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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 18, 1999
(August 10, 1999)
-----------------------------
NEXTEL COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-19656 36-3939651
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification No.)
incorporation)
2001 EDMUND HALLEY DRIVE 20191
RESTON, VIRGINIA (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (703) 433-4000
------------------
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report)
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ITEM 5. OTHER EVENTS.
Copies of the agreement and related term sheet between Nextel Communications,
Inc. and the Federal Communications Commission (the "FCC") and the United States
Department of Justice (the "DOJ"), the existence of which was disclosed in
Nextel's press release of August 11, 1999, have been disclosed to the
debtors-in-possession and to the entity providing interim financing to such
debtors-in-possession, pursuant to an order entered on August 13, 1999 by the
U.S. Bankruptcy Court for the Southern District of New York. The Court declined
to include in such order confidentiality obligations on such recipients as
concerns their ability to further disclose such information. In light of its
disclosure obligations under the Federal securities laws, and the disclosures
already made in compliance with the Court's order, Nextel is filing as Exhibits
99.1, 99.2 and 99.3 hereto (and incorporating herein by reference) a copy of the
term sheet, the letter from the FCC and DOJ and a letter from Nextel.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995: A number of the matters and subject areas discussed in this report and in
the materials filed as Exhibits 99.1, 99.2 and 99.3 to this report that are not
historical or current facts deal with potential future circumstances and
developments. The ability of Nextel to successfully structure agreements to
obtain access to the personal communications services spectrum originally
awarded to the NextWave debtors or to successfully take or complete any other
action or transaction contemplated in such materials, will depend on a number of
factors, including Nextel's ability to reach agreement on terms with relevant
creditor and/or equity constituencies. Successful implementation of such a
potential transaction also would involve additional risks, including those
relating to obtaining required regulatory and judicial approvals and potentially
resolving or prevailing against challenges that may be asserted by third
parties. Additionally, Nextel's existing digital mobile network business remains
subject to those risk factors and uncertainties that Nextel currently believes
may cause actual future experience and results in its digital mobile network
business to differ from Nextel's current expectations and such risks and
uncertainties are described from time to time in Nextel's reports filed with the
Securities and Exchange Commission, including Nextel's Annual Report on Form
10-K for the fiscal year ended December 31, 1998 and in Nextel's Quarterly
Reports on Form 10-Q for the quarters ended March 31, 1999 and June 30, 1999.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
NOT APPLICABLE
(b) PRO FORMA FINANCIAL INFORMATION.
NOT APPLICABLE
(c) EXHIBITS.
Exhibit No. Exhibit Description
99.1 Term Sheet for Comprehensive Settlement Agreement
and Joint Plan of Reorganization.
99.2 Letter from the United States Department of
Justice and the Federal Communications
Commission, dated August 10, 1999, to Nextel
Communications, Inc.
99.3 Letter from Nextel Communications, Inc., dated
August 10, 1999, to the United States Department
of Justice and the Federal Communications
Commission.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NEXTEL COMMUNICATIONS, INC.
Date: August 18, 1999 By: /s/ Thomas J. Sidman
----------------------------------
Thomas J. Sidman
Vice President and General Counsel
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EXHIBIT INDEX
Exhibit No. Exhibit Description
99.1 Term Sheet for Comprehensive Settlement Agreement
and Joint Plan of Reorganization.
99.2 Letter from the United States Department of
Justice and the Federal Communications
Commission, dated August 10, 1999, to Nextel
Communications, Inc.
99.3 Letter from Nextel Communications, Inc., dated
August 10, 1999, to the United States Department
of Justice and the Federal Communications
Commission.
<PAGE> 1
Exhibit 99.1
FINAL
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CONFIDENTIAL
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NEXTEL COMMUNICATIONS, INC.
NEXTWAVE PERSONAL COMMUNICATIONS INC., ET AL.
TERM SHEET FOR COMPREHENSIVE SETTLEMENT AGREEMENT
AND JOINT PLAN OF REORGANIZATION
I. INTRODUCTION
This term sheet (the "Term Sheet"), dated as of August 10, 1999, sets
forth the proposed terms of a transaction to be sponsored by Nextel
Communications, Inc. ("Nextel") and involving the reorganization of
NextWave Personal Communications Inc. ("NPCI") and its affiliates,
NextWave Telecom Inc. ("NTI"), NextWave Partners Inc. ("NPI"), NextWave
Power Partners Inc. ("NPPI") and NextWave Wireless Inc. ("NWI" and,
together with NPCI, NTI, NPI and NPPI, the "NextWave Debtors"), debtors
and debtors in possession in chapter 11 cases pending in the United
States Bankruptcy Court for the Southern District of New York (the
"Bankruptcy Court"), the resolution of certain claims of the Federal
Communications Commission (the "FCC") against the NextWave Debtors (the
"FCC Claims"), the actions to be taken by Nextel, the FCC and the
United States Department of Justice (the "DOJ") to facilitate the
proposed reorganization and the following specific matters in
connection therewith:
A. PLAN OF REORGANIZATION. Nextel, with the support and
assistance of the FCC and the DOJ, would cause the filing of a
plan of reorganization (the "Plan") in the NextWave Debtors'
chapter 11 cases that, among other things, would: (1) resolve
the FCC Claims and the pending litigation between NPCI and the
FCC as provided in this Term Sheet; (2) resolve the claims of
other key creditors against the NextWave Debtors as provided
in this Term Sheet; (3) set forth procedures for the
resolution of all other claims against the NextWave Debtors as
provided in this Term Sheet; and (4) provide for distributions
of property to the NextWave Debtors' equity security holders.
The definitive terms and conditions of the Plan are subject to
final documentation and shall not be inconsistent with the
terms hereof, absent the written consent of the FCC and the
DOJ.
B. TRANSFER OF NEXTWAVE DEBTORS' ASSETS. Pursuant to the Plan,
the radio spectrum licenses (the "Licenses") issued by the FCC
to the NextWave Debtors, and substantially all of the other
assets of the NextWave Debtors (other than any assets
identified in writing by Nextel prior to the closing as to be
retained by the NextWave Debtors), would be transferred
directly to Nextel or one or more of its subsidiaries
identified by Nextel in its transfer application relating to
the Licenses and approved by the FCC as the holder(s) of the
Licenses (the "Subsidiaries"). Although Nextel acknowledges
that it has made no formal request for any required rule or
regulation waivers and that this Term Sheet does not
constitute such a waiver or waivers, the transactions
contemplated hereby would involve a
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waiver of 47 C.F.R. sec. 24.839(a) (I.E., the Designated
Entity-only five-year holding period rule) and any other rule,
including, without limitation, the "unjust enrichment" rules
codified at 47 C.F.R. sec. 1.2111, necessary to ensure the
lawful transfer of the Licenses to Nextel or its Subsidiaries
and the lawful use and operation of the Licenses by Nextel or
its Subsidiaries, and the staff of the FCC confirms that, upon
receipt of such request, it will recommend that the FCC grant
such waiver or waivers in order to implement the transactions
contemplated hereby. Nextel acknowledges that the FCC's grant
of such waivers would be based upon consideration of and
qualification under the FCC's rules and regulations regarding
waivers and that such waivers, the Licenses and control
thereof will not be assignable or transferable to any party
other than Nextel or its Subsidiaries. The transactions
contemplated by this Term Sheet will not be subject to any
condition subsequent relating to Nextel obtaining the
financing required to implement the Plan.
C. SETTLEMENT OF FCC CLAIMS. The FCC Claims would be resolved
through a settlement approved as part of the Plan providing
for the payment to the FCC of consideration totaling at least
$2,092,000,000, consisting of: (1) a cash payment by Nextel in
the approximate amount of $1,593,000,000 (the "FCC Base
Payment"); (2) the FCC's retention of deposits in the
approximate amount of $499,000,000 made by or on behalf of the
NextWave Debtors to the FCC with respect to the issuance of
the Licenses (the "Deposits"); and (3) an additional cash
payment in an amount equal to the value (as determined through
a valuation method to be agreed upon by Nextel and the FCC and
to be specified in the Plan) of all cash and other
consideration to be distributed under the Plan in respect of
any equity securities of any of the NextWave Debtors (the
"Additional FCC Payment"). Although the Plan may contemplate
distributions on account of the interests of the NextWave
Debtors' equity security holders, none of the Deposits would
be available for distribution to such equity security holders.
II. TERMS AND CONDITIONS OF SETTLEMENT AGREEMENT WITH FCC
A. STAY OF FURTHER PROCEEDINGS IN ADVERSARY PROCEEDING. At such
time as Nextel may have reached agreement with either or both
of the NextWave Debtors or the Official Committee of Unsecured
Creditors (the "Committee") in the NextWave Debtors' chapter
11 cases (in either case, a "Consenting Party"), which
agreement shall be evidenced in writing, Nextel and the
Consenting Party may: (1) seek to intervene in the pending
appeal of the Bankruptcy Court's judgment in the adversary
proceeding captioned NEXTWAVE PERSONAL COMMUNICATIONS, INC. V.
FEDERAL COMMUNICATIONS COMMISSION, Adv. Proc. No. 98-5178 (the
"Adversary Proceeding"), and the opinion and order of the
United States District Court for the Southern District of New
York affirming such judgment; and (2) file a joint motion (the
"Stay Motion") in the United States Court of Appeals for the
Second Circuit (the "Second Circuit") requesting that further
proceedings in such appeal be stayed until the earliest of (a)
the date of entry of an order denying the Exclusivity
Termination Motion (as defined below), (b) the Effective Date
(as defined below) or (c) one year after the date of the stay
motion. If, at the time of the filing of the Stay Motion, the
Second Circuit has not yet acted upon or has denied the FCC's
and the DOJ's anticipated motion for the entry of an order
staying consummation of the NextWave Debtors' currently
proposed plan of
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reorganization (a "Confirmation Stay"), the Stay Motion also
shall request such a Confirmation Stay. If Nextel and the
Consenting Party take the actions contemplated by this Section
II.A, but are unable to obtain the relief requested in the
Stay Motion by the time the Bankruptcy Court enters an order
confirming the Plan, the FCC and the DOJ shall, upon the
written request of Nextel, file a motion with the Second
Circuit, which Nextel and the Consenting Party would agree to
support, seeking on behalf of the United States the relief
requested in the Stay Motion and use their reasonable best
efforts to prosecute such motion successfully and obtain the
relief requested therein at the earliest practicable date.
Neither the FCC nor the DOJ shall oppose any Stay Motion filed
and prosecuted in accordance with the terms of this Section
II.A.
B. DISMISSAL OF ADVERSARY PROCEEDING. Pursuant to the terms of
the Plan, as of the date on which Nextel pays the
consideration set forth in Section I.C below to the FCC,
either through a release of funds from the escrow account to
be established as contemplated by Section III.A.1 below or
otherwise (the "FCC Payment Date"), NPCI will dismiss with
prejudice all causes of action brought against the FCC in the
Adversary Proceeding.
C. NO DECISION ON THE MERITS. The settlement of the FCC Claims
and the dismissal of the Adversary Proceeding pursuant to the
Plan would constitute a compromise and settlement of disputed
claims for the purpose of avoiding the costs, disruptions and
uncertainties associated with further litigation. The Plan
would expressly provide that: (1) such compromise and
settlement does not constitute a ruling on the merits, or an
admission of liability on the part of the FCC, with respect to
any matter in the Adversary Proceeding or otherwise relating
to the FCC Claims; and (2) any and all such liability is
expressly denied.
D. MUTUAL RELEASE OF CLAIMS; FCC REGULATORY ACTIONS. The Plan
will provide that, as of the FCC Payment Date: (1) the
NextWave Debtors, their respective creditors and Nextel will
release any and all claims against the United States and any
agency, instrumentality or employee thereof relating to the
Licenses (including any claims for a refund or a return of the
Deposits) or the Adversary Proceeding (or, in the alternative,
that, upon confirmation of the Plan, such Claims would be
extinguished); and (2) except as specifically provided in the
Plan with respect to the satisfaction of the FCC Claims, the
FCC will release any and all claims against (a) the NextWave
Debtors and their respective creditors relating to the
Licenses or the Adversary Proceeding and (b) Nextel relating
to its participation in the plan of reorganization process and
the other aspects of the NextWave chapter 11 cases
contemplated by this Term Sheet; PROVIDED, HOWEVER, that
nothing in the FCC's release of Nextel shall be deemed a
waiver of any other applicable requirement of final FCC
approval of any transfer application relating to the Licenses
or Nextel's related request for a waiver of applicable
"designated entity" or "unjust enrichment" rules or of any
claims of the United States or any agency, instrumentality or
employee thereof, other than claims arising out of Nextel's
participation in the plan of reorganization process or the
NextWave Debtors' chapter 11 cases that do not involve
Nextel's violation of any statute of the United States. The
staff of the FCC shall recommend to the FCC that it grant
final approval of such transfer application and waiver
requests.
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E. SATISFACTION OF FCC CLAIMS; RETENTION OF DEPOSITS. The FCC
Claims will be satisfied pursuant to the terms of the Plan, as
described in Section III below. The Deposits will not be
returned to the NextWave Debtors or their bankruptcy estates,
but rather will be retained by the FCC, as provided in Section
I.C above.
III. TRANSFER OF NEXTWAVE DEBTORS' ASSETS
A. CONSIDERATION FOR TRANSFER OF ASSETS. To provide the
consideration for the transfer of substantially all of the
assets of the NextWave Debtors, including the Licenses, to
Nextel or one or more of its Subsidiaries, Nextel would obtain
the additional capital necessary to meet the following
obligations, which shall be satisfied, as applicable, either
directly by Nextel or out of the escrow account to be
established as contemplated by Section III.A.1 below, in
either case no later than 30 days after the Effective Date:
(1) the FCC Base Payment; (2) the Additional FCC Payment; (3)
the satisfaction of the claims of other creditors of the
NextWave Debtors, pursuant to the terms of the Plan; and (4)
the payment of amounts to be determined on account of the
interests held by equity security holders of the NextWave
Debtors, pursuant to the terms of the Plan. Under this
proposal, the FCC would receive total consideration on account
of the Licenses of at least $2.092 billion, consisting of the
FCC Base Payment (approximately $1.593 billion), the retained
Deposits (approximately $499 million) and the Additional FCC
Payment, if any.
1. TIMING OF DISTRIBUTIONS TO STAKEHOLDERS. The Plan
will provide that Nextel shall make distributions
pursuant to the Plan on account of the FCC Claims and
the claims of other creditors of the NextWave Debtors
or the interests of the equity security holders of
the NextWave Debtors no later than 30 days after the
latest of the following events (the latest of such
events being referred to as the "Effective Date"):
(a) the Bankruptcy Court's entry of an order
confirming the Plan and such order becoming final and
nonappealable; (b) the terms of the comprehensive
settlement contemplated by this Term Sheet, other
than distributions pursuant to the Plan, having been
implemented; (c) all rule waivers and approvals
(collectively, the "Waivers and Approvals") required
for the lawful transfer of the Licenses and
associated assets to Nextel or its Subsidiaries and
the lawful use and operation of the Licenses by
Nextel or its Subsidiaries having been granted by the
FCC, the DOJ and any other relevant regulatory
authorities; and (d) all of the Waivers and Approvals
becoming final and nonappealable. Notwithstanding any
other provisions of this paragraph, no later than 30
days after the latest to occur of (i) the Bankruptcy
Court's order confirming the Plan having been entered
and (ii) the FCC's entry of an order approving the
transfer of the Licenses to Nextel (the "Transfer
Order"), and provided that no stays of the Bankruptcy
Court's order confirming the Plan, the Transfer Order
or any other Waivers and Approvals previously
obtained are then in effect or are then being sought,
Nextel will place funds in the total amount of the
FCC Base Payment and the Additional FCC Payment into
an interest-bearing escrow account (the "Escrow
Account"), pursuant to the terms of an escrow
agreement to be negotiated and executed by Nextel,
the FCC and the DOJ. Such escrow agreement shall
provide, among other customary
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terms and conditions, for the party ultimately
receiving the funds on deposit in the escrow account
also to receive all accrued interest thereon. The FCC
and the DOJ acknowledge and agree that Nextel's
obligations to fund the Escrow Account as security
for the satisfaction of its obligations hereunder may
be satisfied through the establishment of other
arrangements for the assured payment of such
obligations reasonably satisfactory to the FCC and
the DOJ and in compliance with all applicable
statutory and regulatory requirements, which
arrangements shall include provisions for the accrual
of interest on the amount of the FCC Base Payment and
the Additional FCC Payment pending the final
distribution thereof. Nextel, the FCC and the DOJ
further acknowledge and agree that, consistent with
terms of this Section III.A.1, the Transfer Order
will not become effective pursuant to its terms
unless and until the full amount of the FCC Base
Payment and the Additional FCC Payment shall have
been deposited into the Escrow Account or such other
arrangements for assured payment shall have been
agreed upon and implemented by Nextel and the FCC.
2. DISTRIBUTIONS TO EQUITY SECURITY HOLDERS. The amount,
form and terms of the distributions to be made to the
equity security holders of the NextWave Debtors
pursuant to the Plan will be made as determined by
Nextel in its sole and absolute discretion. Nextel
will have no obligation or liability to any creditor
of or claimant against the NextWave Debtors
(including, without limitation, the FCC), other than
the obligation to make the Additional FCC Payment,
for (a) agreeing to make or making any such
distribution to any such equity security holder or
(b) failing to reach or consummate any such
agreement. Unless the FCC and DOJ exercise their
rights under Section III.E below, the FCC and the DOJ
will agree, if requested by Nextel, to support any
motion by Nextel or any other party in interest
seeking the entry of an order of the Bankruptcy Court
confirming the Plan over the objections of the
Committee or any creditors or equity security holders
(in their capacities as such) of the NextWave
Debtors, if required to obtain confirmation of the
Plan.
B. NEGOTIATIONS WITH OTHER CREDITORS AND EQUITY SECURITY HOLDERS.
Nextel would assume sole responsibility for the resolution of
the claims of creditors other than the FCC and the interests
of equity security holders, including the nature, validity,
priority and amount thereof. The FCC and the DOJ hereby
acknowledge that Nextel previously has commenced discussions
with the Committee, other key creditor constituencies and
equity security holders to (1) negotiate the treatment of the
claims of creditors other than the FCC and the interests of
equity security holders under the Plan and (2) seek the
support of such constituencies for the transactions
contemplated by this Term Sheet. Under the Plan contemplated
by this Term Sheet, the percentage recoveries by creditors
other than the FCC may exceed the percentage recovery by the
FCC on the FCC Claims. Nextel also may condition its
arrangements with any such other creditors as Nextel, in its
sole discretion, deems appropriate, including, without
limitation, upon obtaining an option or similar right to
purchase any such creditor's claims, in whole or in part,
against the NextWave Debtors.
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C. TERMINATION OF EXCLUSIVITY. If Nextel and either the Committee
or the NextWave Debtors reach an agreement in principle
regarding the terms of the Plan and the NextWave Debtors'
exclusive periods for filing and soliciting acceptances of a
plan of reorganization has not yet then expired, been modified
after the date of this Term Sheet or been terminated, Nextel
and the applicable Consenting Party will file a joint motion
(the "Exclusivity Termination Motion") in the Bankruptcy Court
requesting the termination of such exclusive periods. The FCC
and the DOJ shall thereafter promptly join in and support the
Exclusivity Termination Motion. A copy of this Term Sheet
shall be attached to the Exclusivity Termination Motion.
D. SUBMISSION OF NEXTEL PROPOSAL TO BANKRUPTCY COURT; WITHDRAWAL
CONDITIONS. The approval of the transfer of the NextWave
Debtors' assets to Nextel or its Subsidiaries and the terms of
the Plan will be submitted to and subject to the approval of
the Bankruptcy Court. The asset purchase and sale transactions
contemplated by this Term Sheet will be final and will not be
subject to auction or any other procedure to solicit higher or
other bids for the NextWave Debtors' assets (other than the
opportunity of parties in interest to propose plans of
reorganization for the NextWave Debtors pursuant to the terms
of any order granting the Exclusivity Termination Motion and
subject in any event to the rights and obligations of the FCC
and the DOJ relating to support of any Competing Proposal, as
defined and set forth below). If the Bankruptcy Court or any
other judicial, legislative or regulatory body or official
imposes any such auction or other competitive bidding
procedures, or if the FCC and the DOJ elect, by written notice
provided to Nextel, to support any Competing Proposal, in
either case prior to the date that is 45 days after the filing
of the Exclusivity Termination Motion (the "Commitment Date"),
the FCC and the DOJ shall be deemed to have terminated, and
Nextel may elect, by written notice provided to the FCC and
the DOJ, to terminate, their respective obligations under this
Term Sheet and the Plan without any liability or further
obligation, except as provided herein. Subsequent to the
Commitment Date, Nextel shall not be entitled to make any such
election to terminate its obligations under this Term Sheet or
the Plan other than on the basis of a breach by the FCC or the
DOJ of their respective obligations hereunder; PROVIDED,
HOWEVER, that Nextel may terminate the agreements and
undertakings set forth in this Term Sheet and any succeeding
Plan or other related documents if the conditions to the
funding of the Escrow Account (or provision of other
assurances of payment), as set forth in Section III.A.1 above,
shall not have been satisfied by August 10, 2001.
E. COMPETING PROPOSALS: CONDITIONS FOR ACCEPTANCE. Prior to the
Commitment Date, the FCC and the DOJ shall not solicit, but
may consider, competing proposals with respect to the
transactions contemplated by this Term Sheet or the Plan,
including the compromise and settlement of the FCC Claims
("Competing Proposals").
1. Notwithstanding any other provision of this Term
Sheet, neither the FCC nor the DOJ will support any
Competing Proposal other than one selected prior to
the Commitment Date, and then only if: (a) such
Competing Proposal is on terms substantially similar
to the proposal set forth in this Term Sheet; and (b)
the FCC and the DOJ provide Nextel with at least five
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business days from and after Nextel's receipt of
written documentation of the applicable Competing
Proposal to match such Competing Proposal. A
Competing Proposal shall be substantially similar to
the proposal set forth in this Term Sheet if it: (a)
is not subject to any conditions subsequent relating
to obtaining the financing required to implement the
plan contemplated by the Competing Proposal; (b)
provides for the acquisition of substantially all of
the Licenses and related assets of the NextWave
Debtors; (c) fully and finally resolves all claims of
all creditors of, and interest holders in, the
NextWave Debtors; (d) provides that distributions or
other payments on account of the FCC Claims be made
solely and exclusively in cash; and (e) otherwise is
substantially similar in its material terms and
conditions to the terms and conditions set forth in
this Term Sheet and in any related Plan. If Nextel
timely elects to match such Competing Proposal, the
FCC and the DOJ (irrespective of whether the
Commitment Date shall then have occurred) shall then
reject the Competing Proposal, and Nextel shall
modify all contractual terms regarding the FCC Base
Payment and the Additional FCC Payment, as set forth
in this Term Sheet and any related Plan, such that
the respective amounts thereof equal the amounts
contemplated by the applicable Competing Proposal.
2. If, to the extent permitted by this Term Sheet, the
FCC and the DOJ elect to support a Competing Proposal
(and thereby terminate their respective obligations
under this Term Sheet in accordance with its terms)
and the transactions contemplated by such Competing
Proposal or any related plan of reorganization for
the NextWave Debtors are thereafter consummated, the
FCC and the DOJ shall require and cause the sponsor
of such Competing Proposal to pay to Nextel, out of
the funds that such Competing Proposal would
otherwise have made available for payment to the
United States, a fee (the "Termination Fee") equal to
0.75% of the amount by which the aggregate value of
the cash and other consideration received by the FCC
and the DOJ in such transactions, including, without
limitation, any purchase or other acquisition of the
FCC Claims, exceeds the Deposits.
3. If, in accordance with the terms and conditions, and
subject to the limitations, of this Term Sheet, the
FCC and the DOJ elect to support a Competing
Proposal, the United States, including its agencies,
instrumentalities and employees, shall have no
obligation or liability to Nextel or any other party,
other than requiring and causing the sponsor of any
Competing Proposal ultimately consummated to pay the
Termination Fee, as provided above.
F. OBLIGATION TO SUPPORT NEXTEL PLAN. Subject to the FCC's and
the DOJ's right under this Term Sheet to consider and support
Competing Proposals prior to the Commitment Date, and subject
to Nextel's concomitant right to match such Competing
Proposals, from the Commitment Date until the entry of any
final judicial order denying confirmation of the Plan
contemplated by this Term Sheet, or unless this Term Sheet is
terminated by Nextel or Nextel breaches its obligations
hereunder, the FCC and the DOJ shall be irrevocably obligated
to:
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(1) vote to accept, and support confirmation of, the Plan; (2)
refuse to consider any competing proposals with respect to the
transactions contemplated by the Plan; and (3) vote to reject,
and oppose confirmation of, any plan or plans of
reorganization or liquidation of the NextWave Debtors other
than the Plan.
G. NO LIABILITY UPON TERMINATION ABSENT BREACH. If either Nextel
or the FCC and the DOJ terminate the parties' respective
obligations under this Term Sheet in accordance with the
provisions of this Term Sheet, then all parties shall be
entitled to terminate their obligations under this Term Sheet
without any further obligation or liability, other than the
FCC's and DOJ's obligation to cause the sponsor of a Competing
Proposal to pay the Termination Fee to Nextel under the
circumstances described above.
IV. CLASSIFICATION AND TREATMENT OF CLAIMS
The following table sets forth Nextel's description of each class of
claims against the NextWave Debtors, the estimated aggregate amount of
each class of claims and the proposed treatment of each class of claims
under the Plan. By including this table in this Term Sheet, the parties
do not acquiesce in or make any admission regarding the validity of any
claims against the NextWave Debtors, other than the FCC Claims, or any
liens asserted against property of the NextWave Debtors' estates, nor
do they waive any potential objections to the validity, priority,
nature or amount of such claims or liens. The estimated aggregate
amount of the claims in each class is based on the claim amounts set
forth in the NextWave Debtors' Schedules of Assets and Liabilities (the
"Schedules") and other pleadings filed by the NextWave Debtors with the
Bankruptcy Court. The proofs of claim that have been filed in the
NextWave Debtors' chapter 11 cases, and other claims that may be
pending against the NextWave Debtors, have not yet been fully analyzed.
Accordingly, the following table does not include claims that are not
reflected on the Schedules or in such other pleadings and assumes that
such other claims do not exist. The addition of any such new claims,
therefore, may result in a decrease in the amount of cash or other
consideration proposed to be distributed under the Plan in respect of
the classes of claims reflected in the following table, other than the
FCC Claims.
<TABLE>
<CAPTION>
CLASS OF CLAIMS/INTERESTS: PROPOSED TREATMENT:
- -------------------------- -------------------
<S> <C>
ADMINISTRATIVE/OTHER PRIORITY CLAIMS Paid in full within 45 days after the Effective
Date, or otherwise in accordance with their
ESTIMATED AGGREGATE AMOUNT: terms.
$_______
(The estimated aggregate amount set
forth above includes unpaid
postpetition and anticipated future
bankruptcy-related professional
fees.)
</TABLE>
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<TABLE>
<CAPTION>
CLASS OF CLAIMS/INTERESTS: PROPOSED TREATMENT:
- -------------------------- -------------------
<S> <C>
PRIORITY TAX CLAIMS Paid in full in deferred payments over a
period of six years from the date of
ESTIMATED AGGREGATE AMOUNT: assessment of the underlying taxes in equal
$_______ annual installments commencing on the first
anniversary of the Effective Date, as
permitted by section 1129(a)(9)(C) of the
Bankruptcy Code.
SECURED CLAIMS OF CELLEXIS Paid in full within 45 days after the Effective
INTERNATIONAL, INC. Date, or otherwise in accordance with the
terms of the debtor in possession financing
ESTIMATED AGGREGATE AMOUNT: facility.
$25 MILLION
(This claim is held by Cellexis
International, Inc. on account of
the NextWave Debtors' debtor in
possession financing facility and
is secured by an alleged first lien
on the D- and E-block licenses, an
alleged second lien on the F-block
licenses and a junior lien on the
other assets of the NextWave
Debtors.)
SECURED CLAIMS OF THE FEDERAL Satisfied by payment of the FCC Payment, as
COMMUNICATIONS COMMISSION described in Section III above.
(This claim is held by the FCC on
account of promissory notes, the
FCC's rules and regulations and the
Licenses. The obligations under
such notes are secured by first
liens on the respective licenses
and the proceeds thereof.)
</TABLE>
9
<PAGE> 10
<TABLE>
<CAPTION>
CLASS OF CLAIMS/INTERESTS: PROPOSED TREATMENT:
- -------------------------- -------------------
<S> <C>
SECURED CLAIMS OF LG INFOCOMM INC. Satisfied by a cash payment in an amount, or
other consideration, to be determined by
ESTIMATED AGGREGATE AMOUNT: agreement of Nextel and LG InfoComm Inc.
$35 MILLION
(This claim is held by LG InfoComm
Inc. on account of prepetition loan
obligations secured by an alleged
first lien on the shares of NPCI and a
second lien on the C-block licenses
and the proceeds thereof.)
SECURED CLAIM OF HUGHES NETWORK Satisfied by a cash payment in an amount, or
SYSTEMS, INC. other consideration, to be determined by
agreement of Nextel and Hughes Network
ESTIMATED AGGREGATE AMOUNT: Systems, Inc.
$35 MILLION
(This claim is held by Hughes Network
Systems, Inc. on account of
prepetition convertible notes secured
by an alleged third lien on the
C-block licenses and the proceeds
thereof.)
SECURED CLAIM OF HANAREUM BANKING Satisfied by a cash payment in an amount, or
CORPORATION other consideration, to be determined by
agreement of Nextel and Hanareum Banking
ESTIMATED AGGREGATE AMOUNT: Corporation.
$34.9 MILLION
(This claim is held by Hanareum
Banking Corporation on account of
prepetition loan obligations secured
by first liens on the shares of NPI,
NPPI, NWI and Tele*Code Inc.)
</TABLE>
10
<PAGE> 11
<TABLE>
<CAPTION>
CLASS OF CLAIMS/INTERESTS: PROPOSED TREATMENT:
- -------------------------- -------------------
<S> <C>
SECURED CLAIMS OF CONVERTIBLE BRIDGE Satisfied by a cash payment in an amount, or
NOTEHOLDERS other consideration, to be determined by
agreement of Nextel and the holders of the
ESTIMATED AGGREGATE AMOUNT: convertible subordinated notes.
$133 MILLION
(These claims are held by holders of
convertible subordinated notes and are
secured by a second lien on the shares
of NPI and NPPI.)
SECURED CLAIM OF CDMA CALIFORNIA Satisfied by a cash payment in an amount, or
PARTNERS LLC other consideration, to be determined by
agreement of Nextel and CDMA California
ESTIMATED AGGREGATE AMOUNT: Partners LLC.
$10 MILLION
(This claim is held by CDMA California
Partners LLC on account of a
prepetition debt restructuring
agreement, obligations under which are
secured by a second lien on the shares
of NPCI.)
SECURED CLAIM OF LCC INTERNATIONAL, Satisfied by a cash payment in an amount, or
INC. other consideration, to be determined by
agreement of Nextel and LCC International,
ESTIMATED AGGREGATE AMOUNT: Inc.
$9,576,497.00
(This claim is held by LCC
International, Inc. against NWI on
account of obligations under a
prepetition note for radio frequency
engineering and program management
services.)
</TABLE>
11
<PAGE> 12
<TABLE>
<CAPTION>
CLASS OF CLAIMS/INTERESTS: PROPOSED TREATMENT:
- -------------------------- -------------------
<S> <C>
SECURED CLAIM OF LUCENT TECHNOLOGIES, Satisfied by a cash payment in an amount, or
INC. other consideration, to be determined by
agreement of Nextel and Lucent
ESTIMATED AGGREGATE AMOUNT: Technologies, Inc.
$9,113,482.00
(This claim is held by Lucent
Technologies, Inc. against NWI on
account of obligations under a
prepetition equipment lease financing
and is secured by a lien on the
equipment.)
SECURED CLAIM OF THE ALLEN GROUP Satisfied by a cash payment in an amount, or
other consideration, to be determined by
ESTIMATED AGGREGATE AMOUNT: agreement of Nextel and The Allen Group.
$1,609,153.11
(This claim is held by The Allen Group
on account of obligations incurred by
NWI in a prepetition equipment purchase
and is secured by a purchase money
security interest in the equipment.)
SECURED CLAIM OF CARLSON Satisfied by a cash payment in an amount, or
TECHNOLOGIES other consideration, to be determined by
agreement of Nextel and Carlson
ESTIMATED AGGREGATE AMOUNT: Technologies.
$1,348,620.67
(This claim is held by Carlson
Technologies on account of a prepetition
levy of execution on accounts held by
Wells Fargo Bank.)
OTHER SECURED CLAIMS Satisfied by a cash payment in an amount, or
other consideration, to be determined by
ESTIMATED AGGREGATE AMOUNT: agreement of Nextel and the respective
$2.2 MILLION secured creditors.
(These claims are held by certain
secured claimants and primarily are
secured by liens on various assets of
NWI.)
</TABLE>
12
<PAGE> 13
<TABLE>
<CAPTION>
CLASS OF CLAIMS/INTERESTS: PROPOSED TREATMENT:
- -------------------------- -------------------
<S> <C>
UNSECURED CLAIMS (INCLUDING Satisfied by a cash payment in an amount, or
UNDERSECURED PORTION OF SECURED other consideration, to be determined by
CLAIMS OTHER THAN THE FCC CLAIMS) agreement of Nextel and the Committee.
ESTIMATED AGGREGATE AMOUNT:
$80.0 MILLION
EQUITY INTERESTS Extinguished through a cash payment in
an amount, or other consideration, to be
determined by agreement of Nextel and the
respective equity security interest holders.
</TABLE>
13
<PAGE> 1
Exhibit 99.2
U.S. DEPARTMENT OF JUSTICE
Office of the Associate Attorney General
The Associate Attorney General Washington, D.C. 20530
August 10, 1999
Leonard J. Kennedy, Esq.
Counsel to Nextel Communications, Inc.
Dow, Lohnes & Albertson, PLLC
1200 New Hampshire Avenue, NW
Washington, DC 20036
Paul E. Harner, Esq.
Counsel to Nextel Communications, Inc.
Jones, Day, Reavis & Pogue
1900 Huntington Center
41 South High Street
Columbus, OH 43215
Re: NEXTWAVE PERSONAL COMMUNICATIONS INC. V. FEDERAL COMMUNICATIONS
COMMISSION, No. 98-5178; IN RE NEXTWAVE PERSONAL COMMUNICATIONS
INC., ET AL., No. 98 B 21589 (ASH)
Dear Mr. Kennedy and Mr. Harner:
We are writing with respect to the Term Sheet for Comprehensive Settlement
Agreement and Joint Plan of Reorganization (the "Term Sheet"), which your
client, Nextel Communications, Inc. ("Nextel"), has proposed in connection with
the above-referenced adversary proceeding and chapter 11 cases (collectively,
the "NextWave Cases"). As you are aware, pursuant to 31 U.S.C. 3711(a)(2) and
implementing regulations the authority for deciding how the United States will
vote on a reorganization plan in the NextWave Cases rests with the United States
Attorney General or her designee, the Associate Attorney General.
This letter confirms that the undersigned, Christopher J. Wright, General
Counsel of the Federal Communications Commission (the "FCC"), and the relevant
staff of the FCC will recommend to the FCC that it accept and agree to support
the resolution of the NextWave Cases as proposed in the Term Sheet. Further, by
this letter, the undersigned, Raymond C. Fisher, Associate Attorney General,
confirms that the United States would support a reorganization plan consistent
with the terms set forth in the Term Sheet, subject to review of the definitive
documentation contemplated in the Term Sheet.
<PAGE> 2
Leonard J. Kennedy, Esq.
Paul E. Harner, Esq.
Page 2
You and Nextel are authorized to disclose the existence and substance of
this letter and the Term Sheet in connection with any efforts to raise necessary
funding, to propose or implement a plan of reorganization consistent with that
described in the Term Sheet (or as otherwise approved by each of the FCC and the
DOJ in writing) or to meet Nextel's obligations under federal securities laws as
determined in good faith by Nextel.
Sincerely,
/s/ Christopher J. Wright /s/ Raymond C. Fisher
Christopher J. Wright Raymond C. Fisher
General Counsel Associate Attorney General
Federal Communications Commission U.S. Department of Justice
<PAGE> 1
Exhibit 99.3
Nextel Communications, Inc.
2001 Edmund Halley Drive, Reston, VA 20191
703 433-4000
NEXTEL
August 10, 1999
Raymond C. Fisher, Esq.
Associate Attorney General
U.S. Department of Justice
950 Pennsylvania Avenue, N.W.
Washington, D.C. 20530-0001
Christopher J. Wright, Esq.
Office of General Counsel
Federal Communications Commission
The Portals
445 - 12th Street, S.W.
Room #8-C755
Washington, D.C. 20554
Re: In Re NextWave Personal Communications Inc., et al.
---------------------------------------------------
Gentlemen:
This letter will confirm that Nextel Communications, Inc. ("Nextel")
has reviewed and approved the final form of the attached Term Sheet
for Comprehensive Settlement Agreement and Joint Plan of Reorganization in
the above-referenced chapter 11 bankruptcy cases (the "Term Sheet"). By this
letter, Nextel confirms that it is bound by the terms and conditions of the
Term Sheet (assuming that the United States Department of Justice and
the Federal Communications Commission are likewise bound by the terms
thereof) and will perform Nextel's obligations and undertakings thereunder.
Very truly yours,
/s/ Christopher T. Rogers
Christopher T. Rogers
Vice President
Corporate Development
