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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 10, 1999
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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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)
1505 FARM CREDIT DRIVE
MCLEAN, VIRGINIA 22102
(703) 394-3000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
THOMAS J. SIDMAN, ESQ.
VICE PRESIDENT AND GENERAL COUNSEL
NEXTEL COMMUNICATIONS, INC.
1505 FARM CREDIT DRIVE
MCLEAN, VIRGINIA 22102/(703) 394-3000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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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. [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE
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<S> <C> <C> <C> <C>
12% Senior Serial Redeemable
Notes Due 2008 $300,000,000(1) $333.33 $100,000,000(2) $27,800(3)
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(1) Represents the maximum principal amount at maturity of 12% Senior Serial
Redeemable Notes due 2008 that may be issued pursuant to the exchange offer
described in this registration statement.
(2) Represents one-third of the $1,000 principal amount at maturity per unit of
the outstanding 12% Senior Serial Redeemable Notes due 2008 to be tendered
to the registrant, which has an accumulated capital deficit, in exchange for
the notes registered under this registration statement.
(3) The registration fee, $27,800, is calculated under Rule 457(f)(2) of the
Securities Act of 1933 as follows: the product of .000278 and $100,000,000,
one-third of the principal amount at maturity of the outstanding notes that
may be tendered to the registrant, which has an accumulated deficit, in
exchange for the notes registered under this registration statement.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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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 FEBRUARY 10, 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 , 1999.
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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 , 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.
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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 , 1999.
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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.
1505 FARM CREDIT DRIVE
MCLEAN, VIRGINIA 22102
ATTENTION: INVESTOR RELATIONS
TELEPHONE: (703) 394-3000
IF YOU WOULD LIKE TO REQUEST COPIES OF THESE DOCUMENTS, PLEASE DO SO BY
, 1999 IN ORDER TO RECEIVE THEM BEFORE THE EXPIRATION OF THE
EXCHANGE OFFER. SEE "XII. WHERE YOU CAN GET MORE INFORMATION."
"Nextel" and "Nextel Direct Connect" are trademarks or service marks of
Nextel. "Motorola," "iDEN" and "i1000" are trademarks of Motorola, Inc.
2
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TABLE OF CONTENTS
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PAGE
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<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.......................................... 9
E. Summary Financial Information............................... 10
III. Risk Factors...................................................... 12
A. Risk Factors Relating to Nextel............................. 12
B. Risk Factors Relating to the Notes.......................... 21
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. Capitalization.................................................... 25
VI. The Exchange Offer................................................ 27
A. Purpose and Effect of the Exchange Offer.................... 27
B. Resale of the Exchange Notes................................ 27
C. Terms of the Exchange Offer................................. 28
D. Expiration Date; Extensions; Amendments..................... 29
E. Conditions.................................................. 30
F. Procedures for Tendering.................................... 30
G. Book-Entry Transfer......................................... 32
H. Guaranteed Delivery Procedures.............................. 33
I. Withdrawal of Tenders....................................... 33
J. Termination of Certain Rights............................... 34
K. Exchange Agent.............................................. 34
L. Fees and Expenses........................................... 34
M. Consequences of Failure to Exchange......................... 35
N. Accounting Treatment........................................ 35
VII. The Exchange Notes................................................ 36
A. Glossary of Defined Terms................................... 36
B. General..................................................... 52
C. Optional Redemption......................................... 53
D. Change of Control........................................... 53
E. Certain Covenants........................................... 54
F. Events of Default........................................... 61
G. Defeasance and Covenant Defeasance.......................... 62
H. Modification and Waiver..................................... 63
I. No Personal Liability of Incorporators, Stockholders,
Officers, Directors or Employees............................ 63
J. Concerning the Trustee...................................... 63
K. Book Entry; Delivery and Form............................... 63
L. Certificated Notes.......................................... 64
VIII. United States Federal Tax Consequences............................ 65
IX. Plan of Distribution.............................................. 67
X. Legal Matters..................................................... 68
XI. Experts........................................................... 68
XII. Where You Can Get More Information................................ 68
A. Available Information....................................... 68
B. Incorporation of Documents by Reference..................... 68
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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 September 30, 1998:
- Nextel provided service to about 2,417,400 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 417,800 analog specialized mobile radio subscriber units.
Nextel's Digital Mobile Network has been developed to replace its remaining
traditional analog specialized mobile radio systems with advanced mobile
communication systems employing digital technology with a multi-site
configuration permitting frequency reuse. Since 1994, the number of Nextel's
digital subscriber units in service has increased significantly, reflecting the
commencement of Digital Mobile Network service in new markets, increased sales
in existing markets and, to a limited extent, acquisitions. The following table
summarizes the approximate number of Nextel's digital subscriber units in
service at the dates indicated:
<TABLE>
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DECEMBER 31,
------------------------------------- SEPTEMBER 30,
1994 1995 1996 1997 1998
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Digital subscriber units.................... 13,500 85,000 300,300 1,270,700 2,417,400
</TABLE>
A customer using Nextel's Digital Mobile Network is able to access:
- mobile telephone services;
- two-way dispatch, which provides instant conferencing capabilities and is
marketed as Nextel's "Direct Connect" service;
- paging; and
- short-messaging service.
In the future, Nextel expects to be able to offer customers access to data
transmission. Nextel is implementing its Digital Mobile Network utilizing
digital technology developed by Motorola, Inc. This digital technology is
referred to as the "integrated Digital Enhanced Network" or "iDEN"(TM).
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 1505
Farm Credit Drive, McLean, Virginia 22102, and its telephone number is (703)
394-3000.
NETWORK EXPANSION
In early 1997, Nextel finalized and began implementing a business plan that
contemplated an accelerated build-out of its Digital Mobile Network in the
United States incorporating the iDEN technology. During 1997, Nextel achieved a
significant expansion of its Digital Mobile Network and experienced a large
increase in the number of subscribers and system minutes of use. In early 1998,
Nextel updated and revised its 1998 business plan for its domestic operations in
light of its results and experience in building out and commercializing its
Digital Mobile Network in 1997. This revised and updated plan contemplated
further 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, that began in 1997, continued and
accelerated through 1998. This growth has contributed significantly to Nextel
achieving positive earnings before interest, taxes, depreciation and
amortization for its domestic operations for the third quarter of 1998. It also
has resulted in a steady increase in Nextel's capital expenditures and in the
amount of net cash used in Nextel's Digital Mobile Network operations during
this 1997-1998 period.
Nextel currently estimates that its aggregate domestic expenditures for
system and non-system capital uses during 1998 totaled about $1,930.0 million as
compared to the about $1,452.5 million in funding used for these purposes during
1997. These actual and estimated capital expenditures exclude capital
expenditures relating to international operations and capitalized interest
relating to Nextel's domestic and international operations for the respective
years. Nextel's actual levels of capital expenditures incurred in 1998 will not
be known until the year end audit is complete. The capital expenditure levels
that Nextel will incur in the future are subject to risks and uncertainties
identified or referred to elsewhere in this prospectus. See "III. A. Risk
Factors -- Risk Factors Relating to Nextel -- Nextel Will Need Substantial
Amounts of Additional Financing" and "-- C. Nextel's Forward Looking Statements
Are Subject to a Variety of Factors That Could Cause Actual Results to Differ
Materially from Current Beliefs."
RECENT DEVELOPMENTS
- Nextel Partners. On February 1, 1999, Nextel announced that it had
entered into definitive agreements providing for Nextel Partners, Inc. to
build out and operate digital mobile systems in various mid-sized and
small domestic markets. Nextel transferred to Nextel Partners digital
mobile systems in five markets and agreed to transfer its licenses in
existing operational Nextel Partners' territory. In exchange for these
assets and to reimburse Nextel for certain capital and operating expenses
that Nextel previously incurred in Nextel Partners' territory, Nextel
Partners issued $131.0 million of its equity to Nextel and paid Nextel
about $125.0 million in cash, subject to adjustments. Nextel Partners
offers its customers the same services as Nextel under the Nextel brand
name allowing customers to roam between both systems at no additional
charge.
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- Motorola International Financing Commitments. On November 11, 1998,
Motorola Capital Corporation reached an agreement in principle with
Nextel International to provide up to $400.0 million in vendor financing
under a senior secured credit facility, which represents about a $260.0
million increase over financing currently in place from Motorola Capital
Corporation and its affiliates. On February 4, 1999, Nextel International
entered into a master equipment financing agreement to provide Nextel
International with access to a portion of the financing available under
this arrangement with Motorola Capital Corporation. For additional
information concerning this facility, see Nextel International's
Quarterly Report on Form 10-Q for the period ended September 30, 1998.
- Amended Bank Financing. On October 28, 1998 and on December 21, 1998,
Nextel entered into agreements that increased its total secured financing
capacity under its bank credit agreement from $3.0 billion to about $3.3
billion. The additional $295.0 million of debt consisted of:
- a $195.0 million term loan that was fully drawn on October 28, 1998
and used to repay revolving debt under Nextel's bank credit agreement;
and
- another term loan in the amount of $100.0 million that was fully drawn
on January 15, 1999.
Each of these term loans bears interest payable quarterly at an
adjustable rate calculated based on either the prime rate or LIBOR and
matures on March 31, 2006.
- Launch of i1000(TM). In September 1998, Nextel began marketing the
i1000, a new pocket-sized phone. The i1000 supports the features and
functions available on Nextel's Digital Mobile Network, including digital
telephone service, Nextel's Direct Connect service and short message
paging, but also offers several new features including extended battery
life and a built-in speaker phone for hands-free use. With the
introduction of the i1000, Nextel expects to broaden its targeted market
to include higher volume "white collar" users.
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,
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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.
Expiration Date............ The exchange offer will expire at 5:00 p.m., New
York City time, on , 1999 unless Nextel
decides to extend the expiration date. See "VI.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 "VI.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 "VI.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
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requests for information should be directed to the
exchange agent. See "VI.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 "VI.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
also follow the withdrawal procedures as described
under the heading "VI.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 "VI.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 "VI.K. The Exchange Offer --
Exchange Agent" and in the letter of transmittal.
See "VI. The Exchange Offer" for more detailed information concerning the
exchange offer.
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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 $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 September 30, 1998, Nextel had about $3.9
billion of outstanding debt that would rank equally
with the notes, excluding guaranties of subsidiary
debt of about $2.2 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.
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See "VII. The Exchange Notes" for more detailed information concerning the
exchange notes.
E. SUMMARY FINANCIAL INFORMATION
The financial information below for the fiscal year ended March 31, 1994,
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 and 1997 have been derived from the audited consolidated financial
statements of Nextel. The financial information for the nine months ended
September 30, 1997 and 1998 is derived from the unaudited financial statements
of Nextel and reflects only normal recurring adjustments necessary for the fair
presentation of this information. You should not expect the results of
operations for interim periods to be an indication of the results for a full
year. 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 "XII. 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 affected by business
combinations, acquisitions and investments made with both domestic and
international companies. 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, 1997.
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, 1997; and
- losses on interest rate hedging activities of $46.9 million in 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 fiscal year ended March 31, 1994 was $86.1 million, 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, for the nine months ended
September 30, 1997 was $955.0 million and for the nine months ended September
30, 1998 was $1,416.5 million.
The as adjusted column reflects the receipt of:
- net proceeds from the offering of the outstanding notes in November
1998 of about $289.3 million;
- net proceeds from the offering of preferred stock in December 1998 of
about $145.0 million;
- the $195.0 million term loan drawn in October 1998, which was used to
repay revolving debt under Nextel's bank credit agreement; and
- the $100.0 million term loan drawn in January 1999.
10
<PAGE> 12
About $173.8 million of cash and cash equivalents and about $49.1 million
of marketable securities held by Nextel International and its subsidiaries as of
September 30, 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.
You should review notes 10 and 11 to the notes to Nextel's consolidated
financial statements in the Annual Report on Form 10-K for the year ended
December 31, 1997 for a detailed discussion of Nextel's capital stock.
<TABLE>
<CAPTION>
NINE MONTHS
FISCAL YEAR NINE MONTHS YEAR ENDED ENDED
ENDED ENDED DECEMBER 31, SEPTEMBER 30,
MARCH 31, DECEMBER 31, -------------------------------------- -----------------------
1994 1994 1995 1996 1997 1997 1998
----------- ------------ --------- ------------ ----------- --------- -----------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues.......................... $ 67,928 $ 74,857 $ 171,703 $ 332,938 $ 738,897 $ 463,838 $ 1,255,145
Cost of operations................ 28,666 51,406 151,718 247,717 284,549 195,077 365,753
Selling, general and
administrative expenses.......... 41,107 85,077 193,321 330,256 865,791 568,112 1,106,312
Expenses related to corporate
reorganization................... -- -- 17,372 -- -- -- --
Depreciation and amortization..... 58,398 94,147 236,178 400,831 526,377 361,757 583,108
-------- --------- --------- --------- ----------- --------- -----------
Operating loss.................... (60,243) (155,773) (426,886) (645,866) (937,820) (661,108) (800,028)
Interest income (expense), net.... (18,101) (41,454) (89,509) (206,480) (378,032) (258,387) (438,074)
Other income (expense), net....... 3 33 (15,372) (10,866) 6,511 5,486 (36,920)
Income tax benefit (provision).... 21,437 71,345 200,602 307,192 (258,726) 125,402 127,502
Extraordinary loss on early
retirement of debt............... -- -- -- -- (45,787) -- (133,225)
Series D and E Preferred Stock
dividends........................ -- -- -- -- (29,119) (12,822) (107,566)
-------- --------- --------- --------- ----------- --------- -----------
Net loss attributable to common
stockholders..................... $(56,904) $(125,849) $(331,165) $(556,020) $(1,642,973) $(801,429) $(1,388,311)
======== ========= ========= ========= =========== ========= ===========
Basic and diluted net loss per
share attributable to common
stockholders..................... $ (.73) $ (1.25) $ (2.31) $ (2.50) $ (6.59) $ (3.28) $ (5.04)
Weighted average number of shares
outstanding...................... 78,439,000 100,639,000 143,283,000 222,779,000 249,320,000 244,221,000 275,584,000
OTHER FINANCIAL DATA:
Ratio of earnings to fixed charges
and preferred stock dividends.... -- -- -- -- -- -- --
</TABLE>
<TABLE>
<CAPTION>
AS OF
SEPTEMBER 30, 1998
-------------------------
AS
ACTUAL ADJUSTED
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
BALANCE SHEET DATA:
Cash, cash equivalents and marketable securities............ $ 343,082 $ 877,401
Intangible assets, net...................................... 4,945,467 4,945,467
Total assets................................................ 11,113,533 11,659,267
Long-term debt (excluding current portion of $5.3 million).. 7,335,254 7,730,988
Redeemable preferred stock.................................. 1,386,658 1,536,658
Stockholders' equity........................................ 606,257 606,257
</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 of about $1.6 billion
during 1997 and about $1.4 billion for the nine months ended September 30, 1998.
Nextel's accumulated deficit was about $4.0 billion at September 30, 1998.
Nextel expects that losses and negative cash flow 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. Nextel may borrow up to about $3.3
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 September 30, 1998, about $2.2 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;
- covenants that restrict Nextel's grant of liens on assets that affect
Nextel's ability to obtain new secured financing; and
12
<PAGE> 14
- existing debt service requirements.
c. FUNDING REQUIREMENTS FOR INTERNATIONAL OPERATIONS AND GROWTH MAY
CAUSE EVEN GREATER CASH NEEDS.
Nextel International is exploring a number of alternative sources of debt
and equity financing, including vendor financing, to fund its operations,
capital expenditures, working capital and other cash needs. Nextel cannot assure
you that this financing will become available. If this financing does not become
available, 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 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;
- 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 certain 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 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 urban and rural
markets in the United States, Nextel cannot assure you that the Nextel Partners
efforts will succeed. Nextel's failure to obtain sufficient additional financing
could result in the delay or abandonment of some or all of its development,
expansion and acquisition plans and expenditures, which could have an adverse
effect on Nextel.
13
<PAGE> 15
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, the further successful commercialization of
the Digital Mobile Network could be delayed and Nextel could adversely be
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. Nextel, however, will not be able to provide roaming system
coverage comparable to that currently available through roaming
arrangements from cellular and certain personal communication system
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 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 systems have made available to their customers
dual mode/dual band (800 MHz cellular/1900 MHz personal communication
systems) subscriber units. These units combine the enhanced feature set
available on digital personal communication systems 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 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
14
<PAGE> 16
as price competition in the wireless industry intensifies, the average
revenue per subscriber unit is expected to decrease and the churn rate of
subscribers is expected to 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. OUR 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 system 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
system 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, thereby reducing 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 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.
15
<PAGE> 17
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 FACES LIMITATIONS ON AVAILABILITY OF 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 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 system wireless service 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 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
16
<PAGE> 18
- 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, thereby adversely
affecting Nextel.
- THE ABILITY OF COMPETITORS TO PROVIDE TWO-WAY DISPATCH
SERVICES. Nextel's two-way dispatch services are currently not available
through traditional cellular or personal communication system providers;
however, if either personal communication system or cellular operators
provide two-way 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 thereof, will have on it. Nextel cannot predict whether it will
successfully compete 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 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
foreseeable future. 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.
6. AGREEMENTS WITH MOTOROLA REDUCE NEXTEL'S OPERATIONAL FLEXIBILITY.
Nextel must purchase from Motorola a significant amount of system
infrastructure equipment. Nextel has agreed to purchase and install Motorola's
iDEN equipment in sufficient quantity to cover the vast majority of the United
States population.
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
17
<PAGE> 19
United States cellular and/or personal communication systems radio telephony
standards prior to August 4, 1999, unless:
- Nextel determines that the iDEN equipment fails to meet certain
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 thereof; or
- Nextel or Digital Radio L.L.C., an entity controlled by Craig O. McCaw,
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 pursuant to 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 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;
18
<PAGE> 20
- 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 restricts the
manner in which that information may be used;
- the re-auction of some spectrum licenses that could be used to provide
competing services currently scheduled to begin on March 23, 1999; and
- the extension of the date for implementation of local number portability
to March 31, 2000.
9. NEXTEL PRIMARILY HAS INTANGIBLE ASSETS.
Nextel's assets consist primarily 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 $4.3 billion as of September 30, 1998.
10. NEXTEL IS SUSCEPTIBLE TO CONTROL BY SIGNIFICANT STOCKHOLDERS.
Based on the ownership information relating to Nextel as of September 30,
1998, entities controlled by Mr. McCaw beneficially owned about 20.6% of the
outstanding Nextel stock. In addition, Motorola beneficially owned about 15.6%
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 certain 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, such
overrides may lead to certain 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, (1) any
Motorola-designated Nextel director retains the right to vote in a manner
consistent with their fiduciary duties and (2) Motorola may vote its shares as
it determines necessary with respect to issues that conflict with Motorola's
corporate ethics or that present conflicts of interest, or in order to protect
the value or marketability of the shares of common stock held by it.
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.
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<PAGE> 21
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 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.
14. NEXTEL'S OPERATIONS MAY BE DISRUPTED DUE TO YEAR 2000 ISSUES.
Nextel may be subject to risks associated with the "Year 2000" issue.
Nextel has substantially completed the assessment phase with respect to the Year
2000 compliance 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 anticipate that its own assessment,
remediation and testing process of financial and operating systems or on
embedded technology in its systems will result in a material cost to it 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 problems of third
parties, especially providers of products and services that are critical to its
ability to conduct its business operations, including other
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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 or assessment
or remediation of their potential Year 2000 issues as are their United States
counterparts. If any of these third parties, or Nextel, is unable to resolve
material Year 2000 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
such 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 such 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 and/or prices of infrastructure
equipment and subscriber handsets;
- foreign taxation of earnings and payments received by Nextel
International from its operating subsidiaries; and
- regulatory changes affecting the telecommunications industry and wireless
communications.
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.
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.
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<PAGE> 23
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 September 30, 1998, Nextel's subsidiaries had outstanding
indebtedness and other trade payables and other accrued liabilities of about
$4.2 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 September 30, 1998, Nextel had about $7.3 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 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;
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<PAGE> 24
- 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 also must begin
to pay cash interest on some 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 "VII. The Exchange Notes," the limitations
could adversely affect Nextel's flexibility.
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
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<PAGE> 25
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 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;
- 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
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<PAGE> 26
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
systems service;
- future legislative 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, 1997 and the Quarterly
Reports on Form 10-Q for the quarters ended March 31, 1998, June 30, 1998
and September 30, 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. CAPITALIZATION
The following table sets forth the consolidated cash, cash equivalents and
marketable securities, current portion of long-term debt and capitalization of
Nextel as of September 30, 1998 (i) on an historical basis and (ii) as adjusted
to give effect to the receipt of the net proceeds from the offering of the
outstanding notes, the receipt of the net proceeds from the offering of zero
coupon convertible preferred stock due 2013 and the term loans drawn in October
1998 and January 1999. This table should be read in conjunction with the
consolidated financial statements and the related notes, which are incorporated
by reference into this prospectus.
Included in cash, cash equivalents and marketable securities is about
$222.9 million held by Nextel International and its subsidiaries as of September
30, 1998, which are not available, due to restrictions contained in Nextel
International's indentures, to fund any of the cash needs of Nextel's domestic
digital mobile and analog specialized mobile radio businesses.
The as adjusted column reflects the application of the net cash proceeds
from the offering of the outstanding notes, the zero coupon convertible
preferred stock due 2013 issued in December 1998 and the term loans drawn in
October 1998 and in January 1999 to reduce outstanding borrowings under Nextel's
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revolving credit facility with the remainder reflected in cash and cash
equivalents available to fund capital expenditures, investments, working capital
needs and for general corporate purposes.
<TABLE>
<CAPTION>
SEPTEMBER 30, 1998
-------------------------
ACTUAL AS ADJUSTED
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
Cash, cash equivalents and marketable securities............ $ 343,082 $ 877,401
=========== ===========
Current portion of long-term debt........................... $ 5,292 $ 5,292
=========== ===========
Long-term debt:
11.5% Senior redeemable discount notes due 2003........... $ 35,811 $ 35,811
9.75% Senior redeemable discount notes due 2004........... 1,087,455 1,087,455
10.125% Senior redeemable OneComm discount notes due
2004................................................... 331,576 331,576
12.25% Senior redeemable Dial Page discount notes due
2004................................................... 7,274 7,274
10.25% Senior redeemable Dial Page discount notes due
2005................................................... 90,038 90,038
13.0% Senior redeemable Nextel International discount
notes due 2007......................................... 594,642 594,642
10.65% Senior redeemable discount notes due 2007.......... 557,290 557,290
9.75% Senior redeemable discount notes due 2007........... 765,727 765,727
9.95% Senior redeemable discount notes due 2008........... 1,064,360 1,064,360
12.125% Senior redeemable Nextel International discount
notes due 2008......................................... 427,758 427,758
Notes..................................................... -- 295,734
Domestic bank credit facility, interest payable quarterly
at an adjusted rate calculated either on the prime rate
or LIBOR (7.94% to 8.84%).............................. 2,217,000 2,317,000
Nextel International bank credit facility, interest
payable quarterly at an adjusted rate calculated either
on the prime rate or LIBOR
(9.44% to 9.5%)........................................ 52,000 52,000
Nextel International vendor credit facility, interest
payable quarterly at 2.5% over the prime rate (10.41%
to 11.0%).............................................. 98,414 98,414
Other..................................................... 5,909 5,909
----------- -----------
Total long-term debt.............................. 7,335,254 7,730,988
Series D Exchangeable Preferred Stock, Mandatorily
Redeemable 2009........................................... 582,389 582,389
Series E Exchangeable Preferred Stock, Mandatorily
Redeemable 2010........................................... 804,269 804,269
Zero Coupon Convertible Preferred Stock due 2013............ -- 150,000
Stockholders' equity:
Preferred stock, Class A convertible redeemable,
7,905,981 shares issued and outstanding............... 290,545 290,545
Preferred stock, Class B convertible, 82 shares issued
and outstanding....................................... -- --
Common stock, Class A, 268,896,065 shares issued and
268,050,209 shares outstanding........................ 269 269
Common stock, Class B, non-voting convertible,
17,830,000 shares issued and outstanding.............. 18 18
Paid-in capital........................................ 4,382,961 4,382,961
Accumulated deficit.................................... (4,029,850) (4,029,850)
Treasury shares, at cost, 845,856 shares (Class A
common stock)......................................... (16,211) (16,211)
Deferred compensation, unrealized gain on investment
and other............................................. (21,475) (21,475)
----------- -----------
Total stockholders' equity........................ 606,257 606,257
----------- -----------
Total capitalization......................... $ 9,328,169 $ 9,873,903
=========== ===========
</TABLE>
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VI. 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.
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
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<PAGE> 29
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. 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 "IX. 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."
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<PAGE> 30
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
, 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.
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
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<PAGE> 31
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.
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:
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<PAGE> 32
- 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.
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
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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 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
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<PAGE> 34
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.
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
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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.
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 $ . These expenses include
registration fees, fees and expenses of the exchange agent, accounting and legal
fees, and printing costs, among others.
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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.
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.
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VII. 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 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,
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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.
"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 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
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- 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 Senior Notes
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 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 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
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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 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,
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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
(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,
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<PAGE> 42
(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.
"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 Senior Notes 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,
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(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."
"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.
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"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
(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 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
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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", "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
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.
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"LICENSES" means SMR licenses granted by the FCC that entitle the holder to
use the radio channels covered thereby, subject to compliance with FCC rules and
regulations, in connection with its SMR business.
"LIEN" means, with respect to any property or assets, any mortgage or deed
of trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien, charge, easement, encumbrance, preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
on or with respect to 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 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,
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(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;
(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 holders,
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
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(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:
(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:
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- 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
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,
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<PAGE> 50
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.
"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.
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"REQUIRED CONSENT" means except as otherwise expressly provided in the
Senior Notes 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
- 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
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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
(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
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purposes of clause (2) 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
(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
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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, commencing 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 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.
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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
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.
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;
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<PAGE> 56
(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;
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
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- 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,
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 initial 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 initial 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
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(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
initial 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.
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.
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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.
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,
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(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.
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
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(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 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.
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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;
(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.
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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 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.
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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
(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.
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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 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.
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VIII. UNITED STATES FEDERAL TAX CONSEQUENCES
The following is a summary of specified United States federal income tax
consequences. 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 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.
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 that is created or organized in or under the laws of the
United States or of any state.
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,
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- 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 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.
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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.
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.
IX. 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
"VI.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
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<PAGE> 69
will indemnify the holders of the exchange notes, including any broker-dealers,
against some liabilities, including some liabilities under the Securities Act of
1933.
X. LEGAL MATTERS
Jones, Day, Reavis & Pogue, Cleveland, Ohio, will pass upon the validity of
the exchange notes for Nextel.
XI. 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, 1997, 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.
XII. 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.
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 request. Requests for those
documents should be directed to Nextel Communications, Inc., 1505 Farm Credit
Drive, McLean, Virginia 22102, Attention: Investor Relations, telephone: (703)
394-3500. This prospectus incorporates by reference the following documents:
- Annual Report on Form 10-K for the year ended December 31, 1997, filed
with the Commission on March 30, 1998;
- Quarterly Reports on Form 10-Q for the quarters ended:
- March 31, 1998, dated and filed with the Commission on May 13, 1998
- June 30, 1998, dated and filed with the Commission on August 14,
1998
- September 30, 1998, dated and filed with the Commission on November
16, 1998;
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- Current Reports on Form 8-K:
- dated and filed with the Commission on February 2, 1998
- dated and filed with the Commission on February 12, 1998
- dated August 13, 1998 and filed with the Commission on August 18,
1998
- dated October 28, 1998 and filed with the Commission on October 29,
1998
- dated and filed with the Commission on December 18, 1998; and
- Proxy Statement, dated as of May 14, 1998, filed with the Commission in
definitive form on April 10, 1998, as amended and filed on April 20,
1998, with the Commission with respect to the information required by
Items 401 (management), 402 (executive compensation) 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 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 -- Form of Note issued pursuant to the August Indenture
(included in Exhibit No. 4.3.1).
4.3.3 -- 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).
4.3.4 -- 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).
4.3.5 -- 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).
4.3.6 -- 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 -- Form of Note issued pursuant to the February Indenture
(included in Exhibit 4.4.1).
4.4.3 -- 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).
</TABLE>
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<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- -----------------------
<C> <C> <S>
4.4.4 -- 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).
4.4.5 -- 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 -- Form of Note issued pursuant to the OneComm Indenture
(included in Exhibit 4.5.1).
4.5.3 -- 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).
4.5.4 -- 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).
4.5.5 -- 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 -- Form of Note issued pursuant to the Dial Call 2004 Indenture
(included in Exhibit 4.6.1).
4.6.3 -- 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).
4.6.4 -- 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).
4.6.5 -- 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).
4.6.6 -- 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).
4.6.7 -- 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 -- Form of Note issued pursuant to the Dial Call 2005 Indenture
(included in Exhibit 4.7.1).
</TABLE>
II-4
<PAGE> 75
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- -----------------------
<C> <C> <S>
4.7.3 -- 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).
4.7.4 -- 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).
4.7.5 -- 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).
4.7.6 -- 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).
4.7.7 -- 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 -- Form of Note issued pursuant to the NI 2007 Indenture
(included in Exhibit 4.8.1).
4.8.3 -- 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).
4.9.1 -- Indenture dated September 17, 1997 between Nextel
Communications, Inc. and Harris Trust and Savings Bank, as
Trustee (the "September 1997 Indenture"), 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).
4.9.2 -- Form of Note issued pursuant to the September 1997 Indenture
(included in Exhibit 4.9.1).
4.10.1 -- Indenture dated as of October 22, 1997 between Nextel
Communications, Inc. and Harris Trust and Savings Bank, as
Trustee (the 'October 1997 Indenture'), 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).
4.10.2 -- Form of Note issued pursuant to the October 1997 Indenture
(included in Exhibit 4.10.1).
4.11.1 -- Indenture dated as of February 11, 1998, between Nextel
Communications, Inc. and Harris Trust and Savings Bank, as
Trustee, (the "February 1998 Indenture") relating to
Nextel's 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).
4.11.2 -- Form of Note issued pursuant to the February 1998 Indenture
(included in Exhibit 4.11.1).
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).
*4.13.1 -- 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.
*4.13.2 -- Form of Note issued pursuant to the November 1998 Indenture
(included in Exhibit 4.13.1).
</TABLE>
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<PAGE> 76
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- -----------------------
<C> <C> <S>
*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.
*5 -- Form of Opinion of Jones, Day, Reavis & Pogue regarding
validity.
*8 -- Form of 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, 1998 as
exhibit 21 to Nextel's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997 and incorporated herein
by reference).
*23.1 -- Consent of Jones, Day, Reavis & Pogue (included in Exhibit
5).
*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
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 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.
II-6
<PAGE> 77
(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> 78
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS 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 10TH DAY OF FEBRUARY 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
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)
* 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)
* President, Chief Operating
- ----------------------------------------------------- Officer and Director
(TIMOTHY M. DONAHUE)
* Director
- -----------------------------------------------------
(KEITH J. BANE)
* Director
- -----------------------------------------------------
(CRAIG O. MCCAW)
* Director
- -----------------------------------------------------
(KEISUKE NAKASAKI)
Director
- -----------------------------------------------------
(MASAAKI TORIMOTO)
* Director
- -----------------------------------------------------
(DENNIS M. WEIBLING)
</TABLE>
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<PAGE> 79
<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 February 10,
- ----------------------------------------------------- 1999
(THOMAS J. SIDMAN)
</TABLE>
II-9
<PAGE> 80
EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE
- ------- ----------------------- ----
<C> <C> <S> <C>
*4.13.1 -- 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.
*4.13.2 -- Form of Note issued pursuant to the November 1998 Indenture
(included in Exhibit 4.13.1).
*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 -- Form of Opinion of Jones, Day, Reavis & Pogue regarding
validity.
*8 -- Form of 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 Exhibit
5).
*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
<PAGE> 1
EXHIBIT 4.13.1
Nextel Communications, Inc.
to
Harris Trust and Savings Bank
Trustee
----------------
Indenture
Dated as of November 4, 1998
----------------
12% Senior Serial Redeemable Notes due 2008
<PAGE> 2
Nextel Communications, Inc.
Reconciliation and tie between Trust Indenture Act
of 1939 and Indenture, dated as of November 4, 1998
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
- --------------- ----------
<S> <C>
Section 310(a)(1) ................................................... 609
(a)(2) ................................................... 609
(a)(3) ................................................... Not Applicable
(a)(4) ................................................... Not Applicable
(a)(5) ................................................... 609
(b) ................................................... 608, 610
Section 311(a) ................................................... 613
(b) ................................................... 613
(c) ................................................... 613
Section 312(a) ................................................... 701, 702
(b) ................................................... 702(b)
(c) ................................................... 702(c)
Section 313(a) ................................................... 703
(b) ................................................... 703
(c) ................................................... 703
(d) ................................................... 703(b)
Section 314(a)(1)-(3) ................................................... 704
(a)(4) ................................................... 1017
(b) ................................................... Not Applicable
(c)(1) ................................................... 102, 401, 1204
(c)(2) ................................................... 102, 401, 1204
(c)(3) ................................................... 1204
(d) ................................................... Not Applicable
(e) ................................................... 102
Section 315(a) ................................................... 601, 603
(b) ................................................... 602
(c) ................................................... 601
(d) ................................................... 601
(e) ................................................... 514
Section 316(a)(1)(A) ................................................... 512
(a)(1)(B) ................................................... 513
(a)(2) ................................................... Not Applicable
(b) ................................................... 508
(c) ................................................... 104
Section 317(a)(1) ................................................... 503
(a)(2) ................................................... 504
(b) ................................................... 1003
Section 318(a) ................................................... 107
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
Page
<S> <C>
TABLE OF CONTENTS
RECITALS OF THE COMPANY.................................................................................................... 1
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions.................................................................................................. 1
Acquired Debt............................................................................................ 2
Act...................................................................................................... 2
Affiliate................................................................................................ 2
Agent Members............................................................................................ 2
Annualized Operating Cash Flow........................................................................... 3
Authenticating Agent..................................................................................... 3
Average Life............................................................................................. 3
Beneficial Owner......................................................................................... 3
Board of Directors....................................................................................... 3
Board Resolution......................................................................................... 3
Business Day............................................................................................. 3
Capital Lease Obligations................................................................................ 3
Capital Stock............................................................................................ 4
Change of Control........................................................................................ 4
Closing Date............................................................................................. 6
Closing Price............................................................................................ 6
Code..................................................................................................... 6
Commission............................................................................................... 6
Common Stock............................................................................................. 7
Company.................................................................................................. 7
Company Request.......................................................................................... 7
Company Order............................................................................................ 7
Consolidated Adjusted Net Income......................................................................... 7
Consolidated Adjusted Net Loss........................................................................... 7
Consolidated Adjusted Net Income (Loss).................................................................. 7
Consolidated Debt to Annualized Operating Cash Flow Ratio................................................ 7
Consolidated Interest Expense............................................................................ 8
Consolidated Net Income.................................................................................. 8
Consolidated Net Loss.................................................................................... 8
Consolidated Net Income (Loss)........................................................................... 8
Consolidated Net Worth................................................................................... 8
Consolidation............................................................................................ 9
Corporate Trust Office................................................................................... 9
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C>
Corporation.............................................................................................. 9
Covenant Defeasance...................................................................................... 9
Credit Facility.......................................................................................... 9
Debt..................................................................................................... 9
Default.................................................................................................. 10
Default Amount........................................................................................... 10
Defaulted Interest....................................................................................... 10
Defeasance............................................................................................... 10
Depository............................................................................................... 10
Digital Mobile........................................................................................... 10
Digital Mobile-SMR Operating Cash Flow................................................................... 10
Directed Investment...................................................................................... 11
Disinterested Director................................................................................... 11
Event of Default......................................................................................... 11
Exchange Securities...................................................................................... 11
Exchange Act............................................................................................. 11
Expiration Date.......................................................................................... 11
Fair Market Value........................................................................................ 12
FCC...................................................................................................... 12
February Indenture....................................................................................... 12
Global Securities........................................................................................ 12
Guarantee................................................................................................ 12
Holder................................................................................................... 12
Incur.................................................................................................... 13
Indenture................................................................................................ 13
Institutional Accredited Investor........................................................................ 13
Interest Payment Date.................................................................................... 13
Investment............................................................................................... 13
Investment Grade......................................................................................... 13
Licenses................................................................................................. 14
Lien..................................................................................................... 14
Marketable Securities.................................................................................... 14
Maturity................................................................................................. 14
Memorandum............................................................................................... 14
Moody's.................................................................................................. 14
Non-U.S. Person.......................................................................................... 15
Notice of Default........................................................................................ 15
October Indenture........................................................................................ 15
October Notes............................................................................................ 15
Offer.................................................................................................... 15
Offer to Purchase........................................................................................ 15
Officers' Certificate.................................................................................... 17
Offshore Global Securities............................................................................... 17
Offshore Physical Securities............................................................................. 17
Operating Cash Flow...................................................................................... 17
Operating Cash Flow to Consolidated Interest Expense Ratio............................................... 17
</TABLE>
-iii-
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<TABLE>
<S> <C>
Opinion of Counsel....................................................................................... 18
Outstanding.............................................................................................. 18
pari passu............................................................................................... 18
Paying Agent............................................................................................. 19
Permitted Debt........................................................................................... 19
Permitted Distribution................................................................................... 20
Permitted Investment..................................................................................... 20
Permitted Transaction.................................................................................... 21
Person................................................................................................... 21
Predecessor Security..................................................................................... 21
Preferred Capital Stock.................................................................................. 21
Private Placement Legend................................................................................. 21
Purchase Amount.......................................................................................... 21
Purchase Date............................................................................................ 21
Purchase Price........................................................................................... 21
QIB...................................................................................................... 21
Record Expiration Date................................................................................... 21
Redeemable Stock......................................................................................... 21
Redemption Date.......................................................................................... 22
Redemption Price......................................................................................... 22
Registration Rights Agreement............................................................................ 22
Registration Statement................................................................................... 22
Regular Record Date...................................................................................... 22
Regulation S............................................................................................. 22
Required Consent......................................................................................... 22
Restricted Payments...................................................................................... 23
Restricted Subsidiary.................................................................................... 23
Rule 144A................................................................................................ 23
S&P...................................................................................................... 23
Securities............................................................................................... 23
Securities Act........................................................................................... 23
Security Register........................................................................................ 23
September Indenture...................................................................................... 23
September Notes.......................................................................................... 23
Series D Debenture Indenture............................................................................. 24
Series D Preferred Stock................................................................................. 24
Series E Debenture Indenture............................................................................. 24
Series E Preferred Stock................................................................................. 24
Shelf Registration Statement............................................................................. 24
Special Record Date...................................................................................... 24
Specialized Mobile Radio................................................................................. 24
Stated Maturity.......................................................................................... 24
Subsidiary............................................................................................... 24
Total Common Equity...................................................................................... 25
Total Market Value of Equity............................................................................. 25
Trading Day.............................................................................................. 25
Trustee.................................................................................................. 25
</TABLE>
-iv-
<PAGE> 6
<TABLE>
<S> <C>
Trust Indenture Act...................................................................................... 25
U.S. Global Securities................................................................................... 25
U.S. Government Obligation............................................................................... 25
U.S. Physical Securities................................................................................. 25
Unrestricted Subsidiary.................................................................................. 25
Vendor Financing Debt.................................................................................... 26
Vice President........................................................................................... 26
Voting Stock............................................................................................. 26
Wholly Owned Restricted Subsidiary....................................................................... 26
SECTION 102. Compliance Certificates and Opinions......................................................................... 26
SECTION 103. Form of Documents Delivered to Trustee....................................................................... 27
SECTION 104. Acts of Holders; Record Dates................................................................................ 27
SECTION 105. Notices, Etc., to Trustee and Company........................................................................ 29
SECTION 106. Notice to Holders; Waiver.................................................................................... 30
SECTION 107. Conflict with Trust Indenture Act............................................................................ 30
SECTION 108. Effect of Headings and Table of Contents..................................................................... 31
SECTION 109. Successors and Assigns....................................................................................... 31
SECTION 110. Separability Clause.......................................................................................... 31
SECTION 111. Benefits of Indenture........................................................................................ 31
SECTION 112. Governing Law................................................................................................ 31
SECTION 113. Legal Holidays............................................................................................... 31
SECTION 114. No Recourse Against Others................................................................................... 31
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally.............................................................................................. 32
SECTION 202. Form of Face of Security..................................................................................... 33
SECTION 203. Form of Reverse of Security.................................................................................. 35
SECTION 204. Form of Trustee's Certificate of Authentication.............................................................. 41
</TABLE>
-v-
<PAGE> 7
<TABLE>
<S> <C>
SECTION 205. Restrictive Legends.......................................................................................... 41
ARTICLE THREE
The Securities
SECTION 301. Title and Terms.............................................................................................. 43
SECTION 302. Denominations................................................................................................ 44
SECTION 303. Execution, Authentication, Delivery and Dating............................................................... 44
SECTION 304. Temporary Securities......................................................................................... 44
SECTION 305. Registration, Registration of Transfer and Exchange.......................................................... 45
SECTION 306. Book-Entry Provisions for Global Security.................................................................... 46
SECTION 307. Special Transfer Provisions.................................................................................. 47
SECTION 308. Mutilated, Destroyed, Lost and Stolen Securities............................................................. 50
SECTION 309. Payment of Interest; Interest Rights Preserved............................................................... 51
SECTION 310. Persons Deemed Owners........................................................................................ 52
SECTION 311. Cancellation................................................................................................. 52
SECTION 312. Computation of Interest...................................................................................... 52
SECTION 313. CUSIP, CINS and ISIN Numbers................................................................................. 53
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture...................................................................... 53
SECTION 402. Application of Trust Money................................................................................... 54
</TABLE>
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<PAGE> 8
<TABLE>
<S> <C>
ARTICLE FIVE
Remedies
SECTION 501. Events of Default............................................................................................ 54
SECTION 502. Acceleration of Maturity; Rescission and Annulment........................................................... 56
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.............................................. 58
SECTION 504. Trustee May File Proofs of Claim............................................................................. 58
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.................................................. 59
SECTION 506. Application of Money Collected............................................................................... 59
SECTION 507. Limitation on Suits.......................................................................................... 59
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and Interest.................................... 60
SECTION 509. Restoration of Rights and Remedies........................................................................... 60
SECTION 510. Rights and Remedies Cumulative............................................................................... 60
SECTION 511. Delay or Omission Not Waiver................................................................................. 61
SECTION 512. Control by Holders........................................................................................... 61
SECTION 513. Waiver of Past Defaults...................................................................................... 61
SECTION 514. Undertaking for Costs........................................................................................ 62
SECTION 515. Waiver of Stay or Extension Laws............................................................................. 62
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities.......................................................................... 62
SECTION 602. Notice of Defaults........................................................................................... 62
SECTION 603. Certain Rights of Trustee.................................................................................... 63
</TABLE>
-vii-
<PAGE> 9
<TABLE>
<S> <C>
SECTION 604. Not Responsible for Recitals or Issuance of Securities....................................................... 64
SECTION 605. May Hold Securities.......................................................................................... 64
SECTION 606. Money Held in Trust.......................................................................................... 64
SECTION 607. Compensation and Reimbursement............................................................................... 64
SECTION 608. Conflicting Interests........................................................................................ 65
SECTION 609. Corporate Trustee Required; Eligibility...................................................................... 65
SECTION 610. Resignation and Removal; Appointment of Successor............................................................ 65
SECTION 611. Acceptance of Appointment by Successor....................................................................... 67
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.................................................. 67
SECTION 613. Preferential Collection of Claims Against Company............................................................ 67
SECTION 614. Appointment of Authenticating Agent.......................................................................... 68
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.................................................... 69
SECTION 702. Preservation of Information; Communications to Holders....................................................... 70
SECTION 703. Reports by Trustee........................................................................................... 70
SECTION 704. Reports by Company........................................................................................... 70
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. Company May Consolidate, Etc................................................................................. 71
SECTION 802. Successor Substituted........................................................................................ 72
</TABLE>
-viii-
<PAGE> 10
<TABLE>
<S> <C>
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without Consent of Holders............................................................ 72
SECTION 902. Supplemental Indentures with Consent of Holders............................................................... 73
SECTION 903. Execution of Supplemental Indentures.......................................................................... 74
SECTION 904. Effect of Supplemental Indentures............................................................................. 74
SECTION 905. Conformity with Trust Indenture Act........................................................................... 74
SECTION 906. Reference in Securities to Supplemental Indentures............................................................ 74
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal, Premium and Interest.................................................................. 75
SECTION 1002. Maintenance of Office or Agency............................................................................. 75
SECTION 1003. Money for Security Payments to be Held in Trust............................................................. 75
SECTION 1004. Existence................................................................................................... 76
SECTION 1005. Maintenance of Properties................................................................................... 77
SECTION 1006. Payment of Taxes and Other Claims........................................................................... 77
SECTION 1007. Maintenance of Insurance.................................................................................... 77
SECTION 1008. Limitation on Consolidated Debt............................................................................. 78
SECTION 1009. Limitation on Restricted Payments........................................................................... 78
SECTION 1010. Restricted Subsidiaries..................................................................................... 81
SECTION 1011. Transactions with Affiliates................................................................................ 83
SECTION 1012. [Intentionally Omitted]..................................................................................... 83
SECTION 1013. Change of Control 83
SECTION 1014. [Intentionally Omitted]..................................................................................... 83
</TABLE>
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<PAGE> 11
<TABLE>
<S> <C>
SECTION 1015. Activities of the Company and Restricted Subsidiaries....................................................... 83
SECTION 1016. Provision of Financial Information.......................................................................... 84
SECTION 1017. Statement by Officers as to Default; Compliance Certificates................................................ 84
SECTION 1018. Waiver of Certain Covenants................................................................................. 84
ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. Right of Redemption......................................................................................... 85
SECTION 1102. Applicability of Article.................................................................................... 86
SECTION 1103. Election to Redeem; Notice to Trustee....................................................................... 86
SECTION 1104. Selection by Trustee of Securities to Be Redeemed........................................................... 86
SECTION 1105. Notice of Redemption........................................................................................ 86
SECTION 1106. Deposit of Redemption Price................................................................................. 87
SECTION 1107. Securities Payable on Redemption Date....................................................................... 87
SECTION 1108. Securities Redeemed in Part................................................................................. 88
ARTICLE TWELVE
Defeasance and Covenant Defeasance
SECTION 1201. Company's Option to Effect Defeasance or Covenant Defeasance................................................ 88
SECTION 1202. Defeasance and Discharge.................................................................................... 88
SECTION 1203. Covenant Defeasance......................................................................................... 89
SECTION 1204. Conditions to Defeasance or Covenant Defeasance............................................................. 89
SECTION 1205. Deposited Money and U.S. Government Obligations to Be Held in Trust; Miscellaneous Provisions............... 91
SECTION 1206. Reinstatement............................................................................................... 92
</TABLE>
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<PAGE> 12
EXHIBITS
EXHIBIT A Form of Certificate to Be Delivered in Connection with Transfers
Pursuant to Regulation S
EXHIBIT B Form of Certificate to Be Delivered in Connection with Transfers
to Non-QIB Institutional Accredited Investors
EXHIBIT C Form of Certificate to Be Delivered in Connection with Transfers
Pursuant to Regulation S
-xii-
<PAGE> 13
INDENTURE, dated as of November 4, 1998, between Nextel
Communications, Inc., a Delaware corporation (herein called the "Company"),
having its principal office at 1505 Farm Credit Dr., McLean, Virginia 22102 and
Harris Trust and Savings Bank, an Illinois banking corporation, as Trustee
(herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its
Senior Serial Redeemable Notes due 2008 of substantially the tenor and amount
hereinafter set forth, and to provide therefor the Company has duly authorized
the execution and delivery of this Indenture.
All things necessary to make the Securities, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities, as
follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) whenever this Indenture requires that a particular ratio or
amount be calculated with respect to a specified period after giving
effect to certain transactions or events on a pro forma basis, such
calculation will be made as if the transactions or events occurred on the
first day of such period, unless otherwise specified herein, and all
accounting terms not otherwise defined herein have the meanings assigned
to them in accordance with generally accepted accounting principles
(whether or not such is indicated herein), and, except as otherwise herein
expressly provided, the term "generally accepted accounting principles"
with respect to any computation required or permitted hereunder
<PAGE> 14
shall mean such accounting principles as are generally accepted at the
date of such computation;
(4) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or Section, as the case may
be, of this Indenture;
(5) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision; and
(6) each reference herein to a rule or form of the Commission
shall mean such rule or form and any rule or form successor thereto, in
each case as amended from time to time.
Certain terms, used principally in Article Six, are defined in that
Article.
Whenever this Indenture requires that a particular ratio or amount
be calculated with respect to a specified period after giving effect to certain
transactions or events on a pro forma basis, such calculation shall be made as
if the transactions or events occurred on the first day of such period, unless
otherwise specified.
"Acquired Debt" means Debt of a Person existing at the time such
Person becomes a Restricted Subsidiary or assumed by the Company or a
Restricted Subsidiary in connection with the acquisition of assets from
such Person.
"Act", when used with respect to any Holder, has the meaning
specified in Section 104.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect
common control with such Person. "Affiliate" shall be deemed to include,
but only for purposes of Section 1011 and without limiting the application
of the preceding sentence for the purpose of such or any other Section,
any Person owning, directly or indirectly, (i) 10% or more of the
Company's outstanding Common Stock or (ii) securities having 10% or more
of the total voting power of the Company's Voting Stock. For the purposes
of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing. No individual
shall be deemed to be controlled by or under common control with any
specified Person solely by virtue of his or her status as an employee or
officer of such specified Person or of any other Person controlled by or
under common control with such specified Person.
"Agent Members" has the meaning provided in Section 306(a).
2
<PAGE> 15
"Annualized Operating Cash Flow" means, for any fiscal quarter, the
Operating Cash Flow for such fiscal quarter multiplied by four.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 hereof to act on behalf of the Trustee to
authenticate Securities.
"Average Life" means, at any date of determination with respect to
any Debt, the quotient obtained by dividing (i) the sum of the products of
(a) the number of years from such date of determination to the dates of
each successive scheduled principal payment of such Debt and (b) the
amount of such principal payment by (ii) the sum of all such principal
payments.
"Beneficial Owner" means a beneficial owner as defined in Rules
13d-3 and 13d-5 under the Exchange Act (or any successor rules), including
the provision of such Rules that a person shall be deemed to have
beneficial ownership of all securities that such person has a right to
acquire within 60 days, provided that a person shall not be deemed a
beneficial owner of, or to own beneficially, any securities if such
beneficial ownership (1) arises solely as a result of a revocable proxy
delivered in response to a proxy or consent solicitation made pursuant to,
and in accordance with, the Exchange Act and the applicable rules and
regulations thereunder and (2) is not also then reportable on Schedule 13D
(or any successor schedule) under the Exchange Act.
"Board of Directors" means (i) whenever used in Sections 1009
through 1015, inclusive, the board of directors of the Company and (ii)
whenever used elsewhere herein, either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors (unless the context specifically
requires that such resolution be adopted by a majority of the
Disinterested Directors, in which case by a majority of such directors)
and to be in full force and effect on the date of such certification and
delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in the Borough of
Manhattan, The City of New York are authorized or obligated by law or
executive order to close.
"Capital Lease Obligations" of any Person means the obligations to
pay rent or other amounts under lease of (or other Debt arrangements
conveying the right to use) real or personal property of such Person which
are required to be classified and accounted for as a capital lease or a
liability on the face of a balance sheet of such Person determined in
accordance with generally accepted accounting principles and the amount of
such obligations shall be the capitalized amount thereof in accordance
with generally accepted accounting principles and the stated maturity
thereof shall be the date of the last payment of rent or any other amount
due under such lease prior to the first date upon which such lease may be
terminated by the lessee without payment of a penalty.
3
<PAGE> 16
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of stock of, or
other ownership interests in, such Person.
"Change of Control" means the occurrence of any of the following
events:
(a) any person (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act and the regulations thereunder) is or
becomes the Beneficial Owner, directly or indirectly, of more than
50% of the total Voting Stock or Total Common Equity of the
Company; provided that no Change of Control shall be deemed to
occur pursuant to this clause (a) (x) if the person is a
corporation with outstanding debt securities having a maturity at
original issuance of at least one year and if such debt securities
are rated Investment Grade by S&P or Moody's for a period of at
least 90 consecutive days, beginning on the date of such event
(which period will be extended up to 90 additional days for as long
as the rating of such debt securities is under publicly announced
consideration for possible downgrading by the applicable rating
agency), or (y) if the person is a corporation (1) that is not, and
does not have any outstanding debt securities that are, rated by
S&P, Moody's or any other rating agency of national standing at any
time during a period of 90 consecutive days beginning on the date
of such event (which period will be extended up to an additional 90
days for as long as any such rating agency has publicly announced
that such corporation or debt thereof will be rated), unless after
such date but during such period debt securities of such
corporation having a maturity at original issuance of at least one
year are rated Investment Grade by S&P or Moody's and remain so
rated for the remainder of the period referred to in clause (x)
above and (2) that, when determined as of the Trading Day
immediately before and the Trading Day immediately after the date
of such event, has Total Common Equity of at least $10 billion
(provided that, solely for the purpose of calculating Total Common
Equity as of such later Trading Day, the average Closing Price of
the Common Stock of such person shall be deemed to equal the
Closing Price of such Common Stock on such later Trading Day,
subject to the last sentence of the definition of "Total Common
Equity"); or
(b) the Company consolidates with, or merges with or
into, another Person or sells, assigns, conveys, transfers, leases
or otherwise disposes of all or substantially all of its assets to
any Person, or any Person consolidates with, or merges with or
into, the Company, in any such event pursuant to a transaction in
which the outstanding Voting Stock of the Company is converted into
or exchanged for cash, securities or other property, other than any
such transaction where (i) the outstanding Voting Stock of the
Company is converted into or exchanged for (1) Voting Stock (other
than Redeemable Stock) of the surviving or transferee Person or (2)
cash, securities and other property in an amount which could be
paid by the Company as a Restricted Payment under this Indenture
and (ii) immediately after such transaction no person (as such term
is used in Sections 13(d) and 14(d) of the Exchange Act and the
regulations thereunder) is the Beneficial Owner, directly or
indirectly, of more than 50% of the total Voting
4
<PAGE> 17
Stock or Total Common Equity of the surviving or transferee Person;
provided that no Change of Control shall be deemed to occur
pursuant to this clause (b), (x) if the surviving or transferee
Person or the person referred to in clause (b)(ii) is a corporation
with outstanding debt securities having a maturity at original
issuance of at least one year and if such debt securities are rated
Investment Grade by S&P or Moody's for a period of at least 90
consecutive days, beginning on the date of such event (which period
will be extended up to 90 additional days for as long as the rating
of such debt securities is under publicly announced consideration
for possible downgrading by the applicable rating agency), or (y)
if the surviving or transferee Person or such other person is a
corporation (1) that is not, and does not have any outstanding debt
securities that are, rated by S&P, Moody's or any other rating
agency of national standing at any time during a period of 90
consecutive days beginning on the date of such event (which period
will be extended up to an additional 90 days for as long as any
such rating agency has publicly announced that such corporation or
debt thereof will be rated), unless after such date but during such
period debt securities of such corporation having a maturity at
original issuance of at least one year are rated Investment Grade
by S&P or Moody's and remain so rated for the remainder of the
period referred to in clause (x) above and (2) that, when
determined as of the Trading Day immediately before and the Trading
Day immediately after the date of such event, has Total Common
Equity of at least $10 billion (provided that, solely for the
purpose of calculating Total Common Equity as of such later Trading
Day, the average Closing Price of the Common Stock of such person
shall be deemed to equal the Closing Price of such Common Stock on
such later Trading Day, subject to the last sentence of the
definition of "Total Common Equity"); or
(c) during any consecutive two-year period, individuals
who at the beginning of such period constituted the Board of
Directors (together with any directors who are members of the Board
of Directors on the date hereof and any new directors whose
election by such Board of Directors or whose nomination for
election by the stockholders of the Company was approved by a vote
of 66 2/3% of the directors then still in office who were either
directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors then in
office.
Any event that would constitute a Change of Control pursuant to
clause (a) or (b) above (i) but for the proviso thereto shall not be
deemed to be a Change of Control until such time (if any) as the
conditions described in such proviso cease to have been met and (ii) if
and to the extent resulting from any restructuring transaction or any sale
or assignment of all or substantially all of the assets and liabilities of
the Company to, or merger or consolidation of the Company with, any Person
(any such transaction, a "Restructuring Transaction") effected at
substantially the same time as and in connection with any of the Permitted
Transactions described in clause (i) of the definition of the term
"Permitted Transactions" shall not constitute a Change of Control so long
as the Persons who, immediately prior to the closing of such Restructuring
Transaction and the particular
5
<PAGE> 18
Permitted Transaction being consummated at substantially the same time
and in connection therewith (the "Restructuring Closing"), were the
Beneficial Owners, directly or indirectly, of more than 50% of the total
Voting Stock and more than 50% of the Total Common Equity of the Company
would remain, immediately after such Restructuring Closing (and after
taking into account all issuances of securities in such Restructuring
Transaction and related Permitted Transaction), the Beneficial Owners,
directly or indirectly, of more than 50% of the total Voting Stock and
more than 50% of the Total Common Equity of the Company (or the surviving
transferee Person, as the case may be); provided that, immediately after
any transaction or combination of transactions described in this clause
(ii), no person (as such term is used in Sections 13(d) and 14(a) of the
Exchange Act and the regulations thereunder) is the ultimate Beneficial
Owner of more than 50% of the total Voting Stock or more than 50% of the
Total Common Equity of the Company (or the surviving transferee Person, as
the case may be) unless such person (as so defined) was the Beneficial
Owner of more than 50% of the total Voting Stock and more than 50% of the
Total Common Equity of the Company immediately before such transaction or
combination of transactions.
"Closing Date" means the date on which the Securities are originally
issued hereunder.
"Closing Price" on any Trading Day with respect to the per share
price of any shares of Capital Stock means the last reported sale price
regular way or, in case no such reported sale takes place on such day, the
average of the reported closing bid and asked prices regular way, in
either case on the New York Stock Exchange or, if such shares of Capital
Stock are not listed or admitted to trading on such exchange, on the
principal national securities exchange on which such shares are listed or
admitted to trading or, if not listed or admitted to trading on any
national securities exchange, on the Nasdaq Stock Market or, if such
shares are not listed or admitted to trading on any national securities
exchange or quoted on the Nasdaq Stock Market but the issuer is a Foreign
Issuer (as defined in Rule 3b-4(b) under the Exchange Act) and the
principal securities exchange on which such shares are listed or admitted
to trading is a Designated Offshore Securities Market (as defined in Rule
902(a) under the Securities Act), the average of the reported closing bid
and asked prices regular way on such principal exchange, or, if such
shares are not listed or admitted to trading on any national securities
exchange or quoted on the Nasdaq Stock Market and the issuer and principal
securities exchange do not meet such requirements, the average of the
closing bid and asked prices in the over-the-counter market as furnished
by any New York Stock Exchange member firm of national standing that is
selected from time to time by the Company for that purpose.
"Code" means the Internal Revenue Code, as amended from time to
time, and the rules and regulations thereunder.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any
time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.
6
<PAGE> 19
"Common Stock" of any Person means Capital Stock of such Person
that does not rank prior, as to the payment of dividends or as to the
distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up of such Person, to shares of Capital Stock of any
other class of such Person.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become
such pursuant to the applicable provisions of this Indenture and
thereafter "Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by its Chairman of the Board, its
President or a Vice President, and by its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Consolidated Adjusted Net Income" and "Consolidated Adjusted Net
Loss" mean, for any period, the net income or net loss, as the case may
be, of the Company and its Restricted Subsidiaries for such period, all as
determined on a Consolidated basis in accordance with generally accepted
accounting principles, adjusted, to the extent included in calculating
such net income or net loss, as the case may be, by excluding without
duplication (a) any after-tax gain or loss attributable to the sale,
conversion or other disposition of assets other than in the ordinary
course of business, (b) any after-tax gains resulting from the write-up of
assets and any loss resulting from the write-down of assets, (c) any
after-tax gain or loss on the repurchase or redemption of any securities
(including in connection with the early retirement or defeasance of any
Debt), (d) any foreign exchange gain or loss, (e) all payments in respect
of dividends on shares of Preferred Capital Stock of the Company, (f) any
other extraordinary, non-recurring or unusual items incurred by the
Company or any of its Restricted Subsidiaries, (g) the net income (or
loss) of any Person acquired by the Company or any Restricted Subsidiary
in a pooling-of-interests transaction for any period prior to the date of
such transaction and (h) all income or losses of Unrestricted Subsidiaries
and Persons (other than Subsidiaries) accounted for by the Company using
the equity method of accounting except, in the case of any such income, to
the extent of dividends, interest or other cash distributions received
directly or indirectly from any such Unrestricted Subsidiary or Person.
"Consolidated Adjusted Net Income (Loss)" means, for any period,
the Company's Consolidated Adjusted Net Income or Consolidated Adjusted Net
Loss for such period, as applicable.
"Consolidated Debt to Annualized Operating Cash Flow Ratio" means,
as at any date of determination, the ratio of (i) the aggregate amount
of Debt of the Company and the Restricted Subsidiaries on a Consolidated
basis outstanding as at the date of determination to (ii) the Annualized
Operating Cash Flow of the Company for the most recently completed fiscal
quarter of the Company.
"Consolidated Interest Expense" of any Person means, for any
period, the aggregate interest expense and fees and other financing costs
in respect of Debt (including
7
<PAGE> 20
amortization of original issue discount and non-cash interest payments
and accruals), the interest component in respect of Capital Lease
Obligations and any deferred payment obligations of such Person and its
Restricted Subsidiaries, determined on a Consolidated basis in accordance
with generally accepted accounting principles and all commissions,
discounts, other fees and charges owed with respect to letters of credit
and bankers' acceptance financing and net costs (including amortizations
of discounts) associated with interest rate swap and similar agreements
and with foreign currency hedge, exchange and similar agreements and the
amount of dividends paid in respect of Redeemable Stock.
"Consolidated Net Income" and "Consolidated Net Loss" mean, for any
period, the net income or net loss, as the case may be, of the Company
and its Restricted Subsidiaries for such period, all as determined on a
Consolidated basis in accordance with generally accepted accounting
principles, adjusted, to the extent included in calculating such net
income or net loss, as the case may be, by excluding without duplication
(a) any after-tax gain or loss attributable to the sale, conversion or
other disposition of assets other than in the ordinary course of business,
(b) any after-tax gains resulting from the write-up of assets and any loss
resulting from the write-down of assets, (c) any after-tax gain or loss on
the repurchase or redemption of any securities (including in connection
with the early retirement or defeasance of any Debt), (d) any foreign
exchange gain or loss, (e) all payments in respect of dividends on shares
of Preferred Capital Stock of the Company, (f) any other extraordinary,
non-recurring or unusual items incurred by the Company or any of its
Restricted Subsidiaries, (g) the net income (or loss) of any Person
acquired by the Company or any Restricted Subsidiary in a
pooling-of-interests transaction for any period prior to the date of such
transaction, (h) all income or losses of Unrestricted Subsidiaries and
Persons (other than Subsidiaries) accounted for by the Company using the
equity method of accounting except, in the case of any such income, to the
extent of dividends, interest or other cash distributions received
directly or indirectly from any such Unrestricted Subsidiary or Person and
(i) the net income (but not net loss) of any Restricted Subsidiary which
is subject to restrictions which prevent the payment of dividends or the
making of distributions to the Company but only to the extent of such
restrictions.
"Consolidated Net Income (Loss)" means, for any period, the
Company's Consolidated Net Income or Consolidated Net Loss for such
period, as applicable.
"Consolidated Net Worth" of any Person means the Consolidated
stockholders' equity of such Person, determined on a Consolidated basis
in accordance with generally accepted accounting principles, less amounts
attributable to Redeemable Stock of such Person; provided that, with
respect to the Company, no effect shall be given to adjustments following
the Closing Date to the accounting books and records of the Company in
accordance with Accounting Principles Board Opinions Nos. 16 and 17 (or
successor opinions thereto) or otherwise resulting from the acquisition of
control of the Company by another Person.
"Consolidation" means the consolidation of the accounts of each of
the Restricted Subsidiaries with those of the Company, if and to the extent
that the accounts of each such
8
<PAGE> 21
Restricted Subsidiary would normally be consolidated with those of the
Company in accordance with generally accepted accounting principles;
provided, however, that "Consolidation" shall not include consolidation of
the accounts of any Unrestricted Subsidiary, but the interest of the
Company or any Restricted Subsidiary in any Unrestricted Subsidiary shall
be accounted for as an investment. The term "Consolidated" has a
correlative meaning.
"Corporate Trust Office" means the principal office of the Trustee
at which at any particular time its corporate trust business shall be
administered, which address as of the Closing Date is located at 311 West
Monroe Street, 12th Floor, Chicago, Illinois 60606, Attention: Indenture
Trust Division.
"Corporation" means a corporation, association, company,
joint-stock company or business trust.
"Covenant Defeasance" has the meaning specified in Section 1203.
"Credit Facility" means any credit facility (whether a term or
revolving type) of the type customarily entered into with banks, between
the Company and/or any of its Restricted Subsidiaries, on the one hand,
and any banks or other lenders, on the other hand (and any renewals,
refundings, extensions or replacements of any such credit facility), which
credit facility is designated by the Company as a "Credit Facility" for
purposes of this Indenture, and shall include all such credit facilities
in existence on the Closing Date whether or not so designated, to the
extent that the aggregate principal balance of Debt that is Incurred and
outstanding under all Credit Facilities at any time does not exceed $3
billion.
"Debt" means (without duplication), with respect to any Person,
whether recourse is to all or a portion of the assets of such Person
and whether or not contingent, (i) every obligation of such Person for
money borrowed, (ii) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including obligations
Incurred in connection with the acquisition of property, assets or
businesses, (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities
issued for the account of such Person, (iv) every obligation of such
Person issued or assumed as the deferred purchase price of property or
services (but excluding trade accounts payable or accrued liabilities
arising in the ordinary course of business which are not overdue or which
are being contested in good faith), (v) every Capital Lease Obligation of
such Person, (vi) the maximum fixed redemption or repurchase price of
Redeemable Stock of such Person at the time of determination plus accrued
but unpaid dividends, (vii) every obligation of such Person under interest
rate swap or similar agreements or foreign currency hedge, exchange or
similar agreements of such Person, and (viii) every obligation of the type
referred to in clauses (i) through (vii) of another Person and all
dividends of another Person the payment of which, in either case, such
Person has Guaranteed or is responsible or liable, directly or indirectly,
as obligor, Guarantor or otherwise. The amount of Debt of any Person
issued with original issue discount is the face amount of such Debt less
the unamortized portion of the original
9
<PAGE> 22
issue discount of such Debt at the time of its issuance as determined in
conformity with generally accepted accounting principles, and money
borrowed at the time of the Incurrence of any Debt in order to pre-fund
the payment of interest on such Debt shall be deemed not to be "Debt".
"Default" means an event that is, or after notice or passage of
time, or both, would be, an Event of Default.
"Default Amount" has the meaning specified in Section 502.
"Defaulted Interest" has the meaning specified in Section 309.
"Defeasance" has the meaning specified in Section 1202.
"Depository" shall mean The Depository Trust Company, as nominees
and their respective successors.
"Digital Mobile" means a radio communications system that employs
digital technology with a multi-site configuration that will permit
frequency reuse as described in the Memorandum.
"Digital Mobile-SMR Operating Cash Flow" means, for any fiscal
quarter, (i) the net income or loss, as the case may be, of the Company
and its Restricted Subsidiaries from its Digital Mobile and Specialized
Mobile Radio businesses and related activities and services for such
fiscal quarter, plus (ii) depreciation and amortization charged with
respect thereto for such fiscal quarter, all as determined on a
Consolidated basis in accordance with generally accepted accounting
principles, adjusted, to the extent included in calculating such net
income or loss, by excluding (a) any after-tax gain or loss attributable
to the sale, conversion or other disposition of assets other than in the
ordinary course of business, (b) any gains resulting from the write-up of
assets and any loss resulting from the write-down of assets, (c) any gain
or loss on the repurchase or redemption of any securities (including in
connection with the early retirement or defeasance of any Debt), (d) any
foreign exchange gain or loss, (e) any other extraordinary, non-recurring
or unusual items and (f) all income or losses of Persons (other than
Subsidiaries) accounted for by the Company using the equity method of
accounting, except, in the case of any such income, to the extent of
dividends, interest or other cash distributions received directly or
indirectly from any such Person, plus (iii) all amounts deducted in
calculating net income or loss for such fiscal quarter in respect of
interest expense and other financing costs and all income taxes, whether
or not deferred, applicable to such fiscal quarter, all as determined on a
Consolidated basis in accordance with generally accepted accounting
principles.
"Directed Investment" by the Company or any of its Restricted
Subsidiaries means any Investment for which the cash or property used
for such Investment is received by the Company from the issuance and sale
(other than to a Restricted Subsidiary) on or after June 1, 1997 of shares
of its Capital Stock (other than Redeemable Stock), or any options,
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<PAGE> 23
warrants or other rights to purchase such Capital Stock (other than
Redeemable Stock) designated by the Board of Directors as a "Directed
Investment" to be used for one or more specified investments in the
telecommunications business (including related activities and services)
and is so designated and used at any time within 365 days after the
receipt thereof; provided that the aggregate amount of any such Directed
Investments may not at any time exceed fifty percent (50%) of the
aggregate amount of such cash or property received by the Company on or
after June 1, 1997 from any such issuance and sale or capital
contribution; and provided further that any proceeds from any such
issuance or sale may not be used for such an Investment if such proceeds
were, prior to being designated for use as a Directed Investment, (x) used
to make a Restricted Payment or (y) used as the basis for the Incurrence
of Debt under clause (i) of Section 1008 unless and until the amount of
any such Debt (I) is treated as newly issued Debt and could be Incurred in
accordance with Section 1008 (other than under clause (i) thereof) or (II)
has been repaid or refinanced with the proceeds of Debt Incurred in
accordance with Section 1008 (other than under clause (i) thereof) or
(III) has otherwise been repaid and, in the circumstances described in
clauses (I) and (II), the Company delivers to the Trustee a certificate
confirming that the requirements of such clauses have been met.
"Disinterested Director" means, with respect to any proposed
transaction between the Company and an Affiliate thereof, a member of
the Board of Directors who is not an officer or employee of the Company,
would not be a party to, or have a financial interest in, such transaction
and is not an officer, director or employee of, and does not have a
financial interest in, such Affiliate. For purposes of this definition, no
person would be deemed not to be a Disinterested Director solely because
such person holds Capital Stock of the Company.
"Event of Default" has the meaning specified in Section 501.
"Exchange Securities" means any security of the Company containing
terms identical to the Securities initially issued hereunder (except
that such Securities shall have been registered under the Securities Act)
that are issued and exchanged for the Securities pursuant to the
Registration Rights Agreement.
"Exchange Act" refers to the Securities Exchange Act of 1934 and
any statute successor thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in the definition of
Offer to Purchase.
"Fair Market Value" means, for purposes of clause (i) of Section
1008, the price that would be paid in an arm's-length transaction
between an informed and willing seller under no compulsion to sell and an
informed and willing buyer under no compulsion to buy, as determined in
good faith by the Board of Directors, whose determination shall be
conclusive if evidenced by a Board Resolution; provided that (x) the Fair
Market Value of any security registered under the Exchange Act shall be
the average of the closing prices, regular way, of such security for the
20 consecutive trading days immediately preceding the sale of Capital
Stock and (y) in the event the aggregate Fair Market Value of any other
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<PAGE> 24
property received by the Company exceeds $10 million, the Fair Market
Value of such property shall be (i) so long as such a Fair Market Value
determination of such property is required to be made pursuant to the
Certificate of Designation for the Series D Preferred Stock, pursuant to
the terms of the Series D Debenture Indenture, pursuant to the Certificate
of Designation for the Series E Preferred Stock or pursuant to the terms
of the Series E Debenture Indenture, the Fair Market Value as so
determined, which shall be set forth in an Officer's Certificate delivered
to the Trustee, and (ii) otherwise, such Fair Market Value shall be as
determined in good faith by the Board of Directors, including a majority
of Disinterested Directors who are then members of such Board of
Directors, which determination shall be conclusive if evidenced by a Board
Resolution.
"FCC" means the Federal Communications Commission.
"February Indenture" means the Indenture, dated February 11, 1998,
between the Company and Harris Trust and Savings Bank, Trustee,
relating to the February Notes.
"February Notes" means the Company's 9.95% Senior Serial Redeemable
Discount Notes due 2008.
"Global Securities" has the meaning provided in Section 201.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person guaranteeing any Debt of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of such Person, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt or to
purchase (or to advance or supply funds for the purchase of) any security
for the payment of such Debt, (ii) to purchase property, securities or
services for the purpose of assuring the holder of such Debt of the
payment of such Debt, or (iii) to maintain working capital, equity capital
or other financial statement condition or liquidity of the primary obligor
so as to enable the primary obligor to pay such Debt (and "Guaranteed",
"Guaranteeing" and "Guarantor" shall have meanings correlative to the
foregoing); provided, however, that the Guarantee by any Person shall not
include endorsements by such Person for collection or deposit, in either
case, in the ordinary course of business.
"Holder" means a Person in whose name a Security is registered in
the Security Register.
"Incur" means, with respect to any Debt or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise),
assume (pursuant to a merger, consolidation, acquisition or other
transaction), Guarantee or otherwise become liable in respect of such Debt
or other obligation or the recording, as required pursuant to generally
accepted accounting principles or otherwise, of any such Debt or other
obligation on the balance sheet of such Person (and "Incurrence" and
"Incurred", shall have meanings correlative to the foregoing); provided,
however, that a change in generally accepted accounting principles that
results in an obligation of such Person that exists at such time becoming
Debt shall not be deemed an Incurrence of such Debt; provided
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<PAGE> 25
further, however, that the accretion of original issue discount on Debt
shall not be deemed to be an Incurrence of Debt. Debt otherwise Incurred
by a Person before it becomes a Subsidiary of the Company shall be deemed
to have been Incurred at the time it becomes such a Subsidiary.
"Indenture" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more
indentures supplemental hereto entered into pursuant to the applicable
provisions hereof, including, for all purposes of this instrument and any
such supplemental indenture, the provisions of the Trust Indenture Act
that are deemed to be a part of and govern this instrument and any such
supplemental indenture, respectively.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3)
or (7) under the Securities Act.
"Interest Payment Date" means the Stated Maturity of an installment
of interest on the Securities.
"Investment" by any Person means any direct or indirect loan,
advance or other extension of credit or capital contribution to (by
means of transfers of cash or other property to others or payments for
property or services for the account or use of others, or otherwise), or
purchase or acquisition of Capital Stock, bonds, notes, debentures or
other securities or evidence of Debt issued by, any other Person or the
designation of a Subsidiary as an Unrestricted Subsidiary; provided that a
transaction will not be an Investment to the extent it involves (i) the
issuance or sale by the Company of its Capital Stock (other than
Redeemable Stock), including options, warrants or other rights to acquire
such Capital Stock (other than Redeemable Stock) or (ii) a transfer,
assignment or contribution by the Company of shares of Capital Stock (or
any options, warrants or rights to acquire Capital Stock), or all or
substantially all of the assets of, any Unrestricted Subsidiary of the
Company to another Unrestricted Subsidiary of the Company.
"Investment Grade" means a rating of at least BBB-, in the case of
S&P, or Baa3, in the case of Moody's.
"Licenses" means SMR licenses granted by the FCC that entitle the
holder to use the radio channels covered thereby, subject to compliance
with FCC rules and regulations, in connection with its SMR business.
"Lien" means, with respect to any property or assets, any mortgage
or deed of trust, pledge, hypothecation, assignment, deposit arrangement,
security interest, lien, charge, easement, encumbrance, preference,
priority or other security agreement or preferential arrangement of any
kind or nature whatsoever on or with respect to such property or assets
(including any conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing).
"Marketable Securities" means:
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<PAGE> 26
(1) securities either issued directly or fully guaranteed or
insured by the government of the United States of America or any agency or
instrumentality thereof having maturities of not more than six months;
(2) time deposits and certificates of deposit, having maturities of
not more than six months from the date of deposit, of any domestic
commercial bank having capital and surplus in excess of $500 million and
having outstanding long-term debt rated A or better (or the equivalent
thereof) by S&P or Aaa or better (or the equivalent thereof) by Moody's;
and
(3) commercial paper rated A-1 or the equivalent thereof by S&P or
P-1 or the equivalent thereof by Moody's, and in each case maturing
within six months.
"Maturity", when used with respect to any Security, means the date
on which the principal of such Security becomes due and payable as
therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption, offer to purchase or
otherwise.
"Memorandum" means the offering memorandum dated October 28, 1998
in connection with the offering of the Securities.
"Moody's" means Moody's Investors Service, Inc. or, if Moody's
Investors Service, Inc. shall cease rating debt securities having a
maturity at original issuance of at least one year and such ratings
business shall have been transferred to a successor Person, such successor
Person; provided, however, that if Moody's Investors Service, Inc. ceases
rating debt securities having a maturity at original issuance of at least
one year and its ratings business with respect thereto shall not have been
transferred to any successor Person, then "Moody's" shall mean any other
national recognized rating agency (other than S&P) that rates debt
securities having a maturity at original issuance of at least one year and
that shall have been designated by the Company by a written notice given
to the Trustee.
"Non-U.S. Person" means a person who is not a "U.S. Person" (as
defined in Regulation S).
"Notice of Default" means a written notice of the kind specified in
Section 501(5).
"October Indenture" means the Indenture, dated October 22, 1997,
between the Company and Harris Trust and Savings Bank, Trustee, relating
to the October Notes.
"October Notes" means the Company's 9 3/4% Senior Serial Redeemable
Discount Notes due 2007.
"Offer" has the meaning specified in the definition of Offer to
Purchase.
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<PAGE> 27
"Offer to Purchase" means a written offer (the "Offer") sent by the
Company by first class mail, postage prepaid, to each Holder at his
address appearing in the Security Register on the date of the Offer
offering to purchase up to the principal amount of Securities specified in
such Offer at the purchase price specified in such Offer (as determined
pursuant to this Indenture). Unless otherwise required by applicable law,
the Offer shall specify an expiration date (the "Expiration Date") of the
Offer to Purchase which shall be, subject to any contrary requirements of
applicable law, not less than 30 days or more than 60 days after the date
of such Offer and a settlement date (the "Purchase Date") for purchase of
Securities within five Business Days after the Expiration Date. The
Company shall notify the Trustee at least 15 days (or such shorter period
as is acceptable to the Trustee) prior to the mailing of the Offer of the
Company's obligation to make an Offer to Purchase, and the Offer shall be
mailed by the Company or, at the Company's request, by the Trustee, in the
name and at the expense of the Company. The Offer shall contain
information concerning the business of the Company and its Subsidiaries
which, at a minimum, shall include (i) the most recent annual and
quarterly financial statements and "Management's Discussion and Analysis
of Financial Condition and Results of Operations" contained in the
documents required to be filed with the Trustee pursuant to this Indenture
(which requirements may be satisfied by delivery of such documents
together with the Offer), (ii) a description of material developments in
the Company's business subsequent to the date of the latest of such
financial statements referred to in clause (i) (including a description of
the events requiring the Company to make the Offer to Purchase), (iii) if
required under applicable law, pro forma financial information concerning,
among other things, the Offer to Purchase and the events requiring the
Company to make the Offer to Purchase and (iv) any other information
required by applicable law to be included therein. The Offer shall contain
all instructions and materials necessary to enable such Holders to tender
their Securities pursuant to the Offer to Purchase. The Offer shall also
state:
(1) the section of this Indenture pursuant to which the Offer
to Purchase is being made;
(2) the Expiration Date and the Purchase Date;
(3) the aggregate principal amount at Stated Maturity of the
Outstanding Securities offered to be purchased by the Company
pursuant to the Offer to Purchase (the "Purchase Amount");
(4) the purchase price to be paid by the Company for each
$1,000 principal amount at Stated Maturity of Securities accepted
for payment (as specified pursuant to this Indenture) (the
"Purchase Price");
(5) the Holder may tender all or any portion of the Securities
registered in the name of such Holder and that any portion of
Securities tendered must be tendered in an integral multiple of
$1,000 of principal amount at Stated Maturity;
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<PAGE> 28
(6) the place or places where the Securities are to be
surrendered for tender pursuant to the Offer to Purchase;
(7) that interest, if any, on any Securities not tendered or
tendered but not purchased by the Company pursuant to the Offer to
Purchase will continue to accrue;
(8) that on the Purchase Date the Purchase Price will become
due and payable upon each Security being accepted for payment
pursuant to the Offer to Purchase;
(9) that each Holder electing to tender Securities pursuant
to the Offer to Purchase will be required to surrender such
Securities at the place or places specified in the Offer prior to
the close of business on the Expiration Date (such Securities
being, if the Company or the Trustee so requires, duly endorsed by,
or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by the
Holder thereof or his attorney duly authorized in writing);
(10) that Holders will be entitled to withdraw all or any
portion of the Securities tendered if the Company (or its Paying
Agent) receives, not later than the close of business on the
Expiration Date, a facsimile transmission or letter setting forth
the name of the Holder, the principal amount at Stated Maturity of
the Securities the Holder tendered, the certificate number of the
Securities the Holder tendered and a statement that such Holder is
withdrawing all or a portion of his tender;
(11) that the Company shall purchase all such Securities duly
tendered and not withdrawn pursuant to the Offer to Purchase; and
(12) that in the case of any Holder whose Securities are
purchased only in part, the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Securities
without service charge, new Securities of any authorized
denomination as requested by such Holder, in an aggregate
principal amount at Stated Maturity equal to and in exchange for
the unpurchased portion of the aggregate principal amount at
Stated Maturity of the Securities so tendered.
Any Offer to Purchase shall be governed by and effected in
accordance with the Offer for such Offer to Purchase.
"Officers' Certificate" means a certificate signed by the Chairman
of the Board, the President or a Vice President, and by the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary, of the
Company, and delivered to the Trustee. One of the officers signing an
Officers' Certificate given pursuant to Section 1017 shall be the
principal executive, financial or accounting officer of the Company.
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<PAGE> 29
"Offshore Global Securities" has the meaning provided in Section
201.
"Offshore Physical Securities" has the meaning provided in Section
201.
"Operating Cash Flow" means, for any fiscal quarter, (i) the
Company's Consolidated Adjusted Net Income (Loss) plus depreciation and
amortization in respect thereof for such fiscal quarter, plus (ii) all
amounts deducted in calculating Consolidated Adjusted Net Income (Loss)
for such fiscal quarter in respect of interest expense and other financing
costs, including dividends paid in respect of Redeemable Stock, and all
income taxes, whether or not deferred, applicable to such income period,
all as determined on a Consolidated basis in accordance with generally
accepted accounting principles. For purposes of calculating Operating Cash
Flow for the fiscal quarter most recently completed prior to any date on
which an action is taken that requires a calculation of the Operating Cash
Flow to Consolidated Interest Expense Ratio or Consolidated Debt to
Annualized Operating Cash Flow Ratio, (1) any Person that is a Restricted
Subsidiary on such date (or would become a Restricted Subsidiary in
connection with the transaction that requires the determination of such
ratio) will be deemed to have been a Restricted Subsidiary at all times
during such fiscal quarter, (2) any Person that is not a Restricted
Subsidiary on such date (or would cease to be a Restricted Subsidiary in
connection with the transaction that requires the determination of such
ratio) will be deemed not to have been a Restricted Subsidiary at any time
during such fiscal quarter and (3) if the Company or any Restricted
Subsidiary shall have in any manner acquired (including through
commencement of activities constituting such operating business) or
disposed (including through termination or discontinuance of activities
constituting such operating business) of any operating business during or
subsequent to the most recently completed fiscal quarter, such calculation
will be made on a pro forma basis on the assumption that such acquisition
or disposition had been completed on the first day of such completed
fiscal quarter.
"Operating Cash Flow to Consolidated Interest Expense Ratio" means,
as at any date of determination, the ratio of (i) the Operating Cash
Flow of the Company for the most recently completed fiscal quarter of the
Company to (ii) the Consolidated Interest Expense of the Company and its
Restricted Subsidiaries for the most recently completed fiscal quarter of
the Company.
"Opinion of Counsel" means a written opinion of counsel, who may
be counsel for the Company, and who shall be acceptable to the Trustee.
"Outstanding", when used with respect to Securities, means, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee
or any Paying
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<PAGE> 30
Agent (other than the Company) in trust or set aside and segregated
in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities; provided that,
if such Securities are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made;
(iii) Securities which have been paid pursuant to Section
308 or in exchange for or in lieu of which other Securities
have been authenticated and delivered pursuant to this Indenture,
other than any such Securities in respect of which there shall have
been presented to the Trustee proof satisfactory to it that such
Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company; and
(iv) Securities as to which Defeasance has been effected
pursuant to Section 1202;
provided, however, that in determining whether the Holders of the
requisite principal amount of the Outstanding Securities have given, made
or taken any request, demand, authorization, direction, notice, consent,
waiver or other action hereunder as of any date, Securities owned by the
Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization,
direction, notice, consent, waiver or other action, only Securities which
the Trustee knows to be so owned shall be so disregarded. Securities so
owned which have been pledged in good faith may be regarded as Outstanding
if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the
pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor.
"pari passu", when used with respect to the ranking of any Debt of
any Person in relation to other Debt of such Person, means that each such
Debt (a) either (i) is not subordinated in right of payment to any other
Debt of such Person or (ii) is subordinate in right of payment to the
same Debt of such Person as is the other and is so subordinate to the
same extent and (b) is not subordinate in right of payment to the other
or to any Debt of such Person as to which the other is not so
subordinate.
"Paying Agent" means any Person authorized by the Company to pay
the principal of (and premium, if any) or interest on any Securities on
behalf of the Company.
"Permitted Debt" means:
(i) any Debt (including Guarantees thereof) outstanding on
the Closing Date (including the Securities) and any accretion of
original issue discount and accrual of interest with respect to
such Debt;
(ii) any Debt outstanding under a Credit Facility;
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<PAGE> 31
(iii) any Vendor Financing Debt or any other Debt Incurred
to finance the cost (including the cost of design, development,
construction, improvement, installation or integration) of
equipment, inventory or network assets acquired by the Company or
any of its Restricted Subsidiaries after the Closing Date;
(iv) Debt (A) to the Company or (B) to any Restricted
Subsidiary; provided that any event which results in any such
Restricted Subsidiary ceasing to be a Restricted Subsidiary or any
subsequent transfer of such Debt (other than to the Company or
another Restricted Subsidiary) shall be deemed, in each case, to
constitute an Incurrence of such Debt not permitted by this clause
(iv);
(v) Debt (A) in respect of performance, surety or appeal
bonds provided in the ordinary course of business, (B) under foreign
currency hedge, interest rate swap or similar agreements; provided
that such agreements (a) are designed solely to protect the
Company or its Restricted Subsidiaries against fluctuations in
foreign currency exchange rates or interest rates and (b) do not
increase the Debt of the obligor outstanding at any time other
than as a result of fluctuations in foreign currency exchange
rates or interest rates or by reason of fees, indemnities and
compensation payable thereunder; and (C) arising from agreements
providing for indemnification, adjustment of purchase price or
similar obligations, or from Guarantees or letters of credit, surety
bonds or performance bonds securing any obligations of the Company
or any Restricted Subsidiary pursuant to such agreements, in any
case Incurred in connection with the disposition of any business,
assets or Restricted Subsidiary (other than Guarantees of Debt
Incurred by any Person acquiring all or any portion of such
business, assets or Restricted Subsidiary for the purpose of
financing such acquisition), in a principal amount not to exceed
the gross proceeds actually received by the Company or any
Restricted Subsidiary in connection with such disposition;
(vi) renewals, refundings or extensions of any Debt referred
to in clause (i) or (iii) above or Incurred pursuant to clause
(ii) of Section 1008 and any renewals, refundings or extensions
thereof, plus (A) the amount of any premium reasonably determined
by the Company as necessary to accomplish such renewal, refunding
or extension and (B) such other fees and expenses of the Company
reasonably incurred in connection with the renewal, refunding or
extension, provided that such renewal, refunding or extension
shall constitute Permitted Debt only (a) to the extent that it
does not result in an increase in the aggregate principal amount
(or, if such Debt provides for an amount less than the principal
amount thereof to be due and payable upon a declaration of
acceleration of the maturity thereof, in an amount not greater
than such lesser amount) of such Debt (except as permitted by
clause (A) or (B) above), and (b) to the extent such renewed,
refunded or extended Debt does not have a mandatory redemption
date prior to the mandatory redemption date of the Debt being
renewed, refunded or extended or have an Average Life shorter than
the remaining Average Life of the Debt being renewed, refunded or
extended;
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<PAGE> 32
(vii) Debt payable solely in, or mandatorily convertible
into, Capital Stock (other than Redeemable Stock) of the Company;
and
(viii) Debt (in addition to Debt permitted under clauses
(i) through (vii) above) in an aggregate principal amount
outstanding at any time not to exceed $450 million.
"Permitted Distribution" of a Person means (x) the exchange by such
Person of Capital Stock (other than Redeemable Stock) for outstanding
Capital Stock; (y) the redemption, repurchase, defeasance or other
acquisition or retirement for value of Debt of the Company that is
subordinate in right of payment to the Securities, in exchange for
(including any such exchange pursuant to the exercise of a conversion
right or privilege in connection with which cash is paid in lieu of the
issuance of fractional shares or scrip), or out of the proceeds of a
substantially concurrent issue and sale (other than to a Restricted
Subsidiary) of, either (a) Capital Stock of the Company (other than
Redeemable Stock) or (b) Debt of the Company that is subordinate in right
of payment to the Securities on subordination terms no less favorable to
the Holders of the Securities in their capacities as such than the
subordination terms (or other arrangement) applicable to the Debt that is
redeemed, repurchased, defeased or otherwise acquired or retired for
value, provided that, in the case of this clause (b), such new Debt does
not mature prior to the Stated Maturity or have a mandatory redemption
date prior to the mandatory redemption date of the Debt being redeemed,
repurchased, defeased or otherwise acquired or retired for value or have
an Average Life shorter than the remaining Average Life of the Debt being
redeemed, repurchased, defeased or otherwise acquired or retired for
value; and (z) dividend, penalty or other mandated payments, including
mandatory repurchases, on or in respect of any class or series of the
Company's Preferred Capital Stock that is authorized and designated on the
Closing Date (i.e., the Class A Preferred Stock, Class B Preferred Stock,
Class C Preferred Stock, Series D Preferred Stock and Series E Preferred
Stock of the Company).
"Permitted Investment" means any Investment in Marketable
Securities.
"Permitted Transaction" means (i) any transaction pursuant to
agreements (whether or not definitive, and regardless of whether binding
or non-binding) existing on the Closing Date and described in or
incorporated by reference into the Memorandum and (ii) any transaction or
transactions with any vendor or vendors of property or materials used in
the telecommunications business (including related activities and
services) of the Company or any Restricted Subsidiary, provided (x) such
transactions are in the ordinary course of business and (y) such vendor
does not beneficially own more than 50% of the voting power of the Voting
Stock of the Company.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency
or political subdivision thereof.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under
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<PAGE> 33
Section 308 in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Security shall be deemed to evidence the same debt as the
mutilated, destroyed, lost or stolen Security.
"Preferred Capital Stock" as applied to the Capital Stock of any
Person, means Capital Stock of such Person of any class or classes (however
designated) that ranks prior, as to the payment of dividends or as to the
distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up of such Person, to shares of Capital Stock of any
other class of such Person.
"Private Placement Legend" means the legend initially set forth on
the Securities in the form set forth in Section 205.
"Purchase Amount" has the meaning specified in the definition of
Offer to Purchase.
"Purchase Date" has the meaning specified in the definition of
Offer to Purchase.
"Purchase Price" has the meaning specified in the definition of
Offer to Purchase.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Record Expiration Date" has the meaning specified in Section 104.
"Redeemable Stock" of any Person means any Capital Stock of such
Person that by its terms or otherwise is (i) required to be redeemed
prior to the Stated Maturity of the Securities, (ii) redeemable at the
option of the holder thereof at any time prior to the Stated Maturity of
the Securities or (iii) convertible into or exchangeable for Capital Stock
referred to in clause (i) or (ii) above or Debt having a scheduled
maturity prior to the Stated Maturity of the Securities; provided that any
Capital Stock that would not constitute Redeemable Stock but for
provisions thereof giving holders thereof the right to require such Person
to repurchase or redeem such Capital Stock upon the occurrence of a
"change of control" occurring prior to the Stated Maturity of the
Securities shall not constitute Redeemable Stock if the "change of
control" provisions applicable to such Capital Stock are no more favorable
to the holders of such Capital Stock than the provisions contained in
Section 1013 and such Capital Stock specifically provides that such Person
will not repurchase or redeem any such stock pursuant to such provision
prior to the Company's repurchase of such Securities as are required to be
repurchased pursuant to Section 1013; and further provided that the Series
D Preferred Stock and the Series E Preferred Stock shall not be considered
to constitute Redeemable Stock.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
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"Registration Rights Agreement" means the Registration Rights
Agreement dated the Closing Date, between the Company and Morgan Stanley &
Co. Incorporated.
"Registration Statement" means the Registration Statement as
defined and described in the Registration Rights Agreement.
"Regular Record Date" for the interest payable on any Interest
Payment Date means the April 15 or October 15 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act.
"Required Consent" means, except as otherwise expressly provided
in this Indenture with respect to matters requiring the consent of each
holder of Securities affected thereby: (i) the consent of holders of not
less than a majority in aggregate principal amount at Stated Maturity of
the Securities for any action to (x) direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any power conferred upon such Trustee, or (y) consent to or
waive, on behalf of the holders of all the Securities, any past default
and its consequences, and (ii) with respect to all other actions requiring
the consent of holders of the Securities, the consent of either (x) a
majority in aggregate principal amount at Stated Maturity of the
Securities or (y) a majority in aggregate principal amount at Stated
Maturity of (I) the Securities, (II) the September Notes, if the holders
of the September Notes are being requested to consent to such action with
respect to the terms of the September Notes or the September Indenture,
(III) the October Notes, if the holders of the October Notes are being
requested to consent to such action with respect to the terms of the
October Notes or the October Indenture, (IV) the February Notes, if the
holders of the February Notes are being requested to consent to such
action with respect to the terms of the February Notes or the February
Indenture and (V) any other issue of unsubordinated, unsecured notes
issued by the Company, if such notes or the indenture pursuant to which
such notes were issued both (A) require the consent of the holders of such
notes to such action and (B) provide that the holders thereof will vote
with the holders of the Securities with respect to such action.
"Restricted Payments" has the meaning specified in Section 1009.
"Restricted Subsidiary" means any Subsidiary of the Company,
whether existing on the Closing Date or created subsequent thereto,
designated from time to time by the Board of Directors as (or otherwise
deemed to be) a "Restricted Subsidiary" in accordance with Section 1010.
"Rule 144A" means Rule 144A under the Securities Act.
"S&P" means Standard & Poor's Ratings Services or, if Standard &
Poor's Ratings Services shall cease rating debt securities having a
maturity at original issuance of at least one year and such ratings
business shall have been transferred to a successor Person, such
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successor Person; provided, however, that if Standard & Poor's Ratings
Services ceases rating debt securities having a maturity at original
issuance of at least one year and its ratings business with respect
thereto shall not have been transferred to any successor Person, then
"S&P" shall mean any other nationally recognized rating agency (other than
Moody's) that rates debt securities having a maturity at original issuance
of at least one year and that shall have been designated by the Company by
a written notice given to the Trustee.
"Securities" means securities designated in the first paragraph of
the RECITALS OF THE COMPANY that are authenticated and delivered under
this Indenture. For all purposes of this Indenture, the term "Securities"
shall include the Securities issued on the Closing Date, any Exchange
Securities to be issued and exchanged for any Securities pursuant to the
Registration Rights Agreement and any other Securities issued after the
Closing Date under this Indenture. For purposes of this Indenture all
Securities shall vote together as one series of Securities under this
Indenture.
"Securities Act" means the Securities Act of 1933 and
any statute successor thereto, in each case as amended from time to time.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"September Indenture" means the Indenture, dated September 17,
1997, between the Company and Harris Trust and Savings Bank, Trustee,
relating to the September Notes.
"September Notes" means the Company's 10.65% Senior Redeemable
Discount Notes due 2007.
"Series D Debenture Indenture" means an indenture (having terms
and conditions substantially as summarized in that certain confidential
Offering Memorandum, dated July 16, 1997), prepared in connection with the
original issuance by the Company of shares of Series D Preferred Stock,
pursuant to which certain exchange debentures may be issued by the Company
in exchange for outstanding shares of Series D Preferred Stock.
"Series D Preferred Stock" means the 13% Series D Exchangeable
Redeemable Preferred Stock of the Company issued on July 21, 1997 and any
shares of Preferred Capital Stock issued in exchange therefor or as
payment in kind dividends thereon.
"Series E Debenture Indenture" means an indenture (having terms and
conditions substantially as summarized in that certain confidential
Offering Memorandum, dated February 6, 1998), prepared in connection with
the original issuance by the Company of shares of Series E Preferred
Stock, pursuant to which certain exchange debentures may be issued by the
Company in exchange for outstanding shares of Series E Preferred Stock.
"Series E Preferred Stock" means the 11.125% Series E Exchangeable
Redeemable Preferred Stock of the Company issued on February 11, 1998 and
any shares
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of Preferred Capital Stock issued in exchange therefor or as payment in
kind dividends thereon.
"Shelf Registration Statement" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.
"Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 309.
"Specialized Mobile Radio" or "SMR" means a mobile radio
communications system that is operated as described in the Memorandum.
"Stated Maturity" when used with respect to any Debt security or any
installment of interest thereon, means the date specified in such Debt
security as the fixed date on which the principal of such Debt security
or such installment of interest is due and payable.
"Subsidiary" of any Person means (i) a corporation more than 50% of
the outstanding Voting Stock of which is owned, directly or indirectly,
by such Person or by one or more other Subsidiaries of such Person or by
such Person and one or more Subsidiaries thereof or (ii) any other Person
(other than a corporation) in which such Person, or one or more other
Subsidiaries of such Person or such Person and one or more other
Subsidiaries thereof, directly or indirectly, has at least a majority
ownership and power to direct the policies, management and affairs
thereof.
"Total Common Equity" of any Person means, as of any day of
determination (and as modified for purposes of the definition of "Change
of Control"), the product of (i) the aggregate number of outstanding
primary shares of Common Stock of such Person on such day (which shall
not include any options or warrants on, or securities convertible or
exchangeable into, shares of Common Stock of such Person) and (ii) the
average Closing Price of such Common Stock over the 20 consecutive
Trading Days immediately preceding such day. If no such Closing Price
exists with respect to shares of any such class, the value of such shares
for purposes of clause (ii) of the preceding sentence shall be determined
by the Board of Directors in good faith and evidenced by a Board
Resolution.
"Total Market Value of Equity" of the Company means, as of any day
of determination, the sum of (1) the product of (i) the aggregate number
of outstanding primary shares of Common Stock of the Company on such day
(which shall not include any options or warrants on, or securities
convertible or exchangeable into, shares of Common Stock of the Company)
and (ii) the average Closing Price of such Common Stock over the 20
consecutive Trading Days immediately preceding such day, plus (2) the
liquidation value of any outstanding shares of Preferred Capital Stock of
the Company on such day. If no such Closing Price exists with respect to
shares of any such class, the value of such shares for purposes of clause
(ii) of the preceding sentence shall be determined by the Board of
Directors in good faith and evidenced by a Board Resolution.
"Trading Day" with respect to a securities exchange or automated
quotation system means a day on which such exchange or system is open for
a full day of trading.
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"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become
such pursuant to the applicable provisions of this Indenture, and
thereafter "Trustee" shall mean such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended
after such date, "Trust Indenture Act" means, to the extent required by
any such amendment, the Trust Indenture Act of 1939 as so amended.
"U.S. Global Securities" has the meaning provided in Section 201.
"U.S. Government Obligation" has the meaning specified in Section
1204.
"U.S. Physical Securities" has the meaning provided in Section 201.
"Unrestricted Subsidiary" means Unrestricted Subsidiary Funding
Company and any other Subsidiary that is not a Restricted Subsidiary and
includes any Restricted Subsidiary that becomes an Unrestricted
Subsidiary in accordance with Section 1010.
"Vendor Financing Debt" means any Debt owed to (i) a vendor or
supplier of any property or materials used by the Company or its
Restricted Subsidiaries in their telecommunications business, (ii) any
Affiliate of such a vendor or supplier, (iii) any assignee of such a
vendor, supplier or Affiliate of such a vendor or supplier, or (iv) a bank
or other financial institution that has financed or refinanced the
purchase of such property or materials from such a vendor, supplier,
Affiliate of such a vendor or supplier or assignee of such a vendor or
supplier; provided that the aggregate amount of such Debt does not exceed
the sum of (w) the purchase price of such property or materials (including
transportation, installation, warranty and testing charges, as well as
applicable taxes paid, in respect of such property or materials), (x) the
cost of design, development, site acquisition and construction, (y) any
interest or other financing costs accruing or otherwise payable in respect
of the foregoing, and (z) the cost of any services provided by such
vendor, supplier or Affiliate of such vendor or supplier.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number
or a word or words added before or after the title "vice president".
"Voting Stock" of any Person means Capital Stock of such Person
which ordinarily has voting power for the election of directors (or persons
performing similar functions) of such Person, whether at all times or
only so long as no senior class of securities has such voting power by
reason of any contingency.
"Wholly Owned Restricted Subsidiary" of the Company means a
Restricted Subsidiary all of the outstanding Capital Stock of which
(other than directors' qualifying shares) shall at the time be owned by
the Company or by one or more Wholly Owned
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Restricted Subsidiaries or by the Company and one or more Wholly Owned
Restricted Subsidiaries.
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company shall furnish
to the Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirement set forth in
this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession
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of the Company, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders; Record Dates.
Any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Indenture to be given or
taken by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security
Register.
Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Indenture to be given or taken by Holders
of Securities, provided that the Company may not set a record date for, and the
provisions of this paragraph shall not apply with respect to, the giving or
making of any notice, declaration, request or direction referred to in the next
paragraph. If any record date is set pursuant to this paragraph, the Holders of
Outstanding Securities on such record date, and no other Holders, shall be
entitled to take the relevant action, whether or not such Holders remain
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Holders after such record date; provided that no such action shall be effective
hereunder unless taken on or prior to the applicable Record Expiration Date by
Holders of the requisite principal amount of Outstanding Securities on such
record date; and provided, further, that for the purpose of determining whether
Holders of the requisite principal amount of such Securities have taken such
action, no Security shall be deemed to have been Outstanding on such record date
unless it is also Outstanding on the date such action is to become effective.
Nothing in this paragraph shall prevent the Company from setting a new record
date for any action for which a record date has previously been set pursuant to
this paragraph (whereupon the record date previously set shall automatically and
with no action by any Person be canceled and of no effect), nor shall anything
in this paragraph be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities on the date such
action is taken. Promptly after any record date is set pursuant to this
paragraph, the Company, at its own expense, shall cause notice of such record
date, the proposed action by Holders and the applicable Record Expiration Date
to be given to the Trustee in writing and to each Holder of Securities in the
manner set forth in Section 106.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to join in the giving
or making of (i) any Notice of Default, (ii) any declaration of acceleration
referred to in Section 502, (iii) any request to institute proceedings referred
to in Section 507(2), (iv) any direction referred to in Section 512 or (v) the
Required Consent. If any record date is set pursuant to this paragraph, the
Holders of Outstanding Securities on such record date, and no other Holders,
shall be entitled to join in such notice, declaration, request or direction,
whether or not such Holders remain Holders after such record date; provided that
no such action shall be effective hereunder unless taken on or prior to the
applicable Record Expiration Date by Holders of the requisite principal amount
of Outstanding Securities on such record date; and provided, further, that for
the purpose of determining whether Holders of the requisite principal amount of
such Securities have taken such action, no Security shall be deemed to have been
Outstanding on such record date unless it is also Outstanding on the date such
action is to become effective. Nothing in this paragraph shall be construed to
prevent the Trustee from setting a new record date for any action (whereupon the
record date previously set shall automatically and without any action by any
Person be canceled and of no effect), nor shall anything in this paragraph be
construed to render ineffective any action taken by Holders of the requisite
principal amount of Outstanding Securities on the date such action is taken.
Promptly after any record date is set pursuant to this paragraph, the Trustee,
at the Company's expense, shall cause notice of such record date, the matter(s)
to be submitted for potential action by Holders and the applicable Record
Expiration Date to be given to the Company in writing and to each Holder of
Securities in the manner set forth in Section 106.
With respect to any record date set pursuant to this Section, the
party hereto that sets such record date may designate any day as the "Record
Expiration Date" and from time to time may change the Record Expiration Date to
any earlier or later day, provided that no such change shall be effective unless
notice of the proposed new Record Expiration Date is given to the other party
hereto in writing, and to each Holder of Securities in the manner set forth in
Section 106, on or before the existing Record Expiration Date. If a Record
Expiration Date is not designated with respect to any record date set pursuant
to this Section, the party hereto that set such record date shall be deemed to
have initially designated the 180th day after such record date as the Record
Expiration Date with respect thereto, subject to its right to change the Record
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Expiration Date as provided in this paragraph. Notwithstanding the foregoing, no
Record Expiration Date shall be later than the 180th day after the applicable
record date.
Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing and mailed, first-class postage prepaid, to or with
the Trustee at its Corporate Trust Office, Attention: Indenture
Trust Division, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at the address of its
principal office specified in the first paragraph of this instrument
or at any other address previously furnished in writing to the
Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each Holder
affected by such event, at his address as it appears in the Security Register,
not later than the latest date (if any), and not earlier than the earliest date
(if any), prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by
Holders shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
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SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be part
of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders of Securities, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 112. GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date,
Purchase Date or Stated Maturity of any Security shall not be a Business Day,
then (notwithstanding any other provision of this Indenture or of the
Securities) payment of interest or principal (and premium, if any) need not be
made on such date, but may be made on the next succeeding Business Day with
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the same force and effect (including with respect to the accrual of interest) as
if made on the Interest Payment Date, Redemption Date or Purchase Date, or at
the Stated Maturity.
SECTION 114. No Recourse Against Others.
No recourse for the payment of the principal of, premium, if any, or
interest on any of the Securities, or for any claim based thereon or otherwise
in respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Company contained in this Indenture, or in any of the
Securities, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator or against any past, present or future
partner, shareholder, other equity holder, officer, director, employee or
controlling person, as such, of the Company or of any successor Person, either
directly or through the Company or any successor Person, whether by virtue of
any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that all such
liability is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of the
Securities.
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally.
The Securities and the Trustee's certificates of authentication
shall be in substantially the forms set forth in this Article, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture, and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon as
may be required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution thereof.
Securities offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more permanent global Securities in registered
form, substantially in the form set forth in Section 202 (the "U.S. Global
Securities"), deposited with the Trustee, as custodian for the Depository, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of the Global Securities may from time
to time be increased or decreased by adjustments made on the records of the
Trustee as custodian for the Depository or its nominee, as hereinafter provided
Securities offered and sold in offshore transactions in reliance on
Regulation S shall be issued initially in the form of one or more permanent
Global Securities in registered form substantially in the form set forth in
Section 202 (the "Offshore Global Securities") deposited with the Trustee, as
custodian for the Depositary, duly executed by the Company and authenticated by
the Trustee as hereinafter provided. The aggregate principal amount of the
Offshore Global Securities may from time to time be increased or decreased by
adjustments made on the records of
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the Trustee, as custodian for the Depositary, as hereinafter provided. The U.S.
Global Securities and the Offshore Global Securities are sometimes collectively
herein referred to as the "Global Securities."
Securities offered and sold in reliance on Regulation D under the
Securities Act or Securities issued pursuant to Section 307(b) shall be issued
in the form of permanent certificated Securities in registered form
substantially in the form set forth in Section 202 (the "U.S. Physical
Securities"). Securities issued pursuant to Section 307(d) in exchange for
interests in the Global Securities shall be in the form of permanent
certificated Securities in registered form substantially in the form set forth
in Section 202 (the "Offshore Physical Securities"). The Offshore Physical
Securities and U.S. Physical Securities are sometimes collectively herein
referred to as the "Physical Securities."
The definitive Securities shall be printed, lithographed or engraved
or produced by any combination of these methods on steel engraved borders or may
be produced in any other manner permitted by the rules of any securities
exchange on which the Securities may be listed, all as determined by the
officers executing such Securities, as evidenced by their execution of such
Securities.
SECTION 202. Form of Face of Security.
Nextel Communications, Inc.
12% Senior Serial Redeemable Notes due 2008
No. __________ $________
CUSIP NO.________
CINS NO.________
Nextel Communications, Inc., a corporation duly organized and
existing under the laws of the State of Delaware (herein called the "Company",
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to __________________,
or registered assigns, the principal sum of _____________________ Dollars on
November 1, 2008 and to pay cash interest thereon from November 4, 1998 or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually in arrears on May 1 and November 1 in each year,
commencing May 1, 1999 at the rate of 12% per annum, until the principal hereof
is paid or duly provided for, provided that any principal and premium, and any
such installment of interest, which is overdue shall bear interest at the rate
of 12 % per annum (to the extent that the payment of such interest shall be
legally enforceable), from the dates such amounts are due until they are paid or
duly provided for, and such interest shall be payable on demand. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in such Indenture, be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, which shall be the April
15 or October 15 (whether or not a Business Day), as the case may be, next
preceding such Interest
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Payment Date. Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities not less than 10
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture.
In the case of a default in payment of principal upon acceleration,
redemption or repurchase, the overdue principal and any overdue premium shall
bear interest at the rate of 12% per annum (to the extent that the payment of
such interest shall be legally enforceable), from the dates such amounts are due
until they are paid or duly provided for. Interest on any overdue principal or
premium shall be payable on demand. Any such interest on overdue principal or
premium which is not paid on demand shall bear interest at the rate of 12% per
annum (to the extent that the payment of such interest on interest shall be
legally enforceable), from the date of such demand until the amount so demanded
is paid or duly provided for, and such shall be payable on demand.
If an exchange offer registered under the Securities Act is not
consummated on or before June 1, 1999 in accordance with the terms of the
Registration Rights Agreement, incremental interest (in addition to the interest
otherwise due on the Securities after such date) will accrue from June 1, 1999,
at an annual rate of 0.5% of the principal amount of the Securities, and if such
exchange offer is not consummated on or before September 1, 1999, additional
incremental interest will accrue from September 1, 1999 at an annual rate of
0.5% of the principal amount of the Securities, with such incremental interest
payable in cash semi-annually, in arrears, on each May 1 and November 1,
commencing November 1, 1999, until the earlier of the date upon which (i) the
exchange offer is consummated, (ii) a Shelf Registration Statement with respect
to all Registrable Securities (as defined in the Registration Rights Agreement)
is declared effective, or (iii) the Securities become fully tradeable without
registration under the Securities Act, provided that from and after any such
relevant date, no such incremental interest will accrue on the Securities and
the interest rate on the Securities shall return to the original rate of 12% per
annum and shall accrue at such original rate thereafter; and provided further
that upon the request of any Holder of the Securities, the Company will deliver
to such Holder certificates evidencing such Holder's Securities without the
Private Placement Legend. The Holder of this Security is entitled to the
benefits of such Registration Rights Agreement.
Payment of the principal of (and premium, if any) and any interest
on this Security will be made at the office or agency of the Company maintained
for that purpose in the Borough of Manhattan, The City of New York, in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
33
<PAGE> 46
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
NEXTEL COMMUNICATIONS, INC.
[Seal]
By:
----------------------
Title:
Attest:
- ------------------------------
Title:
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of Securities of the
Company designated as its 12% Senior Serial Redeemable Notes due 2008 (herein
called the "Securities"), limited in aggregate principal amount to $300,000,000,
issued and to be issued under an Indenture, dated as of November 4, 1998 (herein
called the "Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and Harris Trust and Savings Bank, as Trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), and reference is hereby made to the Indenture for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Securities and of the terms
upon which the Securities are, and are to be, authenticated and delivered.
The Securities may be redeemed at any time on or after November 1,
2003, at the Company's option, in whole or in part, upon not less than 30 nor
more than 60 days' prior written notice mailed by first class mail to each
holder's last address as it appears in the Security Register, at the Redemption
Prices (expressed as a percentage of the principal amount thereof) set forth
below, plus an amount in cash equal to all accrued and unpaid interest, if any,
to the Redemption Date, if redeemed during the 12-month period beginning
November 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>
34
<PAGE> 47
Interest installments whose Stated Maturity is on or prior to any
Redemption Date will be payable to the Holders of Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.
In addition to any redemption provided for in the immediately
preceding paragraphs, in the event of a sale by the Company after the Closing
Date and on or prior to November 1, 2001 of its Capital Stock (other than
Redeemable Stock) in a single transaction or series of transactions for an
aggregate purchase price equal to or exceeding $50 million, up to a maximum of
35% of the original aggregate principal amount of the Outstanding Securities
will, within 180 days of such sale, at the option of the Company, upon not less
than 30 nor more than 60 days' notice by mail, be redeemable from the net
proceeds thereof (but only to the extent such proceeds consist of cash or
readily marketable cash equivalents received in respect of the Company's Capital
Stock so sold, in each case net of all commissions, discounts, fees, expenses
and taxes incurred in respect thereof) at a Redemption Price equal to 112% of
the principal amount of the Securities to be redeemed plus accrued and unpaid
interest to the Redemption Date.
The Securities do not have the benefit of any sinking fund
obligations.
In the event of redemption, or purchase pursuant to an Offer to
Purchase, of this Security in part only, a new Security or Securities for the
unredeemed or unpurchased portion hereof will be issued in the name of the
Holder hereof upon the cancellation hereof.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Security or certain restrictive covenants and Events
of Default with respect to this Security, in each case upon compliance with
certain conditions set forth in the Indenture.
If an Event of Default shall occur and be continuing, there may be
declared due and payable the Default Amount of the Securities, in the manner and
with the effect provided in the Indenture. The Default Amount in respect of this
Security as of any particular date shall equal 100% of the principal amount
payable in respect of this Security at the Stated Maturity hereof. Upon payment
of (i) the Default Amount so declared due and payable and any overdue
installment of interest in respect of this Security, (ii) any overdue principal
or premium payable on redemption or repurchase of this Security and (iii) as
provided on the face hereof, any interest on any overdue Default Amount,
principal, premium or interest in respect of this Security (to the extent that
the payment of such interest shall be legally enforceable), all of the Company's
obligations in respect of the payment of the principal of and any premium and
interest on this Security shall terminate.
The Indenture provides that, subject to certain conditions, if a
Change of Control occurs, the Company shall be required to make an Offer to
Purchase for all of the Securities.
Unless the context otherwise requires, references herein to the
principal amount of any Security mean, as of any day, (i) with respect to any
portion thereof required hereunder to be redeemed or repurchased on any
redemption or repurchase date on or prior to such day, the amount due and
payable in respect of such portion upon such redemption or repurchase date
35
<PAGE> 48
(excluding premium and interest), (ii) with respect to any portion thereof not
required to be so redeemed or repurchased, but which has been declared due and
payable prior to the Stated Maturity thereof as provided in the Indenture, the
Default Amount in respect of such portion as of such day and (iii) with respect
to any portion thereof not required so to be redeemed or repurchased and not so
declared due and payable, such portion of the principal amount of such Security
payable at Stated Maturity thereof.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee after having received the Required
Consent (defined as follows). The Indenture also contains provisions permitting
those Persons giving the Required Consent, on behalf of the Holders of all the
Securities, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.
As used herein, "Required Consent" means, except as otherwise
expressly provided in the Indenture with respect to matters requiring the
consent of each holder of Securities affected thereby: (i) the consent of
holders of not less than a majority in aggregate principal amount at Stated
Maturity of the Securities for any action to (x) direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any power conferred upon such Trustee, or (y) consent to or waive, on
behalf of the holders of all the Securities, any past default and its
consequences, and (ii) with respect to all other actions requiring the consent
of holders of the Securities, the consent of either (x) a majority in aggregate
principal amount at Stated Maturity of the Securities or (y) a majority in
aggregate principal amount at Stated Maturity of (I) the Securities, (II) the
September Notes, if the holders of the September Notes are being requested to
consent to such action with respect to the terms of the September Notes or the
September Indenture, (III) the October Notes, if the holders of the October
Notes are being requested to consent to such action with respect to the terms of
the October Notes or the October Indenture, (IV) the February Notes, if the
holders of the February Notes are being requested to consent to such action with
respect to the terms of the February Notes or the February Indenture and (V) any
other issue of unsubordinated, unsecured notes issued by the Company, if such
notes or the indenture pursuant to which such notes were issued both (A) require
the consent of the holders of such notes to such action and (B) provide that the
holders thereof will vote with the holders of the Securities with respect to
such action.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities, the Holders of not less than 25% in principal amount at Stated
Maturity of the Securities at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity and the Trustee
shall not have received from the Holders of a majority in
36
<PAGE> 49
principal amount at Stated Maturity of Securities at the time Outstanding a
direction inconsistent with such request, and shall have failed to institute any
such proceeding, within 60 days after receipt of such notice, request and offer
of indemnity. The foregoing shall not apply to certain suits described in the
Indenture, including any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein (or, in the case of
redemption, on or after the Redemption Date or, in the case of any purchase of
this Security required to be made pursuant to an Offer to Purchase, on or after
the Purchase Date.)
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest on this Security at the times, place and rate, and
in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed by,
the Holder hereof or his attorney duly authorized in writing, and thereupon one
or more new Securities, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities are issuable only in registered form without coupons
in denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, the Securities
are exchangeable for a like aggregate principal amount of Securities of like
tenor of a different authorized denomination, as requested by the Holder
surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
Interest on this Security shall be computed on the basis of a
360-day year of twelve 30-day months.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
The Indenture and this Security shall be governed by and construed
in accordance with the laws of the State of New York.
37
<PAGE> 50
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
- -------------------------------------------------------------------------------
Please print or typewrite name and address including zip code of assignee
- -------------------------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing ____________________________ attorney to transfer said Security on
the books of the Company with full power of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL SECURITIES OTHER THAN EXCHANGE SECURITIES
AND UNLEGENDED OFFSHORE PHYSICAL AND GLOBAL SECURITIES]
In connection with any transfer of this Security occurring prior to
the date which is the earlier of (i) the date the Shelf Registration Statement
with respect to resales of the Securities is declared effective or (ii) the end
of the period referred to in Rule 144(k) under the Securities Act, the
undersigned confirms that without utilizing any general solicitation or general
advertising that:
[Check One]
[ ] (a) this Security is being transferred in compliance with the
exemption from registration under the Securities Act of 1933, as
amended, provided by Rule 144A thereunder.
[ ] (b) this Security is being transferred other than in accordance with
(a) above and documents are being furnished which comply with the
conditions of transfer set forth in this Security and the Indenture.
If none of the foregoing boxes is checked, the Trustee shall not be obligated to
register this Security in the name of any Person other than the Holder hereof
unless and until the conditions to any such transfer of registration set forth
herein and in Section 307 of the Indenture shall have been satisfied.
Date:_____________________ _________________________________
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within-mentioned
instrument in every particular, without
alteration or any change whatsoever.
38
<PAGE> 51
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Date:_____________________ _________________________________
NOTICE: To be executed by an executive
officer.
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased in its
entirety by the Company pursuant to Section 1013 of the Indenture, check the
box: [ ]
If you want to elect to have only a part of the principal amount at
Stated Maturity of this Security purchased by the Company pursuant to Section
1013 of the Indenture, state the portion of such amount: $_________
Dated: Your Signature:________________________________
(Sign exactly as name appears
on the other side of this Security)
Signature Guarantee:______________________________________
(Signature must be guaranteed by a financial institution that is a member of the
Securities Transfer Agent Medallion Program ("STAMP"), the Stock Exchange
Medallion Program ("SEMP"), the New York Stock Exchange, Inc. Medallion
Signature Program ("MSP") or such other signature guarantee program as may be
determined by the Security Registrar in addition to, or in substitution for,
STAMP, SEMP or MSP, all in accordance with the Securities Exchange Act of 1934,
as amended.)
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<PAGE> 52
SECTION 204. Form of Trustee's Certificate of Authentication.
Dated:
This is one of the Securities referred to in the within-mentioned
Indenture.
Harris Trust and Savings Bank,
as Trustee
By _______________________
Authorized Signatory
SECTION 205. Restrictive Legends. Unless and until a Security is exchanged for
an Exchange Security or sold in connection with an effective Shelf Registration
Statement pursuant to the Registration Rights Agreement, (i) each U.S. Global
Security and each U.S. Physical Security shall bear the legend set forth below
on the reverse thereof and (ii) each Offshore Physical Security and each
Offshore Global Security shall bear the legend set forth below on the reverse
thereof, until at least the 41st day after the Closing Date and receipt by the
Company and the Trustee of a certificate substantially in the form of Exhibit A
hereto:
THIS SENIOR NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT
OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT
IS NOT A U.S. PERSON AND IS ACQUIRING THIS SENIOR NOTE IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, OR (C) IT
IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2),
(3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL
ACCREDITED INVESTOR"), (2) AGREES THAT IT WILL NOT, WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS SENIOR NOTE, RESELL OR OTHERWISE TRANSFER THIS SENIOR
NOTE EXCEPT (A) TO NEXTEL COMMUNICATIONS, INC. OR ANY SUBSIDIARY THEREOF, (B) TO
A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION
FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE),
(E) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR
TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS
SENIOR NOTE (THE FORM OF WHICH LETTER CAN BE
40
<PAGE> 53
OBTAINED FROM THE TRUSTEE) AND IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE
PRINCIPAL AMOUNT OF SENIOR NOTES OF LESS THAN $250,000, AN OPINION OF COUNSEL
ACCEPTABLE TO NEXTEL COMMUNICATIONS, INC. THAT SUCH TRANSFER IS IN COMPLIANCE
WITH THE SECURITIES ACT, OR (F) AFTER REGISTRATION OR PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS SENIOR NOTE IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THIS SENIOR NOTE WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK
THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF
SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO
SUCH TRANSFER, FURNISH TO THE TRUSTEE AND NEXTEL COMMUNICATIONS, INC. SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM
BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION
REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS SENIOR NOTE IN
VIOLATION OF THE FOREGOING RESTRICTIONS.
Each Global Security, whether or not an Exchange Security, shall
also bear the following legend on the reverse thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND
ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO., OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 307 OF THE INDENTURE.
41
<PAGE> 54
ARTICLE THREE
The Securities
SECTION 301. Title and Terms.
The aggregate principal amount at Stated Maturity of Securities
which may be authenticated and delivered under this Indenture is limited to
$300,000,000, except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Securities
pursuant to Section 304, 305, 308, 906 or 1108 or in connection with an Offer to
Purchase pursuant to Section 1013.
The Securities shall be known and designated as the "Senior Serial
Redeemable Notes due 2008" of the Company. Their Stated Maturity shall be
November 1, 2008 and they shall bear cash interest at the rate of 12% per annum,
from November 4, 1998 or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, as the case may be, payable
semi-annually on May 1 and November 1, commencing May 1, 1999 until the
principal thereof is paid or made available for payment.
The principal of (and premium, if any) and interest on the
Securities shall be payable at the office or agency of the Company in the
Borough of Manhattan, The City of New York maintained for such purpose and at
any other office or agency maintained by the Company for such purpose; provided,
however, that at the option of the Company payment of interest, may be made by
check mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register.
The Company may be required to make an Offer to Purchase the
Securities as provided in Section 1013.
The Securities shall be redeemable as provided in Article Two and
Article Eleven.
The Securities shall be subject to Defeasance and/or Covenant
Defeasance as provided in Article Twelve.
SECTION 302. Denominations.
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 principal amount and any integral
multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its President or one of its Vice Presidents, under its
corporate seal reproduced thereon
42
<PAGE> 55
attested by its Secretary or one of its Assistant Secretaries. The signature of
any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities; and the Trustee in accordance
with such Company Order shall authenticate and deliver such Securities as in
this Indenture provided and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such Security
a certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.
If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at any office or agency of the Company designated pursuant to Section
1002, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized denominations and of a like tenor. Until so
exchanged the temporary Securities shall in all respects be entitled to the same
benefits under this Indenture as definitive Securities.
43
<PAGE> 56
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 1002 being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at an
office or agency of the Company designated pursuant to Section 1002 for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denominations and of a like aggregate principal
amount and tenor. No such transfer shall be effected until, and such transferee
shall succeed to the rights of a Holder only upon, final acceptance and
registration of the transfer by the Security Registrar in the Security Register.
Prior to the registration of any transfer by a Holder as provided herein, the
Company, the Trustee and any agent of the Company shall treat the person in
whose name the Security is registered as the owner thereof for all purposes
whether or not the Security shall be overdue, and neither the Company, the
Trustee, nor any such agent shall be affected by notice to the contrary.
Furthermore, any Holder of a Global Security shall, by acceptance of such Global
Security, agree that transfers of beneficial interests in such Global Security
may be effected only through a book entry system maintained by the Holder of
such Global Security (or its agent) and that ownership of a beneficial interest
in the Security shall be required to be reflected in a book entry.
At the option of the Holder, Securities may be exchanged for other
Securities (including an exchange of securities for Exchange Securities) of any
authorized denominations and of a like aggregate principal amount and tenor,
upon surrender of the Securities to be exchanged at such office or agency
provided, that no exchange of Securities for Exchange Securities shall occur
until a Registration Statement shall have been declared effective by the
Commission and that Securities that are exchanged for Exchange Securities
pursuant to such Registration Statement shall be canceled by the Trustee.
Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities which
the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange
of Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
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No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906 or 1108 or in accordance with any Offer
to Purchase pursuant to Section 1013, and in any such case not involving any
transfer.
The Company shall not be required (i) to issue, register the
transfer of or exchange any Security during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities selected for redemption under Section 1104 and ending at the close of
business on the day of such mailing, or (ii) to register the transfer of or
exchange any Security so selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part.
SECTION 306. Book-Entry Provisions for Global Security.
(a) The Global Security initially shall (i) be registered in the
name of the Depository for such Global Security or the nominee of such
Depository; (ii) be delivered to the Trustee as custodian for such Depository;
and (iii) bear legends as set forth in Section 205.
Members of, or participants in, the Depository ("Agent Members")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depository, or the Trustee as its custodian, or
under the Global Security and the Depository may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner of
such Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by the Depository or impair, as between the
Depository and its Agent Members, the operation of customary practices governing
the exercise of the rights of a holder of any Security.
(b) Transfers of a Global Security shall be limited to transfers of
such Global Security in whole, but not in part, to the Depository, its
successors or their respective nominees. Interests of beneficial owners in a
Global Security may be transferred in accordance with the rules and procedures
of the Depository and the provisions of Section 307. In addition, U.S. Physical
Securities and Offshore Physical Securities shall be transferred to all
beneficial owners in exchange for their beneficial interests in the U.S. Global
Securities or Offshore Global Securities, respectively, if (i) the Depository
notifies the Company that it is unwilling or unable to continue as Depository
for the U.S. Global Securities or Offshore Global Securities, as the case may
be, and a successor depository is not appointed by the Company within 90 days of
such notice, (ii) an Event of Default has occurred and is continuing and the
Security Registrar has received a request therefor from the Depository or (iii)
in accordance with the rules and procedures of the Depository and the provisions
of Section 307.
(c) In connection with any transfer of a portion of the beneficial
interests in the Global Security to beneficial owners pursuant to paragraph (b)
of this Section, the Security Registrar shall reflect on the Security Register
the date and a decrease in the principal amount of the Global Security in an
amount equal to the principal amount of the beneficial interest in the
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Global Security to be transferred, and the Company shall execute, and the
Trustee shall authenticate and deliver, one or more Physical Securities of like
tenor and amount.
(d) In connection with the transfer of an entire U.S. Global
Security or Offshore Global Security to beneficial owners pursuant to paragraph
(b) of this Section, such U.S. Global Security or Offshore Global Security shall
be deemed to be surrendered to the Trustee for cancellation, and the Company
shall execute, and the Trustee shall authenticate and deliver, to each
beneficial owner identified by the Depository in exchange for its beneficial
interest in such U.S. Global Security or Offshore Global Security, as the case
may be, an equal aggregate principal amount of U.S. Physical Securities or
Offshore Physical Securities of authorized denominations.
(e) Any Physical Security delivered in exchange for an interest in
the Global Security pursuant to paragraph (b), (c) or (d) of this Section shall,
except as otherwise provided by paragraph (d) of Section 307 bear the legend
regarding transfer restrictions applicable to the Physical Securities set forth
in Section 205.
(f) The registered holder of a Global Security may grant proxies
and otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
SECTION 307. Special Transfer Provisions.
Unless and until a Security is exchanged for an Exchange Security
or sold in connection with an effective Shelf Registration Statement pursuant to
the Registration Rights Agreement, the following provisions shall apply:
(a) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a Physical Security or
an interest in the Global Security prior to the removal of the Private Placement
Legend to a QIB (excluding Non-U.S. Persons):
(i) If the Security to be transferred consists of (x) (A) U.S.
Physical Securities or (B) an interest in an Offshore Global Security prior
to the removal of the Private Placement Legend, the Security Registrar
shall register the transfer if such transfer is being made by a proposed
transferor who has checked the box provided for on the form of security
stating, or has otherwise advised the Company and the Security Registrar in
writing, that the sale has been made in compliance with the provisions of
Rule 144A, to a transferee who has signed the certification provided for on
the form of Security stating, or has otherwise advised the Company and the
Security Registrar in writing, that it is purchasing the Security for its
own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a QIB within the
meaning of Rule 144A, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as it has requested pursuant to Rule 144A
or has determined not to request such information and that it is aware that
the transferor is relying upon its foregoing representations in order to
claim the exemption from registration provided by Rule 144A or (y) an
interest in a
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U.S. Global Security, the transfer of such interest may be effected
only through the book entry system maintained by the Depository.
(ii) If the proposed transferee is an Agent Member, and the
Security to be transferred consists of U.S. Physical Securities, upon
receipt by the Security Registrar of the documents referred to in clause
(i) and instructions given in accordance with the Depository's and the
Security Registrar's procedures, the Security Registrar shall reflect in
the Security Register the date and an increase in the principal amount at
maturity of the U.S. Global Security in an amount equal to the principal
amount at maturity of the U.S. Physical Securities to be transferred, and
the Trustee shall cancel the U.S. Physical Securities so transferred.
(b) Transfers to Non-QIB Institutional Accredited Investors. The
following provisions shall apply with respect to the registration of any
proposed transfer of a Security to any Institutional Accredited Investor which
is not a QIB (excluding Non-U.S. Persons):
(i) The Security Registrar shall register the transfer of any
Security, whether or not such Security bears the Private Placement Legend,
if (x) the requested transfer is after the time period referred to in Rule
144(k) under the Securities Act as in effect with respect to such transfer
or (y) the proposed transferee has delivered to the Security Registrar (A)
a certificate substantially in the form of Exhibit B hereto and (B) if the
aggregate principal amount of the Notes being transferred is less than
$250,000 at the time of such transfer, an Opinion of Counsel acceptable to
the Company that such transfer is in compliance with the Securities Act.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Security, upon receipt by the
Security Registrar of (x) the documents, if any, required by the preceding
paragraph (i), and (y) instructions given in accordance with the
Depositary's and the Security Registrar's procedures, the Security
Registrar shall reflect on its books and records the date and a decrease in
the principal amount of the U.S. Global Security in an amount equal to the
principal amount of the beneficial interest in the U.S. Global Security to
be transferred, and the Company shall execute, and the Trustee shall
authenticate and deliver, one or more U.S. Physical Securities of like
tenor and amount.
(c) Transfers of Interests in the Offshore Global Securities or
Offshore Physical Securities. The following provisions shall apply with respect
to any transfer of interests in the Offshore Global Securities or Offshore
Physical Securities:
(i) prior to removal of the Private Placement Legend from an
Offshore Global Security or Offshore Physical Security pursuant to Section
205, the Security Registrar shall refuse to register such transfer unless
such transfer complies with Section 307(a) or Section 307(d), as the case
may be; and
(ii) after such removal, the Security Registrar shall register the
transfer of any such Security without requiring any additional
certification.
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(d) Transfers to Non-U.S. Persons at Any Time. The following
provisions shall apply with respect to any transfer of a Security to a Non-U.S.
Person:
(i) The Security Registrar shall register any proposed transfer to
any Non-U.S. Person if the Security to be transferred is a U.S. Physical
Security or an interest in a U.S. Global Security only upon receipt of a
certificate substantially in the form of Exhibit C hereto from the proposed
transferor.
(ii) (A) If the proposed Transferor is an Agent Member holding a
beneficial interest in a U.S. Global Security, upon receipt by the Security
Registrar of (x) the documents required by paragraph (i) and (y)
instructions in accordance with the Depositary's and the Security
Registrar's procedures, the Security Registrar shall reflect on its books
and records the date and a decrease in the principal amount of such U.S.
Global Security in an amount equal to the principal amount of the
beneficial interest in the U.S. Global Security to be transferred, and (B)
if the proposed transferee is an Agent Member, upon receipt by the Security
Registrar of instructions given in accordance with the Depositary's and the
Security Registrar's procedures, the Security Registrar shall reflect on
its books and records the date and an increase in the principal amount of
the Offshore Global Security in an amount equal to the principal amount of
the U.S. Physical Securities or the U.S. Global Security, as the case may
be, to be transferred, and the Trustee shall cancel the Physical Security,
if any, so transferred or decrease the amount of the U.S. Global Security.
(e) Private Placement Legend. Upon the transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the Security
Registrar shall deliver Securities that do not bear the Private Placement
Legend. Upon the transfer, exchange or replacement of securities bearing the
Private Placement Legend, the Security Registrar shall deliver only Securities
that bear the Private Placement Legend unless either (i) the circumstances
contemplated by Section 205 exist or (ii) there is delivered to the Trustee an
Opinion of Counsel reasonably satisfactory to the Company and the Trustee to the
effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities
Act.
(f) General. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture. The Security Registrar shall not register a transfer of any
Security unless such transfer complies with the restrictions on transfer of such
Security set forth in the Private Placement Legend and in this Indenture. In
connection with any transfer of Securities, each Holder agrees by its acceptance
of the Securities to furnish the Trustee or the Company such certifications,
legal opinions or other information as either of them may reasonably require to
confirm that such transfer is being made pursuant to an exemption from, or a
transaction not subject to, the registration requirements of the Securities Act;
provided that the Trustee shall not be required to determine (but may rely on a
determination made by the Company with respect to) the sufficiency of any such
certifications, legal opinions or other information.
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The Trustee shall retain copies of all letters, notices and other
written communications received pursuant to Section 306 or this Section 307. The
Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Trustee.
SECTION 308. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 309. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid
or duly provided for, on any Interest Payment Date shall be paid to the Person
in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest.
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Any interest on any Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall
be fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
Security and the date of the proposed payment, and at the same time the
Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest
or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to be
held in trust for the benefit of the Persons entitled to such Defaulted
Interest as in this Clause provided. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest which shall
be not more than 15 days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the Trustee
of the notice of the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the name and at the expense
of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be given to each
Holder in the manner specified in Section 106, not less than 10 days prior
to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose names
the Securities (or their respective Predecessor Securities) are registered
at the close of business on such Special Record Date and shall no longer be
payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this Clause,
such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 310. Persons Deemed Owners.
Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of
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principal of (and premium, if any) and (subject to Section 309) interest on such
Security and for all other purposes whatsoever, whether or not such Security be
overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary.
SECTION 311. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any Offer to Purchase pursuant to
Section 1013 shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly canceled by it. The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Securities so delivered shall be promptly canceled by
the Trustee. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Securities held by the Trustee shall
be disposed of as directed by a Company Order; provided, however, that the
Trustee shall not be required to destroy canceled Securities.
SECTION 312. Computation of Interest.
Interest on the Securities shall be computed on the basis of a
360-day year of twelve 30-day months.
SECTION 313. CUSIP, CINS and ISIN Numbers.
The Company in issuing the Securities may use "CUSIP," "CINS" and
"ISIN" numbers (if then generally in use), and, if so, the Trustee shall use the
"CUSIP," "CINS" and "ISIN" numbers in notices of redemption or repurchase as a
convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of a redemption or repurchase
and that reliance may be placed only on the other identification numbers printed
on the Securities, and any such redemption or repurchase shall not be affected
by any defect in or omission of such numbers.
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to
any surviving rights of registration of transfer or exchange of Securities
herein expressly provided for), and the
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Trustee, on demand of and at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section
308 and (ii) Securities for whose payment money has theretofore
been deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged from
such trust, as provided in Section 1003) have been delivered to
the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the
expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds
in trust for the purpose an amount sufficient to pay and discharge
the entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation, for principal (and
premium, if any) and interest to the date of such deposit (in the
case of Securities which have become due and payable) or to the
Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge
of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture pursuant to
this Article Four, the obligations of the Company to the Trustee under Section
607, the obligations of the Trustee to any Authenticating Agent under Section
614 and, if money shall have been deposited with the Trustee pursuant to
subclause (B) of Clause (1) of this Section, the obligations of the Trustee
under Section 402 and the last paragraph of Section 1003 shall survive.
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SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003,
all money deposited with the Trustee pursuant to Section 401 shall be held in
trust and applied by it, in accordance with the provisions of the Securities and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee.
ARTICLE FIVE
Remedies
SECTION 501. Events of Default.
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(1) default in the payment of the principal of (or premium, if any,
on) any Security at its Maturity; or
(2) default in the payment of any interest upon any Security when
it becomes due and payable, and continuance of such default for a period of
30 days; or
(3) default, on the applicable Purchase Date, in the purchase of
Securities required to be purchased by the Company pursuant to an Offer to
Purchase as to which an Offer has been mailed to Holders or failure to make
an Offer to Purchase as required hereunder; or
(4) default in the performance, or breach, of Section 801; or
(5) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default whose performance or whose breach is elsewhere in this
Section specifically dealt with) or in the Securities, and continuance of
such default or breach for a period of 60 days after there has been given,
by registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in principal amount
at Stated Maturity of the Outstanding Securities a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
(6) a default or defaults under any bond(s), debenture(s), note(s)
or other evidence(s) of Debt for money borrowed by the Company or any
Restricted Subsidiary (or under any mortgage(s), indenture(s) or
instrument(s) under which there may be issued or
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by which there may be secured or evidenced any Debt for money
borrowed by the Company or any Restricted Subsidiary) having, individually
or in the aggregate, a principal or similar amount outstanding of at least
$25,000,000, whether such Debt now exists or shall hereafter be created,
which default or defaults shall constitute a failure to pay any portion of
the principal or similar amount of such Debt when due and payable after the
expiration of any applicable grace period with respect thereto or shall
have resulted in such Debt becoming or being declared due and payable; or
(7) a final judgment or final judgments for the payment of money
are entered against the Company or any Restricted Subsidiary in an
aggregate amount in excess of $25,000,000 by a court or courts of competent
jurisdiction, which judgments remain undischarged or unbonded for a period
(during which execution shall not be effectively stayed) of 60 days after
the right to appeal all such judgments has expired; or
(8) the entry by a court having jurisdiction in the premises of (A)
a decree or order for relief in respect of the Company or any Restricted
Subsidiary in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other similar
law or (B) a decree or order adjudging the Company or any Restricted
Subsidiary a bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or composition of
or in respect of the Company or any Restricted Subsidiary under any
applicable Federal or State law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of
the Company or any Restricted Subsidiary or of any substantial part of the
property of the Company or any Restricted Subsidiary, or ordering the
winding up or liquidation of the affairs of the Company or any Restricted
Subsidiary, and the continuance of any such decree or order for relief or
any such other decree or order unstayed and in effect for a period of 60
consecutive days; or
(9) the commencement by the Company or any Restricted Subsidiary of
a voluntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by the Company or any Restricted Subsidiary to the entry of a
decree or order for relief in respect of the Company or any Restricted
Subsidiary in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other similar
law or to the commencement of any bankruptcy or insolvency case or
proceeding against the Company or any Restricted Subsidiary, or the filing
by the Company or any Restricted Subsidiary of a petition or answer or
consent seeking reorganization or relief under any applicable Federal or
State law, or the consent by the Company or any Restricted Subsidiary to
the filing of such petition or to the appointment of or taking possession
by a custodian, receiver, liquidator, assignee, trustee, sequestrator or
similar official of the Company or any Restricted Subsidiary or of any
substantial part of the property of the Company or any Restricted
Subsidiary, or the making by the Company or any Restricted Subsidiary of an
assignment for the benefit of creditors, or the admission by the Company or
any Restricted Subsidiary in writing of its inability to pay its debts
generally as they become due, or the taking of corporate action by the
Company or any Restricted Subsidiary in furtherance of any such action.
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SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
Section 501(8) or (9)) occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in principal amount at Stated
Maturity of the Outstanding Securities may declare the Default Amount of all the
Securities to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders), and upon any such declaration
such Default Amount and any accrued interest shall become immediately due and
payable. If an Event of Default specified in Section 501(8) or (9) occurs, the
Default Amount of, and any accrued interest on, the Securities then Outstanding
shall ipso facto become immediately due and payable without any declaration or
other Act on the part of the Trustee or any Holder.
The Default Amount in respect of any particular Security as of any
particular date shall equal 100% of the principal amount payable in respect of
the Security at the Stated Maturity thereof.
At any time after such a declaration of acceleration has been made
and before a judgment or decree for payment of the money due has been obtained
by the Trustee as hereinafter in this Article provided, the Holders of a
majority in principal amount at Stated Maturity of the Outstanding Securities,
by written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities (without duplication
of any amount thereof paid or deposited pursuant to Clause (B) or
(C) below),
(B) the principal of (and premium, if any, on) any Securities
which have become due otherwise than by such declaration of
acceleration (including any Securities required to have been
purchased on the Purchase Date pursuant to an Offer to Purchase
made by the Company) and, to the extent that payment of such
interest is lawful, interest thereon at the rate provided by the
Securities (without duplication of any amount thereof paid or
deposited pursuant to Clause (A) above or Clause (C) below),
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate provided by the
Securities (without duplication of any amount thereof paid or
deposited pursuant to Clause (A) or (B) above), and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel;
and
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(2) all Events of Default, other than the non-payment of the
principal of Securities which have become due solely by such
declaration of acceleration, have been cured or waived as provided
in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Unless the context otherwise requires, references in this Indenture
to the principal amount of any Security mean, as of any day, (i) with respect to
any portion thereof required thereunder to be redeemed or repurchased on any
redemption or repurchase date on or prior to such day, the amount due and
payable in respect of such portion upon such redemption or repurchase date
(excluding premium and interest), (ii) with respect to any portion thereof not
required to be so redeemed or repurchased, but which has been declared due and
payable prior to the Stated Maturity thereof, the Default Amount in respect of
such portion as of such day and (iii) with respect to any portion thereof not
required so to be redeemed or repurchased and not so declared due and payable,
such portion of the principal amount of such Security payable at Stated Maturity
thereof.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 30 days, or
(2) default is made in the payment of the principal of (or premium,
if any, on) any Security at the Maturity thereof or, with respect to any
Security required to have been purchased pursuant to an Offer to Purchase
made by the Company, at the Purchase Date thereof,
the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities, the whole amount then due and payable
on such Securities for principal (and premium, if any) and interest, and, to the
extent that payment of such interest shall be legally enforceable, interest on
any overdue principal (and premium, if any) and on any overdue interest, at the
rate provided by the Securities, and, in addition thereto, such further amount
as shall be sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
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SECTION 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.
No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding; provided,
however, that the Trustee may, on behalf of the Holders, vote for the election
of a trustee in bankruptcy or similar official and be a member of a creditors'
or other similar committee.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities in respect of which
such judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal (or
premium, if any) or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607; and
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities in
respect of which or for the benefit
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of which such money has been collected, ratably, without preference
or priority of any kind, according to the amounts due and payable on such
Securities for principal (and premium, if any) and interest, respectively.
SECTION 507. Limitation on Suits.
No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount at Stated
Maturity of the Outstanding Securities shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding;
and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
in principal amount at Stated Maturity of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.
Notwithstanding any other provision in this Indenture, the Holder
of any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Section 309) interest on such Security on the respective Stated Maturities
expressed in such Security (or, in the case of redemption, on the Redemption
Date or in the case of an Offer to Purchase made by the Company and required to
be accepted as to such Security, on the Purchase Date) and to institute suit for
the enforcement of any such payment, and such rights shall not be impaired
without the consent of such Holder.
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SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 308, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Security to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders,
as the case may be.
SECTION 512. Control by Holders.
By giving the Required Consent, those Persons giving the Required
Consent shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on the Trustee, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
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SECTION 513. Waiver of Past Defaults.
By giving the Required Consent, those Persons giving the Required
Consent may, on behalf of the Holders of all the Securities, waive any past
default hereunder and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on any Security (including any Security which is required to have
been purchased pursuant to an Offer to Purchase which has been made by the
Company), or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided, that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company.
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any usury, stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
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ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as provided
by the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
SECTION 602. Notice of Defaults.
The Trustee shall give the Holders notice of any Default hereunder
as and to the extent provided by the Trust Indenture Act; provided, however,
that in the case of any Default of the character specified in Section 501(5), no
such notice to Holders shall be given until at least 30 days after the
occurrence thereof.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
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(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled (subject to reasonable confidentiality arrangements as
may be proposed by the Company) to examine the books, records and premises
of the Company, personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the use
or application by the Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
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SECTION 607. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time such compensation as
the Company and the Trustee shall from time to time agree in writing for
all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless against,
any and all loss, damage, claim, liability or expense incurred without
negligence or bad faith on its part, including taxes (other than taxes
based upon, measured by or determined by the revenue or income of the
Trustee), arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
The Trustee shall have a lien prior to the Securities as to all
property and funds held by it hereunder for any amount owing to it pursuant to
this Section 607, except with respect to funds held in trust for the benefit of
the Holders of particular Securities.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 501(8) or Section 501(9), the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.
The provisions of this Section shall survive any termination of
this Indenture.
SECTION 608. Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within
the meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
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SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000 and its Corporate
Trust Office in Chicago, Illinois or the Borough of Manhattan, The City of New
York. If such Person publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section and to the extent permitted by the Trust
Indenture Act, the combined capital and surplus of such Person shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of
a successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If an instrument of acceptance by a successor Trustee in
accordance with the applicable requirements of Section 611 shall not have been
delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of
a majority in principal amount at Stated Maturity of the Outstanding Securities,
delivered to the Trustee and to the Company. If an instrument of acceptance by a
successor Trustee in accordance with the applicable requirements of Section 611
shall not have been delivered to the Trustee within 30 days after the giving of
such notice of removal, the Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
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then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 514, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount at Stated Maturity of the Outstanding
Securities delivered to the Company and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 611, become the successor
Trustee and supersede the successor Trustee appointed by the Company. If no
successor Trustee shall have been so appointed by the Company or the Holders and
accepted appointment in accordance with the applicable requirements of Section
611, any Holder who has been a bona fide Holder of a Security for at least six
months may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 106. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on request of the
Company or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder. Upon request of any such successor
Trustee, the Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Trustee all such rights,
powers and trusts.
No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
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SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the Securities), the Trustee shall be subject
to the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
SECTION 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents which
shall be authorized to act on behalf of the Trustee to authenticate Securities
issued upon original issue and upon exchange, registration of transfer or
partial redemption or partial purchase or pursuant to Section 308, and
Securities so authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by the
Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, any State thereof or the
District of Columbia, authorized under such laws to act as Authenticating Agent,
having a combined capital and surplus of not less than $50,000,000 and subject
to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation
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succeeding to the corporate agency or corporate trust business of an
Authenticating Agent, shall continue to be an Authenticating Agent, provided
such corporation shall be otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 106, to all Holders as their names
and addresses appear in the Security Register. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with all
the rights, powers and duties of its predecessor hereunder, with like effect as
if originally named as an Authenticating Agent. No successor Authenticating
Agent shall be appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
If an appointment is made pursuant to this Section, the Securities
may have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:
This is one of the Securities described in the within-mentioned
Indenture.
Dated:
Harris Trust and Savings Bank,
as Trustee
By ,
---------------------------
As Authenticating Agent
By
---------------------------
Authorized Signatory
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ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not more than 15 days after each April 15 and
October 15, commencing April 15, 1999, a list, in such form as the Trustee
may reasonably require, of the names and addresses of the Holders as of
such Regular Record Date, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a list
of similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 701 and the names
and addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to the names and addresses of Holders made pursuant
to the Trust Indenture Act.
SECTION 703. Reports by Trustee.
(a) Within 60 days after January 15 of each year commencing January
15, 1999, the Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which the Securities are listed,
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with the Commission and with the Company. The Company will promptly notify the
Trustee when the Securities are listed on any stock exchange.
SECTION 704. Reports by Company.
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission. The Trustee's receipt of such reports, information and documents
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein.
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. Company May Consolidate, Etc. Only on Certain Terms.
The Company (x) shall not, in any transaction or series of related
transactions, merge or consolidate with or into, or sell, assign, convey,
transfer, lease or otherwise dispose of its properties and assets substantially
as an entirety to, any Person, and (y) shall not permit any of its Restricted
Subsidiaries to enter into any such transaction or series of transactions if
such transaction or series of transactions, in the aggregate, would result in a
sale, assignment, conveyance, transfer, lease or other disposition of the
properties and assets of the Company and its Restricted Subsidiaries, taken as a
whole, substantially as an entirety to any Person, unless, in each case (x) or
(y), at the time and after giving effect thereto
(i) either: (A) if the transaction or series of transactions is a
consolidation of the Company with or a merger of the Company with or into
any other Person, the Company shall be the surviving Person of such merger
or consolidation, or (B) the Person formed by any consolidation with or
merger with or into the Company, or to which the properties and assets of
the Company or the Company and its Restricted Subsidiaries, taken as a
whole, as the case may be, substantially as an entirety are sold, assigned,
conveyed, leased or otherwise transferred (any such surviving Person or
transferee Person referred to in this clause (B) being the "Surviving
Entity"), shall be a corporation, partnership or trust organized and
existing under the laws of the United States of America, any state thereof
or the District of Columbia and shall expressly assume by a supplemental
indenture executed and delivered to the Trustee, in form satisfactory to
the Trustee, all the obligations of the Company under the Securities and
this Indenture and, in each case, this Indenture, as so supplemented, shall
remain in full force and effect, and
(ii) immediately before and immediately after giving effect to such
transaction or series of transactions on a pro forma basis (including any
Debt Incurred or anticipated
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to be Incurred in connection with or in respect of such transaction
or series of transactions), no Default or Event of Default shall have
occurred and be continuing, and
(iii) the Consolidated Net Worth of the Company or the Surviving
Entity, as the case may be, shall be equal to or greater than that of the
Company immediately prior to such transaction or series of transactions;
provided, however, that the foregoing requirements shall not apply to any
transaction or series of transactions involving the sale, assignment,
conveyance, transfer, lease or other disposition of the properties and assets by
any Restricted Subsidiary to any other Restricted Subsidiary, or the merger or
consolidation of any Restricted Subsidiary with or into any other Restricted
Subsidiary.
In connection with any consolidation, merger, sale, assignment, conveyance,
transfer, lease or other disposition contemplated by the foregoing provisions,
the Company shall deliver, or cause to be delivered, to the Trustee, in form and
substance reasonably satisfactory to the Trustee, an Officers' Certificate
stating that such consolidation, merger, sale, assignment, conveyance, transfer,
lease or other disposition and the supplemental indenture in respect thereof
(required under clause (i)(B) of the preceding paragraph) comply with the
requirements of this Indenture and an Opinion of Counsel that the conditions of
this Article 8 have been complied with. Each such Officers' Certificate shall
set forth the manner of determination of the Consolidated Net Worth in
accordance with clause (iii) of the preceding paragraph.
For all purposes of this Indenture and the Securities (including the
provisions described in the two immediately preceding paragraphs and Section
1008 and Section 1010), Subsidiaries of any Surviving Entity will, upon such
transaction or series of transactions, become Restricted Subsidiaries or
Unrestricted Subsidiaries as provided pursuant to Section 1010 and all Debt of
the Surviving Entity and its Subsidiaries that was not Debt of the Company and
its Subsidiaries immediately prior to such transaction or series of transactions
shall be deemed to have been Incurred upon such transaction or series of
transactions.
SECTION 802. Successor Substituted.
Upon any transaction or series of transactions that are of the type
described in clause (x) or (y) of, and are effected in accordance with, Section
801, the Surviving Entity shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such Surviving Entity had been named as the Company herein,
and thereafter, except in the case of a lease, the predecessor Person shall be
relieved of all obligations and covenants under this Indenture and the
Securities.
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ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by
a Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form satisfactory to
the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company; or
(3) to comply with any requirements of the Commission in order to
effect and maintain the qualification of this Indenture under the Trust
Indenture Act; or
(4) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture which shall not be inconsistent with
the provisions of this Indenture, provided such action pursuant to this
Clause (5) shall not adversely affect the interests of the Holders in any
material respect (as determined in good faith by the Board of Directors).
SECTION 902. Supplemental Indentures with Consent of Holders.
After receipt of the Required Consent, given by Act of those
Persons giving the Required Consent delivered to the Company and the Trustee,
the Company, when authorized by a Board Resolution, and the Trustee may enter
into an indenture or indentures supplemental hereto for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Indenture or of modifying in any manner the rights of the Holders under
this Indenture; provided, however, that no such supplemental indenture shall,
without the consent of the Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable thereon, or
reduce the Default Amount that would be due and payable on acceleration of
the Maturity thereof pursuant to Section 502, or change the place of
payment where, or the coin or currency in which, any Security or any
premium or interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment on or after the Stated
Maturity thereof (or, in the case of redemption, on or
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after the Redemption Date or, in the case of any Security required
to be purchased pursuant to an Offer to Purchase, on or after the
applicable Purchase Date), or
(2) reduce the percentage in principal amount at Stated Maturity of
the Outstanding Securities, the consent of whose Holders is required for
any such supplemental indenture, or the consent of whose Holders is
required for any waiver (of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences) provided
for in this Indenture, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1018, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby, or
(4) following the mailing of an Offer with respect to an Offer to
Purchase pursuant to Section 1013, modify the provisions of this Indenture
with respect to such Offer to Purchase in a manner adverse to such Holder.
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act.
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SECTION 906. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal, Premium and Interest.
The Company will duly and punctually pay the principal of (and
premium, if any) and interest on the Securities in accordance with the terms of
the Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The City of
New York, an office or agency where Securities may be presented or surrendered
for payment, where Securities may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands. In the event any such notice or demands are so made or
served on the Trustee, the Trustee will promptly forward copies thereof to the
Company.
The Company may also from time to time designate one or more other
offices or agencies (in or outside the Borough of Manhattan, The City of New
York) where the Securities may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided, however,
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough of Manhattan,
The City of New York, for such purposes. The Company will give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.
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SECTION 1003. Money for Security Payments to be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it
will, on or before each due date of the principal of (and premium, if any) or
interest on any of the Securities, segregate and hold in trust for the benefit
of the Persons entitled thereto a sum sufficient to pay the principal (and
premium, if any) or interest so becoming due until such sums shall be paid to
such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will,
prior to each due date of the principal of (and premium, if any) or interest on
any Securities, deposit with a Paying Agent a sum sufficient to pay the
principal (and premium, if any) or interest so becoming due, such sum to be held
as provided by the Trust Indenture Act, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its action or failure
so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will: (i) comply with the provisions of the Trust Indenture
Act applicable to it as Paying Agent and (ii) during the continuance of any
default by the Company (or any other obligor upon the Securities) in the making
of any payment in respect of the Securities, upon the written request of the
Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent as such.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of (and premium,
if any) or interest on any Security and remaining unclaimed for two years after
such principal (and premium, if any) or interest has become due and payable
shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in The City of New York, notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such publication, any unclaimed balance of such money then
remaining will be repaid to the Company.
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SECTION 1004. Existence.
Subject to Article Eight, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its
existence, rights (charter and statutory) and material franchises; provided,
however, that the Company shall not be required to preserve any such right or
franchise if the Board of Directors in good faith shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and that the loss thereof is not disadvantageous in any material
respect to the Holders.
SECTION 1005. Maintenance of Properties.
The Company will cause all material properties used or useful in
the conduct of its business or the business of any Restricted Subsidiary to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such material properties if
such discontinuance is, as determined by the Board of Directors in good faith,
desirable in the conduct of its business or the business of any Restricted
Subsidiary and not disadvantageous in any material respect to the Holders.
SECTION 1006. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all taxes, assessments
and governmental charges levied or imposed upon the Company or any of its
Restricted Subsidiaries or upon the income, profits or property of the Company
or any of its Restricted Subsidiaries, and (2) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Company or any of its Restricted Subsidiaries; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
SECTION 1007. Maintenance of Insurance.
The Company shall, and shall cause its Restricted Subsidiaries to,
keep at all times all of their properties which are of an insurable nature
insured against loss or damage with insurers believed by the Company to be
responsible to the extent that property of similar character is usually so
insured by corporations similarly situated and owning like properties in
accordance with good business practice. The Company shall, and shall cause its
Restricted Subsidiaries to, use the proceeds from any such insurance policy to
repair, replace or otherwise restore all material properties to which such
proceeds relate, provided, however, that the Company shall not be required to
repair, replace or otherwise restore any such material property if the Board of
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Directors in good faith determines that such inaction is desirable in the
conduct of the business of the Company or any Restricted Subsidiary and not
disadvantageous in any material respect to the Holders.
SECTION 1008. Limitation on Consolidated Debt.
The Company shall not, and shall not permit any Restricted
Subsidiary to, Incur any Debt (including Acquired Debt), other than Permitted
Debt, unless (i) with respect to Debt Incurred under this clause (i), the Debt
so Incurred and outstanding is in an aggregate principal amount that does not
exceed 2.25 times, with respect to Capital Stock sales after June 1, 1997 and on
or prior to March 31, 1998, or 2.00 times, with respect to Capital Stock sales
after March 31, 1998, the aggregate amount of net cash proceeds (or 80% of the
Fair Market Value of property other than cash) received by the Company after
June 1, 1997 from the issuance and sale (other than to a Restricted Subsidiary)
of shares of its Capital Stock (other than Redeemable Stock), or any options,
warrants or other rights to purchase such Capital Stock (other than Redeemable
Stock), other than (x) proceeds applied for use as a Directed Investment (unless
such designation has been revoked by the Board of Directors and the Company
either abandons its plans to make such Investment or is able to make such
Investment pursuant to Section 1009 (other than as a Directed Investment)) and
(y) proceeds which have been included in the computation of the amounts
available for Restricted Payments pursuant to clause (c)(2) of Section 1009, to
the extent the inclusion thereof was necessary to allow a subsequent Restricted
Payment to be made, or (ii) on the date of such Incurrence, after giving effect
to the Incurrence of such Debt (or Acquired Debt) and the receipt and
application of the net proceeds thereof (and, if the net proceeds of such new
Debt are used to acquire a Person that becomes a Restricted Subsidiary or an
operating business of the Company or a Restricted Subsidiary, to all terms of
such acquisition) on a pro forma basis, the Operating Cash Flow to Consolidated
Interest Expense Ratio would equal or exceed 1.75 to 1.
SECTION 1009. Limitation on Restricted Payments.
The Company shall not, directly or indirectly:
(i) declare or pay any dividend on, or make any distribution
to the holders of, any shares of its Capital Stock (other than
dividends or distributions payable solely in its Capital Stock
(other than Redeemable Stock) or in options, warrants or other
rights to purchase any such Capital Stock (other than Redeemable
Stock));
(ii) purchase, redeem or otherwise acquire or retire for
value, or permit any Restricted Subsidiary to, directly or
indirectly, purchase, redeem or otherwise acquire or retire for
value (other than value consisting solely of Capital Stock of the
Company that is not Redeemable Stock or options, warrants or other
rights to acquire such Capital Stock that is not Redeemable
Stock), any Capital Stock of the Company (including options,
warrants or other rights to acquire such Capital Stock);
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(iii) redeem, repurchase, defease or otherwise acquire or
retire for value, or permit any Restricted Subsidiary to, directly
or indirectly, redeem, repurchase, defease or otherwise acquire or
retire for value (other than value consisting solely of Capital
Stock of the Company that is not Redeemable Stock or options,
warrants or other rights to acquire such Capital Stock that is not
Redeemable Stock), prior to any scheduled maturity, scheduled
repayment or scheduled sinking fund payment, any Debt that is
subordinate (whether pursuant to its terms or by operation of law)
in right of payment to the Securities; or
(iv) make, or permit any Restricted Subsidiary, directly or
indirectly, to make, any Investment (other than any Permitted
Investment) in any Person (other than in a Restricted Subsidiary
or a Person that becomes a Restricted Subsidiary as a result of
such Investment);
(each of the foregoing actions set forth in clauses (i) through (iv), other than
any such action that is a Permitted Investment or a Permitted Distribution,
being referred to as a "Restricted Payment") unless, at the time of such
Restricted Payment, and after giving effect thereto:
(a) no Default or Event of Default shall have occurred and be
continuing;
(b) except with respect to Investments, after giving effect,
on a pro forma basis, to such Restricted Payment and the
Incurrence of any Debt the net proceeds of which are used to
finance such Restricted Payment, the Consolidated Debt to
Annualized Operating Cash Flow Ratio would not have exceeded 7.0
to 1; and
(c) after giving effect to such Restricted Payment on a pro
forma basis, the aggregate amount of all Restricted Payments made
on or after February 15, 1994 shall not exceed:
(1) 50% of the Consolidated Net Income (or, in the case of
a Consolidated Net Loss, minus 100% of such deficit) of the
Company for the period (taken as one accounting period) from
April 1, 1994 to the last day of the last fiscal quarter
preceding the date of the proposed Restricted Payment, plus
(2) the aggregate net proceeds, including the fair market
value of property other than cash (as determined by the Board
of Directors, whose good faith determination shall be
conclusive and evidenced by a Board Resolution), received by
the Company from the issuance and sale (other than to a
Restricted Subsidiary) on or after February 15, 1994 of shares
of its Capital Stock (other than Redeemable Stock), or any
options, warrants or other rights to purchase such Capital
Stock (other than Redeemable Stock), other than (x) (except
for purposes of determining whether an Investment under clause
(iv) above is permitted) shares of Capital Stock or options,
warrants or other rights to purchase Capital Stock (or shares
issuable upon exercise thereof) issued or sold in the
PowerFone Merger, Questar/AMI Share Exchanges, Motorola
Business Acquisition and NTT transactions as defined and
described in the Company's prospectus, dated February 9, 1994,
relating to the Company's Senior Redeemable Discount Notes
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due 2004 and (y) shares of Capital Stock or options, warrants
or other rights to purchase Capital Stock (or shares issuable
upon exercise thereof), the proceeds of the issuance of which
is used (A) to make a Directed Investment (unless such
designation has been revoked by the Board of Directors and the
Company is able to make such Investment pursuant to this
Section 1009 (other than as a Directed Investment)) or (B) to
Incur Debt under clause (i) of Section 1008 (unless and until
the amount of any such Debt (I) is treated as newly issued
Debt and could be Incurred in accordance with the Section 1008
(other than under clause (i) thereof) or (II) has been repaid
or refinanced with the proceeds of Debt Incurred in accordance
with Section 1008 (other than under clause (i) thereof) or
(III) has otherwise been repaid), plus
(3) the aggregate net proceeds, including the fair market
value of property other than cash (as determined by the Board
of Directors, whose good faith determination shall be
conclusive and evidenced by a Board Resolution), received by
the Company from the issuance or sale (other than to a
Restricted Subsidiary) after February 15, 1994 of any Capital
Stock of the Company (other than Redeemable Stock), or any
options, warrants or other rights to purchase such Capital
Stock (other than Redeemable Stock), upon the conversion of,
or exchange for, Debt of the Company or a Restricted
Subsidiary.
The foregoing limitations in this Section 1009 do not limit or
restrict the making of any Permitted Distribution, Permitted Investment or
Directed Investment, and none of a Permitted Distribution, Permitted Investment
or Directed Investment shall be counted as a Restricted Payment for purposes of
clause (c) above. In addition, the foregoing limitations do not prevent the
Company from (I) paying a dividend on Capital Stock of the Company within 60
days after the declaration thereof if, on the date when the dividend was
declared, the Company could have paid such dividend in accordance with the
provisions of this Indenture, (II) repurchasing Capital Stock of the Company
(including options, warrants or other rights to acquire such Capital Stock) from
employees or former employees of the Company or any Subsidiary thereof for
consideration not to exceed $500,000 in the aggregate in any fiscal year (with
repurchases pursuant to this clause (II) not being counted as Restricted
Payments for purposes of clause (c) above) or (III) the repurchase, redemption
or other acquisition for value of Capital Stock of the Company to the extent
necessary to prevent the loss or secure the renewal or reinstatement of any
license or franchise held by the Company or any of its Subsidiaries from any
governmental agency; or (IV) Investments in Unrestricted Subsidiary Funding
Company so long as (x) such Investments are invested in Nextel International,
Inc. and (y) Nextel International, Inc. is a Subsidiary of the Company.
Notwithstanding the foregoing limitations in this Section 1009, the
Company will be permitted to make any Investment in a Person that is not (either
before or after giving effect thereto) a Subsidiary of the Company, provided
that, immediately after giving effect thereto, the amount equal to (a) the
aggregate amount of all Investments made pursuant to this paragraph minus (b)
all cash received by the Company or any Restricted Subsidiary from the sale,
transfer or other disposition to a Person that is not a Subsidiary of the
Company of any such Investment (or portion thereof) included in such aggregate
amount (with the amount of cash to be counted for this purpose not to exceed the
amount of such Investment (or portion thereof) so included), shall
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not exceed the greater of (i) $250 million and (ii) 2% of the Total Market Value
of Equity of the Company as of such time. For purposes of determining the
aggregate amount of Investments referred to in clause (a), the amount of any
Investment shall be deemed to equal the cash portion thereof plus the fair
market value of any non-cash portion thereof (to the extent such portion
constitutes an Investment) at the time such Investment is made, as determined by
the Board of Directors (whose good faith determination shall be conclusive and
evidenced by a Board Resolution).
Notwithstanding the foregoing, no Investment in a Person that
immediately thereafter would be a Restricted Subsidiary will be a Restricted
Payment. In addition, if any Person in which an Investment is made, which
Investment constitutes a Restricted Payment when made, thereafter becomes a
Restricted Subsidiary, all such Investments previously made in such Person shall
no longer be counted as Restricted Payments for purposes of calculating the
aggregate amount of Restricted Payments pursuant to clause (c) of the third
preceding paragraph or the aggregate amount of Investments pursuant to clause
(a) of the immediately preceding paragraph, in each case to the extent such
Investments would otherwise be so counted.
For purposes of clause (c)(3) above, the net proceeds received by
the Company from the issuance or sale of its Capital Stock either upon the
conversion of, or exchange for, Debt of the Company or any Restricted Subsidiary
shall be deemed to be an amount equal to (a) the sum of (i) the principal amount
or accreted value (whichever is less) of such Debt on the date of such
conversion or exchange and (ii) the additional cash consideration, if any,
received by the Company upon such conversion or exchange, less any payment on
account of fractional shares, minus (b) all expenses incurred in connection with
such issuance or sale. In addition, for purposes of clause (c)(3) above, the net
proceeds received by the Company from the issuance or sale of its Capital Stock
upon the exercise of any options or warrants of the Company or any Restricted
Subsidiary shall be deemed to be an amount equal to (a) the additional cash
consideration, if any, received by the Company upon such exercise, minus (b) all
expenses incurred in connection with such issuance or sale.
For purposes of this Section 1009, if a particular Restricted
Payment involves a non-cash payment, including a distribution of assets, then
such Restricted Payment shall be deemed to be an amount equal to the cash
portion of such Restricted Payment, if any, plus an amount equal to the fair
market value of the non-cash portion of such Restricted Payment, as determined
by the Board of Directors (whose good faith determination shall be conclusive
and evidenced by a Board Resolution).
SECTION 1010. Restricted Subsidiaries.
The Company shall not designate any Restricted Subsidiary as an
Unrestricted Subsidiary, and shall not itself, and shall not permit any
Restricted Subsidiary to, sell, convey, transfer or otherwise dispose of any
assets, other than in the ordinary course of business, to any Unrestricted
Subsidiary or any Person that becomes an Unrestricted Subsidiary as part of such
transaction, unless, after giving effect to any such action, the assets (not
including any assets so sold, conveyed, transferred or otherwise disposed of,
other than in the ordinary course of business, to any Unrestricted Subsidiary or
any Person that becomes an Unrestricted Subsidiary as part of such
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<PAGE> 92
transaction) and business of the Company and its remaining Restricted
Subsidiaries generated at least 90% of Digital Mobile-SMR Operating Cash Flow in
the fiscal quarter of the Company most recently completed prior to the date of
such action.
The Board of Directors may designate any existing Unrestricted
Subsidiary or any Person that is about to become a Subsidiary of the Company as
a Restricted Subsidiary if, after giving effect to such action (and, if such
designation is made in connection with the acquisition of a Person or an
operating business that is about to become a Subsidiary of the Company, after
giving effect to all terms of such acquisition) on a pro forma basis, on the
date of such action, the Debt, if any, of such Unrestricted Subsidiary or
Person outstanding immediately prior to such designation would have been
permitted to be Incurred (and shall be deemed to have been Incurred) for all
purposes of this Indenture.
Subject to the second preceding paragraph and compliance with Section
1009, the Board of Directors may designate any Restricted Subsidiary as an
Unrestricted Subsidiary.
The designation by the Board of Directors of a Restricted Subsidiary
as an Unrestricted Subsidiary shall, for all purposes of Section 1009
(including clause (b) thereof), be deemed to be a Restricted Payment of an
amount equal to the fair market value of the Company's ownership interest in
such Subsidiary (including, without duplication, such indirect ownership
interest in all Subsidiaries of such Subsidiary), as determined by the Board of
Directors in good faith and evidenced by a Board Resolution.
Notwithstanding the foregoing provisions of this Section 1010, the
Board of Directors may not designate a Subsidiary of the Company to be an
Unrestricted Subsidiary if, after such designation, (a) the Company or any of
its other Restricted Subsidiaries (i) provides credit support for, or a
Guarantee of, any Debt of such Subsidiary (including any undertaking, agreement
or instrument evidencing such Debt) or (ii) is directly or indirectly liable
for any Debt of such Subsidiary, (b) a default with respect to any Debt of such
Subsidiary (including any right which the holders thereof may have to take
enforcement action against such Subsidiary) would permit (upon notice, lapse of
time or both) any holder of any other Debt of the Company or any Restricted
Subsidiary to declare a default on such other Debt or cause the payment thereof
to be accelerated or payable prior to its final scheduled maturity or (c) such
Subsidiary owns any Capital Stock of, or owns or holds any Lien on any property
of, any Restricted Subsidiary which is not a Subsidiary of the Subsidiary to be
so designated.
The Board of Directors, from time to time, may designate any Person
that is about to become a Subsidiary of the Company as an Unrestricted
Subsidiary, and may designate any newly-created Subsidiary as an Unrestricted
Subsidiary, if at the time such Subsidiary is created it contains no assets
(other than such de minimis amount of assets then required by law for the
formation of corporations) and no Debt. Subsidiaries of the Company that are
not designated by the Board of Directors as Restricted or Unrestricted
Subsidiaries shall be deemed to be Restricted Subsidiaries. Notwithstanding any
provisions of this Section 1010, all Subsidiaries of an Unrestricted Subsidiary
shall be Unrestricted Subsidiaries. The Board of Directors shall not change the
designation of a Subsidiary of the Company more than twice in any period of
five years.
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<PAGE> 93
SECTION 1011. Transactions with Affiliates.
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, enter into any transaction (including the
purchase, sale, lease or exchange of any property or the rendering of any
service) or series of related transactions with any Affiliate of the Company on
terms that are less favorable to the Company or such Restricted Subsidiary, as
the case may be, than those which might be obtained at the time of such
transaction from a Person that is not such an Affiliate; provided, however, that
this Section 1011 shall not limit, or be applicable to, (i) any transaction
between Unrestricted Subsidiaries not involving the Company or any Restricted
Subsidiary, (ii) any transaction between the Company and any Restricted
Subsidiary or between Restricted Subsidiaries or (iii) any Permitted
Transactions. In addition, any transaction or series of related transactions,
other than Permitted Transactions, between the Company or any Restricted
Subsidiary and any Affiliate of the Company (other than a Restricted Subsidiary)
involving an aggregate consideration of $5 million or more must be approved in
good faith by a majority of the Company's Disinterested Directors (of which
there must be at least one) and evidenced by a Board Resolution. For purposes of
this Section 1011, any transaction or series of related transactions between the
Company or any Restricted Subsidiary and an Affiliate of the Company that is
approved by a majority of the Disinterested Directors (of which there must be at
least one) and evidenced by a Board Resolution shall be deemed to be on terms as
favorable as those that might be obtained at the time of such transaction (or
series of transactions) from a Person that is not such an Affiliate and thus
shall be permitted under this Section 1011.
SECTION 1012. [Intentionally Omitted]
SECTION 1013. Change of Control.
Upon the occurrence of a Change of Control, the Company shall be
required to make an Offer to Purchase Outstanding Securities at a purchase price
in cash equal to 101% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the relevant Purchase Date. The Offer to Purchase must be
made within 30 days following a Change of Control, must remain open for at least
30 and not more than 60 days and must comply with the requirements of Rule 14e-1
under the Exchange Act and any other applicable securities laws and regulations.
SECTION 1014. [Intentionally Omitted]
SECTION 1015. Activities of the Company and Restricted Subsidiaries.
The Company shall not, and shall not permit any Restricted
Subsidiary to, engage in any business other than the telecommunications business
and related activities and services, including such businesses, activities and
services as the Company and the Restricted Subsidiaries are engaged in on the
Closing Date.
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<PAGE> 94
SECTION 1016. Provision of Financial Information.
Whether or not the Company is subject to Section 13(a) or 15(d) of
the Exchange Act, or any successor provision thereto, the Company shall file
with the Commission the annual reports, quarterly reports and other documents
which the Company would have been required to file with the Commission pursuant
to such Section 13(a) or 15(d) or any successor provision thereto if the Company
were subject thereto, such documents to be filed with the Commission on or prior
to the respective dates (the "Required Filing Dates") by which the Company would
have been required to file them. The Company shall also in any event (a) within
15 days of each Required Filing Date (i) transmit by mail to all Holders, as
their names and addresses appear in the Security Register, without cost to such
Holders, and (ii) file with the Trustee copies of the annual reports, quarterly
reports and other documents which the Company would have been required to file
with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act or
any successor provisions thereto if the Company were subject thereto and (b) if
filing such documents by the Company with the Commission is not permitted under
the Exchange Act, promptly upon written request supply copies of such documents
to any prospective Holder. The Trustee's receipt of such reports, information
and documents shall not constitute constructive notice of any information
contained therein or determinable from information contained therein.
SECTION 1017. Statement by Officers as to Default; Compliance Certificates.
(a) The Company shall deliver to the Trustee, within 120 days after
the end of each fiscal year of the Company ending after the date hereof an
Officers' Certificate, stating whether or not to the best knowledge of the
signers thereof the Company is in default in the performance and observance of
any of the terms, provisions and conditions of this Indenture (without regard to
any period of grace or requirement of notice provided hereunder), and if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.
(b) The Company shall deliver to the Trustee, as soon as possible
and in any event within 10 days after the Company becomes aware of the
occurrence of a Default or an Event of Default, an Officers' Certificate setting
forth the details of such Default or Event of Default, and the action which the
Company proposes to take with respect thereto.
SECTION 1018. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Section 801, provided pursuant to Section
901(2) and set forth in Sections 1004 to 1016, inclusive, if before the time for
such compliance the Holders of at least a majority in principal amount at Stated
Maturity of the Outstanding Securities shall, by Act of such Holders, either
waive such compliance in such instance or generally waive compliance with such
covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such covenant or condition shall remain in full
force and effect; provided, however, with respect to an Offer to
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<PAGE> 95
Purchase as to which an Offer has been mailed, no such waiver may be made or
shall be effective against any Holder tendering Securities pursuant to such
Offer, and the Company may not omit to comply with the terms of such Offer as to
such Holder.
ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. Right of Redemption.
The Securities may be redeemed at any time on or after November 1,
2003, at the Company's option, in whole or in part, upon not less than 30 or
more than 60 days' prior written notice mailed by first class mail to each
Holder's last address as it appears in the Security Register, at the redemption
prices (expressed as a percentage of the principal amount thereof) set forth
below, plus an amount in cash equal to all accrued and unpaid interest to the
Redemption Date, if redeemed during the 12-month period beginning November 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>
Interest installments whose Stated Maturity is on or prior to any
Redemption Date will be payable to the Holders of Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates for the payment of such interest installments.
In addition to any redemption provided for in the immediately
preceding paragraphs, in the event of a sale by the Company after the Closing
Date and on or prior to November 1, 2001 of its Capital Stock (other than
Redeemable Stock) in a single transaction or series of transactions for an
aggregate purchase price equal to or exceeding $50 million, up to a maximum of
35% of the original aggregate principal amount of the Outstanding Securities
will, within 180 days of such sale, at the option of the Company, upon not less
than 30 nor more than 60 days' notice by mail, be redeemable from the net
proceeds thereof (but only to the extent such proceeds consist of cash or
readily marketable cash equivalents received in respect of the Company's Capital
Stock so sold, in each case net of all commissions, discounts, fees, expenses
and taxes incurred in respect thereof) at a Redemption Price equal to 112% of
the principal amount of the Securities to be redeemed plus accrued and unpaid
interest to the Redemption Date.
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<PAGE> 96
SECTION 1102. Applicability of Article.
Redemption of Securities at the election of the Company, as
permitted by this Indenture and the provisions of the Securities, shall be made
in accordance with such provisions and this Article.
SECTION 1103. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities pursuant to
Section 1101 shall be evidenced by a Board Resolution. In case of any redemption
at the election of the Company pursuant to Section 1101, the Company shall, at
least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Securities to be redeemed.
SECTION 1104. Selection by Trustee of Securities to Be Redeemed.
In the case of any partial redemption, selection of the Securities
for redemption will be made by the Trustee in compliance with the requirements
of the principal national securities exchange, if any, on which the Securities
are listed or, if the Securities are not listed on a national securities
exchange, on a pro rata basis, by lot or by such other method as the Trustee in
its sole discretion shall deem to be fair and appropriate; provided that no
Security of $1,000 in principal amount or less shall be redeemed in part.
The Trustee shall promptly notify the Company and each Security
Registrar in writing of the Securities selected for redemption and, in the case
of any Securities selected for partial redemption, the principal amount thereof
to be redeemed.
For all purposes of this Indenture and of the Securities, unless
the context otherwise requires, all provisions relating to the redemption of
Securities shall relate, in the case of any Securities redeemed or to be
redeemed only in part, to the portion of the principal amount of such Securities
which has been or is to be redeemed.
SECTION 1105. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register.
All notices of redemption shall state (including CUSIP, CINS and
ISIN numbers, if any):
(1) the Redemption Date,
(2) the Redemption Price,
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<PAGE> 97
(3) if less than all the Outstanding Securities are to be redeemed,
the identification (and, in the case of partial redemption, the principal
amounts) of the particular Securities to be redeemed, including CUSIP, CINS
and ISIN numbers,
(4) that on the Redemption Date the Redemption Price will become
due and payable upon each such Security to be redeemed and that cash
interest thereon will cease to accrue on and after said Redemption Date,
(5) the place or places where such Securities are to be surrendered
for payment of the Redemption Price, and
(6) if the redemption is being made pursuant to the provisions of
the Securities set forth in the third paragraph of Section 203, a brief
description of the nature and amount of Capital Stock sold by the Company,
the aggregate purchase price thereof and the net cash proceeds therefrom
available for such redemption, the date or dates on which such sale was
completed and the percentage of the aggregate principal amount of
Outstanding Securities being redeemed.
Notice of redemption of Securities to be redeemed at the election
of the Company shall be given by the Company or, at the Company's request, by
the Trustee in the name and at the expense of the Company and shall be
irrevocable.
SECTION 1106. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) any applicable accrued interest on, all
the Securities which are to be redeemed on that date.
SECTION 1107. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities
so to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and any applicable
accrued interest) such Securities shall not bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with any applicable
accrued and unpaid interest to the Redemption Date; provided, however, that
installments of interest whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
309.
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<PAGE> 98
If any Security called for redemption in accordance with the
election of the Company made pursuant to Section 1101 shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate provided by the
Security.
SECTION 1108. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be
surrendered at an office or agency of the Company designated for that purpose
pursuant to Section 1002 (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities, of any authorized denomination as
requested by such Holder, in aggregate principal amount at Stated Maturity equal
to and in exchange for the unredeemed portion of the principal amount at Stated
Maturity of the Security so surrendered.
ARTICLE TWELVE
Defeasance and Covenant Defeasance
SECTION 1201. Company's Option to Effect Defeasance or Covenant Defeasance.
The Company may elect, at its option at any time, to have Section
1202 or Section 1203 applied to the Outstanding Securities (as a whole and not
in part) upon compliance with the conditions set forth below in this Article.
Any such election shall be evidenced by a Board Resolution.
SECTION 1202. Defeasance and Discharge.
Upon the Company's exercise of its option to have this Section
applied to the Outstanding Securities (as a whole and not in part), the Company
shall be deemed to have been discharged from its obligations with respect to
such Securities as provided in this Section on and after the date the conditions
set forth in Section 1204 are satisfied (hereinafter called "Defeasance"), and
thereafter such Securities shall not be subject to redemption pursuant thereto.
For this purpose, such Defeasance means that the Company shall be deemed to have
paid and discharged the entire indebtedness represented by such Securities and
to have satisfied all its other obligations under such Securities and this
Indenture insofar as such Securities are concerned (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the
same), subject to the following which shall survive until otherwise terminated
or discharged hereunder: (1) the rights of Holders of such Securities to
receive, solely from the trust fund described in Section 1204 and as more fully
set forth in such Section, payments in respect of the principal of and any
premium and interest on such Securities when payments are due, (2) the Company's
obligations with respect to such Securities under Sections 304, 305, 308, 1002
and
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<PAGE> 99
1003, (3) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and (4) this Article. Subject to compliance with this Article, the
Company may exercise its option to have this Section applied to the Outstanding
Securities (as a whole and not in part) notwithstanding the prior exercise of
its option to have Section 1203 applied to such Securities.
SECTION 1203. Covenant Defeasance.
Upon the Company's exercise of its option to have this Section
applied to the Outstanding Securities (as a whole and not in part), (1) the
Company shall be released from its obligations under Section 801(iii), Sections
1005 through 1016, inclusive, and any covenant provided pursuant to Section
901(2) and (2) the occurrence of any event specified in Section 501(4) (with
respect to Section 801(iii)), Section 501(5) (with respect to any of Sections
1005 through 1016, inclusive, and any such covenants provided pursuant to
Section 901(2)), Section 501(6) or Section 501(7) shall be deemed not to be or
result in an Event of Default, in each case with respect to such Securities as
provided in this Section on and after the date the conditions set forth in
Section 1204 are satisfied (hereinafter called "Covenant Defeasance"). For this
purpose, such Covenant Defeasance means that, with respect to such Securities,
the Company may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such specified Section (to
the extent so specified in the case of Sections 501(4) and 501(5)), whether
directly or indirectly by reason of any reference elsewhere herein to any such
Section or by reason of any reference in any such Section to any other provision
herein or in any other document, but the remainder of this Indenture and such
Securities shall be unaffected thereby.
SECTION 1204. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of Section
1202 or Section 1203 to the Outstanding Securities:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee which satisfies the
requirements contemplated by Section 609 and agrees to comply with the
provisions of this Article applicable to it) as trust funds in trust for
the purpose of making the following payments, specifically pledged as
security for, and dedicated solely to, the benefits of the Holders of such
Securities, (A) money in an amount, or (B) U.S. Government Obligations
which through the scheduled payment of principal and interest in respect
thereof in accordance with their terms will provide, not later than one day
before the due date of any payment, money in an amount, or (C) a
combination thereof, in each case sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or any such other
qualifying trustee) to pay and discharge, the principal of and any
installment of interest on such Securities on the respective Stated
Maturities thereof, in accordance with the terms of this Indenture and such
Securities. As used herein, "U.S. Government Obligation" means (x) any
security which is (i) a direct obligation of the United States of America
for the payment of which the full faith and credit of the United
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<PAGE> 100
States of America is pledged or (ii) an obligation of a Person
controlled or supervised by and acting as an agency or instrumentality of
the United States of America the payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of
America, which, in either case (i) or (ii), is not callable or redeemable
at the option of the issuer thereof, and (y) any depository receipt issued
by a bank (as defined in Section 3(a)(2) of the Securities Act) as
custodian with respect to any U.S. Government Obligation which is specified
in Clause (x) above and held by such bank for the account of the holder of
such depository receipt, or with respect to any specific payment of
principal of or interest on any U.S. Government Obligation which is so
specified and held, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific
payment of principal or interest evidenced by such depository receipt.
(2) In the event of an election to have Section 1202 apply to the
Outstanding Securities, the Company shall have delivered to the Trustee an
Opinion of Counsel stating that (A) the Company has received from, or there
has been published by, the Internal Revenue Service a ruling or (B) since
the Closing Date there has been a change in the applicable Federal income
tax law, in either case (A) or (B) to the effect that, and based thereon
such opinion shall confirm that, the Holders of such Securities will not
recognize gain or loss for Federal income tax purposes as a result of the
deposit, Defeasance and discharge to be effected with respect to such
Securities and will be subject to Federal income tax on the same amount, in
the same manner and at the same times as would be the case if such deposit,
Defeasance and discharge were not to occur.
(3) In the event of an election to have Section 1203 apply to the
Outstanding Securities, the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that the Holders of such Securities will
not recognize gain or loss for Federal income tax purposes as a result of
the deposit and Covenant Defeasance to be effected with respect to such
Securities and will be subject to Federal income tax on the same amount, in
the same manner and at the same times as would be the case if such deposit
and Covenant Defeasance were not to occur.
(4) No Default with respect to the Outstanding Securities shall
have occurred and be continuing at the time of such deposit or, with regard
to any such event specified in Sections 501(8) and (9), at any time on or
prior to the 90th day after the date of such deposit (it being understood
that this condition shall not be deemed satisfied until after such 90th
day).
(5) Such Defeasance or Covenant Defeasance shall not cause the
Trustee to have a conflicting interest within the meaning of the Trust
Indenture Act (assuming all Securities are in default within the meaning of
such Act).
(6) Such Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any other agreement
or instrument to which the Company is a party or by which it is bound.
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<PAGE> 101
(7) Such Defeasance or Covenant Defeasance shall not result in the
trust arising from such deposit constituting an investment company within
the meaning of the Investment Company Act unless such trust shall be
registered under such Act or exempt from registration thereunder.
(8) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have been
complied with.
SECTION 1205. Deposited Money and U.S. Government Obligations to Be Held in
Trust; Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003,
all money and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee or other qualifying trustee (solely for purposes of
this Section and Section 1206, the Trustee and any such other trustee are
referred to collectively as the "Trustee") pursuant to Section 1204 in respect
of the Outstanding Securities shall be held in trust and applied by the Trustee,
in accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any such Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Holders of
such Securities, of all sums due and to become due thereon in respect of
principal and any premium and interest, but money so held in trust need not be
segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 1204 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of Outstanding Securities.
Anything in this Article to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 1204 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect the Defeasance or Covenant Defeasance, as
the case may be, with respect to the Outstanding Securities.
SECTION 1206. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Securities by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the obligations under this
Indenture and such Securities from which the Company has been discharged or
released pursuant to Section 1202 or 1203 shall be revived and reinstated as
though no deposit had occurred pursuant to this Article with respect to such
Securities, until such time as the Trustee or Paying Agent is permitted to apply
all money held in trust pursuant to Section 1205
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<PAGE> 102
with respect to such Securities in accordance with this Article; provided,
however, that if the Company makes any payment of principal of or any premium or
interest on any such Security following such reinstatement of its obligations,
the Company shall be subrogated to the rights (if any) of the Holders of such
Securities to receive such payment from the money so held in trust.
---------------
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
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<PAGE> 103
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
NEXTEL COMMUNICATIONS, INC.
By: /s/ Thomas J. Sidman
---------------------------------------
Title: Thomas J. Sidman Vice President
------------------------------------
Attest:
/s/ Ried R. Zulager
- --------------------------------------
Ried R. Zulager Corporate Secretary
- --------------------------------------
HARRIS TRUST AND SAVINGS BANK, Trustee
By: /s/ Authorized Signatory
-----------------------------
Title: Vice President
--------------------------
Attest:
/s/ Authorized Signatory
- --------------------------------------
Assistant Secretary
- --------------------------------------
90
<PAGE> 1
EXHIBIT 4.14
- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
Dated November 4, 1998
between
NEXTEL COMMUNICATIONS, INC.
and
MORGAN STANLEY & CO. INCORPORATED
- --------------------------------------------------------------------------------
<PAGE> 2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made
and entered into November 4, 1998, between NEXTEL COMMUNICATIONS, INC., a
Delaware corporation (the "Company"), and MORGAN STANLEY & CO. INCORPORATED (the
"Placement Agent").
This Agreement is made pursuant to the Purchase Agreement
dated October 28, 1998, between the Company and the Placement Agent (the
"Purchase Agreement"), which provides for the sale by the Company to the
Placement Agent of $300,000,000 aggregate principal amount at Stated Maturity
(as defined in the Indenture) of the Company's 12% Senior Serial Redeemable
Notes due 2008 (the "Securities"). In order to induce the Placement Agent to
enter into the Purchase Agreement, the Company has agreed to provide to the
Placement Agent and its direct and indirect transferees the registration rights
with respect to the Securities set forth in this Agreement. The execution of
this Agreement is a condition to the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. DEFINITIONS.
As used in this Agreement, the following capitalized defined
terms shall have the following meanings:
"1933 ACT" shall mean the Securities Act of 1933, as amended
from time to time.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"CLOSING DATE" shall mean the Closing Date as defined in the
Purchase Agreement.
"COMPANY" shall have the meaning set forth in the preamble and
shall also include the Company's successors.
"EXCHANGE OFFER" shall mean the exchange offer by the Company
of Exchange Securities for Registrable Securities pursuant to Section
2(a) hereof.
"EXCHANGE OFFER REGISTRATION" shall mean a registration under
the 1933 Act effected pursuant to Section 2(a) hereof.
"EXCHANGE OFFER REGISTRATION STATEMENT" shall mean an exchange
offer registration statement on Form S-4 (or, if applicable, on another
appropriate form) and all amendments and supplements to such
registration statement, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by
reference therein.
<PAGE> 3
"EXCHANGE SECURITIES" shall mean securities issued by the
Company containing terms identical to the Securities (except that such
Exchange Securities shall bear no legend and shall be free from
restrictions on transfers), to be offered to Holders of Securities in
exchange for Securities pursuant to the Exchange Offer.
"HOLDER" shall mean the Placement Agent, for so long as it
owns any Registrable Securities, and each of its successors, assigns
and direct and indirect transferees who become registered owners of
Registrable Securities under the Indenture; PROVIDED that for purposes
of Sections 4 and 5 of this Agreement, the term "Holder" shall include
Participating Broker-Dealers (as defined in Section 4(a)).
"INDENTURE" shall mean the Indenture relating to the
Securities, dated as of November 4, 1998, between the Company and
Harris Trust and Savings Bank, as trustee, as the same may be amended,
supplemented, waived or otherwise modified from time to time in
accordance with the terms thereof.
"MAJORITY HOLDERS" shall mean the Holders of a majority of the
aggregate principal amount at Stated Maturity (as defined in the
Indenture) of outstanding Registrable Securities; PROVIDED that
whenever the consent or approval of Holders of a specified percentage
of Registrable Securities is required hereunder, Registrable Securities
held by the Company or any of its affiliates (as such term is defined
in Rule 405 under the 1933 Act) (other than the Placement Agent or
subsequent holders of Registrable Securities if such subsequent holders
are deemed to be such affiliates solely by reason of their holding of
such Registrable Securities) shall not be counted in determining
whether such consent or approval was given by the Holders of such
required percentage or amount.
"PERSON" shall mean an individual, partnership, corporation,
trust or unincorporated organization, or a government or agency or
political subdivision thereof.
"PLACEMENT AGENT" shall have the meaning set forth in the
preamble.
"PROSPECTUS" shall mean the prospectus included in a
Registration Statement, including any preliminary prospectus, and any
such prospectus as amended or supplemented by any prospectus
supplement, including a prospectus supplement with respect to the terms
of the offering of any portion of the Registrable Securities covered by
a Shelf Registration Statement, and by all other amendments and
supplements to such prospectus, and in each case including all material
incorporated by reference therein.
"PURCHASE AGREEMENT" shall have the meaning set forth in the
preamble.
"REGISTRABLE SECURITIES" shall mean the Securities; PROVIDED,
HOWEVER, that the Securities shall cease to be Registrable Securities
(i) except in the case of the Placement Agent to the extent of any
unsold allotment and Participating Broker-Dealers (as defined in
section 4) to the extent set forth in paragraph 4(a), upon the
expiration date of the Exchange Offer (ii) when a Shelf Registration
Statement with respect to such Securities shall have been declared
effective under the 1933 Act and such Securities shall have been
disposed of pursuant to such Registration Statement, (iii) when such
Securities are
2
<PAGE> 4
saleable to the public pursuant to Rule 144(k) (or any similar
provision then in force, but not Rule 144A) under the 1933 Act or (iv)
when such Securities shall have ceased to be outstanding.
"REGISTRATION EXPENSES" shall mean any and all expenses
incident to performance of or compliance by the Company with this
Agreement, including without limitation: (i) all SEC, stock exchange or
National Association of Securities Dealers, Inc. registration and
filing fees, (ii) all fees and expenses incurred in connection with
compliance with state securities or blue sky laws (including reasonable
fees and disbursements of counsel for any Underwriters or Holders in
connection with blue sky qualification of any of the Exchange
Securities or Registrable Securities), (iii) all expenses of any
Persons in preparing or assisting in preparing, word processing,
printing and distributing any Registration Statement, any Prospectus,
any amendments or supplements thereto, any underwriting agreements,
securities sales agreements and other documents relating to the
performance of and compliance with this Agreement, (iv) all rating
agency fees, if any, (v) the fees and disbursements of the Trustee and
its counsel, if any, (vi) the fees and disbursements of counsel for the
Company and, in the case of a Shelf Registration Statement, the fees
and disbursements of one counsel for the Holders (which counsel shall
be selected by the Majority Holders and which counsel may also be
counsel for the Placement Agent) and (vii) the fees and disbursements
of the independent public accountants of the Company, including the
expenses of any special audits or "cold comfort" letters required by or
incident to such performance and compliance, but excluding fees and
expenses of counsel to the Underwriters (other than fees and expenses
set forth in clause (ii) above) or the Holders and underwriting
discounts and commissions and transfer taxes, if any, relating to the
sale or disposition of Registrable Securities by a Holder.
"REGISTRATION STATEMENT" shall mean any registration statement
of the Company that covers any of the Exchange Securities or
Registrable Securities pursuant to the provisions of this Agreement and
all amendments and supplements to any such Registration Statement,
including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
"SEC" shall mean the Securities and Exchange Commission.
"SHELF REGISTRATION" shall mean a registration effected
pursuant to Section 2(b) hereof.
"SHELF REGISTRATION STATEMENT" shall mean a "shelf"
registration statement of the Company which covers all of the
Registrable Securities (and may include other securities of other
Persons) on an appropriate form under Rule 415 under the 1933 Act, or
any similar rule that may be adopted by the SEC, and all amendments and
supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein,
all exhibits thereto and all material incorporated by reference
therein.
"TRUSTEE" shall mean the trustee under the Indenture.
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<PAGE> 5
"UNDERWRITERS" shall have the meaning set forth in Section 3
hereof.
"UNDERWRITTEN REGISTRATION" or "UNDERWRITTEN OFFERING" shall
mean a registration in which Registrable Securities are sold to an
Underwriter for reoffering to the public.
2. REGISTRATION UNDER THE 1933 ACT.
(a) To the extent not prohibited by any applicable law or
applicable interpretation of the Staff of the SEC, the Company shall use its
best efforts to cause to be filed an Exchange Offer Registration Statement
covering the offer by the Company to the Holders to exchange all of the
Registrable Securities for Exchange Securities and to have such Registration
Statement remain effective until the closing of the Exchange Offer. The Company
shall commence the Exchange Offer promptly after the Exchange Offer Registration
Statement has been declared effective by the SEC and use its best efforts to
have the Exchange Offer consummated not later than 60 days after such effective
date. The Company shall commence the Exchange Offer by mailing the related
exchange offer Prospectus and accompanying documents to each Holder stating, in
addition to such other disclosures as are required by applicable law:
(i) that the Exchange Offer is being made pursuant to this
Agreement and that all Registrable Securities validly tendered will be
accepted for exchange;
(ii) the dates of acceptance for exchange (which shall be a
period of at least 30 days from the date such Prospectus is mailed)
(the "Exchange Dates");
(iii) that any Registrable Securities not tendered will remain
outstanding and shall continue to accrue interest at the initial rate
borne by the Registrable Securities and, other than Registrable
Securities referred to in Section 2(b) below, will not retain any
rights under this Agreement;
(iv) that Holders electing to have Registrable Securities
exchanged pursuant to the Exchange Offer will be required to surrender
such Registrable Securities, together with the enclosed letters of
transmittal, to the institution and at the address (located in the
Borough of Manhattan, The City of New York) specified in the Prospectus
prior to the close of business on the last Exchange Date; and
(v) that Holders will be entitled to withdraw their election,
not later than the close of business on the last Exchange Date, by
sending to the institution and at the address (located in the Borough
of Manhattan, The City of New York) specified in the Prospectus a
telegram, telex, facsimile transmission or letter setting forth the
name of such Holder, the number of shares of Registrable Securities
delivered for exchange and a statement that such Holder is withdrawing
his election to have such Registrable Securities exchanged.
As soon as practicable after the last Exchange Date, the
Company shall:
(i) accept for exchange Registrable Securities or portions
thereof tendered and not validly withdrawn pursuant to the Exchange
Offer; and
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<PAGE> 6
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Securities or portions thereof so accepted
for exchange by the Company and issue, and cause the Trustee to
promptly countersign and register and mail to each Holder, Exchange
Securities with an aggregate principal amount at Stated Maturity (as
defined in the Indenture) equal to the aggregate principal amount at
Stated Maturity (as defined in the Indenture) of the Registrable
Securities surrendered by such Holder.
The Company shall use its best efforts to complete the Exchange Offer as
provided above and shall comply with the applicable requirements of the 1933
Act, the 1934 Act and other applicable laws and regulations in connection with
the Exchange Offer. The Company shall inform the Placement Agent of the names
and addresses of the Holders to whom the Exchange Offer is made, and the
Placement Agent shall have the right, subject to applicable law, to contact such
Holders and otherwise facilitate the tender of Registrable Securities in the
Exchange Offer.
(b) In the event that the Exchange Offer has been completed
and, in the opinion of counsel for the Placement Agent, a Registration Statement
must be filed and a Prospectus must be delivered by the Placement Agent in
connection with any offering or sale of Registrable Securities held by them that
constitute an unsold allotment, the Company shall use its best efforts to cause
to be filed as soon as practicable after the rendering of such opinion and the
delivery thereof, if written, is given to the Company, a Shelf Registration
Statement providing for the sale by the Placement Agent of such Registrable
Securities and to have such Shelf Registration Statement declared effective by
the SEC. The Placement Agent shall sell out its unsold allotments before making
sales of any other Securities and the Placement Agent shall notify the Company
upon the sale of all of their unsold allotments. The Company agrees to use its
best efforts to keep the Shelf Registration Statement continuously effective for
the period referred to in Rule 144(k) or until all of the Registrable Securities
covered by the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement. The Company further agrees to supplement or amend the
Shelf Registration Statement if required by the rules, regulations or
instructions applicable to the registration form used by the Company for such
Shelf Registration Statement or by the 1933 Act or by any other rules and
regulations thereunder for shelf registration or if reasonably requested by a
Holder with respect to information relating to such Holder, and to use its best
efforts to cause any such amendment to become effective and such Shelf
Registration Statement to become usable as soon as thereafter practicable. The
Company agrees to furnish to the Holders of Registrable Securities copies of any
such supplement or amendment promptly after its being used or filed with the
SEC.
(c) The Company shall pay all Registration Expenses in
connection with the registration pursuant to Section 2(a) or Section 2(b). Each
Holder shall pay all underwriting discounts and commissions and transfer taxes,
if any, relating to the sale or disposition of such Holder's Registrable
Securities pursuant to the Shelf Registration Statement.
(d) An Exchange Offer Registration Statement pursuant to
Section 2(a) hereof or a Shelf Registration Statement pursuant to Section 2(b)
hereof will not be deemed to have become effective unless it has been declared
effective by the SEC; PROVIDED, HOWEVER, that if, after it has been declared
effective, the offering of Registrable Securities pursuant to a Shelf
Registration Statement is interfered with by any stop order, injunction or other
order or requirement of the SEC or any other governmental agency or court, such
Registration Statement will be deemed not to have become effective during the
period of such interference until the
5
<PAGE> 7
offering of Registrable Securities pursuant to such Registration Statement may
legally resume. As provided for in the Indenture, in the event the Exchange
Offer is not consummated on or prior to June 1, 1999, the annual interest rate
borne by the Securities shall be increased by 0.5% per annum on the Securities
from June 1, 1999, and, if the Exchange Offer is not consummated on or prior to
September 1, 1999, thereafter the annual interest rate borne by the Securities
shall be increased by an additional rate of 0.5% per annum on the Securities
from September 1, 1999, in each case until the earlier of the date upon which
(i) the Exchange Offer is consummated, (ii) a Shelf Registration Statement with
respect to all Registrable Securities is declared effective or (iii) the
Securities become freely tradeable without registration under the 1933 Act; at
which time, in any such case, upon the request of any Holder of the Securities,
the Company will deliver to such Holder certificates evidencing such Holder's
Securities without the legends restricting the transfer thereof.
(e) Without limiting the remedies available to the Placement
Agent and the Holders, the Company acknowledges that any failure by the Company
to comply with its obligations under Section 2(a) and Section 2(b) hereof may
result in material irreparable injury to the Placement Agent or the Holders for
which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of any such
failure, the Placement Agent or any Holder may obtain such relief as may be
required to specifically enforce the Company's obligations under Section 2(a)
and Section 2(b) hereof.
3. REGISTRATION PROCEDURES.
In connection with the obligations of the Company with respect
to the Registration Statements pursuant to Section 2(a) and Section 2(b) hereof,
the Company shall as expeditiously as possible:
(a) prepare and file with the SEC a Registration Statement on
the appropriate form under the 1933 Act, which form (x) shall be
selected by the Company and (y) shall, in the case of a Shelf
Registration, be available for the sale of the Registrable Securities
by the selling Holders thereof and (z) shall comply as to form in all
material respects with the requirements of the applicable form and
include all financial statements required by the SEC to be filed
therewith, and use its best efforts to cause such Registration
Statement to become effective and remain effective in accordance with
Section 2 hereof;
(b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be
necessary to keep such Registration Statement effective for the
applicable period and cause each Prospectus to be supplemented by any
required prospectus supplement and, as so supplemented, to be filed
pursuant to Rule 424 under the 1933 Act; to keep each Prospectus
current during the period described under Section 4(3) and Rule 174
under the 1933 Act that is applicable to transactions by brokers or
dealers with respect to the Registrable Securities or Exchange
Securities;
(c) in the case of a Shelf Registration, furnish to each
Holder of Registrable Securities, to counsel for the Placement Agent,
to counsel for the Holders and to each Underwriter of an Underwritten
Offering of Registrable Securities, if any, without charge, as many
copies of each Prospectus, including each preliminary Prospectus, and
any
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<PAGE> 8
amendment or supplement thereto and such other documents as such Holder
or Underwriter may reasonably request, in order to facilitate the
public sale or other disposition of the Registrable Securities; and the
Company consents to the use of such Prospectus and any amendment or
supplement thereto in accordance with applicable law by each of the
selling Holders of Registrable Securities and any such Underwriters in
connection with the offering and sale of the Registrable Securities
covered by and in the manner described in such Prospectus or any
amendment or supplement thereto in accordance with applicable law;
(d) use its best efforts to register or qualify the
Registrable Securities under all applicable state securities or "blue
sky" laws of such jurisdictions as any Holder of Registrable Securities
covered by a Registration Statement shall reasonably request in writing
by the time the applicable Registration Statement is declared effective
by the SEC, to cooperate with such Holder in connection with any
filings required to be made with the National Association of Securities
Dealers, Inc. and do any and all other acts and things which may be
reasonably necessary or advisable to enable such Holder to consummate
the disposition in each such jurisdiction of such Registrable
Securities owned by such Holder; PROVIDED, HOWEVER, that the Company
shall not be required to (i) qualify as a foreign corporation or as a
dealer in securities in any jurisdiction where it would not otherwise
be required to qualify but for this Section 3(d), (ii) file any general
consent to service of process or (iii) subject itself to taxation in
any such jurisdiction if it is not so subject;
(e) in the case of a Shelf Registration, notify each Holder of
Registrable Securities, counsel for the Holders and counsel for the
Placement Agent promptly and, if requested by any such Holder or
counsel, confirm such advice in writing (i) when a Registration
Statement has become effective and when any post-effective amendment
thereto has been filed and becomes effective, (ii) of any request by
the SEC or any state securities authority for amendments and
supplements to a Registration Statement and Prospectus or for
additional information after the Registration Statement has become
effective, (iii) of the issuance by the SEC or any state securities
authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that
purpose, (iv) if, between the effective date of a Registration
Statement and the closing of any sale of Registrable Securities covered
thereby, the representations and warranties of the Company contained in
any underwriting agreement, securities sales agreement or other similar
agreement, if any, relating to the offering cease to be true and
correct in all material respects or if the Company receives any
notification with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the initiation
of any proceeding for such purpose, (v) of the happening of any event
during the period a Shelf Registration Statement is effective which
makes any statement made in such Shelf Registration Statement or the
related Prospectus untrue in any material respect or which requires the
making of any changes in such Shelf Registration Statement or
Prospectus in order to make the statements therein not misleading and
(vi) of any determination by the Company that a post-effective
amendment to a Registration Statement would be appropriate;
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<PAGE> 9
(f) make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of a Registration Statement at
the earliest possible moment and provide immediate notice to each
Holder of the withdrawal of any such order;
(g) in the case of a Shelf Registration, upon request, furnish
to each Holder of Registrable Securities, without charge, at least one
conformed copy of each Registration Statement and any post-effective
amendment thereto (without documents incorporated therein by reference
or exhibits thereto, unless requested);
(h) in the case of a Shelf Registration, cooperate with the
selling Holders of Registrable Securities to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any restrictive legends and
enable such Registrable Securities to be in such denominations and
registered in such names as the selling Holders may reasonably request
at least two business days prior to the closing of any sale of
Registrable Securities;
(i) in the case of a Shelf Registration, upon the occurrence
of any event contemplated by Section 3(e)(v) hereof, use its best
efforts to prepare and file with the SEC a supplement or post-effective
amendment to a Registration Statement or the related Prospectus or any
document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of the
Registrable Securities, such Prospectus will not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances under
which they were made, not misleading. The Company agrees to notify the
Holders to suspend use of the Prospectus as promptly as practicable
after the occurrence of such an event, and the Holders hereby agree to
suspend use of the Prospectus until the Company has amended or
supplemented the Prospectus to correct such misstatement or omission;
(j) a reasonable time prior to the filing of any Registration
Statement, any Prospectus, any amendment to a Registration Statement or
amendment or supplement to a Prospectus or any document which is to be
incorporated by reference into a Registration Statement (other than
filings pursuant to the 1934 Act) or a Prospectus after the initial
filing of a Registration Statement, provide copies of such document to
the Placement Agent and its counsel (and, in the case of a Shelf
Registration Statement, the Holders and their counsel) and make such of
the representatives of the Company as shall be reasonably requested by
the Placement Agent or its counsel (and, in the case of a Shelf
Registration Statement, the Holders or their counsel) available for
discussion of such document, and shall not at any time file or make any
amendment to the Registration Statement, any Prospectus or any
amendment of or supplement to a Registration Statement or a Prospectus
or any document which is to be incorporated by reference into a
Registration Statement (other than filings pursuant to the 1934 Act) or
a Prospectus, of which the Placement Agent and its counsel (and, in the
case of a Shelf Registration Statement, the Holders and their counsel)
shall not have previously been advised and furnished a copy or to which
the Placement Agent or its counsel (and, in the case of a Shelf
Registration Statement, the Holders or their counsel) shall object;
8
<PAGE> 10
(k) obtain a CUSIP number, and, if applicable, a CINS number,
for all Exchange Securities or Registrable Securities, as the case may
be, not later than the effective date of a Registration Statement;
(l) in the case of a Shelf Registration, make available for
inspection by a representative of the Holders of the Registrable
Securities, any Underwriter participating in any disposition pursuant
to such Shelf Registration Statement, and attorneys and accountants
designated by the Holders, at reasonable times and in a reasonable
manner, all financial and other records, pertinent documents and
properties of the Company, and cause the respective officers, directors
and employees of the Company to supply all information reasonably
requested by any such representative, Underwriter, attorney or
accountant in connection with a Shelf Registration Statement;
(m) in the case of a Shelf Registration, use its best efforts
to cause all Registrable Securities to be listed on any securities
exchange or any automated quotation system on which similar securities
issued by the Company are then listed if requested by the Majority
Holders, to the extent such Registrable Securities satisfy applicable
listing requirements;
(n) use its best efforts to cause the Exchange Securities or
Registrable Securities, as the case may be, to be rated by two
nationally recognized statistical rating organizations (as such term is
defined in Rule 436(g)(2) under the 1933 Act);
(o) if reasonably requested by any Holder of Registrable
Securities covered by a Registration Statement, (i) promptly
incorporate in a Prospectus supplement or post-effective amendment such
information with respect to such Holder as such Holder reasonably
requests to be included therein and (ii) make all required filings of
such Prospectus supplement or such post-effective amendment as soon as
the Company has received notification of the matters to be incorporated
in such filing; and
(p) in the case of a Shelf Registration, enter into such
customary agreements and take all such other actions in connection
therewith (including those requested by the Holders of a majority of
the Registrable Securities being sold) in order to expedite or
facilitate the disposition of such Registrable Securities including,
but not limited to, an Underwritten Offering and in such connection,
(i) to the extent possible, make such representations and warranties to
the Holders and any Underwriters of such Registrable Securities with
respect to the business of the Company and its subsidiaries, the
Registration Statement, Prospectus and documents incorporated by
reference or deemed incorporated by reference, if any, in each case, in
form, substance and scope as are customarily made by issuers to
underwriters in underwritten offerings and confirm the same if and when
requested, (ii) obtain opinions of counsel to the Company (which
counsel and opinions, in form, scope and substance, shall be reasonably
satisfactory to the Holders and such Underwriters and their respective
counsel) addressed to each selling Holder and Underwriter of
Registrable Securities, covering the matters customarily covered in
opinions requested in underwritten offerings, (iii) obtain "cold
comfort" letters from the independent certified public accountants of
the Company (and, if necessary, any other certified public accountant
of any subsidiary of the Company, or of any business acquired by the
Company for which financial statements and financial data are or are
9
<PAGE> 11
required to be included in the Registration Statement) addressed to
each selling Holder and Underwriter of Registrable Securities, such
letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with
underwritten offerings, and (iv) deliver such documents and
certificates as may be reasonably requested by the Holders of a
majority of the Registrable Securities being sold or the Underwriters,
and which are customarily delivered in underwritten offerings, to
evidence the continued validity of the representations and warranties
of the Company made pursuant to clause (i) above and to evidence
compliance with any customary conditions contained in an underwriting
agreement.
In the case of a Shelf Registration Statement, the Company may
require each Holder of Registrable Securities to furnish to the Company such
information regarding the Holder and the proposed distribution by such Holder of
such Registrable Securities as the Company may from time to time reasonably
request in writing.
In the case of a Shelf Registration Statement, each Holder
agrees that, upon receipt of any notice from the Company of the happening of any
event of the kind described in Section 3(e)(v) hereof, such Holder will
forthwith discontinue disposition of Registrable Securities pursuant to a
Registration Statement until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 3(i) hereof, and, if
so directed by the Company, such Holder will deliver to the Company (at its
expense) all copies in its possession, other than permanent file copies then in
such Holder's possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice. The Company shall not suspend the
disposition of Registrable Securities pursuant to a Shelf Registration Statement
for more than an aggregate of 120 days during any 365 day period. If the Company
shall suspend the disposition of Registrable Securities pursuant to a Shelf
Registration Statement for more than an aggregate of 60 days during any 365 day
period, then the Company shall pay each Holder of Registrable Securities that
are registered pursuant to the Shelf Registration Statement and have not been
sold pursuant thereto an illiquidity fee in an amount equal to 0.5% of the
principal amounts of such Registrable Securities held by such Holder.
The Holders of Registrable Securities covered by a Shelf
Registration Statement who desire to do so may sell such Registrable Securities
in an Underwritten Offering. In any such Underwritten Offering, the investment
banker or investment bankers and manager or managers (the "Underwriters") that
will administer the offering will be selected by the Majority Holders of the
Registrable Securities included in such offering.
4. PARTICIPATION OF BROKER-DEALERS IN EXCHANGE OFFER.
(a) The Staff of the SEC has taken the position that any
broker-dealer that receives Exchange Securities for its own account in the
Exchange Offer in exchange for Securities that were acquired by such
broker-dealer as a result of market-making or other trading activities (a
"Participating Broker-Dealer"), may be deemed to be an "underwriter" within the
meaning of the 1933 Act and must deliver a prospectus meeting the requirements
of the 1933 Act in connection with any resale of such Exchange Securities.
The Company understands that it is the Staff's position that
if the Prospectus contained in the Exchange Offer Registration Statement
includes a plan of distribution
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<PAGE> 12
containing a statement to the above effect and the means by which Participating
Broker-Dealers may resell the Exchange Securities, without naming the
Participating Broker-Dealers or specifying the amount of Exchange Securities
owned by them, such Prospectus may be delivered by Participating Broker-Dealers
to satisfy their prospectus delivery obligation under the 1933 Act in connection
with resales of Exchange Securities for their own accounts, so long as the
Prospectus otherwise meets the requirements of the 1933 Act.
(b) In light of the above, notwithstanding the other
provisions of this Agreement, the Company agrees that the provisions of this
Agreement as they relate to a Shelf Registration shall also apply to an Exchange
Offer Registration to the extent, and with such reasonable modifications thereto
as may be, reasonably requested by the Placement Agent or by one or more
Participating Broker-Dealers, in each case as provided in clause (ii) below, in
order to expedite or facilitate the disposition of any Exchange Securities by
Participating Broker-Dealers consistent with the positions of the Staff recited
in Section 4(a) above; PROVIDED that:
(i) the Company shall not be required to amend or supplement
the Prospectus contained in the Exchange Offer Registration Statement,
as would otherwise be contemplated by Section 3(i) of this Agreement,
for a period exceeding 90 days after the last Exchange Date (as such
period may be extended pursuant to the penultimate paragraph of Section
3 of this Agreement) and Participating Broker-Dealers shall not be
authorized by the Company to deliver and shall not deliver such
Prospectus after such period in connection with the resales
contemplated by this Section 4;
(ii) the application of the Shelf Registration procedures set
forth in Section 3 of this Agreement to an Exchange Offer Registration,
to the extent not required by the positions of the Staff of the SEC or
the 1933 Act and the rules and regulations thereunder, will be in
conformity with the reasonable request to the Company by the Placement
Agent or with the reasonable request in writing to the Company by one
or more broker-dealers who certify to the Placement Agent and the
Company in writing that they anticipate that they will be Participating
Broker-Dealers; and PROVIDED FURTHER that, in connection with such
application of the Shelf Registration procedures set forth in Section 3
of this Agreement to an Exchange Offer Registration, the Company shall
be obligated (x) to deal only with one entity representing the
Participating Broker-Dealers, which shall be Morgan Stanley & Co.
Incorporated unless it elects not to act as such representative and (y)
to cause to be delivered only one, if any, "cold comfort" letter with
respect to the Prospectus in the form existing on the last Exchange
Date and with respect to each subsequent amendment or supplement, if
any, effected during the period specified in clause (i) above; and
(iii) on a weekly basis, the representative of the
Participating Broker-Dealers will confirm with the Company that the
Shelf Registration Statement is available.
(c) The Placement Agent shall have no liability to the Company
or any Holder with respect to any request that it may make pursuant to Section
4(b) above.
5. INDEMNIFICATION AND CONTRIBUTION.
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<PAGE> 13
(a) The Company agrees to indemnify and hold harmless the
Placement Agent, each Holder and each Person, if any, who controls the Placement
Agent or any Holder within the meaning of either Section 15 of the 1933 Act or
Section 20 of the 1934 Act, or is under common control with, or is controlled
by, the Placement Agent or any Holder, from and against all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred by the Placement Agent, any Holder or any such
controlling or affiliated Person in connection with defending or investigating
any such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement (or any
amendment thereto) pursuant to which Exchange Securities or Registrable
Securities were registered under the 1933 Act, including all documents
incorporated therein by reference, or caused by any omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, or caused by any untrue statement or
alleged untrue statement of a material fact contained in any Prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to state
therein a material fact necessary to make the statements therein in light of the
circumstances under which they were made not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission based upon information
relating to the Placement Agent or any Holder furnished to the Company in
writing by the Placement Agent or any selling Holder expressly for use therein;
PROVIDED, HOWEVER, that the foregoing indemnity agreement with respect to any
preliminary Prospectus shall not inure to the benefit of the Placement Agent
from whom the person asserting any such losses, claims, damages or liabilities
purchased Securities, or any person controlling the Placement Agent, if a copy
of the final Prospectus (as then amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) was not sent or given by
or on behalf of the Placement Agent to such person, if required by law so to
have been delivered, at or prior to the written confirmation of the sale of the
Securities to such person, and if the final Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses, claims,
damages or liabilities, unless such failure is the result of noncompliance by
the Company to furnish copies of the final Prospectus, any documents
incorporated by reference therein and any supplements and amendments thereto as
the Placement Agent has reasonably requested. In connection with any
Underwritten Offering permitted by Section 3 of this Agreement, the Company will
also indemnify the Underwriters, if any, selling brokers, dealers and similar
securities industry professionals participating in the distribution, their
officers and directors and each Person who controls such Persons (within the
meaning of the 1933 Act and the 1934 Act) to the same extent as provided above
with respect to the indemnification of the Holders, if requested in connection
with any Registration Statement.
(b) Each Holder agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Placement Agent and the other
selling Holders, and each of their respective directors, officers who sign the
Registration Statement and each Person, if any, who controls the Company, the
Placement Agent and any other selling Holder within the meaning of either
Section 15 of the 1933 Act or Section 20 of the 1934 Act to the same extent as
the foregoing indemnity from the Company to the Placement Agent and the Holders,
but only with reference to information relating to such Holder furnished to the
Company in writing by such Holder expressly for use in any Registration
Statement (or any amendment thereto) or any Prospectus (or any amendment or
supplement thereto).
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<PAGE> 14
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any Person in respect of which
indemnity may be sought pursuant to either paragraph (a) or paragraph (b) above,
such Person (the "indemnified party") shall promptly notify the Person against
whom such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for (a) the fees and expenses of more than one separate
firm (in addition to any local counsel) for the Placement Agent and all Persons,
if any, who control the Placement Agent within the meaning of either Section 15
of the 1933 Act or Section 20 of the 1934 Act, (b) the fees and expenses of more
than one separate firm (in addition to any local counsel) for the Company, its
directors, its officers who sign the Registration Statement and each Person, if
any, who controls the Company within the meaning of either such Section and (c)
the fees and expenses of more than one separate firm (in addition to any local
counsel) for all Holders and all Persons, if any, who control any Holders within
the meaning of either such Section, and that all such fees and expenses shall be
reimbursed as they are incurred. In such case involving the Placement Agent and
Persons who control the Placement Agent, such firm shall be designated in
writing by Morgan Stanley & Co. Incorporated. In such case involving the Holders
and such Persons who control Holders, such firm shall be designated in writing
by the Majority Holders. In all other cases, such firm shall be designated by
the Company. The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent but, if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request (ii) such indemnifying party shall have received notice of the
terms of such settlement at least 30 days prior to such settlement being entered
into and (iii) such indemnifying party shall not have reimbursed the indemnified
party for such fees and expenses of counsel in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which such indemnified party is
or could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such proceeding; PROVIDED that such unconditional release may be
subject to a parallel release of a claimant or plaintiff by such indemnified
party from all liability in respect of claims or counterclaims asserted by such
indemnified party.
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<PAGE> 15
(d) If the indemnification provided for in paragraph (a) or
paragraph (b) of this Section 4 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the relative fault
of the indemnifying party or parties on the one hand and of the indemnified
party or parties on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative fault of the
Company and the Holders shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Holders and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Holders' obligations to contribute pursuant to this
Section 5(d) are several in proportion to the aggregate principal amount at
Stated Maturity of Registrable Securities of such Holder that were registered
pursuant to a Registration Statement.
(e) The Company and each Holder agree that it would not be
just or equitable if contribution pursuant to this Section 5 were determined by
PRO RATA allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (d) above. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in paragraph (d) above shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 5, no Holder shall be required to indemnify or
contribute any amount in excess of the amount by which the total price at which
Registrable Securities were sold by such Holder exceeds the amount of any
damages that such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the 1933 Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Section 5 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.
The indemnity and contribution provisions contained in this
Section 5 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of the Placement Agent, any Holder or any Person controlling the Placement Agent
or any Holder, or by or on behalf of the Company, its officers or directors or
any Person controlling the Company, (iii) acceptance of any of the Exchange
Securities and (iv) any sale of Registrable Securities pursuant to a Shelf
Registration Statement.
6. MISCELLANEOUS.
(a) NO INCONSISTENT AGREEMENTS. The Company has not entered
into, and on or after the date of this Agreement will not enter into, any
agreement which is inconsistent with the rights granted to the Holders of
Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof. The rights granted to the Holders hereunder do not in any
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<PAGE> 16
way conflict with and are not inconsistent with the rights granted to the
holders of the Company's other issued and outstanding securities under any such
agreements.
(b) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of at least a majority in aggregate principal amount at Stated Maturity of the
outstanding Registrable Securities affected by such amendment, modification,
supplement, waiver or consent; PROVIDED, HOWEVER, that no amendment,
modification, supplement, waiver or consents to any departure from the
provisions of Section 5 hereof shall be effective as against any Holder of
Registrable Securities unless consented to in writing by such Holder.
(c) NOTICES. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder to
the Company by means of a notice given in accordance with the provisions of this
Section 6(c), which address initially is, with respect to the Placement Agent,
the address set forth in the Purchase Agreement; and (ii) if to the Company,
initially at the Company's address set forth in the Purchase Agreement and
thereafter at such other address, notice of which is given in accordance with
the provisions of this Section 6(c).
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; two
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied; and
on the next business day if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands, or other communications
shall be concurrently delivered by the person giving the same to the Trustee, at
the address specified in the Indenture.
(d) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including, without limitation and without the need for an
express assignment, subsequent Holders; PROVIDED that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms of the Purchase Agreement. If any
transferee of any Holder shall acquire Registrable Securities, in any manner,
whether by operation of law or otherwise, such Registrable Securities shall be
held subject to all of the terms of this Agreement, and by taking and holding
such Registrable Securities such person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement and such person shall be entitled to receive the benefits hereof. The
Placement Agent (in its capacity as Placement Agent) shall have no liability or
obligation to the Company with respect to any failure by a Holder to comply
with, or any breach by any Holder of, any of the obligations of such Holder
under this Agreement.
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<PAGE> 17
(e) PURCHASES AND SALES OF SECURITIES. The Company shall not,
and shall use its best efforts to cause its affiliates (as defined in Rule 405
under the 1933 Act) not to, purchase and then resell or otherwise transfer any
Securities.
(f) THIRD PARTY BENEFICIARY. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company, on the one
hand, and the Placement Agent, on the other hand, and each Holder shall have the
right to enforce such agreements directly to the extent it deems such
enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder.
(g) COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
(j) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
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<PAGE> 18
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
NEXTEL COMMUNICATIONS, INC.
By: /s/ Thomas J. Sidman
------------------------------
Name: Thomas J. Sidman
Title: Vice President
Confirmed and accepted as of
the date first above written:
MORGAN STANLEY & CO. INCORPORATED
By: /s/ Marc Montagner
--------------------------
Name: Marc Montagner
Title: Principal
17
<PAGE> 1
EXHIBIT 4.16
NEXTEL COMMUNICATIONS, INC.
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
------------------------------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
------------------------------------------------
Nextel Communications, Inc., a corporation organized and existing
under the General Corporation Law of the State of Delaware (the "Company"), does
hereby certify that, pursuant to authority conferred upon the board of directors
of the Company (or any committee of such board of directors, the "Board of
Directors") by its Restated Certificate of Incorporation, as amended
(hereinafter referred to as the "Certificate of Incorporation"), and pursuant to
the provisions of Section 151 of the General Corporation Law of the State of
Delaware, said Board of Directors with full power and authority to act on behalf
of the Board of Directors, at a meeting held on December 17, 1998, duly approved
and adopted the following resolution (the "Resolution"):
RESOLVED, that, pursuant to the authority vested in the Board of
Directors by its Certificate of Incorporation, the Board of Directors does
hereby create, authorize and provide for the issue of Zero Coupon Convertible
Preferred Stock due 2013, par value $0.01 per share, with an initial liquidation
preference of $253.675 per share (the "Initial Liquidation Preference"),
increasing to $1,000 per share on the Mandatory Redemption Date, consisting of
800,000 shares, having the designations, voting power, preferences and relative,
participating, optional and other special rights, qualifications, limitations
and restrictions thereof that are set forth in the Certificate of Incorporation
and in this Resolution as follows (the terms used herein, unless otherwise
defined herein, are used herein as defined in paragraph (q) hereof):
(a) DESIGNATION. There is hereby created out of the authorized and
unissued shares of preferred stock of the Company a class of preferred stock
designated as the "Zero Coupon Convertible Preferred Stock due 2013". The number
of shares constituting such class shall be 800,000 shares of Zero Coupon
Convertible Preferred Stock due 2013, consisting of an initial issuance of
591,308 shares of Zero Coupon Convertible Preferred Stock due 2013 (the
"Original Preferred Stock"), plus up to 147,827 additional shares of Preferred
Stock which may be issued to satisfy certain over-allotment option rights and
any additional shares of Preferred Stock which may be issued as payment of
Liquidated Damages (the "Additional Preferred Stock" and, together with the
Original Preferred Stock, the "Preferred Stock"). The liquidation preference of
the Preferred Stock shall increase to $1,000 per share on the Mandatory
Redemption Date.
<PAGE> 2
(b) RANK. The Preferred Stock shall, with respect to payments of
dividends, if any, and distributions upon the liquidation, winding-up and
dissolution of the Company, rank: (i) senior to (A) all classes of Common Shares
of the Company and (B) any capital stock of the Company that expressly provides
that it will be junior to the Preferred Stock as to dividends, if any, and
distributions upon the liquidation, winding-up and dissolution of the Company
(collectively referred to herein, together with all classes of Common Shares of
the Company, as the "Junior Securities"); (ii) on a parity with (A) the Class A
Preferred Stock (except with respect to the Special Payments (as defined in this
paragraph (b)), the Class B Preferred Stock (except with respect to the Special
Payments (as defined in this paragraph (b)), the Class C Preferred Stock, the
Series D Preferred Stock and the Series E Preferred Stock; and (B) each other
class of capital stock or series of preferred stock hereafter created by the
Board of Directors, the terms of which expressly provide that such class or
series will rank on a parity with the Preferred Stock as to dividend rights and
rights upon the liquidation, winding-up and dissolution of the Company
(collectively referred to as "Parity Securities"); (iii) junior in right of
payment (x) with respect to the dividend accruals and payments on the Class A
Preferred Stock and the $25,000,000 cash payment on the Class B Preferred Stock,
which are required under the terms of the Class A Preferred Stock and the Class
B Preferred Stock as in effect on the date of this Certificate of Designation
upon certain occurrences (such payments and dividend rights of the Class A
Preferred Stock and the Class B Preferred Stock, the "Special Payments"); and
(y) subject to Preferred Stockholder Approval Rights (as defined in subparagraph
(f)(ii)(A)), junior to each class of capital stock or series of preferred stock
hereafter created by the Company, the terms of which have been approved by the
Holders in accordance with subparagraph (f)(ii)(A) hereof and which expressly
provide that such class or series will rank senior to the Preferred Stock as to
dividend rights and rights upon liquidation, winding-up and dissolution of the
Company (collectively referred to as "Senior Securities").
(c) DIVIDENDS AND LIQUIDATION PREFERENCE. (i) Holders shall not be
entitled to receive dividends on the Preferred Stock. The Liquidation Preference
on the Preferred Stock will accrete from the Closing Date at an annual rate of
9.25%, compounded quarterly on each March 23, June 23, September 23 and December
23, commencing March 23, 1999 and shall be determined as set forth in the
definition of "Liquidation Preference." The Liquidation Preference shall cease
to accrete in respect of the Preferred Stock on the Mandatory Redemption Date or
on the date of its earlier redemption, repurchase or conversion unless the
Company shall have failed to pay the relevant redemption price or repurchase
price or effect any such conversion on the date fixed for any such redemption,
repurchase or conversion.
(ii) Notwithstanding anything else provided herein, in the event
(w) the Resale Registration Statement with respect to all Registrable Shares is
not declared effective on or prior to 180 days after Closing Date, (x) prior to
the end of the Effectiveness Period the Prospectus is unavailable for periods in
excess of those specified in Section 3(C) of the Registration Rights Agreement,
(y) the Company fails to make any filing within the periods required under
Section 3(A)(a)(ii)(x) of the Registration Rights Agreement or (z) any filing
required pursuant to Section 3(A)(a)(ii) (y) of the Registration Rights
Agreement is a post-effective amendment required to be declared under the
Securities Act and such amendment is not declared effective within 45 days of
the filing thereof (each, a "Registration Default"), then the Company shall pay
liquidated damages ("Liquidated Damages") to the holders of Preferred Stock and
Common Stock (but in the case of any Registration Default described in clauses
(x), (y) and (z), such Liquidated Damages shall only be paid to the Holders of
Preferred Stock and Common Stock that are Registrable Shares and that are, by
reason of such Registration Default, not entitled (or legally permitted) to
effect sales of such
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<PAGE> 3
Registrable Shares pursuant to the Resale Registration Statement) from and
including the day on which such Registration Default first occurs to (but
excluding) the day on which such Registration Default is cured. Such Liquidated
Damages shall accrue (i) in respect of each such share of Preferred Stock, at a
rate per annum equal to 0.5% of the Liquidation Preference thereof as of the
preceding Accrual Date, and (ii) in respect of each such share of Common Stock
issued upon conversion, repurchase or redemption of the Preferred Stock, at a
rate per annum equal to 0.5% of the Liquidation Preference of the Preferred
Stock divided by the Conversion Rate. Liquidated Damages may be paid, at the
option of the Company, in shares of Preferred Stock having an aggregate
Liquidation Preference equal thereto or in Common Stock having an aggregate
Market Price equal thereto; provided that the Company's right to pay the
Liquidated Damages in Preferred Stock or Common Stock is subject to the receipt
by the Transfer Agent of an opinion of counsel stating that such Common Stock
and/or Preferred Stock to be issued by the Company in payment of Liquidated
Damages, when issued and delivered pursuant to the terms hereof in payment of
any such Liquidated Damages, will be validly issued, fully paid and
nonassessable. Any such Liquidated Damages shall be payable on the next
succeeding Accrual Date following the occurrence of a Registration Default to
Holders of record on the fifth Business Day prior to such Accrual Date of the
shares of Preferred Stock and/or Common Stock entitled to receive such
Liquidated Damages.
(iii) Other than any amount constituting Special Payments, unless
the Liquidation Preference of the outstanding Preferred Stock has increased as
provided above and the Company is not in default in respect of its obligations
described in paragraphs (e)(ii), (g) or (h) hereof, (w) no dividend (other than
a dividend payable solely in shares of Junior Securities or options, warrants or
rights to purchase Junior Securities) shall be declared or paid upon, or any sum
set apart for the payment of dividends upon, any Parity Securities or Junior
Securities, (x) no other distribution shall be declared or made upon, or any sum
set apart for the payment of any distribution upon, any Parity Securities or
Junior Securities, (y) no Parity Securities or Junior Securities shall be
purchased, redeemed or otherwise acquired or retired for value (excluding an
exchange for shares of other Parity Securities or Junior Securities or a
purchase, redemption or other acquisition from the proceeds of a substantially
concurrent sale of Junior Securities, and the repurchase of Junior Securities
(including options, warrants or other rights to acquire such Junior Securities)
from employees or former employees of the Company or its subsidiaries for
consideration not to exceed $500,000 in the aggregate in any fiscal year) by the
Company or any of its subsidiaries, and (z) no monies shall be paid into or set
apart or made available for a sinking or other like fund for the purchase,
redemption or other acquisition or retirement for value of any Parity Securities
or Junior Securities by the Company or any of its subsidiaries.
(d) LIQUIDATION RIGHTS. (i) Upon any voluntary or involuntary
liquidation, dissolution or winding-up of the affairs of the Company, after
payment in full of the liquidation preference (and any accrued and unpaid
dividends) on any Senior Securities, each Holder will be entitled, on an equal
basis with the holders of any outstanding Parity Securities, to payment out of
the assets of the Company available for distribution of an amount equal to the
Liquidation Preference of the Preferred Stock held by such Holder, plus
Liquidated Damages (if any) to the date fixed for liquidation, dissolution,
winding up or reduction before any distribution is made on any Junior
Securities, including, without limitation, the Common Shares of the Company.
Neither the voluntary sale, conveyance, exchange or transfer (for cash, shares
of stock, securities or other consideration) of all or substantially all of the
property or assets of the Company nor the consolidation or merger of the Company
with or into one or more corporations will be deemed to be a voluntary or
involuntary liquidation, dissolution or winding-up of the Company, unless such
sale, conveyance, exchange,
3
<PAGE> 4
transfer, consolidation or merger shall be in connection with a liquidation,
dissolution or winding-up of the business of the Company or reduction or
decrease in capital stock.
(ii) If, upon any voluntary or involuntary liquidation, dissolution
or winding up of the Company, the amounts payable with respect to the Preferred
Stock and all other Parity Securities are not paid in full, the holders of
Preferred Stock and Parity Securities shall share equally and ratably (subject
to the preference of the holders of Class A Preferred Stock and Class B
Preferred Stock to receive any Special Payments then due and not paid in full)
in any distribution of assets of the Company in proportion to the full
liquidation preference and accumulated and unpaid dividends to which each is
entitled. After payment of the full amount of the Liquidation Preference and all
Liquidated Damages (if any) to which they are entitled, the Holders of Preferred
Stock shall not be entitled to any further participation in any distribution of
assets of the Company.
(e) REDEMPTION. (i) OPTIONAL REDEMPTION. (A) The Preferred Stock may be
redeemed (subject to contractual and other restrictions and the legal
availability of funds therefor) at any time on or after December 23, 2005 (any
such date, a "Redemption Date"), at the Company's option, in whole or in part,
in the manner provided in subparagraph (e)(iii), at a redemption price equal to
the Liquidation Preference thereof on the Redemption Date, upon not less than 35
days' nor more than 60 days' notice of redemption given by mail to the Holders;
provided that the Company may condition consummation of any such optional
redemption (if it is to be effected by a redemption of Preferred Stock for cash)
on the occurrence of any event and/or satisfaction of any condition identified
as such in the relevant Redemption Notice to the Holders, and may withdraw such
Redemption Notice (and thereby terminate its obligation to effect such optional
redemption) by written notice to that effect given by mail to the Holders at
least twenty (20) days prior to the relevant Redemption Date. If not so
withdrawn, such redemption will no longer be conditional. The Company may, at
its option, in lieu of paying the redemption price in cash, pay the redemption
price or a portion thereof in Common Stock or in a combination of cash and
Common Stock.
(B) In the event of a redemption pursuant to subparagraph (e)(i)(A)
hereof of only a portion of the then outstanding shares of Preferred Stock, the
Company shall effect such redemption as it determines, pro rata according to the
number of shares of Preferred Stock held by each Holder, provided that the
Company may redeem such shares held by any Holder of fewer than 100 shares of
Preferred Stock without regard to such pro rata redemption requirement, or by
lot, in each case, as may be determined by the Company in its sole discretion.
(ii) MANDATORY REDEMPTION. The Preferred Stock will be subject to
mandatory redemption (subject to the legal availability of funds therefor but
without regard to any contractual or other restrictions with respect thereto),
in the manner provided in paragraph (e)(iii) hereof, in whole on the Mandatory
Redemption Date, at a redemption price equal to the Liquidation Preference
thereof on the Mandatory Redemption Date. The Company may, at its option, in
lieu of paying the redemption price in cash, pay the redemption price or a
portion thereof in Common Stock or in a combination of cash and Common Stock.
(iii) PROCEDURES FOR REDEMPTION. (A) At least 35 days and not more
than 60 days prior to the date fixed for any redemption of the Preferred Stock,
written notice (the "Redemption Notice") shall be given by first-class mail,
postage prepaid, to each Holder of record on the record date fixed for such
redemption of the Preferred Stock at such Holder's address as the same appears
on the stock register of the Company, provided that no failure to give such
notice nor any deficiency
4
<PAGE> 5
therein shall affect the validity of the procedure for the redemption of any
shares of Preferred Stock to be redeemed except as to the Holder or Holders to
whom the Company has failed to give said notice or except as to the Holder or
Holders whose notice was defective. The Redemption Notice shall state:
(1) whether the redemption is pursuant to subparagraph (e)(i)(A) or
(e)(ii) hereof;
(2) the redemption price expressed as a percentage of the
Liquidation Preference;
(3) whether all or less than all the outstanding shares of
Preferred Stock are to be redeemed and the total number of shares of
Preferred Stock being redeemed;
(4) the number of shares of Preferred Stock held, as of the
appropriate record date, by the Holder that the Company intends to
redeem;
(5) the date fixed for redemption;
(6) that the Holder is to surrender to the Company, at the place or
places where certificates for shares of Preferred Stock are to be
surrendered for redemption, in the manner and at the price designated,
his certificate or certificates representing the shares of Preferred
Stock to be redeemed; and
(7) that the Liquidation Preference of Preferred Stock to be
redeemed shall cease to accrete on such Redemption Date unless the
Company defaults in the payment of the redemption price.
(B) Each Holder shall surrender the certificate or certificates
representing such shares of Preferred Stock to the Company, duly endorsed, in
the manner and at the place designated in the Redemption Notice. The full
redemption price for such shares of Preferred Stock shall be payable in cash
and/or Common Stock, at the option of the Company, to the Person whose name
appears on such certificate or certificates as the owner thereof, and each
surrendered certificate shall be canceled and retired. In the event that less
than all of the shares represented by any such certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares.
(C) On and after any Redemption Date, provided that the Company has
made available at the office of the Transfer Agent a sufficient amount of cash
or securities to effect the redemption, the Liquidation Preference will cease to
accrete on the Preferred Stock called for redemption, such shares shall no
longer be deemed to be outstanding and all rights of the holders of such shares
as Holders shall cease except the right to receive the cash and/or Common Stock
deliverable upon such redemption, without interest from the Redemption Date.
(f) VOTING RIGHTS. (i) Holders, except as otherwise required under
Delaware law or as set forth below, shall not be entitled or permitted to vote
on any matter required or permitted to be voted upon by the stockholders of the
Company.
(ii) (A) So long as any shares of Preferred Stock are outstanding,
the Company shall not authorize, create (by way of reclassification or
otherwise) or issue any Senior Securities or any obligation or security
convertible or exchangeable into or evidencing a right to purchase, shares
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<PAGE> 6
of any class or series of Senior Securities without the affirmative vote or
consent of the Holders of a majority of the then outstanding shares of Preferred
Stock, except that the Company may issue shares of Senior Securities without the
approval of such Holders (1) in respect of any dividend or payment obligations
that constitute Special Payments or (2) in exchange for, or the proceeds of
which are used to redeem or repurchase, all shares of Preferred Stock then
outstanding (or less than all such shares pursuant to a partial redemption made
in accordance with subparagraph (e)(i) or repurchase that is made available to
all Holders on a pro rata basis) or any debt of the Company (such approval
rights, herein referred to as "Preferred Stockholder Approval Rights"); provided
that, solely in the case of Senior Securities issued in exchange for, or the
proceeds of which are used to redeem or repurchase, less than all shares of
Preferred Stock then outstanding, the aggregate liquidation preference of such
Senior Securities shall not exceed the aggregate liquidation preference of,
premium and accrued and unpaid dividends on, and expenses in connection with the
refinancing of, the shares of Preferred Stock so exchanged, redeemed or
repurchased.
(B) So long as any shares of the Preferred Stock are outstanding,
the Company shall not amend this Certificate of Designation so as to affect
adversely the specified rights, preferences, privileges or voting rights of
Holders, or to authorize the issuance of any additional shares of Preferred
Stock, without the affirmative vote or, notwithstanding any contrary provisions
of the By-Laws, written consent of Holders of at least a majority of the
outstanding shares of Preferred Stock, voting or consenting, as the case may be,
separately as one class, given in person or by proxy, either in writing or by
resolution adopted at an annual or special meeting.
(C) Except as set forth in subparagraph (f)(ii)(B) hereof, (1) the
creation, authorization or issuance of any shares of any Junior Securities or
Parity Securities, or (2) the increase or decrease in the amount of authorized
capital stock of any class, including any preferred stock, shall not require the
consent of the Holders and shall not, unless not complying with subparagraph
(f)(ii)(B) hereof, be deemed to affect adversely the rights, preferences,
privileges or voting rights of the Holders.
(iii) (A) If (1) the Company fails to comply with its obligations
set forth in paragraphs (g) or (h) hereof or (2) the Company defaults in the
payment of the Liquidation Preference of any share of Preferred Stock payable on
the Mandatory Redemption Date, then the number of directors constituting the
Board of Directors shall be immediately and automatically adjusted to permit the
Holders of a majority of the then outstanding shares of Preferred Stock, voting
separately as one class, to elect two directors. Each event described in clauses
(1) and (2) of this subparagraph (f)(iii)(A) is a "Voting Rights Triggering
Event."
(B) The right of the Holders voting separately as one class to
elect two directors as described in subparagraph (f)(iii)(A) shall continue
until such time as (1) in the event such right arises due to failure by the
Company to comply with its obligations set forth in paragraphs (g) or (h), the
Company remedies any such failure and (2) in the event such right arises due to
a default by the Company in the payment of the Liquidation Preference of any
share of Preferred Stock on the Mandatory Redemption Date, the Company remedies
such default, at which time the term of any directors elected pursuant to
subparagraph (f)(iii)(A) hereof shall terminate and the number of directors
constituting the Board of Directors shall be reduced to the number necessary to
reflect the termination of the right of the Holders to elect directors, subject
always to the same provisions for the renewal and divestment of such special
voting rights in the case of any future Voting Rights Triggering Event. At any
time after voting power to elect directors shall have become vested and
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be continuing in the Holders pursuant to subparagraph (f)(iii)(A) hereof, or if
vacancies shall exist in the offices of directors elected by the Holders, a
proper officer of the Company may, and upon the written request of the Holders
of record of at least 25% of outstanding shares of Preferred Stock then
outstanding addressed to the Secretary of the Company shall, call a special
meeting of the Holders, for the purpose of electing the directors which such
Holders are entitled to elect. If such meeting shall not be called by the proper
officer of the Company within 30 days after personal service of said written
request upon the Secretary of the Company, or within 30 days after mailing the
same within the United States by certified mail, addressed to the Secretary of
the Company at its principal executive offices, then the Holders of record of at
least 25% of the outstanding shares of Preferred Stock may designate in writing
one of their number to call such meeting at the expense of the Company, and such
meeting may be called by the Person so designated upon the notice required for
the annual meetings of stockholders of the Company and shall be held at the
place for holding the annual meetings of stockholders or such other place in the
United States as shall be designated in such notice. Notwithstanding the
provisions of this subparagraph (f)(iii)(B), no such special meeting shall be
called if any such request is received less than 40 days before the date fixed
for the next ensuing annual or special meeting of stockholders of the Company.
Any Holder so designated shall have, and the Company shall provide, access to
the lists of Holders for purposes of calling a meeting pursuant to the
provisions of this subparagraph (f)(iii)(B).
(C) At any meeting held for the purpose of electing directors at
which the Holders shall have the right, voting separately as one class, to elect
directors as aforesaid, the presence in person or by proxy of Holders of at
least a majority of the outstanding Preferred Stock shall be required to
constitute a quorum of such Preferred Stock.
(D) Any vacancy occurring in the office of a director elected by
the Holders may be filled by the remaining director elected by such Holders
unless and until such vacancy shall be filled by such Holders.
(iv) In any case in which the Holders shall be entitled to vote
pursuant to this paragraph (f) or pursuant to Delaware law, each Holder shall be
entitled to one vote for each share of Preferred Stock held. Any action that may
be taken hereunder by the Holders at a meeting may be taken by written consent
of a majority of the Holders.
(g) CHANGE OF CONTROL. (i) A Change of Control shall be deemed to have
occurred at such time after the Closing Date if there shall occur:
(x) the acquisition by any Person of beneficial ownership, directly
or indirectly, through a purchase, merger or other acquisition
transaction or series of transactions, of shares of capital stock of
the Company entitling such Person to exercise 50% or more of the total
voting power of all shares of capital stock of the Company entitled to
vote generally in elections of directors, other than any such
acquisition by the Company, any subsidiary of the Company or any
employee benefit plan of the Company; or
(y) any consolidation of the Company with, or merger of the Company
into, any other Person, any merger of another Person into the Company,
or any sale or transfer of all or substantially all of the assets of
the Company to another Person (other than (a) any such transaction (A)
which does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock and (B) pursuant to
which holders of
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<PAGE> 8
Common Stock immediately prior to such transaction have the entitlement
to exercise, directly or indirectly, 50% or more of the total voting
power of all shares of capital stock (or equivalent unit of ownership
interest) entitled to vote generally in the election of directors (or
other equivalent governing body) of the continuing or surviving Person
immediately after such transaction and (b) any merger which is effected
solely to change the jurisdiction of incorporation of the Company and
results in a reclassification, conversion or exchange of outstanding
shares of Common Stock solely into Common Shares of the surviving
entity in such merger);
provided, however, that a Change of Control shall not be deemed to have occurred
if either (a) the closing price per share of the Common Stock for any five
Trading Days within the period of 10 consecutive Trading Days ending immediately
after the later of the Change of Control or the public announcement of the
Change of Control (in the case of a Change of Control under clause (x) above) or
ending immediately before the Change of Control (in the case of a Change of
Control under clause (y) above) shall equal or exceed 105% of the effective
conversion price in effect on each such Trading Day (i.e., the Liquidation
Preference on such Trading Day, divided by the Conversion Rate in effect on such
Trading Day), or (b) all of the consideration (excluding cash payments for
fractional shares) in the transaction or transactions constituting the Change of
Control consists of Common Shares (or equivalent securities) traded on a
national or regional securities exchange or quoted on the NNM and as a result of
such transaction or transactions the Preferred Stock becomes convertible solely
into such Common Shares (or equivalent securities). "Beneficial ownership" shall
be determined in accordance with Rule 13d-3 promulgated by the Commission under
the Exchange Act.
(ii) Within 30 days after the occurrence of any Change of Control,
the Company shall mail a notice (by first class mail, postage prepaid) to each
Holder (the "Change of Control Company Notice") with a copy to the Transfer
Agent stating that a Change of Control has occurred and whether a special
conversion right or special tender right has arisen as a result thereof.
(iii) (A) If (x) a Change of Control occurs before December 23,
2005 or any earlier refinancing of, or termination of all covenants with respect
to, the Old Senior Notes and (y) an offer to acquire all outstanding shares of
Preferred Stock for cash on a date (an "Acquisition Date") that is not more than
45 days after the date of the Change of Control at a tender price equal to the
Liquidation Preference thereof on such Acquisition Date is not made or all
Preferred Stock validly tendered and not withdrawn on such Acquisition Date is
not acquired in such offer, then the Company shall give to each Holder (by first
class mail, postage prepaid) on or prior to such 45th day, a notice (the
"Conversion Adjustment Notice") which shall state that the Conversion Rate of
the Preferred Stock will be adjusted on the date (the "Special Conversion
Adjustment Date") that is 15 Trading Days after the date the Conversion
Adjustment Notice is given as follows:
(1) if, in connection with a transaction described in subparagraph
(g)(i)(y) (and after giving effect to any adjustment to the Conversion
Rate under paragraph (j) below) the Preferred Stock would be
convertible into cash, the Conversion Rate will be adjusted so that
each share of Preferred Stock then outstanding will be convertible into
such number of shares of Common Stock as shall be equal to the
Liquidation Preference of such Preferred Stock on the Special
Conversion Adjustment Date divided by the amount of cash that would
have been payable per share of Common Stock in such transaction (such
that each share of Preferred
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<PAGE> 9
Stock will thereafter be convertible into the amount of cash equal to
its Liquidation Preference on the Special Conversion Adjustment Date);
(2) if, following such Change of Control (and after giving effect
to any adjustment to the Conversion Rate under paragraph (j) below),
the Preferred Stock is convertible into Common Stock that is traded on
a United States national or regional stock exchange or quoted on the
NNM and either a shelf registration statement with respect to resales
of such Common Stock is effective and available or the Common Stock is
otherwise freely tradeable (assuming the Holder thereof is not an
Affiliate of the Company) without registration under the Securities
Act, the Conversion Rate will be adjusted so that each share of
Preferred Stock then outstanding will be convertible into such number
of shares of Common Stock as shall be equal to the Liquidation
Preference of such Preferred Stock on the Special Conversion Adjustment
Date divided by the Reference Price of the Common Stock; or
(3) if, following the Change of Control (and after giving effect to
any adjustment to the Conversion Rate as described under paragraph (j)
below), the Preferred Stock is convertible into (a) Common Stock that
is not traded on a United States national or regional stock exchange or
quoted on the NNM or a shelf registration statement with respect to
resales of such Common Stock is not effective and available or the
Common Stock is not otherwise freely tradeable without registration
under the Securities Act (other than as a result of the holder being an
Affiliate of the Company), or (b) property other than cash or Common
Stock, the Conversion Rate will be adjusted so that each share of
Preferred Stock then outstanding will be convertible into such number
of shares of Common Stock as shall be equal to the Liquidation
Preference of such Preferred Stock on the Special Conversion Adjustment
Date divided by the Discounted Reference Price of the Common Stock.
Notwithstanding the foregoing, the special conversion adjustment
set forth in this subparagraph (g)(iii) shall not be made if it would result in
a lower Conversion Rate.
(B) To exercise the special conversion rights set forth in
subparagraph (g)(iii), a Holder must comply with the provisions described under
subparagraph (j)(iii) below on or before the 30th day after the Special
Conversion Adjustment Date (the "Special Conversion Expiration Date"). If the
special conversion rights are not exercised on or prior to the Special
Conversion Expiration Date, the Conversion Rate of the Preferred Stock remaining
outstanding will be adjusted immediately following the Special Conversion
Expiration Date to the Conversion Rate in effect immediately prior to the
Special Conversion Adjustment Date (and to extent not otherwise adjusted, giving
effect to any adjustment to the Conversion Rate set forth under paragraph (j)
below as a result events occurring after the date of the Change of Control).
(iv) (A) If a Change of Control occurs on or after December 23,
2005 or any earlier refinancing of, or termination of all covenants with respect
to, the Old Senior Notes the Company shall be required to make an offer to each
Holder to acquire any or all of such Holder's Preferred Stock on a date (an
"Acquisition Date") that is not more than 45 days after the date of the Change
of Control at a tender price equal to the Liquidation Preference thereof on the
Acquisition Date. The Company may, at its option, in lieu of paying the tender
price in cash, pay the tender price or a portion thereof in Common Stock or in a
combination of cash and Common Stock.
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(B) To exercise the special tender right set forth in subparagraph
(g) (iv), a Holder must deliver on or before the 30th day after the date of the
Change of Control Company Notice written notice to the Transfer Agent of the
Holder's exercise of such right, together with the Preferred Stock certificates
with respect to which the right is being exercised. Any such notice by the
Holder may be withdrawn by the Holder by a written notice of withdrawal
delivered to the paying agent prior to the close of business on the Acquisition
Date. The notice of withdrawal shall state the number of shares of Preferred
Stock and the certificate numbers of the Preferred Stock certificates as to
which the withdrawal notice relates and the number of shares, if any, which
remain subject to the Holder's notice.
(C) With respect to any Change of Control occurring after December
23, 2005 or any earlier refinancing of, or termination of all covenants with
respect to, the Old Senior Notes, the Change of Control Company Notice shall
also specify (w) the tender price and the purchase date, which shall be 45 days
after the date of the Change of Control Company Notice (the "Change of Control
Payment Date"); (x) that the Liquidation Preference of any shares of Preferred
Stock not tendered or converted will continue to accrete in accordance with the
terms hereof; (y) that, unless the Company defaults in the payment of the tender
price, the Liquidation Preference of all shares of Preferred Stock accepted for
payment pursuant to this paragraph (g) shall cease to accrete on and after the
Change of Control Payment Date and all rights of the Holders of Preferred Stock
accepted for payment shall terminate on and after the Change of Control Payment
Date and (z) a description of the procedures to be followed by such Holder in
order to have its shares of Preferred Stock repurchased.
(D) On the Change of Control Payment Date, the Company shall, to
the extent lawful, (1) accept for payment shares of Preferred Stock tendered
pursuant to this paragraph (g) and (2) promptly mail to each Holder of Preferred
Stock so accepted payment in an amount equal to the tender price for such shares
and unless the Company defaults in the payment for the shares of Preferred Stock
tendered pursuant to this paragraph (g), the Liquidation Preference shall cease
to accrete with respect to the shares of Preferred Stock tendered and all rights
of Holders of such tendered shares shall terminate, except for the right to
receive payment therefor, on the Change of Control Payment Date. The Company
shall publicly announce the results of its offer to purchase Preferred Stock
pursuant to this paragraph (g) on or as soon as practicable after the Change of
Control Payment Date.
(v) (A) The Company shall comply with Rule 13e-4 under the Exchange
Act and any securities laws and regulations to the extent such laws and
regulations are applicable to the repurchase of shares of the Preferred Stock in
connection with a Change of Control.
(B) Upon determination of the adjusted Conversion Rate pursuant to
subparagraph (g)(iii) or, in the event the Company elects to pay all or a
portion of the tender price in Common Stock, upon determination of the actual
number of shares of Common Stock to be paid in lieu of cash in accordance with
paragraph (i), the Company will publicly announce such determination and file a
Current Report on Form 8-K with the Commission.
(C) If the Transfer Agent holds money or securities sufficient to
pay the tender price on the Business Day following the Acquisition Date, then,
on and after such date, each share of Preferred Stock tendered to the Company
will cease to be outstanding and the Liquidation Preference thereon shall cease
to accrete whether or not book-entry transfer of such Preferred Stock
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<PAGE> 11
is made or such Preferred Stock is delivered to the Transfer Agent, and all
other rights of the Holder thereof shall terminate (other than the right to
receive the tender price, without interest, upon book-entry transfer or delivery
of the Preferred Stock certificate).
(h) CONVERSION OR TENDER AT THE OPTION OF THE HOLDER. (i) The Company
shall (subject to the legal availability of funds therefor) make an offer to
each Holder to purchase on December 23, 2005, and December 23, 2008 (each, a
"Tender Date"), any outstanding shares of Preferred Stock upon delivery of a
written notice (a "Notice") by the Holder to the office of the Transfer Agent at
any time from the opening of business on the date that is 20 Business Days prior
to such Tender Date until the close of business on such Tender Date, which
Notice has not been withdrawn.
(ii) (A) The Notice shall state (w) the certificate numbers of the
shares of Preferred Stock to be delivered by the Holder thereof for acquisition
by the Company; (x) the number of shares of Preferred Stock to be acquired; (y)
that such Preferred Stock is to be acquired by the Company pursuant to the
applicable provisions of this Certificate of Designation and (z) if the Company
elects to pay the tender price to be paid as of such Tender Date in Common
Stock, in whole or in part, but such tender price is ultimately to be paid to
such Holder entirely in cash because any of the conditions to payment of the
tender price (or portion thereof) in Common Stock set forth in paragraph (i)
below is not satisfied by the Tender Date whether such Holder elects (1) to
withdraw such Notice as to some or all of the Preferred Stock to which it
relates (stating the certificate numbers of the shares of Preferred Stock as to
which such withdrawal shall relate), or (2) to receive cash in respect of the
entire tender price for all shares of Preferred Stock subject to such Notice. If
the Holder fails to indicate, in the Notice and in any written notice of
withdrawal relating to such Notice, such Holder's choice with respect to the
election described in clause (z) above, such Holder shall be deemed to have
elected to receive cash in respect of the entire tender price for all shares of
Preferred Stock subject to such Notice in such circumstances.
(B) Any Notice may be withdrawn by the Holder by a written notice
of withdrawal delivered to the Transfer Agent prior to the close of business on
the Tender Date. The notice of withdrawal shall state the certificate numbers of
the shares of Preferred Stock as to which the withdrawal notice relates and the
number of shares, if any, which remain subject to the Notice.
(iii) (A) The tender price payable in respect of a share of
Preferred Stock shall be equal to the Liquidation Preference on the Tender Date.
The Company may, at its option, in lieu of paying the tender price in cash, pay
the tender price or a portion thereof in Common Stock or in a combination of
cash and Common Stock.
(B) Payment of the tender price for Preferred Stock for which a
Notice has been delivered and not withdrawn is conditioned upon book-entry
transfer or delivery of such Preferred Stock (together with necessary
endorsements) to the Transfer Agent at its office in the Borough of Manhattan,
The City of New York, or any other office of the paying agent maintained for
such purpose, at any time (whether prior to, on or after the Tender Date) after
delivery of such Notice. Payment of the tender price for such will be made
promptly following the later of the Tender Date or the time of book-entry
transfer or delivery of such Preferred Stock. If the Transfer Agent holds money
or securities sufficient to pay the tender price of such Preferred Stock on the
Business Day following the Tender Date, then, on and after such date, such
Preferred Stock will cease to be outstanding and the Liquidation Preference on
such Preferred Stock will cease to accrete whether
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<PAGE> 12
or not book-entry transfer of such Preferred Stock is made or such Preferred
Stock is delivered to the Transfer Agent, and all other rights of the Holder
shall terminate (other than the right to receive the tender price, without
interest, upon delivery or book - entry transfer of the Preferred Stock).
(iv) The Company will comply with the provisions of Rule 13e-4 of
the Exchange Act and any other tender offer rules under the Exchange Act which
may then be applicable and will file a Schedule 13E-4 or any other schedule
required thereunder in connection with any offer by the Company to acquire
Preferred Stock at the option of Holders pursuant to subparagraph (h)(i).
(i) PAYMENTS IN COMMON STOCK. (i) If the Company elects to pay any
redemption price or tender price, in whole or in part, in Common Stock, the
number of shares to be delivered in respect of the portion of such redemption
price or tender price to be paid in Common Stock shall be equal to such portion
of the redemption price or tender price divided by the Market Price of the
Common Stock. No fractional shares of Common Stock will be delivered upon any
acquisition of Preferred Stock by the Company through the delivery of Common
Stock in payment, in whole or in part, of the redemption price or tender price.
Instead, the Company, at its option, will either round up to full shares or pay
cash based on the Market Price for all fractional shares of Common Stock. The
Company may elect to pay the redemption price or tender price in Common Stock
only if the Common Stock is listed on a United States national or regional stock
exchange or quoted by the NNM.
(ii) At least 23 Trading Days prior to any Redemption Date,
Acquisition Date or Tender Date, the Company must give notice (a "Company
Notice") to the Holders of its intention to pay the redemption price or tender
price, or any portion thereof, in Common Stock (specifying the percentage
thereof). Upon determination of the actual number of shares of Common Stock in
accordance with the foregoing provisions, the Company will publicly announce
such determination and file a Current Report on Form 8-K with the Commission.
(iii) The Company's right to pay the redemption price or tender
price (or a portion thereof) in Common Stock is subject to: (1) the Company
having given timely Company Notice of its election to purchase all or a
specified percentage of the Preferred Stock with Common Stock as provided
herein; (2) the registration of resales of the Common Stock under the Securities
Act, if required for the Common Stock to be freely tradeable (assuming the
Holder thereof is not an Affiliate of the Company); (3) the issuance of such
Common Stock being in compliance with other applicable federal and state
securities laws, if any; and (4) the receipt by the Transfer Agent of an
officers' certificate and an opinion of counsel each stating that (A) the terms
of the issuance of the Common Stock are in conformity with the terms hereof and
(B) the shares of Common Stock to be issued by the Company in payment of the
specified percentage of the tender price or redemption price have been duly
authorized and, when issued and delivered pursuant to the terms hereof in
payment of the tender price or redemption price will be validly issued, fully
paid and nonassessable, and, in the case of such officers' certificate, stating
that conditions (1), (2) and (3) above have been satisfied (and setting forth
the Sale Price of a share of Common Stock on each Trading Day during the period
during which the Market Price is calculated and ending on the Acquisition Date,
Tender Date or Redemption Date as applicable) and, in the case of such opinion
of counsel, stating that conditions (2) and (3) above have been satisfied.
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If such conditions are not satisfied by the applicable Acquisition
Date, Redemption Date or Tender Date, the Company will pay the tender price or
redemption price on such Acquisition Date, Redemption Date or Tender Date
entirely in cash (except as provided in paragraph (g)).
(j) CONVERSION. (i) A Holder may convert its Preferred Stock into
Common Stock, unless previously redeemed or repurchased, at any time prior to
the close of business on December 23, 2013; provided that if a share of
Preferred Stock is called for redemption, the Holder may convert it only until
the close of business on the applicable Redemption Date unless the Company
defaults in the payment of the redemption price. Preferred Stock which a Holder
has tendered for acquisition by the Company or, as described in paragraph (g), a
third party acquiror pursuant to an offer to acquire, may be converted only if
such Preferred Stock is withdrawn in accordance with the terms of such offer.
The initial Conversion Rate (the "Conversion Rate") is 9.7441
shares of Common Stock per share of Preferred Stock, subject to adjustment upon
the occurrence of certain events, as described below. As promptly as practicable
on or after the Conversion Date, the Company will issue and deliver to the
conversion agent a certificate or certificates for the number of full shares of
Common Stock issuable upon conversion, with any fractional shares rounded up to
full shares or, at the Company's option, paid in cash in lieu of any fraction of
a share, based on the Sale Price of the Common Stock on the Trading Day
preceding the Conversion Date.
(ii) The Company's delivery to the Holder of the number of shares
of Common Stock into which the Preferred Stock is convertible (together with the
cash payment, if any, in lieu of fractional shares of Common Stock) will be
deemed to satisfy the Company's obligation to pay the Liquidation Preference on
the Preferred Stock to the Conversion Date.
(iii) To convert certificated Preferred Stock into Common Stock, a
Holder must (i) complete and manually sign the conversion notice on the back of
the Preferred Stock certificate (or complete and manually sign a facsimile
thereof) and deliver such notice to the Transfer Agent, (ii) surrender the
Preferred Stock certificate to the Transfer Agent, (iii) if required, furnish
appropriate endorsements and transfer documents, and (iv) if required, pay all
transfer or similar taxes. The date on which all of the foregoing requirements
have been satisfied is the "Conversion Date."
(iv) All shares of Common Stock delivered upon conversion of the
Preferred Stock shall and validly issued and fully paid and nonassessable and
shall be free from preemptive rights and free of any lien or adverse claim.
(v) The Conversion Rate shall be subject to adjustments from time
to time as set forth in subparagraph (g)(iii) and as follows:
(A) If the Company shall hereafter pay a dividend or make a
distribution in Common Stock to all holders of any outstanding class or
series of Common Shares of the Company, the Conversion Rate shall be
increased by multiplying such Conversion Rate by a fraction of which
the denominator shall be the number of shares of Common Stock
outstanding (including the number of shares issuable upon conversion of
all then outstanding shares of Class B Common Stock, Class A Preferred
Stock, Class B Preferred Stock and Class C Preferred Stock), at the
close of business on the Record Date (as defined in
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subparagraph (viii) below) fixed for such dividend or distribution and
of which the numerator shall be the sum of such number of outstanding
shares of Common Stock and the total number of shares of Common Stock
constituting such dividend or other distribution, such increase to
become effective immediately after the opening of business on the day
following the Record Date fixed for the determination of shareholders
entitled to receive such dividend or distribution. If any dividend or
distribution of the type described in this subparagraph (v)(A) is
declared but not so paid or made, the Conversion Rate shall again be
adjusted to the Conversion Rate which would then be in effect if such
dividend or distribution had not been declared.
(B) If the Company shall offer or issue rights, options or warrants
to all holders of its outstanding Common Stock entitling them to
subscribe for or purchase Common Stock at a price per share less than
the average market price (determined as provided in subparagraph
(j)(viii) below) on the Record Date fixed for the determination of
shareholders entitled to receive such rights, options or warrants, the
Conversion Rate shall be adjusted so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect at the opening
of business on the date after such Record Date by a fraction of which
the denominator shall be the number of shares of Common Stock
outstanding (including the number of shares issuable upon conversion of
all then outstanding shares of Class B Common Stock, Class A Preferred
Stock, Class B Preferred Stock and Class C Preferred Stock) at the
close of business on the Record Date plus the number of shares of
Common Stock which the aggregate subscription or purchase price of the
total number of shares of Common Stock subject to such rights, options
or warrants would purchase at such average market price and of which
the numerator shall be the number of shares of Common Stock outstanding
(including the number of shares issuable upon conversion of all then
outstanding shares of Class B Common Stock, Class A Preferred Stock,
Class B Preferred Stock and Class C Preferred Stock) at the close of
business on the Record Date plus the total number of additional shares
of Common Stock subject to such rights, options or warrants for
subscription or purchase. Such adjustment shall become effective
immediately after the opening of business on the day following the
Record Date fixed for determination of shareholders entitled to
purchase or receive such rights, options or warrants. To the extent
that shares of Common Stock are not delivered pursuant to such rights,
options or warrants, upon the expiration or termination of such rights,
options or warrants the Conversion Rate shall again be adjusted to be
the Conversion Rate which would then be in effect had the adjustments
made upon the issuance of such rights, options or warrants been made on
the basis of delivery of only the number of shares of Common Stock
actually delivered. If such rights, options or warrants are not so
issued, the Conversion Rate shall again be adjusted to be the
Conversion Rate which would then be in effect if such Record Date fixed
for the determination of shareholders entitled to receive such rights,
options or warrants had not been fixed. In determining whether any
rights, options or warrants entitle the holders to subscribe for or
purchase Common Stock at less than such average market price, and in
determining the aggregate offering price of such shares of Common
Stock, there shall be taken into account any consideration received for
such rights, options or warrants, with the value of such consideration,
if other than cash, to be determined by the Board of Directors. In lieu
of the foregoing adjustment the Company may make adequate provision so
that each Holder shall have the right to receive upon conversion of a
share of Preferred Stock (or any portion thereof) the amount of such
rights, options or warrants such Holder would have
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<PAGE> 15
received had such Holder converted such share of Preferred Stock (or
portion thereof) immediately prior to such Record Date.
(C) If the outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Rate in
effect at the opening of business on the day following the day upon
which such subdivision becomes effective shall be proportionately
increased and, conversely, if the outstanding shares of Common Stock
shall be combined into a smaller number of shares of Common Stock, the
Conversion Rate in effect at the opening of business on the day
following the day upon which such combination becomes effective shall
be proportionately reduced, such increase or reduction, as the case may
be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination
becomes effective.
(D) In case the Company shall issue any Common Stock or Right (as
defined in subparagraph (viii) below) (excluding (i) any Right issued
in any of the transactions described in subparagraphs (v)(A) or (v)(B)
above, (ii) Common Stock issued pursuant to (x) any Rights outstanding
on the Closing Date or (y) a Right, if on the date such Right was
issued, the exercise, conversion or exchange price per share of Common
Stock with respect thereto was at least equal to the then average
market price of the Common Stock and (iii) any Common Stock or Right
issued as consideration when any corporation or business is acquired,
merged into or becomes part of the Company or a subsidiary of the
Company in an arm's-length transaction between the Company and another
Person approved by the Board of Directors of the Company and, if such
Person is an Affiliate of the Company, approved by a majority of the
members of the Board of Directors who are neither (A) officers or
employees of the Company nor (B) Affiliates of such other Person) at a
price per share of Common Stock (determined in the case of any such
Right, by dividing (x) the total consideration receivable by the
Company in consideration of the sale and issuance of such Right, plus
the total consideration payable to the Company upon exercise,
conversion or exchange thereof, by (y) the total number of shares of
Common Stock covered by such Right) that is lower than the average
market price per share of Common Stock in effect immediately prior to
such sale or issuance, then the number of shares of Common Stock
thereafter issuable upon conversion of each share of Preferred Stock
shall be determined by multiplying the Conversion Rate by a fraction,
the numerator of which shall be the number of shares of Common Stock
outstanding (including the number of shares issuable upon conversion of
all then outstanding shares of Class B Common Stock, Class A Preferred
Stock, Class B Preferred Stock and Class C Preferred Stock) immediately
after such sale or issuance and the denominator of which shall be the
number of shares of Common Stock outstanding (including the number of
shares issuable upon conversion of all then outstanding shares of Class
B Common Stock, Class A Preferred Stock, Class B Preferred Stock and
Class C Preferred Stock) immediately prior to such sale or issuance
plus the number of shares of Common Stock which the aggregate
consideration received (determined as provided below) for such sale or
issuance would purchase at such average market price per share of
Common Stock. For purposes of this subparagraph (v)(D), the number of
shares of Common Stock which the holder of any such Right shall be
entitled to subscribe for or purchase shall be deemed to be issued and
outstanding as of the date of such sale and issuance and the
consideration received by the Company therefor shall be deemed to be
the consideration received by the Company for such Right, plus the
consideration or premiums stated in such Right to be paid for the
Common Stock covered thereby. In case the Company
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<PAGE> 16
shall sell and issue Common Stock or any Right for a consideration
consisting, in whole or in part, of property other than cash or its
equivalent, then in determining the "price per share of Common Stock"
and the "consideration received by the Company" for purposes of the
first sentence of this subparagraph (v)(D), the Board of Directors of
the Company shall determine, in good faith, the fair value of said
property, which determination shall be evidenced by a resolution of the
Board of Directors. In case the Company shall sell and issue any Right
together with one or more other securities as part of a unit at a price
per unit, then in determining the "price per share of Common Stock" and
the "consideration received by the Company" for purposes of the first
sentence of this subparagraph (v)(D), the Board of Directors of the
Company shall determine, in good faith, the fair value of the Right
then being sold as part of such unit.
(E) If the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock evidences of its indebtedness, shares
of any class of capital stock, or other property (including securities,
but excluding (i) any rights, options or warrants referred to in
subparagraph (v)(B) of this paragraph (j), (ii) any dividend or
distribution paid exclusively in cash, (iii) any dividend or
distribution referred to in subparagraph (v)(A) of this paragraph (j)
and (iv) any merger or consolidation to which subparagraph (l)(i)
applies), the Conversion Rate shall be adjusted by multiplying the
Conversion Rate in effect immediately prior to the close of business on
the Record Date fixed for the determination of shareholders entitled to
receive such distribution by a fraction of which the denominator shall
be the average market price per share of the Common Stock on such
Record Date less the then Fair Market Value (as determined by the Board
of Directors, whose determination shall be conclusive and described in
a resolution of the Board of Directors) of the portion of the assets,
shares or evidences of indebtedness so distributed applicable to one
share of Common Stock and the numerator shall be such average market
price per share of the Common Stock, such adjustment to become
effective immediately prior to the opening of business on the day
following such Record Date; provided, however, that, in the event the
then Fair Market Value (as so determined) of the portion of the
distributed securities so distributed applicable to one share of Common
Stock is equal to or greater than the average market price of the
Common Stock on the Record Date, in lieu of the foregoing adjustment,
adequate provision shall be made so that each Holder shall have the
right to receive upon conversion of a share of Preferred Stock (or any
portion thereof) the amount of distributed securities such Holder would
have received had such Holder converted such share of Preferred Stock
(or portion thereof) immediately prior to such Record Date. If such
dividend or distribution is not so paid or made, the Conversion Rate
shall again be adjusted to be the Conversion Rate which would then be
in effect if such dividend or distribution had not been declared. If
the Board of Directors determines the Fair Market Value of any
distribution for purposes of this subparagraph (E) by reference to the
actual or when issued trading market for any securities comprising such
distribution, it must in doing so consider the prices in such market
over the same period used in computing the average market price per
share pursuant to subparagraph (ix)(b).
(F) If the Company shall, by dividend or otherwise, make a Cash
Distribution in an aggregate amount that, combined together with (1)
the aggregate amount of any other Cash Distributions made within the 12
months preceding the date of payment of such current Cash Distribution
in respect of which no adjustment pursuant to subparagraph (j)(v)(F) or
(j)(v)(G) has been made and (2) the aggregate amount of any Excess
Purchase Payments
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<PAGE> 17
made within the 12 months preceding the date of payment of such current
Cash Distribution in respect of which no adjustment pursuant to
subparagraph (j)(v)(F) or (j)(v)(G) has been made, exceeds 10% of the
Company's Market Capitalization on the Record Date for such current
Cash Distribution (the amount of such excess being the "Distribution
Excess Amount"), then, and in each such case, immediately after the
close of business on the Record Date for such current Cash
Distribution, the Conversion Rate shall be adjusted by multiplying the
Conversion Rate in effect at the close of business on such Record Date
by a fraction (i) the denominator of which shall be equal to the
average Sale Prices per share of Common Stock for the ten consecutive
Trading Days immediately prior to such Record Date less an amount equal
to the quotient of (x) the Distribution Excess Amount divided by (y)
the number of shares of Common Stock outstanding on such Record Date
plus the number of shares of Common Stock issuable upon conversion of
all shares of Class B Common Stock, Class A Preferred Stock, Class B
Preferred Stock and Class C Preferred Stock outstanding on such Record
Date and (ii) the numerator of which shall be equal to the average Sale
Prices per share of Common Stock for the ten consecutive Trading Days
immediately prior to such Record Date. If such current Cash
Distribution is not made, the Conversion Rate shall again be adjusted
to be the Conversion Rate which would then be in effect if such current
Cash Distribution had not been declared.
(G) If the Company or any of its subsidiaries shall make Excess
Purchase Payments with respect to any tender offer in an aggregate
amount that, combined together with (1) the aggregate amount of any
other Excess Purchase Payments made by the Company or any of its
subsidiaries within the 12 months preceding such current Excess
Purchase Payment in respect of which no adjustment pursuant to
subparagraph (j)(v)(F) or (j)(v)(G) has been made and (2) the aggregate
amount of any Cash Distributions made within the 12 months preceding
such current Excess Purchase Payment in respect of which no adjustment
pursuant to subparagraph (j)(v)(F) or (j)(v)(G) has been made, exceeds
10% of the Company's Market Capitalization as of the Expiration Date
for such tender offer (the amount of such excess being the "Tender
Excess Amount"), then, and in each such case, immediately prior to the
opening of business on the day after the Expiration Date, the
Conversion Rate shall be adjusted by multiplying the Conversion Rate in
effect at the close of business on the Expiration Date by a fraction
(i) the denominator of which shall be equal to the average Sale Prices
per share of Common Stock for the ten consecutive Trading Days
immediately prior to the Expiration Date less an amount equal to the
quotient of (x) the Tender Excess Amount divided by (y) the number of
shares of Common Stock outstanding on such Expiration Date plus the
number of shares of Common Stock issuable upon conversion of all shares
of Class B Common Stock, Class A Preferred Stock, Class B Preferred
Stock and Class C Preferred Stock outstanding on such Expiration Date
(but excluding any shares purchased in such tender offer) and (ii) the
numerator of which shall be equal to the average Sale Prices per share
of Common Stock for the ten consecutive Trading Days immediately prior
to the Expiration Date. If the Company is obligated to purchase shares
pursuant to any such tender offer, but the Company is permanently
prevented by applicable law from effecting any such purchases or all
such purchases are rescinded, the Conversion Rate shall again be
adjusted to be the Conversion Rate which would then be in effect if
such tender offer had not been made.
(vi) No adjustment in the Conversion Rate shall be required unless
such adjustment would require an increase or decrease of at least 1% in such
rate then in effect; provided,
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<PAGE> 18
however, that any adjustments that would otherwise be required to be made shall
be carried forward and taken into account in any subsequent adjustment. Except
as stated above, the Conversion Rate will not be adjusted for the issuance of
Common Stock or any securities convertible into or exchangeable for Common Stock
or carrying the right to purchase any of the foregoing. All calculations under
subparagraph (j)(v) shall be made by the Company and shall be made to the
nearest cent or to the nearest one-hundredth of a share, as the case may be. No
adjustment need be made for a change in the par value or no par value of the
Common Stock.
(vii) The Company will provide to the Holders reasonable notice
(which obligation may be satisfied by means of a public announcement and the
filing of a Current Report on Form 8-K with the Commission) of any event that
would result in an adjustment to the Conversion Rate pursuant to this paragraph
(j) so as to permit the Holders to effect a conversion of Preferred Stock into
shares of Common Stock prior to the occurrence of such event.
(viii) For purposes of this paragraph (j), the following terms
shall have the meaning indicated:
a. "average market price" means the average of the daily Sale
Prices per share of Common Stock for the ten consecutive Trading Days
immediately prior to the date in question.
b. "Cash Distribution" means the distribution by the Company to all
holders of its Common Stock of cash (excluding any cash that is part of a
distribution referred to in subparagraph (j)(v)(E) or cash distributed upon a
merger or consolidation described in subparagraph (j)(xii)).
c. "Excess Purchase Payment" means the excess, if any, of (i) the
amount of cash plus the fair market value (as determined by the Board of
Directors of the Company, whose determination shall be conclusive and set forth
in a board resolution) of any non-cash consideration required to be paid with
respect to one share of Common Stock acquired or to be acquired in a tender
offer made by the Company or any of its subsidiaries for all or any portion of
the Common Stock over (ii) the Sale Price per share of Common Stock on the
Trading Day next succeeding the Expiration Date for such tender offer.
d. "Expiration Date" for any tender offer means the last day
tenders of Common Stock can be made pursuant to a tender offer by the Company or
any of its subsidiaries for all or a portion of the Common Stock.
e. "Market Capitalization" means, with respect to any specified
date, the product of (i) the average Sale Prices per share of Common Stock for
the ten consecutive Trading Days immediately prior to such date times (ii) the
number of shares of Common Stock outstanding on such date plus the number of
shares of Common Stock issuable upon conversion of all shares of Class B Common
Stock, Class A Preferred Stock, Class B Preferred Stock and Class C Preferred
Stock outstanding on such date.
f. "Record Date" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of Common Stock
have the right to receive any cash, securities or other property or in which the
Common Stock (or other applicable security) is exchanged for or converted into
any combination of cash, securities or other property, the date fixed
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<PAGE> 19
for determination of shareholders entitled to receive such cash, securities or
other property (whether such date is fixed by the Board of Directors or by
statute, contract or otherwise).
g. "Right" shall mean any right, option or warrant to subscribe for
or purchase Common Stock.
(ix) Whenever the Conversion Rate is adjusted as herein provided,
the Company shall promptly file with the Transfer Agent an Officers' Certificate
setting forth the Conversion Rate after such adjustment and setting forth a
brief statement of the facts requiring such adjustment. Promptly after delivery
of such certificate, the Company shall prepare a notice of such adjustment of
the Conversion Rate setting forth the adjusted Conversion Rate and the date on
which each adjustment is effective and shall mail such notice of such adjustment
of the Conversion Rate to each Holder at such Holder's last address appearing on
the register of Holders maintained by the Transfer Agent within 20 days of the
effective date of such adjustment. Failure to deliver such notice shall not
affect the legality or validity of any such adjustment.
(x) In any case in which this paragraph provides that an adjustment
shall become effective immediately after a Record Date for an event, the Company
may defer until the occurrence of such event issuing to any Holder of any
Preferred Stock converted after such Record Date and before the occurrence of
such event the additional Common Stock issuable upon such conversion by reason
of the adjustment required by such event over and above the Common Stock
issuable upon such conversion before giving effect to such adjustment. In the
case of any such deferral, if the event triggering an adjustment under
subparagraph (j)(v) does not occur, the Conversion Rate in respect of any
conversion effected during such deferral period shall be the Conversion Rate in
effect immediately prior to the date of the relevant event.
(xi) For purposes of this paragraph (j), the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of Common Stock. The Company shall not
pay any dividend or make any distribution on Common Stock held in the treasury
of the Company.
(xii) In the case of (x) any reclassification of the Common Stock
or (y) a consolidation or merger involving the Company or a sale or conveyance
to another corporation of the property and assets of the Company as an entirety
or substantially as an entirety, in each case as a result of which holders of
Common Stock shall be entitled to receive stock, securities, other property or
assets (including cash) with respect to or in exchange for such Common Stock,
the conversion right with respect to the then outstanding Preferred Stock will
be changed into the right to convert such Preferred Stock into the kind and
amount of shares of stock, securities or other property or assets (including
cash) which they would have owned or been entitled to receive upon such
reclassification, consolidation, merger, sale or conveyance had such Preferred
Stock been converted immediately prior to such reclassification, consolidation,
merger, sale or conveyance at the then effective Conversion Rate applicable to
the Preferred Stock, assuming that a Holder would not have exercised any rights
of election as to the stock, securities or other property or assets (including
cash) receivable in connection therewith.
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(xiii) Without limiting the Company's right and ability to take any
other action with respect to the Preferred Stock or any portion thereof, the
Company from time to time may, to the extent permitted by law, increase the
Conversion Rate by any amount for any period of at least 20 days if the Board of
Directors has made a determination, in its sole discretion, that such increase
would be in the best interests of the Company, which determination shall be
conclusive. The Company will give notice of such increase at least 15 days prior
to the increase. The Company may, at its option, make such increases in the
Conversion Rate, in addition to and subject to those set forth above, as the
Board of Directors deems advisable to avoid or diminish any income tax to
holders of Common Stock resulting from any dividend or distribution of stock or
rights to acquire stock or from any event treated as such for income tax
purposes.
(xiv) Without limiting any other exception contained in paragraph
(j), and in addition thereto, no adjustment under subparagraph (j)(v)(D) need be
made for:
(a) grants of Rights or issuances of Common Stock to employees,
officers or independent directors of the Company or any of its
subsidiaries (and issuances of Common Stock upon the exercise, exchange
or conversion of any such Rights) pursuant to the terms of any
incentive equity, stock purchase or similar plan maintained or
sponsored by the Company or any of its subsidiaries, so long as such
plan has been approved by the Board of Directors of the Company,
including, without limitation, the Company's Amended and Restated
Incentive Equity Plan and Employee Stock Purchase Plan;
(b) issuances of Rights or Common Stock in bona fide public
offerings or private placements pursuant to Section 4(2) of the
Securities Act, Regulation D thereunder or Regulation S under the
Securities Act, involving at least one investment bank of national
reputation (provided any such private placement is to 10 or more
beneficial holders); or
(c) any issuance of Rights or Common Stock if the Company committed
to issue such Rights or Common Stock prior to their issuance for an
amount of consideration per share of Common Stock (determined in the
case of a Right as set forth in subparagraph (j)(v)(D)) not less than
the Sale Price of the Common Stock on the date of such commitment.
(k) MANDATORY CONVERSION. (i) At any time on and after the E&P Notice
Date, if the Company reasonably believes that any shares of Preferred Stock are
held by or on account of a Non- U.S. Holder, such Preferred Stock will be
subject to mandatory conversion (a "Mandatory Conversion"), at the option of the
Company, upon written notice (a "Mandatory Conversion Notice") to such Non-U.S.
Holder. In addition, if at any time on and after the E&P Notice Date upon any
(x) optional redemption by the Company of a Holder's Preferred Stock, (y) tender
by a Holder of any of such Holder's Preferred Stock for acquisition thereof by
the Company, or (z) exercise by a Holder of any of its conversion rights, the
Company reasonably believes that any such Holder is a Non-U.S. Holder, the
Preferred Stock held by such Holder will be subject to Mandatory Conversion, and
such Mandatory Conversion will preempt any conversion or tender rights that any
such Non-U.S. Holder would otherwise have in respect of its Preferred Stock.
(ii) The Mandatory Conversion Notice will be mailed to the Non-U.S.
Holder's address as it appears on the register of Holders maintained by the
Transfer Agent and shall specify the number of the shares of Preferred Stock
subject to such notice, the certificate numbers of such
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<PAGE> 21
shares (if such shares are held in certificated form by such Non-U.S. Holder)
and the basis for the Company's belief that any such Holder is a Non-U.S.
Holder. Such Holder's Preferred Stock will be deemed to have been converted as
of the date of the Mandatory Conversion Notice unless such Holder has
established within 10 days after the date of any such notice by written
documentation or other evidence to the Company's reasonable satisfaction, that
it is a U.S. Holder.
(iii) The Company will issue and deliver to the Transfer Agent a
certificate or certificates for the full number of shares of Common Stock
issuable upon the Mandatory Conversion, with any fractional shares rounded up to
full shares or, at the Company' s option, paid in cash in lieu of any fraction
of a share, based on the Sale Price of the Common Stock on the Trading Day
preceding the applicable Mandatory Conversion Notice. Any Mandatory Conversion
will be conducted in accordance with the conversion procedures described under
paragraph (j). The Company's delivery to the Holder of the number of shares of
Common Stock into which such Holder's Preferred Stock is convertible hereunder
(together with the cash payment, if any, in lieu of fractional shares of Common
Stock, if any) will be deemed to satisfy the Company's obligation to pay the
Liquidation Preference on the Preferred Stock to the applicable Conversion Date.
(iv) If the Transfer Agent holds, in accordance herewith, Common
Stock sufficient to pay the conversion price on the date of the Mandatory
Conversion Notice with respect to any Preferred Stock, then, on and after such
date, such share of Preferred Stock will cease to be outstanding and the
Liquidation Preference thereon shall cease to accrete whether or not book-entry
transfer of such Preferred Stock is made or such Preferred Stock is delivered to
the Transfer Agent, and all other rights of the Holder shall terminate (other
than the right to receive the Common Stock upon delivery of the Preferred Stock
certificate or book-entry transfer of such Preferred Stock to the Transfer
Agent).
(l) CERTAIN COVENANTS. (i) MERGER, CONSOLIDATION AND SALE OF ASSETS.
Without the affirmative vote or consent of the holders of a majority of the then
issued and outstanding shares of Preferred Stock, the Company may not
consolidate or merge with or into, or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its assets to, any person
unless: (x) the entity formed by such consolidation or merger (if other than the
Company) or to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made (the "resulting entity") shall be a corporation
organized or existing under the laws of the United States or any State thereof
or the District of Columbia; (y) the Preferred Stock shall remain unchanged or
be converted into or exchanged for and shall become shares of such resulting
entity, having in respect of such resulting entity substantially the same (or
more favorable) powers, preferences and relative participating, optional or
other special rights, and substantially the same (or more favorable)
qualifications, limitations or restrictions thereon, that the Preferred Stock
had immediately prior to such transaction (provided that (1) if, in accordance
with this Certificate of Designation, the Preferred Stock shall become
convertible into a different amount or type of securities, cash or other
property, such change shall not be deemed to be a change in the powers,
preferences and relative participating, optional or other special rights of the
Preferred Stock and (2) the fact that the resulting entity has authorized or
outstanding any securities, other than Senior Securities, shall not be deemed to
be a change in the powers, preferences and relative participating, optional or
other special rights of the Preferred Stock); and (z) immediately after giving
effect to such transaction, no Voting Rights Triggering Event shall have
occurred and be continuing; provided that the foregoing shall not be applicable
to a transaction or event that constitutes a Change of Control.
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(ii) REPORTS. Whether or not required by the rules and regulations
of the Commission, so long as any shares of Preferred Stock are outstanding, the
Company will furnish to the Holders (i) all quarterly and annual financial
information that would be required to be contained in a filing with the
Commission on Form 10-Q and Form 10-K if the Company were required to file such
forms, including "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and, with respect to the annual information only, a
report thereon by the Company's certified independent accountants and (ii) all
Current Reports that would be required to be filed with the Commission on Form
8-K if the Company were required to file such reports. In the event the Company
has filed any such report or form with the Commission, it will not be obligated
to separately furnish the report or form to any Holder unless and until such
Holder requests a copy of the report or form. In addition, whether or not
required by the rules and regulations of the Commission, the Company will file a
copy of all such information and reports or forms with the Commission for public
availability (unless the Commission will not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request.
(m) AMENDMENT, SUPPLEMENT AND WAIVER. (i) The Company may amend this
Certificate of Designations with the consent of the Holders of a majority of the
Preferred Stock then outstanding (including consents obtained in connection with
a tender offer or exchange offer for the Preferred Stock) and any past default
or failure to comply with any provisions of this Certificate of Designations may
also be waived with the consent of such Holders. Notwithstanding the foregoing,
however, without the consent of the Holders of at least 662/3% of the then
outstanding shares of Preferred Stock, an amendment or waiver may not (with
respect to any shares of the Preferred Stock held by a non-consenting Holder):
(A) alter the voting rights with respect to the Preferred Stock or reduce the
number of shares of the Preferred Stock whose Holders must consent to an
amendment, supplement or waiver, (B) reduce the amount of or rate of accretion
of the Liquidation Preference of any share of the Preferred Stock or adversely
alter the provisions with respect to the redemption of the Preferred Stock, (C)
waive a default in the payment of Liquidated Damages (if any) on the Preferred
Stock, (D) make any change that adversely affects the right to convert the
Preferred Stock or the right to require the Company to purchase the Preferred
Stock, (E) make any share of the Preferred Stock payable in money other than
United States dollars, (F) make any change in the provisions of this Certificate
of Designations relating to waivers of the rights of Holders to receive the
Liquidation Preference or Liquidated Damages (if any) on the Preferred Stock, or
(G) make any change in the foregoing amendment and waiver provisions.
(ii) Notwithstanding the foregoing, without the consent of any
Holder, the Company may (to the extent permitted by Delaware law) amend or
supplement this Certificate of Designation to cure any ambiguity, defect or
inconsistency, to provide for uncertificated shares of the Preferred Stock in
addition to or in place of certificated shares of the Preferred Stock or to make
any change that would provide any additional rights or benefits to the Holders
or to make any change that the Board of Directors determines, in good faith, is
not materially adverse to the Holders.
(n) PREEMPTIVE RIGHTS. No shares of Preferred Stock shall have any
rights of preemption whatsoever as to any securities of the Company, or any
warrants, rights or options issued or granted with respect thereto, regardless
of how such securities or such warrants, rights or options may be designated,
issued or granted.
(o) REISSUANCE OF PREFERRED STOCK. Shares of Preferred Stock that have
been issued and reacquired in any manner, including shares purchased or redeemed
or exchanged, shall (upon
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compliance with any applicable provisions of the laws of Delaware) have the
status of authorized but unissued shares of preferred stock of the Company
undesignated as to series and may be designated or redesignated and issued or
reissued, as the case may be, as part of any series of preferred stock of the
Company, provided that any issuance of such shares as Preferred Stock must be in
compliance with the terms hereof.
(p) BUSINESS DAY. If any payment, redemption, repurchase or conversion
shall be required by the terms hereof to be made on a day that is not a Business
Day, such payment, redemption or conversion shall be made on the immediately
succeeding Business Day.
(q) DEFINITIONS. As used in this Certificate of Designation, the
following terms shall have the following meanings (with terms defined in the
singular having comparable meanings when used in the plural and vice versa),
unless the context otherwise requires. The words "herein," "hereof" and
"hereunder" and words of similar import, shall be construed to refer to this
Certificate of Designation as amended from time to time.
"Accrual Date" means each March 23, June 23, September 23 and
December 23 commencing March 23, 1999 and ending on December 23, 2013.
"Acquisition Date" has the meaning set forth in subparagraph
(g)(iii)(A) and (g)(iv) hereof.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such Person. For the purposes of this definition, "control" when
used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Business Day" means any day except a Saturday or Sunday or other
day on which commercial banks in The City of New York are required or authorized
by law or other governmental action to be closed.
"Change of Control Company Notice" has the meaning set forth in
subparagraph (g)(ii) hereof.
"Change of Control Payment Date" has the meaning set forth in
subparagraph (g)(iv)(C) hereof.
"Class A Preferred Stock" means shares of Class A Convertible
Redeemable Preferred Stock, par value $.01 per share, of the Company.
"Class B Common Stock" means shares of Class B Non-Voting Common
Stock, par value $.001 per share, of the Company.
"Class B Preferred Stock" means shares of Class B Convertible
Preferred Stock, par value $.01 per share, of the Company.
23
<PAGE> 24
"Class C Preferred Stock" means shares of Class C Convertible
Redeemable Preferred Stock, par value $.01 per share, of the Company.
"Closing Date" means the date on which the Original Preferred Stock
is originally issued under this Certificate of Designation.
"Commission" means the Securities and Exchange Commission.
"Common Shares" of any Person means capital stock of such Person
that does not rank prior, as to the payment of dividends or as to the
distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up of such Person, to shares of capital stock of any
other class of such Person.
"Common Stock" means the shares of Class A Common Stock, par value
$0.001 per share, of the Company, and any other capital stock of the Company
into which such Common Stock may be converted, or reclassified or that may be
issued in respect of, in exchange for or in substitution of, such Common Stock
by reason of any stock splits, stock dividends, distributions, mergers,
consolidations or other like events.
"Company Notice" has the meaning set forth in subparagraph (i)(ii)
hereof.
"Conversion Adjustment Notice" has the meaning set forth in
subparagraph (g)(iii)(A) hereof.
"Conversion Date" has the meaning set forth in subparagraph
(j)(iii) hereof.
"Conversion Rate" has the meaning set forth in subparagraph (j)(i)
hereof.
"Discounted Reference Price" means 80% of the average of the Sale
Prices of the Common Stock for (x) if the Preferred Stock is convertible into
Common Stock that is traded on a United States national or regional stock
exchange or quoted on the NNM but a shelf registration statement with respect to
resales of such Common Stock is not effective and available and the Common Stock
is not otherwise freely tradeable (assuming the Holder thereof is not an
Affiliate of the Company) without registration under the Securities Act, the ten
Trading Day period ending on the third Business Day prior to the applicable
Special Conversion Adjustment Date if the third Business Day prior to the
applicable Special Conversion Adjustment Date is a Trading Day, or if such day
is not a Trading Day, then on the last Trading Day prior to such third Business
Day and (y) if the Preferred Stock is convertible into Common Stock that is not
traded on a United States national or regional stock exchange or quoted on the
NNM, the most recent ten Trading Day period prior to the Special Conversion
Adjustment Date for which Sale Prices are available.
"E&P Notice Date" means the later of January 1, 2001 and the date
90 days after the Company gives notice to the Holders that it expects to have
earnings and profits for U.S. federal income tax purposes.
"Effectiveness Period" has the meaning set forth in the
Registration Rights Agreement.
24
<PAGE> 25
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Holder" means a registered holder of Preferred Stock.
"Initial Liquidation Preference" has the meaning set forth in the
preamble hereof.
"Junior Securities" has the meaning set forth in paragraph (b)
hereof.
"Liquidated Damages" has the meaning set forth in subparagraph
(c)(ii) hereof.
"Liquidation Preference" for each share of Preferred Stock for any
specified date shall be as follows:
(i) if such specified date occurs on one of the following Accrual
Dates, the Liquidation Preference per share will equal the amount set forth
below for such Accrual Date:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Liquidation Liquidation
Accrual Date Preference Accrual Date Preference
------------ ---------- ------------ ----------
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
March 23, 1999 $259.5412 September 23, 2006 $515.3085
- --------------------------------------------------------------------------------
June 23, 1999 $265.5431 December 23, 2006 $527.2250
- --------------------------------------------------------------------------------
September 23, 1999 271.6838 March 23, 2007 539.4170
- --------------------------------------------------------------------------------
December 23, 1999 277.9665 June 23, 2007 551.8911
- --------------------------------------------------------------------------------
March 23, 2000 284.3945 September 23, 2007 564.6535
- --------------------------------------------------------------------------------
June 23, 2000 290.9711 December 23, 2007 577.7112
- --------------------------------------------------------------------------------
September 23, 2000 297.6998 March 23, 2008 591.0707
- --------------------------------------------------------------------------------
December 23, 2000 304.5841 June 23, 2008 604.7392
- --------------------------------------------------------------------------------
March 23, 2001 311.6276 September 23, 2008 618.7238
- --------------------------------------------------------------------------------
June 23, 2001 318.8340 December 23, 2008 633.0318
- --------------------------------------------------------------------------------
September 23, 2001 326.2070 March 23, 2009 647.6707
- --------------------------------------------------------------------------------
December 23, 2001 333.7506 June 23, 2009 662.6481
- --------------------------------------------------------------------------------
March 23, 2002 341.4686 September 23, 2009 677.9718
- --------------------------------------------------------------------------------
June 23, 2002 349.3650 December 23, 2009 693.6499
- --------------------------------------------------------------------------------
September 23, 2002 357.4441 March 23, 2010 709.6906
- --------------------------------------------------------------------------------
December 23, 2002 365.7100 June 23, 2010 726.1021
- --------------------------------------------------------------------------------
March 23, 2003 374.1670 September 23, 2010 742.8933
- --------------------------------------------------------------------------------
June 23, 2003 382.8196 December 23, 2010 760.0727
- --------------------------------------------------------------------------------
September 23, 2003 391.6723 March 23, 2011 777.6493
- --------------------------------------------------------------------------------
</TABLE>
25
<PAGE> 26
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Liquidation Liquidation
Accrual Date Preference Accrual Date Preference
------------ ---------- ------------ ----------
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
December 23, 2003 400.7298 June 23, 2011 795.6325
- --------------------------------------------------------------------------------
March 23, 2004 $409.9966 September 23, 2011 $814.0315
- --------------------------------------------------------------------------------
June 23, 2004 419.4778 December 23, 2011 832.8560
- --------------------------------------------------------------------------------
September 23, 2004 429.1782 March 23, 2012 852.1158
- --------------------------------------------------------------------------------
December 23, 2004 $439.1030 June 23, 2012 $871.8209
- --------------------------------------------------------------------------------
March 23, 2005 449.2572 September 23, 2012 891.9818
- --------------------------------------------------------------------------------
June 23, 2005 459.6463 December 23, 2012 912.6089
- --------------------------------------------------------------------------------
September 23, 2005 470.2756 March 23, 2013 933.7130
- --------------------------------------------------------------------------------
December 23, 2005 481.1508 June 23, 2013 955.3051
- --------------------------------------------------------------------------------
March 23, 2006 492.2774 September 23, 2013 977.3965
- --------------------------------------------------------------------------------
June 23, 2006 503.6613 December 23, 2013 1,000.0000
- --------------------------------------------------------------------------------
</TABLE>
(ii) if the specified date occurs before the first Accrual Date,
(x) the Liquidation Preference will equal the sum of (a) the Initial
Liquidation Preference and (b) an amount equal to the product of (1)
the Liquidation Preference for the first Accrual Date less the Initial
Liquidation Preference multiplied by (2) a fraction, the numerator of
which is the number of days from (but including) the Closing Date to
(but excluding) the specified date, using a 360-day year of twelve
30-day months; or
(iii) if the specified date occurs between two Accrual Dates, (x)
the Liquidation Preference will equal the sum of (a) the Liquidation
Preference for the Accrual Date immediately preceding such specified
date and (b) an amount equal to the product of (1) the Liquidation
Preference for the immediately following Accrual Date less the
Liquidation Preference for the immediately preceding Accrual Date
multiplied by (2) a fraction, the numerator of which is the number of
days from (but including) the immediately preceding Accrual Date to
(but excluding) the specified date, using a 360-day year of twelve
30-day months, and the denominator of which is 90.
"Mandatory Conversion" has the meaning set forth in subparagraph
(k)(i) hereof.
"Mandatory Conversion Notice" has the meaning set forth in
subparagraph (k)(i) hereof.
"Mandatory Redemption Date" means December 23, 2013.
"Market Price" means the average of the Sale Prices of the Common
Stock for the 20 Trading Day period ending on the third Business Day prior to
the applicable Acquisition Date, Redemption Date or Tender Date if the third
Business Day prior to the applicable Acquisition Date, Redemption Date or Tender
Date is a Trading Day or, if it is not a Trading Day, then on the last Trading
Day prior to such third Business Day. The Market Price shall be appropriately
adjusted to
26
<PAGE> 27
take into account the occurrence during the period commencing on the first of
such Trading Days during such 20 Trading Day period and ending on such
Acquisition Date, Redemption Date or Tender Date of certain events that would
result in an adjustment of the Conversion Rate pursuant to subparagraphs
(j)(v)(A), (j)(v)(C) and (j)(v)(E) hereof.
"NNM" means The Nasdaq Stock Market, Inc. or any successor thereto.
"Non-U.S. Holder" means any Holder that is not a U.S. Holder.
"Notice" has the meaning set forth in subparagraph (h)(i) hereof.
"Old Senior Notes" means the Company's 9 3/4% Senior Redeemable
Discount Notes Due 2004, 10 1/4% Senior Redeemable Discount Notes Due 2005 and
101/8% Senior Redeemable Discount Notes Due 2004.
"Parity Securities" has the meaning set forth in paragraph (b)
hereof.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Stockholder Approval Rights" has the meaning set forth
in subparagraph (f)(ii)(A) hereof.
"Prospectus" has the meaning set forth in the Registration Rights
Agreement.
"Redemption Date" has the meaning set forth in subparagraph
(e)(i)(A) hereof.
"Redemption Notice" has the meaning set forth in subparagraph
(e)(iii)(A) hereof.
"Reference Price" means the average of the Sale Prices of the
Common Stock for the ten Trading Day period ending on the third Business Day
prior to the applicable Special Conversion Adjustment Date if the third Business
Day prior to the applicable Special Conversion Adjustment Date is a Trading Day,
or if such day is not a Trading Day, then on the last Trading Day prior to such
third Business Day. The Reference Price will be appropriately adjusted to take
into account the occurrence during such period of certain events that would
result in an adjustment of the Conversion Rate pursuant to subparagraphs
(j)(v)(A), (j)(v)(C) and (j)(v)(E) hereof.
"Registrable Shares" has the meaning set forth in the Registration
Rights Agreement.
"Registration Default" has the meaning set forth in subparagraph
(c)(ii).
"Registration Rights Agreement" means the Registration Rights
Agreement among the Company and Goldman, Sachs & Co., Morgan Stanley & Co.
Incorporated and NationsBanc Montgomery Securities LLC dated December 23, 1998.
"Resale Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
27
<PAGE> 28
"Sale Price" of the Common Stock on any date means the closing per
share sale price (or if no closing sale price is reported, the average bid and
ask prices or, if more than one in either case, the average of the average bid
and average ask prices) on such date as reported in the composite transactions
for the principal United States securities exchange on which Common Stock is
traded or, if the Common Stock is not listed on a United States national or
regional stock exchange, as reported by the NNM.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Securities" has the meaning set forth in paragraph (b)
hereof.
"Series D Preferred Stock" means the Series D Exchangeable
Preferred Stock, par value $0.01 per share with a liquidation preference of
$1,000 per share, of the Company.
"Series E Preferred Stock" means the Series E Exchangeable
Preferred Stock, par value $0.01 per share with a liquidation preference of
$1,000 per share, of the Company.
"Special Conversion Adjustment Date" has the meaning set forth in
subparagraph (g)(iii)(A) hereof.
"Special Conversion Expiration Date" has the meaning set forth in
subparagraph (g)(iii)(B) hereof.
"Tender Date" has the meaning set forth in subparagraph (h)(i)
hereof.
"Trading Day" means, in respect of any securities exchange or
securities market, each Monday, Tuesday, Wednesday, Thursday and Friday, other
than any day on which securities are not traded on the applicable securities
exchange or in the applicable securities market.
"Transfer Agent" means First Chicago Trust Company of New York or
such other transfer agent as shall be appointed by the Company from time to time
as transfer agent for the Preferred Stock and/or the Common Stock, and who is
designated as such in a written notice sent by the Company to the Holders.
"U.S. Holder" means a beneficial owner of Preferred Stock that is,
for United States federal income tax purposes, (i) a citizen or individual
resident of the United States; (ii) a corporation (or other entity treated as a
corporation) created in or under the laws of the United States or of any State
thereof; (iii) an estate the income of which is subject to United States federal
income taxation regardless of its source; (iv) 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 such date that
timely elected to continue to be treated as United States persons); or (v) a
partnership that is created or organized in or under the laws of the United
States or of any State thereof.
"Voting Rights Triggering Event" has the meaning set forth in
subparagraph (f)(iii)(A) hereof.
28
<PAGE> 29
(r) TRANSFER AND LEGENDING OF SHARES. (i) No transfer of shares of the
Preferred Stock or Common Stock shall be effective until such transfer is
reflected on the register for the Preferred Stock maintained by the Transfer
Agent. Until registered and disposed of pursuant to the Resale Registration
Statement, the expiration of the time period referred to in Rule 144(k) (as then
in effect) under the Securities Act from the Closing Date, or the Company and
the Holder of such shares otherwise agree, all shares of Preferred Stock and
Common Stock shall bear the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) IN THE
CASE OF THE PREFERRED STOCK, TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN THE
CASE OF THE COMMON STOCK ISSUABLE WITH RESPECT TO THE PREFERRED
STOCK, IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE
904 OF REGULATION S UNDER THE SECURITIES ACT, (3) TO AN
INSTITUTION THAT IS AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF
RULE 501(a)(1), (2), (3) OR (7) IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, (4) PURSUANT TO
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED
BY RULE 144 THEREUNDER (IF AVAILABLE) OR (5) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND IN
EACH CASE, IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
THE STATES OF THE UNITED STATES.
In addition, the Preferred Stock (so long as it is outstanding) will bear the
following legend:
IN ADDITION TO ANY OTHER APPLICABLE RESTRICTIONS, FROM AND AFTER
THE LATER OF JANUARY 1, 2001 AND THE DATE 90 DAYS AFTER THE
COMPANY GIVES NOTICE THAT IT EXPECTS TO HAVE EARNINGS AND PROFITS
FOR U.S. FEDERAL INCOME TAX PURPOSES (THE LATER OF SUCH DATES
BEING THE "E&P" NOTICE DATE"), THE PREFERRED STOCK MAY NOT BE HELD
BY OR FOR THE ACCOUNT OF, OR TRANSFERRED TO ANY PERSON UNLESS SUCH
PERSON IS EITHER (i) A CITIZEN OR INDIVIDUAL RESIDENT OF THE
UNITED STATES, (ii) A CORPORATION (OR OTHER ENTITY TREATED AS A
CORPORATION) CREATED IN OR UNDER THE LAWS OF THE UNITED STATES OR
OF ANY STATE THEREOF, (iii) AN ESTATE THE INCOME OF WHICH IS
SUBJECT TO UNITED STATES FEDERAL INCOME TAXATION REGARDLESS OF ITS
SOURCE, (iv) A TRUST IF A COURT WITHIN THE UNITED
29
<PAGE> 30
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 U.S. TAX PERSONS PRIOR TO SUCH DATE THAT TIMELY
ELECTED TO CONTINUE TO BE TREATED AS U.S. PERSONS) OR (v) A
PARTNERSHIP THAT IS CREATED OR ORGANIZED IN OR UNDER THE LAWS OF
THE UNITED STATES OR OF ANY STATE THEREOF (ANY PERSON DESCRIBED IN
ANY OF CLAUSES (i) THROUGH (v) BEING, A "U.S. HOLDER"). ANY
PREFERRED STOCK HELD BY OR FOR THE ACCOUNT OF A PERSON THAT IS NOT
A U.S. HOLDER (A "NON-U.S. HOLDER") AFTER THE E&P NOTICE DATE MAY
BE CONVERTED BY THE COMPANY INTO COMMON STOCK AT THE CONVERSION
RATE THEN IN EFFECT.
(ii) The Transfer Agent shall refuse to register any attempted
transfer of shares of Preferred Stock not in compliance with this paragraph (r).
(iii) In connection with proposed transfers of Preferred Stock
to an institutional accredited investor, the Transfer Agent or the Company may
require the transferor or transferee, as the case may be, to deliver the
appropriate letter attached hereto as Exhibit A.
30
<PAGE> 31
IN WITNESS WHEREOF, Nextel Communications, Inc. has caused
this Certificate of Designation to be executed in its corporate name by Steven
M. Shindler, its Vice President and attested by Ried R. Zulager, its Secretary,
this _______ day of December, 1998.
NEXTEL COMMUNICATIONS, INC.
By: /s/ Steven M. Shindler
---------------------------
Name: Steven M. Shindler
Title: Vice President
Attest:
By: /s/ Ried R. Zulager
-------------------------
Name: Ried R. Zulager
Title: Secretary
31
<PAGE> 32
EXHIBIT A
---------
Form of Certificate to Be
Delivered in Connection with
Transfers to Non-qib Accredited Investors
-----------------------------------------
---------------, ----
First Chicago Trust Company of New York
525 Washington Boulevard
Jersey City, NJ 07310
Attention:
Re: Nextel Communications, Inc.
(the "Company") Zero Coupon
Convertible Preferred
Stock due 2013 (the "Prefered Stock")
convertible into Class A Common Stock,
par value $.001 per share,
of the Company (the "Common Stock")
-----------------------------------
Dear Ladies and Gentlemen:
In connection with our proposed purchase of ___ shares of the
Preferred Stock, we confirm that:
1. We understand that any subsequent transfer of the Preferred
Stock (and the Common Stock into which such Preferred Stock is
convertible) is subject to certain restrictions and conditions set
forth in the Certificate of Designation relating to the Securities (the
"Certificate of Designation") and the undersigned agrees to be bound
by, and not to resell, pledge or otherwise transfer the Preferred Stock
and Common Stock except in compliance with, such restrictions and
conditions and the Securities Act of 1933, as amended (the "Securities
Act").
2. We understand that the offer and sale of the Preferred
Stock and Common Stock have not been registered under the Securities
Act, and that the Preferred Stock and Common Stock may not be offered,
sold, pledged or otherwise transferred except as permitted in the
following sentence. We agree, on our own behalf and on behalf of any
accounts for which we are acting as hereinafter stated, that if we
should sell any Preferred Stock or Common Stock, we will do so only (1)
in the case of the Preferred Stock, to a person whom we reasonably
believe is a "qualified institutional buyer" within the meaning of Rule
144A under the Securities Act purchasing for its own account or for the
account of
A-1
<PAGE> 33
a "qualified institutional buyer" in a transaction meeting the
requirements of Rule 144A, (2) in the case of the Common Stock, in an
offshore transaction complying with Rule 903 or Rule 904 of Regulation
S under the Securities Act, (3) to an institution that is an
"accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or
(7) in a transaction exempt from the registration requirements of the
Securities Act, (4) pursuant to an exemption from registration under
the Securities Act provided by Rule 144 thereunder (if available) or
(5) pursuant to an effective registration statement under the
Securities Act, and in each case, in accordance with all applicable
securities laws of the states of the United States. We further agree to
provide to any person purchasing any of the Preferred Stock or Common
Stock from us a notice advising such purchaser that resales of the
Preferred Stock and the Common Stock are restricted as stated herein.
3. We understand that, on any proposed resale of any Preferred
Stock or Common Stock, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as
you and the Company may reasonably require to confirm that the proposed
sale complies with the foregoing restrictions. We further understand
that the Preferred Stock and Common Stock purchased by us will bear a
legend to the effect set out in paragraph 2.
4. We are an institutional "accredited investor" and have such
knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the
Preferred Stock or Common Stock, and we and any accounts for which we
are acting are each able to bear the economic risk of our or its
investment.
5. We are acquiring the Preferred Stock and the Common Stock
purchased by us for our own account or for one or more accounts (each
of which is an institutional "accredited investor") as to each of which
we exercise sole investment discretion.
6. We understand that from and after the date of January 1,
2001 and the date that the Company gives notice that it expects to have
earnings and profits for U.S. federal income tax purposes, the
Preferred Stock may not be held by or for the account of or transferred
to a Non-U.S. Person, we agree to take appropriate action to ensure
compliance with this restriction and we understand that the Preferred
Stock purchased by us will bear a legend to that effect.
A-2
<PAGE> 34
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
Very truly yours,
[Name of Holder]
By:
------------------------
Authorized Signature
A-3
<PAGE> 1
EXHIBIT 5
Form of Opinion
JONES, DAY, REAVIS & POGUE
3500 SunTrust Plaza
303 Peachtree Street, NE
Atlanta, Georgia 30308-3242
(404) 521-3939
___________, 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- ) 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,
<PAGE> 1
EXHIBIT 8
Form of Opinion
JONES, DAY, REAVIS & POGUE
3500 SunTrust Plaza
303 Peachtree Street, NE
Atlanta, Georgia 30308-3242
(404) 521-3939
_____________, 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 "VIII. 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,
<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
---------- ---------- ----------
<S> <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)
Add:
Interest expense on indebtedness (including amortization of
debt expense and discount) 115,034 227,495 407,805
Portion of rent expense representative of interest (30%) 17,670 25,350 35,820
========== ========== ==========
Earnings as adjusted (399,063) (599,196) (854,716)
========== ========== ==========
Preferred stock dividends - - 29,119
Effective income tax (benefit) provision rate 72.6% 73.8% 124.6%
---------- ---------- ----------
Preferred stock dividends on pretax basis - - 36,290
Fixed Charges:
Interest expense on indebtedness (including amortization of
debt expense and discount) 115,034 227,495 407,805
Portion of rent expense representative of interest (30%) 17,670 25,350 35,820
Capitalized interest 31,000 32,900 43,000
========== ========== ==========
Fixed charges and preferred stock dividends 163,704 285,745 522,915
========== ========== ==========
Ratio of earnings to fixed charges and preferred stock dividends (2.44) (2.10) (1.63)
Deficiency 562,767 884,941 1,377,631
<CAPTION>
Nine Months Ended
September 30,
1997 1998
---------- ----------
<S> <C> <C>
Loss from continuing operations before
income tax benefit, equity in unconsolidated
subsidiaries, and minority interests (907,983) (1,276,887)
Add:
Interest expense on indebtedness (including amortization of
debt expense and discount) 279,901 467,857
Portion of rent expense representative of interest (30%) 26,865 39,420
========== ==========
Earnings as adjusted (601,217) (769,610)
========== ==========
Preferred stock dividends 12,822 107,566
Effective income tax (benefit) provision rate 87.9% 90.9%
---------- ----------
Preferred stock dividends on pretax basis 11,275 97,787
Fixed Charges:
Interest expense on indebtedness (including amortization of
debt expense and discount) 279,901 467,857
Portion of rent expense representative of interest (30%) 26,865 39,420
Capitalized interest 35,725 41,835
========== ==========
Fixed charges and preferred stock dividends 353,766 646,899
========== ==========
Ratio of earnings to fixed charges and preferred stock dividends (1.70) (1.19)
Deficiency 954,983 1,416,509
</TABLE>
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Nextel Communications, Inc. on Form S-4 of our report dated March 13, 1998,
appearing in the Annual Report on Form 10-K of Nextel Communications, Inc. for
the year ended December 31, 1997, 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
February 10, 1999
<PAGE> 1
Exhibit 24
DIRECTORS AND OFFICERS OF
NEXTEL COMMUNICATIONS, INC.
REGISTRATION STATEMENT ON FORM S-4
POWER OF ATTORNEY
The undersigned directors and officers of Nextel Communications, Inc., a
Delaware corporation (the "Corporation"), do hereby constitute and appoint
Steven M. Shindler, Thomas J. Sidman and Daniel F. Akerson, and each of them,
with full power of substitution and resubstitution, as attorneys-in-fact or
attorney-in-fact of the undersigned, for him/her and in his/her name, place and
stead, to execute and file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933 one or more Registration
Statement(s) on form S-4 relating to the registration for sale of the
Corporation's 12% Senior Serial Redeemable Notes due 2008 (the "Securities"),
with any and all amendments, supplements and exhibits thereto (including
pre-effective and post-effective amendments or supplements), to execute and file
any and all other applications or other documents to be filed with the
Commission and all documents required to be filed with any state securities
regulating board or commission pertaining to such Securities registered pursuant
to the Registration Statement(s) on Form S-4, with any and all amendments,
supplements and exhibits thereto each such attorney to have full power to act
with or without the others, and to have full power and authority to do and
perform, in the name and on behalf of the undersigned, every act whatsoever
necessary, advisable or appropriate to be done in the premises as fully and to
all intents and purposes as the undersigned might or could do in person, hereby
ratifying and approving the act of said attorneys and any of them and any such
substitute.
EXECUTED as of February 2, 1999.
/s/ Daniel F. Akerson /s/ Steven M. Shindler
- ------------------------------- -------------------------------
Daniel F. Akerson Steven M. Shindler
Chairman of the Board, Chief Vice President and Chief
Executive Officer and Director Financial Officer
(Principal Executive Officer) (Principal Financial Officer)
/s/ William G. Arendt
- ------------------------------- -------------------------------
William G. Arendt Morgan E. O'Brien
Vice President and Controller Vice Chairman of the Board
(Principal Accounting Officer) and Director
/s/ Timothy M. Donahue /s/ Keith J. Bane
- ------------------------------- -------------------------------
Timothy M. Donahue Keith J. Bane
President, Chief Operating Director
Officer and Director
/s/ Craig O. McCaw /s/ Keisuke Nakasaki
- ------------------------------- -------------------------------
Craig O. McCaw Keisuke Nakasaki
Director Director
/s/ Dennis M. Weibling
- ------------------------------- -------------------------------
Masaaki Torimoto Dennis M. Weibling
Director Director
/s/ William A. Hoglund /s/ William E. Conway, Jr.
- ------------------------------- -------------------------------
William A. Hoglund William E. Conway, Jr.
Director Director
/s/ Frank M. Drendel
- -------------------------------
Frank M. Drendel
Director
<PAGE> 1
EXHIBIT 25
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
Statement of Eligibility
Under the Trust Indenture Act of 1939
of a Corporation Designated to Act as Trustee
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) ______
HARRIS TRUST AND SAVINGS BANK
(Name of Trustee)
Illinois 36-1194448
(State of Incorporation) (I.R.S. Employer Identification No.)
111 West Monroe Street, Chicago, Illinois 60603
(Address of principal executive offices)
Daniel G. Donovan, Harris Trust and Savings Bank,
311 West Monroe Street, Chicago, Illinois, 60606
(312) 461-2908 phone (312) 461-3525 facsimile
(Name, address and telephone number for agent for service)
NEXTEL COMMUNICATIONS, INC.
(Obligor)
Delaware 36-3939651
(State of Incorporation) (I.R.S. Employer Identification No.)
1505 Farm Credit Drive
McLean, Virginia 22012
(Address of principal executive offices)
12% Senior Serial Redeemable Notes, Due 2008
(Title of indenture securities)
<PAGE> 2
1. GENERAL INFORMATION. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
Commissioner of Banks and Trust Companies, State of Illinois,
Springfield, Illinois; Chicago Clearing House Association, 164 West
Jackson Boulevard, Chicago, Illinois; Federal Deposit Insurance
Corporation, Washington, D.C.; The Board of Governors of the Federal
Reserve System, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Harris Trust and Savings Bank is authorized to exercise corporate
trust powers.
2. AFFILIATIONS WITH OBLIGOR. If the Obligor is an affiliate of the Trustee,
describe each such affiliation.
The Obligor is not an affiliate of the Trustee.
3. through 15.
NO RESPONSE NECESSARY
16. LIST OF EXHIBITS.
1. A copy of the articles of association of the Trustee as now in effect
which includes the authority of the trustee to commence business and
to exercise corporate trust powers.
A copy of the Certificate of Merger dated April 1, 1972 between Harris
Trust and Savings Bank, HTS Bank and Harris Bankcorp, Inc. which
constitutes the articles of association of the Trustee as now in
effect and includes the authority of the Trustee to commence business
and to exercise corporate trust powers was filed in connection with
the Registration Statement of Louisville Gas and Electric Company,
File No. 2-44295, and is incorporated herein by reference.
2. A copy of the existing by-laws of the Trustee.
A copy of the existing by-laws of the Trustee was filed in connection
with the Registration Statement of Commercial Federal Corporation,
File No. 333-20711, and is incorporated herein by reference.
3. The consents of the Trustee required by Section 321(b) of the Act.
(included as Exhibit A on page 2 of this statement)
4. A copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or examining
authority.
(included as Exhibit B on page 3 of this statement)
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
HARRIS TRUST AND SAVINGS BANK, a corporation organized and existing under the
laws of the State of Illinois, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago, and State of Illinois, on the 2nd day of February, 1999.
HARRIS TRUST AND SAVINGS BANK
By: /s/ D. G. DONOVAN
--------------------------
D. G. Donovan
Assistant Vice President
EXHIBIT A
The consents of the trustee required by Section 321(b) of the Act.
Harris Trust and Savings Bank, as the Trustee herein named, hereby consents that
reports of examinations of said trustee by Federal and State authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
HARRIS TRUST AND SAVINGS BANK
By: /s/ D. G. DONOVAN
--------------------------
D. G. Donovan
Assistant Vice President
2
<PAGE> 4
EXHIBIT B
Attached is a true and correct copy of the statement of condition of Harris
Trust and Savings Bank as of September 30, 1998, as published in accordance with
a call made by the State Banking Authority and by the Federal Reserve Bank of
the Seventh Reserve District.
Consolidating Report of Condition of
[HARRIS BANK LOGO]
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60603
of Chicago, Illinois, And Foreign and Domestic Subsidiaries,
at the close of business on September 30, 1998, a state banking
institution organized and operating under the banking laws of
this State and a member of the Federal Reserve System. Published
in accordance with a call made by the Commissioner of Banks and
Trust Companies of the State of Illinois and by the Federal Reserve
Bank of this District.
Bank's Transit Number 71000288
<TABLE>
<CAPTION>
THOUSANDS
ASSETS OF DOLLARS
<S> <C> <C>
Cash and balances due from depository institutions:
Non-interest bearing balances and currency and coin.................... $1,097,714
Interest bearing balances.............................................. $213,712
Securities:..............................................................................
a. Held-to-maturity securities $0
b. Available-for-sale securities $5,036,734
Federal funds sold and securities purchased under agreements to resell $48,950
Loans and lease financing receivables:
Loans and leases, net of unearned income............................... $9,111,098
LESS: Allowance for loan and lease losses............................. $104,900
--------------
Loans and leases, net of unearned income, allowance, and reserve
(item 4.a minus 4.b)................................................... $9,006,198
Assets held in trading accounts.......................................................... $202,008
Premises and fixed assets (including capitalized leases)................................. $245,290
Other real estate owned.................................................................. $365
Investments in unconsolidated subsidiaries and associated companies...................... $41
Customer's liability to this bank on acceptances outstanding............................. $34,997
Intangible assets........................................................................ $260,477
Other assets............................................................................. $1,148,163
-----------------
TOTAL ASSETS $17,294,649
=================
</TABLE>
3
<PAGE> 5
<TABLE>
<S> <C> <C>
LIABILITIES
Deposits:
In domestic offices................................................................. $9,467,895
Non-interest bearing.................................................... $2,787,471
Interest bearing........................................................ $6,680,424
In foreign offices, Edge and Agreement subsidiaries, and IBF's...................... $1,268,759
Non-interest bearing.................................................... $23,329
Interest bearing........................................................ $1,245,430
Federal funds purchased and securities sold under agreements to repurchase in domestic
offices of the bank and of its Edge and Agreement subsidiaries, and in IBF's:
Federal funds purchased & securities sold under agreements to repurchase............. $3,118,548
Trading Liabilities 110,858
Other borrowed money:.....................................................................
a. With remaining maturity of one year or less $1,202,050
b. With remaining maturity of more than one year $0
Bank's liability on acceptances executed and outstanding $34,997
Subordinated notes and debentures......................................................... $225,000
Other liabilities......................................................................... $530,224
-------------
TOTAL LIABILITIES $15,958,331
=============
EQUITY CAPITAL
Common stock.............................................................................. $100,000
Surplus................................................................................... $604,834
a. Undivided profits and capital reserves................................................ $580,271
b. Net unrealized holding gains (losses) on available-for-sale securities $51,213
-------------
TOTAL EQUITY CAPITAL $1,336,318
=============
Total liabilities, limited-life preferred stock, and equity capital....................... $17,294,649
=============
</TABLE>
I, Pamela Piarowski, Vice President of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System and
is true to the best of my knowledge and belief.
/s/ PAMELA PIAROWSKI
10/29/98
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and, to the best of our
knowledge and belief, has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and the
Commissioner of Banks and Trust Companies of the State of Illinois and is true
and correct.
/s/ EDWARD W. LYMAN,
/s/ ALAN G. McNALLY,
/s/ CHARLES SHAW
Directors.
4
<PAGE> 1
EXHIBIT 99.1
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON , 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 , 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 "VI.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 "VI.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>
- -----------------------------------------------------------------------------------------------------------
DESCRIPTION OF OUTSTANDING NOTES
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
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 "VI.E. 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 Payment 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 Payment 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
7
<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>
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>
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>
------------------------------------------------------------------- ------------------------------
Signature Date
- --------------------------------------------------------------------------------------------------------
</TABLE>
8
<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 "VI.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
"VI.E. The Exchange Offer -- Conditions," will be final and binding on all
parties.
9
<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 is 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
10
<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 Payment
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 DELIVERY 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 "VI.E. The Exchange
Offer -- Conditions."
11
<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.
12
<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--
- -----------------------------------------------------------
<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--
- -----------------------------------------------------------
<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.
13
<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.
14
<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>
15
<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 , 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
, 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 "VI.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.
4
