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EXHIBIT 10.1
EXECUTION COPY
MOTOROLA, INC./NEXTEL COMMUNICATIONS, INC./NEXTEL INTERNATIONAL, INC.
MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding ("MOU") establishes certain joint
commitments and agreements between Motorola, Inc.("Motorola"), Nextel
International, Inc. ("NII"), and Nextel Communications, Inc. ("Nextel"),
regarding certain funding obligations of Nextel to NII, certain obligations of
Motorola to exercise certain warrants for common stock of Nextel and to provide
financing to NII, and certain other matters as set forth herein.
SECTION I. IN CONSIDERATION OF THE COMMITMENTS AND AGREEMENTS SET FORTH HEREIN,
MOTOROLA AGREES AS FOLLOWS:
A. Motorola currently holds Warrants for Common Stock (Class A, $0.001
par value) previously received from Nextel which entitle Motorola to
purchase a total of 2,890,000 shares of Class A Common Stock of
Nextel (the "Warrants"). Each Warrant has an exercise price of
$15.00 per share. Such Warrants have expiration dates which range
from October 1, 1999 to June 30, 2002. Motorola hereby agrees to
exercise all such outstanding Warrants not later than May 7, 1999.
B. Subject to NII's receipt of the working capital to be made available
to it by Nextel as provided in Sections II.A, and II.B. of this MOU,
Motorola agrees that it shall provide to NII senior secured
financing, on terms and conditions as provided in the NII $56.65
Million Incremental Senior Secured Facility termsheet attached
hereto, in an amount not to exceed $56.65 million.
SECTION II. IN CONSIDERATION OF THE COMMITMENTS AND AGREEMENTS SET FORTH HEREIN,
NEXTEL AGREES AS FOLLOWS:
A. Upon Motorola's exercise of the Warrants as set forth above, Nextel
agrees that it shall immediately transfer the entire proceeds
realized from such sale of Class A Common Shares resulting from such
Warrant exercise ($43.35 Million) to the account of NII as equity
for use by NII as working capital and for other corporate purposes.
B. Not later than May 7, 1999, Nextel shall transfer a minimum of
$50 Million to the account of NII as equity for use by NII as
working capital and for other corporate purposes.
C. In the event NII is unable to raise at least $50 million in equity
funding from sources other than Nextel and Motorola on or prior to
September 30, 1999, Nextel shall, subject to its receipt of
qualifying equity proceeds that are permitted to be transferred to
NII
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pursuant to Nextel's public note indentures, transfer an additional
$50 million to the account of NII as equity for use by NII as
working capital and for other corporate purposes. The parties hereby
agree that, other than as expressly provided in Sections I.A. and
I.B. above, nothing contained in this MOU is intended to commit
Motorola to extend any financing or to invest in any manner in
Nextel or any subsidiary or affiliate of Nextel.
SECTION III. IN CONSIDERATION OF THE COMMITMENTS AND AGREEMENTS SET FORTH
HEREIN, NII AGREES AS FOLLOWS:
A. From and after the date of this MOU, Motorola (or Motorola's
designee) shall be granted NII Board of Directors Observation
Rights, which shall permit Motorola (or Motorola's designee) to
appoint one person who shall have the following rights with respect
to NII Board of Directors' Meetings to: (i) receive notice of the
time and place of, and an agenda for, all meetings of the Board of
Directors concurrently with the dissemination of such information to
the Directors, and in any event not less than five (5) business days
in advance of meetings and forty-eight (48) hours in advance of
telephonic or video conferences, (ii) receive all materials
distributed to the Directors concurrently with the distribution to
the Directors; provided that Motorola's representative shall not be
entitled to (x) vote as a Board member, or (y) receive compensation
from NII for its attendance at meetings.
B. From and after the date of this MOU, Motorola (or Motorola's
designee) shall have the right to participate in NII's quarterly
business review of all of its operating subsidiaries/ JVs.
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IN WITNESS WHEREOF, the parties have entered into this MOU on the
last date and year set forth below.
MOTOROLA, INC., NEXTEL INTERNATIONAL, INC.,
a Delaware corporation a Washington corporation,
/s/ XXXX XXXXXX /s/ XXXXX XXXXXXXX
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Xxxx Xxxxxx Xxxxx Xxxxxxxx
Senior Vice President Chief Financial Officer
Date: May 3, 1999 Date: May 3, 1999
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NEXTEL COMMUNICATIONS, INC.,
a Delaware corporation,
/s/ XXXXX XXXXXXXX
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Xxxxx Xxxxxxxx
Vice President and Chief Financial Officer
Date: May 3, 1999
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NEXTEL INTERNATIONAL, INC.
$56.65 MILLION
INCREMENTAL SENIOR SECURED FACILITY
Summary of Terms and Conditions
I. Parties
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BORROWER: Nextel International, Inc. ("NII" or the "Borrower")
LENDERS: Motorola Credit Corporation ("MCC"), and/or one or more lenders designated by MCC
(MCC and/or such lenders collectively, the "Lenders").
II. The Facility
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TYPE AND AMOUNT
OF FACILITY: Multiple-draw, non-revolving, term loan facility (the "Facility") in the
aggregate amount not to exceed U.S. $56.65 million (the "Loans"). Funds
may be drawn under the Facility if after giving effect to any requested
drawdown, NII has a combined Unrestricted Cash (to be determined by the
parties) and cash equivalents balance that does not exceed $15 million.
Each drawdown shall be in increments of $5 million.
The Facility shall be an incremental financing as permitted under clause
(e) of the definition of "Permitted Indebtedness" of the Master Equipment
Financing Agreement dated as of February 4, 1999 (as the same may have been or
subsequently my be amended, modified, or supplemented) by and between Motorola
Credit Corporation, as Administrative Agent and as Collateral Agent (in such
respective capacities, the "Agent"), the lenders party thereto and Nextel
International, Inc. (the "MEFA").
AVAILABILITY
PERIOD: The "Availability Period" shall be the period from the initial closing date of
the Facility (the "Closing Date") through and including December 31, 2001 (the
"Commitment Termination Date").
AMORTIZATION: The principal amount of the Loans shall, subject to the mandatory prepayments
provisions below, be repayable in a single payment on December 31, 2001 (the
"Maturity Date").
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USE OF PROCEEDS: The proceeds of the Loans shall be used for working capital and other corporate
purposes.
III. Certain Payment Provisions
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INTEREST RATES: The interest rate under the Facility shall be established with respect to each Loan
at the time of drawdown, at NII's option, from among the following alternatives:
(i) U.S. Prime Rate plus 250 basis points, calculated
on the basis of 365/366-day year and actual number of
days elapsed, or
(ii) three-month LIBOR plus 500 basis points, calculated
on the basis of 360-day year and actual number of
days elapsed. If drawdown occurs on any date other than
an Interest Payment Date (as defined below) then the draw
will be made as a Prime Rate Loan and converted to a LIBOR
Loan on the next Interest Payment Date.
Interest on the principal amount outstanding under the Loans shall be payable
quarterly in arrears on each March 31, June 30, September 30, and December
31 (each an "Interest Payment Date").
At any time when NII is in default in the payment of any amount due under the
Facility, such amount shall bear interest at 2% above the rate of interest
otherwise applicable thereto.
ARRANGEMENT FEE: An Arrangement Fee of 1% of the maximum Facility Amount shall be payable on the
Closing Date
COMMITMENT FEE: A Commitment Fee of 0.50% per annum shall be payable quarterly in arrears on
each consecutive Interest Payment Date on the average daily available undrawn
commitments for the then ending quarter under the Facility.
OPTIONAL PREPAYMENTS
AND COMMITMENT
REDUCTIONS: Loans may be prepaid (without penalty or premium) and commitments may be
permanently reduced by NII in minimum amounts to be agreed upon; provided that NII
shall pay any funding breakage costs due to prepayment/cancellation. Any
amounts prepaid or otherwise canceled cannot be reborrowed by NII.
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IV. Ranking and Collateral
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The indebtedness under the Facility shall rank at least pari passu with all of the
Borrower's other senior indebtedness and shall be secured by a first priority
security interest in the following assets whether now existing or hereafter arising:
(i) a pledge to Lenders of all of the shares of capital stock of
Clearnet Communications, Inc. (the "Clearnet Stock") held/owned
by NII.
The Lenders agree to release their lien on the Clearnet Stock if, and only if,
simultaneously with the release of the lien NII provides substitute collateral in
the form of $56.6 million in unencumbered cash held in an escrow account in a
financial institution acceptable to the Lenders and pledged to the Lenders.
V. Certain Conditions
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INITIAL CONDITIONS: The availability of the Facility shall be conditioned upon satisfaction of, among
other things, the following conditions precedent:
(i) NII shall have executed and delivered satisfactory and definitive
financing and security documentation with respect to the Facility (the
"Credit Documentation").
(ii) The Lenders shall have received all fees required to be paid, and
all expenses for which invoices have been presented.
(iii) The Lenders shall have received a first priority perfected
security interest in all of the Clearnet Stock (including the
delivery of stock certificates and stock transfer documents required
to effectuate such first priority perfected security interest), free
and clear of any and all other liens. In addition, the Lenders shall
have completed its due diligence with respect to NII's ability to pledge
the Clearnet Stock to the Lenders and related registration rights, and
completed its review of Canadian regulatory, ownership and enforcement
issues, and the Lenders shall be satisfied (in its sole discretion)
with the results of all of such due diligence.
(iv) The Lenders shall have completed to its satisfaction all due diligence
reviews (including the reviews described
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above and all other legal, regulatory and financial reviews) of NII and its
subsidiaries as it deems appropriate in its sole discretion.
(v) There shall be no breach of any covenant, representation, warranty,
or other Event of Default or an event which, with the giving of notice,
lapse of time, determination of materiality or fulfillment of any other
applicable condition (or any combination thereof) would constitute an
Event of Default under the MEFA.
(vi) Nextel shall have contributed as equity in NII the sum of (a) all
proceeds received from Motorola's exercise of certain warrants pursuant
to the Memorandum of Understanding dated April [___], 1999 by and
between Nextel and Motorola, Inc. (the "April 1999 MOU"), and (b) $50
million.
(vii) The Lenders shall have received opinions of outside counsel
(including, without limitation, foreign counsel) to NII (such counsel to
be reasonably acceptable to the Lenders) covering such matters as may
be reasonably requested by the Lenders.
(viii) NII shall have received all necessary consents and approvals
(regulatory or otherwise) to be obtained in connection with the
Facility, including, without limitation, any required consents under
the public note indentures of NII.
ON-GOING
CONDITIONS: The making of each extension of credit shall be conditioned upon (a) the accuracy of all
representations and warranties in the Credit Documentation (including, without limitation,
the material adverse change and litigation representations described below), and (b) there
being no default or event of default in existence at the time of such extension of credit
under either the Facility or the MEFA. As used herein and in the Credit Documentation a
"MATERIAL ADVERSE CHANGE" shall mean any event, development or circumstance that has had
or could reasonably be expected to have a material adverse effect on (a) the business,
assets, property, condition (financial or otherwise), or prospects of the Borrower taken
as a whole, (b) the legality, validity or enforceability of any of the Credit
Documentation or the rights and remedies of the MCC thereunder or (c) the economic,
political or regulatory environment in any jurisdiction that would reasonably be expected
to adversely affect
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the business, operations, properties or prospects of the Borrower taken as a whole.
VI. Certain Documentation Matters
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The Credit Documentation shall contain the representations and warranties,
covenants, events of default and all other terms and conditions contained in the
MEFA(to the extent not modified herein), plus such additional ones as agreed upon
by the parties.
ASSIGNMENTS AND
PARTICIPATIONS: The Lenders shall be permitted to assign all or any portion of the Loans, and/or to
sell participations in their Loans and commitments.
PAYMENTS: All payments of principal, interest and fees shall be made in U.S. dollars free of
all present and future taxes, levies, duties, withholdings and other deductions of
any nature.
EXPENSES AND
INDEMNIFICATION: NII shall pay (a) all reasonable out-of-pocket expenses of Lender associated with
the preparation, negotiation, documentation, execution, and delivery and
administration of the Credit Documentation including, without limitation, any
amendment or waiver with respect thereto (it being understood that, the portion of
such fees, disbursements and other charges of counsel, counsel fees and ordinary
expenses to be reimbursed by NII in connection with the preparation, execution and
delivery of the Credit Documentation shall be limited to U.S. $50,000 and (b) all
out-of-pocket expenses of the Lenders in connection with the enforcement of the
Lenders' rights against NII. In the event that Lenders determines that the Facility
will not be closed, such amounts shall become immediately due and payable by NII.
The Lenders (and their respective affiliates and officers, directors, employees,
advisors and agents) will have no liability for, and will be indemnified and held
harmless against, any loss, liability, cost or expense incurred in respect of the
financing contemplated hereby or the use or the proposed use of proceeds thereof
(except to the extent resulting from the gross negligence or willful misconduct
of the indemnified party).
GOVERNING LAW
AND FORUM: State of Illinois; NII and its subsidiaries will submit to the non-exclusive
jurisdiction of the courts of the State of Illinois.
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This Summary of Terms and Conditions is not meant to be, nor should it be
construed as, an attempt to define all of the terms and conditions of the
transactions contemplated hereby, nor is it intended to reflect specific
document phrasing that will exist in the Credit Documentation. It is intended
only to outline the basic points of business understanding around which binding
legal documentation will be structured.
MCC agrees with you to make reasonable efforts to close the Facility on or prior
to June 31, 1999. If, however, the Credit Documentation is not executed and
delivered as provided herein before August 31, 1999 the commitments hereunder
shall expire.
