<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 6, 2000
REGISTRATION NO. 333-92895
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1 TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
NEXTEL COMMUNICATIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
(State or Other Jurisdiction of
Incorporation or Organization)
4812
(Primary Standard Industrial
Classification Code Number)
36-3939651
(I.R.S. Employer
Identification Number)
2001 EDMUND HALLEY DRIVE
RESTON, VIRGINIA 20191
(703) 433-4000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
THOMAS J. SIDMAN, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
NEXTEL COMMUNICATIONS, INC.
2001 EDMUND HALLEY DRIVE
RESTON, VIRGINIA 20191/(703) 433-4000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------
COPIES TO:
LISA A. STATER, ESQ.
JONES, DAY, REAVIS & POGUE
3500 SUNTRUST PLAZA
303 PEACHTREE STREET
ATLANTA, GEORGIA 30308-3242
(404) 521-3939
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable following the effective date of this Registration Statement.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
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 JANUARY 6, 2000
PROSPECTUS
$2,000,000,000
OFFER TO EXCHANGE
9.375% SENIOR SERIAL REDEEMABLE NOTES DUE 2009
FOR ANY AND ALL OUTSTANDING 9.375% SENIOR SERIAL REDEEMABLE NOTES DUE 2009
OF
NEXTEL COMMUNICATIONS, INC.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON FEBRUARY 10, 2000, UNLESS EXTENDED.
------------------------
The Registered Notes
- The terms of the notes to be issued are substantially identical to the
outstanding notes that Nextel issued on November 12, 1999, except for
transfer restrictions, registration rights and liquidated damages
provisions relating to the outstanding notes that will not apply to the
offered notes.
- The notes mature on November 15, 2009.
- Interest on the notes accrues at the rate of 9.375% per year, payable in
cash every six months on May 15 and November 15, with the first payment
on May 15, 2000.
- The notes are senior, unsecured obligations of Nextel and will rank
equally with all other unsecured and unsubordinated obligations of
Nextel.
The Exchange Offer
- Expires at 5:00 p.m., New York City time, on February 10, 2000, unless
Nextel extends the exchange offer.
- The exchange offer is subject to conditions, which Nextel may waive.
- Tenders of outstanding notes may be withdrawn at any time prior to the
expiration of the exchange offer.
- 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.
- If you do not tender your notes in the exchange offer, you will continue
to hold unregistered securities and your ability to transfer your notes
could be adversely affected.
- Nextel will not receive any cash proceeds from the exchange offer.
------------------------
PLEASE CONSIDER CAREFULLY THE "RISK FACTORS" BEGINNING ON PAGE 11 OF THIS
PROSPECTUS.
------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved the notes to be distributed in the exchange offer, nor
have any of these organizations determined that this prospectus is accurate or
complete. Any representation to the contrary is a criminal offense.
------------------------
THE DATE OF THIS PROSPECTUS IS JANUARY , 2000
<PAGE> 3
I. REFERENCES TO ADDITIONAL INFORMATION
AS USED IN THIS PROSPECTUS, "NEXTEL" REFERS TO NEXTEL COMMUNICATIONS, INC.
AND ITS SUBSIDIARIES, EXCEPT WHERE THE CONTEXT OTHERWISE REQUIRES OR AS
OTHERWISE INDICATED. 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 FROM:
NEXTEL COMMUNICATIONS, INC.
2001 EDMUND HALLEY DRIVE
RESTON, VIRGINIA 20191
ATTENTION: INVESTOR RELATIONS
TELEPHONE: (703) 433-4000
IF YOU WOULD LIKE TO REQUEST COPIES OF THESE DOCUMENTS, PLEASE DO SO BY
FEBRUARY 3, 2000, WHICH IS FIVE BUSINESS DAYS BEFORE THE EXPIRATION DATE OF THE
EXCHANGE OFFER, IN ORDER TO RECEIVE THEM BEFORE THE EXPIRATION OF THE EXCHANGE
OFFER. SEE "XI. WHERE YOU CAN GET MORE INFORMATION."
"Nextel" and "Nextel Direct Connect" are trademarks or service marks of
Nextel. "Motorola," "i1000plus," "i500plus" and "i700plus" are trademarks of
Motorola, Inc.
2
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C> <C>
I. References to Additional Information.............................. 2
II. Summary........................................................... 4
A. Nextel...................................................... 4
B. Use of Proceeds............................................. 4
C. The Exchange Offer.......................................... 5
D. The Exchange Notes.......................................... 7
E. Summary Financial Information............................... 8
III. Risk Factors...................................................... 11
A. Risk Factors Relating to Nextel............................. 11
B. Risk Factors Relating to the Notes.......................... 19
C. Nextel's Forward Looking Statements Are Subject to a Variety
of Factors That Could Cause Actual Results to Differ
Materially from Current Beliefs............................. 22
IV. Use of Proceeds................................................... 23
V. The Exchange Offer................................................ 23
A. Purpose and Effect of the Exchange Offer.................... 23
B. Resale of the Exchange Notes................................ 24
C. Terms of the Exchange Offer................................. 25
D. Expiration Date; Extensions; Amendments..................... 25
E. Conditions.................................................. 27
F. Procedures for Tendering.................................... 27
G. Book-Entry Transfer......................................... 29
H. Guaranteed Delivery Procedures.............................. 30
I. Withdrawal of Tenders....................................... 30
J. Termination of Certain Rights............................... 31
K. Exchange Agent.............................................. 31
L. Fees and Expenses........................................... 31
M. Consequences of Failure to Exchange......................... 32
N. Accounting Treatment........................................ 32
VI. The Exchange Notes................................................ 32
A. Glossary of Defined Terms................................... 32
B. General..................................................... 50
C. Optional Redemption......................................... 50
D. Change of Control........................................... 51
E. Certain Covenants........................................... 52
F. Events of Default........................................... 58
G. Defeasance and Covenant Defeasance.......................... 59
H. Modification and Waiver..................................... 60
I. No Personal Liability of Incorporators, Stockholders,
Officers, Directors or Employees............................ 61
J. Concerning the Trustee...................................... 61
K. Book Entry; Delivery and Form............................... 61
L. Certificated Notes.......................................... 62
Principal United States Federal Tax Considerations to Non-U.S.
VII. Holders........................................................... 62
VIII. Plan of Distribution.............................................. 65
IX. Legal Matters..................................................... 66
X. Experts........................................................... 66
XI. Where You Can Get More Information................................ 66
A. Available Information....................................... 66
B. Incorporation of Documents by Reference..................... 66
</TABLE>
3
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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
Nextel provides a wide array of digital 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.
A customer using Nextel's digital mobile network is able to access:
- digital mobile telephone service;
- digital two-way radio dispatch service, which provides instant
conferencing capabilities and is marketed as "Nextel Direct Connect"
service;
- paging; and
- short-messaging service.
Nextel refers to the handset device on which it delivers these services as
a subscriber unit.
As of September 30, 1999:
- Nextel provided service to about 4,050,900 digital subscriber units in
the United States; and
- Nextel's digital mobile network or the compatible digital mobile
network of Nextel Partners, Inc., a joint venture in which Nextel is a
participant, was operational in areas in and around 92 of the top 100
metropolitan statistical areas in the United States.
Nextel has also announced its plans to offer its customers access to new
digital two-way mobile data and Internet connectivity services. Three new
handsets developed and manufactured by Motorola, the "i1000plus," the "i500plus"
and the "i700plus," have been introduced since May 1999. These new handsets are
expected to be the first in a product line that incorporates micro-browsers and
wireless Internet capability, which is planned to be combined with other mobile
data applications to be used in connection with Nextel's planned wireless data
service offering. Nextel has begun testing the underlying technology for these
services in several U.S. markets and currently plans to commercially launch the
wireless data service offering in mid-2000.
In addition to its domestic operations, Nextel has ownership interests in
international wireless companies through its subsidiary, Nextel International,
Inc. The subsidiaries of Nextel International, Inc., or other entities in which
Nextel International, Inc. holds equity or equivalent interests, own and operate
wireless communications systems in and around various major metropolitan market
areas in Latin America, Asia and Canada. Nextel International, Inc., together
with Nextel, provides services in ten of the world's 25 largest cities.
Nextel's principal executive and administrative facility is located at 2001
Edmund Halley Drive, Reston, Virginia 20191, and its telephone number is (703)
433-4000.
B. USE OF PROCEEDS
Nextel will not receive any cash proceeds from the exchange offer.
4
<PAGE> 6
C. THE EXCHANGE OFFER
The Exchange Offer......... Nextel offers to exchange $2.0 billion in principal
amount of its 9.375% senior serial redeemable notes
due November 15, 2009, which have been registered
under the federal securities laws, for $2.0 billion
principal amount of its outstanding unregistered
9.375% senior serial redeemable notes due November
15, 2009 which Nextel issued on November 12, 1999
in a private placement. You have the right to
exchange your outstanding notes for an equal
principal amount of 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 before the expiration of the
exchange offer 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 12,
1999 in a private placement. At that time, Nextel
signed a registration rights agreement with the
initial purchasers of the notes, which requires
Nextel to conduct this exchange offer.
This exchange offer is intended to satisfy those
registration rights set forth in the registration
rights agreement. After the exchange offer is
complete, you will no longer be entitled to
registration rights with respect to outstanding
notes you do not exchange.
If You Fail to Exchange
Your Outstanding Notes..... If you do not exchange your outstanding notes for
exchange notes in the exchange offer, you will
continue to be subject to the restrictions on
transfer as provided in the outstanding notes and
the indenture governing those notes. In general,
you may not offer or sell your outstanding notes
unless the offer or sale is registered under the
federal securities laws or unless those notes 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 February 10, 2000 unless Nextel
decides to extend the expiration date.
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.
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 tenders
of outstanding notes; and
5
<PAGE> 7
- to waive any condition or otherwise amend
the terms of the exchange offer in any
respect.
Procedures for Tendering
Outstanding Notes.......... If you wish to tender your outstanding notes for
exchange, you must:
- complete and sign the enclosed letter of
transmittal by following the related
instructions; and
- send the letter of transmittal, as directed
in the instructions, together with any other
required documents, to the exchange agent,
either (1) with the outstanding notes to be
tendered or (2) in compliance with the
specified procedures for guaranteed delivery
of the outstanding notes.
Brokers, dealers, commercial banks, trust companies
and other nominees may also effect tenders by
book-entry transfer.
Please do not send your letter of transmittal or
certificates representing your outstanding notes to
Nextel. Those documents should only be sent to the
exchange agent. Questions regarding how to tender
and requests for information should be directed to
the exchange agent.
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.
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 "V.I. The Exchange
Offer -- Withdrawal of Tenders."
Resales of Exchange
Notes...................... Nextel believes that you will be able to offer for
resale, resell or otherwise transfer exchange notes
issued in the exchange offer without compliance
with the registration and prospectus delivery
provisions of the federal securities laws, provided
that:
- you are acquiring the exchange notes in the
ordinary course of business;
- you are not participating, and have no
arrangement or understanding with any person
to participate, in the distribution of the
exchange notes; and
- you are not an affiliate of Nextel. An
affiliate of Nextel is a person that
"controls or is controlled by or is under
common control with" Nextel.
Nextel's belief is based on interpretations by the
Staff of the Commission, as set forth in no-action
letters issued to third parties unrelated to
Nextel. The Staff has not considered this exchange
offer in the context of a no-action letter, and
Nextel cannot assure you that the Staff would make
a similar determination with respect to this
exchange offer.
6
<PAGE> 8
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 by
that broker-dealer.
Exchange Agent............. The exchange agent for the exchange offer is Harris
Trust and Savings Bank. The address, telephone
number and facsimile number of the exchange agent
are set forth in "V.K. The Exchange
Offer -- Exchange Agent" and in the letter of
transmittal.
See "V. The Exchange Offer" for more detailed information concerning the
exchange offer.
D. THE EXCHANGE NOTES
Exchange Notes............. $2.0 billion principal amount of Nextel's 9.375%
senior serial redeemable notes due November 15,
2009.
Interest Payment Dates..... Interest on the notes accrues at the rate of 9.375%
per year, payable in cash every six months on May
15 and November 15, with the first payment on May
15, 2000.
Optional Redemption........ On or after November 15, 2004, 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
15, 2002 at least $50 million of qualifying capital
stock, it may redeem up to 35% in principal amount
of the notes at a price of 109.375% of their
principal amount, plus accrued and unpaid interest,
if any, to the date of redemption with the proceeds
from that sale as 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 unsecured guarantees of debt of its
subsidiaries;
- will be senior in right of payment to all
existing and future subordinated debt of
Nextel;
- will be effectively subordinated to all
existing and future debt of Nextel's
subsidiaries; and
- will be subordinated to all existing and
future secured debt of Nextel.
At September 30, 1999, Nextel had about $5.1
billion of outstanding debt that ranked equally
with the notes. At September 30, 1999,
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<PAGE> 9
Nextel's subsidiaries had about $4.7 billion of
outstanding debt and current liabilities, including
trade payables.
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 currently
authorized preferred stock;
- make investments or restricted payments;
- enter into specified transactions with
affiliates;
- merge or consolidate; and
- transfer and sell assets.
Change of Control.......... Upon a change of control, as defined later in this
prospectus, Nextel will be required to offer to
repurchase your notes at a price equal to 101% of
their principal amount plus accrued and unpaid
interest, if any, to the date of purchase.
See "VI. The Exchange Notes" for more detailed information concerning the
exchange notes.
Risk Factors............... You should read the "Risk Factors" section
beginning on page 11 of this prospectus, as well as
other cautionary statements throughout the entire
prospectus, to ensure that you understand the risks
associated with the notes.
E. SUMMARY FINANCIAL INFORMATION
The financial information below for the nine months ended December 31,
1994, which reflects the change in Nextel's fiscal year end from March 31 to
December 31, and the years ended December 31, 1995, 1996, 1997 and 1998 have
been derived from the audited consolidated financial statements of Nextel. The
financial information for the nine months ended September 30, 1998 and 1999 has
been 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 of interim periods
to be an indication of 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 "XI.A. Where You
Can Get More Information -- Available Information."
Acquisitions. Nextel's results were affected by business combinations,
acquisitions and investments involving both domestic and international
companies. In July 1995, Nextel completed the acquisition of substantially all
of Motorola's 800 MHz specialized mobile radio licenses in the continental
United States and mergers with OneComm Corporation and American Mobile Systems,
Incorporated. Additional information regarding acquisitions completed in 1996,
1997 and 1998 can be found in note 2 to the consolidated financial statements in
Nextel's Annual Report on Form 10-K for the year ended December 31, 1998.
Income Tax Provision. As a result of operating results and the change in
useful lives of some intangible assets, Nextel increased its valuation allowance
for deferred tax assets resulting in a tax provision of about $259 million in
1997. Additional information can be found in note 10 to the consolidated
financial statements in Nextel's Annual Report on Form 10-K for the year ended
December 31, 1998.
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Ratio of Earnings to Fixed Charges. For the purpose of computing the ratio
of earnings to fixed charges, earnings consist of loss before income taxes plus
fixed charges less capitalized interest and 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; and
- that portion of rental expense which Nextel believes to be
representative of interest.
The deficiency of earnings to cover fixed charges for the nine months ended
December 31, 1994 was $218 million, for the year ended December 31, 1995 was
$563 million, for the year ended December 31, 1996 was $885 million, for the
year ended December 31, 1997 was $1,342 million, for the year ended December 31,
1998 was $1,771 million, for the nine months ended September 30, 1998 was $1,319
million and for the nine months ended September 30, 1999 was $1,041 million.
As Adjusted. At September 30, 1999, the as adjusted balance sheet data
reflects the receipt of the estimated net proceeds from the sale of 33,781,785
shares of Class A common stock of about $2.8 billion in a public offering
completed on November 5, 1999, as well as the estimated net proceeds of the
offering of the outstanding notes on November 12, 1999 of about $2.0 billion,
but does not reflect the expected repurchase or redemption of Nextel's public
notes that were issued prior to 1997, nor the expected extraordinary loss that
would result from the extinguishment of that debt. As of December 31, 1999, in
accordance with the provisions of the relevant indentures, Nextel redeemed all
outstanding senior notes in three of the series of senior notes and Nextel
delivered notices and other appropriate documents to the trustee commencing the
redemption of all outstanding senior notes in the remaining two series issued
prior to 1997. The notes redeemed and called for redemption represented an
aggregate carrying value of $1,617 million in long term indebtedness on Nextel's
September 30, 1999 balance sheet, and the remaining two redemptions are
scheduled for closing on January 15, 2000 and February 15, 2000.
You should review notes 12 and 13 to the consolidated financial statements
in Nextel's Annual Report on Form 10-K for the year ended December 31, 1998 for
a detailed discussion of Nextel's capital stock.
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<TABLE>
<CAPTION>
NINE MONTHS
NINE MONTHS ENDED
ENDED YEAR ENDED DECEMBER 31, SEPTEMBER 30,
DECEMBER 31, ----------------------------------------- -------------------
1994 1995 1996 1997 1998 1998 1999
------------ -------- -------- -------- -------- -------- --------
(IN MILLIONS, EXCEPT PER SHARE AND SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Operating revenues........................ $ 75 $ 172 $ 333 $ 739 $ 1,847 $ 1,255 $ 2,346
Cost of revenues.......................... 52 152 248 289 516 371 504
Selling, general and administrative....... 85 194 330 862 1,551 1,101 1,523
Expenses related to corporate
reorganization.......................... -- 17 -- -- -- -- --
Depreciation and amortization............. 94 236 401 526 832 583 732
-------- -------- -------- -------- -------- -------- --------
Operating loss............................ (156) (427) (646) (938) (1,052) (800) (413)
Interest expense, net..................... (41) (90) (206) (378) (622) (439) (599)
Other (expense) income net................ -- (15) (11) 7 (37) (37) (32)
Income tax benefit (provision)............ 71 201 307 (259) 192 128 25
-------- -------- -------- -------- -------- -------- --------
Loss before extraordinary item............ (126) (331) (556) (1,568) (1,519) (1,148) (1,019)
Extraordinary item -- loss on early
retirement of debt, net of tax of $0.... -- -- -- (46) (133) (133) --
Mandatorily redeemable preferred stock
dividends............................... -- -- -- (29) (149) (107) (142)
-------- -------- -------- -------- -------- -------- --------
Loss attributable to common
stockholders............................ $ (126) $ (331) $ (556) $ (1,643) $ (1,801) $ (1,388) $ (1,161)
======== ======== ======== ======== ======== ======== ========
Loss per share attributable to common
stockholders, basic and diluted:
Loss before extraordinary item
attributable to common stockholders... $ (1.25) $ (2.31) $ (2.50) $ (6.41) $ (5.98) $ (4.56) $ (3.78)
Extraordinary item...................... -- -- -- (0.18) (0.48) (0.48) --
-------- -------- -------- -------- -------- -------- --------
$ (1.25) $ (2.31) $ (2.50) $ (6.59) $ (6.46) $ (5.04) $ (3.78)
======== ======== ======== ======== ======== ======== ========
Weighted average number of common shares
outstanding (in thousands).............. 100,639 143,283 222,779 249,320 278,643 275,584 307,286
======== ======== ======== ======== ======== ======== ========
OTHER FINANCIAL DATA:
Ratio of earnings to fixed charges (see
discussion above)....................... -- -- -- -- -- -- --
</TABLE>
<TABLE>
<CAPTION>
SEPTEMBER 30, 1999
---------------------
ACTUAL AS ADJUSTED
------- -----------
(IN MILLIONS)
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents, including restricted portion of
$78....................................................... $ 1,379 $ 6,091
Intangible assets, net...................................... 4,610 4,610
Total assets................................................ 13,157 17,909
Long-term debt, excluding current portion................... 8,444 10,444
Mandatorily redeemable preferred stock...................... 1,720 1,720
Stockholders' equity........................................ 54 2,806
</TABLE>
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III. RISK FACTORS
You should carefully consider the risk factors discussed below, as well as
other information included and incorporated by reference in this prospectus in
connection with an investment in the exchange notes.
A. RISK FACTORS RELATING TO NEXTEL
1. NEXTEL HAS A HISTORY OF NET LOSSES AND NEGATIVE CASH FLOW AND MAY NEVER
BE ABLE TO SATISFY ITS CASH NEEDS FROM OPERATIONS.
Nextel has never been profitable and has experienced negative cash flow
since its start in 1987. If these losses continue, Nextel's ability to pay cash
interest and to make scheduled principal repayments, on its indebtedness,
including the notes, may be adversely affected. Nextel had net losses
attributable to common stockholders of about $1.8 billion during 1998 and about
$1.2 billion for the nine months ended September 30, 1999. Nextel's accumulated
deficit was about $5.4 billion at September 30, 1999. Nextel expects that losses
will continue over the next several years. Nextel cannot know when, if ever, net
cash generated by its internal business operations will support its growth and
continued operations.
2. IF NEXTEL DOES NOT OBTAIN SUFFICIENT ADDITIONAL FINANCING COMMITMENTS TO
MEET ITS LONG-TERM NEEDS, NEXTEL'S ABILITY TO PAY INTEREST AND TO MAKE
PRINCIPAL PAYMENTS ON THE NOTES MAY BE ADVERSELY AFFECTED.
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;
- potential acquisitions, including negotiated acquisitions of spectrum
from third parties and any future Federal Communications Commission
auctions of spectrum;
- debt service requirements; and
- other general corporate expenditures.
If Nextel can't fund these needs, its growth plans and operations, and
Nextel's ability to pay cash interest, and to make scheduled principal
repayments, on its indebtedness, including the notes, may be adversely affected.
Nextel expects its cash needs will exceed its cash flows from operating
activities through 2000. 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 THAT MAY RESTRICT GROWTH AND
ADVERSELY AFFECT OPERATIONS.
Nextel's long-term cash needs may be much greater than its cash on hand and
availability under its existing financing agreements. As a result, Nextel may
have to raise substantial amounts of additional funds, in the form of equity or
debt, in the future to support its growth and operations. If it is unable to do
so, Nextel may not be able to expand the coverage and capacity of its network to
meet the demands of Nextel's anticipated growth. Nextel's inability to achieve
contemplated levels of growth would adversely affect its financial results and
may adversely affect Nextel's ability to pay cash interest, and to make
scheduled principal repayments, on its indebtedness, including the notes.
Under its bank credit agreement as amended effective November 12, 1999,
Nextel may borrow up to $5.0 billion in secured financing from its bank lenders
provided that Nextel satisfies financial and other conditions. As of September
30, 1999, about $1.8 billion of this secured financing had been drawn under the
bank credit agreement as in effect prior to its amendment. As of November 12,
1999, Nextel had about $2.7 billion of debt outstanding under the amended bank
credit agreement. The availability of this financing is also subject to Nextel
satisfying covenants under indentures relating to Nextel's other public
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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
- existing debt service requirements.
c. FUNDING REQUIREMENTS FOR INTERNATIONAL OPERATIONS AND GROWTH MAY
CAUSE EVEN GREATER CASH NEEDS, WHICH MAY RESULT IN LESS FUNDING
AVAILABLE FOR NEXTEL'S DOMESTIC GROWTH AND OPERATIONS.
Based on Nextel International, Inc.'s assessment of the business activity
and related cash needs of its operating subsidiaries that are controlled by or
that rely substantially on Nextel International, Inc. for further funding,
Nextel International, Inc. believes that it will have adequate funding to
continue its operations only through the early portion of 2000. Nextel,
therefore, currently expects that it may need to fund a significant portion of
Nextel International, Inc.'s funding needs in 2000. This would increase Nextel's
own cash needs, which could result in a lesser amount of cash available to
Nextel for domestic use.
d. FUNDING REQUIREMENTS FOR A NEXTEL-SPONSORED REORGANIZATION OF THE
NEXTWAVE ENTITIES OR ACQUISITION OF SPECTRUM INITIALLY AWARDED TO
NEXTWAVE MAY REQUIRE NEXTEL TO RAISE ADDITIONAL CAPITAL.
If a Nextel-sponsored plan of reorganization of the NextWave entities is
implemented, or if Nextel were otherwise to acquire spectrum initially awarded
to NextWave, Nextel anticipates that it would need to raise a substantial amount
of additional capital to finance the cash distributions under that plan or
acquisition and to pursue the business opportunities arising from any such
transaction. Nextel cannot assure you that any plan involving Nextel in a
reorganization of the NextWave entities or acquisition of spectrum initially
awarded to NextWave will be implemented or that the necessary additional capital
for that purpose will be available on acceptable terms, or at all. If sufficient
additional capital is not available, Nextel may be unable to complete any such
reorganization or acquisition or the amount of funding available to Nextel for
its existing businesses would be reduced.
e. OTHER FACTORS MAY ADVERSELY AFFECT NEXTEL'S ACCESS TO ADDITIONAL
FINANCING AND NEXTEL MAY HAVE TO CURTAIL ITS BUSINESS IF IT CANNOT
ACCESS ADDITIONAL FUNDING.
Nextel's access to additional funds also may be limited by:
- general market conditions that adversely affect the availability or
cost of financings;
- market conditions affecting the telecommunications industry in
general; and
- specific factors affecting Nextel's attractiveness as a borrower or
investment vehicle, including:
(1) the terms of Nextel's arrangements with Motorola that relate to
Motorola's ownership interest in Nextel, and the terms of options
and warrants issued to others, that may make equity financings
more difficult;
(2) the ability to relocate current spectrum licensees from some
frequencies in order to remove them from spectrum as to which
Nextel was the highest bidder at an auction;
(3) the potential commercial opportunities and risks associated with
implementation of Nextel's business plan;
(4) the market's perception of Nextel's performance and assets; and
(5) the actual amount of cash needed by Nextel to pursue its business
strategy.
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F. FUNDING FOR NEXTEL'S CAPITAL NEEDS IS NOT ASSURED AND NEXTEL MAY
HAVE TO CURTAIL ITS BUSINESS IF IT CANNOT FIND ADEQUATE FUNDING.
Currently, 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, to maintain its current levels of operation or to pursue
strategic acquisitions or other opportunities to increase its spectrum holdings.
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
and on Nextel's ability to pay cash interest, and to make scheduled principal
repayments, on its indebtedness, including the notes.
3. NEXTEL'S FUTURE PERFORMANCE WILL DEPEND ON ITS ABILITY TO SUCCEED IN THE
HIGHLY COMPETITIVE WIRELESS COMMUNICATIONS INDUSTRY.
Nextel's ability to compete effectively with established and prospective
wireless communications service providers depends on many factors, including:
- IF NEXTEL'S WIRELESS COMMUNICATIONS TECHNOLOGY DOES NOT PERFORM IN A
MANNER THAT MEETS CUSTOMER EXPECTATIONS, NEXTEL WILL BE UNABLE TO ATTRACT
AND RETAIN CUSTOMERS, WHICH WOULD ADVERSELY AFFECT NEXTEL'S ABILITY TO
PAY INTEREST AND TO MAKE PRINCIPAL PAYMENTS ON THE NOTES. 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. If Nextel is unable to address and resolve satisfactorily
performance or other transmission quality issues as they arise, or if
these issues limit Nextel's ability to expand its network coverage or
capacity as currently planned, or if these issues were to place Nextel at
a competitive disadvantage to other wireless service providers in its
markets, Nextel may have difficulty attracting and retaining customers,
which would adversely affect Nextel's ability to pay cash interest, and
to make scheduled principal repayments, on its indebtedness, including
the notes.
- IF NEXTEL CANNOT EXPAND, PROVIDE AND MAINTAIN ITS SYSTEM COVERAGE, THEN
ITS GROWTH AND OPERATIONS, AND NEXTEL'S ABILITY TO PAY INTEREST AND TO
MAKE PRINCIPAL PAYMENTS ON THE NOTES, WOULD BE ADVERSELY AFFECTED. Nextel
will not be able to provide roaming system coverage comparable to that
currently available through roaming arrangements from cellular and some
personal communication services operators, unless and until a nationwide
digital mobile network build-out is substantially completed. This places
Nextel at a competitive disadvantage, as some other providers currently
have roaming agreements that provide coverage of each other's markets
throughout the United States, including areas where Nextel's network has
not been or will not be built. In addition, some of Nextel's competitors
provide their customers with subscriber units with both digital and
analog capability, which expands their coverage, while Nextel has only
digital capability. Nextel cannot assure you that it will be able to
achieve sufficient system coverage or 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.
- NEXTEL DOES NOT HAVE THE EXTENSIVE DIRECT AND INDIRECT CHANNELS OF
DISTRIBUTION FOR ITS DIGITAL MOBILE NETWORK PRODUCTS AND SERVICES THAT
SOME OF ITS COMPETITORS HAVE, WHICH MAY ADVERSELY AFFECT NEXTEL'S
OPERATING RESULTS AND COULD ADVERSELY AFFECT NEXTEL'S ABILITY TO PAY
INTEREST AND TO MAKE PRINCIPAL PAYMENTS ON THE NOTES. Many of Nextel's
competitors have 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
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for its digital wireless service offerings. However, as Nextel expands
its retail subscriber base through increased reliance on indirect
distribution channels and as price competition in the wireless industry
intensifies, Nextel's average revenue per digital subscriber unit may
decrease and Nextel's customer retention may be adversely affected.
- NEXTEL'S INABILITY TO MAINTAIN PRICING PACKAGES ATTRACTIVE TO CUSTOMERS
MAY ADVERSELY AFFECT OPERATING RESULTS, WHICH COULD ADVERSELY AFFECT
NEXTEL'S ABILITY TO PAY INTEREST AND TO MAKE PRINCIPAL PAYMENTS ON THE
NOTES.
A. SOME OF NEXTEL'S COMPETITORS ARE FINANCIALLY STRONGER THAN
NEXTEL, WHICH ALLOWS THEM TO PRICE THEIR SERVICE PACKAGES AT
LEVELS BELOW THOSE THAT NEXTEL CAN OR IS WILLING TO MATCH.
Nextel's ability to compete based on the price of its digital mobile
network subscriber units and service offerings will be limited. This could
adversely affect Nextel's growth and Nextel's ability to pay cash
interest, and to make scheduled principal repayments, on its indebtedness,
including the notes.
B. NEXTEL'S EQUIPMENT IS MORE EXPENSIVE THAN SOME COMPETITORS'
WHICH MAY ADVERSELY AFFECT GROWTH AND OPERATING RESULTS.
Nextel currently markets multi-function digital subscriber handsets,
providing mobile telephone and private and group dispatch service, in
addition to paging and alphanumeric short-text messaging. Nextel's
handsets are, and are likely to remain, significantly more expensive than
analog handsets and are, and are likely to remain, somewhat more expensive
than digital cellular or personal communication services handsets that do
not incorporate a comparable multi-function capability. Although Nextel
believes that its multi-function subscriber handsets currently are
competitively priced compared to multi-function digital cellular and
personal communication services handsets, the higher cost of Nextel's
equipment may make it more difficult or less profitable to attract
customers who do not place a high value on Nextel's unique multi-service
offering. This may reduce Nextel's growth opportunities or profitability
and may adversely affect Nextel's ability to pay cash interest, and to
make scheduled principal repayments, on its indebtedness, including the
notes.
C. NEXTEL MAY FACE CONTINUING PRESSURE TO REDUCE PRICES, WHICH
WOULD ADVERSELY AFFECT OPERATING RESULTS AND NEXTEL'S
ABILITY TO PAY INTEREST AND TO MAKE PRINCIPAL PAYMENTS ON
THE NOTES.
Over the past several years as the number of wireless communications
providers in Nextel's market areas has increased, its competitors' prices
in these markets have generally decreased. Nextel may encounter further
market pressures to:
- reduce its digital mobile network service offering prices;
- restructure its digital mobile network service offering packages to
offer more value;
- 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
- remain competitive if wireless service providers generally continue
to reduce the prices charged to their customers.
- NEXTEL'S EFFORTS TO KEEP PACE WITH TECHNOLOGICAL CHANGE MAY BE
UNSUCCESSFUL OR MAY ADVERSELY AFFECT OPERATING RESULTS, WHICH WOULD
ADVERSELY AFFECT NEXTEL'S ABILITY TO PAY INTEREST AND TO MAKE PRINCIPAL
PAYMENTS ON THE NOTES. Nextel's digital technology could become
obsolete. Nextel relies
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on digital technology that is not compatible with, and competes with,
other forms of digital and non-digital voice communication technology.
Competition among these differing technologies can:
- segment the user markets, which could reduce demand for specific
technologies, including Nextel's;
- reduce the resources devoted by third party suppliers, including
Motorola, which supplies all of Nextel's current digital technology,
in developing or improving the technology for Nextel's systems; and
- adversely affect market acceptance of Nextel's services.
Nextel cannot assure you that its digital voice 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.
- NEXTEL'S GROWTH MAY EXCEED THE CAPABILITIES OF ITS SYSTEMS, HURTING ITS
PERFORMANCE AND NEXTEL'S ABILITY TO PAY INTEREST AND TO MAKE PRINCIPAL
PAYMENTS ON THE NOTES.
A. NEXTEL FACES LIMITATIONS ON ITS ABILITY TO INCREASE
SUBSCRIBERS, WHICH CAN LIMIT ITS GROWTH AND PERFORMANCE.
Nextel's ability to continue to increase the number of subscribers on
its digital mobile network depends on a variety of factors, including:
- the ability to successfully plan for additional system capacity at
levels needed to meet anticipated new subscribers and the related
increases in system usage;
- the ability to obtain additional radio spectrum when and where
required; and
- the availability of a sufficient quantity of cell sites, system
infrastructure equipment and subscriber units, of the appropriate
models and types, to meet the demands and preferences of potential
subscribers to the digital mobile network.
B. NEXTEL MAY FACE LIMITATIONS ON AVAILABILITY OF CELL SITES
AND EQUIPMENT, WHICH MAY ADVERSELY AFFECT ITS GROWTH AND
PERFORMANCE.
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. 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, but Nextel cannot assure you that quantities will be
sufficient in the future. Additionally, Nextel has contractual
arrangements with Nextel International, Inc. and Nextel Partners, Inc.
that contemplate that, in the event of shortages of that equipment,
available supplies would be allocated proportionately among Nextel and
those entities.
C. NEXTEL HAS POTENTIAL SYSTEMS LIMITATIONS ON ADDING
CUSTOMERS, WHICH MAY ADVERSELY AFFECT ITS GROWTH AND
PERFORMANCE.
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
of some of its competitors; and
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- Nextel's ability to improve the efficiency and speed of the processes
for Nextel's customer service and accounts receivable collection
functions.
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. Nextel's inability to timely
and efficiently meet the demands for its services could decrease or
postpone subscriber growth, or delay or otherwise impede billing and
collection of amounts owed, which would adversely affect Nextel, and could
adversely affect Nextel's ability to pay cash interest, and to make
scheduled principal repayments, on its indebtedness, including the notes.
- IF COMPETITORS PROVIDE TWO-WAY RADIO DISPATCH SERVICES, NEXTEL WILL LOSE
A COMPETITIVE ADVANTAGE. Nextel's two-way radio dispatch services are
currently not available through traditional cellular or personal
communication services providers; however, if either personal
communication services or cellular operators provide two-way radio
dispatch or comparable services in the future, Nextel's competitive
advantage may be impaired.
Nextel cannot predict the competitive effect that any of these factors, or
any combination of these factors, will have on it or whether it will compete
successfully in the future.
4. REGULATORY AND OTHER FACTORS COULD DELAY OR PREVENT NEXTEL FROM OFFERING
SERVICES IN NEW MARKET AREAS, WHICH MAY ADVERSELY AFFECT NEXTEL'S
ABILITY TO PAY INTEREST AND TO MAKE PRINCIPAL PAYMENTS ON THE NOTES.
Before fully implementing Nextel's digital mobile network in a new market
area or expanding coverage in an existing 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. These processes
take 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.
5. NEXTEL RELIES ON MOTOROLA FOR SUBSTANTIALLY ALL OF ITS EQUIPMENT AND
TECHNOLOGY AND ANY FAILURE OF MOTOROLA TO PERFORM WOULD ADVERSELY AFFECT
NEXTEL'S OPERATING RESULTS AND NEXTEL'S ABILITY TO PAY INTEREST AND TO
MAKE PRINCIPAL PAYMENTS ON THE NOTES.
There is a risk that the failure by Motorola to deliver necessary
technology improvements and enhancements and system infrastructure and
subscriber equipment on a timely, cost-effective basis would have an adverse
effect on Nextel's growth and operations and would adversely affect Nextel's
ability to pay interest and to make principal payments on the notes. Motorola is
currently Nextel's sole source for the infrastructure and subscriber handset
equipment used by Nextel throughout its markets. Nextel expects to rely
principally on Motorola for the manufacture of a substantial portion of the
equipment necessary to construct its digital mobile network and handset
equipment for the next several years. If Motorola does not provide the necessary
equipment to Nextel, then Nextel may not be able to service its existing
subscribers or add new subscribers. 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. Recently, Nextel and Kyocera Corporation of Japan
entered into a memorandum of understanding with the intent to have Kyocera
manufacture a handset compatible with Nextel's digital mobile network. It is
anticipated that Motorola will license its technology to Kyocera to enable
Kyocera to manufacture those handsets. However, Nextel cannot predict when or
whether Kyocera and Motorola will enter into an appropriate license agreement or
that Nextel and Kyocera will be able to negotiate a mutually acceptable
definitive agreement for Kyocera's manufacture and Nextel's purchase of those
handsets.
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6. AGREEMENTS WITH MOTOROLA REDUCE NEXTEL'S OPERATIONAL FLEXIBILITY AND MAY
ADVERSELY AFFECT ITS GROWTH, OR OPERATING RESULTS, WHICH WOULD ADVERSELY
AFFECT NEXTEL'S ABILITY TO PAY INTEREST AND TO MAKE PRINCIPAL PAYMENTS
ON THE NOTES.
Nextel's agreements with Motorola impose limitations and conditions on
Nextel's ability to use other technologies. These terms may operate to delay or
prevent Nextel from employing new or different technologies that perform better
or are available at a lower cost because of the additional economic costs and
other impediments to change arising under the Motorola agreements. For example,
Nextel's equipment purchase agreement with Motorola provides that Nextel must
provide Motorola with notice of its determination that Motorola's technology is
no longer suited to Nextel's needs at least six months before publicly
announcing or entering into a contract to purchase an alternate technology.
In addition, if Motorola manufactures, or elects to manufacture, the
alternate technology that Nextel elects to deploy, Nextel must give Motorola the
opportunity to supply 50% of its infrastructure requirements for the alternate
technology for three years. Finally, if after a switch to an alternate
technology Nextel does not maintain operational Motorola infrastructure
equipment at the majority of its cell sites that are deployed at the date the
switch to an alternate technology is first publicly announced, Motorola may
require that all financing provided by Motorola to Nextel be repaid.
7. NEXTEL'S INTERESTS MAY CONFLICT WITH THOSE OF MOTOROLA. ANY CONFLICT
COULD ADVERSELY AFFECT NEXTEL'S GROWTH, OPERATING RESULTS OR STRATEGIC
FLEXIBILITY AND NEXTEL'S ABILITY TO PAY INTEREST AND TO MAKE PRINCIPAL
PAYMENTS ON THE NOTES.
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, WHICH OPERATES IN A REGULATED INDUSTRY, MAY BE ADVERSELY
AFFECTED BY GOVERNMENTAL REGULATION.
The Federal Communications Commission regulates the licensing, operation,
acquisition and sale of Nextel's specialized mobile radio businesses. Future
changes in regulation or legislation and Congress' and the Federal
Communications Commission's continued allocation of additional commercial mobile
radio services spectrum could impose significant additional costs on Nextel
either in the form of direct out of pocket costs or additional compliance
obligations. These regulations can also have the effect of introducing
additional competitive entrants to the already crowded wireless communications
marketplace.
Nextel International, Inc.'s operations are subject to similar effects
caused by operating in a regulated industry, since its operations are regulated
by the foreign countries in which its business is conducted and are also subject
to regional and local regulation. Additional information regarding government
regulation can be found in Nextel's Annual Report on Form 10-K for the year
ended December 31, 1998 and Nextel's other filings made under the Securities
Exchange Act of 1934.
9. NEXTEL HAS SIGNIFICANT INTANGIBLE ASSETS, WHICH MAY NOT BE ADEQUATE TO
SATISFY ITS OBLIGATIONS IN THE EVENT OF A LIQUIDATION.
If Nextel defaults on debt or if Nextel were liquidated, Nextel cannot
assure you that the value of its assets will be sufficient to satisfy its
obligations, including its obligations in respect of the notes. Nextel has a
significant amount of intangible assets, such as licenses granted by the Federal
Communications Commission. The value of these licenses will depend significantly
upon the success of Nextel's digital mobile network business and the growth of
the specialized mobile radio and wireless communications industries in general.
Nextel had a net tangible book value deficit of about $2.1 billion as of
September 30, 1999, as adjusted to reflect the receipt of about $2.8 billion in
net proceeds from the public offering of Nextel's common stock, which was
completed on November 5, 1999.
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10. NEXTEL IS SUSCEPTIBLE TO CONTROL BY SIGNIFICANT STOCKHOLDERS.
Significant blocks of Nextel's outstanding stock are held by Motorola and
entities controlled by Mr. Craig O. McCaw. In addition, an affiliate of Mr.
McCaw may designate at least one fourth of the board of directors of Nextel and
may select, from their representatives on the board of directors, a majority of
the operations committee of Nextel's board of directors, which has significant
authority relating to Nextel's business strategy, budgets, financing
arrangements and in the nomination and oversight of specified executive
officers. As a result, Mr. McCaw may exert significant influence over Nextel's
affairs. Presently, three of the ten members of Nextel's board of directors are
designees of Mr. McCaw's affiliates. In addition, Daniel F. Akerson, formerly an
executive officer of Nextel, currently holds positions with Eagle River, Inc.
and NEXTLINK Communications, Inc., each of which is controlled by Mr. McCaw. Mr.
Akerson continues to serve as chairman of Nextel's board of directors and as a
member of the operations committee of the board, but he is not a designee of Mr.
McCaw's affiliates. Under its agreements with Nextel, Motorola may nominate two
directors to the board of directors of Nextel. In addition, Motorola has agreed
to support the decisions and recommendations of the operations committee and to
vote its shares of common stock accordingly, subject to specified limitations.
If Mr. McCaw and Motorola choose to act together, they could have a
sufficient number of members on Nextel's board of directors and 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.
Mr. McCaw and his affiliates have and, subject to the terms of applicable
agreements, may acquire an investment or other interest in entities that provide
wireless telecommunications services that could potentially compete with Nextel.
Under the relevant agreements, Mr. McCaw and his 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 waived or rejected by Nextel.
11. CONCERNS ABOUT HEALTH RISKS RELATING TO THE USE OF PORTABLE HANDSETS
MAY AFFECT NEXTEL'S PROSPECTS AND NEXTEL'S ABILITY TO PAY INTEREST AND
TO MAKE PRINCIPAL PAYMENTS ON THE NOTES.
Portable communications devices have been alleged to 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 portable 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.
12. IF NEXTEL'S OPERATIONS ARE DISRUPTED DUE TO YEAR 2000 READINESS ISSUES,
THERE WOULD BE AN ADVERSE EFFECT ON ITS GROWTH AND OPERATING RESULTS
AND ON NEXTEL'S ABILITY TO PAY INTEREST AND TO MAKE PRINCIPAL PAYMENTS
ON THE NOTES.
Nextel may be subject to risks associated with Year 2000 readiness,
including those associated with third parties. Nextel has not yet finally
determined its need for, or, if and where likely to be needed, finally
developed, contingency plans for resolving issues that may be identified and for
which remediation is not possible on a timely or cost-effective basis. If any of
these third parties, or Nextel, is unable to resolve material Year 2000
readiness issues on a timely or cost-effective basis, there would be an adverse
effect on Nextel, and on Nextel's ability to pay interest and to make principal
payments on the notes.
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13. RISKS RELATING TO NEXTEL'S JOINT INVESTMENTS MAY ADVERSELY AFFECT
NEXTEL'S GROWTH AND OPERATING RESULTS AND NEXTEL'S ABILITY TO PAY
INTEREST AND TO MAKE PRINCIPAL PAYMENTS ON THE NOTES.
Nextel has entered into a contractual joint venture regarding its ownership
interests in and arrangements with Nextel Partners, Inc., and may enter into
other joint ventures or similar arrangements in the future. Outside the United
States, several of Nextel's international operations are conducted through
entities having one or more third-party owners, and some of these entities are
not controlled by Nextel. There are risks in participating in arrangements of
these types, including the risk that the other participants may at any time have
economic, business or legal interests or goals that are inconsistent with those
of the joint enterprise or Nextel. There also is the risk that a participant may
be unable to meet its economic or other obligations to the joint enterprise and
that Nextel may be required to fulfill some or all of those obligations. Nextel
also may be or become obligated to acquire all or a portion of the ownership
interest of some or all of the other participants in these joint enterprises. In
addition, to the extent that Nextel participates in international arrangements
of these types, the operations of the relevant entity will be subject to various
additional risks not present in domestic joint enterprises.
14. RISKS RELATING TO NEXTEL'S FOREIGN OPERATIONS MAY ADVERSELY AFFECT
NEXTEL'S GROWTH AND OPERATING RESULTS AND NEXTEL'S ABILITY TO PAY
INTEREST AND TO MAKE PRINCIPAL PAYMENTS ON THE NOTES.
Nextel owns interests in and operates international wireless companies
through Nextel International, Inc. The risks that relate to these foreign
operations include:
- political, economic and social conditions in the foreign countries where
Nextel conducts operations;
- currency risks and exchange controls;
- potential inflation in the applicable foreign economies;
- the impact of import duties on the cost or prices of infrastructure
equipment and subscriber handsets;
- foreign taxation of earnings and payments received by Nextel
International, Inc. from its operating subsidiaries;
- regulatory changes affecting the telecommunications industry and wireless
communications; and
- operations being disrupted due to Year 2000 readiness issues affecting
Nextel International, Inc.
Nextel cannot assure you that the risks associated with its foreign
operations will not adversely affect its or Nextel International, Inc.'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 HOLDERS OF THE NOTES.
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 its 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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B. NEXTEL'S SUBSIDIARIES HAVE RESTRICTIONS ON WHAT THEY CAN PAY
TO NEXTEL.
Nextel and its subsidiaries have entered into 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, Inc. and the entities in which Nextel International, Inc. holds
investments contain and are expected to impose restrictions on dividends, loans,
advances and other payments to Nextel by Nextel International, Inc. 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 could 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
amount of 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 SUCCESSFUL IMPLEMENTATION OF NEXTEL'S STRATEGY IS NECESSARY FOR
NEXTEL TO MEET ITS DEBT SERVICE REQUIREMENTS.
The successful implementation of Nextel's strategy, including the
continuing build-out, expansion and enhancement of its digital mobile network,
obtaining and retaining a significant number of subscribers and increasing
market share and achieving significant growth in revenues and earnings, is
necessary for Nextel to be able to meet its working capital, capital expenditure
and debt service requirements.
3. THE LIABILITIES OF NEXTEL'S SUBSIDIARIES AND UNDER NEXTEL'S SECURED DEBT
ARE EFFECTIVELY SENIOR TO THE NOTES.
As of September 30, 1999, Nextel's subsidiaries had outstanding
indebtedness and current liabilities of about $4.7 billion, including trade
payables. Assets of some of Nextel's operating subsidiaries secure some of its
senior borrowings. Borrowings by Nextel International, Inc. 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, Inc. or of those subsidiaries and affiliates and also may be
guaranteed by those entities as well.
Nextel and its subsidiaries may incur additional debt, subject to
limitations, and that additional debt may be secured. Secured debt of Nextel and
debt of its subsidiaries will be effectively senior to the notes. Nextel's
subsidiaries have no obligation to pay amounts due on 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.
4. NEXTEL'S HIGH LEVEL OF INDEBTEDNESS COULD ADVERSELY AFFECT ITS ABILITY
TO REPAY THE NOTES.
At September 30, 1999, Nextel had about $8.4 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
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digital mobile network and funding cash flow deficits, including principally
additional borrowings under the terms of the bank financing agreements.
Nextel's high level of indebtedness could have important consequences to
holders of the notes, including, but not limited to, the following:
- limiting Nextel's ability to obtain additional financing for
acquisitions, working capital, capital expenditures or other purposes;
- limiting Nextel's ability to use operating cash flow in other areas of
its business because it must dedicate a substantial portion of these
funds to make cash interest payments and fund required principal payments
on its debt;
- limiting Nextel's ability to borrow additional funds or to dispose of
assets;
- limiting Nextel's ability to compete with others in its industry who are
not as highly leveraged; and
- limiting Nextel's ability to react to changing market conditions, changes
in its industry and economic downturns.
5. IF NEXTEL IS UNABLE TO REFINANCE ITS EXISTING INDEBTEDNESS, THERE COULD
BE AN ADVERSE EFFECT ON NEXTEL'S ABILITY TO PAY INTEREST AND TO MAKE
PRINCIPAL REPAYMENTS ON THE NOTES.
Nextel currently has substantial debt obligations that will mature before
the maturity of the notes. In addition, Nextel has preferred stock that it is
required to redeem before the maturity of the notes. Nextel has begun payment of
cash interest on some of its public notes and also must begin to pay cash
interest on some other outstanding debt and cash dividends on some outstanding
shares of preferred stock before the maturity of the notes. Nextel may not be
able to generate sufficient funds from operations to repay all of those
obligations as they are currently scheduled to become due. Accordingly, it will
be necessary to refinance some of those obligations at or before their
respective maturities or mandatory redemption dates. In addition, if Nextel is
prohibited under the terms of any of its debt from paying dividends on its
preferred stock, Nextel will have to refinance that debt or, to the extent
permitted under the terms of its debt, refinance the preferred stock before the
time the dividends would need to be paid. Nextel's ability to refinance these
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, including on Nextel's ability to pay cash interest, and to
make scheduled principal repayments on its indebtedness, including the notes.
This risk compounds the risks associated with Nextel's need for additional
financing in order to maintain its growth.
6. THE INDENTURE CONTAINS RESTRICTIVE DEBT COVENANTS THAT COULD IMPEDE
NEXTEL IN 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 in or in respect
of 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.
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Although there are a number of important exceptions to these covenants,
which are more fully described under "VI. The Exchange Notes," these 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 governing the
notes.
7. 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 the 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 arrangements. Nextel may not be able to
pay you the required price for notes you present to it at the time of a Change
of Control, because Nextel might not have enough funds at that time or the terms
of its other financing agreements may prevent it from making those payments.
8. THERE IS NO PUBLIC MARKET FOR THE EXCHANGE NOTES.
There is no existing trading market for the outstanding notes. Nextel
cannot assure you that any trading market for the exchange notes will develop.
If such a market were to develop, the outstanding notes and the exchange notes
could trade at prices that may be lower than the initial offering price of the
notes depending on many factors, including prevailing interest rates, Nextel's
operating results and the market for similar securities.
9. 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 before the expiration of the exchange
offer. You should allow adequate time for delivery if you choose to tender your
outstanding notes for exchange. Outstanding notes that are not exchanged will
remain subject to restrictions on transfer and will not have any rights to
registration.
If you do participate in the exchange offer for the purpose of
participating in the distribution of the exchange notes, you must comply with
the registration and prospectus delivery requirements of the Securities Act of
1933 for any resale transaction. Each broker-dealer who holds outstanding notes
for its own account due to market-making or other trading activities and who
receives exchange notes for its own account must acknowledge that it will
deliver a prospectus in connection with any resale of the exchange notes. If any
outstanding notes are not tendered in the exchange or are tendered but not
accepted, the trading market for such outstanding notes could be negatively
affected due to the limited number of outstanding notes expected to remain
outstanding following the completion of the exchange offer.
C. NEXTEL'S FORWARD LOOKING STATEMENTS ARE SUBJECT TO A VARIETY OF FACTORS
THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM CURRENT BELIEFS.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act
of 1995: A number of the statements made or incorporated by reference 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 expectations generally, and also may
materially differ from Nextel's actual 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
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other risks and uncertainties in addition to the relevant qualifying factors
identified elsewhere in the above "Risk Factors" section and elsewhere in this
prospectus, 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 technology being deployed in
Nextel's various market areas;
- the ability to achieve and maintain market penetration and average
subscriber revenue levels sufficient to provide financial viability to
Nextel's digital mobile network business;
- Nextel's ability to timely and successfully accomplish required scale-up
of its billing, collection, customer care and similar back-room
operations to keep pace with customer growth, increased system usage
rates and growth in levels of accounts receivables being generated by the
digital mobile network customer base;
- access to sufficient debt or equity capital to meet Nextel's operating
and financing needs;
- the quality and price of similar or comparable wireless communications
services offered or to be offered by Nextel's competitors, including
providers of cellular and personal communication services;
- the ability to successfully develop or obtain from third parties, and
implement, Year 2000 readiness solutions in systems that are critical to
Nextel's business operations;
- future legislation or regulatory actions relating to specialized mobile
radio services, other wireless communications services or
telecommunications generally; and
- other risks and uncertainties described from time to time in Nextel's
reports and, with specific reference to risk factors relating to
international operations, in Nextel International, Inc.'s reports, filed
with the Securities and Exchange Commission, including the Annual Reports
on Form 10-K for the fiscal year ended December 31, 1998 and the
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1999,
June 30, 1999 and September 30, 1999 of Nextel and Nextel International,
Inc.
IV. USE OF PROCEEDS
Nextel will not receive any cash proceeds from the issuance of the exchange
notes. Because Nextel is exchanging the exchange notes for the outstanding
notes, which have substantially identical terms, the issuance of the exchange
notes will not result in any increase in the indebtedness of Nextel.
V. THE EXCHANGE OFFER
A. PURPOSE AND EFFECT OF THE EXCHANGE OFFER
On November 12, 1999, Nextel sold $2.0 billion in principal amount of the
outstanding notes in a private placement through Goldman, Sachs & Co., as
representative of the initial purchasers, to a limited number of "Qualified
Institutional Buyers," as defined under the Securities Act of 1933, and to a
limited number of persons outside the United States. In connection with the sale
of the outstanding notes, Nextel and Goldman, Sachs & Co., as representative of
the initial purchasers, entered into a registration rights agreement, dated as
of November 12, 1999. 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
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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 outstanding notes for an equal principal amount 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 if you have
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, by incorporation by reference, 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 above in "-- Purpose and Effect of
the Exchange Offer" apply to you.
If you tender in the exchange offer with the intention of participating in
a distribution of the exchange notes, you cannot rely on the interpretation by
the Staff of the Commission as set forth in the Morgan Stanley & Co.
Incorporated no-action letter and other similar letters and you must comply with
the registration and prospectus delivery requirements of the Securities Act of
1933 in connection with a secondary resale transaction. In the event that
Nextel's belief regarding resale is inaccurate, those who transfer exchange
notes in violation of the prospectus delivery provisions of the Securities Act
of 1933 and without an exemption from registration under the federal securities
laws may incur liability under these laws. Nextel does not assume or indemnify
you against this liability.
The exchange offer is not being made to, nor will Nextel accept surrenders
for exchange from, holders of outstanding notes in any jurisdiction in which the
exchange offer or the acceptance thereof would not be in compliance with the
securities or blue sky laws of the particular jurisdiction. Each broker-dealer
that receives exchange notes for its own account in exchange for outstanding
notes, where the outstanding notes were acquired by that broker-dealer as a
result of market-making activities or other trading activities, must acknowledge
that it will deliver a prospectus in connection with any resale of the exchange
notes by that broker-dealer. 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 Goldman, Sachs &
Co. 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
Goldman,
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Sachs & Co. 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, Goldman, Sachs & Co. 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 Goldman, Sachs & Co. 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 "VIII. Plan of Distribution."
C. TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this prospectus
and in the Letter of Transmittal, Nextel will accept any and all outstanding
notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time,
on the day the exchange offer expires.
As of the date of this prospectus, $2.0 billion in principal amount of the
notes are outstanding. This prospectus, together with the Letter of Transmittal,
is being sent to all registered holders of the outstanding notes on this date.
There will be no fixed record date for determining registered holders of the
outstanding notes entitled to participate in the exchange offer; however,
holders of the outstanding notes must tender their certificates therefor or
cause their outstanding notes to be tendered by book-entry transfer prior to the
expiration date of the exchange offer to participate.
The form and terms of the exchange notes will be the same as the form and
terms of the outstanding notes except that the exchange notes will be registered
under the Securities Act of 1933 and therefore will not bear legends restricting
their transfer. Following consummation of the exchange offer, all rights under
the registration rights agreement accorded to holders of outstanding notes,
including the right to receive additional incremental interest on the
outstanding notes, to the extent and in the circumstances specified in the
registration rights agreement, will terminate.
Nextel intends to conduct the exchange offer in accordance with the
provisions of the registration rights agreement and applicable federal
securities laws. Outstanding notes that are not tendered for exchange under the
exchange offer will remain outstanding and will be entitled to the rights under
the related indenture. Any outstanding notes not tendered for exchange will not
retain any rights under the registration rights agreement and will remain
subject to transfer restrictions. See "-- Consequences of Failure to Exchange."
Nextel will be deemed to have accepted validly tendered outstanding notes
when, as and if Nextel will have given oral or written notice of its acceptance
to the exchange agent. The exchange agent will act as agent for the tendering
holders for the purposes of receiving the exchange notes from Nextel. If any
tendered outstanding notes are not accepted for exchange because of an invalid
tender, the occurrence of other events set forth in this prospectus, or
otherwise, certificates for any unaccepted outstanding notes will be returned,
or, in the case of outstanding notes tendered by book-entry transfer, those
unaccepted outstanding notes will be credited to an account maintained with The
Depository Trust Company, without expense to the tendering holder of those
outstanding notes as promptly as practicable after the expiration date of the
exchange offer. See "-- Procedures for Tendering."
Those who tender outstanding notes in the exchange offer will not be
required to pay brokerage commissions or fees or, subject to the instructions in
the Letter of Transmittal, transfer taxes with respect to the exchange pursuant
to the exchange offer. Nextel will pay all charges and expenses, other than
applicable taxes described below, in connection with the exchange offer. See
"-- Fees and Expenses."
D. EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The expiration date is 5:00 p.m., New York City time on February 10, 2000,
unless Nextel, in its sole discretion, extends the exchange offer, in which
case, the expiration date will be the latest date and
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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 following that
amendment and its disclosure.
Without limiting the manner in which Nextel may choose to make a public
announcement of any delay, extension, amendment, or termination of the exchange
offer, Nextel will have no obligation to publish, advertise, or otherwise
communicate that public announcement, other than by making a timely release to
an appropriate news agency.
Upon satisfaction or waiver of all the conditions to the exchange offer,
Nextel will accept, promptly after the expiration date of the exchange offer,
all outstanding notes properly tendered and will issue the exchange notes
promptly after acceptance of the outstanding notes. See "-- Conditions" below.
For purposes of the exchange offer, Nextel will be deemed to have accepted
properly tendered outstanding notes for exchange when, as and if Nextel will
have given oral or written notice of its acceptance to the exchange agent.
In all cases, issuance of the exchange notes for outstanding notes that are
accepted for exchange pursuant to the exchange offer will be made only after
timely receipt by the exchange agent of certificates for those outstanding notes
or a timely confirmation of book-entry transfer of the outstanding notes into
the exchange agent's account at The Depository Trust Company, a properly
completed and duly executed Letter of Transmittal, and all other required
documents; provided, however, that Nextel reserves the absolute right to waive
any defects or irregularities in the tender of outstanding notes or in the
satisfaction of conditions of the exchange offer by holders of the outstanding
notes. If any tendered outstanding notes are not accepted for any reason set
forth in the terms and conditions of the exchange offer, if the holder withdraws
such previously tendered outstanding notes, or if outstanding notes are
submitted for a greater principal amount of outstanding notes than the holder
desires to exchange, then the unaccepted, withdrawn or portion of non-exchanged
outstanding notes, as appropriate, will be returned as promptly as practicable
after the expiration or termination of the exchange offer, or, in the case of
outstanding notes tendered by book-entry transfer, those unaccepted, withdrawn
or portion of non-exchanged outstanding notes, as appropriate, will be credited
to an account maintained with The Depository Trust Company, without expense to
the tendering holder thereof.
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E. CONDITIONS
Without regard to other terms of the exchange offer, Nextel will not be
required to exchange any exchange notes for any outstanding notes and may
terminate the exchange offer before the acceptance of any outstanding notes for
exchange, if:
- any action or proceeding is instituted or threatened in any court or by
or before any governmental agency with respect to the exchange offer
which, in Nextel's reasonable judgment, might materially impair the
ability of Nextel to proceed with the exchange offer;
- the Staff of the Commission proposes, adopts or enacts any law, statute,
rule or regulation or issues any interpretation of any existing law,
statute, rule or regulation, which, in Nextel's reasonable judgment,
might materially impair the ability of Nextel to proceed with the
exchange offer; or
- any governmental approval or approval by holders of the outstanding notes
has not been obtained, which approval Nextel will, in its reasonable
judgment, deem necessary for the consummation of the exchange offer.
If Nextel determines that any of these conditions are not satisfied, Nextel
may
- refuse to accept any outstanding notes and return all tendered
outstanding notes to the tendering holders, or, in the case of
outstanding notes tendered by book-entry transfer, credit those
outstanding notes to an account maintained with The Depository Trust
Company,
- extend the exchange offer and retain all outstanding notes tendered prior
to the expiration of the exchange offer, subject, however, to the rights
of holders who tendered the outstanding notes to withdraw their tendered
outstanding notes, or
- subject to applicable law, 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 following such waiver and its disclosure.
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 for receipt before the
expiration date of the exchange offer. In addition, either:
- certificates for the outstanding notes must be received by the exchange
agent, along with the Letter of Transmittal, or
- a timely confirmation of transfer by book-entry of those outstanding
notes, if the book-entry procedure is available, into the exchange
agent's account at The Depository Trust Company, as set forth in the
procedure for book-entry transfer described below, which the exchange
agent must receive prior to the expiration date of the exchange offer, or
- you must comply with the guaranteed delivery procedures described below.
To be tendered effectively, the exchange agent must receive the Letter of
Transmittal and other required documents at the address set forth below under
"-- Exchange Agent" prior to the expiration of the exchange offer.
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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.,
- a commercial bank,
- a trust company having an office or correspondent in the United States or
- an eligible guarantor institution as provided by Rule 17Ad-15 of the
Securities Exchange Act of 1934.
If the Letter of Transmittal is signed by a person other than the
registered holder of any outstanding notes, the outstanding notes must be
endorsed or accompanied by a properly completed bond power, signed by the
registered holder as his, her or its name appears on the outstanding notes.
If trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity sign the Letter of Transmittal or any outstanding notes or bond power,
those persons should so indicate when signing, and evidence satisfactory to
Nextel of their authority to so act must be submitted with the Letter of
Transmittal, unless Nextel waives that requirement.
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
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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
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 a manually signed
facsimile thereof, with any required signature guarantees or an Agent's Message,
in the case of a book-entry transfer, and any other required documents, must, in
any case, be transmitted to and received by the exchange agent at the address
set forth below under "-- Exchange Agent" on or prior to the expiration date of
the exchange offer, unless the holder complies with the guaranteed delivery
procedures described below.
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H. GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their outstanding notes and (1) whose
outstanding notes are not immediately available or (2) who cannot deliver their
outstanding notes, the Letter of Transmittal, or any other required documents to
the exchange agent prior to the expiration date, may effect a tender if:
- the tender is made through an eligible institution;
- before 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 date of execution of the Notice of Guaranteed
Delivery, 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 date of execution of the Notice of
Guaranteed Delivery.
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, which determination will be final and binding on all
parties. Any outstanding notes so withdrawn will be deemed not to have been
validly tendered for purposes of the exchange offer, and no exchange notes will
be issued with respect to those outstanding notes unless the outstanding notes
so withdrawn are validly retendered.
Any outstanding notes that have been tendered but that are withdrawn or 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
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procedures described above under "-- Procedures for Tendering" at any time
before 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 Wall Street Station
19th Floor P.O. Box 1010
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 about $300,000. These expenses include registration fees, fees and
expenses of the exchange agent, accounting and legal fees, and printing costs,
among others.
Nextel will pay all transfer taxes, if any, applicable to the exchange of
the outstanding notes for exchange notes. The tendering holder of outstanding
notes, however, will pay applicable taxes if certificates representing
outstanding notes not tendered or accepted for exchange are to be delivered to,
or are to be issued in the name of, any person other than the registered holder
of outstanding notes tendered, or
- if tendered, the certificates representing outstanding notes are
registered in the name of any person other than the person signing the
Letter of Transmittal, or
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- 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.
VI. THE EXCHANGE NOTES
The outstanding notes were, and the exchange notes will be, issued under
the indenture, dated as of November 12, 1999 between Nextel, as issuer, and
Harris Trust and Savings Bank, 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 capitalized
terms used in this prospectus for which no definition is provided.
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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 the 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 those accounting principles as are generally accepted at
the date of the computation.
"ACQUIRED DEBT" means Debt of a Person existing at the time the Person
becomes a Restricted Subsidiary or assumed by Nextel or a Restricted Subsidiary
in connection with the acquisition of assets from the Person.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Person. "Affiliate" will be deemed to include, but only for
purposes of the "Transactions with Affiliates" covenant and without limiting the
application of the preceding sentence for the purpose of that or any other
section, any Person owning, directly or indirectly,
(1) 10% or more of Nextel's outstanding common stock or
(2) securities having 10% or more of the total voting power of Nextel's
Voting Stock.
For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
that Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing. No individual will be
deemed to be controlled by or under common control with any specified Person
solely by virtue of his or her status as an employee or officer of that
specified Person or of any other Person controlled by or under common control
with that specified Person.
"ANNUALIZED OPERATING CASH FLOW" means, for any fiscal quarter, the
Operating Cash Flow for the fiscal quarter multiplied by four.
"AVERAGE LIFE" means, at any date of determination with respect to any
Debt, the quotient obtained by dividing:
(1) the sum of the products of:
(a) the number of years from the date of determination to the dates
of each successive scheduled principal payment of the Debt, and
(b) the amount of the principal payment,
by:
(2) the sum of all the principal payments.
"BENEFICIAL OWNER" means a beneficial owner as defined in Rules 13d-3 and
13d-5 under the Securities Exchange Act of 1934 (or any successor rules),
including the provision of those rules that a person will be deemed to have
beneficial ownership of all securities that person has a right to acquire within
60 days, provided that a person shall not be deemed a beneficial owner of, or to
own beneficially, any securities if the 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.
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"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 applicable rating agency has publicly announced
that the corporation or debt thereof will be rated, unless
after that date, but during that period debt securities of the
corporation having a maturity at original issuance of at least
one year are rated Investment Grade by S&P or Moody's and
remain so rated for the remainder of the period referred to in
clause (a) above, and
- that, when determined as of the Trading Day immediately before
and the Trading Day immediately after the date of that event,
has Total Common Equity of at least $10 billion, provided
that, solely for the purpose of calculating Total Common
Equity as of the later Trading Day, the average Closing Price
of the common stock of the person will be deemed to equal the
Closing Price of the common stock on the later Trading Day,
subject to the last sentence of the definition of "Total
Common Equity"; or
(2) Nextel consolidates with, or merges with or into, another Person or
sells or otherwise disposes of all or substantially all of its assets
to any Person, or any Person consolidates with, or merges with or into,
Nextel, in any event pursuant to a transaction in which the outstanding
Voting Stock of
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<PAGE> 36
Nextel is converted into or exchanged for cash, securities or other
property, other than any transaction where:
(a) the outstanding Voting Stock of Nextel is converted into or
exchanged for:
- Voting Stock, other than Redeemable Stock, of the surviving or
transferee Person, or
- cash, securities and other property in an amount that could be
paid by Nextel as a Restricted Payment under the indenture,
and
(b) immediately after the transaction no person is the Beneficial
Owner, directly or indirectly, of more than 50% of the total
Voting Stock or Total Common Equity of the surviving or
transferee Person;
provided that no Change of Control will be deemed to occur under
this clause (2),
- if the surviving or transferee Person or the person referred
to in clause (2)(b) is a corporation with outstanding debt
securities having a maturity at original issuance of at least
one year and if those debt securities are rated Investment
Grade by S&P or Moody's for a period of at least 90
consecutive days, beginning on the date of the event, which
period will be extended up to 90 additional days for as long
as the rating of the debt securities is under publicly
announced consideration for possible downgrading by the
applicable rating agency, or
- if the surviving or transferee Person or other person is a
corporation
- that is not, and does not have any outstanding debt
securities that are, rated by S&P, Moody's or any other
rating agency of national standing at any time during a
period of 90 consecutive days beginning on the date of
that event, which period will be extended up to an
additional 90 days for as long as any applicable rating
agency has publicly announced that the corporation or debt
thereof will be rated, unless after that date, but during
the period debt securities of the corporation having a
maturity at original issuance of at least one year are
rated Investment Grade by S&P or Moody's and remain so
rated for the remainder of the period referred to in the
clause above, and
- that, when determined as of the Trading Day immediately
before and the Trading Day immediately after the date of
the event, has Total Common Equity of at least $10
billion, provided that, solely for the purpose of
calculating Total Common Equity as of the later Trading
Day, the average Closing Price of the common stock of that
person will be deemed to equal the Closing Price of the
common stock on the later Trading Day, subject to the last
sentence of the definition of "Total Common Equity"; or
(3) during any consecutive two-year period, individuals who at the
beginning of that period constituted the board of directors, together
with any directors who are members of the board of directors on the
Closing Date and any new directors whose election by that board of
directors or whose nomination for election by the stockholders of
Nextel was approved by a vote of 66 2/3% of the directors then still in
office who were either directors at the beginning of the period or
whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority of the board of directors
then in office.
Any event that would constitute a Change of Control pursuant to clause (1) or
(2) above:
- but for the proviso thereto will not be deemed to be a Change of Control
until the time, if any, as the conditions described in that proviso 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,
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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 the
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 or 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 or 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 12, 1999, 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 other requirements stated above, the average of the
closing bid and asked prices in the over-the-counter market as furnished by any
New York Stock Exchange member firm of national standing that may be selected by
Nextel for that purpose.
"CODE" means the Internal Revenue Code and the rules and regulations
thereunder.
"COMMON STOCK" of any Person means Capital Stock of the Person that does
not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of that Person, to shares of Capital Stock of any other class of that Person.
"CONSOLIDATED ADJUSTED NET INCOME" and "CONSOLIDATED ADJUSTED NET LOSS"
mean, for any period, the net income or net loss, as the case may be, of Nextel
and its Restricted Subsidiaries for the period, all as determined on a
Consolidated basis in accordance with generally accepted accounting principles,
adjusted, to the extent included in calculating such net income or net loss, as
the case may be, by excluding without duplication:
(1) any after-tax gain or loss attributable to the sale, conversion or
other disposition of assets other than in the ordinary course of
business,
(2) any after-tax gains resulting from the write-up of assets and any loss
resulting from the write-down of assets,
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(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 (unless such dividends are paid in Capital Stock that is not
Redeemable Stock).
"CONSOLIDATED NET INCOME" and "CONSOLIDATED NET LOSS" mean, for any period,
the net income or net loss, as the case may be, of Nextel and its Restricted
Subsidiaries for that period, all as determined on a Consolidated basis in
accordance with generally accepted accounting principles, adjusted, to the
extent included in calculating that net income or net loss, as the case may be,
by excluding without duplication:
(1) any after-tax gain or loss attributable to the sale, conversion or
other disposition of assets other than in the ordinary course of
business,
(2) any after-tax gains resulting from the write-up of assets and any loss
resulting from the write-down of assets,
(3) any after-tax gain or loss on the repurchase or redemption of any
securities including in connection with the early retirement or
defeasance of any Debt,
(4) any foreign exchange gain or loss,
(5) all payments in respect of dividends on shares of Preferred Capital
Stock of Nextel,
(6) any other extraordinary, non-recurring or unusual items incurred by
Nextel or any of its Restricted Subsidiaries,
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(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 will be accounted for as an
investment. The term "Consolidated" has a correlative meaning.
"CREDIT FACILITY" means any credit facility, whether a term or revolving
loan, of the type customarily entered into with banks, between Nextel and/or any
of its Restricted Subsidiaries, on the one hand, and any banks or other lenders,
on the other hand, including any renewals, refundings, extensions or
replacements of any such credit facility, which credit facility is designated by
Nextel as a "Credit Facility" for purposes of the indenture, and will include
all those credit facilities in existence on the Closing Date whether or not so
designated, to the extent that the aggregate principal balance of Debt that is
Incurred and outstanding under all Credit Facilities at any time does not exceed
$3,000,000,000.
"DEBT" means, without duplication, with respect to any Person, whether
recourse is to all or a portion of the assets of that Person and whether or not
contingent,
(1) every obligation of that Person for money borrowed,
(2) every obligation of that Person evidenced by bonds, debentures, notes
or other similar instruments, including obligations Incurred in
connection with the acquisition of property, assets or businesses,
(3) every reimbursement obligation of that Person with respect to letters
of credit, bankers' acceptances or similar facilities issued for the
account of that Person,
(4) every obligation of that Person issued or assumed as the deferred
purchase price of property or services, but excluding trade accounts
payable or accrued liabilities arising in the ordinary course of
business which are not overdue or which are being contested in good
faith,
(5) every Capital Lease Obligation of that Person,
(6) the maximum fixed redemption or repurchase price of Redeemable Stock of
that Person at the time of determination, plus accrued but unpaid
dividends,
(7) every obligation of that Person under interest rate swap or similar
agreements or foreign currency hedge, exchange or similar agreements of
that Person, and
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(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 circular, dated as of November 5, 1999, relating to
the original issuance of the outstanding notes.
"DIGITAL MOBILE-SMR OPERATING CASH FLOW" means, for any fiscal quarter,
(1) the net income or loss, as the case may be, of Nextel and its
Restricted Subsidiaries from its Digital Mobile and Specialized Mobile
Radio businesses and related activities and services for that fiscal
quarter, plus
(2) depreciation and amortization charged with respect thereto for that
fiscal quarter, all as determined on a Consolidated basis in accordance
with generally accepted accounting principles, adjusted, to the extent
included in calculating net income or loss, by excluding
(a) any after-tax gain or loss attributable to the sale, conversion
or other disposition of assets other than in the ordinary
course of business,
(b) any gains resulting from the write-up of assets and any loss
resulting from the write-down of assets,
(c) any gain or loss on the repurchase or redemption of any
securities, including in connection with the early retirement
or defeasance of any Debt,
(d) any foreign exchange gain or loss,
(e) any other extraordinary, non-recurring or unusual items, and
(f) all income or losses of Persons, other than Subsidiaries,
accounted for by Nextel using the equity method of accounting,
except to the extent of dividends, interest or other cash
distributions received directly or indirectly from any such
Person, plus
(3) all amounts deducted in calculating net income or loss for that fiscal
quarter in respect of interest expense and other financing costs and
all income taxes, whether or not deferred, applicable to that fiscal
quarter, all as determined on a Consolidated basis in accordance with
generally accepted accounting principles.
"DIRECTED INVESTMENT" by Nextel or any of its Restricted Subsidiaries means
any Investment for which the cash or property used for that Investment is
received by Nextel from the issuance and sale, other than to a Restricted
Subsidiary, on or after June 1, 1997 of shares of its Capital Stock, other than
Redeemable Stock, or any options, warrants or other rights to purchase the
Capital Stock, other than Redeemable Stock, designated by the board of directors
as a "Directed Investment" to be used for one or more specified investments in
the telecommunications business, including related activities and services, and
is so designated and used at any time within 365 days after the receipt thereof.
The aggregate amount of any Directed Investments may not at any time exceed
fifty percent (50%) of the aggregate amount of the cash or property received by
Nextel on or after June 1, 1997 from any issuance and sale or capital
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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, 9.95% Senior Redeemable Discount Notes Due
2008, 12% Senior Serial Redeemable Notes Due 2008 and 4 3/4% Convertible Senior
Notes due 2007.
"FAIR MARKET VALUE" means, for purposes of clause (1) of the "Limitation on
Consolidated Debt" covenant, the price that would be paid in an arm's-length
transaction between an informed and willing seller under no compulsion to sell
and an informed and willing buyer under no compulsion to buy, as determined in
good faith by the board of directors, whose determination will be conclusive if
evidenced by a Board Resolution; provided that:
(1) the Fair Market Value of any security registered under the Securities
Exchange Act of 1994 will be the average of the closing prices, regular
way, of that security for the 20 consecutive trading days immediately
preceding the sale of Capital Stock, and
(2) in the event the aggregate Fair Market Value of any other property
received by Nextel exceeds $10 million, the Fair Market Value of the
property will be:
(a) so long as a Fair Market Value determination of the property is
required to be made pursuant to the Certificate of Designation
for the Series D Preferred Stock or pursuant to the terms of
the Series D Debenture Indenture, or pursuant to the
Certificate of Designation for the Series E Preferred Stock or
pursuant to the terms of the Series E Debenture Indenture, the
Fair Market Value as so determined, which will be set forth in
an officer's certificate delivered to the Trustee, and
(b) otherwise, the 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.
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"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 the
Person that exists at that time becoming Debt will not be deemed an Incurrence
of that Debt; provided further, however, that the accretion of original issue
discount on Debt will not be deemed to be an Incurrence of Debt. Debt otherwise
Incurred by a Person before it becomes a Restricted Subsidiary of Nextel will be
deemed to have been Incurred at the time it becomes a Restricted 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 Capital Stock, other than Redeemable Stock, or
(2) a transfer, assignment or contribution by Nextel of shares of Capital
Stock, or any options, warrants or rights to acquire Capital Stock, or
all or substantially all of the assets of, any Unrestricted Subsidiary
of Nextel to another Unrestricted Subsidiary of Nextel.
"INVESTMENT GRADE" means a rating of at least BBB-, in the case of S&P, or
Baa3, in the case of Moody's.
"LICENSES" means SMR licenses granted by the Federal Communications
Commission that entitle the holder to use the radio channels covered thereby,
subject to compliance with Federal Communications Commission rules and
regulations, in connection with its SMR business.
"LIEN" means, with respect to any property or assets, any mortgage or deed
of trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien, charge, easement, encumbrance, preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
on or with respect to the property or assets, including any conditional sale or
other title retention agreement having substantially the same economic effect as
any of the foregoing.
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"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.
"NOVEMBER 1998 INDENTURE" means the indenture dated November 4, 1998,
between Nextel, as issuer, and Harris Trust and Savings Bank, as trustee,
relating to the November 1998 Notes.
"NOVEMBER 1998 NOTES" means Nextel's 12% Senior Serial Redeemable Notes due
2008.
"OCTOBER INDENTURE" means the indenture dated October 22, 1997, between
Nextel, as issuer, and Harris Trust and Savings Bank, as trustee, relating to
the October Notes.
"OCTOBER NOTES" means Nextel's 9 3/4% Senior Serial Redeemable Discount
Notes due 2007.
"OFFER TO PURCHASE" means a written offer sent by Nextel by first class
mail, postage prepaid, to each holder at his address appearing in the security
register maintained by the Trustee on the date of the offer offering to purchase
the notes at the purchase price specified in the offer, as determined pursuant
to the indenture. Unless otherwise required by applicable law, the offer will
specify an expiration date of the Offer to Purchase that will be, subject to any
contrary requirements of applicable law, not less than 30 days or more than 60
days after the date of the offer and a settlement date for purchase of notes
within five business days after the expiration date. Nextel will notify the
Trustee at least 15 days, or shorter period as is acceptable to the Trustee,
prior to the mailing of the offer of Nextel's obligation to make an Offer to
Purchase, and the offer will be mailed by Nextel or, at Nextel's request, by the
Trustee, in the name and at the expense of Nextel. The offer will contain
information concerning the business of Nextel and its Subsidiaries which, at a
minimum, will include:
(1) the most recent annual and quarterly financial statements and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" contained in the documents required to be filed
with the Trustee under the indenture, which requirements may be
satisfied by delivery of the documents together with the offer,
(2) a description of material developments in Nextel's business subsequent
to the date of the latest of the financial statements referred to in
clause (1), including a description of the events requiring Nextel to
make the Offer to Purchase,
(3) if required under applicable law, pro forma financial information
concerning, among other things, the Offer to Purchase and the events
requiring Nextel to make the Offer to Purchase, and
(4) any other information required by applicable law to be included
therein.
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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 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 the 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
the 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 the holder, in an aggregate principal amount at
Stated Maturity equal to and in exchange for the unpurchased
portion of the aggregate principal amount at Stated Maturity
of the notes so tendered.
Any Offer to Purchase will be governed by and effected in accordance with
the offer for the Offer to Purchase.
"OLD SENIOR NOTES" means Nextel's 9 3/4% Senior Redeemable Discount Notes
due 2004, 10 1/4% Senior Redeemable Discount Notes due 2005 and 10 1/8% Senior
Redeemable Discount Notes due 2004.
"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; provided that 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 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,
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(b) under foreign currency hedge, interest rate swap or similar
agreements, if the agreements:
- are designed solely to protect Nextel or its Restricted
Subsidiaries against fluctuations in foreign currency exchange
rates or interest rates, and
- do not increase the Debt of the obligor outstanding at any
time other than as a result of fluctuations in foreign
currency exchange rates or interest rates or by reason of
fees, indemnities and compensation payable thereunder; and
(c) arising from agreements providing for indemnification,
adjustment of purchase price or similar obligations, or from
Guarantees or letters of credit, surety bonds or performance
bonds securing any obligations of Nextel or any Restricted
Subsidiary pursuant to those agreements, in any case Incurred
in connection with the disposition of any business, assets or
Restricted Subsidiary, other than Guarantees of Debt Incurred
by any Person acquiring all or any portion of that business,
assets or Restricted Subsidiary for the purpose of financing
the acquisition, in a principal amount not to exceed the gross
proceeds actually received by Nextel or any Restricted
Subsidiary in connection with that disposition;
(6) renewals, refundings or extensions of any Debt referred to in clause
(1) or (3) above or Incurred pursuant to clause (2) of the "Limitation
on Consolidated Debt" covenant and any renewals, refundings or
extensions thereof, plus:
(a) the amount of any premium reasonably determined by Nextel as
necessary to accomplish the renewal, refunding or extension,
and
(b) the other fees and expenses of Nextel reasonably incurred in
connection with the renewal, refunding or extension, provided
that the renewal, refunding or extension will constitute
Permitted Debt only to the extent of the lesser of:
- the aggregate principal amount of the Debt being renewed,
refunded or extended, and
- the principal amount of the refunding, renewal or extension
to be due and payable upon a declaration of acceleration of
the maturity of the refunding, renewal or extension,
except as permitted by (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;
(7) Debt payable solely in, or mandatorily convertible into, Capital Stock,
other than Redeemable Stock, of Nextel; and
(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, including, without limitation,
the redemption, repurchase or other acquisition or retirement for value
of Capital Stock out of the proceeds of a substantially concurrent
issue and sale, other than to a Restricted Subsidiary, of Capital Stock
other than Redeemable Stock;
(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
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exchange pursuant to the exercise of a conversion right or privilege in
connection with which cash is paid in lieu of the issuance of
fractional shares or scrip, or out of the proceeds of a substantially
concurrent issue and sale, other than to a Restricted Subsidiary, of,
either
(a) Capital Stock of Nextel, other than Redeemable Stock, or
(b) Debt of Nextel that is subordinate in right of payment to the
notes on subordination terms no less favorable to the holders
of the notes in their capacities as such than the subordination
terms, or other arrangement, applicable to the Debt that is
redeemed, repurchased, defeased or otherwise acquired or
retired for value, provided that, in the case of this clause
(b), the new Debt does not mature prior to the Stated Maturity
or have a mandatory redemption date prior to the mandatory
redemption date of the Debt being redeemed, repurchased,
defeased or otherwise acquired or retired for value or have an
Average Life shorter than the remaining Average Life of the
Debt being redeemed, repurchased, defeased or otherwise
acquired or retired for value; and
(3) dividend, penalty or other mandated payments, including mandatory
repurchases, on or in respect of any class or series of Nextel's
Preferred Capital Stock that is authorized and designated on the
Closing Date, that is, the Class A preferred stock, Class B preferred
stock, Class C preferred stock, Series D Preferred Stock, Series E
Preferred Stock and Zero Coupon 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
circular dated as of November 5, 1999, relating to the original
issuance of the outstanding 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
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<PAGE> 48
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 such 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, the Series E Preferred Stock and the Zero Coupon
Preferred Stock of Nextel will not be considered to constitute Redeemable Stock.
"REQUIRED CONSENT" means except as otherwise expressly provided in the
indenture with respect to matters requiring the consent of each holder of the
notes affected thereby,
(1) the consent of holders of not less than a majority in aggregate
principal amount at Stated Maturity of the notes for any action to
(a) direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any
power conferred upon the 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,
- the November 1998 Notes, if the holders of the November 1998
Notes are being requested to consent to the action with
respect to the terms of the November 1998 Notes or the
November 1998 Indenture, and
- any other issue of unsubordinated, unsecured notes issued by
Nextel, if those notes or the indenture pursuant to which
those notes were issued both
- require the consent of the holders of those notes to such
action and
- provide that the holders thereof will vote with the
holders of these 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
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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, as issuer and Harris Trust and Savings Bank, as trustee, relating to the
September Notes.
"SEPTEMBER NOTES" means Nextel's 10.65% Senior Redeemable Discount Notes
due 2007.
"SERIES D DEBENTURE INDENTURE" means an indenture, having terms and
conditions substantially as summarized in the confidential offering memorandum,
dated July 16, 1997, prepared in connection with the original issuance by Nextel
of shares of Series D Preferred Stock, pursuant to which exchange debentures may
be issued by Nextel, the "Series D Exchange Debentures", in exchange for
outstanding shares of Series D Preferred Stock.
"SERIES D PREFERRED STOCK" means the 13% Series D Exchangeable Redeemable
Preferred Stock of Nextel issued on July 21, 1997 and any shares of Preferred
Capital Stock issued in exchange therefor or as payment in kind dividends
thereon.
"SERIES E DEBENTURE INDENTURE" means an indenture, having terms and
conditions substantially as summarized in that confidential offering memorandum,
dated February 6, 1998, prepared in connection with the original issuance by
Nextel of shares of Series E Preferred Stock, pursuant to which exchange
debentures may be issued by Nextel, the "Series E Exchange Debentures" in
exchange for outstanding shares of Series E Preferred Stock.
"SERIES E PREFERRED STOCK" means the 11.125% Series E Exchangeable
Redeemable Preferred Stock of Nextel issued on February 6, 1998 and any shares
of Preferred Capital Stock issued in exchange therefore or as payment in kind
dividends thereon.
"SPECIALIZED MOBILE RADIO" or "SMR" means a mobile radio communications
system that is operated as described in the offering circular dated November 5,
1999, relating to the original issuance of the outstanding 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 that 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
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<PAGE> 50
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 that 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 that day.
If no Closing Price exists with respect to shares of the class, the value
of those shares for purposes of clause (b) of the preceding sentence shall be
determined by the board of directors in good faith and evidenced by a Board
Resolution.
"TRADING DAY" with respect to a securities exchange or automated quotation
system means a day on which the exchange or system is open for a full day of
trading.
"TRUSTEE" means the trustee under the indenture.
"UNRESTRICTED SUBSIDIARY" means Unrestricted Subsidiary Funding Company and
any other Subsidiary that is not a Restricted Subsidiary and includes any
Restricted Subsidiary that becomes an Unrestricted Subsidiary in accordance with
the "Restricted Subsidiaries" covenant described below.
"VENDOR FINANCING DEBT" means any Debt owed to
(1) a vendor or supplier of any property or materials used by Nextel or its
Restricted Subsidiaries in their telecommunications business,
(2) any Affiliate of such a vendor or supplier,
(3) any assignee of a vendor, supplier or Affiliate of a vendor or
supplier, or
(4) a bank or other financial institution that has financed or refinanced
the purchase of property or materials from that vendor, supplier,
Affiliate of a vendor or supplier or assignee of a vendor or supplier;
provided that the aggregate amount of Debt does not exceed the sum of
(a) the purchase price of property or materials, including
transportation, installation, warranty and testing charges, as
well as applicable taxes paid, in respect of property or
materials,
(b) the cost of design, development, site acquisition and
construction,
(c) any interest or other financing costs accruing or otherwise
payable in respect of the foregoing, and
(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.
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"ZERO COUPON PREFERRED STOCK" means the Zero Coupon Convertible Preferred
Stock due 2013 of Nextel issued on December 23, 1998.
B. GENERAL
The exchange notes will be general, unsecured obligations of Nextel limited
in aggregate principal amount to $2.0 billion and will mature on November 15,
2009. The exchange notes will be issued in fully registered form only in
denominations and integral multiples of $1,000. The exchange notes will be
senior, unsecured indebtedness of Nextel, will rank equally in right of payment
with all unsubordinated, unsecured indebtedness of Nextel, including, without
limitation, the indebtedness evidenced by the Existing Senior Notes, and will be
senior in right of payment to all subordinated indebtedness of Nextel. The
exchange notes will be effectively subordinated to all current and future
indebtedness of Nextel's subsidiaries, including trade payables and other
accrued liabilities. Substantially all of this subsidiary indebtedness presently
is, and is expected to be, secured by the assets of Nextel's subsidiaries and/or
guaranteed by Nextel and its subsidiaries.
Principal of, premium, if any, and interest on the notes will be payable,
and the notes may be presented for registration of transfer or exchange, at the
office of the Paying Agent and Registrar. At Nextel's option, interest may be
paid by check mailed to the registered address of holders of the notes as shown
on the register for the notes. The Trustee will initially act as Paying Agent
and Registrar. Nextel may change any Paying Agent and Registrar without prior
notice to holders of the notes. Holders of the notes must surrender notes to the
Paying Agent to collect principal payments.
Cash interest on the notes will be payable at a rate of 9.375% per year,
semi-annually in arrears on each May 15 and November 15, with the first payment
on May 15, 2000 to holders of record of such notes at the close of business on
the May 1 and November 1 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 15, 2004, 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 15 of each
of the years set forth below.
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2004.............................................. 104.688%
2005.............................................. 103.125
2006.............................................. 101.563
2007 and thereafter............................... 100.000
</TABLE>
In addition, in the event of one or more sales by Nextel on or before
November 15, 2002 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 109.375% 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
such sale of Capital Stock.
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SELECTION
In the case of any partial redemption, selection of the notes for
redemption will be made by the Trustee in compliance with the requirements of
the principal national securities exchange, if any, on which the notes are
listed or, if the notes are not listed on a national securities exchange, on a
pro rata basis, by lot or by any other method as the Trustee in its sole
discretion deems to be fair and appropriate; provided that no notes of $1,000 in
principal amount or less shall be redeemed in part. If any notes are to be
redeemed in part only, the notice of redemption relating to those notes will
state the portion of the principal amount of those notes to be redeemed. A new
note in principal amount equal to the unredeemed portion of the notes will be
issued in the name of the holder of the notes upon cancellation of the original
note.
D. CHANGE OF CONTROL
Upon the occurrence of a Change of Control, Nextel will be required to make
an Offer to Purchase to each holder of the notes to repurchase all or any part
of the holder's notes at a cash purchase price equal to 101% of the principal
amount of those notes, plus accrued and unpaid interest to the date of purchase.
The Offer to Purchase must be made within 30 days following a Change of Control,
must remain open for at least 30 and not more than 60 days and must comply with
applicable securities laws.
None of the provisions in the indenture relating to a purchase upon a
Change of Control are waivable by the board of directors. Nextel could, in the
future, enter into transactions, including recapitalizations of Nextel, that
would not constitute a Change of Control, but would increase the amount of
indebtedness outstanding at that time. If a Change of Control were to occur,
Nextel would be obligated:
- for a Change of Control occurring on or after December 15, 2005, or any
earlier refinancing of, or termination of the covenants with respect to,
all of the Old Senior Notes, the 11 1/2% Senior Redeemable Discount Notes
due 2003 of Nextel and the 12 1/4% Senior Redeemable Dial Page Discount
Notes due 2004, to offer to purchase outstanding shares of the Series D
Preferred Stock and the Series E Preferred Stock,
- for a Change of Control occurring before December 23, 2005 or any earlier
refinancing of, or termination of the covenants with respect to, all of
the Old Senior Notes, to either offer to purchase outstanding shares of
the Zero Coupon Preferred Stock or increase the conversion rate of the
Zero Coupon Preferred Stock,
- for a Change of Control occurring on or after December 23, 2005 or any
earlier refinancing of, or termination of the covenants with respect to,
all of the Old Senior Notes, to offer to purchase outstanding shares of
the Zero Coupon Preferred Stock,
- to offer to purchase all Debt which then would be entitled to receive a
comparable offer to purchase by reason of the Change in Control,
including, without limitation, the Existing Senior Notes, and
- to 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 would need
to seek third-party financing to the extent it does not have available funds to
meet its purchase obligations. However, there can be no assurance that Nextel
would be able to obtain the financing. In addition, Nextel's ability to purchase
the notes may be limited by other then-existing agreements.
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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 second paragraph of the "Limitation on Restricted Payments"
covenant, to the extent the inclusion thereof was necessary to
allow a subsequent Restricted Payment to be made, or
(2) on the date of the Incurrence, after giving effect to the Incurrence of
the Debt or Acquired Debt and the receipt and application of the net
proceeds thereof, and, if the net proceeds of the new Debt are used to
acquire a Person that becomes a Restricted Subsidiary or an operating
business of Nextel or a Restricted Subsidiary, to all terms of the
acquisition, on a pro forma basis, the Operating Cash Flow to
Consolidated Interest Expense Ratio would equal or exceed 1.75 to 1.
LIMITATION ON RESTRICTED PAYMENTS
Nextel will not, directly or indirectly:
(1) declare or pay any dividend on, or make any distribution to the holders
of, any shares of its Capital Stock, other than dividends or
distributions payable solely in its Capital Stock, other than
Redeemable Stock or in options, warrants or other rights to purchase
any of the Capital Stock, other than Redeemable Stock;
(2) purchase, redeem or otherwise acquire or retire for value, or permit
any Restricted Subsidiary to, directly or indirectly, purchase, redeem
or otherwise acquire or retire for value, other than value consisting
solely of Capital Stock of Nextel that is not Redeemable Stock or
options, warrants or other rights to acquire the Capital Stock that is
not Redeemable Stock, any Capital Stock of Nextel, including options,
warrants or other rights to acquire the Capital Stock;
(3) redeem, repurchase, defease or otherwise acquire or retire for value,
or permit any Restricted Subsidiary to, directly or indirectly, redeem,
repurchase, defease or otherwise acquire or retire for value, other
than value consisting solely of Capital Stock of Nextel that is not
Redeemable Stock or options, warrants or other rights to acquire the
Capital Stock that is not Redeemable Stock, prior to any scheduled
maturity, scheduled repayment or scheduled sinking fund payment, any
Debt that is subordinate, whether pursuant to its terms or by operation
of law, in right of payment to the notes; or
(4) make, or permit any Restricted Subsidiary, directly or indirectly, to
make, any Investment other than any Permitted Investment, in any
Person, other than in a Restricted Subsidiary or a Person that becomes
a Restricted Subsidiary as a result of the Investment;
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(each of the foregoing actions set forth in clauses (1) through (4), other
than an action that is a Permitted Investment or a Permitted Distribution, is a
"Restricted Payment") unless, at the time of the Restricted Payment, and after
giving effect thereto:
(1) no Default or Event of Default will have occurred and be continuing;
(2) except with respect to Investments, after giving effect, on a pro forma
basis, to the Restricted Payment and the Incurrence of any Debt the net
proceeds of which are used to finance the Restricted Payment, the
Consolidated Debt to Annualized Operating Cash Flow Ratio would not
have exceeded 7.0 to 1; and
(3) after giving effect to the Restricted Payment on a pro forma basis, the
aggregate amount of all Restricted Payments made on or after February
15, 1994 will not exceed:
(a) 50% of the Consolidated Net Income, or, in the case of a
Consolidated Net Loss, minus 100% of that deficit, of Nextel for
the period, taken as one accounting period from April 1, 1994 to
the last day of the last fiscal quarter preceding the date of the
proposed Restricted Payment, plus
(b) the aggregate net proceeds, including the fair market value of
property other than cash, as determined by the board of directors,
whose good faith determination shall be conclusive and evidenced
by a Board Resolution, received by Nextel from the issuance and
sale, other than to a Restricted Subsidiary, on or after February
15, 1994 of shares of its Capital Stock, except for Redeemable
Stock, or any options, warrants or other rights to purchase that
Capital Stock, except for Redeemable Stock, other than
- except for purposes of determining whether an Investment under
clause (4) above is permitted, shares of Capital Stock or
options, warrants or other rights to purchase Capital Stock, or
shares issuable upon exercise thereof, issued or sold in the
PowerFone Merger, Questar/AMI Share Exchanges, Motorola
Transaction and NTT transactions as defined and described in
Nextel's prospectus, dated February 9, 1994, relating to Nextel's
Senior Redeemable Discount Notes due 2004 and
- shares of Capital Stock or options, warrants or other rights to
purchase Capital Stock, or shares issuable upon exercise thereof,
the proceeds of the issuance of which is used
- to make a Directed Investment, unless the designation has been
revoked by the board of directors and Nextel is able to make
the Investment pursuant to this "Limitation on Restricted
Payments" covenant, other than as a Directed Investment or
- to Incur Debt under clause (1) of the "Limitation on
Consolidated Debt" covenant, unless and until the amount of
the 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 Capital Stock, other
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than Redeemable Stock, upon the conversion of, or exchange for, Debt
of Nextel or a Restricted Subsidiary.
The foregoing limitations in this "Limitation on Restricted Payments"
covenant do not limit or restrict the making of any Permitted Distribution,
Permitted Investment or Directed Investment, and none of a Permitted
Distribution, Permitted Investment or Directed Investment will be counted as a
Restricted Payment for purposes of clause (3) in the preceding paragraph. In
addition, the foregoing limitations do not prevent Nextel from
(1) paying a dividend on Capital Stock of Nextel within 60 days after the
declaration thereof if, on the date when the dividend was declared,
Nextel could have paid the dividend in accordance with the provisions
of the indenture,
(2) repurchasing Capital Stock of Nextel, including options, warrants or
other rights to acquire the Capital Stock from employees or former
employees of Nextel or any Subsidiary thereof for consideration not to
exceed $500,000 in the aggregate in any fiscal year, with repurchases
pursuant to this clause (2) not being counted as Restricted Payments
for purposes of clause (3) in the preceding paragraph, or
(3) the repurchase, redemption or other acquisition for value of Capital
Stock of Nextel to the extent necessary to prevent the loss or secure
the renewal or reinstatement of any license or franchise held by Nextel
or any of its Subsidiaries from any governmental agency; or
(4) Investments in Unrestricted Subsidiary Funding Company so long as
(a) the Investments are invested in Nextel International, Inc. and
(b) Nextel International, Inc. is a Subsidiary of Nextel.
Notwithstanding the foregoing limitations in this "Limitation on Restricted
Payments" covenant, Nextel will be permitted to make any Investment in a Person
that is not, either before or after giving effect thereto, a Subsidiary of
Nextel, provided that, immediately after giving effect thereto, the amount equal
to
(1) the aggregate amount of all Investments made pursuant to this paragraph
minus
(2) all cash received by Nextel or any Restricted Subsidiary from the sale,
transfer or other disposition to a Person that is not a Subsidiary of
Nextel, of any Investment, or portion thereof, included in the
aggregate amount, with the amount of cash to be counted for this
purpose not to exceed the amount of the Investment, or portion thereof,
so included,
will not exceed the greater of
(a) $250 million and
(b) 2% of the Total Market Value of Equity of Nextel as of the time.
For purposes of determining the aggregate amount of Investments referred to in
clause (1), the amount of any Investment will be deemed to equal the cash
portion thereof plus the fair market value of any non-cash portion thereof, to
the extent the portion constitutes an Investment, at the time the Investment is
made, as determined by the board of directors, whose good faith determination
will be conclusive and evidenced by a Board Resolution.
Notwithstanding the foregoing, no Investment in a Person that immediately
thereafter would be a Restricted Subsidiary will be a Restricted Payment. In
addition, if any Person in which an Investment is made, which Investment
constitutes a Restricted Payment when made, thereafter becomes a Restricted
Subsidiary, all Investments previously made in the Person shall no longer be
counted as Restricted Payments for purposes of calculating the aggregate amount
of Restricted Payments pursuant to clause (3) of the third preceding paragraph
or the aggregate amount of Investments pursuant to clause (1) of the immediately
preceding paragraph, in each case to the extent the Investments would otherwise
be so
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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.
The board of directors may designate any existing Unrestricted Subsidiary
or any Person that is about to become a Subsidiary of Nextel as a Restricted
Subsidiary if, after giving effect to the action (and, if the designation is
made in connection with the acquisition of a Person or an operating business
that is about to become a Subsidiary of Nextel, after giving effect to all terms
of the acquisition) on a pro forma basis, on the date of the action, the Debt,
if any, of the Unrestricted Subsidiary or Person outstanding immediately prior
to the designation would have been permitted to be Incurred, and will be deemed
to have been Incurred, for all purposes of the indenture.
Subject to the second preceding paragraph and compliance with the
"Limitation on Restricted Payments" covenant, the board of directors may
designate any Restricted Subsidiary as an Unrestricted Subsidiary. The
designation by the board of directors of a Restricted Subsidiary as an
Unrestricted Subsidiary will, for all purposes of the "Limitation on Restricted
Payments" covenant, including the second clause (2) thereof, be deemed to be a
Restricted Payment of an amount equal to the fair market value of Nextel's
ownership interest in the Subsidiary, including, without duplication, such
indirect ownership interest in all Subsidiaries of the Subsidiary, as determined
by the board of directors in good faith and evidenced by a Board Resolution.
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Notwithstanding the foregoing provisions of this "Restricted Subsidiaries"
covenant, the board of directors may not designate a Subsidiary of Nextel to be
an Unrestricted Subsidiary if, after that designation,
(1) Nextel or any of its other Restricted Subsidiaries
(a) provides credit support for, or a Guarantee of, any Debt of the
Subsidiary, including any undertaking, agreement or instrument
evidencing the Debt, or
(b) is directly or indirectly liable for any Debt of the Subsidiary,
(2) a default with respect to any Debt of the 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 may 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 that might be obtained at the time of the transaction from a Person that
is not an Affiliate; provided, however, that this "Transactions with Affiliates"
covenant will not limit, or be applicable to,
(1) any transaction involving one or more Unrestricted Subsidiaries and not
involving Nextel or any Restricted Subsidiary,
(2) any transaction between Nextel and any Restricted Subsidiary or between
Restricted Subsidiaries or
(3) any Permitted Transactions.
In addition, any transaction or series of related transactions, other than
Permitted Transactions, between Nextel or any Restricted Subsidiary and any
Affiliate of Nextel, other than a Restricted Subsidiary, involving an aggregate
consideration of $5 million or more must be approved in good faith by a majority
of Nextel's Disinterested Directors, of which there must be at least one, and
evidenced by a Board Resolution. For purposes of this "Transactions with
Affiliates" covenant, any transaction or series of related transactions between
Nextel or any Restricted Subsidiary and an Affiliate of Nextel that is approved
by a majority of the Disinterested Directors, of which there must be at least
one, and evidenced by a Board Resolution will be deemed to be on terms as
favorable as those that might be obtained at the time of the transaction, or
series of transactions, from a Person that is not an Affiliate and thus will be
permitted under this covenant.
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ACTIVITIES OF NEXTEL AND RESTRICTED SUBSIDIARIES
Nextel will not, and will not permit any Restricted Subsidiary to, engage
in any business other than the telecommunications business and related
activities and services, including those businesses, activities and services as
Nextel and the Restricted Subsidiaries were engaged in on the Closing Date.
PROVISION OF FINANCIAL INFORMATION
Regardless of whether Nextel is subject to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, or any successor provision, Nextel will file
with the Commission the annual reports, quarterly reports and other documents
which Nextel would have been required to file with the Commission pursuant to
Section 13(a) or 15(d) or any successor provision thereto if Nextel were subject
thereto, the documents to be filed with the Commission on or prior to the
respective dates by which Nextel would have been required to file them. Nextel
will also in any event:
(1) within 15 days of each required filing date
(a) transmit by mail to all holders, as their names and addresses
appear in the Security Register, without cost to those holders,
and
(b) file with the Trustee
copies of the annual reports, quarterly reports and other documents
which Nextel would have been required to file with the Commission
pursuant to Section 13(a) or 15(d) of the Exchange Act or any successor
provisions thereto if Nextel were subject thereto and
(2) if filing the documents by Nextel with the Commission is not permitted
under the Securities Exchange Act of 1934, promptly upon written
request supply copies of the documents to any prospective holder.
The Trustee's receipt of the reports, information and documents will not
constitute constructive notice of any information contained in or determinable
from information in the applicable report or document.
MERGER, SALE OF ASSETS, ETC.
Nextel
(1) will not, in any transaction or series of related transactions, merge
or consolidate with or into, or sell, assign, convey, transfer, lease
or otherwise dispose of its properties and assets substantially as an
entirety to, any Person, and
(2) will not permit any of its Restricted Subsidiaries to enter into any
transaction or series of transactions if the transaction or series of
transactions, in the aggregate, would result in a sale, assignment,
conveyance, transfer, lease or other disposition of the properties and
assets of Nextel and its Restricted Subsidiaries, taken as a whole,
substantially as an entirety to any Person,
unless, in each case (1) or (2), at the time and after giving effect thereto
(a) either:
- if the transaction or series of transactions is a consolidation
of Nextel with or a merger of Nextel with or into any other
Person, Nextel is 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") must be a corporation, partnership or trust
organized and existing under the laws of the United States, any
state or the District of Columbia
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and must 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 may have occurred
and be continuing, and
(c) the Consolidated Net Worth of Nextel or the Surviving Entity, as
the case may be, will be equal to or greater than that of Nextel
immediately prior to the transaction or series of transactions;
provided, however, that the foregoing requirements will not apply to any
transaction or series of transactions involving the sale, assignment,
conveyance, transfer, lease or other disposition of the properties and
assets by any Restricted Subsidiary to any other Restricted Subsidiary,
or the merger or consolidation of any Restricted Subsidiary with or into
any other Restricted Subsidiary.
In connection with any consolidation, merger, sale, assignment, conveyance,
transfer, lease or other disposition contemplated by the foregoing provisions,
Nextel will deliver, or cause to be delivered, to the Trustee, in form and
substance reasonably satisfactory to the Trustee, an Officers' Certificate
stating that the consolidation, merger, sale, assignment, conveyance, transfer,
lease or other disposition and the supplemental indenture in respect thereof,
required under second bullet point under clause (a) of the preceding paragraph,
comply with the requirements of the indenture and an opinion of counsel stating
that the conditions of the indenture have been complied with. Each Officers'
Certificate will set forth the manner of determination of the Consolidated Net
Worth in accordance with clause (c) of the preceding paragraph.
For all purposes of the indenture and the notes, including the provisions
described in the two immediately preceding paragraphs and the "Limitation on
Consolidated Debt" and "Restricted Subsidiaries" covenants, Subsidiaries of any
Surviving Entity will, upon the transaction or series of transactions, become
Restricted Subsidiaries or Unrestricted Subsidiaries as provided pursuant to the
"Restricted Subsidiaries" covenant and all Debt of the Surviving Entity and its
Subsidiaries that was not Debt of Nextel and its Subsidiaries immediately prior
to the transaction or series of transactions will be deemed to have been
Incurred upon the transaction or series of transactions.
F. EVENTS OF DEFAULT
The following will be Events of Default under the indenture:
(1) failure to pay principal of, or premium, if any, on, any notes when
due;
(2) failure to pay any interest on any notes when due, continued for 30
days;
(3) default in the payment of principal of, and premium and interest, if
any, on the notes required to be purchased pursuant to an Offer to
Purchase as described under "Change of Control" when due and payable,
or failure to make an Offer to Purchase as required thereunder;
(4) failure to perform or comply with the provisions described under
"Merger, Sale of Assets, Etc.";
(5) failure to perform any other covenant or agreement of Nextel under the
indenture or the notes continued for 60 days after written notice to
Nextel by the Trustee or holders of at least 25% in aggregate principal
amount of outstanding notes;
(6) failure to pay when due (subject to any applicable grace period) the
principal of, or acceleration of, any Debt of Nextel or any Restricted
Subsidiary having an outstanding principal amount of at least $25.0
million, individually or in the aggregate;
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(7) the rendering of a final judgment or judgments against Nextel or any
Restricted Subsidiary in an amount in excess of $25.0 million which
remains undischarged or unstayed for a period of 60 days after the date
on which the right to appeal has expired; and
(8) specified 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) occurs and is 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 automatically 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, if an Event of Default occurs and is 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 has previously given to the Trustee written notice of a
continuing Event of Default,
- the holders of at least 25% in aggregate principal amount at Stated
Maturity of the Outstanding Securities have made written request to the
Trustee to institute the proceeding as trustee,
- the holder or holders have offered reasonable indemnity to the Trustee
for expenses of the proceeding,
- the Trustee failed to institute the proceeding within 60 days after
receiving the request, and
- the Trustee has not received from the holders of a majority in aggregate
principal amount at Stated Maturity of the Outstanding Securities a
direction inconsistent with the request.
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 set forth in the note.
Nextel will be required to furnish to the Trustee annually a statement as
to the performance by it of some of its obligations under the indenture and as
to any default in the performance.
G. DEFEASANCE AND COVENANT DEFEASANCE
Nextel may elect, at its option at any time, to have the provisions of the
indenture relating to defeasance and discharge of indebtedness or the provisions
relating to defeasance of some restrictive covenants in the indenture, applied
to the Outstanding Securities, as a whole and not in part.
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Defeasance and Discharge. Upon Nextel's exercise of its option to have the
provisions relating to defeasance and discharge applied to the Outstanding
Securities, Nextel will be discharged from all its obligations with respect to
the notes, except for 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 the restrictive covenants applied to the Outstanding Securities, Nextel
may omit to comply with specified restrictive covenants, including those
described under "Covenants" and clause (2)(c) under "Merger, Sale of Assets,
Etc.," and the occurrence of specified 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
Securities and these notes were declared due and payable prior to their Stated
Maturity because of the occurrence of any Event of Default or become payable on
any redemption date at the option of Nextel, the amount of money and United
States Government Obligations so deposited in trust would be sufficient to pay
amounts due on the notes at the time of their respective Stated Maturities but
may not be sufficient to pay amounts due on the notes upon the acceleration or
redemption. In this case, Nextel would remain liable for the payments.
H. MODIFICATION AND WAIVER
Modifications and amendments of the indenture may be made by Nextel and the
Trustee with Required Consent; provided, however, that no such modification or
amendment may, without the consent of each holder of the notes affected thereby:
(1) change the Stated Maturity of the principal of, or any installment of
interest on, any note,
(2) reduce the principal amount of, premium, if any, or interest on, any
note,
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(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 Securities 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
Securities 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.
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
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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, it is under no
obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. Nextel will have no responsibility
for the performance by The Depository Trust Company or its respective
participants or indirect participants of its respective obligations under the
rules and procedures governing their operations.
L. CERTIFICATED NOTES
If The Depository Trust Company is at any time unwilling or unable to
continue as a depositary for the global exchange note and a successor depositary
is not appointed by Nextel within 90 days, Nextel will issue a physical
certificate for such notes in exchange for the global exchange note. In
addition, if there is an Event of Default under the notes, The Depository Trust
Company may exchange the global exchange note for certificated notes and
distribute these certificated notes to its participants. Finally, beneficial
owners whose interests are represented by the global exchange note may request a
physical certificate.
VII. PRINCIPAL UNITED STATES FEDERAL TAX CONSIDERATIONS TO NON-U.S. HOLDERS
The following is a summary of specified United States federal income and
estate tax matters. In the case of Non-U.S. Holders, as defined below, this
discussion summarizes the principal United States Federal income tax
considerations 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 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
considerations that may be relevant to holders of the notes in light
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of their particular circumstances or to holders of the notes subject to special
rules, for example, banks, insurance companies, tax-exempt organizations,
dealers in securities or foreign currencies, persons holding the notes as part
of a hedging transaction, "straddle," conversion transaction, or other
integrated transaction, or foreign currency effects on holders of the notes
whose functional currency, as defined in Section 985 of the Code, is not the
United States dollar. Persons considering the purchase of the notes should
consult with their own tax advisors about the application of the United States
federal income tax laws to their particular situations as well as any tax
considerations 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 over which a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more
United States persons have the authority to control all substantial
decisions of the trust, including certain trusts in existence on August
20, 1996 and treated as United States persons prior to this date that
timely elected to continue to be treated as United States persons; or
- a partnership, or other entity treated as a partnership, created or
organized in or under the laws of the United States or of any state,
except as Treasury regulations may provide.
The term "Non-U.S. Holder" means any holder that is not a U.S. Holder.
EXCHANGE OFFER
The exchange of the outstanding notes for exchange notes should not be
treated as a taxable transaction to U.S. Holders or to Non-U.S. Holders for
United States federal income tax purposes. Rather, the exchange notes received
should be treated as a continuation of the outstanding notes surrendered in
exchange. As a result, there should be no material United States federal income
tax consequences to U.S. Holders or to Non-U.S. Holders exchanging outstanding
notes for exchange notes.
OWNERSHIP AND DISPOSITION OF NOTES BY NON-U.S. HOLDERS
Under present United States federal law, and subject to the discussion
below concerning backup withholding:
(a) payments of principal, interest and premium, if any, on the notes
by Nextel or its paying agent to any Non-U.S. Holder will not be
subject to 30% United States federal withholding tax, provided
that, in the case of interest,
- the holder does not own, actually or constructively, 10% or more of
the total combined voting power of all classes of stock of Nextel
entitled to vote and is not a controlled foreign corporation
related, directly or indirectly, to Nextel through stock ownership,
and
- the certification requirement set forth in Section 871(h) or
Section 881(c) of the Code has been fulfilled with respect to the
beneficial owner, as discussed below;
(b) a Non-U.S. Holder of a note will not be subject to United States
federal income tax on gain realized on the sale, exchange or other
disposition of that note, unless
- the Non-U.S. Holder is an individual who is present in the United
States for 183 days or more in the taxable year of the disposition
and specific other conditions are met, or
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- 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, for
United States estate tax purposes, 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 a
properly executed Internal Revenue Service ("IRS") Form W-8, IRS Form W-8BEN or
successor form under penalties of perjury, that it is not a United States person
and provides its name and address, and
- that beneficial owner files IRS Form W-8, IRS Form W-8BEN or
successor form with the withholding agent or
- in the case of a note held by a 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 IRS
Form W-8, IRS Form W-8BEN or successor form 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 IRS
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, 2000, unless the foreign partnership has entered into
a withholding agreement with the IRS, a foreign partnership will be
required, in addition to providing an intermediary IRS Form W-8IMY
or successor form, 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 IRS Form 4224, IRS Form W-8ECI or
successor form, 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 or any gain recognized on the sale, exchange or
other disposition of a note will be included in the effectively connected
earnings and profits of the Non-U.S. Holder if such interest or gain, as the
case may be, is effectively connected with the conduct by the Non-U.S. Holder of
a trade or business in the United States.
BACKUP WITHHOLDING AND INFORMATION REPORTING. Nextel will, where required,
report to Non-U.S. Holders of notes and to the IRS the amount of any interest
paid on the notes. 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 payer, 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.
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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 information reporting or 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, 2000, 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.
Treasury regulations recently issued by the IRS, which are generally
effective for payments made after December 31, 2000, make certain modifications
to the certification procedures applicable to Non-U.S. Holders. 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
IRS.
VIII. PLAN OF DISTRIBUTION
Except as described below, a broker-dealer may not participate in the
exchange offer in connection with a distribution of the exchange notes. Each
broker-dealer that receives exchange notes for its own account pursuant to the
exchange offer must acknowledge that it will deliver a prospectus in connection
with any resale of the exchange notes by such broker-dealer. This prospectus, as
it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of exchange notes received for its own
account in exchange for outstanding notes where those outstanding notes were
acquired as a result of market-making activities or other trading activities.
Nextel has agreed that for a period of 90 days after the expiration date of the
exchange offer, it will make this prospectus, as amended or supplemented,
available to any broker-dealer for use in connection with any resale subject to
the conditions described under "V.B. The Exchange Offer -- Resale of the
Exchange Notes."
Nextel will not receive any proceeds from any sale of exchange notes by
broker-dealers. Exchange notes received by broker-dealers for their own account
pursuant to the exchange offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the exchange notes or a combination of those methods
of resale, at market prices prevailing at the time of resale, at prices related
to the prevailing market prices, or negotiated prices. Any resale may be made
directly to purchasers or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any broker-dealer
and/or the purchasers of any exchange notes. Any broker or dealer that
participates in a distribution of the exchange notes may be deemed to be an
"underwriter" within the meaning of the Securities Act of 1933, and any profit
on the resale of exchange notes and any commissions or concessions received by
those persons may be deemed to be underwriting compensation under the Securities
Act of 1933. The Letter of Transmittal states that by acknowledging that it will
deliver and by delivering a prospectus a broker-dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act of
1933.
Nextel has agreed to pay all expenses incident to the exchange offer other
than commissions or concessions of any brokers or dealers and expenses of
counsel for the holders of the exchange notes and will indemnify the holders of
the exchange notes, including any broker-dealers, against some liabilities,
including some liabilities under the Securities Act of 1933.
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IX. LEGAL MATTERS
Jones, Day, Reavis & Pogue, Atlanta, Georgia, will pass upon the validity
of the exchange notes for Nextel.
X. EXPERTS
The consolidated financial statements and related financial statement
schedules of Nextel incorporated in this prospectus by reference from Nextel's
Annual Report on Form 10-K for the year ended December 31, 1998, have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, and have been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
XI. WHERE YOU CAN GET MORE INFORMATION
A. AVAILABLE INFORMATION
Nextel files reports, proxy statements and other information with the
Securities and Exchange Commission. You may read and copy this information at
the public reference facilities maintained by the Commission at:
- The Commission's Public Reference Room 1024, 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549
- The Commission's regional offices at
- 7 World Trade Center, 13th Floor, New York, New York 10048 and
- Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661.
You may obtain information on the operation of the public reference room by
calling the Commission at 1-800-SEC-0330. Nextel's filings are also available on
the Commission's web site on the Internet at http://www.sec.gov.
Nextel filed a registration statement with the Commission under the
Securities Act of 1933 to register the exchange notes to be issued in the
exchange offer. As allowed by the Commission's rules, this prospectus does not
contain all of the information you can find in the registration statement and
its exhibits. As a result, statements in this prospectus concerning the contents
of any contract, agreement or other document are not necessarily complete. If
Nextel filed any contract, agreement or other document as an exhibit to the
registration statement, you should read the exhibit for a more complete
understanding of the document or matter involved.
B. INCORPORATION OF DOCUMENTS BY REFERENCE
The Commission allows Nextel to "incorporate by reference" information into
this prospectus. This means Nextel can disclose information to you by referring
you to another document filed by Nextel with the Commission. Nextel will make
those documents available to you without charge upon your oral or written
request. Requests for those documents should be directed to Nextel
Communications, Inc., 2001 Edmund Halley Drive, Reston, Virginia 20191,
Attention: Investor Relations, telephone: (703) 433-4000. This prospectus
incorporates by reference the following documents:
- Annual Report on Form 10-K for the year ended December 31, 1998, dated
and filed with the Commission on March 30, 1999;
- Current Reports on Form 8-K:
- dated and filed with the Commission on February 24, 1999;
- dated and filed with the Commission on April 1, 1999;
- dated May 12, 1999 and filed with the Commission on May 13, 1999;
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<PAGE> 68
- dated and filed with the Commission on June 15, 1999;
- dated and filed with the Commission on June 23, 1999;
- dated and filed with the Commission on August 12, 1999;
- dated and filed with the Commission on August 18, 1999;
- dated October 20, 1999 and filed with the Commission on October 21,
1999;
- dated and filed with the Commission on November 8, 1999;
- dated and filed with the Commission on November 12, 1999;
- dated November 30, 1999 and filed with the Commission on December 1,
1999;
- dated and filed with the Commission on December 16, 1999;
- dated and filed with the Commission on December 21, 1999;
- dated December 22, 1999 and filed with the Commission on December 23,
1999;
- dated and filed with the Commission on December 23, 1999;
- Quarterly Report on Form 10-Q for the quarter ended March 31, 1999, dated
and filed with the Commission on May 17, 1999;
- Quarterly Report on Form 10-Q for the quarter ended June 30, 1999, dated
and filed with the Commission on August 16, 1999;
- Quarterly Report on Form 10-Q for the quarter ended September 30, 1999,
dated and filed with the Commission on November 15, 1999; and
- Proxy Statement, dated as of April 7, 1999, filed with the Commission in
definitive form on April 8, 1999, with respect to the information
required by Items 401 (management), 402 (executive compensation), 403
(securities ownership) and 404 (certain relationships and related
transactions) of Regulation S-K promulgated under the Securities Act of
1933 and the Securities Exchange Act of 1934.
Nextel is also incorporating by reference additional documents it may file
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934 after the date of this prospectus and before
- the exchange of the exchange notes for the outstanding notes, or
- to the extent this prospectus is used by one or more broker-dealers in
connection with the resale of exchange notes received by that
broker-dealer for its own account in exchange for outstanding notes
acquired as a result of market-making or other trading activities, the
date those resales are complete.
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.
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).
</TABLE>
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<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- -----------------------
<C> <C> <S>
4.1.4 -- 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 (filed
on February 10, 1999 as Exhibit 4.16 to Nextel's
Registration Statement on Form S-4 (the "February 1999 Form
S-4") and incorporated herein by reference).
4.2 -- Amended and Restated By-laws of Nextel (filed on July 31,
1995 as Exhibit No. 4.2 to the Nextel S-8 Registration
Statement and incorporated herein by reference).
4.3.1 -- Indenture between Old Nextel and The Bank of New York, as
Trustee, dated August 15, 1993 (the "August Indenture")
(filed on December 23, 1993 as Exhibit 4.13 to Old Nextel's
Registration Statement No. 33-73388 on Form S-4 and
incorporated herein by reference).
4.3.2 -- Supplemental Indenture, dated as of June 30 1995, to the
August Indenture between Nextel and The Bank of New York
(filed on November 14, 1995 as Exhibit 4.1 to Nextel's
Quarterly Report on Form 10-Q for the quarter ended
September 30, 1995 (the "November 14 Form 10-Q") and
incorporated herein by reference).
4.3.3 -- Second Supplemental Indenture, dated as of July 28, 1995, to
the August Indenture between ESMR, Inc. (now known as
Nextel), as Successor by Merger to Nextel and The Bank of
New York (relating to the August Indenture) (filed on
November 14, 1995 as Exhibit 4.3 to the November 14 Form
10-Q and incorporated herein by reference).
4.3.4 -- Third Supplemental Indenture, dated as of June 13, 1997, to
the August Indenture between Nextel Communications, Inc. and
The Bank of New York, as Trustee (filed on June 17, 1997 as
Exhibit 4.1 to the Current Report on Form 8-K dated June 13,
1997 (the "June 13 Form 8-K") and incorporated herein by
reference).
4.3.5 -- Fourth Supplemental Indenture, dated March 24, 1998, to the
August Indenture between Nextel Communications, Inc. and The
Bank of New York, as Trustee (filed on May 13, 1998 as
Exhibit 4.3 to Nextel's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1998 (the "May 13 Form 10-Q")
and incorporated herein by reference).
4.4.1 -- Indenture between Old Nextel and the Bank of New York, as
Trustee, dated as of February 15, 1994 (the "February
Indenture") (filed on March 1, 1994 as Exhibit 4.1 to Old
Nextel's Current Report on Form 8-K dated February 16, 1994
and incorporated herein by reference).
4.4.2 -- Supplemental Indenture dated as of June 30, 1995 to the
February Indenture between Old Nextel and The Bank of New
York (filed on November 14, 1995 as Exhibit 4.2 to the
November 14 Form 10-Q and incorporated herein by reference).
4.4.3 -- Second Supplemental Indenture, dated as of July 28, 1995, to
the February Indenture between ESMR, Inc. (now known as
Nextel), as Successor by Merger to Old Nextel and The Bank
of New York (relating to the February Indenture) (filed on
November 14, 1995 as Exhibit 4.4 to the November 14 Form
10-Q and incorporated herein by reference).
4.4.4 -- Third Supplemental Indenture, dated as of June 13, 1997, to
the February Indenture between Nextel Communications, Inc.,
and The Bank of New York, as Trustee (filed on June 17, 1997
as Exhibit 4.2 to the June 13 Form 8-K and incorporated
herein by reference).
4.5.1 -- Indenture for Senior Redeemable Discount Notes due 2004,
dated as of January 13, 1994, between OneComm Corporation
(formerly called CenCall Communications Corp.) and The Bank
of New York (the "OneComm Indenture") (filed on June 7, 1995
as Exhibit 99.2 to Nextel's Registration Statement No.
33-93182 on Form S-4 (the "OneComm S-4 Registration
Statement") and incorporated herein by reference).
4.5.2 -- Supplemental Indenture, dated as of June 30, 1995, to the
OneComm Indenture between OneComm Corporation (formerly
called CenCall Communications Corp.) and The Bank of New
York (filed on November 14, 1995 as Exhibit 10.12 to the
November 14 Form 10-Q and incorporated herein by reference).
</TABLE>
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<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- -----------------------
<C> <C> <S>
4.5.3 -- Second Supplemental Indenture, dated as of July 28, 1995, to
the OneComm Indenture between Nextel (formerly known as
ESMR, Inc.), as successor to OneComm Corporation and The
Bank of New York (filed on November 14, 1995 as Exhibit
10.13 to the November 14 Form 10-Q and incorporated herein
by reference).
4.5.4 -- Third Supplemental Indenture, dated as of June 13, 1997, to
the OneComm Indenture between Nextel and The Bank of New
York (filed on June 17, 1997 as Exhibit 4.5 to the June 13
Form 8-K and incorporated herein by reference).
4.6.1 -- Indenture for Senior Redeemable Discount Notes due 2004,
dated as of April 25, 1994, between Dial Call
Communications, Inc. and The Bank of New York (the "Dial
Call 2004 Indenture") (filed on June 7, 1995 as Exhibit 99.4
to the OneComm S-4 Registration Statement and incorporated
herein by reference).
4.6.2 -- Supplemental Indenture, dated as of August 7, 1995, to the
Dial Call 2004 Indenture between Dial Call Communications,
Inc. and The Bank of New York (filed on December 5, 1995 as
Exhibit 99.3 to the Nextel's Registration Statement No.
33-80021 on Form S-4 (the "Dial Page S-4 Registration
Statement") and incorporated herein by reference).
4.6.3 -- Second Supplemental Indenture, dated as of January 30, 1996,
to the Dial Call 2004 Indenture between Dial Page, Inc. (as
successor to Dial Call Communications, Inc.) and The Bank of
New York (filed on April 1, 1996 as Exhibit 4.26 to Nextel's
Annual Report on Form 10-K for the year ended December 31,
1995 (the "1995 Form 10-K") and incorporated herein by
reference).
4.6.4 -- Third Supplemental Indenture, dated as of January 30, 1996,
to the Dial Call 2004 Indenture between Nextel (as successor
to Dial Page, Inc.) and The Bank of New York (filed on April
1, 1996 as Exhibit 4.27 to the 1995 Form 10-K and
incorporated herein by reference).
4.6.5 -- Fourth Supplemental Indenture, dated as of June 13, 1997, to
the Dial Call 2004 Indenture between Nextel and The Bank of
New York (filed on June 17, 1997 as Exhibit 4.3 to the June
13 Form 8-K and incorporated herein by reference).
4.6.6 -- Fifth Supplement Indenture, dated March 24, 1998, to the
Dial Call 2004 Indenture between Nextel and The Bank of New
York (filed on May 13, 1998 as Exhibit 4.4 to the May 13
Form 10-Q and incorporated herein by reference).
4.7.1 -- Indenture for Senior Discount Notes due 2005, dated as of
December 22, 1993, between Dial Call Communications, Inc.
and The Bank of New York (the "Dial Call 2005 Indenture")
(filed as Exhibit 99.3 to the OneComm S-4 Registration
Statement and incorporated herein by reference).
4.7.2 -- Supplemental Indenture, dated as of April 25, 1994, to the
Dial Call 2005 Indenture between Dial Call Communications,
Inc. and The Bank of New York (filed on April 1, 1996 as
Exhibit 4.29 to the 1995 Form 10-K and incorporated herein
by reference).
4.7.3 -- Supplemental Indenture, dated as of June 30, 1995, to the
Dial Call 2005 Indenture between Dial Call Communications,
Inc. and The Bank of New York (filed on December 5, 1995 as
Exhibit 99.4 to the Dial Page S-4 Registration Statement and
incorporated herein by reference).
4.7.4 -- Third Supplemental Indenture, dated as of January 30, 1996,
to the Dial Call 2005 Indenture between Dial Page Inc. (as
successor to Dial Call Communications, Inc.) and The Bank of
New York (filed on April 1, 1996 as Exhibit 4.31 to the 1995
Form 10-K and incorporated herein by reference).
4.7.5 -- Fourth Supplemental Indenture, dated as of January 30, 1996,
to the Dial Call 2005 Indenture between Nextel (as successor
to Dial Page, Inc.) and The Bank of New York (filed on April
1, 1996 as Exhibit 4.32 to the 1995 Form 10-K and
incorporated herein by reference).
4.7.6 -- Fifth Supplemental Indenture, dated as of June 13, 1997, to
the Dial Call 2005 Indenture between Nextel and The Bank of
New York (filed on June 17, 1997 as Exhibit 4.4 to the June
13 Form 8-K and incorporated herein by reference).
</TABLE>
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<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- -----------------------
<C> <C> <S>
4.8.1 -- Indenture for Senior Discount Notes due 2007, dated as of
March 6, 1997, between McCaw International, Ltd. (now known
as Nextel International) and The Bank of New York, as
Trustee (the "NI 2007 Indenture") (filed on March 31, 1997
as Exhibit 4.24 to Nextel's Annual Report on Form 10-K for
the year ended December 31, 1996 (the "1996 Form 10-K") and
incorporated herein by reference).
4.8.2 -- Warrant Agreement, dated as of March 6, 1997, between McCaw
International, Ltd. and The Bank of New York (filed on March
31, 1997 as Exhibit 4.26 to the 1996 Form 10-K and
incorporated herein by reference).
4.9 -- Indenture dated September 17, 1997 between Nextel
Communications, Inc. and Harris Trust and Savings Bank, as
Trustee, relating to Nextel's 10.65% Senior Redeemable
Discount Notes due 2007 (filed on September 22, 1997 as
Exhibit 4.1 to Nextel's Current Report on Form 8-K dated
September 22, 1997 and incorporated herein by reference).
4.10 -- Indenture dated as of October 22, 1997 between Nextel
Communications, Inc. and Harris Trust and Savings Bank, as
Trustee, relating to Nextel's 9.75% Senior Serial Redeemable
Discount Notes due 2007 (filed on October 23, 1997 as
Exhibit 4.1 to Nextel's Current Report on Form 8-K dated
October 23, 1997 and incorporated herein by reference).
4.11 -- Indenture dated as of February 11, 1998, between Nextel
Communications, Inc. and Harris Trust and Savings Bank, as
Trustee, relating to Nextel's 9.95% Senior Serial Redeemable
Discount Notes due 2008 (filed on February 12, 1998 as
Exhibit 4.2 to the February 11 Form 8-K and incorporated
herein by reference).
4.12 -- Indenture dated as of November 4, 1998 between Nextel
Communications, Inc. and Harris Trust and Savings Bank, as
Trustee, relating to Nextel's 12.0% Senior Serial Redeemable
Notes due 2008 (filed February 10, 1999 as Exhibit 4.13.1 to
the February 1999 Form S-4 and incorporated herein by
reference).
4.13 -- Indenture for Senior Discount Notes due 2008, dated March
12, 1998 between Nextel International, Inc. and The Bank of
New York (filed on May 14, 1998 as Exhibit 4.1 to Nextel
International Inc.'s Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998 and incorporated herein by
reference).
4.14 -- Registration Rights Agreement, dated December 23, 1998, by
and between Nextel, Goldman, Sachs & Co., Morgan Stanley &
Co., Incorporated and Nationsbanc Montgomery Securities LLC
(filed on March 30, 1999 as Exhibit 4.13 to Nextel's Annual
Report on Form 10-K for the fiscal year ended December 31,
1998 and incorporated herein by reference).
4.15 -- Indenture, dated as of June 16, 1999, between Nextel
Communications, Inc. and Harris Trust and Savings Bank, as
Trustee, relating to Nextel's 4 3/4% Convertible Senior
Notes due 2007 (filed on June 23, 1999 as Exhibit 4.1 to the
Current Report on Form 8-K dated and filed with the
Commission on June 23, 1999 and incorporated herein by
reference.)
4.16 -- Indenture dated as of November 12, 1999 between Nextel
Communications, Inc. and Harris Trust and Savings Bank, as
Trustee, relating to Nextel's 9.375% Senior Serial
Redeemable Notes due 2009 (filed on November 15, 1999 as
Exhibit 4.1 to Nextel's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1999 and incorporated herein
by reference).
4.17 -- Registration Rights Agreement, dated as of November 12, 1999
between Nextel and Goldman, Sachs & Co. (filed on November
15, 1999 as Exhibit 4.2 to Nextel's Quarterly Report on Form
10-Q for the quarter ended September 30, 1999 and
incorporated herein by reference).
4.18 -- Amended and Restated Credit Agreement, dated as of November
9, 1999 between Nextel Communications, Inc., Nextel Finance
Company, the other restricted companies party thereto, the
lenders party thereto, Toronto Dominion (Texas) Inc., as
Administrative Agent and The Chase Manhattan Bank, as
Collateral Agent (filed as Exhibit 4.3 to Nextel's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1999
and incorporated herein by reference).
**5 -- Opinion of Jones, Day, Reavis & Pogue regarding validity.
**8 -- Opinion of Jones, Day, Reavis & Pogue regarding certain tax
matters.
*12 -- Statement regarding computation of earnings to fixed
charges.
</TABLE>
II-5
<PAGE> 74
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- -----------------------
<C> <C> <S>
23.1 -- Consent of Jones, Day, Reavis & Pogue (included in Exhibits
5 and 8).
**23.2 -- Consent of Deloitte & Touche LLP.
*24 -- Powers of Attorney.
*25 -- Statement of eligibility under the Trust Indenture Act of
1939 on Form T-1.
**99.1 -- Letter of Transmittal.
**99.2 -- Notice of Guaranteed Delivery.
</TABLE>
- ---------------
* previously filed
** 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.
(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
II-6
<PAGE> 75
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> 76
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED
ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF
RESTON, IN THE COMMONWEALTH OF VIRGINIA, ON THE 5TH DAY OF JANUARY 2000.
NEXTEL COMMUNICATIONS, INC.
By: /s/ THOMAS J. SIDMAN
--------------------------------------
(THOMAS J. SIDMAN)
SENIOR VICE PRESIDENT AND GENERAL
COUNSEL
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING
PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<S> <C> <C>
* Chairman of the Board and
- ----------------------------------------------------- Director
(DANIEL F. AKERSON)
* President, Chief Executive
- ----------------------------------------------------- Officer and Director
(TIMOTHY M. DONAHUE) (Principal Executive
Officer)
* Executive Vice President
- ----------------------------------------------------- and Chief Financial Officer
(STEVEN M. SHINDLER) (Principal Financial
Officer)
* Vice President and
- ----------------------------------------------------- Controller (Principal
(WILLIAM G. ARENDT) Accounting Officer)
* Vice Chairman of the Board
- ----------------------------------------------------- and Director
(MORGAN E. O'BRIEN)
* Director
- -----------------------------------------------------
(KEITH J. BANE)
* Director
- -----------------------------------------------------
(WILLIAM E. CONWAY, JR.)
* Director
- -----------------------------------------------------
(FRANK M. DRENDEL)
* Director
- -----------------------------------------------------
(JANET HILL)
* Director
- -----------------------------------------------------
(WILLIAM A. HOGLUND)
</TABLE>
II-8
<PAGE> 77
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<S> <C> <C>
* Director
- -----------------------------------------------------
(CRAIG O. MCCAW)
* Director
- -----------------------------------------------------
(DENNIS M. WEIBLING)
/s/ THOMAS J. SIDMAN Attorney-in-fact January 5, 2000
- -----------------------------------------------------
(THOMAS J. SIDMAN)
</TABLE>
II-9
<PAGE> 78
EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS PAGE
- --------- ----------------------- ----
<C> <C> <S> <C>
** 5 -- Opinion of Jones, Day, Reavis & Pogue regarding validity.
** 8 -- Opinion of Jones, Day, Reavis & Pogue regarding certain tax
matters.
*12 -- Statement regarding computation of earnings to fixed
charges.
23.1 -- Consent of Jones, Day, Reavis & Pogue (included in Exhibits
5 and 8).
**23.2 -- Consent of Deloitte & Touche LLP.
*24 -- Powers of Attorney.
*25 -- Statement of eligibility under the Trust Indenture Act of
1939 on Form T-1.
**99.1 -- Letter of Transmittal.
**99.2 -- Notice of Guaranteed Delivery.
</TABLE>
- ---------------
* Previously filed
** Filed herewith
<PAGE> 1
EXHIBIT 5
JONES, DAY, REAVIS & POGUE
3500 SunTrust Plaza
303 Peachtree Street
Atlanta, Georgia 30308-3242
(404)521-3939
January 5, 2000
Nextel Communications, Inc.
2001 Edmund Halley Drive
Reston, Virginia 20191
Re: Registration Statement for 9.375% Senior Serial Redeemable Notes
due 2009
Ladies and Gentlemen:
We are acting as counsel to Nextel Communications, Inc., a Delaware
corporation (the "Company") in connection with the preparation of the Company's
registration statement on Form S-4 (the Form S-4, including any amendments and
supplements thereto, is referred to herein as the "Registration Statement") as
filed with the Securities and Exchange Commission on December 16, 1999 under
the Securities Act of 1933, as amended (the "Securities Act"). The Registration
Statement relates to the Company's offer to exchange (the "Exchange Offer") up
to $2,000,000,000 aggregate principal amount of its 9.375% Senior Serial
Redeemable Notes due 2009, which have been registered under the Securities Act
(the "Exchange Notes") for any and all of its outstanding 9.375% Senior Serial
Redeemable Notes due 2009, which were issued on November 12, 1999 in a private
placement (the "Private Notes"). The Private Notes were, and the Exchange Notes
will be, issued pursuant to the Indenture, dated as of November 12, 1999 by and
among the Company and Harris Trust and Savings Bank, as Trustee (the
"Indenture").
As counsel for the Company, and for purposes of this opinion, we have
made those examinations and investigations of legal and factual matters as we
have deemed advisable and have examined originals or copies, certified or
otherwise, identified to our satisfaction as true copies of originals, of those
corporate records, agreements, certificates, 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, necessary or appropriate to enable us
to render the opinion expressed below. We have assumed, without independent
verification, the genuineness and authorization of all signatures, the
conformity to the originals of all copies submitted to us or inspected by us as
certified, conformed, or photostatic copies.
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, we are of the opinion that the Exchange Notes have
been duly authorized, and when executed by
<PAGE> 2
authorized officers of the Company, authenticated by the trustee, and issued in
accordance with the Indenture and as described in the Registration Statement,
will constitute valid and legally binding obligations of the Company enforceable
in accordance with their terms and entitled to the benefits of the Indenture,
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 filing of this opinion as an exhibit to the
Registration Statement and to the reference to us with respect to this opinion
under the heading "Legal Matters" in the prospectus which is part of the
Registration Statement.
Very truly yours,
/s/ Jones, Day, Reavis & Pogue
<PAGE> 1
EXHIBIT 8
JONES, DAY, REAVIS & POGUE
3500 SunTrust Plaza
303 Peachtree Street, NE
Atlanta, Georgia 30308-3242
(404) 521-3939
January 5, 2000
Nextel Communications, Inc.
2001 Edmund Halley Drive
Raston, Virginia 20191
Re: Exchange Offer for 9.375% Senior Serial Redeemable Notes due 2009
Ladies and Gentlemen:
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 9.375%
Senior Serial Redeemable Notes due 2009 (the "Exchange Notes") for the Company's
outstanding 9.375% Senior Serial Redeemable Notes due 2009 (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 tax matters set forth under the
caption "United States Federal Tax Consequences" in the prospectus contained in
the registration statement summarizes the principal United States federal income
tax consequences relevant to the Exchange Offer and to the purchase, ownership
and disposition of the Notes.
We hereby consent to the filing with the Securities and Exchange
Commission of this opinion as an exhibit to the registration statement and to
the reference to this firm in the prospectus constituting part of the
registration statement.
Very truly yours,
/s/ Jones, Day, Reavis & Pogue
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement No. 333-92895 of Nextel Communications, Inc. on Form S-4
of our report dated February 22, 1999, appearing in the Annual Report on Form
10-K of Nextel Communications, Inc. for the year ended December 31, 1998, and
to the reference to us under the heading "Experts" in the Prospectus, which is
part of this Registration Statement.
/s/ Deloitte & Touche LLP
McLean, Virginia
January 5, 2000
<PAGE> 1
EXHIBIT 99.1
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON FEBRUARY 10, 2000 UNLESS EXTENDED (THE "EXPIRATION DATE").
- --------------------------------------------------------------------------------
LETTER OF TRANSMITTAL
OFFER TO EXCHANGE
9.375% SENIOR SERIAL REDEEMABLE NOTES DUE 2009,
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
FOR ANY AND ALL OUTSTANDING
9.375% SENIOR SERIAL REDEEMABLE NOTES DUE 2009
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
Wall Street Station 88 Pine Street by Telephone:
P.O. Box 1010 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 January 7, 2000 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 of its 9.375% Senior
Serial Redeemable Notes due 2009, which have been registered under the
Securities Act (the "Exchange Notes") for each $1,000 in principal amount of its
outstanding 9.375% Senior Serial Redeemable Notes due 2009 (the "Outstanding
Notes"). $2,000,000,000 in principal amount of the Outstanding Notes are
currently issued and outstanding.
This letter of transmittal is to be completed by a Holder (this term is
defined below) of Outstanding Notes if:
(1) the Holder is delivering certificates for Outstanding Notes with
this document, or
(2) the tender of certificates for Outstanding Notes will be made by
book-entry transfer to the account maintained by Harris Trust and Savings
Bank, the exchange agent for these notes, at The Depository Trust Company
("DTC") according to the procedures described in the prospectus under the
heading "V.F. The Exchange Offer -- Procedures for Tendering." Please note
that delivery of documents required by this letter of transmittal to DTC
does not constitute delivery to the exchange agent.
You must tender your Outstanding Notes according to the guaranteed delivery
procedures described in this document if:
(1) your Outstanding Notes are not immediately available;
(2) you cannot deliver your Outstanding Notes, this letter of
transmittal and all required documents to the exchange agent before on or
before the Expiration Date; or
(3) you are unable to obtain confirmation of a book-entry tender of
your Outstanding Notes into the exchange agent's account at DTC on or
before the Expiration Date.
<PAGE> 2
More complete information about guaranteed delivery procedures is contained
in the prospectus under the heading "V.H. The Exchange Offer -- Guaranteed
Delivery Procedures." You should also read Instruction 1 to determine whether or
not this section applies to you.
As used in this letter of transmittal, the term "Holder" means (1) any
person in whose name Outstanding Notes are registered on the books of Nextel,
(2) any other person who has obtained a properly executed bond power from the
registered Holder or (3) any person whose Outstanding Notes are held of record
by DTC who desires to deliver such notes by book-entry transfer at DTC. You
should use this letter of transmittal to indicate whether or not you would like
to participate in the Exchange Offer. If you decide to tender your Outstanding
Notes, you must complete this entire letter of transmittal.
YOU MUST FOLLOW THE INSTRUCTIONS IN THIS LETTER OF TRANSMITTAL -- PLEASE
READ THIS ENTIRE DOCUMENT CAREFULLY. IF YOU HAVE QUESTIONS OR NEED HELP, OR IF
YOU WOULD LIKE ADDITIONAL COPIES OF THE PROSPECTUS AND THIS LETTER OF
TRANSMITTAL, YOU SHOULD CONTACT THE EXCHANGE AGENT AT (212) 701-7624 OR AT ITS
ADDRESS SET FORTH ABOVE.
Please describe your Outstanding Notes below.
<TABLE>
<C> <C> <S> <C>
- -----------------------------------------------------------------------------------------------------------
DESCRIPTION OF OUTSTANDING NOTES
- -----------------------------------------------------------------------------------------------------------
AGGREGATE PRINCIPAL
NAME(S) AND ADDRESSES(ES) AMOUNT OF
OF REGISTERED HOLDER(S) OUTSTANDING NOTES PRINCIPAL AMOUNT
(PLEASE COMPLETE, IF REPRESENTED BY OF OUTSTANDING
BLANK) CERTIFICATE NUMBER(S) CERTIFICATE(S) NOTES TENDERED*
- -----------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL
- -----------------------------------------------------------------------------------------------------------
</TABLE>
* You will be deemed to have tendered the entire principal amount of Outstanding
Notes represented in the column labeled "Aggregate Principal Amount of
Outstanding Notes Represented by Certificate(s)" unless you indicate otherwise
in the column labeled "Principal Amount of Outstanding Notes Tendered."
If you need more space, list the certificate numbers and principal amount
of Outstanding Notes on a separate schedule, sign the schedule and attach it to
this letter of transmittal.
[ ] CHECK HERE IF YOU HAVE ENCLOSED OUTSTANDING NOTES WITH THIS LETTER OF
TRANSMITTAL.
[ ] CHECK HERE IF YOU WILL BE TENDERING OUTSTANDING NOTES BY BOOK-ENTRY TRANSFER
MADE TO THE EXCHANGE AGENT'S ACCOUNT AT DTC.
2
<PAGE> 3
COMPLETE THE FOLLOWING ONLY IF YOU ARE AN ELIGIBLE INSTITUTION (THIS TERM
IS DEFINED BELOW):
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 Initial Purchasers of the
Outstanding Notes at (212) 848-7293 to confirm the availability of the
prospectus for delivery in connection with resales.
Upon request, I will execute and deliver any additional documents deemed by
the exchange agent or Nextel to be necessary or desirable to complete the
assignment, transfer, and purchase of the Outstanding Notes I have tendered.
I understand that Nextel will be deemed to have accepted validly tendered
Outstanding Notes when Nextel gives oral or written notice of acceptance to the
exchange agent.
4
<PAGE> 5
If, for any reason, any tendered Outstanding Notes are not accepted for
exchange in the Exchange Offer, certificates for those unaccepted Outstanding
Notes will be returned to me without charge at the address shown below or at a
different address if one is listed under "Special Delivery Instructions." Any
unaccepted Outstanding Notes which had been tendered by book-entry transfer will
be credited to an account at DTC, as soon as reasonably possible after the
Expiration Date.
All authority granted or agreed to be granted by this letter of transmittal
will survive my death, incapacity or, if I am a corporation or institution, my
dissolution and every obligation under this letter of transmittal is binding
upon my heirs, personal representatives, successors, and assigns.
I understand that tenders of Outstanding Notes according to the procedures
described in the prospectus under the heading "V.F. The Exchange
Offer -- Procedures for Tendering" and in the instructions included in this
document constitute a binding agreement between myself and Nextel subject to the
terms and conditions of the Exchange Offer.
Unless I have described other instructions in this letter of transmittal
under the section "Special Issuance Instructions," please issue the certificates
representing Exchange Notes issued 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 the "Special
Issuance Instructions" and/or "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/or return
any Outstanding Notes that were not tendered or exchanged and send such
certificates to, the person(s) so indicated. I understand that if Nextel does
not accept any of the tendered Outstanding Notes for exchange, Nextel has no
obligation to transfer any Outstanding Notes from the name of the registered
Holder(s) according to my instructions in the "Special Issuance Instructions"
and "Special Delivery Instructions" sections of this document.
5
<PAGE> 6
PLEASE SIGN HERE WHETHER OR NOT
OUTSTANDING NOTES ARE BEING PHYSICALLY TENDERED HEREBY
<TABLE>
<S> <C>
- ------------------------------------------------ ------------------------------------------------
(Date)
- ------------------------------------------------ ------------------------------------------------
Signature(s) of Registered Holder(s) (Date)
or Authorized Signatory
Area Code and Telephone Number(s):
- --------------------------------------------------------------------------------------------------
Tax Identification or Social Security Number(s):
- --------------------------------------------------------------------------------------------------
</TABLE>
The above lines must be signed by the registered Holder(s) of Outstanding
Notes as their name(s) appear(s) on the certificate for the Outstanding Notes or
by person(s) authorized to become registered Holders(s) by a properly completed
bond power from the registered Holder(s). A copy of the completed bond power
must be delivered with this letter of transmittal. If any Outstanding Notes
tendered through this letter of transmittal are held of record by two or more
joint Holders, then all such Holders must sign this letter of transmittal. If
the signature is by trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, then such person must (1) state his or her full
title below and (2) unless waived by Nextel, submit evidence satisfactory to
Nextel of such person's authority to act on behalf of the Holder. See
Instruction 4 for more information about completing this letter of transmittal.
<TABLE>
<S> <C>
Name(s):
------------------------------------------------------------
------------------------------------------------------------
(Please Print)
Capacity:
------------------------------------------------------------
Address:
------------------------------------------------------------
------------------------------------------------------------
(Include Zip Code)
Signature(s) Guaranteed by an Eligible Institution, if
required by Instruction 4:
------------------------------------------------------------
(Authorized Signature)
------------------------------------------------------------
(Title)
------------------------------------------------------------
(Name of Firm)
</TABLE>
Dated:
- ------------------------
6
<PAGE> 7
PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW.
PAYER'S NAME: HARRIS TRUST AND SAVINGS BANK
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
PART 1--PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT ----------------------------
SUBSTITUTE AND CERTIFY BY SIGNING AND DATING BELOW. SOCIAL SECURITY NUMBER
FORM W-9
OR
----------------------------
EMPLOYER IDENTIFICATION NUMBER
----------------------------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE PART 2 -- CERTIFICATION -- UNDER PENALTIES OF PART 3 --
PERJURY, I CERTIFY THAT: AWAITING TIN [ ]
(1) THE NUMBER SHOWN ON THIS FORM IS MY CORRECT TIN
(OR I AM WAITING FOR A NUMBER TO BE ISSUED TO ME)
AND
(2) I AM NOT SUBJECT TO BACKUP WITHHOLDING BECAUSE
(A) I AM EXEMPT FROM BACKUP WITHHOLDING, OR (B) I
HAVE NOT BEEN NOTIFIED BY THE INTERNAL REVENUE
SERVICE ("IRS") THAT I AM SUBJECT TO BACKUP
WITHHOLDING AS A RESULT OF FAILURE TO REPORT ALL
INTEREST OR DIVIDENDS, OR (C) THE IRS HAS
NOTIFIED ME THAT I AM NO LONGER SUBJECT TO BACKUP
WITHHOLDING.
----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C>
CERTIFICATION INSTRUCTIONS -- YOU MUST CROSS OUT ITEM (2) IN THE BOX ABOVE IF YOU
PAYER'S REQUEST FOR HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE CURRENTLY SUBJECT TO BACKUP WITHHOLDING
TAXPAYER IDENTIFICATION BECAUSE OF UNDERREPORTING INTEREST OR DIVIDENDS ON YOUR TAX RETURN.
NUMBER ("TIN")
CERTIFICATION SIGNATURE __________ DATE __________
- -----------------------------------------------------------------------------------------------------------------------
</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>
7
<PAGE> 8
INSTRUCTIONS
PART OF THE TERMS AND CONDITIONS OF THE
EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND OUTSTANDING NOTES. The
tendered Outstanding Notes or a confirmation of book-entry delivery, as well as
a properly completed and a manually signed executed copy or facsimile of this
letter of transmittal and any other required documents must be received by the
exchange agent at its address listed on the cover of this document before 5:00
p.m., New York City time, on the Expiration Date. YOU ARE RESPONSIBLE FOR THE
DELIVERY OF THE OUTSTANDING NOTES, THIS LETTER OF TRANSMITTAL AND ALL REQUIRED
DOCUMENTS TO THE EXCHANGE AGENT. EXCEPT UNDER THE LIMITED CIRCUMSTANCES
DESCRIBED BELOW, THE DELIVERY OF THESE DOCUMENTS WILL BE CONSIDERED TO HAVE BEEN
MADE ONLY WHEN ACTUALLY RECEIVED OR CONFIRMED BY THE EXCHANGE AGENT. WHILE THE
METHOD OF DELIVERY IS AT YOUR RISK AND CHOICE, NEXTEL RECOMMENDS THAT YOU USE AN
OVERNIGHT OR HAND DELIVERY SERVICE RATHER THAN REGULAR MAIL. YOU SHOULD SEND
YOUR DOCUMENTS WELL BEFORE THE EXPIRATION DATE TO ENSURE RECEIPT BY THE EXCHANGE
AGENT. YOU MAY REQUEST THAT YOUR BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY
OR NOMINEE DELIVER YOUR OUTSTANDING NOTES, THIS LETTER OF TRANSMITTAL AND ALL
REQUIRED DOCUMENTS TO THE EXCHANGE AGENT. DO NOT SEND YOUR OUTSTANDING NOTES TO
NEXTEL.
If you wish to tender your Outstanding Notes, but:
(a) your Outstanding Notes are not immediately available;
(b) you cannot deliver your Outstanding Notes, this letter of
transmittal and all required documents to the exchange agent before the
Expiration Date; or
(c) you are unable to complete the book-entry tender procedure before
the Expiration Date,
you must tender your Outstanding Notes according to the guaranteed delivery
procedure. A summary of this procedure follows, but you should read the section
in the prospectus titled "V.H. The Exchange Offer -- Guaranteed Delivery
Procedures" 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 manually signed
facsimile of it, or an Agent's Message, in the case of a book-entry
transfer, 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 date of
execution of the Notice of Guaranteed Delivery.
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 date of execution of the Notice of Guaranteed Delivery 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
8
<PAGE> 9
letter of transmittal and in the prospectus under the heading "V.E. The Exchange
Offer -- Conditions," will be final and binding on all parties.
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. Tender of 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 any Outstanding Notes that were invalidly
tendered if the defect of invalidity has not been cured or waived.
2. TENDER BY HOLDER. You must be a Holder of Outstanding Notes in order to
participate in the Exchange Offer. If you are a beneficial holder of Outstanding
Notes who wishes to tender, but you are not the registered Holder, you must
arrange with the registered Holder to execute and deliver this letter of
transmittal on his, her or its behalf. Before completing and executing this
letter of transmittal and delivering the registered Holder's Outstanding Notes,
you must either make appropriate arrangements to register ownership of the
Outstanding Notes in your name, or obtain a properly executed bond power from
the registered Holder. The transfer of registered ownership of Outstanding Notes
may take a long period of time.
3. PARTIAL TENDERS. If you are tendering less than the entire principal
amount of Outstanding Notes represented by a certificate, you should fill in the
principal amount you are tendering in the last 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.
9
<PAGE> 10
- 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 The Exchange Notes," the Outstanding Notes tendered must
be endorsed or accompanied by appropriate bond powers, in each case
signed in the name of the registered Holder(s) exactly as it appears on
the Outstanding Notes. Please note that the signatures on any endorsement
or bond power must be guaranteed by an Eligible Institution.
- If this letter of transmittal, any Outstanding Notes tendered or any bond
powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations, or others acting in a
fiduciary or representative capacity, that person must indicate their
title or capacity when signing. Unless waived by Nextel, evidence
satisfactory to Nextel of that person's authority to act must be
submitted with this letter of transmittal. Please note that the
signatures on any endorsement or bond power must be guaranteed by an
Eligible Institution.
- ALL SIGNATURES ON THIS LETTER OF TRANSMITTAL MUST BE GUARANTEED BY AN
ELIGIBLE INSTITUTION UNLESS ONE OF THE FOLLOWING SITUATIONS APPLY:
- If this letter of transmittal is signed by the registered Holder(s) of
the Outstanding Notes tendered with this letter of transmittal and such
Holder(s) has not completed the box titled "Special Issuance
Instructions" or the box titled "Special Delivery Instructions;" or
- If the Outstanding Notes are tendered for the account of an Eligible
Institution.
5. SPECIAL ISSUANCE 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 notes for Outstanding
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, Form W-8 BEN or other similar statement, signed under
penalties of perjury, certifying as to that individual's exempt status. You can
obtain the appropriate form from the exchange agent.
10
<PAGE> 11
8. WAIVER OF CONDITIONS. Nextel may choose, at any time and for any
reason, to amend, waive or modify certain of the conditions to the Exchange
Offer. The conditions applicable to tenders of Outstanding Notes in the Exchange
Offer are described in the prospectus under the heading "V.E. The Exchange
Offer -- Conditions."
9. MUTILATED, LOST, STOLEN OR DESTROYED OUTSTANDING NOTES. If your
Outstanding Notes have been mutilated, lost, stolen or destroyed, you should
contact the exchange agent at the address listed on the cover page of this
document for further instructions.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. If you have questions,
need assistance, or would like to receive additional copies of the prospectus or
this letter of transmittal, you should contact the exchange agent at the address
listed in the prospectus. You may also contact your broker, dealer, commercial
bank, trust company, or other nominee for assistance concerning the Exchange
Offer.
11
<PAGE> 12
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GUIDE THE
PAYER.-- Social Security Numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer Identification Numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<CAPTION>
- -----------------------------------------------------------
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- -----------------------------------------------------------
<S> <C> <C>
1. An individual's account. The individual
2. Two or more individuals The actual owner of
(joint account) the account or, if
combined funds, the
first individual on
the account(1)
3. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
4. a. The usual revocable savings The grantor-trustee
trust account (grantor is (1)
also trustee)
b. So-called trust account The actual owner(1)
that is not a legal or valid
trust under State law
5. Sole proprietorship account The owner(3)
- -----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------
GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- -----------------------------------------------------------
<C> <S> <C>
6. A valid trust, estate, or The legal entity (Do
pension trust not furnish the
identifying number of
the personal
representative or
trustee unless the
legal entity itself is
not designated in the
account title.)(4)
7. Corporate account The corporation
8. Religious, charitable, or The organization
educational organization
account
9. Partnership The partnership
10. Association, club or other The organization
tax-exempt organization
11. A broker or registered nominee The broker or nominee
12. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a State
or local government, school
district, or prison) that
receives agricultural program
payments
- -----------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has a Social Security Number, that
person's number must be furnished.
(2) Circle the minor's name and furnish the minor's Social Security Number.
(3) Show the name of the owner. You may also enter your business name. You may
use your Social Security Number or Employer Identification Number.
(4) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number
will be considered to be that of the first name listed.
12
<PAGE> 13
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
OBTAINING A NUMBER
If you don't have a Taxpayer Identification Number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on broker transactions
include the following:
- A corporation.
- A financial institution.
- An organization exempt from tax under Section 501(a), an individual
retirement plan, or a custodial account under Section 403(b)(7), if the
account satisfies the requirements of Section 401(f)(2).
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency or instrumentality thereof.
- A dealer in securities or commodities required to be registered in the
United States, the District of Columbia, or a possession of the United
States.
- A real estate investment trust.
- A futures commissions merchant registered with the Commodity Futures Trading
Commission.
- A common trust fund operated by a bank under Section 584(a).
- An entity registered at all times under the Investment Company Act of 1940.
- A foreign central bank of issue.
- A person registered under the Investment Advisors Act of 1940 who regularly
acts as a broker.
Payments of dividends not generally subject to backup withholding include the
following:
- Payments to nonresident aliens subject to withholding under Section 1441.
- Payments to partnerships not engaged in a trade or business in the United
States and which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments described in Section 404(k) made by an employee stock ownership
plan.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct Taxpayer Identification Number to the payer.
- Payments of tax-exempt interest (including tax-exempt interest dividends
under Section 852).
- Payments described in Section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under Section 1451.
- Payments made by certain foreign organizations.
- Payments of mortgage interest to you.
Exempt payees described above should file Substitute Form W-9 to avoid
possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH
YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM,
SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER.
PRIVACY ACT NOTICE -- Section 6109 requires most recipients of dividend,
interest, or other payments to give Taxpayer Identification Numbers to payers
who must report the payments to the IRS. The IRS uses the numbers for
identification purposes. Payers must be given the numbers whether or not
recipients are required to file tax returns. Payers must generally withhold
31% of taxable interest, dividend, and certain other payments to a payee who
does not furnish a Taxpayer Identification Number to a payer. Certain
penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. -- If you
fail to furnish your Taxpayer Identification Number to a payer, you are subject
to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE IRS.
13
<PAGE> 14
(DO NOT WRITE IN SPACE BELOW)
<TABLE>
<S> <C> <C>
CERTIFICATE OUTSTANDING NOTES OUTSTANDING NOTES
SURRENDERED TENDERED ACCEPTED
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
Delivery Prepared by:
----------------------------------------------------------
Checked by:
--------------------------------------------------------------------
Date:
--------------------------------------------------------------------------
</TABLE>
14
<PAGE> 1
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
FOR
9.375% SENIOR SERIAL REDEEMABLE NOTES DUE 2009
OF
NEXTEL COMMUNICATIONS, INC.
As set forth in the Prospectus dated January 7, 2000 (the "Prospectus"), of
Nextel Communications, Inc. and in the related letter of transmittal, this form
or one substantially similar must be used to accept Nextel's offer to exchange
all of its outstanding 9.375% Senior Serial Redeemable Notes due 2009 (the
"Outstanding Notes") for its 9.375% Senior Serial Redeemable Notes due 2009,
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 below). 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 FEBRUARY 10,
2000, 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
Wall Street Station 88 Pine Street Confirm Receipt of Facsimile
P. O. Box 1010 19th Floor by Telephone:
New York, NY 10268-1010 New York, NY 10005 (212) 701-7624
</TABLE>
Delivery of this notice to an address, or transmission of instructions via
a facsimile, other than as set forth above, does not constitute a valid
delivery.
This form is not to be used to guarantee signatures. If a signature on the
letter of transmittal to be used to tender Outstanding Notes is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the letter
of transmittal.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to Nextel Communications, Inc., a Delaware
corporation (the "Company"), upon the terms and subject to the conditions set
forth in the Prospectus and the letter of transmittal (which together constitute
the "Exchange Offer"), receipt of which is hereby acknowledged, Outstanding
Notes pursuant to guaranteed delivery procedures set forth in Instruction 1 of
the letter of transmittal.
The undersigned understands that tenders of Outstanding Notes will be
accepted only in principal amounts equal to $1,000 or integral multiples
thereof. The undersigned understands that tenders of Outstanding Notes pursuant
to the Exchange Offer may be withdrawn only in accordance with the procedures
set forth in "V.I. The Exchange Offer -- Withdrawal of Tenders" section of the
Prospectus.
All authority herein conferred or agreed to be conferred by this Notice of
Guaranteed Delivery shall survive the death, incapacity or dissolution of the
undersigned and every obligation of the undersigned under this Notice of
Guaranteed Delivery shall be binding upon the heirs, personal representatives,
executors, administrators, successors, assigns, trustees in bankruptcy and other
legal representatives of the undersigned.
NOTE: SIGNATURES MUST BE PROVIDED WHERE INDICATED BELOW.
<TABLE>
<S> <C>
Certificate No(s). for Outstanding Notes Principal Amount of Outstanding Notes
(if available)
- ----------------------------------------------------- -----------------------------------------------------
Principal Amount of Outstanding Notes Tendered Signature(s)
- ----------------------------------------------------- -----------------------------------------------------
Dated: If Outstanding Notes will be delivered by book-entry
transfer at the Depository Trust Company, Depository
Account No.:
- ----------------------------------------------------- -----------------------------------------------------
</TABLE>
This Notice of Guaranteed Delivery must be signed by the registered
holder(s) of Outstanding Notes exactly as its (their) name(s) appear on
certificates of Outstanding Notes or on a security position listing as the owner
of Outstanding Notes, or by person(s) authorized to become registered holder(s)
by endorsements and documents transmitted with this
2
<PAGE> 3
Notice of Guaranteed Delivery. If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer or other person acting in a
fiduciary or representative capacity, such person must provide the following
information:
Please print name(s) and address(es)
<TABLE>
<S> <C>
Name(s): ------------------------------------------------------------
------------------------------------------------------------
Capacity: ------------------------------------------------------------
------------------------------------------------------------
Address(es): ------------------------------------------------------------
------------------------------------------------------------
Area Code and Telephone No.: ------------------------------------------------------------
------------------------------------------------------------
</TABLE>
3
<PAGE> 4
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member firm of a registered national securities exchange
or of the National Association of Securities Dealers, Inc., or a commercial bank
or trust company having an office or correspondent in the United States or an
"eligible guarantor institution" within the meaning of Rule 17Ad-15 under the
Securities Exchange Act of 1934 (the "Exchange Act"), hereby
(a) represents that the above named person(s) "own(s)" the Outstanding
Notes to be tendered within the meaning of Rule 14e-4 under the
Exchange Act,
(b) represents that such tender of Outstanding Notes complies with Rule
14e-4 under the Exchange Act and
(c) guarantees that delivery to the exchange agent of certificates for the
Outstanding Notes to be tendered, in 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,
or an Agent's Message, in the case of a book-entry transfer, and any
other required documents, will be received by the exchange agent at one
of its addresses set forth above within three New York Stock Exchange
trading days after the date of execution of the Notice of Guaranteed
Delivery.
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.
4
