<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 7, 1999
REGISTRATION NO. 333-72105
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1 TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
NEXTEL COMMUNICATIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
(State or Other Jurisdiction of
Incorporation or Organization)
4812
(Primary Standard Industrial
Classification Code Number)
36-3939651
(I.R.S. Employer
Identification Number)
2001 EDMUND HALLEY DRIVE
RESTON, VIRGINIA 20191
(703) 433-4000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
THOMAS J. SIDMAN, ESQ.
VICE PRESIDENT AND GENERAL COUNSEL
NEXTEL COMMUNICATIONS, INC.
2001 EDMUND HALLEY DRIVE
RESTON, VIRGINIA 20191/(703) 433-4000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------
COPIES TO:
DAVID P. PORTER, ESQ.
JONES, DAY, REAVIS & POGUE
NORTH POINT/901 LAKESIDE AVENUE
CLEVELAND, OHIO 44114
(216) 586-3939
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable following the effective date of this Registration Statement.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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The information in this prospectus is not complete. Nextel may not sell or
offer these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and Nextel is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED MAY 7, 1999
PROSPECTUS
$300,000,000
OFFER TO EXCHANGE
ALL OUTSTANDING 12% SENIOR SERIAL REDEEMABLE NOTES DUE 2008
FOR 12% SENIOR SERIAL REDEEMABLE NOTES DUE 2008
OF
NEXTEL COMMUNICATIONS, INC.
THIS EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON JUNE 7, 1999.
------------------------
The Registered Notes
- The terms of the notes to be issued are substantially identical to the
outstanding notes that Nextel issued on November 4, 1998, except for
transfer restrictions, registration rights and liquidated damages
provisions relating to the outstanding notes that will not apply to the
notes.
- Interest on the notes accrues at the rate of 12% per year, payable in
cash every six months on May 1 and November 1, with the first payment on
May 1, 1999.
- The notes are senior, unsecured obligations of Nextel and will rank
equally with all other unsecured and unsubordinated obligations of
Nextel.
Material Terms of the Exchange Offer
- Expires at 5:00 p.m., New York City time, on June 7, 1999, unless
extended.
- The exchange offer is not subject to any condition other than that it
must not violate applicable law or any applicable interpretation of the
Staff of the Securities and Exchange Commission.
- All outstanding notes that are validly tendered and not validly withdrawn
will be exchanged for an equal principal amount of notes which are
registered under the Securities Act of 1933.
- Tenders of outstanding notes may be withdrawn at any time prior to the
expiration of the exchange offer.
- Nextel will not receive any cash proceeds from the exchange offer.
------------------------
Please consider carefully the "Risk Factors" beginning on page 12 of this
prospectus.
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED THE NOTES TO BE DISTRIBUTED IN THE EXCHANGE OFFER, NOR
HAVE ANY OF THESE ORGANIZATIONS DETERMINED THAT THIS PROSPECTUS IS ACCURATE OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
THE DATE OF THIS PROSPECTUS IS MAY 7, 1999.
<PAGE> 3
I. REFERENCES TO ADDITIONAL INFORMATION
THIS PROSPECTUS INCORPORATES IMPORTANT BUSINESS AND FINANCIAL INFORMATION
ABOUT NEXTEL THAT IS NOT INCLUDED IN OR DELIVERED WITH THIS PROSPECTUS. YOU MAY
OBTAIN DOCUMENTS THAT ARE FILED BY NEXTEL WITH THE SECURITIES AND EXCHANGE
COMMISSION AND INCORPORATED BY REFERENCE IN THIS PROSPECTUS BY REQUESTING THE
DOCUMENTS, IN WRITING OR BY TELEPHONE, FROM THE COMMISSION OR:
NEXTEL COMMUNICATIONS, INC.
2001 EDMUND HALLEY DRIVE
RESTON, VIRGINIA 20191
ATTENTION: INVESTOR RELATIONS
TELEPHONE: (703) 433-4000
IF YOU WOULD LIKE TO REQUEST COPIES OF THESE DOCUMENTS, PLEASE DO SO BY MAY
28, 1999 IN ORDER TO RECEIVE THEM BEFORE THE EXPIRATION OF THE EXCHANGE OFFER.
SEE "XI. WHERE YOU CAN GET MORE INFORMATION."
"Nextel" and "Nextel Direct Connect" are trademarks or service marks of
Nextel. "Motorola," "iDEN", "i1000" "i1000plus" and "i2000" are trademarks of
Motorola, Inc.
2
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C> <C>
I. References to Additional Information.............................. 2
II. Summary........................................................... 4
A. Nextel...................................................... 4
B. Use of Proceeds............................................. 6
C. The Exchange Offer.......................................... 6
D. The Exchange Notes.......................................... 8
E. Summary Financial Information............................... 9
III. Risk Factors...................................................... 12
A. Risk Factors Relating to Nextel............................. 12
B. Risk Factors Relating to the Notes.......................... 22
C. Nextel's Forward Looking Statements Are Subject to a Variety
of Factors That Could Cause Actual Results to Differ
Materially from Current Beliefs............................. 24
IV. Use of Proceeds................................................... 25
V. The Exchange Offer................................................ 25
A. Purpose and Effect of the Exchange Offer.................... 25
B. Resale of the Exchange Notes................................ 26
C. Terms of the Exchange Offer................................. 27
D. Expiration Date; Extensions; Amendments..................... 27
E. Conditions.................................................. 29
F. Procedures for Tendering.................................... 29
G. Book-Entry Transfer......................................... 31
H. Guaranteed Delivery Procedures.............................. 32
I. Withdrawal of Tenders....................................... 32
J. Termination of Certain Rights............................... 33
K. Exchange Agent.............................................. 33
L. Fees and Expenses........................................... 33
M. Consequences of Failure to Exchange......................... 34
N. Accounting Treatment........................................ 34
VI. The Exchange Notes................................................ 34
A. Glossary of Defined Terms................................... 34
B. General..................................................... 51
C. Optional Redemption......................................... 51
D. Change of Control........................................... 52
E. Certain Covenants........................................... 53
F. Events of Default........................................... 59
G. Defeasance and Covenant Defeasance.......................... 60
H. Modification and Waiver..................................... 61
I. No Personal Liability of Incorporators, Stockholders,
Officers, Directors or Employees............................ 62
J. Concerning the Trustee...................................... 62
K. Book Entry; Delivery and Form............................... 62
L. Certificated Notes.......................................... 63
VII. United States Federal Tax Consequences............................ 63
VIII. Plan of Distribution.............................................. 66
IX. Legal Matters..................................................... 66
X. Experts........................................................... 66
XI. Where You Can Get More Information................................ 67
A. Available Information....................................... 67
B. Incorporation of Documents by Reference..................... 67
</TABLE>
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II. SUMMARY
This summary highlights basic information about Nextel and the exchange
offer, but does not contain all information important to you. You should read
the more detailed information and consolidated financial statements and the
related notes appearing elsewhere in this prospectus and incorporated by
reference into this prospectus.
A. NEXTEL
OVERVIEW
Nextel provides a wide array of digital and analog wireless communications
services throughout the United States. Nextel offers a differentiated,
integrated package of digital wireless communications services under the Nextel
brand name, primarily to business users. Nextel's Digital Mobile Network
constitutes one of the largest integrated wireless communications systems
utilizing a single transmission technology in the United States. Nextel has
significant specialized mobile radio spectrum holdings in and around every major
business and population center in the country, including all of the top 50
metropolitan statistical areas in the United States.
As of December 31, 1998:
- Nextel provided service to about 2,789,900 digital subscriber units in
the United States;
- Nextel's Digital Mobile Network was operational in areas in and around 91
of the top 100 metropolitan statistical areas in the United States; and
- Nextel operated analog wireless networks that provide analog specialized
mobile radio services throughout the continental United States and in
Hawaii to about 354,000 analog specialized mobile radio subscriber units.
Nextel's Digital Mobile Network has been developed and deployed utilizing
advanced mobile communication systems employing digital technology with a
multi-site configuration permitting frequency reuse. This digital technology,
developed by Motorola, Inc., is referred to as the "integrated Digital Enhanced
Network" or "iDEN".
The number of Nextel's digital subscriber units in service has increased
significantly in recent years, reflecting the commencement of Digital Mobile
Network service in new markets and increased sales in existing markets. The
following table summarizes the approximate number of Nextel's digital subscriber
units in service at the dates indicated:
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------
1996 1997 1998
------- --------- ---------
<S> <C> <C> <C>
Digital subscriber units...................... 300,300 1,270,700 2,789,900
</TABLE>
A customer using Nextel's Digital Mobile Network is able to access:
- digital mobile telephone service;
- digital two-way radio dispatch, which provides instant conferencing
capabilities and is marketed as "Nextel Direct Connect" service;
- paging; and
- short-messaging service.
Nextel recently announced its plans and anticipated schedule to offer its
customers access to new digital two-way mobile data and Internet connectivity
services.
In addition, Nextel is involved in international wireless companies through
its subsidiary Nextel International, Inc. Nextel International's subsidiaries,
or other entities in which Nextel International holds
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equity or equivalent interests, own and operate wireless communications systems
in and around various major metropolitan market areas in Latin America, Asia and
Canada.
Nextel's principal executive and administrative facility is located at 2001
Edmund Halley Drive, Reston, Virginia 20191, and its telephone number is (703)
433-4000.
1998 NETWORK EXPANSION
In 1998, Nextel implemented a business plan for its domestic operations
that contemplated an accelerated expansion of Nextel's Digital Mobile Network
with the objectives of:
- achieving additional penetration in its targeted business customer base
in markets where the Digital Mobile Network was operating or was planned
to be operating in early 1998;
- selecting and prioritizing additional markets for expansion of Digital
Mobile Network coverage by Nextel during 1998; and
- enhancing the quality and performance of its Digital Mobile Network
wireless services offerings to maintain and strengthen Nextel's
competitive position relative to other existing and emerging providers of
digital wireless services in the United States.
The growth in Nextel's Digital Mobile Network coverage and capacity, and
the related significant increases in the number of Nextel's digital subscriber
units in service and in system minutes of use, which began in 1997, continued
and accelerated through 1998. This growth contributed significantly to Nextel's
achievement of positive earnings before interest, taxes, depreciation and
amortization for its domestic operations for the second half of 1998.
In particular, as of December 31, 1998, the implementation of Nextel's
business plan resulted in:
- an increase of roughly 173% in monthly total system minutes of use, from
about 403 million in December 1997 to about 1.1 billion in December 1998;
- around 2,200 additional digital cell sites being placed in service during
1998, for a total of about 6,200 digital cell sites in operation on the
Digital Mobile Network in addition to Nextel adding 14 switches to its
Digital Mobile Network during 1998 for 31 total switches in service at
December 31, 1998;
- coverage expansion from 75 of the top 100 U.S. markets at year end 1997
to 91 of the top 100 U.S. markets; and
- an increase in net domestic capital expenditures to about $1,900 million
in 1998 from about $1,500 million in 1997.
RECENT DEVELOPMENTS
Sale of NEXTBAND Interest. On March 31, 1999, Nextel entered into
definitive agreements with NEXTLINK Communications, Inc. providing for the sale
of Nextel's interest in NEXTBAND Communications, L.L.C. to NEXTLINK. NEXTBAND
was formed by Nextel and NEXTLINK to bid in an auction of Local Multipoint
Distribution System spectrum licenses by the Federal Communications Commission.
In the auction NEXTBAND was awarded licenses in 42 markets for a bid price of
about $134.7 million, one half of which was paid by Nextel in 1998. The purchase
price of Nextel's interest in NEXTBAND will be $137.7 million. A minimum of
$68.85 million of the price will be paid in cash with the remainder payable in
stock of NEXTLINK. The transaction is subject to receipt of necessary regulatory
approvals and to customary closing conditions. Nextel expects that the
transaction will be scheduled for a closing during the second quarter of 1999.
First Quarter Results. On April 19, 1999, Nextel announced its operating
results for the first quarter of 1999 including:
- revenues of about $663.8 million as compared to about $327.1 million in
the first quarter of 1998;
- an operating loss of about $192.6 million as compared to about $289.5
million in the first quarter of 1998;
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- consolidated earnings before interest, taxes, depreciation and
amortization of about $35.8 million compared to a loss in 1998 of about
$105.0 million;
- average monthly revenue per digital subscriber of about $71.
- about 415,000 net subscriber additions during the quarter;
- about 3,152,900 domestic digital subscriber units in use at the end of
the quarter; and
- the churn rate remained flat for the quarter at about 2% compared with
the fourth quarter of 1998.
Towers Transaction. On April 20, 1999, Nextel and SpectraSite
Communications, Inc. consummated agreements pursuant to which Nextel transferred
specified telecommunications towers and related assets to SpectraSite and leased
them back. Nextel received about $560.0 million and about an 18% ownership
interest in SpectraSite. In connection with the transaction, the parties 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, Inc.
B. USE OF PROCEEDS
Nextel will not receive any cash proceeds from the exchange offer.
C. THE EXCHANGE OFFER
The Exchange Offer......... Nextel offers to exchange $300.0 million in
principal amount of its 12% Senior Serial
Redeemable Notes due November 1, 2008, which have
been registered under the federal securities laws,
for $300.0 million principal amount of its
outstanding unregistered 12% Senior Serial
Redeemable Notes due November 1, 2008 which Nextel
issued on November 4, 1998 in a private offering.
You have the right to exchange your outstanding
notes for exchange notes with substantially
identical terms.
In order for your outstanding notes to be
exchanged, you must properly tender them prior to
the expiration of the exchange offer. All
outstanding notes that are validly tendered and not
validly withdrawn will be exchanged. Nextel will
issue the exchange notes on or promptly after the
expiration of the exchange offer.
Registration Rights
Agreement.................. Nextel sold the outstanding notes on November 4,
1998 to Morgan Stanley & Co. Incorporated. At that
time, Nextel signed a registration rights agreement
with Morgan Stanley & Co. Incorporated, which
requires Nextel to conduct this exchange offer.
This exchange offer is intended to satisfy those
rights set forth in the registration rights
agreement. After the exchange offer is complete,
you will no longer be entitled to registration
rights with respect to outstanding notes you do not
exchange.
If you Fail to Exchange
Your Outstanding Notes..... If you do not exchange your outstanding notes for
exchange notes in the exchange offer, you will
continue to be subject to the restrictions on
transfer provided in the outstanding notes and the
indenture governing those notes. In general, you
may not offer or sell your outstanding notes unless
they are registered under the federal securities
laws or are sold in a transaction exempt from or
not subject to the registration requirements of the
federal securities laws and applicable state
securities laws.
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Expiration Date............ The exchange offer will expire at 5:00 p.m., New
York City time, on June 7, 1999 unless Nextel
decides to extend the expiration date. See "V.D.
The Exchange Offer -- Expiration Date; Extensions;
Amendments."
Conditions to the Exchange
Offer...................... The exchange offer is subject to conditions which
Nextel may waive. The exchange offer is not
conditioned upon any minimum amount of outstanding
notes being tendered for exchange. See "V.E. The
Exchange Offer -- Conditions."
Nextel reserves the right, subject to applicable
law, at any time and from time to time:
- to delay the acceptance of the outstanding
notes;
- to terminate the exchange offer if specified
conditions have not been satisfied;
- to extend the expiration date of the
exchange offer and retain all tendered
outstanding notes subject to the right of
tendering holders to withdraw their tender
of outstanding notes; and
- to waive any condition or otherwise amend
the terms of the exchange offer in any
respect.
See "V.D. The Exchange Offer -- Expiration Date;
Extensions; Amendments."
Procedures for Tendering
Outstanding Notes.......... If you wish to tender your outstanding notes for
exchange, you must:
- complete and sign the enclosed letter of
transmittal by following the related
instructions; and
- send the letter of transmittal, as directed
in the instructions, together with any other
required documents, to the exchange agent,
either (1) with the outstanding notes to be
tendered or (2) in compliance with the
specified procedures for guaranteed delivery
of the outstanding notes.
Brokers, dealers, commercial banks, trust companies
and other nominees may also effect tenders by
book-entry transfer.
Please do not send your letter of transmittal or
certificates representing your outstanding notes to
Nextel. Those documents should only be sent to the
exchange agent. Questions regarding how to tender
and requests for information should be directed to
the exchange agent. See "V.K. The Exchange
Offer -- Exchange Agent."
Special Procedures for
Beneficial Owners.......... If your outstanding notes are registered in the
name of a broker, dealer, commercial bank, trust
company or other nominee, Nextel urges you to
contact that person promptly if you wish to tender
your outstanding notes pursuant to the exchange
offer. See "V.F. The Exchange Offer -- Procedures
for Tendering."
Withdrawal Rights.......... You may withdraw the tender of your outstanding
notes at any time prior to the expiration date of
the exchange offer by delivering a written notice
of your withdrawal to the exchange agent. You must
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also follow the withdrawal procedures as described
under the heading "V.I. The Exchange
Offer -- Withdrawal of Tenders."
Resales of Exchange
Notes...................... Nextel believes that you will be able to offer for
resale, resell or otherwise transfer exchange notes
issued in the exchange offer without compliance
with the registration and prospectus delivery
provisions of the federal securities laws, provided
that:
- you are acquiring the exchange notes in the
ordinary course of business;
- you are not participating, and have no
arrangement or understanding with any person
to participate, in the distribution of the
exchange notes; and
- you are not an affiliate of Nextel. An
affiliate of Nextel is a person that
"controls or is controlled by or is under
common control with" Nextel.
Nextel's belief is based on interpretations by the
Staff of the Commission, as set forth in no-action
letters issued to third parties unrelated to
Nextel. The Staff has not considered this exchange
offer in the context of a no-action letter, and
Nextel cannot assure you that the Staff would make
a similar determination with respect to this
exchange offer.
If Nextel's belief is not accurate and you transfer
an exchange note without delivering a prospectus
meeting the requirements of the federal securities
laws or without an exemption from these laws, you
may incur liability under the federal securities
laws. Nextel does not and will not assume or
indemnify you against this liability.
Each broker-dealer that receives exchange notes for
its own account in exchange for outstanding notes
which were acquired by such broker-dealer as a
result of market-making or other trading activities
must agree to deliver a prospectus meeting the
requirements of the federal securities laws in
connection with any resale of the exchange notes.
See "V.B. The Exchange Offer -- Resale of the
Exchange Notes."
Exchange Agent............. The exchange agent for the exchange offer is Harris
Trust and Savings Bank. The address, telephone
number and facsimile number of the exchange agent
are set forth in "V.K. The Exchange Offer --
Exchange Agent" and in the letter of transmittal.
See "V. The Exchange Offer" for more detailed information concerning the
exchange offer.
D. THE EXCHANGE NOTES
Exchange Notes............. $300.0 million principal amount of Nextel's 12%
Senior Serial Redeemable Notes due November 1,
2008.
Interest Payment Dates..... Interest on the notes accrues at the rate of 12%
per year, payable in cash every six months on May 1
and November 1, with the first payment on May 1,
1999.
Optional Redemption........ On or after November 1, 2003, Nextel may redeem
some or all of the notes at the redemption prices
set forth in this prospectus, plus accrued and
unpaid interest, if any, to the date of redemption.
In addition, if Nextel sells on or before November
1, 2001 at least
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$50.0 million of qualifying capital stock, it may
redeem up to $105.0 million in principal amount of
the notes at a price of 112% of their principal
amount, plus accrued and unpaid interest, if any,
to the date of redemption with the proceeds from
that sale so long as any redemption occurs within
180 days of the sale of the capital stock.
Ranking.................... The exchange notes will not be secured debt of
Nextel and:
- will rank equal in right of payment to all
Nextel's existing and future senior
unsecured debt;
- will effectively rank equal in right of
payment with obligations arising out of
Nextel's guaranties of debt of its
subsidiaries;
- will be senior in right of payment to all
existing and future subordinated debt of
Nextel;
- will be effectively subordinate to all
existing and future debt of Nextel's
subsidiaries; and
- will be subordinate to all existing and
future secured debt of Nextel.
At December 31, 1998, Nextel had about $4.0 billion
of outstanding debt that ranked equally with the
notes, excluding guaranties of subsidiary debt of
about $2.3 billion.
Covenants.................. The indenture governing the notes contains
covenants which restrict, among other things, the
ability of Nextel and some of its subsidiaries to:
- incur more debt;
- pay dividends or make distributions on their
stock, other than Nextel's preferred stock;
- make investments or payments;
- enter into specified transactions with
affiliates;
- merge or consolidate; and
- transfer and sell substantial assets.
Change of Control.......... Upon a change of control, as defined later in this
prospectus, Nextel will be required to offer to
repurchase your exchange notes at a price equal to
101% of their principal amount plus accrued and
unpaid interest, if any, to the date of purchase.
See "VI. The Exchange Notes" for more detailed information concerning the
exchange notes.
E. SUMMARY FINANCIAL INFORMATION
The financial information below for the nine months ended December 31,
1994, which reflects the change in Nextel's fiscal year end from March 31 to
December 31, and the years ended December 31, 1995, 1996, 1997 and 1998 have
been derived from the audited consolidated financial statements of Nextel. This
information is only a summary and should be read in conjunction with Nextel's
historical financial statements contained in reports filed with the Commission.
See "XI. Where You Can Get More Information."
As you read this summary financial information, you should note that during
1995 Nextel undertook a corporate reorganization that resulted in a one-time
charge to operations. In addition, Nextel's results were
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affected by business combinations, acquisitions and investments made with both
domestic and international companies. In July 1995, Nextel completed mergers
with a subsidiary of Motorola, OneComm Corporation and American Mobile Systems,
Incorporated. Additional information regarding acquisitions completed in 1996,
1997 and 1998 can be found in note 2 to the consolidated financial statements in
Nextel's Annual Report on Form 10-K for the year ended December 31, 1998.
Other income (expense), net includes:
- $15.0 million write-down of the investment in Corporacion Mobilcom
S.A. de C.V., a subsidiary of Nextel, as a result of the devaluation
of the Mexican peso in 1995;
- equity in the losses of some foreign investments accounted for under
the equity method in 1996. Additional information can be found in note
2 to the financial statements in Nextel's Annual Report on Form 10-K
for the year ended December 31, 1998; and
- losses on interest rate protection activities of $46.9 million in
1998.
As a result of the change in useful lives of some intangible assets and
recent operating results, Nextel increased its valuation allowance resulting in
a tax provision of about $258.7 million in 1997. Additional information can be
found in note 10 to the consolidated financial statements in Nextel's Annual
Report on Form 10-K for the year ended December 31, 1998.
For the purpose of computing the ratio of earnings to fixed charges and
preferred stock dividends, earnings consist of loss before income taxes less
income (loss) from equity method investments and loss (income) attributable to
minority interests. Fixed charges consist of:
- interest on all indebtedness and amortization of deferred financing
costs and amortization of original issue discount;
- that portion of rental expense which Nextel believes to be
representative of interest; and
- preferred stock dividends.
The deficiency of earnings to cover fixed charges and preferred stock dividends
for the nine months ended December 31, 1994 was $218.5 million, for the year
ended December 31, 1995 was $562.8 million, for the year ended December 31, 1996
was $884.9 million, for the year ended December 31, 1997 was $1,377.6 million
and for the year ended December 31, 1998 was $1,905.0 million.
About $121.1 million of cash and cash equivalents held by Nextel
International and its subsidiaries as of December 31, 1998 included below, are
not available to fund any of the cash needs of Nextel's domestic digital mobile
and analog specialized mobile radio businesses.
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You should review notes 12 and 13 to the consolidated financial statements
in Nextel's Annual Report on Form 10-K for the year ended December 31, 1998 for
a detailed discussion of Nextel's capital stock.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED DECEMBER 31,
DECEMBER 31, -----------------------------------------------------
1994 1995 1996 1997 1998
------------ ----------- ----------- ----------- -----------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Operating revenues.................... $ 74,857 $ 171,703 $ 332,938 $ 738,897 $ 1,846,758
Cost of revenues...................... 51,406 151,718 247,717 288,752 516,393
Selling, general and administrative... 85,077 193,321 330,256 861,588 1,550,323
Expenses related to corporate
reorganization...................... -- 17,372 -- -- --
Depreciation and amortization......... 94,147 236,178 400,831 526,377 832,299
----------- ----------- ----------- ----------- -----------
Operating loss........................ (155,773) (426,886) (645,866) (937,820) (1,052,257)
Interest (expense), net............... (41,454) (89,509) (206,480) (378,032) (622,056)
Other, net............................ 33 (15,372) (10,866) 6,511 (36,462)
Income tax benefit (provision)........ 71,345 200,602 307,192 (258,726) 191,912
----------- ----------- ----------- ----------- -----------
Loss before extraordinary item........ (125,849) (331,165) (556,020) (1,568,067) (1,518,863)
Extraordinary item -- loss on early
retirement of debt.................. -- -- -- (45,787) (133,225)
Mandatorily redeemable preferred stock
dividends........................... -- -- -- (29,119) (149,161)
----------- ----------- ----------- ----------- -----------
Loss attributable to common
stockholders........................ $ (125,849) $ (331,165) $ (556,020) $(1,642,973) $(1,801,249)
=========== =========== =========== =========== ===========
Loss per share attributable to common
stockholders, basic and diluted:
Loss before extraordinary item
attributable to common
stockholders........................ $ (1.25) $ (2.31) $ (2.50) $ (6.41) $ (5.98)
Extraordinary item.................... -- -- -- (0.18) (0.48)
----------- ----------- ----------- ----------- -----------
$ (1.25) $ (2.31) $ (2.50) $ (6.59) $ (6.46)
=========== =========== =========== =========== ===========
Weighted average number of shares
outstanding......................... 100,639,000 143,283,000 222,779,000 249,320,000 278,643,000
OTHER FINANCIAL DATA:
Ratio of earnings to fixed charges and
preferred stock dividends........... -- -- -- -- --
</TABLE>
<TABLE>
<CAPTION>
AS OF
DECEMBER 31,
1998
--------------
(IN THOUSANDS)
<S> <C>
BALANCE SHEET DATA:
Cash and cash equivalents................................... $ 321,379
Intangible assets, net...................................... 4,937,124
Total assets................................................ 11,573,361
Long-term debt (excluding current portion of $9.9
million).................................................. 7,710,373
Redeemable preferred stock.................................. 1,578,252
Stockholders' equity........................................ 229,502
</TABLE>
11
<PAGE> 13
III. RISK FACTORS
You should carefully consider the following risk factors and all other
information in this prospectus before deciding to invest in the exchange notes.
A. RISK FACTORS RELATING TO NEXTEL
1. NEXTEL HAS A HISTORY OF NET LOSSES AND NEGATIVE CASH FLOW AND MAY NOT BE
ABLE TO SATISFY ITS CASH NEEDS FROM OPERATIONS.
Nextel has focused on developing its business, rather than emphasizing
current earnings. Nextel has never been profitable and has experienced negative
cash flow since its start in 1987. Nextel had net losses attributable to common
stockholders of about $1.8 billion during 1998. Nextel's accumulated deficit was
about $4.4 billion at December 31, 1998. Nextel expects that losses will
continue over the next several years. Nextel's ability to obtain financing and
to generate revenue to support its operations and to meet its working capital
needs is subject to many risks and uncertainties. In addition, Nextel cannot
know when, if ever, net cash generated by its internal business operations will
support its growth and continued operations.
2. NEXTEL WILL NEED SUBSTANTIAL AMOUNTS OF ADDITIONAL FINANCING.
A. REASONS NEXTEL WILL NEED CASH.
Nextel anticipates that it will need substantial amounts of cash for:
- capital expenditures to build and enhance its Digital Mobile Network;
- operating expenses relating to its Digital Mobile Network and analog
specialized mobile radio business;
- potential acquisitions, including acquisition of rights to radio
spectrum, which Nextel requires to conduct its wireless communications
business;
- debt service requirements; and
- other general corporate purposes.
Nextel expects its cash needs will exceed its cash flows from operating
activities through 1999. In addition, Nextel may need to revise its business
plan to respond to competitive and other factors, so its need for cash may
increase.
B. NEXTEL'S CURRENT CREDIT FACILITIES ARE LIMITED AND CONTAIN
RESTRICTIONS ON ADDITIONAL FINANCINGS.
Nextel's long-term cash needs are much greater than its availability under
its existing financing agreements. Nextel may not be able to generate sufficient
net cash through its internal business operations, or otherwise obtain access to
sufficient additional funds, for example, by selling non-strategic or non-core
assets, to meet its future cash needs. As a result, Nextel will have to raise
substantial amounts of additional funds, in the form of equity or debt, in the
future to support its growth and operations. Under its bank credit agreement as
in effect on December 31, 1998, Nextel may borrow up to $3.295 billion in
secured financing from its bank lenders provided that Nextel satisfies financial
and other conditions. Assets of some of Nextel's operating subsidiaries secure
amounts outstanding under these financing arrangements. As of December 31, 1998,
about $2.1 billion of this secured financing had been drawn. The availability of
this financing is also subject to Nextel satisfying covenants under indentures
relating to Nextel's public notes. Nextel's access to additional funds may be
limited by the terms of its existing financing agreements, including:
- covenants that restrict the amount of additional borrowings, including
additional borrowings under existing financing arrangements;
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<PAGE> 14
- covenants that restrict Nextel's grant of liens on assets that affect
Nextel's ability to obtain new secured financing; and
- existing debt service requirements.
C. FUNDING REQUIREMENTS FOR INTERNATIONAL OPERATIONS AND GROWTH MAY
CAUSE EVEN GREATER CASH NEEDS.
Based on Nextel International's assessment of the business activity and
related cash needs of its operating subsidiaries that are controlled by or that
rely substantially on Nextel International for further funding, Nextel
International believes that it will have adequate funding to continue its
operations only into the latter half of 1999. Nextel International is exploring
a number of alternative sources of debt and equity financing, and has entered
into arrangements with Motorola to obtain additional vendor financing, to fund
its operations, capital expenditures, working capital and other cash needs. If
sufficient financing does not become available at times or in amounts required
to meet Nextel International's needs, Nextel may fund some or all of Nextel
International's cash needs. This would increase Nextel's own cash needs. If
Nextel does provide funding to Nextel International and Nextel's remaining
financing sources are not sufficient to meet its own needs, Nextel may seek to
raise additional capital from public or private debt or equity sources.
D. OTHER FACTORS MAY ADVERSELY AFFECT NEXTEL'S ACCESS TO ADDITIONAL
FINANCING.
Nextel's access to additional funds also may be limited by:
- general market conditions that adversely affect the availability or cost
of financings;
- market conditions affecting the telecommunications industry in general;
and
- specific factors affecting Nextel's attractiveness as a borrower or
investment vehicle, including:
(1) the terms of Nextel's arrangements with Motorola that relate to
Motorola's ownership interest in Nextel, and the terms of options
and warrants issued to others, that may make equity financings more
difficult;
(2) the uncertainty concerning the ultimate outcomes of legal challenges
lodged against auctions of spectrum and licenses;
(3) the ability to retune specific incumbent licensees to remove them
from spectrum as to which Nextel was the highest bidder at an
auction;
(4) the potential commercial opportunities and risks associated with
implementation of Nextel's business plan;
(5) the market's perception of Nextel's performance; and
(6) the actual amount of cash needed by Nextel to pursue its business
strategy.
E. NEXTEL DOES NOT HAVE SUFFICIENT ADDITIONAL FINANCING COMMITMENTS TO
MEET ITS LONG-TERM NEEDS.
Currently, other than under its existing bank facility, Nextel has no
legally binding commitments or understandings with any third parties to obtain
any material amount of additional equity or debt financing. Nextel cannot assure
you that it will be able to obtain any additional financing in the amounts or at
the times that it may require the financing, or if Nextel does obtain any
financing, that it would be on acceptable terms. As a result, Nextel cannot
assure you that it will have adequate capital to implement the contemplated
expansion and enhancement of its Digital Mobile Network. Additionally, although
Nextel has entered into arrangements with Nextel Partners, Inc. that are
separately funded and are intended to result in a faster build-out and
commencement of Digital Mobile Network operations in secondary and smaller
markets in the United States, Nextel cannot assure you that Nextel Partners'
efforts will succeed. Nextel's failure to obtain sufficient additional financing
could result in the delay or abandonment of some
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<PAGE> 15
or all of its development, expansion and acquisition plans and expenditures,
which could have an adverse effect on Nextel.
3. NEXTEL'S FUTURE PERFORMANCE WILL DEPEND ON ITS ABILITY TO SUCCEED IN THE
HIGHLY COMPETITIVE WIRELESS VOICE TRANSMISSION INDUSTRY.
Nextel's ability to compete effectively with established and prospective
wireless communications service providers depends on many factors, including:
- THE CONTINUED SATISFACTORY PERFORMANCE OF NEXTEL'S VOICE TRANSMISSION
TECHNOLOGY. Technology performance issues could adversely affect the
implementation of Nextel's Digital Mobile Network. Customer acceptance of
the services Nextel offers is and will continue to be affected by
technology-based differences and by the operational performance and
reliability of system transmissions on Nextel's Digital Mobile Network.
In the past, using the first generation iDEN digital transmission
technology, Nextel encountered performance, reliability, accessibility
and transmission quality issues on its Digital Mobile Network. If Nextel
is unable to address and resolve satisfactorily performance or other
transmission quality issues as they arise, the further successful
commercialization of the Digital Mobile Network could be delayed and
Nextel could be adversely affected. If Nextel, for any reason, is unable
to continue to implement its Digital Mobile Network as it currently
expects, Nextel may not be competitive with other wireless communications
providers. In addition, Nextel would be unable, utilizing its analog
specialized mobile radio technology and systems, to provide mobile
telephone services comparable to those provided by other cellular and
wireless communications services providers or to achieve significant
further subscriber growth.
- THE ABILITY TO EXPAND, PROVIDE AND MAINTAIN SYSTEM COVERAGE. Nextel's
geographic system coverage could adversely affect Nextel's competitive
position. Nextel currently offers its mobile telephone customers the
ability to "roam" throughout Nextel's existing Digital Mobile Network
market areas and its roaming agreement with Nextel Partners permits
Nextel's customers the ability to "roam" in additional United States
market areas deployed and operated by Nextel Partners. Nextel, however,
will not be able to provide roaming system coverage comparable to that
currently available through roaming arrangements from cellular and some
personal communication services operators, unless and until a nationwide
Digital Mobile Network build-out is substantially completed. This places
Nextel at a competitive disadvantage, as some other providers currently
have roaming agreements that provide coverage of each other's markets
throughout the United States. Nextel also cannot assure you that a
sufficient number of customers or potential customers will be willing to
accept system coverage limitations as a trade-off for the enhanced
multi-function wireless communications package Nextel provides on its
nationwide Digital Mobile Network.
- THE ABILITY TO PROVIDE DUAL MODE SERVICE. Nextel currently is not able
to provide its digital customers with analog capability. During the
transition to digital technology, some participants in the United States
cellular industry are offering subscriber units with dual mode, analog
and digital, compatibility. Additionally, some analog cellular system
operators that directly or through their affiliates also operate digital
personal communication services have made available to their customers
dual mode/dual band (800 MHz cellular/1900 MHz personal communication
services) subscriber units. These units combine the enhanced feature set
available on digital personal communication services within their digital
service coverage areas with the broader wireless coverage area available
on the analog cellular network. Nextel does not have comparable hybrid
subscriber units of either type currently available to its customers.
- THE ABILITY TO FURTHER DEVELOP COST EFFECTIVE DIRECT AND INDIRECT
CHANNELS OF DISTRIBUTION FOR ITS DIGITAL MOBILE NETWORK PRODUCTS AND
SERVICES. Many of Nextel's competitors have offered cellular and other
telecommunications services for many years. During that period, those
competitors established extensive networks of retail locations and
multiple distribution channels, and so enjoy a competitive advantage over
Nextel in these areas. Nextel has increased the proportion of its Digital
Mobile Network customers that it obtains through its indirect distributor
network, and
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<PAGE> 16
Nextel currently anticipates that it will rely more heavily on indirect
distribution channels to achieve greater market penetration for its
digital wireless service offerings. However, as Nextel expands its retail
subscriber base through increased reliance on indirect distribution
channels, and as price competition in the wireless industry intensifies,
the average revenue per subscriber unit may decrease and the churn rate
of subscribers may increase.
- THE ABILITY TO MAINTAIN PRICING PACKAGES ATTRACTIVE TO CUSTOMERS. Nextel
faces price competition.
A. SOME OF NEXTEL'S COMPETITORS ARE FINANCIALLY STRONGER THAN
NEXTEL.
Some competitors may be able to offer prospective customers lower base
prices, or greater equipment subsidies or discounts than those, if any,
that Nextel could afford to offer. Nextel's competitors may also be able
to offer services to customers at prices that are below prices that Nextel
offers for comparable services. As a result, Nextel's ability to compete
based on the price of its Digital Mobile Network subscriber units and
service offerings will be limited.
B. NEXTEL'S EQUIPMENT IS MORE EXPENSIVE THAN SOME COMPETITORS'.
Nextel currently markets multi-function subscriber handsets, providing
mobile telephone and private and group dispatch service, in addition to
paging and alphanumeric short-text messaging. Nextel's handsets are, and
are likely to remain, significantly more expensive than analog handsets
and are, and are likely to remain, somewhat more expensive than digital
cellular or personal communication services handsets that do not
incorporate a comparable multi-function capability. However, Nextel
believes that its multi-function subscriber handsets currently are
competitively priced compared to multi-function digital cellular and
personal communication services handsets.
C. NEXTEL MAY FACE CONTINUING PRESSURE TO REDUCE PRICES.
Over the past several years as the number of wireless communications
providers in Nextel's market areas has increased, its competitors' prices
in such markets have generally decreased. Nextel may encounter further
market pressures:
- to reduce its Digital Mobile Network service offering prices;
- to restructure its Digital Mobile Network service offering packages
to offer more value;
- to respond to particular short term, market specific situations, for
example, special introductory pricing or packages that may be offered
by new providers launching their service in a particular market; or
- to remain competitive in the event that wireless service providers
generally continue to reduce the prices charged to their customers.
- THE ABILITY TO KEEP PACE WITH TECHNOLOGICAL CHANGE. Nextel's digital
technology could become obsolete. Nextel relies on digital technology
that is not compatible with, and competes with, other forms of digital
and non-digital voice communication technology. Competition among these
differing technologies can:
- segment the user markets, which could reduce demand for specific
technologies, including Nextel's;
- reduce the resources devoted by third party suppliers, including
Motorola, which supplies all of Nextel's current digital technology,
in developing or improving the technology for Nextel's systems; and
- adversely affect market acceptance of Nextel's services.
Nextel cannot assure you that its digital technology will successfully
compete with the other forms of digital and non-digital voice
communication systems. Further, new digital or non-digital
15
<PAGE> 17
voice communication transmission technology may develop that will cause
Nextel's existing systems technology to be obsolete or otherwise impair
market acceptance of its technology.
- THE ABILITY TO MARKET SUCCESSFULLY ITS INTEGRATED WIRELESS COMMUNICATIONS
SERVICES. Nextel's growth may exceed the capabilities of its systems,
hurting its performance.
A. NEXTEL FACES LIMITATIONS ON ITS ABILITY TO INCREASE
SUBSCRIBERS.
Nextel's ability to continue to increase the number of subscribers on
its Digital Mobile Network depends on a variety of factors, including:
- the ability to successfully plan for additional system capacity at
levels needed to meet anticipated new subscribers and the related
increases in system usage;
- the ability to obtain additional radio spectrum when and where
required; and
- the availability of a sufficient quantity of cell sites, system
infrastructure equipment and subscriber units, of the appropriate
models and types, to meet the demands and preferences of potential
subscribers to the Digital Mobile Network.
B. NEXTEL MAY FACE LIMITATIONS ON AVAILABILITY OF CELL SITES
AND EQUIPMENT.
Although Nextel believes it has secured sufficient cell sites at
appropriate locations in its markets to meet planned system coverage and
capacity targets, Nextel cannot assure you that it will meet those needs
in the future. In addition, Nextel generally has been able to obtain
adequate quantities of base radios and other system infrastructure
equipment from Motorola and other suppliers, and adequate volumes and mix
of subscriber units and related accessories from Motorola, to meet
subscriber and system loading rates. However, Nextel cannot assure you
that quantities will be sufficient in the future. Additionally, Nextel has
contractual arrangements with Nextel International and Nextel Partners
that contemplate that, in the event of shortages of that equipment,
available supplies would be allocated proportionately among Nextel and
those entities.
C. NEXTEL HAS POTENTIAL SYSTEMS LIMITATIONS ON ADDING
CUSTOMERS.
Other factors affecting Nextel's ability to successfully add customers
to its Digital Mobile Network include:
- the adequacy and efficiency of Nextel's information systems, business
processes and related support functions;
- the length of time between customer order to activation of service on
the Digital Mobile Network, which currently is much longer than that
typically encountered for "off the shelf" cellular and personal
communication services wireless offerings; and
- Nextel's ability to improve the efficiency and speed of the processes
for Nextel's customer service and accounts receivable collection
functions to adequately respond to the needs of a growing customer
base on the Digital Mobile Network and the increasing amounts of
billed digital service and equipment revenue.
Customer reliance on Nextel's customer service functions may increase
as Nextel adds Digital Mobile Network customers through indirect
distribution channels and through direct sales channels not involving
direct face-to-face contact with a sales representative, for example,
phone order sales or sales through web sites.
Although Nextel has taken steps to refine, improve and scale-up its
back-office and support systems and processes, Nextel cannot assure you
that these systems and processes will achieve
16
<PAGE> 18
levels of capacity, or improvements in speed and efficiency, sufficient to
meet customer and network growth and demands, or that Nextel will be able
to do so on a timely basis. Nextel's inability to:
- timely meet Digital Mobile Network capacity needs;
- have access to suitable cell sites and infrastructure and subscriber
equipment in any one or more of its market areas; or
- develop, when required, improvements or expansions to its systems and
processes adequate to meet desired levels of customer activation and
increased levels of usage and demand for wireless services on the
Digital Mobile Network;
could decrease or postpone subscriber growth, or delay or otherwise
impede billing and collection of amounts owed, which would adversely
affect Nextel.
- THE ABILITY OF COMPETITORS TO PROVIDE TWO-WAY RADIO DISPATCH
SERVICES. Nextel's two-way radio dispatch services are currently not
available through traditional cellular or personal communication services
providers; however, if either personal communication services or cellular
operators provide two-way radio dispatch services in the future, Nextel's
competitive advantage may be impaired.
Nextel cannot predict the competitive effect that any of these factors, or
any combination of these factors, will have on it or whether it will compete
successfully in the future.
4. REGULATORY AND OTHER FACTORS COULD DELAY OR PREVENT NEXTEL FROM OFFERING
SERVICES IN NEW MARKET AREAS.
Before fully implementing its Digital Mobile Network in a new market area,
Nextel must complete systems design work, find appropriate sites and construct
necessary transmission structures, receive regulatory approvals, free up
frequency channels now devoted to non-digital transmissions and begin systems
optimization. In the past, these processes have taken weeks or months to
complete, and may be hindered or delayed by many factors, including
unavailability of antenna sites at optimal locations, land use and zoning
controversies and limitations of available frequencies. Nextel cannot know when,
if ever, its digital technology will be available for commercial use in new
markets. Nextel will rely on Nextel Partners to implement the Digital Mobile
Network in new markets located in Nextel Partners' territory. Nextel Partners
likely will encounter many of the same challenges as Nextel in implementing the
Digital Mobile Network in its new markets.
5. NEXTEL PRINCIPALLY RELIES ON ONE SUPPLIER TO IMPLEMENT ITS DIGITAL
MOBILE NETWORK.
Motorola is currently Nextel's sole source for the iDEN infrastructure and
subscriber handset equipment used by Nextel throughout its markets. Nextel
expects to rely on Motorola for the manufacture of a substantial portion of the
equipment necessary to construct its Digital Mobile Network and handset
equipment for the next several years. The failure by Motorola to deliver
necessary technology improvements and enhancements and iDEN system
infrastructure and subscriber equipment on a timely, cost-effective basis would
have an adverse effect on Nextel. Nextel expects that for the next few years,
Motorola and competing manufacturers who are licensed by Motorola will be the
only manufacturers of subscriber equipment that is compatible with Nextel's
Digital Mobile Network. The equipment purchase agreements between Nextel and
Motorola provide for the licensing by Motorola of interfaces relating to
infrastructure and subscriber equipment and of additional manufacturers for
subscriber equipment. Motorola has agreed to negotiate to enter into licenses
with at least one alternative manufacturer of iDEN infrastructure equipment.
Currently, however, there are no arrangements in effect with any additional
manufacturers to supply Nextel with alternative sources for either iDEN system
infrastructure or subscriber equipment.
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<PAGE> 19
6. AGREEMENTS WITH MOTOROLA REDUCE NEXTEL'S OPERATIONAL FLEXIBILITY.
Nextel must purchase from Motorola a significant amount of system
infrastructure equipment. Nextel has agreed not to install and use digital radio
frequency technology as an alternative to iDEN on more than 25% of its
specialized mobile radio channels in the 806-824 MHz band in one or more of its
top 20 domestic markets, or to utilize any of its specialized mobile radio
channels for voice interconnect on United States cellular and/or personal
communication services radio telephony standards prior to August 4, 1999,
unless:
- Nextel determines that the iDEN equipment fails to meet performance
specifications established in the equipment purchase agreements with
Motorola, which failure materially adversely affects the commercial
viability of the technology to provide reliable services as intended by
Motorola and Nextel, and Motorola does not cure the failure within six
months after receiving notice of the failure; or
- Nextel or Digital Radio L.L.C., an entity controlled by Craig O. McCaw, a
significant stockholder of Nextel, offers to acquire the remainder of
Motorola's shares of Nextel common stock at a per share price of at least
110% of the average of the closing prices of the common stock over the 30
trading days before the public announcement by Nextel of the decision to
implement the plan.
In either case, if Motorola manufactures, or elects to manufacture, the
alternate technology that Nextel elects to deploy, Nextel must purchase 50% of
its infrastructure requirements and 25% of its subscriber equipment requirements
from Motorola for three years, so long as the equipment is competitive in price
and performance to the equipment utilizing or incorporating the alternate
technology then offered by other manufacturers.
Should Nextel choose to deploy a technology other than iDEN for any of its
wireless communications services, Nextel believes that its systems planning and
contractual relationships with Motorola would permit it to utilize a different
technology. Due to the considerable present uncertainty surrounding the factors
that might affect that decision, including the additional capital requirements
associated with the deployment of an alternative technology, the performance
characteristics and customer perceptions of iDEN, or of competing digital
technologies and possible future improvements in the iDEN technology platform,
it is impossible to predict if or when Nextel would make that decision.
7. NEXTEL'S INTERESTS MAY CONFLICT WITH THOSE OF MOTOROLA.
Motorola and its affiliates engage in wireless communications businesses,
and may in the future engage in additional businesses, which do or may compete
with some or all of the services Nextel offers through its Digital Mobile
Network. Although Nextel believes that its relationship with Motorola reflects
the realities of purchasing from a competitor, Nextel cannot assure you that the
potential conflict of interest will not adversely affect Nextel in the future.
In addition, Motorola is a significant stockholder of Nextel, which creates
potential conflicts of interest, particularly with regard to significant
transactions.
8. NEXTEL'S FUTURE DEPENDS ON GOVERNMENTAL REGULATION.
The Federal Communications Commission regulates the licensing, operation,
acquisition and sale of Nextel's specialized mobile radio businesses. Federal
law governs the allocation and licensing of the radio frequency spectrum that
Nextel uses to conduct those businesses. The Federal Communications Commission's
regulations have significantly changed during the last few years and continue to
evolve as new regulations are adopted under the Omnibus Budget Reconciliation
Act of 1993 and the Telecommunications Act of 1996. Nextel's ability to conduct
its business depends, in part, on its compliance with these regulations. Future
changes in regulation or legislation affecting Digital Mobile Network service
and Congress' and the Federal Communications Commission's continued allocation
of
18
<PAGE> 20
additional commercial mobile radio services spectrum could adversely affect
Nextel's business. Similar government regulatory factors affect Nextel's
operations outside the United States.
In particular, Nextel may be impacted by the following recent regulatory
developments involving the Federal Communications Commission:
- a proposal to alter the allocation of Nextel's revenues between federal
and state jurisdictions for purposes of calculating universal service
fund contributions;
- a proposal to regulate billing disclosures and billing practices in a
manner that could be disadvantageous to Nextel;
- a proposal to implement statutory requirements relating to the
accessibility by persons with disabilities to telecommunications
services, which may include proposals requiring modifications to
equipment used by those customers;
- extension of the date for compliance with federal statutory provisions
requiring telecommunications service providers to make their networks
accessible to law enforcement authorities and proposals that require
those providers to have additional capabilities to facilitate this
access;
- the temporary stay of some provisions of rules that protect against the
disclosure of customer proprietary network information and restrict the
manner in which that information may be used;
- the reauction of some spectrum licenses that could be used to provide
competing services which began on March 23, 1999; and
- the extension of the date for implementation of local number portability
to November 24, 2002.
9. NEXTEL PRIMARILY HAS INTANGIBLE ASSETS.
Nextel has a significant amount of intangible assets, such as licenses
granted by the Federal Communications Commission. The value of these licenses
will depend significantly upon the success of Nextel's Digital Mobile Network
business and the growth of the specialized mobile radio and wireless
communications industries in general. If Nextel defaults on debt or if Nextel
were liquidated, Nextel cannot assure you that the value of these assets will be
sufficient to satisfy its obligations. Nextel had a net tangible book value
deficit of about $5.0 billion as of December 31, 1998.
10. NEXTEL IS SUSCEPTIBLE TO CONTROL BY SIGNIFICANT STOCKHOLDERS.
Based on the ownership information relating to Nextel as of December 31,
1998, and giving effect to the conversion of Nextel's preferred stock and
non-voting common stock, and the exercise in full of all options to purchase
common stock issued by Nextel and Motorola to entities controlled by Mr. McCaw
and a warrant held by Motorola, Mr. McCaw's affiliates would hold about 20.4%
and Motorola would hold about 15.4% of the outstanding Nextel stock.
Digital Radio L.L.C. may designate at least one fourth of the board of
directors of Nextel. In addition, Digital Radio may select, from its
representatives on the board of directors, a majority of the operations
committee of Nextel's board of directors, which has significant authority
relating to Nextel's business strategy, budgets, financing arrangements and in
the nomination and oversight of specified executive officers. As a result,
Digital Radio may exert significant influence over Nextel's affairs. Although
the board of directors retains the authority to override actions taken or
proposed to be taken by the operations committee, under agreements with Digital
Radio, these overrides may lead to specific adverse financial consequences.
Motorola may nominate two directors to the board of directors of Nextel.
Although Motorola has agreed to support the decisions and recommendations of the
operations committee and to vote its shares of common stock accordingly, any
Motorola-designated Nextel director retains the right to vote in a manner
consistent with his fiduciary duties and Motorola may vote its shares as it
determines
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<PAGE> 21
necessary with respect to issues that conflict with Motorola's corporate ethics
or that present conflicts of interest, or in order to protect the value or
marketability of the shares of common stock held by it.
If Digital Radio and Motorola choose to act together, they could have a
sufficient voting interest in Nextel to, among other things:
- exert effective control over the approval of amendments to Nextel's
certificate of incorporation, mergers, sales of assets or other major
corporate transactions as well as other matters submitted for stockholder
vote;
- defeat a takeover attempt; and
- otherwise control whether particular matters are submitted for a vote of
the stockholders of Nextel.
Digital Radio, Mr. McCaw and their affiliates have and, subject to the
terms of applicable agreements between Digital Radio and Nextel, may have an
investment or interest in entities that provide wireless telecommunications
services that could potentially compete with Nextel. Under the relevant
agreements, Mr. McCaw, Digital Radio and their controlled affiliates may not,
for a period of time, participate in other two-way terrestrial-based mobile
wireless communications systems in the region that includes any part of North
America or South America unless these opportunities have first been presented to
and rejected by Nextel.
11. NEXTEL'S COMMITMENTS TO ISSUE ADDITIONAL COMMON STOCK MAY IMPAIR ITS
ABILITY TO RAISE CAPITAL.
Nextel currently has outstanding commitments in various forms, including
warrants, options and convertible securities, to issue a substantial number of
new shares of its common stock. The shares subject to these issuance
commitments, to some degree, will be issued in registered transactions and thus
will be freely tradeable. In many other instances, these shares will be subject
to grants of registration rights that, if and when exercised, would result in
those shares becoming freely tradeable. Nextel has also granted registration
rights with respect to a significant number of its outstanding shares, including
shares of common stock issuable upon conversion of securities issued in some
transactions. The exercise of registration rights by persons holding those
shares would permit those persons to sell those shares without regard to the
limitations of Rule 144 under the Securities Act of 1933. An increase in the
number of shares of Nextel's common stock that will become available for sale in
the public market may adversely affect the market price of the common stock and,
as a result, could impair Nextel's ability to raise additional capital through
the sale of its equity securities.
12. CONCERNS ABOUT HEALTH RISK MAY AFFECT NEXTEL'S PROSPECTS.
Mobile communications devices allegedly pose health risks due to radio
frequency emissions from these devices. Studies performed by wireless telephone
equipment manufacturers have investigated these allegations, and a major
industry trade association and governmental agencies have stated publicly that
the use of these phones poses no undue health risk. The actual or perceived risk
of mobile communications devices could adversely affect Nextel through a reduced
subscriber growth rate, a reduction in subscribers, reduced network usage per
subscriber or through reduced financing available to the mobile communications
industry.
13. NEXTEL DEPENDS ON ITS MANAGEMENT TEAM TO EFFECT ITS RAPID GROWTH
STRATEGY.
Nextel's senior management team develops and implements its business plans
and strategies, which contemplate an accelerated nationwide build-out, expansion
and enhancement of its Digital Mobile Network and related aggressive advertising
and marketing campaigns. Nextel's rapid growth depends on the focused activities
of its senior management team. The unexpected loss of the services of any of
these individuals could adversely affect Nextel's ability to maintain its growth
momentum.
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14. NEXTEL'S OPERATIONS MAY BE DISRUPTED DUE TO YEAR 2000 READINESS ISSUES.
Nextel may be subject to risks associated with Year 2000 readiness. Nextel
has substantially completed the assessment phase with respect to the Year 2000
readiness status of its own internal systems and processes and recently
commenced the remediation and testing phase for some aspects of its business.
Nextel has not yet developed contingency plans for resolving issues that may be
identified and for which remediation is not possible on a timely or
cost-effective basis. Nextel does not currently anticipate that the cost of the
assessment, remediation and testing of its domestic and international financial
and operating systems will exceed $45 million or will require that it defer or
abandon any material projects, goals or objectives relating to its operations.
Nextel is subject to risks associated with the Year 2000 readiness problems
of third parties, especially providers of products and services that are
critical to its ability to conduct its business operations, including other
telephone service providers with which its service connects. Nextel also is
aware that, with respect to its operations outside the United States,
governmental authorities and third parties with whom it may have material
business relationships may not be at the same level of awareness, assessment or
remediation of their potential Year 2000 readiness issues as are their United
States counterparts. If any of these third parties, or Nextel, is unable to
resolve material Year 2000 readiness issues on a timely or cost-effective basis,
there would be an adverse effect on Nextel.
15. NEXTEL IS SUBJECT TO RISKS RELATING TO ITS JOINT INVESTMENTS.
Nextel recently has entered into a contractual joint venture and other
relationships in connection with the formation and financing of Nextel Partners,
and may enter into other joint ventures or similar arrangements in the future.
Outside the United States, several of Nextel's international operations are
conducted through entities having one or more third-party owners, and some of
these entities are not controlled by Nextel. There are risks in participating in
arrangements of these types, including the risk that the other participants may
at any time have economic, business or legal interests or goals that are
inconsistent with those of the joint enterprise or Nextel. There also is the
risk that a participant may be unable to meet its economic or other obligations
to the joint enterprise and that Nextel may be required to fulfill some or all
of those obligations. Nextel also may be or become obligated to acquire all or a
portion of the ownership interest of some or all of the other participants in
these joint enterprises. In addition, to the extent that Nextel participates in
international arrangements of these types, the operations of the relevant entity
will be subject to various additional risks not present in domestic joint
enterprises.
16. NEXTEL IS SUBJECT TO RISKS RELATING TO ITS FOREIGN OPERATIONS.
Nextel owns interests in and operates international wireless companies
through Nextel International. The risks that relate to these foreign operations
include:
- political, economic and social conditions in the foreign countries where
Nextel conducts operations;
- currency risks and exchange controls;
- potential inflation in the applicable foreign economies;
- the impact of import duties on the cost or prices of infrastructure
equipment and subscriber handsets;
- foreign taxation of earnings and payments received by Nextel
International from its operating subsidiaries;
- regulatory changes affecting the telecommunications industry and wireless
communications; and
- operations being disrupted due to Year 2000 readiness issues affecting
Nextel International.
Nextel cannot assure you that the risks associated with its foreign
operations will not adversely affect its or Nextel International's operating
results or prospects, particularly as these operations expand in scope, scale
and significance.
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B. RISK FACTORS RELATING TO THE NOTES
1. NEXTEL MAY BE UNABLE TO PAY INTEREST OR REPAY THE NOTES.
A. NEXTEL IS A HOLDING COMPANY AND ITS SUBSIDIARIES HAVE NO
OBLIGATIONS TO THE NOTEHOLDERS.
Nextel conducts substantially all of its business through its subsidiaries.
Nextel's cash flow and, consequently, its ability to pay interest in cash and to
service debt, including the notes, are dependent upon the cash flow of its
subsidiaries and the payment of funds by those subsidiaries in the form of
loans, dividends or otherwise. Nextel's subsidiaries are separate and distinct
legal entities and will have no obligation, contingent or otherwise, to pay any
amounts due on the notes or to make cash available for that purpose.
B. NEXTEL'S SUBSIDIARIES HAVE RESTRICTIONS ON WHAT THEY CAN PAY
TO NEXTEL.
Nextel and its subsidiaries have entered financing agreements that impose
significant limits on, and are expected to continue to significantly limit, the
amount of cash available to pay dividends or make loans and cash distributions
to Nextel from its subsidiaries that operate the Digital Mobile Network in
Nextel's market areas in the United States. Similarly, financing arrangements
and indentures entered and to be entered into by Nextel International and the
entities in which Nextel International holds investments contain and are
expected to impose restrictions on dividends, loans, advances and other payments
to Nextel by Nextel International and its subsidiaries. As long as these
limitations are in place, money generated by these subsidiaries may not be
available to Nextel for the payment of interest on the notes or to repay the
notes. If Nextel's financing arrangements limit its ability to pay interest on
the notes when required, Nextel will need to refinance amounts outstanding under
those arrangements to make interest payments. Nextel cannot assure you that it
will be able to refinance this debt. The failure of Nextel to pay interest on
the notes when required could result in defaults under some of Nextel's debt
agreements. Nextel may enter into financing arrangements in the future that may
impose additional restrictions on dividends, loans, advances and other payments
by its subsidiaries. Some of Nextel's existing financing arrangements contain
restrictive covenants applicable to Nextel and some of its subsidiaries,
including a limitation on the debt that Nextel may incur that may limit its
ability to borrow funds to pay any amounts due pursuant to the notes. Finally,
some of these agreements also contain limitations on some "restricted payments,"
which could represent amounts Nextel would need to receive to meet its cash
interest and debt service obligations, including those relating to the notes.
2. THE LIABILITIES OF NEXTEL'S SUBSIDIARIES ARE EFFECTIVELY SENIOR TO THE
NOTES.
As of December 31, 1998, Nextel's subsidiaries had outstanding indebtedness
and other trade payables and other accrued liabilities of about $4.5 billion.
Assets of some of Nextel's operating subsidiaries secure some of its senior
borrowings. Borrowings by Nextel International or its subsidiaries or affiliates
under any bank or vendor financing agreements that may be entered into from time
to time likewise may be secured by liens on assets of Nextel International or of
those subsidiaries and affiliates and may be guaranteed by those entities as
well.
Nextel and its subsidiaries may incur additional debt, subject to
limitations, and that additional debt may rank senior to the notes. Nextel's
subsidiaries will have no obligation to pay amounts due under the notes. These
subsidiaries may use the earnings they generate, as well as their existing
assets, to fulfill their own direct debt service requirements, particularly
because the agreements relating to their debt may restrict their ability to pay
dividends or to make loans, advances or other distributions to Nextel or because
the debt of these subsidiaries may be secured by their assets.
3. NEXTEL HAS A HIGH LEVEL OF INDEBTEDNESS THAT COULD ADVERSELY AFFECT ITS
ABILITY TO REPAY THE NOTES.
At December 31, 1998, Nextel had about $7.7 billion of long term debt,
including the current portion. Furthermore, subject to restrictions in the
indenture for the notes and in its other financing agreements, Nextel, along
with its subsidiaries, may incur additional indebtedness from time to time to
finance further deployment of its Digital Mobile Network, provide for working
capital or capital expenditures or for other
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purposes. Nextel anticipates that it and its subsidiaries will incur substantial
additional indebtedness in the future in connection with the further build-out,
expansion and enhancement of its Digital Mobile Network and funding cash flow
deficits, including principally additional borrowings pursuant to the terms of
the bank financing agreements.
Nextel's high level of indebtedness could have important consequences to
holders of the notes, including, but not limited to, the following:
- limiting Nextel's ability to obtain additional financing for
acquisitions, working capital, capital expenditures or other purposes;
- limiting Nextel's ability to use operating cash flow in other areas of
its business because it must dedicate a substantial portion of these
funds to make cash interest payments and fund required principal payments
on its debt;
- limiting Nextel's ability to borrow additional funds or to dispose of
assets;
- limiting Nextel's ability to compete with others in its industry who are
not as highly leveraged; and
- limiting Nextel's ability to react to changing market conditions, changes
in its industry and economic downturns.
4. NEXTEL WILL NEED TO REFINANCE ITS EXISTING INDEBTEDNESS.
Nextel currently has substantial debt obligations that will mature prior to
the maturity of the notes. In addition, Nextel has preferred stock that it may
be required to redeem before the maturity of the notes. Nextel has begun payment
of cash interest on some of its public notes and also must begin to pay cash
interest on some other outstanding debt and cash dividends on some outstanding
shares of preferred stock prior to the maturity of the notes. Nextel does not
expect to generate sufficient funds from operations to repay those obligations
as they are currently scheduled to become due. Accordingly, it will be necessary
to refinance those obligations at or before their respective maturities or
mandatory redemption dates. Nextel's ability to refinance those obligations will
depend on, among other factors, its financial condition at the time of the
refinancing, the restrictions contained in its remaining financing agreements
and market conditions. Nextel cannot assure you that it will be able to
refinance those obligations. If Nextel is unable to refinance those obligations,
or unable to obtain satisfactory terms, there could be an adverse effect on
Nextel. This risk compounds the risks associated with Nextel's need for
additional financing in order to maintain its growth.
5. THE INDENTURE CONTAINS RESTRICTIVE DEBT COVENANTS THAT COULD IMPEDE ITS
OBTAINING NECESSARY FINANCING.
The indenture governing the notes limits what Nextel, and most of its
subsidiaries, may do. The provisions of the indenture limit Nextel's ability to:
- incur more debt;
- pay dividends or make distributions of stock other than Nextel's
preferred stock;
- issue stock of subsidiaries;
- make investments or payments;
- enter into specified transactions with affiliates;
- merge or consolidate; and
- transfer and sell substantial assets.
Although there are a number of important exceptions to these covenants,
which are more fully described under "VI. The Exchange Notes," the limitations
could adversely affect Nextel's flexibility.
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Nextel's existing financing agreements contain many similar limitations.
Under specific circumstances, all amounts borrowed under its financing
agreements, plus interest, may be declared to be due and payable, which would be
an event of default under the indenture governing the notes. Nextel cannot
assure you that it would have sufficient assets to pay indebtedness then
outstanding under its other financing agreements and the indenture.
6. NEXTEL MAY BE UNABLE TO REPURCHASE YOUR NOTES UPON A CHANGE OF CONTROL.
If Nextel experiences a "Change of Control" as defined in the indenture, it
must offer to purchase your notes at 101% of their face amount, plus accrued
interest. A Change of Control may also trigger similar repurchase obligations
under some of Nextel's other financing agreements. Nextel might not be able to
pay you the required price for notes you present to it at the time of a Change
of Control, because Nextel might not have enough funds at that time or the terms
of its other financing agreements may prevent it from making such payments.
7. THERE MAY NOT BE A PUBLIC MARKET FOR THE EXCHANGE NOTES.
There is no existing trading market for the outstanding notes. If such a
market were to develop, the outstanding notes and, if issued, the exchange notes
could trade at prices that may be lower than the initial offering price
depending on many factors, including prevailing interest and dividend rates,
Nextel's operating results and the market for similar securities.
8. IF YOU DO NOT EXCHANGE YOUR OUTSTANDING NOTES YOU MAY HAVE DIFFICULTY IN
TRANSFERRING THEM AT A LATER TIME.
Nextel will issue exchange notes in exchange for the outstanding notes
after the exchange agent receives your outstanding notes, the letter of
transmittal and all related documents. You should allow adequate time for
delivery if you choose to tender your outstanding notes for exchange.
Outstanding notes that are not exchanged will remain subject to restrictions on
transfer and will not have any rights to registration.
If you do participate in the exchange offer for the purpose of
participating in the distribution of the exchange notes, you must comply with
the registration and prospectus delivery requirements of the Securities Act of
1933 for any resale transaction. Each broker-dealer who holds outstanding notes
for its own account due to market-making or other trading activities and who
receives exchange notes for its own account must acknowledge that it will
deliver a prospectus in connection with any resale of the exchange notes. If any
outstanding notes are not tendered in the exchange or are tendered but not
accepted, the trading market for such outstanding notes could be negatively
affected due to the limited number of outstanding notes expected to remain
outstanding following the completion of the exchange offer.
C. NEXTEL'S FORWARD LOOKING STATEMENTS ARE SUBJECT TO A VARIETY OF FACTORS
THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM CURRENT BELIEFS.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act
of 1995: A number of the statements made in this prospectus 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 future expectations generally, and also may materially differ from
Nextel's actual future experience involving any one or more of these matters and
subject areas. Nextel has attempted to identify, in context, some of the factors
that it currently believes may cause actual future experience and results to
differ from Nextel's current expectations regarding the relevant matter or
subject area. The operation and results of Nextel's wireless communications
business also may be subject to the effect of other risks and uncertainties in
addition to the relevant qualifying factors identified elsewhere in the
foregoing "Risk Factors" section, including, but not limited to:
- general economic conditions in the geographic areas and occupational
market segments that Nextel is targeting for its Digital Mobile Network
service;
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- the availability of adequate quantities of system infrastructure and
subscriber equipment and components to meet Nextel's service deployment
and marketing plans and customer demand;
- the success of efforts to improve and satisfactorily address any issues
relating to Nextel's Digital Mobile Network performance;
- the continued successful performance of the iDEN technology being
deployed in Nextel's various market areas;
- the ability to achieve market penetration and average subscriber revenue
levels sufficient to provide financial viability to Nextel's Digital
Mobile Network business;
- Nextel's ability to timely and successfully accomplish required scale-up
of its 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 receivables being generated by the
Digital Mobile Network customer base;
- access to sufficient debt or equity capital to meet Nextel's operating
and financing needs;
- the quality and price of similar or comparable wireless communications
services offered or to be offered by Nextel's competitors, including
providers of cellular and personal communication services;
- the ability to successfully develop or obtain from third parties and
implement Year 2000 readiness solutions in systems that are critical to
its 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 Nextel's
reports filed with the Commission, including the Annual Report on Form
10-K for the fiscal year ended December 31, 1998.
IV. USE OF PROCEEDS
Nextel will not receive any cash proceeds from the issuance of the exchange
notes. Because Nextel is exchanging the exchange notes for the outstanding
notes, which have substantially identical terms, the issuance of the exchange
notes will not result in any increase in the indebtedness of Nextel.
V. THE EXCHANGE OFFER
A. PURPOSE AND EFFECT OF THE EXCHANGE OFFER
On November 4, 1998, Nextel sold $300.0 million in principal amount at
maturity of the outstanding notes in a private placement through Morgan Stanley
& Co. Incorporated to a limited number of "Qualified Institutional Buyers," as
defined under the Securities Act of 1933, and to limited persons outside the
United States. In connection with the sale of the outstanding notes, Nextel and
Morgan Stanley & Co. Incorporated entered into a registration rights agreement,
dated as of November 4, 1998. Under that agreement, Nextel must, among other
things, use its best efforts to file with the Commission a registration
statement under the Securities Act of 1933 covering the exchange offer and to
cause that registration statement to become effective under the Securities Act
of 1933. Upon the effectiveness of that registration statement, Nextel must also
offer each holder of the outstanding notes the opportunity to exchange its
securities for an equal principal amount at maturity of exchange notes. You are
a holder with respect to the exchange offer if you are a person in whose name
any outstanding notes are registered on Nextel's books or any other person who
has obtained a properly completed assignment of outstanding notes from the
registered holder.
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Nextel is making the exchange offer to comply with its obligations under
the registration rights agreement. A copy of the registration rights agreement
has been filed as an exhibit to the registration statement of which this
prospectus is a part.
In order to participate in the exchange offer, you must represent to
Nextel, among other things, that:
- the exchange notes being acquired pursuant to the exchange offer are
being obtained in the ordinary course of business of the person receiving
the exchange notes,
- neither you nor any other person is engaging in or intends to engage in a
distribution of those exchange notes,
- neither you nor any other person has an arrangement or understanding with
any third person to participate in the distribution of the exchange
notes, and
- neither you nor any other person is an affiliate of Nextel. An affiliate
is any person who "controls or is controlled by or is under common
control with" Nextel.
B. RESALE OF THE EXCHANGE NOTES
Based on a previous interpretation by the Staff of the Commission set forth
in no-action letters issued to third parties, including Exxon Capital Holdings
Corporation (available May 13, 1988), Morgan Stanley & Co. Incorporated
(available June 5, 1991), Mary Kay Cosmetics, Inc. (available June 5, 1991),
Warnaco, Inc. (available October 11, 1991), and K-III Communications Corp.
(available May 14, 1993), Nextel believes that the exchange notes issued in the
exchange offer may be offered for resale, resold, and otherwise transferred by
you, except if you are an affiliate of Nextel, without compliance with the
registration and prospectus delivery provisions of the Securities Act of 1933,
provided that the representations set forth in "-- Purpose and Effect of the
Exchange Offer" apply to you.
If you tender in the exchange offer with the intention of participating in
a distribution of the exchange notes, you cannot rely on the interpretation by
the Staff of the Commission as set forth in the Morgan Stanley & Co.
Incorporated no-action letter and other similar letters and you must comply with
the registration and prospectus delivery requirements of the Securities Act of
1933 in connection with a secondary resale transaction. In the event that
Nextel's belief regarding resale is inaccurate, those who transfer exchange
notes in violation of the prospectus delivery provisions of the Securities Act
of 1933 and without an exemption from registration under the federal securities
laws may incur liability under these laws. Nextel does not assume or indemnify
you against this liability.
The exchange offer is not being made to, nor will Nextel accept surrenders
for exchange from, holders of outstanding notes in any jurisdiction in which the
exchange offer or the acceptance thereof would not be in compliance with the
securities or blue sky laws of the particular jurisdiction. Each broker-dealer
that receives exchange notes for its own account in exchange for outstanding
notes, where the outstanding notes were acquired by that broker-dealer as a
result of market-making activities or other trading activities, must acknowledge
that it will deliver a prospectus in connection with any resale of the exchange
notes. In order to facilitate the disposition of exchange notes by
broker-dealers participating in the exchange offer, Nextel has agreed, subject
to specific conditions, to make this prospectus, as it may be amended or
supplemented from time to time, available for delivery by those broker-dealers
to satisfy their prospectus delivery obligations under the Securities Act of
1933.
Nextel is obligated to deal with only one entity representing the
broker-dealers participating in the exchange offer, which is Morgan Stanley &
Co. Incorporated unless it elects not to act as the representative of the
broker-dealers. Any holder that is a broker-dealer participating in the exchange
offer must notify Morgan Stanley & Co. Incorporated at the telephone number set
forth in the enclosed Letter of Transmittal and must comply with the procedures
for brokers-dealers participating in the exchange offer. Among other things,
Morgan Stanley & Co. Incorporated is required to confirm with Nextel on a weekly
basis that the prospectus is available. In addition, broker-dealers
participating in the exchange offer will be required to confirm this
availability with Morgan Stanley & Co. Incorporated on a weekly basis.
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Under the registration rights agreement, Nextel is not required to amend or
supplement the prospectus for a period exceeding 90 days after the expiration
date of the exchange offer, except in limited circumstances where Nextel
suspends use of the registration statement. Nextel has not entered into any
arrangement or understanding with any person to distribute the exchange notes to
be received in the exchange offer. See "VIII. Plan of Distribution."
C. TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this prospectus
and in the Letter of Transmittal, Nextel will accept any and all outstanding
notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time,
on the day the exchange offer expires.
As of the date of this prospectus, $300.0 million in principal amount at
maturity of the notes are outstanding. This prospectus, together with the Letter
of Transmittal, is being sent to all registered holders of the outstanding notes
on this date. There will be no fixed record date for determining registered
holders of the outstanding notes entitled to participate in the exchange offer;
however, holders of the outstanding notes must tender their certificates
therefor or cause their outstanding notes to be tendered by book-entry transfer
prior to the expiration date of the exchange offer to participate.
The form and terms of the exchange notes will be the same as the form and
terms of the outstanding notes except that the exchange notes will be registered
under the Securities Act of 1933 and therefore will not bear legends restricting
their transfer. Following consummation of the exchange offer, all rights under
the registration rights agreement accorded to holders of outstanding notes,
including the right to receive additional incremental interest on the
outstanding notes, to the extent and in the circumstances specified in the
registration rights agreement, will terminate.
Nextel intends to conduct the exchange offer in accordance with the
provisions of the registration rights agreement and applicable federal
securities laws. Outstanding notes that are not tendered for exchange under the
exchange offer will remain outstanding and will be entitled to the rights under
the related indenture. Any outstanding notes not tendered for exchange will not
retain any rights under the registration rights agreement and will remain
subject to transfer restrictions. See "-- Consequences of Failure to Exchange."
Nextel will be deemed to have accepted validly tendered outstanding notes
when, as and if Nextel will have given oral or written notice of its acceptance
to the exchange agent. The exchange agent will act as agent for the tendering
holders for the purposes of receiving the exchange notes from Nextel. If any
tendered outstanding notes are not accepted for exchange because of an invalid
tender, the occurrence of other events set forth in this prospectus, or
otherwise, certificates for any unaccepted outstanding notes will be returned,
or, in the case of outstanding notes tendered by book-entry transfer, those
unaccepted outstanding notes will be credited to an account maintained with The
Depository Trust Company, without expense to the tendering holder of those
outstanding notes as promptly as practicable after the expiration date of the
exchange offer. See "-- Procedures for Tendering."
Those who tender outstanding notes in the exchange offer will not be
required to pay brokerage commissions or fees or, subject to the instructions in
the Letter of Transmittal, transfer taxes with respect to the exchange pursuant
to the exchange offer. Nextel will pay all charges and expenses, other than
applicable taxes described below, in connection with the exchange offer. See
"-- Fees and Expenses."
D. EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The expiration date is 5:00 p.m., New York City time on June 7, 1999,
unless Nextel, in its sole discretion, extends the exchange offer, in which
case, the expiration date will be the latest date and time to which the exchange
offer is extended. Nextel may, in its sole discretion, extend the expiration
date of, or terminate, the exchange offer.
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To extend the exchange offer, Nextel must notify the exchange agent by oral
or written notice prior to 9:00 a.m., New York City time, on the next business
day after the previously scheduled expiration date and make a public
announcement of the extension.
Nextel reserves the right:
- to delay accepting any outstanding notes, to extend the exchange offer or
to terminate the exchange offer if any of the conditions set forth below
under "-- Conditions" are not satisfied by giving oral or written notice
of the delay, extension, or termination to the exchange agent; or
- to amend the terms of the exchange offer in any manner consistent with
the registration rights agreement.
Any delay in acceptances, extension, termination, or amendment will be
followed as promptly as practicable by oral or written notice of the delay to
the registered holders of the outstanding notes. If Nextel amends the exchange
offer in a manner that constitutes a material change, Nextel will promptly
disclose the amendment by means of a prospectus supplement that will be
distributed to the registered holders of the outstanding notes, and Nextel will
extend the exchange offer for a period of five to ten business days, depending
upon the significance of the amendment and the manner of disclosure to the
registered holders of the outstanding notes, if the exchange offer would
otherwise expire during the five to ten business day period.
Without limiting the manner in which Nextel may choose to make a public
announcement of any delay, extension, amendment, or termination of the exchange
offer, Nextel will have no obligation to publish, advertise, or otherwise
communicate that public announcement, other than by making a timely release to
an appropriate news agency.
Upon satisfaction or waiver of all the conditions to the exchange offer,
Nextel will accept, promptly after the expiration date of the exchange offer,
all outstanding notes properly tendered and will issue the exchange notes
promptly after acceptance of the outstanding notes. See "-- Conditions" below.
For purposes of the exchange offer, Nextel will be deemed to have accepted
properly tendered outstanding notes for exchange when, as and if Nextel will
have given oral or written notice of its acceptance to the exchange agent.
In all cases, issuance of the exchange notes for outstanding notes that are
accepted for exchange pursuant to the exchange offer will be made only after
timely receipt by the exchange agent of certificates for those outstanding notes
or a timely confirmation of book-entry transfer of the outstanding notes into
the exchange agent's account at The Depository Trust Company, a properly
completed and duly executed Letter of Transmittal, and all other required
documents; provided, however, that Nextel reserves the absolute right to waive
any defects or irregularities in the tender of outstanding notes or in the
satisfaction of conditions of the exchange offer by holders of the outstanding
notes. If any tendered outstanding notes are not accepted for any reason set
forth in the terms and conditions of the exchange offer, if the holder withdraws
such previously tendered outstanding notes, or if outstanding notes are
submitted for a greater principal amount of outstanding notes than the holder
desires to exchange, then the unaccepted, withdrawn or portion of non-exchanged
outstanding notes, as appropriate, will be returned as promptly as practicable
after the expiration or termination of the exchange offer, or, in the case of
outstanding notes tendered by book-entry transfer, those unaccepted, withdrawn
or portion of non-exchanged outstanding notes, as appropriate, will be credited
to an account maintained with The Depository Trust Company, without expense to
the tendering holder thereof.
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E. CONDITIONS
Without regard to other terms of the exchange offer, Nextel will not be
required to exchange any exchange notes for any outstanding notes and may
terminate the exchange offer before the acceptance of any outstanding notes for
exchange, if:
- any action or proceeding is instituted or threatened in any court or by
or before any governmental agency with respect to the exchange offer
which, in Nextel's reasonable judgment, might materially impair the
ability of Nextel to proceed with the exchange offer;
- the Staff of the Commission proposes, adopts or enacts any law, statute,
rule or regulation or issues any interpretation of any existing law,
statute, rule or regulation, which, in Nextel's reasonable judgment,
might materially impair the ability of Nextel to proceed with the
exchange offer; or
- any governmental approval or approval by holders of the outstanding notes
has not been obtained, which approval Nextel will, in its reasonable
judgment, deem necessary for the consummation of the exchange offer.
If Nextel determines that any of these conditions are not satisfied, Nextel
may
- refuse to accept any outstanding notes and return all tendered
outstanding notes to the tendering holders, or, in the case of
outstanding notes tendered by book-entry transfer, credit those
outstanding notes to an account maintained with The Depository Trust
Company,
- extend the exchange offer and retain all outstanding notes tendered prior
to the expiration of the exchange offer, subject, however, to the rights
of holders who tendered the outstanding notes to withdraw their tendered
outstanding notes, or
- waive unsatisfied conditions with respect to the exchange offer and
accept all properly tendered outstanding notes that have not been
withdrawn. If the waiver constitutes a material change to the exchange
offer, Nextel will promptly disclose the waiver by means of a prospectus
supplement that will be distributed to the registered holders of the
outstanding notes, and Nextel will extend the exchange offer for a period
of five to ten business days, depending upon the significance of the
waiver and the manner of disclosure to the registered holders of the
outstanding notes, if the exchange offer would otherwise expire during
this period.
F. PROCEDURES FOR TENDERING
To tender in the exchange offer, you must complete, sign and date an
original or facsimile Letter of Transmittal, have the signatures thereon
guaranteed if required by the Letter of Transmittal, and mail or otherwise
deliver the Letter of Transmittal to the exchange agent prior to the expiration
date of the exchange offer. In addition, either:
- certificates for the outstanding notes must be received by the exchange
agent, along with the Letter of Transmittal, or
- a timely confirmation of transfer by book-entry of those outstanding
notes, if the book-entry procedure is available, into the exchange
agent's account at The Depository Trust Company, as set forth in the
procedure for book-entry transfer described below, which the exchange
agent must receive prior to the expiration date of the exchange offer, or
- you must comply with the guaranteed delivery procedures described below.
To be tendered effectively, the exchange agent must receive the Letter of
Transmittal and other required documents at the address set forth below under
"-- Exchange Agent" prior to the expiration of the exchange offer.
If you tender your outstanding notes and do not withdraw them prior to the
expiration date of the exchange offer, you will be deemed to have an agreement
with Nextel in accordance with the terms and subject to the conditions set forth
in this prospectus and in the Letter of Transmittal.
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THE METHOD OF DELIVERY OF OUTSTANDING NOTES AND THE LETTER OF TRANSMITTAL
AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT YOUR RISK. INSTEAD
OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT YOU USE AN OVERNIGHT OR HAND
DELIVERY SERVICE, PROPERLY INSURED. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE OF
THE EXCHANGE OFFER. NO LETTER OF TRANSMITTAL OR OUTSTANDING NOTES SHOULD BE SENT
TO NEXTEL. YOU MAY REQUEST YOUR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES, OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR YOU.
Any beneficial owner whose outstanding notes are registered in the name of
a broker, dealer, commercial bank, trust company, or other nominee and who
wishes to tender its outstanding notes should contact the registered holder
promptly and instruct that registered holder to tender the outstanding notes on
the beneficial owner's behalf. If the beneficial owner wishes to tender its
outstanding notes on the owner's own behalf, that owner must, prior to
completing and executing the Letter of Transmittal and delivering its
outstanding notes, either make appropriate arrangements to register ownership of
the outstanding notes in that owner's name or obtain a properly completed
assignment from the registered holder. The transfer of registered ownership of
outstanding notes may take considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by an eligible institution unless the
outstanding notes tendered pursuant thereto are tendered:
- by a registered holder who has not completed the box entitled "Special
Payment Instructions" or "Special Delivery Instructions" on the Letter of
Transmittal or
- for the account of an eligible institution.
In the event that signatures on a Letter of Transmittal or a notice of
withdrawal, as the case may be, are required to be guaranteed, each of the
following is deemed an eligible institution:
- a member firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc.,
- commercial bank,
- trust company having an office or correspondent in the United States or
- eligible guarantor institution as provided by Rule 17Ad-15 of the
Securities Exchange Act of 1934.
If the Letter of Transmittal is signed by a person other than the
registered holder of any outstanding notes, the outstanding notes must be
endorsed or accompanied by a properly completed bond power, signed by the
registered holder as his, her or its name appears on the outstanding notes.
If trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity sign the Letter of Transmittal or any outstanding notes or bond power,
those persons should so indicate when signing, and unless Nextel waives evidence
satisfactory to Nextel of their authority to so act must be submitted with the
Letter of Transmittal.
Nextel will determine all questions as to the validity, form, eligibility,
including time of receipt, acceptance of tendered outstanding notes, and
withdrawal of tendered outstanding notes, in its sole discretion. All of these
determinations by Nextel will be final and binding. Nextel reserves the absolute
right to reject any and all outstanding notes not properly tendered or any
outstanding notes Nextel's acceptance of which would, in the opinion of counsel
for Nextel, be unlawful. Nextel also reserves the right to waive any defects,
irregularities or conditions of tender as to particular outstanding notes.
Nextel's interpretation of the terms and conditions of the exchange offer,
including the instructions in the Letter of Transmittal will be final and
binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of outstanding notes must be cured within the time
Nextel determines. Although Nextel intends to notify holders of outstanding
notes of defects or irregularities with respect to tenders of outstanding notes,
neither Nextel, nor the exchange agent, or any other person will incur any
liability for failure to give this notification. Tenders of outstanding notes
will not be deemed to have been made until defects or irregularities have been
cured or waived. Any outstanding notes received by the exchange agent that are
not properly tendered and as to which the defects or irregularities have not
been cured or waived
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will be returned by the exchange agent to the tendering holders of outstanding
notes, unless otherwise provided in the Letter of Transmittal, as soon as
practicable following the expiration date of the exchange offer.
In addition, Nextel reserves the right, in its sole discretion, to purchase
or make offers for any outstanding notes that remain outstanding subsequent to
the expiration date of the exchange offer or, as set forth above under
"-- Conditions," to terminate the exchange offer and, to the extent permitted by
applicable law and the terms of its agreements relating to its outstanding
indebtedness, purchase outstanding notes in the open market, in privately
negotiated transactions or otherwise. The terms of any purchases or offers could
differ from the terms of the exchange offer.
If the holder of outstanding notes is a broker-dealer participating in the
exchange offer that will receive exchange notes for its own account in exchange
for outstanding notes that were acquired as a result of market-making activities
or other trading activities, that broker-dealer will be required to acknowledge
in the Letter of Transmittal that it will deliver a prospectus in connection
with any resale of the exchange notes and otherwise agree to comply with the
procedures described above under "-- Resale of the Exchange Notes"; however, by
so acknowledging and delivering a prospectus, that broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act of 1933.
In all cases, issuance of exchange notes pursuant to the exchange offer
will be made only after timely receipt by the exchange agent of certificates for
the outstanding notes or a timely confirmation of book-entry transfer of
outstanding notes into the exchange agent's account at The Depository Trust
Company, a properly completed and duly executed Letter of Transmittal, and all
other required documents. If any tendered outstanding notes are not accepted for
any reason set forth in the terms and conditions of the exchange offer or if
outstanding notes are submitted for a greater principal amount of outstanding
notes than the holder of outstanding notes desires to exchange, the unaccepted
or portion of non-exchanged outstanding notes will be returned as promptly as
practicable after the expiration or termination of the exchange offer, or, in
the case of outstanding notes tendered by book-entry transfer into the exchange
agent's account at The Depository Trust Company pursuant to the book-entry
transfer procedures described below, the unaccepted or portion of non-exchanged
outstanding notes will be credited to an account maintained with The Depository
Trust Company, without expense to the tendering holder of outstanding notes.
G. BOOK-ENTRY TRANSFER
The exchange agent will make a request to establish an account with respect
to the outstanding notes at The Depository Trust Company for the purposes of the
exchange offer within two business days after the date of this prospectus, and
any financial institution that is a participant in The Depository Trust
Company's systems may make book-entry delivery of outstanding notes by causing
The Depository Trust Company to transfer the outstanding notes into the exchange
agent's account at The Depository Trust Company in accordance with The
Depository Trust Company's procedures for transfer. However, although delivery
of outstanding notes may be effected through book-entry transfer at The
Depository Trust Company, the Letter of Transmittal or facsimile thereof, with
any required signature guarantees and any other required documents, must, in any
case, be transmitted to and received by the exchange agent at the address set
forth below under "-- Exchange Agent" on or prior to the expiration date of the
exchange offer, unless the holder complies with the guaranteed delivery
procedures described below.
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H. GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their outstanding notes and (1) whose
outstanding notes are not immediately available or (2) who cannot deliver their
outstanding notes, the Letter of Transmittal, or any other required documents to
the exchange agent prior to the expiration date, may effect a tender if:
- The tender is made through an eligible institution;
- Prior to the expiration date of the exchange offer, the exchange agent
receives from such eligible institution a properly completed and duly
executed Notice of Guaranteed Delivery, by facsimile transmission, mail
or hand delivery, setting forth the name and address of the holder, the
certificate number(s) of the outstanding notes and the principal amount
of outstanding notes tendered and stating that the tender is being made
thereby and guaranteeing that, within three New York Stock Exchange
trading days after the expiration date of the exchange offer, the Letter
of Transmittal, together with the certificate(s) representing the
outstanding notes in proper form for transfer or a confirmation of
book-entry transfer, as the case may be, and any other documents required
by the Letter of Transmittal will be deposited by the eligible
institution with the exchange agent; and
- The exchange agent receives the properly completed and executed Letter of
Transmittal, as well as the certificate(s) representing all tendered
outstanding notes in proper form for transfer and other documents
required by the Letter of Transmittal within three New York Stock
Exchange trading days after the expiration date of the exchange offer.
Upon request to the exchange agent, a Notice of Guaranteed Delivery will be
sent to holders who wish to tender their outstanding notes according to the
guaranteed delivery procedures set forth above.
I. WITHDRAWAL OF TENDERS
Except as otherwise provided, tenders of outstanding notes may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the expiration date of
the exchange offer.
To withdraw a tender of outstanding notes in the exchange offer, a written
or facsimile transmission notice of withdrawal must be received by the exchange
agent at its address set forth herein prior to 5:00 p.m., New York City time, on
the expiration date of the exchange offer. Any such notice of withdrawal must
- specify the name of the person having deposited the outstanding notes to
be withdrawn,
- identify the outstanding notes to be withdrawn,
- be signed by the holder in the same manner as the original signature on
the Letter of Transmittal by which the outstanding notes were tendered or
be accompanied by documents of transfer sufficient to have the exchange
agent register the transfer of the outstanding notes in the name of the
person withdrawing the tender, and
- specify the name in which any outstanding notes are to be registered, if
different from that of the person who deposited the outstanding notes to
be withdrawn.
Nextel will determine all questions as to the validity, form, and
eligibility of the notices, whose determination will be final and binding on all
parties. Any outstanding notes so withdrawn will be deemed not to have been
validly tendered for purposes of the exchange offer, and no exchange notes will
be issued with respect to those outstanding notes unless the outstanding notes
so withdrawn are validly retendered.
Any outstanding notes that have been tendered but that are not accepted for
payment will be returned to the holder of those outstanding notes, or in the
case of outstanding notes tendered by book-entry transfer, will be credited to
an account maintained with The Depository Trust Company, without cost to the
holder as soon as practicable after withdrawal, rejection of tender or
termination of the exchange offer. Properly withdrawn outstanding notes may be
retendered by following one of the procedures described above under
"-- Procedures for Tendering" at any time prior to the expiration date of the
exchange offer.
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J. TERMINATION OF CERTAIN RIGHTS
All rights given to holders of outstanding notes under the registration
rights agreement will terminate upon the consummation of the exchange offer
except with respect to Nextel's duty:
- to keep the registration statement effective until the closing of the
exchange offer and, for a period not to exceed 90 days after the
expiration date of the exchange offer, and
- to provide copies of the latest version of this prospectus to any
broker-dealer that requests copies of this prospectus for use in
connection with any resale by that broker-dealer of exchange notes
received for its own account pursuant to the exchange offer in exchange
for outstanding notes acquired for its own account as a result of
market-making or other trading activities, subject to the conditions
described above under "-- Resale of the Exchange Notes."
K. EXCHANGE AGENT
Harris Trust and Savings Bank has been appointed exchange agent for the
exchange offer. Questions and requests for assistance, requests for additional
copies of this prospectus or the Letter of Transmittal, and requests for copies
of the Notice of Guaranteed Delivery with respect to the outstanding notes
should be addressed to the exchange agent as follows:
<TABLE>
<S> <C>
By Hand or Overnight Courier: By Registered or Certified Mail:
Harris Trust and Savings Bank Harris Trust and Savings Bank
c/o Harris Trust Company of New York c/o Harris Trust Company of New York
88 Pine Street P.O. Box 1010
19th Floor Wall Street Station
New York, New York 10005 New York, New York 10268-1010
</TABLE>
By Telephone (to confirm receipt of facsimile):(212) 701-7624
By Facsimile (for Eligible Institutions only): (212) 701-7636
L. FEES AND EXPENSES
Nextel will pay the expenses of soliciting tenders in connection with the
exchange offer. The principal solicitation is being made by mail; however,
additional solicitation may be made by telecopier, telephone, or in person by
officers and regular employees of Nextel and its affiliates.
Nextel has not retained any dealer-manager in connection with the exchange
offer and will not make any payments to broker-dealers or others soliciting
acceptances of the exchange offer. Nextel, however, will pay the exchange agent
reasonable and customary fees for its services and will reimburse the exchange
agent for its reasonable out-of-pocket expenses in connection with the exchange
offer.
Nextel estimates that its cash expenses in connection with the exchange
offer will be approximately $155,000. These expenses include registration fees,
fees and expenses of the exchange agent, accounting and legal fees, and printing
costs, among others.
Nextel will pay all transfer taxes, if any, applicable to the exchange of
the outstanding notes for exchange notes. The tendering holder of outstanding
notes, however, will pay applicable taxes if certificates representing
outstanding notes not tendered or accepted for exchange are to be delivered to,
or are to be issued in the name of, any person other than the registered holder
of outstanding notes tendered, or
- if tendered, the certificates representing outstanding notes are
registered in the name of any person other than the person signing the
Letter of Transmittal, or
- if a transfer tax is imposed for any reason other than the exchange of
the outstanding notes in the exchange offer.
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If satisfactory evidence of payment of the transfer taxes or exemption from
payment of transfer taxes is not submitted with the Letter of Transmittal, the
amount of the transfer taxes will be billed directly to the tendering holder and
the exchange notes need not be delivered until the transfer taxes are paid.
M. CONSEQUENCES OF FAILURE TO EXCHANGE
Participation in the exchange offer is voluntary. Holders of the
outstanding notes are urged to consult their financial and tax advisors in
making their own decisions on what action to take.
Outstanding notes that are not exchanged for the exchange notes in the
exchange offer will not retain any rights under the registration rights
agreement and will remain restricted securities for purposes of the federal
securities laws. Accordingly, the outstanding notes may not be offered, sold,
pledged, or otherwise transferred except:
- to Nextel or any subsidiary thereof;
- to a "Qualified Institutional Buyer" within the meaning of Rule 144A
under the Securities Act of 1933 purchasing for its own account or for
the account of a qualified institutional buyer in a transaction meeting
the requirements of Rule 144A;
- in an offshore transaction complying with Rule 904 of Regulation S under
the Securities Act of 1933;
- pursuant to an exemption from registration under the Securities Act of
1933 provided by Rule 144 thereunder, if available;
- to "Institutional Accredited Investors" in a transaction exempt from the
registration requirements of the Securities Act of 1933; or
- pursuant to an effective registration statement under the Securities Act
of 1933, and, in each case, in accordance with all other applicable
securities laws.
N. ACCOUNTING TREATMENT
For accounting purposes, Nextel will recognize no gain or loss as a result
of the exchange offer. The exchange notes will be recorded at the same carrying
value as the outstanding notes, as reflected in Nextel's accounting records on
the date of the exchange. The expenses of the exchange offer will be amortized
over the remaining term of the exchange notes.
VI. THE EXCHANGE NOTES
The outstanding notes were, and the exchange notes will be, issued under
the indenture, dated as of November 4, 1998 between Nextel, as issuer, and
Harris Bank and Trust, as trustee. The terms of the notes include those stated
in the indenture and those made part of the indenture by reference to the Trust
Indenture Act of 1939. The following summary of the indenture does not purport
to be complete and is subject to, and is qualified in its entirety by reference
to, the Trust Indenture Act and to all of the provisions of the indenture,
including the definitions of terms used in the indenture and those terms made a
part of the indenture by reference to the Trust Indenture Act.
A. GLOSSARY OF DEFINED TERMS
The following is a glossary of defined terms used in the indenture.
Reference is made to the terms of the notes and indenture for the full
definitions of all terms, including those below, as well as any other
capitalized terms used in this prospectus for which no definition is provided.
Whenever the notes or the indenture requires that a particular ratio or
amount be calculated with respect to a specified period after giving effect to
certain transactions or events on a pro forma basis, the calculation will be
made as if the transactions or events occurred on the first day of such period,
unless otherwise specified. All accounting terms not otherwise defined in the
notes or the indenture have the
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meanings ascribed to them in accordance with generally accepted accounting
principles. Except as otherwise expressly provided in the notes or the
indenture, the term "generally accepted accounting principles," with respect to
any computation required or permitted by the notes or the indenture means such
accounting principles as are generally accepted at the date of the computation.
"ACQUIRED DEBT" means Debt of a Person existing at the time the Person
becomes a Restricted Subsidiary or assumed by Nextel or a Restricted Subsidiary
in connection with the acquisition of assets from the Person.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Person. "Affiliate" will be deemed to include, but only for
purposes of the "Transactions with Affiliates" covenant and without limiting the
application of the preceding sentence for the purpose of that or any other
section, any Person owning, directly or indirectly,
(1) 10% or more of Nextel's outstanding common stock or
(2) securities having 10% or more of the total voting power of Nextel'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
that 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 will 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 that
specified Person or of any other Person controlled by or under common control
with that specified Person.
"ANNUALIZED OPERATING CASH FLOW" means, for any fiscal quarter, the
Operating Cash Flow for the fiscal quarter multiplied by four.
"AVERAGE LIFE" means, at any date of determination with respect to any
Debt, the quotient obtained by dividing:
(1) the sum of the products of:
(a) the number of years from the date of determination to the dates of
each successive scheduled principal payment of the Debt, and
(b) the amount of the principal payment,
by:
(2) the sum of all the principal payments.
"BENEFICIAL OWNER" means a beneficial owner as defined in Rules 13d-3 and
13d-5 under the Securities Exchange Act of 1934 (or any successor rules),
including the provision of those rules that a person will be deemed to have
beneficial ownership of all securities that 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 Securities Exchange Act of 1934 and the applicable rules and
regulations thereunder and
(2) is not also then reportable on Schedule 13D or any successor schedule
under the Securities Exchange Act of 1934.
"BOARD RESOLUTION" means a copy of a resolution certified by the secretary
or an assistant secretary of Nextel to have been duly adopted by the board of
directors, unless the context specifically requires that the resolution be
adopted by a majority of the Disinterested Directors, in which case by a
majority of those directors, and to be in full force and effect on the date of
the certification and delivered to the Trustee.
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"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 that 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 that Person determined in accordance with generally accepted
accounting principles and the amount of those obligations will be the
capitalized amount thereof in accordance with generally accepted accounting
principles and the stated maturity thereof will be the date of the last payment
of rent or any other amount due under the lease prior to the first date upon
which that 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, that Person.
"CHANGE OF CONTROL" means the occurrence of any of the following events:
(1) any person, as that term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934 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 Nextel; provided
that no Change of Control will be deemed to occur pursuant to this
clause (1):
(a) if the person is a corporation with outstanding debt securities
having a maturity at original issuance of at least one year and if
those 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 the event, which period will be extended up to 90
additional days for as long as the rating of those debt securities
is under publicly announced consideration for possible downgrading
by the applicable rating agency, or
(b) if the person is a corporation:
- that is not, and does not have any outstanding debt securities
that are, rated by 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 the event, which period will be extended
up to an additional 90 days for as long as any applicable rating
agency has publicly announced that the corporation or debt
thereof will be rated, unless after that date, but during that
period debt securities of the 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 (a) above, and
- that, when determined as of the Trading Day immediately before
and the Trading Day immediately after the date of that event, has
Total Common Equity of at least $10 billion, provided that,
solely for the purpose of calculating Total Common Equity as of
the later Trading Day, the average Closing Price of the common
stock of the person will be deemed to equal the Closing Price of
the common stock on the later Trading Day, subject to the last
sentence of the definition of "Total Common Equity"; or
(2) Nextel consolidates with, or merges with or into, another Person or
sells or otherwise disposes of all or substantially all of its assets
to any Person, or any Person consolidates with, or merges with or into,
Nextel, in any event pursuant to a transaction in which the outstanding
Voting Stock of Nextel is converted into or exchanged for cash,
securities or other property, other than any transaction where:
(a) the outstanding Voting Stock of Nextel is converted into or
exchanged for:
- Voting Stock, other than Redeemable Stock, of the surviving or
transferee Person, or
- cash, securities and other property in an amount that could be
paid by Nextel as a Restricted Payment under the indenture, and
(b) immediately after the transaction no person is the Beneficial
Owner, directly or indirectly, of more than 50% of the total
Voting Stock or Total Common Equity of the surviving or
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transferee Person; provided that no Change of Control will be deemed
to occur under this clause (2),
- if the surviving or transferee Person or the person referred to
in clause (2)(b) is a corporation with outstanding debt
securities having a maturity at original issuance of at least one
year and if those 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 the event, which period will be extended
up to 90 additional days for as long as the rating of the debt
securities is under publicly announced consideration for possible
downgrading by the applicable rating agency, or
- if the surviving or transferee Person or other person is a
corporation
- 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 that event, which
period will be extended up to an additional 90 days for as
long as any applicable rating agency has publicly announced
that the corporation or debt thereof will be rated, unless
after that date, but during the period debt securities of the
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
the clause above, and
- that, when determined as of the Trading Day immediately before
and the Trading Day immediately after the date of the event,
has Total Common Equity of at least $10 billion, provided
that, solely for the purpose of calculating Total Common
Equity as of the later Trading Day, the average Closing Price
of the common stock of that person will be deemed to equal the
Closing Price of the common stock on the later Trading Day,
subject to the last sentence of the definition of "Total
Common Equity"; or
(3) during any consecutive two-year period, individuals who at the
beginning of that 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 that board of
directors or whose nomination for election by the stockholders of
Nextel was approved by a vote of 66 2/3% of the directors then still in
office who were either directors at the beginning of the 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 (1)
or (2) above:
- but for the provision thereto will not be deemed to be a Change of
Control until the time, if any, as the conditions described in that
provision cease to have been met, and
- 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 Nextel to, or merger or consolidation of Nextel 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 (1) of the definition of the
term "Permitted Transactions" will 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 Nextel would remain, immediately after the
Restructuring Closing (and after taking into account all issuances of
securities in the 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 Nextel (or the surviving transferee
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Person, as the case may be). Immediately after any transaction or
combination of transactions described in this bulleted point, no person
may be the ultimate Beneficial Owner of more than 50% of the total Voting
Stock or more than 50% of the Total Common Equity of Nextel, or the
surviving transferee Person, as the case may be, unless the person was
the Beneficial Owner of more than 50% of the total Voting Stock and more
than 50% of the Total Common Equity of Nextel immediately before the
transaction or combination of transactions.
"CLOSING DATE" means November 4, 1998, the date on which the outstanding
notes were originally issued under the indenture.
"CLOSING PRICE" on any Trading Day with respect to the per share price of
any shares of Capital Stock means the last reported sale price regular way or,
in case no reported sale takes place on the day, the average of the reported
closing bid and asked prices regular way, in either case on the New York Stock
Exchange or, if no shares of Capital Stock are listed or admitted to trading on
the New York Stock Exchange, on the principal national securities exchange on
which the 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 no shares Capital of Stock are 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 Securities Exchange Act of
1934, and the principal securities exchange on which the shares are listed or
admitted to trading is a Designated Offshore Securities Market, as defined in
Rule 902(a) under the Securities Act of 1933, the average of the reported
closing bid and asked prices regular way on the principal exchange, or, if no
shares are 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 the 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 may be selected by Nextel for
that purpose.
"CODE" means the Internal Revenue Code and the rules and regulations
thereunder.
"COMMON STOCK" of any Person means Capital Stock of the 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 that Person, to shares of Capital Stock of any other class of that Person.
"CONSOLIDATED ADJUSTED NET INCOME" and "CONSOLIDATED ADJUSTED NET LOSS"
mean, for any period, the net income or net loss, as the case may be, of Nextel
and its Restricted Subsidiaries for the 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:
(1) any after-tax gain or loss attributable to the sale, conversion or
other disposition of assets other than in the ordinary course of
business,
(2) any after-tax gains resulting from the write-up of assets and any loss
resulting from the write-down of assets,
(3) 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,
(4) any foreign exchange gain or loss,
(5) all payments in respect of dividends on shares of Preferred Capital
Stock of Nextel,
(6) any other extraordinary, non-recurring or unusual items incurred by
Nextel or any of its Restricted Subsidiaries,
(7) the net income or loss of any Person acquired by Nextel or any
Restricted Subsidiary in a pooling-of-interests transaction for any
period prior to the date of that transaction and
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(8) all income or losses of Unrestricted Subsidiaries and Persons, other
than Subsidiaries, accounted for by Nextel using the equity method of
accounting except, in the case of any income, to the extent of
dividends, interest or other cash distributions received directly or
indirectly from any Unrestricted Subsidiary or Person.
"CONSOLIDATED ADJUSTED NET INCOME (LOSS)" means, for any period, Nextel's
Consolidated Adjusted Net Income or Consolidated Adjusted Net Loss for the
period, as applicable.
"CONSOLIDATED DEBT TO ANNUALIZED OPERATING CASH FLOW RATIO" means, as at
any date of determination, the ratio of:
(1) the aggregate amount of Debt of Nextel and the Restricted Subsidiaries
on a Consolidated basis outstanding as at the date of determination, to
(2) the Annualized Operating Cash Flow of Nextel for the most recently
completed fiscal quarter of Nextel.
"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 the Person and its
Restricted Subsidiaries, determined on a Consolidated basis in accordance with
generally accepted accounting principles and all commissions, discounts, other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing and net costs, including amortizations of discounts, associated with
interest rate swap and similar agreements and with foreign currency hedge,
exchange and similar agreements and the amount of dividends paid in respect of
Redeemable Stock.
"CONSOLIDATED NET INCOME" and "CONSOLIDATED NET LOSS" mean, for any period,
the net income or net loss, as the case may be, of Nextel and its Restricted
Subsidiaries for that period, all as determined on a Consolidated basis in
accordance with generally accepted accounting principles, adjusted, to the
extent included in calculating that net income or net loss, as the case may be,
by excluding without duplication:
(1) any after-tax gain or loss attributable to the sale, conversion or
other disposition of assets other than in the ordinary course of
business,
(2) any after-tax gains resulting from the write-up of assets and any loss
resulting from the write-down of assets,
(3) 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,
(4) any foreign exchange gain or loss,
(5) all payments in respect of dividends on shares of Preferred Capital
Stock of Nextel,
(6) any other extraordinary, non-recurring or unusual items incurred by
Nextel or any of its Restricted Subsidiaries,
(7) the net income (or loss) of any Person acquired by Nextel or any
Restricted Subsidiary in a pooling-of-interests transaction for any
period prior to the date of the transaction,
(8) all income or losses of Unrestricted Subsidiaries and Persons, other
than Subsidiaries, accounted for by Nextel using the equity method of
accounting except, in the case of any income, to the extent of
dividends, interest or other cash distributions received directly or
indirectly from any Unrestricted Subsidiary or Person, and
(9) 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 Nextel, but only to the extent of the
restrictions.
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"CONSOLIDATED NET INCOME (LOSS)" means, for any period, Nextel's
Consolidated Net Income or Consolidated Net Loss for the period, as applicable.
"CONSOLIDATED NET WORTH" of any Person means the consolidated stockholders'
equity of the Person, determined on a Consolidated basis in accordance with
generally accepted accounting principles, less amounts attributable to
Redeemable Stock of the Person. With respect to Nextel, no effect will be given
to adjustments following the Closing Date to the accounting books and records of
Nextel in accordance with Accounting Principles Board Opinions Nos. 16 and 17,
or successor opinions thereto, or otherwise resulting from the acquisition of
control of Nextel by another Person.
"CONSOLIDATION" means the consolidation of the accounts of each of the
Restricted Subsidiaries with those of Nextel, if and to the extent that the
accounts of each Restricted Subsidiary would normally be consolidated with those
of Nextel in accordance with generally accepted accounting principles; provided,
however, that "Consolidation" does not include consolidation of the accounts of
any Unrestricted Subsidiary, but the interest of Nextel or any Restricted
Subsidiary in any Unrestricted Subsidiary accounted for as an investment. The
term "Consolidated" has a correlative meaning.
"CREDIT FACILITY" means any credit facility, whether a term or revolving
loan, of the type customarily entered into with banks, between Nextel and/or any
of its Restricted Subsidiaries, on the one hand, and any banks or other lenders,
on the other hand, including any renewals, refundings, extensions or
replacements of any such credit facility, which credit facility is designated by
Nextel as a "Credit Facility" for purposes of the indenture, and will include
all those 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
$3,000,000,000.
"DEBT" means, without duplication, with respect to any Person, whether
recourse is to all or a portion of the assets of that Person and whether or not
contingent,
(1) every obligation of that Person for money borrowed,
(2) every obligation of that Person evidenced by bonds, debentures, notes
or other similar instruments, including obligations Incurred in
connection with the acquisition of property, assets or businesses,
(3) every reimbursement obligation of that Person with respect to letters
of credit, bankers' acceptances or similar facilities issued for the
account of that Person,
(4) every obligation of that 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,
(5) every Capital Lease Obligation of that Person,
(6) the maximum fixed redemption or repurchase price of Redeemable Stock of
that Person at the time of determination, plus accrued but unpaid
dividends,
(7) every obligation of that Person under interest rate swap or similar
agreements or foreign currency hedge, exchange or similar agreements of
that Person, and
(8) every obligation of the type referred to above of another Person and
all dividends of another Person the payment of which, in either case,
that 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
that Debt less the unamortized portion of the original issue discount
of that 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 the Debt will be deemed not to be "Debt."
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"DEFAULT" means an event that is, or after notice or passage of time, or
both, would be, an Event of Default.
"DIGITAL MOBILE" means a radio communications system that employs digital
technology with a multi-site configuration that will permit frequency reuse as
described in the offering memorandum, dated as of October 28, 1998, relating to
the original issuance of the notes.
"DIGITAL MOBILE-SMR OPERATING CASH FLOW" means, for any fiscal quarter,
(1) the net income or loss, as the case may be, of Nextel and its
Restricted Subsidiaries from its Digital Mobile and Specialized Mobile
Radio businesses and related activities and services for that fiscal
quarter, plus
(2) depreciation and amortization charged with respect thereto for that
fiscal quarter, all as determined on a Consolidated basis in accordance
with generally accepted accounting principles, adjusted, to the extent
included in calculating 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 Nextel using the equity method of accounting,
except to the extent of dividends, interest or other cash
distributions received directly or indirectly from any such
Person, plus
(3) all amounts deducted in calculating net income or loss for that fiscal
quarter in respect of interest expense and other financing costs and
all income taxes, whether or not deferred, applicable to that fiscal
quarter, all as determined on a Consolidated basis in accordance with
generally accepted accounting principles.
"DIRECTED INVESTMENT" by Nextel or any of its Restricted Subsidiaries means
any Investment for which the cash or property used for that Investment is
received by Nextel 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 the
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.
The aggregate amount of any Directed Investments may not at any time exceed
fifty percent (50%) of the aggregate amount of the cash or property received by
Nextel on or after June 1, 1997 from any issuance and sale or capital
contribution. Any proceeds from any issuance or sale may not be used for an
Investment if the proceeds were, prior to being designated for use as a Directed
Investment:
(1) used to make a Restricted Payment, or
(2) used as the basis for the Incurrence of Debt under clause (1) of the
"Limitation on Consolidated Debt" covenant unless and until the amount
of any Debt:
(a) is treated as newly issued Debt and could be Incurred in
accordance with the "Limitation on Consolidated Debt" covenant,
other than under clause (1) thereof, or
(b) has been repaid or refinanced with the proceeds of Debt Incurred
in accordance with the "Limitation on Consolidated Debt" covenant,
other than under clause (1) thereof, or
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(c) has otherwise been repaid and, in the circumstances described in
clauses (a) and (b), Nextel delivers to the Trustee a certificate
confirming that the requirements of these clauses have been met.
"DISINTERESTED DIRECTOR" means, with respect to any proposed transaction
between Nextel and an Affiliate thereof, a member of the board of directors who
is not an officer or employee of Nextel, would not be a party to, or have a
financial interest in, the transaction and is not an officer, director or
employee of, and does not have a financial interest in, that Affiliate. For
purposes of this definition, no person would be deemed not to be a Disinterested
Director solely because that person holds Capital Stock of Nextel.
"EXISTING SENIOR NOTES" means Nextel's outstanding 11 1/2% Senior
Redeemable Discount Notes Due 2003, 9 3/4% Senior Redeemable Discount Notes Due
2004, 12 1/4% Senior Redeemable Discount Notes Due 2004, 10 1/4% Senior
Redeemable Discount Notes Due 2005, 10 1/8% Senior Redeemable Discount Notes Due
2004, 10.65% Senior Redeemable Discount Notes Due 2007, 9 3/4% Senior Serial
Redeemable Discount Notes Due 2007 and 9.95% Senior Redeemable Discount Notes
Due 2008.
"FAIR MARKET VALUE" means, for purposes of clause (1) of the "Limitation on
Consolidated Debt" covenant, the price that would be paid in an arm's-length
transaction between an informed and willing seller under no compulsion to sell
and an informed and willing buyer under no compulsion to buy, as determined in
good faith by the board of directors, whose determination will be conclusive if
evidenced by a Board Resolution; provided that:
(1) the Fair Market Value of any security registered under the Securities
Exchange Act of 1994 will be the average of the closing prices, regular
way, of that security for the 20 consecutive trading days immediately
preceding the sale of Capital Stock, and
(2) in the event the aggregate Fair Market Value of any other property
received by Nextel exceeds $10 million, the Fair Market Value of the
property will be:
(a) so long as a Fair Market Value determination of the property is
required to be made pursuant to the Certificate of Designation for
the Series D Preferred Stock or pursuant to the terms of the
Series D Debenture Indenture, or 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 will be set forth in an officer's
certificate delivered to the Trustee, and
(b) otherwise, such Fair Market Value will be determined in good faith
by the board of directors, including a majority of the
Disinterested Directors who are then members of the board of
directors, which determination will be conclusive if evidenced by
a Board Resolution.
"FEBRUARY INDENTURE" means the indenture, dated February 11, 1998, between
Nextel, as issuer, and Harris Trust and Savings Bank, as trustee, relating to
the February Notes.
"FEBRUARY NOTES" means Nextel's 9.95% Senior Serial Redeemable Discount
Notes due 2008.
"GUARANTEE" by any Person means any obligation, contingent or otherwise, of
that Person guaranteeing any Debt of any other Person, the "primary obligor", in
any manner, whether directly or indirectly, and including any obligation of that
Person,
(1) to purchase or pay, or advance or supply funds for the purchase or
payment of, that Debt or to purchase, or to advance or supply funds for
the purchase of, any security for the payment of that Debt,
(2) to purchase property, securities or services for the purpose of
assuring the holder of that Debt of the payment of that Debt, or
(3) 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 that Debt. "Guaranteed",
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"Guaranteeing" and "Guarantor" have meanings correlative to the
foregoing. The Guarantee by any Person will not include endorsements by
that Person for collection or deposit, in either case, in the ordinary
course of business.
"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 that Debt or other obligation or the
recording, as required pursuant to generally accepted accounting principles or
otherwise, of any Debt or other obligation on the balance sheet of that Person.
"Incurrence" and "Incurred" have meanings correlative to the foregoing. A change
in generally accepted accounting principles that results in an obligation of the
Person that exists at that time becoming Debt will not be deemed an Incurrence
of that Debt; provided further, however, that the accretion of original issue
discount on Debt will not be deemed to be an Incurrence of Debt. Debt otherwise
Incurred by a Person before it becomes a Subsidiary of Nextel will be deemed to
have been Incurred at the time it becomes a Subsidiary.
"INVESTMENT" by any Person means any direct or indirect loan, advance or
other extension of credit or capital contribution to, by means of transfers of
cash or other property to others or payments for property or services for the
account or use of others, or otherwise, or purchase or acquisition of Capital
Stock, bonds, notes, debentures or other securities or evidence of Debt issued
by, any other Person or the designation of a Subsidiary as an Unrestricted
Subsidiary. A transaction will not be an Investment to the extent it involves:
(1) the issuance or sale by Nextel of its Capital Stock, other than
Redeemable Stock, including options, warrants or other rights to
acquire such Capital Stock, other than Redeemable Stock, or
(2) a transfer, assignment or contribution by Nextel 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 Nextel to another Unrestricted Subsidiary of Nextel.
"INVESTMENT GRADE" means a rating of at least BBB-, in the case of S&P, or
Baa3, in the case of Moody's.
"LICENSES" means SMR licenses granted by the Federal Communications
Commission that entitle the holder to use the radio channels covered thereby,
subject to compliance with Federal Communications Commission 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 the 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 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.
"MOODY'S" means Moody's Investors Service, Inc. or, if Moody's Investors
Service, Inc. ceases rating debt securities having a maturity at original
issuance of at least one year and that ratings business has been transferred to
a successor Person, the successor Person. 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
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with respect thereto has not been transferred to any successor Person, then
"Moody's" means 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 has been designated by Nextel by a written notice given to the
Trustee.
"OCTOBER INDENTURE" means the indenture dated October 22, 1997, between
Nextel, as issuer, and Harris Trust and Savings Bank, as trustee, relating to
the October Notes.
"OCTOBER NOTES" means Nextel's 9 3/4% Senior Serial Redeemable Discount
Notes due 2007.
"OFFER TO PURCHASE" means a written offer sent by Nextel by first class
mail, postage prepaid, to each holder at his address appearing in the security
register maintained by the Trustee on the date of the offer offering to purchase
the notes at the purchase price specified in the offer (as determined pursuant
to the indenture). Unless otherwise required by applicable law, the offer will
specify an expiration date of the Offer to Purchase that will be, subject to any
contrary requirements of applicable law, not less than 30 days or more than 60
days after the date of the offer and a settlement date for purchase of notes
within five business days after the expiration date. Nextel will notify the
Trustee at least 15 days, or shorter period as is acceptable to the Trustee,
prior to the mailing of the offer of Nextel's obligation to make an Offer to
Purchase, and the offer will be mailed by Nextel or, at Nextel's request, by the
Trustee, in the name and at the expense of Nextel. The offer will contain
information concerning the business of Nextel and its Subsidiaries which, at a
minimum, will include:
(1) the most recent annual and quarterly financial statements and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" contained in the documents required to be filed
with the Trustee under the indenture, which requirements may be
satisfied by delivery of the documents together with the offer,
(2) a description of material developments in Nextel's business subsequent
to the date of the latest of the financial statements referred to in
clause (1), including a description of the events requiring Nextel to
make the Offer to Purchase,
(3) if required under applicable law, pro forma financial information
concerning, among other things, the Offer to Purchase and the events
requiring Nextel to make the Offer to Purchase, and
(4) any other information required by applicable law to be included
therein. The offer will contain all instructions and materials
necessary to enable holders to tender their notes pursuant to the Offer
to Purchase. The offer will also state:
(a) the section of the indenture under which the Offer to Purchase is
being made;
(b) the expiration date and the settlement date;
(c) the aggregate principal amount at Stated Maturity of the
outstanding notes offered to be purchased by Nextel pursuant to
the Offer to Purchase;
(d) the purchase price to be paid by Nextel for each $1,000 principal
amount at Stated Maturity of notes accepted for payment, as
specified pursuant to the indenture;
(e) the holder may tender all or any portion of the notes registered
in the name of that holder and that any portion of notes tendered
must be tendered in an integral multiple of $1,000 of principal
amount at Stated Maturity;
(f) the place or places where the notes are to be surrendered for
tender under the Offer to Purchase;
(g) that interest, if any, on any notes not tendered or tendered, but
not purchased by Nextel under the Offer to Purchase, will continue
to accrue;
(h) that on the purchase date the purchase price will become due and
payable upon each note being accepted for payment pursuant to the
Offer to Purchase;
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(i) that each holder electing to tender notes pursuant to the Offer to
Purchase will be required to surrender such notes at the place or
places specified in the Offer prior to the close of business on
the expiration date, the notes being, if Nextel or the Trustee so
requires, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to Nextel and the Trustee duly
executed by the holder thereof or his attorney duly authorized in
writing;
(j) that holders will be entitled to withdraw all or any portion of
the notes tendered if Nextel, or its Paying Agent, receives, not
later than the close of business on the expiration date, a
facsimile transmission or letter setting forth the name of the
holder, the principal amount at Stated Maturity of the notes the
holder tendered, the certificate number of the notes the holder
tendered and a statement that such holder is withdrawing all or a
portion of his tender;
(k) that Nextel will purchase all those notes duly tendered and not
withdrawn under the Offer to Purchase; and
(l) that in the case of any holder whose notes are purchased only in
part, Nextel will execute, and the Trustee will authenticate and
deliver to the holder of any notes without service charge, new
notes of any authorized denomination as requested by such holder,
in an aggregate principal amount at Stated Maturity equal to and
in exchange for the unpurchased portion of the aggregate principal
amount at Stated Maturity of the notes so tendered.
Any Offer to Purchase will be governed by and effected in accordance with
the offer for the Offer to Purchase.
"OPERATING CASH FLOW" means, for any fiscal quarter,
(1) Nextel's Consolidated Adjusted Net Income (Loss) plus depreciation and
amortization in respect thereof for that fiscal quarter, plus
(2) all amounts deducted in calculating Consolidated Adjusted Net Income
(Loss) for that 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
that income period, all as determined on a Consolidated basis in
accordance with generally accepted accounting principles. For purposes
of calculating Operating Cash Flow for the fiscal quarter most recently
completed prior to any date on which an action is taken that requires a
calculation of the Operating Cash Flow to Consolidated Interest Expense
Ratio or Consolidated Debt to Annualized Cash Flow Ratio:
(a) any Person that is a Restricted Subsidiary on that date, or would
become a Restricted Subsidiary in connection with the transaction
that requires the determination of that ratio, will be deemed to
have been a Restricted Subsidiary at all times during that fiscal
quarter,
(b) any Person that is not a Restricted Subsidiary on that date, or
would cease to be a Restricted Subsidiary in connection with the
transaction that requires the determination of that ratio, will be
deemed not to have been a Restricted Subsidiary at any time during
that fiscal quarter and
(c) if Nextel or any Restricted Subsidiary have in any manner
acquired, including through commencement of activities
constituting the operating business, or disposed, including
through termination or discontinuance of activities constituting
that operating business, of any operating business during or
subsequent to the most recently completed fiscal quarter, the
calculation will be made on a pro forma basis on the assumption
that the acquisition or disposition had been completed on the
first day of the completed fiscal quarter.
"OPERATING CASH FLOW TO CONSOLIDATED INTEREST EXPENSE RATIO" means, as at
any date of determination, the ratio of:
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(1) the Operating Cash Flow of Nextel for the most recently completed
fiscal quarter of Nextel, to
(2) the Consolidated Interest Expense of Nextel and its Restricted
Subsidiaries for the most recently completed fiscal quarter of Nextel.
"PERMITTED DEBT" means:
(1) any Debt, including Guarantees thereof, outstanding on the Closing
Date, including the notes, and any accretion of original issue discount
and accrual of interest with respect to that Debt;
(2) any Debt outstanding under a Credit Facility;
(3) 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 Nextel or any of its Restricted Subsidiaries
after the Closing Date;
(4) Debt:
(a) to Nextel, or
(b) to any Restricted Subsidiary. Any event resulting in any such
Restricted Subsidiary ceasing to be a Restricted Subsidiary or any
subsequent transfer of any Debt, other than to Nextel or another
Restricted Subsidiary, will be deemed, in each case, to constitute
an Incurrence of the Debt not permitted by this clause (4);
(5) 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, if such agreements:
- are designed solely to protect Nextel or its Restricted
Subsidiaries against fluctuations in foreign currency exchange
rates or interest rates, and
- do not increase the Debt of the obligor outstanding at any time
other than as a result of fluctuations in foreign currency
exchange rates or interest rates or by reason of fees,
indemnities and compensation payable thereunder; and
(c) arising from agreements providing for indemnification, adjustment
of purchase price or similar obligations, or from Guarantees or
letters of credit, surety bonds or performance bonds securing any
obligations of Nextel or any Restricted Subsidiary pursuant to
those 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 that business, assets or Restricted Subsidiary
for the purpose of financing the acquisition, in a principal
amount not to exceed the gross proceeds actually received by
Nextel or any Restricted Subsidiary in connection with that
disposition;
(6) renewals, refundings or extensions of any Debt referred to in clause
(1) or (3) above or Incurred pursuant to clause (2) of the "Limitation
on Consolidated Debt" covenant and any renewals, refundings or
extensions thereof, plus:
(a) the amount of any premium reasonably determined by Nextel as
necessary to accomplish the renewal, refunding or extension, and
(b) the other fees and expenses of Nextel reasonably incurred in
connection with the renewal, refunding or extension, provided that
the renewal, refunding or extension will constitute Permitted Debt
only:
- to the extent that it does not result in an increase in the
aggregate principal amount, or, if the Debt provides for an
amount less than the principal amount thereof to be due and
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payable upon a declaration of acceleration of the maturity
thereof, in an amount not greater than the lesser amount, of the
Debt, except as permitted by clause (a) or (b) above, and
- to the extent the renewed, refunded or extended Debt does not
have a mandatory redemption date prior to the mandatory
redemption date of the Debt being renewed, refunded or extended
or have an Average Life shorter than the remaining Average Life
of the Debt being renewed, refunded or extended; and
(7) Debt payable solely in, or mandatorily convertible into, Capital Stock
(other than Redeemable Stock) of Nextel;
(8) Debt, in addition to Debt permitted under clauses (1) through (7)
above, in an aggregate principal amount outstanding at any time not to
exceed $450 million.
"PERMITTED DISTRIBUTION" of a Person means:
(1) the exchange by that Person of Capital Stock, other than Redeemable
Stock, for outstanding Capital Stock;
(2) the redemption, repurchase, defeasance or other acquisition or
retirement for value of Debt of Nextel that is subordinate in right of
payment to the notes, in exchange for, including any 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 Nextel, other than Redeemable Stock, or
(b) Debt of Nextel that is subordinate in right of payment to the
notes on subordination terms no less favorable to the holders of
the notes in their capacities as such than the subordination
terms, or other arrangement, applicable to the Debt that is
redeemed, repurchased, defeased or otherwise acquired or retired
for value, provided that, in the case of this clause (b), the 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
(3) dividend, penalty or other mandated payments, including mandatory
repurchases, on or in respect of any class or series of Nextel's
Preferred Capital Stock that is authorized and designated on the
Closing Date, that is, the Class A preferred stock, Class B preferred
stock, Class C preferred stock, Series D Preferred Stock and Series E
Preferred Stock of Nextel.
"PERMITTED INVESTMENT" means any Investment in Marketable Securities.
"PERMITTED TRANSACTION" means
(1) 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
memorandum, dated as of October 28, 1998, relating to the original
issuance of the notes, and
(2) any transaction or transactions with any vendor or vendors of property
or materials used in the telecommunications business, including related
activities and services, of Nextel or any Restricted Subsidiary,
provided
(a) those transactions are in the ordinary course of business, and
(b) that vendor does not beneficially own more than 50% of the voting
power of the Voting Stock of Nextel.
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"PERSON" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"PREFERRED CAPITAL STOCK," as applied to the Capital Stock of any Person,
means Capital Stock of the 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 the Person, to shares of Capital Stock of any other class of that Person.
"REDEEMABLE STOCK" of any Person means any Capital Stock of that Person
that by its terms or otherwise is
(1) required to be redeemed prior to the Stated Maturity of the notes,
(2) redeemable at the option of the holder thereof at any time prior to the
Stated Maturity of the notes, or
(3) convertible into or exchangeable for Capital Stock referred to in
clause (1) or (2) above or Debt having a scheduled maturity prior to
the Stated Maturity of the notes; provided that any Capital Stock that
would not constitute Redeemable Stock but for provisions thereof giving
holders thereof the right to require the Person to repurchase or redeem
the Capital Stock upon the occurrence of a "change of control"
occurring prior to the Stated Maturity of the notes will not constitute
Redeemable Stock if the "change of control" provisions applicable to
that Capital Stock are no more favorable to the holders of that Capital
Stock than the provisions contained in the "Change of Control" covenant
described herein and that Capital Stock specifically provides that the
Person will not repurchase or redeem any stock pursuant to that
provision prior to Nextel's repurchase of those notes as are required
to be repurchased pursuant to the "Change of Control" covenant
described below; and further provided that the Series D Preferred Stock
and the Series E Preferred Stock of Nextel will not be considered to
constitute Redeemable Stock.
"REQUIRED CONSENT" means except as otherwise expressly provided in the
indenture with respect to matters requiring the consent of each holder of the
notes affected thereby,
(1) the consent of holders of not less than a majority in aggregate
principal amount at Stated Maturity of the notes for any action to
(a) 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
(b) consent to or waive, on behalf of the holders of all the notes,
any past default and its consequences, and
(2) with respect to all other actions requiring the consent of holders of
the notes, the consent of either:
(a) a majority in aggregate principal amount at Stated Maturity of the
notes, or
(b) a majority in aggregate principal amount at Stated Maturity of:
- the notes,
- the September Notes, if the holders of the September Notes are
being requested to consent to the action with respect to the
terms of the September Notes or the September Indenture,
- the October Notes, if the holders of the October Notes are being
requested to consent to the action with respect to the October
Notes or the October Indenture,
- the February Notes, if the holders of the February Notes are
being requested to consent to the action with respect to the
terms of the February Notes or the February Indenture and
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- any other issue of unsubordinated, unsecured notes issued by
Nextel, if the notes or the indenture pursuant to which the notes
were issued both
- require the consent of the holders of the notes to such action
and
- provide that the holders thereof will vote with the holders of
the notes with respect to such action.
"RESTRICTED SUBSIDIARY" means any Subsidiary of Nextel, whether existing on
the Closing Date or created subsequent thereto, designated from time to time by
the board of directors as, or otherwise deemed to be, a "Restricted Subsidiary"
in accordance with the "Restricted Subsidiaries" covenant described below.
"S&P" means Standard & Poor's Ratings Services or, if Standard & Poor's
Ratings Services will cease rating debt securities having a maturity at original
issuance of at least one year and the ratings business will have been
transferred to a successor Person, any 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 will not have been transferred to any successor Person, then
"S&P" will 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 will have been designated by Nextel by a written notice
given to the Trustee.
"SEPTEMBER INDENTURE" means the Indenture dated September 17, 1997, between
Nextel and Harris Trust and Savings Bank, as Trustee, relating to the September
Notes.
"SEPTEMBER NOTES" means Nextel's 10.65% Senior Redeemable Discount Notes
due 2007.
"SERIES D DEBENTURE INDENTURE" means an indenture, having terms and
conditions substantially as summarized in the confidential offering memorandum,
dated July 16, 1997, prepared in connection with the original issuance by Nextel
of shares of Series D Preferred Stock, pursuant to which exchange debentures may
be issued by Nextel, the "Series D Exchange Debentures", in exchange for
outstanding shares of Series D Preferred Stock.
"SERIES D PREFERRED STOCK" means the 13% Series D Exchangeable Redeemable
Preferred Stock of Nextel 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 confidential offering memorandum,
dated February 6, 1998, prepared in connection with the original issuance by
Nextel of shares of Series E Preferred Stock, pursuant to which exchange
debentures may be issued by Nextel, the "Series E Exchange Debentures" 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 Nextel issued on February 6, 1998 and any shares
of Preferred Capital Stock issued in exchange therefore or as payment in kind
dividends thereon.
"SPECIALIZED MOBILE RADIO" or "SMR" means a mobile radio communications
system that is operated as described in the offering memorandum, dated as of
October 28, 1998, relating to the original issuance of the notes.
"STATED MATURITY", when used with respect to any Debt security or any
installment of interest thereon, means the date specified in the Debt security
as the fixed date on which the principal of the Debt security or the installment
of interest is due and payable.
"SUBSIDIARY" of any Person means
(1) a corporation more than 50% of the outstanding Voting Stock of which is
owned, directly or indirectly, by the Person or by one or more other
Subsidiaries of the Person or by the Person and one or more
Subsidiaries thereof or
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<PAGE> 51
(2) any other Person, other than a corporation in which the Person, or one
or more other Subsidiaries of the Person or the 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
(1) the aggregate number of outstanding primary shares of common stock of
the Person on the day, which will not include any options or warrants
on, or securities convertible or exchangeable into, shares of common
stock of that Person, and
(2) the average Closing Price of the common stock over the 20 consecutive
Trading Days immediately preceding that day. If no Closing Price exists
with respect to shares of the class, the value of those shares for
purposes of clause (2) of the preceding sentence will be determined by
the board of directors in good faith and evidenced by a board
resolution.
"TOTAL MARKET VALUE OF EQUITY" of Nextel means, as of any day of
determination, the sum of
(1) the product of
(a) the aggregate number of outstanding primary shares of common stock
of Nextel on the day, which will not include any options or
warrants on, or securities convertible or exchangeable into,
shares of common stock of Nextel, and
(b) the average Closing Price of the common stock over the 20
consecutive Trading Days immediately preceding that day, plus
(2) the liquidation value of any outstanding shares of Preferred Capital
Stock of Nextel on the day. If no Closing Price exists with respect to
shares of the class, the value of those shares for purposes of clause
(b) of the preceding sentence shall be determined by the board of
directors in good faith and evidenced by a Board Resolution.
"TRADING DAY" with respect to a securities exchange or automated quotation
system means a day on which the exchange or system is open for a full day of
trading.
"TRUSTEE" means the trustee under the indenture.
"UNRESTRICTED SUBSIDIARY" means Unrestricted Subsidiary Funding Company and
any other Subsidiary that is not a Restricted Subsidiary and includes any
Restricted Subsidiary that becomes an Unrestricted Subsidiary in accordance with
the "Restricted Subsidiaries" covenant described below.
"VENDOR FINANCING DEBT" means any Debt owed to
(1) a vendor or supplier of any property or materials used by Nextel or its
Restricted Subsidiaries in their telecommunications business,
(2) any Affiliate of such a vendor or supplier,
(3) any assignee of a vendor, supplier or Affiliate of a vendor or
supplier, or
(4) a bank or other financial institution that has financed or refinanced
the purchase of property or materials from that vendor, supplier,
Affiliate of a vendor or supplier or assignee of a vendor or supplier;
provided that the aggregate amount of Debt does not exceed the sum of
(a) the purchase price of property or materials, including
transportation, installation, warranty and testing charges, as
well as applicable taxes paid, in respect of property or
materials,
(b) the cost of design, development, site acquisition and
construction,
(c) any interest or other financing costs accruing or otherwise
payable in respect of the foregoing, and
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(d) the cost of any services provided by a vendor, supplier or
Affiliate of a vendor or supplier.
"VOTING STOCK" of any Person means Capital Stock of the Person which
ordinarily has voting power for the election of directors, or persons performing
similar functions, of the Person, whether at all times or only so long as no
senior class of securities has voting power by reason of any contingency.
"WHOLLY OWNED RESTRICTED SUBSIDIARY" of Nextel means a Restricted
Subsidiary all of the outstanding Capital Stock of which, other than directors'
qualifying shares, will at the time be owned by Nextel or by one or more Wholly
Owned Restricted Subsidiaries or by Nextel and one or more Wholly Owned
Restricted Subsidiaries.
B. GENERAL
The exchange notes will be general, unsecured obligations of Nextel, will
be limited in aggregate principal amount to $300.0 million and will mature on
November 1, 2008. The exchange notes will be issued in fully registered form
only in denominations and integral multiples of $1,000. The exchange notes will
be senior, unsecured indebtedness of Nextel, will rank equally in right of
payment with all unsubordinated, unsecured indebtedness of Nextel, including,
without limitation, the indebtedness evidenced by the Existing Senior Notes, and
will be senior in right of payment to all subordinated indebtedness of Nextel.
The exchange notes will be effectively subordinated to all current and future
indebtedness of Nextel's subsidiaries, including trade payables and other
accrued liabilities. Substantially all of this subsidiary indebtedness presently
is, and is expected to be, secured by the assets of Nextel's subsidiaries and/or
guaranteed by Nextel and its subsidiaries.
Principal of, premium, if any, and interest on the notes will be payable,
and the notes may be presented for registration of transfer or exchange, at the
office of the Paying Agent and Registrar. At Nextel's option, interest may be
paid by check mailed to the registered address of holders of the notes as shown
on the register for the notes. The Trustee will initially act as Paying Agent
and Registrar. Nextel may change any Paying Agent and Registrar without prior
notice to holders of the notes. Holders of the notes must surrender notes to the
Paying Agent to collect principal payments.
Cash interest on the notes will be payable at a rate of 12% per year,
semi-annually in arrears on each May 1 and November 1, with the first interest
payment May 1, 1999 to holders of record of such notes at the close of business
on the April 15 and October 15 next preceding the interest payment date. Cash
interest will accrue from the most recent interest payment date to which
interest has been paid or duly provided for or, if no interest has been paid or
duly provided for, from the Closing Date. Cash interest will be computed on a
basis of a 360-day year of twelve 30-day months. Some of Nextel's existing debt
agreements restrict the ability of Nextel's subsidiaries to pay dividends to
enable Nextel to pay interest on the notes.
The notes are not subject to any sinking fund.
C. OPTIONAL REDEMPTION
The notes may be redeemed at any time on or after November 1, 2003, at
Nextel'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
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and unpaid interest to the redemption date, if redeemed during the twelve-month
period beginning November 1 of each of the years set forth below.
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---- ----------
<S> <C>
2003.............................................. 106.000%
2004.............................................. 104.800
2005.............................................. 103.600
2006.............................................. 102.400
2007.............................................. 101.200
2008.............................................. 100.000
</TABLE>
In addition, in the event of one or more sales by Nextel on or prior to
November 1, 2001 of at least $50 million of its Capital Stock, other than
Redeemable Stock, Nextel may redeem up to a maximum of 35% of the original
principal amount of the notes at a redemption price equal to 112.000% of their
principal amount plus accrued and unpaid interest to the redemption date;
provided that the redemption occurs within 180 days after consummation of any
sale.
SELECTION
In the case of any partial redemption, selection of the notes for
redemption will be made by the Trustee in compliance with the requirements of
the principal national securities exchange, if any, on which the notes are
listed or, if the notes are not listed on a national securities exchange, on a
pro rata basis, by lot or by any other method as the Trustee in its sole
discretion deems to be fair and appropriate; provided that no notes of $1,000 in
principal amount or less shall be redeemed in part. If any notes are to be
redeemed in part only, the notice of redemption relating to those notes will
state the portion of the principal amount of those notes to be redeemed. A new
note in principal amount equal to the unredeemed portion of the notes will be
issued in the name of the holder of the notes upon cancellation of the original
note.
D. CHANGE OF CONTROL
Upon the occurrence of a Change of Control, Nextel will be required to make
an Offer to Purchase to each holder of the notes to repurchase all or any part
of the holder's notes at a cash purchase price equal to 101% of the principal
amount of those notes, plus accrued and unpaid interest to the date of purchase.
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
applicable securities laws.
None of the provisions in the indenture relating to a purchase upon a
Change of Control are waivable by the board of directors. Nextel could, in the
future, enter into transactions, including recapitalizations of Nextel, that
would not constitute a Change of Control, but would increase the amount of
indebtedness outstanding at such time. If a Change of Control were to occur,
Nextel would be obligated to offer to purchase outstanding shares of the Series
D Preferred Stock and the Series E Preferred Stock, as well as to purchase all
Debt which then would be entitled to receive a comparable offer to purchase by
reason of the Change in Control, including, without limitation, the Existing
Senior Notes in addition to making an offer to repurchase the notes. There can
be no assurance that Nextel would have sufficient funds to pay the purchase
price for all notes that Nextel would be required to purchase if a Change of
Control were to occur. In the event that Nextel were required to purchase
outstanding notes pursuant to an Offer to Purchase, Nextel expects that it would
need to seek third-party financing to the extent it does not have available
funds to meet its purchase obligations. However, there can be no assurance that
Nextel would be able to obtain the financing. In addition, Nextel's ability to
purchase the notes may be limited by other then-existing agreements.
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<PAGE> 54
E. CERTAIN COVENANTS
LIMITATION ON CONSOLIDATED DEBT
Nextel will not, and will not permit any Restricted Subsidiary to, Incur
any Debt, including Acquired Debt, other than Permitted Debt, unless
(1) with respect to Debt Incurred under this clause (1), 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 Nextel after June 1, 1997 from the issuance and
sale, other than a Restricted Subsidiary, of shares of its Capital
Stock, other than Redeemable Stock, or any options, warrants or other
rights to purchase the Capital Stock other than Redeemable Stock, other
than
(a) proceeds applied for use as a Directed Investment, unless the
designation has been revoked by the board of directors and Nextel
either abandons its plans to make the Investment or is able to
make the Investment pursuant to the "Limitation on Restricted
Payments" covenant, other than as a Directed Investment, and
(b) proceeds which have been included in the computation of the
amounts available for Restricted Payments pursuant to clause 3(b)
of the "Limitation on Restricted Payments" covenant, to the extent
the inclusion thereof was necessary to allow a subsequent
Restricted Payment to be made, or
(2) on the date of the Incurrence, after giving effect to the Incurrence of
the Debt or Acquired Debt and the receipt and application of the net
proceeds thereof, and, if the net proceeds of the new Debt are used to
acquire a Person that becomes a Restricted Subsidiary or an operating
business of Nextel or a Restricted Subsidiary, to all terms of the
acquisition, on a pro forma basis, the Operating Cash Flow to
Consolidated Interest Expense Ratio would equal or exceed 1.75 to 1.
LIMITATION ON RESTRICTED PAYMENTS
Nextel will not, directly or indirectly:
(1) 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 of the Capital Stock, other than Redeemable Stock;
(2) 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 Nextel that is not Redeemable Stock or
options, warrants or other rights to acquire the Capital Stock that is
not Redeemable Stock, any Capital Stock of Nextel, including options,
warrants or other rights to acquire the Capital Stock;
(3) 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 Nextel that is not
Redeemable Stock or options, warrants or other rights to acquire the
Capital Stock that is not Redeemable Stock, prior to any scheduled
maturity, scheduled repayment or scheduled sinking fund payment, any
Debt that is subordinate, whether pursuant to its terms or by operation
of law, in right of payment to the notes; or
(4) 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 the Investment;
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Each of the foregoing actions set forth in clauses (1) through (4), other
than an action that is a Permitted Investment or a Permitted Distribution, is a
"Restricted Payment," unless, at the time of the Restricted Payment, and after
giving effect thereto:
(1) no Default or Event of Default will have occurred and be continuing;
(2) except with respect to Investments, after giving effect, on a pro forma
basis, to the Restricted Payment and the Incurrence of any Debt the net
proceeds of which are used to finance the Restricted Payment, the
Consolidated Debt to Annualized Operating Cash Flow Ratio would not
have exceeded 7.0 to 1; and
(3) 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 will not exceed:
(a) 50% of the Consolidated Net Income, or, in the case of a
Consolidated Net Loss, minus 100% of that deficit, of Nextel 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
(b) 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 Nextel from the issuance and
sale, other than to a Restricted Subsidiary, on or after February
15, 1994 of shares of its Capital Stock, except for Redeemable
Stock, or any options, warrants or other rights to purchase that
Capital Stock, except for Redeemable Stock, other than
- except for purposes of determining whether an Investment under
clause (4) above is permitted, shares of Capital Stock or
options, warrants or other rights to purchase Capital Stock, or
shares issuable upon exercise thereof, issued or sold in the
PowerFone Merger, Questar/AMI Share Exchanges, Motorola
Transaction and NTT transactions as defined and described in
Nextel's prospectus, dated February 9, 1994, relating to Nextel's
Senior Redeemable Discount Notes due 2004 and
- 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
- to make a Directed Investment, unless the designation has been
revoked by the board of directors and Nextel is able to make
the Investment pursuant to this "Limitation on Restricted
Payments" covenant, other than as a Directed Investment or
- to Incur Debt under clause (1) of the "Limitation on
Consolidated Debt" covenant, unless and until the amount of
any such Debt
- is treated as newly issued Debt and could be Incurred in
accordance with the "Limitation on Consolidated Debt"
covenant, other than under clause (1) thereof, or
- has been repaid or refinanced with the proceeds of Debt
Incurred in accordance with the "Limitation on
Consolidated Debt" covenant, other than under clause (1)
thereof, or
- has otherwise been repaid, plus
(c) 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 will be conclusive and evidenced by
a Board Resolution, received by Nextel from the issuance or sale,
other than to a Restricted Subsidiary, after February 15, 1994 of
any Capital Stock of Nextel, other than Redeemable Stock, or any
options, warrants or other rights to purchase that Capital Stock,
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<PAGE> 56
other than Redeemable Stock, upon the conversion of, or exchange for,
Debt of Nextel or a Restricted Subsidiary.
The foregoing limitations in this "Limitation on Restricted Payments"
covenant do not limit or restrict the making of any Permitted Distribution,
Permitted Investment or Directed Investment, and none of a Permitted
Distribution, Permitted Investment or Directed Investment will be counted as a
Restricted Payment for purposes of clause (3) above. In addition, the foregoing
limitations do not prevent Nextel from
(1) paying a dividend on Capital Stock of Nextel within 60 days after the
declaration thereof if, on the date when the dividend was declared,
Nextel could have paid the dividend in accordance with the provisions
of the indenture,
(2) repurchasing Capital Stock of Nextel, including options, warrants or
other rights to acquire the Capital Stock from employees or former
employees of Nextel or any Subsidiary thereof for consideration not to
exceed $500,000 in the aggregate in any fiscal year, with repurchases
pursuant to this clause (2) not being counted as Restricted Payments
for purposes of clause (3) above, or
(3) the repurchase, redemption or other acquisition for value of Capital
Stock of Nextel to the extent necessary to prevent the loss or secure
the renewal or reinstatement of any license or franchise held by Nextel
or any of its Subsidiaries from any governmental agency; or
(4) Investments in Unrestricted Subsidiary Funding Company so long as
(a) the Investments are invested in Nextel International, Inc. and
(b) Nextel International, Inc. is a Subsidiary of Nextel.
Notwithstanding the foregoing limitations in this "Limitation on Restricted
Payments" covenant, Nextel will be permitted to make any Investment in a Person
that is not, either before or after giving effect thereto, a Subsidiary of
Nextel, provided that, immediately after giving effect thereto, the amount equal
to
(1) the aggregate amount of all Investments made pursuant to this paragraph
minus
(2) all cash received by Nextel or any Restricted Subsidiary from the sale,
transfer or other disposition to a Person that is not a Subsidiary of
Nextel, of any Investment, or portion thereof, included in the
aggregate amount, with the amount of cash to be counted for this
purpose not to exceed the amount of the Investment, or portion thereof,
so included, will not exceed the greater of
(a) $250 million and
(b) 2% of the Total Market Value of Equity of Nextel as of the time.
For purposes of determining the aggregate amount of Investments referred to in
clause (1), the amount of any Investment will be deemed to equal the cash
portion thereof plus the fair market value of any non-cash portion thereof, to
the extent the portion constitutes an Investment, at the time the Investment is
made, as determined by the board of directors, whose good faith determination
will 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 Investments previously made in the Person shall no longer be
counted as Restricted Payments for purposes of calculating the aggregate amount
of Restricted Payments pursuant to clause (3) of the third preceding paragraph
or the aggregate amount of Investments pursuant to clause (1) of the immediately
preceding paragraph, in each case to the extent the Investments would otherwise
be so counted.
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For purposes of clause (3)(c) above, the net proceeds received by Nextel
from the issuance or sale of its Capital Stock either upon the conversion of, or
exchange for, Debt of Nextel or any Restricted Subsidiary will be deemed to be
an amount equal to
(1) the sum of
(a) the principal amount or accreted value, whichever is less, of Debt
on the date of the conversion or exchange and
(b) the additional cash consideration, if any, received by Nextel upon
the conversion or exchange, less any payment on account of
fractional shares, minus
(2) all expenses incurred in connection with the issuance or sale.
In addition, for purposes of clause (3)(c) above, the net proceeds received
by Nextel from the issuance or sale of its Capital Stock upon the exercise of
any options or warrants of Nextel or any Restricted Subsidiary will be deemed to
be an amount equal to
(1) the additional cash consideration, if any, received by Nextel upon the
exercise, minus
(2) all expenses incurred in connection with the issuance or sale.
For purposes of this "Limitation on Restricted Payments" covenant, if a
particular Restricted Payment involves a non-cash payment, including a
distribution of assets, then the Restricted Payment will be deemed to be an
amount equal to the cash portion of the Restricted Payment, if any, plus an
amount equal to the fair market value of the non-cash portion of the Restricted
Payment, as determined by the board of directors, whose good faith determination
will be conclusive and evidenced by a Board Resolution.
RESTRICTED SUBSIDIARIES
Nextel will not designate any Restricted Subsidiary as an Unrestricted
Subsidiary, and will not itself, and will 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 the transaction, unless, after
giving effect to any action, the assets, not including any assets so sold,
conveyed, transferred or otherwise disposed of, other than in the ordinary
course of business, to any Unrestricted Subsidiary or any Person that becomes an
Unrestricted Subsidiary as part of the transaction, and business of Nextel and
its remaining Restricted Subsidiaries generated at least 90% of Digital
Mobile-SMR Operating Cash Flow in the fiscal quarter of Nextel most recently
completed prior to the date of the action.
The board of directors may designate any existing Unrestricted Subsidiary
or any Person that is about to become a Subsidiary of Nextel as a Restricted
Subsidiary if, after giving effect to the action (and, if the designation is
made in connection with the acquisition of a Person or an operating business
that is about to become a Subsidiary of Nextel, after giving effect to all terms
of the acquisition) on a pro forma basis, on the date of the action, the Debt,
if any, of the Unrestricted Subsidiary or Person outstanding immediately prior
to the designation would have been permitted to be Incurred, and will be deemed
to have been Incurred, for all purposes of the indenture.
Subject to the second preceding paragraph and compliance with the
"Limitation on Restricted Payments" covenant, the board of directors may
designate any Restricted Subsidiary as an Unrestricted Subsidiary.
The designation by the board of directors of a Restricted Subsidiary as an
Unrestricted Subsidiary will, for all purposes of the "Limitation on Restricted
Payments" covenant, including the second clause (2) thereof, be deemed to be a
Restricted Payment of an amount equal to the fair market value of Nextel's
ownership interest in the Subsidiary, including, without duplication, such
indirect ownership interest in all Subsidiaries of the Subsidiary, as determined
by the board of directors in good faith and evidenced by a Board Resolution.
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Notwithstanding the foregoing provisions of this "Restricted Subsidiaries"
covenant, the board of directors may not designate a Subsidiary of Nextel to be
an Unrestricted Subsidiary if, after that designation,
(1) Nextel or any of its other Restricted Subsidiaries
(a) provides credit support for, or a Guarantee of, any Debt of the
Subsidiary, including any undertaking, agreement or instrument
evidencing the Debt, or
(b) is directly or indirectly liable for any Debt of such Subsidiary,
(2) a default with respect to any Debt of such Subsidiary, including any
right which the holders thereof may have to take enforcement action
against the Subsidiary, would permit, upon notice, lapse of time or
both, any holder of any other Debt of Nextel or any Restricted
Subsidiary to declare a default on the other Debt or cause the payment
thereof to be accelerated or payable prior to its final scheduled
maturity or
(3) the 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 Nextel as an Unrestricted Subsidiary, and may
designate any newly-created Subsidiary as an Unrestricted Subsidiary, if at the
time that Subsidiary is created it contains no assets, other than the de minimis
amount of assets then required by law for the formation of corporations, and no
Debt. Subsidiaries of Nextel that are not designated by the board of directors
as Restricted or Unrestricted Subsidiaries will be deemed to be Restricted
Subsidiaries. Notwithstanding any provisions of this "Restricted Subsidiaries"
covenant, all Subsidiaries of an Unrestricted Subsidiary shall be Unrestricted
Subsidiaries. The board of directors will not change the designation of a
Subsidiary of Nextel more than twice in any period of five years.
TRANSACTIONS WITH AFFILIATES
Nextel will not, and will 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 Nextel on terms that are less
favorable to Nextel 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 an Affiliate; provided, however, that this "Transactions with Affiliates"
covenant will not limit, or be applicable to,
(1) any transaction between Unrestricted Subsidiaries not involving Nextel
or any Restricted Subsidiary,
(2) any transaction between Nextel and any Restricted Subsidiary or between
Restricted Subsidiaries or
(3) any Permitted Transactions.
In addition, any transaction or series of related transactions, other than
Permitted Transactions, between Nextel or any Restricted Subsidiary and any
Affiliate of Nextel, other than a Restricted Subsidiary, involving an aggregate
consideration of $5 million or more must be approved in good faith by a majority
of Nextel's Disinterested Directors, of which there must be at least one, and
evidenced by a Board Resolution. For purposes of this "Transactions with
Affiliates" covenant, any transaction or series of related transactions between
Nextel or any Restricted Subsidiary and an Affiliate of Nextel that is approved
by a majority of the Disinterested Directors, of which there must be at least
one, and evidenced by a Board Resolution will be deemed to be on terms as
favorable as those that might be obtained at the time of the transaction, or
series of transactions, from a Person that is not an Affiliate and thus will be
permitted under this covenant.
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ACTIVITIES OF NEXTEL AND RESTRICTED SUBSIDIARIES
Nextel will not, and will not permit any Restricted Subsidiary to, engage
in any business other than the telecommunications business and related
activities and services, including those businesses, activities and services as
Nextel and the Restricted Subsidiaries were engaged in on the Closing Date.
PROVISION OF FINANCIAL INFORMATION
Whether or not Nextel is subject to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, or any successor provision, Nextel will file
with the Commission the annual reports, quarterly reports and other documents
which Nextel would have been required to file with the Commission pursuant to
Section 13(a) or 15(d) or any successor provision thereto if Nextel were subject
thereto, the documents to be filed with the Commission on or prior to the
respective dates by which Nextel would have been required to file them. Nextel
will also in any event:
(1) within 15 days of each required filing date
(a) transmit by mail to all holders, as their names and addresses
appear in the Security Register, without cost to those holders,
and
(b) file with the Trustee copies of the annual reports, quarterly
reports and other documents which Nextel 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 Nextel
were subject thereto and
(2) if filing the documents by Nextel with the Commission is not permitted
under the Securities Exchange Act of 1934, promptly upon written
request supply copies of the documents to any prospective holder.
The Trustee's receipt of the reports, information and documents will not
constitute constructive notice of any information contained in or determinable
from information in the applicable report or document.
MERGER, SALE OF ASSETS, ETC.
Nextel
(1) will 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
(2) will not permit any of its Restricted Subsidiaries to enter into any
transaction or series of transactions if the 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 Nextel and its Restricted Subsidiaries, taken as a whole,
substantially as an entirety to any Person, unless, in each case (1) or
(2), at the time and after giving effect thereto
(a) either:
- if the transaction or series of transactions is a consolidation
of Nextel with or a merger of Nextel with or into any other
Person, Nextel will be the surviving Person of the merger or
consolidation, or
- the Person formed by any consolidation with or merger with or
into Nextel, or to which the properties and assets of Nextel or
Nextel 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 surviving Person
or transferee Person referred to in this clause being the
"Surviving Entity", will be a corporation, partnership or trust
organized and existing under the laws of the United States, any
state or the District of Columbia and will expressly assume by a
supplemental indenture executed and delivered to the
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Trustee, in form satisfactory to the Trustee, all the obligations
of Nextel under the notes and the indenture and, in each case, the
indenture, as so supplemented, will remain in full force and
effect, and
(b) immediately before and immediately after giving effect to the
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 the transaction or series of
transactions), no Default or Event of Default will have occurred
and be continuing, and
(c) the Consolidated Net Worth of Nextel or the Surviving Entity, as
the case may be, will be equal to or greater than that of Nextel
immediately prior to the transaction or series of transactions;
provided, however, that the foregoing requirements will 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,
Nextel will deliver, or cause to be delivered, to the Trustee, in form and
substance reasonably satisfactory to the Trustee, an Officers' Certificate
stating that the consolidation, merger, sale, assignment, conveyance, transfer,
lease or other disposition and the supplemental indenture in respect thereof,
required under second bullet point under clause (a) of the preceding paragraph,
comply with the requirements of the indenture and an opinion of counsel stating
that the conditions of the indenture have been complied with. Each Officers'
Certificate will set forth the manner of determination of the Consolidated Net
Worth in accordance with clause (c) of the preceding paragraph.
For all purposes of the indenture and the notes, including the provisions
described in the two immediately preceding paragraphs and the "Limitation on
Consolidated Debt" and "Restricted Subsidiaries" covenants, Subsidiaries of any
Surviving Entity will, upon the transaction or series of transactions, become
Restricted Subsidiaries or Unrestricted Subsidiaries as provided pursuant to the
"Restricted Subsidiaries" covenant and all Debt of the Surviving Entity and its
Subsidiaries that was not Debt of Nextel and its Subsidiaries immediately prior
to the transaction or series of transactions will be deemed to have been
Incurred upon the transaction or series of transactions.
F. EVENTS OF DEFAULT
The following will be Events of Default under the indenture:
(1) failure to pay principal of, or premium, if any, on, any notes when
due;
(2) failure to pay any interest on any notes when due, continued for 30
days;
(3) default in the payment of principal of, and premium and interest, if
any, on the notes required to be purchased pursuant to an Offer to
Purchase as described under "Change of Control" when due and payable,
or failure to make an Offer to Purchase as required thereunder;
(4) failure to perform or comply with the provisions described under
"Merger, Sale of Assets, Etc.";
(5) failure to perform any other covenant or agreement of Nextel under the
indenture or the notes continued for 60 days after written notice to
Nextel by the Trustee or holders of at least 25% in aggregate principal
amount of outstanding notes;
(6) failure to pay when due (subject to any applicable grace period) the
principal of, or acceleration of, any Debt of Nextel or any Restricted
Subsidiary having an outstanding principal amount of at least $25.0
million, individually or in the aggregate;
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(7) the rendering of a final judgment or judgments against Nextel or any
Restricted Subsidiary in an amount in excess of $25.0 million which
remains undischarged or unstayed for a period of 60 days after the date
on which the right to appeal has expired; and
(8) some events of bankruptcy, insolvency or reorganization affecting
Nextel or any Restricted Subsidiary.
If an Event of Default (other than an Event of Default described in clause
(8) above) will occur and be continuing, either the Trustee or the holders of at
least 25% in aggregate principal amount at Stated Maturity of the outstanding
notes may accelerate the principal amount of all the notes; provided however
that after the acceleration, but before a judgment or decree based on
acceleration, the holders by Required Consent may, under some circumstances,
rescind and annul the acceleration if all Events of Default, other than the
nonpayment of the principal amount of the notes, have been cured or waived as
provided in the indenture. If an Event of Default specified in clause (8) above
occurs, the principal amount of the outstanding notes will ipso facto become
immediately due and payable without any declaration or other act on the part of
the Trustee or any holder. For information as to waiver of defaults, see
"Modification and Waiver."
Subject to the provisions of the indenture relating to the duties of the
Trustee in case an Event of Default will occur and be continuing, the Trustee
will be under no obligation to exercise any of its rights or powers under the
indenture at the request or direction of any of the holders, unless the holders
shall have offered to the Trustee reasonable security or indemnity. Subject to
the provisions for the indemnification of the Trustee, the holders by Required
Consent will have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on the Trustee.
No holder of any notes will have any right to institute any proceeding with
respect to the indenture or for any remedy thereunder, unless the holder will
have previously given to the Trustee written notice of a continuing Event of
Default and unless also the holders of at least 25% in aggregate principal
amount at Stated Maturity of the outstanding notes will have made written
request, and offered reasonable security or indemnity, to the Trustee to
institute the proceeding as trustee, and the Trustee shall not have received
from the holders of a majority in aggregate principal amount at Stated Maturity
of the outstanding notes a direction inconsistent with the request and will have
failed to institute the proceeding within 60 days. However, those limitations do
not apply to a suit instituted by a holder of a note for enforcement of payment
of the principal of, premium and interest, if any, on the note on or after the
respective due dates expressed in the note.
Nextel will be required to furnish to the Trustee annually a statement as
to the performance by it of some of its obligations under the indenture and as
to any default in the performance.
G. DEFEASANCE AND COVENANT DEFEASANCE
Nextel may elect, at its option at any time, to have the provisions of the
indenture relating to defeasance and discharge of indebtedness or the provisions
relating to defeasance of some restrictive covenants in the indenture, applied
to the outstanding notes, as a whole and not in part.
Defeasance and Discharge. Upon Nextel's exercise of its option to have the
provisions relating to defeasance and discharge applied to the outstanding
notes, Nextel will be discharged from all its obligations with respect to the
notes, except for some obligations to:
- exchange or register the transfer of the notes,
- replace stolen, lost or mutilated notes,
- maintain paying agencies and
- hold moneys for payment in trust, upon the deposit in trust for the
benefit of the holders of the notes of money or United States
Government Obligations, or both, which, through the
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payment of principal and interest in respect thereof in accordance
with their terms, will provide money in an amount sufficient to pay
the principal of and any installment of interest on the notes on the
respective Stated Maturities thereof in accordance with the terms of
the indenture and the notes. This defeasance or discharge may occur
only if, among other things, Nextel has delivered to the Trustee an
opinion of counsel to the effect that Nextel has received from, or
there has been published by, the Internal Revenue Service, the "IRS",
a ruling, or there has been a change in tax law, in either case to the
effect that holders of the notes will not recognize gain or loss for
federal income tax purposes as a result of the deposit, defeasance and
discharge and will be subject to federal income tax on the same
amount, in the same manner and at the same times as would have been
the case if such deposit, defeasance and discharge were not to occur.
Defeasance of Certain Covenants. Upon Nextel's exercise of its option to
defease some restrictive covenants applied to the outstanding notes, Nextel may
omit to comply with some restrictive covenants, including those described under
"Covenants" and clause (2)(c) under "Merger, Sale of Assets, Etc.," and the
occurrence of some Events of Default, which are described above in clause (4),
with respect to clause (2)(c)), clause (5), with respect to the restrictive
covenants, clause (6) and clause (7) under "Events of Default," will be deemed
not to be or result in an Event of Default, in each case with respect to the
notes. Nextel, in order to exercise the option, will be required to deposit, in
trust for the benefit of the holders of the notes, money or U.S. Government
Obligations, or both, which, through the payment of principal and interest in
respect thereof in accordance with their terms, will provide money in an amount
sufficient to pay the principal of and any installment of interest on the notes
on the respective Stated Maturities thereof in accordance with the terms of the
indenture and the notes. Nextel will also be required, among other things, to
deliver to the Trustee an opinion of counsel to the effect that holders of the
notes will not recognize gain or loss for federal income tax purposes as a
result of the deposit and defeasance of some obligations and will be subject to
federal income tax on the same amount, in the same manner and at the same times
as would have been the case if the deposit and defeasance were not to occur. In
the event Nextel exercised this option with respect to the outstanding notes and
these notes were declared due and payable prior to their Stated Maturity because
of the occurrence of any Event of Default or become payable on any redemption
date at the option of Nextel, the amount of money and United States Government
Obligations so deposited in trust would be sufficient to pay amounts due on the
notes at the time of their respective Stated Maturities but may not be
sufficient to pay amounts due on the notes upon the acceleration or redemption.
In this case, Nextel would remain liable for the payments.
H. MODIFICATION AND WAIVER
Modifications and amendments of the indenture may be made by Nextel and the
Trustee with Required Consent; provided, however, that no such modification or
amendment may, without the consent of each holder of the notes affected thereby:
(1) change the Stated Maturity of the principal of, or any installment of
interest on, any note,
(2) reduce the principal amount of, premium, if any, or interest on, any
note,
(3) change the place or currency of payment of principal or premium, if
any, or interest on, any note,
(4) impair the right to institute suit for the enforcement of any payment
on or after the Stated Maturity, or, in the case of a redemption, on or
after the Redemption Date, of any note,
(5) reduce the above-stated percentage of outstanding notes the consent of
whose holders is necessary to modify or amend the indenture,
(6) waive a default in the payment of principal of, premium, if any, or
interest on, the notes,
(7) reduce the percentage of aggregate principal amount of outstanding
notes the consent of whose holders is necessary for waiver of
compliance with provisions of the indenture or for waiver of defaults
or
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(8) following the mailing of an Offer to Purchase, modify the provisions of
the indenture with respect to the Offer to Purchase in a manner adverse
to those holders.
I. NO PERSONAL LIABILITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS, DIRECTORS
OR EMPLOYEES
There will be no recourse against any incorporator or past, present or
future stockholder, officer, director, employee or controlling person of Nextel
- for the payment of the principal of, premium, if any, or interest on,
any of the notes, or
- for any claim and no recourse under or upon any obligation, covenant
or agreement of Nextel contained in the indenture or in any of the
notes, or
- because of the creation of any Debt represented thereby.
Each holder, by accepting the notes, waives and releases all the liability.
J. CONCERNING THE TRUSTEE
Except during the continuance of an Event of Default, the Trustee will
perform only those duties as are specifically set forth in the indenture. If an
Event of Default has occurred and is continuing, the Trustee will exercise those
rights and powers vested in it under the indenture and use the same degree of
care and skill in its exercise of these rights and powers as a prudent person
would exercise under the circumstances in the conduct of the person's own
affairs.
The indenture and provisions of the Trust Indenture Act, incorporated by
reference in the indenture, contain limitations on the rights of the Trustee
should it become a creditor of Nextel, to obtain payment of claims in some cases
or to realize on property received by it in respect of any claims, as security
or otherwise. The Trustee is permitted to engage in other transactions;
provided, however, that if it acquires any conflicting interest, it must
eliminate the conflict or resign.
K. BOOK ENTRY; DELIVERY AND FORM
The exchange notes will initially be issued in the form of one global
certificate. The global exchange note will be deposited on the date of the
consummation of the exchange offer with or on behalf of The Depository Trust
Company and registered in the name of The Depository Trust Company or its
nominee.
Nextel understands that The Depository Trust Company is a limited purpose
trust company organized under the laws of the State of New York, a "banking
organization" within the meaning of New York Banking Law, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "Clearing Agency" registered pursuant to the
provisions of Section 17A of the Securities Exchange Act of 1934. The Depository
Trust Company was created to hold securities for its participants and facilitate
the clearance and settlement of securities transactions between participants
through electronic book-entry changes in accounts of its participants, thereby
eliminating the need for physical movement of certificates. Participants include
securities brokers and dealers, banks, trust companies and clearing corporations
and may include other organizations. Indirect access to The Depository Trust
Company system is available to other banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a participant,
either directly or indirectly.
So long as The Depository Trust Company, or its nominee, is the registered
owner or holder of the global exchange note, The Depository Trust Company or the
nominee, as the case may be, will be considered the sole owner or holder of the
exchange notes represented by the global exchange note for all purposes under
the indenture. No beneficial owner of an interest in a global exchange note will
be able to transfer that interest except in accordance with The Depository Trust
Company's applicable procedures, in addition to those provided for under the
indenture.
Payments made with respect to a global exchange note will be made to The
Depository Trust Company or its nominee, as the case may be, as the registered
owner thereof. Nextel will have no
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responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a global exchange
note or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
Nextel expects that The Depository Trust Company or its nominee, upon
receipt of any payments made with respect to a global exchange note, will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such global exchange
note as shown on the records of The Depository Trust Company or its nominee.
Nextel also expects that payments by participants to owners of beneficial
interests in such global exchange note held through such participants will be
governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers registered in the names of
nominees for such customers. These payments will be the responsibility of the
participants.
Transfers between participants in The Depository Trust Company will be
effected in the ordinary way in accordance with The Depository Trust Company
rules and will be settled in same-day funds.
Although The Depository Trust Company is expected to follow the foregoing
procedures in order to facilitate transfers of interests in the global exchange
note among participants of The Depository Trust Company, they are under no
obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. Nextel will have no responsibility
for the performance by The Depository Trust Company or its respective
participants or indirect participants of its respective obligations under the
rules and procedures governing their operations.
L. CERTIFICATED NOTES
If The Depository Trust Company is at any time unwilling or unable to
continue as a depositary for the global exchange note and a successor depositary
is not appointed by Nextel within 90 days, Nextel will issue a physical
certificate for such notes in exchange for the global exchange note. In
addition, if there is an Event of Default under the notes, The Depository Trust
Company may exchange the global exchange note for certificated notes and
distribute these certificated notes to its participants. Finally, beneficial
owners whose interests are represented by the global exchange note may request a
physical certificate.
VII. UNITED STATES FEDERAL TAX CONSEQUENCES
The following is a summary of specified United States federal income tax
matters. In the case of Non-U.S. Holders, as defined below, this discussion
summarizes the material United States federal income tax consequences of the
exchange offer and of the purchase, ownership and disposition of the notes. In
the case of U.S. Holders, as defined below, this discussion addresses only the
United States federal income tax consequences of the exchange offer. This
discussion does not purport to be a complete analysis of all of the potentially
relevant tax effects. This summary is based on the Internal Revenue Code of
1986, existing and proposed Treasury regulations promulgated under that Code,
and administrative and judicial interpretations of the regulations, all as of
the date of this prospectus and all of which are subject to change, possibly
with retroactive effect.
This summary deals only with notes held as capital assets within the
meaning of Section 1221 of the Code. It does not discuss all of the tax
consequences that may be relevant to holders of the notes in light of their
particular circumstances or to holders of the notes subject to special rules,
for example, banks, insurance companies, tax-exempt organizations, dealers in
securities or foreign currencies, persons holding the notes as part of a hedging
transaction, "straddle," conversion transaction, or other integrated
transaction, or foreign currency effects on holders of the notes whose
functional currency, as defined in Section 985 of the Code, is not the United
States dollar. Persons considering the purchase of the notes should consult with
their own tax advisors about the application of the United States federal income
tax laws to their particular situations as well as any tax consequences under
the laws of any state, local or foreign jurisdiction.
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As used in this prospectus, the term "U.S. Holder" means a beneficial owner
of notes that is, for United States federal income tax purposes:
- a citizen or individual resident of the United States;
- a corporation, or other entity treated as a corporation, created in or
under the laws of the United States or of any state;
- an estate the income of which is subject to United States federal income
taxation regardless of its source;
- a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United
States persons have the authority to control all substantial decisions of
the trust, including certain trusts in existence on August 20, 1996 and
treated as United States persons prior to this date that timely elected
to continue to be treated as United States persons; or
- a partnership, or other entity treated as a partnership, created or
organized in or under the laws of the United States or of any state,
except as Treasury Regulations may provide.
The term "Non-U.S. Holder" means any holder that is not a U.S. Holder.
EXCHANGE OFFER
The exchange of the outstanding notes for exchange notes should not be
treated as a taxable transaction to U.S. Holders or to Non-U.S. Holders for
United States federal income tax purposes. Rather, the exchange notes received
should be treated as a continuation of the outstanding notes surrendered in
exchange. As a result, there should be no material United States federal income
tax consequences to U.S. Holders or to Non-U.S. Holders exchanging outstanding
notes for exchange notes.
OWNERSHIP AND DISPOSITION OF NOTES BY NON-U.S. HOLDERS
Under present United States federal law, and subject to the discussion
below concerning backup withholding:
(a) payments of principal, interest and premium, if any, on the notes
by Nextel or its paying agent to any Non-U.S. Holder will not be
subject to 30% United States federal withholding tax, provided
that, in the case of interest,
- the holder does not own, actually or constructively, 10% or more of
the total combined voting power of all classes of stock of Nextel
entitled to vote and is not a controlled foreign corporation
related, directly or indirectly, to Nextel through stock ownership,
and
- the certification requirement set forth in Section 871(h) or
Section 881(c) of the Code has been fulfilled with respect to the
beneficial owner, as discussed below;
(b) a Non-U.S. Holder of a note will not be subject to United States
federal income tax on gain realized on the sale, exchange or other
disposition of that note, unless
- the Non-U.S. Holder is an individual who is present in the United
States for 183 days or more in the taxable year of the disposition
and specific other conditions are met, or
- the gain is effectively connected with the conduct by this Non-U.S.
Holder of a trade or business in the United States; and
(c) under Code Section 2105(b) with respect to United Stated federal
estate tax law, a note held by an individual who is not a citizen
or resident of the United States at the time of his death
generally will not be subject to United States federal estate tax
as a result of that individual's death, provided that the
individual does not own, actually or constructively, 10% or more
of the total combined voting power of all classes of stock of
Nextel entitled to vote
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and, at the time of that individual's death, payments with respect to
the note would not have been effectively connected with the conduct by
that individual of a trade or business in the United States.
The certification requirement referred to in the second bullet point of
paragraph (a) will be fulfilled if the beneficial owner of a note certifies on
Internal Revenue Service Form W-8, under penalties of perjury, that it is not a
United States person and provides its name and address, and
- that beneficial owner files a Form W-8 with the withholding agent
or
- in the case of a note held by securities clearing organization,
bank or other financial institution holding customers' securities
in the ordinary course of its trade or business holding the note on
behalf of the beneficial owner, that financial institution files
with the withholding agent a statement that it has received the
Form W-8 from the holder and furnishes the withholding agent with a
copy thereof. With respect to notes held by a foreign partnership,
under current law, the Form W-8 may be provided by the foreign
partnership. However, for interest and disposition proceeds paid
with respect to a note after December 31, 1999, unless the foreign
partnership has entered into a withholding agreement with the
Internal Revenue Service, a foreign partnership will be required,
in addition to providing an intermediary Form W-8, to attach an
appropriate certification by each partner. Prospective investors,
including foreign partnerships and their partners, should consult
their tax advisers regarding possible additional reporting
requirements.
If a Non-U.S. Holder is engaged in a trade or business in the United
States, and if interest on the note is effectively connected with the conduct of
such trade or business, the Non-U. S. Holder, although exempt from the
withholding tax discussed in the preceding paragraphs, will generally be subject
to regular United States income tax on interest and on any gain realized on the
sale, exchange or disposition of a note on a net income basis in the same manner
as if it were a United States person. In lieu of the certificate described in
the preceding paragraph, such a holder will be required to provide to the
withholding agent a properly executed Internal Revenue Service Form 4224, or,
after December 31, 1999, a Form W-8 to claim an exemption from withholding tax.
In addition, if such Non-U.S. Holder is a foreign corporation, it may be subject
to a 30% branch profits tax for the taxable year, subject to adjustments. For
purposes of the branch profits tax, interest on any gain recognized an the sale,
exchange or other disposition of a note will be included in the effectively
connected earnings and profits of the Non-U.S. Holder if such interest or gain,
as the case may be, is effectively connected with the conduct by the Non-U.S.
Holder of a trade or business in the United States.
BACKUP WITHHOLDING AND INFORMATION REPORTING. Under current United States
federal income tax law, backup withholding tax of 31% will not apply to payments
on a note if the certifications required by Sections 871(h) and 881(c) of the
Code are received, provided in each case that the payor, including a bank or its
paying agent, as the case may be, does not have actual knowledge that the payee
is a United States person.
Under current Treasury Regulations, payments on the sale, exchange or other
disposition of a note made to or through a foreign office of a broker generally
will not be subject to backup withholding. However, if such broker is a United
States person, a controlled foreign corporation for United States federal income
tax purposes, a foreign person 50% or more of whose gross income is effectively
connected with a United States trade or business for a specified three-year
period or, in the case of payments made after December 31, 1999, a foreign
partnership with specific connections to the United States, then information
reporting will be required unless the broker has in its records documentary
evidence that the beneficial owner otherwise establishes an exemption. Backup
withholding may apply to any payment that the broker is required to report if
the broker has actual knowledge that the payee is a United States person.
Payments to or through the United States office of a broker will be subject to
backup withholding and information reporting unless the holder certifies, under
penalties of perjury, that it is not a United States person or otherwise
establishes an exemption.
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Non-U.S. Holders of notes should consult their tax advisers regarding the
application of information reporting and backup withholding in their particular
situations, the availability of an exemption therefrom, and the procedure for
obtaining that exemption, if available. Any amounts withheld from a payment to a
Non-U.S. Holder under the backup withholding rules will be allowed as a credit
against the holder's United States federal income tax liability and may entitle
the holder to a refund, provided that the required information is furnished to
the Internal Revenue Service.
VIII. PLAN OF DISTRIBUTION
Except as described below, a broker-dealer may not participate in the
exchange offer in connection with a distribution of the exchange notes. Each
broker-dealer that receives exchange notes for its own account pursuant to the
exchange offer must acknowledge that it will deliver a prospectus in connection
with any resale of the exchange notes. This prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of exchange notes received for its own account in exchange for
outstanding notes where those outstanding notes were acquired as a result of
market-making activities or other trading activities. Nextel has agreed that for
a period of 90 days after the expiration date of the exchange offer, it will
make this prospectus, as amended or supplemented, available to any broker-dealer
for use in connection with any resale subject to the conditions described under
"V.B. The Exchange Offer -- Resale of the Exchange Notes."
Nextel will not receive any proceeds from any sale of exchange notes by
broker-dealers. Exchange notes received by broker-dealers for their own account
pursuant to the exchange offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the exchange notes or a combination of those methods
of resale, at market prices prevailing at the time of resale, at prices related
to the prevailing market prices, or negotiated prices. Any resale may be made
directly to purchasers or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any broker-dealer
and/or the purchasers of any exchange notes. Any broker or dealer that
participates in a distribution of the exchange notes may be deemed to be an
"underwriter" within the meaning of the Securities Act of 1933, and any profit
on the resale of exchange notes and any commissions or concessions received by
those persons may be deemed to be underwriting compensation under the Securities
Act of 1933. The Letter of Transmittal states that by acknowledging that it will
deliver and by delivering a prospectus a broker-dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act of
1933.
Nextel has agreed to pay all expenses incident to the exchange offer other
than commissions or concessions of any brokers or dealers and expenses of
counsel for the holders of the exchange notes and will indemnify the holders of
the exchange notes, including any broker-dealers, against some liabilities,
including some liabilities under the Securities Act of 1933.
IX. LEGAL MATTERS
Jones, Day, Reavis & Pogue, Cleveland, Ohio, will pass upon the validity of
the exchange notes for Nextel.
X. EXPERTS
The consolidated financial statements and related financial statement
schedules of Nextel incorporated in this prospectus by reference from Nextel's
Annual Report on Form 10-K for the year ended December 31, 1998, have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, and have been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
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XI. WHERE YOU CAN GET MORE INFORMATION
A. AVAILABLE INFORMATION
Nextel files reports, proxy statements and other information with the
Securities and Exchange Commission. You may read and copy this information at
the public reference facilities maintained by the Commission at:
- The Commission's room 1024, 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549
- The Commission's regional offices at
- 7 World Trade Center, 13th Floor, New York, New York 10048 and
- Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661.
You may obtain information on the operation of the public reference room by
calling the Commission at 1-800-SEC-0330. Nextel's filings are also available on
the Commission's web site on the Internet at http://www.sec.gov.
Nextel filed a registration statement with the Commission under the
Securities Act of 1933 to register the exchange notes to be issued in the
exchange offer. As allowed by the Commission's rules, this prospectus does not
contain all of the information you can find in the registration statement and
its exhibits. As a result, statements in this prospectus concerning the contents
of any contract, agreement or other document are not necessarily complete. If
Nextel filed any contract, agreement or other document as an exhibit to the
registration statement, you should read the exhibit for a more complete
understanding of the document or matter involved.
B. INCORPORATION OF DOCUMENTS BY REFERENCE
The Commission allows Nextel to "incorporate by reference" information into
this prospectus. This means Nextel can disclose information to you by referring
you to another document filed by Nextel with the Commission. Nextel will make
those documents available to you without charge upon your oral or written
request. Requests for those documents should be directed to Nextel
Communications, Inc., 2001 Edmund Halley Drive, Reston, Virginia 20191,
Attention: Investor Relations, telephone: (703) 433-4000. This prospectus
incorporates by reference the following documents:
- Annual Report on Form 10-K for the year ended December 31, 1998, filed
with the Commission on March 30, 1999;
- Current Reports on Form 8-K:
- dated and filed with the Commission on February 24, 1999; and
- dated and filed with the Commission on April 1, 1999; and
- Proxy Statement, dated as of April 7, 1999, filed with the Commission in
definitive form on April 8, 1999, with respect to the information
required by Items 401 (management), 402 (executive compensation), 403
(securities ownership) and 404 (certain relationships and related
transactions) of Regulation S-K promulgated under the Securities Act of
1933 and the Securities Exchange Act of 1934.
Nextel is also incorporating by reference additional documents it may file
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934 after the date of this prospectus and before the exchange of the
outstanding notes for the exchange notes. This additional information is a part
of this prospectus from the date of filing of those documents.
Any statements made in this prospectus or in a document incorporated or
deemed to be incorporated by reference in this prospectus will be deemed to be
modified or superseded for purposes of this prospectus to the extent that a
statement contained in this prospectus or in any other subsequently filed
document which is also incorporated or deemed to be incorporated by reference in
this prospectus modifies or
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<PAGE> 69
supersedes the statement. Any statement so modified or superseded will not be
deemed, except as so modified or superseded, to constitute a part of this
prospectus.
The information relating to Nextel contained in this prospectus should be
read together with the information in the documents incorporated by reference.
In addition, some of the information, including financial information, contained
in this prospectus or incorporated in this prospectus by reference should be
read in conjunction with documents filed with the Commission by Nextel
International, Inc.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Set forth below is a description of certain provisions of the Restated
Certificate of Incorporation, as amended (the "Nextel Charter"), of Nextel
Communications, Inc. ("New Nextel," and, together with "Old Nextel," its
predecessor corporation of the same name, "Nextel"), the Amended and Restated
By-laws of Nextel (the "Nextel By-laws"), and the Delaware General Corporation
Law (the "DGCL"). This description is intended as a summary only and is
qualified in its entirety by reference to the Nextel Charter, the Nextel
By-laws, and the DGCL.
Elimination of Liability in Certain Circumstances. The Nextel Charter
provides that, to the full extent provided by law, a director will not be
personally liable to Nextel or its stockholders for or with respect to any acts
or omissions in the performance of his or her duties as a director. The DGCL
provides that a corporation may limit or eliminate a director's personal
liability for monetary damages to the corporation or its stockholders, except
for liability (i) for any breach of the director's duty of loyalty to such
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) for
paying a dividend or approving a stock repurchase in violation of Section 174 of
the DGCL, or (iv) for any transaction from which the director derived an
improper personal benefit.
While Article 7 of the Nextel Charter provides directors with protection
from awards for monetary damages for breaches of the duty of care, it does not
eliminate the directors' duty of care. Accordingly, Article 7 will have no
effect on the availability of equitable remedies such as an injunction or
rescission based on a director's breach of the duty of care. The provisions of
Article 7 as described above apply to officers of Nextel only if they are
directors of Nextel and are acting in their capacity as directors, and does not
apply to officers of Nextel who are not directors.
Indemnification and Insurance. Under the DGCL, directors and officers as
well as other employees and individuals may be indemnified against expenses
(including attorneys' fees), judgments, fines, and amounts paid in settlement in
connection with specified actions, suits, or proceedings, whether civil,
criminal, administrative, or investigative (other than an action by or in the
right of the corporation as a derivative action) if they acted in good faith and
in a manner they reasonably believed to be in or not opposed to the best
interest of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe their conduct was unlawful.
Article 6 of the Nextel Charter and Article VII of the Nextel By-laws
provide to directors and officers indemnification to the full extent provided by
law, thereby affording the directors and officers of Nextel the protections
available to directors and officers of Delaware corporations. Article VII of the
Nextel By-laws also provides that expenses incurred by a person in defending a
civil or criminal action, suit, or proceeding by reason of the fact that he or
she is or was a director or officer shall be paid in advance of the final
disposition of such action, suit, or proceeding upon receipt of an undertaking
by or on behalf of such director or officer to repay such amount if it shall
ultimately be determined that he or she is not entitled to be indemnified by
Nextel as authorized by relevant Delaware law. Nextel has obtained directors and
officers liability insurance providing coverage to its directors and officers.
On September 12, 1991, the Board of Directors of Nextel unanimously adopted
resolutions authorizing Nextel to enter into an Indemnification Agreement (the
"Indemnification Agreement") with each director of Nextel. Nextel has entered
into an Indemnification Agreement with each of its directors and officers.
One of the purposes of the Indemnification Agreements is to attempt to
specify the extent to which persons entitled to indemnification thereunder (the
"Indemnitees") may receive indemnification under circumstances in which
indemnity would not otherwise be provided by the DGCL. Pursuant to the
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Indemnification Agreements, an Indemnitee is entitled to indemnification as
provided by Section 145 of the DGCL and to indemnification for any amount which
the Indemnitee is or becomes legally obligated to pay relating to or arising out
of any claim made against such person because of any act, failure to act, or
neglect or breach of duty, including any actual or alleged error, misstatement,
or misleading statement, which such person commits, suffers, permits, or
acquiesces in while acting in the Indemnitee's position with Nextel. The
Indemnification Agreements are in addition to and are not intended to limit any
rights of indemnification which are available under the Nextel Charter or the
Nextel By-laws, any policy of insurance or otherwise. Nextel is not required
under the Indemnification Agreements to make payments in excess of those
expressly provided for in the DGCL in connection with any claim against the
Indemnitee:
(i) which results in a final, nonappealable order directing the
Indemnitee to pay a fine or similar governmental imposition which Nextel is
prohibited by applicable law from paying; or
(ii) based upon or attributable to the Indemnitee gaining in fact a
personal profit to which he was not legally entitled including, without
limitation, profits made from the purchase and sale by the Indemnitee of
equity securities of Nextel which are recoverable by Nextel pursuant to
Section 16(b) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and profits arising from transactions in publicly traded
securities of Nextel which were effected by the Indemnitee in violation of
Section 10(b) of the Exchange Act or Rule 10b-5 promulgated thereunder.
In addition to the rights to indemnification specified therein, the
Indemnification Agreements are intended to increase the certainty of receipt by
the Indemnitee of the benefits to which he or she is entitled by providing
specific procedures relating to indemnification.
The Indemnification Agreements are also intended to provide increased
assurance of indemnification by prohibiting Nextel from adopting any amendment
to the Nextel Charter or the Nextel By-laws which would have the effect of
denying, diminishing or encumbering the Indemnitee's rights pursuant thereto or
to the DGCL or any other law as applied to any act or failure to act occurring
in whole or in part prior to the effective date of such amendment.
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ITEM 21. EXHIBITS.
Pursuant to Item 601 of Regulation S-K, 17 C.F.R.
sec.229.601(b)(4)(iii)(A), Nextel has excluded from Exhibit No. 4 instruments
defining the rights of holders of long-term debt with respect to debt that does
not exceed 10% of the total assets of Nextel. Nextel agrees to furnish copies of
such instruments to the Commission upon request.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- -----------------------
<C> <C> <S>
4.1.1 -- Restated Certificate of Incorporation of Nextel (filed on
July 31, 1995 as Exhibits No. 4.1.1 and 4.1.2 to Nextel's
Post-Effective Amendment No. 1 on Form S-8 to Registration
Statement No. 33-91716 on Form S-4 (the "Nextel S-8
Registration Statement") and incorporated herein by
reference).
4.1.2 -- Certificate of Designation of the Powers, Preferences and
Relative, Participating, Optional and Other Special Rights
of 13% Series D Exchangeable Preferred Stock and
Qualifications, Limitations and Restrictions Thereof (filed
on July 21, 1997 as Exhibit 4.1 to the Current Report on
Form 8-K dated on July 21, 1997 and incorporated herein by
reference).
4.1.3 -- Certificate of Designation of the Powers, Preferences and
Relative, Participating, Optional and Other Special Rights
of 11.125% Series E Exchangeable Preferred Stock and
Qualifications, Limitations and Restrictions Thereof (filed
on February 12, 1998 as Exhibit 4.1 to the Current Report on
Form 8-K dated on February 11, 1998 (the "February 11 Form
8-K") and incorporated herein by reference).
4.2 -- Amended and Restated By-laws of Nextel (filed on July 31,
1995 as Exhibit No. 4.2 to the Nextel S-8 Registration
Statement and incorporated herein by reference).
4.3.1 -- Indenture between Old Nextel and The Bank of New York, as
Trustee, dated August 15, 1993 (the "August Indenture")
(filed on December 23, 1993 as Exhibit 4.13 to Old Nextel's
Registration Statement No. 33-73388 on Form S-4 and
incorporated herein by reference).
4.3.2 -- Supplemental Indenture, dated as of June 30 1995, to the
August Indenture between Nextel and The Bank of New York
(filed on November 14, 1995 as Exhibit 4.1 to Nextel's
Quarterly Report on Form 10-Q for the quarter ended
September 30, 1995 (the "November 14 Form 10-Q") and
incorporated herein by reference).
4.3.3 -- Second Supplemental Indenture, dated as of July 28, 1995, to
the August Indenture between ESMR, Inc. (now known as
Nextel), as Successor by Merger to Nextel and The Bank of
New York (relating to the August Indenture) (filed on
November 14, 1995 as Exhibit 4.3 to the November 14 Form
10-Q and incorporated herein by reference).
4.3.4 -- Third Supplemental Indenture, dated as of June 13, 1997, to
the August Indenture between Nextel Communications, Inc. and
The Bank of New York, as Trustee (filed on June 17, 1997 as
Exhibit 4.1 to the Current Report on Form 8-K dated June 13,
1997 (the "June 13 Form 8-K") and incorporated herein by
reference).
4.3.5 -- Fourth Supplemental Indenture, dated March 24, 1998, to the
August Indenture between Nextel Communications, Inc. and The
Bank of New York, as Trustee (filed on May 13, 1998 as
Exhibit 4.3 to Nextel's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1998 (the "May 13 Form 10-Q")
and incorporated herein by reference).
4.4.1 -- Indenture between Old Nextel and the Bank of New York, as
Trustee, dated as of February 15, 1994 (the "February
Indenture") (filed on March 1, 1994 as Exhibit 4.1 to Old
Nextel's Current Report on Form 8-K dated February 16, 1994
and incorporated herein by reference).
4.4.2 -- Supplemental Indenture dated as of June 30, 1995 to the
February Indenture between Old Nextel and The Bank of New
York (filed on November 14, 1995 as Exhibit 4.2 to the
November 14 Form 10-Q and incorporated herein by reference).
4.4.3 -- Second Supplemental Indenture, dated as of July 28, 1995, to
the February Indenture between ESMR, Inc. (now known as
Nextel), as Successor by Merger to Old Nextel and The Bank
of New York (relating to the February Indenture) (filed on
November 14, 1995 as Exhibit 4.4 to the November 14 Form
10-Q and incorporated herein by reference).
</TABLE>
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<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- -----------------------
<C> <C> <S>
4.4.4 -- Third Supplemental Indenture, dated as of June 13, 1997, to
the February Indenture between Nextel Communications, Inc.,
and The Bank of New York, as Trustee (filed on June 17, 1997
as Exhibit 4.2 to the June 13 Form 8-K and incorporated
herein by reference).
4.5.1 -- Indenture for Senior Redeemable Discount Notes due 2004,
dated as of January 13, 1994, between OneComm Corporation
(formerly called CenCall Communications Corp.) and The Bank
of New York (the "OneComm Indenture") (filed on June 7, 1995
as Exhibit 99.2 to Nextel's Registration Statement No.
33-93182 on Form S-4 (the "OneComm S-4 Registration
Statement") and incorporated herein by reference).
4.5.2 -- Supplemental Indenture, dated as of June 30, 1995, to the
OneComm Indenture between OneComm Corporation (formerly
called CenCall Communications Corp.) and The Bank of New
York (filed on November 14, 1995 as Exhibit 10.12 to the
November 14 Form 10-Q and incorporated herein by reference).
4.5.3 -- Second Supplemental Indenture, dated as of July 28, 1995, to
the OneComm Indenture between Nextel (formerly known as
ESMR, Inc.), as successor to OneComm Corporation and The
Bank of New York (filed on November 14, 1995 as Exhibit
10.13 to the November 14 Form 10-Q and incorporated herein
by reference).
4.5.4 -- Third Supplemental Indenture, dated as of June 13, 1997, to
the OneComm Indenture between Nextel and The Bank of New
York (filed on June 17, 1997 as Exhibit 4.5 to the June 13
Form 8-K and incorporated herein by reference).
4.6.1 -- Indenture for Senior Redeemable Discount Notes due 2004,
dated as of April 25, 1994, between Dial Call
Communications, Inc. and The Bank of New York (the "Dial
Call 2004 Indenture") (filed on June 7, 1995 as Exhibit 99.4
to the OneComm S-4 Registration Statement and incorporated
herein by reference).
4.6.2 -- Supplemental Indenture, dated as of August 7, 1995, to the
Dial Call 2004 Indenture between Dial Call Communications,
Inc. and The Bank of New York (filed on December 5, 1995 as
Exhibit 99.3 to the Nextel's Registration Statement No.
33-80021 on Form S-4 (the "Dial Page S-4 Registration
Statement") and incorporated herein by reference).
4.6.3 -- Second Supplemental Indenture, dated as of January 30, 1996,
to the Dial Call 2004 Indenture between Dial Page, Inc. (as
successor to Dial Call Communications, Inc.) and The Bank of
New York (filed on April 1, 1996 as Exhibit 4.26 to Nextel's
Annual Report on Form 10-K for the year ended December 31,
1995 (the "1995 Form 10-K") and incorporated herein by
reference).
4.6.4 -- Third Supplemental Indenture, dated as of January 30, 1996,
to the Dial Call 2004 Indenture between Nextel (as successor
to Dial Page, Inc.) and The Bank of New York (filed on April
1, 1996 as Exhibit 4.27 to the 1995 Form 10-K and
incorporated herein by reference).
4.6.5 -- Fourth Supplemental Indenture, dated as of June 13, 1997, to
the Dial Call 2004 Indenture between Nextel and The Bank of
New York (filed on June 17, 1997 as Exhibit 4.3 to the June
13 Form 8-K and incorporated herein by reference).
4.6.6 -- Fifth Supplement Indenture, dated March 24, 1998, to the
Dial Call 2004 Indenture between Nextel and The Bank of New
York (filed on May 13, 1998 as Exhibit 4.4 to the May 13
Form 10-Q and incorporated herein by reference).
4.7.1 -- Indenture for Senior Discount Notes due 2005, dated as of
December 22, 1993, between Dial Call Communications, Inc.
and The Bank of New York (the "Dial Call 2005 Indenture")
(filed as Exhibit 99.3 to the OneComm S-4 Registration
Statement and incorporated herein by reference).
4.7.2 -- Supplemental Indenture, dated as of April 25, 1994, to the
Dial Call 2005 Indenture between Dial Call Communications,
Inc. and The Bank of New York (filed on April 1, 1996 as
Exhibit 4.29 to the 1995 Form 10-K and incorporated herein
by reference).
4.7.3 -- Supplemental Indenture, dated as of June 30, 1995, to the
Dial Call 2005 Indenture between Dial Call Communications,
Inc. and The Bank of New York (filed on December 5, 1995 as
Exhibit 99.4 to the Dial Page S-4 Registration Statement and
incorporated herein by reference).
</TABLE>
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<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- -----------------------
<C> <C> <S>
4.7.4 -- Third Supplemental Indenture, dated as of January 30, 1996,
to the Dial Call 2005 Indenture between Dial Page Inc. (as
successor to Dial Call Communications, Inc.) and The Bank of
New York (filed on April 1, 1996 as Exhibit 4.31 to the 1995
Form 10-K and incorporated herein by reference).
4.7.5 -- Fourth Supplemental Indenture, dated as of January 30, 1996,
to the Dial Call 2005 Indenture between Nextel (as successor
to Dial Page, Inc.) and The Bank of New York (filed on April
1, 1996 as Exhibit 4.32 to the 1995 Form 10-K and
incorporated herein by reference).
4.7.6 -- Fifth Supplemental Indenture, dated as of June 13, 1997, to
the Dial Call 2005 Indenture between Nextel and The Bank of
New York (filed on June 17, 1997 as Exhibit 4.4 to the June
13 Form 8-K and incorporated herein by reference).
4.8.1 -- Indenture for Senior Discount Notes due 2007, dated as of
March 6, 1997, between McCaw International, Ltd. (now known
as Nextel International) and The Bank of New York, as
Trustee (the "NI 2007 Indenture") (filed on March 31, 1997
as Exhibit 4.24 to Nextel's Annual Report on Form 10-K for
the year ended December 31, 1996 (the "1996 Form 10-K") and
incorporated herein by reference).
4.8.2 -- Warrant Agreement, dated as of March 6, 1997, between McCaw
International, Ltd. and The Bank of New York (filed on March
31, 1997 as Exhibit 4.26 to the 1996 Form 10-K and
incorporated herein by reference).
4.9 -- Indenture dated September 17, 1997 between Nextel
Communications, Inc. and Harris Trust and Savings Bank, as
Trustee, relating to Nextel's 10.65% Senior Redeemable
Discount Notes due 2007 (filed on September 22, 1997 as
Exhibit 4.1 to Nextel's Current Report on Form 8-K dated
September 22, 1997 and incorporated herein by reference).
4.10 -- Indenture dated as of October 22, 1997 between Nextel
Communications, Inc. and Harris Trust and Savings Bank, as
Trustee, relating to Nextel's 9.75% Senior Serial Redeemable
Discount Notes due 2007 (filed on October 23, 1997 as
Exhibit 4.1 to Nextel's Current Report on Form 8-K dated
October 23, 1997 and incorporated herein by reference).
4.11 -- Indenture dated as of February 11, 1998, between Nextel
Communications, Inc. and Harris Trust and Savings Bank, as
Trustee, relating to Nextel's 9.95% Senior Serial Redeemable
Discount Notes due 2008 (filed on February 12, 1998 as
Exhibit 4.2 to the February 11 Form 8-K and incorporated
herein by reference).
4.12 -- Credit Agreement dated as of March 12, 1998 among Nextel,
NFC, the Restricted Companies party thereto, the Lenders
party thereto, Toronto Dominion (Texas) Inc., as
Administrative Agent, and The Chase Manhattan Bank as
Collateral Agent (filed as Exhibit 4.12 to Nextel's Annual
Report on Form 10-K for the year ended December 31, 1997 and
incorporated by reference herein).
+4.13 -- Indenture dated as of November 4, 1998 between Nextel
Communications, Inc. and Harris Trust and Savings Bank, as
Trustee, relating to Nextel's 12.0% Senior Serial Redeemable
Notes due 2008.
+4.14 -- Registration Rights Agreement, dated as of November 4, 1998
by and between Nextel and Morgan Stanley & Co. Incorporated.
4.15 -- Amendment No. 1 dated as of October 28, 1998, amending the
Credit Agreement dated as of March 12, 1998, between Nextel
Communications, Inc., Nextel Finance Company, the other
restricted companies party thereto, the lenders party
thereto and the Administrative Agent and Collateral Agent
(filed on October 29, 1998, as Exhibit 4.1 to Nextel's
Current Report on Form 8-K dated October 28, 1998, and
incorporated herein by reference).
+4.16 -- Certificate of Designation of the Powers, Preferences and
Relative, Participating, Optional and Other Special Rights
of Zero Coupon Convertible Preferred Stock due 2013 and
Qualifications, Limitations and Restrictions Thereof.
</TABLE>
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<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- -----------------------
<C> <C> <S>
4.17 -- Indenture for Senior Discount Notes due 2008, dated March
12, 1998, between Nextel International, Inc. and The Bank of
New York (filed on May 14, 1998 as Exhibit 4.1 to Nextel
International Inc.'s Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998 and incorporated herein by
reference).
4.18 -- Amendment No. 2, dated as of December 21, 1998, amending
Credit Agreement dated as of March 12, 1998, between Nextel
Communications, Inc., Nextel Finance Company, the other
restricted companies party thereto, the lenders party
thereto and the Administrative Agent and Collateral Agent
(filed as Exhibit 4.14.3 to Nextel's Annual Report on Form
10-K for the year ended December 31, 1998 and incorporated
herein by reference).
4.19 -- Registration Rights Agreement, dated December 23, 1998 by
and among Nextel, Goldman Sachs & Co., Morgan Stanley & Co.,
Incorporated and Nationsbanc Montgomery Securities LLC
(filed as Exhibit 4.13 to Nextel's Annual Report on Form
10-K for the year ended December 31, 1998 and incorporated
herein by reference).
*5 -- Opinion of Jones, Day, Reavis & Pogue regarding validity.
*8 -- Opinion of Jones, Day, Reavis & Pogue regarding certain tax
matters.
*12 -- Statement regarding computation of earnings to fixed charges
and preferred stock dividends.
21. -- Subsidiaries of the Company (filed on March 30, 1999 as
exhibit 21 to Nextel's Annual Report on Form 10-K for the
fiscal year ended December 31, 1998 and incorporated herein
by reference).
*23.1 -- Consent of Jones, Day, Reavis & Pogue (included in Exhibits
5 and 8).
*23.2 -- Consent of Deloitte & Touche LLP.
+24 -- Powers of Attorney.
+25 -- Statement of eligibility under the Trust Indenture Act of
1939 on Form T-1.
*99.1 -- Letter of Transmittal.
*99.2 -- Notice of Guaranteed Delivery.
</TABLE>
- ---------------
* filed herewith
+ previously filed
ITEM 22. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement; provided, however, that paragraphs (1)(i) and (1)(ii) do not
apply if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed
II-6
<PAGE> 76
with or furnished to the Commission by the registrant pursuant to
Sections 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(d) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
(e) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-7
<PAGE> 77
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS AMENDMENT TO ITS REGISTRATION STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF MCLEAN, IN
THE COMMONWEALTH OF VIRGINIA, ON THE 7TH DAY OF MAY 1999.
NEXTEL COMMUNICATIONS, INC.
By:/s/ THOMAS J. SIDMAN
------------------------------------
(THOMAS J. SIDMAN)
VICE PRESIDENT AND GENERAL COUNSEL
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN
THE CAPACITIES AND ON THE DATES INDICATED:
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<S> <C> <C>
* Chairman of the Board, Chief
- ----------------------------------------------------- Executive Officer and
(DANIEL F. AKERSON) Director (Principal Executive
Officer)
* President, Chief Operating
- ----------------------------------------------------- Officer and Director
(TIMOTHY M. DONAHUE)
* Vice President and Chief
- ----------------------------------------------------- Financial Officer
(STEVEN M. SHINDLER) (Principal Financial Officer)
* Vice President and Controller
- ----------------------------------------------------- (Principal Accounting
(WILLIAM G. ARENDT) Officer)
Vice Chairman of the Board
- ----------------------------------------------------- and Director
(MORGAN E. O'BRIEN)
* Director
- -----------------------------------------------------
(KEITH J. BANE)
* Director
- -----------------------------------------------------
(CRAIG O. MCCAW)
* Director
- -----------------------------------------------------
(KEISUKE NAKASAKI)
* Director
- -----------------------------------------------------
(DENNIS M. WEIBLING)
</TABLE>
II-8
<PAGE> 78
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<S> <C> <C>
* Director
- -----------------------------------------------------
(WILLIAM A. HOGLUND)
* Director
- -----------------------------------------------------
(WILLIAM E. CONWAY, JR.)
* Director
- -----------------------------------------------------
(FRANK M. DRENDEL)
/s/ THOMAS J. SIDMAN Attorney-in-fact May 7, 1999
- -----------------------------------------------------
(THOMAS J. SIDMAN)
</TABLE>
II-9
<PAGE> 79
EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE
- ------- ----------------------- ----
<C> <C> <S> <C>
+4.13 -- Indenture dated as of November 4, 1998 between Nextel
Communications, Inc. and Harris Trust and Savings Bank, as
Trustee (the "November 1998 Indenture"), relating to
Nextel's 12.0% Senior Serial Redeemable Notes due 2008.
+4.14 -- Registration Rights Agreement, dated as of November 4, 1998
by and between Nextel and Morgan Stanley & Co. Incorporated.
+4.16 -- Certificate of Designation of the Powers, Preferences and
Relative, Participating, Optional and Other Special Rights
of Zero Coupon Convertible Preferred Stock due 2013 and
Qualifications, Limitations and Restrictions Thereof.
*5 -- Opinion of Jones, Day, Reavis & Pogue regarding validity.
*8 -- Opinion of Jones, Day, Reavis & Pogue regarding certain tax
matters.
*12 -- Statement regarding computation of earnings to fixed charges
and preferred stock dividends.
*23.1 -- Consent of Jones, Day, Reavis & Pogue (included in Exhibits
5 and 8).
*23.2 -- Consent of Deloitte & Touche LLP.
+24 -- Powers of Attorney.
+25 -- Statement of eligibility under the Trust Indenture Act of
1939 on Form T-1.
*99.1 -- Letter of Transmittal.
*99.2 -- Notice of Guaranteed Delivery.
</TABLE>
- ---------------
* filed herewith
+ previously filed
<PAGE> 1
EXHIBIT 5
JONES, DAY, REAVIS & POGUE
3500 SunTrust Plaza
303 Peachtree Street, NE
Atlanta, Georgia 30308-3242
(404) 521-3939
May 6, 1999
Nextel Communications, Inc.
1505 Farm Credit Drive
McLean, Virginia 22102
Ladies and Gentlemen:
We are acting as counsel to Nextel Communications, Inc. (the "Company"),
a corporation organized under the laws of the State of Delaware, in connection
with (i) the offer to exchange (the "Senior Note Exchange Offer") $1,000
principal amount at maturity of the Company's 12% Senior Serial Redeemable Notes
due 2008 (the "Exchange Notes") for each $1,000 principal amount at maturity of
the Company's outstanding 12% Senior Serial Redeemable Notes due 2008 (the
"Private Notes") and (ii) the preparation of the prospectus (the "Prospectus")
contained in the registration statement on Form S-4 (the "Registration
Statement") (No. 333-72105) filed with the Securities and Exchange Commission by
the Company for the purpose of registering the Exchange Notes under the
Securities Act of 1933 (the "Act"). The Private Notes have been, and the
Exchange Notes will be, issued pursuant to an Indenture, dated as of November 4,
1998 (the "Indenture"), between the Company and Harris Trust and Savings Bank,
as Trustee. Unless otherwise defined herein, terms defined in the Prospectus are
used herein as defined therein.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such corporate records, agreements, documents, and other
instruments and such certificates or comparable documents of public officials
and representatives of the Company and have made such other and further
investigations as we have deemed relevant and necessary as a basis for the
opinions hereinafter set forth. In such examination, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such latter documents.
Based on the foregoing, and subject to the qualifications and limitations
stated herein, we are of the opinion that when the Exchange Notes, substantially
in the form as set forth on an exhibit to the Indenture filed as Exhibit 4.13.1
to the Registration Statement, have been duly executed by the Company and
authenticated by the Trustee in accordance with the Indenture and
<PAGE> 2
duly delivered in exchange for the Private Notes in accordance with the Senior
Note Exchange Offer in the manner described in the Registration Statement, the
Exchange Notes will constitute valid and legally binding obligations of the
Company enforceable in accordance with their terms, except to the extent
enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally and general equitable principles (whether considered
in a proceeding in equity or at law).
We hereby consent to the use of our name under the caption "Legal
Matters" in the Prospectus forming part of the Registration Statement and to the
filing of this opinion as Exhibit 5 to the Registration Statement.
Very truly yours,
/s/ Jones, Day, Reavis & Pogue
<PAGE> 1
EXHIBIT 8
JONES, DAY, REAVIS & POGUE
3500 SunTrust Plaza
303 Peachtree Street, NE
Atlanta, Georgia 30308-3242
(404) 521-3939
May 6, 1999
Nextel Communications, Inc.
1505 Farm Credit Drive
McLean, Virginia 22102
Re: Exchange Offer for 12% Senior Serial Redeemable Notes due 2008
Dear Sirs:
We have acted as counsel to Nextel Communications, Inc. (the "Company")
in connection with the Registration Statement on Form S-4, to which this opinion
appears as Exhibit 8, which includes the prospectus of the Company relating to
the offer by the Company to exchange (the "Exchange Offer") the Company's 12%
Senior Serial Redeemable Notes due 2008 (the "Exchange Notes") for the Company's
outstanding 12% Senior Serial Redeemable Notes due 2008 (the "Outstanding
Notes" and together with the Exchange Notes, the "Notes").
On the basis of the foregoing and upon consideration of applicable law,
we are of the opinion that, subject to the qualifications stated therein, the
discussion as to the United States federal income tax matters set forth under
the caption "VII. United States Federal Tax Consequences" in the prospectus
contained in the registration statement summarizes the principal United States
federal income tax consequences relevant to the Exchange Offer and to the
purchase, ownership and disposition of the Notes.
We hereby consent to the filing with the Securities and Exchange
Commission of this opinion as an exhibit to the registration statement and to
the reference to this firm in the prospectus constituting part of the
registration statement.
Very truly yours,
/s/ Jones, Day, Reavis & Pogue
<PAGE> 1
EXHIBIT 12
NEXTEL COMMUNICATONS INC. AND SUBSIDIARIES
STATEMENT REGARDING COMPUTATION OF RATIO OF EARNINGS
TO FIXED CHARGES AND PREFERRED DIVIDENDS
(dollars in thousands)
<TABLE>
<CAPTION>
Fiscal Year Nine Months
Ended Ended
March 31, December 31,
1994 1994
---------- ----------
<S> <C> <C>
Loss from continuing operations before
income tax benefit, equity in unconsolidated
subsidiaries, and minority interests (78,341) (197,194)
Add:
Interest expense on indebtedness (including amortization of
debt expense and discount) 29,891 69,491
Portion of rent expense representative of interest (30%) 2,456 11,100
========== ==========
Earnings as adjusted (45,994) (116,603)
========== ==========
Preferred stock dividends - -
Effective income tax (benefit) provision rate 78.5% 73.4%
---------- ----------
Preferred stock dividends on pretax basis - -
Fixed Charges:
Interest expense on indebtedness (including amortization of
debt expense and discount) 29,891 69,491
Portion of rent expense representative of interest (30%) 2,456 11,100
Capitalized interest 7,800 21,300
========== ==========
Fixed charges and preferred stock dividends 40,147 101,891
========== ==========
Ratio of earnings to fixed charges and preferred stock dividends (1.15) (1.14)
Deficiency 86,141 218,494
<CAPTION>
Year Ended December 31,
1995 1996 1997 1998
---------- ---------- ---------- -------
<S> <C> <C> <C> <C>
Loss from continuing operations before
income tax benefit, equity in unconsolidated
subsidiaries, and minority interests (531,767) (852,041) (1,298,341) (1,715,713)
Add:
Interest expense on indebtedness (including amortization of
debt expense and discount) 115,034 227,495 407,805 656,080
Portion of rent expense representative of interest (30%) 17,670 25,350 35,820 54,510
========== ========== ========== ==========
Earnings as adjusted (399,063) (599,196) (854,716) (1,005,123)
========== ========== ========== ==========
Preferred stock dividends - - 29,119 149,161
Effective income tax (benefit) provision rate 72.6% 73.8% 124.6% 89.9%
---------- ---------- ---------- ----------
Preferred stock dividends on pretax basis - - 36,290 134,116
Fixed Charges:
Interest expense on indebtedness (including amortization of
debt expense and discount) 115,034 227,495 407,805 656,080
Portion of rent expense representative of interest (30%) 17,670 25,350 35,820 54,510
Capitalized interest 31,000 32,900 43,000 55,200
========== ========== ========== ==========
Fixed charges and preferred stock dividends 163,704 285,745 522,915 899,906
========== ========== ========== ==========
Ratio of earnings to fixed charges and preferred stock dividends (2.44) (2.10) (1.63) (1.12)
Deficiency 562,767 884,941 1,377,631 1,905,029
</TABLE>
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement No. 333-72105 of Nextel Communications, Inc. on Form S-4
of our report dated February 22, 1999, appearing in the Annual Report on Form
10-K of Nextel Communications, Inc. for the year ended December 31, 1998, and
to the reference to us under the heading "Experts" in the Prospectus, which is
part of this Registration Statement.
/s/ DELOITTE & TOUCHE LLP
McLean, Virginia
May 7, 1999
<PAGE> 1
Exhibit 99.1
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON JUNE 7, 1999 UNLESS EXTENDED (THE "EXPIRATION DATE").
- --------------------------------------------------------------------------------
LETTER OF TRANSMITTAL
OFFER TO EXCHANGE
12% SENIOR SERIAL REDEEMABLE NOTES DUE 2008,
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
FOR ANY AND ALL OUTSTANDING
12% SENIOR SERIAL REDEEMABLE NOTES DUE 2008
OF
NEXTEL COMMUNICATIONS, INC.
Deliver to:
HARRIS TRUST AND SAVINGS BANK, EXCHANGE AGENT
<TABLE>
<S> <C> <C>
By Registered or Certified By Hand or Overnight Facsimile Transmission Number:
Mail: Delivery:
Harris Trust and Savings Harris Trust and Savings Bank (For Eligible Institutions Only)
c/o Harris Trust Company c/o Harris Trust Company (212) 701-7636
of New York of New York Confirm Receipt of Facsimile
P.O. Box 1010 88 Pine Street by Telephone:
Wall Street Station 19th Floor (212) 701-7624
New York, NY 10268-1010 New York, NY 10005
</TABLE>
Your delivery of this letter of transmittal will not be valid unless you
deliver it to one of the addresses, or transmit it to the facsimile number, set
forth above. Please carefully read this entire document, including the
instructions, before completing this letter of transmittal. DO NOT DELIVER THIS
LETTER OF TRANSMITTAL TO NEXTEL.
By completing this letter of transmittal, you acknowledge that you have
received and reviewed Nextel's prospectus dated May 7, 1999 and this letter of
transmittal, which together constitute the "Exchange Offer." This letter of
transmittal and the prospectus have been delivered to you in connection with
Nextel's offer to exchange $1,000 in principal amount at maturity of its 12%
Senior Serial Redeemable Notes due 2008, which have been registered under the
Securities Act (the "Exchange Notes") for $1,000 in principal amount at maturity
of its outstanding 12% Senior Serial Redeemable Notes due 2008 (the "Outstanding
Notes"). $300,000,000 in principal amount of the Outstanding Notes are currently
issued and outstanding.
This letter of transmittal is to be completed by Holder (this term is
defined below) of Outstanding Notes if:
(1) the Holder is delivering certificates for Outstanding Notes with
this document, or
(2) the tender of certificates for Outstanding Notes will be made by
book-entry transfer to the account maintained by Harris Trust and Savings
Bank, the exchange agent for these notes, at the Depository Trust Company
("DTC") according to the procedures described in the prospectus under the
heading "V.F. The Exchange Offer -- Procedures for Tendering." Please note
that delivery of documents required by this letter of transmittal to DTC
does not constitute delivery to the exchange agent.
You must tender your Outstanding Notes according to the guaranteed delivery
procedures described in this document if:
(1) your Outstanding Notes are not immediately available;
(2) you cannot deliver your Outstanding Notes, this letter of
transmittal and all required documents to the exchange agent before on or
before the Expiration Date; or
(3) you are unable to obtain confirmation of a book-entry tender of
your Outstanding Notes into the exchange agent's account at DTC on or
before the Expiration Date.
<PAGE> 2
More complete information about guaranteed delivery procedures is contained
in the prospectus under the heading "V.H. The Exchange Offer -- Guaranteed
Delivery Procedures." You should also read Instruction 1 to determine whether or
not this section applies to you.
As used in this letter of transmittal, the term "Holder" means (1) any
person in whose name Outstanding Notes are registered on the books of Nextel,
(2) any other person who has obtained a properly executed bond power from the
registered Holder or (3) any person whose Outstanding Notes are held of record
by DTC who desires to deliver such notes by book-entry transfer at DTC. You
should use this letter of transmittal to indicate whether or not you would like
to participate in the Exchange Offer. If you decide to tender your Outstanding
Notes, you must complete this entire letter of transmittal.
YOU MUST FOLLOW THE INSTRUCTIONS IN THIS LETTER OF TRANSMITTAL -- PLEASE
READ THIS ENTIRE DOCUMENT CAREFULLY. IF YOU HAVE QUESTIONS OR NEED HELP, OR IF
YOU WOULD LIKE ADDITIONAL COPIES OF THE PROSPECTUS AND THIS LETTER OF
TRANSMITTAL, YOU SHOULD CONTACT THE EXCHANGE AGENT AT (212) 701-7624 OR AT ITS
ADDRESS SET FORTH ABOVE.
Please describe your Outstanding Notes below.
<TABLE>
<C> <C> <S> <C>
- -----------------------------------------------------------------------------------------------------------
DESCRIPTION OF OUTSTANDING NOTES
- -----------------------------------------------------------------------------------------------------------
AGGREGATE PRINCIPAL
NAME(S) AND ADDRESSES(ES) AMOUNT OF
OF REGISTERED HOLDER(S) OUTSTANDING NOTES PRINCIPAL AMOUNT
(PLEASE COMPLETE, IF REPRESENTED BY OF OUTSTANDING
BLANK) CERTIFICATE NUMBER(S) CERTIFICATE(S) NOTES TENDERED*
- -----------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL
- -----------------------------------------------------------------------------------------------------------
</TABLE>
* You will be deemed to have tendered the entire principal amount of Outstanding
Notes represented in the column labeled "Aggregate Principal Amount of
Outstanding Notes Represented by Certificate(s)" unless you indicate otherwise
in the column labeled "Principal Amount of Outstanding Notes Tendered."
If you need more space, list the certificate numbers and principal amount
of Outstanding Notes on a separate schedule, sign the schedule and attach it to
this letter of transmittal.
[ ] CHECK HERE IF YOU HAVE ENCLOSED OUTSTANDING NOTES WITH THIS LETTER OF
TRANSMITTAL.
[ ] CHECK HERE IF YOU WILL BE TENDERING OUTSTANDING NOTES BY BOOK-ENTRY TRANSFER
MADE TO THE EXCHANGE AGENT'S ACCOUNT AT DTC
COMPLETE THE FOLLOWING ONLY IF YOU ARE AN ELIGIBLE INSTITUTION (THIS TERM
IS DEFINED BELOW):
2
<PAGE> 3
Name of Tendering Institution:
- --------------------------------------------------------------------------------
Account Number:
- --------------------------------------------------------------------------------
Transaction Code Number:
- --------------------------------------------------------------------------------
[ ] CHECK HERE IF YOU ARE DELIVERING TENDERED OUTSTANDING NOTES THROUGH A NOTICE
OF GUARANTEED DELIVERY AND HAVE ENCLOSED THAT NOTICE WITH THIS LETTER OF
TRANSMITTAL
COMPLETE THE FOLLOWING ONLY IF YOU ARE AN ELIGIBLE INSTITUTION:
Name(s) of Registered Holder(s) of Outstanding Notes:
- -----------------------------------------------------------------
- --------------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
- ----------------------------------------------------------------------
- --------------------------------------------------------------------------------
Window Ticket Number (if available):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Name of Institution that Guaranteed Delivery:
- -----------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Account Number (if delivered by book-entry transfer):
- --------------------------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 4, 5 AND 6)
Complete this section ONLY if: (1) certificates for untendered Outstanding
Notes are to be issued in the name of someone other than you; (2) certificates
for Exchange Notes issued in exchange for tendered and accepted Outstanding
Notes are to be issued in the name of someone other than you; or (3) Outstanding
Notes tendered by book-entry transfer that are not exchanged are to be returned
by credit to an account maintained at DTC.
Issue Certificate(s) to:
Name
- ----------------------------------------------
(PLEASE PRINT)
Address
- --------------------------------------------
------------------------------------------------------
------------------------------------------------------
(INCLUDE ZIP CODE)
------------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(PLEASE ALSO COMPLETE SUBSTITUTE FORM W-9)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4, 5 AND 6)
Complete this section ONLY if certificates for untendered Outstanding Notes,
or Exchange Notes issued in exchange for tendered and accepted Outstanding Notes
are to be sent to someone other than you, or to you at an address other than the
address shown above.
Mail and deliver Certificate(s) to:
Name
- ----------------------------------------------
(PLEASE PRINT)
Address
- --------------------------------------------
------------------------------------------------------
------------------------------------------------------
(INCLUDE ZIP CODE)
------------------------------------------------------
3
<PAGE> 4
Ladies and Gentlemen:
According to the terms and conditions of the Exchange Offer, I hereby
tender to Nextel the principal amount of Outstanding Notes indicated above. At
the time these notes are accepted by Nextel, and exchanged for the same
principal amount of Exchange Notes, I will sell, assign, and transfer to Nextel
all right, title and interest in and to the Outstanding Notes I have tendered. I
am aware that the exchange agent also acts as the agent of Nextel. By executing
this document, I irrevocably appoint the exchange agent as my agent and
attorney-in-fact for the tendered Outstanding Notes with full power of
substitution to:
1. deliver certificates for the Outstanding Notes, or transfer
ownership of the Outstanding Notes on the account books maintained by DTC,
to Nextel and deliver all accompanying evidences of transfer and
authenticity to Nextel, and
2. present the Outstanding Notes for transfer on the books of Nextel,
receive all benefits and exercise all rights of beneficial ownership of
these Outstanding Notes, according to the terms of the Exchange Offer. The
power of attorney granted in this paragraph is irrevocable and coupled with
an interest.
I represent and warrant that I have full power and authority to tender,
sell, assign, and transfer the Outstanding Notes that I am tendering. I
represent and warrant that Nextel will acquire good and unencumbered title to
the Outstanding Notes, free and clear of all liens, restrictions, charges and
encumbrances and that the Outstanding Notes will not be subject to any adverse
claim at the time Nextel acquires them. I further represent that:
1. any Exchange Notes I will acquire in exchange for the Outstanding
Notes I have tendered will be acquired in the ordinary course of business;
2. I have not engaged in, do not intend to engage in, and have no
arrangement with any person to engage in, a distribution of any Exchange
Notes issued to me; and
3. I am not an "affiliate" (as defined in Rule 405 under the
Securities Act) of Nextel.
I understand that the Exchange Offer is being made in reliance on
interpretations contained in letters issued to third parties by the staff of the
Securities and Exchange Commission ("Commission"). These letters provide that
the Exchange Notes issued in exchange for the Outstanding Notes in the Exchange
Offer may be offered for resale, resold, and otherwise transferred by a Holder
of Exchange Notes, unless that person is an "affiliate" of Nextel within the
meaning of Rule 405 under the Securities Act, without compliance with the
registration and prospectus delivery provisions of the Securities Act. The
Exchange Notes must be acquired in the ordinary course of the Holder's business
and the Holder must not be engaging in, must not intend to engage in, and must
not have any arrangement or understanding with any person to participate in, a
distribution of the Exchange Notes.
If I am a broker-dealer that will receive Exchange Notes for my own account
in exchange for Outstanding Notes that were acquired as a result of
market-making activities or other trading activities (a "Participating
Broker-Dealer"), I acknowledge that I will deliver a prospectus in connection
with any resale of the Exchange Notes. However, by this acknowledgment and by
delivering a prospectus, I will not be deemed to admit that I am an
"underwriter" within the meaning of the Securities Act. If I am a Participating
Broker-Dealer, I will, on a weekly basis during the 90-day period following the
Expiration Date, or any longer period required if use of the prospectus has been
suspended by Nextel, contact counsel to the Placement Agents of the initial
offering of the Outstanding Notes at (212) 848-7293 to confirm the availability
of the prospectus for delivery in connection with resales.
Upon request, I will execute and deliver any additional documents deemed by
the exchange agent or Nextel to be necessary or desirable to complete the
assignment, transfer, and purchase of the Outstanding Notes I have tendered.
I understand that Nextel will be deemed to have accepted validly tendered
Outstanding Notes when Nextel gives oral or written notice of acceptance to the
exchange agent.
4
<PAGE> 5
If, for any reason, any tendered Outstanding Notes are not accepted for
exchange in the Exchange Offer, certificates for those unaccepted Outstanding
Notes will be returned to me without charge at the address shown below or at a
different address if one is listed under "Special Delivery Instructions." Any
unaccepted Outstanding Notes which had been tendered by book-entry transfer will
be credited to an account at DTC, as soon as reasonably possible after the
Expiration Date.
All authority granted or agreed to be granted by this letter of transmittal
will survive my death, incapacity or, if I am a corporation or institution, my
dissolution and every obligation under this letter of transmittal is binding
upon my heirs, personal representatives, successors, and assigns.
I understand that tenders of Outstanding Notes according to the procedures
described in the prospectus under the heading "V.F. The Exchange
Offer -- Procedures for Tendering" and in the instructions included in this
document constitute a binding agreement between myself and Nextel subject to the
terms and conditions of the Exchange Offer.
Unless I have described other instructions in this letter of transmittal
under the section "Special Issuance Instructions," please issue the certificates
representing Exchange Notes issued and accepted in exchange for my tendered and
accepted Outstanding Notes in my name, and issue any replacement certificates
for Outstanding Notes not tendered or not exchanged in my name. Similarly,
unless I have instructed otherwise under the section "Special Delivery
Instructions," please send the certificates representing the Exchange Notes
issued in exchange for tendered and accepted Outstanding Notes and any
certificates for Outstanding Notes that were not tendered or not exchanged, as
well as any accompanying documents, to me at the address shown below my
signature. If both "Special Issuance Instructions" and "Special Delivery
Instructions" are completed, please issue the certificates representing the
Exchange Notes issued in exchange for my tendered and accepted Outstanding Notes
in the name(s) of, and return any Outstanding Notes that were not tendered or
exchanged and send such certificates to, the person(s) so indicated. I
understand that if Nextel does not accept any of the tendered Outstanding Notes
for exchange, Nextel has no obligation to transfer any Outstanding Notes from
the name of the registered Holder(s) according to my instructions in the
"Special Issuance Instructions" and "Special Delivery Instructions" sections of
this document.
5
<PAGE> 6
PLEASE SIGN HERE WHETHER OR NOT
OUTSTANDING NOTES ARE BEING PHYSICALLY TENDERED HEREBY
<TABLE>
<S> <C>
- ------------------------------------------------ ------------------------------------------------
(Date)
- ------------------------------------------------ ------------------------------------------------
Signature(s) of Registered Holder(s) (Date)
or Authorized Signatory
Area Code and Telephone Number(s):
- --------------------------------------------------------------------------------------------------
Tax Identification or Social Security Number(s):
- --------------------------------------------------------------------------------------------------
</TABLE>
The above lines must be signed by the registered Holder(s) of Outstanding
Notes as their name(s) appear(s) on the certificate for the Outstanding Notes or
by person(s) authorized to become registered Holders(s) by a properly completed
bond power from the registered Holder(s). A copy of the completed bond power
must be delivered with this letter of transmittal. If any Outstanding Notes
tendered through this letter of transmittal are held of record by two or more
joint Holders, then all such Holders must sign this letter of transmittal. If
the signature is by trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, then such person must (1) state his or her full
title below and (2) unless waived by Nextel, submit evidence satisfactory to
Nextel of such person's authority to act on behalf of the Holder. See
Instruction 4 for more information about completing this letter of transmittal.
<TABLE>
<S> <C>
Name(s):
------------------------------------------------------------
------------------------------------------------------------
(Please Print)
Capacity:
------------------------------------------------------------
Address:
------------------------------------------------------------
------------------------------------------------------------
(Include Zip Code)
Signature(s) Guaranteed by an Eligible Institution, if
required by Instruction 4:
------------------------------------------------------------
(Authorized Signature)
------------------------------------------------------------
(Title)
------------------------------------------------------------
(Name of Firm)
</TABLE>
Dated
- ------------------------ , 1999
6
<PAGE> 7
PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW.
PAYOR'S NAME: HARRIS TRUST AND SAVINGS BANK
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
PART 1--PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT ----------------------------
SUBSTITUTE AND CERTIFY BY SIGNING AND DATING BELOW. SOCIAL SECURITY NUMBER
FORM W-9
OR
----------------------------
EMPLOYER IDENTIFICATION NUMBER
----------------------------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE PART 2 -- CERTIFICATION -- UNDER PENALTIES OF PART 3 --
PERJURY, I CERTIFY THAT: AWAITING TIN [ ]
(1) THE NUMBER SHOWN ON THIS FORM IS MY CORRECT TIN
(OR I AM WAITING FOR A NUMBER TO BE ISSUED TO ME)
AND
(2) I AM NOT SUBJECT TO BACKUP WITHHOLDING BECAUSE
(A) I AM EXEMPT FROM BACKUP WITHHOLDING, OR (B) I
HAVE NOT BEEN NOTIFIED BY THE INTERNAL REVENUE
SERVICE ("IRS") THAT I AM SUBJECT TO BACKUP
WITHHOLDING AS A RESULT OF FAILURE TO REPORT ALL
INTEREST OR DIVIDENDS, OR (C) THE IRS HAS
NOTIFIED ME THAT I AM NO LONGER SUBJECT TO BACKUP
WITHHOLDING.
----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C>
CERTIFICATION INSTRUCTIONS -- YOU MUST CROSS OUT ITEM (2) IN THE BOX ABOVE IF YOU
PAYER'S REQUEST FOR HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE CURRENTLY SUBJECT TO BACKUP WITHHOLDING
TAXPAYER IDENTIFICATION BECAUSE OF UNDERREPORTING INTEREST OR DIVIDENDS ON YOUR TAX RETURN.
NUMBER ("TIN")
CERTIFICATION SIGNATURE __________ DATE __________ , 1998
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: IF YOU DO NOT COMPLETE AND RETURN THIS FORM YOU MAY BE SUBJECT TO BACKUP
WITHHOLDING OF 31% OF PAYMENTS MADE TO YOU UNDER THIS EXCHANGE OFFER. FOR
MORE INFORMATION, PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION
OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9.
<TABLE>
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I CERTIFY UNDER PENALTIES OF PERJURY THAT A TAXPAYER IDENTIFICATION NUMBER HAS NOT BEEN ISSUED TO ME, AND
EITHER (A) I HAVE MAILED OR DELIVERED AN APPLICATION TO RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE
APPROPRIATE INTERNAL REVENUE CENTER OR SOCIAL SECURITY ADMINISTRATION OFFICE OR (B) I INTEND TO MAIL OR
DELIVER AN APPLICATION IN THE NEAR FUTURE. I UNDERSTAND THAT IF I DO NOT PROVIDE A TAXPAYER IDENTIFICATION
NUMBER WITHIN SIXTY (60) DAYS, 31% OF ALL REPORTABLE PAYMENTS MADE TO ME THEREAFTER WILL BE WITHHELD UNTIL I
PROVIDE A NUMBER.
</TABLE>
<TABLE>
<S> <C> <C> <C>
------------------------------------------------------------------- ------------------------------
Signature Date
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE> 8
INSTRUCTIONS
PART OF THE TERMS AND CONDITIONS OF THE
EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND OUTSTANDING NOTES. The
tendered Outstanding Notes or a confirmation of book-entry delivery, as well as
a properly completed and executed copy or facsimile of this letter of
transmittal and any other required documents must be received by the exchange
agent at its address listed on the cover of this document before 5:00 p.m., New
York City time, on the Expiration Date. YOU ARE RESPONSIBLE FOR THE DELIVERY OF
THE OUTSTANDING NOTES, THIS LETTER OF TRANSMITTAL AND ALL REQUIRED DOCUMENTS TO
THE EXCHANGE AGENT. EXCEPT UNDER THE LIMITED CIRCUMSTANCES DESCRIBED BELOW, THE
DELIVERY OF THESE DOCUMENTS WILL BE CONSIDERED TO HAVE BEEN MADE ONLY WHEN
ACTUALLY RECEIVED OR CONFIRMED BY THE EXCHANGE AGENT. WHILE THE METHOD OF
DELIVERY IS AT YOUR RISK AND CHOICE, NEXTEL RECOMMENDS THAT YOU USE AN OVERNIGHT
OR HAND DELIVERY SERVICE RATHER THAN REGULAR MAIL. YOU SHOULD SEND YOUR
DOCUMENTS WELL BEFORE THE EXPIRATION DATE TO ENSURE RECEIPT BY THE EXCHANGE
AGENT. YOU MAY REQUEST THAT YOUR BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY
OR NOMINEE DELIVER YOUR OUTSTANDING NOTES, THIS LETTER OF TRANSMITTAL AND ALL
REQUIRED DOCUMENTS TO THE EXCHANGE AGENT. DO NOT SEND YOUR OUTSTANDING NOTES TO
NEXTEL.
If you wish to tender your Outstanding Notes, but:
(a) your Outstanding Notes are not immediately available;
(b) you cannot deliver your Outstanding Notes, this letter of
transmittal and all required documents to the exchange agent before the
Expiration Date; or
(c) you are unable to complete the book-entry tender procedure before
the Expiration Date,
you must tender your Outstanding Notes according to the guaranteed delivery
procedure. A summary of this procedure follows, but you should read the section
in the prospectus titled "V.H. The Exchange Offer -- Guaranteed Delivery
Procedure" for more complete information. As used in this letter of transmittal,
an "Eligible Institution" is any participant in a Recognized Signature Guarantee
Medallion Program within the meaning of Rule 17Ad-15 of the Exchange Act.
For a tender made through the guaranteed delivery procedure to be valid,
the exchange agent must receive a properly completed and executed Notice of
Guaranteed Delivery or a facsimile of that notice before 5:00 p.m., New York
City time, on the Expiration Date. The Notice of Guaranteed Delivery must be
delivered by an Eligible Institution and must:
(a) state your name and address;
(b) list the certificate numbers and principal amounts of the
Outstanding Notes being tendered;
(c) state that tender of your Outstanding Notes is being made through
the Notice of Guaranteed Delivery; and
(d) guarantee that this letter of transmittal, or a facsimile of it,
the certificates representing the Outstanding Notes, or a confirmation of
DTC book-entry transfer, and all other required documents will be deposited
with the exchange agent by the Eligible Institution within three New York
Stock Exchange trading days after the Expiration Date.
The exchange agent must receive your Outstanding Notes certificates, or a
confirmation of DTC book entry, in proper form for transfer, this letter of
transmittal and all required documents within three New York Stock Exchange
trading days after the Expiration Date or your tender will be invalid and may
not be accepted for exchange.
Nextel has the sole right to decide any questions about the validity, form,
eligibility, time of receipt, acceptance or withdrawal of tendered Outstanding
Notes, and its decision will be final and binding. Nextel's interpretation of
the terms and conditions of the Exchange Offer, including the instructions
contained in this letter of transmittal and in the prospectus under the heading
"V.E. The Exchange Offer -- Conditions," will be final and binding on all
parties.
8
<PAGE> 9
Nextel has the absolute right to reject any or all of the tendered
Outstanding Notes if
(1) the Outstanding Notes are not properly tendered or
(2) in the opinion of counsel, the acceptance of those Outstanding
Notes would be unlawful.
Nextel may also decide to waive any conditions, defects, or invalidity of
tender of Outstanding Notes and accept such Outstanding Notes for exchange. Any
defect or invalidity in the tender of Outstanding Notes that is not waived by
Nextel must be cured within the period of time set by Nextel.
It is your responsibility to identify and cure any defect or invalidity in
the tender of your Outstanding Notes. Your Outstanding Notes will not be
considered to have been made until any defect is cured or waived. Neither
Nextel, the exchange agent nor any other person is required to notify you that
your tender was invalid or defective, and no one will be liable for any failure
to notify you of such a defect or invalidity in your tender of Outstanding
Notes. As soon as reasonably possible after the Expiration Date, the exchange
agent will return to the Holder tendering any Outstanding Notes that were
invalidly tendered if the defect of invalidity has not been cured or waived.
2. TENDER BY HOLDER. You must be a Holder of Outstanding Notes in order to
participate in the Exchange Offer. If you are a beneficial holder of Outstanding
Notes who wishes to tender, but you are not the registered Holder, you must
arrange with the registered Holder to execute and deliver this letter of
transmittal on his, her or its behalf. Before completing and executing this
letter of transmittal and delivering the registered Holder's Outstanding Notes,
you must either make appropriate arrangements to register ownership of the
Outstanding Notes in your name, or obtain a properly executed bond power from
the registered Holder. The transfer of registered ownership of Outstanding Notes
may take a long period of time.
3. PARTIAL TENDERS. If you are tendering less than the entire principal
amount of Outstanding Notes represented by a certificate, you should fill in the
principal amount you are tendering in the third column of the box entitled
"Description of Outstanding Notes." The entire principal amount of Outstanding
Notes listed on the certificate delivered to the exchange agent will be deemed
to have been tendered unless you fill in the appropriate box. If the entire
principal amount of all Outstanding Notes is not tendered, a certificate will be
issued for the principal amount of those untendered Outstanding Notes not
tendered.
Unless a different address is provided in the appropriate box on this
letter of transmittal, certificate(s) representing Exchange Notes issued in
exchange for any tendered and accepted Outstanding Notes will be sent to the
registered Holder at his or her registered address, promptly after the
Outstanding Notes are accepted for exchange. In the case of Outstanding Notes
tendered by book-entry transfer, any untendered Outstanding Notes and any
Exchange Notes issued in exchange for tendered and accepted Outstanding Notes
will be credited to accounts at DTC.
4. SIGNATURES ON THE LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURES.
- If you are the registered Holder of the Outstanding Notes tendered with
this document, and are signing this letter of transmittal, your signature
must match exactly with the name(s) written on the face of the
Outstanding Notes. There can be no alteration, enlargement, or change in
your signature in any manner. If certificates representing the Exchange
Notes, or certificates issued to replace any Outstanding Notes you have
not tendered are to be issued to you as the registered Holder, do not
endorse any tendered Outstanding Notes, and do not provide a separate
bond power.
- If you are not the registered Holder, or if Exchange Note or any
replacement Outstanding Note certificates will be issued to someone other
than you, you must either properly endorse the Outstanding Notes you have
tendered or deliver with this letter of transmittal a properly completed
separate bond power. Please note that the signatures on any endorsement
or bond power must be guaranteed by an Eligible Institution.
- If you are signing this letter of transmittal but are not the registered
Holder(s) of any Outstanding Notes listed on this document under the
"Description of Outstanding Notes," the Outstanding Notes tendered must
be endorsed or accompanied by appropriate bond powers, in each case
signed in the
9
<PAGE> 10
name of the registered Holder(s) exactly as it appears on the Outstanding
Notes. Please note that the signatures on any endorsement or bond power
must be guaranteed by an Eligible Institution.
- If this letter of transmittal, any Outstanding Notes tendered or any bond
powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations, or others acting in a
fiduciary or representative capacity, that person must indicate their
title or capacity when signing. Unless waived by Nextel, evidence
satisfactory to Nextel of that person's authority to act must be
submitted with this letter of transmittal. Please note that the
signatures on any endorsement or bond power must be guaranteed by an
Eligible Institution.
- All signatures on this letter of transmittal must be guaranteed by an
Eligible Institution unless one of the following situations apply:
- If this letter of transmittal is signed by the registered Holder(s) of
the Outstanding Notes tendered with this letter of transmittal and such
Holder(s) has not completed the box titled "Special Issuance
Instructions" or the box titled "Special Delivery Instructions;" or
- If the Outstanding Notes are tendered for the account of an Eligible
Institution.
5. SPECIAL PAYMENT AND ISSUANCE INSTRUCTIONS. If different from the name
and address of the person signing this letter of transmittal, you should
indicate, in the applicable box or boxes, the name and address where Outstanding
Notes issued in replacement for any untendered or tendered but unaccepted
Outstanding Notes should be issued or sent. If replacement Original Notes are to
be issued in a different name, you must indicate the taxpayer identification or
social security number of the person named.
6. TRANSFER TAXES. Nextel will pay all transfer taxes, if any, applicable
to the exchange of Outstanding Notes in the Exchange Offer. However, transfer
taxes will be payable by you (or by the tendering Holder if you are signing this
letter on behalf of a tendering Holder) if:
- certificates representing Exchange Notes or notes issued to replace any
Outstanding Notes not tendered or accepted for exchange are to be
delivered to, or are to be registered or issued in the name of, a person
other than the registered Holder;
- tendered Outstanding Notes are registered in the name of any person other
than the person signing this letter of transmittal; or
- a transfer tax is imposed for any reason other than the exchange of
Outstanding Notes according to the Exchange Offer. If satisfactory
evidence of the payment of those taxes or an exemption from payment is
not submitted with this letter of transmittal, the amount of those
transfer taxes will be billed directly to the tendering Holder. Until
those transfer taxes are paid, Nextel will not be required to deliver any
Exchange Notes required to be delivered to, or at the direction of, such
tendering Holder.
Except as provided in this Instruction 6, it is not necessary for transfer
tax stamps to be attached to the Outstanding Notes listed in this letter of
transmittal.
7. FORM W-9. You must provide the exchange agent with a correct Taxpayer
Identification Number ("TIN") for the Holder on the enclosed Form W-9. If the
Holder is an individual, the TIN is his or her social security number. If you do
not provide the required information on the Form W-9, you may be subject to 31%
Federal income tax withholding on certain payments made to the Holders of
Exchange Notes. Certain Holders, such as corporations and certain foreign
individuals, are not subject to these backup withholding and reporting
requirements. For additional information, please read the enclosed Guidelines
for Certification of TIN on Substitute Form W-9. To prove to the exchange agent
that a foreign individual qualifies as an exempt Holder, the foreign individual
must submit a Form W-8, signed under penalties of perjury, certifying as to that
individual's exempt status. You can obtain a Form W-8 from the exchange agent.
8. WAIVER OF CONDITIONS. Nextel may choose, at any time and for any
reason, to amend, waive or modify certain of the conditions to the Exchange
Offer. The conditions applicable to tenders of Outstanding Notes in the Exchange
Offer are described in the prospectus under the heading "V.E. The Exchange
Offer -- Conditions."
10
<PAGE> 11
9. MUTILATED, LOST, STOLEN OR DESTROYED OUTSTANDING NOTES. If your
Outstanding Notes have been mutilated, lost, stolen or destroyed, you should
contact the exchange agent at the address listed on the cover page of this
document for further instructions.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. If you have questions,
need assistance, or would like to receive additional copies of the prospectus or
this letter of transmittal, you should contact the exchange agent at the address
listed in the prospectus. You may also contact your broker, dealer, commercial
bank, trust company, or other nominee for assistance concerning the Exchange
Offer.
11
<PAGE> 12
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GUIDE THE
PAYER.-- Social Security Numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer Identification Numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<CAPTION>
- -----------------------------------------------------------
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- -----------------------------------------------------------
<C> <S> <C>
1. An individual's account. The individual
2. Two or more individuals The actual owner of
(joint account) the account or, if
combined funds, the
first individual on
the account(1)
3. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
4. a. The usual revocable savings The grantor-trustee
trust account (grantor is (1)
also trustee)
b. So-called trust account The actual owner(1)
that is not a legal or valid
trust under State law
5. Sole proprietorship account The owner(3)
- -----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------
GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- -----------------------------------------------------------
<C> <S> <C>
6. A valid trust, estate, or The legal entity (Do
pension trust not furnish the
identifying number of
the personal
representative or
trustee unless the
legal entity itself is
not designated in the
account title.)(4)
7. Corporate account The corporation
8. Religious, charitable, or The organization
educational organization
account
9. Partnership The partnership
10. Association, club or other The organization
tax-exempt organization
11. A broker or registered nominee The broker or nominee
12. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a State
or local government, school
district, or prison) that
receives agricultural program
payments
- -----------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has a Social Security Number, that
person's number must be furnished.
(2) Circle the minor's name and furnish the minor's Social Security Number.
(3) Show the name of the owner. You may also enter your business name. You may
use your Social Security Number or Employer Identification Number.
(4) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number
will be considered to be that of the first name listed.
12
<PAGE> 13
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
OBTAINING A NUMBER
If you don't have a Taxpayer Identification Number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on broker transactions
include the following:
- A corporation.
- A financial institution.
- An organization exempt from tax under Section 501(a), an individual
retirement plan, or a custodial account under Section 403(b)(7), if the
account satisfies the requirements of Section 401(f)(2).
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency or instrumentality thereof.
- A dealer in securities or commodities required to be registered in the
United States, the District of Columbia, or a possession of the United
States.
- A real estate investment trust.
- A futures commissions merchant registered with the Commodity Futures Trading
Commission.
- A common trust fund operated by a bank under Section 584(a).
- An entity registered at all times under the Investment Company Act of 1940.
- A foreign central bank of issue.
- A person registered under the Investment Advisors Act of 1940 who regularly
acts as a broker.
Payments of dividends not generally subject to backup withholding include the
following:
- Payments to nonresident aliens subject to withholding under Section 1441.
- Payments to partnerships not engaged in a trade or business in the United
States and which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments described in Section 404(k) made by an employee stock ownership
plan.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct Taxpayer Identification Number to the payer.
- Payments of tax-exempt interest (including tax-exempt interest dividends
under Section 852).
- Payments described in Section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under Section 1451.
- Payments made by certain foreign organizations.
- Payments of mortgage interest to you.
Exempt payees described above should file Substitute Form W-9 to avoid
possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH
YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM,
SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER.
PRIVACY ACT NOTICE -- Section 6109 requires most recipients of dividend,
interest, or other payments to give Taxpayer Identification Numbers to payers
who must report the payments to the IRS. The IRS uses the numbers for
identification purposes. Payers must be given the numbers whether or not
recipients are required to file tax returns. Payers must generally withhold
31% of taxable interest, dividend, and certain other payments to a payee who
does not furnish a Taxpayer Identification Number to a payer. Certain
penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. -- If you
fail to furnish your Taxpayer Identification Number to a payer, you are subject
to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE IRS.
13
<PAGE> 14
(DO NOT WRITE IN SPACE BELOW)
<TABLE>
<S> <C> <C>
CERTIFICATE OUTSTANDING NOTES OUTSTANDING NOTES
SURRENDERED TENDERED ACCEPTED
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
Delivery Prepared by:
Checked by:
Date:
</TABLE>
14
<PAGE> 1
Exhibit 99.2
NOTICE OF GUARANTEED DELIVERY
FOR
12% SENIOR SERIAL REDEEMABLE NOTES DUE 2008
OF
NEXTEL COMMUNICATIONS, INC.
As set forth in the Prospectus dated May 7, 1999 (the "Prospectus"), of
Nextel Communications, Inc. and in the letter of transmittal, this form or one
substantially similar must be used to accept Nextel's offer to exchange all of
its outstanding 12% Senior Serial Redeemable Notes due 2008 (the "Outstanding
Notes") for its 12% Senior Serial Redeemable Notes due 2008, which have been
registered under the Securities Act of 1933, if certificates for the Outstanding
Notes are not immediately available or if the Outstanding Notes, the letter of
transmittal or any other required documents cannot be delivered to the exchange
agent, or the procedure for book-entry transfer cannot be completed, prior to
5:00 p.m., New York City time, on the Expiration Date (as defined in the
Prospectus). This form may be delivered by an Eligible Institution by hand or
transmitted by facsimile transmission, overnight courier or mail to the exchange
agent as indicated below.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON JUNE 7,
1999, UNLESS THE OFFER IS EXTENDED (THE "EXPIRATION DATE"). TENDERS OF
OUTSTANDING NOTES MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M. ON THE
EXPIRATION DATE.
Deliver to:
HARRIS TRUST AND SAVINGS BANK,
EXCHANGE AGENT
<TABLE>
<S> <C> <C>
By Registered or Certified Mail: By Hand or Overnight Delivery: Facsimile Transmission Number:
Harris Trust and Savings Bank Harris Trust and Savings Bank (For Eligible Institutions Only)
c/o Harris Trust Company of c/o Harris Trust Company of (212) 701-7636
New York New York
P. O. Box 1010 88 Pine Street Confirm Receipt of Facsimile
Wall Street Station 19th Floor by Telephone:
New York, NY 10268-1010 New York, NY 10005 (212) 701-7624
</TABLE>
Delivery of this notice to an address, or transmission of instructions via
a facsimile, other than as set forth above, does not constitute a valid
delivery.
This form is not to be used to guarantee signatures. If a signature on the
letter of transmittal to be used to tender Outstanding Notes is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the letter
of transmittal.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to Nextel Communications, Inc., a Delaware
corporation (the "Company"), upon the terms and subject to the conditions set
forth in the Prospectus and the letter of transmittal (which together constitute
the "Exchange Offer"), receipt of which is hereby acknowledged, Outstanding
Notes pursuant to guaranteed delivery procedures set forth in Instruction 1 of
the letter of transmittal.
The undersigned understands that tenders of Outstanding Notes will be
accepted only in principal amounts equal to $1,000 or integral multiples
thereof. The undersigned understands that tenders of Outstanding Notes pursuant
to the Exchange Offer may be withdrawn only in accordance with the procedures
set forth in "V.I. The Exchange Offer -- Withdrawal of Tenders" section of the
Prospectus.
All authority herein conferred or agreed to be conferred by this Notice of
Guaranteed Delivery shall survive the death, incapacity or dissolution of the
undersigned and every obligation of the undersigned under this Notice of
Guaranteed Delivery shall be binding upon the heirs, personal representatives,
executors, administrators, successors, assigns, trustees in bankruptcy and other
legal representatives of the undersigned.
NOTE: SIGNATURES MUST BE PROVIDED WHERE INDICATED BELOW.
<TABLE>
<S> <C>
Certificate No(s). for Outstanding Notes Principal Amount of Outstanding Notes
(if available)
- ----------------------------------------------------- -----------------------------------------------------
Principal Amount of Outstanding Notes Tendered Signature(s)
- ----------------------------------------------------- -----------------------------------------------------
Dated: If Outstanding Notes will be delivered by book-entry
transfer at the Depository Trust Company, Depository
Account No.:
- ----------------------------------------------------- -----------------------------------------------------
</TABLE>
This Notice of Guaranteed Delivery must be signed by the registered
holder(s) of Outstanding Notes exactly as its (their) name(s) appear on
certificates of Outstanding Notes or on a security position listing as the owner
of Outstanding Notes, or by person(s) authorized to become registered holder(s)
by endorsements and documents transmitted with this
2
<PAGE> 3
Notice of Guaranteed Delivery. If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer or other person acting in a
fiduciary or representative capacity, such person must provide the following
information:
Please print name(s) and address(es)
<TABLE>
<S> <C>
Name(s): ------------------------------------------------------------
------------------------------------------------------------
Capacity: ------------------------------------------------------------
------------------------------------------------------------
Address(es): ------------------------------------------------------------
------------------------------------------------------------
Area Code and Telephone No.: ------------------------------------------------------------
------------------------------------------------------------
</TABLE>
3
<PAGE> 4
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member firm of a registered national securities exchange
or of the National Association of Securities Dealers, Inc., or a commercial bank
or trust company having an office or correspondent in the United States or an
"eligible guarantor institution" within the meaning of Rule 17Ad-15 under the
Securities Exchange Act of 1934 (the "Exchange Act"), hereby
(a) represents that the above named person(s) "own(s)" the Outstanding
Notes to be tendered within the meaning of Rule 14e-4 under the
Exchange Act,
(b) represents that such tender of Outstanding Notes complies with Rule
14e-4 under the Exchange Act and
(c) guarantees that delivery to the exchange agent of certificates for the
Outstanding Notes to be tendered, proper form for transfer (or
confirmation of the book-entry transfer of such Outstanding Notes into
the exchange agent's account at the Depository Trust company, pursuant
to the procedures for book-entry transfer set forth in the prospectus),
with delivery of a properly completed and duly executed (or manually
signed facsimile) letter of transmittal with any required signatures
and any other required documents, will be received by the exchange
agent at one of its addresses set forth above within five business days
after the Expiration Date.
I HEREBY ACKNOWLEDGE THAT I MUST DELIVER THE LETTER OF TRANSMITTAL AND
OUTSTANDING NOTES TO BE TENDERED TO THE EXCHANGE AGENT WITHIN THE TIME PERIOD
SET FORTH AND THAT FAILURE TO DO SO COULD RESULT IN FINANCIAL LOSS TO ME.
<TABLE>
<S> <C>
- -------------------------------------------- --------------------------------------------
Name of Firm Authorized Signature
- -------------------------------------------- --------------------------------------------
Address Title
- -------------------------------------------- Name:
Zip Code --------------------------------------------
(Please Type or Print)
Area Code and Telephone No. Dated:
-------------------- --------------------------------------------
</TABLE>
NOTE: DO NOT SEND OUTSTANDING NOTES WITH THIS FORM; OUTSTANDING NOTES SHOULD BE
SENT WITH YOUR LETTER OF TRANSMITTAL SO THAT THEY ARE RECEIVED BY THE
EXCHANGE AGENT WITHIN THREE NEW YORK STOCK EXCHANGE TRADING DAYS AFTER THE
EXPIRATION DATE.
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