................86
ARTICLE TWELVE
Defeasance and Covenant Defeasance
SECTION 1201. Company's Option to Effect Defeasance or Covenant
Defeasance................................................................................................87
SECTION 1202. Defeasance and Discharge....................................................................................87
SECTION 1203. Covenant Defeasance.........................................................................................87
SECTION 1204. Conditions to Defeasance or Covenant Defeasance.............................................................88
SECTION 1205. Deposited Money and U.S. Government Obligations to
Be Held in Trust; Miscellaneous Provisions................................................................89
SECTION 1206. Reinstatement...............................................................................................90
</TABLE>
-x-
<PAGE> 11
EXHIBITS
EXHIBIT A Form of Certificate to Be Delivered in Connection with Transfers
Pursuant to Regulation S
EXHIBIT B Form of Certificate to Be Delivered in Connection with Transfers
to Non-QIB Institutional Accredited Investors
EXHIBIT C Form of Certificate to Be Delivered in Connection with Transfers
Pursuant to Regulation S
-xi-
<PAGE> 12
Nextel Communications, Inc.
Reconciliation and tie between Trust Indenture Act
of 1939 and Indenture, dated as of November 12, 1999
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
- - --------------- ---------
<S> <C>
Section 310(a)(1) ........................................................ 609
(a)(2) ........................................................ 609
(a)(3) ........................................................ Not Applicable
(a)(4) ........................................................ Not Applicable
(a)(5) ........................................................ 609
(b) ........................................................ 608, 610
Section 311(a) ........................................................ 613
(b) ........................................................ 613
(c) ........................................................ 613
Section 312(a) ........................................................ 701, 702
(b) ........................................................ 702(b)
(c) ........................................................ 702(c)
Section 313(a) ........................................................ 703
(b) ........................................................ 703
(c) ........................................................ 703
(d) ........................................................ 703(b)
Section 314(a)(1)-(3) ........................................................ 704
(a)(4) ........................................................ 1017
(b) ........................................................ Not Applicable
(c)(1) ........................................................ 102, 401, 1204
(c)(2) ........................................................ 102, 401, 1204
(c)(3) ........................................................ 1204
(d) ........................................................ Not Applicable
(e) ........................................................ 102
Section 315(a) ........................................................ 601, 603
(b) ........................................................ 602
(c) ........................................................ 601
(d) ........................................................ 601
(e) ........................................................ 514
Section 316(a)(1)(A) ........................................................ 512
(a)(1)(B) ........................................................ 513
(a)(2) ........................................................ Not Applicable
(b) ........................................................ 508
(c) ........................................................ 104
Section 317(a)(1) ........................................................ 503
(a)(2) ........................................................ 504
(b) ........................................................ 1003
Section 318(a) ........................................................ 107
</TABLE>
<PAGE> 13
INDENTURE, dated as of November 12, 1999, between Nextel Communications,
Inc., a Delaware corporation (herein called the "Company"), having its principal
office at 2001 Edmund Halley Dr., Reston, Virginia 20191 and Harris Trust and
Savings Bank, an Illinois banking corporation, as Trustee (herein called the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its Senior
Serial Redeemable Notes due 2009 of substantially the tenor and amount
hereinafter set forth, and to provide therefor the Company has duly authorized
the execution and delivery of this Indenture.
All things necessary to make the Securities, when executed by the Company
and authenticated and delivered hereunder and duly issued by the Company, the
valid obligations of the Company, and to make this Indenture a valid agreement
of the Company, in accordance with their and its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(3) whenever this Indenture requires that a particular ratio or amount be
calculated with respect to a specified period after giving effect to certain
transactions or events on a pro forma basis, such calculation will be made as if
the transactions or events occurred on the first day of such period, unless
otherwise specified herein, and all accounting terms not otherwise defined
herein have the meanings assigned to them in accordance with generally accepted
accounting principles (whether or not such is indicated herein), and, except as
otherwise herein expressly provided, the term "generally accepted accounting
principles" with respect to any computation required or permitted
<PAGE> 14
hereunder shall mean such accounting principles as are generally accepted
at the date of such computation;
(4) unless the context otherwise requires, any reference to an "Article"
or a "Section" refers to an Article or Section, as the case may be, of this
Indenture;
(5) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision; and
(6) each reference herein to a rule or form of the Commission shall mean
such rule or form and any rule or form successor thereto, in each case as
amended from time to time.
Certain terms, used principally in Article Six, are defined in that
Article.
Whenever this Indenture requires that a particular ratio or amount be
calculated with respect to a specified period after giving effect to certain
transactions or events on a pro forma basis, such calculation shall be made as
if the transactions or events occurred on the first day of such period, unless
otherwise specified.
"ACQUIRED DEBT" means Debt of a Person existing at the time such Person
becomes a Restricted Subsidiary or assumed by the Company or a Restricted
Subsidiary in connection with the acquisition of assets from such Person.
"ACT", when used with respect to any Holder, has the meaning specified in
Section 104.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such Person. "Affiliate" shall be deemed to include, but only for
purposes of Section 1011 and without limiting the application of the preceding
sentence for the purpose of such or any other Section, any Person owning,
directly or indirectly, (i) 10% or more of the Company's outstanding Common
Stock or (ii) securities having 10% or more of the total voting power of the
Company's Voting Stock. For the purposes of this definition, "control" when used
with respect to any specified Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. No
individual shall be deemed to be controlled by or under common control with any
specified Person solely by virtue of his or her status as an employee or officer
of such specified Person or of any other Person controlled by or under common
control with such specified Person.
"AGENT MEMBERS" has the meaning provided in Section 306(a).
"ANNUALIZED OPERATING CASH FLOW" means, for any fiscal quarter, the
Operating Cash Flow for such fiscal quarter multiplied by four.
2
<PAGE> 15
"AUTHENTICATING AGENT" means any Person authorized by the Trustee
pursuant to Section 614 hereof to act on behalf of the Trustee to authenticate
Securities.
"AVERAGE LIFE" means, at any date of determination with respect to any
Debt, the quotient obtained by dividing (i) the sum of the products of (a) the
number of years from such date of determination to the dates of each successive
scheduled principal payment of such Debt and (b) the amount of such principal
payment by (ii) the sum of all such principal payments.
"BENEFICIAL OWNER" means a beneficial owner as defined in Rules 13d-3 and
13d-5 under the Exchange Act (or any successor rules), including the provision
of such Rules that a person shall be deemed to have beneficial ownership of all
securities that such person has a right to acquire within 60 days, provided that
a person shall not be deemed a beneficial owner of, or to own beneficially, any
securities if such beneficial ownership (1) arises solely as a result of a
revocable proxy delivered in response to a proxy or consent solicitation made
pursuant to, and in accordance with, the Exchange Act and the applicable rules
and regulations thereunder and (2) is not also then reportable on Schedule 13D
(or any successor schedule) under the Exchange Act.
"BOARD OF DIRECTORS" means (i) whenever used in Sections 1009 through
1015, inclusive, the board of directors of the Company and (ii) whenever used
elsewhere herein, either the board of directors of the Company or any duly
authorized committee of that board.
"BOARD RESOLUTION" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors (unless the context specifically requires that such
resolution be adopted by a majority of the Disinterested Directors, in which
case by a majority of such directors) and to be in full force and effect on the
date of such certification and delivered to the Trustee.
"BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in the Borough of Manhattan,
The City of New York are authorized or obligated by law or executive order to
close.
"CAPITAL LEASE OBLIGATIONS" of any Person means the obligations to pay
rent or other amounts under lease of (or other Debt arrangements conveying the
right to use) real or 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.
3
<PAGE> 16
"CHANGE OF CONTROL" means the occurrence of any of the following events:
(a) any person (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act and the regulations thereunder) is or becomes the
Beneficial Owner, directly or indirectly, of more than 50% of the total
Voting Stock or Total Common Equity of the Company; provided that no
Change of Control shall be deemed to occur pursuant to this clause (a)
(x) if the person is a corporation with outstanding debt securities
having a maturity at original issuance of at least one year and if such
debt securities are rated Investment Grade by S&P or Moody's for a period
of at least 90 consecutive days, beginning on the date of such event
(which period will be extended up to 90 additional days for as long as
the rating of such debt securities is under publicly announced
consideration for possible downgrading by the applicable rating agency),
or (y) if the person is a corporation (1) that is not, and does not have
any outstanding debt securities that are, rated by S&P, Moody's or any
other rating agency of national standing at any time during a period of
90 consecutive days beginning on the date of such event (which period
will be extended up to an additional 90 days for as long as any such
rating agency has publicly announced that such corporation or debt
thereof will be rated), unless after such date but during such period
debt securities of such corporation having a maturity at original
issuance of at least one year are rated Investment Grade by S&P or
Moody's and remain so rated for the remainder of the period referred to
in clause (x) above and (2) that, when determined as of the Trading Day
immediately before and the Trading Day immediately after the date of such
event, has Total Common Equity of at least $10 billion (provided that,
solely for the purpose of calculating Total Common Equity as of such
later Trading Day, the average Closing Price of the Common Stock of such
person shall be deemed to equal the Closing Price of such Common Stock on
such later Trading Day, subject to the last sentence of the definition of
"Total Common Equity"); or
(b) the Company consolidates with, or merges with or into, another
Person or sells, assigns, conveys, transfers, leases or otherwise
disposes of all or substantially all of its assets to any Person, or any
Person consolidates with, or merges with or into, the Company, in any
such event pursuant to a transaction in which the outstanding Voting
Stock of the Company is converted into or exchanged for cash, securities
or other property, other than any such transaction where (i) the
outstanding Voting Stock of the Company is converted into or exchanged
for (1) Voting Stock (other than Redeemable Stock) of the surviving or
transferee Person or (2) cash, securities and other property in an amount
which could be paid by the Company as a Restricted Payment under this
Indenture and (ii) immediately after such transaction no person (as such
term is used in Sections 13(d) and 14(d) of the Exchange Act and the
regulations thereunder) is the Beneficial Owner, directly or indirectly,
of more than 50% of the total Voting Stock or Total Common Equity of the
surviving or transferee Person; provided that no Change of Control shall
be deemed to occur pursuant to this clause (b), (x) if the surviving or
transferee Person or the person referred to in clause (b)(ii) is a
corporation with outstanding debt securities having a maturity at
original issuance of at least one year and if such debt securities are
rated Investment Grade by S&P or Moody's for a period of at least 90
consecutive days, beginning on the
4
<PAGE> 17
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 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 or transferee Person,
as the case may
5
<PAGE> 18
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 or
transferee Person, as the case may be) unless such person (as so defined) was
the Beneficial Owner of more than 50% of the total Voting Stock and more than
50% of the Total Common Equity of the Company immediately before such
transaction or combination of transactions.
"CLOSING DATE" means the date on which the Securities are originally
issued hereunder.
"CLOSING PRICE" on any Trading Day with respect to the per share price of
any shares of Capital Stock means the last reported sale price regular way or,
in case no such reported sale takes place on such day, the average of the
reported closing bid and asked prices regular way, in either case on the New
York Stock Exchange or, if such shares of Capital Stock are not listed or
admitted to trading on such exchange, on the principal national securities
exchange on which such shares are listed or admitted to trading or, if not
listed or admitted to trading on any national securities exchange, on the Nasdaq
Stock Market or, if such shares are not listed or admitted to trading on any
national securities exchange or quoted on the Nasdaq Stock Market but the issuer
is a Foreign Issuer (as defined in Rule 3b-4(b) under the Exchange Act) and the
principal securities exchange on which such shares are listed or admitted to
trading is a Designated Offshore Securities Market (as defined in Rule 902(a)
under the Securities Act), the average of the reported closing bid and asked
prices regular way on such principal exchange, or, if such shares are not listed
or admitted to trading on any national securities exchange or quoted on the
Nasdaq Stock Market and the issuer and principal securities exchange do not meet
such requirements, the average of the closing bid and asked prices in the
over-the-counter market as furnished by any New York Stock Exchange member firm
of national standing that is selected from time to time by the Company for that
purpose.
"CODE" means the Internal Revenue Code, as amended from time to time, and
the rules and regulations thereunder.
"COMMISSION" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or, if at any time after
the execution of this instrument such Commission is not existing and performing
the duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"COMMON STOCK" of any Person means Capital Stock of such Person that does
not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
"COMPANY" means the Person named as the "Company" in the first paragraph
of this instrument until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture and thereafter "Company" shall mean
such successor Person.
6
<PAGE> 19
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or order
signed in the name of the Company by its Chairman of the Board, its President or
a Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or
an Assistant Secretary, and delivered to the Trustee.
"CONSOLIDATED ADJUSTED NET INCOME" and "CONSOLIDATED ADJUSTED NET LOSS"
mean, for any period, the net income or net loss, as the case may be, of the
Company and its Restricted Subsidiaries for such period, all as determined on a
Consolidated basis in accordance with generally accepted accounting principles,
adjusted, to the extent included in calculating such net income or net loss, as
the case may be, by excluding without duplication (a) any after-tax gain or loss
attributable to the sale, conversion or other disposition of assets other than
in the ordinary course of business, (b) any after-tax gains resulting from the
write-up of assets and any loss resulting from the write-down of assets, (c) any
after-tax gain or loss on the repurchase or redemption of any securities
(including in connection with the early retirement or defeasance of any Debt),
(d) any foreign exchange gain or loss, (e) all payments in respect of dividends
on shares of Preferred Capital Stock of the Company, (f) any other
extraordinary, non-recurring or unusual items incurred by the Company or any of
its Restricted Subsidiaries, (g) the net income (or loss) of any Person acquired
by the Company or any Restricted Subsidiary in a pooling-of-interests
transaction for any period prior to the date of such transaction and (h) all
income or losses of Unrestricted Subsidiaries and Persons (other than
Subsidiaries) accounted for by the Company using the equity method of accounting
except, in the case of any such income, to the extent of dividends, interest or
other cash distributions received directly or indirectly from any such
Unrestricted Subsidiary or Person.
"CONSOLIDATED ADJUSTED NET INCOME (LOSS)" means, for any period, the
Company's Consolidated Adjusted Net Income or Consolidated Adjusted Net
Loss for such period, as applicable.
"CONSOLIDATED DEBT TO ANNUALIZED OPERATING CASH FLOW RATIO" means, as at
any date of determination, the ratio of (i) the aggregate amount of Debt of the
Company and the Restricted Subsidiaries on a Consolidated basis outstanding as
at the date of determination to (ii) the Annualized Operating Cash Flow of the
Company for the most recently completed fiscal quarter of the Company.
"CONSOLIDATED INTEREST EXPENSE" of any Person means, for any period, the
aggregate interest expense and fees and other financing costs in respect of Debt
(including amortization of original issue discount and non-cash interest
payments and accruals), the interest component in respect of Capital Lease
Obligations and any deferred payment obligations of such Person and its
Restricted Subsidiaries, determined on a Consolidated basis in accordance with
generally accepted accounting principles and all commissions, discounts, other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing and net costs (including amortizations of discounts) associated with
interest rate swap and similar agreements and with foreign currency hedge,
exchange and similar agreements and the amount of dividends paid in respect of
Redeemable Stock (unless such dividends are paid in Capital Stock that is not
Redeemable Stock).
7
<PAGE> 20
"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.
"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.
"CORPORATE TRUST OFFICE" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered,
which address as of the Closing Date is located at 311 West Monroe Street, 12th
Floor, Chicago, Illinois 60606, Attention: Indenture Trust Division.
8
<PAGE> 21
"CORPORATION" means a corporation, association, company, joint-stock
company or business trust.
"COVENANT DEFEASANCE" has the meaning specified in Section 1203.
"CREDIT FACILITY" means any credit facility (whether a term or revolving
type) of the type customarily entered into with banks, between the Company
and/or any of its Restricted Subsidiaries, on the one hand, and any banks or
other lenders, on the other hand (and any renewals, refundings, extensions or
replacements of any such credit facility), which credit facility is designated
by the Company as a "Credit Facility" for purposes of this Indenture, 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 $3 billion.
"DEBT" means (without duplication), with respect to any Person, whether
recourse is to all or a portion of the assets of such Person and whether or not
contingent, (i) every obligation of such Person for money borrowed, (ii) every
obligation of such Person evidenced by bonds, debentures, notes or other similar
instruments, including obligations Incurred in connection with the acquisition
of property, assets or businesses, (iii) every reimbursement obligation of such
Person with respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person, (iv) every obligation of such
Person issued or assumed as the deferred purchase price of property or services
(but excluding trade accounts payable or accrued liabilities arising in the
ordinary course of business which are not overdue or which are being contested
in good faith), (v) every Capital Lease Obligation of such Person, (vi) the
maximum fixed redemption or repurchase price of Redeemable Stock of such Person
at the time of determination plus accrued but unpaid dividends, (vii) every
obligation of such Person under interest rate swap or similar agreements or
foreign currency hedge, exchange or similar agreements of such Person, and
(viii) every obligation of the type referred to in clauses (i) through (vii) of
another Person and all dividends of another Person the payment of which, in
either case, such Person has Guaranteed or is responsible or liable, directly or
indirectly, as obligor, Guarantor or otherwise. The amount of Debt of any Person
issued with original issue discount is the face amount of such Debt less the
unamortized portion of the original issue discount of such Debt at the time of
its issuance as determined in conformity with generally accepted accounting
principles, and money borrowed at the time of the Incurrence of any Debt in
order to pre-fund the payment of interest on such Debt shall be deemed not to be
"Debt".
"DEFAULT" means an event that is, or after notice or passage of time, or
both, would be, an Event of Default.
"DEFAULT AMOUNT" has the meaning specified in Section 502.
"DEFAULTED INTEREST" has the meaning specified in Section 309.
"DEFEASANCE" has the meaning specified in Section 1202.
9
<PAGE> 22
"DEPOSITORY" shall mean The Depository Trust Company, as nominees and
their respective successors.
"DIGITAL MOBILE" means a radio communications system that employs digital
technology with a multi-site configuration that will permit frequency reuse as
described in the Offering Circular.
"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 Redeemable Stock), or any options, warrants or other rights to
purchase such Capital Stock (other than Redeemable Stock) designated by the
Board of Directors as a "Directed Investment" to be used for one or more
specified investments in the telecommunications business (including related
activities and services) and is so designated and used at any time within 365
days after the receipt thereof; provided that the aggregate amount of any such
Directed Investments may not at any time exceed fifty percent (50%) of the
aggregate amount of such cash or property received by the Company on or after
June 1, 1997 from any such issuance and sale or capital contribution; and
provided further that any proceeds from any such issuance or sale may not be
used for such an Investment if such proceeds were, prior to being designated for
use as a Directed Investment, (x) used to make a Restricted Payment or (y) used
as the basis for the Incurrence of Debt under clause (i) of Section 1008 unless
and until the amount of any such Debt (I) is treated as newly issued Debt and
could be Incurred in accordance with Section 1008 (other than under clause (i)
thereof) or (II) has been repaid or refinanced with the proceeds of Debt
Incurred in accordance with Section 1008 (other than under clause (i) thereof)
or (III) has otherwise been repaid and,
10
<PAGE> 23
in the circumstances described in clauses (I) and (II), the Company delivers to
the Trustee a certificate confirming that the requirements of such clauses have
been met.
"DISINTERESTED DIRECTOR" means, with respect to any proposed transaction
between the Company and an Affiliate thereof, a member of the Board of Directors
who is not an officer or employee of the Company, would not be a party to, or
have a financial interest in, such transaction and is not an officer, director
or employee of, and does not have a financial interest in, such Affiliate. For
purposes of this definition, no person would be deemed not to be a Disinterested
Director solely because such person holds Capital Stock of the Company.
"EVENT OF DEFAULT" has the meaning specified in Section 501.
"EXCHANGE SECURITIES" means any security of the Company containing terms
identical to the Securities initially issued hereunder (except that such
Securities shall have been registered under the Securities Act) that are issued
and exchanged for the Securities pursuant to the Registration Rights Agreement.
"EXCHANGE ACT" refers to the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time.
"EXPIRATION DATE" has the meaning specified in the definition of Offer to
Purchase.
"FAIR MARKET VALUE" means, for purposes of clause (i) of Section 1008,
the price that would be paid in an arm's-length transaction between an informed
and willing seller under no compulsion to sell and an informed and willing buyer
under no compulsion to buy, as determined in good faith by the Board of
Directors, whose determination shall be conclusive if evidenced by a Board
Resolution; provided that (x) the Fair Market Value of any security registered
under the Exchange Act shall be the average of the closing prices, regular way,
of such security for the 20 consecutive trading days immediately preceding the
sale of Capital Stock and (y) in the event the aggregate Fair Market Value of
any other property received by the Company exceeds $10 million, the Fair Market
Value of such property shall be (i) so long as such a Fair Market Value
determination of such property is required to be made pursuant to the
Certificate of Designation for the Series D Preferred Stock, pursuant to the
terms of the Series D Debenture Indenture, pursuant to the Certificate of
Designation for the Series E Preferred Stock or pursuant to the terms of the
Series E Debenture Indenture, the Fair Market Value as so determined, which
shall be set forth in an Officer's Certificate delivered to the Trustee, and
(ii) otherwise, such Fair Market Value shall be as determined in good faith by
the Board of Directors, including a majority of Disinterested Directors who are
then members of such Board of Directors, which determination shall be conclusive
if evidenced by a Board Resolution.
"FCC" means the Federal Communications Commission.
"FEBRUARY INDENTURE" means the Indenture, dated February 11, 1998,
between the Company and Harris Trust and Savings Bank, Trustee, relating to the
February Notes.
11
<PAGE> 24
"FEBRUARY NOTES" means the Company's 9.95% Senior Serial Redeemable
Discount Notes due 2008.
"GLOBAL SECURITIES" has the meaning provided in Section 201.
"GUARANTEE" by any Person means any obligation, contingent or otherwise,
of such Person guaranteeing any Debt of any other Person (the "primary obligor")
in any manner, whether directly or indirectly, and including any obligation of
such Person, (i) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Debt or to purchase (or to advance or supply funds for the
purchase of) any security for the payment of such Debt, (ii) to purchase
property, securities or services for the purpose of assuring the holder of such
Debt of the payment of such Debt, or (iii) to maintain working capital, equity
capital or other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Debt (and "Guaranteed",
"Guaranteeing" and "Guarantor" shall have meanings correlative to the
foregoing); provided, however, that the Guarantee by any Person shall not
include endorsements by such Person for collection or deposit, in either case,
in the ordinary course of business.
"HOLDER" means a Person in whose name a Security is registered in the
Security Register.
"INCUR" means, with respect to any Debt or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise), assume
(pursuant to a merger, consolidation, acquisition or other transaction),
Guarantee or otherwise become liable in respect of such Debt or other obligation
or the recording, as required pursuant to generally accepted accounting
principles or otherwise, of any such Debt or other obligation on the balance
sheet of such Person (and "Incurrence" and "Incurred", shall have meanings
correlative to the foregoing); provided, however, that a change in generally
accepted accounting principles that results in an obligation of such Person that
exists at 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 Restricted Subsidiary of the Company shall be
deemed to have been Incurred at the time it becomes such a Restricted
Subsidiary.
"INDENTURE" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"INTEREST PAYMENT DATE" means the Stated Maturity of an installment of
interest on the Securities.
12
<PAGE> 25
"INVESTMENT" by any Person means any direct or indirect loan, advance or
other extension of credit or capital contribution to (by means of transfers of
cash or other property to others or payments for property or services for the
account or use of others, or otherwise), or purchase or acquisition of Capital
Stock, bonds, notes, debentures or other securities or evidence of Debt issued
by, any other Person or the designation of a Subsidiary as an Unrestricted
Subsidiary; provided that a transaction will not be an Investment to the extent
it involves (i) the issuance or sale by the Company of its Capital Stock (other
than Redeemable Stock), including options, warrants or other rights to acquire
such Capital Stock (other than Redeemable Stock) or (ii) a transfer, assignment
or contribution by the Company of shares of Capital Stock (or any options,
warrants or rights to acquire Capital Stock), or all or substantially all of the
assets of, any Unrestricted Subsidiary of the Company to another Unrestricted
Subsidiary of the Company.
"INVESTMENT GRADE" means a rating of at least BBB-, in the case of S&P,
or Baa3, in the case of Moody's.
"LICENSES" means SMR licenses granted by the FCC that entitle the holder
to use the radio channels covered thereby, subject to compliance with FCC rules
and regulations, in connection with its SMR business.
"LIEN" means, with respect to any property or assets, any mortgage or
deed of trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien, charge, easement, encumbrance, preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
on or with respect to such property or assets (including any conditional sale or
other title retention agreement having substantially the same economic effect as
any of the foregoing).
"MARKETABLE SECURITIES" means:
(1) securities either issued directly or fully guaranteed or insured by
the government of the United States of America or any agency or instrumentality
thereof having maturities of not more than six months;
(2) time deposits and certificates of deposit, having maturities of not
more than six months from the date of deposit, of any domestic commercial bank
having capital and surplus in excess of $500 million and having outstanding
long-term debt rated A or better (or the equivalent thereof) by S&P or Aaa or
better (or the equivalent thereof) by Moody's; and
(3) commercial paper rated A-1 or the equivalent thereof by S&P or P-1 or
the equivalent thereof by Moody's, and in each case maturing within six months.
"MATURITY", when used with respect to any Security, means the date on
which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption, offer to purchase or otherwise.
13
<PAGE> 26
"MOODY'S" means Moody's Investors Service, Inc. or, if Moody's Investors
Service, Inc. shall cease rating debt securities having a maturity at original
issuance of at least one year and such ratings business shall have been
transferred to a successor Person, such successor Person; provided, however,
that if Moody's Investors Service, Inc. ceases rating debt securities having a
maturity at original issuance of at least one year and its ratings business with
respect thereto shall not have been transferred to any successor Person, then
"Moody's" shall mean any other national recognized rating agency (other than
S&P) that rates debt securities having a maturity at original issuance of at
least one year and that shall have been designated by the Company by a written
notice given to the Trustee.
"NON-U.S. PERSON" means a person who is not a "U.S. PERSON" (as defined
in Regulation S).
"NOTICE OF DEFAULT" means a written notice of the kind specified in
Section 501(5).
"NOVEMBER 1998 INDENTURE" means the indenture dated November 4, 1998
between the Company, as issuer, and Harris Trust and Savings Bank, as trustee,
relating to the November 1998 Notes.
"NOVEMBER 1998 NOTES" means the Company's 12% Senior Serial Redeemable
Notes due 2008.
"OCTOBER INDENTURE" means the Indenture, dated October 22, 1997, between
the Company and Harris Trust and Savings Bank, Trustee, relating to the October
Notes.
"OCTOBER NOTES" means the Company's 9 3/4% Senior Serial Redeemable
Discount Notes due 2007.
"OFFER" has the meaning specified in the definition of Offer to Purchase.
"OFFER TO PURCHASE" means a written offer (the "Offer") sent by the
Company by first class mail, postage prepaid, to each Holder at his address
appearing in the Security Register on the date of the Offer offering to purchase
up to the principal amount of Securities specified in such Offer at the purchase
price specified in such Offer (as determined pursuant to this Indenture). Unless
otherwise required by applicable law, the Offer shall specify an expiration date
(the "Expiration Date") of the Offer to Purchase which shall be, subject to any
contrary requirements of applicable law, not less than 30 days or more than 60
days after the date of such Offer and a settlement date (the "Purchase Date")
for purchase of Securities within five Business Days after the Expiration Date.
The Company shall notify the Trustee at least 15 days (or such shorter period as
is acceptable to the Trustee) prior to the mailing of the Offer of the Company's
obligation to make an Offer to Purchase, and the Offer shall be mailed by the
Company or, at the Company's request, by the Trustee, in the name and at the
expense of the Company. The Offer shall contain information concerning the
business of the Company and its Subsidiaries which, at a minimum, shall include
(i) the most recent annual and quarterly financial statements and "Management's
Discussion and Analysis of Financial
14
<PAGE> 27
Condition and Results of Operations" contained in the documents required to be
filed with the Trustee pursuant to this Indenture (which requirements may be
satisfied by delivery of such documents together with the Offer), (ii) a
description of material developments in the Company's business subsequent to the
date of the latest of such financial statements referred to in clause (i)
(including a description of the events requiring the Company to make the Offer
to Purchase), (iii) if required under applicable law, pro forma financial
information concerning, among other things, the Offer to Purchase and the events
requiring the Company to make the Offer to Purchase and (iv) any other
information required by applicable law to be included therein. The Offer shall
contain all instructions and materials necessary to enable such Holders to
tender their Securities pursuant to the Offer to Purchase. The Offer shall also
state:
(1) the section of this Indenture pursuant to which the Offer to
Purchase is being made;
(2) the Expiration Date and the Purchase Date;
(3) the aggregate principal amount at Stated Maturity of the
Outstanding Securities offered to be purchased by the Company pursuant to
the Offer to Purchase (the "Purchase Amount");
(4) the purchase price to be paid by the Company for each $1,000
principal amount at Stated Maturity of Securities accepted for payment
(as specified pursuant to this Indenture) (the "Purchase Price");
(5) the Holder may tender all or any portion of the Securities
registered in the name of such Holder and that any portion of Securities
tendered must be tendered in an integral multiple of $1,000 of principal
amount at Stated Maturity;
(6) the place or places where the Securities are to be surrendered
for tender pursuant to the Offer to Purchase;
(7) that interest, if any, on any Securities not tendered or
tendered but not purchased by the Company pursuant to the Offer to
Purchase will continue to accrue;
(8) that on the Purchase Date the Purchase Price will become due
and payable upon each Security being accepted for payment pursuant to the
Offer to Purchase;
(9) that each Holder electing to tender Securities pursuant to the
Offer to Purchase will be required to surrender such Securities at the
place or places specified in the Offer prior to the close of business on
the Expiration Date (such Securities being, if the Company or the Trustee
so requires, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Trustee duly
executed by the Holder thereof or his attorney duly authorized in
writing);
15
<PAGE> 28
(10) that Holders will be entitled to withdraw all or any portion
of the Securities tendered if the Company (or its Paying Agent) receives,
not later than the close of business on the Expiration Date, a facsimile
transmission or letter setting forth the name of the Holder, the
principal amount at Stated Maturity of the Securities the Holder
tendered, the certificate number of the Securities the Holder tendered
and a statement that such Holder is withdrawing all or a portion of his
tender;
(11) that the Company shall purchase all such Securities duly
tendered and not withdrawn pursuant to the Offer to Purchase; and
(12) that in the case of any Holder whose Securities are purchased
only in part, the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Securities without service
charge, new Securities of any authorized denomination as requested by
such Holder, in an aggregate principal amount at Stated Maturity equal to
and in exchange for the unpurchased portion of the aggregate principal
amount at Stated Maturity of the Securities so tendered.
Any Offer to Purchase shall be governed by and effected in accordance
with the Offer for such Offer to Purchase.
"OFFERING CIRCULAR" means the offering circular dated November 5, 1999
used in connection with the offering of the Securities.
"OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of the
Board, the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Company, and
delivered to the Trustee. One of the officers signing an Officers' Certificate
given pursuant to Section 1017 shall be the principal executive, financial or
accounting officer of the Company.
"OFFSHORE GLOBAL SECURITIES" has the meaning provided in Section 201.
"OFFSHORE PHYSICAL SECURITIES" has the meaning provided in Section 201.
"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 Operating Cash Flow Ratio, (1) any Person that is a Restricted
Subsidiary on such date (or would become a Restricted Subsidiary in connection
with the transaction that requires the determination of such ratio) will be
deemed to have been a Restricted Subsidiary at all times during such fiscal
quarter, (2)
16
<PAGE> 29
any Person that is not a Restricted Subsidiary on such date (or would cease to
be a Restricted Subsidiary in connection with the transaction that requires the
determination of such ratio) will be deemed not to have been a Restricted
Subsidiary at any time during such fiscal quarter and (3) if the Company or any
Restricted Subsidiary shall have in any manner acquired (including through
commencement of activities constituting such operating business) or disposed
(including through termination or discontinuance of activities constituting such
operating business) of any operating business during or subsequent to the most
recently completed fiscal quarter, such calculation will be made on a pro forma
basis on the assumption that such acquisition or disposition had been completed
on the first day of such completed fiscal quarter.
"OPERATING CASH FLOW TO CONSOLIDATED INTEREST EXPENSE RATIO" means, as at
any date of determination, the ratio of (i) the Operating Cash Flow of the
Company for the most recently completed fiscal quarter of the Company to (ii)
the Consolidated Interest Expense of the Company and its Restricted Subsidiaries
for the most recently completed fiscal quarter of the Company.
"OPINION OF COUNSEL" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee.
"OUTSTANDING", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities; provided that, if such
Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to
the Trustee has been made;
(iii) Securities which have been paid pursuant to Section 308 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by a
bona fide purchaser in whose hands such Securities are valid obligations
of the Company; and
(iv) Securities as to which Defeasance has been effected pursuant
to Section 1202;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date,
17
<PAGE> 30
Securities owned by the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent, waiver or other action, only Securities which the
Trustee knows to be so owned shall be so disregarded. Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor.
"PARI PASSU", when used with respect to the ranking of any Debt of any
Person in relation to other Debt of such Person, means that each such Debt (a)
either (i) is not subordinated in right of payment to any other Debt of such
Person or (ii) is subordinate in right of payment to the same Debt of such
Person as is the other and is so subordinate to the same extent and (b) is not
subordinate in right of payment to the other or to any Debt of such Person as to
which the other is not so subordinate.
"PAYING AGENT" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.
"PERMITTED DEBT" means:
(i) any Debt (including Guarantees thereof) outstanding on the
Closing Date (including the Securities) and any accretion of original
issue discount and accrual of interest with respect to such Debt;
(ii) any Debt outstanding under a Credit Facility;
(iii) any Vendor Financing Debt or any other Debt Incurred to
finance the cost (including the cost of design, development,
construction, improvement, installation or integration) of equipment,
inventory or network assets acquired by the Company or any of its
Restricted Subsidiaries after the Closing Date;
(iv) Debt (A) to the Company or (B) to any Restricted Subsidiary;
provided that any event which results in any such Restricted Subsidiary
ceasing to be a Restricted Subsidiary or any subsequent transfer of such
Debt (other than to the Company or another Restricted Subsidiary) shall
be deemed, in each case, to constitute an Incurrence of such Debt not
permitted by this clause (iv);
(v) Debt (A) in respect of performance, surety or appeal bonds
provided in the ordinary course of business, (B) under foreign currency
hedge, interest rate swap or similar agreements; provided that such
agreements (a) are designed solely to protect the Company or its
Restricted Subsidiaries against fluctuations in foreign currency exchange
rates or interest rates and (b) do not increase the Debt of the obligor
outstanding at any time other than as a result of fluctuations in foreign
currency exchange rates or interest rates or by reason of fees,
indemnities and compensation payable thereunder; and (C) arising from
agreements providing
18
<PAGE> 31
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 Section
1008 and any renewals, refundings or extensions thereof, plus (A) the
amount of any premium reasonably determined by the Company as necessary
to accomplish such renewal, refunding or extension and (B) such other
fees and expenses of the Company reasonably incurred in connection with
the renewal, refunding or extension, provided that such renewal,
refunding or extension shall constitute Permitted Debt only (a) to the
extent that it does not result in an increase in the aggregate principal
amount (or, if such Debt provides for an amount less than the principal
amount thereof to be due and payable upon a declaration of acceleration
of the maturity thereof, in an amount not greater than such lesser
amount) of such Debt (except as permitted by clause (A) or (B) above),
and (b) to the extent such renewed, refunded or extended Debt does not
have a mandatory redemption date prior to the mandatory redemption date
of the Debt being renewed, refunded or extended or have an Average Life
shorter than the remaining Average Life of the Debt being renewed,
refunded or extended;
(vii) Debt payable solely in, or mandatorily convertible into,
Capital Stock (other than Redeemable Stock) of the Company; and
(viii) Debt (in addition to Debt permitted under clauses (i)
through (vii) above) in an aggregate principal amount outstanding at any
time not to exceed $450 million.
"PERMITTED DISTRIBUTION" of a Person means (x) the exchange by such
Person of Capital Stock (other than Redeemable Stock) for outstanding Capital
Stock, including, without limitation, the redemption, repurchase or other
acquisition or retirement for value of Capital Stock out of the proceeds of a
substantially concurrent issue and sale, other than to a Restricted Subsidiary,
of Capital Stock (other than Redeemable Stock); (y) the redemption, repurchase,
defeasance or other acquisition or retirement for value of Debt of the Company
that is subordinate in right of payment to the Securities, in exchange for
(including any such exchange pursuant to the exercise of a conversion right or
privilege in connection with which cash is paid in lieu of the issuance of
fractional shares or scrip), or out of the proceeds of a substantially
concurrent issue and sale (other than to a Restricted Subsidiary) of, either (a)
Capital Stock of the Company (other than Redeemable Stock) or (b) Debt of the
Company that is subordinate in right of payment to the Securities on
subordination terms no less favorable to the Holders of the Securities in their
capacities as such than the subordination terms (or other arrangement)
applicable to
19
<PAGE> 32
the Debt that is redeemed, repurchased, defeased or otherwise acquired or
retired for value, provided that, in the case of this clause (b), such new Debt
does not mature prior to the Stated Maturity or have a mandatory redemption date
prior to the mandatory redemption date of the Debt being redeemed, repurchased,
defeased or otherwise acquired or retired for value or have an Average Life
shorter than the remaining Average Life of the Debt being redeemed, repurchased,
defeased or otherwise acquired or retired for value; and (z) dividend, penalty
or other mandated payments, including mandatory repurchases, on or in respect of
any class or series of the Company's Preferred Capital Stock that is authorized
and designated on the Closing Date (i.e., the Class A Preferred Stock, Class B
Preferred Stock, Class C Preferred Stock, Series D Preferred Stock, Series E
Preferred Stock and Zero Coupon Preferred Stock of the Company).
"PERMITTED INVESTMENT" means any Investment in Marketable Securities.
"PERMITTED TRANSACTION" means (i) any transaction pursuant to agreements
(whether or not definitive, and regardless of whether binding or non-binding)
existing on the Closing Date and described in or incorporated by reference into
the Offering Circular and (ii) any transaction or transactions with any vendor
or vendors of property or materials used in the telecommunications business
(including related activities and services) of the Company or any Restricted
Subsidiary, provided (x) such transactions are in the ordinary course of
business and (y) such vendor does not beneficially own more than 50% of the
voting power of the Voting Stock of the Company.
"PERSON" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"PREDECESSOR SECURITY" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 308 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"PREFERRED CAPITAL STOCK" as applied to the Capital Stock of any Person,
means Capital Stock of such Person of any class or classes (however designated)
that ranks prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
"PRIVATE PLACEMENT LEGEND" means the legend initially set forth on the
Securities in the form set forth in Section 205.
"PURCHASE AMOUNT" has the meaning specified in the definition of Offer to
Purchase.
"PURCHASE DATE" has the meaning specified in the definition of Offer to
Purchase.
20
<PAGE> 33
"PURCHASE PRICE" has the meaning specified in the definition of Offer to
Purchase.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"RECORD EXPIRATION DATE" has the meaning specified in Section 104.
"REDEEMABLE STOCK" of any Person means any Capital Stock of such Person
that by its terms or otherwise is (i) required to be redeemed prior to the
Stated Maturity of the Securities, (ii) redeemable at the option of the holder
thereof at any time prior to the Stated Maturity of the Securities or (iii)
convertible into or exchangeable for Capital Stock referred to in clause (i) or
(ii) above or Debt having a scheduled maturity prior to the Stated Maturity of
the Securities; provided that any Capital Stock that would not constitute
Redeemable Stock but for provisions thereof giving holders thereof the right to
require such Person to repurchase or redeem such Capital Stock upon the
occurrence of a "change of control" occurring prior to the Stated Maturity of
the Securities shall not constitute Redeemable Stock if the "change of control"
provisions applicable to such Capital Stock are no more favorable to the holders
of such Capital Stock than the provisions contained in Section 1013 and such
Capital Stock specifically provides that such Person will not repurchase or
redeem any such stock pursuant to such provision prior to the Company's
repurchase of such Securities as are required to be repurchased pursuant to
Section 1013; and further provided that the Series D Preferred Stock, the Series
E Preferred Stock and the Zero Coupon Preferred Stock shall not be considered to
constitute Redeemable Stock.
"REDEMPTION DATE", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"REDEMPTION PRICE", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement
dated the Closing Date, between the Company and Goldman, Sachs & Co., as
representative of the Initial Purchasers (as defined therein).
"REGISTRATION STATEMENT" means the Registration Statement as defined and
described in the Registration Rights Agreement.
"REGULAR RECORD DATE" for the interest payable on any Interest Payment
Date means the May 1 or November 1 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date.
"REGULATION S" means Regulation S under the Securities Act.
"REQUIRED CONSENT" means, except as otherwise expressly provided in this
Indenture with respect to matters requiring the consent of each holder of
Securities affected thereby: (i) the consent of holders of not less than a
majority in aggregate principal amount at Stated Maturity of the Securities for
any action to (x) direct the time,
21
<PAGE> 34
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any power conferred upon such Trustee, or (y) consent to
or waive, on behalf of the holders of all the Securities, any past default and
its consequences, and (ii) with respect to all other actions requiring the
consent of holders of the Securities, the consent of either (x) a majority in
aggregate principal amount at Stated Maturity of the Securities or (y) a
majority in aggregate principal amount at Stated Maturity of (I) the Securities,
(II) the September Notes, if the holders of the September Notes are being
requested to consent to such action with respect to the terms of the September
Notes or the September Indenture, (III) the October Notes, if the holders of the
October Notes are being requested to consent to such action with respect to the
terms of the October Notes or the October Indenture, (IV) the February Notes, if
the holders of the February Notes are being requested to consent to such action
with respect to the terms of the February Notes or the February Indenture, (V)
the November 1998 Notes, if the holders of the November 1998 Notes are being
requested to consent to such action with respect to the terms of the November
1998 Notes or the November 1998 Indenture and (VI) any other issue of
unsubordinated, unsecured notes issued by the Company, if such notes or the
indenture pursuant to which such notes were issued both (A) require the consent
of the holders of such notes to such action and (B) provide that the holders
thereof will vote with the holders of the Securities with respect to such
action.
"RESTRICTED PAYMENTS" has the meaning specified in Section 1009.
"RESTRICTED SUBSIDIARY" means any Subsidiary of the Company, whether
existing on the Closing Date or created subsequent thereto, designated from time
to time by the Board of Directors as (or otherwise deemed to be) a "Restricted
Subsidiary" in accordance with Section 1010.
"RULE 144A" means Rule 144A under the Securities Act.
"S&P" means Standard & Poor's Ratings Services or, if Standard & Poor's
Ratings Services shall cease rating debt securities having a maturity at
original issuance of at least one year and such ratings business shall have been
transferred to a successor Person, such successor Person; provided, however,
that if Standard & Poor's Ratings Services ceases rating debt securities having
a maturity at original issuance of at least one year and its ratings business
with respect thereto shall not have been transferred to any successor Person,
then "S&P" shall mean any other nationally recognized rating agency (other than
Moody's) that rates debt securities having a maturity at original issuance of at
least one year and that shall have been designated by the Company by a written
notice given to the Trustee.
"SECURITIES" means securities designated in the first paragraph of the
RECITALS OF THE COMPANY that are authenticated and delivered under this
Indenture. For all purposes of this Indenture, the term "Securities" shall
include the Securities issued on the Closing Date, any Exchange Securities to be
issued and exchanged for any Securities pursuant to the Registration Rights
Agreement and any other Securities issued after the Closing Date under this
Indenture. For purposes of this Indenture all Securities shall vote together as
one series of Securities under this Indenture.
22
<PAGE> 35
"SECURITIES ACT" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time.
"SECURITY REGISTER" and "SECURITY REGISTRAR" have the respective meanings
specified in Section 305.
"SEPTEMBER INDENTURE" means the Indenture, dated September 17, 1997,
between the Company and Harris Trust and Savings Bank, Trustee, relating to the
September Notes.
"SEPTEMBER NOTES" means the Company's 10.65% Senior Redeemable Discount
Notes due 2007.
"SERIES D DEBENTURE INDENTURE" means an indenture (having terms and
conditions substantially as summarized in that certain confidential Offering
Memorandum, dated July 16, 1997), prepared in connection with the original
issuance by the Company of shares of Series D Preferred Stock, pursuant to which
certain exchange debentures may be issued by the Company in exchange for
outstanding shares of Series D Preferred Stock.
"SERIES D PREFERRED STOCK" means the 13% Series D Exchangeable Redeemable
Preferred Stock of the Company issued on July 21, 1997 and any shares of
Preferred Capital Stock issued in exchange therefor or as payment in kind
dividends thereon.
"SERIES E DEBENTURE INDENTURE" means an indenture (having terms and
conditions substantially as summarized in that certain confidential Offering
Memorandum, dated February 6, 1998), prepared in connection with the original
issuance by the Company of shares of Series E Preferred Stock, pursuant to which
certain exchange debentures may be issued by the Company in exchange for
outstanding shares of Series E Preferred Stock.
"SERIES E PREFERRED STOCK" means the 11.125% Series E Exchangeable
Redeemable Preferred Stock of the Company issued on February 11, 1998 and any
shares of Preferred Capital Stock issued in exchange therefor or as payment in
kind dividends thereon.
"SHELF REGISTRATION STATEMENT" means the Shelf Registration Statement as
defined in the Registration Rights Agreement.
"SPECIAL RECORD DATE" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 309.
"SPECIALIZED MOBILE RADIO" or "SMR" means a mobile radio communications
system that is operated as described in the Offering Circular.
"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
23
<PAGE> 36
date on which the principal of such Debt security or such installment of
interest is due and payable.
"SUBSIDIARY" of any Person means (i) a corporation more than 50% of the
outstanding Voting Stock of which is owned, directly or indirectly, by such
Person or by one or more other Subsidiaries of such Person or by such Person and
one or more Subsidiaries thereof or (ii) any other Person (other than a
corporation) in which such Person, or one or more other Subsidiaries of such
Person or such Person and one or more other Subsidiaries thereof, directly or
indirectly, has at least a majority ownership and power to direct the policies,
management and affairs thereof.
"TOTAL COMMON EQUITY" of any Person means, as of any day of determination
(and as modified for purposes of the definition of "Change of Control"), the
product of (i) the aggregate number of outstanding primary shares of Common
Stock of such Person on such day (which shall not include any options or
warrants on, or securities convertible or exchangeable into, shares of Common
Stock of such Person) and (ii) the average Closing Price of such Common Stock
over the 20 consecutive Trading Days immediately preceding such day. If no such
Closing Price exists with respect to shares of any such class, the value of such
shares for purposes of clause (ii) of the preceding sentence shall be determined
by the Board of Directors in good faith and evidenced by a Board Resolution.
"TOTAL MARKET VALUE OF EQUITY" of the Company means, as of any day of
determination, the sum of (1) the product of (i) the aggregate number of
outstanding primary shares of Common Stock of the Company on such day (which
shall not include any options or warrants on, or securities convertible or
exchangeable into, shares of Common Stock of the Company) and (ii) the average
Closing Price of such Common Stock over the 20 consecutive Trading Days
immediately preceding such day, plus (2) the liquidation value of any
outstanding shares of Preferred Capital Stock of the Company on such day. If no
such Closing Price exists with respect to shares of any such class, the value of
such shares for purposes of clause (ii) of the preceding sentence shall be
determined by the Board of Directors in good faith and evidenced by a Board
Resolution.
"TRADING DAY" with respect to a securities exchange or automated
quotation system means a day on which such exchange or system is open for a full
day of trading.
"TRUSTEE" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"U.S. GLOBAL SECURITIES" has the meaning provided in Section 201.
24
<PAGE> 37
"U.S. GOVERNMENT OBLIGATION" has the meaning specified in Section 1204.
"U.S. PHYSICAL SECURITIES" has the meaning provided in Section 201.
"UNRESTRICTED SUBSIDIARY" means Unrestricted Subsidiary Funding Company
and any other Subsidiary that is not a Restricted Subsidiary and includes any
Restricted Subsidiary that becomes an Unrestricted Subsidiary in accordance with
Section 1010.
"VENDOR FINANCING DEBT" means any Debt owed to (i) a vendor or supplier
of any property or materials used by the Company or its Restricted Subsidiaries
in their telecommunications business, (ii) any Affiliate of such a vendor or
supplier, (iii) any assignee of such a vendor, supplier or Affiliate of such a
vendor or supplier, or (iv) a bank or other financial institution that has
financed or refinanced the purchase of such property or materials from such a
vendor, supplier, Affiliate of such a vendor or supplier or assignee of such a
vendor or supplier; provided that the aggregate amount of such Debt does not
exceed the sum of (w) the purchase price of such property or materials
(including transportation, installation, warranty and testing charges, as well
as applicable taxes paid, in respect of such property or materials), (x) the
cost of design, development, site acquisition and construction, (y) any interest
or other financing costs accruing or otherwise payable in respect of the
foregoing, and (z) the cost of any services provided by such vendor, supplier or
Affiliate of such vendor or supplier.
"VICE PRESIDENT", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
"VOTING STOCK" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such Person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
"WHOLLY OWNED RESTRICTED SUBSIDIARY" of the Company means a Restricted
Subsidiary all of the outstanding Capital Stock of which (other than directors'
qualifying shares) shall at the time be owned by the Company or by one or more
Wholly Owned Restricted Subsidiaries or by the Company and one or more Wholly
Owned Restricted Subsidiaries.
"ZERO COUPON PREFERRED STOCK" means the Zero Coupon Convertible Preferred
Stock due 2013 of the Company issued on December 23, 1998.
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirement set forth in
this Indenture.
25
<PAGE> 38
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders; Record Dates.
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such
26
<PAGE> 39
Holders in person or by agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee and, where it is hereby
expressly required, to the Company. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Section 601)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security Register.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Indenture to be given or taken by Holders
of Securities, provided that the Company may not set a record date for, and the
provisions of this paragraph shall not apply with respect to, the giving or
making of any notice, declaration, request or direction referred to in the next
paragraph. If any record date is set pursuant to this paragraph, the Holders of
Outstanding Securities on such record date, and no other Holders, shall be
entitled to take the relevant action, whether or not such Holders remain Holders
after such record date; provided that no such action shall be effective
hereunder unless taken on or prior to the applicable Record Expiration Date by
Holders of the requisite principal amount of Outstanding Securities on such
record date; and provided, further, that for the purpose of determining whether
Holders of the requisite principal amount of such Securities have taken such
action, no Security shall be deemed to have been Outstanding on such record date
unless it is also Outstanding on the date such action is to become effective.
Nothing in this paragraph shall prevent the Company from setting a new record
date for any action for which a record date has previously been set pursuant to
this paragraph (whereupon the record date previously set shall automatically and
with no action by any Person be canceled and of no effect), nor shall anything
in this paragraph be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities on the date such
action is taken. Promptly after any record date is set pursuant to this
paragraph, the Company, at its own expense, shall cause notice of such record
date, the proposed action by Holders and the applicable Record
27
<PAGE> 40
Expiration Date to be given to the Trustee in writing and to each Holder of
Securities in the manner set forth in Section 106.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to join in the giving
or making of (i) any Notice of Default, (ii) any declaration of acceleration
referred to in Section 502, (iii) any request to institute proceedings referred
to in Section 507(2), (iv) any direction referred to in Section 512 or (v) the
Required Consent. If any record date is set pursuant to this paragraph, the
Holders of Outstanding Securities on such record date, and no other Holders,
shall be entitled to join in such notice, declaration, request or direction,
whether or not such Holders remain Holders after such record date; provided that
no such action shall be effective hereunder unless taken on or prior to the
applicable Record Expiration Date by Holders of the requisite principal amount
of Outstanding Securities on such record date; and provided, further, that for
the purpose of determining whether Holders of the requisite principal amount of
such Securities have taken such action, no Security shall be deemed to have been
Outstanding on such record date unless it is also Outstanding on the date such
action is to become effective. Nothing in this paragraph shall be construed to
prevent the Trustee from setting a new record date for any action (whereupon the
record date previously set shall automatically and without any action by any
Person be canceled and of no effect), nor shall anything in this paragraph be
construed to render ineffective any action taken by Holders of the requisite
principal amount of Outstanding Securities on the date such action is taken.
Promptly after any record date is set pursuant to this paragraph, the Trustee,
at the Company's expense, shall cause notice of such record date, the matter(s)
to be submitted for potential action by Holders and the applicable Record
Expiration Date to be given to the Company in writing and to each Holder of
Securities in the manner set forth in Section 106.
With respect to any record date set pursuant to this Section, the party
hereto that sets such record date may designate any day as the "Record
Expiration Date" and from time to time may change the Record Expiration Date to
any earlier or later day, provided that no such change shall be effective unless
notice of the proposed new Record Expiration Date is given to the other party
hereto in writing, and to each Holder of Securities in the manner set forth in
Section 106, on or before the existing Record Expiration Date. If a Record
Expiration Date is not designated with respect to any record date set pursuant
to this Section, the party hereto that set such record date shall be deemed to
have initially designated the 180th day after such record date as the Record
Expiration Date with respect thereto, subject to its right to change the Record
Expiration Date as provided in this paragraph. Notwithstanding the foregoing, no
Record Expiration Date shall be later than the 180th day after the applicable
record date.
Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Security may do so with regard to
all or any part of the principal amount of such Security or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
28
<PAGE> 41
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed
in writing and mailed, first-class postage prepaid, to or with the
Trustee at its Corporate Trust Office, Attention: Indenture Trust
Division, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to the
Company addressed to it at the address of its principal office specified
in the first paragraph of this instrument or at any other address
previously furnished in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act that is required under such Act to be part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
29
<PAGE> 42
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors hereunder
and the Holders of Securities, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
SECTION 112. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, Purchase
Date or Stated Maturity of any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal (and premium, if any) need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect (including with respect to the accrual of interest) as if made on the
Interest Payment Date, Redemption Date or Purchase Date, or at the Stated
Maturity.
SECTION 114. No Recourse Against Others.
No recourse for the payment of the principal of, premium, if any, or
interest on any of the Securities, or for any claim based thereon or otherwise
in respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Company contained in this Indenture, or in any of the
Securities, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator or against any past, present or future
partner, shareholder, other equity holder, officer, director, employee or
controlling person, as such, of the Company or of any successor Person, either
directly or through the Company or any successor Person, whether by virtue of
any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that all such
liability is hereby
30
<PAGE> 43
expressly waived and released as a condition of, and as a consideration for, the
execution of this Indenture and the issue of the Securities.
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally.
The Securities and the Trustee's certificates of authentication shall be
in substantially the forms set forth in this Article, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution thereof.
Securities offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more permanent global Securities in registered
form, substantially in the form set forth in Section 202 (the "U.S. Global
Securities"), deposited with the Trustee, as custodian for the Depository, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of the Global Securities may from time
to time be increased or decreased by adjustments made on the records of the
Trustee as custodian for the Depository or its nominee, as hereinafter provided
Securities offered and sold in offshore transactions in reliance on
Regulation S shall be issued initially in the form of one or more permanent
Global Securities in registered form substantially in the form set forth in
Section 202 (the "Offshore Global Securities") deposited with the Trustee, as
custodian for the Depositary, duly executed by the Company and authenticated by
the Trustee as hereinafter provided. The aggregate principal amount of the
Offshore Global Securities may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the Depositary,
as hereinafter provided. The U.S. Global Securities and the Offshore Global
Securities are sometimes collectively herein referred to as the "Global
Securities."
Securities offered and sold in reliance on Regulation D under the
Securities Act or Securities issued pursuant to Section 307(b) shall be issued
in the form of permanent certificated Securities in registered form
substantially in the form set forth in Section 202 (the "U.S. Physical
Securities"). Securities issued pursuant to Section 307(d) in exchange for
interests in the Global Securities shall be in the form of permanent
certificated Securities in registered form substantially in the form set forth
in Section 202 (the "Offshore Physical Securities"). The Offshore Physical
Securities and U.S. Physical Securities are sometimes collectively herein
referred to as the "Physical Securities."
The definitive Securities shall be printed, lithographed or engraved or
produced by any combination of these methods on steel engraved borders or may be
produced in any other manner permitted by the rules of any securities exchange
on which the Securities may be listed,
31
<PAGE> 44
all as determined by the officers executing such Securities, as evidenced by
their execution of such Securities.
SECTION 202. Form of Face of Security.
Nextel Communications, Inc.
9.375% Senior Serial Redeemable Notes due 2009
No. __________ $________
CUSIP NO.________
CINS NO.________
Nextel Communications, Inc., a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to __________________, or registered
assigns, the principal sum of _____________________ Dollars on November 15, 2009
and to pay cash interest thereon from November 12, 1999 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semi-annually in arrears on May 15 and November 15 in each year, commencing May
15, 2000 at the rate of 9.375% per annum, until the principal hereof is paid or
duly provided for, provided that any principal and premium, and any such
installment of interest, which is overdue shall bear interest at the rate of
9.375 % per annum (to the extent that the payment of such interest shall be
legally enforceable), from the dates such amounts are due until they are paid or
duly provided for, and such interest shall be payable on demand. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in such Indenture, be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, which shall be the May 1
or November 1 (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in said
Indenture.
In the case of a default in payment of principal upon acceleration,
redemption or repurchase, the overdue principal and any overdue premium shall
bear interest at the rate of 9.375% per annum (to the extent that the payment of
such interest shall be legally enforceable), from the dates such amounts are due
until they are paid or duly provided for. Interest on any overdue principal or
premium shall be payable on demand. Any such interest on overdue principal or
premium which is not paid on demand shall bear interest at the rate of 9.375%
per annum (to the extent that the payment of such interest on interest shall be
legally enforceable),
32
<PAGE> 45
from the date of such demand until the amount so demanded is paid or duly
provided for, and such shall be payable on demand.
If an exchange offer registered under the Securities Act is not
consummated on or before June 15, 2000 in accordance with the terms of the
Registration Rights Agreement, incremental interest (in addition to the interest
otherwise due on the Securities after such date) will accrue from June 15, 2000,
at an annual rate of 0.5% of the principal amount of the Securities, and if such
exchange offer is not consummated on or before September 15, 2000, additional
incremental interest will accrue from September 15, 1999 at an annual rate of
0.5% of the principal amount of the Securities, with such incremental interest
payable in cash semi-annually, in arrears, on each May 15 and November 15,
commencing November 15, 2000, until the earlier of the date upon which (i) the
exchange offer is consummated, (ii) a Shelf Registration Statement with respect
to all Registrable Securities (as defined in the Registration Rights Agreement)
is declared effective, or (iii) solely with respect to Securities held by
holders other than the Initial Purchasers (as defined in the Registration Rights
Agreement), the expiration of the holding period applicable to the Securities
held by non-affiliates of the Company under Rule 144(k) under the Securities
Act, or successor provision, provided that from and after any such relevant
date, no such incremental interest will accrue on the Securities and the
interest rate on the Securities shall return to the original rate of 9.375% per
annum and shall accrue at such original rate thereafter; and provided further
that upon the request of any Holder of the Securities, the Company will deliver
to such Holder certificates evidencing such Holder's Securities without the
Private Placement Legend. The Holder of this Security is entitled to the
benefits of such Registration Rights Agreement.
Payment of the principal of (and premium, if any) and any interest on
this Security will be made at the office or agency of the Company maintained for
that purpose in the Borough of Manhattan, The City of New York, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
33
<PAGE> 46
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
NEXTEL COMMUNICATIONS, INC.
[Seal]
By:______________________
Title:
Attest:
- - ------------------------------
Title:
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of Securities of the
Company designated as its 9.375% Senior Serial Redeemable Notes due 2009 (herein
called the "Securities"), limited in aggregate principal amount to
$2,000,000,000, issued and to be issued under an Indenture, dated as of November
12, 1999 (herein called the "Indenture", which term shall have the meaning
assigned to it in such instrument), between the Company and Harris Trust and
Savings Bank, as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), and reference is hereby made to the
Indenture for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee and the Holders of
the Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered.
The Securities may be redeemed at any time on or after November 15, 2004,
at the Company's option, in whole or in part, upon not less than 30 nor more
than 60 days' prior written notice mailed by first class mail to each holder's
last address as it appears in the Security Register, at the Redemption Prices
(expressed as a percentage of the principal amount thereof) set forth below,
plus an amount in cash equal to all accrued and unpaid interest, if any, to the
Redemption Date, if redeemed during the 12-month period beginning November 15 of
each of the years set forth below.
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2004 104.688%
2005 103.125%
2006 101.563%
2007 and thereafter 100.000%
</TABLE>
34
<PAGE> 47
Interest installments whose Stated Maturity is on or prior to any
Redemption Date will be payable to the Holders of Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.
In addition to any redemption provided for in the immediately preceding
paragraphs, in the event of a sale by the Company after the Closing Date and on
or prior to November 15, 2002 of its Capital Stock (other than Redeemable Stock)
in a single transaction or series of transactions for an aggregate purchase
price equal to or exceeding $50 million, up to a maximum of 35% of the original
aggregate principal amount of the Outstanding Securities will, within 180 days
of such sale, at the option of the Company, upon not less than 30 nor more than
60 days' notice by mail, be redeemable from the net proceeds thereof (but only
to the extent such proceeds consist of cash or readily marketable cash
equivalents received in respect of the Company's Capital Stock so sold, in each
case net of all commissions, discounts, fees, expenses and taxes incurred in
respect thereof) at a Redemption Price equal to 109.375% of the principal amount
of the Securities to be redeemed plus accrued and unpaid interest to the
Redemption Date.
The Securities do not have the benefit of any sinking fund obligations.
In the event of redemption, or purchase pursuant to an Offer to Purchase,
of this Security in part only, a new Security or Securities for the unredeemed
or unpurchased portion hereof will be issued in the name of the Holder hereof
upon the cancellation hereof.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Security or certain restrictive covenants and Events
of Default with respect to this Security, in each case upon compliance with
certain conditions set forth in the Indenture.
If an Event of Default shall occur and be continuing, there may be
declared due and payable the Default Amount of the Securities, in the manner and
with the effect provided in the Indenture. The Default Amount in respect of this
Security as of any particular date shall equal 100% of the principal amount
payable in respect of this Security at the Stated Maturity hereof. Upon payment
of (i) the Default Amount so declared due and payable and any overdue
installment of interest in respect of this Security, (ii) any overdue principal
or premium payable on redemption or repurchase of this Security and (iii) as
provided on the face hereof, any interest on any overdue Default Amount,
principal, premium or interest in respect of this Security (to the extent that
the payment of such interest shall be legally enforceable), all of the Company's
obligations in respect of the payment of the principal of and any premium and
interest on this Security shall terminate.
The Indenture provides that, subject to certain conditions, if a Change
of Control occurs, the Company shall be required to make an Offer to Purchase
for all of the Securities.
Unless the context otherwise requires, references herein to the principal
amount of any Security mean, as of any day, (i) with respect to any portion
thereof required hereunder to be redeemed or repurchased on any redemption or
repurchase date on or prior to such day, the amount due and payable in respect
of such portion upon such redemption or repurchase date (excluding premium and
interest), (ii) with respect to any portion thereof not required to be so
35
<PAGE> 48
redeemed or repurchased, but which has been declared due and payable prior to
the Stated Maturity thereof as provided in the Indenture, the Default Amount in
respect of such portion as of such day and (iii) with respect to any portion
thereof not required so to be redeemed or repurchased and not so declared due
and payable, such portion of the principal amount of such Security payable at
Stated Maturity thereof.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee after having received the Required
Consent (defined as follows). The Indenture also contains provisions permitting
those Persons giving the Required Consent, on behalf of the Holders of all the
Securities, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.
As used herein, "Required Consent" means, except as otherwise expressly
provided in the Indenture with respect to matters requiring the consent of each
holder of Securities affected thereby: (i) the consent of holders of not less
than a majority in aggregate principal amount at Stated Maturity of the
Securities for any action to (x) direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any power
conferred upon such Trustee, or (y) consent to or waive, on behalf of the
holders of all the Securities, any past default and its consequences, and (ii)
with respect to all other actions requiring the consent of holders of the
Securities, the consent of either (x) a majority in aggregate principal amount
at Stated Maturity of the Securities or (y) a majority in aggregate principal
amount at Stated Maturity of (I) the Securities, (II) the September Notes, if
the holders of the September Notes are being requested to consent to such action
with respect to the terms of the September Notes or the September Indenture,
(III) the October Notes, if the holders of the October Notes are being requested
to consent to such action with respect to the terms of the October Notes or the
October Indenture, (IV) the February Notes, if the holders of the February Notes
are being requested to consent to such action with respect to the terms of the
February Notes or the February Indenture, (V) the November 1998 Notes, if the
holders of the November 1998 Notes are being requested to consent to such action
with respect to the terms of the November 1998 Notes or the November 1998
Indenture and (VI) any other issue of unsubordinated, unsecured notes issued by
the Company, if such notes or the indenture pursuant to which such notes were
issued both (A) require the consent of the holders of such notes to such action
and (B) provide that the holders thereof will vote with the holders of the
Securities with respect to such action.
As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Securities, the Holders of not less than 25% in principal amount at Stated
Maturity of the Securities at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee
36
<PAGE> 49
reasonable indemnity and the Trustee shall not have received from the Holders of
a majority in principal amount at Stated Maturity of Securities at the time
Outstanding a direction inconsistent with such request, and shall have failed to
institute any such proceeding, within 60 days after receipt of such notice,
request and offer of indemnity. The foregoing shall not apply to certain suits
described in the Indenture, including any suit instituted by the Holder of this
Security for the enforcement of any payment of principal hereof or any premium
or interest hereon on or after the respective due dates expressed herein (or, in
the case of redemption, on or after the Redemption Date or, in the case of any
purchase of this Security required to be made pursuant to an Offer to Purchase,
on or after the Purchase Date.)
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed by,
the Holder hereof or his attorney duly authorized in writing, and thereupon one
or more new Securities, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, the Securities
are exchangeable for a like aggregate principal amount of Securities of like
tenor of a different authorized denomination, as requested by the Holder
surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
Interest on this Security shall be computed on the basis of a 360-day
year of twelve 30-day months.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
The Indenture and this Security shall be governed by and construed in
accordance with the laws of the State of New York.
37
<PAGE> 50
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
- - ----------------------------------
- - --------------------------------------------------------------------------------
Please print or typewrite name and address including zip code of assignee
- - --------------------------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing ____________________________ attorney to transfer said Security on
the books of the Company with full power of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL SECURITIES OTHER THAN EXCHANGE SECURITIES
AND UNLEGENDED OFFSHORE PHYSICAL AND GLOBAL SECURITIES]
In connection with any transfer of this Security occurring prior to the
date which is the earlier of (i) the date the Shelf Registration Statement with
respect to resales of the Securities is declared effective or (ii) the end of
the period referred to in Rule 144(k) under the Securities Act, the undersigned
confirms that without utilizing any general solicitation or general advertising
that:
[Check One]
[ ] (a) this Security is being transferred in compliance with the
exemption from registration under the Securities Act of 1933, as
amended, provided by Rule 144A thereunder.
[ ] (b) this Security is being transferred other than in accordance with
(a) above and documents are being furnished which comply with the
conditions of transfer set forth in this Security and the
Indenture.
If none of the foregoing boxes is checked, the Trustee shall not be obligated to
register this Security in the name of any Person other than the Holder hereof
unless and until the conditions to any such transfer of registration set forth
herein and in Section 307 of the Indenture shall have been satisfied.
Date:_____________________ _________________________________
NOTICE: The signature to this assignment must
correspond with the name as written upon the face
of the within-mentioned instrument in every
particular, without alteration or any change
whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
38
<PAGE> 51
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Date:_____________________ _________________________________
NOTICE: To be executed by an executive officer.
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased in its entirety by
the Company pursuant to Section 1013 of the Indenture, check the box: [ ]
If you want to elect to have only a part of the principal amount at
Stated Maturity of this Security purchased by the Company pursuant to Section
1013 of the Indenture, state the portion of such amount: $_________
Dated: Your Signature:________________________________
(Sign exactly as name appears
on the other side of this Security)
Signature Guarantee:______________________________________
(Signature must be guaranteed by a financial institution that is a member of the
Securities Transfer Agent Medallion Program ("STAMP"), the Stock Exchange
Medallion Program ("SEMP"), the New York Stock Exchange, Inc. Medallion
Signature Program ("MSP") or such other signature guarantee program as may be
determined by the Security Registrar in addition to, or in substitution for,
STAMP, SEMP or MSP, all in accordance with the Securities Exchange
Act of 1934, as amended.)
SECTION 204. Form of Trustee's Certificate of Authentication.
Dated:
This is one of the Securities referred to in the within-mentioned
Indenture.
Harris Trust and Savings Bank,
as Trustee
By _______________________
Authorized Signatory
39
<PAGE> 52
SECTION 205. Restrictive Legends. Unless and until a Security is exchanged for
an Exchange Security or sold in connection with an effective Shelf Registration
Statement pursuant to the Registration Rights Agreement, (i) each U.S. Global
Security and each U.S. Physical Security shall bear the legend set forth below
on the reverse thereof and (ii) each Offshore Physical Security and each
Offshore Global Security shall bear the legend set forth below on the reverse
thereof, until at least the 41st day after the Closing Date and receipt by the
Company and the Trustee of a certificate substantially in the form of Exhibit A
hereto:
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED ("THE SECURITIES ACT") AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON WHO
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE
903 OR 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) TO AN INSTITUTION THAT
IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1),(2),(3) OR (7) OF
REGULATION D IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (5) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B) IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES.
Each Global Security, whether or not an Exchange Security, shall also
bear the following legend on the reverse thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO., OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE
40
<PAGE> 53
IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 307 OF THE
INDENTURE.
ARTICLE THREE
The Securities
SECTION 301. Title and Terms.
The aggregate principal amount at Stated Maturity of Securities which may
be authenticated and delivered under this Indenture is limited to
$2,000,000,000, except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Securities
pursuant to Section 304, 305, 308, 906 or 1108 or in connection with an Offer to
Purchase pursuant to Section 1013.
The Securities shall be known and designated as the "Senior Serial
Redeemable Notes due 2009" of the Company. Their Stated Maturity shall be
November 15, 2009 and they shall bear cash interest at the rate of 9.375% per
annum, from November 12, 1999 or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, as the case may be, payable
semi-annually on May 15 and November 15, commencing May 15, 2000 until the
principal thereof is paid or made available for payment.
The principal of (and premium, if any) and interest on the Securities
shall be payable at the office or agency of the Company in the Borough of
Manhattan, The City of New York maintained for such purpose and at any other
office or agency maintained by the Company for such purpose; provided, however,
that at the option of the Company payment of interest, may be made by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register.
The Company may be required to make an Offer to Purchase the Securities
as provided in Section 1013.
The Securities shall be redeemable as provided in Article Two and Article
Eleven.
The Securities shall be subject to Defeasance and/or Covenant Defeasance
as provided in Article Twelve.
SECTION 302. Denominations.
The Securities shall be issuable only in registered form without coupons
and only in denominations of $1,000 principal amount and any integral multiple
thereof.
41
<PAGE> 54
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman
of the Board, its President or one of its Vice Presidents, under its corporate
seal reproduced thereon attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities; and the Trustee in accordance
with such Company Order shall authenticate and deliver such Securities as in
this Indenture provided and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at any office
or agency of the Company designated pursuant to Section 1002, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Securities the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of definitive Securities of
authorized denominations and of a like tenor. Until so exchanged the temporary
Securities shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities.
42
<PAGE> 55
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office
of the Trustee a register (the register maintained in such office and in any
other office or agency designated pursuant to Section 1002 being herein
sometimes collectively referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Securities and of transfers of Securities. The Trustee
is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at an
office or agency of the Company designated pursuant to Section 1002 for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denominations and of a like aggregate principal
amount and tenor. No such transfer shall be effected until, and such transferee
shall succeed to the rights of a Holder only upon, final acceptance and
registration of the transfer by the Security Registrar in the Security Register.
Prior to the registration of any transfer by a Holder as provided herein, the
Company, the Trustee and any agent of the Company shall treat the person in
whose name the Security is registered as the owner thereof for all purposes
whether or not the Security shall be overdue, and neither the Company, the
Trustee, nor any such agent shall be affected by notice to the contrary.
Furthermore, any Holder of a Global Security shall, by acceptance of such Global
Security, agree that transfers of beneficial interests in such Global Security
may be effected only through a book entry system maintained by the Holder of
such Global Security (or its agent) and that ownership of a beneficial interest
in the Security shall be required to be reflected in a book entry.
At the option of the Holder, Securities may be exchanged for other
Securities (including an exchange of securities for Exchange Securities) of any
authorized denominations and of a like aggregate principal amount and tenor,
upon surrender of the Securities to be exchanged at such office or agency
provided, that no exchange of Securities for Exchange Securities shall occur
until a Registration Statement shall have been declared effective by the
Commission and that Securities that are exchanged for Exchange Securities
pursuant to such Registration Statement shall be canceled by the Trustee.
Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities which
the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
43
<PAGE> 56
No service charge shall be made for any registration of transfer
or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 304, 906 or 1108 or in accordance with any
Offer to Purchase pursuant to Section 1013, and in any such case not involving
any transfer.
The Company shall not be required (i) to issue, register the
transfer of or exchange any Security during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities selected for redemption under Section 1104 and ending at the close of
business on the day of such mailing, or (ii) to register the transfer of or
exchange any Security so selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part.
SECTION 306. Book-Entry Provisions for Global Security.
(a) The Global Security initially shall (i) be registered in the
name of the Depository for such Global Security or the nominee of such
Depository; (ii) be delivered to the Trustee as custodian for such Depository;
and (iii) bear legends as set forth in Section 205.
Members of, or participants in, the Depository ("Agent Members")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depository, or the Trustee as its custodian, or
under the Global Security and the Depository may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner of
such Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by the Depository or impair, as between the
Depository and its Agent Members, the operation of customary practices governing
the exercise of the rights of a holder of any Security.
(b) Transfers of a Global Security shall be limited to transfers
of such Global Security in whole, but not in part, to the Depository, its
successors or their respective nominees. Interests of beneficial owners in a
Global Security may be transferred in accordance with the rules and procedures
of the Depository and the provisions of Section 307. In addition, U.S. Physical
Securities and Offshore Physical Securities shall be transferred to all
beneficial owners in exchange for their beneficial interests in the U.S. Global
Securities or Offshore Global Securities, respectively, if (i) the Depository
notifies the Company that it is unwilling or unable to continue as Depository
for the U.S. Global Securities or Offshore Global Securities, as the case may
be, and a successor depository is not appointed by the Company within 90 days of
such notice, (ii) an Event of Default has occurred and is continuing and the
Security Registrar has received a request therefor from the Depository or (iii)
in accordance with the rules and procedures of the Depository and the provisions
of Section 307.
(c) In connection with any transfer of a portion of the beneficial
interests in the Global Security to beneficial owners pursuant to paragraph (b)
of this Section, the Security Registrar shall reflect on the Security Register
the date and a decrease in the principal amount of the Global Security in an
amount equal to the principal amount of the beneficial interest in the
44
<PAGE> 57
Global Security to be transferred, and the Company shall execute, and the
Trustee shall authenticate and deliver, one or more Physical Securities of like
tenor and amount.
(d) In connection with the transfer of an entire U.S. Global
Security or Offshore Global Security to beneficial owners pursuant to paragraph
(b) of this Section, such U.S. Global Security or Offshore Global Security shall
be deemed to be surrendered to the Trustee for cancellation, and the Company
shall execute, and the Trustee shall authenticate and deliver, to each
beneficial owner identified by the Depository in exchange for its beneficial
interest in such U.S. Global Security or Offshore Global Security, as the case
may be, an equal aggregate principal amount of U.S. Physical Securities or
Offshore Physical Securities of authorized denominations.
(e) Any Physical Security delivered in exchange for an interest in
the Global Security pursuant to paragraph (b), (c) or (d) of this Section shall,
except as otherwise provided by paragraph (d) of Section 307 bear the legend
regarding transfer restrictions applicable to the Physical Securities set forth
in Section 205.
(f) The registered holder of a Global Security may grant proxies
and otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
SECTION 307. Special Transfer Provisions.
Unless and until a Security is exchanged for an Exchange Security
or sold in connection with an effective Shelf Registration Statement pursuant to
the Registration Rights Agreement, the following provisions shall apply:
(a) Transfers to QIBs. The following provisions shall apply
with respect to the registration of any proposed transfer of a Physical Security
or an interest in the Global Security prior to the removal of the Private
Placement Legend to a QIB (excluding Non-U.S. Persons):
(i) If the Security to be transferred consists of (x) (A) U.S.
Physical Securities or (B) an interest in an Offshore Global Security
prior to the removal of the Private Placement Legend, the Security
Registrar shall register the transfer if such transfer is being made by a
proposed transferor who has checked the box provided for on the form of
security stating, or has otherwise advised the Company and the Security
Registrar in writing, that the sale has been made in compliance with the
provisions of Rule 144A, to a transferee who has signed the certification
provided for on the form of Security stating, or has otherwise advised
the Company and the Security Registrar in writing, that it is purchasing
the Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is
a QIB within the meaning of Rule 144A, and is aware that the sale to it
is being made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Company as it has requested
pursuant to Rule 144A or has determined not to request such information
and that it is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration
provided by Rule 144A or (y) an interest
45
<PAGE> 58
in a U.S. Global Security, the transfer of such interest may be effected
only through the book entry system maintained by the Depository.
(ii) If the proposed transferee is an Agent Member, and the
Security to be transferred consists of U.S. Physical Securities, upon
receipt by the Security Registrar of the documents referred to in clause
(i) and instructions given in accordance with the Depository's and the
Security Registrar's procedures, the Security Registrar shall reflect in
the Security Register the date and an increase in the principal amount at
maturity of the U.S. Global Security in an amount equal to the principal
amount at maturity of the U.S. Physical Securities to be transferred, and
the Trustee shall cancel the U.S. Physical Securities so transferred.
(b) Transfers to Non-QIB Institutional Accredited Investors. The
following provisions shall apply with respect to the registration of any
proposed transfer of a Security to any Institutional Accredited Investor which
is not a QIB (excluding Non-U.S. Persons):
(i) The Security Registrar shall register the transfer of any
Security, whether or not such Security bears the Private Placement
Legend, if (x) the requested transfer is after the time period referred
to in Rule 144(k) under the Securities Act as in effect with respect to
such transfer or (y) the proposed transferee has delivered to the
Security Registrar (A) a certificate substantially in the form of Exhibit
B hereto and (B) if the aggregate principal amount of the Notes being
transferred is less than $250,000 at the time of such transfer, an
Opinion of Counsel acceptable to the Company that such transfer is in
compliance with the Securities Act.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Security, upon receipt by the
Security Registrar of (x) the documents, if any, required by the
preceding paragraph (i), and (y) instructions given in accordance with
the Depositary's and the Security Registrar's procedures, the Security
Registrar shall reflect on its books and records the date and a decrease
in the principal amount of the U.S. Global Security in an amount equal to
the principal amount of the beneficial interest in the U.S. Global
Security to be transferred, and the Company shall execute, and the
Trustee shall authenticate and deliver, one or more U.S. Physical
Securities of like tenor and amount.
(c) Transfers of Interests in the Offshore Global Securities or
Offshore Physical Securities. The following provisions shall apply with respect
to any transfer of interests in the Offshore Global Securities or Offshore
Physical Securities:
(i) prior to removal of the Private Placement Legend from an
Offshore Global Security or Offshore Physical Security pursuant to
Section 205, the Security Registrar shall refuse to register such
transfer unless such transfer complies with Section 307(a) or Section
307(d), as the case may be; and
(ii) after such removal, the Security Registrar shall register
the transfer of any such Security without requiring any additional
certification.
46
<PAGE> 59
(d) Transfers to Non-U.S. Persons at Any Time. The following
provisions shall apply with respect to any transfer of a Security to a Non-U.S.
Person:
(i) The Security Registrar shall register any proposed transfer
to any Non-U.S. Person if the Security to be transferred is a U.S.
Physical Security or an interest in a U.S. Global Security only upon
receipt of a certificate substantially in the form of Exhibit C hereto
from the proposed transferor.
(ii) (A) If the proposed Transferor is an Agent Member
holding a beneficial interest in a U.S. Global Security, upon receipt by
the Security Registrar of (x) the documents required by paragraph (i) and
(y) instructions in accordance with the Depositary's and the Security
Registrar's procedures, the Security Registrar shall reflect on its books
and records the date and a decrease in the principal amount of such U.S.
Global Security in an amount equal to the principal amount of the
beneficial interest in the U.S. Global Security to be transferred, and
(B) if the proposed transferee is an Agent Member, upon receipt by the
Security Registrar of instructions given in accordance with the
Depositary's and the Security Registrar's procedures, the Security
Registrar shall reflect on its books and records the date and an increase
in the principal amount of the Offshore Global Security in an amount
equal to the principal amount of the U.S. Physical Securities or the U.S.
Global Security, as the case may be, to be transferred, and the Trustee
shall cancel the Physical Security, if any, so transferred or decrease
the amount of the U.S. Global Security.
(e) Private Placement Legend. Upon the transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the Security
Registrar shall deliver Securities that do not bear the Private Placement
Legend. Upon the transfer, exchange or replacement of securities bearing the
Private Placement Legend, the Security Registrar shall deliver only Securities
that bear the Private Placement Legend unless either (i) the circumstances
contemplated by Section 205 exist or (ii) there is delivered to the Trustee an
Opinion of Counsel reasonably satisfactory to the Company and the Trustee to the
effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities
Act.
(f) General. By its acceptance of any Security bearing the
Private Placement Legend, each Holder of such a Security acknowledges the
restrictions on transfer of such Security set forth in this Indenture and in the
Private Placement Legend and agrees that it will transfer such Security only as
provided in this Indenture. The Security Registrar shall not register a transfer
of any Security unless such transfer complies with the restrictions on transfer
of such Security set forth in the Private Placement Legend and in this
Indenture. In connection with any transfer of Securities, each Holder agrees by
its acceptance of the Securities to furnish the Trustee or the Company such
certifications, legal opinions or other information as either of them may
reasonably require to confirm that such transfer is being made pursuant to an
exemption from, or a transaction not subject to, the registration requirements
of the Securities Act; provided that the Trustee shall not be required to
determine (but may rely on a determination made by the Company with respect to)
the sufficiency of any such certifications, legal opinions or other information.
47
<PAGE> 60
The Trustee shall retain copies of all letters, notices and other
written communications received pursuant to Section 306 or this Section 307. The
Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Trustee.
SECTION 308. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 309. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid
or duly provided for, on any Interest Payment Date shall be paid to the Person
in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest.
Any interest on any Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith
48
<PAGE> 61
cease to be payable to the Holder on the relevant Regular Record Date by virtue
of having been such Holder, and such Defaulted Interest may be paid by the
Company, at its election in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities (or their
respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security and the date of the proposed
payment, and at the same time the Company shall deposit with the Trustee
an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
Clause provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall be not more than
15 days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of the
notice of the proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at the expense
of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be given to
each Holder in the manner specified in Section 106, not less than 10 days
prior to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose
names the Securities (or their respective Predecessor Securities) are
registered at the close of business on such Special Record Date and shall
no longer be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this Clause,
such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 310. Persons Deemed Owners.
Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of (and premium,
if any) and (subject to Section 309) interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
49
<PAGE> 62
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 311. Cancellation.
All Securities surrendered for payment, redemption, registration
of transfer or exchange or for credit against any Offer to Purchase pursuant to
Section 1013 shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly canceled by it. The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Securities so delivered shall be promptly canceled by
the Trustee. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Securities held by the Trustee shall
be disposed of as directed by a Company Order; provided, however, that the
Trustee shall not be required to destroy canceled Securities.
SECTION 312. Computation of Interest.
Interest on the Securities shall be computed on the basis of a
360-day year of twelve 30-day months.
SECTION 313. CUSIP, CINS and ISIN Numbers.
The Company in issuing the Securities may use "CUSIP," "CINS" and
"ISIN" numbers (if then generally in use), and, if so, the Trustee shall use the
"CUSIP," "CINS" and "ISIN" numbers in notices of redemption or repurchase as a
convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of a redemption or repurchase
and that reliance may be placed only on the other identification numbers printed
on the Securities, and any such redemption or repurchase shall not be affected
by any defect in or omission of such numbers.
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to
any surviving rights of registration of transfer or exchange of Securities
herein expressly provided for), and the Trustee, on demand of and at the expense
of the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
50
<PAGE> 63
(1) either
(A) all Securities theretofore authenticated and
delivered (other than (i) Securities which have been destroyed,
lost or stolen and which have been replaced or paid as provided in
Section 308 and (ii) Securities for whose payment money has
theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the
giving of notice of redemption by the Trustee in the name,
and at the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust
funds in trust for the purpose an amount sufficient to pay and
discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for
principal (and premium, if any) and interest to the date of such
deposit (in the case of Securities which have become due and
payable) or to the Stated Maturity or Redemption Date, as the case
may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge
of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture pursuant to
this Article Four, the obligations of the Company to the Trustee under Section
607, the obligations of the Trustee to any Authenticating Agent under Section
614 and, if money shall have been deposited with the Trustee pursuant to
subclause (B) of Clause (1) of this Section, the obligations of the Trustee
under Section 402 and the last paragraph of Section 1003 shall survive.
51
<PAGE> 64
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003,
all money deposited with the Trustee pursuant to Section 401 shall be held in
trust and applied by it, in accordance with the provisions of the Securities and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee.
ARTICLE FIVE
Remedies
SECTION 501. Events of Default.
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(1) default in the payment of the principal of (or premium, if
any, on) any Security at its Maturity; or
(2) default in the payment of any interest upon any Security
when it becomes due and payable, and continuance of such default for a
period of 30 days; or
(3) default, on the applicable Purchase Date, in the purchase
of Securities required to be purchased by the Company pursuant to an
Offer to Purchase as to which an Offer has been mailed to Holders or
failure to make an Offer to Purchase as required hereunder; or
(4) default in the performance, or breach, of Section 801; or
(5) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default whose performance or whose breach is elsewhere in this
Section specifically dealt with) or in the Securities, and continuance of
such default or breach for a period of 60 days after there has been
given, by registered or certified mail, to the Company by the Trustee or
to the Company and the Trustee by the Holders of at least 25% in
principal amount at Stated Maturity of the Outstanding Securities a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" hereunder;
or
(6) a default or defaults under any bond(s), debenture(s),
note(s) or other evidence(s) of Debt for money borrowed by the Company or
any Restricted Subsidiary (or under any mortgage(s), indenture(s) or
instrument(s) under which there may be issued or by which there may be
secured or evidenced any Debt for money borrowed by the
52
<PAGE> 65
Company or any Restricted Subsidiary) having, individually or in the
aggregate, a principal or similar amount outstanding of at least
$25,000,000, whether such Debt now exists or shall hereafter be created,
which default or defaults shall constitute a failure to pay any portion
of the principal or similar amount of such Debt when due and payable
after the expiration of any applicable grace period with respect thereto
or shall have resulted in such Debt becoming or being declared due and
payable; or
(7) a final judgment or final judgments for the payment of
money are entered against the Company or any Restricted Subsidiary in an
aggregate amount in excess of $25,000,000 by a court or courts of
competent jurisdiction, which judgments remain undischarged or unbonded
for a period (during which execution shall not be effectively stayed) of
60 days after the right to appeal all such judgments has expired; or
(8) the entry by a court having jurisdiction in the premises of
(A) a decree or order for relief in respect of the Company or any
Restricted Subsidiary in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or (B) a decree or order adjudging the Company or any
Restricted Subsidiary a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company or any Restricted Subsidiary
under any applicable Federal or State law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or any Restricted Subsidiary or of any
substantial part of the property of the Company or any Restricted
Subsidiary, or ordering the winding up or liquidation of the affairs of
the Company or any Restricted Subsidiary, and the continuance of any such
decree or order for relief or any such other decree or order unstayed and
in effect for a period of 60 consecutive days; or
(9) the commencement by the Company or any Restricted
Subsidiary of a voluntary case or proceeding under any applicable Federal
or State bankruptcy, insolvency, reorganization or other similar law or
of any other case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by the Company or any Restricted Subsidiary to
the entry of a decree or order for relief in respect of the Company or
any Restricted Subsidiary in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or insolvency
case or proceeding against the Company or any Restricted Subsidiary, or
the filing by the Company or any Restricted Subsidiary of a petition or
answer or consent seeking reorganization or relief under any applicable
Federal or State law, or the consent by the Company or any Restricted
Subsidiary to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or similar official of the Company or any
Restricted Subsidiary or of any substantial part of the property of the
Company or any Restricted Subsidiary, or the making by the Company or any
Restricted Subsidiary of an assignment for the benefit of creditors, or
the admission by the Company or any Restricted Subsidiary in writing of
its inability to pay its debts generally as they become due, or the
taking of corporate action by the Company or any Restricted Subsidiary in
furtherance of any such action.
53
<PAGE> 66
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified
in Section 501(8) or (9)) occurs and is continuing, then and in every such case
the Trustee or the Holders of not less than 25% in principal amount at Stated
Maturity of the Outstanding Securities may declare the Default Amount of all the
Securities to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders), and upon any such declaration
such Default Amount and any accrued interest shall become immediately due and
payable. If an Event of Default specified in Section 501(8) or (9) occurs, the
Default Amount of, and any accrued interest on, the Securities then Outstanding
shall ipso facto become immediately due and payable without any declaration or
other Act on the part of the Trustee or any Holder.
The Default Amount in respect of any particular Security as of any
particular date shall equal 100% of the principal amount payable in respect of
the Security at the Stated Maturity thereof.
At any time after such a declaration of acceleration has been made
and before a judgment or decree for payment of the money due has been obtained
by the Trustee as hereinafter in this Article provided, the Holders of a
majority in principal amount at Stated Maturity of the Outstanding Securities,
by written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities (without
duplication of any amount thereof paid or deposited pursuant to
Clause (B) or (C) below),
(B) the principal of (and premium, if any, on) any
Securities which have become due otherwise than by such
declaration of acceleration (including any Securities required to
have been purchased on the Purchase Date pursuant to an Offer to
Purchase made by the Company) and, to the extent that payment of
such interest is lawful, interest thereon at the rate provided by
the Securities (without duplication of any amount thereof paid or
deposited pursuant to Clause (A) above or Clause (C) below),
(C) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate provided by the
Securities (without duplication of any amount thereof paid or
deposited pursuant to Clause (A) or (B) above), and
(D) all sums paid or advanced by the Trustee hereunder
and the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel;
and
54
<PAGE> 67
(2) all Events of Default, other than the non-payment of the
principal of Securities which have become due solely by such declaration
of acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Unless the context otherwise requires, references in this
Indenture to the principal amount of any Security mean, as of any day, (i) with
respect to any portion thereof required thereunder to be redeemed or repurchased
on any redemption or repurchase date on or prior to such day, the amount due and
payable in respect of such portion upon such redemption or repurchase date
(excluding premium and interest), (ii) with respect to any portion thereof not
required to be so redeemed or repurchased, but which has been declared due and
payable prior to the Stated Maturity thereof, the Default Amount in respect of
such portion as of such day and (iii) with respect to any portion thereof not
required so to be redeemed or repurchased and not so declared due and payable,
such portion of the principal amount of such Security payable at Stated Maturity
thereof.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any
Security when such interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof or, with
respect to any Security required to have been purchased pursuant to an
Offer to Purchase made by the Company, at the Purchase Date thereof,
the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities, the whole amount then due and payable
on such Securities for principal (and premium, if any) and interest, and, to the
extent that payment of such interest shall be legally enforceable, interest on
any overdue principal (and premium, if any) and on any overdue interest, at the
rate provided by the Securities, and, in addition thereto, such further amount
as shall be sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.
If an Event of Default occurs and is continuing, the Trustee may
in its discretion proceed to protect and enforce its rights and the rights of
the Holders by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
55
<PAGE> 68
SECTION 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.
No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding; provided,
however, that the Trustee may, on behalf of the Holders, vote for the election
of a trustee in bankruptcy or similar official and be a member of a creditors'
or other similar committee.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal (or
premium, if any) or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607; and
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any
56
<PAGE> 69
kind, according to the amounts due and payable on such Securities for
principal (and premium, if any) and interest, respectively.
SECTION 507. Limitation on Suits.
No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount at
Stated Maturity of the Outstanding Securities shall have made written
request to the Trustee to institute proceedings in respect of such Event
of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in principal amount at Stated Maturity of the Outstanding
Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.
Notwithstanding any other provision in this Indenture, the Holder
of any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Section 309) interest on such Security on the respective Stated Maturities
expressed in such Security (or, in the case of redemption, on the Redemption
Date or in the case of an Offer to Purchase made by the Company and required to
be accepted as to such Security, on the Purchase Date) and to institute suit for
the enforcement of any such payment, and such rights shall not be impaired
without the consent of such Holder.
57
<PAGE> 70
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 308, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Security to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders,
as the case may be.
SECTION 512. Control by Holders.
By giving the Required Consent, those Persons giving the Required
Consent shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on the Trustee, provided that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
58
<PAGE> 71
SECTION 513. Waiver of Past Defaults.
By giving the Required Consent, those Persons giving the Required
Consent may, on behalf of the Holders of all the Securities, waive any past
default hereunder and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on any Security (including any Security which is required to
have been purchased pursuant to an Offer to Purchase which has been made
by the Company), or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided, that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company.
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any usury, stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
59
<PAGE> 72
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as
provided by the Trust Indenture Act. Notwithstanding the foregoing, no provision
of this Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this Indenture
relating to the conduct or affecting the liability of or affording protection to
the Trustee shall be subject to the provisions of this Section.
SECTION 602. Notice of Defaults.
The Trustee shall give the Holders notice of any Default hereunder
as and to the extent provided by the Trust Indenture Act; provided, however,
that in the case of any Default of the character specified in Section 501(5), no
such notice to Holders shall be given until at least 30 days after the
occurrence thereof.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order and
any resolution of the Board of Directors may be sufficiently evidenced by
a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the Trustee
(unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
60
<PAGE> 73
(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document, but the Trustee, in its discretion, may make
such further inquiry or investigation into such facts or matters as it
may see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled (subject to reasonable
confidentiality arrangements as may be proposed by the Company) to
examine the books, records and premises of the Company, personally or by
agent or attorney; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
SECTION 604. Trustee Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the use
or application by the Company of Securities or the proceeds thereof.
SECTION 605. Trustee May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed in writing with the Company.
61
<PAGE> 74
SECTION 607. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time such compensation
as the Company and the Trustee shall from time to time agree in writing
for all services rendered by it hereunder (which compensation shall not
be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable compensation and
the expenses and disbursements of its agents and counsel), except any
such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any and all loss, damage, claim, liability or expense incurred
without negligence or bad faith on its part, including taxes (other than
taxes based upon, measured by or determined by the revenue or income of
the Trustee), arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of
defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
The Trustee shall have a lien prior to the Securities as to all
property and funds held by it hereunder for any amount owing to it pursuant to
this Section 607, except with respect to funds held in trust for the benefit of
the Holders of particular Securities.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 501(8) or Section 501(9), the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.
The provisions of this Section shall survive any termination of
this Indenture.
SECTION 608. Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within
the meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
62
<PAGE> 75
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000 and its Corporate
Trust Office in Chicago, Illinois or the Borough of Manhattan, The City of New
York. If such Person publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section and to the extent permitted by the Trust
Indenture Act, the combined capital and surplus of such Person shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment
of a successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If an instrument of acceptance by a successor Trustee in
accordance with the applicable requirements of Section 611 shall not have been
delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the
Holders of a majority in principal amount at Stated Maturity of the Outstanding
Securities, delivered to the Trustee and to the Company. If an instrument of
acceptance by a successor Trustee in accordance with the applicable requirements
of Section 611 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of removal, the Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609
and shall fail to resign after written request therefor by the Company or
by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
63
<PAGE> 76
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 514, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable
of acting, or if a vacancy shall occur in the office of Trustee for any cause,
the Company, by a Board Resolution, shall promptly appoint a successor Trustee.
If, within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount at Stated Maturity of the Outstanding
Securities delivered to the Company and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 611, become the successor
Trustee and supersede the successor Trustee appointed by the Company. If no
successor Trustee shall have been so appointed by the Company or the Holders and
accepted appointment in accordance with the applicable requirements of Section
611, any Holder who has been a bona fide Holder of a Security for at least six
months may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 106. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on request of the
Company or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder. Upon request of any such successor
Trustee, the Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Trustee all such rights,
powers and trusts.
No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or
64
<PAGE> 77
substantially all the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such corporation shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto. In case
any Securities shall have been authenticated, but not delivered, by the Trustee
then in office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the Securities
so authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the Securities), the Trustee shall be subject
to the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
SECTION 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents which
shall be authorized to act on behalf of the Trustee to authenticate Securities
issued upon original issue and upon exchange, registration of transfer or
partial redemption or partial purchase or pursuant to Section 308, and
Securities so authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by the
Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, any State thereof or the
District of Columbia, authorized under such laws to act as Authenticating Agent,
having a combined capital and surplus of not less than $50,000,000 and subject
to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
65
<PAGE> 78
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 106, to all Holders as their names
and addresses appear in the Security Register. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with all
the rights, powers and duties of its predecessor hereunder, with like effect as
if originally named as an Authenticating Agent. No successor Authenticating
Agent shall be appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time
to time reasonable compensation for its services under this Section.
If an appointment is made pursuant to this Section, the Securities
may have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:
66
<PAGE> 79
This is one of the Securities described in the within-mentioned
Indenture.
Dated:
Harris Trust and Savings Bank,
as Trustee
By___________________________,
As Authenticating Agent
By___________________________
Authorized Signatory
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not more than 15 days after each May 1 and
November 1, commencing May 1, 2000, a list, in such form as the Trustee
may reasonably require, of the names and addresses of the Holders as of
such Regular Record Date, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days prior
to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 701 and the names
and addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders
with respect to their rights under this Indenture or under the Securities, and
the corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
67
<PAGE> 80
(c) Every Holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
any disclosure of information as to the names and addresses of Holders made
pursuant to the Trust Indenture Act.
SECTION 703. Reports by Trustee.
(a) Within 60 days after January 15 of each year commencing
January 15, 2000, the Trustee shall transmit to Holders such reports concerning
the Trustee and its actions under this Indenture as may be required pursuant to
the Trust Indenture Act at the times and in the manner provided pursuant
thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which the Securities are listed, with the Commission and with the Company. The
Company will promptly notify the Trustee when the Securities are listed on any
stock exchange.
SECTION 704. Reports by Company.
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission. The Trustee's receipt of such reports, information and documents
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein.
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. Company May Consolidate, Etc. Only on Certain Terms.
The Company (x) shall not, in any transaction or series of related
transactions, merge or consolidate with or into, or sell, assign, convey,
transfer, lease or otherwise dispose of its properties and assets substantially
as an entirety to, any Person, and (y) shall not permit any of its Restricted
Subsidiaries to enter into any such transaction or series of transactions if
such transaction or series of transactions, in the aggregate, would result in a
sale, assignment, conveyance, transfer, lease or other disposition of the
properties and assets of the Company and its Restricted Subsidiaries, taken as a
whole, substantially as an entirety to any Person, unless, in each case (x) or
(y), at the time and after giving effect thereto
(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
68
<PAGE> 81
Company shall be the surviving Person of such merger or consolidation, or
(B) the Person formed by any consolidation with or merger with or into
the Company, or to which the properties and assets of the Company or the
Company and its Restricted Subsidiaries, taken as a whole, as the case
may be, substantially as an entirety are sold, assigned, conveyed, leased
or otherwise transferred (any such surviving Person or transferee Person
referred to in this clause (B) being the "Surviving Entity"), shall be a
corporation, partnership or trust organized and existing under the laws
of the United States of America, any state thereof or the District of
Columbia and shall expressly assume by a supplemental indenture executed
and delivered to the Trustee, in form satisfactory to the Trustee, all
the obligations of the Company under the Securities and this Indenture
and, in each case, this Indenture, as so supplemented, shall remain in
full force and effect, and
(ii) immediately before and immediately after giving effect to
such transaction or series of transactions on a pro forma basis
(including any Debt Incurred or anticipated to be Incurred in connection
with or in respect of such transaction or series of transactions), no
Default or Event of Default shall have occurred and be continuing, and
(iii) the Consolidated Net Worth of the Company or the Surviving
Entity, as the case may be, shall be equal to or greater than that of the
Company immediately prior to such transaction or series of transactions;
provided, however, that the foregoing requirements shall not apply to any
transaction or series of transactions involving the sale, assignment,
conveyance, transfer, lease or other disposition of the properties and assets by
any Restricted Subsidiary to any other Restricted Subsidiary, or the merger or
consolidation of any Restricted Subsidiary with or into any other Restricted
Subsidiary.
In connection with any consolidation, merger, sale, assignment,
conveyance, transfer, lease or other disposition contemplated by the foregoing
provisions, the Company shall deliver, or cause to be delivered, to the Trustee,
in form and substance reasonably satisfactory to the Trustee, an Officers'
Certificate stating that such consolidation, merger, sale, assignment,
conveyance, transfer, lease or other disposition and the supplemental indenture
in respect thereof (required under clause (i)(B) of the preceding paragraph)
comply with the requirements of this Indenture and an Opinion of Counsel that
the conditions of this Article 8 have been complied with. Each such Officers'
Certificate shall set forth the manner of determination of the Consolidated Net
Worth in accordance with clause (iii) of the preceding paragraph.
For all purposes of this Indenture and the Securities (including the
provisions described in the two immediately preceding paragraphs and Section
1008 and Section 1010), Subsidiaries of any Surviving Entity will, upon such
transaction or series of transactions, become Restricted Subsidiaries or
Unrestricted Subsidiaries as provided pursuant to Section 1010 and all Debt of
the Surviving Entity and its Subsidiaries that was not Debt of the Company and
its Subsidiaries immediately prior to such transaction or series of transactions
shall be deemed to have been Incurred upon such transaction or series of
transactions.
69
<PAGE> 82
SECTION 802. Successor Substituted.
Upon any transaction or series of transactions that are of the
type described in clause (x) or (y) of, and are effected in accordance with,
Section 801, the Surviving Entity shall succeed to, and be substituted for, and
may exercise every right and power of, the Company under this Indenture with the
same effect as if such Surviving Entity had been named as the Company herein,
and thereafter, except in the case of a lease, the predecessor Person shall be
relieved of all obligations and covenants under this Indenture and the
Securities.
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized
by a Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form satisfactory to
the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants of the Company
herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon the
Company; or
(3) to comply with any requirements of the Commission in order
to effect and maintain the qualification of this Indenture under the
Trust Indenture Act; or
(4) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to matters
or questions arising under this Indenture which shall not be inconsistent
with the provisions of this Indenture, provided such action pursuant to
this Clause (5) shall not adversely affect the interests of the Holders
in any material respect (as determined in good faith by the Board of
Directors).
SECTION 902. Supplemental Indentures with Consent of Holders.
After receipt of the Required Consent, given by Act of those
Persons giving the Required Consent delivered to the Company and the Trustee,
the Company, when authorized by a Board Resolution, and the Trustee may enter
into an indenture or indentures supplemental hereto for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Indenture or of modifying in any manner the rights of the Holders under
this Indenture; provided, however, that no such supplemental indenture shall,
without the consent of the Holder of each Outstanding Security affected thereby,
70
<PAGE> 83
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable thereon,
or reduce the Default Amount that would be due and payable on
acceleration of the Maturity thereof pursuant to Section 502, or change
the place of payment where, or the coin or currency in which, any
Security or any premium or interest thereon is payable, or impair the
right to institute suit for the enforcement of any such payment on or
after the Stated Maturity thereof (or, in the case of redemption, on or
after the Redemption Date or, in the case of any Security required to be
purchased pursuant to an Offer to Purchase, on or after the applicable
Purchase Date), or
(2) reduce the percentage in principal amount at Stated
Maturity of the Outstanding Securities, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain provisions
of this Indenture or certain defaults hereunder and their consequences)
provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 513
or Section 1018, except to increase any such percentage or to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security
affected thereby, or
(4) following the mailing of an Offer with respect to an Offer
to Purchase pursuant to Section 1013, modify the provisions of this
Indenture with respect to such Offer to Purchase in a manner adverse to
such Holder.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
71
<PAGE> 84
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal, Premium and Interest.
The Company will duly and punctually pay the principal of (and
premium, if any) and interest on the Securities in accordance with the terms of
the Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The City of
New York, an office or agency where Securities may be presented or surrendered
for payment, where Securities may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands. In the event any such notice or demands are so made or
served on the Trustee, the Trustee will promptly forward copies thereof to the
Company.
The Company may also from time to time designate one or more other
offices or agencies (in or outside the Borough of Manhattan, The City of New
York) where the Securities may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided, however,
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough of
72
<PAGE> 85
Manhattan, The City of New York, for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
SECTION 1003. Money for Security Payments to be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it
will, on or before each due date of the principal of (and premium, if any) or
interest on any of the Securities, segregate and hold in trust for the benefit
of the Persons entitled thereto a sum sufficient to pay the principal (and
premium, if any) or interest so becoming due until such sums shall be paid to
such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it
will, prior to each due date of the principal of (and premium, if any) or
interest on any Securities, deposit with a Paying Agent a sum sufficient to pay
the principal (and premium, if any) or interest so becoming due, such sum to be
held as provided by the Trust Indenture Act, and (unless such Paying Agent is
the Trustee) the Company will promptly notify the Trustee of its action or
failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will: (i) comply with the provisions of the Trust Indenture
Act applicable to it as Paying Agent and (ii) during the continuance of any
default by the Company (or any other obligor upon the Securities) in the making
of any payment in respect of the Securities, upon the written request of the
Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent as such.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of (and premium,
if any) or interest on any Security and remaining unclaimed for two years after
such principal (and premium, if any) or interest has become due and payable
shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in The City of
73
<PAGE> 86
New York, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be repaid
to the Company.
SECTION 1004. Existence.
Subject to Article Eight, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its
existence, rights (charter and statutory) and material franchises; provided,
however, that the Company shall not be required to preserve any such right or
franchise if the Board of Directors in good faith shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and that the loss thereof is not disadvantageous in any material
respect to the Holders.
SECTION 1005. Maintenance of Properties.
The Company will cause all material properties used or useful in
the conduct of its business or the business of any Restricted Subsidiary to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such material properties if
such discontinuance is, as determined by the Board of Directors in good faith,
desirable in the conduct of its business or the business of any Restricted
Subsidiary and not disadvantageous in any material respect to the Holders.
SECTION 1006. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all taxes, assessments
and governmental charges levied or imposed upon the Company or any of its
Restricted Subsidiaries or upon the income, profits or property of the Company
or any of its Restricted Subsidiaries, and (2) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Company or any of its Restricted Subsidiaries; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
SECTION 1007. Maintenance of Insurance.
The Company shall, and shall cause its Restricted Subsidiaries to,
keep at all times all of their properties which are of an insurable nature
insured against loss or damage with insurers believed by the Company to be
responsible to the extent that property of similar
74
<PAGE> 87
character is usually so insured by corporations similarly situated and owning
like properties in accordance with good business practice. The Company shall,
and shall cause its Restricted Subsidiaries to, use the proceeds from any such
insurance policy to repair, replace or otherwise restore all material properties
to which such proceeds relate, provided, however, that the Company shall not be
required to repair, replace or otherwise restore any such material property if
the Board of Directors in good faith determines that such inaction is desirable
in the conduct of the business of the Company or any Restricted Subsidiary and
not disadvantageous in any material respect to the Holders.
SECTION 1008. Limitation on Consolidated Debt.
The Company shall not, and shall not permit any Restricted Subsidiary to,
Incur any Debt (including Acquired Debt), other than Permitted Debt, unless (i)
with respect to Debt Incurred under this clause (i), the Debt so Incurred and
outstanding is in an aggregate principal amount that does not exceed 2.25 times,
with respect to Capital Stock sales after June 1, 1997 and on or prior to March
31, 1998, or 2.00 times, with respect to Capital Stock sales after March 31,
1998, the aggregate amount of net cash proceeds (or 80% of the Fair Market Value
of property other than cash) received by the Company after June 1, 1997 from the
issuance and sale (other than to a Restricted Subsidiary) of shares of its
Capital Stock (other than Redeemable Stock), or any options, warrants or other
rights to purchase such Capital Stock (other than Redeemable Stock), other than
(x) proceeds applied for use as a Directed Investment (unless such designation
has been revoked by the Board of Directors and the Company either abandons its
plans to make such Investment or is able to make such Investment pursuant to
Section 1009 (other than as a Directed Investment)) and (y) proceeds which have
been included in the computation of the amounts available for Restricted
Payments pursuant to clause (c)(2) of Section 1009, to the extent the inclusion
thereof was necessary to allow a subsequent Restricted Payment to be made, or
(ii) on the date of such Incurrence, after giving effect to the Incurrence of
such Debt (or Acquired Debt) and the receipt and application of the net proceeds
thereof (and, if the net proceeds of such new Debt are used to acquire a Person
that becomes a Restricted Subsidiary or an operating business of the Company or
a Restricted Subsidiary, to all terms of such acquisition) on a pro forma basis,
the Operating Cash Flow to Consolidated Interest Expense Ratio would equal or
exceed 1.75 to 1.
SECTION 1009. Limitation on Restricted Payments.
The Company shall not, directly or indirectly:
(i) declare or pay any dividend on, or make any distribution to
the holders of, any shares of its Capital Stock (other than dividends or
distributions payable solely in its Capital Stock (other than Redeemable
Stock) or in options, warrants or other rights to purchase any such
Capital Stock (other than Redeemable Stock));
(ii) purchase, redeem or otherwise acquire or retire for value, or
permit any Restricted Subsidiary to, directly or indirectly, purchase,
redeem or otherwise acquire or retire for value (other than value
consisting solely of Capital Stock of the Company that is not Redeemable
Stock or options, warrants or other rights to acquire such Capital Stock
75
<PAGE> 88
that is not Redeemable Stock), any Capital Stock of the Company
(including options, warrants or other rights to acquire such Capital
Stock);
(iii) redeem, repurchase, defease or otherwise acquire or retire
for value, or permit any Restricted Subsidiary to, directly or
indirectly, redeem, repurchase, defease or otherwise acquire or retire
for value (other than value consisting solely of Capital Stock of the
Company that is not Redeemable Stock or options, warrants or other rights
to acquire such Capital Stock that is not Redeemable Stock), prior to any
scheduled maturity, scheduled repayment or scheduled sinking fund
payment, any Debt that is subordinate (whether pursuant to its terms or
by operation of law) in right of payment to the Securities; or
(iv) make, or permit any Restricted Subsidiary, directly or
indirectly, to make, any Investment (other than any Permitted Investment)
in any Person (other than in a Restricted Subsidiary or a Person that
becomes a Restricted Subsidiary as a result of such Investment);
(each of the foregoing actions set forth in clauses (i) through (iv), other than
any such action that is a Permitted Investment or a Permitted Distribution,
being referred to as a "Restricted Payment") unless, at the time of such
Restricted Payment, and after giving effect thereto:
(a) no Default or Event of Default shall have occurred and be
continuing;
(b) except with respect to Investments, after giving effect, on a
pro forma basis, to such Restricted Payment and the Incurrence of any
Debt the net proceeds of which are used to finance such Restricted
Payment, the Consolidated Debt to Annualized Operating Cash Flow Ratio
would not have exceeded 7.0 to 1; and
(c) after giving effect to such Restricted Payment on a pro forma
basis, the aggregate amount of all Restricted Payments made on or after
February 15, 1994 shall not exceed:
(1) 50% of the Consolidated Net Income (or, in the case of
a Consolidated Net Loss, minus 100% of such deficit) of the
Company for the period (taken as one accounting period) from April
1, 1994 to the last day of the last fiscal quarter preceding the
date of the proposed Restricted Payment, plus
(2) the aggregate net proceeds, including the fair market
value of property other than cash (as determined by the Board of
Directors, whose good faith determination shall be conclusive and
evidenced by a Board Resolution), received by the Company from the
issuance and sale (other than to a Restricted Subsidiary) on or
after February 15, 1994 of shares of its Capital Stock (other than
Redeemable Stock), or any options, warrants or other rights to
purchase such Capital Stock (other than Redeemable Stock), other
than (x) (except for purposes of determining whether an Investment
under clause (iv) above is permitted) shares of Capital Stock or
options, warrants or other rights to purchase Capital Stock (or
shares issuable upon exercise thereof) issued or sold in the
PowerFone Merger, Questar/AMI Share Exchanges, Motorola Business
Acquisition and NTT
76
<PAGE> 89
transactions as defined and described in the Company's prospectus,
dated February 9, 1994, relating to the Company's Senior
Redeemable Discount Notes due 2004 and (y) shares of Capital Stock
or options, warrants or other rights to purchase Capital Stock (or
shares issuable upon exercise thereof), the proceeds of the
issuance of which is used (A) to make a Directed Investment
(unless such designation has been revoked by the Board of
Directors and the Company is able to make such Investment pursuant
to this Section 1009 (other than as a Directed Investment)) or (B)
to Incur Debt under clause (i) of Section 1008 (unless and until
the amount of any such Debt (I) is treated as newly issued Debt
and could be Incurred in accordance with the Section 1008 (other
than under clause (i) thereof) or (II) has been repaid or
refinanced with the proceeds of Debt Incurred in accordance with
Section 1008 (other than under clause (i) thereof) or (III) has
otherwise been repaid), plus
(3) the aggregate net proceeds, including the fair market
value of property other than cash (as determined by the Board of
Directors, whose good faith determination shall be conclusive and
evidenced by a Board Resolution), received by the Company from the
issuance or sale (other than to a Restricted Subsidiary) after
February 15, 1994 of any Capital Stock of the Company (other than
Redeemable Stock), or any options, warrants or other rights to
purchase such Capital Stock (other than Redeemable Stock), upon
the conversion of, or exchange for, Debt of the Company or a
Restricted Subsidiary.
The foregoing limitations in this Section 1009 do not limit or restrict
the making of any Permitted Distribution, Permitted Investment or Directed
Investment, and none of a Permitted Distribution, Permitted Investment or
Directed Investment shall be counted as a Restricted Payment for purposes of
clause (c) above. In addition, the foregoing limitations do not prevent the
Company from (I) paying a dividend on Capital Stock of the Company within 60
days after the declaration thereof if, on the date when the dividend was
declared, the Company could have paid such dividend in accordance with the
provisions of this Indenture, (II) repurchasing Capital Stock of the Company
(including options, warrants or other rights to acquire such Capital Stock) from
employees or former employees of the Company or any Subsidiary thereof for
consideration not to exceed $500,000 in the aggregate in any fiscal year (with
repurchases pursuant to this clause (II) not being counted as Restricted
Payments for purposes of clause (c) above) or (III) the repurchase, redemption
or other acquisition for value of Capital Stock of the Company to the extent
necessary to prevent the loss or secure the renewal or reinstatement of any
license or franchise held by the Company or any of its Subsidiaries from any
governmental agency; or (IV) Investments in Unrestricted Subsidiary Funding
Company so long as (x) such Investments are invested in Nextel International,
Inc. and (y) Nextel International, Inc. is a Subsidiary of the Company.
Notwithstanding the foregoing limitations in this Section 1009, the
Company will be permitted to make any Investment in a Person that is not (either
before or after giving effect thereto) a Subsidiary of the Company, provided
that, immediately after giving effect thereto, the amount equal to (a) the
aggregate amount of all Investments made pursuant to this paragraph minus (b)
all cash received by the Company or any Restricted Subsidiary from the sale,
transfer or other disposition to a Person that is not a Subsidiary of the
Company of any such Investment (or portion thereof) included in such aggregate
amount (with the amount of cash to be counted
77
<PAGE> 90
for this purpose not to exceed the amount of such Investment (or portion
thereof) so included), shall not exceed the greater of (i) $250 million and (ii)
2% of the Total Market Value of Equity of the Company as of such time. For
purposes of determining the aggregate amount of Investments referred to in
clause (a), the amount of any Investment shall be deemed to equal the cash
portion thereof plus the fair market value of any non-cash portion thereof (to
the extent such portion constitutes an Investment) at the time such Investment
is made, as determined by the Board of Directors (whose good faith determination
shall be conclusive and evidenced by a Board Resolution).
Notwithstanding the foregoing, no Investment in a Person that immediately
thereafter would be a Restricted Subsidiary will be a Restricted Payment. In
addition, if any Person in which an Investment is made, which Investment
constitutes a Restricted Payment when made, thereafter becomes a Restricted
Subsidiary, all such Investments previously made in such Person shall no longer
be counted as Restricted Payments for purposes of calculating the aggregate
amount of Restricted Payments pursuant to clause (c) of the third preceding
paragraph or the aggregate amount of Investments pursuant to clause (a) of the
immediately preceding paragraph, in each case to the extent such Investments
would otherwise be so counted.
For purposes of clause (c)(3) above, the net proceeds received by the
Company from the issuance or sale of its Capital Stock either upon the
conversion of, or exchange for, Debt of the Company or any Restricted Subsidiary
shall be deemed to be an amount equal to (a) the sum of (i) the principal amount
or accreted value (whichever is less) of such Debt on the date of such
conversion or exchange and (ii) the additional cash consideration, if any,
received by the Company upon such conversion or exchange, less any payment on
account of fractional shares, minus (b) all expenses incurred in connection with
such issuance or sale. In addition, for purposes of clause (c)(3) above, the net
proceeds received by the Company from the issuance or sale of its Capital Stock
upon the exercise of any options or warrants of the Company or any Restricted
Subsidiary shall be deemed to be an amount equal to (a) the additional cash
consideration, if any, received by the Company upon such exercise, minus (b) all
expenses incurred in connection with such issuance or sale.
For purposes of this Section 1009, if a particular Restricted Payment
involves a non-cash payment, including a distribution of assets, then such
Restricted Payment shall be deemed to be an amount equal to the cash portion of
such Restricted Payment, if any, plus an amount equal to the fair market value
of the non-cash portion of such Restricted Payment, as determined by the Board
of Directors (whose good faith determination shall be conclusive and evidenced
by a Board Resolution).
SECTION 1010. Restricted Subsidiaries.
The Company shall not designate any Restricted Subsidiary as an
Unrestricted Subsidiary, and shall not itself, and shall not permit any
Restricted Subsidiary to, sell, convey, transfer or otherwise dispose of any
assets, other than in the ordinary course of business, to any Unrestricted
Subsidiary or any Person that becomes an Unrestricted Subsidiary as part of such
transaction, unless, after giving effect to any such action, the assets (not
including any assets so sold, conveyed, transferred or otherwise disposed of,
other than in the ordinary course of business, to any Unrestricted Subsidiary or
any Person that becomes an Unrestricted Subsidiary
78
<PAGE> 91
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, if any, of such Unrestricted Subsidiary or Person
outstanding immediately prior to such designation would have been permitted to
be Incurred (and shall be deemed to have been Incurred) for all purposes of this
Indenture.
Subject to the second preceding paragraph and compliance with Section
1009, the Board of Directors may designate any Restricted Subsidiary as an
Unrestricted Subsidiary.
The designation by the Board of Directors of a Restricted Subsidiary as
an Unrestricted Subsidiary shall, for all purposes of Section 1009 (including
clause (b) thereof), be deemed to be a Restricted Payment of an amount equal to
the fair market value of the Company's ownership interest in such Subsidiary
(including, without duplication, such indirect ownership interest in all
Subsidiaries of such Subsidiary), as determined by the Board of Directors in
good faith and evidenced by a Board Resolution.
Notwithstanding the foregoing provisions of this Section 1010, the Board
of Directors may not designate a Subsidiary of the Company to be an Unrestricted
Subsidiary if, after such designation, (a) the Company or any of its other
Restricted Subsidiaries (i) provides credit support for, or a Guarantee of, any
Debt of such Subsidiary (including any undertaking, agreement or instrument
evidencing such Debt) or (ii) is directly or indirectly liable for any Debt of
such Subsidiary, (b) a default with respect to any Debt of such Subsidiary
(including any right which the holders thereof may have to take enforcement
action against such Subsidiary) would permit (upon notice, lapse of time or
both) any holder of any other Debt of the Company or any Restricted Subsidiary
to declare a default on such other Debt or cause the payment thereof to be
accelerated or payable prior to its final scheduled maturity or (c) such
Subsidiary owns any Capital Stock of, or owns or holds any Lien on any property
of, any Restricted Subsidiary which is not a Subsidiary of the Subsidiary to be
so designated.
The Board of Directors, from time to time, may designate any Person that
is about to become a Subsidiary of the Company as an Unrestricted Subsidiary,
and may designate any newly-created Subsidiary as an Unrestricted Subsidiary, if
at the time such Subsidiary is created it contains no assets (other than such de
minimis amount of assets then required by law for the formation of corporations)
and no Debt. Subsidiaries of the Company that are not designated by the Board of
Directors as Restricted or Unrestricted Subsidiaries shall be deemed to be
Restricted Subsidiaries. Notwithstanding any provisions of this Section 1010,
all Subsidiaries of an Unrestricted Subsidiary 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.
79
<PAGE> 92
SECTION 1011. Transactions with Affiliates.
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, enter into any transaction (including the purchase,
sale, lease or exchange of any property or the rendering of any service) or
series of related transactions with any Affiliate of the Company on terms that
are less favorable to the Company or such Restricted Subsidiary, as the case may
be, than those which might be obtained at the time of such transaction from a
Person that is not such an Affiliate; provided, however, that this Section 1011
shall not limit, or be applicable to, (i) any transaction involving one or more
Unrestricted Subsidiaries and not involving the Company or any Restricted
Subsidiary, (ii) any transaction between the Company and any Restricted
Subsidiary or between Restricted Subsidiaries or (iii) any Permitted
Transactions. In addition, any transaction or series of related transactions,
other than Permitted Transactions, between the Company or any Restricted
Subsidiary and any Affiliate of the Company (other than a Restricted Subsidiary)
involving an aggregate consideration of $5 million or more must be approved in
good faith by a majority of the Company's Disinterested Directors (of which
there must be at least one) and evidenced by a Board Resolution. For purposes of
this Section 1011, any transaction or series of related transactions between the
Company or any Restricted Subsidiary and an Affiliate of the Company that is
approved by a majority of the Disinterested Directors (of which there must be at
least one) and evidenced by a Board Resolution shall be deemed to be on terms as
favorable as those that might be obtained at the time of such transaction (or
series of transactions) from a Person that is not such an Affiliate and thus
shall be permitted under this Section 1011.
SECTION 1012. [Intentionally Omitted]
SECTION 1013. Change of Control.
Upon the occurrence of a Change of Control, the Company shall be required
to make an Offer to Purchase Outstanding Securities at a purchase price in cash
equal to 101% of the principal amount thereof, plus accrued and unpaid interest,
if any, to the relevant Purchase Date. The Offer to Purchase must be made within
30 days following a Change of Control, must remain open for at least 30 and not
more than 60 days and must comply with the requirements of Rule 14e-1 under the
Exchange Act and any other applicable securities laws and regulations.
SECTION 1014. [Intentionally Omitted]
SECTION 1015. Activities of the Company and Restricted Subsidiaries.
The Company shall not, and shall not permit any Restricted Subsidiary to,
engage in any business other than the telecommunications business and related
activities and services, including such businesses, activities and services as
the Company and the Restricted Subsidiaries are engaged in on the Closing Date.
80
<PAGE> 93
SECTION 1016. Provision of Financial Information.
Whether or not the Company is subject to Section 13(a) or 15(d) of the
Exchange Act, or any successor provision thereto, the Company shall file with
the Commission the annual reports, quarterly reports and other documents which
the Company would have been required to file with the Commission pursuant to
such Section 13(a) or 15(d) or any successor provision thereto if the Company
were subject thereto, such documents to be filed with the Commission on or prior
to the respective dates (the "Required Filing Dates") by which the Company would
have been required to file them. The Company shall also in any event (a) within
15 days of each Required Filing Date (i) transmit by mail to all Holders, as
their names and addresses appear in the Security Register, without cost to such
Holders, and (ii) file with the Trustee copies of the annual reports, quarterly
reports and other documents which the Company would have been required to file
with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act or
any successor provisions thereto if the Company were subject thereto and (b) if
filing such documents by the Company with the Commission is not permitted under
the Exchange Act, promptly upon written request supply copies of such documents
to any prospective Holder. The Trustee's receipt of such reports, information
and documents shall not constitute constructive notice of any information
contained therein or determinable from information contained therein.
SECTION 1017. Statement by Officers as to Default; Compliance Certificates.
(a) The Company shall deliver to the Trustee, within 120 days
after the end of each fiscal year of the Company ending after the date hereof an
Officers' Certificate, stating whether or not to the best knowledge of the
signers thereof the Company is in default in the performance and observance of
any of the terms, provisions and conditions of this Indenture (without regard to
any period of grace or requirement of notice provided hereunder), and if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.
(b) The Company shall deliver to the Trustee, as soon as
possible and in any event within 10 days after the Company becomes aware of the
occurrence of a Default or an Event of Default, an Officers' Certificate setting
forth the details of such Default or Event of Default, and the action which the
Company proposes to take with respect thereto.
SECTION 1018. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Section 801, provided pursuant to Section
901(2) and set forth in Sections 1004 to 1016, inclusive, if before the time for
such compliance the Holders of at least a majority in principal amount at Stated
Maturity of the Outstanding Securities shall, by Act of such Holders, either
waive such compliance in such instance or generally waive compliance with such
covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such covenant or condition shall remain in full
force and effect; provided, however, with respect to an Offer to Purchase as to
which an Offer has been mailed, no such waiver may be made or shall be effective
81
<PAGE> 94
against any Holder tendering Securities pursuant to such Offer, and the Company
may not omit to comply with the terms of such Offer as to such Holder.
ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. Right of Redemption.
The Securities may be redeemed at any time on or after November
15, 2004, at the Company's option, in whole or in part, upon not less than 30 or
more than 60 days' prior written notice mailed by first class mail to each
Holder's last address as it appears in the Security Register, at the redemption
prices (expressed as a percentage of the principal amount thereof) set forth
below, plus an amount in cash equal to all accrued and unpaid interest to the
Redemption Date, if redeemed during the 12-month period beginning November 15 of
each of the years set forth below.
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2004 104.688%
2005 103.125%
2006 101.563%
2007 and thereafter 100.000%
</TABLE>
Interest installments whose Stated Maturity is on or prior to any
Redemption Date will be payable to the Holders of Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates for the payment of such interest installments.
In addition to any redemption provided for in the immediately
preceding paragraphs, in the event of a sale by the Company after the Closing
Date and on or prior to November 15, 2002 of its Capital Stock (other than
Redeemable Stock) in a single transaction or series of transactions for an
aggregate purchase price equal to or exceeding $50 million, up to a maximum of
35% of the original aggregate principal amount of the Outstanding Securities
will, within 180 days of such sale, at the option of the Company, upon not less
than 30 nor more than 60 days' notice by mail, be redeemable from the net
proceeds thereof (but only to the extent such proceeds consist of cash or
readily marketable cash equivalents received in respect of the Company's Capital
Stock so sold, in each case net of all commissions, discounts, fees, expenses
and taxes incurred in respect thereof) at a Redemption Price equal to 109.375%
of the principal amount of the Securities to be redeemed plus accrued and unpaid
interest to the Redemption Date.
SECTION 1102. Applicability of Article.
Redemption of Securities at the election of the Company, as
permitted by this Indenture and the provisions of the Securities, shall be made
in accordance with such provisions and this Article.
82
<PAGE> 95
SECTION 1103. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities pursuant to
Section 1101 shall be evidenced by a Board Resolution. In case of any redemption
at the election of the Company pursuant to Section 1101, the Company shall, at
least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Securities to be redeemed.
SECTION 1104. Selection by Trustee of Securities to Be Redeemed.
In the case of any partial redemption, selection of the Securities
for redemption will be made by the Trustee in compliance with the requirements
of the principal national securities exchange, if any, on which the Securities
are listed or, if the Securities are not listed on a national securities
exchange, on a pro rata basis, by lot or by such other method as the Trustee in
its sole discretion shall deem to be fair and appropriate; provided that no
Security of $1,000 in principal amount or less shall be redeemed in part.
The Trustee shall promptly notify the Company and each Security
Registrar in writing of the Securities selected for redemption and, in the case
of any Securities selected for partial redemption, the principal amount thereof
to be redeemed.
For all purposes of this Indenture and of the Securities, unless
the context otherwise requires, all provisions relating to the redemption of
Securities shall relate, in the case of any Securities redeemed or to be
redeemed only in part, to the portion of the principal amount of such Securities
which has been or is to be redeemed.
SECTION 1105. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register.
All notices of redemption shall state (including CUSIP, CINS and
ISIN numbers, if any):
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amounts) of the particular Securities to be redeemed, including
CUSIP, CINS and ISIN numbers,
(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be redeemed and that
cash interest thereon will cease to accrue on and after said Redemption
Date,
83
<PAGE> 96
(5) the place or places where such Securities are to be
surrendered for payment of the Redemption Price, and
(6) if the redemption is being made pursuant to the provisions
of the Securities set forth in the third paragraph of Section 203, a
brief description of the nature and amount of Capital Stock sold by the
Company, the aggregate purchase price thereof and the net cash proceeds
therefrom available for such redemption, the date or dates on which such
sale was completed and the percentage of the aggregate principal amount
of Outstanding Securities being redeemed.
Notice of redemption of Securities to be redeemed at the election
of the Company shall be given by the Company or, at the Company's request, by
the Trustee in the name and at the expense of the Company and shall be
irrevocable.
SECTION 1106. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) any applicable accrued interest on, all
the Securities which are to be redeemed on that date.
SECTION 1107. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless the Company shall default in the payment of the Redemption Price and any
applicable accrued interest) such Securities shall not bear interest. Upon
surrender of any such Security for redemption in accordance with said notice,
such Security shall be paid by the Company at the Redemption Price, together
with any applicable accrued and unpaid interest to the Redemption Date;
provided, however, that installments of interest whose Stated Maturity is on or
prior to the Redemption Date shall be payable to the Holders of such Securities,
or one or more Predecessor Securities, registered as such at the close of
business on the relevant Record Dates according to their terms and the
provisions of Section 309.
If any Security called for redemption in accordance with the
election of the Company made pursuant to Section 1101 shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate provided by the
Security.
SECTION 1108. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be
surrendered at an office or agency of the Company designated for that purpose
pursuant to Section 1002 (with, if
84
<PAGE> 97
the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in writing), and
the Company shall execute, and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge, a new Security or Securities, of
any authorized denomination as requested by such Holder, in aggregate principal
amount at Stated Maturity equal to and in exchange for the unredeemed portion of
the principal amount at Stated Maturity of the Security so surrendered.
ARTICLE TWELVE
Defeasance and Covenant Defeasance
SECTION 1201. Company's Option to Effect Defeasance or Covenant Defeasance.
The Company may elect, at its option at any time, to have Section
1202 or Section 1203 applied to the Outstanding Securities (as a whole and not
in part) upon compliance with the conditions set forth below in this Article.
Any such election shall be evidenced by a Board Resolution.
SECTION 1202. Defeasance and Discharge.
Upon the Company's exercise of its option to have this Section
applied to the Outstanding Securities (as a whole and not in part), the Company
shall be deemed to have been discharged from its obligations with respect to
such Securities as provided in this Section on and after the date the conditions
set forth in Section 1204 are satisfied (hereinafter called "Defeasance"), and
thereafter such Securities shall not be subject to redemption pursuant thereto.
For this purpose, such Defeasance means that the Company shall be deemed to have
paid and discharged the entire indebtedness represented by such Securities and
to have satisfied all its other obligations under such Securities and this
Indenture insofar as such Securities are concerned (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the
same), subject to the following which shall survive until otherwise terminated
or discharged hereunder: (1) the rights of Holders of such Securities to
receive, solely from the trust fund described in Section 1204 and as more fully
set forth in such Section, payments in respect of the principal of and any
premium and interest on such Securities when payments are due, (2) the Company's
obligations with respect to such Securities under Sections 304, 305, 308, 1002
and 1003, (3) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and (4) this Article. Subject to compliance with this Article, the
Company may exercise its option to have this Section applied to the Outstanding
Securities (as a whole and not in part) notwithstanding the prior exercise of
its option to have Section 1203 applied to such Securities.
SECTION 1203. Covenant Defeasance.
Upon the Company's exercise of its option to have this Section
applied to the Outstanding Securities (as a whole and not in part), (1) the
Company shall be released from its obligations under Section 801(iii), Sections
1005 through 1016, inclusive, and any covenant
85
<PAGE> 98
provided pursuant to Section 901(2) and (2) the occurrence of any event
specified in Section 501(4) (with respect to Section 801(iii)), Section 501(5)
(with respect to any of Sections 1005 through 1016, inclusive, and any such
covenants provided pursuant to Section 901(2)), Section 501(6) or Section 501(7)
shall be deemed not to be or result in an Event of Default, in each case with
respect to such Securities as provided in this Section on and after the date the
conditions set forth in Section 1204 are satisfied (hereinafter called "Covenant
Defeasance"). For this purpose, such Covenant Defeasance means that, with
respect to such Securities, the Company may omit to comply with and shall have
no liability in respect of any term, condition or limitation set forth in any
such specified Section (to the extent so specified in the case of Sections
501(4) and 501(5)), whether directly or indirectly by reason of any reference
elsewhere herein to any such Section or by reason of any reference in any such
Section to any other provision herein or in any other document, but the
remainder of this Indenture and such Securities shall be unaffected thereby.
SECTION 1204. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of
Section 1202 or Section 1203 to the Outstanding Securities:
(1) The Company shall irrevocably have deposited or caused to
be deposited with the Trustee (or another trustee which satisfies the
requirements contemplated by Section 609 and agrees to comply with the
provisions of this Article applicable to it) as trust funds in trust for
the purpose of making the following payments, specifically pledged as
security for, and dedicated solely to, the benefits of the Holders of
such Securities, (A) money in an amount, or (B) U.S. Government
Obligations which through the scheduled payment of principal and interest
in respect thereof in accordance with their terms will provide, not later
than one day before the due date of any payment, money in an amount, or
(C) a combination thereof, in each case sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in
a written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or any such other
qualifying trustee) to pay and discharge, the principal of and any
installment of interest on such Securities on the respective Stated
Maturities thereof, in accordance with the terms of this Indenture and
such Securities. As used herein, "U.S. Government Obligation" means (x)
any security which is (i) a direct obligation of the United States of
America for the payment of which the full faith and credit of the United
States of America is pledged or (ii) an obligation of a Person controlled
or supervised by and acting as an agency or instrumentality of the United
States of America the payment of which is unconditionally guaranteed as a
full faith and credit obligation by the United States of America, which,
in either case (i) or (ii), is not callable or redeemable at the option
of the issuer thereof, and (y) any depository receipt issued by a bank
(as defined in Section 3(a)(2) of the Securities Act) as custodian with
respect to any U.S. Government Obligation which is specified in Clause
(x) above and held by such bank for the account of the holder of such
depository receipt, or with respect to any specific payment of principal
of or interest on any U.S. Government Obligation which is so specified
and held, provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in
respect of the U.S.
86
<PAGE> 99
Government Obligation or the specific payment of principal or interest
evidenced by such depository receipt.
(2) In the event of an election to have Section 1202 apply to
the Outstanding Securities, the Company shall have delivered to the
Trustee an Opinion of Counsel stating that (A) the Company has received
from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the Closing Date there has been a change in the
applicable Federal income tax law, in either case (A) or (B) to the
effect that, and based thereon such opinion shall confirm that, the
Holders of such Securities will not recognize gain or loss for Federal
income tax purposes as a result of the deposit, Defeasance and discharge
to be effected with respect to such Securities and will be subject to
Federal income tax on the same amount, in the same manner and at the same
times as would be the case if such deposit, Defeasance and discharge were
not to occur.
(3) In the event of an election to have Section 1203 apply to
the Outstanding Securities, the Company shall have delivered to the
Trustee an Opinion of Counsel to the effect that the Holders of such
Securities will not recognize gain or loss for Federal income tax
purposes as a result of the deposit and Covenant Defeasance to be
effected with respect to such Securities and will be subject to Federal
income tax on the same amount, in the same manner and at the same times
as would be the case if such deposit and Covenant Defeasance were not to
occur.
(4) No Default with respect to the Outstanding Securities shall
have occurred and be continuing at the time of such deposit or, with
regard to any such event specified in Sections 501(8) and (9), at any
time on or prior to the 90th day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until after
such 90th day).
(5) Such Defeasance or Covenant Defeasance shall not cause the
Trustee to have a conflicting interest within the meaning of the Trust
Indenture Act (assuming all Securities are in default within the meaning
of such Act).
(6) Such Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under, any other
agreement or instrument to which the Company is a party or by which it is
bound.
(7) Such Defeasance or Covenant Defeasance shall not result in
the trust arising from such deposit constituting an investment company
within the meaning of the Investment Company Act unless such trust shall
be registered under such Act or exempt from registration thereunder.
(8) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent with respect to such Defeasance or Covenant
Defeasance have been complied with.
87
<PAGE> 100
SECTION 1205. Deposited Money and U.S. Government Obligations to Be Held in
Trust; Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003,
all money and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee or other qualifying trustee (solely for purposes of
this Section and Section 1206, the Trustee and any such other trustee are
referred to collectively as the "Trustee") pursuant to Section 1204 in respect
of the Outstanding Securities shall be held in trust and applied by the Trustee,
in accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any such Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Holders of
such Securities, of all sums due and to become due thereon in respect of
principal and any premium and interest, but money so held in trust need not be
segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 1204 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of Outstanding Securities.
Anything in this Article to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 1204 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect the Defeasance or Covenant Defeasance, as
the case may be, with respect to the Outstanding Securities.
SECTION 1206. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Securities by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the obligations under this
Indenture and such Securities from which the Company has been discharged or
released pursuant to Section 1202 or 1203 shall be revived and reinstated as
though no deposit had occurred pursuant to this Article with respect to such
Securities, until such time as the Trustee or Paying Agent is permitted to apply
all money held in trust pursuant to Section 1205 with respect to such Securities
in accordance with this Article; provided, however, that if the Company makes
any payment of principal of or any premium or interest on any such Security
following such reinstatement of its obligations, the Company shall be subrogated
to the rights (if any) of the Holders of such Securities to receive such payment
from the money so held in trust.
88
<PAGE> 101
--------------------
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
89
<PAGE> 102
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
NEXTEL COMMUNICATIONS, INC.
By:/s/ Authorized Signatory
----------------------------------
Title:
-------------------------------
Attest:
- - ----------------------------
HARRIS TRUST AND SAVINGS BANK, Trustee
By:/s/ Authorized Signatory
----------------------------------
Title:
-------------------------------
Attest:
- - ----------------------------
90
<PAGE> 103
EXHIBIT A
Form of Certificate to Be
Delivered in Connection with
Transfers Pursuant to Regulation S
_______________, _____
Harris Trust and Savings Bank
311 West Monroe Street
12th Floor
Chicago, Illinois 60606
Nextel Communications, Inc.
2001 Edmund Halley Drive
Reston, Virginia 20191
Attn: Treasurer
Re: Nextel Communications, Inc. (the "Company")
9.375% Senior Serial Redeemable Notes Due 2009 (the "Notes")
Ladies and Gentlemen:
This letter relates to U.S. $__________ principal amount of Notes
represented by a Note (the "Legended Note") which bears a legend outlining
restrictions upon transfer of such Legended Note. Pursuant to Section 205 of the
Indenture dated as of November 12, 1999 (the "Indenture") relating to the Notes,
we hereby certify that we are (or we will hold such securities on behalf of) a
person outside the United States to whom the Notes could be transferred in
accordance with Rule 904 of Regulation S promulgated under the U.S. Securities
Act of 1933, as amended. Accordingly, you are hereby requested to exchange the
legended certificate for an unlegended certificate representing an identical
principal amount of Notes, all in the manner provided for in the Indenture.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Holder]
By:
-----------------------------------
Authorized Signature
91
<PAGE> 104
EXHIBIT B
Form of Certificate to Be Delivered
in Connection with Transfers to
Non-QIB Institutional Accredited Investors
_______________, _____
Harris Trust and Savings Bank
311 West Monroe Street
12th Floor
Chicago, Illinois 60606
Nextel Communications, Inc.
2001 Edmund Halley Drive
Reston, Virginia 20191
Attn: Treasurer
Re: Nextel Communications, Inc. (the "Company")
9.375% Senior Serial Redeemable Notes due 2009 (the "Notes")
Ladies and Gentlemen:
In connection with our proposed purchase of U.S.$__________
aggregate principal amount at stated maturity of the Notes, we confirm that:
1. We understand that any subsequent transfer of the Notes is
subject to certain restrictions and conditions set forth in the Indenture dated
as of November 12, 1999 (the "Indenture"), relating to the Notes, and we agree
to be bound by, and not to resell, pledge or otherwise transfer the Notes 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 Notes have not
been registered under the Securities Act, and that the Notes 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 offer or sell any Notes, 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) to
an institutional "accredited investor" (as defined below) that, prior to such
transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to
you and to the Company a signed letter substantially in the form of this letter,
(D) pursuant to the exemption from registration provided by Rule 144 under the
Securities Act, (E) pursuant to an effective registration statement under the
Securities Act, if available, or (F) outside the United States in accordance
with Rule 904 of Regulation S under the Securities Act, and we further agree to
provide to any person purchasing any of the Notes from us a notice advising such
purchaser that resales of the Notes are restricted as stated herein.
92
<PAGE> 105
3. We understand that, on any proposed resale of any Notes, 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 Notes purchased by us will bear a legend to the
foregoing effect.
4. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) 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 notes, 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 Notes 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.
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 Transferee]
By:
----------------------------------
Authorized Signature
93
<PAGE> 106
EXHIBIT C
Form of Certificate to Be Delivered
in Connection with Transfers
Pursuant to Regulation S
_______________, _____
Harris Trust and Savings Bank
311 West Monroe Street
12th Floor
Chicago, Illinois 60606
Nextel Communications, Inc.
2001 Edmund Halley Drive
Reston, Virginia 20191
Attn: Treasurer
Re: Nextel Communications, Inc. (the "Company")
9.375% Senior Redeemable Notes due 2009 (the "Notes")
Ladies and Gentlemen:
In connection with our proposed sale of U.S. $__________ aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the Securities Act of 1933
and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the
United States;
(2) at the time the buy order was originated, the transferee
was outside the United States or we and any person acting on our behalf
reasonably believed that the transferee was outside the United States;
(3) no directed selling efforts have been made by us in the
United States in contravention of the requirements of Rule 903(b) or Rule 904(b)
of Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade
the registration requirements of the U.S. Securities Act of 1933.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
------------------------------
Authorized Signature
94
<PAGE> 1
Exhibit 4.2
- - --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
Dated November 12, 1999
between
NEXTEL COMMUNICATIONS, INC.
and
GOLDMAN, SACHS & CO.,
As Representative of the Several Purchasers Named in the
Purchase Agreement Referred to Herein
- - --------------------------------------------------------------------------------
<PAGE> 2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into November 12, 1999, between NEXTEL COMMUNICATIONS, INC., a Delaware
corporation (the "Company"), and GOLDMAN, SACHS & CO. as representative of the
several purchasers named in the Purchase Agreement referred to below (the
"Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement dated November
5, 1999, between the Company and the Initial Purchasers (the "Purchase
Agreement"), which provides for the sale by the Company to the Initial
Purchasers of $2,000,000,000 aggregate principal amount of the Company's 9.375%
Senior Serial Redeemable Notes due 2009 (the "Securities"). In order to induce
the Initial Purchasers to enter into the Purchase Agreement, the Company has
agreed to provide to the Initial Purchasers and their respective direct and
indirect transferees the registration rights with respect to the Securities set
forth in this Agreement. The execution of this Agreement is a condition to the
closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
1. Definitions.
As used in this Agreement, the following capitalized defined terms shall
have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended from time to
time.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended from
time to time.
"Closing Date" shall mean the Closing Date as defined in the Purchase
Agreement.
"Company" shall have the meaning set forth in the preamble and shall also
include the Company's successors.
"Exchange Offer" shall mean the exchange offer by the Company of Exchange
Securities for Registrable Securities pursuant to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the 1933 Act
effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form) and all amendments and supplements to such registration statement, in
each case including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference therein.
"Exchange Securities" shall mean securities issued by the Company
containing terms identical to the Securities (except that such Exchange
Securities shall bear no
<PAGE> 3
legend and shall be free from restrictions on transfers), to be offered to
Holders of Securities in exchange for Securities pursuant to the Exchange
Offer.
"Holder" shall mean the Initial Purchasers, for so long as they own any
Registrable Securities, and each of their successors, assigns and direct and
indirect transferees who become registered owners of Registrable Securities
under the Indenture; provided that for purposes of Sections 4 and 5 of this
Agreement, the term "Holder" shall include Participating Broker-Dealers (as
defined in Section 4(a)).
"Indenture" shall mean the Indenture relating to the Securities, dated as
of November 12, 1999, between the Company and Harris Trust and Savings Bank,
as trustee, as the same may be amended, supplemented, waived or otherwise
modified from time to time in accordance with the terms thereof.
"Initial Purchasers" shall have the meaning set forth in the preamble.
"Majority Holders" shall mean the Holders of a majority of the aggregate
principal amount at Stated Maturity (as defined in the Indenture) of
outstanding Registrable Securities; provided that whenever the consent or
approval of Holders of a specified percentage of Registrable Securities is
required hereunder, Registrable Securities held by the Company or any of its
affiliates (as such term is defined in Rule 405 under the 1933 Act) (other
than the Initial Purchasers or subsequent holders of Registrable Securities
if such subsequent holders are deemed to be such affiliates solely by reason
of their holding of such Registrable Securities) shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage or amount.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political
subdivision thereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to such prospectus, and in each case
including all material incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the preamble.
"Registrable Securities" shall mean the Securities; provided, however,
that the Securities shall cease to be Registrable Securities (i) except in
the case of any Initial Purchaser to the extent of any unsold allotment and
Participating Broker-Dealers (as defined in Section 4) to the extent set
forth in Section 4(a), upon the expiration date of the Exchange Offer, (ii)
when a Shelf Registration Statement with respect to such Securities shall
have been declared effective under the 1933 Act and such Securities shall
have been disposed of pursuant to such Registration Statement, (iii) when
such Securities are saleable to the public pursuant to Rule 144(k) (or any
similar provision then in force, but
2
<PAGE> 4
not Rule 144A) under the 1933 Act or (iv) when such Securities shall have
ceased to be outstanding.
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC, stock exchange or National Association of
Securities Dealers, Inc. registration and filing fees, (ii) all fees and
expenses incurred in connection with compliance with state securities or blue
sky laws (including reasonable fees and disbursements of counsel for any
Underwriters or Holders in connection with blue sky qualification of any of
the Exchange Securities or Registrable Securities), (iii) all expenses of any
Persons in preparing or assisting in preparing, word processing, printing and
distributing any Registration Statement, any Prospectus, any amendments or
supplements thereto, any underwriting agreements, securities sales agreements
and other documents relating to the performance of and compliance with this
Agreement, (iv) all rating agency fees, if any, (v) the fees and
disbursements of the Trustee and its counsel, if any, (vi) the fees and
disbursements of counsel for the Company and, in the case of a Shelf
Registration Statement, the fees and disbursements of one counsel for the
Holders (which counsel shall be selected by the Majority Holders and which
counsel may also be counsel for the Initial Purchasers) and (vii) the fees
and disbursements of the independent public accountants of the Company,
including the expenses of any special audits or "cold comfort" letters
required by or incident to such performance and compliance, but excluding (x)
fees and expenses of counsel to the Underwriters (other than fees and
expenses set forth in clause (ii) above) or the Holders and (y) underwriting
discounts and commissions and transfer taxes, if any, relating to the sale or
disposition of Registrable Securities by a Holder.
"Registration Statement" shall mean any registration statement of the
Company that covers any of the Exchange Securities or Registrable Securities
pursuant to the provisions of this Agreement and all amendments and
supplements to any such Registration Statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"SEC" shall mean the Securities and Exchange Commission.
"Shelf Registration" shall mean a registration effected pursuant to
Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration statement
of the Company which covers all of the Registrable Securities (and may
include other securities of other Persons) on an appropriate form under Rule
415 under the 1933 Act, or any similar rule that may be adopted by the SEC,
and all amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"Trustee" shall mean the trustee under the Indenture.
3
<PAGE> 5
"Underwriters" shall have the meaning set forth in Section 3 hereof.
"Underwritten Registration" or "Underwritten Offering" shall mean a
registration in which Registrable Securities are sold to an Underwriter for
reoffering to the public.
2. Registration Under the 1933 Act.
(a) To the extent not prohibited by any applicable law or applicable
interpretation of the Staff of the SEC, the Company shall use its best efforts
to cause to be filed an Exchange Offer Registration Statement covering the offer
by the Company to the Holders to exchange all of the Registrable Securities for
Exchange Securities and to have such Registration Statement remain effective
until the closing of the Exchange Offer. The Company shall commence the Exchange
Offer promptly after the Exchange Offer Registration Statement has been declared
effective by the SEC and use its best efforts to have the Exchange Offer
consummated not later than 60 days after such effective date. The Company shall
commence the Exchange Offer by mailing the related exchange offer Prospectus and
accompanying documents to each Holder stating, in addition to such other
disclosures as are required by applicable law:
(i) that the Exchange Offer is being made pursuant to this Agreement
and that all Registrable Securities validly tendered will be accepted for
exchange;
(ii) the dates of acceptance for exchange (which shall be a period of at
least 30 days from the date such Prospectus is mailed) (the "Exchange
Dates");
(iii) that any Registrable Securities not tendered will remain outstanding
and shall continue to accrue interest at the initial rate borne by the
Registrable Securities and, other than Registrable Securities referred to in
Section 2(b) below, will not retain any rights under this Agreement;
(iv) that Holders electing to have Registrable Securities exchanged
pursuant to the Exchange Offer will be required to surrender such Registrable
Securities, together with the enclosed letters of transmittal, to the
institution and at the address (located in the Borough of Manhattan, The City
of New York) specified in the Prospectus prior to the close of business on
the last Exchange Date; and
(v) that Holders will be entitled to withdraw their election, not later
than the close of business on the last Exchange Date, by sending to the
institution and at the address (located in the Borough of Manhattan, The City
of New York) specified in the Prospectus a telegram, telex, facsimile
transmission or letter setting forth the name of such Holder, the principal
amount of Registrable Securities delivered for exchange and a statement that
such Holder is withdrawing his election to have such Registrable Securities
exchanged.
As soon as practicable after the last Exchange Date, the Company shall:
(i) accept for exchange Registrable Securities or portions thereof
tendered and not validly withdrawn pursuant to the Exchange Offer; and
4
<PAGE> 6
(ii) deliver, or cause to be delivered, to the Trustee for cancellation
all Registrable Securities or portions thereof so accepted for exchange by
the Company and issue, and cause the Trustee to promptly countersign and
register and mail to each Holder, Exchange Securities with an aggregate
principal amount equal to the aggregate principal amount of the Registrable
Securities surrendered by such Holder.
The Company shall use its best efforts to complete the Exchange Offer as
provided above and shall comply with the applicable requirements of the 1933
Act, the 1934 Act and other applicable laws and regulations in connection with
the Exchange Offer. The Company shall inform the Initial Purchasers of the names
and addresses of the Holders to whom the Exchange Offer is made, and the Initial
Purchasers shall have the right, subject to applicable law, to contact such
Holders and otherwise facilitate the tender of Registrable Securities in the
Exchange Offer.
(b) In the event that the Exchange Offer has been completed and, in the
opinion of counsel for the Initial Purchasers, a Registration Statement must be
filed and a Prospectus must be delivered by any Initial Purchaser in connection
with any offering or sale of Registrable Securities held by it that constitute
an unsold allotment, the Company shall use its best efforts to cause to be filed
as soon as practicable after the rendering of such opinion and the delivery
thereof, if written, is given to the Company, a Shelf Registration Statement
providing for the sale by the Initial Purchasers of such Registrable Securities
and to have such Shelf Registration Statement declared effective by the SEC. The
Initial Purchasers shall sell out their unsold allotments before making sales of
any other Securities and the Initial Purchasers shall notify the Company upon
the sale of all of their unsold allotments. The Company agrees to use its best
efforts to keep the Shelf Registration Statement continuously effective for the
period referred to in Rule 144(k) or until all of the Registrable Securities
covered by the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement. The Company further agrees to supplement or amend the
Shelf Registration Statement if required by the rules, regulations or
instructions applicable to the registration form used by the Company for such
Shelf Registration Statement or by the 1933 Act or by any other rules and
regulations thereunder for shelf registration or if reasonably requested by a
Holder with respect to information relating to such Holder, and to use its best
efforts to cause any such amendment to become effective and such Shelf
Registration Statement to become usable as soon as thereafter practicable. The
Company agrees to furnish to the Holders of Registrable Securities copies of any
such supplement or amendment promptly after its being used or filed with the
SEC.
(c) The Company shall pay all Registration Expenses in connection with
the registration pursuant to Section 2(a) or Section 2(b). Each Holder shall pay
all underwriting discounts and commissions and transfer taxes, if any, relating
to the sale or disposition of such Holder's Registrable Securities pursuant to
the Shelf Registration Statement.
(d) An Exchange Offer Registration Statement pursuant to Section 2(a)
hereof or a Shelf Registration Statement pursuant to Section 2(b) hereof will
not be deemed to have become effective unless it has been declared effective by
the SEC; provided, however, that if, after it has been declared effective, the
offering of Registrable Securities pursuant to a Shelf Registration Statement is
interfered with by any stop order, injunction or other order or requirement of
the SEC or any other governmental agency or court, such Registration Statement
will be deemed not to have become effective during the period of such
interference until the offering of Registrable Securities pursuant to such
Registration Statement may legally resume.
5
<PAGE> 7
As provided for in the Indenture, in the event the Exchange Offer is not
consummated, or if required a Shelf Registration Statement is not declared
effective, on or prior to June 15, 2000, the annual interest rate borne by the
Securities shall be increased by 0.5% per annum on the affected Securities from
June 15, 2000, and, if the Exchange Offer is not consummated on or prior to
September 15, 2000, thereafter the annual interest rate borne by the affected
Securities shall be increased by an additional rate of 0.5% per annum on such
Securities from September 15, 2000, in each case until the earliest of the date
upon which (i) the Exchange Offer is consummated, (ii) a Shelf Registration
Statement with respect to all Registrable Securities is declared effective or
(iii) solely with respect to Registrable Securities held by Holders other than
the Initial Purchasers, the expiration of the holding period applicable to Notes
held by non-affiliates of Nextel under Rule 144(k) under the Securities Act; at
which time, in any such case, upon the request of any Holder of such Securities,
the Company will deliver to such Holder certificates evidencing such Holder's
Securities without the legends restricting the transfer thereof.
(e) Without limiting the remedies available to the Initial Purchasers
and the Holders, the Company acknowledges that any failure by the Company to
comply with its obligations under Section 2(a) and Section 2(b) hereof may
result in material irreparable injury to the Initial Purchasers or the Holders
for which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of any such
failure, the Initial Purchasers or any Holder may obtain such relief as may be
required to specifically enforce the Company's obligations under Section 2(a)
and Section 2(b) hereof; provided, that no monetary damages shall be assessed
against the Company by reason of any failure by the Company to comply with its
obligations under Section 2(a) and Section 2(b) hereof, it being understood that
the penalty interest rates applicable to the Securities as provided in Section
2(a) hereof are intended to serve as full and complete monetary compensation to
the Holders in such circumstances.
3. Registration Procedures.
In connection with the obligations of the Company with respect to the
Registration Statements pursuant to Section 2(a) and Section 2(b) hereof, the
Company shall as expeditiously as possible:
(a) prepare and file with the SEC a Registration Statement on the
appropriate form under the 1933 Act, which form (x) shall be selected by the
Company and (y) shall, in the case of a Shelf Registration, be available for
the sale of the Registrable Securities by the selling Holders thereof and (z)
shall comply as to form in all material respects with the requirements of the
applicable form and include all financial statements required by the SEC to
be filed therewith, and use its best efforts to cause such Registration
Statement to become effective and remain effective in accordance with Section
2 hereof;
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement effective for the applicable period and cause each
Prospectus to be supplemented by any required prospectus supplement and, as
so supplemented, to be filed pursuant to Rule 424 under the 1933 Act; to keep
each Prospectus current during the period described under Section 4(3) and
Rule 174 under the 1933 Act that is applicable to
6
<PAGE> 8
transactions by brokers or dealers with respect to the Registrable Securities
or Exchange Securities;
(c) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities, to counsel for the Initial Purchasers, to counsel for
the Holders and to each Underwriter of an Underwritten Offering of
Registrable Securities, if any, without charge, as many copies of each
Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other documents as such Holder or Underwriter may
reasonably request, in order to facilitate the public sale or other
disposition of the Registrable Securities; and the Company consents to the
use of such Prospectus and any amendment or supplement thereto in accordance
with applicable law by each of the selling Holders of Registrable Securities
and any such Underwriters in connection with the offering and sale of the
Registrable Securities covered by and in the manner described in such
Prospectus or any amendment or supplement thereto in accordance with
applicable law;
(d) use its best efforts to register or qualify the Registrable
Securities under all applicable state securities or "blue sky" laws of such
jurisdictions as any Holder of Registrable Securities covered by a
Registration Statement shall reasonably request in writing by the time the
applicable Registration Statement is declared effective by the SEC, to
cooperate with such Holder in connection with any filings required to be made
with the National Association of Securities Dealers, Inc. and do any and all
other acts and things which may be reasonably necessary or advisable to
enable such Holder to consummate the disposition in each such jurisdiction of
such Registrable Securities owned by such Holder; provided, however, that the
Company shall not be required to (i) qualify as a foreign corporation or as a
dealer in securities in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3(d), (ii) file any general consent
to service of process or (iii) subject itself to taxation in any such
jurisdiction if it is not so subject;
(e) in the case of a Shelf Registration, notify each Holder of
Registrable Securities, counsel for the Holders and counsel for the Initial
Purchasers promptly and, if requested by any such Holder or counsel, confirm
such advice in writing (i) when a Registration Statement has become effective
and when any post-effective amendment thereto has been filed and becomes
effective, (ii) of any request by the SEC or any state securities authority
for amendments and supplements to a Registration Statement and Prospectus or
for additional information after the Registration Statement has become
effective, (iii) of the issuance by the SEC or any state securities authority
of any stop order suspending the effectiveness of a Registration Statement or
the initiation of any proceedings for that purpose, (iv) if, between the
effective date of a Registration Statement and the closing of any sale of
Registrable Securities covered thereby, the representations and warranties of
the Company contained in any underwriting agreement, securities sales
agreement or other similar agreement, if any, relating to the offering cease
to be true and correct in all material respects or if the Company receives
any notification with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the initiation of any
proceeding for such purpose, (v) of the happening of any event during the
period a Shelf Registration Statement is effective which makes any statement
made in such Shelf Registration Statement or the related Prospectus untrue
7
<PAGE> 9
in any material respect or which requires the making of any changes in such
Shelf Registration Statement or Prospectus in order to make the statements
therein not misleading in any material respect and (vi) of any determination
by the Company that a post-effective amendment to a Registration Statement
would be appropriate;
(f) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement at the earliest
possible moment and provide immediate notice to each Holder of the withdrawal
of any such order;
(g) in the case of a Shelf Registration, upon request, furnish to each
Holder of Registrable Securities, without charge, at least one conformed copy
of each Registration Statement and any post-effective amendment thereto
(without documents incorporated therein by reference or exhibits thereto,
unless requested);
(h) in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Securities to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and
not bearing any restrictive legends and enable such Registrable Securities to
be in such denominations and registered in such names as the selling Holders
may reasonably request at least two business days prior to the closing of any
sale of Registrable Securities;
(i) in the case of a Shelf Registration, upon the occurrence of any
event contemplated by Section 3(e)(v) hereof, use its best efforts to prepare
and file with the SEC a supplement or post-effective amendment to a
Registration Statement or the related Prospectus or any document incorporated
therein by reference or file any other required document so that, as
thereafter delivered to the purchasers of the Registrable Securities, such
Prospectus will not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading. The Company
agrees to notify the Holders to suspend use of the Prospectus as promptly as
practicable after the occurrence of such an event, and the Holders hereby
agree to suspend use of the Prospectus until the Company has amended or
supplemented the Prospectus to correct such misstatement or omission;
(j) a reasonable time prior to the filing of any Registration Statement,
any Prospectus, any amendment to a Registration Statement or amendment or
supplement to a Prospectus or any document which is to be incorporated by
reference into a Registration Statement (other than filings pursuant to the
1934 Act) or a Prospectus after the initial filing of a Registration
Statement, provide copies of such document to the Initial Purchasers and
their counsel (and, in the case of a Shelf Registration Statement, the
Holders and their counsel) and make such of the representatives of the
Company as shall be reasonably requested by the Initial Purchasers or their
counsel (and, in the case of a Shelf Registration Statement, the Holders or
their counsel) available for discussion of such document, and shall not at
any time file or make any amendment to the Registration Statement, any
Prospectus or any amendment of or supplement to a Registration Statement or a
Prospectus or any document which is to be incorporated by reference into a
Registration Statement (other than filings pursuant to the 1934 Act) or a
Prospectus, of which the Initial Purchasers and their counsel (and, in the
case of a Shelf Registration Statement, the Holders and their counsel) shall
not have previously been advised and
8
<PAGE> 10
furnished a copy or to which the Initial Purchasers or its counsel (and, in
the case of a Shelf Registration Statement, the Holders or their counsel)
shall object;
(k) obtain a CUSIP number, and, if applicable, a CINS number, for all
Exchange Securities or Registrable Securities, as the case may be, not later
than the effective date of a Registration Statement;
(l) in the case of a Shelf Registration, make available for inspection
by a representative of the Holders of the Registrable Securities, any
Underwriter participating in any disposition pursuant to such Shelf
Registration Statement, and attorneys and accountants designated by the
Holders, at reasonable times and in a reasonable manner, all financial and
other records, pertinent documents and properties of the Company, and cause
the respective officers, directors and employees of the Company to supply all
information reasonably requested by any such representative, Underwriter,
attorney or accountant in connection with a Shelf Registration Statement;
(m) in the case of a Shelf Registration, use its best efforts to cause
all Registrable Securities to be listed on any securities exchange or any
automated quotation system on which similar securities issued by the Company
are then listed if requested by the Majority Holders, to the extent such
Registrable Securities satisfy applicable listing requirements;
(n) use its best efforts to cause the Exchange Securities or Registrable
Securities, as the case may be, to be rated by two nationally recognized
statistical rating organizations (as such term is defined in Rule 436(g)(2)
under the 1933 Act);
(o) if reasonably requested by any Holder of Registrable Securities
covered by a Registration Statement, (i) promptly incorporate in a Prospectus
supplement or post-effective amendment such information with respect to such
Holder as such Holder reasonably requests to be included therein and (ii)
make all required filings of such Prospectus supplement or such
post-effective amendment as soon as the Company has received notification of
the matters to be incorporated in such filing; and
(p) in the case of a Shelf Registration, enter into such customary
agreements and take all such other actions in connection therewith (including
those requested by the Holders of a majority of the Registrable Securities
being sold) in order to expedite or facilitate the disposition of such
Registrable Securities including, but not limited to, an Underwritten
Offering and in such connection, (i) to the extent possible, make such
representations and warranties to the Holders and any Underwriters of such
Registrable Securities with respect to the business of the Company and its
subsidiaries, the Registration Statement, Prospectus and documents
incorporated by reference or deemed incorporated by reference, if any, in
each case, in form, substance and scope as are customarily made by issuers to
underwriters in underwritten offerings and confirm the same if and when
requested, (ii) obtain opinions of counsel to the Company (which counsel and
opinions, in form, scope and substance, shall be reasonably satisfactory to
the Holders and such Underwriters and their respective counsel) addressed to
each selling Holder and Underwriter of Registrable Securities, covering the
matters customarily covered in opinions requested in underwritten offerings,
(iii) obtain "cold comfort" letters
9
<PAGE> 11
from the independent certified public accountants of the Company (and, if
necessary, any other certified public accountant of any subsidiary of the
Company, or of any business acquired by the Company for which financial
statements and financial data are or are required to be included in the
Registration Statement) addressed to each selling Holder and Underwriter of
Registrable Securities, such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort" letters in
connection with underwritten offerings, and (iv) deliver such documents and
certificates as may be reasonably requested by the Holders of a majority of
the Registrable Securities being sold or the Underwriters, and which are
customarily delivered in underwritten offerings, to evidence the continued
validity of the representations and warranties of the Company made pursuant
to clause (i) above and to evidence compliance with any customary conditions
contained in an underwriting agreement.
In the case of a Shelf Registration Statement, the Company may require
each Holder of Registrable Securities to furnish to the Company such information
regarding the Holder and the proposed distribution by such Holder of such
Registrable Securities as the Company may from time to time reasonably request
in writing.
In the case of a Shelf Registration Statement, each Holder agrees that,
upon receipt of any notice from the Company of the happening of any event of the
kind described in Section 3(e)(v) hereof, such Holder will forthwith discontinue
disposition of Registrable Securities pursuant to a Registration Statement until
such Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 3(i) hereof, and, if so directed by the Company, such
Holder will deliver to the Company (at its expense) all copies in its
possession, other than permanent file copies then in such Holder's possession,
of the Prospectus covering such Registrable Securities current at the time of
receipt of such notice. The Company shall not suspend the disposition of
Registrable Securities pursuant to a Shelf Registration Statement for more than
an aggregate of 120 days during any 365 day period. If the Company shall suspend
the disposition of Registrable Securities pursuant to a Shelf Registration
Statement for more than an aggregate of 60 days during any 365 day period, then
the Company shall pay each Holder of Registrable Securities that are registered
pursuant to the Shelf Registration Statement and have not been sold pursuant
thereto an illiquidity fee in an amount equal to 0.5% per annum of the principal
amounts of such Registrable Securities held by such Holder for the period in
excess of 60 days in such 365 day period when dispositions pursuant to such
Shelf Registration Statement are suspended (or until such date, if sooner, on
which such securities cease to qualify as Registrable Securities).
The Holders of Registrable Securities covered by a Shelf Registration
Statement who desire to do so may sell such Registrable Securities in an
Underwritten Offering. In any such Underwritten Offering, the investment banker
or investment bankers and manager or managers (the "Underwriters") that will
administer the offering will be selected by the Majority Holders of the
Registrable Securities included in such offering and shall be reasonably
acceptable to the Company.
4. Participation of Broker-Dealers in Exchange Offer.
(a) The Staff of the SEC has taken the position that any broker-dealer
that receives Exchange Securities for its own account in the Exchange Offer in
exchange for
10
<PAGE> 12
Securities that were acquired by such broker-dealer as a result of market-making
or other trading activities (a "Participating Broker-Dealer"), may be deemed to
be an "underwriter" within the meaning of the 1933 Act and must deliver a
prospectus meeting the requirements of the 1933 Act in connection with any
resale of such Exchange Securities.
The Company understands that it is the Staff's position that if the
Prospectus contained in the Exchange Offer Registration Statement includes a
plan of distribution containing a statement to the above effect and the means by
which Participating Broker-Dealers may resell the Exchange Securities, without
naming the Participating Broker-Dealers or specifying the amount of Exchange
Securities owned by them, such Prospectus may be delivered by Participating
Broker-Dealers to satisfy their prospectus delivery obligation under the 1933
Act in connection with resales of Exchange Securities for their own accounts, so
long as the Prospectus otherwise meets the requirements of the 1933 Act.
(b) In light of the above, notwithstanding the other provisions of this
Agreement, the Company agrees that the provisions of this Agreement as they
relate to a Shelf Registration shall also apply to an Exchange Offer
Registration to the extent, and with such reasonable modifications thereto as
may be, reasonably requested by the Initial Purchasers or by one or more
Participating Broker-Dealers, in each case as provided in clause (ii) below, in
order to expedite or facilitate the disposition of any Exchange Securities by
Participating Broker- Dealers consistent with the positions of the Staff recited
in Section 4(a) above; provided that:
(i) the Company shall not be required to amend or supplement the
Prospectus contained in the Exchange Offer Registration Statement, as would
otherwise be contemplated by Section 3(i) of this Agreement, for a period
exceeding 90 days after the last Exchange Date and Participating
Broker-Dealers shall not be authorized by the Company to deliver and shall
not deliver such Prospectus after such period in connection with the resales
contemplated by this Section 4;
(ii) the application of the Shelf Registration procedures set forth in
Section 3 of this Agreement to an Exchange Offer Registration, to the extent
not required by the positions of the Staff of the SEC or the 1933 Act and the
rules and regulations thereunder, will be in conformity with the reasonable
request to the Company by the Initial Purchasers or with the reasonable
request in writing to the Company by one or more broker-dealers who certify
to the Initial Purchasers and the Company in writing that they anticipate
that they will be Participating Broker-Dealers; and provided further that, in
connection with such application of the Shelf Registration procedures set
forth in Section 3 of this Agreement to an Exchange Offer Registration, the
Company shall be obligated (x) to deal only with one entity representing the
Participating Broker-Dealers, which shall be Goldman, Sachs & Co. unless it
elects not to act as such representative and (y) to cause to be delivered
only one, if any, "cold comfort" letter with respect to the Prospectus in the
form existing on the last Exchange Date and with respect to each subsequent
amendment or supplement, if any, effected during the period specified in
clause (i) above; and
(iii) on a weekly basis, the representative of the Participating
Broker-Dealers will confirm with the Company that the Shelf Registration
Statement is available.
11
<PAGE> 13
(c) The Initial Purchasers shall have no liability to the Company or any
Holder with respect to any request that it may make pursuant to Section 4(b)
above.
5. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Initial
Purchaser, each Holder and each Person, if any, who controls any Initial
Purchaser or any Holder within the meaning of either Section 15 of the 1933 Act
or Section 20 of the 1934 Act, or is under common control with, or is controlled
by, any Initial Purchaser or any Holder, from and against all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred by any Initial Purchaser, any Holder or any such
controlling or affiliated Person in connection with defending or investigating
any such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement (or any
amendment thereto) pursuant to which Exchange Securities or Registrable
Securities were registered under the 1933 Act, including all documents
incorporated therein by reference, or caused by any omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, or caused by any untrue statement or
alleged untrue statement of a material fact contained in any Prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to state
therein a material fact necessary to make the statements therein in light of the
circumstances under which they were made not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission based upon information
relating to any Initial Purchaser or any Holder furnished to the Company in
writing by any Initial Purchaser or any selling Holder expressly for use
therein. In connection with any Underwritten Offering permitted by Section 3 of
this Agreement, the Company will also indemnify the Underwriters, if any,
selling brokers, dealers and similar securities industry professionals
participating in the distribution, their officers and directors and each Person
who controls such Persons (within the meaning of the 1933 Act and the 1934 Act)
to the same extent as provided above with respect to the indemnification of the
Holders, if requested in connection with any Registration Statement.
(b) Each Holder agrees, severally and not jointly, to indemnify and hold
harmless the Company, the Initial Purchasers and the other selling Holders, and
each of their respective directors, officers who sign the Registration Statement
and each Person, if any, who controls the Company, any Initial Purchaser and any
other selling Holder within the meaning of either Section 15 of the 1933 Act or
Section 20 of the 1934 Act to the same extent as the foregoing indemnity from
the Company to the Initial Purchasers and the Holders, but only with reference
to information relating to such Holder furnished to the Company in writing by
such Holder expressly for use in any Registration Statement (or any amendment
thereto) or any Prospectus (or any amendment or supplement thereto).
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any Person in respect of which indemnity may be
sought pursuant to either paragraph (a) or paragraph (b) above, such Person (the
"indemnified party") shall promptly notify the Person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others
12
<PAGE> 14
the indemnifying party may designate in such proceeding and shall pay the fees
and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for (a) the fees and expenses of more than one separate
firm (in addition to any local counsel) for the Initial Purchasers and all
Persons, if any, who control the Initial Purchasers within the meaning of either
Section 15 of the 1933 Act or Section 20 of the 1934 Act, (b) the fees and
expenses of more than one separate firm (in addition to any local counsel) for
the Company, its directors, its officers who sign the Registration Statement and
each Person, if any, who controls the Company within the meaning of either such
Section and (c) the fees and expenses of more than one separate firm (in
addition to any local counsel) for all Holders and all Persons, if any, who
control any Holders within the meaning of either such Section, and that all such
fees and expenses shall be reimbursed as they are incurred. In such case
involving the Initial Purchasers and Persons who control the Initial Purchasers,
such firm shall be designated in writing by Goldman, Sachs & Co. In such case
involving the Holders and such Persons who control Holders, such firm shall be
designated in writing by the Majority Holders. In all other cases, such firm
shall be designated by the Company. The indemnifying party shall not be liable
for any settlement of any proceeding effected without its written consent but,
if settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed the indemnified party for such fees and expenses of counsel in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which such indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party, unless such
settlement (i) includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding; provided
that such unconditional release may be subject to a parallel release of a
claimant or plaintiff by such indemnified party from all liability in respect of
claims or counterclaims asserted by such indemnified party and (ii) does not
include a statement as to, or an admission of, fault, culpability or a failure
to act by or on behalf of any indemnified party.
(d) If the indemnification provided for in paragraph (a) or paragraph
(b) of this Section 4 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities, then each indemnifying
party under such paragraph, in lieu of indemnifying such indemnified party
thereunder, shall contribute to the amount paid or payable
13
<PAGE> 15
by such indemnified party as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the relative fault
of the indemnifying party or parties on the one hand and of the indemnified
party or parties on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative fault of the
Company and the Holders shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Holders and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Holders' obligations to contribute pursuant to this
Section 5(d) are several in proportion to the aggregate principal amount of
Registrable Securities of such Holder that were registered pursuant to a
Registration Statement.
(e) The Company and each Holder agree that it would not be just or
equitable if contribution pursuant to this Section 5 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) above. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages
and liabilities referred to in paragraph (d) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 5, no Holder shall be required to indemnify or contribute any amount in
excess of the amount by which the total price at which Registrable Securities
were sold by such Holder exceeds the amount of any damages that such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 5 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
The indemnity and contribution provisions contained in this Section 5
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Initial Purchaser, any Holder or any Person controlling any Initial
Purchaser or any Holder, or by or on behalf of the Company, its officers or
directors or any Person controlling the Company, (iii) acceptance of any of the
Exchange Securities and (iv) any sale of Registrable Securities pursuant to a
Shelf Registration Statement.
6. Miscellaneous.
(a) No Inconsistent Agreements. The Company has not entered into, and on
or after the date of this Agreement will not enter into, any agreement which is
inconsistent with the rights granted to the Holders of Registrable Securities in
this Agreement or otherwise conflicts with the provisions hereof. The rights
granted to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's other
issued and outstanding securities under any such agreements.
(b) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or
14
<PAGE> 16
consents to departures from the provisions hereof may not be given unless the
Company has obtained the written consent of Holders of at least a majority in
aggregate principal amount of the outstanding Registrable Securities affected by
such amendment, modification, supplement, waiver or consent; provided, however,
that no amendment, modification, supplement, waiver or consents to any departure
from the provisions of Section 5 hereof shall be effective as against any Holder
of Registrable Securities unless consented to in writing by such Holder.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder to
the Company by means of a notice given in accordance with the provisions of this
Section 6(c), which address initially is, with respect to the Initial
Purchasers, the address set forth in the Purchase Agreement; and (ii) if to the
Company, initially at the Company's address set forth in the Purchase Agreement
and thereafter at such other address, notice of which is given in accordance
with the provisions of this Section 6(c).
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; two business days
after being deposited in the mail, postage prepaid, if mailed; when answered
back, if telexed; when receipt is acknowledged, if telecopied; and on the next
business day if timely delivered to an air courier guaranteeing overnight
delivery.
Copies of all such notices, demands, or other communications shall be
concurrently delivered by the person giving the same to the Trustee, at the
address specified in the Indenture.
(d) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders; provided that nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Registrable Securities
in violation of the terms of the Purchase Agreement. If any transferee of any
Holder shall acquire Registrable Securities, in any manner, whether by operation
of law or otherwise, such Registrable Securities shall be held subject to all of
the terms of this Agreement, and by taking and holding such Registrable
Securities such person shall be conclusively deemed to have agreed to be bound
by and to perform all of the terms and provisions of this Agreement and such
person shall be entitled to receive the benefits hereof. The Initial Purchasers
(in their capacity as Initial Purchasers) shall have no liability or obligation
to the Company with respect to any failure by a Holder to comply with, or any
breach by any Holder of, any of the obligations of such Holder under this
Agreement.
(e) Purchases and Sales of Securities. The Company shall not, and shall
use its best efforts to cause its affiliates (as defined in Rule 405 under the
1933 Act) not to, purchase and then resell or otherwise transfer any Securities.
(f) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company, on the one
hand, and the Initial Purchasers, on the other hand, and each Holder shall have
the right to enforce such agreements
15
<PAGE> 17
directly to the extent it deems such enforcement necessary or advisable to
protect its rights or the rights of Holders hereunder.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the
principles of conflicts or choices of law thereof.
(j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
16
<PAGE> 18
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
NEXTEL COMMUNICATIONS, INC.
By: /s/ Thomas J. Sidman
--------------------------------
Name: Thomas J. Sidman
Title: Senior Vice President
Confirmed and accepted as of
the date first above written:
GOLDMAN, SACHS & CO.,
as representative of the several purchasers
named in the Purchase Agreement referred
to herein
By:/s/ Authorized Signatory
---------------------------------
Name:
----------------------------
Title:
---------------------------
17
<PAGE> 1
Exhibit 4.3
[Conformed copy]
File No. 28692-00500
================================================================================
AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of
November 9, 1999
--------------
NEXTEL COMMUNICATIONS, INC.,
NEXTEL FINANCE COMPANY
--------------
CHASE SECURITIES INC.
BANC OF AMERICA SECURITIES LLC,
as Joint Book Managers and Co-Lead Arrangers
--------------
CHASE SECURITIES INC.,
as Syndication Agent
--------------
BANC OF AMERICA SECURITIES LLC
BARCLAYS CAPITAL (the investment banking division of Barclays Bank Plc),
as Documentation Agents
--------------
CHASE SECURITIES INC.
BANC OF AMERICA SECURITIES LLC
BARCLAYS CAPITAL (the investment banking division of Barclays Bank Plc)
TD SECURITIES (USA) INC.
THE BANK OF NOVA SCOTIA
CREDIT SUISSE FIRST BOSTON
DEUTSCHE BANK SECURITIES INC.
as Arrangers
--------------
TORONTO DOMINION (TEXAS) INC.,
as Administrative Agent
THE CHASE MANHATTAN BANK,
as Collateral Agent
================================================================================
<PAGE> 2
TABLE OF CONTENTS
PAGE
----
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms...................................................1
SECTION 1.02. Classification of Loans and Borrowings.........................28
SECTION 1.03. Terms Generally................................................28
SECTION 1.04. Accounting Terms; GAAP.........................................29
SECTION 1.05. Tax Sharing Agreement..........................................29
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments....................................................29
SECTION 2.02. Loans and Borrowings...........................................33
SECTION 2.03. Requests for Borrowings........................................33
SECTION 2.04. Letters of Credit..............................................34
SECTION 2.05. Funding of Borrowings..........................................38
SECTION 2.06. Interest Elections.............................................38
SECTION 2.07. Termination and Reduction of Commitments.......................40
SECTION 2.08. Repayment of Loans; Evidence of Debt...........................42
SECTION 2.09. Prepayment of Loans............................................46
SECTION 2.10. Fees...........................................................51
SECTION 2.11. Interest.......................................................53
SECTION 2.12. Alternate Rate of Interest.....................................54
SECTION 2.13. Increased Costs................................................54
SECTION 2.14. Break Funding Payments.........................................55
SECTION 2.15. Taxes..........................................................56
SECTION 2.16. Payments Generally; Pro Rata Treatment; Sharing of Set-Offs....57
SECTION 2.17. Mitigation Obligations; Replacement of Lenders.................59
ARTICLE III
GUARANTEE BY NCI
SECTION 3.01. The Guarantee..................................................60
SECTION 3.02. Obligations Unconditional......................................60
SECTION 3.03. Reinstatement..................................................61
(i)
<PAGE> 3
SECTION 3.04. Subrogation....................................................61
SECTION 3.05. Remedies.......................................................62
SECTION 3.06. Instrument for the Payment of Money............................62
SECTION 3.07. Continuing Guarantee...........................................62
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Organization; Powers...........................................62
SECTION 4.02. Authorization; Enforceability..................................62
SECTION 4.03. Governmental Approvals; No Conflicts...........................63
SECTION 4.04. Financial Condition; No Material Adverse Change................63
SECTION 4.05. Properties.....................................................64
SECTION 4.06. Litigation and Environmental Matters...........................64
SECTION 4.07. Compliance with Laws and Agreements............................65
SECTION 4.08. Investment and Holding Company Status..........................65
SECTION 4.09. Taxes..........................................................65
SECTION 4.10. ERISA..........................................................65
SECTION 4.11. Disclosure.....................................................65
SECTION 4.12. Material Agreements and Liens..................................66
SECTION 4.13. Regulatory Matters.............................................66
SECTION 4.14. Subsidiaries...................................................67
SECTION 4.15. Capitalization of Credit Parties...............................68
SECTION 4.16. Public Note Indentures.........................................68
SECTION 4.17. Certain Additional Agreements..................................68
ARTICLE V
CONDITIONS
SECTION 5.01. Effective Date.................................................68
SECTION 5.02. Each Extension of Credit.......................................70
ARTICLE VI
AFFIRMATIVE COVENANTS
SECTION 6.01. Financial Statements and Other Information.....................71
SECTION 6.02. Notices of Material Events.....................................73
SECTION 6.03. Existence; Conduct of Business.................................74
SECTION 6.04. Payment of Obligations.........................................75
SECTION 6.05. Maintenance of Properties; Insurance...........................75
SECTION 6.06. Books and Records; Inspection Rights...........................75
SECTION 6.07. Fiscal Year....................................................75
(ii)
<PAGE> 4
SECTION 6.08. Compliance with Laws...........................................75
SECTION 6.09. Use of Proceeds................................................75
SECTION 6.10. Hedging Agreements.............................................76
SECTION 6.11. Certain Obligations Respecting Subsidiaries and
Collateral Security..........................................76
SECTION 6.12. Designation of Off-Balance Sheet Companies.....................77
ARTICLE VII
NEGATIVE COVENANTS
SECTION 7.01. Indebtedness...................................................79
SECTION 7.02. Liens..........................................................82
SECTION 7.03. Fundamental Changes............................................83
SECTION 7.04. Investments and Acquisitions; Hedging Agreements...............85
SECTION 7.05. Restricted Payments............................................88
SECTION 7.06. Transactions with Affiliates...................................89
SECTION 7.07. Restrictive Agreements.........................................90
SECTION 7.08. Certain Financial and Other Covenants..........................90
SECTION 7.09. Lines of Business, Etc.........................................91
SECTION 7.10. Modifications to Certain Agreements............................92
ARTICLE VIII
EVENTS OF DEFAULT.............................................93
ARTICLE IX
THE AGENTS....................................................96
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Notices.......................................................98
SECTION 10.02. Waivers; Amendments...........................................99
SECTION 10.03. Expenses; Indemnity; Damage Waiver...........................101
SECTION 10.04. Successors and Assigns.......................................103
SECTION 10.05. Survival.....................................................106
SECTION 10.06. Counterparts; Integration; Effectiveness.....................106
SECTION 10.07. Severability.................................................107
SECTION 10.08. Right of Setoff..............................................107
SECTION 10.09. Governing Law; Jurisdiction; Consent to Service of Process...107
SECTION 10.10. WAIVER OF JURY TRIAL.........................................108
(iii)
<PAGE> 5
SECTION 10.11. Headings.....................................................108
SECTION 10.12. Confidentiality..............................................108
SECTION 10.13. Designation as Credit Facility...............................109
SECTION 10.14. Obligations Senior...........................................109
SECTION 10.15. Release of Recordings in Real Estate Records.................109
(iv)
<PAGE> 6
SCHEDULES:
Schedule 2.01 -- Commitments
Schedule 4.06 -- Disclosed Matters
Schedule 4.12 -- Material Agreements and Liens
Schedule 4.13 -- License Compliance
Schedule 4.14 -- Subsidiaries
Schedule 4.15 -- Capitalization of NCI
Schedule 7.01 -- Existing Indebtedness and Disqualified Capital Stock
Schedule 7.07 -- Existing Restrictions
EXHIBITS:
Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Opinion of Special Counsel
Exhibit C -- Form of Amended and Restated Restricted Company Guarantee and
Security Agreement
Exhibit D -- Form of Joinder Agreement
(v)
<PAGE> 7
AMENDED AND RESTATED CREDIT AGREEMENT dated as of November 9, 1999
among NEXTEL COMMUNICATIONS, INC., NEXTEL FINANCE COMPANY and the other
RESTRICTED COMPANIES party hereto, the LENDERS party hereto, TORONTO DOMINION
(TEXAS) INC., as Administrative Agent, and THE CHASE MANHATTAN BANK, as
Collateral Agent.
Nextel Communications, Inc., Nextel Finance Company, the Subsidiary
Guarantors, the lenders named therein (including certain of the Lenders
hereunder), Toronto Dominion (Texas) Inc., as the Administrative Agent, and The
Chase Manhattan Bank, as the Collateral Agent, are party to a Credit Agreement
dated as of March 12, 1998 (as heretofore modified and supplemented and in
effect on the date hereof immediately before giving effect to the amendment and
restatement contemplated hereby, the "EXISTING CREDIT AGREEMENT"). Nextel
Finance Company has requested that the Lenders party hereto amend the Existing
Credit Agreement to provide (i) for the extension of credit to it (by means of
loans and letters of credit) in an aggregate principal or face amount equal to
$5,000,000,000 (which, in the circumstances contemplated by Section 2.01(e), may
be increased to $6,000,000,000), under the guarantee of Nextel Communications,
Inc. (as provided in Article III) and the other Restricted Companies party
hereto (as provided in the Amended and Restated Restricted Company Guarantee and
Security Agreement hereinafter referred to), which credit shall be used, among
other purposes, to extend and renew amounts outstanding under the Existing
Credit Agreement, to refinance certain existing indebtedness of Nextel
Communications, Inc. and Nextel Finance Company, and to make investments,
acquisitions and capital expenditures and (ii) for certain other modifications
to the Existing Credit Agreement.
In that connection, the parties wish to amend and restate the
Existing Credit Agreement and, accordingly, the parties hereto hereby agree that
the Existing Credit Agreement shall be amended and restated as of the date
hereof (but subject to Section 5.01) in its entirety as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINED TERMS. As used in this Agreement, the
following terms have the meanings specified below:
"ADDITIONAL EQUITY CAPITAL" means, on any date, (a) the aggregate
amount of equity capital, other than Permanent Equity Capital, contributed to
the Borrower in cash after October 9, 1997 MINUS (b) the aggregate amount of
Restricted Payments made by the Borrower to NCI in cash after October 9, 1997,
for any of the purposes described in Section 7.05(d). The aggregate amount of
Additional Equity Capital on October 31, 1999 was $2,527,049,387.
"ADJUSTED BASE RATE" means, for any day, a rate per annum equal to
the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2
CREDIT AGREEMENT
<PAGE> 8
- 2 -
of 1%. Any change in the Adjusted Base Rate due to a change in the Prime Rate or
the Federal Funds Effective Rate shall be effective from and including the
effective date of such change in the Prime Rate or the Federal Funds Effective
Rate, respectively.
"ADJUSTED LIBO RATE" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"ADMINISTRATIVE AGENT" means Toronto Dominion (Texas) Inc., in its
capacity as administrative agent for the Lenders hereunder.
"ADMINISTRATIVE QUESTIONNAIRE" means an Administrative Questionnaire
in a form supplied by the Administrative Agent.
"AFFILIATE" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"AGENTS" means the Administrative Agent and the Collateral Agent.
"ANNUALIZED OPERATING CASH FLOW" means, as at any day, Operating
Cash Flow for the fiscal quarter ending on or most recently ended prior to such
day multiplied by 4.
"APPLICABLE PERCENTAGE" means (a) with respect to any Revolving
Credit Lender for purposes of Section 2.04 (or Section 10.03(c), to the extent
relating to Letters of Credit), the percentage of the total Revolving Credit
Commitments represented by such Lender's Revolving Credit Commitment and (b)
with respect to any Lender in respect of any indemnity claim under Section
10.03(c) arising out of an action or omission of an Agent under this Agreement
or any other Loan Document, the percentage of the total Commitments of all
Classes hereunder represented by the aggregate amount of such Lender's
Commitment of all Classes hereunder. If the Commitments hereunder have
terminated or expired, the Applicable Percentages shall be determined based upon
the Commitments most recently in effect, giving effect to any assignments.
"APPLICABLE RATE" means (a) in the case of Tranche B Term Loans, for
any day, 2.375% with respect to any Base Rate Loan and 3.375% with respect to
any Eurodollar Loan, (b) in the case of Tranche C Term Loans, for any day,
2.625% with respect to any Base Rate Loan and 3.625% with respect to any
Eurodollar Loan, (c) in the case of Incremental Facility Loans for any Series,
such rates of interest as shall be agreed upon at the time Incremental Facility
Loan Commitments of such Series are established, and (d) in the case of
Revolving Credit Loans and Tranche A Term Loans, for any day, the applicable
rate per annum set forth below under the caption "Base Rate Spread" or
"Eurodollar Spread", as applicable, based upon the Total Indebtedness to Cash
Flow Ratio as at the last day of the fiscal quarter most recently ended as to
which NCI has delivered financial statements pursuant to Section 6.01:
CREDIT AGREEMENT
<PAGE> 9
- 3 -
<TABLE>
<CAPTION>
TOTAL INDEBTEDNESS TO CASH FLOW RATIO BASE RATE SPREAD EURODOLLAR SPREAD
- - ----------------------------------------------------- ---------------------------- ----------------------------
<S> <C> <C>
Greater than 8.00 to 1 1.50% 2.50%
- - ----------------------------------------------------- ---------------------------- ----------------------------
Greater than 7.00 to 1 and
less than or equal to
8.00 to 1 1.25% 2.25%
- - ----------------------------------------------------- ---------------------------- ----------------------------
Greater than 6.00 to 1 and
less than or equal to
7.00 to 1 1.00% 2.00%
- - ----------------------------------------------------- ---------------------------- ----------------------------
Greater than 5.00 to 1 and
less than or equal to
6.00 to 1 0.75% 1.75%
- - ----------------------------------------------------- ---------------------------- ----------------------------
Greater than 4.00 to 1 and
less than or equal to
5.00 to 1 0.50% 1.50%
- - ----------------------------------------------------- ---------------------------- ----------------------------
Less than or equal to
4.00 to 1 0.25% 1.25%
- - ----------------------------------------------------- ---------------------------- ----------------------------
</TABLE>
Each change in the "Applicable Rate" based upon any change in the
Total Indebtedness to Cash Flow Ratio shall become effective for purposes of the
accrual of interest hereunder on the date three Business Days after the delivery
to the Administrative Agent of the financial statements of NCI and its
subsidiaries (and of the Restricted Companies) for the most recently ended
fiscal quarter pursuant to Section 6.01(c), and shall remain effective for such
purpose until three Business Days after the next delivery of such financial
statements to the Administrative Agent hereunder, PROVIDED that, notwithstanding
the foregoing, until the date six months after the Effective Date, the
Applicable Rate for Revolving Credit Loans and Tranche A Term Loans shall be the
highest rates provided for in the schedule above.
Notwithstanding the foregoing, if the Applicable Rate for either
Type of any Series of Incremental Facility Loans is greater than .25% above the
dollar-weighted average Applicable Rates for such Type of Tranche B Term Loans
and Tranche C Term Loans (after giving effect to any prior increase of such
Applicable Rates pursuant to this paragraph), the Applicable Rates for such Type
of Tranche B Term Loans and Tranche C Term Loans will be automatically adjusted
upwards on the date upon which the Incremental Facility Commitments of such
Series are established pursuant to Section 2.01(e) so that the Applicable Rate
for such Type of such Series of Incremental Facility Loans is not greater than
.25% above such dollar-weighted average Applicable Rates for such Type of
Tranche B Term Loans and Tranche C Term Loans (such adjustment upward to in any
case maintain the existing spread between the Applicable Rates for such Type of
Tranche B Term Loans and Tranche C Term Loans). For purposes hereof, the
"DOLLAR-WEIGHTED AVERAGE APPLICABLE RATES" for either Type of Tranche B Term
Loans and Tranche C Term Loans shall be determined at any time by (A) adding the
product of the then-outstanding aggregate principal amount of Tranche B Term
Loans MULTIPLIED BY the then Applicable Rate for such Type for Tranche B Term
Loans and the product of the then-outstanding aggregate principal amount of
Tranche C Term Loans MULTIPLIED BY the then Applicable Rate for such Type for
Tranche C Term Loans and (B) dividing the result of such addition by the
then-outstanding aggregate principal amount of Tranche B Term Loans and
Tranche C Term Loans.
CREDIT AGREEMENT
<PAGE> 10
- 4 -
"APPROVED FUND" means, with respect to any Lender that is a fund
that invests in commercial loans, any other fund that invests in commercial
loans and is managed or advised by the same investment advisor as such Lender or
by an Affiliate of such investment advisor.
"ARRANGERS" means Chase Securities Inc., Banc of America Securities
LLC, Barclays Capital, the investment banking division of Barclays Bank PLC, TD
Securities (USA) Inc., The Bank of Nova Scotia, Credit Suisse First Boston and
Deutsche Bank Securities Inc.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 10.04), and accepted by the Administrative Agent,
in the form of Exhibit A or any other form approved by the Administrative Agent.
"ATTRIBUTABLE INDEBTEDNESS" means, with respect to any Sale and
Leaseback Transaction as at any date of determination, the greater of (a) the
fair market value of the property subject to such arrangement and (b) the
present value (discounted at the rate of interest implicit in such transaction)
of the total obligations of the lessee for rental payments during the remaining
term of the lease included in such Sale and Leaseback Transaction (including any
period for which such lease has been extended).
"AUTHORIZATIONS" means all validations, exemptions, franchises,
waivers, approvals, orders or authorizations, consents, licenses, certificates
and permits from, the FCC, any PUC and any other Federal, state or local
regulatory or governmental bodies and authorities, including any subdivision
thereof.
"AVERAGE LIFE TO MATURITY" means, as at any day with respect to any
Indebtedness or Disqualified Capital Stock, the quotient obtained by dividing
(a) the sum of the products of (i) the number of years from such day to the date
or dates of each successive principal payment of such Indebtedness or mandatory
redemption date of such Disqualified Capital Stock multiplied by (ii) the amount
of each such principal or redemption payment by (b) the sum of all such
principal or redemption payments. The Average Life to Maturity of commitment
reductions shall be determined in like manner as if the relevant commitments
were at all times fully drawn.
"BASE RATE", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted Base Rate.
"BOARD" means the Board of Governors of the Federal Reserve System
of the United States of America.
"BORROWER" means Nextel Finance Company, a Delaware corporation.
"BORROWING" means Loans of a particular Class of the same Type,
made, converted or continued on the same date and, in the case of Eurodollar
Loans, as to which a single Interest Period is in effect.
CREDIT AGREEMENT
<PAGE> 11
- 5 -
"BORROWING REQUEST" means a request by the Borrower for a Borrowing
in accordance with Section 2.03.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to remain closed; PROVIDED that, when used in connection with a Eurodollar Loan,
the term "Business Day" shall also exclude any day on which banks are not open
for dealings in U.S. dollar deposits in the London interbank market.
"CAPITAL EXPENDITURES" means, for any period, the sum for the
Restricted Companies (or, as the case may be, for NCI and the Restricted
Companies) of the aggregate amount of expenditures (including the aggregate
amount of Capital Lease Obligations incurred during such period) made to acquire
or construct fixed assets, plant and equipment (including renewals, improvements
and replacements, but excluding repairs) during such period computed in
accordance with GAAP. "Capital Expenditures" for the Restricted Companies shall
be determined on a combined basis, and for NCI and the Restricted Companies
shall be determined on a consolidated basis (excluding the Unrestricted
Companies), in each case without duplication in accordance with GAAP.
"CAPITAL LEASE OBLIGATIONS" of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"CHANGE IN CONTROL" means any of the following: (a) any of the
Restricted Companies ceasing to be a subsidiary of NCI (other than pursuant to a
Disposition permitted under this Agreement or to which the Required Lenders
shall have consented), (b) the occurrence of a "Change of Control" under and as
defined in the Public Note Indentures, or any other similar event (howsoever
defined) requiring the prepayment, redemption or offer to repurchase of any
Indebtedness or capital stock, (c) any Person or group (within the meaning of
the Securities Exchange Act of 1934 and the rules of the Securities and Exchange
Commission thereunder as in effect on the date hereof) shall acquire or own,
directly or indirectly, beneficially or of record, shares representing more than
50% of the ordinary voting power represented by the issued and outstanding
voting capital stock of NCI, or (d) a majority of the seats (other than vacant
seats) on the board of directors of NCI shall be occupied by Persons who were
neither (i) nominated by the board of directors of NCI nor (ii) appointed by
directors so nominated.
"CHANGE IN LAW" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender or
Issuing Bank (or, for purposes of Section 2.13(b), by any lending office of such
Lender or by such Lender's or Issuing Bank's holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
CREDIT AGREEMENT
<PAGE> 12
- 6 -
"CLASS", when used in reference to any Loan, Borrowing or
Commitment, refers to whether such Loan, the Loans comprising such Borrowing or
the Loans that a Lender holding such Commitment is obligated to make, are
Revolving Credit Loans, Tranche A Term Loans, Tranche B Term Loans, Tranche C
Term Loans or Incremental Facility Loans of any Series.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time.
"COLLATERAL" means all cash and other property in which the
Collateral Agent has a Lien (whether or not perfected under applicable law and
whether or not such cash or other property is in the possession, or under the
control, of the Collateral Agent) under any of the Security Documents, including
all "Collateral" under and as defined in the Restricted Company Guarantee and
Security Agreement.
"COLLATERAL AGENT" means The Chase Manhattan Bank, in its capacity
as Collateral Agent for the Lenders under the Security Documents.
"COMMITMENTS" means the Revolving Credit Commitments, the Tranche A
Term Loan Commitments, the Tranche B Term Loan Commitments, the Tranche C Term
Loan Commitments and the Incremental Facility Loan Commitments of any Series.
"CONTROL" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"CREDIT PARTIES" means NCI and the Restricted Companies.
"DEBT SERVICE" means, for any period, the sum for the Restricted
Companies (or, as the case may be, for NCI and the Restricted Companies) of the
following: (a) the amount, if any, by which the aggregate principal amount of
Revolving Credit Loans (and, if applicable, Incremental Facility Loans of any
Series that are in the form of revolving credit loans) outstanding hereunder at
the beginning of such period shall exceed the aggregate amount of the Revolving
Credit Commitments (and commitments to make Incremental Facility Loans of any
Series that are to be revolving credit loans) scheduled pursuant to Section 2.07
(or pursuant to the provisions of this Agreement applicable to reductions of
commitments for Incremental Facility Loans of any Series that are to be
revolving credit loans) to be in effect at the end of such period PLUS (b) all
regularly scheduled payments or regularly scheduled mandatory prepayments of
principal of any other Indebtedness (including the Tranche A Term Loans,
Tranche B Term Loans, Tranche C Term Loans and, if applicable, Incremental
Facility Loans of any Series that are in the form of term loans, and the
principal component of any payments in respect of Capital Lease Obligations, but
excluding any prepayments made pursuant to Section 2.09) made during such period
PLUS (c) all Interest Expense for such period. "Debt Service" for the Restricted
Companies shall be determined on a combined basis, and for NCI and the
Restricted Companies shall be determined on a consolidated basis (excluding the
Unrestricted Companies), in each case without duplication in accordance with
GAAP.
CREDIT AGREEMENT
<PAGE> 13
- 7 -
"DEFAULT" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"DISCLOSED MATTERS" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 4.06.
"DISPOSITION" means any sale, assignment, transfer or other
disposition of any property (whether now owned or hereafter acquired) by any
Restricted Company to any other Person excluding (a) any sale, assignment,
transfer or other disposition of any property sold or disposed of in the
ordinary course of business and on ordinary business terms and (b) any sale,
assignment, transfer or other disposition (or series of related sales,
assignments, transfers or other dispositions) of any property involving net
consideration of less than $2,000,000.
"DISPOSITION INVESTMENT" means, with respect to any Disposition, any
promissory notes or other evidences of indebtedness or investments received by
the Restricted Companies in connection with such Disposition.
"DISQUALIFIED CAPITAL STOCK" means any capital stock issued by NCI
that, by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable), or upon the happening of any event, matures or
is mandatorily redeemable, for cash or other property (other than capital stock
of NCI that is not Disqualified Capital Stock) pursuant to a sinking fund
obligation or otherwise, or is redeemable, in whole or in part, at the option of
the holder thereof for cash or other property (other than for capital stock of
NCI that is not Disqualified Capital Stock), in each case on or prior to the
final stated maturity of the Loans hereunder, PROVIDED that any capital stock
that provides that it may be redeemed at the option of the holders thereof in
the event of a Change in Control shall not be deemed to be Disqualified Capital
Stock as a consequence of such provision.
"EFFECTIVE DATE" means the date on which the conditions specified in
Section 5.01 are satisfied (or waived in accordance with Section 10.02), and the
initial Borrowing hereunder shall be made.
"ENHANCED SMR SYSTEM" means a wide-area network of specialized
mobile radio base stations that employs digital and other advanced, spectrally
efficient communications technologies to provide a full range of communications
services including voice, dispatch, interconnected telephone and data services.
"ENVIRONMENTAL LAWS" means all laws, rules, regulations, policies,
codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters, including FCC rules and policies
concerning RF Emissions.
"ENVIRONMENTAL LIABILITY" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of any Restricted Company
directly or indirectly resulting from or based upon (a) violation of any
CREDIT AGREEMENT
<PAGE> 14
- 8 -
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials or RF Emissions, (c) exposure
to any Hazardous Materials or RF Emissions, (d) the release or threatened
release of any Hazardous Materials into the environment or (e) any contract,
agreement or other consensual arrangement pursuant to which liability is assumed
or imposed with respect to any of the foregoing.
"EQUITY RIGHTS" means, with respect to any Person, any
subscriptions, options, warrants, commitments, preemptive rights or agreements
of any kind (including any stockholders' or voting trust agreements) for the
issuance or sale of, or securities convertible into, any additional shares of
capital stock of any class, or partnership or other ownership interests of any
type in, such Person.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA EVENT" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived), (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived, (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan, (d) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan, (e) the receipt by the Borrower or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan, (f)
the incurrence by the Borrower or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan, or (g) the receipt by the Borrower or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
"EURODOLLAR", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"EVENT OF DEFAULT" has the meaning assigned to such term in
Article VIII.
"EXCESS CASH FLOW" means, for any fiscal year of the Restricted
Companies, the excess of (a) Operating Cash Flow for such fiscal year OVER (b)
the sum of (i) Debt Service for the Restricted Companies for such fiscal year
plus (ii) the aggregate amount of all Capital Expenditures for the Restricted
Companies made during such fiscal year, except for any such Capital Expenditures
to the
CREDIT AGREEMENT
<PAGE> 15
- 9 -
extent financed with the proceeds of Indebtedness incurred pursuant to Section
7.01(d) or 7.01(e) during such fiscal year and that is secured by Liens
permitted under Section 7.02(f) PLUS (iii) the aggregate amount paid, or
required to be paid, in cash in respect of income taxes during such fiscal year
PLUS (iv) the aggregate amount of Restricted Payments made by the Restricted
Companies to enable the payment of principal and interest in respect of Public
Notes, or the redemption price and dividends in respect of Disqualified Capital
Stock (other than any such Restricted Payments to the extent financed with the
proceeds of equity capital received by the Restricted Companies or Indebtedness
incurred pursuant to Section 7.01(e) during such fiscal year) PLUS (v)
$10,000,000.
"EXCLUDED SUBSIDIARY" means any subsidiary of a Restricted Company,
which subsidiary is not a Credit Party, as to which no holder or holders of any
Indebtedness of any of the Credit Parties (other than Indebtedness hereunder)
shall have the right (upon notice, lapse of time or both), which right shall not
have been waived, to declare a default in respect of such Indebtedness, or to
cause the payment thereof to be accelerated or payable prior to its final
scheduled maturity, by reason of the occurrence of a default with respect to any
Indebtedness of such subsidiary.
"EXCLUDED TAXES" means, with respect to either Agent, any Lender,
any Issuing Bank or any other recipient of any payment to be made by or on
account of any obligation of the Borrower hereunder, (a) income, net worth or
franchise taxes imposed on (or measured by) its net income or net worth by the
United States of America, or by the jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or, in the
case of any Lender, in which its applicable lending office is located, (b) any
branch profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction in which the Borrower is located and (c) in
the case of a Foreign Lender (other than an assignee pursuant to a request by
the Borrower under Section 2.17(b)), any withholding tax that is imposed on
amounts payable to such Foreign Lender at the time such Foreign Lender becomes a
party to this Agreement or is attributable to such Foreign Lender's failure or
inability to comply with Section 2.15(e), except to the extent that such Foreign
Lender's assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 2.15(a).
"EXISTING CREDIT AGREEMENT" has the meaning assigned to such term in
the preamble.
"EXISTING PUBLIC NOTES" means the Public Notes outstanding on the
date hereof, i.e. the Public Notes issued pursuant to the indentures identified
in clauses (a) through (j) of the definition of "Public Note Indentures" in this
Section 1.01.
"FCC" means the Federal Communications Commission or any United
States Governmental Authority substituted therefor.
"FCC LICENSE" means any paging, mobile telephone, specialized mobile
radio, microwave, personal communications services or other license, permit,
consent, certificate of compliance, franchise, approval, waiver or authorization
granted or issued by the FCC, including any of the foregoing authorizing or
permitting the acquisition, construction or operation of any Mobile
Communications System.
CREDIT AGREEMENT
<PAGE> 16
- 10 -
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of l%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"FINAL ORDER" means an action by any Governmental Authority that has
not been reversed, stayed, enjoined, set aside, annulled, or suspended, and with
respect to which no requests are pending for administrative or judicial review,
reconsideration, appeal, or stay, and the time for filing any such requests and
the time for such Governmental Authority to set aside the action on its own
motion have expired.
"FINANCIAL OFFICER" means, with respect to NCI or the Borrower, the
chief financial officer, principal accounting officer, treasurer or controller
of NCI or the Borrower, as the case may be.
"FIRST TIER RESTRICTED COMPANY" means any Restricted Company that is
not a Wholly Owned Subsidiary of one or more other Restricted Companies.
"FIXED CHARGES RATIO" means, as at the last day of any fiscal
quarter, the ratio of (a) the sum of (i) Annualized Operating Cash Flow as at
such day PLUS (ii) the aggregate unutilized amount of the Revolving Credit
Commitments hereunder as at such day PLUS (iii) the amount of cash and cash
equivalents held by NCI and the Restricted Companies on such day to (b) the sum
of (i) Debt Service for NCI and the Restricted Companies for the period of four
fiscal quarters ending on such day PLUS (ii) the aggregate amount of Capital
Expenditures for NCI and the Restricted Companies made during such period,
except for any such Capital Expenditures to the extent financed with the
proceeds of Indebtedness incurred pursuant to Section 7.01(d) or 7.01(e) during
such fiscal year and that is secured by Liens permitted under Section 7.02(f)
PLUS (iii) the aggregate amount of Federal, state and local income taxes paid by
NCI and its subsidiaries in respect of such period.
"FOREIGN LENDER" means any Lender that is organized under the laws
of a jurisdiction other than that in which the Borrower is located. For purposes
of this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"GAAP" means generally accepted accounting principles in the United
States of America.
"GOVERNMENTAL AUTHORITY" means the government of the United States
of America, any other nation or any political subdivision thereof, whether state
or local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
CREDIT AGREEMENT
<PAGE> 17
- 11 -
"GUARANTEE" of or by any Person (the "GUARANTOR") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "PRIMARY OBLIGOR") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; PROVIDED, that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.
"HAZARDOUS MATERIALS" means all explosive or radioactive substances
or wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"HEDGING AGREEMENT" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"INCREMENTAL FACILITY AMENDMENT" means any amendment to this
Agreement pursuant to which Incremental Facility Loan Commitments of any Series
are established pursuant to Section 2.01(e).
"INCREMENTAL FACILITY LOAN" has the meaning assigned to such term in
Section 2.01(e).
"INCREMENTAL FACILITY LOAN COMMITMENT" means, collectively, the
Incremental Facility Revolving Loan Commitments of each Series and the
Incremental Facility Term Loan Commitments of each Series. The aggregate amount
of the Incremental Facility Loan Commitments of all Series shall not exceed
$1,000,000,000.
"INCREMENTAL FACILITY LOAN COMMITMENT TERMINATION DATE" means, with
respect to the Incremental Facility Loan Commitments of any Series, the date on
which the Incremental Facility Loan Commitments of such Series are to terminate,
as agreed to by the Borrower and the Incremental Facility Loan Lenders of such
Series at the time such Incremental Facility Loan Commitments are established
pursuant to Section 2.01(e).
"INCREMENTAL FACILITY LOAN LENDERS" means, in respect of any Series
of Incremental Facility Loans, (a) initially, the Lenders whose offers to make
Incremental Facility Loans of such Series shall have been accepted by the
Borrower in accordance with the provisions of Section 2.01(e) and (b)
thereafter, the Lenders from time to time holding Incremental Facility Loans of
such Series and/or Incremental Facility Loan Commitments of such Series after
giving effect to any assignments thereof permitted by Section 10.04.
CREDIT AGREEMENT
<PAGE> 18
- 12 -
"INCREMENTAL FACILITY REVOLVING LOAN" has the meaning assigned to
such term in Section 2.01(e).
"INCREMENTAL FACILITY REVOLVING LOAN COMMITMENT" means, with respect
to each Incremental Facility Lender of any Series, the commitment, if any, of
such Lender to make Incremental Facility Revolving Loans of such Series as such
commitment may be (a) reduced from time to time pursuant to Sections 2.07 and
2.09 and (b) reduced or increased from time to time pursuant to assignments by
or to such Lender pursuant to Section 10.04. The initial amount of each Lender's
Incremental Facility Revolving Loan Commitment of any Series will be specified
in the Incremental Facility Amendment for such Series, or will be set forth in
the Assignment and Acceptance pursuant to which such Lender shall have assumed
its Incremental Facility Revolving Loan Commitment of such Series.
"INCREMENTAL FACILITY TERM LOAN" has the meaning assigned to such
term in Section 2.01(e).
"INCREMENTAL FACILITY TERM LOAN COMMITMENT" means, with respect to
each Incremental Facility Loan Lender of any Series, the commitment, if any, of
such Lender to make Incremental Facility Term Loans of such Series hereunder.
The amount of each Lender's Incremental Facility Term Loan Commitment of any
Series will be specified in the Incremental Facility Amendment for such Series.
"INDEBTEDNESS" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money (whether by loan, the issuance and
sale of debt securities or the sale of property to another Person subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
from such Person), (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
under conditional sale or other title retention agreements relating to property
acquired by such Person, (d) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding current accounts
payable incurred in the ordinary course of business), (e) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (f) all Guarantees by such Person of Indebtedness of others, (g)
all Capital Lease Obligations of such Person, (h) all obligations, contingent or
otherwise, of such Person as an account party in respect of letters of credit
and letters of guaranty, (i) all obligations, contingent or otherwise, of such
Person in respect of bankers' acceptances and (j) in the case of the Restricted
Companies, the recourse portion, if any, of the Indebtedness of Off-Balance
Sheet Companies. The Indebtedness of any Person shall include the Indebtedness
of any other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person's ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness provide that such Person is not liable
therefor.
"INDEMNIFIED TAXES" means all Taxes other than (a) Excluded Taxes
and Other Taxes and (b) amounts constituting penalties or interest imposed with
respect to Excluded Taxes or Other Taxes.
CREDIT AGREEMENT
<PAGE> 19
- 13 -
"INFORMATION MEMORANDUM" means the Information Memorandum dated
October 1999 prepared by NCI in connection with the syndication of the
Commitments hereunder.
"INTEREST COVERAGE RATIO" means, at any day, the ratio of (a)
Annualized Operating Cash Flow as at such day to (b) Interest Expense for NCI
and the Restricted Companies for the period of four fiscal quarters ending on or
most recently ended prior to such day.
"INTEREST ELECTION REQUEST" means a request by the Borrower to
convert or continue a Borrowing in accordance with Section 2.06.
"INTEREST EXPENSE" means, for any period, the following:
(a) in the case of the Restricted Companies, the sum of (i) all
interest and fees in respect of Indebtedness accrued or capitalized during
such period, including the interest component of any payments in respect
of Capital Lease Obligations, but excluding any interest and fees not
required to be paid in cash during such period, plus (ii) all Restricted
Payments made by any Restricted Company to NCI during such period to
enable NCI to pay interest in respect of Indebtedness of NCI as permitted
by Section 7.05(b), plus (iii) the net amount payable (or minus the net
amount receivable) under Hedging Agreements during such period (whether or
not actually paid or received during such period); and
(b) in the case of NCI and the Restricted Companies, the sum of (i)
all interest and fees in respect of Indebtedness accrued or capitalized
during such period, including the interest component of any payments in
respect of Capital Lease Obligations, but excluding any interest and fees
not required to be paid in cash during such period, plus (ii) the net
amount payable (or minus the net amount receivable) under Hedging
Agreements during such period (whether or not actually paid or received
during such period).
"Interest Expense" for the Restricted Companies shall be determined on a
combined basis, and for NCI and the Restricted Companies shall be determined on
a consolidated basis (excluding the Unrestricted Companies), in each case
without duplication in accordance with GAAP.
"INTEREST PAYMENT DATE" means (a) with respect to any Base Rate
Loan, each Quarterly Date and (b) with respect to any Eurodollar Loan, the last
Business Day of the Interest Period applicable to the Borrowing of which such
Loan is a part and, in the case of a Eurodollar Borrowing with an Interest
Period of more than three months' duration, each Business Day prior to the last
day of such Interest Period that occurs at intervals of three months' duration
after the first day of such Interest Period.
"INTEREST PERIOD" means with respect to any Eurodollar Borrowing,
the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months (or, with the consent of each Lender of the relevant Class, twelve
months) thereafter, as the Borrower may elect; PROVIDED, that (i) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar
CREDIT AGREEMENT
<PAGE> 20
- 14 -
month, in which case such Interest Period shall end on the next preceding
Business Day and (ii) any Interest Period that commences on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period) shall end
on the last Business Day of the last calendar month of such Interest Period. For
purposes hereof, the date of a Borrowing initially shall be the date on which
such Borrowing is made and thereafter shall be the effective date of the most
recent conversion or continuation of such Borrowing. Notwithstanding the
foregoing,
(w) if any Interest Period for any Revolving Credit Borrowing (or
Incremental Facility Revolving Loan Borrowing of any Series) would
otherwise end after the Revolving Credit Maturity Date (or the final date
scheduled for termination of the Incremental Facility Revolving Loan
Commitments of such Series), such Interest Period shall end on the
Revolving Credit Maturity Date (or on such final date),
(x) no Interest Period for any Revolving Credit Borrowing (or
Incremental Facility Revolving Loan Borrowing of any Series) may commence
before and end after any Revolving Credit Commitment Reduction Date (or
date scheduled for reduction of the Incremental Facility Revolving Loan
Commitments of such Series) unless, after giving effect thereto, the
aggregate principal amount of Revolving Credit Loans having Interest
Periods that end after such Revolving Credit Commitment Reduction Date (or
Incremental Facility Revolving Loans of such Series having Interest
Periods that end after such reduction date) shall be equal to or less than
the aggregate principal amount of Revolving Credit Loans (or Incremental
Facility Revolving Loans of such Series) scheduled to be outstanding after
giving effect to the payments of principal required to be made on such
Revolving Credit Commitment Reduction Date (or such reduction date),
(y) no Interest Period for any Term Loan Borrowing of any Class may
commence before and end after any Principal Payment Date (or, in the case
of any Incremental Facility Term Loan Borrowing of any Series, any date
for payment of principal thereof) unless, after giving effect thereto, the
aggregate principal amount of the Term Loans of such Class having Interest
Periods that end after such Principal Payment Date (or such date for
payment of principal) shall be equal to or less than the aggregate
principal amount of the Term Loans of such Class scheduled to be
outstanding after giving effect to the payments of principal required to
be made on such Principal Payment Date (or on such date for payment of
principal),
(z) notwithstanding the foregoing clauses (w), (x) and (y), no
Interest Period shall have a duration of less than one month and, if the
Interest Period for any Eurodollar Loan would otherwise be a shorter
period, such Loan shall not be available hereunder as a Eurodollar Loan
for such period.
"ISSUING BANKS" mean Barclays Bank PLC, The Chase Manhattan Bank,
Bank of America, N.A. and The Toronto-Dominion Bank, in their capacity as the
issuers of Letters of Credit hereunder.
CREDIT AGREEMENT
<PAGE> 21
- 15 -
"JANUARY 1994 INDENTURE" means the Indenture referred to in clause
(b) of the definition of the term "Public Note Indentures" in this Section 1.01.
"JOINDER AGREEMENT" means a Joinder Agreement substantially in the
form of Exhibit E.
"LC DISBURSEMENT" means a payment made by an Issuing Bank pursuant
to a Letter of Credit.
"LC EXPOSURE" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or
on behalf of the Borrower at such time. The LC Exposure of any Revolving Credit
Lender at any time shall be its Applicable Percentage of the total LC Exposure
at such time.
"LENDERS" means (a) the Persons listed on Schedule 2.01, (b) any
Person that shall agree to become a party hereto as a "Lender" hereunder with a
commitment to make Incremental Facility Loans of any Series hereunder pursuant
to Section 2.01(e) and (c) any other Person that shall have become a party
hereto pursuant to an Assignment and Acceptance, other than any such Person that
ceases to be a party hereto pursuant to an Assignment and Acceptance.
"LETTER OF CREDIT" means any letter of credit issued pursuant to
this Agreement.
"LETTER OF CREDIT ACCOUNT" has the meaning assigned to such term in
the Restricted Company Guarantee and Security Agreement.
"LIBO RATE" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Telerate Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to U.S. dollar deposits in the London interbank
market) at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for U.S. dollar deposits with
a maturity comparable to such Interest Period. In the event that such rate is
not available at such time for any reason, then the "LIBO Rate" with respect to
such Eurodollar Borrowing for such Interest Period shall be the rate at which
U.S. dollar deposits of $5,000,000, and for a maturity comparable to such
Interest Period, are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"LICENSE COMPANY" means any Restricted Company that holds any FCC
Licenses or PUC Authorizations.
"LIEN" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
CREDIT AGREEMENT
<PAGE> 22
- 16 -
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party (other than a Restricted
Company) with respect to such securities.
"LOAN DOCUMENTS" means this Agreement, any promissory notes
evidencing Loans hereunder, the Security Documents and, as the context may
require, any Incremental Facility Amendment.
"LOANS" means the loans made by the Lenders to the Borrower pursuant
to this Agreement (including any Incremental Facility Loans of any Series).
"MASTER SITE COMMITMENT AGREEMENT" means the Master Site Commitment
Agreement made as of the 20th day of April, 1999, by and among NCI, Nextel of
New York, Inc., Nextel of California, Inc, Nextel of Texas, Inc., Nextel South
Corp., Nextel West Corp., Nextel Communications of the Mid-Atlantic, Inc., Tower
Parent Corp., SpectraSite Holdings, Inc. and Tower Asset Sub, Inc.
"MASTER SITE LEASE AGREEMENT" means the Master Site Lease Agreement
entered into as of the 20th day of April, 1999 between Nextel of New York, Inc.,
Nextel Communications of Mid-Atlantic, Inc., Nextel South Corp., Nextel of
Texas, Inc., Nextel West Corp., Nextel of California, Inc. and Tower Asset Sub,
Inc.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, assets, operations, prospects or condition, financial or otherwise, of
NCI and its subsidiaries, or of the Restricted Companies, in each case taken as
a whole, (b) the ability of any of NCI and the Restricted Companies to perform
any of their respective obligations under this Agreement or the other Loan
Documents or (c) the rights of or benefits available to the Lenders under this
Agreement and the other Loan Documents.
"MATERIAL INDEBTEDNESS" means Indebtedness (other than the Loans or
Letters of Credit), or obligations in respect of one or more Hedging Agreements,
of any one or more of the Credit Parties (or of any subsidiary of any Restricted
Company, other than an Excluded Subsidiary) in an aggregate principal amount
exceeding $25,000,000. For purposes of determining Material Indebtedness, the
"principal amount" of the obligations of any Person in respect of any Hedging
Agreement at any time shall be the maximum aggregate amount (giving effect to
any netting agreements) that such Person would be required to pay if such
Hedging Agreement were terminated at such time.
"MAXIMUM RECEIVABLES EXPOSURE" means, for any Permitted Receivable
Financing, the maximum aggregate face amount of Off-Balance Sheet Receivables
that all Receivable Financiers in respect thereof are required or entitled to
purchase, fund or otherwise finance.
"MOBILE COMMUNICATIONS BUSINESS" means the business consisting of
(a) owning, operating or managing one or more Mobile Communications Systems
(including any thereof on the 800 MHz, 900MHz or 1.8GHz bands) and (b) to the
extent ancillary thereto and not constituting a material part of the operations
as a whole, other communications businesses related thereto which utilize the
CREDIT AGREEMENT
<PAGE> 23
- 17 -
training or resources appurtenant to the operation of any of the foregoing,
including radio paging services or sales or servicing of radio equipment or
mechanical parts and mobile telephone services.
"MOBILE COMMUNICATIONS SYSTEM" means any SMR System, radio paging
system, mobile telephone system, cellular radio telecommunications system,
conventional mobile telephone system, personal communications system, data
transmission system or other radio communications system.
"MOODY'S" means Moody's Investors Service, Inc.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"NCI" means Nextel Communications, Inc., a Delaware corporation.
"NET CASH PAYMENTS" means, with respect to any Disposition, the
aggregate amount of all cash payments received by the Restricted Companies
directly or indirectly in connection with such Disposition, whether at the time
of such Disposition or after such Disposition under deferred payment
arrangements or investments entered into or received in connection with such
Disposition (including Disposition Investments); PROVIDED that
(a) Net Cash Payments shall be net of (i) the amount of any legal,
title and recording tax expenses, commissions and other fees and expenses
payable by the Restricted Companies in connection with such Disposition
and (ii) any Federal, state and local income or other taxes estimated to
be payable by the Restricted Companies as a result of such Disposition,
but only to the extent that on the date of such Disposition the Borrower
delivers a certificate of a Financial Officer setting forth a calculation
of the amount of such estimated taxes and delivers an amount of such Net
Cash Payments equal to such estimated taxes to the Collateral Agent to be
held in the Tax Proceeds Account until such payment of taxes is in fact
made, it being understood that to the extent the amount so deposited is
not applied to such payment of taxes by the March 15 of the year
immediately following the fiscal year in which such Disposition shall have
occurred, the remaining balance shall be treated as "Net Cash Payments"
for purposes of this Agreement and shall be applied in accordance with the
provisions of Section 2.09(b)(ii) (and, in the event the Borrower shall
elect, pursuant to Section 2.09(b)(ii)(y) to reinvest such remaining
balance into replacement assets, the twelve-month period provided for in
Section 2.09(b)(ii)(z) shall be measured from such March 15), and
(b) Net Cash Payments shall be net of any repayments by the
Restricted Companies of Indebtedness or other obligations to the extent
that (i) such Indebtedness or other obligations are secured by a Lien on
the property that is the subject of such Disposition and the transferee of
(or holder of a Lien on) such property requires that such Indebtedness or
other obligations be repaid as a condition to the purchase of such
property or (ii) such Indebtedness or other obligations require that they
be repaid as a condition to such Disposition.
"NET INCOME" means, for any period, the net income of the Restricted
Companies (determined on a combined basis without duplication in accordance with
GAAP) and treating as
CREDIT AGREEMENT
<PAGE> 24
- 18 -
operating expenses all amounts paid by the Restricted Companies to NCI pursuant
to the Overhead Services Agreement.
"NET PP&E" means, at any date, the aggregate net book value of the
property, plant and equipment of the Restricted Companies (determined on a
combined basis without duplication in accordance with GAAP) at the end of the
most recently-completed fiscal quarter.
"NEXTEL PARTNERS" means Nextel Partners, Inc., a Delaware
corporation and holder, directly or indirectly through one or more Non-Core
Companies, of all Non-Core Assets.
"NEXTEL PARTNERS AGREEMENT" means the Joint Venture Agreement dated
as of January 29, 1999 by and among Nextel Partners, Nextel Partners Operating
Corp., a Delaware corporation, and NWIP, as amended by an Amendment No. 1 dated
as of April 20, 1999.
"NON-CORE ASSETS" means, collectively, the assets that have been or
may in the future be transferred to NWIP or a Non-Core Company pursuant to the
Nextel Partners Agreement (including any "Option Sections" under and as defined
in said Agreement).
"NON-CORE COMPANY" means Nextel Partners and its subsidiaries.
"NWIP" means Nextel WIP Corp., a Delaware corporation and a Wholly
Owned Subsidiary of NCI that is an "Unrestricted Subsidiary" under the Public
Note Indentures.
"OFF-BALANCE SHEET ASSETS" means, collectively, Off-Balance Sheet
Receivables and Off-Balance Sheet Equipment.
"OFF-BALANCE SHEET COMPANY" means (a) any newly-formed subsidiary of
a Restricted Company, designated as an "Off-Balance Sheet Company" in accordance
with the provisions of Section 6.12 and (b) any subsidiary of an Off-Balance
Sheet Company. As of the date hereof, no Off-Balance Sheet Companies have been
designated.
"OFF-BALANCE SHEET EQUIPMENT" means subscriber equipment sold or
leased to customers of the Restricted Companies.
"OFF-BALANCE SHEET RECEIVABLES" means customer lease contracts (and
related rental payments), and other accounts receivable and related payments due
under the terms of customer service contracts, or as set forth in customer
account statements with customers of the Restricted Companies.
"OFF-BALANCE SHEET TRANSACTION" means any sale, transfer or other
assignment of Off-Balance Sheet Assets to facilitate "off-balance sheet" or
other secured financings of such Off-Balance Sheet Assets, excluding, however,
any sale of Off-Balance Sheet Equipment pursuant to a transaction permitted
under Section 7.03(i).
"OPERATING CASH FLOW" means, for any period, the sum, for the
Restricted Companies (determined on a combined basis without duplication in
accordance with GAAP), of the following (in
CREDIT AGREEMENT
<PAGE> 25
- 19 -
each case adjusted to exclude all extraordinary and unusual items, income or
loss attributable to equity in affiliates and non-cash minority interest
payments and receipts): (a) Net Income for such period PLUS (b) income tax
expense and Interest Expense (to the extent deducted in determining Net Income)
for such period PLUS (c) depreciation, amortization and other non-cash charges
(to the extent deducted in determining Net Income) for such period MINUS (d)
non-cash gains (to the extent included in determining Net Income) for such
period.
"OTHER TAXES" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement and the other
Loan Documents, PROVIDED that there shall be excluded from "Other Taxes" all
Excluded Taxes.
"OVERHEAD SERVICES AGREEMENT" means the Overhead Services Agreement
dated as of September 27, 1996 between the Restricted Companies and NCI.
"PART 90" means 47 CFR Part 90 of the Rules and Regulations of the
FCC in effect from time to time or such other parts or subparts that may be
substituted for or combined with said Part 90.
"PAYABLE IN CASH" means, in respect of the current dividends on any
Disqualified Capital Stock, that such dividends are required to be paid in cash
(i.e., only to the extent that NCI is not permitted to exercise any option to
have such dividends paid through the delivery of any non-cash consideration,
such as through the delivery of shares of capital stock of any class).
"PBGC" means the Pension Benefit Guaranty Corporation referred to
and defined in ERISA and any successor entity performing similar functions.
"PERMANENT EQUITY CAPITAL" means equity capital contributed to any
of the Restricted Companies in cash that is either (a) designated as such
pursuant to Section 4.15(b) or (b) in the case of any such capital contributed
after March 12, 1998, is designated, at the time of such contribution or at any
time thereafter, as "Permanent Equity Capital" for purposes of this Agreement in
a certificate of a Financial Officer of NCI delivered to each of the Agents.
"PERMITTED ENCUMBRANCES" means:
(a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 6.04;
(b) carriers', warehousemen's, mechanics', landlord's, lessor's,
materialmen's, repairmen's and other like Liens imposed by law, arising in
the ordinary course of business and securing obligations that are not
overdue by more than 30 days or are being contested in compliance with
Section 6.04;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
CREDIT AGREEMENT
<PAGE> 26
- 20 -
(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature, in each case in the ordinary
course of business;
(e) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not
materially detract from the value of the affected property or interfere
with the ordinary conduct of business of any Restricted Company;
(f) subleases of property with respect to which a Restricted Company
is the primary lessee, to the extent such subleases arise in the ordinary
course of business and do not interfere in any material respect with the
business of any Restricted Company;
(g) precautionary Uniform Commercial Code filings made with respect
to equipment or vehicles leased to the Restricted Companies in the
ordinary course of business under operating leases (i.e. leases not giving
rise to Capital Lease Obligations); and
(h) Uniform Commercial Code filings made with respect to the sale or
assignment of Off-Balance Sheet Receivables in connection with Off-Balance
Sheet Transactions permitted hereunder;
PROVIDED that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"PERMITTED INVESTMENTS" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America), in
each case maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from
the date of acquisition thereof and having, at such date of acquisition,
the highest credit rating obtainable from S&P or from Moody's;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within 180 days from the date of acquisition
thereof issued or guaranteed by or placed with, and money market deposit
accounts issued or offered by, (i) any domestic office of any commercial
bank organized under the laws of the United States of America or any State
thereof, Canada or any Province thereof, or any member state of the
European Union, which has a combined capital and surplus and undivided
profits of not less than $250,000,000 or (ii) any office of any of the
Arrangers (or Bank of America, N.A.) located in the United Kingdom or the
Bahamas; and
CREDIT AGREEMENT
<PAGE> 27
- 21 -
(d) fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (a) above and entered
into with a financial institution satisfying the criteria described in
clause (c) above.
"PERMITTED RECEIVABLE FINANCING" means any transaction involving one
or more sales, contributions or other conveyances by the Restricted Companies of
any Off-Balance Sheet Receivables to a special purpose entity (which may be a
subsidiary or Affiliate of the Restricted Companies), which special purpose
entity finances such sales, contributions or other conveyances by in turn
conveying an interest in such Off-Balance Sheet Receivables to one or more
Receivable Financiers, PROVIDED that (a) such transaction shall not involve any
recourse to any Restricted Company (other than such special purpose entity) for
any reason other than (i) repurchases of non-eligible Off-Balance Sheet
Receivables, (ii) indemnification for losses (including any adjustments for
dilutions), other than credit losses related to the Off-Balance Sheet
Receivables conveyed in such transaction, and (iii) payment of costs, fees,
expenses and indemnities relating to such transaction, (b) the terms of such
transaction, including the discount at which Off-Balance Sheet Receivables are
conveyed to any such Receivable Financier and any termination events, shall be
reasonably consistent with those prevailing in the market for similarly
structured transactions involving Off-Balance Sheet Receivables and originators
of similar credit quality and a pool of Off-Balance Sheet Receivables of similar
characteristics and (c) the terms of such transaction shall provide for a
specified Maximum Receivable Exposure for such Receivable Financiers.
"PERSON" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"PLAN" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"POPULATION" means, as at any date and for any area, the population
of such area as reflected in the 1997 Demographics Projections prepared by
National Decision Systems based on the 1990 census data of the United States
Census Bureau.
"PRIME RATE" means the rate of interest per annum publicly announced
from time to time by The Toronto-Dominion Bank, as its prime rate in effect at
its principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"PRINCIPAL PAYMENT DATES" means the Quarterly Dates falling on or
nearest to March 31, June 30, September 30 and December 31 of each year,
commencing with December 31, 2002.
"PUBLIC NOTE INDENTURES" means, collectively, (a) the Indenture
dated as of August 15, 1993, between NCI and The Bank of New York, as Trustee,
(b) the Indenture dated as of December 22, 1993 between NCI (as successor to
Dial Call Communications, Inc.) and The Bank of New York, as Trustee, (c) the
Indenture dated as of January 13, 1994 between NCI (as successor to CenCall
Communications Corp.) and The Bank of New York, as Trustee, (d) the Indenture
dated as of February
CREDIT AGREEMENT
<PAGE> 28
- 22 -
15, 1994 between NCI and The Bank of New York, as Trustee, (e) the Indenture
dated as of April 24, 1994 between NCI (as successor to Dial Call
Communications, Inc.) and The Bank of New York, as Trustee, (f) the Indenture
dated as of September 17, 1997 between NCI and Harris Trust and Savings Bank, as
Trustee, (g) the Indenture dated as of October 22, 1997 between NCI and Harris
Trust and Savings Bank, as Trustee, (h) the Indenture dated as of February 11,
1998 between NCI and Harris Trust and Savings Bank, as Trustee, (i) the
Indenture dated as of November 4, 1998 between NCI and Harris Trust and Savings
Bank, as Trustee, (j) the Indenture dated as of June 16, 1999 between NCI and
Harris Trust and Savings Bank, as Trustee, and (k) any other indenture or
similar instrument pursuant to which any Indebtedness of NCI is issued after the
date hereof in a registered public offering under the Securities Act of 1933, or
pursuant to Rule 144A under said Act, pursuant to Section 7.01(b).
"PUBLIC NOTES" means, collectively, the respective Notes issued
pursuant to the Public Note Indentures.
"PUC" means any state regulatory agency or body that exercises
jurisdiction over the rates or services or the ownership, construction or
operation of any Mobile Communications System or over Persons who own, construct
or operate Mobile Communications Systems, in each case by reason of the nature
or type of the business subject to regulation and not pursuant to laws and
regulations of general applicability to Persons conducting business in said
state.
"PUC AUTHORIZATION" means any Authorization issued by a PUC.
"QUARTERLY DATES" means the last Business Day of March, June,
September and December in each year, the first of which shall be the first such
day after the date of this Agreement.
"RECEIVABLE FINANCIER" means any Person (other than a Subsidiary or
Affiliate of a Restricted Company) that finances the acquisition by a special
purpose entity of Off-Balance Sheet Receivables from the Restricted Companies.
"REGISTER" has the meaning assigned to such term in Section 10.04.
"RELATED PARTIES" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, trustees, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"REQUIRED LENDERS" means, at any time, Lenders having Loans, LC
Exposures and unused Commitments representing more than 50% of the sum of the
total Loans, LC Exposures and unused Commitments at such time. The "Required
Lenders" of a particular Class of Loans means Lenders having Loans, LC Exposures
and unused Commitments of such Class representing more than 50% of the sum of
the total Loans, LC Exposures and unused Commitments of such Class at such time.
"RESERVED COMMITMENT AMOUNT" has the meaning assigned to such term
in Section 2.01(a).
CREDIT AGREEMENT
<PAGE> 29
- 23 -
"RESTRICTED COMPANY" means the Borrower, the other Persons listed on
the signature pages hereto under the caption "RESTRICTED COMPANIES" and each
Person that becomes a Restricted Company after the date hereof pursuant to
Section 6.11. As provided in Section 6.11, none of the Off-Balance Sheet
Companies shall be "Restricted Companies".
"RESTRICTED COMPANY GUARANTEE AND SECURITY AGREEMENT" means an
Amended and Restated Guarantee and Security Agreement substantially in the form
of Exhibit C between the Restricted Companies and the Collateral Agent.
"RESTRICTED PAYMENT" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any shares of
any class of capital stock of any Restricted Company, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such shares of capital stock of any
Restricted Company or any option, warrant or other right to acquire any such
shares of capital stock of any Restricted Company, but excluding any such
dividend, distribution or payment either (i) made solely in shares of its common
stock or (ii) made to any other Restricted Company. The term "Restricted
Payment" shall include any transaction (including the entering into of any
derivative or similar transaction) that has substantially the same economic
effect of any of the transactions described in the preceding sentence.
"REVOLVING CREDIT AVAILABILITY PERIOD" means the period from and
including the Effective Date to but excluding the earlier of (a) the Revolving
Credit Maturity Date and (b) the date of termination of the Revolving Credit
Commitments.
"REVOLVING CREDIT COMMITMENT" means, with respect to each Lender,
the commitment of such Lender to make Revolving Credit Loans and to acquire
participations in Letters of Credit hereunder, as such commitment may be (a)
reduced from time to time pursuant to Sections 2.07 and 2.09 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 10.04. The initial amount of each Lender's Revolving Credit
Commitment is set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Revolving Credit
Commitment, as applicable. The aggregate original amount of the Revolving Credit
Commitments is $1,500,000,000.
"REVOLVING CREDIT COMMITMENT REDUCTION DATES" means the Quarterly
Dates falling on or nearest to March 31, June 30, September 30 and December 31
of each year, commencing with December 31, 2002, through and including December
31, 2007.
"REVOLVING CREDIT EXPOSURE" means, with respect to any Revolving
Credit Lender at any time, the sum of the outstanding principal amount of such
Lender's Revolving Credit Loans and its LC Exposure at such time.
"REVOLVING CREDIT LENDER" means (a) a Lender that has a Revolving
Credit Commitment set forth opposite its name on Schedule 2.01 and (b)
thereafter, the Lenders from time to time holding Revolving Credit Loans and
Revolving Credit Commitments, after giving effect to any assignments thereof
permitted by Section 10.04.
CREDIT AGREEMENT
<PAGE> 30
- 24 -
"REVOLVING CREDIT LOAN" means a Loan made pursuant to Section
2.01(a) that utilizes the Revolving Credit Commitments.
"REVOLVING CREDIT MATURITY DATE" means the last Business Day in
December, 2007.
"RF EMISSIONS" means radio frequency emissions governed by FCC rules
and policies.
"S&P" means Standard & Poor's Rating Services, a Division of The
McGraw-Hill Companies, Inc.
"SALE AND LEASEBACK TRANSACTION" means any transaction or
arrangement by any Restricted Company, directly or indirectly, with any Person
whereby the Restricted Company shall sell or transfer any property, real or
personal, used or useful in its business, whether now owned or hereafter
acquired, and thereafter rent or lease such property or other property which it
intends to use for substantially the same purpose or purposes as the property
being sold or transferred.
"SALE PROCEEDS REINVESTMENT ACCOUNT" has the meaning assigned to
such term in the Restricted Company Guarantee and Security Agreement.
"SECURED INDEBTEDNESS" means, as at any day, all Indebtedness of the
Restricted Companies hereunder, and all other Indebtedness that is secured by
any Lien upon property of any of the Restricted Companies, including all Capital
Lease Obligations.
"SECURED INDEBTEDNESS TO CASH FLOW RATIO" means, as at the last day
of any fiscal quarter, the ratio of (a) Secured Indebtedness as at such day to
(b) Annualized Operating Cash Flow as at such day.
"SECURITY DOCUMENTS" means the Restricted Company Guarantee and
Security Agreement and all Uniform Commercial Code financing statements required
by any of such instruments to be filed with respect to the security interests in
personal property and fixtures created pursuant thereto.
"SERIES" has the meaning assigned to such term in Section 2.01(e).
"SMR LICENSE" means an FCC License authorizing the construction,
ownership and operation of an SMR System in the 800 or 900 MHz band.
"SMR SYSTEM" means a specialized mobile radio system licensed under
Part 90, together with such other facilities from time to time licensed or
otherwise authorized by the FCC as shall be necessary to provide the
communications services to be offered by the Restricted Companies. The term "SMR
System" shall include an Enhanced SMR System using FCC Licenses in the 800 MHz
or 900 MHz band.
CREDIT AGREEMENT
<PAGE> 31
- 25 -
"SPECIAL COUNSEL" means Milbank, Tweed, Hadley & McCloy LLP, in its
capacity as special counsel to the Syndication Agent.
"SPECIFIED DEFAULT" means any Event of Default under paragraph (a),
(b), (d), (f), (g), (h) or (i) of Article VIII.
"STATUTORY RESERVE RATE" means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D or any comparable
regulation. The Statutory Reserve Rate shall be adjusted automatically on and as
of the effective date of any change in any reserve percentage.
"SUBSIDIARY" means, with respect to any Person (the "PARENT") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the ordinary voting power or, in the case of a partnership, more
than 50% of the general partnership interests are, as of such date, owned,
controlled or held, or (b) that is, as of such date, otherwise Controlled, by
the parent or one or more subsidiaries of the parent or by the parent and one or
more subsidiaries of the parent.
"SUBSIDIARY" means any subsidiary of the Borrower.
"SYNDICATION AGENT" means Chase Securities Inc. in its capacity as
syndication agent in respect of the syndication of the Commitments hereunder.
"TAX PROCEEDS ACCOUNT" has the meaning assigned to such term in the
Restricted Company Guarantee and Security Agreement.
"TAX SHARING AGREEMENT" means the Tax Sharing Agreement dated as of
September 27, 1996 by and among NCI and the "Affiliated Corporations" (including
the Restricted Companies) therein referred to.
"TAXES" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"TERM LOANS" means, collectively, the Tranche A Term Loans, the
Tranche B Term Loans, the Tranche C Term Loans and the Incremental Facility Term
Loans of each Series.
CREDIT AGREEMENT
<PAGE> 32
- 26 -
"THRESHOLD AMOUNT" means (a) $1,000,000,000 at all times when the
Total Indebtedness to Cash Flow Ratio is less then 5.00 to 1 and no Default
shall have occurred and be continuing and (b) zero at all other times.
"TOTAL CONSOLIDATED ASSETS" means, as at any date, the net book
value of the assets of the Restricted Companies (determined on a combined basis
without duplication in accordance with GAAP) on such date.
"TOTAL INDEBTEDNESS" means, as at any day, all Indebtedness of NCI
and the Restricted Companies, determined on a consolidated basis (excluding the
Unrestricted Companies) without duplication in accordance with GAAP.
"TOTAL INDEBTEDNESS TO CASH FLOW RATIO" means, as at the last day of
any fiscal quarter, the ratio of (a) Total Indebtedness as at such day to (b)
Annualized Operating Cash Flow as at such day.
"TOWER MERGER AGREEMENT" means the Agreement and Plan of Merger
dated as of February 10, 1999, as amended by an Amendment No. 1 thereto dated
April 10, 1999, between NCI, TPC, Tower Merger Vehicle, Inc. a Delaware
corporation and wholly owned direct Subsidiary of TPC ("MERGER SUB"), Tower
Asset Sub, Inc., a Delaware corporation and wholly owned direct Subsidiary of
Merger Sub, SpectraSite Holdings, Inc., a Delaware corporation ("TOWER
AGGREGATOR"), SpectraSite Communications, Inc., a Delaware corporation and
wholly owned direct Subsidiary of Tower Aggregator ("SCI"), and SHI Merger Sub,
Inc., a Delaware corporation and wholly owned direct Subsidiary of SCI.
"TOWER MERGER DOCUMENTS" means, collectively, the Tower Merger
Agreement, the Master Site Commitment Agreement and the Master Site Lease
Agreement, the Subordination, Non-Disturbance and Attornment Agreement (as
defined in said Master Site Lease Agreement), the Security and Subordination
Agreement and the Stockholders Agreement (each as defined in the Tower Merger
Agreement) and the Intercreditor Agreement and Subordination Agreement to be
executed and delivered between TPC and the Transferring Subsidiaries (as defined
in the Tower Merger Agreement) and certain other parties in connection with the
consummation of the transactions contemplated by the Tower Merger Agreement.
"TPC" means Tower Parent Corp., a Delaware corporation and wholly
owned direct Subsidiary of NCI that is an "Unrestricted Subsidiary" under the
Public Note Indentures.
"TPC NOTES" means the Promissory Notes issued by TPC in favor of
certain of the Restricted Companies pursuant to the Tower Merger Agreement.
"TRANCHE A TERM LOAN" means a Loan made pursuant to Section 2.01(b).
"TRANCHE A TERM LOAN AVAILABILITY PERIOD" means the period from and
including the Effective Date to and including the earlier of the date 180 days
after the Effective Date (or, if such date is not a Business Day, the next
preceding Business Day) and the date of termination of the Tranche A Term Loan
Commitments.
CREDIT AGREEMENT
<PAGE> 33
- 27 -
"TRANCHE A TERM LOAN COMMITMENT" means, with respect to each Lender,
the commitment of such Lender to make Tranche A Term Loans hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.07 or
Section 2.09 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 10.04. The initial amount
of each Lender's Tranche A Term Loan Commitment is set forth on Schedule 2.01,
or in the Assignment and Acceptance pursuant to which such Lender shall have
assumed its Tranche A Term Loan Commitment, as applicable. The aggregate
original amount of the Tranche A Term Loan Commitments is $1,700,000,000.
"TRANCHE A TERM LOAN LENDER" means (a) a Lender that has a Tranche A
Term Loan Commitment set forth opposite its name on Schedule 2.01 and (b)
thereafter, the Lenders from time to time holding Tranche A Term Loans and
Tranche A Term Loan Commitments after giving effect to any assignments thereof
permitted by Section 10.04.
"TRANCHE B TERM LOAN" means a Loan made pursuant to Section 2.01(c).
"TRANCHE B TERM LOAN COMMITMENT" means, with respect to each Lender,
the commitment of such Lender to make Tranche B Term Loans hereunder. The amount
of each Lender's Tranche B Term Loan Commitment is set forth on Schedule 2.01.
The aggregate original amount of the Tranche B Term Loan Commitments is
$900,000,000.
"TRANCHE B TERM LOAN LENDER" means (a) a Lender that has a Tranche B
Term Loan Commitment set forth opposite its name on Schedule 2.01 and (b)
thereafter, the Lenders from time to time holding Tranche B Term Loans after
giving effect to any assignments thereof permitted by Section 10.04.
"TRANCHE C TERM LOAN" means a Loan made pursuant to Section 2.01(d).
"TRANCHE C TERM LOAN COMMITMENT" means, with respect to each Lender,
the commitment of such Lender to make Tranche C Term Loans hereunder. The amount
of each Lender's Tranche C Term Loan Commitment is set forth on Schedule 2.01.
The aggregate original amount of the Tranche C Term Loan Commitments is
$900,000,000.
"TRANCHE C TERM LOAN LENDER" means (a) a Lender that has a Tranche C
Term Loan Commitment set forth opposite its name on Schedule 2.01 and (b)
thereafter, the Lenders from time to time holding Tranche C Term Loans after
giving effect to any assignments thereof permitted by Section 10.04.
"TRANSACTIONS" means (a) with respect to the Borrower, the
execution, delivery and performance by the Borrower of the Loan Documents to
which it is a party, the borrowing of Loans and the use of the proceeds thereof,
and the issuance of Letters of Credit hereunder and (b) with respect to any
Credit Party (other than the Borrower), the execution, delivery and performance
by such Credit Party of the Loan Documents to which it is a party.
CREDIT AGREEMENT
<PAGE> 34
- 28 -
"TYPE", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Adjusted
Base Rate.
"UNRESTRICTED COMPANIES" means each subsidiary of NCI other than the
Restricted Companies.
"U.S. DOLLARS" or "$" refers to lawful money of the United States of
America.
"VENDOR INDEBTEDNESS" has the meaning assigned to such term in
Section 7.01(d).
"WHOLLY OWNED SUBSIDIARY" means, with respect to any Person at any
date, any corporation, limited liability company, partnership, association or
other entity of which securities or other ownership interests representing 100%
of the equity or ordinary voting power (other than directors' qualifying shares)
or, in the case of a partnership, 100% of the general partnership interests are,
as of such date, directly or indirectly owned, controlled or held by such Person
or one or more Wholly Owned Subsidiaries of such Person or by such Person and
one or more Wholly Owned Subsidiaries of such Person.
"WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. CLASSIFICATION OF LOANS AND BORROWINGS. For purposes
of this Agreement, Loans may be classified and referred to by Class (e.g., a
"Revolving Credit Loan", "Tranche A Term Loan", "Tranche B Term Loan", "Tranche
C Term Loan", "Incremental Facility Revolving Loan" of a Series or "Incremental
Facility Term Loan" of a Series) or by Type (e.g., a "Base Rate Loan" or a
"Eurodollar Loan") or by Class and Type (e.g., a "Eurodollar Revolving Credit
Loan" or a "Base Rate Revolving Credit Loan"). In similar fashion, (i)
Borrowings may be classified and referred to by Class, by Type and by Class and
Type, and (ii) Commitments may be classified and referred to by Class. The
Incremental Facility Loans of any Series constitute a separate Class of Loans
for all purposes of this Agreement.
SECTION 1.03. TERMS GENERALLY. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall
CREDIT AGREEMENT
<PAGE> 35
- 29 -
be construed to refer to Articles and Sections of, and Exhibits and Schedules
to, this Agreement and (e) the words "asset" and "property" shall be construed
to have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.04. ACCOUNTING TERMS; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; PROVIDED
that, if the Borrower and NCI notify the Administrative Agent that the Borrower
and NCI request an amendment to any provision hereof to eliminate the effect of
any change occurring after the date hereof in GAAP or in the application thereof
on the operation of such provision (or if the Administrative Agent notifies the
Borrower and NCI that the Required Lenders request an amendment to any provision
hereof for such purpose), regardless of whether any such notice is given before
or after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
SECTION 1.05. TAX SHARING AGREEMENT. Pursuant to the Tax Sharing
Agreement, the Restricted Companies have agreed to join the affiliated group
headed by NCI as "common parent" (within the meaning of Section 1504 of the
Code) in filing consolidated Federal, and (in certain circumstances) state and
local, income tax returns and have also agreed as to the amounts, if any, that
the Restricted Companies shall be obligated to pay to NCI in respect of Federal,
state and local income taxes (or the amounts that the Restricted Companies shall
be entitled to receive as refunds in respect of such taxes). So long as the
Restricted Companies shall be included in consolidated Federal, state and local
income tax returns filed by NCI pursuant to the Tax Sharing Agreement, whenever
making determinations under this Agreement of the amount of such taxes payable
during any period (or the amount of refunds in respect of such taxes receivable
during any period) by the Restricted Companies, the amount of such taxes payable
or receivable shall be deemed to be equal to the amounts payable or receivable,
as the case may be, in respect of such taxes under the Tax Sharing Agreement
without reference to whether NCI and its subsidiaries as an affiliated group
shall in fact pay any amounts in respect of Federal, state and local income
taxes (or receive any amounts in respect of refunds of such taxes) during the
relevant period.
ARTICLE II
THE CREDITS
SECTION 2.01. COMMITMENTS.
(a) REVOLVING CREDIT LOANS. Subject to the terms and conditions set
forth herein, each Revolving Credit Lender agrees to make Revolving Credit Loans
to the Borrower from time to time during the Revolving Credit Availability
Period in an aggregate principal amount that will not result in such Lender's
Revolving Credit Loans exceeding such Lender's Revolving Credit Commitment,
CREDIT AGREEMENT
<PAGE> 36
- 30 -
PROVIDED that (i) the total Revolving Credit Exposure shall not at any time
exceed the total Revolving Credit Commitments and (ii) no Revolving Credit Loans
shall be made hereunder unless the Tranche B Term Loan Commitments and the
Tranche C Term Loan Commitments are borrowed in full on the Effective Date.
Within the foregoing limits and subject to the terms and conditions set forth
herein, the Borrower may borrow, prepay and reborrow Revolving Credit Loans.
Proceeds of Revolving Credit Loans shall be available for any use
permitted under the applicable provisions of Section 6.09, PROVIDED that, in the
event that as contemplated by Section 2.09(b)(ii), the Borrower shall prepay
Revolving Credit Loans from the proceeds of a Disposition hereunder, then an
amount of Revolving Credit Commitments, as specified by the Borrower pursuant to
the next sentence, equal to the amount of such prepayment (herein the "RESERVED
COMMITMENT AMOUNT") shall be reserved and shall not be available for Borrowings
hereunder except and to the extent that the proceeds of such Borrowings are to
be applied to make reinvestments permitted under Section 7.04(a)(vi) or to make
prepayments of Loans under Section 2.09(b)(ii)(z)(B). The Borrower agrees, upon
the occasion of any Borrowing of Revolving Credit Loans hereunder that is to
constitute a utilization of any Reserved Commitment Amount, to advise the
Administrative Agent in writing of such fact at the time of such Borrowing,
identifying the amount of such Borrowing that is to constitute such utilization,
the reinvestment in respect of which the proceeds of such Borrowing are to be
applied and the reduced Reserved Commitment Amount to be in effect after giving
effect to such Borrowing.
(b) TRANCHE A TERM LOANS. Subject to the terms and conditions set
forth herein, each Tranche A Term Loan Lender agrees to make Tranche A Term
Loans to the Borrower from time to time during the Tranche A Term Loan
Availability Period in an aggregate principal amount that will not result in
such Lender's Tranche A Term Loans exceeding such Lender's Tranche A Term Loan
Commitment, PROVIDED that (i) no Tranche A Term Loans shall be made hereunder
unless the Tranche B Term Loan Commitments and the Tranche C Term Loan
Commitments are borrowed in full on the Effective Date and (ii) on the Effective
Date the Borrower shall borrow an amount of Tranche A Term Loans at least equal
to 50% of the aggregate original amount of the Tranche A Term Loan Commitments.
Proceeds of Tranche A Term Loans shall be available for any use permitted under
Section 6.09.
(c) TRANCHE B TERM LOANS. Subject to the terms and conditions set
forth herein, each Tranche B Term Loan Lender agrees to make Tranche B Term
Loans to the Borrower on the Effective Date in an aggregate principal amount
equal to such Lender's Tranche B Term Loan Commitment. Proceeds of Tranche B
Term Loans shall be available for any use permitted under Section 6.09.
(d) TRANCHE C TERM LOANS. Subject to the terms and conditions set
forth herein, each Tranche C Term Loan Lender agrees to make Tranche C Term
Loans to the Borrower on the Effective Date in an aggregate principal amount
equal to such Lender's Tranche C Term Loan Commitment. Proceeds of Tranche C
Term Loans shall be available for any use permitted under Section 6.09.
(e) INCREMENTAL FACILITY LOANS. In addition to Borrowings of
Revolving Credit Loans, Tranche A Term Loans, Tranche B Term Loans and Tranche C
Term Loans pursuant to paragraphs (a), (b), (c) and (d) above, at any time and
from time to time prior to December 31, 2002, the Borrower may request that one
or more Persons (which may include the Lenders) offer to enter into commitments
to
CREDIT AGREEMENT
<PAGE> 37
- 31 -
make additional revolving loans ("INCREMENTAL FACILITY REVOLVING LOANS") or term
loans ("INCREMENTAL FACILITY TERM LOANS" and, together with the Incremental
Facility Revolving Loans, "INCREMENTAL FACILITY LOANS") under this paragraph
(e), it being understood that if such offer is to be made by any Person that is
not already a Lender hereunder, the Administrative Agent shall have consented to
such Person being a Lender hereunder to the extent such consent would be
required pursuant to Section 10.04(b) in the event of an assignment to such
Person. In the event that one or more of such Persons offer, in their sole
discretion, to enter into such commitments, and such Persons and the Borrower
agree as to the amount of such commitments that shall be allocated to the
respective Persons making such offers and the fees (if any) to be payable by the
Borrower in connection therewith, in the case of Incremental Facility Revolving
Loans the commitment reduction schedule and commitment termination date to be
applicable thereto and, in the case of Incremental Facility Term Loans the
amortization and maturity date to be applicable thereto, the Borrower, such
Persons, the Administrative Agent and the Collateral Agent shall execute and
deliver an appropriate Incremental Facility Amendment, and such Persons shall
become obligated to make Incremental Facility Revolving Loans or Incremental
Facility Term Loans, as applicable, under this Agreement in an amount equal to
the amount of their respective Incremental Facility Revolving Loan Commitments
and Incremental Facility Term Loan Commitments, as applicable, as specified in
such Incremental Facility Amendment. The Incremental Facility Loans to be made
pursuant to any such agreement between the Borrower and one or more Persons in
response to any such request by the Borrower shall be deemed to be a separate
"SERIES" of Incremental Facility Loans for all purposes of this Agreement.
Anything herein to the contrary notwithstanding, the following
additional provisions shall be applicable to the Incremental Facility Loan
Commitments, and Incremental Facility Loans, of any Series:
(i) the minimum aggregate principal amount of Incremental Facility
Loan Commitments entered into pursuant to any such request (and,
accordingly, the minimum aggregate principal amount of any Series of
Incremental Facility Loans) shall be $100,000,000,
(ii) the Average Life to Maturity of scheduled commitment reductions
for Incremental Facility Revolving Loan Commitments shall be greater than
the Average Life to Maturity (determined on a combined basis) of the
Revolving Credit Loans, Tranche A Term Loans, Tranche B Term Loans and
Tranche C Term Loans (except that Incremental Facility Revolving Loan
Commitments shall be entitled to participate, to the extent provided in
Section 2.09(b), in mandatory commitment reductions),
(iii) the Average Life to Maturity of the Incremental Facility Term
Loans of any Series shall be greater than the Average Life to Maturity
(determined on a combined basis) of the Revolving Credit Loans, Tranche A
Term Loans, Tranche B Term Loans and Tranche C Term Loans (except that
Incremental Facility Term Loans shall be entitled to participate, to the
extent provided in Section 2.09(b), in mandatory prepayments),
(iv) the commitment termination date of the Incremental Facility
Revolving Loan Commitments of any Series shall not be earlier than the
date three months after the final Principal Payment Date for the Tranche C
Term Loans (but such commitment termination date
CREDIT AGREEMENT
<PAGE> 38
- 32 -
may be accelerated to any accelerated final Principal Payment Date
for the Tranche C Term Loans pursuant to the last sentence of
Section 2.08(d)), PROVIDED that such commitment termination date may
be earlier than the date three months after the final Principal
Payment Date for the Tranche C Term Loans if on such commitment
termination date the Incremental Facility Revolving Loans of such
Series convert into term loans having a maturity date and
amortization otherwise meeting the requirements of clauses (iii) and
(v) of this paragraph (and, upon such conversion, such Loans shall
be treated as "Incremental Facility Term Loans" for all purposes of
this Agreement) and
(v) the final maturity date of the Incremental Facility Term Loans
of any Series shall not be earlier than the date three months after the
final Principal Payment Date for the Tranche C Term Loans (but such final
maturity may be accelerated to any accelerated final Principal Payment
Date for the Tranche C Term Loans pursuant to the last sentence of Section
2.08(d)).
Following execution and delivery by the Borrower, one or more
Incremental Facility Lenders, the Administrative Agent and the Collateral Agent
as provided above of an Incremental Facility Amendment with respect to any
Series then, subject to the terms and conditions set forth herein:
(x) if such Incremental Facility Loans are to be Incremental
Facility Revolving Loans, each Incremental Facility Loan Lender of such
Series agrees to make Incremental Facility Revolving Loans of such Series
to the Borrower from time to time during the availability period for such
Loans set forth in such Incremental Facility Amendment, in an aggregate
principal amount that will not result in such Lender's Incremental
Facility Revolving Loans of such Series exceeding such Lender's
Incremental Facility Revolving Loan Commitment of such Series; within the
foregoing limits and subject to the terms and conditions set forth herein,
the Borrower may borrow, prepay and reborrow Incremental Facility
Revolving Loans of such Series; and
(y) if such Incremental Facility Loans are to be Incremental
Facility Term Loans, each Incremental Facility Term Loan Lender of such
Series agrees to make Incremental Facility Term Loans of such Series to
the Borrower from time to time during the availability period for such
Loans set forth in such Incremental Facility Amendment, in a principal
amount up to but not exceeding such Lender's Incremental Facility Term
Loan Commitment of such Series.
Proceeds of Incremental Facility Loans shall be available for any
use permitted under the applicable provisions of Section 6.09.
(f) TREATMENT OF LOANS OUTSTANDING UNDER EXISTING CREDIT AGREEMENT.
In the event that any loans under the Existing Credit Agreement shall remain
outstanding on the Effective Date, then any then-outstanding Interest Periods
shall automatically be terminated and such loans shall be continued as Revolving
Credit Loans or Term Loans hereunder of one or more Classes, as the Borrower
shall specify at the time of the initial Borrowing hereunder, and the Lenders
hereunder shall, on the Effective Date, take such actions, and make such
adjustments among themselves, as shall be necessary so that such loans are held
hereunder pro rata in accordance with their respective Revolving Credit
Commitments and Term Loan Commitments of the Classes selected, including by
purchasing the loans under the Existing Credit Agreement of any "Lenders" under
the Existing Credit Agreement that are not becoming
CREDIT AGREEMENT
<PAGE> 39
- 33 -
Lenders hereunder. On the Effective Date, the Borrower shall cause to be paid to
each "Lender" party to the Existing Credit Agreement, all amounts that would be
owing to such Lender under Section 2.14 of the Existing Credit Agreement as if
the "Loans" of such Lender under the Existing Credit Agreement were being repaid
on the Effective Date, whether or not any such loans are actually repaid on the
Effective Date.
SECTION 2.02. LOANS AND BORROWINGS.
(a) OBLIGATION OF LENDERS. Each Loan of a particular Class shall be
made as part of a Borrowing consisting of Loans of such Class made by the
Lenders ratably in accordance with their respective Commitments of such Class.
The failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder; PROVIDED that the
Commitments of the Lenders are several and no Lender shall be responsible for
any other Lender's failure to make Loans as required.
(b) TYPE OF LOANS. Subject to Section 2.12, each Borrowing shall be
comprised entirely of Base Rate Loans or Eurodollar Loans as the Borrower may
request in accordance herewith. Each Lender at its option may make any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan; PROVIDED that any exercise of such option shall not
affect the obligation of the Borrower to repay such Loan in accordance with the
terms of this Agreement.
(c) MINIMUM AMOUNTS. At the commencement of each Interest Period for
a Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is
an integral multiple of $1,000,000 and not less than $5,000,000. At the time
that each Base Rate Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $500,000 and not less than $5,000,000;
PROVIDED that (i) a Base Rate Borrowing of Loans of any Class may be in an
aggregate amount that is equal to the entire unused balance of the total
Commitments of such Class and (ii) a Revolving Credit Base Rate Borrowing may be
in an amount that is required to finance the reimbursement of an LC Disbursement
as contemplated by Section 2.04(e). Borrowings of more than one Type and Class
may be outstanding at the same time; PROVIDED that there shall not at any time
be more than a total of 20 Eurodollar Borrowings outstanding.
SECTION 2.03. REQUESTS FOR BORROWINGS. To request a Borrowing, the
Borrower shall notify the Administrative Agent of such request by telephone (a)
in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before the date of the proposed Borrowing or (b) in
the case of a Base Rate Borrowing, not later than 11:00 a.m., New York City
time, one Business Day before the date of the proposed Borrowing; PROVIDED that
any such notice of a Revolving Credit Base Rate Borrowing to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.04(e) may be
given not later than 10:00 a.m., New York City time, on the date of the proposed
Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall
be confirmed promptly by hand delivery or telecopy to the Administrative Agent
of a written Borrowing Request in a form approved by the Administrative Agent
and signed by the Borrower. Each such telephonic and written Borrowing Request
shall specify the following information in compliance with Section 2.02:
CREDIT AGREEMENT
<PAGE> 40
- 34 -
(i) whether the requested Borrowing is to be a Revolving Credit
Borrowing, Tranche A Term Loan Borrowing, Tranche B Term Loan Borrowing,
Tranche C Term Loan Borrowing or Incremental Facility Loan Borrowing
(including, if applicable, the respective Series of Incremental Facility
Loans to which such Borrowing relates);
(ii) the aggregate amount of such Borrowing;
(iii) the date of such Borrowing, which shall be a Business Day;
(iv) whether such Borrowing is to be a Base Rate Borrowing or a
Eurodollar Borrowing;
(v) in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated by
the definition of the term "Interest Period"; and
(vi) the location and number of the Borrower's account to which
funds are to be disbursed, which shall comply with the requirements of
Section 2.05.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall (x) in the case of a Revolving Credit Borrowing or Incremental
Facility Revolving Loan Borrowing, be a Base Rate Borrowing and (y) in the case
of a Term Loan Borrowing, be a Eurodollar Borrowing having an Interest Period of
one month's duration. If no Interest Period is specified with respect to any
requested Eurodollar Borrowing, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration. Promptly following receipt
of a Borrowing Request in accordance with this Section 2.03, the Administrative
Agent shall advise each Lender of the details thereof and of the amount of such
Lender's Loan to be made as part of the requested Borrowing.
Anything herein to the contrary notwithstanding, the initial
Borrowing hereunder shall be a Base Rate Borrowing, except to the extent that
this Agreement shall have been duly executed and delivered by each of the
parties hereto at least three Business Days prior to the Effective Date and the
Borrower has given timely notice of a Eurodollar Borrowing after such execution
and delivery.
SECTION 2.04. LETTERS OF CREDIT.
(a) GENERAL. Subject to the terms and conditions set forth herein,
in addition to the Revolving Credit Loans PROVIDED for in Section 2.01(a), the
Borrower may request the issuance of Letters of Credit for its own account by
any Issuing Bank, in a form reasonably acceptable to such Issuing Bank, at any
time and from time to time during the Revolving Credit Availability Period.
Letters of Credit issued hereunder shall constitute utilization of the Revolving
Credit Commitments. In the event of any inconsistency between the terms and
conditions of this Agreement and the terms and conditions of any form of letter
of credit application or other agreement submitted by the Borrower to, or
entered into by the Borrower with, an Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control.
(b) NOTICE OF ISSUANCE, AMENDMENT, RENEWAL, EXTENSION; CERTAIN
CONDITIONS. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding
CREDIT AGREEMENT
<PAGE> 41
- 35 -
Letter of Credit), the Borrower shall hand deliver or telecopy (or transmit by
electronic communication, if arrangements for doing so have been approved by the
respective Issuing Bank) to an Issuing Bank selected by it and the
Administrative Agent (reasonably in advance of the requested date of issuance,
amendment, renewal or extension) a notice requesting the issuance of a Letter of
Credit, or identifying the Letter of Credit to be amended, renewed or extended,
the date of issuance, amendment, renewal or extension, the date on which such
Letter of Credit is to expire (which shall comply with paragraph (c) of this
Section 2.04), the amount of such Letter of Credit, the name and address of the
beneficiary thereof and such other information as shall be necessary to prepare,
amend, renew or extend such Letter of Credit. If requested by the respective
Issuing Bank, the Borrower also shall submit a letter of credit application on
such Issuing Bank's standard form in connection with any request for a Letter of
Credit. A Letter of Credit shall be issued, amended, renewed or extended only if
(and upon issuance, amendment, renewal or extension of each Letter of Credit the
Borrower shall be deemed to represent and warrant that), after giving effect to
such issuance, amendment, renewal or extension (i) the aggregate LC Exposure of
any Issuing Bank (determined for these purposes without giving effect to the
participations therein of the Revolving Credit Lenders pursuant to paragraph (d)
of this Section 2.04) shall not exceed $75,000,000, (ii) the aggregate LC
Exposure of all of the Issuing Banks (so determined) shall not exceed
$150,000,000 and (iii) the total Revolving Credit Exposure shall not exceed the
total Revolving Credit Commitments.
(c) EXPIRATION DATE. Each Letter of Credit shall expire at or prior
to the close of business on the earlier of (i) the date 18 months after the date
of the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, 18 months after such renewal or extension) and (ii) the date
that is five Business Days prior to the Revolving Credit Maturity Date.
(d) PARTICIPATIONS. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) by any Issuing
Bank, and without any further action on the part of such Issuing Bank or the
Lenders, such Issuing Bank hereby grants to each Revolving Credit Lender, and
each Revolving Credit Lender hereby acquires from such Issuing Bank, a
participation in such Letter of Credit equal to such Revolving Credit Lender's
Applicable Percentage of the aggregate amount available to be drawn under such
Letter of Credit. In consideration and in furtherance of the foregoing, each
Revolving Credit Lender hereby absolutely and unconditionally agrees to pay to
the Administrative Agent, for the account of such Issuing Bank, such Revolving
Credit Lender's Applicable Percentage of each LC Disbursement made by such
Issuing Bank and not reimbursed by the Borrower on the date due as provided in
paragraph (e) of this Section 2.04, or of any reimbursement payment required to
be refunded to the Borrower for any reason. Each Revolving Credit Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including any
amendment, renewal or extension of any Letter of Credit or the occurrence and
continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever.
(e) REIMBURSEMENT. If an Issuing Bank shall make any LC Disbursement
in respect of a Letter of Credit, the Borrower shall reimburse such Issuing Bank
in respect of such LC Disbursement by paying to the Administrative Agent an
amount equal to such LC Disbursement not later than 12:00 noon, New York City
time, on (i) the Business Day that the Borrower receives notice of such LC
CREDIT AGREEMENT
<PAGE> 42
- 36 -
Disbursement, if such notice is received prior to 10:00 a.m., New York City
time, or (ii) the Business Day immediately following the day that the Borrower
receives such notice, if such notice is not received prior to such time,
PROVIDED that, if such LC Disbursement is not less than $1,000,000, the Borrower
may, subject to the conditions to borrowing set forth herein, request in
accordance with Section 2.03 that such payment be financed with a Revolving
Credit Base Rate Borrowing in an equivalent amount and, to the extent so
financed, the Borrower's obligation to make such payment shall be discharged and
replaced by the resulting Revolving Credit Base Rate Borrowing.
If the Borrower fails to make such payment when due, the
Administrative Agent shall notify each Revolving Credit Lender of the applicable
LC Disbursement, the payment then due from the Borrower in respect thereof and
such Revolving Credit Lender's Applicable Percentage thereof. Promptly following
receipt of such notice, each Revolving Credit Lender shall pay to the
Administrative Agent its Applicable Percentage of the payment then due from the
Borrower, in the same manner as provided in Section 2.05 with respect to
Revolving Credit Loans made by such Lender (and Section 2.05 shall apply,
mutatis mutandis, to the payment obligations of the Revolving Credit Lenders),
and the Administrative Agent shall promptly pay to the respective Issuing Bank
the amounts so received by it from the Revolving Credit Lenders. Promptly
following receipt by the Administrative Agent of any payment from the Borrower
pursuant to this paragraph, the Administrative Agent shall distribute such
payment to the respective Issuing Bank or, to the extent that the Revolving
Credit Lenders have made payments pursuant to this paragraph to reimburse such
Issuing Bank, then to such Lenders and such Issuing Bank as their interests may
appear. Any payment made by a Revolving Credit Lender pursuant to this paragraph
to reimburse the Issuing Bank for any LC Disbursement shall not constitute a
Loan and shall not relieve the Borrower of its obligation to reimburse such LC
Disbursement.
(f) OBLIGATIONS ABSOLUTE. The Borrower's obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section 2.04 shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit, or any term or provision therein, (ii) any draft or other
document presented under a Letter of Credit proving to be forged, fraudulent or
invalid in any respect or any statement therein being untrue or inaccurate in
any respect, (iii) payment by the respective Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
strictly with the terms of such Letter of Credit and (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section 2.04, constitute a legal or
equitable discharge of the Borrower's obligations hereunder.
Neither the Administrative Agent, the Lenders nor any Issuing Bank,
nor any of their Related Parties, shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit
by such Issuing Bank or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of the respective Issuing Bank; PROVIDED that the
foregoing shall not be construed to excuse an Issuing Bank from liability to the
Borrower to the extent of any direct damages
CREDIT AGREEMENT
<PAGE> 43
- 37 -
(as opposed to consequential damages, claims in respect of which are hereby
waived by the Borrower to the extent permitted by applicable law) suffered by
the Borrower that are caused by such Issuing Bank's gross negligence or wilful
misconduct when determining whether drafts and other documents presented under a
Letter of Credit comply with the terms thereof. The parties hereto expressly
agree that:
(i) such Issuing Bank may accept documents that appear on their face
to be in substantial compliance with the terms of a Letter of Credit
without responsibility for further investigation, regardless of any notice
or information to the contrary, and may make payment upon presentation of
documents that appear on their face to be in substantial compliance with
the terms of such Letter of Credit;
(ii) such Issuing Bank shall have the right, in its sole discretion,
to decline to accept such documents and decline to make such payment if
such documents are not in strict compliance with the terms of such Letter
of Credit; and
(iii) this sentence shall establish the standard of care to be
exercised by an Issuing Bank when determining whether drafts and other
documents presented under a Letter of Credit comply with the terms thereof
(and the parties hereto hereby waive, to the extent permitted by
applicable law, any standard of care inconsistent with the foregoing).
(g) DISBURSEMENT PROCEDURES. The Issuing Bank for any Letter of
Credit shall, promptly following its receipt thereof, examine all documents
purporting to represent a demand for payment under such Letter of Credit. Such
Issuing Bank shall promptly notify the Administrative Agent and the Borrower by
telephone (confirmed by telecopy) of such demand for payment and whether such
Issuing Bank has made or will make an LC Disbursement thereunder; PROVIDED that
any failure to give or delay in giving such notice shall not relieve the
Borrower of its obligation to reimburse such Issuing Bank and the Revolving
Credit Lenders with respect to any such LC Disbursement.
(h) INTERIM INTEREST. If the Issuing Bank for any Letter of Credit
shall make any LC Disbursement, then, unless the Borrower shall reimburse such
LC Disbursement in full on the date such LC Disbursement is made, the unpaid
amount thereof shall bear interest, for each day from and including the date
such LC Disbursement is made to but excluding the date that the Borrower
reimburses such LC Disbursement, at the rate per annum then applicable to
Revolving Credit Base Rate Loans; PROVIDED that, if the Borrower fails to
reimburse such LC Disbursement when due pursuant to paragraph (e) of this
Section 2.04, then Section 2.11(c) shall apply. Interest accrued pursuant to
this paragraph shall be for the account of such Issuing Bank, except that
interest accrued on and after the date of payment by any Revolving Credit Lender
pursuant to paragraph (e) of this Section 2.04 to reimburse such Issuing Bank
shall be for the account of such Lender to the extent of such payment.
(i) CASH COLLATERALIZATION. If either (i) an Event of Default shall
occur and be continuing and the Borrower receives notice from the Administrative
Agent or the Required Revolving Credit Lenders demanding the deposit of cash
collateral pursuant to this paragraph, or (ii) the Borrower shall be required to
provide cover for LC Exposure pursuant to Section 2.09(b), the Borrower shall
immediately deposit into the Letter of Credit Account an amount in cash equal
to, in the case of an Event of Default, the LC Exposure as of such date plus any
accrued and unpaid interest thereon and, in the case of cover
CREDIT AGREEMENT
<PAGE> 44
- 38 -
pursuant to Section 2.09(b), the amount required under Section 2.09(b); PROVIDED
that the obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable, without
demand or other notice of any kind, upon the occurrence of any Event of Default
with respect to any Credit Party described in clause (h) or (i) of Article VIII.
Such deposit shall be held by the Collateral Agent as collateral in the first
instance for the LC Exposure under this Agreement and thereafter for the payment
of the "Secured Obligations" under and as defined in the Restricted Company
Guarantee and Security Agreement.
(j) EXISTING LETTERS OF CREDIT. Pursuant to Section 2.04 of the
Existing Credit Agreement, the Issuing Banks have issued various "Letters of
Credit" under and as defined in the Existing Credit Agreement. On the Effective
Date, subject to the satisfaction of the conditions precedent set forth in
Article V, each of such "Letters of Credit" under the Existing Credit Agreement
shall automatically, and without any action on the part of any Person, become a
Letter of Credit hereunder.
SECTION 2.05. FUNDING OF BORROWINGS.
(a) FUNDING BY LENDERS. Each Lender shall make each Loan to be made
by it hereunder on the proposed date thereof by wire transfer of immediately
available funds by 12:00 noon, New York City time, to the account of the
Administrative Agent most recently designated by it for such purpose by notice
to the Lenders. The Administrative Agent will make such Loans available to the
Borrower by promptly crediting the amounts so received, in like funds, to an
account of the Borrower maintained with the Administrative Agent in New York
City and designated by the Borrower in the applicable Borrowing Request;
PROVIDED that Revolving Credit Base Rate Loans made to finance the reimbursement
of an LC Disbursement under any Letter of Credit as provided in Section 2.04(e)
shall be remitted by the Administrative Agent to the respective Issuing Bank for
such Letter of Credit.
(b) PRESUMPTION BY ADMINISTRATIVE AGENT. Unless the Administrative
Agent shall have received notice from a Lender prior to the proposed date of any
Borrowing that such Lender will not make available to the Administrative Agent
such Lender's share of such Borrowing, the Administrative Agent may assume that
such Lender has made such share available on such date in accordance with
paragraph (a) of this Section 2.05 and may, in reliance upon such assumption,
make available to the Borrower a corresponding amount. In such event, if a
Lender has not in fact made its share of the applicable Borrowing available to
the Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment to
the Administrative Agent, at the Federal Funds Effective Rate. If such Lender
pays such amount to the Administrative Agent, then such amount shall constitute
such Lender's Loan included in such Borrowing.
SECTION 2.06. INTEREST ELECTIONS.
(a) ELECTIONS BY BORROWER. Each Borrowing initially shall be of the
Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in such
Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing
to a different Type or to continue such Borrowing and, in the case of a
Eurodollar
CREDIT AGREEMENT
<PAGE> 45
- 39 -
Borrowing, may elect Interest Periods therefor, all as provided in this Section
2.06. The Borrower may elect different options for continuations and conversions
with respect to different portions of the affected Borrowing, in which case each
such portion shall be allocated ratably among the Lenders holding the Loans
comprising such Borrowing, and the Loans comprising each such portion shall be
considered a separate Borrowing.
(b) NOTICE OF ELECTIONS. To make an election pursuant to this
Section 2.06, the Borrower shall notify the Administrative Agent of such
election by telephone by the time that a Borrowing Request would be required
under Section 2.03 if the Borrower were requesting a Borrowing of the Type
resulting from such election to be made on the effective date of such election.
Each such telephonic Interest Election Request shall be irrevocable and shall be
confirmed promptly by hand delivery or telecopy to the Administrative Agent of a
written Interest Election Request in a form approved by the Administrative Agent
and signed by the Borrower.
(c) INFORMATION IN ELECTION NOTICES. Each telephonic and written
Interest Election Request shall specify the following information in compliance
with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies
(including, if applicable, the respective Series of Incremental Facility
Loans to which such Interest Election Request relates) and, if different
options for continuations or conversions are being elected with respect to
different portions thereof, the portions thereof to be allocated to each
resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be a Base Rate Borrowing
or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) NOTICE BY ADMINISTRATIVE AGENT TO LENDERS. Promptly following
receipt of an Interest Election Request, the Administrative Agent shall advise
each Lender of the details thereof and of such Lender's portion of each
resulting Borrowing.
(e) PRESUMPTION IF NO NOTICE. If the Borrower fails to deliver a
timely Interest Election Request with respect to a Eurodollar Borrowing prior to
the end of the Interest Period applicable thereto, then, unless such Borrowing
is repaid as provided herein, at the end of such Interest Period such Borrowing
shall (x) if a Revolving Credit Borrowing or Incremental Facility Revolving Loan
CREDIT AGREEMENT
<PAGE> 46
- 40 -
Borrowing, be converted to a Base Rate Borrowing and (y) if a Term Loan
Borrowing, be converted into, or continued as, a Eurodollar Borrowing having an
Interest Period of one month's duration. Notwithstanding any contrary provision
hereof, if a Specified Default has occurred and is continuing and the
Administrative Agent, at the request of the Required Lenders, so notifies the
Borrower, then, so long as a Specified Default is continuing (i) no outstanding
Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii)
unless repaid, each Eurodollar Borrowing shall be converted to a Base Rate
Borrowing at the end of the Interest Period applicable thereto.
SECTION 2.07. TERMINATION AND REDUCTION OF COMMITMENTS.
(a) TERMINATION OF COMMITMENTS. Unless previously terminated, (i)
the Revolving Credit Commitments shall terminate at the close of business on the
Revolving Credit Maturity Date, (ii) the Tranche A Term Loan Commitments shall
terminate at the close of business on the last day of the Tranche A Term Loan
Availability Period, (iii) the Tranche B Term Loan Commitments and the Tranche C
Term Loan Commitments shall terminate after the Borrowing of Tranche B Term
Loans and the Tranche C Term Loans on the Effective Date and (iv) the
Incremental Facility Loan Commitments of any Series shall terminate on the
respective date provided therefor in the Incremental Facility Amendment in
respect of such Series.
(b) SCHEDULED REDUCTIONS OF REVOLVING CREDIT COMMITMENTS. The
aggregate amount of the Revolving Credit Commitments shall be automatically
reduced at the close of business on each Revolving Credit Commitment Reduction
Date set forth in column (A) below to the amount (subject to reduction pursuant
to paragraph (c) below) set forth in column (B) below opposite such Revolving
Credit Commitment Reduction Date:
(A) (B)
Revolving Credit Revolving Credit
Commitment Reduction Commitments Reduced
Date Falling on or to the Following
Nearest To: Amounts:
----------- --------
December 31, 2002 $ 1,462,500,000
March 31, 2003 $ 1,425,000,000
June 30, 2003 $ 1,387,500,000
September 30, 2003 $ 1,350,000,000
December 31, 2003 $ 1,312,500,000
March 31, 2004 $ 1,275,000,000
June 30, 2004 $ 1,200,000,000
September 30, 2004 $ 1,125,000,000
December 31, 2004 $ 1,050,000,000
March 31, 2005 $ 975,000,000
CREDIT AGREEMENT
<PAGE> 47
- 41 -
June 30, 2005 $ 881,250,000
September 30, 2005 $ 787,500,000
December 31, 2005 $ 693,750,000
March 31, 2006 $ 600,000,000
June 30, 2006 $ 506,250,000
September 30, 2006 $ 412,500,000
December 31, 2006 $ 318,750,000
March 31, 2007 $ 225,000,000
June 30, 2007 $ 150,000,000
September 30, 2007 $ 75,000,000
December 31, 2007 $ 0
Notwithstanding the foregoing, if on any date (the "TEST DATE"), the
maturity date for any then-outstanding Public Notes (excluding all Existing
Public Notes maturing in 2003, 2004 and 2005 and excluding also all Public Notes
maturing after June 30, 2009), or mandatory redemption date for Disqualified
Capital Stock (excluding all Disqualified Capital Stock with a mandatory
redemption date after June 30, 2009), shall fall within six months of the Test
Date then, if the aggregate principal amount of all such Public Notes that
mature, and the redemption price of all such Disqualified Capital Stock that is
required to be redeemed, prior to June 30, 2009 is at such time greater than the
Threshold Amount, the Revolving Credit Commitments shall automatically reduce to
zero on the Test Date, PROVIDED that the foregoing shall not apply if either (x)
the long-term debt rating for the outstanding unsecured and unenhanced Public
Notes is at least BBB- by S&P or Baa3 by Moody's or (y) the Required Lenders
shall elect otherwise at any time prior to the Test Date.
(c) VOLUNTARY TERMINATION OR REDUCTION. The Borrower may at any time
terminate, or from time to time reduce, the Commitments of any Class; PROVIDED
that (i) each reduction of the Commitments of such Class shall be in an amount
that is an integral multiple of $1,000,000 and not less than $5,000,000, (ii)
the Borrower shall not terminate or reduce the Commitments of such Class
(including any Incremental Facility Revolving Loan Commitments of any Class) if,
after giving effect to any concurrent prepayment of Loans in accordance with
Section 2.09, the outstanding Loans of such Class would exceed the total
Commitments of such Class and (iii) the Borrower shall not terminate or reduce
the Revolving Credit Commitments if, after giving effect to any concurrent
prepayment of the Loans in accordance with Section 2.09, the total Revolving
Credit Exposures would exceed the total Revolving Credit Commitments.
(d) NOTICE OF TERMINATION OR REDUCTION. The Borrower shall notify
the Administrative Agent of any election to terminate or reduce Commitments
under paragraph (c) of this Section 2.07 at least three Business Days prior to
the effective date of such termination or reduction, specifying such election
and the effective date thereof. Promptly following receipt of any notice, the
Administrative Agent shall advise the Lenders of the contents thereof. Each
notice delivered by the Borrower pursuant to this Section 2.07 shall be
irrevocable; PROVIDED that a notice of termination of Commitments delivered by
the Borrower may state that such notice is conditioned upon the effectiveness of
other credit facilities, in which case such notice may be revoked by the
Borrower (by notice to the Administrative
CREDIT AGREEMENT
<PAGE> 48
- 42 -
Agent on or prior to the specified effective date) if such condition is not
satisfied. Any termination or reduction of Commitments shall be permanent. Each
reduction of Commitments of any Class shall be made ratably among the Lenders in
accordance with their respective Commitments of such Class.
SECTION 2.08. REPAYMENT OF LOANS; EVIDENCE OF DEBT.
(a) REVOLVING CREDIT LOANS. The Borrower hereby unconditionally
promises to pay to the Administrative Agent for the account of each Revolving
Credit Lender the then unpaid principal amount of such Lender's Revolving Credit
Loans on the Revolving Credit Maturity Date.
(b) TRANCHE A TERM LOANS. The Borrower hereby unconditionally
promises to pay to the Administrative Agent for the account of the Tranche A
Term Loan Lenders the principal of the Tranche A Term Loans in twenty-one
installments payable on the Principal Payment Dates as follows:
Principal Payment Date
Falling on or Nearest to: Amount of Installment:
------------------------- ----------------------
December 31, 2002 $ 42,500,000
March 31, 2003 $ 42,500,000
June 30, 2003 $ 42,500,000
September 30, 2003 $ 42,500,000
December 31, 2003 $ 42,500,000
March 31, 2004 $ 42,500,000
June 30, 2004 $ 85,000,000
September 30, 2004 $ 85,000,000
December 31, 2004 $ 85,000,000
March 31, 2005 $ 85,000,000
June 30, 2005 $106,250,000
September 30, 2005 $106,250,000
December 31, 2005 $106,250,000
March 31, 2006 $106,250,000
June 30, 2006 $106,250,000
September 30, 2006 $106,250,000
December 31, 2006 $106,250,000
March 31, 2007 $106,250,000
June 30, 2007 $ 85,000,000
September 30, 2007 $ 85,000,000
December 31, 2007 $ 85,000,000
CREDIT AGREEMENT
<PAGE> 49
- 43 -
If on the close of business on the last day of the Tranche A Term Loan
Availability Period the aggregate outstanding principal amount of the Tranche A
Term Loans shall be less than the aggregate original principal amount of the
Tranche A Term Loan Commitments, the shortfall shall be applied to reduce the
foregoing installments ratably.
Notwithstanding the foregoing, if on any date (the "TEST DATE"), the
maturity date for any then-outstanding Public Notes (excluding all Existing
Public Notes maturing in 2003, 2004 and 2005 and excluding also all Public Notes
maturing after June 30, 2009), or mandatory redemption date for Disqualified
Capital Stock (excluding all Disqualified Capital Stock with a mandatory
redemption date after June 30, 2009), shall fall within six months of the Test
Date then, if the aggregate principal amount of all such Public Notes that
mature, and the redemption price of all such Disqualified Capital Stock that is
required to be redeemed, prior to June 30, 2009 is at such time greater than the
Threshold Amount, the Tranche A Term Loans shall be paid in full on the Test
Date, PROVIDED that the foregoing shall not apply if either (x) the long-term
debt rating for the outstanding unsecured and unenhanced Public Notes is at
least BBB- by S&P or Baa3 by Moody's or (y) the Required Lenders shall elect
otherwise at any time prior to the Test Date.
(c) TRANCHE B TERM LOANS. The Borrower hereby unconditionally
promises to pay to the Administrative Agent for the account of the Tranche B
Term Loan Lenders the principal of the Tranche B Term Loans in twenty-three
installments payable on the Principal Payment Dates as follows:
Principal Payment Date
Falling on or Nearest to: Amount of Installment:
------------------------- ----------------------
December 31, 2002 $ 2,250,000
March 31, 2003 $ 2,250,000
June 30, 2003 $ 2,250,000
September 30, 2003 $ 2,250,000
December 31, 2003 $ 2,250,000
March 31, 2004 $ 2,250,000
June 30, 2004 $ 2,250,000
September 30, 2004 $ 2,250,000
December 31, 2004 $ 2,250,000
March 31, 2005 $ 2,250,000
June 30, 2005 $ 2,250,000
September 30, 2005 $ 2,250,000
December 31, 2005 $ 2,250,000
March 31, 2006 $ 2,250,000
CREDIT AGREEMENT
<PAGE> 50
- 44 -
June 30, 2006 $ 2,250,000
September 30, 2006 $ 2,250,000
December 31, 2006 $ 2,250,000
March 31, 2007 $ 2,250,000
June 30, 2007 $ 2,250,000
September 30, 2007 $ 2,250,000
December 31, 2007 $ 2,250,000
March 31, 2008 $ 2,250,000
June 30, 2008 $ 850,500,000
Notwithstanding the foregoing, if on any date (the "TEST DATE"), the
maturity date for any then-outstanding Public Notes (excluding all Existing
Public Notes maturing in 2003, 2004 and 2005 and excluding also all Public Notes
maturing after June 30, 2009), or mandatory redemption date for Disqualified
Capital Stock (excluding all Disqualified Capital Stock with a mandatory
redemption date after June 30, 2009), shall fall within six months of the Test
Date then, if the aggregate principal amount of all such Public Notes that
mature, and the redemption price of all such Disqualified Capital Stock that is
required to be redeemed, prior to June 30, 2009 is at such time greater than the
Threshold Amount, the Tranche B Term Loans shall be paid in full on the Test
Date, PROVIDED that the foregoing shall not apply if either (x) the long-term
debt rating for the outstanding unsecured and unenhanced Public Notes is at
least BBB- by S&P or Baa3 by Moody's or (y) the Required Lenders shall elect
otherwise at any time prior to the Test Date.
(d) TRANCHE C TERM LOANS. The Borrower hereby unconditionally
promises to pay to the Administrative Agent for the account of the Tranche C
Term Loan Lenders the principal of the Tranche C Term Loans in twenty-five
installments payable on the Principal Payment Dates as follows:
Principal Payment Date
Falling on or Nearest to: Amount of Installment:
------------------------- ----------------------
December 31, 2002 $ 2,250,000
March 31, 2003 $ 2,250,000
June 30, 2003 $ 2,250,000
September 30, 2003 $ 2,250,000
December 31, 2003 $ 2,250,000
March 31, 2004 $ 2,250,000
June 30, 2004 $ 2,250,000
September 30, 2004 $ 2,250,000
December 31, 2004 $ 2,250,000
March 31, 2005 $ 2,250,000
CREDIT AGREEMENT
<PAGE> 51
- 45 -
June 30, 2005 $ 2,250,000
September 30, 2005 $ 2,250,000
December 31, 2005 $ 2,250,000
March 31, 2006 $ 2,250,000
June 30, 2006 $ 2,250,000
September 30, 2006 $ 2,250,000
December 31, 2006 $ 2,250,000
March 31, 2007 $ 2,250,000
June 30, 2007 $ 2,250,000
September 30, 2007 $ 2,250,000
December 31, 2007 $ 2,250,000
March 31, 2008 $ 2,250,000
June 30, 2008 $ 2,250,000
September 30, 2008 $ 2,250,000
December 31, 2008 $ 846,000,000
Notwithstanding the foregoing, if on any date (the "TEST DATE"), the
maturity date for any then-outstanding Public Notes (excluding all Existing
Public Notes maturing in 2003, 2004 and 2005 and excluding also all Public Notes
maturing after June 30, 2009), or mandatory redemption date for Disqualified
Capital Stock (excluding all Disqualified Capital Stock with a mandatory
redemption date after June 30, 2009), shall fall within six months of the Test
Date then, if the aggregate principal amount of all such Public Notes that
mature, and the redemption price of all such Disqualified Capital Stock that is
required to be redeemed, prior to June 30, 2009 is at such time greater than the
Threshold Amount, the Tranche C Term Loans shall be paid in full on the Test
Date, PROVIDED that the foregoing shall not apply if either (x) the long-term
debt rating for the outstanding unsecured and unenhanced Public Notes is at
least BBB- by S&P or Baa3 by Moody's or (y) the Required Lenders shall elect
otherwise at any time prior to the Test Date.
(e) INCREMENTAL FACILITY LOANS. The Borrower hereby unconditionally
promises to pay to the Administrative Agent for the account of the Incremental
Facility Lenders of any Series the principal of the Incremental Facility Loans
of such Series on such dates and in such amounts as shall be agreed upon
pursuant to Section 2.01(e) at the time the Incremental Facility Commitments of
such Series are established.
Notwithstanding the foregoing, if on any date (the "TEST DATE"), the
maturity date for any then-outstanding Public Notes (excluding all Existing
Public Notes maturing in 2003, 2004 and 2005 and excluding also all Public Notes
maturing after June 30, 2009), or mandatory redemption date for Disqualified
Capital Stock (excluding all Disqualified Capital Stock with a mandatory
redemption date after June 30, 2009), shall fall within six months of the Test
Date then, if the aggregate principal amount of all such Public Notes that
mature, and the redemption price of all such Disqualified Capital Stock that is
required to be redeemed, prior to June 30, 2009 is at such time greater than the
Threshold Amount, the Incremental Facility Loans shall be paid in full on the
Test Date, PROVIDED that the foregoing shall not
CREDIT AGREEMENT
<PAGE> 52
- 46 -
apply if either (x) the long-term debt rating for the outstanding unsecured and
unenhanced Public Notes is at least BBB- by S&P or Baa3 by Moody's or (y) the
Required Lenders shall elect otherwise at any time prior to the Test Date.
(f) MAINTENANCE OF LOAN ACCOUNTS BY LENDERS. Each Lender shall
maintain in accordance with its usual practice an account or accounts evidencing
the indebtedness of the Borrower to such Lender resulting from each Loan made by
such Lender, including the amounts of principal and interest payable and paid to
such Lender from time to time hereunder.
(g) MAINTENANCE OF LOAN ACCOUNTS BY ADMINISTRATIVE AGENT. The
Administrative Agent shall maintain accounts in which it shall record (i) the
amount of each Loan made hereunder, the Class and Type thereof and the Interest
Period applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) the amount of any sum received by the Administrative Agent hereunder
for the account of the Lenders and each Lender's share thereof.
(h) EFFECT OF LOAN ACCOUNTS. The entries made in the accounts
maintained pursuant to paragraph (f) or (g) of this Section 2.08 shall be prima
facie evidence of the existence and amounts of the obligations recorded therein;
PROVIDED that the failure of any Lender or the Administrative Agent to maintain
such accounts or any error therein shall not in any manner affect the obligation
of the Borrower to repay the Loans in accordance with the terms of this
Agreement.
(i) PROMISSORY NOTES. Any Lender may request that Loans made by it
be evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Administrative Agent. If any Lender
requests that the Loans made by it be evidenced by a promissory note, and such
Lender is a Lender under the Existing Credit Facility, the Borrower will not be
obligated to execute and deliver any such promissory note to such Lender unless
such Lender shall first have delivered any existing promissory notes executed
and delivered to such Lender pursuant to the Existing Credit Agreement to the
Administrative Agent or Special Counsel. Thereafter, the Loans evidenced by such
promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 10.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.09. PREPAYMENT OF LOANS.
(a) OPTIONAL PREPAYMENTS. The Borrower shall have the right at any
time and from time to time to prepay any Borrowing in whole or in part, subject
to prior notice in accordance with paragraph (d) of this Section 2.09.
Prepayments of Term Loan Borrowings under this Section 2.09(a) shall be applied
to each of such Classes of Borrowings (i) as between such Classes of Borrowings,
pro rata in accordance with the respective aggregate principal amounts of the
Loans of such Classes outstanding on the date of prepayment and (ii) as within
such Classes of Loans, to the respective installments thereof in the direct
order of their maturities (i.e., so that the earliest maturing installments are
prepaid first).
CREDIT AGREEMENT
<PAGE> 53
- 47 -
(b) MANDATORY PREPAYMENTS -- ALL LOANS. The Borrower shall make
prepayments of the Loans hereunder (and reduce the Commitments hereunder) as
follows:
(i) EXCESS CASH FLOW. Not later than the date 135 days after the end
of each fiscal year of the Borrower as at the end of which the Total
Indebtedness to Cash Flow Ratio is greater than 5.00 to 1 (commencing with
Excess Cash Flow for the fiscal year ending on December 31, 2002), the
Borrower shall prepay the Loans hereunder (and provide cover for LC
Exposure as specified in clause (iv) of this Section 2.09(b)), and the
Commitments hereunder of each Class shall be subject to automatic
reduction, in an aggregate amount equal to 50% of Excess Cash Flow for
such fiscal year, such prepayment and reduction to be effected in each
case in the manner and to the extent specified in clause (iv) of this
Section 2.09(b). Notwithstanding the foregoing, to the extent that during
any fiscal year the Borrower shall have made voluntary prepayments of any
Class of Term Loans, or shall have voluntarily reduced the Revolving
Credit Commitments or Incremental Facility Revolving Loan Commitments of
any Series, then such prepayment or reduction shall be credited against
the prepayment or reduction of the corresponding Class of Loans or
Commitments otherwise required under this clause (i) with respect to
Excess Cash Flow for the fiscal year in which such prepayment or reduction
occurred.
(ii) SALE OF ASSETS. Without limiting the obligation of the
Restricted Companies to obtain the consent of the Required Lenders to any
Disposition not otherwise permitted hereunder, the Borrower agrees, on or
prior to the occurrence of any Disposition after the Effective Date
(herein, the "CURRENT DISPOSITION") as to which the estimated amount of
the Net Cash Payments, together with all prior Dispositions after the
Effective Date as to which a prepayment has not yet been made under this
Section 2.09(b)(ii) and as to which a report contemplated by this Section
2.09(b)(ii) has not been delivered, shall exceed $100,000,000, to deliver
to the Administrative Agent a report certified by a Financial Officer, in
form and detail reasonably satisfactory to the Administrative Agent, with
respect to such Current Disposition and all such prior Dispositions
setting out the estimated amount of the Net Cash Payments of all such
Dispositions that will (on the date of the Current Disposition) have been
received in cash, whereupon the Borrower will prepay the Loans hereunder
(and provide cover for LC Exposure as specified in clause (iv) of this
Section 2.09(b)), and the Commitments hereunder of each Class shall be
subject to automatic reduction, as follows:
(w) upon the date of the Current Disposition, in an
aggregate amount equal to 100% of such estimated amount of the Net
Cash Payments of the Current Disposition, to the extent received in
cash on the date of the Current Disposition, together with 100% of
the Net Cash Payments of all such prior Dispositions to the extent
received in cash on or prior to such date; and
(x) thereafter, quarterly, on the date of the delivery
by the Borrower to the Administrative Agent pursuant to Section
6.01(c) of the financial statements for each quarterly fiscal period
or (if earlier) the date 60 days after the end of such quarterly
fiscal period (90 days in the case of the last fiscal quarter in any
fiscal year), to the extent the Restricted Companies shall receive
Net Cash Payments during such quarterly fiscal
CREDIT AGREEMENT
<PAGE> 54
- 48 -
period in cash under deferred payment arrangements or Disposition
Investments entered into or received in connection with any
Disposition, an amount equal to (A) 100% of the aggregate amount of
such Net Cash Payments MINUS (B) any transaction expenses associated
with Dispositions and not previously deducted in the determination
of Net Cash Payments PLUS (or MINUS, as the case may be) (C) any
other adjustment received or paid by the Restricted Companies
pursuant to the respective agreements giving rise to Dispositions
and not previously taken into account in the determination of the
Net Cash Payments of Dispositions, PROVIDED that if prior to the
date upon which the Borrower would otherwise be required to make a
prepayment under this clause (x) with respect to any quarterly
fiscal period the aggregate amount of such Net Cash Payments (after
giving effect to the adjustments provided for in this clause (x))
shall exceed $100,000,000, then the Borrower shall within three
Business Days make a prepayment under this clause (x) in an amount
equal to such required prepayment.
Prepayments of Loans (and cover for LC Exposure) and reductions of
Commitments shall be effected in each case in the manner and to the
extent specified in clause (iv) of this Section 2.09(b).
Notwithstanding the foregoing, the Borrower shall not be required to
make a prepayment (or provide cover) pursuant to this Section 2.09(b)(ii)
with respect to the Net Cash Payments from any Disposition in the event
that the Borrower advises the Administrative Agent at the time a
prepayment is required to be made under the foregoing clauses (w) or (x)
that it intends to reinvest such Net Cash Payments in assets to be used in
the business of the Restricted Companies (including through Capital
Expenditures or pursuant to an acquisition permitted under Section
7.04(a)(vi)), so long as:
(y) such Net Cash Payments are either (A) delivered to
the Collateral Agent to be held in the Sale Proceeds Reinvestment
Account pending such reinvestment, in which event the Collateral
Agent need not release such Net Cash Payments except upon
presentation of evidence reasonably satisfactory to it that such Net
Cash Payments are to be so reinvested in compliance with the
provisions of this Agreement or (B) applied by the Borrower to the
prepayment of Revolving Credit Loans hereunder (in which event the
Borrower agrees to advise the Administrative Agent in writing at the
time of such prepayment of Revolving Credit Loans that such
prepayment is being made from the proceeds of a Disposition and
that, as contemplated by the second paragraph of Section 2.01(a), a
portion of the Revolving Credit Commitments equal to the amount of
such prepayment gives rise to a Reserved Commitment Amount that
shall be available hereunder only for purposes of acquiring assets
to be used in the business of the Restricted Companies (including
through Capital Expenditures or making acquisitions under Section
7.04(a)(vi)) or to make prepayments of Loans under clause (z)(B)
below), and
(z) the Net Cash Payments from any Disposition are in
fact so reinvested within twelve months of such Disposition (it
being understood that, in the event Net Cash Payments from more than
one Disposition are delivered to the Collateral Agent
CREDIT AGREEMENT
<PAGE> 55
- 49 -
or applied to the prepayment of Revolving Credit Loans as provided
in clause (y) above, such Net Cash Payments shall be deemed to be
released (or, as the case may be, Revolving Credit Loans utilizing
the Reserved Commitment Amount shall be deemed to be made) in the
same order in which such Dispositions occurred and, accordingly, (A)
any such Net Cash Payments so held for more than twelve months shall
be forthwith applied to the prepayment of Loans (and cover for LC
Exposure) and reductions of Commitments as provided in clause (iv)
of this Section 2.09(b) and (B) any Reserved Commitment Amount that
remains so unutilized for twelve months shall be utilized through
the borrowing by the Borrower of Revolving Credit Loans the proceeds
of which shall be applied to the prepayment of Loans (and cover for
LC Exposure) and reductions of Commitments as provided in clause
(iv) of this Section 2.09(b)).
As contemplated by Article V of the Restricted Company Guarantee and
Security Agreement, nothing in this Section 2.09(b)(ii) shall be deemed to
obligate the Collateral Agent to release any of such proceeds from the
Sale Proceeds Reinvestment Account to the Restricted Companies for
purposes of reinvestment as aforesaid upon the occurrence and during the
continuance of any Event of Default.
In the event that any Reserved Commitment Amount with respect to any
Disposition shall remain unutilized for twelve months and the Borrower
shall for any reason not borrow Revolving Credit Loans the proceeds of
which are applied to the prepayment of Loans (and cover for LC Exposure)
and reductions of Commitments as provided above in this clause (ii), the
Revolving Credit Lenders agree (which agreement shall be absolute and
unconditional, regardless of whether or not the conditions to a borrowing
of Revolving Credit Loans hereunder shall have been satisfied and
regardless of the occurrence or continuance of any Event of Default,
including any Event of Default described in paragraphs (h) or (i) of
Article VIII) to purchase participations in the Loans of each of the other
Lenders (including the Incremental Facility Lenders, if any, of each
Series) in amounts equivalent to the amount of the respective prepayments
that each of such Lenders would have received had such borrowing of
Revolving Credit Loans occurred as provided above.
(iii) CHANGE IN CONTROL. Upon the occurrence of any Change in
Control, the Borrower shall prepay the Loans hereunder in full (and
provide cover for LC Exposure as specified in clause (iv) of this Section
2.09(b)), and, unless the Required Lenders shall elect otherwise, the
Commitments hereunder of each Class shall be automatically terminated.
(iv) APPLICATION. Upon each required reduction of Commitments and
prepayment of Loans (and cover for LC Exposure) pursuant to this Section
2.09(b), the respective Commitments of each Class shall be reduced, and
(if the Commitments of such Class have terminated) the respective Loans of
each Class shall be prepaid, ratably in accordance with the respective
then-outstanding aggregate amounts of such Commitments or Loans
(whichever, as to any particular Class is greater). If after giving effect
to any such reduction of the Commitments of any Class the aggregate
principal amount of the Loans of such Class (or, in the case of Revolving
Credit Commitments, the aggregate Revolving Credit Exposure) shall exceed
the amount of such Commitments, the Borrower will prepay the Loans of such
Class (and, to the
CREDIT AGREEMENT
<PAGE> 56
- 50 -
extent necessary, in the case of the Revolving Credit Commitments,
provide cover for LC Exposure pursuant to Section 2.04(i)) in an amount
equal to such excess. Prepayments of the Loans of any Class shall be
applied to the installments thereof in the direct order of maturity (i.e.,
so that the earliest maturing installments are prepaid first).
Subject to the requirements of this clause (iv), in making
prepayments of the Loans of any particular Class, the Borrower may elect
to prepay Base Rate Loans of such Class (or Eurodollar Loans of such Class
having Interest Periods that are the earliest scheduled to expire) in
order to minimize amounts that it would otherwise be required to pay under
Section 2.14 in connection with such prepayment.
(c) MANDATORY PREPAYMENTS - REVOLVING CREDIT LOANS.
(i) OFF-BALANCE SHEET TRANSACTIONS. In the event that any of the
Restricted Companies shall at any time receive any proceeds from any
Off-Balance Sheet Transaction, the Borrower shall forthwith apply the
amount of such proceeds to the prepayment of Revolving Credit Loans and
Incremental Facility Revolving Loans of each Series hereunder ratably
(but, in each case, without any reduction of Revolving Credit Commitments
or Incremental Facility Revolving Loan Commitments), it being understood
that such proceeds shall not include amounts collected by the Restricted
Companies on behalf of Off-Balance Sheet Companies representing payments
or other amounts payable by customers in respect of Off-Balance Sheet
Assets of such Off-Balance Sheet Companies.
(ii) OUTSTANDINGS EXCEEDING COMMITMENTS. If at any time the
aggregate amount of the Revolving Credit Exposure shall exceed the
Revolving Credit Commitments (including by reason of a regularly-scheduled
reduction in such Commitments pursuant to Section 2.07(b)), the Borrower
will prepay the Revolving Credit Loans (and, to the extent necessary
provide cover for LC Exposure pursuant to Section 2.04(i)) in an amount
equal to such excess.
(d) NOTIFICATION OF PREPAYMENTS. The Borrower shall notify the
Administrative Agent by telephone (confirmed by telecopy) of any prepayment
hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later
than 11:00 a.m., New York City time, three Business Days before the date of
prepayment or (ii) in the case of prepayment of a Base Rate Borrowing, not later
than 11:00 a.m., New York City time, on the date of prepayment. Each such notice
shall be irrevocable and shall specify the prepayment date and the principal
amount of each Borrowing or portion thereof to be prepaid; PROVIDED that, if a
notice of prepayment is given in connection with a conditional notice of
termination of Commitments as contemplated by Section 2.07, then such notice of
prepayment may be revoked if such notice of termination is revoked in accordance
with Section 2.07. Promptly following receipt of any such notice relating to a
Borrowing of a particular Class, the Administrative Agent shall advise the
Lenders holding Loans of such Class of the contents thereof. Each partial
prepayment of any Borrowing under paragraph (a) of this Section 2.09 shall be in
an amount that would be permitted in the case of an advance of a Borrowing of
the same Type as provided in Section 2.02.
(e) PREPAYMENTS ACCOMPANIED BY INTEREST. Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.11.
CREDIT AGREEMENT
<PAGE> 57
- 51 -
(f) PREPAYMENT PREMIUM. Upon any prepayment of Tranche B Term Loans
or Tranche C Term Loans pursuant to paragraph (b) above (i) during the period
commencing on the Effective Date to but not including the first anniversary
thereof, the Borrower shall pay to the holders of such Loans a prepayment
premium in respect of the principal amount of such Loans so prepaid equal to 2%
of such principal amount and (ii) during the period commencing on such first
anniversary to but not including the second anniversary of the Effective Date,
the Borrower shall pay to the holders of such Loans a prepayment premium in
respect of the principal amount of such Loans so prepaid equal to 1% of such
principal amount, it being understood that no prepayment premium shall be
required pursuant to this paragraph in respect of any prepayment of such Loans
made on or after such second anniversary. For purposes hereof, any prepayment
made pursuant to Section 2.09(a) after a public announcement of a Change in
Control (and prior to the date of a public announcement that the transaction
giving rise to such impending Change in Control has been rescinded or
terminated) shall be deemed to be a prepayment made pursuant to Section
2.09(b)(iii). In addition, in the event that the Required Lenders shall modify
or waive any of the provisions of Section 2.09(b) and, as a result thereof, a
prepayment that would otherwise have been required under Section 2.09(b) shall
not be made, the Borrower shall nevertheless pay to the holders of the Loans
under the Term B Facility and Term C Facility a prepayment premium equal to the
amount of prepayment premium that would otherwise have been paid had such
prepayment occurred.
SECTION 2.10. FEES.
(a) COMMITMENT FEE. The Borrower agrees to pay to the Administrative
Agent for the account of each Lender a commitment fee, for each day from and
including the Effective Date to but excluding the date on which such Lender's
Revolving Credit Commitment or Tranche A Term Loan Commitment, as applicable,
shall terminate, at a rate per annum equal to the Commitment Fee Rate (as
defined below) on the unused amount of the Revolving Credit Commitment and
Tranche A Term Loan Commitment of such Lender for such day. Accrued commitment
fees shall be payable in arrears on each Quarterly Date and, in respect of any
Commitment, on the date such Commitment terminates, commencing on the first such
date to occur after the date hereof. All commitment fees shall be computed on
the basis of a year of 360 days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day). For purposes
hereof, the "COMMITMENT FEE RATE" means, for any day, the rate per annum set
forth in the schedule below opposite the percentage of the aggregate Revolving
Credit Commitments of all of the Revolving Credit Lenders that shall be utilized
on such day:
UTILIZATION PERCENTAGE COMMITMENT FEE RATE
---------------------- -------------------
Greater than or equal to 50% 0.50%
Greater than or equal to 25% and less than 50% 0.75%
Less than 25% 1.00%
Notwithstanding the foregoing, the Commitment Fee Rate otherwise applicable will
be reduced by 0.125% effective on the date three Business Days after the
delivery to the Administrative Agent of the financial statements of NCI and its
subsidiaries (and of the Restricted Companies) for any fiscal quarter
CREDIT AGREEMENT
<PAGE> 58
- 52 -
pursuant to Section 6.01(c) if, as at the end of such fiscal quarter, the Total
Indebtedness to Cash Flow Ratio is less than 7.00 to 1, such reduction to remain
effective for such purpose until three Business Days after the next delivery of
such financial statements to the Administrative Agent hereunder (whereupon such
reduction shall continue to the extent such Ratio is again less than 7.00 to 1
as at the then most-recently ended fiscal quarter).
The Borrower agrees to pay to the Administrative Agent for the
account of each Incremental Facility Lender in respect of its Incremental
Facility Loan Commitment of any Series a commitment fee at such rate per annum
(computed on such basis) as shall be agreed upon pursuant to Section 2.01(e) at
the time such Incremental Facility Loan Commitment is established.
(b) LETTER OF CREDIT FEES. The Borrower agrees to pay with respect
to Letters of Credit outstanding hereunder the following fees:
(i) to the Administrative Agent for the account of each Revolving
Credit Lender a participation fee with respect to its participations in
Letters of Credit, which shall accrue at a rate per annum equal to the
Applicable Rate used in determining interest on Revolving Credit
Eurodollar Loans on the average daily amount of such Lender's LC Exposure
(excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Effective Date to
but excluding the later of the date on which such Lender's Revolving
Credit Commitment terminates and the date on which there shall no longer
be any Letters of Credit outstanding hereunder, and
(ii) to each Issuing Bank (x) a fronting fee, which shall accrue at
the rate of 1/4 of 1% per annum on the average daily amount of the LC
Exposure of such Issuing Bank (determined for these purposes without
giving effect to the participations therein of the Revolving Credit
Lenders pursuant to paragraph (d) of Section 2.04, and excluding any
portion thereof attributable to unreimbursed LC Disbursements) during the
period from and including the Effective Date to but excluding the later of
the date of termination of the Revolving Credit Commitments and the date
on which there shall no longer be any Letters of Credit of such Issuing
Bank outstanding hereunder, and (y) such Issuing Bank's standard fees with
respect to the issuance, amendment, renewal or extension of any Letter of
Credit or processing of drawings thereunder.
Accrued participation fees and fronting fees shall be payable in arrears on each
Quarterly Date and on the date the Revolving Credit Commitments terminate,
commencing on the first such date to occur after the date hereof, PROVIDED that
any such fees accruing after the date on which the Revolving Credit Commitments
terminate shall be payable on demand. All participation fees and fronting fees
shall be computed on the basis of a year of 360 days and shall be payable for
the actual number of days elapsed (including the first day but excluding the
last day).
(c) AGENCY FEES. The Borrower agrees to pay to the Administrative
Agent and the Collateral Agent, for their own respective accounts, fees payable
in the amounts and at the times separately agreed in writing upon between the
Borrower and the Administrative Agent and the Collateral Agent, respectively.
CREDIT AGREEMENT
<PAGE> 59
- 53 -
(d) PAYMENT OF FEES. All fees payable hereunder shall be paid on the
dates due, in immediately available funds, to the Administrative Agent for
distribution to the Lenders entitled thereto. Fees paid shall not be refundable
under any circumstances, absent manifest error in the determination thereof.
SECTION 2.11. INTEREST.
(a) BASE RATE BORROWINGS. The Loans comprising each Base Rate
Borrowing shall bear interest at a rate per annum equal to the Adjusted Base
Rate plus the Applicable Rate.
(b) EURODOLLAR BORROWINGS. The Loans comprising each Eurodollar
Borrowing shall bear interest at a rate per annum equal to the Adjusted LIBO
Rate for the Interest Period in effect for such Borrowing plus the Applicable
Rate.
(c) DEFAULT INTEREST. Notwithstanding the foregoing, (i) during the
period when any Specified Default shall have occurred and be continuing, the
principal of each Loan hereunder shall bear interest, after as well as before
judgment, at a rate per annum (herein, the "POST-DEFAULT RATE") equal to 2% plus
the rate (taking into account the last paragraph of the definition of
"Applicable Rate" in Section 1.01) otherwise applicable to such Loan as provided
above and (ii) if any interest on any Loan or any fee or other amount payable by
the Borrower hereunder is not paid when due, whether at stated maturity, upon
acceleration or otherwise, such overdue amount shall bear interest, after as
well as before judgment, at a rate per annum equal to the Post-Default Rate for
the Loan in respect of which such interest is payable (or, in the case of a fee
or other amount that does not relate to a Loan of a particular type, at the
Post-Default Rate for Base Rate Tranche B Term Loans).
(d) PAYMENT OF INTEREST. Accrued interest on each Loan shall be
payable in arrears on each Interest Payment Date for such Loan; PROVIDED that
(i) interest accrued pursuant to paragraph (c) of this Section 2.11 shall be
payable on demand, (ii) in the event of any repayment or prepayment of any
Eurodollar Loan (or the repayment or prepayment in full of the Term Loans of any
Class), accrued interest on the principal amount repaid or prepaid shall be
payable on the date of such repayment or prepayment, (iii) in the event of any
conversion of any Eurodollar Loan prior to the end of the current Interest
Period therefor, accrued interest on such Loan shall be payable on the effective
date of such conversion and (iv) all accrued interest on Revolving Credit Loans
shall be payable upon termination of the Revolving Credit Commitments and all
accrued interest on Incremental Facility Revolving Loans of any Series shall be
payable upon termination of the Incremental Facility Revolving Loan Commitments
of such Series.
(e) COMPUTATION. All interest hereunder shall be computed on
the basis of a year of 360 days, except that interest computed by reference to
the Adjusted Base Rate at times when the Adjusted Base Rate is based on the
Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in
a leap year), and in each case shall be payable for the actual number of days
elapsed (including the first day but excluding the last day). The applicable
Adjusted Base Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest
error.
CREDIT AGREEMENT
<PAGE> 60
- 54 -
SECTION 2.12. ALTERNATE RATE OF INTEREST. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall
be conclusive absent manifest error) that adequate and reasonable means do
not exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as
applicable, for such Interest Period; or
(b) if such Borrowing is of a particular Class of Loans, the
Administrative Agent is advised by the Required Lenders of such Class that
the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest
Period will not adequately and fairly reflect the cost to such Lenders of
making or maintaining their Loans of such Class included in such Borrowing
for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as a Base Rate Borrowing.
SECTION 2.13. INCREASED COSTS.
(a) INCREASED COSTS GENERALLY. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit
or similar requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted LIBO Rate) or Issuing Bank; or
(ii) impose on any Lender or Issuing Bank or the London interbank
market any other condition affecting this Agreement or Eurodollar Loans
made by such Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or any
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or such
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or such Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or such Issuing
Bank, as the case may be, for such additional costs incurred or reduction
suffered.
(b) CAPITAL REQUIREMENTS. If any Lender or Issuing Bank reasonably
determines that any Change in Law regarding capital requirements has or would
have the effect of reducing the rate of return on such Lender's or such Issuing
Bank's capital or on the capital of such Lender's or Issuing Bank's
CREDIT AGREEMENT
<PAGE> 61
- 55 -
holding company, if any, as a consequence of this Agreement or the Loans made
by, or participations in Letters of Credit held by, such Lender, or the Letters
of Credit issued by such Issuing Bank, to a level below that which such Lender
or such Issuing Bank or such Lender's or Issuing Bank's holding company could
have achieved but for such Change in Law (taking into consideration such
Lender's or Issuing Bank's policies and the policies of such Lender's or Issuing
Bank's holding company with respect to capital adequacy), then from time to time
the Borrower will pay to such Lender or Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or Issuing Bank, or
such Lender's or Issuing Bank's holding company, for any such reduction
suffered.
(c) CERTIFICATES FROM LENDERS. A certificate of a Lender or Issuing
Bank setting forth the amount or amounts necessary to compensate such Lender or
Issuing Bank or its holding company, as the case may be, as specified in
paragraph (a) or (b) of this Section 2.13 shall be delivered to the Borrower and
shall be conclusive so long as it reflects a reasonable basis for the
calculation of the amounts set forth therein and does not contain any manifest
error. The Borrower shall pay such Lender or Issuing Bank the amount shown as
due on any such certificate within 10 days after receipt thereof.
(d) DELAY IN REQUESTS. Failure or delay on the part of any Lender or
Issuing Bank to demand compensation pursuant to this Section 2.13 shall not
constitute a waiver of such Lender's or Issuing Bank's right to demand such
compensation; PROVIDED that the Borrower shall not be required to compensate a
Lender or Issuing Bank pursuant to this Section 2.13 for any increased costs or
reductions incurred more than six months prior to the date that such Lender or
Issuing Bank, as the case may be, notifies the Borrower of the Change in Law
giving rise to such increased costs or reductions and of such Lender's or
Issuing Bank's intention to claim compensation therefor; PROVIDED FURTHER that,
if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the six-month period referred to above shall be extended to
include the period of retroactive effect thereof.
SECTION 2.14. BREAK FUNDING PAYMENTS. In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice is permitted to be revocable
and is revoked in accordance herewith) or (d) the assignment of any Eurodollar
Loan other than on the last day of the Interest Period applicable thereto as a
result of a request by the Borrower pursuant to Section 2.17, then, in any such
event, the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event.
In the case of a Eurodollar Loan, the loss to any Lender
attributable to any such event shall be deemed to include an amount determined
by such Lender to be equal to the excess, if any, of (i) the amount of interest
that such Lender would pay for a deposit equal to the principal amount of such
Loan for the period from the date of such payment, conversion, failure or
assignment to the last day of the then current Interest Period for such Loan
(or, in the case of a failure to borrow, convert or continue, the duration of
the Interest Period that would have resulted from such borrowing, conversion or
continuation) if the interest rate payable on such deposit were equal to the
Adjusted LIBO Rate for such Interest Period, over (ii) the amount of interest
that such Lender would earn on such principal amount for such period if such
Lender were to invest such principal amount for such period at the interest rate
CREDIT AGREEMENT
<PAGE> 62
- 56 -
that would be bid by such Lender (or an affiliate of such Lender) for U.S.
dollar deposits from other banks in the eurodollar market at the commencement of
such period. A certificate of any Lender setting forth any amount or amounts
that such Lender is entitled to receive pursuant to this Section 2.14 shall be
delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay such Lender the amount shown as due on any such certificate
within 10 days after receipt thereof.
SECTION 2.15. TAXES.
(a) PAYMENTS FREE OF TAXES. Any and all payments by or on account of
any obligation of the Borrower hereunder shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes (except to the extent
that, after request by the Borrower, the respective Lender shall have failed to
deliver the documents referred to in paragraph (e) of this Section 2.15);
PROVIDED that if the Borrower shall be required to deduct any Indemnified Taxes
or Other Taxes from such payments, then (i) the sum payable shall be increased
as necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.15) the
Administrative Agent, Lender or Issuing Bank (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions and (iii) the Borrower shall pay
the full amount deducted to the relevant Governmental Authority in accordance
with applicable law.
(b) OTHER TAXES. In addition the Borrower shall pay any Other Taxes
to the relevant Governmental Authority in accordance with applicable law.
(c) INDEMNIFICATION BY BORROWER. The Borrower shall indemnify the
Administrative Agent, each Lender and each Issuing Bank, within 10 days after
written demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section 2.15) paid by the
Administrative Agent, such Lender or Issuing Bank, as the case may be (and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto during the period prior to the Borrower making the payment demanded
under this paragraph (c)), whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to the Borrower by a Lender or an Issuing Bank, or by the Administrative Agent
on its own behalf or on behalf of a Lender or an Issuing Bank, shall be
conclusive absent manifest error.
(d) RECEIPT FOR PAYMENTS. As soon as practicable after any payment
of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority,
the Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.
(e) FOREIGN LENDERS. Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the jurisdiction
in which the Borrower is located, or any treaty to which such jurisdiction is a
party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable
CREDIT AGREEMENT
<PAGE> 63
- 57 -
law or reasonably requested by the Borrower, such properly completed and
executed documentation prescribed by applicable law as will permit such payments
to be made without withholding or at a reduced rate.
SECTION 2.16. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF
SET-OFFS.
(a) PAYMENTS BY OBLIGORS. The Borrower shall make each payment
required to be made by it hereunder (whether of principal, interest, fees or
reimbursement of LC Disbursements, or under Section 2.13, 2.14 or 2.15, or
otherwise) prior to 12:00 noon, New York City time, on the date when due, in
immediately available funds, without set-off or counterclaim. Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at such of its offices in New York
City as shall be notified to the relevant parties from time to time, except
payments to be made directly to an Issuing Bank as expressly provided herein and
except that payments pursuant to Sections 2.13, 2.14, 2.15 and 10.03 shall be
made directly to the Persons entitled thereto. The Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof, and the
Borrower shall have no liability in the event timely or correct distribution of
such payments is not so made. If any payment hereunder shall be due on a day
that is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
hereunder shall be made in U.S. dollars.
(b) APPLICATION IF PAYMENTS INSUFFICIENT. If at any time
insufficient funds are received by and available to the Administrative Agent to
pay fully all amounts of principal, unreimbursed LC Disbursements, interest and
fees then due hereunder, such funds shall be applied (i) first, to pay interest
and fees then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of interest and fees then due to such parties, and
(ii) second, to pay principal and unreimbursed LC Disbursements then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal and unreimbursed LC Disbursements then due to such parties.
(c) PRO RATA TREATMENT. Except to the extent otherwise provided
herein: (i) each borrowing of Loans of a particular Class from the Lenders under
Section 2.01 hereof shall be made from the relevant Lenders, each payment of
commitment fee under Section 2.10 hereof in respect of Commitments of a
particular Class shall be made for account of the relevant Lenders, and each
termination or reduction of the amount of the Commitments of a particular Class
under Section 2.03 hereof shall be applied to the respective Commitments of such
Class of the relevant Lenders, pro rata according to the amounts of their
respective Commitments of such Class; (ii) Eurodollar Loans of any Class having
the same Interest Period shall be allocated pro rata among the relevant Lenders
according to the amounts of their Commitments or such Class (in the case of the
making of Loans) or their respective Loans of such Class (in the case of
conversions and continuations of Loans); (iii) each payment or prepayment by the
Borrower of principal of Loans of a particular Class shall be made for account
of the relevant Lenders pro rata in accordance with the respective unpaid
principal amounts of the Loans of such Class held by them; (iv) each payment by
the Borrower of interest on Loans of a particular Class shall be made for
account of the relevant Lenders pro rata in accordance with the
CREDIT AGREEMENT
<PAGE> 64
- 58 -
amounts of interest on such Loans then due and payable to the respective
Lenders; and (v) each payment by the Borrower of participation fees in respect
of Letters of Credit shall be made for the account of the Revolving Credit
Lenders pro rata in accordance with the amount of participation fees then due
and payable to the Revolving Credit Lenders.
(d) SHARING OF PAYMENTS BY LENDERS. If, at any time after the
occurrence and during the continuance of an Event of Default hereunder, any
Lender shall, by exercising any right of set-off or counterclaim or otherwise
(including through voluntary prepayment by the Restricted Companies, or through
the exercise of any remedies under, or payments made pursuant to, the Restricted
Company Guarantee and Security Agreement), obtain payment in respect of any
principal of or interest on any of its Loans (or participations in LC
Disbursements) of any Class resulting in such Lender receiving payment of a
greater proportion of the aggregate principal amount of its Loans (and
participations in LC Disbursements) of such Class and accrued interest thereon
than the proportion of such amounts received by any other Lender of such Class
or any other Class, then the Lender receiving such greater proportion shall
purchase (for cash at face value) participations in the Loans (and LC
Disbursements) of the other Lenders to the extent necessary so that the benefit
of such payments shall be shared by all the Lenders ratably in accordance with
the aggregate amount of principal of and accrued interest on their respective
Loans (and participations in LC Disbursements); PROVIDED that (i) if any such
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment
obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans (or participations in LC Disbursements) to any
assignee or participant, other than to any Credit Party or any subsidiary or
Affiliate thereof (as to which the provisions of this paragraph shall apply).
The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation.
(e) PRESUMPTIONS OF PAYMENT. Unless the Administrative Agent shall
have received notice from the Borrower prior to the date on which any payment is
due to the Administrative Agent for the account of the Lenders or any Issuing
Bank entitled thereto (the "APPLICABLE RECIPIENT") hereunder that the Borrower
will not make such payment, the Administrative Agent may assume that the
Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Applicable Recipient the amount
due. In such event, if the Borrower has not in fact made such payment, then each
Applicable Recipient severally agrees to repay to the Administrative Agent
forthwith on demand the amount so distributed to such Applicable Recipient with
interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to the Administrative
Agent, at the Federal Funds Effective Rate.
(f) CERTAIN DEDUCTIONS BY ADMINISTRATIVE AGENT. If any Lender shall
fail to make any payment required to be made by it pursuant to Section 2.04(d),
2.04(e), 2.05(b) or 2.16(e), then the Administrative Agent may, in its
discretion (notwithstanding any contrary provision hereof), apply any amounts
thereafter received by the Administrative Agent for the account of such Lender
to satisfy such Lender's obligations under such Section until all such
unsatisfied obligations are fully paid.
CREDIT AGREEMENT
<PAGE> 65
- 59 -
SECTION 2.17. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.
(a) DESIGNATION OF DIFFERENT LENDING OFFICe. If any Lender requests
compensation under Section 2.13, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 2.15, then such Lender shall use reasonable
efforts to designate a different lending office for funding or booking its Loans
(or participations in LC Disbursements) hereunder or to assign its rights and
obligations, hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 2.13 or 2.15, as the case may be,
in the future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
(b) REPLACEMENT OF LENDERS -- INCREASED COSTS, ETC. If any Lender
requests compensation under Section 2.13, or if the Borrower is required to pay
any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.15, or if any Lender defaults in its
obligation to fund Loans hereunder, then the Borrower may, at its sole expense
and effort, upon notice to such Lender and the Administrative Agent, require
such Lender to assign and delegate, without recourse (in accordance with and
subject to the restrictions contained in Section 10.04), all its interests,
rights and obligations under this Agreement to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such
assignment); PROVIDED that (i) the Borrower shall have received the prior
written consent of the Administrative Agent (and, if a Revolving Credit
Commitment is being assigned, each Issuing Bank), which consents shall not
unreasonably be withheld or delayed, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans (and
participations in LC Disbursements), accrued interest thereon, accrued fees and
all other amounts payable to it hereunder, from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrower (in
the case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.13 or payments required
to be made pursuant to Section 2.15, such assignment will result in a reduction
in such compensation or payments. A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply.
(c) REPLACEMENT OF LENDERS -- AMENDMENTS. If, in connection with a
request by any Credit Party to obtain the consent of the Lenders to a waiver,
amendment or modification of any of the provisions of this Agreement or any
other Loan Document that requires the consent of all of the Lenders under
Section 10.02, one or more Lenders (the "DECLINING LENDERS") having Loans, LC
Exposure and unused Commitments representing not more than 5% of the sum of the
total Loans, LC Exposure and unused Commitments at such time have declined to
agree to such request, then the Borrower may, at its sole expense and effort,
upon notice to such Lender(s) and the Administrative Agent, require all (but not
less than all) of such Declining Lenders to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 10.04), all their interests, rights and obligations under this Agreement
to one or more assignees that shall assume such obligations (any of which
assignees may be
CREDIT AGREEMENT
<PAGE> 66
- 60 -
another Lender, if a Lender accepts such assignment); PROVIDED that (i) the
Borrower shall have received the prior written consent of the Administrative
Agent (and, if a Revolving Credit Commitment is being assigned, each Issuing
Bank), which consents shall not unreasonably be withheld or delayed, (ii) each
such Declining Lender shall have received payment of an amount equal to the
outstanding principal of its Loans (and participations in LC Disbursements),
accrued interest thereon, accrued fees and all other amounts payable to it
hereunder and under any other Loan Document, from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrower (in
the case of all other amounts) and (iii) the Borrower shall have paid to each of
the Lenders compensation in an amount equivalent (taking into account the total
Commitments, LC Exposure and Loans of such other Lenders) to any compensation
required to induce the assignees to take such assignment from the Declining
Lenders.
ARTICLE III
GUARANTEE BY NCI
SECTION 3.01. THE GUARANTEE. NCI hereby guarantees to each Lender,
each Issuing Bank and each Agent and their respective successors and assigns the
prompt payment in full when due (whether at stated maturity, by acceleration or
otherwise) of the principal of and interest on the Loans made by the Lenders to
the Borrower, all LC Disbursements and all other amounts from time to time owing
to the Lenders, any Issuing Bank or either Agent by the Borrower hereunder or
under any other Loan Document, and all obligations of the Borrower to any Lender
(or any affiliate of any Lender) under any Hedging Agreement, in each case
strictly in accordance with the terms thereof (such obligations being herein
collectively called the "GUARANTEED OBLIGATIONS"). NCI hereby further agrees
that if the Borrower shall fail to pay in full when due (whether at stated
maturity, by acceleration or otherwise) any of the Guaranteed Obligations, NCI
will promptly pay the same, without any demand or notice whatsoever, and that in
the case of any extension of time of payment or renewal of any of the Guaranteed
Obligations, the same will be promptly paid in full when due (whether at
extended maturity, by acceleration or otherwise) in accordance with the terms of
such extension or renewal.
SECTION 3.02. OBLIGATIONS UNCONDITIONAL. The obligations of NCI
under Section 3.01 are absolute and unconditional irrespective of the value,
genuineness, validity, regularity or enforceability of this Agreement, the other
Loan Documents or any other agreement or instrument referred to herein or
therein, or any substitution, release or exchange of any other guarantee of or
security for any of the Guaranteed Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
that might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 3.02 that the
obligations of NCI hereunder shall be absolute and unconditional under any and
all circumstances. Without limiting the generality of the foregoing, it is
agreed that the occurrence of any one or more of the following shall not alter
or impair the liability of NCI hereunder which shall remain absolute and
unconditional as described above:
CREDIT AGREEMENT
<PAGE> 67
- 61 -
(i) at any time or from time to time, without notice to NCI, the
time for any performance of or compliance with any of the Guaranteed
Obligations shall be extended, or such performance or compliance shall be
waived;
(ii) any of the acts mentioned in any of the provisions hereof or of
the other Loan Documents or any other agreement or instrument referred to
herein or therein shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right hereunder or under
the other Loan Documents or any other agreement or instrument referred to
herein or therein shall be waived or any other guarantee of any of the
Guaranteed Obligations or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with; or
(iv) any lien or security interest granted to, or in favor of, the
Collateral Agent, any Issuing Bank or any Lender or Lenders as security
for any of the Guaranteed Obligations shall fail to be perfected.
NCI hereby expressly waives diligence, presentment, demand of payment, protest
and all notices whatsoever, and any requirement that the Administrative Agent,
the Collateral Agent, any Issuing Bank or any Lender exhaust any right, power or
remedy or proceed against the Borrower hereunder or under the other Loan
Documents or any other agreement or instrument referred to herein or therein, or
against any other Person under any other guarantee of, or security for, any of
the Guaranteed Obligations.
SECTION 3.03. REINSTATEMENT. The obligations of NCI under this
Article III shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of the Borrower in respect of the Guaranteed
Obligations is rescinded or must be otherwise restored by any holder of any of
the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy
or reorganization or otherwise, and NCI agrees that it will indemnify the
Administrative Agent, the Collateral Agent, each Issuing Bank and each Lender on
demand for all reasonable costs and expenses (including fees of counsel)
incurred by the Administrative Agent, the Collateral Agent or such Issuing Bank
or Lender in connection with such rescission or restoration, including any such
costs and expenses incurred in defending against any claim alleging that such
payment constituted a preference, fraudulent transfer or similar payment under
any bankruptcy, insolvency or similar law.
SECTION 3.04. SUBROGATION. NCI hereby waives all rights of
subrogation or contribution, whether arising by contract or operation of law
(including, without limitation, any such right arising under the Federal
Bankruptcy Code of 1978, as amended) or otherwise by reason of any payment by it
pursuant to the provisions of this Article III and further agrees with the
Borrower for the benefit of each of its creditors (including, without
limitation, each Issuing Bank, each Lender, the Collateral Agent and the
Administrative Agent) that any such payment by it shall constitute a
contribution of capital by NCI to the Borrower.
CREDIT AGREEMENT
<PAGE> 68
- 62 -
SECTION 3.05. REMEDIES. NCI agrees that, as between NCI and the
Issuing Banks and Lenders, the obligations of the Borrower hereunder may be
declared to be forthwith due and payable as provided in Article VIII or Section
2.04(i), as applicable (and shall be deemed to have become automatically due and
payable in the circumstances provided in Article VIII or Section 2.04(i), as
applicable) for purposes of Section 3.01 notwithstanding any stay, injunction or
other prohibition preventing such declaration (or such obligations from becoming
automatically due and payable) as against the Borrower and that, in the event of
such declaration (or such obligations being deemed to have become automatically
due and payable), such obligations (whether or not due and payable by the
Borrower) shall forthwith become due and payable by NCI for purposes of Section
3.01.
SECTION 3.06. INSTRUMENT FOR THE PAYMENT OF MONEY. NCI hereby
acknowledges that the guarantee in this Article III constitutes an instrument
for the payment of money, and consents and agrees that any Issuing Bank, any
Lender, the Collateral Agent or the Administrative Agent, at its sole option, in
the event of a dispute by NCI in the payment of any moneys due hereunder, shall
have the right to bring motion-action under New York CPLR Section 3213.
SECTION 3.07. CONTINUING GUARANTEE. The guarantee in this Article
III is a continuing guarantee, and shall apply to all Guaranteed Obligations
whenever arising.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
NCI and each Restricted Company represents and warrants to the
Lenders and the Agents, as to itself and each of its subsidiaries, that:
SECTION 4.01. ORGANIZATION; POWERS. NCI is duly organized, validly
existing and in good standing under the laws of the State of Delaware. Each of
the Restricted Companies is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization. Each Credit
Party has all requisite power and authority under its respective organizational
documents to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
SECTION 4.02. AUTHORIZATION; ENFORCEABILITY. The Transactions are
within the corporate or other power of each Credit Party and have been duly
authorized by all necessary corporate and, if required, stockholder or other
action on the part of such Credit Party. This Agreement has been duly executed
and delivered by each Credit Party and constitutes a legal, valid and binding
obligation of such Credit Party, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
CREDIT AGREEMENT
<PAGE> 69
- 63 -
SECTION 4.03. GOVERNMENTAL APPROVALS; NO CONFLICTS. The Transactions
(a) do not require any consent or approval of, registration or filing with, or
any other action by, any Governmental Authority, (b) will not violate any
applicable law, policy or regulation or the charter, by-laws or other
organizational documents of any Credit Party or any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
agreement or other instrument binding upon any Credit Party, or any of its
assets, or give rise to a right thereunder to require any payment to be made by
any Credit Party, and (d) except for the Liens created by the Security
Documents, will not result in the creation or imposition of any Lien on any
asset of the Credit Parties.
SECTION 4.04. FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE.
(a) FINANCIAL STATEMENTS. The Credit Parties have heretofore
delivered to the Lenders the following financial statements:
(i) the audited consolidated balance sheet and statements of
operations, changes in stockholders' equity and cash flows of NCI and its
subsidiaries as of and for the fiscal year ended December 31, 1998,
reported on by Deloitte & Touche LLP, independent public accountants;
(ii) the unaudited combined condensed consolidated balance sheet and
statements of changes in stockholders' equity and cash flows of NCI and
its subsidiaries as of and for the six-month period ended June 30, 1999,
together with the unaudited consolidated statements of operations for such
period and for the fiscal quarter ended June 30, 1999, in each case
certified by a Financial Officer of NCI;
(iii) the unaudited combined condensed balance sheet and statements
of operations, changes in stockholders' equity and cash flows of the
Restricted Companies as of and for the fiscal year ended December 31,
1998, certified by a Financial Officer of the Borrower; and
(iv) the unaudited combined condensed balance sheet and statements
of changes in stockholders' equity and cash flows of the Restricted
Companies as of and for the six-month period ended June 30, 1999, together
with the unaudited combined statements of operations for such period and
for the fiscal quarter ended June 30, 1999, in each case certified by a
Financial Officer of the Borrower.
Such financial statements present fairly, in all material respects, the
consolidated financial position and results of operations and cash flows of NCI
and its subsidiaries, and the combined condensed financial position and results
of operations and cash flows of the Restricted Companies, as of such dates and
for such periods in accordance with GAAP, subject to year-end audit adjustments
and the absence of footnotes in the case of the statements as at and for the
fiscal quarter and six-month period ended June 30, 1999.
(b) NO MATERIAL ADVERSE CHANGE. Since June 30, 1999, there has been
no material adverse change in the business, assets, operations, prospects or
condition, financial or otherwise, of NCI and its subsidiaries, or of the
Restricted Companies, in each case taken as a whole.
CREDIT AGREEMENT
<PAGE> 70
- 64 -
(c) NO MATERIAL UNDISCLOSED LIABILITIES. None of the Credit Parties
has on the date hereof any contingent liabilities, liabilities for taxes,
unusual forward or long-term commitments or unrealized or anticipated losses
from any unfavorable commitments in each case that are material, except as
referred to or reflected or provided for in the balance sheets as at June 30,
1999 referred to above.
(d) YEAR 2000 ISSUES. The Restricted Companies have completed a
review and have substantially completed the testing of their operations with a
view to assessing whether their business or operations will, in the receipt,
transmission, processing, manipulation, storage, retrieval, retransmission or
other utilization of data, be vulnerable to any significant risk that computer
hardware or software used in their business or operations (including systems and
equipment supplied by others or with which the systems of the Restricted
Companies interface) will not, in the case of dates or time periods occurring
after December 31, 1999, function at least as effectively as in the case of
dates or time periods occurring prior to January 1, 2000. Based on such review,
the Borrower has no reason to believe that a Material Adverse Effect will occur
with respect to such business or operations resulting from any such risk.
SECTION 4.05. PROPERTIES.
(a) TITLE GENERALLY. Each of the Credit Parties has good title to,
or valid leasehold interests in, all its real and personal property material to
its business, except for minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes.
(b) INTELLECTUAL PROPERTY. Each of the Credit Parties and their
respective subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, patents and other intellectual property material to its business,
and the use thereof by the Credit Parties and their respective subsidiaries does
not infringe upon the rights of any other Person, except for any such
infringements that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 4.06. LITIGATION AND ENVIRONMENTAL MATTERS.
(a) LITIGATION GENERALLY. There are no actions, suits or proceedings
by or before any arbitrator or Governmental Authority pending against or, to the
knowledge of any of the Credit Parties, threatened against or affecting any of
the Credit Parties or any of their respective subsidiaries (i) as to which there
is a reasonable possibility of an adverse determination and that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect (other than the Disclosed Matters) or (ii)
that involve any of the Loan Documents or the Transactions.
(b) ENVIRONMENTAL MATTERS. Except for the Disclosed Matters and
except with respect to any other matters that, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect, no
Credit Party nor any of their respective subsidiaries (i) has failed to comply
with any Environmental Law or to obtain, maintain or comply with any permit,
license or other approval required under any Environmental Law, (ii) has become
subject to any Environmental Liability, (iii) has
CREDIT AGREEMENT
<PAGE> 71
- 65 -
received notice of any claim with respect to any Environmental Liability or any
inquiry, allegation, notice or other communication from any Governmental
Authority concerning its compliance with any Environmental Law or (iv) knows of
any basis for any Environmental Liability.
(c) NO CHANGE IN STATUS OF DISCLOSED MATTERS. Since the date of this
Agreement, there has been no change in the status of the Disclosed Matters that,
individually or in the aggregate, has resulted in, or materially increased the
likelihood of, a Material Adverse Effect.
SECTION 4.07. COMPLIANCE WITH LAWS AND AGREEMENTS. Each of the
Credit Parties and their respective subsidiaries is in compliance with all laws,
regulations, policies and orders of any Governmental Authority applicable to it
or its property and all indentures, agreements and other instruments binding
upon it or its property, except where the failure to do so, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect. No Default has occurred and is continuing.
SECTION 4.08. INVESTMENT AND HOLDING COMPANY STATUS. No Credit Party
nor any of their respective subsidiaries is (a) an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940,
as amended, or (b) a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935, as amended.
SECTION 4.09. TAXES. Each of the Credit Parties and their respective
subsidiaries has timely filed or caused to be filed all Tax returns and reports
required to have been filed and has paid or caused to be paid all Taxes required
to have been paid by it, except (a) Taxes that are being contested in good faith
by appropriate proceedings and for which such Credit Party has set aside on its
books adequate reserves with respect thereto in accordance with GAAP or (b) to
the extent that the failure to do so could not reasonably be expected to result
in a Material Adverse Effect.
SECTION 4.10. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. As of the date hereof, none of the
Restricted Companies has contributed to, or within the past six years has
contributed to or been required to contribute to, any "employee benefit pension
plan" subject to Title IV of ERISA.
SECTION 4.11. DISCLOSURE. The Credit Parties have disclosed to the
Lenders all agreements, instruments and corporate or other restrictions to which
any Credit Party is subject, and all other matters known to any Credit Party,
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect. None of the reports, financial statements,
certificates or other information furnished by or on behalf of the Credit
Parties to the Administrative Agent, the Collateral Agent or any Lender in
connection with the negotiation of this Agreement or delivered hereunder (as
modified or supplemented by other information so furnished) taken together with
any information contained in the public filings made by NCI with the Securities
and Exchange Commission pursuant to the Securities Exchange Act of 1934, as
amended, contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not materially misleading; PROVIDED
that, with respect to
CREDIT AGREEMENT
<PAGE> 72
- 66 -
projected financial information, the Credit Parties represent only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time.
SECTION 4.12. MATERIAL AGREEMENTS AND LIENS.
(a) INDEBTEDNESS. Part A of Schedule 4.12 is a complete and correct
list, as of the date of this Agreement, of each credit agreement, loan
agreement, indenture, purchase agreement, guarantee, letter of credit or other
arrangement (other than this Agreement, the Existing Credit Agreement or the
Public Note Indentures) providing for or otherwise relating to any Indebtedness
or any extension of credit (or commitment for any extension of credit) to, or
guarantee by, any of the Credit Parties the aggregate principal or face amount
of which equals or exceeds (or may equal or exceed) $25,000,000, and the
aggregate principal or face amount outstanding or that may become outstanding
under each such arrangement is correctly described in Part A of said Schedule
4.12.
(b) LIENS. Part B of Schedule 4.12 hereto is a complete and correct
list, as of the date of this Agreement, of each Lien securing Indebtedness of
any Person the aggregate principal or face amount of which equals or exceeds (or
may equal or exceed) $25,000,000 and covering any property of any of the Credit
Parties, and the aggregate Indebtedness secured (or that may be secured) by each
such Lien and the property covered by each such Lien is correctly described in
Part B of said Schedule 4.12.
SECTION 4.13. REGULATORY MATTERS.
(a) LICENSE INFORMATION. The FCC Licenses and PUC Authorizations
held or managed by the Restricted Companies that are material to the Mobile
Communications Business of the Restricted Companies are valid and in full force
and effect without conditions except for such conditions as are generally
applicable to holders of FCC Licenses and such Authorizations. No event
(including the pendency of any petition to deny, informal objection, petition to
revoke, or other complaint, investigation or proceeding before the FCC or any
PUC) has occurred and is continuing which could reasonably be expected to (i)
result in the imposition of a material forfeiture or the revocation, termination
or adverse modification of any FCC License or PUC Authorization held or managed
by a Restricted Company and material to the Mobile Communications Business of
the Restricted Companies or (ii) materially and adversely affect any rights of
the Restricted Companies thereunder that are material to the Mobile
Communications Business of the Restricted Companies.
None of the Restricted Companies has any reason to believe or has
any knowledge that the FCC Licenses and PUC Authorizations held or managed by
the Restricted Companies that are material to the Mobile Communications Business
of the Restricted Companies will not be renewed in the ordinary course. The
Restricted Companies (taking into account the Commitments hereunder and the
other financial sources reflected or assumed in the business plan of NCI set
forth in the Information Memorandum) have sufficient time, materials, equipment,
contract rights and other required resources to complete, in a timely fashion
and in full, construction of each Mobile Communications System they currently
operate or currently plan to operate in compliance with all applicable technical
standards and construction requirements and deadlines. The current ownership and
operation by each of the Restricted Companies of its Mobile Communications
Business comply with the Communications Act of 1934, as amended, and all rules,
regulations and policies of the FCC, any PUC and of any other Governmental
CREDIT AGREEMENT
<PAGE> 73
- 67 -
Authority, except for such non-compliance that could not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect.
(b) CONDITION OF SYSTEMS. All of the material properties, equipment
and systems owned, leased or managed by each Restricted Company are, and (to the
best knowledge of the Restricted Companies) all such material property,
equipment and systems to be acquired or added in connection with any
contemplated system expansion or construction will be, in good repair, working
order and condition and are and will be in compliance with all terms and
conditions of the FCC Licenses and all standards or rules imposed by any
Governmental Authority (including the FCC or any PUC) or as imposed under any
agreements with telephone companies and customers, except for any such failure
to be in good repair, working order or condition, and any such non-compliance,
that could not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect.
(c) FEES. Each of the Restricted Companies (as to all Mobile
Communications Systems owned, leased or managed by any of such entities) has
paid all franchise, license or other fees and charges which have become due
pursuant to any Authorization in respect of its business and has made
appropriate provision as is required by GAAP for any such fees and charges which
have accrued.
(d) LICENSE COMPLIANCE. Except as specifically set forth in Schedule
4.13 hereto, each of the Restricted Companies has secured all Authorizations
with the FCC, and, if applicable, any PUC and any other Governmental Authority
exercising jurisdiction over the Mobile Communications Business of the
Restricted Companies (or the construction of delivery systems therefor) required
for the conduct of the business and operations of the Mobile Communications
Business as currently conducted, except where the failure to so obtain such
Authorizations could not reasonably be expected to result in a Material Adverse
Effect. All management agreements covering any FCC Licenses managed by the
Restricted Companies, and all agreements among the Restricted Companies with
respect to the operation of licenses, are in compliance with all applicable laws
as well as the rules, orders and policies of any Governmental Authority,
including the FCC and applicable PUC's, except for any non-compliance that could
not reasonably be expected to result in a Material Adverse Effect. The
Restricted Companies have timely filed all required reports, applications,
certificates, and other documents with the FCC and any applicable PUC or other
Governmental Authority with respect to any Mobile Communications Systems owned
or managed by any Restricted Company, except where failure to file any such
documents could not result in a Material Adverse Effect.
SECTION 4.14. SUBSIDIARIES. Set forth in Schedule 4.14 is a complete
and correct list of all of the Restricted Companies and their subsidiaries as of
the date hereof together with, for each such subsidiary, (a) the jurisdiction of
organization of such subsidiary, (b) each Person holding ownership interests in
such subsidiary and (c) the nature of the ownership interests held by each such
Person and the percentage of ownership of such subsidiary represented by such
ownership interests. Except as disclosed in Schedule 4.14, (i) each Credit Party
owns, free and clear of Liens (other than Liens created pursuant to the Security
Documents), and has the unencumbered right to vote, all outstanding ownership
interests in each Person shown to be held by it in Schedule 4.14, (y) all of the
issued and outstanding capital stock of each such Person organized as a
corporation is validly issued, fully paid and nonassessable and (z) there are no
outstanding Equity Rights with respect to such Person.
CREDIT AGREEMENT
<PAGE> 74
- 68 -
SECTION 4.15. CAPITALIZATION OF CREDIT PARTIES.
(a) CAPITALIZATION OF NCI. Schedule 4.15 correctly summarizes the
existing equity capitalization of NCI as of September 30, 1999. As of the date
hereof, except as set forth in Schedule 4.15, there are no outstanding
obligations of NCI or any Restricted Company to repurchase, redeem, or otherwise
acquire any shares of capital stock of NCI or any Restricted Company, nor are
there any outstanding obligations of NCI, any Restricted Company or any of their
subsidiaries to make payments to any Person, such as "phantom stock" payments,
where the amount thereof is calculated with reference to the fair market value
or equity value of NCI or any Restricted Company.
(b) CAPITALIZATION OF RESTRICTED COMPANIES. The aggregate amount of
equity capital contributed to the Restricted Companies after September 27, 1996,
and through March 12, 1998 is $2,327,100,000 (of which NCI hereby designates
$1,200,500,000 as "Permanent Equity Capital" for purposes of this Agreement);
the aggregate amount of equity capital contributed to the Restricted Companies
by NCI after March 12, 1998 through October 31, 1999 that is eligible to be
designated as "Permanent Equity Capital" for purposes of this Agreement is
$2,222,062,207.
SECTION 4.16. PUBLIC NOTE INDENTURES. NCI has heretofore delivered
to each Agent a true and complete copy of each Public Note Indenture (including
all modifications and supplements thereto) for each of the Existing Public
Notes. The Restricted Companies constitute all of the "Restricted Subsidiaries"
on the date hereof under and as defined in the Public Note Indentures. Each of
the covenants set forth in Sections 1008, 1009, 1010, 1012, 1013, 1015 and 1017
of the Indenture dated as of August 15, 1993, between NCI and The Bank of New
York, as Trustee, has been removed from said Indenture by consent of the holders
of the Public Notes outstanding thereunder, and not more than $36,000,000
aggregate principal amount of Public Notes remains outstanding under said
Indenture.
SECTION 4.17. CERTAIN ADDITIONAL AGREEMENTS. NCI has heretofore
delivered to each Agent a true and complete copy of the Nextel Partners
Agreement and each of the Tower Merger Documents (including all modifications
and supplements thereto), each as in effect on the date hereof.
ARTICLE V
CONDITIONS
SECTION 5.01. EFFECTIVE DATE. The effectiveness of this Agreement
(and the amendment and restatement of the Existing Credit Agreement to be
effected hereby) and of the obligations of the Lenders to make Loans, and of any
Issuing Bank to issue Letters of Credit, hereunder is subject to the conditions
precedent that each of the following conditions shall have been satisfied (or
waived in accordance with Section 10.02):
(a) COUNTERPARTS OF AGREEMENT. The Administrative Agent (or Special
Counsel) shall have received from each party hereto either (i) a
counterpart of this Agreement signed on behalf of such party or (ii)
written evidence satisfactory to the Administrative Agent (which may
CREDIT AGREEMENT
<PAGE> 75
- 69 -
include telecopy transmission of a signed signature page of this
Agreement) that such party has signed a counterpart of this Agreement.
(b) OPINION OF COUNSEL TO CREDIT PARTIES. The Administrative Agent
(or Special Counsel) shall have received a favorable written opinion
(addressed to each Agent and the Lenders and dated the Effective Date) of
Jones, Day, Reavis & Pogue, counsel to the Credit Parties, covering such
matters relating to the Credit Parties, this Agreement, the other Loan
Documents or the Transactions as either Agent shall request (and each
Credit Party hereby requests such counsel to deliver such opinion). To the
extent deemed appropriate by the Restricted Companies, internal corporate
matters in such opinion (such as due incorporation and the like) may be
rendered in a separate opinion from the General Counsel of NCI.
(c) OPINION OF SPECIAL COUNSEL. The Administrative Agent shall have
received a favorable written legal opinion (addressed to each Agent and
the Lenders and dated the Effective Date) of Special Counsel,
substantially in the form of Exhibit B (and the Syndication Agent hereby
requests Special Counsel to deliver such opinion).
(d) CORPORATE MATTERS. The Administrative Agent (or Special Counsel)
shall have received such documents and certificates as either Agent or
Special Counsel may reasonably request relating to the organization,
existence and good standing of each Credit Party, the authorization of the
Transactions and any other legal matters relating to the Credit Parties,
this Agreement, the other Loan Documents or the Transactions, all in form
and substance reasonably satisfactory to each Agent.
(e) FINANCIAL OFFICER CERTIFICATE. The Administrative Agent (or
Special Counsel) shall have received a certificate, dated the Effective
Date and signed by the President, a Vice President or a Financial Officer
of the Borrower, confirming compliance with the conditions set forth in
paragraphs (a) and (b) of Section 5.02.
(f) NOTES. The Administrative Agent (or Special Counsel) shall have
received for each Lender that shall have requested a promissory note, a
duly completed and executed promissory note for such Lender, and, if such
Lender was a Lender under the Existing Credit Agreement, the
Administrative Agent or Special Counsel shall have received any promissory
notes of the Borrower that have been executed and delivered to such Lender
pursuant to the Existing Credit Agreement.
(g) RESTRICTED COMPANY GUARANTEE AND SECURITY AGREEMENT. The
Collateral Agent (or Special Counsel) shall have received (i) from each
Restricted Company a counterpart of the Restricted Company Guarantee and
Security Agreement signed on behalf of such Restricted Company and (ii) to
the extent not previously delivered to the Collateral Agent under the
Existing Credit Agreement or the "Restricted Company Guarantee
CREDIT AGREEMENT
<PAGE> 76
- 70 -
and Security Agreement" executed and delivered pursuant thereto, the
stock certificates identified under the name of such Restricted Company in
Annex 1 thereto, accompanied by undated stock powers executed in blank. In
addition, each Restricted Company shall have taken such other action to
the extent not previously taken under the Existing Credit Agreement or
said "Restricted Company Guarantee and Security Agreement" (including
delivering to the Collateral Agent, for filing, appropriately completed
and duly executed copies of Uniform Commercial Code financing statements
consistent with the requirements of the Restricted Company Guarantee and
Security Agreement) as the Collateral Agent shall have requested in order
to perfect the security interests created pursuant to the Restricted
Company Guarantee and Security Agreement.
(h) FEES AND EXPENSES. The Administrative Agent shall have received
all fees and other amounts due and payable on or prior to the Effective
Date, including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by the Borrower
hereunder.
Notwithstanding the foregoing, the obligations of the Lenders to make Loans, and
of the Issuing Banks to issue Letters of Credit, hereunder shall not become
effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 10.02) at or prior to 3:00 p.m., New York City time, on
November 30, 1999 (and, in the event such conditions are not so satisfied or
waived, the Commitments shall terminate at such time).
SECTION 5.02. EACH EXTENSION OF CREDIT. The obligation of each
Lender to make a Loan on the occasion of any Borrowing, and of any Issuing Bank
to issue, amend, renew or extend any Letter of Credit, is subject to the
satisfaction of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of each Credit Party set forth in this Agreement and the other
Loan Documents shall be true and correct on and as of the date of such
Borrowing, or (as applicable) the date of issuance, amendment, renewal or
extension of such Letter of Credit, both before and after giving effect
thereto and to the use of the proceeds thereof (or, if any such
representation or warranty is expressly stated to have been made as of a
specific date, such representation or warranty shall be true and correct
as of such specific date).
(b) NO DEFAULTS. At the time of and immediately after giving effect
to such Borrowing, or (as applicable) the date of issuance, amendment,
renewal or extension of such Letter of Credit, no Default shall have
occurred and be continuing.
Each Borrowing Request, or request for issuance, amendment, renewal or extension
of a Letter of Credit, shall be deemed to constitute a representation and
warranty by the Borrower (both as of the date of such Borrowing Request, or
request for issuance, amendment, renewal or extension, and as of the date of the
related Borrowing or issuance, amendment, renewal or extension) as to the
matters specified in paragraphs (a) and (b) of this Section 5.02.
CREDIT AGREEMENT
<PAGE> 77
- 71 -
ARTICLE VI
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, each of the Credit Parties
covenants and agrees with the Lenders that:
SECTION 6.01. FINANCIAL STATEMENTS AND OTHER INFORMATION. NCI and
the Borrower will furnish to the Administrative Agent (which shall promptly
deliver copies thereof to each Lender):
(a) within 120 days after the end of each fiscal year, the audited
consolidated statements of operations, changes in stockholders' equity and
cash flows of NCI and its subsidiaries for such fiscal year, and the
related audited consolidated balance sheet for NCI and its subsidiaries as
of the end of such fiscal year, setting forth in each case in comparative
form the corresponding figures for the previous fiscal year, all reported
on by Deloitte & Touche LLP, or other independent public accountants of
recognized national standing (without a "going concern" or like
qualification or exception and without any qualification or exception as
to the scope of such audit), to the effect that such audited consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of NCI and its subsidiaries on a
consolidated basis in accordance with GAAP consistently applied;
(b) within 120 days after the end of each fiscal year, the unaudited
combined statements of operations, changes in stockholders' equity and
cash flows of the Restricted Companies for such fiscal year, and the
related unaudited combined balance sheet for the Restricted Companies as
of the end of such fiscal year, setting forth in each case in comparative
form the corresponding figures for the previous fiscal year, all certified
by a Financial Officer of the Borrower as presenting fairly in all
material respects the financial condition and results of operations of the
Restricted Companies on a combined basis in accordance with GAAP
consistently applied, each of which financial statements shall be
accompanied with a reconciliation, in form and detail satisfactory to the
Administrative Agent, to the audited financial statements for NCI and its
subsidiaries for such fiscal year delivered pursuant to clause (a) above;
(c) within 60 days after the end of each fiscal quarter of each
fiscal year beginning with the fiscal quarter ended September 30, 1999
(100 days in the case of the last fiscal quarter in each fiscal year):
(i) the unaudited consolidated statements of operations
of NCI and its subsidiaries (and, separately stated, the unaudited
combined statements of operations of the Restricted Companies) for
such fiscal quarter and for the then elapsed portion of the fiscal
year,
CREDIT AGREEMENT
<PAGE> 78
- 72 -
(ii) the unaudited consolidated statements of changes in
stockholders' equity and cash flows of NCI and its subsidiaries
(and, separately stated, the unaudited combined statements of
changes in stockholders' equity and cash flows of the Restricted
Companies) for the then elapsed portion of the fiscal year and
(iii) the unaudited related consolidated balance sheet
for NCI and its subsidiaries (and, separately stated, the related
unaudited combined balance sheet for the Restricted Companies) as at
the end of such fiscal quarter,
setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance
sheet, as of the end of) the previous fiscal year, all certified by a
Financial Officer of NCI or the Borrower (as the case may be) as
presenting fairly, in all material respects, the financial condition
and results of operations of NCI and its subsidiaries on a consolidated
basis (or, as the case may be, of the Restricted Companies on a
combined basis) in accordance with GAAP consistently applied, subject
to normal year-end audit adjustments and the absence of footnotes;
(d) concurrently with any delivery of financial statements under
clause (a), (b) or (c) above, a certificate of a Financial Officer of each
of NCI and the Borrower:
(i) certifying as to whether a Default has occurred and,
if a Default has occurred, specifying the details thereof and any
action taken or proposed to be taken with respect thereto,
(ii) setting forth reasonably detailed calculations
demonstrating compliance with clauses (b), (d), (e) and (g) of
Section 7.01, clause (f) of Section 7.02, clauses (f), (i) and (j)
of Section 7.03, subclauses (iv), (v), (vi) and (viii) of 7.04(a),
clauses (c) and (d) of Section 7.05 and Section 7.08,
(iii) setting forth the estimated amount of Net Cash
Payments received during the most-recently ended fiscal quarter from
Dispositions during such quarter,
(iv) if any of the Public Notes (other than Existing
Public Notes maturing in 2003, 2004 and 2005) shall mature, or the
mandatory redemption date for any Disqualified Capital Stock shall
fall, within six months of the last day of the fiscal quarter
immediately following the fiscal quarter covered by such financial
statements, describing the respective dates and amounts of the
Public Notes so maturing, and Disqualified Capital Stock required to
be redeemed, that is outstanding as at the last day of the fiscal
quarter as of which such financial statements are prepared; and
(v) stating whether any change in GAAP or in the
application thereof has occurred since the later of the date of the
financial statements as at December 31, 1998 referred to in Section
4.04 and the date of the last certificate delivered pursuant to this
clause (d) and, if any such change has occurred, specifying the
effect of such change on the financial statements accompanying such
certificate;
CREDIT AGREEMENT
<PAGE> 79
- 73 -
(e) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
any Credit Party with the Securities and Exchange Commission, or any
Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed by
NCI to the holders of the Public Notes or to its shareholders generally;
(f) as soon as available and in any event within 45 days after the
end of each fiscal quarter of each fiscal year of the Borrower, a report
identifying any FCC License or PUC Authorization material to the Mobile
Communications Business of the Restricted Companies that has been lost,
surrendered or canceled during such period, and within 10 Business Days of
the receipt by any of the Restricted Companies of notice that any such SMR
License or PUC Authorization has been lost or canceled or is subject to
any action that might reasonably be expected to cause such loss or
cancellation, copies of any such notice accompanied by a report describing
the measures undertaken by the Restricted Companies to prevent such loss
or cancellation (and the anticipated impact, if any, that such loss or
cancellation will have upon the Mobile Communications Business of the
Restricted Companies); and
(g) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of any
Credit Party, or compliance with the terms of this Agreement, as the
Administrative Agent, the Collateral Agent or any Lender (through the
Administrative Agent or Collateral Agent) may reasonably request.
SECTION 6.02. NOTICES OF MATERIAL EVENTS. NCI and the Borrower will
furnish to the Administrative Agent (which shall promptly deliver copies thereof
to each Lender) prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by
or before any arbitrator or Governmental Authority against or affecting any
Credit Party that, if adversely determined, could reasonably be expected to
result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Restricted Companies in an aggregate amount exceeding
$25,000,000; and
(d) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section 6.02 shall be accompanied by a
statement of a Financial Officer or other executive officer of NCI or the
Borrower, as the case may be, setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken
with respect thereto.
CREDIT AGREEMENT
<PAGE> 80
- 74 -
SECTION 6.03. EXISTENCE; CONDUCT OF BUSINESS. Each of the Credit
Parties will do or cause to be done all things necessary to preserve, renew and
keep in full force and effect its legal existence and the rights, licenses,
permits, privileges and franchises material to the conduct of its business;
PROVIDED that the foregoing shall not prohibit any merger, consolidation,
liquidation or dissolution permitted under Section 7.03. In that connection,
each of the Restricted Companies shall take any and all necessary and
appropriate action to maintain all of the FCC Licenses and PUC Authorizations
material to the Mobile Communications Business of the Restricted Companies in
full force and effect without adverse modification, shall construct and operate
each Mobile Communications System and other ancillary system in compliance with
applicable FCC Licenses and PUC Authorizations, and shall otherwise comply in
all material respects with the terms of all FCC Licenses and PUC Authorizations
as well as applicable laws, rules, policies, decisions and orders of the FCC,
any applicable PUC and any other Governmental Authority, including new rules
issued by the FCC with respect to RF Emissions.
Without limiting the generality of the foregoing, each of the
Restricted Companies will:
(i) do all things necessary to maintain its corporate
existence separate and apart from NCI and the Unrestricted Companies
and any division thereof, including holding regular meetings of its
shareholders and Board of Directors and maintaining appropriate
corporate books and records (including current minute books);
(ii) not suffer any limitation on the authority of its own
officers and directors to conduct its business and affairs in
accordance with their independent business judgment, or authorize or
suffer any Person other than its own officers to conduct its business
and affairs in accordance with their independent business judgment, or
authorize or suffer any Person other than its own officers and
directors to act on its behalf with respect to matters (other than
matters customarily delegated to others under power of attorney) for
which a corporation's own officers and directors would customarily be
responsible;
(iii) maintain the operations of the Restricted Companies
separate and apart from the operations of NCI and the Unrestricted
Companies, including (A) following customary corporate formalities, (B)
identifying separately all of its assets from those of NCI and the
Unrestricted Companies, (C) when dealing with creditors of the
Restricted Companies, or supplying financial information to creditors
of the Restricted Companies, identifying the respective Restricted
Company as a separate legal entity, (D) if NCI shall issue account
statements on behalf of the Restricted Companies to customers of the
Restricted Companies, identifying that such statements are being
delivered "for the respective operating companies" (or words of similar
import) rendering the services covered by such statements and (E)
accounting for and managing all of its liabilities separately from
those of NCI and the Unrestricted Companies, including payment by it of
all payroll and other administrative expenses and taxes (except as
contemplated by the Overhead Services Agreement and the Tax Sharing
Agreement) from its own assets; and
(iv) not commingle its funds with those of NCI, any
Unrestricted Company, any Non-Core Company or any Off-Balance Sheet
Company, or use its funds other than in the business conducted by the
Restricted Companies, PROVIDED that nothing in this clause (iv) shall
prohibit a
CREDIT AGREEMENT
<PAGE> 81
- 75 -
Restricted Company from billing and collecting amounts
payable to an Unrestricted Company, a Non-Core Company or an
Off-Balance Sheet Company (including the deposit of such amounts
into such Restricted Company's lock box or depository account) and
remitting such collected amounts to the respective Unrestricted
Company, Non-Core Company or Off-Balance Sheet Company entitled
thereto.
SECTION 6.04. PAYMENT OF OBLIGATIONS. Each of the Credit Parties
will pay its obligations, including Tax liabilities, that, if not paid, could
result in a Material Adverse Effect before the same shall become delinquent or
in default, except where (a) the validity or amount thereof is being contested
in good faith by appropriate proceedings, (b) such Credit Party has set aside on
its books adequate reserves with respect thereto in accordance with GAAP and (c)
the failure to make payment pending such contest could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 6.05. MAINTENANCE OF PROPERTIES; INSURANCE. Each of the
Credit Parties will (a) keep and maintain all property material to the conduct
of its business in good working order and condition, ordinary wear and tear
excepted, and (b) maintain, with financially sound and reputable insurance
companies, insurance in such amounts and against such risks as are customarily
maintained by companies engaged in the same or similar businesses operating in
the same or similar locations.
SECTION 6.06. BOOKS AND RECORDS; INSPECTION RIGHTS. Each of the
Credit Parties will keep proper books of record and account in which full, true
and correct entries are made of all dealings and transactions in relation to its
business and activities. Each of the Credit Parties will permit any
representatives designated by the Administrative Agent or any Lender, upon
reasonable prior notice, to visit and inspect its properties, to examine and
make extracts from its books and records, and to discuss its affairs, finances
and condition with its officers and independent accountants, all at such
reasonable times and as often as reasonably requested.
SECTION 6.07. FISCAL YEAR. The Credit Parties will not change the
last day of their fiscal year from December 31 of each year, or the last days of
the first three fiscal quarters in each of their fiscal years from March 31,
June 30 and September 30 of each year, respectively.
SECTION 6.08. COMPLIANCE WITH LAWS. Each of the Credit Parties will
comply with all laws, rules, regulations and orders of any Governmental
Authority applicable to it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
SECTION 6.09. USE OF PROCEEDS.
(a) REVOLVING CREDIT AND TERM LOANS. The proceeds of the Loans
hereunder (after giving effect to the extension and renewal of Indebtedness
outstanding under the Existing Credit Agreement as contemplated by Section
2.01(f)) will be used for general corporate purposes including capital
expenditures, the payment of interest and fees hereunder, working capital,
investments, acquisitions and refinancing of Indebtedness of the Restricted
Companies (including Indebtedness under the Public Notes maturing in 2003, 2004
and 2005), in each case in compliance with the applicable provisions of the
Public Note Indentures and of this Agreement.
CREDIT AGREEMENT
<PAGE> 82
- 76 -
(b) REGULATIONS U AND X. No part of the proceeds of any Loan will be
used, whether directly or indirectly, for any purpose that entails a violation
of any of the Regulations of the Board, including Regulations U and X.
SECTION 6.10. HEDGING AGREEMENTS. Within 90 days after the Effective
Date, the Borrower will enter into and thereafter maintain in full force and
effect one or more Hedging Agreements with one or more of the Lenders (and/or
with a bank or other financial institution having capital, surplus and undivided
profits of at least $500,000,000), that satisfy the following requirements:
(a) as at the last day of each fiscal quarter ending after the date
90 days after the Effective Date, the notional principal amount of such
Hedging Agreement(s), together with the aggregate principal amount of
Indebtedness of NCI and the Restricted Companies bearing interest at a
fixed rate, shall be at least equal to 50% of the sum of the Commitments
hereunder and all other Indebtedness of NCI and the Restricted Companies
outstanding on the last day of such fiscal quarter; and
(b) each such Hedging Agreement shall have a minimum term of three
years and shall enable the Restricted Companies during the term thereof to
protect themselves against three-month London interbank offered rate
fluctuations at rates, and in a manner, reasonably satisfactory to each of
the Agents,
PROVIDED that the Borrower will not be required to maintain such Hedging
Agreements in place if, as at the last day of any fiscal quarter of the
Restricted Companies, the Total Indebtedness to Cash Flow Ratio is less than or
equal to 5.00 to 1.
SECTION 6.11. CERTAIN OBLIGATIONS RESPECTING SUBSIDIARIES AND
COLLATERAL SECURITY.
(a) GUARANTORS. In the event that any Restricted Company shall form
or acquire any new subsidiary after the date hereof (and in the event that NCI
shall form or acquire any new subsidiary after the date hereof constituting a
"Restricted Subsidiary" under and as defined in the Public Note Indentures or
shall designate an existing Unrestricted Company as a "Restricted Subsidiary"
under and as defined in the Public Note Indentures), such Credit Party will,
within five Business Days of such formation or acquisition, cause such new
subsidiary (or such "Restricted Subsidiary"):
(i) to execute and deliver to the Collateral Agent a
Joinder Agreement (and thereby become a party to this Agreement, as
a "Restricted Company" hereunder, and the Restricted Company
Guarantee and Security Agreement as a "Guarantor" thereunder) and to
pledge and grant a security interest in its property pursuant to the
Restricted Company Guarantee and Security Agreement to the
Collateral Agent for the benefit of the Lenders;
(ii) to take such action (including delivering such
shares of stock and executing and delivering such Uniform Commercial
Code financing statements) as shall be necessary to create and
perfect valid and enforceable first priority Liens consistent with
the provisions of the Security Documents, on substantially all of
the shares of stock and property of such new
CREDIT AGREEMENT
<PAGE> 83
- 77 -
subsidiary (or such "Restricted Subsidiary") under the Restricted
Company Guarantee and Security Agreement; and
(iii) to deliver such proof of corporate action,
incumbency of officers and other documents (including opinions of
counsel, but only in the case of any such subsidiary, or group of
subsidiaries, that in the aggregate have assets with a fair market
value exceeding $25,000,000 and then only to the extent requested by
either Agent) as are consistent with those delivered by each
Restricted Company pursuant to Section 5.01 upon the Effective Date
or as either Agent shall have requested.
Notwithstanding the foregoing, (x) no Off-Balance Sheet Company shall be
required to execute and deliver any Joinder Agreement (or take any of the other
actions) referred to in clause (i) above, and no Off-Balance Sheet Company shall
become a "Restricted Company" for purposes of this Agreement, but any Restricted
Company that owns any shares of stock or other equity interest in any Non-Core
Company or Off-Balance Sheet Company shall take the actions specified in clause
(ii) above with respect to such stock or other equity interests and (y) no
subsidiary that is an "Unrestricted Subsidiary" under and as defined in the
Public Note Indentures shall be designated as a "Restricted Subsidiary" under
and as defined in the Public Note Indentures unless immediately prior thereto
and after giving effect thereto, no Default shall have occurred and be
continuing.
(b) OWNERSHIP OF SUBSIDIARIES. Each Restricted Company will take
such action from time to time as shall be necessary to ensure that the
percentage of the equity capital of any class or character owned by it in any
subsidiary on the date hereof (or, in the case of any newly formed or newly
acquired subsidiary, on the date of formation or acquisition) is not at any time
decreased, other than by reason of transfers to another Restricted Company. In
the event that any additional shares of stock shall be issued by any subsidiary
of any Restricted Company to any Restricted Company, the respective Restricted
Company shall forthwith deliver to the Collateral Agent pursuant to the
Restricted Company Guarantee and Security Agreement the certificates evidencing
such shares of stock, accompanied by undated stock powers executed in blank and
to take such other action as the Collateral Agent shall request to perfect the
security interest created therein pursuant to the Restricted Company Guarantee
and Security Agreement.
(c) REGULATORY MATTERS. If after the date hereof there shall be a
change in law, or the rules or regulations of the FCC or applicable to any PUC
Authorization, the effect of which is to permit the granting of a security
interest in the FCC Licenses or such PUC Authorization, the Restricted Companies
will, within five Business Days after request therefor by the Collateral Agent
(or the Required Lenders through the Collateral Agent) execute and deliver all
such instruments and documents, and take such other actions, as shall be
necessary or desirable, or that the Collateral Agent (or the Required Lenders)
may reasonably request, in order to create and perfect (or to confirm the
creation and perfection of) a security interest in the FCC Licenses or such PUC
Authorization.
SECTION 6.12. DESIGNATION OF OFF-BALANCE SHEET COMPANIES. NCI may at
any time after the Effective Date designate any of the Restricted Companies and
any newly-acquired or newly-formed subsidiary of any Restricted Company (any
such Restricted Company or newly-acquired or newly-formed subsidiary being
herein called a "PROSPECTIVE DESIGNATED COMPANY") to be an "Off-
CREDIT AGREEMENT
<PAGE> 84
- 78 -
Balance Sheet Company" for purposes of this Agreement, by delivering to each of
the Agents a certificate of a Financial Officer of NCI stating that the
conditions set forth in this Section 6.12 have been satisfied with respect to
such designation, such conditions being as follows:
(a) no Restricted Company (i) is directly or indirectly liable for
any Indebtedness of such Prospective Designated Company or (ii) has any
obligation (x) to subscribe for additional equity interests in such
Prospective Designated Company (other than in exchange for the transfer of
Off-Balance Sheet Assets in connection with an Off-Balance Sheet
Transaction permitted hereunder) or (y) to maintain or preserve such
Prospective Designated Company's financial condition or to cause such
Prospective Designated Company to achieve certain levels of operating
results, except in the case of either of the foregoing clauses (i) or (ii)
to the extent of any Guarantee that, after giving effect to such
designation, would be permitted under Section 7.04(b);
(b) no Restricted Company has made an investment in such Prospective
Designated Company, except to the extent of any investment that, after
giving effect to such designation, would be permitted under Section
7.04(a)(v) (and, for purposes of this clause (b), the amount of any such
investment described in Section 7.04(a)(v) on the date of such designation
shall be deemed to be equal to the greater of (i) the amount of the
investments by the Restricted Companies in such Prospective Designated
Company (determined in accordance with the last sentence of Section
7.04(a)) on the date of such designation, and (ii) the fair market value
of all property of such Prospective Designated Company on such date of
designation, excluding property of third parties being contributed to such
Prospective Designated Company on the date of such designation);
(c) if immediately following such designation it is intended that
such Prospective Designated Company enter into a transaction (such as
incurring Indebtedness from, or granting a Lien to, a third party) that
would not be permitted hereunder if such Prospective Designated Company
were not designated as an Off-Balance Sheet Company hereunder; and
(d) such Prospective Designated Company does not at the time of such
designation own any property other than Off-Balance Sheet Assets, and cash
and incidental property not material in value (in relation to the
aggregate assets owned by such Prospective Designated Company); and
(e) at the time of such designation and after giving effect thereto,
no Default shall have occurred and be continuing.
Upon such designation, the Collateral Agent shall take such action, at the
expense of the Borrower and as shall be reasonably requested by the Borrower, to
release the Prospective Designated Company so designated from its obligations
(if any) as a Guarantor under the Restricted Company Guarantee and Security
Agreement, and release all Liens granted by such Prospective Designated Company
to the Collateral Agent pursuant to the Security Documents.
CREDIT AGREEMENT
<PAGE> 85
- 79 -
ARTICLE VII
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal
of and interest on each Loan and all fees payable hereunder have been paid in
full and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, the Credit Parties covenant and agree
with the Lenders that:
SECTION 7.01. INDEBTEDNESS. No Credit Party will create, incur,
issue, assume or permit to exist any Indebtedness or Disqualified Capital Stock,
except:
(a) Indebtedness created hereunder (including in respect of
Incremental Facility Loans);
(b) Indebtedness of the Credit Parties, and Disqualified Capital
Stock of NCI, existing on the date hereof and set forth in Schedule 7.01
(and any additional shares of Disqualified Capital Stock of any class
issued as dividends in respect of shares of Disqualified Capital Stock of
such class) and additional Indebtedness and Disqualified Capital Stock
incurred or issued by NCI after the date hereof (including Indebtedness
incurred to refinance Existing Public Notes), so long as
(i) no scheduled payments, prepayments, redemptions or
sinking fund or like payments in respect of such additional
Indebtedness or Disqualified Capital Stock shall be required prior
to the date six months after the later of (x) the latest maturity or
commitment termination date, as applicable, for any Incremental
Facility Loans of any Series outstanding at the time of such
issuance and (y) June 30, 2009,
(ii) the terms and conditions of such additional
Indebtedness (other than in respect of the rate of interest, which
shall not be restricted) are no less favorable to NCI, the
Restricted Companies, the Lenders and the Agents than the terms and
conditions of the Existing Public Notes maturing after 2004 (as each
is in effect on the date hereof) or, in the case of the issuance of
any Disqualified Capital Stock, no less favorable to NCI, the
Restricted Companies, the Lenders and the Agents than the terms and
conditions of presently-outstanding Disqualified Capital Stock
having a mandatory redemption date after 2004,
(iii) at the time of issuance and after giving effect to
such additional Indebtedness and Disqualified Capital Stock, no
Default shall have occurred and be continuing, and
(iv) NCI shall be in compliance with Section 7.08 on a
pro forma basis giving effect to the incurrence or issuance of such
additional Indebtedness or Disqualified Capital Stock (the
determination of such compliance to be calculated on a pro forma
basis, as at the end of and for the applicable period specified in
the relevant provisions of Section 7.08 and most recently ended
prior to the date of the incurrence or issuance of such additional
Indebtedness or Disqualified Capital Stock for which financial
statements
CREDIT AGREEMENT
<PAGE> 86
- 80 -
of NCI and the Restricted Companies are available, under the
assumption that such additional Indebtedness had been incurred, and
such Disqualified Capital Stock had been issued, at the beginning of
the applicable period, and under the assumption that interest or
dividends, as applicable, for such period had been equal to the
actual rate of interest or current dividends in effect for such
additional Indebtedness or Disqualified Capital Stock, as the case
may be) and, in the event that the aggregate amount of such
additional Indebtedness or Disqualified Capital Stock shall exceed
$50,000,000, NCI shall have delivered to the Administrative Agent a
certificate of a Financial Officer showing calculations in
reasonable detail to demonstrate compliance with this subclause
(iv),
PROVIDED that if on the date of incurrence of any such additional
Indebtedness, or issuance of any such Disqualified Capital Stock, (x) the
Total Indebtedness to Cash Flow Ratio is less than 7.00 to 1, NCI may
incur Indebtedness (and issue Disqualified Capital Stock) up to an
aggregate of $500,000,000 without regard to subclause (i) above and (y) if
the condition in the foregoing clause (x) is satisfied and the long-term
debt rating for the outstanding unsecured and unenhanced Public Notes is
at least BBB- by S&P or Baa3 by Moody's, NCI may incur Indebtedness (and
issue Disqualified Capital Stock) up to an aggregate of $1,000,000,000
without regard to subclause (i) above, it being understood that the
aggregate amount of such additional Indebtedness and Disqualified Capital
Stock that may be incurred without regard to said subclause (i) pursuant
to the foregoing clauses (x) and (y) shall not exceed $1,000,000,000;
(c) Indebtedness of NCI to any Restricted Company arising in respect
of investments in NCI permitted under Section 7.04(a)(v), and Indebtedness
of any Restricted Company to any other Restricted Company howsoever
arising;
(d) Indebtedness (herein referred to as "VENDOR INDEBTEDNESS") of
the Borrower (and Guarantees thereof by the other Restricted Companies and
by NCI pursuant to a Guarantee in substantially the form of Article III)
in an aggregate principal amount not exceeding $500,000,000 arising
pursuant to one or more agreements entered into with vendors (or
affiliates of vendors) from which the Restricted Companies purchase
equipment and related services, so long as
(i) the agreements pursuant to which such Vendor
Indebtedness is incurred shall contain covenants and defaults no
more restrictive than those set forth in this Agreement, and shall
otherwise be in form satisfactory to (and shall have been consented
to by) each Agent and, to the extent that the Borrower desires that
such Vendor Indebtedness be entitled to participate in mandatory
prepayments pursuant to Section 2.09(b) as provided in subclause
(iii) below, this Agreement shall be amended pursuant to an
instrument in form satisfactory to each Agent to modify the
provisions of said Section 2.09(b) to effect such participation,
(ii) such Vendor Indebtedness shall not be entitled to
the benefits of any Liens on any property of any of the Credit
Parties other than the Liens in favor of the Collateral Agent
pursuant to the Security Documents (which Liens shall be spread to
cover such Vendor Indebtedness, on an equal and ratable basis,
pursuant to such intercreditor
CREDIT AGREEMENT
<PAGE> 87
- 81 -
agreements and other instruments entered into with the Credit
Parties and the respective vendors (or affiliates thereof) extending
the credit giving rise to such Vendor Indebtedness as shall be
satisfactory in form and substance to the Collateral Agent),
(iii) the Average Life to Maturity of any such Vendor
Indebtedness shall be greater than the Average Life to Maturity
(determined on a combined basis) of the Revolving Credit Loans,
Tranche A Term Loans, Tranche B Term Loans and Tranche C Term Loans,
except that, to the extent requested by the Borrower as contemplated
in subclause (i) above, such Vendor Indebtedness shall be entitled
to participate, to the same extent as the Tranche A Term Loans,
Tranche B Term Loans and Tranche C Term Loans (and, if any thereof
are outstanding, Incremental Facility Loans) hereunder, in mandatory
prepayments pursuant to Section 2.09(b),
(iv) the final maturity of any such Vendor Indebtedness
shall not be earlier than the date three months after the final
Principal Payment Date for the Tranche C Term Loans (but such final
maturity may be accelerated to the date three months after any
accelerated final Principal Payment Date for the Tranche C Term
Loans pursuant to the last sentence of Section 2.08(d)),
(v) at the time of issuance and after giving effect to
such Vendor Indebtedness, no Default shall have occurred and be
continuing, and
(vi) NCI shall be in compliance with Section 7.08 on a
pro forma basis giving effect to the incurrence of such Vendor
Indebtedness (the determination of such compliance to be calculated
on a pro forma basis, as at the end of and for the applicable period
specified in the relevant provisions of Section 7.08 most recently
ended prior to the date of the incurrence of such Vendor
Indebtedness for which financial statements of NCI and the
Restricted Companies are available, under the assumption that such
Vendor Indebtedness had been incurred at the beginning of the
applicable period, and under the assumption that interest for such
period had been equal to the actual rate of interest in effect for
such Vendor Indebtedness) and NCI shall have delivered to the
Administrative Agent a certificate of a Financial Officer showing
calculations in reasonable detail to demonstrate compliance with
this subclause (vi),
(e) other Indebtedness (in addition to any amounts permitted
pursuant to the foregoing paragraphs (a), (c) and (d)) of the Restricted
Companies in an aggregate principal amount not exceeding, at the time of
incurrence thereof, 10% of Net PP&E, so long as
(i) at the time of the incurrence and after giving
effect to such Indebtedness, no Default shall have occurred and be
continuing, and
(ii) NCI shall be in compliance with Section 7.08 on a
pro forma basis giving effect to the incurrence of such Indebtedness
(the determination of such compliance to be calculated on a pro
forma basis, as at the end of and for the applicable period
specified in the relevant provisions of Section 7.08 most recently
ended prior to the date of the
CREDIT AGREEMENT
<PAGE> 88
- 82 -
incurrence of such Indebtedness for which financial statements of
NCI and the Restricted Companies are available, under the assumption
that such Indebtedness had been incurred at the beginning of the
applicable period, and under the assumption that interest for such
period had been equal to the actual rate of interest in effect for
such Indebtedness) and, in the event that the aggregate amount of
such Indebtedness shall exceed $50,000,000, NCI shall have delivered
to the Administrative Agent a certificate of a Financial Officer
showing calculations in reasonable detail to demonstrate compliance
with this subclause (ii);
(f) unsecured Guarantees by NCI of obligations of the Restricted
Companies; and
(g) other unsecured Indebtedness of NCI in an aggregate principal
amount not exceeding $50,000,000 at any time outstanding (or such greater
amount to which the Required Lenders shall have consented).
SECTION 7.02. LIENS. NCI will not create, incur, assume or permit to
exist any Lien on any shares of stock or other ownership interests in any of the
Restricted Companies now owned or hereafter acquired by NCI to secure
Indebtedness (the "RELEVANT INDEBTEDNESS") without making effective provision
for securing the Indebtedness of NCI hereunder (and, if NCI shall so determine,
any other Indebtedness of NCI which is not subordinated in right of payment to
the Indebtedness hereunder) equally and ratably with the Relevant Indebtedness
as to such shares of stock and other ownership interests for so long as the
Relevant Indebtedness shall be so secured.
No Restricted Company will create, incur, assume or permit to exist
any Lien on any of its assets except:
(a) Liens created by the Security Documents securing the obligations
of the Restricted Companies hereunder (including in respect of Incremental
Facility Loans), in respect of Vendor Indebtedness permitted under Section
7.01(d), and under the Security Documents;
(b) Permitted Encumbrances;
(c) any Lien on any property or asset of any Restricted Company
existing on the date hereof and set forth in Schedule 4.12; PROVIDED that
(i) such Lien shall not apply to any other property or asset of any
Restricted Company and (ii) such Lien shall secure only those obligations
that it secures on the date hereof (and extensions, renewals and
refinancings thereof that comply with the requirements of Section
7.01(b));
(d) Liens securing judgments for the payment of money in an amount
not resulting (whether immediately or with the passage of time) in an
Event of Default under clause (k) of Article VIII;
(e) any Lien in favor of a special purpose company or Receivable
Financier created or deemed to exist pursuant to a Permitted Receivable
Financing, but only to the extent such Lien
CREDIT AGREEMENT
<PAGE> 89
- 83 -
relates to the applicable Off-Balance Sheet Receivables conveyed by
the Restricted Companies; and
(f) additional Liens (including any Liens arising in connection with
Sale and Leaseback Transactions and Liens securing financings permitted by
Section 7.01(e)) covering property of the Restricted Companies securing
Indebtedness (or obligations under a lease entered into pursuant to a Sale
and Leaseback Transaction) in an aggregate amount not exceeding, at the
time of incurrence thereof, 5% of Net PP&E (and, for purposes hereof, the
amount of the obligations under a lease entered into pursuant to a Sale
and Leaseback Transaction shall be deemed to be the Attributable
Indebtedness in respect of such Sale and Leaseback Transaction).
SECTION 7.03. FUNDAMENTAL CHANGES. NCI shall not sell, transfer,
lease or otherwise dispose of any shares of stock of any of the Restricted
Companies owned by it. In addition, NCI shall not merge or consolidate with any
other Person unless (i) at the time thereof, and after giving effect thereto, no
Default shall have occurred and be continuing, (ii) either (x) NCI shall be the
continuing or surviving entity or (y) the continuing or surviving entity shall
have assumed all of the obligations of NCI hereunder pursuant to an instrument
in form and substance satisfactory to the Administrative Agent and shall have
delivered such proof of corporate action, incumbency of officers, opinions of
counsel and other documents as is consistent with those delivered by NCI
pursuant to Section 5.01 upon the Effective Date or as either Agent shall have
requested and (iii) the net worth (determined on a consolidated basis in
accordance with GAAP) of the continuing or surviving entity immediately after
giving effect thereto shall be greater than or equal to the net worth (so
determined) of NCI immediately prior to giving effect thereto.
No Restricted Company will merge into or consolidate with any other
Person, or permit any other Person to merge into or consolidate with it, or
sell, transfer, lease or otherwise dispose of (in one transaction or in a series
of transactions) any cash or other property (including the stock of any of its
subsidiaries), whether now owned or hereafter acquired, except that:
(a) any Restricted Company (other than a License Company) may merge
into the Borrower in a transaction in which the Borrower is the surviving
corporation;
(b) any Restricted Company may merge into any other Restricted
Company, PROVIDED that no such merger may involve a License Company,
unless (x) immediately after giving effect thereto no Default shall have
occurred and be continuing and (y) in the case of any License Company
substantially all of whose assets consist of FCC Licenses or PUC
Authorizations, the surviving entity in such merger is a License Company
substantially all of whose assets consist of FCC Licenses or PUC
Authorizations;
(c) any Restricted Company may permit any other Person to merge into
or consolidate with such Restricted Company to the extent permitted by
Section 7.04(a)(vi);
(d) any Restricted Company other than the Borrower may sell,
transfer, lease or otherwise dispose of its assets to another Restricted
Company, PROVIDED that no such transaction may involve a disposition of
assets of any License Company unless (x) immediately after giving
CREDIT AGREEMENT
<PAGE> 90
- 84 -
effect thereto no Default shall have occurred and be continuing and
(y) in the case of any transfer of assets by a License Company
substantially all of whose assets consist of FCC Licenses or PUC
Authorizations, the acquiror of such assets (after giving effect to such
acquisition) is a License Company substantially all of whose assets
consist of FCC Licenses or PUC Authorizations;
(e) any Restricted Company may sell, transfer, lease or otherwise
dispose of its assets to any Person on an arm's-length basis in the
ordinary course of business (including dispositions of worn-out property
and equipment);
(f) any Restricted Company may sell any of its assets for
consideration in an amount not less than the fair market value of such
assets, PROVIDED that (A) at least 85% of such consideration is in the
form of cash, (B) the Net Cash Payments of such sale are applied to prepay
the Loans and reduce the Commitments hereunder to the extent required by
Section 2.09(b)(ii), (C) at the time of such sale and immediately after
giving effect thereto no Default shall have occurred and be continuing and
(D) the aggregate fair market value of all such assets sold by the
Restricted Companies after the Effective Date shall not exceed, as at the
date of any such sale, 5% of Total Consolidated Assets;
(g) the Restricted Companies may dispose of assets relating to any
Mobile Communications Business (or the capital stock of any Restricted
Company that owns such assets), PROVIDED that:
(i) both immediately prior to such disposition and,
after giving effect thereto, no Default shall have occurred and be
continuing; and
(ii) such disposition is an exchange, with another
Person not an Affiliate of such Restricted Company, of such assets
for assets of like kind owned by such Person (or the capital stock,
or other equity ownership interest, of such Person) of equal or
greater value, as determined in good faith by the Board of Directors
of such Restricted Company, PROVIDED that (x) the acquisition of
assets of such Person pursuant to such exchange (excluding
acquisitions of FCC Licenses in exchange for other FCC Licenses for
the purpose of enabling the Restricted Companies to create
contiguous blocks of spectrum covered by the SMR Licenses of the
Restricted Companies) shall comply with the provisions of Section
7.04(a)(vi) and be treated as an acquisition covered by said Section
and (y) the Borrower shall have furnished to the Agents, promptly
following request therefor, copies of such information or documents
relating to such disposition as either Agent shall have reasonably
requested;
(h) the Restricted Companies may, whether for cash or non-cash or
other consideration, sell, transfer, lease or otherwise dispose of (i)
Non-Core Assets to NWIP or any Non-Core Company pursuant to the Nextel
Partners Agreement and (ii) other assets to NWIP or any Non-Core Company
to the extent such assets are incidental to the assets referred to in the
foregoing clause (i) and the Administrative Agent and the Collateral Agent
have determined that the sale, transfer, lease or other disposition of
such assets is not material with respect to the interests of
CREDIT AGREEMENT
<PAGE> 91
- 85 -
the Lenders under this Agreement or any of the other Loan Documents,
or to the extent that the Required Lenders have consented thereto for
purposes of this clause (h);
(i) the Restricted Companies may sell Off-Balance Sheet Equipment to
an Off-Balance Sheet Company or other Person, for cash in an amount not
less than the original purchase price or acquisition cost for such
Off-Balance Sheet Equipment paid by the Restricted Companies;
(j) the Restricted Companies may sell or otherwise transfer
Off-Balance Sheet Assets in connection with Off-Balance Sheet Transactions
(excluding, however, Off-Balance Sheet Equipment sold in accordance with
the provisions of paragraph (i) above), so long as (w) any such sale of
Off-Balance Sheet Receivables qualifies as a Permitted Receivable
Financing, (x) on any date the Maximum Receivables Exposure, together with
the aggregate amount of Off-Balance Sheet Equipment that shall have been
transferred and which remains in use, shall not exceed $500,000,000, (y)
such sale is effected pursuant to documentation and in a manner that is
consistent with the requirements of the Public Notes and that, in the
judgment of each of the Agents, will not adversely affect the restrictions
imposed by this Article VII and (z) at the time of such sale, and after
giving effect thereto, no Default shall have occurred and be continuing;
and
(k) the Restricted Companies may sell or otherwise transfer towers,
tower sites and related transmission space and equipment pursuant to the
Master Site Commitment Agreement and the Master Site Lease Agreement.
SECTION 7.04. INVESTMENTS AND ACQUISITIONS; HEDGING AGREEMENTS.
(a) INVESTMENTS AND ACQUISITIONS, ETC. No Restricted Company will
purchase, hold or acquire any capital stock, evidences of indebtedness or other
securities (including any option, warrant or other right to acquire any of the
foregoing) of, make or permit to exist any loans or advances to, or make or
permit to exist any investment or any other interest in, any other Person, or
purchase or otherwise acquire (in one transaction or a series of transactions)
any assets of any other Person constituting a business unit from any other
Person, except:
(i) Permitted Investments, and Disposition Investments
received in connection with any Disposition permitted under Section
7.03(f) or any Disposition to which the Lenders shall have consented
in accordance with Section 10.02, so long as each such Disposition
Investment shall have been delivered to the Collateral Agent to be
held as collateral security by the Collateral Agent pursuant to the
Restricted Company Guarantee and Security Agreement;
(ii) investments by Restricted Companies in the capital
stock of other Restricted Companies, and investments (whether
consisting of equity interests, or debt or other securities)
received (a) upon or as a result of any transfer of Non-Core Assets
to NWIP or any Non-Core Company to the extent such transfer is
permitted under Section 7.03(h) or (b) upon or as a result of any
transfer of Off-Balance Sheet Assets to any Person to the extent
such transfer is permitted under Section 7.03(j);
CREDIT AGREEMENT
<PAGE> 92
- 86 -
(iii) loans or advances made by any Restricted Company
to any other Restricted Company;
(iv) investments in Affiliates (excluding investments in
NCI, Unrestricted Companies, NWIP, Non-Core Companies and
Off-Balance Sheet Companies, as to which the provisions of clause
(v) below shall apply), so long as (x) the aggregate amount of such
investments as to all Restricted Companies shall not exceed
$25,000,000 at any one time outstanding and (y) both immediately
prior to each such investment and after giving effect thereto, no
Default shall have occurred and be continuing;
(v) investments in NCI and investments in Unrestricted
Companies, and investments in NWIP, Non-Core Companies and
Off-Balance Sheet Companies (excluding, however, investments
received upon the transfer of Non-Core Assets to NWIP or any
Non-Core Company pursuant to the Nextel Partners Agreement, or upon
the transfer of Off-Balance Sheet Assets to Off-Balance Sheet
Companies, as to which the provisions of clause (ii) above shall
apply), as to all such investments for all Restricted Companies in
an aggregate amount at any one time outstanding not exceeding the
sum of (A) $500,000,000 PLUS (B) the net aggregate amount of
Permanent Equity Capital received after March 12, 1998 (and prior to
the date of any such investment) by the Restricted Companies in
respect of shares of common stock, so long as (x) any such
investments in NWIP or any Non-Core Company or Off-Balance Sheet
Company shall consist solely of cash and (y) both immediately prior
to each such investment and after giving effect thereto, no Default
shall have occurred and be continuing;
(vi) acquisitions of FCC Licenses or of any business,
and the related assets, of any other Person (whether by way of
purchase of assets or stock, by merger or consolidation or
otherwise), so long as:
(A) such acquisition (if by purchase of
assets, merger or consolidation) shall be effected in
such manner so that the acquired FCC Licenses or
business, and the related assets, are owned either by a
Restricted Company or a Subsidiary of a Restricted
Company and, if effected by merger or consolidation
involving a Restricted Company, such Restricted Company
shall be the continuing or surviving entity and, if
effected by merger or consolidation involving a
Subsidiary of a Restricted Company, such Subsidiary
shall be the continuing or surviving entity;
(B) such acquisition (if by purchase of
stock) shall be effected in such manner so that the
acquired entity becomes a Subsidiary of a Restricted
Company;
(C) upon consummation of such acquisition,
the Restricted Companies shall have taken, and shall
have caused any new Subsidiary acquired in such
acquisition to take, the actions required pursuant to
Section 6.11;
(D) the Borrower shall have furnished to the
Agents, promptly following request therefor, copies of
such information or documents relating to such
acquisition as either Agent shall have reasonably
requested;
CREDIT AGREEMENT
<PAGE> 93
- 87 -
(E) immediately prior to such acquisition
and after giving effect thereto, no Default shall have
occurred and be continuing; and
(F) after giving effect to such acquisition,
NCI shall be in compliance with Section 7.08 on a pro
forma basis giving effect to such acquisition (the
determination of such compliance to be calculated on a
pro forma basis, as at the end of and for the applicable
period specified in the relevant provisions of Section
7.08 most recently ended prior to the date of such
acquisition for which financial statements of NCI and
the Restricted Companies are available, under the
assumption that such acquisition had occurred, and any
Indebtedness in connection therewith had been incurred,
at the beginning of the applicable period, and under the
assumption that interest for such period had been equal
to the actual rate of interest in effect for such
Indebtedness) and, in the event that the aggregate
amount of expenditures in respect of such acquisition
shall exceed $50,000,000, NCI shall have delivered to
each Agent a certificate of a Financial Officer showing
calculations in reasonable detail to demonstrate
compliance with this subclause (F);
(vii) the acquisition of FCC Licenses pursuant to an
exchange transaction permitted under Section 7.03(g) for the purpose
of enabling the Restricted Companies to create contiguous blocks of
spectrum covered by the SMR Licenses of the Restricted Companies;
and
(viii) additional investments up to but not exceeding an
outstanding aggregate amount of $250,000,000.
The aggregate amount of an investment at any one time outstanding
for purposes of clauses (iv), (v) and (viii) above, shall be deemed to be equal
to (A) the aggregate amount of cash, together with the aggregate fair market
value of property, loaned, advanced, contributed, transferred or otherwise
invested that gives rise to such investment minus (B) the aggregate amount of
dividends, distributions or other payments received in cash in respect of such
investment; the amount of an investment shall not in any event be reduced by
reason of any write-off of such investment.
(b) GUARANTEES. No Restricted Company will Guarantee any obligations
of any other Person, except Guarantees constituting Indebtedness permitted by
Section 7.01(e) and Guarantees by any Restricted Company of any other Restricted
Company.
(c) HEDGING AGREEMENTS. No Restricted Company will enter into any
Hedging Agreement, other than Hedging Agreements entered into in the ordinary
course of business to hedge or mitigate risks to which the Restricted Companies
are exposed in the conduct of their business or the management of their
liabilities (including, in the case of the Borrower, the Hedging Agreements
required by Section 6.10).
CREDIT AGREEMENT
<PAGE> 94
- 88 -
SECTION 7.05. RESTRICTED PAYMENTS. No Restricted Company will
declare or make, or agree to pay or make, directly or indirectly, any Restricted
Payment consisting of any cash or other property, except:
(a) any Restricted Company may make Restricted Payments to the
extent necessary to make required payments under the Overhead Services
Agreement, and required tax distributions under the Tax Sharing Agreement;
(b) so long as at the time thereof, and after giving effect thereto,
no Default shall have occurred and be continuing, any Restricted Company
that is a subsidiary of NCI may make Restricted Payments to NCI to the
extent necessary (i) to enable NCI to make scheduled payments of principal
and interest on the Public Notes and (ii) to enable NCI to make scheduled
payments of current dividends (but not redemptions) of Disqualified
Capital Stock outstanding on the date hereof (and any additional shares of
Disqualified Capital Stock of any class issued as dividends in respect of
shares of Disqualified Capital Stock of such class) that are Payable in
Cash;
(c) in addition to the Restricted Payments permitted under the
foregoing clauses (a) and (b), during any fiscal year (commencing with
Excess Cash Flow for the fiscal year ending December 31, 2002), the
Restricted Companies may make Restricted Payments, subject to the
satisfaction of each of the following conditions on the date of such
payment and after giving effect thereto:
(i) no Default shall have occurred and be continuing;
(ii) the Total Indebtedness to Cash Flow Ratio as at the
last day of the fiscal quarter ending on or most recently ended
prior to the date of such Restricted Payment shall be less than 5.00
to 1;
(iii) the aggregate amount of Restricted Payments under
this clause (c) made during such fiscal year (the "CURRENT FISCAL
YEAR") shall not exceed 50% of Excess Cash Flow for the fiscal year
immediately preceding the current fiscal year;
(iv) the Borrower shall have delivered to each Agent, at
least ten Business Days (but not more than twenty Business Days)
prior to the date of the proposed Restricted Payment, a certificate
of a Financial Officer setting forth computations in reasonable
detail demonstrating satisfaction of the foregoing conditions as at
the date of such certificate; and
(v) prior to, or concurrently with, the making of such
Restricted Payment, the Borrower shall prepay the Loans as required
by Section 2.09(b)(i); and
(d) so long as at the time thereof, and after giving effect thereto,
no Default shall have occurred and be continuing, the Borrower may make
Restricted Payments to NCI to the extent necessary to enable NCI to
refinance or repurchase (directly or indirectly) any of the Public
CREDIT AGREEMENT
<PAGE> 95
- 89 -
Notes or any Disqualified Capital Stock (it being understood that
the amount of such Restricted Payment may include any redemption or tender
premium required to be paid by NCI in connection with such refinancing or
repurchase), PROVIDED that the aggregate amount of all such Restricted
Payments shall not exceed on any date, taking into account all previous
Restricted Payments under this paragraph (d), the sum of (i)
$1,700,000,000 PLUS (ii) the aggregate amount of Additional Equity Capital
on such date.
SECTION 7.06. TRANSACTIONS WITH AFFILIATES. Except as expressly
permitted by this Agreement, no Restricted Company will sell, lease or otherwise
transfer any cash or other property to, or purchase, lease or otherwise acquire
any property or assets from, or otherwise engage in any other transactions with,
any of its Affiliates, except
(a) in the ordinary course of business at prices and on terms and
conditions not less favorable to such Restricted Company than could be
obtained on an arm's-length basis from unrelated third parties,
(b) transactions between or among the Restricted Companies not
involving any other Affiliate,
(c) any Restricted Payment permitted by Section 7.05,
(d) as contemplated by the Overhead Services Agreement and the Tax
Sharing Agreement,
(e) any sale, transfer or other disposition of the equity interests
in Nextel Partners to an Affiliate that is not a subsidiary of NCI, to the
extent such transaction is permitted under Section 7.03, and
(f) transactions by any of the Restricted Companies with any
Unrestricted Company or Non-Core Company with respect to the operation of
Non-Core Assets owned by such Unrestricted Company or Non-Core Company to
the extent such Non-Core Assets are integrated (as defined below) with the
Mobile Communications Business operated by the Restricted Companies, and
to the extent the respective Restricted Company receives fair market value
for the property or services supplied by it to such Unrestricted Company
or Non-Core Company, PROVIDED that nothing herein shall be deemed to
prohibit the provision of services by a Restricted Company to any
Unrestricted Company or Non-Core Company to which a Restricted Company
shall have transferred Non-Core Assets in exchange for debt obligations
of, or an equity interest in, such Unrestricted Company or Non-Core
Company, if such services are provided pursuant to a contract entered into
by such Restricted Company at the time of such transfer of such Non-Core
Assets to such Restricted Company or Non-Core Company and if such contract
shall have been approved by the disinterested directors of NCI prior to
the execution and delivery thereof.
For purposes of the foregoing clause (f), (A) Non-Core Assets shall be deemed
"integrated" with the Mobile Communications Business operated by the Restricted
Companies if (i) such Non-Core Assets are operated under the "Nextel" tradename,
(ii) such Non-Core Assets are employed in an SMR System
CREDIT AGREEMENT
<PAGE> 96
- 90 -
using digital technology that is the same as, or compatible with, the technology
used in the Mobile Communications Business of the Restricted Companies and (iii)
one or more of the Restricted Companies has entered into arrangements with the
holder of such Non-Core Assets for the provision of common billing services,
switching or related services or other management services and for reciprocal
roaming agreements and (B) "DISINTERESTED DIRECTORS" means, with respect to any
transaction involving an Unrestricted Company or Non-Core Company, directors
that are not officers or employees of NCI or any of its subsidiaries and that do
not have a direct or indirect economic interest in such transaction or
Unrestricted Company or Non-Core Company.
SECTION 7.07. RESTRICTIVE AGREEMENTS. No Restricted Company will
directly or indirectly, enter into, incur or permit to exist any agreement or
other arrangement that prohibits, restricts or imposes any condition upon (a)
the ability of any Restricted Company to create, incur or permit to exist any
Lien upon any of its property or assets, or (b) the ability of any Restricted
Company to pay dividends or other distributions with respect to any shares of
its capital stock or to make or repay loans or advances to any Restricted
Company or to Guarantee Indebtedness of any other Restricted Company; PROVIDED
that
(i) the foregoing shall not apply to restrictions and conditions (v)
imposed by law or by this Agreement or the other Loan Documents, (w)
contained in agreements relating to any Vendor Indebtedness permitted
under Section 7.01(d), (x) existing on the date hereof identified in
Schedule 7.07 (but shall apply to any extension or renewal of, or any
amendment or modification expanding the scope of, any such restriction or
condition), (y) consisting of customary restrictions on transfers of site
leases, or (z) contained in agreements relating to the sale of a
Restricted Company pending such sale, PROVIDED such restrictions and
conditions apply only to the Restricted Company or assets that are to be
sold and such sale is permitted hereunder and
(ii) clause (a) above shall not apply to (x) restrictions or
conditions imposed by any agreement relating to secured Indebtedness
permitted by this Agreement if such restrictions or conditions apply only
to the property or assets securing such Indebtedness or (y) customary
provisions in leases and other contracts restricting the assignment
thereof.
SECTION 7.08. CERTAIN FINANCIAL AND OTHER COVENANTS.
(a) TOTAL INDEBTEDNESS TO CASH FLOW RATIO. NCI will not permit the
Secured Indebtedness to Cash Flow Ratio or Total Indebtedness to Cash Flow
Ratio at any time during any period below to exceed the respective ratio
set opposite such period below:
<TABLE>
<CAPTION>
Secured Indebtedness Total Indebtedness
to Cash Flow to Cash Flow
Period Ratio Ratio
------ ----- -----
<S> <C> <C>
From September 30, 1999
through December 30, 1999 6.00 to 1 12.50 to 1
</TABLE>
CREDIT AGREEMENT
<PAGE> 97
- 91 -
<TABLE>
<S> <C> <C>
From December 31, 1999
through March 30, 2000 5.00 to 1 12.50 to 1
From March 31, 2000
through September 29, 2000 5.00 to 1 10.00 to 1
From September 30, 2000
through March 30, 2001 4.50 to 1 9.00 to 1
From March 31, 2001
through September 29, 2001 4.00 to 1 8.00 to 1
From September 30, 2001
through March 30, 2002 3.50 to 1 7.00 to 1
From March 31, 2002
through September 29, 2002 3.00 to 1 6.00 to 1
From September 30, 2002
and at all times thereafter 3.00 to 1 5.00 to 1
</TABLE>
(b) INTEREST COVERAGE RATIO. NCI will not permit the Interest
Coverage Ratio at any time during any period below to be less than the
ratio set opposite such period below:
Period Ratio
------ -----
From September 30, 1999
through June 29, 2000 1.50 to 1
From June 30, 2000
through March 30, 2001 1.75 to 1
From March 31, 2001
and at all times thereafter 2.00 to 1
(c) FIXED CHARGES RATIO. NCI will not permit the Fixed Charges
Ratio, as at any day, for the period of four fiscal quarters ending on or most
recently ended prior to such day, on or after June 30, 2002 to be less than 1.00
to 1.
SECTION 7.09. LINES OF BUSINESS, ETC.
(a) BUSINESS ACTIVITIES. No Restricted Company will engage to any
substantial extent in any line or lines of business activity other than the
Mobile Communications Business, and businesses reasonably related thereto.
CREDIT AGREEMENT
<PAGE> 98
- 92 -
(b) LICENSE COMPANIES. The Restricted Companies will not at any time
permit any FCC Licenses and PUC Authorizations (including any thereof acquired
after the date hereof, but excluding any PUC Authorizations issued by PUC's in
any jurisdiction that prohibits the actions contemplated by this paragraph (b))
to be held by any First Tier Restricted Company, PROVIDED that with respect to
any FCC Licenses and PUC Authorizations acquired by any First Tier Restricted
Company after the date hereof pursuant to an acquisition permitted under Section
7.04, such First Tier Restricted Company will cause such FCC Licenses and PUC
Authorizations to the extent necessary to be transferred as provided in this
paragraph (b) no later than the date 90 days after the respective acquisition
date therefor.
SECTION 7.10. MODIFICATIONS TO CERTAIN AGREEMENTS. The Credit
Parties will not consent to any modification, supplement or waiver of any of the
provisions of the Overhead Services Agreement (other than to add new Restricted
Companies as parties thereto) or the Tax Sharing Agreement (other than to add
new subsidiaries of NCI as parties thereto), without, in each case, the prior
consent of the Required Lenders (unless the Administrative Agent and Collateral
Agent have determined that such modification is not material with respect to the
interests of the Lenders under this Agreement or any of the other Loan
Documents). In addition, NCI will not consent to any modification, supplement or
waiver of any of the provisions of the Public Note Indentures or the Public
Notes without the prior consent of the Required Lenders, PROVIDED that no such
prior consent shall be necessary (i) for the removal of any one or more of the
covenants or other requirements from a Public Note Indenture, or any
modifications thereto that have the effect of making such covenants or other
provisions of any Public Note Indenture less restrictive or (ii) for any other
modification if the Administrative Agent and Collateral Agent have determined
that such modification is not material with respect to the interests of the
Lenders under this Agreement or any of the other Loan Documents.
In addition, the Credit Parties will not consent to any
modification, supplement or waiver of any of the provisions of the TPC Notes,
the Tower Merger Documents or the Nextel Partners Agreement without, in each
case, the prior consent of the Administrative Agent (with the approval of the
Required Lenders), PROVIDED that no such consent shall be required with respect
to any modification, supplement or waiver of any of the provisions of (i) any of
the Tower Merger Documents to the extent relating to particular tower sites (or
to particular groups of tower sites not aggregating more than 5% of the total
tower sites), (ii) to the conditions for delivery or lease of newly-constructed
tower sites pursuant to the Master Site Commitment Agreement or Master Site
Lease Agreement, as applicable, or (iii) to any other modification of any of the
Tower Merger Documents or the Nextel Partners Agreement if the Administrative
Agent and Collateral Agent have determined that such modification is not
material with respect to the interests of the Lenders under this Agreement or
any of the other Loan Documents.
CREDIT AGREEMENT
<PAGE> 99
- 93 -
ARTICLE VIII
EVENTS OF DEFAULT
If any of the following events ("EVENTS OF DEFAULT") shall
occur:
(a) the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the
same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or any
fee or any other amount (other than an amount referred to in clause (a) of
this Article) payable under this Agreement, when and as the same shall
become due and payable, and such failure shall continue unremedied for a
period of three or more Business Days;
(c) any representation or warranty made or deemed made by or on
behalf of any Credit Party in or in connection with this Agreement or any
of the other Loan Documents or any amendment or modification hereof or
thereof (or in any report, certificate, financial statement or other
document furnished pursuant to or in connection with this Agreement, any
of the other Loan Documents or any amendment or modification hereof or
thereof) shall prove to have been incorrect when made or deemed made in
any material respect;
(d) the Credit Parties shall fail to observe or perform any
covenant, condition or agreement contained in Section 6.02, 6.03 (with
respect to the existence of the Restricted Companies), 6.09 or 6.11, or
Article VII, or in Section 5.01 or 6.02 of the Restricted Company
Guarantee and Security Agreement;
(e) any Credit Party shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement or any other Loan
Document (other than those specified in clause (a), (b), (c) or (d) of
this Article), and such failure shall continue unremedied for a period of
thirty or more days after notice thereof from the Administrative Agent
(given at the request of any Lender) to the Borrower;
(f) any Credit Party (or any subsidiary of any Restricted Company,
other than an Excluded Subsidiary) shall fail to make any payment (whether
of principal or interest and regardless of amount) in respect of any
Material Indebtedness, when and as the same shall become due and payable;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables
or permits (with or without the giving of notice, the lapse of time or
both) the holder or holders of any Material Indebtedness or any trustee or
agent on its or their behalf to cause any Material Indebtedness to become
due, or to require the prepayment, repurchase, redemption or defeasance
thereof, prior to its scheduled maturity; PROVIDED that this clause (g)
shall not apply to secured Indebtedness that becomes due as a result of
the voluntary sale or transfer of the property or assets securing such
Indebtedness;
CREDIT AGREEMENT
<PAGE> 100
- 94 -
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of any Credit Party (or any subsidiary of any Restricted
Company) or its debts, or of a substantial part of its assets, under any
Federal, state or foreign bankruptcy, insolvency, receivership or similar
law now or hereafter in effect or (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for any
Credit Party (or any subsidiary of any Restricted Company) or for a
substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for 60 days or an order or decree
approving or ordering any of the foregoing shall be entered;
(i) any Credit Party (or any subsidiary of any Restricted Company)
shall (i) voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition
described in clause (h) of this Article, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator
or similar official for any Credit Party (or any subsidiary of any
Restricted Company) or for a substantial part of its assets, (iv) file an
answer admitting the material allegations of a petition filed against it
in any such proceeding, (v) make a general assignment for the benefit of
creditors or (vi) take any action for the purpose of effecting any of the
foregoing;
(j) any Credit Party (or any subsidiary of any Restricted Company)
shall become unable, admit in writing or fail generally to pay its debts
as they become due;
(k) one or more judgments for the payment of money in an aggregate
amount in excess of $25,000,000 shall be rendered against any one or more
of the Credit Parties (or any subsidiary of any Restricted Company) and
the same shall remain undischarged for a period of 30 consecutive days
during which execution shall not be effectively stayed, or any action
shall be legally taken by a judgment creditor to attach or levy upon any
assets of any Credit Party (or any subsidiary of any Restricted Company)
to enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that
have occurred, could reasonably be expected to result in a Material
Adverse Effect;
(m) a proceeding shall have been initiated by or before, or any
action shall have been taken by, the FCC, a PUC, a court of competent
jurisdiction, or other Governmental Authority which either:
(i) has resulted in the cancellation, non-renewal or
adverse modification of any one or more FCC Licenses, radio channels
authorized under FCC Licenses or PUC Authorizations held by one or
more of the Restricted Companies or any of their subsidiaries, or
CREDIT AGREEMENT
<PAGE> 101
- 95 -
(ii) in the reasonable opinion of the Required Lenders,
is likely to result in the cancellation, non-renewal or adverse
modification of any one or more FCC Licenses, radio channels
authorized under FCC Licenses, or PUC Authorizations held by one or
more Restricted Companies or any of their subsidiaries,
that, in the aggregate, in the judgment of the Required Lenders,
have resulted or are reasonably likely to result in a Material Adverse
Effect, and the same shall continue uncured for a period of 45 or more
days after notice thereof to the Borrower by the Required Lenders (through
the Administrative Agent);
(n) any FCC License or PUC Authorization, or any other material
operating assets, rights or other property, relating to the operation of
all or any part of the Mobile Communications Business of any of the
Restricted Companies (excluding, however, the Non-Core Assets) shall be
held by NCI or any of the Unrestricted Companies, other than any FCC
Licenses or PUC Authorizations that (i) are acquired by Unrestricted
Companies after the date hereof, (ii) are not material to the Mobile
Communications Business of the Restricted Companies, (iii) are subject to
management agreements in favor of the Restricted Companies and (iv) do not
relate to a portion of the Mobile Communications Business of the
Restricted Companies representing more than 5% of the aggregate Operating
Cash Flow;
(o) a reasonable basis shall exist for the assertion against any
Credit Party, or any predecessor in interest of any Credit Party or its
Affiliates, of (or there shall have been asserted against any Credit
Party) any claims or liabilities, whether accrued, absolute or contingent,
based on or arising from the generation, storage, transport, handling or
disposal of Hazardous Materials or RF Emissions by any Credit Party or any
of its subsidiaries, Affiliates or predecessors that, in the judgment of
the Required Lenders is reasonably likely to be determined adversely to
any Credit Party, and the amount thereof (either individually or in the
aggregate) is reasonably likely to have a Material Adverse Effect (insofar
as such amount is payable by a Credit Party but after deducting any
portion thereof that is reasonably expected to be paid by other
creditworthy Persons jointly and severally liable therefor);
(p) Any of the following shall occur: (i) the Liens created by the
Security Documents shall at any time, with respect to any material portion
of the property of the Restricted Companies, not constitute valid and
perfected Liens on the Collateral intended to be covered thereby (to the
extent perfection by filing, registration, recordation or possession is
required herein or therein) in favor of the Collateral Agent for the
benefit of the Lenders hereunder, free and clear of all other Liens (other
than Liens permitted under Section 7.02 or under the respective Security
Documents); (ii) except for expiration in accordance with its terms, any
of the Security Documents shall for whatever reason be terminated, or
shall cease to be in full force and effect, with respect to any material
portion of the property of the Restricted Companies; (iii) the
enforceability of any of the Security Documents shall be contested by any
Credit Party; or (iv) the enforceability of the Guaranty of NCI set forth
in Article III shall be contested by NCI; or
CREDIT AGREEMENT
<PAGE> 102
- 96 -
(q) Any of the Restricted Companies shall default in the payment of
any Rent under the Master Site Lease Agreement and the same shall continue
beyond the period of grace provided for therein and, as a result thereof,
the Restricted Companies shall receive a "Cross Default Notice" under and
as defined in Section 27(d) of said Master Site Lease Agreement, or any of
the Restricted Companies shall receive notice of one or more defaults
under said Master Site Lease Agreement which defaults, if uncured, could
result in the termination of the Restricted Companies' rights with respect
to 10% or more of the sites covered in said Master Site Lease Agreement;
then, and in every such event (other than an event with respect to any Credit
Party described in clause (h) or (i) of this Article), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Lenders shall, by notice to the Borrower,
take either or both of the following actions, at the same or different times:
(i) terminate the Commitments, and thereupon the Commitments shall terminate
immediately, and (ii) declare the Loans then outstanding to be due and payable
in whole (or in part, in which case any principal not so declared to be due and
payable may thereafter be declared to be due and payable), and thereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of the Borrower accrued
hereunder, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower; and in case of any event with respect to any Credit Party
described in clause (h) or (i) of this Article, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Borrower accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.
ARTICLE IX
THE AGENTS
Each of the Lenders and each Issuing Bank hereby irrevocably
appoints each of the Administrative Agent and the Collateral Agent as its agent
and authorizes such Agent to take such actions on its behalf and to exercise
such powers as are delegated to such Agent by the terms of this Agreement and
the other Loan Documents, together with such actions and powers as are
reasonably incidental thereto.
Each of The Toronto-Dominion Bank and The Chase Manhattan Bank shall
have the same rights and powers in its capacity as a Lender hereunder as any
other Lender and may exercise the same as though Toronto Dominion (Texas) Inc.
were not the Administrative Agent and The Chase Manhattan Bank were not the
Collateral Agent, and each such bank and its Affiliates may accept deposits
from, lend money to and generally engage in any kind of business with any Credit
Party or any subsidiary or other Affiliate of any thereof as if it were not such
Agent hereunder.
Neither Agent shall have any duties or obligations except those
expressly set forth in this Agreement and the other Loan Documents. Without
limiting the generality of the foregoing, (a) neither
CREDIT AGREEMENT
<PAGE> 103
- 97 -
Agent shall be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing, (b) neither Agent shall have
any duty to take any discretionary action or exercise any discretionary powers,
except discretionary rights and powers expressly contemplated by this Agreement
and the other Loan Documents that such Agent is required to exercise in writing
by the Required Lenders, and (c) except as expressly set forth herein and in the
other Loan Documents, neither Agent shall have any duty to disclose, and shall
not be liable for the failure to disclose, any information relating to any
Credit Party or any of its respective subsidiaries that is communicated to or
obtained by the bank serving as such Agent or any of its Affiliates in any
capacity. Neither Agent shall be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders or, if provided
herein, with the consent or at the request of the Required Lenders of a
particular Class, or in the absence of its own gross negligence or wilful
misconduct. Neither Agent shall be deemed to have knowledge of any Default
unless and until written notice thereof is given to such Agent by the Borrower,
a Lender or the other Agent, and neither Agent shall be responsible for or have
any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement or the other Loan
Documents, (ii) the contents of any certificate, report or other document
delivered hereunder or under any of the other Loan Documents or in connection
herewith of therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or in any
other Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement, the other Loan Documents or any other agreement,
instrument or document, or (v) the satisfaction of any condition set forth in
Article V or elsewhere herein, other than to confirm receipt of items expressly
required to be delivered to such Agent.
Neither Agent shall, except to the extent expressly instructed by
the Required Lenders with respect to collateral security under the Security
Documents, be required to initiate or conduct any litigation or collection
proceedings hereunder or under any other Loan Document.
Each Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. Each Agent also may rely
upon any statement made to it orally or by telephone and believed by it to be
made by the proper Person, and shall not incur any liability for relying
thereon. Each Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.
Either Agent may perform any and all of its duties, and exercise its
rights and powers, by or through any one or more sub-agents appointed by such
Agent. Either Agent and any such sub-agent may perform any and all its duties
and exercise its rights and powers through their respective Related Parties. The
exculpatory provisions of the preceding paragraphs shall apply to any such
sub-agent and to the Related Parties of such Agent and any such sub-agent, and
shall apply to their respective activities in connection with the syndication of
the credit facilities provided for herein as well as activities as such Agent.
Subject to the appointment and acceptance of a successor
Administrative Agent or Collateral Agent, as the case may be, as provided in
this paragraph, either Agent may resign at any time
CREDIT AGREEMENT
<PAGE> 104
- 98 -
by notifying the Lenders, each Issuing Bank, the Borrower and the other Agent.
Upon any such resignation, the Required Lenders shall have the right, in
consultation with the Borrower, to appoint a successor Administrative Agent, and
the Required Lenders shall have the right, in consultation with the Borrower, to
appoint a successor Collateral Agent. If no successor shall have been so
appointed and shall have accepted such appointment within 30 days after such
retiring Agent gives notice of its resignation, then such retiring Agent may, on
behalf of the Lenders and the Issuing Banks, appoint a successor Administrative
Agent or Collateral Agent, as the case may be, which shall be a bank with an
office in New York, New York, or an Affiliate of any such bank. Upon the
acceptance of its appointment as Administrative Agent or Collateral Agent, as
the case may be, by a successor, such successor shall succeed to and become
vested with all the rights, powers, privileges and duties of such retiring
Agent, and such retiring Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents. The fees payable by
the Borrower to a successor Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such successor.
After an Agent's resignation hereunder, the provisions of this Article and
Section 10.03 shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Administrative Agent
or Collateral Agent, as the case may be.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent, the Collateral Agent, any Issuing Bank
or any other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent, the Collateral Agent, any Issuing Bank
or any other Lender and based on such documents and information as it shall from
time to time deem appropriate, continue to make its own decisions in taking or
not taking action under or based upon this Agreement and the other Loan
Documents, any related agreement or any document furnished hereunder or
thereunder.
Anything herein to the contrary notwithstanding, none of the Joint
Book Managers, Co-Lead Arrangers or Arrangers listed on the cover page hereof,
nor the Syndication Agent, shall have any duties or responsibilities under this
Agreement, except in their capacity, if any, as Agents or Lenders hereunder.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. NOTICES. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to NCI or the Borrower, to it at 2001 Edmund Halley Drive,
Reston, Virginia 20191, Attention John S. Brittain, Jr., Vice President
and Treasurer (Telecopy No. 703-433-4414);
CREDIT AGREEMENT
<PAGE> 105
- 99 -
(b) if to any Restricted Company other than the Borrower, to such
Restricted Company care of the Borrower at the address for notices
indicated in clause (a) above;
(c) if to the Administrative Agent, to it at 909 Fannin Street,
Suite 1700, Houston, Texas 77010, Attention Sophia Sgarbi (Telecopy No.
713-951-9921);
(d) if to the Collateral Agent, to it at 270 Park Avenue, 37th
Floor, New York, New York 10017, Attention Tracey Navin Ewing (Telecopy
No. 212-270-4164); and
(e) if to any Lender (including any Lender in its capacity as an
Issuing Bank hereunder), to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 10.02. WAIVERS; AMENDMENTS.
(a) NO DEEMED WAIVERS; REMEDIES CUMULATIVE. No failure or delay by
either Agent, any Issuing Bank or any Lender in exercising any right or power
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Agents, the Issuing Banks and the Lenders hereunder are cumulative and are
not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of this Agreement or consent to any departure by any
Restricted Company therefrom shall in any event be effective unless the same
shall be permitted by paragraph (b) of this Section 10.02, and then such waiver
or consent shall be effective only in the specific instance and for the purpose
for which given. Without limiting the generality of the foregoing, the making of
a Loan or issuance of a Letter of Credit shall not be construed as a waiver of
any Default, regardless of whether either Agent, any Lender or the respective
Issuing Bank may have had notice or knowledge of such Default at the time.
(b) AMENDMENTS TO THIS AGREEMENT. Neither this Agreement nor any
provision hereof may be waived, amended or modified except pursuant to an
agreement or agreements in writing entered into by the Restricted Companies and
the Required Lenders or by the Restricted Companies and the Administrative Agent
with the consent of the Required Lenders; PROVIDED that no such agreement shall:
(i) increase any Commitment of any Lender without the written
consent of such Lender;
(ii) reduce the principal amount of any Loan or LC Disbursement or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby;
CREDIT AGREEMENT
<PAGE> 106
- 100 -
(iii) postpone the scheduled date of payment of the
principal amount of any Loan or LC Disbursement, or any interest
thereon, or any fees payable hereunder, or reduce the amount of,
waive or excuse any such payment, or postpone the scheduled date of
reduction or expiration of any Commitment, without the written
consent of each Lender affected thereby;
(iv) change Section 2.16(c) or 2.16(d), without the
written consent of each Lender affected thereby;
(v) change any of the provisions of this Section 10.02
or the percentage set forth in the definition of "Required Lenders"
or any other provision hereof specifying the number or percentage of
Lenders required to waive, amend or modify any rights hereunder or
under any other Loan Document or make any determination or grant any
consent hereunder or thereunder, without the written consent of each
Lender; or
(vi) release NCI from its obligations in respect of its
Guarantee under Article III, without the written consent of each
Lender;
PROVIDED FURTHER that (A) no such agreement shall amend, modify or otherwise
affect the rights or duties of either Agent or any Issuing Bank hereunder
without the prior written consent of such Agent or Issuing Bank, as the case may
be and (B) to the extent specified in Section 2.01(e), this Agreement may be
amended (x) to establish Incremental Facility Loan Commitments of any Series
pursuant to an Incremental Facility Amendment executed between the Borrower, the
relevant Lenders of such Series, the Administrative Agent and the Collateral
Agent, and (y) to include a participation by holders of any Vendor Indebtedness
in mandatory prepayments pursuant to Section 2.09(b) pursuant to an amendment to
this Agreement executed by the Borrower, the Administrative Agent and the
Collateral Agent executed and delivered pursuant to Section 7.01(d)(i), and any
such Incremental Facility Amendment or amendment referred to in the foregoing
clauses (x) and (y) shall not require the consent of any other party to this
Agreement.
In connection with any waiver, amendment or other modification to
this Agreement, the Administrative Agent shall be permitted to establish a
"record date" to determine which Lenders are to be entitled to participate in
consenting to such waiver, amendment or modification (it being understood that
Persons that become "Lenders" under this Agreement after such "record date"
pursuant to an assignment in accordance with Section 10.04 shall not be entitled
to participate in such consent), PROVIDED that in no event shall such "record
date" be a date more than 10 days earlier than the date such waiver, amendment
or modification is distributed to the Lenders for execution.
Anything in this Agreement to the contrary notwithstanding, (A) no
waiver or modification of any provision of this Agreement that has the effect
(either immediately or at some later time) of enabling the Borrower to satisfy a
condition precedent to the making of a Loan of any Class shall be effective
against the Lenders of such Class, unless the Required Lenders of the affected
Class shall have
CREDIT AGREEMENT
<PAGE> 107
- 101 -
concurred with such waiver or modification, and (B) no waiver or modification of
any provision of this Agreement or any other Loan Document that could reasonably
be expected to adversely affect the Lenders of any Class disproportionately when
compared to the Lenders of all other Classes shall be effective against the
Lenders of such Class unless the Required Lenders of such Class shall have
concurred with such waiver or modification, PROVIDED that nothing in this clause
(B) shall override any provision in this Agreement or the other Loan Documents
that expressly permits any action to be taken, or waiver to be given, by the
Required Lenders.
(c) AMENDMENTS TO SECURITY DOCUMENTS. No Security Document nor any
provision thereof may be waived, amended or modified, nor may the Liens thereof
be spread to secure any additional obligations (including any increase in Loans
hereunder) except pursuant to an agreement or agreements in writing entered into
by the Restricted Companies party thereto, and by the Collateral Agent with the
consent of the Required Lenders; provided that, (i) without the written consent
of each Lender, no such agreement shall release all or substantially all of the
Restricted Companies from their respective obligations under the Security
Documents and (ii) without the written consent of each Lender, no such agreement
shall release all or substantially all of the collateral security or otherwise
terminate all or substantially all of the Liens under the Security Documents,
alter the relative priorities of the obligations entitled to the Liens created
under the Security Documents (except in connection with securing additional
obligations equally and ratably with the Loans and other obligations hereunder)
with respect to all or substantially all of the collateral security provided
thereby, or release all or substantially all of the guarantors under the
Restricted Company Guarantee and Security Agreement from their guarantee
obligations thereunder, except that (A) no such consent shall be required, and
the Collateral Agent is hereby authorized (and so agrees with the Restricted
Companies), to release any Lien covering property (and to release any such
guarantor) that is the subject of either a disposition of property permitted
hereunder or a disposition to which the Required Lenders have consented, (B) no
such consent shall be required with respect to, and the Collateral Agent is
hereby authorized to enter into, any amendment that would implement collateral
security either for the Incremental Facility Loans hereunder or for Vendor
Indebtedness permitted under Section 7.01(d) and (C) no such agreement shall
amend, modify or otherwise affect the rights or duties of the Collateral Agent
without the prior written consent of the Collateral Agent.
SECTION 10.03. EXPENSES; INDEMNITY; DAMAGE WAIVER.
(a) COSTS AND EXPENSES. The Credit Parties jointly and severally
agree to pay, or reimburse the Syndication Agent for paying, (i) all reasonable
out-of-pocket expenses incurred by the Syndication Agent and its Affiliates,
including the reasonable fees, charges and disbursements of Special Counsel, in
connection with the syndication of the credit facilities provided for herein,
the preparation of this Agreement and the other Loan Documents or any
amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all out-of-pocket expenses incurred by any Issuing Bank in
connection with the issuance, amendment, renewal or extension of any Letter of
Credit or any demand for payment thereunder, (iii) all amounts that the
Collateral Agent is required to make under any indemnity issued to any bank with
which deposit arrangements are entered into pursuant to the Restricted Company
Guarantee and Security Agreement, (iv) all out-of-pocket expenses incurred by
either Agent, any Issuing Bank or any Lender, including the fees, charges and
disbursements of any counsel for such Agent, Issuing Bank or Lender, in
connection with the enforcement or protection of its rights in connection with
this Agreement and the other Loan Documents, including its rights under this
Section 10.03, or in connection with the Loans made or Letters of Credit issued
hereunder, including in connection with any workout, restructuring or
negotiations in respect thereof and (v) all transfer, stamp,
CREDIT AGREEMENT
<PAGE> 108
- 102 -
documentary or other similar taxes, assessments or charges levied by any
governmental or revenue authority in respect of this Agreement or any of the
other Loan Documents or any other document referred to herein or therein and all
costs, expenses, taxes, assessments and other charges incurred in connection
with any filing, registration, recording or perfection of any security interest
contemplated by any Security Document or any other document referred to therein.
(b) INDEMNIFICATION BY CREDIT PARTIES. The Credit Parties jointly
and severally agree to indemnify each Agent, each Issuing Bank and each Lender,
and each Related Party of any of the foregoing Persons (each such Person being
called an "INDEMNITEE") against, and hold each Indemnitee harmless from, any and
all losses, claims, damages, liabilities and related expenses, including the
fees, charges and disbursements of any counsel for any Indemnitee, incurred by
or asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement, the other Loan
Documents or any agreement or instrument contemplated hereby, the performance by
the parties hereto and thereto of their respective obligations hereunder or
thereunder or the consummation of the Transactions or any other transactions
contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use of
the proceeds therefrom (including any refusal by any Issuing Bank to honor a
demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such Letter
of Credit), (iii) any actual or alleged presence or release of Hazardous
Materials or RF Emissions on or from any property owned or operated by any
Credit Party or any of their subsidiaries, or any Environmental Liability
related in any way to any Credit Party or any of its subsidiaries, or (iv) any
actual or prospective claim, litigation, investigation or proceeding relating to
any of the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; PROVIDED that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or wilful misconduct of such Indemnitee.
(c) REIMBURSEMENT BY LENDERS. To the extent that the Credit Parties
fail to pay any amount required to be paid by them to either Agent under
paragraph (a) or (b) of this Section 10.03, each Lender severally agrees to pay
to such Agent such Lender's Applicable Percentage (determined as of the time
that the applicable unreimbursed expense or indemnity payment is sought) of such
unpaid amount; PROVIDED that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against such Agent in its capacity as such. To the extent that the
Credit Parties fail to pay any amount required to be paid by them to any Issuing
Bank under paragraph (a) or (b) of this Section 10.03, each Revolving Credit
Lender severally agrees to pay to such Issuing Bank such Lender's Applicable
Percentage (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount; PROVIDED that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against such Issuing
Bank in its capacity as such. Nothing herein shall be deemed to limit the
obligations of the Credit Parties under paragraph (b) above to reimburse the
Lenders for any payment made under this paragraph (c).
(d) WAIVER OF CONSEQUENTIAL DAMAGES, ETC. To the extent
permitted by applicable law, none of the Credit Parties shall assert, and each
Credit Party hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as
CREDIT AGREEMENT
<PAGE> 109
- 103 -
opposed to direct or actual damages) arising out of, in connection with, or as a
result of, this Agreement, the other Loan Documents or any agreement or
instrument contemplated hereby or thereby, the Transactions, any Loan or Letter
of Credit or the use of the proceeds thereof.
(e) PAYMENTS. All amounts due under this Section 10.03 shall be
payable promptly after written demand therefor.
SECTION 10.04. SUCCESSORS AND ASSIGNS.
(a) ASSIGNMENTS GENERALLY. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that no Credit Party may assign
or otherwise transfer any of its rights or obligations hereunder without the
prior written consent of each Lender (and any attempted assignment or transfer
by any Credit Party without such consent shall be null and void). Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby and, to the extent expressly contemplated hereby, the Related
Parties of each of the Agents, the Issuing Banks and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
(b) ASSIGNMENTS BY LENDERS. Any Lender may assign to one or more
banks or other financial institutions (including funds) all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitments and the Loans at the time owing to it); PROVIDED that
(i) except in the case of an assignment to a Lender or an Affiliate
of a Lender or an Approved Fund, each of the Borrower and the
Administrative Agent (and, in the case of an assignment of all or a
portion of a Revolving Credit Commitment or any Revolving Credit Lender's
obligations in respect of its LC Exposure, each Issuing Bank) must give
their prior written consent to such assignment (which consent shall not be
unreasonably withheld or delayed) and, in the case of any such assignment
as to which no consent of the Administrative Agent is required, the
Administrative Agent shall have acknowledged receipt of such assignment,
(ii) except in the case of an assignment to a Lender or an Affiliate
of a Lender or an Approved Fund or an assignment of the entire remaining
amount of the assigning Lender's Commitments, the amount of the
Commitments of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to
such assignment is delivered to the Administrative Agent) shall not be
less than $1,000,000 unless each of the Borrower and the Administrative
Agent otherwise consents,
(iii) each partial assignment of rights with respect to any Class of
Loans and/or Commitments shall be made as an assignment of a proportionate
part of all the assigning Lender's rights and obligations under this
Agreement with respect to such Class (including, in the case of any
assignment of Revolving Credit Commitments, of a proportionate part of the
assigning Lender's LC Exposure),
CREDIT AGREEMENT
<PAGE> 110
- 104 -
(iv) the parties to each assignment shall execute and deliver to the
Administrative Agent (with sufficient copies for the assignor, the
assignee and the Borrower) an Assignment and Acceptance, together with a
processing and recordation fee of $3,500, and
(v) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire;
PROVIDED, FURTHER that any consent of the Borrower otherwise required under this
paragraph shall not be required if an Event of Default under clause (h) or (i)
of Article VIII has occurred and is continuing.
Upon acceptance and recording pursuant to paragraph (d) of this
Section 10.04, from and after the effective date specified in each Assignment
and Acceptance, the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Acceptance, have (in
addition to any such rights and obligations theretofore held by it) the rights
and obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of the assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 2.13,
2.14, 2.15 and 10.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (e) of
this Section 10.04.
Notwithstanding anything to the contrary contained herein, any
Lender (a "GRANTING LENDER") may grant to a special purpose vehicle (an "SPC")
of such Granting Lender, identified as such in writing from time to time by the
Granting Lender to each Agent and the Borrower, the option to provide to the
Borrower all or any part of any Loan that such Granting Lender would otherwise
be obligated to make to the Borrower pursuant to Section 2.01, PROVIDED that (i)
nothing herein shall constitute a commitment to make any Loan by an SPC, (ii) if
an SPC elects not to exercise such option or otherwise fails to provide all or
any part of such Loan, the Granting Lender shall be obligated to make such Loan
pursuant to the terms hereof and (iii) the Credit Parties may bring any
proceeding against either the Granting Lender or the SPC in order to enforce any
rights of the Credit Parties under any of the Loan Documents. The making of a
Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender to
the same extent, and as if, such Loan were made by the Granting Lender. Each
party hereto hereby agrees that no SPC shall be liable for any payment under
this Agreement for which a Lender would otherwise be liable, for so long as, and
to the extent, the related Granting Lender makes such payment. In furtherance of
the foregoing, each party hereto hereby agrees that, prior to the date that is
one year and one day after the payment in full of all outstanding senior
indebtedness of any SPC, it will not institute against, or join any other person
in instituting against, such SPC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or similar proceedings under the laws of
the United States or any State thereof arising out of any claim against such SPC
under this Agreement. In addition, notwithstanding anything to the contrary
contained in this Section 10.04, any SPC may with notice to, but without the
prior written consent of, the Borrower or the Administrative Agent and without
paying any processing fee therefor, assign all or a portion of its interests in
any Loans to its Granting Lender or to any financial institutions providing
liquidity and/or credit support (if any)
CREDIT AGREEMENT
<PAGE> 111
- 105 -
with respect to commercial paper issued by such SPC to fund such Loans and such
SPC may disclose on a confidential basis, confidential information with respect
to the Credit Parties and their Subsidiaries to any rating agency, commercial
paper dealer or provider of a surety, guarantee or credit liquidity enhancement
to such SPC.
(c) MAINTENANCE OF REGISTER BY ADMINISTRATIVE AGENT. The
Administrative Agent, acting for this purpose as an agent of the Borrower, shall
maintain a copy of each Assignment and Acceptance delivered to it and a register
for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amount of the Loans and LC Disbursements owing to,
each Lender pursuant to the terms hereof from time to time (the "REGISTER"). The
entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent, the Issuing Banks and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Borrower, any
Issuing Bank and any Lender, at any reasonable time and from time to time upon
reasonable prior notice. The Administrative Agent hereby agrees to supply the
Syndication Agent weekly with a complete and correct copy of the Register.
(d) EFFECTIVENESS OF ASSIGNMENTS. Upon its receipt of a duly
completed Assignment and Acceptance executed by an assigning Lender and an
assignee, the assignee's completed Administrative Questionnaire (unless the
assignee shall already be a Lender hereunder), the processing and recordation
fee referred to in paragraph (b) of this Section 10.04 and any written consent
to such assignment required by paragraph (b) of this Section 10.04, the
Administrative Agent shall accept such Assignment and Acceptance and record the
information contained therein in the Register on a date mutually agreed upon
between the assignor, the assignee and the Administrative Agent (which shall be
no later than the date 5 Business Days after compliance with the requirements of
this paragraph). No assignment shall be effective for purposes of this Agreement
unless it has been recorded in the Register as provided in this paragraph.
(e) PARTICIPATIONS. Any Lender may, without the consent of the
Restricted Companies, the Administrative Agent or any Issuing Bank sell
participations to one or more banks or other entities (a "PARTICIPANT") in all
or a portion of such Lender's rights and obligations under this Agreement
(including all or a portion of its Commitments and the Loans and LC Exposure
owing to it); PROVIDED that (i) such Lender's obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (iii) the
Borrower, the Administrative Agent, the Issuing Banks and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; PROVIDED that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 10.02(b), or
the first proviso to Section 10.02(c), that affects such Participant. Subject to
paragraph (f) of this Section 10.04, the Borrower agrees that each Participant
shall be entitled to the benefits of Sections 2.13, 2.14 and 2.15 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section 10.04.
CREDIT AGREEMENT
<PAGE> 112
- 106 -
(f) LIMITATIONS ON RIGHTS OF PARTICIPANTS. A Participant shall not
be entitled to receive any greater payment under Section 2.13 or 2.15 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower's prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 2.15 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 2.15(e) as though it were a
Lender.
(g) PLEDGES. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any such pledge or assignment to a Federal
Reserve Bank, and this Section 10.04 shall not apply to any such pledge or
assignment of a security interest; PROVIDED that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such assignee for such Lender as a party hereto.
(h) NO ASSIGNMENTS TO BORROWER OR AFFILIATES. Anything in this
Section 10.04 to the contrary notwithstanding, no Lender may assign or
participate any interest in any Loan held by it hereunder to the Borrower or any
of its Affiliates or subsidiaries without the prior consent of each Lender.
SECTION 10.05. SURVIVAL. All covenants, agreements, representations
and warranties made by the Credit Parties herein and in the other Loan
Documents, and in the certificates or other instruments delivered in connection
with or pursuant to this Agreement and the other Loan Documents, shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the other Loan
Documents and the making of any Loans and issuance of any Letters of Credit,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that the Administrative Agent, any Issuing Bank or any
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect so long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement or the other Loan Documents is outstanding and unpaid or any Letter of
Credit is outstanding and so long as the Commitments have not expired or
terminated. The provisions of Sections 2.13, 2.14, 2.15 and 10.03 and Article IX
shall survive and remain in full force and effect regardless of the consummation
of the transactions contemplated hereby, any assignment or participation
pursuant to Section 10.04 (with respect to matters arising prior to such
assignment or participation), the repayment of the Loans, the expiration or
termination of the Letters of Credit and the Commitments or the termination of
this Agreement or any other Loan Document or any provision hereof or thereof.
SECTION 10.06. COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement and
any separate letter agreements with respect to fees payable to either Agent
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. This Agreement
CREDIT AGREEMENT
<PAGE> 113
- 107 -
shall become effective when it shall have been executed by the Administrative
Agent and when the Administrative Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of the other parties
hereto, and thereafter shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. Delivery of an
executed counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.
SECTION 10.07. SEVERABILITY. Any provision of this Agreement held to
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 10.08. RIGHT OF SETOFF. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of the Borrower against any of and all the
obligations of the Borrower now or hereafter existing under this Agreement held
by such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement and although such obligations may be unmatured. The
rights of each Lender under this Section 10.08 are in addition to any other
rights and remedies (including other rights of setoff) which such Lender may
have.
SECTION 10.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS.
(a) GOVERNING LAW. This Agreement shall be construed in accordance
with and governed by the law of the State of New York.
(b) SUBMISSION TO JURISDICTION. Each party hereto (other than any
Lender that is an agency of a Governmental Authority) hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State
court (or, to the extent permitted by law, in such Federal court). Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that either Agent, any Issuing Bank or any Lender may otherwise
have to bring any action or proceeding relating to this Agreement or any other
Loan Document against any Credit Party or its properties in the courts of any
jurisdiction.
(c) WAIVER OF VENUE. Each party hereto hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter
CREDIT AGREEMENT
<PAGE> 114
- 108 -
have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement or the other Loan Documents in any court referred to
in paragraph (b) of this Section 10.09. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(d) SERVICE OF PROCESS. Each party to this Agreement irrevocably
consents to service of process in the manner provided for notices in Section
10.01. Nothing in this Agreement will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
SECTION 10.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.10.
SECTION 10.11. HEADINGS. Article and Section headings and the Table
of Contents used herein are for convenience of reference only, are not part of
this Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 10.12. CONFIDENTIALITY. Each of the Agents, the Issuing
Banks and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and its
Affiliates, directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to any
direct or indirect contractual counterparty in swap agreements (or to such
contractual counterparty's professional advisor), so long as such contractual
counterparty (or such professional advisor) agrees to be bound by the provisions
of this Section 10.12, (c) to the extent requested by any regulatory authority
(including the NAIC), (d) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (e) to any other party
to this Agreement, (f) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder, (g) subject to the execution and delivery of an agreement
containing provisions substantially the same as those of this Section 10.12, to
any assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations under this Agreement, (h) with the consent
of the Borrower or (i) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section 10.12 or (ii)
becomes available to either Agent, any Issuing Bank or any Lender on a
nonconfidential basis from a source other than the Borrower. Unless specifically
prohibited by applicable law or court order, each Lender and Agent shall, prior
to disclosure thereof, notify the Borrower of any request for
CREDIT AGREEMENT
<PAGE> 115
- 109 -
disclosure of any Information (A) by any governmental agency or representative
thereof (other than any such request in connection with an examination of the
financial condition of such Lender by such governmental agency) or (B) pursuant
to legal process (including agency subpoenas) and, at the expense of the
Borrower, will cooperate with reasonable efforts by the Borrower to seek a
protective order or other assurances that confidential treatment will be
accorded such Information.
For the purposes of this Section 10.12, "INFORMATION" means all
information received from the Borrower relating to the Credit Parties or their
business, other than any such information that is available to either Agent, any
Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by the
Borrower; PROVIDED that, in the case of information received from the Borrower
after the date hereof, such information is clearly identified at the time of
delivery as confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section 10.12 shall be considered to have
complied with its obligation to do so if such Person has exercised the same
degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
SECTION 10.13. DESIGNATION AS CREDIT FACILITY. NCI hereby designates
each of the Commitments and Loans hereunder as the "Credit Facility" under and
for all purposes of the Public Note Indentures. In that connection, NCI hereby
represents and warrants as of the date hereof that there is not currently in
effect any designation of any other credit facility as a "Credit Facility" under
any of the Public Note Indentures (other than, for periods prior to the
Effective Date, the Existing Credit Agreement). NCI further agrees that, until
the principal of and interest on all of the Loans have been paid in full and all
of the Commitments terminated, it will not designate any credit facility (other
than the Commitments and Loans hereunder pursuant to this Section 10.13) as a
"Credit Facility" for purposes of any of the Public Note Indentures.
SECTION 10.14. OBLIGATIONS SENIOR. The obligations of the Restricted
Companies hereunder and under the other Loan Documents constitute "senior Debt"
for the purposes of the second paragraph of Section 10.12 of the January 1994
Indenture.
SECTION 10.15. RELEASE OF RECORDINGS IN REAL ESTATE RECORDS. Each of
the Lenders by its signature below hereby authorizes and directs the Collateral
Agent to release any recordings of the Liens created under the Restricted
Company Guarantee and Security Agreement (or under the Existing Restricted
Company Guarantee and Security Agreement under and as defined therein, or
otherwise pursuant to the Existing Credit Agreement) to the extent made in the
real estate records of any jurisdiction, it being understood that it is the
intent of this Agreement and of the Restricted Company Guarantee and Security
Agreement that the only filings and recordings required to be made in respect of
the Liens created pursuant to the Restricted Company Guarantee and Security
Agreement shall, unless requested by the Collateral Agent pursuant to Section
6.11 of the Restricted Company Guarantee and Security Agreement, be the filing
of non-fixture Uniform Commercial Code financing statements.
CREDIT AGREEMENT
<PAGE> 116
- 110 -
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
NEXTEL COMMUNICATIONS, INC.
By
/s/ John Brittain
------------------------------------
Name: John Brittain
Title: Vice President and Treasurer
RESTRICTED COMPANIES
NEXTEL FINANCE COMPANY
by
/s/ John Brittain
------------------------------------
Name: John Brittain
Title: Vice President and Treasurer
CREDIT AGREEMENT
<PAGE> 117
- 111 -
CELL CALL, INC.
FCI 900, Inc.
NEXTEL COMMUNICATIONS OF
THE MID-ATLANTIC, INC.
NEXTEL OF CALIFORNIA, INC.
NEXTEL LICENSE ACQUISITION
CORP.
NEXTEL LICENSE HOLDINGS 1,
INC.
NEXTEL LICENSE HOLDINGS 2,
INC.
NEXTEL LICENSE HOLDINGS 3,
INC.
NEXTEL LICENSE HOLDINGS 4,
INC.
NEXTEL OF NEW YORK, INC.
NEXTEL OPERATIONS, INC.
NEXTEL SOUTH CORP.
NEXTEL SOCAL, INC.
NEXTEL OF TEXAS, INC.
NEXTEL SYSTEMS CORP.
NEXTEL WEST CORP.
PITTENCRIEFF
COMMUNICATIONS, INC.
RADIOCALL SERVICE AND
SYSTEMS, INC.
SAFETY NET, INC.
SPECTRUM RESOURCES OF
THE NORTHEAST, INC.
SRI, INC.
By
/s/ JOHN BRITTAIN
------------------------------
Name: John Brittain
Title: Vice President and Treasurer
CREDIT AGREEMENT
<PAGE> 118
- 112 -
FORT WORTH TRUNKED RADIO
LIMITED PARTNERSHIP
By Nextel of Texas, Inc.,
a General Partner
By
/s/ JOHN BRITTAIN
------------------------------
Name: John Brittain
Title: Vice President and Treasurer
CREDIT AGREEMENT
<PAGE> 119
- 113 -
LENDERS
THE CHASE MANHATTAN BANK BANK OF AMERICA, N.A.
By /s/ TRACEY NAVIN EWING By /s/ JENNIFER ZYDNEY
---------------------------- ----------------------------
Name: Tracey Navin Ewing Name: Jennifer Zydney
Title: Vice President Title: Managing Director
THE BANK OF NOVA SCOTIA BANKERS TRUST COMPANY
By /s/ PAUL A. WEISSENBERGER By /s/ GREGORY SHEFRIN
---------------------------- ----------------------------
Name: P.A. Weissenberger Name: Gregory Shefrin
Title: Authorized Signatory Title: Principal
BARCLAYS BANK PLC CREDIT SUISSE FIRST BOSTON
By /s/ DANIELE IACOVONE By /s/ JOEL GLODOWSKI
---------------------------- ----------------------------
Name: Daniele Iacovone Name: Joel Glodowski
Title: Associate Director Title: Managing Director
By /s/ CHRIS T. HORGAN
----------------------------
Name: Chris T. Horgan
Title: Vice President
TORONTO DOMINION (TEXAS), INC.
By /s/ JEFFREY R. LENTS
----------------------------
Name: Jeffrey R. Lents
Title: Vice President
CREDIT AGREEMENT
<PAGE> 120
- 114 -
ABN AMRO BANK N.V. ALLFIRST BANK
By /s/ FRANCES O'R. LOGAN By /s/ W. BLAKE HAMPSON
---------------------------- ----------------------------
Name: Frances O'R. Logan Name: W. Blake Hampson
Title: Senior Vice President Title: Vice President
By /s/ CARTER VENKAT
----------------------------
Name: Carter Venkat
Title: Corporate Banking Officer
BANK AUSTRIA CREDITANSTALT BANK OF MONTREAL
CORPORATE FINANCE, INC.
By /s/ KAREN KLAPPER
----------------------------
By /s/ RICHARD W. VARALLA Name: Karen Klapper
----------------------------
Name: Richard W. Varalla Title: Director
Title: Associate
By /s/ JOHN G. TAYLOR
----------------------------
Name: John G. Taylor
Title: Vice President
THE BANK OF NEW YORK BANK OF TOKYO - MITSUBISHI
TRUST COMPANY
By /s/ GERRY GRANOVSKY
----------------------------
Name: Gerry Granovsky By /s/ EMILE ELNEMS
----------------------------
Title: Vice President Name: Emile Elnems
Title: Vice President
CREDIT AGREEMENT
<PAGE> 121
- 115 -
BHF (USA) CAPITAL CORPORATION BALANCED HIGH YIELD FUND II LTD.
By : BHF (USA) Capital Corporation
as Attorney-in-fact
By /s/ MICHAEL PELLERITO
----------------------------
Name: Michael Pellerito
Title: Assistant Vice President By /s/ MICHAEL PELLERITO
----------------------------
Name: Michael Pellerito
Title: Assistant V ice
President
By /s/ CHRISTOPHER DUGGER
----------------------------
Name: Christopher Dugger
Title: Associate By /s/ CHRISTOPHER DUGGER
----------------------------
Name: Christopher Dugger
Title: Associate
CANADIAN IMPERIAL BANK OF CIBC INC.
COMMERCE
By /s/ LAURA HOM
----------------------------
By /s/ WILLIAM M. SWENSON Name: Laura Hom
----------------------------
Name: William M. Swenson Title: Executive Director
Title: Authorized Signatory CIBC World Markets
Corp. as Agent
THE CIT GROUP/EQUIPMENT COOPERATIEVE CENTRALE
FINANCING, INC. RAIFFEISEN-BOERENLEENBANK
B.A., "RABOBANK NEDERLAND",
NEW YORK BRANCH
By /s/ J. E. PALMER
----------------------------
Name: J. E. Palmer
Title: Assistant Vice President By /s/ ALAN E. MCLINTOCK
----------------------------
Name: Alan E. McLintock
Title: Vice President
By /s/ NANCY O'CONNOR
----------------------------
Name: Nancy O'Connor
Title: Vice President
CREDIT AGREEMENT
<PAGE> 122
- 116 -
CREDIT AGRICOLE INDOSUEZ CYPRESSTREE INSTITUTIONAL FUND, LLC
By: CypressTree Investment
Management
Company, Inc. its Managing Member
By /s/ JOHN MCCLOSKEY
----------------------------
Name: John McCloskey
Title: Vice President, SRM By /s/ PHILIP C. ROBBINS
----------------------------
Name: Philip C. Robbins
By /s/ RENE LEBLANC Title: Principal
----------------------------
Name: Rene LeBlanc
Title:
CYPRESSTREE INVESTMENT FUND, LLC CYPRESSTREE INVESTMENT
By: CypressTree Investment Management MANAGEMENT COMPANY, INC.
Company, Inc. its Managing Member As: Attorney-in-fact and on
behalf of First Allmerica
Financial Life Insurance Company
By /s/ PHILIP C. ROBBINS as Portfolio Manager
----------------------------
Name: Philip C. Robbins
Title: Principal By /s/ PHILIP C. ROBBINS
----------------------------
Name: Philip C. Robbins
Title: Principal
CYPRESSTREE SENIOR FLOATING DEBT STRATEGIES FUND, INC.
RATE FUND
By: CypressTree Investment Management
Company, Inc. as Portfolio Manager By /s/ ANDREW C. LIGGIO
----------------------------
Name: Andrew C. Liggio
Title: Authorized Signatory
By /s/ PHILIP C. ROBBINS
----------------------------
Name: Philip C. Robbins
Title: Principal
DEBT STRATEGIES FUND II, INC. DEBT STRATEGIES FUND III, INC.
By /s/ ANDREW C. LIGGIO By /s/ ANDREW C. LIGGIO
---------------------------- ----------------------------
Name: Andrew C. Liggio Name: Andrew C. Liggio
Title: Authorized Signatory Title: Authorized Signatory
CREDIT AGREEMENT
<PAGE> 123
- 117 -
EXPORT DEVELOPMENT CORPORATION FIRST UNION NATIONAL BANK
By /s/ STEPHEN DAVIES By /s/ MARK L. COOK
---------------------------- ----------------------------
Name: Stephen Davies Name: Mark L. Cook
Title: Financial Services Manager- Title: Senior Vice President
Telecom Team
By /s/ ROBERT FORBES
----------------------------
Name: Robert Forbes
Title: Team Leader-Telecom Team
FLEET NATIONAL BANK FLOATING RATE PORTFOLIO
by INVESCO Senior Secured
Management,
Inc. as attorney in fact
By /s/ CHRISTINE CAMPANELLI
----------------------------
Name: Christine Campanelli
Title: Vice President By /s/ GREGORY STOECKLE
----------------------------
Name: Gregory Stoeckle
Title: Authorized Signatory
FOOTHILL CAPITAL CORPORATION FOOTHILL INCOME TRUST, L.P.
by: FIT GP, LLC, its general
partner
By /s/ JEFF NIKORA
----------------------------
Name: Jeff Nikora By /s/ JEFF NIKORA
----------------------------
Title: Executive Vice President Name: Jeff Nikora
Title: Managing Member
FREMONT INVESTMENT & LOAN GALAXY CLO 1999-1
By: SAI Investment Advisor,
its Collateral Manager
By /s/ KANNIKA VIRAVAN
----------------------------
Name: Kannika Viravan
Title: Vice President By /s/ SABUR MOINI
----------------------------
Name: Sabur Moini
Title: Authorized Signatory
CREDIT AGREEMENT
<PAGE> 124
- 118 -
GENERAL ELECTRIC CAPITAL CORPORATION GOLDMAN SACHS CREDIT PARTNERS L.P.
By /s/ MOLLY S. FERGUSSON By /s/ EDWARD C. FORST
---------------------------- ----------------------------
Name: Molly S. Fergusson Name: Edward C. Forst
Title: Manager, Operations Title: Authorized Signatory
THE GOVERNOR AND COMPANY HELLER FINANCIAL, INC.
OF THE BANK OF SCOTLAND
By /s/ K. CRAIG GALLEHUGH
----------------------------
By /s/ STUART GIBSON Name: K. Craig Gallehugh
----------------------------
Name: Stuart Gibson Title: Vice President
Title: Director, Telecoms & Media
IBM CREDIT CORPORATION THE ING CAPITAL SENIOR SECURED
HIGH INCOME FUND, L.P.
by: ING Capital Advisors LLC,
By /s/ THOMAS S. CURCIO as Investment Advisor
----------------------------
Name: Thomas S. Curcio
Title: Manager of Credit
By /s/ MICHAEL J. CAMPBELL
----------------------------
Name: Michael J. Campbell
Title: Senior Vice President &
Portfolio Manager
ING HIGH INCOME PRINCIPAL PRESERVATION KEMPER FLOATING RATE FUND
FUND HOLDINGS, LDC
by: ING Capital Advisors LLC,
as Investment Advisor By /s/ MARK E. WITTNEBEL
----------------------------
Name: Mark E. Wittnebel
Title: Senior Vice President
By /s/ MICHAEL J. CAMPBELL
----------------------------
Name: Michael J. Campbell
Title: Senior Vice President &
Portfolio Manager
CREDIT AGREEMENT
<PAGE> 125
- 119 -
KZH CNC LLC KZH CYPRESSTREE-1 LLC
By /s/ PETER CHIN By /s/ PETER CHIN
---------------------------- ----------------------------
Name: Peter Chin Name: Peter Chin
Title: Authorized Agent Title: Authorized Agent
KZH HIGHLAND-2 LLC KZH III LLC
By /s/ PETER CHIN By /s/ PETER CHIN
---------------------------- ----------------------------
Name: Peter Chin Name: Peter Chin
Title: Authorized Agent Title: Authorized Agent
KZH ING-2 LLC KZH LANGDALE LLC
By /s/ PETER CHIN By /s/ PETER CHIN
---------------------------- ----------------------------
Name: Peter Chin Name: Peter Chin
Title: Authorized Agent Title: Authorized Agent
KZH RIVERSIDE LLC KZH SHOSHONE LLC
By /s/ PETER CHIN By /s/ PETER CHIN
---------------------------- ----------------------------
Name: Peter Chin Name: Peter Chin
Title: Authorized Agent Title: Authorized Agent
KZH SOLEIL LLC KZH SOLEIL 2 LLC
By /s/ PETER CHIN By /s/ PETER CHIN
---------------------------- ----------------------------
Name: Peter Chin Name: Peter Chin
Title: Authorized Agent Title: Authorized Agent
KZH STERLING LLC KZH WATERSIDE LLC
By /s/ PETER CHIN By /s/ PETER CHIN
---------------------------- ----------------------------
Name: Peter Chin Name: Peter Chin
Title: Authorized Agent Title: Authorized Agent
CREDIT AGREEMENT
<PAGE> 126
- 120 -
BANKBOSTON, N.A., as Trust Administrator MEES PIERSON CAPITAL CORP.
for Longlane Master Trust IV
By /s/ RENEE A. ROSS By /s/ SCOTT T. WEBSTER JR.
---------------------------- ----------------------------
Name: Renee A. Ross Name: Scott T. Webster Jr.
Title: Managing Director - Title: Vice President
Credit Derivatives
By /s/ JOHN C. PRENETA
----------------------------
Name: John C. Preneta
Title: Executive Vice
President
MERCANTILE BANK NATIONAL MERRILL LYNCH SENIOR FLOATING
ASSOCIATION RATE FUND, INC.
By /s/ MICHAEL HOMEYER By /s/ ANDREW C. LIGGIO
---------------------------- ----------------------------
Name: Michael Homeyer Name: Andrew C. Liggio
Title: Assistant Vice President Title: Authorized Signatory
MERRILL LYNCH SENIOR FLOATING METROPOLITAN LIFE INSURANCE
RATE FUND II, INC. COMPANY
By /s/ ANDREW C. LIGGIO By /s/ JAMES R. DINGLER
---------------------------- ----------------------------
Name: Andrew C. Liggio Name: James R. Dingler
Title: Authorized Signatory Title: Director
MITSUBISHI TRUST AND BANKING MORGAN GUARANTY TRUST COMPANY
CORPORATION OF NEW YORK
By /s/ BEATRICE E. KOSSODO By /s/ JOHN KOWALCZUK
---------------------------- ----------------------------
Name: Beatrice E. Kossodo Name: John Kowalczuk
Title: Senior Vice President Title: Vice President
CREDIT AGREEMENT
<PAGE> 127
- 121 -
MORGAN STANLEY DEAN WITTER MORGAN STANLEY DEAN WITTER PRIME
PRIME INCOME TRUST RATE INCOME TRUST(1)
By /s/ SHEILA A. FINNERTY By
----------------------------
Name: Sheila A. Finnerty Name:
Title: Vice President Title:
MOTOROLA CREDIT CORPORATION NORTH AMERICAN SENIOR
FLOATING RATE FUND
By: CypressTree Investment
Management
By /s/ WALTER F. KEATING III Company, Inc. its Managing Member
----------------------------
Name: Walter F. Keating III
Title: Vice President
By /s/ PHILIP C. ROBBINS
----------------------------
Name: Philip C. Robbins
Title: Principal
OCTAGON LOAN TRUST OLYMPIC FUNDING TRUST, SERIES
By: Octagon Credit Investors, 1999-1(2)
as manager
By
----------------------------
Name:
By /s/ ANDREW D. GORDON Title:
----------------------------
Name: Andrew D. Gordon
Title: Portfolio Manager
PACIFIC REDWOOD CBO PILGRIM PRIME RATE TRUST
By: Pilgrim Investments, Inc.
By /s/ LORI A. JOHNSTONE as its investment manger
----------------------------
Name: Lori A. Johnstone
Title: Assistant Vice President
By /s/ JEFFREY A. BAKALAR
----------------------------
By /s/ MICHAEL LONG Name: Jeffrey A. Bakalar
----------------------------
Name: Michael Long Title: Vice President
Title: Assistant Vice President
(1) Not executed; to become a Lender pursuant to assignment.
(2) Not executed; to become a Lender pursuant to assignment.
CREDIT AGREEMENT
<PAGE> 128
- 122 -
PNC BANK, NATIONAL ASSOCIATION ROYAL BANK OF CANADA
By /s/ JOHN T. WILDEN By /s/ ANDREW C. WILLIAMSON
---------------------------- ----------------------------
Name: John T. Wilden Name: Andrew C. Williamson
Title: Vice President Title: Senior Manager
THE ROYAL BANK OF SCOTLAND PLC SENIOR HIGH INCOME PORTFOLIO, INC.
By /s/ KAREN L. STEFANCIC By /s/ ANDREW C. LIGGIO
---------------------------- ----------------------------
Name: Karen L. Stefancic Name: Andrew C. Liggio
Title: Vice President Title: Authorized Signatory
SKANDINAVISKA ENSKILDA BANKEN, SOCIETE GENERALE
NEW YORK BRANCH
By /s/ C. J. CONA
By /s/ P. MONTEMURRO Name: C. J. Cona
---------------------------- ----------------------------
Name: P. Montemurro Title: Vice President
Title: Vice President
By /s/ LARS NYBOUN
----------------------------
Name: Lars Nyboun
Title: Assistant Vice President
SRF TRADING, INC.(3) STEIN ROE & FARNHAM INCORPORATED,
as agent for Keyport Life
Insurance Company(4)
By
----------------------------
Name: By
----------------------------
Title: Name:
Title:
(3) Not executed; to become a Lender pursuant to assignment.
(4) Not executed; to become a Lender pursuant to assignment.
CREDIT AGREEMENT
<PAGE> 129
- 123 -
TRAVELERS CORPORATE LOAN FUND(5) THE TRAVELERS INSURANCE COMPANY
By By /s/ JOHN W. PETCHLER
---------------------------- ----------------------------
Name: Name: John W. Petchler
Title: Title: Second Vice President
UBS AG, LONDON BRANCH U.S. BANK NATIONAL ASSOCIATION
By /s/ JAMES J. DUPLESSIE By /s/ RAYMOND S. OSBURN
---------------------------- ----------------------------
Name: James J. Duplessie Name: Raymond S. Osburn
Title: Executive Director Title: Assistant Vice
UBS AG, New York Branch President
By /s/ HERBERT E. SEIF
----------------------------
Name: Herbert E. Seif
Title: Managing Director
UBS AG, New York Branch
WADDELL & REED INVESTMENT WINGED FOOT FUNDING TRUST
MANAGEMENT COMPANY
By /s/ KELLY C. WALKER
----------------------------
By /s/ JOHN E. SUNDEEN, JR. Name: Kelly C. Walker
----------------------------
Name: John E. Sundeen, Jr. Title: Authorized Agent
Title: Senior Vice President
(5) Not executed; to become a Lender pursuant to assignment.
CREDIT AGREEMENT
<PAGE> 130
- 124 -
KZH CRESCENT LLC KZH CRESCENT-2 LLC
By /s/ V. CONWAY By /s/ V. CONWAY
---------------------------- ----------------------------
Name: Virginia Conway Name: Virginia Conway
Title: Authorized Agent Title: Authorized Agent
KZH CRESCENT-3 LLC UNITED OF OMAHA LIFE INSURANCE
COMPANY
By: TCW Asset Management
By /s/ V. CONWAY Company, its Investment
----------------------------
Name: Virginia Conway Advisor
Title: Authorized Agent
By /s/ MARK L. GOLD
----------------------------
Name: Mark L. Gold
Title: Managing Director
By /s/ JONATHAN R. INSULL
----------------------------
Name: Jonathan R. Insull
Title: Vice President
SEQUILS I, LTD CRESCENT/MACH 1 PARTNERS, L.P.
by: TCW Asset Management Company
By: TCW Advisors, Inc., as its Its Investment Manager
Collateral Manager
By /s/ JONATHAN R. INSULL
----------------------------
By MARK L. GOLD Name: Jonathan R. Insull
----------------------------
Name: Mark L. Gold Title: Vice President
Title: Managing Director
By /s/ JONATHAN R. INSULL
----------------------------
Name: Jonathan R. Insull
Title: Vice President
CREDIT AGREEMENT
<PAGE> 131
- 125 -
WESTDEUTSCHE LANDESBANK
GIROZENTRALE
By /s/ MICHAEL J. WYNNE
----------------------------
Name: Michael J. Wynne
Title: Managing Director
By /s/ MICHAEL D. PEIST
----------------------------
Name: Michael D. Peist
Title: Vice President
CREDIT AGREEMENT
<PAGE> 1
NEXTEL COMMUNICATIONS, INC.
AMENDED AND RESTATED INCENTIVE EQUITY PLAN
(AS AMENDED AND RESTATED AS OF JULY 14, 1999)
<PAGE> 2
NEXTEL COMMUNICATIONS, INC.
AMENDED AND RESTATED INCENTIVE EQUITY PLAN
(AS AMENDED AND RESTATED AS OF JULY 14, 1999)
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
1. Purpose...........................................................................................1
2. Definitions.......................................................................................1
3. Shares and Performance Units Available under the Plan.............................................6
4. Option Rights.....................................................................................8
5. Appreciation Rights...............................................................................9
6. Restricted Shares................................................................................11
7. Deferred Shares..................................................................................12
8. Performance Shares and Performance Units.........................................................13
9. Transferability..................................................................................14
10. Adjustments......................................................................................15
11. Fractional Shares................................................................................16
12. Withholding Taxes................................................................................16
13. Participation by Employees of or Consultants to a Less-Than-Eighty-Percent
Subsidiary.......................................................................................16
14. Certain Terminations of Employment, Hardship and Approved Leaves of Absence......................16
15. Foreign Participants.............................................................................17
16. Administration of the Plan.......................................................................17
17. Amendments and Other Matters.....................................................................18
</TABLE>
<PAGE> 3
NEXTEL COMMUNICATIONS, INC.
AMENDED AND RESTATED INCENTIVE EQUITY PLAN
(AS AMENDED AND RESTATED AS OF JULY 14, 1999)
1. PURPOSE. The purpose of this Plan is to attract and
retain directors and officers and other key employees of and consultants to
Nextel Communications, Inc. (the "Corporation") and its Subsidiaries and to
provide such persons with incentives and rewards for superior performance.
2. DEFINITIONS. (a) As used in this Plan,
"ACCELERATED VESTING PERIOD" means the period beginning on the
effective date of a Change of Control and ending on the first anniversary of
such effective date.
"ACCELERATED VESTING PROVISION" means an Option Rights
agreement provision pursuant to Section 4(g)(ii) of this Plan, a Deferred
Shares agreement provision pursuant to Section 7(c)(ii) of this Plan or a
Performance Shares or Performance Units agreement provision pursuant to Section
8(b)(ii) of this Plan.
"APPRECIATION RIGHT" means a right granted pursuant to
Section 5 of this Plan, including a Free-Standing Appreciation Right and a
Tandem Appreciation Right.
"BASE PRICE" means the price to be used as the basis for
determining the Spread upon the exercise of a Free-Standing Appreciation Right.
"BOARD" means the Board of Directors of the Corporation and,
to the extent of any delegation by the Board to a committee of the Board (or a
subcommittee thereof) pursuant to Section 16(a) of this Plan, such committee
(or subcommittee).
"CAUSE" means (i) the conviction of a felony involving an
intentional act of fraud, embezzlement or theft in connection with one's duties
or otherwise in the course of one's employment with an Employer, (ii) the
intentional and wrongful damaging of property, contractual interests or
business relationships of an Employer, (iii) the intentional and wrongful
disclosure of secret processes or confidential information of an Employer in
violation of an agreement with or a policy of an Employer, or (iv) intentional
conduct contrary to an Employer's announced policies or practices (including
those contained in the Corporation's Employee Handbook) where either:
(A) the nature and/or severity of the conduct or its
consequences typically would have resulted in immediate
termination based on the Corporation's established employee
termination or disciplinary practices in place on the
Reference Date; or
1
<PAGE> 4
(B) the employee has been provided with written notice
detailing the relevant policy or practice and the nature of
the objectionable conduct or other violation, and within 20
business days of the receipt of such notice the employee has
not remedied the violation or ceased to engage in the
objectionable conduct.
"CHANGE OF CONTROL" means the occurrence of any of the
following events:
(i) the Corporation is merged or consolidated or
reorganized into or with another company or other legal entity, and as
a result of such merger, consolidation or reorganization less than a
majority of the combined voting power of the then-outstanding
securities of such resulting company or entity immediately after such
transaction is held directly or indirectly in the aggregate by the
holders of voting securities of the Corporation immediately prior to
such transaction, including voting securities issuable upon the
exercise or conversion of options, warrants or other securities or
rights;
(ii) the Corporation sells or otherwise transfers all or
substantially all of its assets to another company or other legal
entity, and as a result of such sale or other transfer of assets, less
than a majority of the combined voting power or the then outstanding
securities of such company or other entity immediately after such sale
or transfer is held directly or indirectly in the aggregate by the
holders of voting securities of the Corporation immediately prior to
such sale or transfer, including voting securities issuable upon
exercise or conversion of options, warrants or other securities or
rights;
(iii) a report is filed on Schedule 13D or Schedule 14D-1
(or any successor schedule, form or report), each as promulgated
pursuant to the Securities Exchange Act of 1934, as amended ( the
"Exchange Act"), disclosing that any "person" (as that term is used in
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has become
the "beneficial owner" (as that term is used in Rule 13d-3 promulgated
under the Exchange Act) of securities representing 50% or more of the
voting securities of the Corporation (or any successor thereto by
operation of law or by reason of the acquisition of all or
substantially all of the assets of the Corporation), including voting
securities issuable upon the exercise of options, warrants or other
securities or rights; or
(iv) the Corporation (or any successor thereto by
operation of law or by acquisition of all or substantially all of the
assets of the Corporation) files a report or proxy statement pursuant
to the Exchange Act disclosing in response to Form 8-K or Schedule 14A
(or any successor schedule, form, report or item therein) that a change
in control of the Corporation (or such successor) has occurred;
2
<PAGE> 5
provided, however, notwithstanding the provisions of (iii) and (iv) above, a
"Change of Control" shall not be deemed to have occurred solely because (1) the
Corporation, (2) an entity in which the Corporation directly or indirectly
beneficially owns 50% or more of the voting securities or (3) any
Corporation-sponsored employee stock ownership plan or other employee benefit
plan of the Corporation, either files or becomes obligated to file a report or
proxy statement under or in response to Schedule 13D, Schedule 14D-1, Form 8-K
or Schedule 14A (or any successor form, report, schedule or item therein) under
the Exchange Act, disclosing beneficial ownership by it of voting securities,
whether in excess of 50% or otherwise, or because the Corporation reports that
a change of control of the Corporation has or may have occurred or will or may
occur in the future by reason of such beneficial ownership.
"CODE" means the Internal Revenue Code of 1986, as amended
from time to time.
"COMMISSION" means the United States Securities and Exchange
Commission.
"COMMON SHARES" means (i) shares of the Class A Common Stock,
par value $.001 per share, of the Corporation and (ii) any security into which
Common Shares may be converted by reason of any transaction or event of the
type referred to in Section 10 of this Plan.
"DATE OF GRANT" means the date specified by the Board on which
a grant of Option Rights, Appreciation Rights or Performance Shares or
Performance Units or a grant or sale of Restricted Shares or Deferred Shares
shall become effective, which shall not be earlier than the date on which the
Board takes action with respect thereto.
"DEFERRAL PERIOD" means the period of time during which
Deferred Shares are subject to deferral limitations under Section 7 of this
Plan.
"DEFERRED SHARES" means an award pursuant to Section 7 of this
Plan of the right to receive Common Shares at the end of a specified Deferral
Period.
"EMPLOYER" means the Corporation or a Subsidiary (other than a
Less-Than-Eighty-Percent Subsidiary) or a successor to the Corporation or any
such Subsidiary by merger or otherwise upon or following a Change of Control.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time.
"EXECUTIVE" means any individual employed by any Employer in a
position having a salary grade of EX3, EX2 or EX1 (as the Corporation's salary
grades are established and in existence on July 14, 1999, and adjusting as
appropriate for any changes to the
3
<PAGE> 6
Corporation's system of classifying its employees by salary grades implemented
subsequent to such date).
"GOOD REASON" means that an Executive shall have made a good
faith determination that one or more of the following has occurred:
(i) any significant and adverse change in the Executive's
duties, responsibilities and authority, as compared in each case to
the corresponding circumstances in place on the Reference Date;
(ii) a relocation of the Executive's principal work
location as established on the Reference Date to a location that is
more than 30 miles away from such location;
(iii) a reduction in the Executive's salary or bonus
potential that is not in either case agreed to by the Executive, or
any other significant adverse financial consequences associated with
the Executive's employment as compared to the corresponding
circumstances in place on the Reference Date; or
(iv) a breach by any Employer of its obligations under any
agreement to which the Employer and the Executive are parties that is
not cured within 20 business days following the Employer's receipt of
a written notice from the Executive specifying the particulars of such
breach in reasonable detail.
"FREE-STANDING APPRECIATION RIGHT" means an Appreciation Right
granted pursuant to Section 5 of this Plan that is not granted in tandem with
an Option Right or similar right.
"IMMEDIATE FAMILY" has the meaning ascribed thereto in Rule
16a-1(e), as promulgated and amended from time to time by the Commission under
the Exchange Act, or any successor rule to the same effect.
"INCENTIVE STOCK OPTION" means an Option Right that is
intended to quality as an "incentive stock option" under Section 422 of the
Code or any successor provision thereto.
"LESS-THAN-EIGHTY-PERCENT SUBSIDIARY" means a Subsidiary with
respect to which the Corporation directly or indirectly owns or controls less
than 80 percent of the total combined voting or other decision-making power.
"MANAGEMENT OBJECTIVES" means the achievement or performance
objectives established pursuant to this Plan for Participants who have received
grants of Performance Shares or Performance Units or, when so determined by the
Board, Restricted Shares.
4
<PAGE> 7
"MARKET VALUE PER SHARE" means the fair market value of the
Common Shares as determined by the Board from time to time.
"NONAFFILIATE DIRECTOR" means a person who (i) is serving (or
who has been elected or appointed and has agreed to serve) as a member of the
Board, (ii) is not an officer or employee of the Corporation or any Subsidiary
or a beneficial owner of 10 percent or more of the outstanding Common Shares
and (iii) was not elected or appointed as a member of the Board pursuant to or
in connection with any contractual or other commitment on the part of the
Corporation to cause such person to be elected or appointed, or to nominate or
otherwise advance such person for election or appointment, as a member of the
Board.
"NONQUALIFIED OPTION" means an Option Right that is not
intended to qualify as a Tax-Qualified Option.
"OPTIONEE" means the person so designated in an agreement
evidencing an outstanding Option Right.
"OPTION PRICE" means the purchase price payable upon the
exercise of an Option Right.
"OPTION RIGHT" means the right to purchase Common Shares from
the Corporation upon the exercise of a Nonqualified Option or a Tax-Qualified
Option granted pursuant to Section 4, or a Replacement Option Right granted
pursuant to Section 17(c), of this Plan.
"PARTICIPANT" means a person who is selected by the Board to
receive benefits under this Plan and (i) is at that time a Nonaffiliate
Director or an officer (including but not limited to an officer who may also be
a member of the Board) or other key employee of or a consultant to the
Corporation or any Subsidiary or (ii) has agreed to commence serving as an
officer or other key employee of or as a consultant to the Corporation or any
Subsidiary.
"PERFORMANCE PERIOD" means, in respect of a Performance Share
or Performance Unit, a period of time established pursuant to Section 8 of this
Plan within which the Management Objectives relating thereto are to be
achieved.
"PERFORMANCE SHARE" means a bookkeeping entry that records the
equivalent of one Common Share awarded pursuant to Section 8 of this Plan.
"PERFORMANCE UNIT" means a bookkeeping entry that records a
unit equivalent to $1.00 awarded pursuant to Section 8 of this Plan.
"REFERENCE DATE" means the day before the effective date of
any Change of Control of the Corporation.
5
<PAGE> 8
"REPLACEMENT OPTION RIGHT" means an Option Right granted
pursuant to Section 17(c) of this Plan in exchange for the surrender and
cancellation of an option to purchase shares of another corporation that is
acquired by the Corporation or a Subsidiary by merger or otherwise.
"RESTRICTED SHARES" means Common Shares granted or sold
pursuant to Section 6 of this Plan as to which neither the substantial risk of
forfeiture nor the restrictions on transfer referred to in Section 6 hereof has
expired.
"RULE 16b-3" means Rule 16b-3, as promulgated and amended from
time to time by the Commission under the Exchange Act, or any successor rule to
the same effect.
"SPREAD" means, in the case of a Free-Standing Appreciation
Right, the amount by which the Market Value per Share on the date when the
Appreciation Right is exercised exceeds the Base Price specified therein or, in
the case of a Tandem Appreciation Right, the amount by which the Market Value
per Share on the date when the Appreciation Right is exercised exceeds the
Option Price specified in the related Option Right.
"STOCK OPTION PLAN" means the Fleet Call, Inc. Stock Option
Plan (as amended and restated as of July 15, 1992).
"SUBSIDIARY" means a corporation, partnership, joint venture,
unincorporated association or other entity in which the Corporation has a
direct or indirect ownership or other equity interest; provided, however, for
the purpose of determining whether any person may be a Participant for the
purposes of any grant of Incentive Stock Options, "Subsidiary" means any
corporation in which the Corporation owns or controls directly or indirectly
more than 50 percent of the total combined voting power represented by all
classes of stock issued by such corporation at the time of the grant.
"TANDEM APPRECIATION RIGHT" means an Appreciation Right
granted pursuant to Section 5 of this Plan that is granted in tandem with an
Option Right or any similar right granted under any other plan of the
Corporation.
"TAX-QUALIFIED OPTION" means an Option Right that is intended
to qualify under particular provisions of the Code, including but not limited
to an Incentive Stock Option.
(b) As used in this Plan, the term "employment" shall be
deemed to refer to service as a member of the Board or as a consultant, as well
as to a traditional employment relationship, as the case may be.
3. SHARES AND PERFORMANCE UNITS AVAILABLE UNDER THE
PLAN. (a)(i) Subject to adjustment as provided in Section 10 of this Plan, the
number of Common Shares
6
<PAGE> 9
covered by outstanding awards, except Replacement Option Rights, granted under
this Plan and issued or transferred upon the exercise or payment thereof shall
not in the aggregate exceed 45,000,000 Common Shares, which may be Common
Shares of original issuance or Common Shares held in treasury or a combination
thereof and which include 40,019,778 Common Shares that have been reserved by
the Board for issuance or transfer under this Plan only, the 921,859 Common
Shares that remained available for issuance or transfer under the Stock Option
Plan and were not covered by stock options outstanding thereunder as of July
22, 1993, and any of the 4,058,363 Common Shares that were covered by stock
options outstanding under the Stock Option Plan as of July 22, 1993, and have
or may become available for issuance or transfer under this Plan as a result of
the cancellation or termination of any such options prior to the exercise
thereof; provided, however, that the number of Common Shares issued or
transferred as Restricted Shares shall not in the aggregate exceed 200,000
Common Shares, and that the number of Common Shares covered by outstanding
Option Rights granted to consultants at an Option Price per Common Share that
is less than the Market Value per Share on the Date of Grant and issued or
transferred upon the exercise thereof shall not in the aggregate exceed
1,000,000 Common Shares, subject in each case to adjustment as provided in
Section 10 of this Plan.
(ii) Subject to adjustment as provided in Section
10 of this Plan, the number of Common Shares covered by Replacement Option
Rights granted under this Plan during any calendar year shall not in the
aggregate exceed five percent of the Common Shares outstanding on January 1 of
that year.
(iii) For the purposes of this Section 3(a):
(1) Upon payment in cash of the benefit
provided by any award granted under this Plan, any Common Shares that
were covered by that award shall again be available for issuance or
transfer hereunder.
(2) Common Shares covered by any award
granted under this Plan shall be deemed to have been issued or
transferred, and shall cease to be available for future issuance or
transfer in respect of any other award granted hereunder, at the
earlier of the time when they are actually issued or transferred or
the time when dividends or dividend equivalents are paid thereon;
provided, however, that Restricted Shares shall be deemed to have been
issued or transferred at the earlier of the time when they cease to be
subject to a substantial risk of forfeiture or the time when dividends
are paid thereon.
(b) The number of Performance Units that may be granted
under this Plan shall not in the aggregate exceed 500,000. Performance Units
that are granted under this Plan, but are not earned by the Participant at the
end of the Performance Period, shall be available for future grants of
Performance Units hereunder.
7
<PAGE> 10
4. OPTION RIGHTS. The Board may authorize grants to
Participants of options to purchase Common Shares upon such terms and
conditions as the Board may determine in accordance with the following
provisions:
(a) Each grant shall specify the number of Common Shares
to which it pertains.
(b) Each grant shall specify an Option Price per Common
Share, which shall be equal to or greater than the Market Value per
Share on the Date of Grant; provided, however, that the Option Price
per Common Share of a Replacement Option Right, and that the Option
Price per Common Share of an Option Right granted to a consultant, may
be less than the Market Value per Share on the Date of Grant
(c) Each grant shall specify the form of consideration to
be paid in satisfaction of the Option Price and the manner of payment
of such consideration, which may include (i) cash in the form of
currency or check or other cash equivalent acceptable to the
Corporation, (ii) nonforfeitable, nonrestricted Common Shares that are
already owned by the optionee and have a value at the time of exercise
that is equal to the Option Price, (iii) any other legal consideration
that the Board may deem appropriate, including but not limited to any
form of consideration authorized under Section 4(d), on such basis as
the Board may determine in accordance with this Plan and (iv) any
combination of the foregoing.
(d) On or after the Date of Grant of any Nonqualified
Option, the Board may determine that payment of the Option Price may
also be made in whole or in part in the form of Restricted Shares or
other Common Shares that are subject to risk of forfeiture or
restrictions on transfer. Unless otherwise determined by the Board on
or after the Date of Grant, whenever any Option Price is paid in whole
or in part by means of any of the forms of consideration specified in
this Section 4(d), the Common Shares received by the Optionee upon the
exercise of the Nonqualified Option shall be subject to the same risks
of forfeiture or restrictions on transfer as those that applied to the
consideration surrendered by the Optionee; provided, however, that
such risks of forfeiture and restrictions on transfer shall apply only
to the same number of Common Shares received by the Optionee as
applied to the forfeitable or restricted Common Shares surrendered by
the Optionee.
(e) Any grant may provide for deferred payment of the
Option Price from the proceeds of sale through a broker on the date of
exercise of some or all of the Common Shares to which the exercise
relates.
(f) Successive grants may be made to the same Participant
regardless of whether any Option Rights previously granted to the
Participant remain unexercised.
8
<PAGE> 11
(g) Each grant (i) shall specify the period or periods of
continuous employment of the Optionee by the Corporation or any
Subsidiary that are necessary before the Option Rights or installments
thereof shall become exercisable and (ii) in the case of any grant
subsequent to July 14, 1999, unless otherwise expressly determined in
a resolution duly adopted by the Board on the Date of Grant or such
later date on which the Board may ratify such grant, shall provide
that the Option Rights shall (A) if the Optionee is a Nonaffiliate
Director, immediately become fully exercisable upon the occurrence of
a Change of Control of the Corporation or (B) if the Optionee is
recognized by any Employer as a regular full time employee who is
subject to U.S. income tax withholding, immediately become fully
exercisable upon the termination of the Optionee's employment by an
Employer without Cause during the Accelerated Vesting Period or also,
in the case of an Optionee who is an Executive, upon the termination
of the Optionee's employment by the Optionee for Good Reason during
the Accelerated Vesting Period; provided, however, that any such
Accelerated Vesting Provision shall be deemed void ab initio and shall
be of no force or effect, if it should be determined that any such
provision would prevent a proposed merger or other business
combination that is intended by the parties thereto to be accounted
for as a pooling of interests from being so accounted for.
(h) Option Rights granted pursuant to this Section 4 may
be Nonqualified Options or Tax-Qualified Options or combinations
thereof.
(i) On or after the Date of Grant of any Nonqualified
Option, the Board may provide for the payment to the Optionee of
dividend equivalents thereon in cash or Common Shares on a current,
deferred or contingent basis, or the Board may provide that any
dividend equivalents shall be credited against the Option Price.
(j) No Option Right granted pursuant to this Section 4
may be exercised more than 10 years from the Date of Grant.
(k) Each grant shall be evidenced by an agreement that
shall be executed on behalf of the Corporation by any officer thereof
and delivered to and accepted by the Optionee and shall contain such
terms and provisions as the Board may determine consistent with this
Plan.
5. APPRECIATION RIGHTS. The Board may authorize grants
to Participants of Appreciation Rights. An Appreciation Right shall be a right
of the Participant to receive from the Corporation an amount that shall be
determined by the Board and shall be expressed as a percentage (not exceeding
100 percent) of the Spread at the time of the exercise of the Appreciation
Right. Any grant of Appreciation Rights under this Plan shall be upon such
terms and conditions as the Board may determine in accordance with the
following provisions:
9
<PAGE> 12
(a) Any grant may specify that the amount payable upon
the exercise of an Appreciation Right may be paid by the Corporation
in cash, Common Shares or any combination thereof and may (i) either
grant to the Participant or reserve to the Board the right to elect
among those alternatives or (ii) preclude the right of the Participant
to receive and the Corporation to issue Common Shares or other equity
securities in lieu of cash; provided, however, that no form of
consideration or manner of payment that would cause Rule 16b-3 to
cease to apply to this Plan shall be permitted.
(b) Any grant may specify that the amount payable upon
the exercise of an Appreciation Right shall not exceed a maximum
specified by the Board on the Date of Grant.
(c) Any grant may specify (i) a waiting period or periods
before Appreciation Rights shall become exercisable and (ii)
permissible dates or periods on or during which Appreciation Rights
shall be exercisable.
(d) Any grant may specify that an Appreciation Right may
be exercised only in the event of a Change of Control or other similar
transaction or event.
(e) On or after the Date of Grant of any Appreciation
Rights, the Board may provide for the payment to the Participant of
dividend equivalents thereon in cash or Common Shares on a current,
deferred or contingent basis.
(f) Each grant shall be evidenced by an agreement that
shall be executed on behalf of the Corporation by any officer thereof
and delivered to and accepted by the Participant and shall contain
such terms and provisions as the Board may determine consistent with
this Plan.
(g) Regarding Tandem Appreciation Rights only: Each grant
shall specifically identify the related Option Right (or similar right
granted under any other plan of the Corporation) and shall provide
that the Tandem Appreciation Right may be exercised only (i) at a time
when the related Option Right (or such similar right) is also
exercisable and the Spread is positive and (ii) by surrender of the
related Option Right (or such similar right) for cancellation.
(h) Regarding Free-Standing Appreciation Rights only:
(i) Each grant shall specify in respect of each
Free-Standing Appreciation Right a Base Price per Common
Share, which shall be equal to or greater than the Market
Value per Share on the Date of Grant;
10
<PAGE> 13
(ii) Successive grants may be made to the same
Participant regardless of whether any Free-Standing
Appreciation Rights previously granted to the Participant
remain unexercised;
(iii) Each grant shall specify the period or
periods of continuous employment of the Participant by the
Corporation or any Subsidiary that are necessary before the
Free-Standing Appreciation Rights or installments thereof
shall become exercisable, and any grant may provide for the
earlier exercise of the Free-Standing Appreciation Rights in
the event of a Change of Control or other similar transaction
or event; and
(iv) No Free-Standing Appreciation Right granted
under this Plan may be exercised more than 10 years from the
Date of Grant.
6. RESTRICTED SHARES. The Board may authorize grants or
sales to Participants of Restricted Shares upon such terms and conditions as
the Board may determine in accordance with the following provisions:
(a) Each grant or sale shall constitute an immediate
transfer of the ownership of Common Shares to the Participant in
consideration of the performance of services, entitling such
Participant to dividend, voting and other ownership rights, subject to
the substantial risk of forfeiture and restrictions on transfer
hereinafter referred to.
(b) Each grant or sale may be made without additional
consideration from the Participant or in consideration of a payment by
the Participant that is less than the Market Value per Share on the
Date of Grant.
(c) Each grant or sale shall provide that the Restricted
Shares covered thereby shall be subject to a "substantial risk of
forfeiture" within the meaning of Section 83 of the Code for a period
to be determined by the Board on the Date of Grant, and any grant or
sale may provide for the earlier termination of such period in the
event of a Change of Control or other similar transaction or event.
(d) Each grant or sale shall provide that, during the
period for which such substantial risk of forfeiture is to continue,
the transferability of the Restricted Shares shall be prohibited or
restricted in the manner and to the extent prescribed by the Board on
the Date of Grant. Such restrictions may include without limitation
rights of repurchase or first refusal in the Corporation or provisions
subjecting the Restricted Shares to a continuing substantial risk of
forfeiture in the hands of any transferee.
(e) Any grant or sale may require that any or all
dividends or other distributions paid on the Restricted Shares during
the period of such restrictions be automatically sequestered and
reinvested on an immediate or deferred basis in additional
11
<PAGE> 14
Common Shares, which may be subject to the same restrictions as the
underlying award or such other restrictions as the Board may
determine.
(f) Each grant or sale shall be evidenced by an agreement
that shall be executed on behalf of the Corporation by any officer
thereof and delivered to and accepted by the Participant and shall
contain such terms and provisions as the Board may determine
consistent with this Plan. Unless otherwise directed by the Board, all
certificates representing Restricted Shares, together with a stock
power that shall be endorsed in blank by the Participant with respect
to the Restricted Shares, shall be held in custody by the Corporation
until all restrictions thereon lapse.
7. DEFERRED SHARES. The Board may authorize grants or
sales of Deferred Shares to Participants upon such terms and conditions as the
Board may determine in accordance with the following provisions:
(a) Each grant or sale shall constitute the agreement by
the Corporation to issue or transfer Common Shares to the Participant
in the future in consideration of the performance of services, subject
to the fulfillment during the Deferral Period of such conditions as
the Board may specify.
(b) Each grant or sale may be made without additional
consideration from the Participant or in consideration of a payment by
the Participant that is less than the Market Value per Share on the
Date of Grant.
(c) Each grant or sale (i) shall provide that the
Deferred Shares covered thereby shall be subject to a Deferral Period,
which shall be determined by the Board on the Date of Grant, and (ii)
in the case of any grant or sale subsequent to July 14, 1999, unless
otherwise expressly determined in a resolution duly adopted by the
Board on the Date of Grant or such later date on which the Board may
ratify such grant or sale, shall provide for the earlier termination
of the Deferral Period, and the immediate vesting of the Participant's
rights to all of the Deferred Shares subject to the grant or sale, (A)
if the Participant is a Nonaffiliate Director, upon the occurrence of
a Change of Control of the Corporation or (B) if the Participant is
recognized by any Employer as a regular full time employee who is
subject to U.S. income tax withholding, upon the termination of the
Participant's employment by an Employer without Cause during the
Accelerated Vesting Period or also, in the case of a Participant who
is an Executive, upon the termination of the Participant's employment
by the Participant for Good Reason during the Accelerated Vesting
Period; provided, however, that any such Accelerated Vesting Provision
shall be deemed void ab initio and shall be of no force or effect, if
it should be determined that any such provision would prevent a
proposed merger or other business combination that is intended by the
parties thereto to be accounted for as a pooling of interests from
being so accounted for.
12
<PAGE> 15
(d) During the Deferral Period, the Participant shall not
have any rights of ownership in the Deferred Shares, shall not have
any right to vote the Deferred Shares and, except as provided in
Section 9(c), shall not have any right to transfer any rights under
the subject award, but the Board may on or after the Date of Grant
authorize the payment of dividend equivalents on the Deferred Shares
in cash or additional Common Shares on a current, deferred or
contingent basis.
(e) Each grant or sale shall be evidenced by an agreement
that shall be executed on behalf of the Corporation by any officer
thereof and delivered to and accepted by the Participant and shall
contain such terms and provisions as the Board may determine
consistent with this Plan.
8. PERFORMANCE SHARES AND PERFORMANCE UNITS. The Board
may authorize grants of Performance Shares and Performance Units, which shall
become payable to the Participant upon the achievement of specified Management
Objectives, upon such terms and conditions as the Board may determine in
accordance with the following provisions:
(a) Each grant shall specify the number of Performance
Shares or Performance Units to which it pertains, which may be subject
to adjustment to reflect changes in compensation or other factors.
(b) The Performance Period with respect to each
Performance Share or Performance Unit (i) shall be determined by the
Board on the Date of Grant and (ii) in the case of any grant made
subsequent to July 14, 1999, unless otherwise expressly determined in
a resolution duly adopted by the Board on the Date of Grant or such
later date on which the Board may ratify such grant, shall provide for
the earlier termination of the Performance Period, and the immediate
vesting of the Participant's rights to all of the Performance Shares
or Performance Units subject to the grant, (A) if the Participant is a
Nonaffiliate Director, upon the occurrence of a Change of Control of
the Corporation or (B) if the Participant is recognized by any
Employer as a regular full time employee who is subject to U.S. income
tax withholding, upon the termination of the Participant's employment
by an Employer without Cause during the Accelerated Vesting Period or
also, in the case of a Participant who is an Executive, upon the
termination of the Participant's employment by the Participant for
Good Reason during the Accelerated Vesting Period; provided, however,
that any such Accelerated Vesting Provision shall be deemed void ab
initio and shall be of no force or effect, if it should be determined
that any such provision would prevent a proposed merger or other
business combination that is intended by the parties thereto to be
accounted for as a pooling of interests from being so accounted for.
(c) Each grant shall specify the Management Objectives
that are to be achieved by the Participant, which may be described in
terms of Corporation-wide objectives or objectives that are related to
the performance of the individual Participant or
13
<PAGE> 16
the Subsidiary, division, department or function within the
Corporation or Subsidiary in which the Participant is employed or with
respect to which the Participant provides consulting services.
(d) Each grant shall specify in respect of the specified
Management Objectives a minimum acceptable level of achievement below
which no payment will be made and shall set forth a formula for
determining the amount of any payment to be made if performance is at
or above the minimum acceptable level but falls short of full
achievement of the specified Management Objectives.
(e) Each grant shall specify the time and manner of
payment of Performance Shares or Performance Units that shall have
been earned, and any grant may specify that any such amount may be
paid by the Corporation in cash, Common Shares or any combination
thereof and may either grant to the Participant or reserve to the
Board the right to elect among those alternatives; provided, however,
that no form of consideration or manner of payment that would cause
Rule 16b-3 to cease to apply to this Plan shall be permitted.
(f) Any grant of Performance Shares may specify that the
amount payable with respect thereto may not exceed a maximum specified
by the Board on the Date of Grant. Any grant of Performance Units may
specify that the amount payable, or the number of Common Shares
issuable, with respect thereto may not exceed maximums specified by
the Board on the Date of Grant
(g) On or after the Date of Grant of Performance Shares,
the Board may provide for the payment to the Participant of dividend
equivalents thereon in cash or additional Common Shares on a current,
deferred or contingent basis.
(h) The Board may adjust Management Objectives and the
related minimum acceptable level of achievement if, in the sole
judgment of the Board, events or transactions have occurred after the
Date of Grant that are unrelated to the performance of the Participant
and result in distortion of the Management Objectives or the related
minimum acceptable level of achievement.
(i) Each grant shall be evidenced by an agreement that
shall be executed on behalf of the Corporation by any officer thereof
and delivered to and accepted by the Participant and shall contain
such terms and provisions as the Board may determine consistent with
this Plan.
9. TRANSFERABILITY. (a) Except as otherwise determined
by the Board, no Option Right, Appreciation Right or other derivative security
granted under this Plan shall be transferable by a Participant other than by
will or the laws of descent and distribution and, except as otherwise
determined by the Board, Option Rights and Appreciation Rights shall be
14
<PAGE> 17
exercisable during a Participant's lifetime only by the Participant or his or
her guardian or legal representative.
(b) The Board may specify at the Date of Grant that all
or any part of the Common Shares that are to be issued or transferred by the
Corporation upon the exercise of Option Rights or Appreciation Rights, upon the
termination of the Deferral Period applicable to Deferred Shares or upon
payment under any grant of Performance Shares or Performance Units, or are to
be no longer subject to the substantial risk of forfeiture and restrictions on
transfer referred to in Section 6 of this Plan, shall be subject to further
restrictions on transfer.
(c) Notwithstanding the provisions of Section 10(a),
Option Rights (other than Incentive Stock Options), Appreciation Rights,
Restricted Shares, Deferred Shares, Performance Shares and Performance Units
shall be transferable by a Participant, without payment of consideration
therefor by the transferee, to any one or more members of the Participant's
Immediate Family (or to one or more trusts established solely for the benefit
of one or more members of the Participant's Immediate Family or to one or more
partnerships in which the only partners are members of the Participant's
Immediate Family); provided, however, that (i) no such transfer shall be
effective unless reasonable prior notice thereof is delivered to the
Corporation and such transfer is thereafter effected in accordance with any
terms and conditions that shall have been made applicable thereto by the
Corporation or the Board and (ii) any such transferee shall be subject to the
same terms and conditions hereunder as the Participant.
10. ADJUSTMENTS. The Board may make or provide for such
adjustments in the number of Common Shares covered by outstanding Option
Rights, Appreciation Rights, Deferred Shares and Performance Shares granted
hereunder, the Option Prices per Common Share or Base Prices per Common Share
applicable to any such Option Rights and Appreciation Rights, and the kind of
shares (including shares of another issuer) covered thereby, as the Board may
in good faith determine to be equitably required in order to prevent dilution
or expansion of the rights of Participants that otherwise would result from (a)
any stock dividend, stock split, combination of shares, recapitalization or
other change in the capital structure of the Corporation or (b) any merger,
consolidation, spin-off, spin-out, split-off, split-up, reorganization, partial
or complete liquidation or other distribution of assets, issuance of warrants
or other rights to purchase securities or any other corporate transaction or
event having an effect similar to any of the foregoing. In the event of any
such transaction or event, the Board may provide in substitution for any or all
outstanding awards under this Plan such alternative consideration as it may in
good faith determine to be equitable under the circumstances and may require in
connection therewith the surrender of all awards so replaced. On or after the
Date of Grant of any award under this Plan, the Board may provide in the
agreement evidencing the award that the holder of the award may elect to
receive an equivalent award in respect of securities of the surviving entity of
any merger, consolidation or other transaction or event having a similar
effect, or the Board may provide that the holder will automatically be entitled
to receive such an equivalent award. The Board may also make or provide for
such adjustments in the numbers of Common Shares specified in Sections 3(a)(i)
and 3(a)(ii) of this Plan as the Board may in good
15
<PAGE> 18
faith determine to be appropriate in order to reflect any transaction or event
described in this Section 10.
11. FRACTIONAL SHARES. The Corporation shall not be
required to issue any fractional Common Shares pursuant to this Plan. The Board
may provide for the elimination of fractions or for the settlement thereof in
cash.
12. WITHHOLDING TAXES. To the extent that the
Corporation is required to withhold federal, state, local or foreign taxes in
connection with any payment made or benefit realized by a Participant or other
person under this Plan, and the amounts available to the Corporation for the
withholding are insufficient, it shall be a condition to the receipt of any
such payment or the realization of any such benefit that the Participant or
such other person make arrangements satisfactory to the Corporation for payment
of the balance of any taxes required to be withheld. At the discretion of the
Board, any such arrangements may include relinquishment of a portion of any
such payment or benefit. The Corporation and any Participant or such other
person may also make similar arrangements with respect to the payment of any
taxes with respect to which withholding is not required.
13. PARTICIPATION BY EMPLOYEES OF OR CONSULTANTS TO A
LESS-THAN-EIGHTY-PERCENT SUBSIDIARY. As a condition to the effectiveness of
any grant or award to be made hereunder to a Participant who is an employee of
or a consultant to a Less-Than-Eighty-Percent Subsidiary, regardless of whether
the Participant is also employed by or engaged as a consultant to the
Corporation or another Subsidiary, the Board may require the
Less-Than-Eighty-Percent Subsidiary to agree to transfer to the Participant
(as, if and when provided for under this Plan and any applicable agreement
entered into between the Participant and the Less-Than-Eighty-Percent
Subsidiary pursuant to this Plan) the Common Shares that would otherwise be
delivered by the Corporation upon receipt by the Less-Than-Eighty-Percent
Subsidiary of any consideration then otherwise payable by the Participant to
the Corporation. Any such award may be evidenced by an agreement between the
Participant and the Less-Than-Eighty-Percent Subsidiary, in lieu of the
Corporation, on terms consistent with this Plan and approved by the Board and
the Less-Than-Eighty-Percent Subsidiary. All Common Shares so delivered by or
to a Less-Than-Eighty-Percent Subsidiary will be treated as if they had been
delivered by or to the Corporation for the purposes of Section 3 of this Plan,
and all references to the Corporation in this Plan shall be deemed to refer to
the Less-Than-Eighty-Percent Subsidiary except with respect to the definitions
of the Board and the Board and in other cases where the context otherwise
requires.
14. CERTAIN TERMINATIONS OF EMPLOYMENT, HARDSHIP AND
APPROVED LEAVES OF ABSENCE. Notwithstanding any other provision of this Plan
to the contrary, in the event of termination of employment by reason of death,
disability, normal retirement, early retirement with the consent of the
Corporation, termination of employment to enter public service with the consent
of the Corporation or leave of absence approved by the Corporation, or in the
event of hardship or other special circumstances, of a Participant who holds an
Option
16
<PAGE> 19
Right or Appreciation Right that is not immediately and fully exercisable, any
Restricted Shares as to which the substantial risk of forfeiture or the
prohibition or restriction on transfer has not lapsed, any Deferred Shares as
to which the Deferral Period is not complete, any Performance Shares or
Performance Units that have not been fully earned, or any Common Shares that
are subject to any transfer restriction pursuant to Section 9(b) of this Plan,
the Board may take any action that it deems to be equitable under the
circumstances or in the best interests of the Corporation, including but not
limited to waiving or modifying any limitation or requirement with respect to
any award under this Plan.
15. FOREIGN PARTICIPANTS. In order to facilitate the
making of any award or combination of awards under this Plan, the Board may
provide for such special terms for awards to Participants who are foreign
nationals, or who are employed by or engaged as consultants to the Corporation
or any Subsidiary outside of the United States of America, as the Board may
consider necessary or appropriate to accommodate differences in local law, tax
policy or custom. In addition, the Board may approve such supplements to, or
amendments, restatements or alternative versions of, this Plan as it may
consider necessary or appropriate for such purposes without thereby affecting
the terms of this Plan as in effect for any other purpose; provided, however,
that no such supplements, amendments, restatements or alternative versions
shall include any provisions that are inconsistent with the terms of this Plan,
as then in effect, unless this Plan could have been amended to eliminate the
inconsistency without further approval by the stockholders of the Corporation.
16. ADMINISTRATION OF THE PLAN. (a) This Plan shall be
administered by the Board, which may from time to time delegate all or any part
of its authority under this Plan to a committee of the Board consisting of two
or more members of the Board, or a subcommittee of a committee of the Board
consisting exclusively of two or more "Non-Employee Directors" (as defined in
Rule 16b-3), appointed by the Board. A majority of the committee (or
subcommittee) shall constitute a quorum, and the action of the members of the
committee (or subcommittee) present at any meeting at which a quorum is
present, or acts unanimously approved in writing, shall be the acts of the
committee (or subcommittee). To the extent of any such delegation, references
in this Plan to the Board shall be deemed to be references to any such
committee or subcommittee.
(b) The Board may from time to time reserve a specified
number of Common Shares, subject to adjustment as provided in Section 10 of
this Plan, for grants of Nonqualified Options to Participants who have agreed
to commence employment with the Corporation or any Subsidiary and may delegate
to one or more officers of the Corporation the authority to determine the
Participants to whom such Nonqualified Options shall be granted, and to
determine the number of such Common Shares to which any such Nonqualified
Option shall pertain, subject to the terms and conditions of this Plan and the
terms and conditions of an agreement evidencing any such Nonqualified Option and
approved by the Board. For the purposes of Section 4(b) of this Plan, as it
relates to any Nonqualified Option that shall be granted pursuant to this
Section 16(b), (i) the Date of Grant shall be the date on which the Participant
agrees to accept employment with the Corporation or any Subsidiary, which may
precede the date on which the Participant's employment actually commences (or,
if such date is not specified in the Participant's employment offer and
acceptance materials, the Date of Grant will be the commencement date of such
Participant's employment with the Corporation or any Subsidiary), and (ii) the
Market Value per Share on the Date of Grant shall be the closing price of the
Common Shares on the Nasdaq Stock Market on the last trading day immediately
preceding the Date of Grant.
(c) The interpretation and construction by the Board of
any provision of this Plan or any agreement, notification or document
evidencing the grant of Option Rights, Appreciation Rights, Restricted Shares,
Deferred Shares, Performance Shares or Performance Units, and any determination
by the Board pursuant to any provision of this Plan or any such agreement,
notification or document, shall be final and conclusive. No member of the Board
shall be liable for any such action taken or determination made in good faith.
17
<PAGE> 20
17 AMENDMENTS AND OTHER MATTERS. (a) The Board may at
any time and from time to time amend this Plan in whole or in part; provided,
however, that any amendment that must be approved by the stockholders of the
Corporation in order to comply with applicable law or the rules of the Nasdaq
National Market shall not be effective unless and until such approval has been
obtained.
(b) With the concurrence of the affected Participant, the
Board may cancel any agreement evidencing Option Rights or any other award
granted under this Plan. In the event of any such cancellation, the Board may
authorize the granting of new Option Rights or other awards hereunder, which
may or may not cover the same number of Common Shares as had been covered by
the canceled Option Rights or other award, at such Option Price, in such manner
and subject to such other terms, conditions and discretion as would have been
permitted under this Plan had the canceled Option Rights or other award not
been granted.
(c) The Board may grant under this Plan any award or
combination of awards authorized under this Plan, including but not limited to
Replacement Option Rights, in exchange for the surrender and cancellation of an
award that was not granted under this Plan (including but not limited to an
award that was granted by the Corporation or a Subsidiary, or by another
corporation that is acquired by the Corporation or a Subsidiary by merger or
otherwise, prior to the adoption of this Plan by the Board), and any such award
or combination of awards so granted under this Plan may or may not cover the
same number of Common Shares as had been covered by the canceled award and
shall be subject to such other terms, conditions and discretion as would have
been permitted under this Plan had the canceled award not been granted.
(d) This Plan shall not confer upon any Participant any
right with respect to continuance of employment or other service with the
Corporation or any Subsidiary and shall not interfere in any way with any right
that the Corporation or any Subsidiary would otherwise have to terminate any
Participant's employment or other service at any time.
(e) To the extent that any provision of this Plan would
prevent any Option Right that was intended to qualify as a Tax-Qualified Option
from so qualifying, any such provision shall be null and void with respect to
any such Option Right; provided, however, that any such provision shall remain
in effect with respect to other Option Rights, and there shall be no further
effect on any provision of this Plan.
(f) The Board may also permit Participants to elect to
defer the issuance of Common Shares or the settlement of awards in cash under
this Plan pursuant to such procedures, programs or rules as the Board may
establish for the purposes of this Plan. The Board may also provide that
deferred issuances and settlements include the payment or crediting of dividend
equivalents or interest on the deferral amounts.
(g) The Board may condition the grant of any award or
combination of awards authorized under this Plan on the surrender or deferral
by the Participant of his or her right to receive a cash bonus or other
compensation otherwise payable by the Company or a Subsidiary to the
Participant.
18
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AT SEPTEMBER 30, 1999 (UNAUDITED) AND THE
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 (UNAUDITED) AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 1,379
<SECURITIES> 0
<RECEIVABLES> 627
<ALLOWANCES> 73
<INVENTORY> 76
<CURRENT-ASSETS> 2,069
<PP&E> 7,350
<DEPRECIATION> 1,753
<TOTAL-ASSETS> 13,157
<CURRENT-LIABILITIES> 1,542
<BONDS> 8,444
1,720
291
<COMMON> 0
<OTHER-SE> (237)
<TOTAL-LIABILITY-AND-EQUITY> 13,157
<SALES> 0
<TOTAL-REVENUES> 2,346
<CGS> 0
<TOTAL-COSTS> 504
<OTHER-EXPENSES> 732
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 627
<INCOME-PRETAX> (1,044)
<INCOME-TAX> (25)
<INCOME-CONTINUING> (1,019)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,019)
<EPS-BASIC> (3.78)
<EPS-DILUTED> (3.78)
</TABLE>
