sv4
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Form S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
NII Capital Corp.
(as Issuer)
(Exact name of registrant as
specified in its charter)
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Delaware
(State or other jurisdiction of
incorporation or organization)
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6022
(Primary Standard Industrial
Classification Code Number)
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22-3176843
(I.R.S. Employer
Identification No.)
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NII Holdings, Inc.
(as Guarantor)
(and the other guarantors
identified in the Table of Co-Registrants below)
(Exact name of registrant as
specified in its charter)
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Delaware
(State or other jurisdiction of
incorporation or organization)
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6022
(Primary Standard Industrial
Classification Code Number)
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91-1671412
(I.R.S. Employer
Identification No.)
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1875 Explorer Street,
Suite 1000
Reston, Virginia 20190
(703) 390-5100
(Address, including zip code,
and telephone number, including area code, of registrants
principal executive offices)
Gary D. Begeman,
Esquire
Vice President, General Counsel
and Secretary
NII Holdings, Inc.
1875 Explorer Street,
Suite 1000
Reston, Virginia 20190
(703) 390-5100
(Name, address, including zip
code, and telephone number, including area code, of agent for
service)
Copies to:
Robert E. Spicer, Jr.,
Esquire
Charles W. Kemp,
Esquire
Williams Mullen
1021 East Cary Street
Richmond, Virginia
23219
(804) 643-1991
Approximate date of commencement of proposed sale to the
public: As soon as practicable after the
effectiveness 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. o
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. o
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. o
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated
filer and smaller reporting company in
Rule 12b-2
of the Exchange Act. (Check one):
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Large accelerated filer þ
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Accelerated filer o
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Non-accelerated
filer o
(Do not check if a smaller reporting company)
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Smaller reporting company o
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If applicable, place an X in the box to designate the
appropriate rule provision relied upon in conducting this
transaction:
Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender
Offer) o
Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender
Offer) o
CALCULATION OF REGISTRATION
FEE
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Proposed Maximum
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Proposed Maximum
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Amount of
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Title of Each Class of
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Amount to be
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Offering Price
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Aggregate
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Registration
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Securities to be Registered
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Registered
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per Unit(1)
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Offering Price(1)
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Fee
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10% Senior Notes due 2016
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$800,000,000
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100%
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$800,000,000
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$57,040
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8.875% Senior Notes due 2019
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$500,000,000
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100%
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$500,000,000
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$35,650
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Guarantee(s) of the 10% Senior Notes due 2016(2)
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(4)
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Guarantee(s) of the 8.875% Senior Notes due 2019(3)
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(4)
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(1)
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Estimated solely for the purpose of
calculating the registration fee in accordance with Rule 457(f)
of the Securities Act of 1933, as amended.
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(2)
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The 10% Senior Notes due 2016
are fully and unconditionally guaranteed on a senior unsecured
basis by NII Holdings, Inc. and all of its current and future
domestic restricted subsidiaries, other than NII Capital Corp.
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(3)
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The 8.875% Senior Notes due
2019 are fully and unconditionally guaranteed on a senior
unsecured basis by NII Holdings, Inc. and all of its current and
future domestic restricted subsidiaries, other than NII Capital
Corp.
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(4)
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Pursuant to 457(n), no separate fee
for the guarantee is payable because the guarantees relate to
other securities that are being registered concurrently.
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The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Securities
and Exchange Commission, acting pursuant to Section 8(a),
may determine.
TABLE OF
CO-REGISTRANTS
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State of Other
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Primary Standard
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Jurisdiction of
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I.R.S. Employer
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Industrial
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Incorporation or
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Identification
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Classification Code
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Exact Name of Registrant Guarantor(1)
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Organization
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Number
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Number
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NII Global Holdings, Inc.
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Delaware
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27-1341283
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4812
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Nextel International (Services), Ltd.
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Delaware
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91-1726566
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4812
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NII Aviation, Inc.
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Delaware
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20-1256551
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4812
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NII Mercosur, LLC
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Delaware
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27-0924079
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4812
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NII Funding Corp.
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Delaware
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91-1806265
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4812
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(1) |
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The address and telephone number for each guarantor is 1875
Explorer Street, Suite 1000, Reston, Virginia 20190,
and the telephone number at that address is
(703) 390-5100. |
The
information in this prospectus is not complete and may be
changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange commission is
effective. This prospectus is not an offer to exchange these
securities and it is not the solicitation of an offer to
exchange these securities in any state where the offer or sale
is not permitted.
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SUBJECT TO COMPLETION, DATED
MARCH 8, 2010
PROSPECTUS
NII CAPITAL CORP.
Offers to Exchange
10% SENIOR NOTES DUE 2016 that have been registered under
the Securities Act of
1933 for any and all 10% SENIOR NOTES DUE 2016
and
8.875% SENIOR NOTES DUE 2019 that have been registered
under the Securities Act of
1933 for any and all 8.875% SENIOR NOTES DUE 2019
This Exchange Offer will expire
at 5:00 P.M.
New York City time, on April , 2010, unless
extended.
NII Capital Corp. is offering to exchange:
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$800,000,000 aggregate principal amount of registered
10% Senior Notes due 2016, which we refer to as the 10%
Exchange Notes, for any and all of our original unregistered
10% Senior Notes due 2016 that were issued in a private
offering on August 18, 2009, which we refer to as the 10%
Old Notes; and
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$500,000,000 aggregate principal amount of registered
8.875% Senior Notes due 2019, which we refer to as the
8.875% Exchange Notes, for any and all of our original
unregistered 8.875% Senior Notes due 2019 that were issued
in a private offering on December 15, 2009, which we refer
to as the 8.875% Old Notes.
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We refer to these exchanges as the exchange offers. We refer to
the 10% Exchange Notes and the 8.875% Exchange Notes
collectively as the Exchange Notes and we refer to the 10% Old
Notes and the 8.875% Old Notes collectively as the Old Notes.
NII Capital Corp. will not receive any proceeds from the
exchange offers.
Terms of the exchange offers:
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NII Capital Corp. will exchange all outstanding Old Notes that
are validly tendered and not withdrawn prior to the expiration
of the exchange offers for an equal principal amount of Exchange
Notes. All interest due and payable on the Old Notes will become
due on the same terms under the Exchange Notes.
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The terms of the Exchange Notes are substantially identical to
those of the Old Notes, except that the Exchange Notes will be
registered under the Securities Act of 1933, as amended, and the
transfer restrictions and registration rights relating to the
Old Notes will not apply to the Exchange Notes.
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You may withdraw your tender of Old Notes at any time prior to
the expiration of the exchange offers.
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Any Old Notes that are validly tendered and not timely withdrawn
may be accepted by us.
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The exchange of Old Notes for Exchange Notes generally will not
be a taxable exchange for U.S. federal income tax purposes,
but you should see the discussion under the caption
Certain Federal Income Tax Considerations on
page 73 for more information.
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The Old Notes are, and the Exchange Notes will be, fully and
unconditionally guaranteed on a senior unsecured basis by NII
Holdings, Inc. and all of its current and future first tier and
domestic restricted subsidiaries, other than NII Capital Corp.
We refer to NII Holdings, Inc. and these first tier and domestic
subsidiaries as the guarantors.
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We do not intend to apply for a listing of the Exchange Notes on
any securities exchange or quotation system.
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Participating in the exchange offer involves risks. See
Risk Factors beginning on page 11.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal
offense.
The date of this prospectus
is 2010.
TABLE OF
CONTENTS
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Page
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1
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10
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11
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14
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16
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25
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26
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27
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28
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73
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74
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75
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75
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75
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In this prospectus, NII Holdings, we,
us, our and our company
refer to NII Holdings, Inc. and its subsidiaries, including NII
Capital Corp., the issuer of the Old Notes and the Exchange
Notes, as a combined entity, except where it is clear that the
terms mean only NII Holdings, Inc. This prospectus also uses the
terms issuer and NII Capital to refer to
NII Capital Corp. as a separate entity.
THIS PROSPECTUS IS PART OF A REGISTRATION STATEMENT WE
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, OR SEC. IN
MAKING YOUR INVESTMENT DECISION, YOU SHOULD RELY ONLY ON THE
INFORMATION CONTAINED IN THIS PROSPECTUS OR INCORPORATED BY
REFERENCE INTO THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO
PROVIDE YOU WITH ANY OTHER OR DIFFERENT INFORMATION. IF YOU
RECEIVE ANY UNAUTHORIZED INFORMATION, YOU MUST NOT RELY ON IT.
THIS PROSPECTUS MAY ONLY BE USED WHERE IT IS LEGAL TO EXCHANGE
THE OLD NOTES FOR THE EXCHANGE NOTES AND THIS
PROSPECTUS IS NOT AN OFFER TO EXCHANGE OR A SOLICITATION TO
EXCHANGE THE OLD NOTES FOR THE EXCHANGE NOTES IN ANY
JURISDICTION WHERE AN OFFER OR EXCHANGE WOULD BE UNLAWFUL. YOU
SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS
PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE
FRONT COVER OF THIS PROSPECTUS.
Each broker-dealer that receives Exchange Notes for its own
account pursuant to an exchange offer must acknowledge that it
will deliver a prospectus in connection with any resale of such
Exchange Notes. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer
will not be deemed to admit that it is an
underwriter within the meaning of the Act. 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 in exchange for securities where such
securities were acquired by such broker-dealer as a result of
market-making activities or other trading activities. NII
Capital has agreed that, beginning on the date of consummation
of the exchange offers and ending on the close of business
180-days
after the consummation of the exchange offers, it will make this
prospectus, as amended or supplemented, available to any
broker-dealer for use in connection with any such resale. See
Plan of Distribution.
Except as otherwise indicated, all amounts are expressed in
U.S. dollars and references to dollars and
$ are to U.S. dollars. All historical financial
statements contained in this offering memorandum are prepared in
accordance with accounting principles generally accepted in the
United States.
SUMMARY
This summary highlights selected information from this
prospectus and from the documents incorporated into this
prospectus by reference and does not contain all the information
that you should consider before participating in an exchange
offer. You should read the entire prospectus and the documents
we have referred you to carefully, especially Risk
Factors on page 11, before deciding to participate in
an exchange offer described in this prospectus.
About NII
Holdings
General
We provide wireless communication services, primarily targeted
at meeting the needs of customers who use our services in their
businesses and individuals that have medium to high usage
patterns, both of whom value our multi function handsets,
including our Nextel Direct
Connect®
feature, and our high level of customer service. We provide
these services under the
NextelTM
brand through operating companies located in selected Latin
American markets, with our principal operations located in major
business centers and related transportation corridors of Mexico,
Brazil, Argentina, Peru and Chile. We provide our services in
major urban and suburban centers with high population densities,
which we refer to as major business centers, where we believe
there is a concentration of the countrys business users
and economic activity. We believe that vehicle traffic
congestion, low wireline service penetration and the expanded
coverage of wireless networks in these major business centers
encourage the use of the mobile wireless communications services
that we offer.
We currently provide services in the three largest metropolitan
areas in each of Mexico, Brazil, Argentina, Peru and Chile, as
well as in various other cities in each of these countries.
As illustrated in the table below, as of December 31, 2009,
our operating companies had a total of about 7.39 million
handsets in commercial service, an increase of 1.19 million
from the 6.20 million handsets in commercial service as of
December 31, 2008. For purposes of the table, handsets in
commercial service represent all handsets with active customer
accounts on our mobile networks in each of the listed countries.
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Handsets in
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Commercial
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Service
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As of December 31,
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2009
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2008
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(In thousands)
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Mexico
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2,987
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2,726
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Brazil
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2,483
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1,812
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Argentina
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1,030
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967
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Peru
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841
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669
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Chile
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44
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26
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Total
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7,385
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6,200
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Our goal is to generate increased revenues in our Latin American
markets by providing differentiated wireless communications
services that are valued by our customers while improving our
profitability and cash flow over the long term. Our strategy for
achieving that goal is based on several core principles,
including focusing on major business centers in key Latin
American markets, targeting high value customers, providing
differentiated services and delivering superior customer service.
We intend to operate our business with a focus on generating
growth in operating income and cash flow over the long term and
enhancing our profitability by attracting and retaining high
value wireless subscribers while maintaining appropriate
controls on costs. To support this goal, we plan to continue to
expand the coverage and capacity of our networks in our existing
markets and increase our existing subscriber base while managing
our costs in a manner designed to support that growth and
improve our operating results.
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We believe that the wireless communications industry in the
markets in which we operate has been and will continue to be
highly competitive on the basis of price, the types of services
offered, the diversity of handsets and other devices offered and
quality of service. To address the competitive pressures we face
in some of our markets, we have:
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added cell sites to improve network performance and expand the
coverage and capacity of our networks, with much of that
coverage expansion focused in Brazil and Mexico;
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launched commercial campaigns offering handsets to new and
existing customers at a lower cost and offering service plans
with prices and terms that are more competitive;
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implemented customer retention programs that are focused on our
high value customers;
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worked with Motorola to develop new handset models and features;
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acquired additional spectrum in some of our markets and have
deployed, or begun work on the development of, enhanced third
generation networks that will allow us to provide new service
capabilities such as high speed internet access, increased
network capacity and reduced costs for voice and data services;
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adjusted our credit policies in certain markets in an effort to
promote subscriber growth while maintaining the overall credit
quality of our customer base; and
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implemented incentives to improve third party sales
distribution, such as increasing commission rates and making
other modifications to the compensation arrangements with our
indirect sales channels in an effort to promote additional sales
through these channels.
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Our overall strategy and the competitive conditions in the
markets where we operate require that we continually improve the
coverage and capacity of our networks and the types and quality
of the services we offer. In order to do so, we must ensure that
we have sufficient radio spectrum in the geographic areas in
which we operate to support the services that we currently offer
and may offer in the future. To enhance our current service
offerings, we plan to launch third generation networks utilizing
WCMDA technology. Third generation technologies provide new
service capabilities such as high speed internet access,
increased network capacity and reduced costs for voice and data
services when compared to second generation and other previous
generation technologies. We expect that although we will
continue to focus on our current high value subscriber base, the
introduction of new handsets, service offerings and pricing
plans made possible by a third generation network may enable us
to further expand our customer base.
Changes
in the Global Environment
During 2009, the global economic environment experienced
significant fluctuations, and we experienced dramatic economic
changes in our local markets. For information on how future
adverse changes in the global economic environments and the
economic environments in our local markets could affect our
business and strategy, see NII Holdings Annual Report on
Form 10-K
for the year ended December 31, 2009
Item 1A. Risk Factors 2a.
Adverse changes in the economic environment in our markets and a
decline in foreign exchange rates for currencies in our markets
may adversely affect our growth and our operating
results.
Organizational
Structure
We provide our services through operating companies located in
each of our Latin American markets and we refer to our operating
companies by the countries in which they operate, such as Nextel
Mexico, Nextel Brazil, Nextel Argentina, Nextel Peru and Nextel
Chile. All of the operating companies and their subsidiaries are
organized under foreign law. Each of the operating companies is
owned, directly or indirectly, by an intermediary
U.S. subsidiary of NII Holdings. Each of those intermediary
U.S. subsidiaries will guarantee the Exchange Notes. We
refer to the intermediary U.S. subsidiaries that guarantee
the Exchange Notes as the subsidiary guarantors and to NII
Holdings and the subsidiary guarantors collectively as the
guarantors.
2
The following chart represents the corporate organizational
structure of NII Holdings and its U.S. subsidiaries on the
date hereof. This chart excludes foreign intermediate
subsidiaries and the foreign subsidiaries of the operating
companies.
* * * * *
Our corporate headquarters are located at 1875 Explorer Street,
Suite 1000, Reston, Virginia 20190, and our telephone
number is
(703) 390-5100.
Our Internet address is www.nii.com. The information contained
on our web site is not part of this offering memorandum.
The
Exchange Offers
On August 18, 2009 and December 15, 2009, we completed
unregistered private offerings of the 10% Old Notes and 8.875%
Old Notes, respectively. As part of those offerings, we entered
into registration rights agreements (copies of which are filed
with the SEC as exhibits to this registration statement), or the
Registration Rights Agreements, with the initial purchasers of
the Old Notes, in which we agreed, among other things, to
deliver this prospectus to you and to use commercially
reasonable efforts to complete an exchange offer. The following
is a summary of the exchange offers.
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Old Notes |
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10% Senior Notes due 2016, which were issued on August 18,
2009. |
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8.875% Senior Notes due 2019, which were issued on
December 15, 2009. |
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Exchange Notes |
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10% Senior Notes due 2016 and 8.875% Senior Notes due
2019. The terms of the Exchange Notes are substantially
identical to those terms of the Old Notes, except that the
Exchange Notes are registered under |
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the Securities Act and are not subject to the transfer
restrictions and registration rights relating to the Old Notes. |
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Exchange Offers |
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To satisfy our obligations under the Registration Rights
Agreements we are offering to exchange $800 million
principal amount of our 10% Exchange Notes for an equal amount
of our 10% Old Notes that have been registered under the
Securities Act and $500 million principal amount of our
8.875% Exchange Notes for an equal amount of our 8.875% Old
Notes that have been registered under the Securities Act. We may
withdraw the exchange offers at any time. |
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The Exchange Notes will evidence the same debt as the Old Notes,
including principal and interest, and will be issued under and
be entitled to the benefits of the same indentures that govern
the Old Notes. Holders of the Old Notes do not have any
appraisal or dissenters rights in connection with the
exchange offers. Because the Exchange Notes will be registered,
the Exchange Notes will not be subject to transfer restrictions,
and holders of Old Notes that have tendered and had their Old
Notes accepted in an exchange offer will have no registration
rights. With the consummation of the exchange offers the Old
Notes will not be entitled to receive liquidated damages, in the
form of additional interest, under the Registration Rights
Agreements. |
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Expiration Date |
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The exchange offers will expire at 5:00 P.M., New York City
time, on April , 2010, unless we decide to
extend it or terminate it early. A tender of Old Notes pursuant
to these exchange offers may be withdrawn at any time prior to
the Expiration Date if we receive a valid written withdrawal
request before the expiration of the exchange offers. |
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Conditions to the Exchange Offers |
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The exchange offers are subject to customary conditions, which
we may, but are not required to, waive. Please see The
Exchange Offers Conditions to the Exchange
Offers for more information regarding the conditions to
the exchange offers. We reserve the right, in our sole
discretion, to waive any and all conditions to the exchange
offers on or prior to the Expiration Date. |
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Procedures for Tendering Old Notes |
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Unless you comply with the procedures described below under
The Exchange Offers Procedures for Tendering
Old Notes Guaranteed Delivery, you must do one
of the following on or prior to the Expiration Date to
participate in an exchange offer: |
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tender your Old Notes by sending the certificates
for your Old Notes, in proper form for transfer, a properly
completed and duly executed letter of transmittal with the
required signature guarantee, and all other documents required
by the letter of transmittal, to Wilmington Trust Company,
as exchange agent, at the address set forth in this prospectus
and such Old Notes are received by our exchange agent prior to
the expiration of the exchange offers; or
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tender your Old Notes by using the book-entry
transfer procedures described in The Exchange
Offers Procedures for Tendering Old
Notes Book-Entry Delivery Procedures and
transmitting a properly completed and duly executed letter of
transmittal with the required signature guarantee, or an
agents message instead of the
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letter of transmittal, to the exchange agent. In order for a
book-entry transfer to constitute a valid tender of your Old
Notes in an exchange offer, Wilmington Trust Company, as
registrar and exchange agent, must receive a confirmation of
book-entry transfer of your Old Notes into the exchange
agents account at The Depository Trust Company prior
to the expiration of the exchange offers. |
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By signing or agreeing to be bound by the letter of transmittal,
you will represent to us that, among other things: |
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any Exchange Notes that you will receive will be
acquired in the ordinary course of your business;
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you have no arrangement or understanding with any
person or entity to participate in the distribution of the
Exchange Notes;
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you are transferring good and marketable title to
the Old Notes free and clear of all liens, security interests,
encumbrances, or rights or interests of parties other than you;
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if you are a broker-dealer that will receive
Exchange Notes for your own account in exchange for Old Notes
that were acquired as a result of market-making activities, that
you will deliver a prospectus, as required by law, in connection
with any resale of such Exchange Notes; and
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you are not our affiliate as defined in
Rule 405 under the Securities Act.
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Guaranteed Delivery Procedures |
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If you are a registered holder of the Old Notes and wish to
tender your Old Notes in an exchange offer, but |
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the Old Notes are not immediately available,
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time will not permit your Old Notes or other
required documents to be received by our exchange agent before
the expiration of the exchange offers, or
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the procedure for book-entry transfer cannot be
completed prior to the expiration of the exchange offers,
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then you may tender Old Notes by following the procedures
described below under The Exchange Offers
Procedures for Tendering Old Notes Guaranteed
Delivery. |
|
Procedures for Beneficial Owners |
|
If you are a beneficial owner whose Old Notes are registered in
the name of a broker, dealer, commercial bank, trust company or
other nominee and you wish to tender your Old Notes in an
exchange offer, you should promptly contact the person in whose
name the Old Notes are registered and instruct that person to
tender on your behalf the Old Notes prior to the expiration of
the exchange offers. |
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If you wish to tender in an exchange offer on your own behalf,
prior to completing and executing the letter of transmittal and
delivering the certificates for your Old Notes, you must either
make appropriate arrangements to register ownership of the Old
Notes in your name or obtain a properly completed bond power
from the person in whose name the Old Notes are registered. |
5
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Withdrawal; Non-Acceptance |
|
You may withdraw any Old Notes tendered in an exchange offer at
any time prior to 5:00 P.M., New York City time, on the
Expiration Date by sending our exchange agent written notice of
withdrawal. Any Old Notes tendered on or prior to the Expiration
Date that are not validly withdrawn on or prior to the
Expiration Date may not be withdrawn. If we decide for any
reason not to accept any Old Notes tendered for exchange or to
withdraw the exchange offers, the Old Notes will be returned to
the registered holder at our expense promptly after the
expiration or termination of the exchange offers. In the case of
Old Notes tendered by book-entry transfer into the exchange
agents account at The Depository Trust Company, any
withdrawn or unaccepted Old Notes will be credited to the
tendering holders account at The Depository
Trust Company. For further information regarding the
withdrawal of tendered Old Notes, please see The Exchange
Offers Withdrawal of Tenders. |
|
Certain Federal Income Tax Considerations |
|
The exchange of Old Notes for Exchange Notes in the exchange
offer will generally not be a taxable exchange for U.S. federal
income tax purposes. Please see Certain Federal Income Tax
Considerations for more information regarding the tax
consequences to you of the exchange offers. |
|
Use of Proceeds |
|
The issuance of the Exchange Notes will not provide us with any
new proceeds. We are making this exchange offer solely to
satisfy our obligations under the Registration Rights Agreements. |
|
Fees and Expenses |
|
We will pay all of our expenses incident to the exchange offers. |
|
Exchange Agent |
|
We have appointed Wilmington Trust Company as our exchange
agent for the exchange offers. You can find the address and
telephone number of the exchange agent under The Exchange
Offers Exchange Agent. |
|
Resales of Exchange Notes |
|
Based on interpretations by the staff of the SEC, as set forth
in no-action letters issued to third parties, we believe that
the Exchange Notes you receive in the exchange offers may be
offered for resale, resold or otherwise transferred by you
without compliance with the registration and prospectus delivery
provisions of the Securities Act so long as certain conditions
are met. See The Exchange Offers Resale of the
Exchange Notes; Plan of Distribution for more information
regarding resales. |
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Each broker-dealer that receives Exchange Notes for its own
account in exchange for Old Notes, where such Old Notes were
acquired by such 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 such
Exchange Notes. See Plan of Distribution. |
|
Consequences of Not Exchanging Your Old Notes |
|
If you do not exchange your Old Notes in these exchange offers,
you will no longer be able to require us to register your Old
Notes under the Securities Act pursuant to the Registration
Rights Agreements except in the limited circumstances provided
under the Registration Rights Agreements. In addition, you will
not be able to resell, offer to resell or |
6
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otherwise transfer your Old Notes unless we have registered the
Old Notes under the Securities Act, or unless you resell, offer
to resell or otherwise transfer them under an exemption from the
registration requirements of, or in a transaction not subject
to, the Securities Act and applicable state securities laws.
Other than in connection with these exchange offers, or as
otherwise required under certain limited circumstances pursuant
to the terms of the Registration Rights Agreements, we do not
currently anticipate that we will register the Old Notes under
the Securities Act. |
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For information regarding the consequences of not tendering your
Old Notes and our obligation to file a registration statement,
please see The Exchange Offers Consequences of
Failure to Exchange. |
Description
of the Exchange Notes
The terms of the Exchange Notes are substantially identical to
those terms of the Old Notes, except that the Exchange Notes are
registered under the Securities Act and are not subject to the
transfer restrictions and registration rights relating to the
Old Notes.
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Issuer |
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NII Capital Corp. |
|
Notes Offered |
|
$800 million aggregate principal amount of 10% Senior
Notes due 2016. |
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$500 million aggregate principal amount of
8.875% Senior Notes due 2019. |
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Maturity Date |
|
The 10% Exchange Notes will mature on August 15, 2016. The
8.875% Exchange Notes will mature on December 15, 2019. |
|
Interest |
|
Interest on the 10% Exchange Notes will accrue at 10% per annum,
payable semi-annually in arrears. Interest on the 8.875%
Exchange Notes will accrue at 8.875% per annum, payable
semi-annually in arrears. |
|
Interest Payment Dates |
|
The interest payment dates for the 10% Exchange Notes will be
February 15 and August 15 of each year, beginning on
August 15, 2010. The interest payment dates for the 8.875%
Exchange Notes will be June 15 and December 15 of each year,
beginning on June 15, 2010. |
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Optional Redemption |
|
NII Capital may redeem the 10% Exchange Notes, in whole or in
part, at any time on or after August 15, 2013 and the
8.875% Exchange Notes, in whole or in part, at any time on or
after December 15, 2014, at the applicable redemption
prices set forth in this prospectus, plus accrued and unpaid
interest. Prior to August 15, 2013 for the 10% Exchange
Notes and December 15, 2014 for the 8.875% Exchange Notes,
NII Capital may redeem the Exchange Notes, in whole or in part,
at a redemption price equal to 100% of the principal amount
thereof plus a make-whole premium and accrued and
unpaid interest as described in Description of
Notes Optional Redemption. |
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Prior to August 15, 2012 for the 10% Exchange Notes and
December 15, 2012 for the 8.875% Exchange Notes, NII
Capital may redeem up to 35% of the aggregate principal amount
of the Exchange Notes with the net cash proceeds from specified
equity offerings by NII Holdings at a redemption price of 110%
of the 10% |
7
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Exchange Notes principal amount or 108.875% of the 8.875%
Exchange Notes principal amount, as applicable, plus
accrued and unpaid interest. NII Capital may, however, only make
such a redemption if, after the redemption, at least 65% of the
aggregate principal amount of each series of the Exchange Notes
issued under the respective indentures remains outstanding. |
|
Change of Control |
|
If a change of control of NII Holdings occurs, each holder of
Exchange Notes may require us to repurchase all of the
holders Exchange Notes at a purchase price equal to 101%
of the principal amount of the Exchange Notes, plus accrued and
unpaid interest. See Description of Notes
Repurchase at the Option of Holders Change of
Control. |
|
Guarantees |
|
The Exchange Notes will be fully and unconditionally guaranteed
on a senior unsecured basis by NII Holdings and all of its
current and future first tier and domestic restricted
subsidiaries, other than NII Capital. We refer to NII Holdings.
and these domestic subsidiaries as the guarantors.
No foreign subsidiaries will guarantee the Exchange Notes unless
they are first tier subsidiaries of NII Holdings. |
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Ranking |
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The Exchange Notes and the guarantees: |
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will be general senior unsecured obligations of NII
Capital and the guarantors;
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will rank equally in right of payment with any
future unsecured and unsubordinated indebtedness of NII Capital
and the guarantors, including, but not limited to, with respect
to NII Holdings guarantee, NII Holdings outstanding
$1,200 million aggregate principal amount of 3.125%
convertible notes due 2012 and $350 million aggregate
principal amount of 2.75% convertible notes due 2025;
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will be effectively junior to existing and future
secured obligations of NII Capital and the guarantors to the
extent of the assets securing such obligations;
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will be structurally junior to all existing and
future liabilities, including trade payables, of NII
Holdings subsidiaries that do not guarantee the Exchange
Notes; and
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will be senior in right of payment to any future
subordinated indebtedness of NII Capital or any guarantor.
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As of December 31, 2009, (i) NII Holdings had
$1,550.0 million principal amount of indebtedness
outstanding on an unconsolidated basis (excluding its
obligations pursuant to the guarantee of the Old Notes), none of
which was secured, (ii) NII Capital had $1.3 billion
aggregate principal amount of indebtedness outstanding,
representing the Old Notes, and (iii) other than NII
Aviation, which had $42.7 million principal amount of
secured indebtedness outstanding, none of the other subsidiary
guarantors had any indebtedness outstanding other than the
guarantee of the Old Notes. In addition, as of December 31,
2009, NII Holdings subsidiaries that were not subsidiary
guarantors or the issuer had $3,348.6 million in
liabilities outstanding, including $820.8 million aggregate
principal amount of indebtedness. |
8
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Certain Covenants |
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The indentures governing the Exchange Notes, among other things,
limit NII Holdings ability and the ability of its
restricted subsidiaries, including NII Capital, to: |
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incur additional indebtedness and issue preferred
stock;
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create liens or other encumbrances;
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place limitations on distributions from restricted
subsidiaries;
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pay dividends, acquire shares of our capital stock,
make investments,
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prepay subordinated indebtedness or make other
restricted payments;
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issue or sell capital stock of restricted
subsidiaries;
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issue guarantees;
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sell or exchange assets;
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enter into transactions with affiliates; and
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merge or consolidate with another entity.
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The covenants are subject to a number of important
qualifications and exceptions that are described in the section
Description of Notes Certain Covenants. |
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Covenant Suspension |
|
During any period of time that (i) the ratings assigned to
the Exchange Notes by both of Moodys Investors Service,
Inc. and Standard & Poors Ratings Service are
equal to or higher than Baa3 and BBB−, respectively (or,
if either such entity ceases to rate the Exchange Notes for
reasons outside of our control, the equivalent investment grade
credit rating from any other nationally recognized
statistical rating organization within the meaning of
Section 3(a)(62) under the Exchange Act, selected by us as
a replacement agency), and (ii) no default or event of
default has occurred and is continuing, we will not be subject
to most of the covenants discussed above with respect to the
Exchange Notes. In the event that we are not subject to certain
covenants for any period of time as a result of the preceding
sentence and, on any subsequent date, the rating assigned by
either rating agency (or replacement agency) should decline
below the level set forth above, then we will thereafter again
be subject to all covenants. |
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Risk Factors |
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You should refer to the section of this prospectus entitled
Risk Factors for a discussion of the factors you
should carefully consider before deciding to invest in the
Exchange Notes, including factors affecting forward- looking
statements. |
9
SELECTED
CONSOLIDATED FINANCIAL DATA
The tables below set forth selected consolidated financial data
for the periods or as of the dates indicated and should be read
in conjunction with the consolidated financial statements and
notes thereto in our current report on
Form 8-K
dated March 8, 2010 and Managements Discussion
and Analysis of Financial Condition and Results of
Operations in Item 7 of our Annual Report on
Form 10-K
for the year ended December 31, 2009.
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Year Ended December 31,
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2009
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2008
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2007
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|
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2006
|
|
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2005
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|
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(In thousands, except per share data)
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Consolidated Statement of Operations Data:
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|
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|
|
|
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Operating revenues
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$
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4,397,599
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|
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$
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4,269,380
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|
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$
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3,296,295
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|
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$
|
2,371,340
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|
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$
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1,745,839
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Foreign currency transaction gains (losses), net
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$
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104,866
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$
|
(120,572
|
)
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$
|
19,008
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|
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$
|
3,557
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|
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$
|
3,357
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Net income
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$
|
381,491
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|
|
$
|
341,955
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|
|
$
|
353,748
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|
|
$
|
284,950
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|
|
$
|
165,810
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Net income per common share, basic
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$
|
2.30
|
|
|
$
|
2.05
|
|
|
$
|
2.12
|
|
|
$
|
1.85
|
|
|
$
|
1.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Net income per common share, diluted
|
|
$
|
2.27
|
|
|
$
|
2.02
|
|
|
$
|
2.02
|
|
|
$
|
1.67
|
|
|
$
|
1.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
2005
|
|
|
|
(In thousands)
|
|
|
Consolidated Balance Sheet Data:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Total assets
|
|
$
|
7,554,693
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|
|
$
|
5,090,073
|
|
|
$
|
5,436,205
|
|
|
$
|
3,298,681
|
|
|
$
|
2,622,960
|
|
Long-term debt, including current portion
|
|
$
|
3,580,788
|
|
|
$
|
2,133,140
|
|
|
$
|
2,061,381
|
|
|
$
|
1,078,698
|
|
|
$
|
1,078,655
|
|
Ratio of
Earnings to Fixed Charges:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
2008
|
|
2007
|
|
2006
|
|
2005
|
|
|
3.04x
|
|
|
|
2.78x
|
|
|
|
3.45x
|
|
|
|
3.60x
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|
|
|
3.46x
|
|
For the purpose of computing the ratio of earnings to fixed
charges, earnings consist of income (loss) from continuing
operations before income taxes plus fixed charges and
amortization of capitalized interest less interest capitalized
during the period. Fixed charges consist of:
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|
|
interest on all indebtedness, amortization of debt financing
costs and amortization of original issue discount;
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|
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interest capitalized; and
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the portion of rental expense we believe is representative of
interest.
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Foreign Currency Transaction Gains (Losses),
Net. Consolidated foreign currency transaction
gains of $104.9 million for the year ended
December 31, 2009 are primarily related to the impact of
the significant appreciation in the value of the Brazilian real
relative to the U.S. dollar during 2009 on Nextel
Brazils syndicated loan facility, which is denominated in
U.S. dollars. Consolidated foreign currency transaction
losses of $120.6 million for the year ended
December 31, 2008 are primarily due to $80.2 million
in losses related to the impact of the significant depreciation
in the value of the Brazilian real relative to the
U.S. dollar during the second half of 2008 on Nextel
Brazils syndicated loan facility, which is denominated in
U.S. dollars, as well as $44.8 million in losses
related to the depreciation in the value of the Mexican peso
relative to the U.S. dollar on Nextel Mexicos
U.S. dollar-denominated net liabilities during the same
period. See Critical Accounting Policies and
Estimates Foreign Currency. in our
Annual Report on
Form 10-K
for the year ended December 31, 2009 for more information.
10
RISK
FACTORS
Before you make an investment decision, you should be aware
of various risks, including the risks described below and in the
section entitled Risk Factors in our annual report
on
Form 10-K
for the year ended December 31, 2009. Our business,
financial condition or results of operations could be materially
adversely affected by any of these risks. The trading price of
the Exchange Notes could decline due to any of these risks, and
you may lose all or part of your investment. In addition, please
read Forward-Looking and Cautionary Statements in
this prospectus, where we describe additional uncertainties
associated with our business and the forward-looking statements
included or incorporated by reference in this prospectus. Our
actual results could differ materially from those anticipated in
these forward-looking statements as a result of certain factors,
including the risks faced by us described below and included
elsewhere or incorporated by reference in this prospectus.
Please note that additional risks not presently known to us or
that we currently deem immaterial may also impair our business
and operations.
Risk
Factors Relating To The Exchange Offers
You
may have difficulty selling the Old Notes you do not
exchange.
If you do not exchange your Old Notes for Exchange Notes in the
exchange offer, you will continue to be subject to the
restrictions on transfer of your Old Notes as described in the
legend on the global notes representing the Old Notes. There are
restrictions on transfer of your Old Notes because we issued the
Old Notes under an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act
and applicable state securities laws. In general, you may only
offer or sell the Old Notes if they are registered under the
Securities Act and applicable state securities laws or offered
and sold under an exemption from, or in a transaction not
subject to, these requirements. We do not intend to register any
Old Notes not tendered in the exchange offers and, upon
consummation of the exchange offers, you will not be entitled to
any rights to have your untendered Old Notes registered under
the Securities Act. In addition, the trading market, if any, for
the remaining Old Notes will be adversely affected depending on
the extent to which Old Notes are tendered and accepted in the
exchange offers.
Broker-dealers
may need to comply with the registration and prospectus delivery
requirements of the Securities Act.
Any broker-dealer that exchanges its Old Notes in an exchange
offer for the purpose of participating in a distribution of the
Exchange Notes or resells Exchange Notes that were received by
it for its own account in an exchange offer may be deemed to
have received restricted securities and will be required to
comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale
transaction by that broker-dealer. Any profit on the resale of
the Exchange Notes and any commission or concessions received by
a broker-dealer may be deemed to be underwriting compensation
under the Securities Act.
You
may not receive Exchange Notes in the exchange offers if the
exchange offer procedure is not followed.
We will only issue Exchange Notes in exchange for Old Notes that
you timely and properly tender. Therefore, you should allow
sufficient time to ensure timely delivery of the Old Notes to
the exchange agent and you should carefully follow the
instructions on how to tender your Old Notes. Neither we nor the
exchange agent is required to tell you of any defects or
irregularities with respect to your tender of Old Notes. We may
waive any defects or irregularities with respect to your tender
of Old Notes, but we are not required to do so and may not do
so. See The Exchange Offers Procedures for
Tendering Old Notes and Description of Notes.
Risk
Factors Relating To The Exchange Notes
Although
the Exchange Notes are referred to as Senior Notes,
they will be effectively subordinated to NII Capitals and
the guarantors secured indebtedness and to the
indebtedness and other liabilities of our non-guarantor
subsidiaries.
The Exchange Notes and the guarantees are unsecured and
therefore will be effectively subordinated to the existing and
future secured indebtedness of NII Holdings, NII Capital and the
subsidiary guarantors to the extent of
11
the assets securing such indebtedness. As of December 31,
2009, NII Aviation, which is one of the subsidiary guarantors,
and which had $42.7 million principal amount of secured
indebtedness outstanding and NII Holdings, NII Capital and the
subsidiary guarantors other than NII Aviation had no secured
indebtedness outstanding; however, the indentures governing the
Exchange Notes permit NII Holdings, NII Capital and the
subsidiary guarantors to incur a substantial amount of secured
indebtedness. See Description of Notes.
If NII Holdings, NII Capital or a subsidiary guarantor becomes
insolvent or is liquidated, the lenders under NII Holdings, NII
Capital or the subsidiary guarantors secured indebtedness
will have claims on the assets securing their indebtedness and
will have priority over any claim for payment under the Exchange
Notes or the guarantees to the extent of such security.
Accordingly, in the event of a bankruptcy or insolvency, it is
possible that there would be no assets remaining after
satisfaction of the claims of such secured creditors from which
claims of the holders of the Exchange Notes could be satisfied
or, if any assets remained, they might be insufficient to
satisfy such claims fully. Also, as described below, there are
federal and state laws that could invalidate NII Holdings
and the subsidiary guarantors guarantees of the Exchange
Notes. If that were to occur, the claims of creditors of NII
Holdings and those subsidiaries would also rank effectively
senior to the Exchange Notes, to the extent of the assets of
those entities.
None of our foreign subsidiaries has any obligation to pay any
amounts due on the Exchange Notes or to provide us with funds
for our payment obligations, whether by dividends,
distributions, loans or other payments. In the event of a
bankruptcy, liquidation or reorganization of any of our
non-guarantor subsidiaries, holders of their liabilities,
including trade creditors, will generally be entitled to payment
of their claims from the assets of those non-guarantor
subsidiaries before any assets are made available for
distribution to us. As of December 31, 2009, our
non-guarantor subsidiaries had total liabilities of
$3,348.6 million, including outstanding indebtedness of
$820.8 million.
Contractual
provisions in our subsidiaries debt agreements, as well as
laws restricting the exchange of currencies or expatriating
funds, impair the ability of our subsidiaries to make funds
available to us to pay debt service.
Because almost all of our business operations and assets are
conducted and held by our foreign subsidiaries, we depend on
those subsidiaries to provide us with cash to satisfy our
obligations, including debt service on the Exchange Notes,
whether in the form of advances from our subsidiaries, the
repayment by our subsidiaries of intercompany loans or the
payment of dividends and other distributions from the net
earnings and cash flow generated by such subsidiaries.
Contractual provisions in the agreements governing the
indebtedness of our foreign subsidiaries and laws or regulations
restricting the exchange of currencies or expatriation of funds,
as well as any such subsidiarys financial condition and
operating requirements, may limit the ability of our foreign
subsidiaries to distribute cash to NII Holdings, NII Capital or
the subsidiary guarantors. For example, Brazilian law provides
that the Brazilian government may, for a limited period of time,
impose restrictions on the remittance by Brazilian companies to
foreign investors of the proceeds of investments in Brazil.
These restrictions may be imposed whenever there is a material
imbalance or a serious risk of a material imbalance in
Brazils balance of payments. The inability to receive
sufficient cash from our foreign subsidiaries to satisfy our
obligations would require us to obtain additional debt or equity
financing or sell assets. There can be no assurance that we
would be able to obtain such financing or sell assets at
acceptable terms or at all and, under such circumstances, our
failure to do so could prevent us from satisfying our
obligations, including making payments on the Exchange Notes
when due.
Federal
and state statutes allow courts, under specific circumstances,
to void guarantees and require noteholders to return payments
received from the guarantors.
The creditors of the guarantors could challenge the guarantees
as fraudulent conveyances or on other grounds. Under federal
bankruptcy law and comparable provisions of state fraudulent
transfer laws, the delivery of the guarantees could be found to
be a fraudulent transfer and declared void if a court determined
that the guarantor, at the time it incurred the obligations
evidenced by its guarantee, (1) delivered the guarantee
with the intent to hinder,
12
delay or defraud its existing or future creditors; or
(2) received less than reasonably equivalent value or did
not receive fair consideration for the issuance of the guarantee
and any of the following three conditions apply:
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the guarantor was insolvent on the date of the issuance of the
guarantee or was rendered insolvent as a result of the issuance
of the guarantee;
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the guarantor was engaged in a business or transaction, or was
about to engage in a business or transaction, for which the
guarantors remaining assets constituted unreasonably small
capital; or
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the guarantor intended to incur, or believed that it would
incur, debts beyond its ability to pay as such debts matured.
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In addition, any payment by that guarantor pursuant to its
guarantee could be voided and required to be returned to the
guarantor, or to a fund for the benefit of the creditors of the
guarantor. In any such case, your right to receive payments in
respect of the Exchange Notes from any such guarantor would be
effectively subordinated to all indebtedness and other
liabilities of that guarantor.
If a court declares the guarantees to be void, or if the
guarantees must be limited or voided in accordance with their
terms, any claim you may make against us for amounts payable on
the Exchange Notes would, with respect to amounts claimed
against the guarantors, be subordinated to the indebtedness of
the guarantors, including trade payables. The measures of
insolvency for purposes of these fraudulent transfer laws will
vary depending upon the law applied in any proceeding to
determine whether a fraudulent transfer has occurred. Generally,
however, a guarantor would be considered insolvent if:
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the sum of its debts, including contingent liabilities, was
greater than the fair saleable value of all of its assets;
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if the present fair saleable value of its assets was less than
the amount that would be required to pay its probable liability
on its existing debts, including contingent liabilities, as they
become absolute and mature; or
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it could not pay its debts as they become due.
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We cannot assure you, however, as to what standard a court would
apply in making these determinations.
Your
ability to transfer the Exchange Notes may be limited by the
absence of an active trading market, and an active trading
market for the Exchange Notes may not develop.
The Exchange Notes are new securities for which there is no
established market. Accordingly, the development or liquidity of
any market for the Exchange Notes is uncertain. We do not intend
to apply for a listing of the Exchange Notes on a securities
exchange or any automated dealer quotation system.
We cannot assure you as to the liquidity of markets that may
develop for the Exchange Notes, your ability to sell the
Exchange Notes or the price at which you would be able to sell
the Exchange Notes. If such markets were to exist, the Exchange
Notes could trade at prices that may be lower than their
principal amount or purchase price depending on many factors,
including prevailing interest rates, the market for similar
notes, our financial and operations performance and other
factors. Historically, the market for non-investment grade debt
has been subject to disruptions that have caused substantial
volatility in the prices of securities similar to the Exchange
Notes. The market, if any, for the Exchange Notes may experience
similar disruptions, and any such disruptions may adversely
affect the prices at which you may sell your Exchange Notes.
The
trading prices for the Exchange Notes will be directly affected
by many factors, including our credit rating.
Credit rating agencies continually revise their ratings for
companies they follow, including us. Any ratings downgrade could
adversely affect the trading price of the Exchange Notes, or the
trading market for the Exchange Notes, to the extent a trading
market for the Exchange Notes develops. The condition of the
financial and credit markets and prevailing interest rates have
fluctuated in the past and are likely to fluctuate in the future
and any fluctuation may impact the trading price of the Exchange
Notes.
13
We may
not have sufficient cash flow to make payments on the Exchange
Notes and our other debt.
Our ability to pay principal and interest on the Exchange Notes
and our other debt and to fund our planned capital expenditures
depends on our future operating performance. Our future
operating performance is subject to a number of risks and
uncertainties that are often beyond our control, including
general economic conditions and financial, competitive,
regulatory and environmental factors. For a discussion of some
of these risks and uncertainties, see the section entitled
Risk Factors in our annual report on
Form 10-K
for the year ended December 31, 2009. Consequently, we
cannot assure you that we will have sufficient cash flow to meet
our liquidity needs, including making payments on our
indebtedness.
If our cash flow and capital resources are insufficient to allow
us to make scheduled payments on the Exchange Notes or our other
debt, we may have to sell assets, seek additional capital or
restructure or refinance our debt. We cannot assure you that the
terms of our debt will allow for these alternative measures or
that such measures would satisfy our scheduled debt service
obligations.
If we cannot make scheduled payments on our debt:
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the holders of our debt could declare all outstanding principal
and interest to be due and payable;
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the holders of our secured debt could commence foreclosure
proceedings against our assets;
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we could be forced into bankruptcy or liquidation; and
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you could lose all or part of your investment in the Exchange
Notes.
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NII
Capital may not be able to purchase the Exchange Notes upon a
change of control, which would result in a default under the
indentures governing the Exchange Notes and would adversely
affect our business and financial condition.
Upon the occurrence of events constituting a change in control,
each holder of the Exchange Notes will have the right to require
NII Capital to repurchase all or any part of such holders
Exchange Notes at 101% of the principal amount thereof plus
accrued and unpaid interest, if any, up to but excluding the
purchase date. We may not have sufficient funds available to
make any required repurchases of the Exchange Notes, and we may
be unable to receive distributions or advances from our
subsidiaries in the future sufficient to meet such repurchase
obligation. In addition, restrictions under future debt
instruments may not permit NII Capital to repurchase the
Exchange Notes. If NII Capital fails to repurchase Exchange
Notes in that circumstance, we will be in default under the
indentures governing the Exchange Notes. See Description
of Notes Repurchase at the Option of Holders.
FORWARD-LOOKING
AND CAUTIONARY STATEMENTS
We caution you that this prospectus and the documents
incorporated by reference into this prospectus contain certain
estimates, projections and other forward-looking
statements within the meaning of the Private Securities
Litigation Reform Act of 1995 and are subject to the safe harbor
created by that act. Statements regarding expectations,
including performance assumptions and estimates relating to
capital requirements, as well as other statements that are not
historical facts, are forward-looking statements.
These statements reflect managements judgments based on
currently available information and involve a number of risks
and uncertainties that could cause actual results to differ
materially from those in the forward-looking statements. With
respect to these forward-looking statements, management has made
assumptions regarding, among other things, customer and network
usage, customer growth and retention, pricing, operating costs,
the timing of various events, the economic and regulatory
environment and the foreign currency exchange rates of
currencies in the countries in which our operating companies
conduct business relative to the U.S. dollar.
We have included risk factors and uncertainties that might cause
differences between anticipated and actual future results in the
Risk Factors section of this prospectus and the
section entitled Risk Factors incorporated into this
prospectus by reference to our annual report on
Form 10-K
for the year ended December 31, 2009. Future
14
performance cannot be assured. Actual results may differ
materially from those in the forward-looking statements. Some
factors that could cause actual results to differ include:
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our ability to attract and retain customers;
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our ability to meet the operating goals established by our
business plan;
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general economic conditions in the United States or in Latin
America and in the market segments that we are targeting for our
services, including the impact of the current uncertainties in
global economic conditions;
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the political and social conditions in the countries in which we
operate, including political instability, which may affect the
economies of our markets and the regulatory schemes in these
countries;
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the impact of foreign currency exchange rate volatility in our
markets when compared to the U.S. dollar and related
currency depreciation in countries in which our operating
companies conduct business;
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our ability to access sufficient debt or equity capital to meet
any future operating and financial needs, including the impact
of the disruption in global capital markets during 2008 and 2009
that have made it more difficult or costly to obtain funding on
acceptable terms;
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reasonable access to and the successful performance of the
technology being deployed in our service areas, and improvements
thereon, including technology deployed in connection with the
introduction of digital two-way mobile data or Internet
connectivity services in our markets;
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the availability of adequate quantities of system infrastructure
and subscriber equipment and components at reasonable pricing to
meet our service deployment and marketing plans and customer
demand;
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Motorolas ability and willingness to provide handsets and
related equipment and software applications or to develop new
technologies or features for us, including the timely
development and availability of new handsets with expanded
applications and features;
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the risk of deploying new technologies, including the potential
need for additional funding to support that deployment, the risk
that new services supported by the new technology will not
attract enough subscribers to support the related costs of
deploying or operating the new technology, the need to
significantly increase our employee base and the potential
distraction of management;
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our ability to successfully scale our billing, collection,
customer care and similar back-office operations to keep pace
with customer growth, increased system usage rates and growth or
to successfully deploy new systems that support those functions;
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the success of efforts to improve and satisfactorily address any
issues relating to our network performance;
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future legislation or regulatory actions relating to our SMR
services, other wireless communications services or
telecommunications generally and the costs
and/or
potential customer impacts of compliance with regulatory
mandates;
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the ability to achieve and maintain market penetration and
average subscriber revenue levels sufficient to provide
financial viability to our network business;
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the quality and price of similar or comparable wireless
communications services offered or to be offered by our
competitors, including providers of cellular services and
personal communications services;
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market acceptance of our new service offerings;
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equipment failure, natural disasters, terrorist acts or other
breaches of network or information technology security; and
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other risks and uncertainties described in this prospectus and
from time to time in our reports filed with the SEC, which we
have incorporated by reference into this prospectus.
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The words may, could,
estimate, project, forecast,
intend, expect, believe,
target, plan, providing
guidance and similar expressions are intended to identify
forward-looking statements. Forward-
15
looking statements are found throughout this prospectus and
elsewhere in this report. The reader should not place undue
reliance on forward-looking statements, which speak only as of
the date of this prospectus, or in the case of a document
incorporated by reference, as of the date of that document.
Except as required by law, we do not undertake any obligation to
publicly update or release any revisions to the forward-looking
statement to reflect any events or circumstances after the date
of this prospectus or to reflect the occurrence of unanticipated
events.
Additional factors that could cause actual results to differ
materially from those expressed in the forward-looking
statements are discussed in reports filed with the SEC by NII
Holdings. See Where You Can Find More Information on
page 75 for a list of the documents incorporated by
reference into this prospectus.
THE
EXCHANGE OFFERS
This section of the prospectus describes the proposed
exchange offers. While we believe that the description covers
the material terms of the exchange offers, this summary may not
contain all of the information that is important to you. You
should carefully read this entire document for a complete
understanding of the exchange offers.
Purpose
and Effects of the Exchange Offers
The Exchange Notes are being offered in the exchange offer in
exchange for the Old Notes, which were issued in unregistered
private offerings. In the private offerings, we issued
$800 million principal amount of the 10% Old Notes on
August 18, 2009 and $500 million principal amount of
the 8.875% Old Notes on December 15, 2009. The initial
purchasers subsequently offered and sold a portion of the Old
Notes only to qualified institutional buyers as
defined in and in compliance with Rule 144A and outside the
United States in compliance with Regulation S of the
Securities Act.
In connection with the sale of the Old Notes, we and the
guarantors entered into Registration Rights Agreements, which
require us, among other things, to:
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file with the SEC a registration statement under the Securities
Act with respect to an offer to exchange the outstanding Old
Notes for Exchange Notes identical in all material respects to
the Old Notes within 210 days after the issuance of the Old
Notes; and
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use our commercially reasonable efforts to cause such
registration statement to become effective as promptly as
possible; and
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consummate the Exchange Offer within 270 days after the
issuance of the Old Notes.
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If we failed to comply with the requirements of the Registration
Rights Agreements we would be required to pay certain liquidated
damages in the form of additional interest to each holder of Old
Notes.
We are making the exchange offers to satisfy our obligations
under the Registration Rights Agreements. The term
holder with respect to the exchange offers means any
person in whose name Old Notes are registered on our books or on
the books of the Depository Trust Company, or DTC, or any
other person who has obtained a properly completed certificate
of transfer from the registered holder, or any person whose Old
Notes are held of record by DTC who desires to deliver such Old
Notes by book-entry transfer at DTC.
Based on interpretations by the staff of the SEC set forth in
no-action letters issued to third parties, we believe the
Exchange Notes issued in exchange for Old Notes may be offered
for resale, resold and otherwise transferred by any holder
without compliance with the registration and prospectus delivery
provisions of the Securities Act provided that you:
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are not a broker-dealer who purchased Old Notes directly from us
for resale pursuant to Rule 144A or any other available
exemption under the Securities Act;
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are not our affiliate; or
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acquire the Exchange Notes in the ordinary course of your
business and that you have no arrangement or understanding with
any person to participate in the distribution of the Exchange
Notes.
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Any holder who tenders in an exchange offer with the intention
to participate, or for the purpose of participating, in a
distribution of the Exchange Notes or who is our affiliate may
not rely upon such interpretations by the staff of the SEC and,
in the absence of an exemption, must comply with the
registration and prospectus delivery requirements of the
Securities Act in connection with any secondary resale
transaction. Any such holder may incur liabilities under the
Securities Act for which the holder is not indemnified by us in
order to comply with such requirements. Each broker-dealer
(other than an affiliate of ours) that receives Exchange Notes
for its own account in the exchange offers must acknowledge that
it will deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale of Exchange Notes.
The letter of transmittal states that by so acknowledging 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. We have agreed that, for a period of
180 days after the consummation of the exchange offer, we
will make the prospectus available to any broker-dealer for use
in connection with any such resale. See Plan of
Distribution.
We are not making these exchange offers to, nor will we accept
surrenders for exchange from, holders of Old Notes in any
jurisdiction in which this exchange offer or its acceptance
would not comply with the securities or blue sky laws.
By tendering in the exchange offers, you will represent to us
that, among other things, you:
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are acquiring the Exchange Notes in an exchange offer in the
ordinary course of your business, whether or not you are a
holder;
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are transferring good and marketable title to the Old Notes free
and clear of all liens, security interests, charges or
encumbrances or rights of parties other than you;
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do not have an arrangement or understanding with any person to
participate in the distribution of the Exchange Notes;
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are not a broker-dealer, or you are a broker-dealer but will not
receive Exchange Notes for your own account in exchange for Old
Notes, neither you nor any other person is engaged in or intends
to participate in the distribution of the Exchange
Notes; and
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are not our affiliate within the meaning of
Rule 405 under the Securities Act or, if you are our
affiliate, you will comply with the registration and prospectus
delivery requirements of the Securities Act to the extent
applicable.
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Following the completion of the exchange offers, no Old Notes
will be entitled to the liquidated damages payment applicable to
the Old Notes. Nor will holders of Old Notes have any further
registration rights, and the Old Notes will continue to be
subject to certain restrictions on transfer. See
Consequences of Failure to Exchange.
Accordingly, the liquidity of the market for the Old Notes could
be adversely affected.
Participation in the exchange offers is voluntary and you should
carefully consider whether to accept. We urge you to consult
your financial and tax advisors in making your own decisions on
whether to participate in an exchange offer.
Consequences
of Failure to Exchange
The Old Notes that are not exchanged for Exchange Notes in the
exchange offers will remain restricted securities within the
meaning of Rule 144(a)(3) of the Securities Act and subject
to restrictions on transfer, and you will no longer be able to
require us to register your Old Notes under the Securities Act,
except in the limited circumstances set forth in the
Registration Rights Agreement related to your Old Notes.
Accordingly, such Old Notes may not be offered, sold, pledged or
otherwise transferred except:
(1) to us;
(2) so long as the Old Notes are eligible for resale
pursuant to Rule 144A, to a person whom the seller
reasonably believes is a qualified institutional buyer within
the meaning of Rule 144A, purchasing for its own account or
for the account of a qualified institutional buyer to whom
notice is given that the resale, pledge or other transfer is
being made in reliance on Rule 144A;
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(3) in an offshore transaction in accordance with
Regulation S under the Securities Act;
(4) pursuant to an exemption from registration in
accordance with Rule 144, if available, under the
Securities Act;
(5) in reliance on another exemption from the registration
requirements of the Securities Act; or
(6) pursuant to an effective registration statement under
the Securities Act.
In all of the situations discussed above, the resale must be in
accordance with the Securities Act, any applicable securities
laws of any U.S. state, the securities laws of any foreign
country and subject to certain requirements of the registrar or
co-registrar being met, including receipt by the registrar or
co-registrar of a certification and, in the case of (3),
(4) and (5) above, an opinion of counsel reasonably
acceptable to us and the registrar.
To the extent Old Notes are tendered and accepted in these
exchange offers, the principal amount of outstanding Old Notes
will decrease with a resulting decrease in the liquidity in the
market therefor. Accordingly, the liquidity of the market of the
Old Notes could be adversely affected.
Terms of
the Exchange Offers
Upon the terms and subject to the conditions set forth in this
prospectus and in the applicable letter of transmittal, we will
accept any and all Old Notes validly tendered and not withdrawn
prior to the Expiration Date. We will issue Exchange Notes in
denominations of $2,000 and integral multiples of $1,000 in
excess thereof in exchange for Old Notes of equal principal
amounts that are accepted in the exchange offers. The Exchange
Notes will accrue interest on the same terms as the Old Notes;
however, holders of the Old Notes accepted for exchange will not
receive accrued interest thereon at the time of exchange;
rather, all accrued interest on the Old Notes will become
obligations under the Exchange Notes. Holders may tender some or
all of their Old Notes pursuant to the exchange offers. However,
Old Notes may be tendered only in minimum denominations of
$2,000 and integral multiples of $1,000 in excess thereof.
The form and terms of the Exchange Notes are the same as the
form and terms of the Old Notes, except that:
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the Exchange Notes will have been registered under the
Securities Act and will not bear legends restricting their
transfer pursuant to the Securities Act; and
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except as otherwise described above, holders of the Exchange
Notes will not be entitled to the rights of holders of Old Notes
under the Registration Rights Agreement.
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The Exchange Notes will evidence the same debt as the Old Notes
that they replace, and will be issued under, and be entitled to
the benefits of, the indentures that govern all of the notes,
including the payment of principal and interest.
We are sending this prospectus and the letter of transmittal to
all registered holders of outstanding Old Notes. Only a
registered holder of Old Notes or such holders legal
representative or attorney-in-fact as reflected on the indenture
trustees records may participate in the exchange offers.
There will be no fixed record date for determining holders of
the Old Notes entitled to participate in the exchange offers.
Holders of the Old Notes do not have any appraisal or
dissenters rights under Delaware law or the indentures in
connection with the exchange offers. We intend to conduct the
exchange offers in accordance with the requirements of the
Exchange Act and the SECs rules and regulations thereunder.
We will be deemed to have accepted validly tendered Old Notes
when and if we have given oral or written notice thereof to the
exchange agent. The exchange agent will act solely as our agent
in connection with the tendering of the Old Notes and our
acceptance of the Old Notes. The Exchange Notes delivered in the
exchange offer will be issued on the earliest practicable date
following our acceptance for exchange of Old Notes.
If any tendered Old Notes are not accepted for exchange because
of an invalid tender, our withdrawal of the tender offer, the
occurrence of certain other events set forth herein or
otherwise, certificates for any such unaccepted Old Notes will
be returned, without expense, to the tendering holder as
promptly as practicable after the Expiration Date. Any
acceptance, waiver of default or a rejection of a tender of Old
Notes shall be at our discretion and shall be conclusive, final
and binding.
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Holders who tender Old 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 of the Old Notes in the exchange offers.
We will pay all charges and expenses, other than certain taxes,
in connection with the exchange offers. See
Fees and Expenses.
Expiration
Date; Extensions; Amendments; Termination and Waivers
The term Expiration Date with respect to the
exchange offer means 5:00 p.m., New York City time, on
April , 2010 unless we, in our sole discretion,
extend the exchange offers, in which case the term
Expiration Date shall mean the latest date and time
to which the exchange offers are extended.
If we extend the exchange offers, we will notify the exchange
agent of any extension by oral or written notice and will make a
public announcement thereof, each prior to 9:00 a.m., New
York City time, on the next business day after the previously
scheduled Expiration Date.
We reserve the right, in our sole discretion:
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to extend the exchange offers;
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if any of the conditions set forth below under
Conditions to the Exchange Offer have
not been satisfied, to terminate either or both exchange offers
or waive any conditions that have not been satisfied; or
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to amend the terms of the exchange offers in any manner.
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We may affect any such delay, extension, waiver or termination
by giving oral or written notice thereof to the exchange agent.
Except as specified in the second paragraph under this heading,
we will make a public announcement of any such delay in
acceptance, extension, termination, waiver or amendment as
promptly as practicable. If we amend or waive any condition of
an exchange offer in a manner determined by us to constitute a
material change to that exchange offer, we will promptly
disclose such amendment or waiver in a prospectus supplement
that will be distributed to the registered holders of the Old
Notes. That exchange offer will then be extended for a period of
five to ten business days, as required by law, depending upon
the significance of the amendment or waiver and the manner of
disclosure to the registered holders.
We will make a timely release of a public announcement of any
delay, extension, termination, waiver or amendment to the
exchange offer to an appropriate news agency.
Procedures
for Tendering Old Notes
Tenders
of Old Notes
The tender by a holder of Old Notes pursuant to any of the
procedures set forth below will constitute the tendering
holders acceptance of the terms and conditions of the
applicable exchange offer. Our acceptance for exchange of Old
Notes tendered pursuant to any of the procedures described below
will constitute a binding agreement between such tendering
holder and us in accordance with the terms and subject to the
conditions of the applicable exchange offer. Only holders are
authorized to tender their Old Notes. The procedures by which
Old Notes may be tendered by beneficial owners that are not
holders will depend upon the manner in which the Old Notes are
held.
DTC has authorized DTC participants that are beneficial owners
of Old Notes through DTC to tender their Old Notes as if they
were holders. To effect a tender, DTC participants should either
(1) complete and sign the letter of transmittal or a
facsimile thereof, have the signature thereon guaranteed if
required by the instructions in the letter of transmittal, and
mail or deliver the letter of transmittal or such facsimile
pursuant to the procedures for book-entry transfer set forth
below under Book-Entry Delivery
Procedures, or (2) transmit their acceptance to DTC
through the DTC Automated Tender Offer Program, or ATOP, for
which the transaction will be eligible, and follow the
procedures for book-entry transfer, set forth below under
Book-Entry Delivery Procedures.
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Tender
of Old Notes Held in Physical Form
To tender Old Notes held in physical form in the exchange offers:
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the exchange agent must receive at one of the addresses set
forth in this prospectus: (i) a properly completed letter
of transmittal applicable to such Old Notes (or a facsimile
thereof) duly executed by the tendering holder, (ii) any
other documents the letter of transmittal requires, and
(iii) the physical Old Notes or electronic delivery of Old
Notes effected through the deposit of Old Notes into the
exchange agents account with DTC and making book-entry
delivery as set forth below), on or prior to the Expiration
Date; or
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the tendering holder must comply with the guaranteed delivery
procedures set forth below on or prior to the Expiration Date.
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Letters of transmittal or Old Notes should be sent only to the
exchange agent and should not be sent to us.
Tender
of Old Notes Held Through a Custodian
To tender Old Notes that a custodian bank, depository, broker,
trust company or other nominee holds of record, the beneficial
owner thereof must instruct such holder to tender the Old Notes
on the beneficial owners behalf. A letter of instructions
from the record owner to the beneficial owner may be included in
the materials provided along with this prospectus which the
beneficial owner may use in this process to instruct the
registered holder of such owners Old Notes to effect the
tender.
Tender
of Old Notes Held Through DTC
To tender Old Notes that are held through DTC, DTC participants
on or before the Expiration Date should either:
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properly complete and duly execute the letter of transmittal (or
a facsimile thereof), and any other documents required by the
letter of transmittal, and mail or deliver the letter of
transmittal or such facsimile pursuant to the procedures for
book-entry transfer set forth below; or
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transmit their acceptance through ATOP, for which the
transaction will be eligible, and DTC will then edit and verify
the acceptance and send an Agents Message to the exchange
agent for its acceptance.
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The term Agents Message means a message
transmitted by DTC to, and received by, the exchange agent and
forming a part of the Book-Entry Confirmation, which states that
DTC has received an express acknowledgment from each participant
in DTC tendering the Old Notes and that such participant has
received the letter of transmittal and agrees to be bound by the
terms of the letter of transmittal and we may enforce such
agreement against such participant.
Old Notes held through DTC may only be tendered pursuant to the
book-entry delivery procedures set forth below, or the tendering
DTC participant must comply with the guaranteed delivery
procedures set forth below.
The method of delivery of Old Notes and letters of transmittal,
any required signature guarantees and all other required
documents, including delivery through DTC and any acceptance or
Agents Message transmitted through ATOP, is at the
election and risk of the person tendering Old Notes and
delivering letters of transmittal. If you use ATOP to tender,
you must allow sufficient time for completion of the ATOP
procedures during normal business hours of DTC on the Expiration
Date. Except as otherwise provided in the letter of transmittal,
tender and delivery will be deemed made only when actually
received by the exchange agent. If delivery is by mail, it is
suggested that the holder use properly insured, registered mail
with return receipt requested, and that the mailing be made
sufficiently in advance of the Expiration Date to permit
delivery to the exchange agent prior to such date.
Except as provided below, unless the Old Notes being tendered
are deposited with the exchange agent on or prior to the
Expiration Date (accompanied by a properly completed and duly
executed letter of transmittal or a properly transmitted
Agents Message), we may, at our option, reject such
tender. Exchange of Exchange Notes for Old Notes will be made
only against deposit of the tendered Old Notes and delivery of
all other required documents.
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Book-Entry
Delivery Procedures
The exchange agent will establish accounts with respect to the
Old Notes at DTC for purposes of the exchange offers within two
business days after the date of this prospectus, and any
financial institution that is a participant in DTC may make
book-entry delivery of the Old Notes by causing DTC to transfer
the Old Notes into the exchange agents account in
accordance with DTCs procedures for transfer. However,
although delivery of Old Notes may be effected through
book-entry at DTC, the letter of transmittal (or facsimile
thereof), with any required signature guarantees, or an
Agents Message in connection with a book-entry transfer,
and any other required documents, must, in any case, be
transmitted to and received by the exchange agent at one or more
of its addresses set forth in this prospectus on or prior to the
Expiration Date, or compliance must be made with the guaranteed
delivery procedures described below. Delivery of documents to
DTC does not constitute delivery to the exchange agent. The
confirmation of a book-entry transfer into the exchange
agents account at DTC as described above is referred to as
a Book-Entry Confirmation.
Signature
Guarantees
Signatures on all letters of transmittal must be guaranteed by a
recognized member of the Medallion Signature Guarantee Program
or by any other eligible guarantor institution, as
that term is defined in
Rule 17Ad-15
under the Exchange Act (each of the foregoing, an Eligible
Institution), unless the Old Notes tendered thereby are
tendered (1) by a registered holder of Old Notes (or by a
participant in DTC whose name appears on a DTC security position
listing as the owner of such Old Notes) who has not completed
either the box entitled Special Issuance
Instructions or Special Delivery Instructions
on the letter of transmittal, or (2) for the account of an
Eligible Institution. See Instruction 1 of the letter of
transmittal. If the Old Notes are registered in the name of a
person other than the signer of the letter of transmittal or if
Old Notes not accepted for exchange or not tendered are to be
returned to a person other than the registered holder, then the
signatures on the letter of transmittal accompanying the
tendered Old Notes must be guaranteed by an Eligible Institution
as described above. See Instructions 1 and 5 of the letter
of transmittal.
Guaranteed
Delivery
If you wish to tender your Old Notes but they are not
immediately available or if you cannot deliver your Old Notes,
the letter of transmittal or any other required documents to the
exchange agent or comply with the applicable procedures under
DTCs automated tender offer program prior to the
Expiration Date, you may tender if:
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the tender is made by or through an eligible institution;
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prior to 5:00 p.m., New York City time, on the Expiration
Date, the exchange agent receives from that eligible institution
either a properly completed and duly executed notice of
guaranteed delivery by facsimile transmission, mail, courier or
overnight delivery or a properly transmitted agents
message relating to a notice of guaranteed delivery:
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stating your name and address, the registration number or
numbers of your Old Notes and the principal amount of Old Notes
tendered;
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stating that the tender is being made thereby; and
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guaranteeing that, within three trading days after the
Expiration Date of the exchange offer, the letter of transmittal
or facsimile thereof or agents message in lieu thereof,
together with the Old Notes or a book-entry confirmation, and
any other documents required by the letter of transmittal, will
be deposited by the eligible institution with the exchange
agent; and
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the exchange agent receives such properly completed and executed
letter of transmittal or facsimile or Agents Message, as
well as all tendered Old Notes in proper form for transfer or a
book-entry confirmation, and all other documents required by the
letter of transmittal, within three trading days after the
Expiration Date.
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Upon request to the exchange agent, the exchange agent will send
a notice of guaranteed delivery to you if you wish to tender
your Old Notes according to the guaranteed delivery procedures
described above.
21
Determination
of Validity
All questions as to the validity, form, eligibility (including
time of receipt), acceptance and withdrawal of tendered Old
Notes will be determined by us in our sole discretion, which
determination will be conclusive, final and binding.
Alternative, conditional or contingent tenders of Old Notes will
not be considered valid and may not be accepted. We reserve the
absolute right to reject any and all Old Notes not properly
tendered or any Old Notes our acceptance of which, in the
opinion of our counsel, would be unlawful.
We also reserve the right to waive any defects, irregularities
or conditions of tender as to particular Old Notes. The
interpretation of the terms and conditions of our exchange offer
(including the instructions in the letter of transmittal) by us
will be conclusive, final and binding on all parties. Unless
waived, any defects or irregularities in connection with tenders
of Old Notes must be cured within such time as we shall
determine.
Although we intend to notify holders of defects or
irregularities with respect to tenders of Old Notes through the
exchange agent, neither we, the exchange agent nor any other
person is under any duty to give such notice, nor shall they
incur any liability for failure to give such notification.
Tenders of Old Notes will not be deemed to have been made until
such defects or irregularities have been cured or waived.
Any Old Notes received by the exchange agent that are not
validly tendered and as to which the defects or irregularities
have not been cured or waived, and Old Notes submitted in a
principal amount greater than the principal amount of Old Notes
being tendered by such tendering holder, will be:
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returned by the exchange agent to the tendering holders; or
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in the case of Old Notes tendered by book-entry transfer into
the exchange agents account at the book-entry transfer
facility pursuant to the book-entry transfer procedures
described below, credited to an account maintained with such
book-entry transfer facility.
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Withdrawal
of Tenders
Except as otherwise provided herein, tenders of Old Notes in the
exchange offer may be withdrawn, unless accepted for exchange as
provided in the exchange offer, at any time prior to the
Expiration Date.
To be effective, a written or facsimile transmission notice of
withdrawal must be received by the exchange agent at its address
set forth herein prior to the Expiration Date. Any such notice
of withdrawal must:
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specify the name of the person having deposited the Old Notes to
be withdrawn;
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identify the Old Notes to be withdrawn, including the
certificate number or numbers of the particular certificates
evidencing the Old Notes (unless the Old Notes were tendered by
book-entry transfer), and aggregate principal amount of the Old
Notes; and
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be signed by the holder in the same manner as the original
signature on the letter of transmittal (including any required
signature guarantees) or be accompanied by documents of transfer
sufficient to have the trustee under the indentures register the
transfer of the Old Notes into the name of the person
withdrawing the Old Notes.
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If Old Notes have been delivered pursuant to the procedures for
book-entry transfer set forth in Procedures
for Tendering Old Notes Book-Entry Delivery
Procedures, any notice of withdrawal must specify the name
and number of the account at the appropriate book-entry transfer
facility to be credited with the withdrawn Old Notes and must
otherwise comply with the book-entry transfer facilitys
procedures.
If the Old Notes to be withdrawn have been delivered or
otherwise identified to the exchange agent, a signed notice of
withdrawal meeting the requirements discussed above is effective
immediately upon written or facsimile notice of withdrawal, even
if physical release is not yet effected. A withdrawal of Old
Notes can only be accomplished in accordance with these
procedures.
All questions as to the validity, form and eligibility
(including time of receipt) of any notices will be determined by
us in our sole discretion, which determination shall be final
and binding on all parties. No withdrawal of Old Notes will be
deemed to have been properly made until all defects or
irregularities have been cured or
22
expressly waived. Neither we, the exchange agent nor any other
person will be under any duty to give notification of any
defects or irregularities in any notice of withdrawal or
revocation, nor shall we or they incur any liability for failure
to give any such notification. Any Old 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
thereto unless the Old Notes so withdrawn are retendered prior
to the Expiration Date. Properly withdrawn Old Notes may be
retendered by following one of the procedures described above
under Procedures for Tendering Old Notes
at any time prior to the Expiration Date.
Any Old Notes which have been tendered but which are not
accepted for exchange due to the rejection of the tender due to
uncured defects or the prior termination of the exchange offer,
or which have been validly withdrawn, will be returned to the
holder thereof unless otherwise provided in the letter of
transmittal, as soon as practicable following the Expiration
Date or, if so requested in the notice of withdrawal, promptly
after receipt by us of notice of withdrawal without cost to such
holder.
Conditions
to the Exchange Offer
The exchange offers are not subject to any conditions, other
than that:
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the exchange offers, or the making of any exchange by a holder,
do not violate applicable law or any applicable interpretation
of the staff of the SEC;
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there shall have not been instituted, threatened or be pending
any action or proceeding before or by any court, governmental,
regulatory or administrative agency or instrumentality, or by
any other person, in connection with an exchange offer, that
would or might, in our sole judgment, prohibit, prevent,
restrict or delay consummation of that exchange offer;
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no order, statute, rule, regulation, executive order, stay,
decree, judgment or injunction shall have been proposed,
enacted, entered, issued, promulgated, enforced or deemed
applicable by any court or governmental, regulatory or
administrative agency or instrumentality that, in our sole
judgment, would or might prohibit, prevent, restrict or delay
consummation of the exchange offers, or that is, or is
reasonably likely to be, materially adverse to the business,
operations, properties, condition (financial or otherwise),
assets, liabilities or prospects, of us, our subsidiaries or our
affiliates;
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there shall not have occurred or be likely to occur any event
affecting the business, operations, properties, condition
(financial or otherwise), assets, liabilities or prospects of
us, our subsidiaries or our affiliates that, in our sole
judgment, would or might prohibit, prevent, restrict or delay
consummation of the exchange offers;
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the Trustee under the indentures shall not have objected in any
respect to or taken any action that could, in our sole judgment,
adversely affect the consummation of the exchange offers, or
shall have taken any action that challenges the validity or
effectiveness of the procedures used by us in soliciting or the
making of the exchange offers; or
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there shall not have occurred: (i) any general suspension
of, or limitation on prices for, trading in the
U.S. securities or financial markets, (ii) a material
impairment in the trading market for debt securities,
(iii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States,
(iv) any limitation (whether or not mandatory) by any
government or governmental, administrative or regulatory
authority or agency, domestic or foreign, or other event that,
in our sole judgment, might affect the extension of credit by
banks or other lending institutions, (v) an outbreak or
escalation of hostilities or acts of terrorism involving the
U.S. or declaration of a national emergency or war by the
U.S. or any other calamity or crisis or any other change in
political, financial or economic conditions, if the effect of
any such event, in our sole judgment, makes it impractical or
inadvisable to proceed with the exchange offers, or (vi) in
the case of any of the foregoing existing on the date hereof, a
material acceleration or worsening thereof.
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If we determine in our reasonable discretion that any of the
conditions to the exchange offer are not satisfied, we may, as
to either or both exchange offers:
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refuse to accept any Old Notes and return all tendered Old Notes
to the tendering holders;
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terminate the exchange offer;
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extend the exchange offer and retain all Old Notes tendered
prior to the Expiration Date, subject, however, to the rights of
holders to withdraw such Old Notes; or
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waive that unsatisfied conditions with respect to the exchange
offer and accept all validly tendered Old Notes which have not
been withdrawn.
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If a waiver constitutes a material change to an exchange offer,
we will promptly disclose the waiver by means of a prospectus
supplement that will be distributed to the registered holders
and will extend that exchange offer for a period of five to 10
business days, depending upon the significance of the waiver and
the manner of disclosure to the registered holders, if that
exchange offer would otherwise expire during such five to 10
business day period.
Exchange
Agent
Wilmington Trust Company, the trustee under the indentures
governing the notes, has been appointed as exchange agent for
the exchange offers. You should direct questions and requests
for assistance, requests for additional copies of this
prospectus or of the letter of transmittal, and requests for
notices of guaranteed delivery and other documents to the
exchange agent addressed as follows:
Delivery
by Regular, Registered or Certified Mail or Overnight
Delivery:
Wilmington
Trust Company
Rodney Square North
1100 N. Market St.
Wilmington, DE
19890-1615
Attn: Sam Hamed
To Confirm by Telephone or for Information:
(302) 636-6470
Facsimile (eligible institutions only):
(302) 636-4139
Attn: Exchanges
Fees and
Expenses
We will bear the expenses of soliciting tenders. The principal
solicitation is being made by mail by the exchange agent;
however, additional solicitation may be made by telegraph,
telecopy, telephone or in person by our or our affiliates
officers and regular employees.
No dealer-manager has been retained in connection with the
exchange offers and no payments will be made to brokers, dealers
or others soliciting acceptance of the exchange offers. However,
reasonable and customary fees will be paid to the exchange agent
for its services and it will be reimbursed for its reasonable
out-of-pocket
expenses.
Our
out-of-pocket
expenses for the exchange offers will include fees and expenses
of the exchange agent and the trustee under the indentures,
accounting and legal fees, and printing costs, among others.
Transfer
Taxes
We will pay all transfer taxes, if any, applicable to the
exchange of the Old Notes pursuant to the exchange offers. If,
however, a transfer tax is imposed for any reason other than the
exchange of the Old Notes pursuant to the exchange offers, then
the amount of any such transfer taxes (whether imposed on the
registered holder or any other persons) will be payable by the
tendering holder. If satisfactory evidence of payment of such
taxes or exemption therefrom is not submitted with the letter of
transmittal, the amount of these transfer taxes will be billed
directly to the tendering holder.
24
USE OF
PROCEEDS
The exchange offer is intended to satisfy our obligations under
the Registration Rights Agreement relating to the Old Notes. We
will not receive any proceeds from the issuance of the Exchange
Notes in the exchange offers. In consideration for issuing the
Exchange Notes as contemplated in this prospectus, we will
receive, in exchange, outstanding Old Notes in like principal
amount. We will cancel all Old Notes tendered in exchange for
Exchange Notes in the exchange offers. As a result, the issuance
of the Exchange Notes will not result in any increase or
decrease in our indebtedness or in the early payment of interest.
25
CAPITALIZATION
The following table sets forth our consolidated cash and cash
equivalents and capitalization, as of December 31, 2009.
You should read the information set forth in the table in
conjunction with our historical consolidated financial
statements and notes thereto incorporated by reference in this
prospectus from our current report on
Form 8-K
dated March 8, 2010.
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As of
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December 31,
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2009
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(In thousands)
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Cash and cash equivalents
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$
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2,504,064
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Total debt:
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10.0% senior notes due 2016, net(1)
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$
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781,261
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8.875% senior notes due 2019, net(1)
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495,946
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3.125% convertible notes due 2012(2)
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1,097,628
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2.75% convertible notes due 2025(2)(3)
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342,412
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Brazil syndicated loan facility
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259,481
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Mexico syndicated loan facility
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156,600
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Tower financing obligations
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174,497
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Capital lease obligations
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110,063
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Other Brazil financings
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151,053
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Other
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11,847
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Total debt
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3,580,788
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Stockholders equity:
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Common stock, 166,730 shares issued and outstanding(4)
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$
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166
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Paid-in capital
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1,239,541
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Retained earnings
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1,674,898
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Accumulated other comprehensive loss
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(167,768
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Total stockholders equity
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2,746,837
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Total capitalization
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$
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6,327,625
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(1) |
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Amounts shown are net of original issue discounts and deferred
financing costs. As of December 31, 2009, the outstanding
aggregate principal amount of the 10% Senior Notes was
$800.0 million, and the outstanding aggregate principal
amount of the 8.875% Senior Notes was $500.0 million. |
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(2) |
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Amounts reflected in the table above for our convertible debt
instruments reflect the adjustments to the outstanding balance
resulting from our adoption of ASC 830. As of December 31,
2009, the principal amounts of the 3.125% convertible notes and
the 2.75% convertible notes were $1,200.0 million and
$350.0 million, respectively. |
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The noteholders have the right to require NII Holdings to
repurchase the 2.75% notes at par on August 15 of 2010,
2012, 2015 and 2020. |
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Excludes the shares of common stock issuable upon conversion of
our outstanding convertible notes and shares of our common stock
reserved for issuance under our stock option plan. |
26
DESCRIPTION
OF OTHER INDEBTEDNESS
The following is a summary of certain of our indebtedness that
will be outstanding following the consummation of this exchange
offers in addition to the Exchange Notes issued pursuant to this
offering and any Old Notes that remain outstanding following the
consummation of the exchange offers. This summary is qualified
in its entirety by the documents incorporated by reference in
this prospectus, including the indentures and loan documentation
incorporated by reference into our annual report on
Form 10-K
for the year ended December 31, 2009 and the description of
our indebtedness in Note 5 to our consolidated financial
statements in our current report on
Form 8-K
dated March 8, 2010.
3.125% Convertible
Notes
In May 2007, NII Holdings privately placed $1.0 billion
aggregate principal amount of 3.125% convertible notes due 2012,
which we refer to as the 3.125% notes. In addition, NII
Holdings granted the initial purchaser an option to purchase up
to an additional $200.0 million principal amount of
3.125% notes, which the initial purchaser exercised in
full. As a result, NII Holdings issued a total of
$1.2 billion principal amount of the 3.125% notes for
which it received total gross proceeds of $1.2 billion. NII
Holdings also incurred direct issuance costs of
$22.8 million, which it recorded as a deferred financing
cost that it will amortize into interest expense over the term
of the 3.125% notes. Our 3.125% notes are senior
unsecured obligations and rank equal in right of payment with
all of NII Holdings other existing and future senior
unsecured debt.
The 3.125% notes bear interest at a rate of 3.125% per
annum on the principal amount of the notes, payable
semi-annually in arrears in cash on June 15 and December 15 of
each year, beginning December 15, 2007, and will mature on
June 15, 2012, when the entire principal balance of
$1,200.0 million will be due. In addition, and subject to
specified exceptions, the noteholders have the right to require
us to repurchase the notes at a repurchase price equal to 100%
of their principal amount, plus any accrued and unpaid interest
(including additional amounts, if any) up to, but excluding, the
repurchase date upon the occurrence of a fundamental change.
The 3.125% notes are convertible into shares of NII
Holdings common stock at a conversion rate of
8.4517 shares per $1,000 principal amount of notes, or
10,142,040 aggregate common shares, representing a conversion
price of $118.32 per share. The right to convert the
3.125% notes is subject to customary terms and adjustments.
Neither NII Holdings, nor any of its subsidiaries, are subject
to any financial covenants under NII Holdings
3.125% notes. In addition, the indenture governing the
3.125% notes does not restrict NII Holdings or any of its
subsidiaries from paying dividends, incurring debt, or issuing
or repurchasing NII Holdings securities.
2.75% Convertible
Notes.
In the third quarter of 2005, NII Holdings privately placed
$350.0 million aggregate principal amount of 2.75%
convertible notes due 2025, which we refer to as our
2.75% notes. NII Holdings also incurred direct issuance
costs of $9.0 million, which it recorded as deferred
financing costs on its consolidated balance sheet and is
amortizing over five years. NII Holdings 2.75% notes
are senior unsecured obligations and rank equal in right of
payment with all of NII Holdings other existing and future
senior unsecured debt.
The 2.75% notes bear interest at a rate of 2.75% per year
on the principal amount of the notes, payable semi-annually in
arrears in cash on February 15 and August 15 of each year, and
will mature on August 15, 2025, when the entire principal
balance of $350.0 million will be due. The 2.75% notes
were publicly registered, effective February 10, 2006.
The noteholders have the right to require NII Holdings to
repurchase the 2.75% notes on August 15 of 2010, 2012, 2015
and 2020 at a repurchase price equal to 100% of their principal
amount, plus any accrued and unpaid interest up to, but
excluding, the repurchase date. In addition, if a fundamental
change or termination of trading, as defined, occurs prior to
maturity, the noteholders have a right to require NII Holdings
to repurchase all or part of the notes at a repurchase price
equal to 100% of the principal amount, plus accrued and unpaid
interest.
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The 2.75% notes are convertible, at the option of the
holder, into shares of NII Holdings common stock at an
adjusted conversion rate of 19.967 shares per $1,000
principal amount of notes, or 6,988,370 aggregate common shares,
representing a conversion price of about $50.08 per share. The
right to convert the 2.75% notes is subject to customary
terms and adjustments.
Prior to August 20, 2010, the notes will not be redeemable.
On or after August 20, 2010, NII Holdings may redeem for
cash some or all of the notes, at any time and from time to
time, upon at least 30 days notice for a price equal
to 100% of the principal amount of the notes to be redeemed,
plus any accrued and unpaid interest up to but excluding the
redemption date.
Neither NII Holdings, nor any of its subsidiaries, are subject
to any financial covenants under our 2.75% notes. In
addition, the indenture governing the 2.75% notes does not
restrict NII Holdings or any of its subsidiaries from paying
dividends, incurring debt, or issuing or repurchasing our
securities.
Brazil
Syndicated Loan Facility
In September 2007, Nextel Brazil entered into a
$300.0 million syndicated loan facility. Of the total
amount of the facility, $45.0 million is denominated in
U.S. dollars with a floating interest rate based on LIBOR
plus a specified margin ranging from 2.00% to 2.50%
(Tranche A 2.25% and 3.43% as of
December 31, 2009 and 2008, respectively). The remaining
$255.0 million is denominated in U.S. dollars with a
floating interest rate based on LIBOR plus a specified margin
ranging from 1.75% to 2.25% (Tranche B 2.00%
and 3.18% as of December 31, 2009 and 2008, respectively).
Tranche A matures on September 14, 2014, and
Tranche B matures on September 14, 2012. Nextel
Brazils obligations under the syndicated loan facility
agreement are guaranteed by all of its material operating
subsidiaries and are secured by a pledge of the outstanding
equity interests in Nextel Brazil and those subsidiaries. In
addition, Nextel Brazil is subject to various legal and
financial covenants under the syndicated loan facility that,
among other things, require Nextel Brazil to maintain certain
financial ratios and may limit the amount of funds that could be
repatriated in certain periods. Nextel Brazil has utilized
borrowings under this syndicated loan facility for capital
expenditures, general corporate purposes and the repayment of
specified short-term intercompany debt. In connection with this
agreement, Nextel Brazil deferred $5.0 million of financing
costs, which Nextel Brazil is amortizing as additional interest
expense over the term of the syndicated loan.
During the fourth quarter of 2007, Nextel Brazil borrowed
$26.2 million in term loans under Tranche A and
$148.8 million in term loans under Tranche B of this
syndicated loan facility. During the first quarter of 2008,
Nextel Brazil borrowed the remaining $18.8 million in term
loans under Tranche A and $106.2 million in term loans
under Tranche B of this syndicated loan facility.
DESCRIPTION
OF NOTES
The Issuer will issue the 10% Exchange Notes offered hereby
pursuant to an indenture dated as of August 18, 2009, by
and among the Issuer, the Initial Guarantors and Wilmington
Trust Company, as trustee (the 10% Indenture)
and will issue the 8.875% Exchange Notes offered hereby pursuant
to an indenture dated as of December 15, 2009, by and among
the Issuer, the Initial Guarantors and Wilmington
Trust Company, as trustee (the 8.875% Indenture
and, together with the 10% Indenture, the
Indentures). The terms of the Exchange Notes include
those stated in the Indentures and those made part of the
Indentures by reference to the Trust Indenture Act of 1939,
as amended (the Trust Indenture Act). The Notes
are subject to all such terms, and you should refer to the
Indentures and the Trust Indenture Act for a statement
thereof.
The following description is a summary of the material
provisions of the Indentures relating to the Exchange Notes
offered hereby. It does not restate the Indentures in their
entirety. We urge you to read the Indentures because the
applicable Indenture, and not this description, defines your
rights as Holders of the Exchange Notes. Anyone who receives
this prospectus may obtain copies of the Indentures, without
charge, by writing to NII Holdings, Inc., 1875 Explorer Street,
Suite 1000, Reston, Virginia 20190, Attention: Secretary.
The 10% Indenture and 8.875% Indenture are also on file with the
SEC as exhibits to our current reports on
Form 8-K,
dated August 18, 2009 and December 15, 2009,
respectively.
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You can find the definitions of certain terms used in this
description below under the caption
Certain Definitions. Certain
capitalized terms used in this description but not defined below
under the caption Certain Definitions
have the meanings assigned to them in the Indentures. In this
description, the word Issuer refers only to NII
Capital Corp. and not to any of its subsidiaries, the word
Parent refers only to NII Holdings, Inc. and not to
any of its subsidiaries and the word Notes refers to
the Exchange Notes, the Old Notes and any Additional Notes
issued pursuant to the Indentures.
The registered Holder of a Note will be treated as its owner for
all purposes. Only registered Holders of Notes will have rights
under the Indentures.
The terms of the Exchange Notes are substantially identical to
those terms of the Old Notes, except that the Exchange Notes are
registered under the Securities Act and are not subject to the
transfer restrictions and registration rights relating to the
Old Notes.
Brief
Description of the Exchange Notes
The Exchange Notes:
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are general unsecured obligations of the Issuer;
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are equal in right of payment with any future unsecured,
unsubordinated Indebtedness of the Issuer,
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are senior in right of payment to any future subordinated
Indebtedness of the Issuer; and
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are effectively subordinated to all existing and any future
Secured Indebtedness of the Issuer, to the extent of the assets
securing such Indebtedness, and to all existing and any future
Indebtedness and other liabilities (including trade payables) of
the Parents Subsidiaries that are not Guarantors (or the
Issuer), to the extent of the assets of such Subsidiaries.
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As of December 31, 2009, (i) the Parent had
$1,550.0 million principal amount of indebtedness
outstanding on an unconsolidated basis (excluding its
obligations pursuant to the guarantee of the Old Notes), none of
which was secured, (ii) the Issuer had $1.3 billion
aggregate principal amount of unsecured indebtedness
outstanding, representing the Old Notes, and (iii) other
than NII Aviation, which had $42.7 million principal amount
of secured indebtedness outstanding, none of the Subsidiary
Guarantors has any indebtedness outstanding other than the
guarantee of the Old Notes pursuant to the Note Guarantees. In
addition, as of December 31, 2009, the Parents
Subsidiaries that are not Subsidiary Guarantors or the Issuer
had $3,348.6 million in liabilities outstanding, including
$820.8 million aggregate principal amount of indebtedness.
The Parent, the Issuer and the Subsidiary Guarantors are holding
companies substantially all of the assets of which consist of
the capital stock of, and loans to, the Parents
Subsidiaries and cash and Cash Equivalents.
Although the Indentures will limit the Incurrence of
Indebtedness by the Parent and its Restricted Subsidiaries, such
limitations are subject to a number of significant exceptions.
The Parent and its Restricted Subsidiaries may be able to incur
substantial amounts of Indebtedness, including secured
Indebtedness, in the future.
As of the date of the exchange offers, all of the Parents
Subsidiaries, including the Issuer, will be Restricted
Subsidiaries. However, under the circumstances described
below under the caption Certain
Covenants Designation of Restricted and Unrestricted
Subsidiaries, the Parent will be permitted to designate
certain of its Subsidiaries as Unrestricted
Subsidiaries. Any Unrestricted Subsidiaries will not be
subject to any of the restrictive covenants in the Indentures
and will not Guarantee the Exchange Notes. As of the Issue Date,
the Parent and all of the Parents Domestic Restricted
Subsidiaries, other than the Issuer, will Guarantee the Exchange
Notes.
Principal,
Maturity and Interest
The Indentures provide for the issuance by the Issuer of Notes
with an unlimited principal amount, of which $1.3 billion
principal amount are outstanding as Old Notes and up to
$1.3 billion principal amount will be issued in connection
with this exchange offer. The Issuer may issue additional notes
(the Additional Notes) from time to time. Any
offering of Additional Notes is subject to the covenant
described below under the caption Certain
Covenants Incurrence of Indebtedness. The
Exchange Notes offered hereby, the Old Notes, and any Additional
29
Notes subsequently issued under either the 10% Indenture or the
8.875% Indenture will be treated as a single class for all
purposes under that Indenture, including, without limitation,
waivers, amendments, redemptions and offers to purchase. The
Issuer will issue Exchange Notes in denominations of $2,000 and
integral multiples of $1,000 in excess thereof. The 10% Exchange
Notes will mature on August 15, 2016 and the 8.875%
Exchange Notes will mature on December 15, 2019.
Cash interest on the 10% Exchange Notes will accrue at the rate
of 10% per annum and will be payable semi-annually in arrears on
February 15 and August 15, beginning on February 15,
2010. The Issuer will make each interest payment to the Holders
of record of the 10% Exchange Notes on the immediately preceding
February 1 and August 1.
Cash interest on the 8.875% Exchange Notes will accrue at the
rate of 8.875% per annum and will be payable semi-annually in
arrears on June 15 and December 15, beginning on
June 15, 2010. The Issuer will make each interest payment
to the Holders of record of the 8.875% Exchange Notes on the
immediately preceding June 1 and December 1.
Interest on the Notes will accrue from the most recent date on
which interest on the Notes has been paid, or if no interest has
been paid, from the Issue Date. Interest will be computed on the
basis of a
360-day year
comprised of twelve
30-day
months.
Methods
of Receiving Payments on the Notes
If a Holder has given wire transfer instructions to the Issuer,
the Issuer will pay or cause the Paying Agent to pay all
principal, interest and premium on that Holders Notes in
accordance with those instructions. All other payments on Notes
will be made at the office or agency of the Paying Agent and
Registrar unless the Issuer elects to make interest payments by
check mailed to the Holders at their addresses set forth in the
register of Holders.
Paying
Agent and Registrar for the Notes
The Trustee will initially act as Paying Agent and Registrar.
The location of the corporate trust office of the Trustee is
1100 North Market Street, Rodney Square North, Wilmington,
Delaware
19890-1615.
The Issuer may change the Paying Agent or Registrar without
prior notice to the Holders, and the Parent or any of its
Subsidiaries may act as Paying Agent or Registrar.
Transfer
and Exchange
A Holder may transfer or exchange Notes in accordance with the
Indentures. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and
transfer documents and the Issuer may require a Holder to pay
any taxes and fees required by law or permitted by the
Indentures. The Issuer is not required to transfer or exchange
any Note selected for redemption. Also, the Issuer is not
required to transfer or exchange any Note for a period of
15 days before a selection of Notes to be redeemed.
Note
Guarantees
The Old Notes are, and any Exchange Notes or Additional Notes
will be, guaranteed, jointly and severally, by Parent and each
of its First Tier Restricted Subsidiaries and Domestic
Restricted Subsidiaries other than the Issuer.
Each Note Guarantee:
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will be a general unsecured obligation of the Guarantor;
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will be equal in right of payment with all existing and any
future unsecured, unsubordinated Indebtedness of such Guarantor,
including, in the case of the Parent, $1,200 million
aggregate principal amount of the Parents outstanding
3.125% convertible notes due 2012 and $350 million
aggregate principal amount of the Parents outstanding
2.75% convertible notes due 2025;
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will be senior in right of payment to any future subordinated
Indebtedness of the Guarantor; and
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30
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will be effectively subordinated to all existing and any future
secured Indebtedness of such Guarantor, to the extent of the
assets securing such Indebtedness, and the Note Guarantee of
each Guarantor will be effectively subordinated to all existing
and any future liabilities of such Guarantors Subsidiaries
other than the Issuer and any Subsidiary Guarantor to the extent
of the assets of such Subsidiaries.
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The obligations of each Guarantor under its Note Guarantee will
be limited as necessary to prevent that Note Guarantee from
constituting a fraudulent conveyance under applicable law. See
Risk Factors Federal and state statutes allow
courts, under specific circumstances, to void guarantees and
require noteholders to return payments received from the
guarantors. As of December 31, 2009, (i) the
Parent had $1,550.0 million principal amount of
indebtedness outstanding on an unconsolidated basis (excluding
its obligations as a guarantor of the Old Notes under the Note
Guarantee), none of which was secured, (ii) the Issuer had
$1.3 billion principal amount of indebtedness outstanding,
representing the Old Notes, and (iii) other than NII
Aviation, which had $42.7 million principal amount of
secured indebtedness outstanding, none of the other Subsidiary
Guarantors had any indebtedness outstanding other than their
respective obligations as guarantors of the Old Notes under the
Note Guarantee. In addition, as of December 31, 2009, the
Parents Subsidiaries that are not Subsidiary Guarantors or
the Issuer had $3,348.6 million in liabilities outstanding,
including $820.8 million aggregate principal amount of
indebtedness.
Note Guarantees of the Subsidiary Guarantors may be released in
certain circumstances. See Certain
Covenants Guarantees.
Optional
Redemption of 10% Exchange Notes
At any time prior to August 15, 2012, the Issuer may (on
any one or more occasions) redeem up to 35% of the aggregate
principal amount of Notes issued under the 10% Indenture
(including any Additional Notes) at a redemption price of 110%
of the principal amount thereof, plus accrued and unpaid
interest thereon to the redemption date, with the net cash
proceeds of one or more Equity Offerings; provided that:
(1) at least 65% of the aggregate principal amount of Notes
issued under the 10% Indenture (including any Additional Notes)
remains outstanding immediately after the occurrence of such
redemption (excluding Notes held by the Issuer and its
Affiliates); and
(2) the redemption must occur within 180 days of the
date of the closing of such Equity Offering.
At any time prior to August 15, 2013, the Issuer may redeem
all or part of the Notes issued under the 10% Indenture upon not
less than 30 nor more than 60 days prior notice at a
redemption price equal to the sum of (i) 100% of the
principal amount thereof, plus (ii) the Applicable Premium
as of the date of redemption, plus (iii) accrued and unpaid
interest to the date of redemption.
At any time on or after August 15, 2013, the Issuer may
redeem all or a part of the Notes issued under the 10% Indenture
upon not less than 30 nor more than 60 days prior
notice, at the redemption prices set forth below (expressed as
percentages of principal amount), plus accrued and unpaid
interest on the Notes to be redeemed to the date of redemption,
if redeemed during the twelve-month period beginning on August
15 of the years indicated below:
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Year
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Percentage
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2013
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105.00%
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2014
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102.50%
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2015 and thereafter
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100.00%
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If less than all of the Notes issued under the 10% Indenture are
to be redeemed at any time, the Trustee will select Notes for
redemption as follows:
(1) if the Notes are listed on any national securities
exchange, in compliance with the requirements of such principal
national securities exchange; or
(2) if the Notes are not so listed, on a pro rata basis.
31
No Notes of $2,000 or less will be redeemed in part. Notices of
redemption will be mailed by first class mail at least 30 but
not more than 60 days before the redemption date to each
Holder of Notes to be redeemed at its registered address.
Notices of redemption may not be conditional.
If any Note is to be redeemed in part only, the notice of
redemption that relates to that Note will state the portion of
the principal amount thereof to be redeemed. A Note in principal
amount equal to the unredeemed portion of the original Note will
be issued in the name of the Holder thereof upon cancellation of
the original Note. Notes called for redemption become due on the
date fixed for redemption. On and after the redemption date,
interest ceases to accrue on Notes or portions of them called
for redemption.
Optional
Redemption of 8.875% Exchange Notes
At any time prior to December 15, 2012, the Issuer may (on
any one or more occasions) redeem up to 35% of the aggregate
principal amount of Notes issued under the 8.875% Indenture
(including any Additional Notes) at a redemption price of
108.875% of the principal amount thereof, plus accrued and
unpaid interest thereon to the redemption date, with the net
cash proceeds of one or more Equity Offerings; provided
that:
(1) at least 65% of the aggregate principal amount of Notes
issued under the 8.875% Indenture (including any Additional
Notes) remains outstanding immediately after the occurrence of
such redemption (excluding Notes held by the Issuer and its
Affiliates); and
(2) the redemption must occur within 180 days of the
date of the closing of such Equity Offering.
At any time prior to December 15, 2014, the Issuer may
redeem all or part of the Notes issued under the 8.875%
Indenture upon not less than 30 nor more than 60 days
prior notice at a redemption price equal to the sum of
(i) 100% of the principal amount thereof, plus
(ii) the Applicable Premium as of the date of redemption,
plus (iii) accrued and unpaid interest to the date of
redemption.
At any time on or after December 15, 2014, the Issuer may
redeem all or a part of the Notes issued under the 8.875%
Indenture upon not less than 30 nor more than 60 days
prior notice, at the redemption prices set forth below
(expressed as percentages of principal amount), plus accrued and
unpaid interest on the Notes to be redeemed to the date of
redemption, if redeemed during the twelve-month period beginning
on December 15 of the years indicated below:
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Year
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Percentage
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2014
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104.438%
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2015
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102.958%
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2016
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101.479%
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2017 and thereafter
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100.000%
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If less than all of the Notes issued under the 8.875% Indenture
are to be redeemed at any time, the Trustee will select Notes
for redemption as follows:
(1) if the Notes are listed on any national securities
exchange, in compliance with the requirements of such principal
national securities exchange; or
(2) if the Notes are not so listed, on a pro rata basis.
No Notes of $2,000 or less will be redeemed in part. Notices of
redemption will be mailed by first class mail at least 30 but
not more than 60 days before the redemption date to each
Holder of Notes to be redeemed at its registered address.
Notices of redemption may not be conditional.
If any Note is to be redeemed in part only, the notice of
redemption that relates to that Note will state the portion of
the principal amount thereof to be redeemed. A Note in principal
amount equal to the unredeemed portion of the original Note will
be issued in the name of the Holder thereof upon cancellation of
the original Note. Notes called for redemption become due on the
date fixed for redemption. On and after the redemption date,
interest ceases to accrue on Notes or portions of them called
for redemption.
32
Mandatory
Redemption
The Issuer is not required to make mandatory redemption or
sinking fund payments with respect to the Notes.
Repurchase
at the Option of Holders
Change
of Control
If a Change of Control occurs, each Holder of Notes will have
the right to require the Issuer to repurchase all or any part
(equal to $2,000 or an integral multiple of $1,000 in excess
thereof) of that Holders Notes pursuant to an offer (a
Change of Control Offer) on the terms set forth in
the applicable Indenture. In the Change of Control Offer, the
Issuer will offer payment (a Change of Control
Payment) in cash equal to not less than 101% of the
aggregate principal amount of Notes repurchased plus accrued and
unpaid interest thereon, to the date of repurchase (the
Change of Control Payment Date, which date will be
no earlier than the date of such Change of Control);
provided, however, that notwithstanding the occurrence of
a Change of Control, the Issuer shall not be obligated to
purchase the Notes pursuant to this section in the event that
the Issuer has exercised its right to redeem all the Notes under
the terms of the caption Optional Redemption. No
later than 30 days following any Change of Control, the
Issuer will mail a notice to each Holder describing the
transaction or transactions that constitute the Change of
Control and offering to repurchase Notes on the Change of
Control Payment Date specified in such notice, which date will
be no earlier than 30 days and no later than 60 days
from the date such notice is mailed, pursuant to the procedures
required by the applicable Indenture and described in such
notice. The Issuer will comply with the requirements of
Rule 14e-1
under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and regulations
are applicable in connection with the repurchase of the Notes as
a result of a Change of Control. To the extent that the
provisions of any securities laws or regulations conflict with
the Change of Control provisions of the Indentures, the Issuer
will comply with the applicable securities laws and regulations
and will not be deemed to have breached its obligations under
the Change of Control provisions of the Indentures by virtue of
such compliance.
On the Change of Control Payment Date, the Issuer will, to the
extent lawful:
(1) accept for payment all Notes or portions thereof
properly tendered pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent, prior to 11:00 am, New
York City time, an amount equal to the Change of Control Payment
in respect of all Notes or portions thereof properly
tendered; and
(3) deliver or cause to be delivered to the Trustee the
Notes so accepted together with an Officers Certificate
stating the aggregate principal amount of Notes or portions
thereof being purchased by the Issuer.
The Paying Agent will promptly mail or wire transfer to each
Holder of Notes so tendered the Change of Control Payment for
such Notes, and the Trustee will promptly authenticate and mail
(or cause to be transferred by book entry) to each Holder a new
Note equal in principal amount to any unpurchased portion of the
Notes surrendered, if any; provided that each such new
Note will be in a principal amount of $2,000 or an integral
multiple of $1,000 in excess thereof. The Issuer will publicly
announce the results of the Change of Control Offer on or as
soon as practicable after the Change of Control Payment Date.
Future credit agreements or other similar agreements to which
the Parent or any of its subsidiaries becomes a party may
contain restrictions on the Issuers ability to purchase
the Notes. In the event a Change of Control occurs at a time
when the Issuer is prohibited from purchasing Notes, the Parent
or applicable subsidiary could seek the consent of its lenders
to the purchase of Notes or could attempt to refinance the
borrowings that contain such prohibition. If the Parent or such
subsidiary does not obtain such consent or repay such
borrowings, the Issuer will remain prohibited from purchasing
Notes. In such case, the Issuers failure to purchase
properly tendered Notes would constitute an Event of Default
under the applicable Indenture which could, in turn, constitute
a default under such other agreements.
The provisions described above that require the Issuer to make a
Change of Control Offer following a Change of Control will be
applicable regardless of whether any other provisions of the
Indentures are applicable. Except as described above with
respect to a Change of Control, the Indentures do not contain
provisions that permit the
33
Holders of the Notes to require that the Issuer repurchase or
redeem the Notes in the event of a takeover, recapitalization or
similar transaction.
The Issuer will not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change
of Control Offer in the manner, at the times and otherwise in
compliance with the requirements set forth in the Indentures
applicable to a Change of Control Offer made by the Issuer and
purchases all Notes properly tendered and not withdrawn under
such Change of Control Offer.
A Change of Control Offer may be made in advance of a Change of
Control, and conditioned upon such Change of Control, if a
definitive agreement is in place for the Change of Control at
the time of making of the Change of Control Offer.
The definition of Change of Control includes a phrase relating
to the direct or indirect sale, transfer, conveyance or other
disposition of all or substantially all of the
properties or assets of the Parent and its Restricted
Subsidiaries taken as a whole. Although there is a limited body
of case law interpreting the phrase substantially
all, there is no precise established definition of the
phrase under applicable law. Accordingly, the ability of a
Holder of Notes to require the Issuer to repurchase Notes as a
result of a sale, transfer, conveyance or other disposition of
less than all of the assets of the Parent and its Restricted
Subsidiaries taken as a whole to another person or group may be
uncertain.
Holders may not be able to require the Issuer to purchase their
Notes in certain circumstances involving a significant change in
the composition of the Parents board of directors,
including a proxy contest where the Parents board of
directors does not endorse the dissident slate of directors but
approves them as Continuing Directors. In this
regard, a recent decision of the Delaware Chancery Court (not
involving the Parent or its securities) considered a change of
control redemption provision of an indenture governing publicly
traded debt securities substantially similar to the change of
control event described in clause (4) of the definition of
Change of Control. In its decision, the court noted
that a board of directors may approve a dissident
shareholders nominees solely for purposes of such an
indenture, provided the board of directors determines in good
faith that the election of the dissident nominees would not be
materially adverse to the interests of the corporation or its
stockholders (without taking into consideration the interests of
the holders of debt securities in making this determination).
Asset
Sales
The Parent will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:
(1) the Parent or such Restricted Subsidiary receives
consideration at the time of such Asset Sale at least equal to
the Fair Market Value of the assets or Equity Interests issued
or sold or otherwise disposed of; and
(2) at least 75% of the consideration therefor received by
the Parent or such Restricted Subsidiary is in the form of cash,
Cash Equivalents or Replacement Assets or a combination thereof.
For purposes of this provision, each of the following will be
deemed to be cash:
(a) any liabilities, as shown on the Parents or such
Restricted Subsidiarys most recent balance sheet, of the
Parent or any Restricted Subsidiary (other than contingent
liabilities, Indebtedness that is by its terms subordinated to
the Notes or any Note Guarantee and liabilities to the extent
owed to the Parent or any Affiliate of the Parent) that are
assumed by the transferee of any such assets or Equity Interests
pursuant to a written novation agreement that releases the
Parent or such Restricted Subsidiary from further liability
therefor; and
(b) any securities, notes or other obligations received by
the Parent or any such Restricted Subsidiary from such
transferee that are (within 60 days of receipt and subject
to ordinary settlement periods) converted by the Parent or such
Restricted Subsidiary into cash (to the extent of the cash
received in that conversion).
34
Within 365 days after the receipt of any Net Proceeds from
an Asset Sale, the Parent or its Restricted Subsidiaries may
apply such Net Proceeds at its option:
(1) to repay, prepay, defease, redeem, purchase or
otherwise retire, in whole or in part, (i) Indebtedness
secured by such assets, (ii) unsubordinated Indebtedness of
the Issuer or any Subsidiary Guarantor or (iii) any
Indebtedness of any Restricted Subsidiary of the Parent that is
not a Subsidiary Guarantor or the Issuer, other than
Indebtedness owed to the Parent or another Restricted Subsidiary
and, in each case, if the Indebtedness repaid is revolving
credit Indebtedness to correspondingly reduce commitments with
respect thereto; or
(2) to purchase Replacement Assets (or enter into a binding
agreement to purchase such Replacement Assets; provided
that (i) such purchase is consummated within the later
of (x) 180 days after the date such binding agreement
is entered into and (y) 365 days after the receipt of
Net Proceeds from such Asset Sale and (ii) if such purchase
is not consummated within the period set forth in subclause (i),
the Net Proceeds not so applied will be deemed to be Excess
Proceeds (as defined below)).
Pending the final application of any such Net Proceeds, the
Parent or any of its Restricted Subsidiaries may temporarily
reduce revolving credit borrowings or otherwise invest such Net
Proceeds in any manner that is not prohibited by the applicable
Indenture.
On the
365th day
after an Asset Sale (or, in the event that a binding agreement
has been entered into as set forth in clause (2) of the
preceding paragraph, the later date set forth in such clause
(2)) or such earlier date, if any, as the Parent determines not
to apply the Net Proceeds relating to such Asset Sale as set
forth in the preceding paragraph (each such date being referred
as an Excess Proceeds Trigger Date), such aggregate
amount of Net Proceeds that has not been applied on or before
the Excess Proceeds Trigger Date as permitted in the preceding
paragraph (Excess Proceeds) will be applied by the
Issuer to make an offer (an Asset Sale Offer) to all
Holders of Notes and all holders of other Indebtedness that is
pari passu with the Notes or any Note Guarantee
containing provisions similar to those set forth in the
Indentures with respect to offers to purchase with the proceeds
of sales of assets, to purchase the maximum principal amount of
Notes and such other pari passu Indebtedness that may be
purchased out of the Excess Proceeds. The offer price in any
Asset Sale Offer will be equal to 100% of the principal amount
of the Notes and such other pari passu Indebtedness plus
accrued and unpaid interest to the date of purchase, and will be
payable in cash.
The Issuer may defer the Asset Sale Offer until the aggregate
unutilized Excess Proceeds accrued equals or exceeds
$100 million, at which time the entire unutilized amount of
Excess Proceeds (not only the amount in excess of
$100 million) will be applied as provided in the preceding
paragraph. If any Excess Proceeds remain after consummation of
an Asset Sale Offer, the Parent and its Restricted Subsidiaries
may use such Excess Proceeds for any purpose not otherwise
prohibited by the Indentures. If the aggregate principal amount
of Notes and such other pari passu Indebtedness tendered
into such Asset Sale Offer exceeds the amount of Excess
Proceeds, the Notes and such other pari passu
Indebtedness will be purchased on a pro rata basis based on
the principal amount of Notes and such other pari passu
Indebtedness tendered. Upon completion of each Asset Sale
Offer, the Excess Proceeds subject to such Asset Sale will no
longer be deemed to be Excess Proceeds.
The Issuer will comply with the requirements of
Rule 14e-1
under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and regulations
are applicable in connection with each repurchase of Notes
pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with
the Asset Sale provisions of the Indentures, the Issuer will
comply with the applicable securities laws and regulations and
will not be deemed to have breached its obligations under the
Asset Sale provisions of the Indentures by virtue of such
compliance.
The Issuer will not be required to make an Asset Sale Offer as
described above if the Parent or any of its Restricted
Subsidiaries makes the Asset Sale Offer in the manner, at the
times and otherwise in compliance with the requirements set
forth in the Indentures applicable to an Asset Sale Offer made
by the Issuer and purchases all Notes properly tendered and not
withdrawn under such Asset Sale Offer.
Future credit agreements or other similar agreements to which
the Parent or its subsidiaries becomes a party may contain
restrictions on the Issuers ability to purchase Notes. In
the event an Asset Sale occurs at a time when the Issuer is
prohibited from purchasing Notes, the Parent or applicable
subsidiary could seek the consent of its
35
lenders to the purchase of Notes or could attempt to refinance
the borrowings that contain such prohibition. If the Parent or
such subsidiary does not obtain such consent or repay such
borrowings, the Issuer will remain prohibited from purchasing
Notes. In such case, the Issuers failure to purchase
tendered Notes would constitute an Event of Default under an
Indenture which could, in turn, constitute a default under such
other agreements.
Certain
Covenants
Changes
in Covenants When Notes Rated Investment Grade
If on any date following the Issue Date:
(1) the Notes are rated Baa3 or better by Moodys and
BBB- or better by Standard & Poors (or, if
either such entity ceases to rate the Notes for reasons outside
of the control of the Parent or the Issuer, the equivalent
investment grade credit rating from any other nationally
recognized statistical rating organization within the
meaning of Section 3(a)(62) under the Exchange Act,
selected by the Issuer as a replacement agency); and
(2) no Default or Event of Default shall have occurred and
be continuing,
then, beginning on that day and subject to the provisions of the
following paragraph, the covenants specifically listed under the
following captions in this prospectus will be suspended:
(1) Repurchase at the Option of Holders
Asset Sales;
(2) Restricted Payments;
(3) Incurrence of Indebtedness;
(4) Dividend and Other Payment
Restrictions Affecting Restricted Subsidiaries;
(5) Transactions with Affiliates;
(6) clause (3) of the covenant
described below under the caption Merger,
Consolidation or Sale of Assets;
(7) Designation of Restricted and
Unrestricted Subsidiaries;
(8) Note Guarantees; and
(9) Business Activities.
During any period that the foregoing covenants have been
suspended, the Parents board of directors may not
designate any of its Subsidiaries as Unrestricted Subsidiaries
pursuant to the covenant under the caption
Designation of Restricted and Unrestricted
Subsidiaries unless such designation would have been
permitted if a Suspension Period had not been in effect at such
time.
Notwithstanding the foregoing, if the rating assigned by either
such rating agency should subsequently decline to below Baa3 or
BBB-, respectively (or if either such agency ceases to rate the
Exchange Notes, the equivalent investment grade credit rating
from another nationally recognized statistical rating
organization), the foregoing covenants will be reinstated as of
and from the date of such rating decline. Calculations under the
reinstated Restricted Payments covenant will be made
as if the Restricted Payments covenant had been in
effect since the date of the indenture except that no default
will be deemed to have occurred solely by reason of a Restricted
Payment made while that covenant was suspended. Notwithstanding
that the suspended covenants may be reinstated, no default will
be deemed to have occurred as a result of a failure to comply
with such suspended covenants during any period such covenants
have been suspended. There can be no assurance that the Exchange
Notes will ever achieve an investment grade rating or that any
such rating will be maintained.
Restricted
Payments
(A) The Parent will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay (without duplication) any dividend or
make any other payment or distribution on account of the
Parents or any of its Restricted Subsidiaries Equity
Interests (including, without limitation, any
36
payment in connection with any merger or consolidation involving
the Parent or any of its Restricted Subsidiaries) or to the
direct or indirect holders of the Parents or any of its
Restricted Subsidiaries Equity Interests in their capacity
as such (other than dividends, payments or distributions
(x) payable in Equity Interests (other than Disqualified
Stock) of the Parent or (y) to the Parent or a Restricted
Subsidiary of the Parent);
(2) purchase, redeem or otherwise acquire or retire for
value (including, without limitation, in connection with any
merger or consolidation involving the Parent or any of its
Restricted Subsidiaries) any Equity Interests of the Parent or
any Restricted Subsidiary thereof held by persons other than the
Parent or any of its Restricted Subsidiaries;
(3) make any payment on or with respect to, or purchase,
redeem, defease or otherwise acquire or retire for value any
Indebtedness that is subordinated to the Notes or any Note
Guarantee, except (x) a payment of interest or principal at
the Stated Maturity thereof or (y) the purchase, repurchase
or other acquisition of any such Indebtedness in anticipation of
satisfying a sinking fund obligation, principal installment or
final maturity, in each case due within one year of the date of
such purchase, repurchase or other acquisition; or
(4) make any Restricted Investment (all such payments and
other actions set forth in clauses (1) through
(4) above being collectively referred to as
Restricted Payments),
unless, at the time of and after giving effect to such
Restricted Payment:
(1) no Default or Event of Default will have occurred and
be continuing or would occur as a consequence thereof;
(2) the Parent would, at the time of such Restricted
Payment and after giving pro forma effect thereto as if such
Restricted Payment had been made at the beginning of the
applicable Four Quarter Period, have been permitted to Incur at
least $1.00 of additional Indebtedness pursuant to the first
paragraph of the covenant described below under the caption
Incurrence of Indebtedness; and
(3) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Parent and
its Restricted Subsidiaries after the August 18, 2009
(excluding Restricted Payments permitted by clauses (2), (3),
(4), (5), (6), (8) and (9) of the next succeeding
paragraph (B)), is less than the sum, without duplication, of:
(i) 100% of the Consolidated Cash Flow of the Parent for
the period (taken as one accounting period) from July 1,
2009 to the end of the Parents most recently ended fiscal
quarter for which internal financial statements are available at
the time of such Restricted Payment, minus 1.4 times the Fixed
Charges of the Parent for the same period, plus
(ii) 100% of the aggregate net proceeds (including
(x) cash and Cash Equivalents and (y) the Fair Market
Value of property other than cash and Cash Equivalents, provided
that if the Fair Market Value of such property exceeds
$50 million such Fair Market Value shall be determined in
good faith by the board of directors of the Parent, whose good
faith determination shall be conclusive and evidenced by a board
resolution) received by the Parent since August 18, 2009 as
a contribution to its common equity capital or from the issue or
sale of Equity Interests (other than Disqualified Stock) of the
Parent or from the Incurrence of Indebtedness of the Parent or
the Issuer that has been converted into or exchanged for such
Equity Interests (other than Equity Interests sold to, or
Indebtedness held by, a Subsidiary of the Parent), plus
(iii) with respect to Restricted Investments made by the
Parent and its Restricted Subsidiaries after August 18,
2009, an amount equal to the net reduction in such Restricted
Investments in any person resulting from repayments of loans or
advances, or other transfers of assets, in each case to the
Parent or any Restricted Subsidiary or from the net cash
proceeds from the sale of any such Restricted Investment
(except, in each case, to the extent any such payment or
proceeds are included in the calculation of Consolidated Cash
Flow), from the release of any Guarantee (except to the extent
any amounts are paid under such Guarantee) or from
redesignations of Unrestricted Subsidiaries as Restricted
Subsidiaries, not
37
to exceed, in each case, the amount of Restricted Investments
previously made by the Parent or any Restricted Subsidiary in
such person or Unrestricted Subsidiary after August 18,
2009.
(B) The preceding provisions will not prohibit, so long as,
in the case of clauses (5), (7) and (9) below, no
Default has occurred and is continuing or would be caused
thereby:
(1) the payment of any dividend within 60 days after
the date of declaration thereof, if at said date of declaration
such payment would have complied with the provisions of the
applicable Indenture;
(2) the payment of any dividend by a Restricted Subsidiary
of the Parent to the holders of its common stock on a pro rata
basis;
(3) the redemption, repurchase, retirement, defeasance or
other acquisition of any subordinated Indebtedness of the
Parent, the Issuer or any Subsidiary Guarantor or of any Equity
Interests of the Parent or any Restricted Subsidiary in exchange
for, or out of the net cash proceeds of a contribution to the
common equity of the Parent or a substantially concurrent sale
(other than to a Restricted Subsidiary of the Parent) of, Equity
Interests (other than Disqualified Stock) of the Parent;
provided that the amount of any such net cash proceeds that are
utilized for any such redemption, repurchase, retirement,
defeasance or other acquisition will be excluded from clause (3)
(ii) of the preceding paragraph (A);
(4) the defeasance, redemption, repurchase or other
acquisition of Indebtedness subordinated to the Notes or any
Note Guarantee with the net cash proceeds from an Incurrence of
Permitted Refinancing Indebtedness;
(5) the payment of any dividend or the making of any other
payment or distribution on account of the Parents Equity
Interests or the purchase, redemption or other acquisition or
retirement for value of any Equity Interests of the Parent or
any Restricted Subsidiary of the Parent in an aggregate amount
not to exceed $100 million;
(6) the repurchase of Equity Interests deemed to occur upon
the exercise of options or warrants to the extent that such
Equity Interests represents all or a portion of the exercise
price thereof;
(7) the repurchase, redemption or other acquisition or
retirement for value of any Equity Interests of the Parent held
by any current or former employee, consultant or director of the
Parent, or any Restricted Subsidiaries of the Parent pursuant to
the terms of any equity subscription agreement, stock option
agreement or similar agreement entered into in the ordinary
course of business; provided that the aggregate of all amounts
paid by the Parent in any calendar year will not exceed
$20 million (with unused amounts in any calendar year being
carried over to the next succeeding calendar year; provided,
further, that such amount in any calendar year may be increased
by an amount equal to (a) the net cash proceeds from the
sale of Equity Interests of the Parent to current or former
members of management, directors, consultants or employees that
occurs after August 18, 2009 (provided that the amount of
any such net cash proceeds will be excluded from clause (3)
(ii) of the preceding paragraph (A)) plus (b) the net
cash proceeds of key man life insurance policies received by the
Parent or its Restricted Subsidiaries after August 18, 2009;
(8) the purchase, redemption, acquisition, cancellation or
other retirement for value of shares of capital stock of the
Parent, to the extent necessary, in the good faith judgment of
the Parents board of directors, to prevent the loss or
secure the renewal or reinstatement of any license held by the
Parent or any of its Restricted Subsidiaries from any
governmental agency; and
(9) other Restricted Payments in an aggregate amount not to
exceed $250 million.
The amount of all Restricted Payments (other than cash) will be
the Fair Market Value on the date of the Restricted Payment of
the asset(s) or securities proposed to be transferred or issued
to or by the Parent or such Subsidiary, as the case may be,
pursuant to the Restricted Payment; provided that if the
Fair Market Value exceeds $50 million, such Fair Market
Value shall be determined in good faith by the board of
directors of the Parent evidenced by a board resolution. Not
later than the date of making any Restricted Payment under
paragraph (A) or clause B (9) above, the Parent
will deliver to the Trustee an Officers Certificate
stating that such Restricted
38
Payment is permitted and setting forth the basis upon which the
calculations required by this Restricted Payments
covenant were computed, together with a copy of any opinion or
appraisal required by the Indentures.
Incurrence
of Indebtedness
The Parent will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, Incur any Indebtedness;
provided, however, that the Parent, the Issuer, any
Subsidiary Guarantor or any Foreign Restricted Subsidiary that
is not a Subsidiary Guarantor may Incur Indebtedness if, after
giving effect to the Incurrence of such Indebtedness and the
receipt and application of the proceeds therefrom, the
Consolidated Leverage Ratio would be less than 5.25 to 1, and if
(A) such Indebtedness is to be Incurred by the Issuer or
any Subsidiary Guarantor, the Subsidiary Debt Leverage Ratio
would less than 3.5 to 1 or (B) such Indebtedness is to be
Incurred by a Foreign Restricted Subsidiary that is not a
Subsidiary Guarantor, the Priority Debt Leverage Ratio would be
less than 2.5 to 1.
The first paragraph of this covenant will not prohibit the
Incurrence of any of the following items of Indebtedness
(collectively, Permitted Debt):
(1) the Incurrence by the Parent, the Issuer, any
Subsidiary Guarantor or any Foreign Restricted Subsidiary of
Indebtedness under Credit Facilities in an aggregate amount at
any one time outstanding pursuant to this clause (1), including
all Permitted Refinancing Indebtedness Incurred to refund,
refinance or replace any Indebtedness Incurred pursuant to this
clause (1), not to exceed $500 million, less the aggregate
amount of all Net Proceeds of Asset Sales applied by the Parent,
the Issuer, any Subsidiary Guarantor or any Foreign Restricted
Subsidiary to permanently repay any such Indebtedness pursuant
to the covenant described above under the caption
Repurchase at the Option of
Holders Asset Sales;
(2) the Incurrence of Existing Indebtedness;
(3) the Incurrence by the Parent, the Issuer and the
Subsidiary Guarantors of Indebtedness represented by the Notes
and the related Note Guarantees;
(4) the Incurrence by the Parent or any Restricted
Subsidiary of Indebtedness represented by Capital Lease
Obligations, mortgage financings, Attributable Debt, purchase
money obligations or other obligations, in each case, Incurred
for the purpose of financing all or any part of the purchase
price or cost of construction or improvement of property, plant
or equipment (including acquisition of capital stock of a person
that becomes a Restricted Subsidiary to the extent of the Fair
Market Value of the property, plant or equipment of such person)
used in the business of the Parent or such Restricted
Subsidiary, in an aggregate amount, including all Permitted
Refinancing Indebtedness Incurred to refund, refinance or
replace any Indebtedness Incurred pursuant to this clause (4),
not to exceed $350 million at any time outstanding;
(5) the Incurrence by the Parent or any Restricted
Subsidiary of the Parent of Permitted Refinancing Indebtedness
in exchange for, or the net proceeds of which are used to
refund, refinance, replace, defease or discharge Indebtedness
(other than intercompany Indebtedness) that was permitted by the
applicable Indenture to be Incurred under the first paragraph of
this covenant or clauses (1), (2), (3), (4), (5), (12), (13),
(15) or (16) of this paragraph;
(6) the Incurrence by the Parent or any of its Restricted
Subsidiaries of intercompany Indebtedness owing to or held by
the Parent or any of its Restricted Subsidiaries; provided,
however, that:
(a) if the Parent, the Issuer or any Subsidiary Guarantor
is the obligor on such Indebtedness, such Indebtedness must be
unsecured and expressly subordinated to the prior payment in
full in cash of all Obligations with respect to the Notes, in
the case of the Issuer, or the Note Guarantee, in the case of
the Parent or a Subsidiary Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being held by a
person other than the Parent or a Restricted Subsidiary of the
Parent and (ii) any sale or other transfer of any such
Indebtedness to a person that is not the Parent or a Restricted
Subsidiary of the Parent, will be deemed, in each case, to
constitute an Incurrence of such Indebtedness by the Parent or
such Restricted Subsidiary, as the case may be, that was not
permitted by this clause (6);
39
(7) the Guarantee by the Parent, the Issuer or any
Subsidiary Guarantor of Indebtedness of the Parent or a
Restricted Subsidiary of the Parent that was permitted to be
Incurred by another provision of this covenant (other than
(x) a Guarantee by the Issuer or any Subsidiary Guarantor
of Existing Indebtedness of the Parent and (y) a Guarantee
by the Issuer or any Subsidiary Guarantor of Indebtedness of the
Parent Incurred under the first paragraph of this covenant or in
the case of clauses (x) and (y) any refinancings
thereof); provided that if the Indebtedness being
Guaranteed is subordinated to or pari passu with the
Notes or any Note Guarantee, then the Guarantee shall be
subordinated or pari passu, as applicable, to the same
extent as the Indebtedness guaranteed;
(8) the Incurrence by the Parent or any of its Restricted
Subsidiaries of Hedging Obligations that are Incurred for the
purpose of fixing, hedging or swapping interest rate, commodity
price or foreign currency exchange rate risk (or to reverse or
amend any such agreements previously made for such purposes),
and not for speculative purposes, and that do not increase the
Indebtedness of the obligor outstanding at any time other than
as a result of fluctuations in interest rates, commodity prices
or foreign currency exchange rates or by reason of fees,
indemnities and compensation payable thereunder;
(9) the Incurrence by the Parent or any of its Restricted
Subsidiaries of Indebtedness arising from agreements providing
for indemnification, adjustment of purchase price or similar
obligations, or Guarantees or letters of credit, surety bonds or
performance bonds securing any obligations of the Parent or any
of its Restricted Subsidiaries pursuant to such agreements, in
any case Incurred in connection with the disposition of any
business, assets or Restricted Subsidiary (other than Guarantees
of Indebtedness Incurred by any person acquiring all or any
portion of such business, assets or Restricted Subsidiary for
the purpose of financing such acquisition), so long as the
amount (other than with respect to indemnities relating to tax
obligations) does not exceed the gross proceeds actually
received by the Parent or any Restricted Subsidiary thereof in
connection with such disposition;
(10) the Incurrence by the Parent or any of its Restricted
Subsidiaries of Indebtedness arising from the honoring by a bank
or other financial institution of a check, draft or similar
instrument drawn against insufficient funds in the ordinary
course of business, provided, however, that such
Indebtedness is extinguished promptly after its Incurrence;
(11) the Incurrence by the Parent or any of its Restricted
Subsidiaries of Indebtedness constituting reimbursement
obligations with respect to letters of credit issued in the
ordinary course of business; provided that, upon the drawing of
such letters of credit or the Incurrence of such Indebtedness,
such obligations are reimbursed within 30 days following
such drawing or Incurrence;
(12) the Incurrence by the Parent, the Issuer or any
Subsidiary Guarantor of Permitted Subordinated Indebtedness in
an aggregate principal amount at any time outstanding, including
all Permitted Refinancing Indebtedness Incurred to refund,
refinance or replace any Indebtedness Incurred pursuant to this
clause (12), not to exceed $500 million;
(13) the Incurrence by the Parent or any Restricted
Subsidiary of Acquired Indebtedness, provided that immediately
after giving effect to such Incurrence on a pro forma basis, the
Consolidated Leverage Ratio and, if the Acquired Indebtedness is
to be Incurred by the Issuer or any Subsidiary Guarantor, the
Subsidiary Debt Leverage Ratio and, if the Acquired Indebtedness
is to be Incurred by a Foreign Restricted Subsidiary that is not
a Subsidiary Guarantor, the Priority Debt Leverage Ratio will
not be greater than the such ratios immediately prior to such
Incurrence;
(14) the Incurrence by the Parent, the Issuer or any
Subsidiary Guarantor of Indebtedness to the extent that the net
proceeds thereof are promptly deposited to defease or to satisfy
and discharge the Notes;
(15) the Incurrence by the Parent or any Restricted
Subsidiary of Indebtedness in favor of a governmental entity in
connection with the purchase of licenses or other rights to
utilize radio spectrum in an aggregate principal amount at any
time outstanding, including all Permitted Refinancing
Indebtedness Incurred to refund, refinance or replace any
Indebtedness Incurred pursuant to this clause (15), not to
exceed $300 million; or
40
(16) the Incurrence by the Parent, Issuer or any Subsidiary
Guarantor or any of its Restricted Subsidiaries of additional
Indebtedness in an aggregate principal amount at any time
outstanding, including all Permitted Refinancing Indebtedness
Incurred to refund, refinance or replace any Indebtedness
Incurred pursuant to this clause (16), not to exceed
$250 million.
For purposes of determining compliance with this covenant, in
the event that any proposed Indebtedness meets the criteria of
more than one of the categories of Permitted Debt described in
clauses (1) through (16) above, or is entitled to be
Incurred pursuant to the first paragraph of this covenant, the
Parent will be permitted to divide and classify such item of
Indebtedness at the time of its Incurrence in any manner that
complies with this covenant and may later redivide
and/or
reclassify all or a portion of such item of Indebtedness in any
manner that complies with this covenant; provided that
notwithstanding the foregoing, Indebtedness outstanding
under Credit Facilities on the Issue Date shall be deemed to
have been incurred on such date under clause (1) above.
For purposes of determining compliance with any
U.S. dollar-denominated restriction on the incurrence of
Indebtedness, the U.S. dollar-equivalent principal amount
of Indebtedness denominated in a foreign currency shall be
calculated based on the relevant currency exchange rate in
effect on the date such Indebtedness was incurred, in the case
of term debt, or first committed, in the case of revolving
credit debt; provided that if such Indebtedness is incurred to
refinance other Indebtedness denominated in a foreign currency,
and such refinancing would cause the applicable
U.S. dollar-denominated restriction to be exceeded if
calculated at the relevant currency exchange rate in effect on
the date of such refinancing, such U.S. dollar-denominated
restrictions shall be deemed not to have been exceeded so long
as the principal amount of such refinancing Indebtedness does
not exceed the principal amount of such Indebtedness being
refinanced.
The principal amount of any Indebtedness incurred to refinance
other Indebtedness, if incurred in a different currency from the
Indebtedness being refinanced, shall be calculated based on the
currency exchange rate applicable to the currencies in which
such respective Indebtedness is denominated that is in effect on
the date of such refinancing.
The Issuer will not Incur any Indebtedness that is subordinate
in right of payment to any other Indebtedness of the Issuer
unless it is subordinate in right of payment to the Notes to the
same extent. The Parent will not, and will not permit any
Subsidiary Guarantor to, Incur any Indebtedness that is
subordinate in right of payment to any other Indebtedness of the
Parent or such Subsidiary Guarantor, as the case may be, unless
it is subordinate in right of payment to the relevant Note
Guarantee to the same extent. For purposes of the foregoing, no
Indebtedness will be deemed to be subordinated in right of
payment to any other Indebtedness of the Parent, the Issuer or
any Subsidiary Guarantor, as applicable, solely by reason of any
Liens or Guarantees arising or created in respect thereof or by
virtue of the fact that the holders of any Secured Indebtedness
have entered into intercreditor agreements giving one or more of
such holders priority over the other holders in the collateral
held by them.
Liens
The Parent will not, and will not permit the Issuer or any
Subsidiary Guarantor to, create, Incur, assume or otherwise
cause or suffer to exist or become effective any Lien of any
kind (other than Permitted Liens) upon any of its property or
assets, now owned or hereafter acquired, unless all payments due
under the Indentures and the Notes or the Note Guarantee, as
applicable, are secured on an equal and ratable basis with the
obligations so secured (or, in the case of Indebtedness
subordinated to the Notes, prior or senior thereto, with the
same relative priority as the Notes or Note Guarantee will have
with respect to such subordinated Indebtedness) until such time
as such obligations are no longer secured by a Lien.
41
Dividend
and Other Payment Restrictions Affecting Restricted
Subsidiaries
The Parent will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to
exist or become effective any consensual encumbrance or
restriction on the ability of any Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its
capital stock (or with respect to any other interest or
participation in, or measured by, its profits) to the Parent or
any of its Restricted Subsidiaries or pay any liabilities owed
to the Parent or any of its Restricted Subsidiaries;
(2) make loans or advances to the Parent or any of its
Restricted Subsidiaries; or
(3) sell, lease or transfer any of its properties or assets
to the Parent or any of its Restricted Subsidiaries.
However, the preceding restrictions will not apply to
encumbrances or restrictions:
(1) existing under, by reason of or with respect to
Existing Indebtedness or any other agreements in effect on the
Issue Date and any amendments, modifications, restatements,
renewals, extensions, supplements, refundings, replacements or
refinancings thereof, provided that the encumbrances and
restrictions in any such amendments, modifications,
restatements, renewals, extensions, supplements, refundings,
replacements or refinancings, in the good faith judgment of the
board of directors of the Parent, whose judgment shall be
conclusively binding and evidenced by a board resolution, either
(i) are not materially more restrictive, taken as a whole,
than those contained in Existing Indebtedness or such other
agreements, as the case may be, as in effect on the Issue Date
or (ii) will not materially affect the Issuers
ability to pay the interest or principal, when due, on the Notes;
(2) set forth in the Indentures and the Notes and the Note
Guarantees;
(3) existing under, by reason of or with respect to
applicable law, rule, regulation or order;
(4) with respect to any person or the property or assets of
a person acquired by the Parent or any of its Restricted
Subsidiaries existing at the time of such acquisition and not
incurred in connection with or in contemplation of such
acquisition, which encumbrance or restriction is not applicable
to any person or the properties or assets of any person, other
than the person, or the property or assets of the person, so
acquired and any amendments, modifications, restatements,
renewals, extensions, supplements, refundings, replacements or
refinancings thereof, provided that the encumbrances and
restrictions in any such amendments, modifications,
restatements, renewals, extensions, supplements, refundings,
replacements or refinancings, in the good faith judgment of the
board of directors of the Parent, whose judgment shall be
binding and evidenced by a board resolution, either (i) are
not materially more restrictive, taken as a whole, than those in
effect on the date of the acquisition or (ii) will not
materially affect the Issuers ability to pay the interest
or principal, when due, on the Notes;
(5) in the case of clause (3) of the first paragraph
of this covenant:
(A) that restrict in a customary manner the subletting,
assignment or transfer of any property or asset that is a lease,
license, conveyance or contract or similar property or asset,
(B) existing by virtue of any transfer of, agreement to
transfer, option or right with respect to, or Lien on, any
property or assets of the Parent or any Restricted Subsidiary
thereof not otherwise prohibited by the Indentures, or
(C) arising or agreed to in the ordinary course of
business, not relating to any Indebtedness, and that do not,
individually or in the aggregate, detract from the value of
property or assets of the Parent or any Restricted Subsidiary
thereof in any manner material to the Parent or any Restricted
Subsidiary thereof;
(6) existing under, by reason of or with respect to any
agreement for the sale or other disposition of all or
substantially all of the capital stock of, or property and
assets of, a Restricted Subsidiary that restrict distributions
by that Restricted Subsidiary pending such sale or other
disposition;
42
(7) existing under restrictions on cash or other deposits
or net worth imposed by customers or required by insurance,
surety or bonding companies, in each case, under contracts
entered into in the ordinary course of business;
(8) existing under, by reason of or with respect to
provisions with respect to the disposition or distribution of
assets or property, in each case contained in joint venture
agreements and which the board of directors of the Parent
determines in good faith will not adversely affect the
Issuers ability to make payments of principal or interest
payments on the Notes; and
(9) encumbrances and restrictions in other Indebtedness
incurred in compliance with the covenant described under the
caption Incurrence of Indebtedness;
provided that such encumbrances and restrictions, taken as a
whole, in the good faith judgment of the Parents board of
directors, whose judgment shall be binding and evidenced by a
board resolution, either (x) are no more materially
restrictive with respect to such encumbrances and restrictions
than those contained in the existing agreements referenced in
clauses (1) and (2) above or (y) are ordinary and
customary for Indebtedness of that type at such time and will
not materially affect the Issuers ability to pay the
interest or principal, when due, on the Notes.
Merger,
Consolidation or Sale of Assets
The Parent will not, directly or indirectly:
(i) consolidate or merge with or into another person
(whether or not the Parent is the surviving corporation) or
(ii) sell, assign, transfer, convey or otherwise dispose of
all or substantially all of the properties and assets of the
Parent and its Restricted Subsidiaries, taken as a whole, in one
or more related transactions, to another person, unless:
(1) either: (a) the Parent is the surviving
corporation; or (b) the person formed by or surviving any
such consolidation or merger (if other than the Parent) or to
which such sale, assignment, transfer, conveyance or other
disposition will have been made (i) is a corporation,
partnership or limited liability company organized or existing
under the laws of the United States, any state thereof or the
District of Columbia and (ii) assumes all the obligations
of the Parent under its Guarantee and the applicable Indenture,
pursuant to agreements reasonably satisfactory to the Trustee;
(2) immediately after giving effect to such transaction, no
Default or Event of Default exists;
(3) immediately after giving effect to such transaction on
a pro forma basis, (a) the Parent (or the person formed by
or surviving any such consolidation or merger with the Parent,
if other than the Parent, or the person to which such sale,
assignment, transfer, conveyance or other disposition will have
been made) will be permitted to Incur at least $1.00 of
additional Indebtedness pursuant to the first paragraph of the
covenant described above under the caption
Incurrence of Indebtedness or
(b) the Consolidated Leverage Ratio for the Parent (or such
person, as the case may be) will not be greater than the
Consolidated Leverage Ratio for the Parent immediately prior to
such transaction; and
(4) each Guarantor, unless such Guarantor is the person
with which the Parent has entered into a transaction under this
covenant, will have by amendment to its Note Guarantee confirmed
that its Note Guarantee will apply to the obligations of the
Issuer in accordance with the Notes and the Indentures.
Upon any consolidation or merger, or any sale, assignment,
transfer, conveyance or other disposition of all or
substantially all of the assets of the Parent in accordance with
this covenant, the successor corporation formed by such
consolidation or into or with which the Parent is merged or to
which such sale, assignment, transfer, conveyance or other
disposition is made will succeed to, and be substituted for (so
that from and after the date of such consolidation, merger,
sale, assignment, conveyance or other disposition, the
provisions of the Indentures referring to the Parent
will refer instead to the successor corporation and not to the
Parent) and may exercise all rights and powers of, the Parent
under the Indentures with the same effect as if such successor
person had been named as the Parent in the Indentures.
In addition, the Parent and its Restricted Subsidiaries may not,
directly or indirectly, lease all or substantially all of its
and its Restricted Subsidiaries properties or assets taken as a
whole, in one or more related transactions, to any other person.
Clause (3) above of this covenant will not apply to
(x) any merger, consolidation or sale,
43
assignment, transfer, conveyance or other disposition of assets
between or among the Parent and any of Parents Restricted
Subsidiaries or (y) a merger of the Parent with an
Affiliate solely for the purpose of reincorporating the Parent
in another jurisdiction.
The Issuer will not, directly or indirectly:
(i) consolidate or merge with or into another person
(whether or not the Issuer is the surviving corporation) or
(ii) sell, assign, transfer, convey or otherwise dispose of
all or substantially all of the properties and assets of the
Issuer and its Restricted Subsidiaries, taken as a whole, in one
or more related transactions, to another person, unless:
(1) immediately after giving effect to that transaction, no
Default or Event of Default exists; and
(2) in the case of a consolidation or merger:
(a) either: (i) the Issuer is the surviving
corporation; or (ii) the person formed by or surviving any
such consolidation or merger (if other than the Issuer )
(x) is a corporation, partnership or limited liability
company organized or existing under the laws of the United
States, any state thereof or the District of Columbia and
(y) assumes all the obligations of the Issuer under the
Notes and the Indentures, pursuant to agreements reasonably
satisfactory to the Trustee; provided that in the case
where such person is not a corporation, a co-obligor of the
Notes is a corporation; and
(b) each Guarantor, unless such Guarantor is the person
with which the Issuer has consolidated with or merged into, will
have by amendment to its Note Guarantee confirmed that its Note
Guarantee will apply to the obligations of the Issuer in
accordance with the Notes and the Indentures; or
(3) in the case of a sale, assignment, transfer, conveyance
or other disposition of all or substantially all of the
properties and assets of the Issuer and its Restricted
Subsidiaries, taken as a whole, either:
(a) (i) the person acquiring the property in any such
sale, assignment, transfer, conveyance or other disposition
(x) is a corporation, partnership or limited liability
company organized or existing under the laws of the United
States, any state thereof or the District of Columbia and
(y) assumes all the obligations of the Issuer under the
Notes and the Indentures, pursuant to agreements reasonably
satisfactory to the Trustee; provided that in the case
where such person is not a corporation, a co-obligor of the
Notes is a corporation; and
(ii) each Guarantor, unless such Guarantor is the person
with which the Issuer has consolidated with or merged into, will
have by amendment to its Note Guarantee confirmed that its Note
Guarantee will apply to the obligations of the Issuer in
accordance with the Notes and the Indentures ; or
(b) to the extent such properties and assets constitute all
or substantially all of the properties and assets of the Parent
and its Restricted Subsidiaries taken as a whole, such sale or
other disposition complies with the covenant described above
under the caption Repurchase at the Option of
Holders Asset Sales.
Upon any consolidation or merger of the Issuer in accordance
with this covenant, or any sale, assignment, transfer,
conveyance or other disposition of all or substantially all of
the assets of the Issuer in accordance with clause (3)(a) of
this covenant, the successor corporation formed by such
consolidation or into or with which the Issuer is merged or to
which such sale, assignment, transfer, conveyance or other
disposition is made will succeed to, and be substituted for (so
that from and after the date of such consolidation, merger,
sale, assignment, conveyance or other disposition, the
provisions of the Indentures referring to the Issuer
will refer instead to the successor corporation and not to the
Issuer, and may exercise all rights and powers of, the Issuer
under the Indentures with the same effect as if such successor
person had been named as the Issuer in the Indentures.
In the event of any consolidation or merger between the Issuer
and the Parent in accordance with this covenant, the successor
corporation of such transaction (whether the Issuer or the
Parent) shall be deemed to be the Issuer for purposes of the
first paragraph of Incurrence of Indebtedness
covenant following such event.
44
Transactions
with Affiliates
The Parent will not, and will not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer
or otherwise dispose of any of its properties or assets to, or
purchase any property or assets from, or enter into, make,
amend, renew or extend any transaction, contract, agreement,
understanding, loan, advance or Guarantee with, or for the
benefit of, any Affiliate (each, an Affiliate
Transaction), unless:
(1) such Affiliate Transaction is on terms that are no less
favorable to the Parent or the relevant Restricted Subsidiary
than those that would have been obtained in a comparable
arms-length transaction by the Parent or such Restricted
Subsidiary with a person that is not an Affiliate of the Parent
or any of its Restricted Subsidiaries; and
(2) the Parent delivers to the Trustee:
(a) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration
in excess of $25 million, a board resolution set forth in
an Officers Certificate certifying that such Affiliate
Transaction or series of related Affiliate Transactions complies
with this covenant and that such Affiliate Transaction or series
of related Affiliate Transactions has been approved by a
majority of the disinterested members of the board of directors
of the Parent; and
(b) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration
in excess of $50 million, an opinion as to the fairness to
the Parent or such Restricted Subsidiary of such Affiliate
Transaction or series of related Affiliate Transactions from a
financial point of view issued by an independent accounting,
appraisal or investment banking firm of national standing.
The following items will not be deemed to be Affiliate
Transactions and, therefore, will not be subject to the
provisions of the prior paragraph:
(1) transactions between or among the Parent
and/or its
Restricted Subsidiaries;
(2) payment of reasonable and customary compensation to,
and reasonable and customary indemnification and similar
payments on behalf of, directors of the Parent;
(3) Permitted Investments and Restricted Payments that are
permitted by the provisions of the Indentures described above
under the caption Restricted Payments;
(4) any sale of Equity Interests (other than Disqualified
Stock) of the Parent or receipt of any capital contribution to
the Parent from any Affiliate of the Parent;
(5) transactions pursuant to agreements or arrangements in
effect on the Issue Date, or any amendment, modification, or
supplement thereto or replacement thereof, as long as such
agreement or arrangement, as so amended, modified, supplemented
or replaced, taken as a whole, is not materially more
disadvantageous to the Parent and its Restricted Subsidiaries
than the original agreement or arrangement in existence on the
Issue Date;
(6) any employment, consulting, service or termination
agreement or arrangement, or indemnification arrangements,
entered into by the Parent or any of its Restricted Subsidiaries
with current or former directors, officers and employees of the
Parent or any of its Restricted Subsidiaries and the payment of
compensation to current or former directors, officers and
employees of the Parent or any of its Restricted Subsidiaries
(including amounts paid pursuant to employee benefit plans,
employee stock option or similar plans), so long as such
agreement, arrangement, plan or payment has been approved by a
majority of the disinterested members of the board of directors
of the Parent;
(7) issuances, purchases or repurchases of Notes or other
Indebtedness of the Parent or its Restricted Subsidiaries or
solicitations of amendments, waivers or consents in respect of
Notes or such other Indebtedness, so long as such issuance,
purchase, repurchase or solicitation is (i) offered
generally to other holders of the Notes or other Indebtedness on
the same or more favorable terms and (ii) approved by a
majority of the disinterested members of the board of directors
of the Parent;
45
(8) transactions with any person that is an Affiliate of
the Parent solely by reason of the Parents ownership
interest in such person in the ordinary course of business and
otherwise in compliance with the terms of the applicable
Indenture which are fair to the Parent and its Restricted
Subsidiaries, in the reasonable determination of the Parent, or
are on terms at least as favorable as might reasonably have been
obtained at such time from an unaffiliated party; and
(9) reasonable and customary payments made for any
financial advisory, financing, underwriting, placement or
syndication services approved by the board of directors of the
Parent in good faith.
Designation
of Restricted and Unrestricted Subsidiaries
The board of directors of the Parent may designate any
Restricted Subsidiary of the Parent, other than the Issuer, to
be an Unrestricted Subsidiary; provided that:
(1) any Guarantee by the Parent or any Restricted
Subsidiary thereof of any Indebtedness of the Subsidiary being
so designated will be deemed to be an Incurrence of Indebtedness
by the Parent or such Restricted Subsidiary (or both, if
applicable) at the time of such designation, and such Incurrence
of Indebtedness would be permitted under the covenant described
above under the caption Incurrence of
Indebtedness;
(2) the aggregate Fair Market Value of all outstanding
Investments owned by the Parent and its Restricted Subsidiaries
in the Subsidiary being so designated (including any Guarantee
by the Parent or any Restricted Subsidiary thereof of any
Indebtedness of such Subsidiary) and any commitments to make any
such Investments will be deemed to be an Investment made as of
the time of such designation and that such Investment would be
permitted under the covenant described above under the caption
Restricted Payments;
(3) such Subsidiary does not hold any Liens on any property
of the Parent or any Restricted Subsidiary thereof;
(4) the Subsidiary being so designated:
(a) is not party to any agreement, contract, arrangement or
understanding with the Parent or any Restricted Subsidiary of
the Parent unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the Parent
or such Restricted Subsidiary than those that could have been
obtained at the time the agreement, contract, arrangement or
understanding was entered into from persons who are not
Affiliates of the Parent (other than any such agreement,
contract, arrangement or understanding permitted under the
covenant described under the caption Certain
Covenants Transactions with
Affiliates), and
(b) has not Guaranteed or otherwise directly or indirectly
provided credit support for any Indebtedness of the Parent or
any of its Restricted Subsidiaries, except to the extent such
Guarantee or credit support would be released upon such
designation; and
(5) no Default or Event of Default would be in existence
following such designation.
Any designation of a Subsidiary of the Parent as an Unrestricted
Subsidiary will be evidenced to the Trustee by filing with the
Trustee the board resolution giving effect to such designation
and an Officers Certificate certifying that such
designation complied with the preceding conditions and was
permitted by the applicable Indenture. If, at any time, any
Unrestricted Subsidiary would fail to meet any of the preceding
requirements described in clause (4) above, it will
thereafter cease to be an Unrestricted Subsidiary for purposes
of the Indentures and any Indebtedness, Investments, or Liens on
the property, of such Subsidiary will be deemed to be Incurred
or made by a Restricted Subsidiary of the Parent as of such date
and, if such Indebtedness, Investments or Liens are not
permitted to be Incurred or made as of such date under the
Indentured, the Parent will be in default under the Indentures.
The board of directors of the Parent may at any time designate
any person that is about to become a Subsidiary of the Parent 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
46
then required by law for the formation of corporations, and
Subsidiaries of the Parent that are not designated by the board
of directors as Restricted or Unrestricted will be deemed to be
Restricted Subsidiaries.
The board of directors of the Parent may at any time designate
any Unrestricted Subsidiary to be a Restricted Subsidiary;
provided that:
(1) such designation will be deemed to be an Incurrence of
Indebtedness by a Restricted Subsidiary of the Parent of any
outstanding Indebtedness of such Unrestricted Subsidiary and
such designation will only be permitted if such Indebtedness is
permitted under the covenant described under the caption
Incurrence of Indebtedness;
(2) all outstanding Investments owned by such Unrestricted
Subsidiary will be deemed to be made as of the time of such
designation and such designation will only be permitted if such
Investments would be permitted under the covenant described
above under the caption Restricted
Payments;
(3) all Liens upon property or assets of such Unrestricted
Subsidiary existing at the time of such designation would be
permitted under the caption
Liens; and
(4) no Default or Event of Default would be in existence
following such designation.
Note
Guarantees
The Parent will cause each of its First Tier Restricted
Subsidiaries and each of its Domestic Restricted Subsidiaries to
Guarantee the payment of the Notes.
In addition, the Parent will not permit any of its Restricted
Subsidiaries, directly or indirectly, to Guarantee or pledge any
assets to secure the payment of any other Indebtedness of the
Parent, the Issuer or any Subsidiary Guarantor unless such
Restricted Subsidiary is the Issuer or a Subsidiary Guarantor or
simultaneously executes and delivers to the Trustee an opinion
of counsel and a supplemental indenture providing for the
Guarantee of the payment of the Notes (a Note
Guarantee) by such Restricted Subsidiary, which Note
Guarantee will be pari passu with or, if such other
Indebtedness is subordinated to the Notes or any Note
Guarantees, senior to such Subsidiarys Guarantee of such
other Indebtedness.
A Subsidiary Guarantor may not sell or otherwise dispose of all
or substantially all of its assets to, or consolidate with or
merge with or into (whether or not such Subsidiary Guarantor is
the surviving person), another person, other than the Parent,
the Issuer or another Subsidiary Guarantor, unless:
(1) immediately after giving effect to that transaction, no
Default or Event of Default exists; and
(2) either:
(a) the person acquiring the property in any such sale or
disposition or the person formed by or surviving any such
consolidation or merger (if other than the Subsidiary Guarantor)
is organized or existing under the laws of the United States,
any state thereof or the District of Columbia and assumes all
the obligations of that Subsidiary Guarantor under the
Indentures and its Note Guarantee pursuant to a supplemental
indenture satisfactory to the Trustee; or
(b) such sale or other disposition or consolidation or
merger complies with the covenant described above under the
caption Repurchase at the Option of
Holders Asset Sales.
The Note Guarantee of a Subsidiary Guarantor will be released:
(1) in connection with any sale or other disposition of all
of the capital stock of a Subsidiary Guarantor to a person that
is not (either before or after giving effect to such
transaction) a Restricted Subsidiary of the Parent, if the sale
of all such capital stock of that Subsidiary Guarantor complies
with the covenant described above under the caption
Repurchase at the Option of
Holders Asset Sales;
(2) if the Parent properly designates any Restricted
Subsidiary that is a Subsidiary Guarantor as an Unrestricted
Subsidiary under the Indentures;
47
(3) upon legal or covenant defeasance or satisfaction and
discharge of the Notes as permitted under the Indentures;
(4) other than with respect to Domestic Restricted
Subsidiaries, solely in the case of a Note Guarantee created
pursuant to the second paragraph of this covenant, upon release
or discharge of the Guarantee which resulted in the creation of
such Note Guarantee pursuant to this covenant, except a
discharge or release by or as a result of payment under such
Guarantees; or
(5) if such Subsidiary Guarantor becomes a Foreign
Restricted Subsidiary by merger, consolidation or otherwise,
unless such Foreign Restricted Subsidiary (i) is a First
Tier Restricted Subsidiary or (ii) is required to Guarantee
the Notes and be a Subsidiary Guarantor pursuant to the second
paragraph of this covenant.
Business
Activities
The Parent will not, and will not permit any Restricted
Subsidiary thereof to, engage in any business other than
Permitted Businesses, except to such extent as would not be
material to the Parent and its Restricted Subsidiaries taken as
a whole. The Parent shall be a holding company substantially all
of the assets of which will consist of the capital stock of its
Subsidiaries, loans to the Issuer or any Subsidiary Guarantor
and cash and Cash Equivalents.
Payments
for Consent
The Parent will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid
any consideration to or for the benefit of any Holder of Notes
for or as an inducement to any consent, waiver or amendment of
any of the terms or provisions of the Indentures or the Notes
unless such consideration is offered to be paid and is paid to
all Holders of the Notes that consent, waive or agree to amend
in the time frame set forth in the solicitation documents
relating to such consent, waiver or agreement.
Reports
Each of the Parent and the Issuer will furnish to the Trustee
and, upon written request, to beneficial owners and prospective
investors a copy of all of the information and reports referred
to in clauses (1) and (2) below within the time
periods specified in the SECs rules and regulations
(including all applicable extension periods):
(1) all quarterly and annual financial information that
would be required to be contained in a filing with the SEC on
Forms 10-Q
and 10-K if
it were required to file such Forms, including a
Managements Discussion and Analysis of Financial
Condition and Results of Operations and, with respect to
the annual information only, a report on the annual financial
statements by its certified independent accountants; and
(2) all current reports that would be required to be filed
with the SEC on
Form 8-K
if it were required to file such reports.
Whether or not required by the SEC, the Parent and the Issuer
will comply with the periodic reporting requirements of the
Exchange Act and will file the reports specified in the
preceding paragraph with the SEC within the time periods
specified above unless the SEC will not accept such a filing. To
the extent such filings are made, the reports will be deemed to
be furnished to the Trustee and the Holders of the Notes. The
Parent and the Issuer each agrees that it will not take any
action for the purpose of causing the SEC not to accept any such
filings. If, notwithstanding the foregoing, the SEC will not
accept the Parents or Issuers filings for any
reason, the Parent or the Issuer, as the case may be, will post
the reports referred to in the preceding paragraph on its
website within the time periods that would apply if the Parent
or the Issuer were required to file those reports with the SEC
(including all applicable extension periods).
If the Parent has designated any of its Subsidiaries as
Unrestricted Subsidiaries, then the quarterly and annual
financial information required by this covenant will include a
summary presentation, either on the face of the financial
statements or in the footnotes thereto, or in
Managements Discussion and Analysis of Financial
Condition and Results of Operations, of the revenues, net
income, total assets and total liabilities of the Parent and its
Restricted Subsidiaries separate from the revenues, net income,
total assets and total liabilities of the Unrestricted
Subsidiaries of the Parent, provided that the foregoing
will not apply if the Subsidiaries that the
48
Parent has designated as Unrestricted Subsidiaries in the
aggregate do not constitute a Significant Subsidiary
as such term is defined under
Rule 1-02(w)
of
Regulation S-X
under the Exchange Act.
In addition, the Issuer and the Guarantors each agrees that, for
so long as any Notes remain outstanding and the Parent and the
Issuer is not required to comply with the periodic reporting
requirements of the Exchange Act, it will furnish to the Holders
and to prospective investors, upon their written request, the
information required to be delivered pursuant to
Rule 144A(d)(4) under the Securities Act.
Notwithstanding the foregoing, so long as the Parent is a
Guarantor, the reports, information and other documents required
to be filed and provided by the Issuer as described above will
be satisfied by those of Parent, so long as such filings would
satisfy the SECs requirements.
Notwithstanding anything herein to the contrary, neither the
Parent nor the Issuer will not be deemed to have failed to
comply with any of its obligations hereunder for purposes of
clause (4) under Events of Default and Remedies
until 120 days after the date any report hereunder is due.
Events of
Default and Remedies
Each of the following is an Event of Default:
(1) default for 30 days in the payment when due of
interest on the Notes;
(2) default in payment when due (whether at maturity, upon
acceleration, redemption, required repurchase or otherwise) of
the principal of, or premium, if any, on the Notes;
(3) failure by the Parent, the Issuer or any Restricted
Subsidiaries of the Parent for 30 days after written notice
to the Parent by the Trustee or the Holders of at least 25% in
aggregate principal amount of Notes then outstanding to comply
with the provisions described under the captions
Repurchase at the Option of
Holders Change of Control, or
Repurchase at the Option of
Holders Asset Sales, (in each case other than
a failure to purchase Notes which will constitute an Event of
Default under clause (2) above) or the failure by the
Parent or the Issuer to comply with the provisions described
under Certain Covenants Merger,
Consolidation or Sale of Assets;
(4) failure by the Parent, the Issuer or any Restricted
Subsidiary of the Parent for 60 days after written notice
to the Parent by the Trustee or the Holders of at least 25% in
aggregate principal amount of Notes then outstanding to comply
with any of the other agreements in the Indentures;
(5) default under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured
or evidenced any Indebtedness by the Parent, the Issuer or any
Restricted Subsidiary that is a Significant Subsidiary of the
Parent (or the payment of which is Guaranteed by the Parent, the
Issuer or any Restricted Subsidiary that is a Significant
Subsidiary of the Parent) whether such Indebtedness or Guarantee
now exists, or is created after the Issue Date, if that default:
(a) is caused by a failure to make any payment when due at
the final maturity of such Indebtedness (a Payment
Default); or
(b) results in the acceleration of such Indebtedness prior
to its express maturity, and,
in each case, such default shall not have been rescinded or such
Indebtedness shall not have been discharged within 10 days
and the amount of any such Indebtedness, together with the
amount of any other such Indebtedness under which there has been
a Payment Default or the maturity of which has been so
accelerated, aggregates $50 million or more;
(6) failure by the Parent, the Issuer or any Restricted
Subsidiary that is a Significant Subsidiary of the Parent to pay
final judgments (to the extent such judgments are not paid or
covered by insurance provided by a reputable carrier)
aggregating in excess of $50 million, which judgments are
not paid, discharged or stayed for a period of 60 days;
49
(7) except as permitted by the Indentures, any Note
Guarantee is held in any judicial proceeding to be unenforceable
or invalid or ceases for any reason to be in full force and
effect or any Guarantor, or any person acting on behalf of any
Guarantor, denies or disaffirms its obligations under its Note
Guarantee; and
(8) certain events of bankruptcy or insolvency with respect
to the Parent, the Issuer, or any Significant Subsidiary of the
Parent.
In the case of an Event of Default under clause (8), all
outstanding Notes will become due and payable immediately
without further action or notice. If any other Event of Default
occurs and is continuing, the Trustee or the Holders of at least
25% in aggregate principal amount of the then outstanding Notes
may declare all the Notes to be due and payable immediately by
notice in writing to the Parent specifying the Event of Default.
Holders of the Notes may not enforce the Indentures or the Notes
except as provided in the Indentures. Subject to certain
limitations, Holders of a majority in aggregate principal amount
of the then outstanding Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from
Holders of the Notes notice of any Default or Event of Default
(except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice
is in their interest.
The Holders of a majority in aggregate principal amount of the
Notes then outstanding by notice to the Trustee may on behalf of
the Holders of all of the Notes waive any existing Default or
Event of Default and its consequences under the applicable
Indenture except a continuing Default or Event of Default in the
payment of interest on, or the principal of, the Notes. The
Holders of a majority in aggregate principal amount of the then
outstanding Notes will have the right to direct the time, method
and place of conducting any proceeding for exercising any remedy
available to the Trustee. However, the Trustee may refuse to
follow any direction that conflicts with law or the applicable
Indenture, that may involve the Trustee in personal liability,
or that the Trustee determines in good faith may be unduly
prejudicial to the rights of Holders of Notes not joining in the
giving of such direction and may take any other action it deems
proper that is not inconsistent with any such direction received
from Holders of Notes. A Holder may not pursue any remedy with
respect to the Indentures or the Notes unless:
(1) the Holder gives the Trustee written notice of a
continuing Event of Default;
(2) the Holders of at least 25% in aggregate principal
amount of then outstanding Notes make a written request to the
Trustee to pursue the remedy;
(3) such Holder or Holders offer the Trustee indemnity
satisfactory to the Trustee against any costs, liability or
expense;
(4) the Trustee does not comply with the request within
60 days after receipt of the request and the offer of
indemnity; and
(5) during such
60-day
period, the Holders of a majority in aggregate principal amount
of the outstanding Notes do not give the Trustee a direction
that is inconsistent with the request.
However, such limitations do not apply to the right of any
Holder of a Note to receive payment of the principal of, premium
or interest on, such Note or to bring suit for the enforcement
of any such payment, on or after the due date expressed in the
Notes, which right will not be impaired or affected without the
consent of the Holder.
The Parent is required to deliver to the Trustee annually within
90 days after the end of each fiscal year a statement
regarding compliance with the Indentures. Upon becoming aware of
any Default or Event of Default, the Parent is required to
deliver to the Trustee a statement specifying such Default or
Event of Default, and in any event, no later than 5 business
days.
No
Personal Liability of Directors, Officers, Employees and
Stockholders
No director, officer, employee, incorporator, stockholder,
member, manager or partner of the Issuer or any Guarantor, as
such, will have any liability for any obligations of the Issuer
or the Guarantors under the Notes, the Indentures, the Note
Guarantees or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of
Notes by accepting a Note waives and releases all such
liability. The waiver and release are
50
part of the consideration for issuance of the Notes. The waiver
may not be effective to waive liabilities under the federal
securities laws.
Legal
Defeasance and Covenant Defeasance
The Issuer may, at its option and at any time, elect to have all
of its obligations discharged with respect to the outstanding
Notes and all obligations of the Guarantors discharged with
respect to their Note Guarantees (Legal Defeasance)
except for:
(1) the rights of Holders of outstanding Notes to receive
payments in respect of the principal of, or interest or premium
on such Notes when such payments are due from the trust referred
to below;
(2) the Issuers obligations with respect to the Notes
concerning issuing temporary Notes, mutilated, destroyed, lost
or stolen Notes and the maintenance of an office or agency for
payment and money for security payments held in trust;
(3) the rights, powers, trusts, duties and immunities of
the Trustee, and the Issuers and any Guarantors
obligations in connection therewith; and
(4) the Legal Defeasance provisions of the Indentures.
In addition, the Issuer may, at its option and at any time,
elect to have the obligations of the Parent and the its
Restricted Subsidiaries released with respect to certain
covenants that are described in the Indentures (Covenant
Defeasance) and thereafter any omission to comply with
those covenants will not constitute a Default or Event of
Default with respect to the Notes. In the event Covenant
Defeasance occurs, certain events (not including non-payment,
bankruptcy, receivership, rehabilitation and insolvency events)
described under Events of Default will no longer
constitute Events of Default with respect to the Notes.
In order to exercise either Legal Defeasance or Covenant
Defeasance:
(1) the Issuer must irrevocably deposit with the Trustee,
in trust, for the benefit of the Holders of the Notes, cash in
U.S. dollars, non-callable Government Securities, or a
combination thereof, in such amounts as will be sufficient, in
the opinion of a nationally recognized firm of independent
public accountants, to pay the principal of, or interest and
premium on the outstanding Notes on the Stated Maturity or on
the applicable redemption date, as the case may be, and the
Issuer must specify whether the Notes are being defeased to
maturity or to a particular redemption date;
(2) in the case of Legal Defeasance, the Issuer will have
delivered to the Trustee an opinion of counsel reasonably
acceptable to the Trustee confirming that (a) the Issuer
has received from, or there has been published by, the Internal
Revenue Service (the IRS) a ruling or (b) since
the Issue Date, there has been a change in the applicable
U.S. federal income tax law, in either case to the effect
that, and based thereon such opinion of counsel will confirm
that, the Holders of the outstanding Notes will not recognize
income, gain or loss for U.S. federal income tax purposes
as a result of such Legal Defeasance and will be subject to
U.S. federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
Legal Defeasance had not occurred;
(3) in the case of Covenant Defeasance, the Issuer will
have delivered to the Trustee an opinion of counsel reasonably
acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for
U.S. federal income tax purposes as a result of such
Covenant Defeasance and will be subject to U.S. federal
income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Covenant
Defeasance had not occurred;
(4) no Default or Event of Default will have occurred and
be continuing either: (a) on the date of such deposit; or
(b) insofar as Events of Default from bankruptcy or
insolvency events are concerned, at any time in the period
ending on the 123rd day after the date of deposit;
(5) such Legal Defeasance or Covenant Defeasance will not
result in a breach or violation of, or constitute a default
under any material agreement or instrument to which the Parent
or any of its Subsidiaries is a party or by which the Parent or
any of its Subsidiaries is bound;
51
(6) the Issuer must have delivered to the Trustee an
opinion of counsel to the effect that, (1) assuming no
intervening bankruptcy of the Parent, the Issuer or any
Subsidiary Guarantor between the date of deposit and the
123rd day following the deposit and assuming that no Holder
is an insider of the Parent, the Issuer or any
Subsidiary Guarantor under applicable bankruptcy law, after the
123rd day following the deposit, the trust funds will not
be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting
creditors rights generally, including Section 547 of
the United States Bankruptcy Code and Section 15 of the New
York Debtor and Creditor Law and (2) the creation of the
defeasance trust does not violate the Investment Company Act of
1940;
(7) the Issuer must deliver to the Trustee an
Officers Certificate stating that the deposit was not made
by the Issuer with the intent of preferring the Holders over the
other creditors of the Issuer or any Guarantor with the intent
of defeating, hindering, delaying or defrauding creditors of the
Issuer, any Guarantor or others;
(8) if the Notes are to be redeemed prior to their Stated
Maturity, the Issuer must deliver to the Trustee irrevocable
instructions to redeem all of the Notes on the specified
redemption date; and
(9) the Issuer must deliver to the Trustee an
Officers Certificate and an opinion of counsel, each
stating that all conditions precedent relating to the Legal
Defeasance or the Covenant Defeasance have been complied with.
Amendment,
Supplement and Waiver
Except as provided in the next two succeeding paragraphs, the
Indentures or the Notes may be amended or supplemented with the
consent of the Holders of at least a majority in aggregate
principal amount of the Notes then outstanding (including,
without limitation, consents obtained in connection with a
purchase of, or tender offer or exchange offer for, Notes), and
any existing default or compliance with any provision of the
Indentures or the Notes may be waived with the consent of the
Holders of a majority in aggregate principal amount of the then
outstanding Notes (including, without limitation, consents
obtained in connection with a purchase of, or tender offer or
exchange offer for, Notes).
Without the consent of each Holder affected, an amendment or
waiver may not:
(1) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of
any Note or alter the provisions, or waive any payment, with
respect to the redemption of the Notes;
(3) amend, change or modify the obligation of the Issuer to
make and consummate an Asset Sale Offer with respect to any
Asset Sale in accordance with the covenant described under the
caption Repurchase at the Option of Holders
Asset Sales after the obligation to make such Asset Sale
Offer has arisen, or the obligation of the Issuer to make and
consummate a Change of Control Offer in the event of a Change of
Control in accordance with the covenant described under the
caption Repurchase at the Option of Holders
Change of Control after such Change of Control has
occurred, including, in each case, amending, changing or
modifying any definition relating thereto;
(4) reduce the rate of or change the time for payment of
interest on any Note;
(5) waive a Default or Event of Default in the payment of
principal of, or interest, or premium on, the Notes (except a
rescission of acceleration of the Notes by the Holders of at
least a majority in aggregate principal amount of the then
outstanding Notes and a waiver of the payment default that
resulted from such acceleration);
(6) make any Note payable in money other than
U.S. dollars;
(7) make any change in the provisions of the Indentures
relating to waivers of past Defaults or the rights of Holders of
Notes to receive payments of principal of, or interest or
premium on, the Notes;
52
(8) release any Guarantor from any of its obligations under
its Note Guarantee or the Indentures, except in accordance with
the terms of the applicable Indenture;
(9) impair the right to institute suit for the enforcement
of any payment on or with respect to the Notes or any Note
Guarantee;
(10) except as otherwise permitted under the covenants
described under the captions Certain
Covenants Merger, Consolidation and Sale of
Assets and Certain Covenants
Note Guarantees, consent to the assignment or transfer by
the Parent, the Issuer or any Subsidiary Guarantor of any of
their rights or obligations under the Indentures;
(11) contractually subordinate in right of payment the
Notes or any Note Guarantee to any other Indebtedness; or
(12) make any change in the preceding amendment and waiver
provisions.
Notwithstanding the preceding, without the consent of any Holder
of Notes, the Issuer, the Guarantors and the Trustee may amend
or supplement the Indentures or the Notes:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or
in place of certificated Notes;
(3) to provide for the assumption of the Parents, the
Issuers or any Subsidiary Guarantors obligations to
Holders of Notes in the case of a merger or consolidation or
sale of all or substantially all of the Parents, the
Issuers or such Subsidiary Guarantors assets;
(4) to make any change that would provide any additional
rights or benefits to the Holders of Notes or that does not
materially adversely affect the legal rights under the
Indentures of any such Holder;
(5) to comply with requirements of the SEC in order to
effect or maintain the qualification of the Indentures under the
Trust Indenture Act;
(6) to comply with the provisions described under
Certain Covenants Note
Guarantees;
(7) to evidence and provide for the acceptance of
appointment by a successor Trustee;
(8) to provide for the issuance of Additional Notes in
accordance with the Indentures; or
(9) to conform the text of an Indenture or the Notes to any
provision of the Description of Notes to the extent
such provision in the Description of Notes was
intended to be a verbatim recitation of a provision of that
Indenture.
Satisfaction
and Discharge
The applicable Indenture will be discharged and will cease to be
of further effect as to all Notes issued thereunder, when:
(1) either:
(a) all Notes that have been authenticated (except lost,
stolen or destroyed Notes that have been replaced or paid and
Notes for whose payment money has theretofore been deposited in
trust and thereafter repaid to the Issuer) have been delivered
to the Trustee for cancellation; or
(b) all Notes that have not been delivered to the Trustee
for cancellation have become due and payable by reason of the
mailing of a notice of redemption or otherwise or will become
due and payable within one year and the Issuer or any Guarantor
has irrevocably deposited or caused to be deposited with the
Trustee as trust funds in trust solely for the benefit of the
Holders, cash in U.S. dollars, non-callable Government
Securities, or a combination thereof, in such amounts as will be
sufficient without consideration of any reinvestment of
interest, to pay and discharge the entire indebtedness on the
Notes not delivered to the Trustee for cancellation for
principal, premium and accrued interest to the date of maturity
or redemption;
53
(2) no Default or Event of Default will have occurred and
be continuing on the date of such deposit or will occur as a
result of such deposit and such deposit will not result in a
breach or violation of, or constitute a default under, any other
instrument to which the Parent, the Issuer or any Subsidiary
Guarantor is a party or by which the Parent, the Issuer or any
Subsidiary Guarantor is bound;
(3) the Issuer or any Guarantor has paid or caused to be
paid all sums payable by it under the applicable
Indenture; and
(4) the Issuer has delivered irrevocable instructions to
the Trustee under the applicable Indenture to apply the
deposited money toward the payment of the Notes at maturity or
the redemption date, as the case may be.
In addition, the Parent or the Issuer, as the case may be, must
deliver an Officers Certificate and an opinion of counsel
to the Trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied.
Concerning
the Trustee
If the Trustee becomes a creditor of the Issuer or any
Guarantor, the Indentures and the Trust Indenture Act limit
its right to obtain payment of claims in certain cases, or to
realize on certain property received in respect of any such
claim as security or otherwise. The Trustee will be permitted to
engage in other transactions; however, if it acquires any
conflicting interest it must eliminate such conflict within
90 days, apply to the SEC for permission to continue or
resign.
The Indentures provide that in case an Event of Default will
occur and be continuing, the Trustee will be required, in the
exercise of its power, to use the degree of care of a prudent
man in the conduct of his own affairs. Subject to such
provisions, the Trustee will be under no obligation to exercise
any of its rights or powers under the Indentures at the request
of any Holder of Exchange Notes, unless such Holder will have
offered to the Trustee security and indemnity satisfactory to it
against any loss, liability or expense.
Book-Entry,
Delivery and Form
Except as set forth below, Notes will be issued in registered,
global form in minimum denominations of $2,000 and integral
multiples of $1,000 in excess thereof; provided that Notes may
be issuable in denominations less than $1,000 solely to the
extent necessary to accomodate book-entry positions created in
such amounts by DTC. Notes will be issued at the closing of this
offering only against payment in immediately available funds.
Notes initially will be represented by one or more Notes in
registered, global form without interest coupons (collectively,
the Global Notes). The Global Notes will be
deposited upon issuance with the Trustee as custodian for DTC,
and registered in the name of DTC or its nominee, in each case
for credit to an account of a direct or indirect participant in
DTC as described below.
Except as set forth below, the Global Notes may be transferred,
in whole and not in part, only to another nominee of DTC or to a
successor of DTC or its nominee. Beneficial interests in the
Global Notes may not be exchanged for Notes in certificated
form, except in the circumstances described below. See
Exchange of Book-Entry Notes for Certificated
Notes.
Transfers of beneficial interests in the Global Notes will be
subject to the applicable rules and procedures of DTC and its
direct or indirect participants (including, if applicable, those
of Euroclear and Clearstream), which may change from time to
time.
Depository
Procedures
The following description of the operations and procedures of
DTC, Euroclear and Clearstream are provided solely as a matter
of convenience. These operations and procedures are solely
within the control of the respective settlement systems and are
subject to changes by them. The Issuer takes no responsibility
for these operations and procedures and urges investors to
contact the system or their participants directly to discuss
these matters.
DTC has advised the Issuer that DTC is a limited-purpose trust
company created to hold securities for its participating
organizations (collectively, the Participants) and
to facilitate the clearance and settlement of
54
transactions in those securities between Participants through
electronic book-entry changes in accounts of its Participants.
The Participants include securities brokers and dealers
(including the Initial Purchasers), banks, trust companies,
clearing corporations and certain other organizations. Access to
DTCs system is also available to other entities such as
banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a Participant, either
directly or indirectly (collectively, the Indirect
Participants). Persons who are not Participants may
beneficially own securities held by or on behalf of DTC only
through the Participants or the Indirect Participants. The
ownership interests in, and transfers of ownership interests in,
each security held by or on behalf of DTC are recorded on the
records of the Participants and Indirect Participants.
DTC has also advised the Issuer that, pursuant to procedures
established by it:
(1) upon deposit of the Global Notes, DTC will credit the
accounts of Participants designated by the Initial Purchasers
with portions of the principal amount of the Global
Notes; and
(2) ownership of these interests in the Global Notes will
be shown on, and the transfer of ownership thereof will be
effected only through, records maintained by DTC (with respect
to the Participants) or by the Participants and the Indirect
Participants (with respect to other owners of beneficial
interest in the Global Notes).
Investors in the Global Notes who are Participants in DTCs
system may hold their interests therein directly through DTC.
Investors in the Global Notes who are not Participants may hold
their interests therein indirectly through organizations
(including Euroclear and Clearstream) which are Participants in
such system. All interests in a Global Note, including those
held through Euroclear or Clearstream, may be subject to the
procedures and requirements of DTC. Those interests held through
Euroclear or Clearstream may also be subject to the procedures
and requirements of such systems. The laws of some states
require that certain persons take physical delivery in
definitive form of securities that they own. Consequently, the
ability to transfer beneficial interests in a Global Note to
such persons will be limited to that extent. Because DTC can act
only on behalf of Participants, which in turn act on behalf of
Indirect Participants, the ability of a person having beneficial
interest in a Global Note to pledge such interests to persons
that do not participate in the DTC system, or otherwise take
actions in respect of such interests, may be affected by the
lack of a physical certificate evidencing such interests.
Except as described below, owners of interests in the Global
Notes will not have Notes registered in their names, will not
receive physical delivery of Notes in certificated form and will
not be considered the registered owners or Holders
thereof under the Indentures for any purpose.
Payments in respect of the principal of, and interest and
premium on a Global Note registered in the name of DTC or its
nominee will be payable to DTC in its capacity as the registered
Holder under the Indentures. Under the terms of the Indentures,
the Issuer, the Guarantors and the Trustee will treat the
persons in whose names the Notes, including the Global Notes,
are registered as the owners thereof for the purpose of
receiving payments and for all other purposes. Consequently,
neither the Issuer, the Guarantors, the Trustee nor any agent of
the Issuer, the Guarantors or the Trustee has or will have any
responsibility or liability for:
(1) any aspect of DTCs records or any
Participants or Indirect Participants records
relating to or payments made on account of beneficial ownership
interest in the Global Notes or for maintaining, supervising or
reviewing any of DTCs records or any Participants or
Indirect Participants records relating to the beneficial
ownership interests in the Global Notes; or
(2) any other matter relating to the actions and practices
of DTC or any of its Participants or Indirect Participants.
DTC has advised the Issuer that its current practice, upon
receipt of any payment in respect of securities such as the
Notes (including principal and interest), is to credit the
accounts of the relevant Participants with the payment on the
payment date unless DTC has reason to believe it will not
receive payment on such payment date. Each relevant Participant
is credited with an amount proportionate to its beneficial
ownership of an interest in the principal amount of the relevant
security as shown on the records of DTC. Payments by the
Participants and the Indirect Participants to the beneficial
owners of Notes will be governed by standing instructions and
customary practices and will be the responsibility of the
Participants or the Indirect Participants and will not be the
responsibility of DTC, the
55
Trustee, the Issuer or the Guarantors. Neither the Issuer, the
Guarantors nor the Trustee will be liable for any delay by DTC
or any of its Participants in identifying the beneficial owners
of the Notes, and the Issuer, the Guarantors and the Trustee may
conclusively rely on and will be protected in relying on
instructions from DTC or its nominee for all purposes.
Transfers between Participants in DTC will be effected in
accordance with DTCs procedures, and will be settled in
same-day
funds, and transfers between participants in Euroclear and
Clearstream will be effected in accordance with their respective
rules and operating procedures.
Cross-market transfers between the Participants in DTC, on the
one hand, and Euroclear or Clearstream participants, on the
other hand, will be effected through DTC in accordance with
DTCs rules on behalf of Euroclear or Clearstream, as the
case may be, by its respective depositary; however, such
cross-market transactions will require delivery of instructions
to Euroclear or Clearstream, as the case may be, by the
counterparty in such system in accordance with the rules and
procedures and within the established deadlines (Brussels time)
of such system. Euroclear or Clearstream, as the case may be,
will, if the transaction meets its settlement requirements,
deliver instructions to its respective depositary to take action
to effect final settlement on its behalf by delivering or
receiving interests in the relevant Global Note in DTC, and
making or receiving payment in accordance with normal procedures
for same-day
funds settlement applicable to DTC. Euroclear participants and
Clearstream participants may not deliver instructions directly
to the depositories for Euroclear or Clearstream.
DTC has advised the Issuer that it will take any action
permitted to be taken by a Holder of Notes only at the direction
of one or more Participants to whose account DTC has credited
the interests in the Global Notes and only in respect of such
portion of the aggregate principal amount of the Notes as to
which such Participant or Participants has or have given such
direction. However, if there is an Event of Default under the
Notes, DTC reserves the right to exchange the Global Notes for
Notes in certificated form, and to distribute such certificated
Notes to its Participants.
Although DTC, Euroclear and Clearstream have agreed to the
foregoing procedures to facilitate transfers of interests in the
Global Notes among participants in DTC, Euroclear and
Clearstream, they are under no obligation to perform or to
continue to perform such procedures, and may discontinue such
procedures at any time. Neither the Issuer, the Guarantors nor
the Trustee nor any of their respective agents will have any
responsibility for the performance by DTC, Euroclear or
Clearstream or their respective participants or indirect
participants of their respective obligations under the rules and
procedures governing their operations.
Exchange
of Global Notes for Certificated Notes
A Global Note is exchangeable for definitive Notes in registered
certificated form (Certificated Notes) if:
(1) DTC (a) notifies the Issuer that it is unwilling
or unable to continue as depositary for the Global Notes or
(b) has ceased to be a clearing agency registered under the
Exchange Act, and in each case the Issuer fails to appoint a
successor depositary;
(2) the Issuer, at its option, notifies the Trustee in
writing that it elects to cause the issuance of Certificated
Notes (DTC has advised the Issuer that, in such event, under its
current practices, DTC would notify its Participants of the
Issuers request, but will only withdraw beneficial
interests from a Global Note at the request of each DTC
Participant); or
(3) there will have occurred and be continuing a Default or
Event of Default with respect to the Notes.
In addition, beneficial interests in a Global Note may be
exchanged for Certificated Notes upon prior written notice given
to the Trustee by or on behalf of DTC in accordance with the
Indentures. In all cases, Certificated Notes delivered in
exchange for any Global Note or beneficial interests in Global
Notes will be registered in the names, and issued in any
approved denominations, requested by or on behalf of the
depositary (in accordance with its customary procedures).
Same Day
Settlement and Payment
The Issuer will make payments in respect of the Notes
represented by the Global Notes (including principal, premium,
if any, interest) by wire transfer of immediately available
funds to the accounts specified by the Global
56
Note Holder. The Issuer will make all payments of principal,
interest and premium with respect to Certificated Notes by wire
transfer of immediately available funds to the accounts
specified by the Holders thereof or, if no such account is
specified, by mailing a check to each such Holders
registered address. The Notes represented by the Global Notes
are expected to trade in DTCs
Same-Day
Funds Settlement System, and any permitted secondary market
trading activity in such Notes will, therefore, be required by
DTC to be settled in immediately available funds. The Issuer
expects that secondary trading in any Certificated Notes will
also be settled in immediately available funds.
Because of time zone differences, the securities account of a
Euroclear or Clearstream participant purchasing an interest in a
Global Note from a Participant in DTC will be credited, and any
such crediting will be reported to the relevant Euroclear or
Clearstream participant, during the securities settlement
processing day (which must be a business day for Euroclear and
Clearstream) immediately following the settlement date of DTC.
DTC has advised the Issuer that cash received in Euroclear or
Clearstream as a result of sales of interests in a Global Note
by or through a Euroclear or Clearstream participant to a
Participant in DTC will be received with value on the settlement
date of DTC but will be available in the relevant Euroclear or
Clearstream cash account only as of the business day for
Euroclear or Clearstream following DTCs settlement date.
Certain
Definitions
Set forth below are certain defined terms used in the
Indentures. Reference is made to the Indentures for a full
disclosure of all such terms, as well as any other capitalized
terms used herein for which no definition is provided.
Acquired Indebtedness means Indebtedness of a
person existing at the time such person becomes a Restricted
Subsidiary or merges with or into the Parent or any of its
Restricted Subsidiaries or which is assumed by the Parent or any
of its Restricted Subsidiaries in connection with an Asset
Acquisition and not incurred in connection with, or in
anticipation of, such person becoming a Restricted Subsidiary or
such Asset Acquisition. The term Acquired
Indebtedness does not include Indebtedness of a person
which is redeemed, defeased, retired or otherwise repaid at the
time of or immediately upon consummation of the transactions by
which such person becomes a Restricted Subsidiary or such Asset
Acquisition.
Affiliate of any specified person means
(1) any other person directly or indirectly controlling or
controlled by or under direct or indirect common control with
such specified person or (2) any executive officer or
director of such specified person. For purposes of this
definition, control, as used with respect to any
person, will mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or
policies of such person, whether through the ownership of voting
securities, by agreement or otherwise; provided that
beneficial ownership of 5% or more of the Voting Stock of a
person will be deemed to be control. For purposes of this
definition, the terms controlling, controlled
by and under common control with will have
correlative meanings.
Applicable Premium means, (1) with
respect to a 10% Exchange Note at any date of redemption, the
greater of (i) 1.0% of the principal amount of such 10%
Exchange Note and (ii) the excess of (a) the present
value at such date of redemption of (I) the redemption
price of such 10% Exchange Note at August 15, 2013 (such
redemption price being described under
Optional Redemption) plus
(II) all remaining required interest payments due on such
10% Exchange Note through August 15, 2013 (excluding
accrued but unpaid interest to the date of redemption), computed
using a discount rate equal to the Treasury Rate plus
50 basis points, over (b) the principal amount of such
10% Exchange Note and (2) with respect to a 8.875% Exchange
Note at any date of redemption, the greater of (i) 1.0% of
the principal amount of such 8.875% Exchange Note and
(ii) the excess of (a) the present value at such date
of redemption of (I) the redemption price of such 8.875%
Exchange Note at December 15, 2014 (such redemption price
being described under Optional
Redemption) plus (II) all remaining required
interest payments due on such 8.875% Exchange Note through
December 15, 2014 (excluding accrued but unpaid interest to
the date of redemption), computed using a discount rate equal to
the Treasury Rate plus 50 basis points, over (b) the
principal amount of such 8.875% Exchange Note.
57
Asset Acquisition means:
(1) an Investment by the Parent or any of its Restricted
Subsidiaries in any other person pursuant to which such person
shall become a Restricted Subsidiary or shall be merged into or
consolidated with the Parent or any of its Restricted
Subsidiaries but only if such persons primary business is
a Permitted Business, or
(2) an acquisition by the Parent or any of its Restricted
Subsidiaries of the property and assets of any person other than
the Parent or any of its Restricted Subsidiaries that constitute
all or substantially all of a division, operating unit or line
of business of such person but only if the property and assets
so acquired is a Permitted Business.
Asset Disposition means the sale or other
disposition by the Parent or any of its Restricted Subsidiaries,
other than to the Parent or another Restricted Subsidiary, of
(a) all or substantially all of the capital stock of any
Restricted Subsidiary or (b) all or substantially all of
the assets that constitute a division, operating unit or line of
business of the Parent or any of its Restricted Subsidiaries.
Asset Sale means:
(1) the sale, lease, conveyance or other disposition of any
assets, other than a transaction governed by the provisions of
the Indentures described above under the caption
Repurchase at the Option of
Holders Change of Control
and/or the
provisions described above under the caption
Certain Covenants Merger,
Consolidation or Sale of Assets; and
(2) (a) the issuance of Equity Interests by any of the
Parents Restricted Subsidiaries or (b) the sale by
the Parent or any Restricted Subsidiary thereof of any Equity
Interests it owns in any of its Subsidiaries (other than
directors qualifying shares and shares issued to foreign
nationals to the extent required by applicable law).
Notwithstanding the preceding, the following items will be
deemed not to be Asset Sales:
(1) any single transaction or series of related
transactions that involves assets or Equity Interests having a
Fair Market Value of less than $15 million;
(2) a transfer of assets or Equity Interests between or
among the Parent and its Restricted Subsidiaries;
(3) an issuance of Equity Interests by a Restricted
Subsidiary of the Parent to the Parent or to another Restricted
Subsidiary;
(4) the sale, lease, sublease, license, sublicense,
consignment, conveyance or other disposition of equipment,
inventory, accounts receivable or other assets in the ordinary
course of business in compliance with the provisions under
Certain Covenants Transactions with
Affiliates;
(5) the sale or other disposition of Cash Equivalents;
(6) dispositions of accounts receivable in connection with
the compromise, settlement or collection thereof in the ordinary
course of business or in bankruptcy or similar proceedings;
(7) a Restricted Payment that is permitted by the covenant
described above under the caption Certain
Covenants Restricted Payments and any
Permitted Investment;
(8) any sale or disposition of any property or equipment
that has become damaged, worn out or obsolete;
(9) the creation of a Lien not prohibited by the Indentures;
(10) the licensing of intellectual property or other
general intangibles (other than Wireless Licenses) to third
persons on terms approved by the board of directors of the
Parent in good faith and in the ordinary course of business;
(11) the sale or other disposition of transmission towers
and related equipment and assets in one or more Sale and
Leaseback Transactions, in an aggregate amount not to exceed
$100 million;
(12) any surrender or waiver of contract rights or the
settlement, release or surrender of contract, tort or other
claims of any kind; and
58
(13) any disposition arising from foreclosure, condemnation
or similar action with respect to any property or other assets
or exercise of termination rights under any lease, license,
concession or other agreement.
Attributable Debt in respect of a Sale and
Leaseback Transaction means, at the time of determination, the
present value of the obligation of the lessee for net rental
payments during the remaining term of the lease included in such
Sale and Leaseback Transaction, including any period for which
such lease has been extended or may, at the option of the
lessor, be extended. Such present value will be calculated using
a discount rate equal to the rate of interest implicit in such
transaction, determined in accordance with GAAP.
Beneficial Owner has the meaning assigned to
such term in
Rule 13d-3
and
Rule 13d-5
under the Exchange Act, except that in calculating the
beneficial ownership of any particular person (as
that term is used in Section 13(d) (3) of the Exchange
Act), such person will be deemed to have beneficial
ownership of all securities that such person has the
right to acquire by conversion or exercise of other securities,
whether such right is currently exercisable or is exercisable
only upon the occurrence of a subsequent condition. The terms
Beneficially Owns and Beneficially Owned
will have a corresponding meaning.
Capital Lease Obligation means, at the time
any determination thereof is to be made, the amount of the
liability in respect of a capital lease that would at that time
be required to be capitalized on a balance sheet in accordance
with GAAP, and the Stated Maturity thereof shall be the date of
the last payment of rent or any other amount due under such
lease prior to the first date upon which such lease may be
prepaid by the lessee without payment of a penalty.
Cash Equivalents means:
(1) (a) United States dollars; and (b) in the
case of the Parent or any Restricted Subsidiary of the Parent,
the local currency of the country in which it or any of its
Restricted Subsidiaries operates;
(2) readily marketable obligations issued or directly and
fully guaranteed or insured by the United States of America or
any agency or instrumentality thereof (provided that the
full faith and credit of the United States of America is pledged
in support thereof), having maturities, unless such securities
are deposited to defease any Indebtedness, of not more than one
year from the date of acquisition thereof;
(3) demand deposits, certificates of deposit, overnight
deposits and time deposits with maturities of one year or less
from the date of acquisition, bankers acceptances with
maturities not exceeding one year and overnight bank deposits,
in each case, with any commercial bank that is organized under
the laws of the United States of America, any state thereof or
any foreign country recognized by the United States and at the
time of acquisition thereof has capital and surplus in excess of
$500 million (or the foreign currency equivalent thereof)
and a rating of
P-1 or
better from Moodys or
A-1 or
better from S&P or, with respect to a commercial bank
organized outside of the United States, a local market credit
rating of at least BBB- (or the then equivalent
grade) by S&P and the equivalent rating by Moodys, or
with government owned financial institution that is organized
under the laws of any of the countries in which the
Parents Restricted Subsidiaries conduct business;
(4) commercial paper outstanding at any time issued by any
person that is organized under the laws of the United States of
America, any state thereof or any foreign country recognized by
the United States and rated
P-1 or
better from Moodys or
A-1 or
better from S&P or, with respect to persons organized
outside of the United States, a local market credit rating at
least BBB- (or the then equivalent grade) by
S&P and the equivalent rating by Moodys and in each
case with maturities of not more than 360 days from the
date of acquisition thereof;
(5) securities with final maturities of not more than one
year from the date of acquisition thereof issued or fully
guaranteed by any state, territory or municipality of the United
States of America or by any political subdivision, taxing
authority, agency or instrumentality thereof or any country
recognized by the United States, which securities are rated at
the time of acquisition at least A by S&P or A by
Moodys;
59
(6) insured demand deposits made in the ordinary course of
business and consistent with the Parents or its
Subsidiaries customary cash management policy in any
domestic office of any commercial bank organized under the laws
of the United States of America or any state thereof;
(7) repurchase obligations with a term of not more than
360 days for underlying securities of the types described
in clauses (2), (3) and (4) above entered into with
any financial institution meeting the qualifications specified
in clause (3) above;
(8) local currency denominated investments in government
issued instruments with a term of not more than 360 days
from the date of acquisition, but only to the extent the
countrys credit rating is at least BBB- (or
the then equivalent grade) by S&P and the equivalent rating
by Moodys; and
(9) investments, classified in accordance with GAAP as
current assets of the Parent or any of its Restricted
Subsidiaries, in money market funds or investment programs
registered under the Investment Company Act of 1940 or similar
provision under foreign law, at least 90% of the portfolios of
which are limited to Investments of the character, quality and
maturity described in clauses (1) through (8) of this
definition.
Change of Control means the occurrence of any
of the following:
(1) the direct or indirect sale, transfer, conveyance or
other disposition (other than by way of merger or
consolidation), in one or a series of related transactions, of
all or substantially all of the properties or assets of the
Parent and its Restricted Subsidiaries, taken as a whole, to any
person (as that term is used in Section 13(d)
(3) of the Exchange Act);
(2) the adoption of a plan relating to the liquidation or
dissolution of the Parent or the Issuer;
(3) any person or group (as such
terms are used in Sections 13(d) and 14(d) of the Exchange
Act, but excluding any employee benefit plan of such
person or its Subsidiaries, and any person or entity
acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan) becomes the Beneficial Owner,
directly or indirectly, of 35% or more of the Voting Stock of
Parent or the Issuer on a fully-diluted basis (and taking into
account all such securities that such person or
group has the right to acquire pursuant to any
option right to the extent that such option right is exercisable
within 60 days after the date of determination);
(4) the first day on which a majority of the members of the
board of directors of the Parent or the Issuer are not
Continuing Directors;
(5) the Parent or the Issuer consolidates with, or merges
with or into, any person, or any person consolidates with, or
merges with or into the Parent or the Issuer, in any such event
pursuant to a transaction in which any of the outstanding Voting
Stock of the Parent or the Issuer, as the case may be, or such
person is converted into or exchanged for cash, securities or
other property, other than any such transaction where the Voting
Stock of the Parent or the Issuer as the case may be,
outstanding immediately prior to such transaction is converted
into or exchanged for Voting Stock (other than Disqualified
Stock) of the surviving or transferee person constituting a
majority of the outstanding shares of such Voting Stock of such
surviving or transferee person (immediately after giving effect
to such issuance); or
(6) Parent ceases to own 100% of the Equity Interests of
the Issuer (unless the Parent and the Issuer are merged);
provided that no Change of Control shall be deemed to
occur if the Notes are rated Baa3 or better by Moodys and
BBB- or better by Standard & Poors (or, if
either such entity ceases to rate the Exchange Notes for reasons
outside of the control of the Parent or the Issuer, the
equivalent investment grade credit rating from any other
nationally recognized statistical rating
organization within the meaning of Section 3(a)(62)
under the Exchange Act, selected by the Issuer as a replacement
agency) for a period of at least 90 consecutive days, beginning
on the date of such event, which period will be extended for so
long as the rating of the Exchange Notes is under publicly
announced consideration for possible downgrading by the
applicable rating agency.
60
Consolidated Cash Flow means, with respect to
any specified person for any period, the Consolidated Net Income
of such person for such period plus:
(1) provision for taxes based on income or profits of such
person and its Restricted Subsidiaries for such period
(including withholding taxes), to the extent that such provision
for taxes was deducted in computing such Consolidated Net
Income; plus
(2) Fixed Charges of such person and its Restricted
Subsidiaries for such period, to the extent that any such Fixed
Charges were deducted in computing such Consolidated Net Income;
plus
(3) depreciation, amortization (including amortization of
intangibles but excluding amortization of prepaid cash expenses
that were paid in a prior period) and other non-cash expenses or
charges (including, without limitation, minority interest
expense and foreign exchange losses and excluding any such
non-cash expense to the extent that it represents an accrual of
or reserve for cash expenses in any future period or
amortization of a prepaid cash expense that was paid in a prior
period) of such person and its Restricted Subsidiaries for such
period to the extent that such depreciation, amortization and
other non-cash expenses or charges were deducted in computing
such Consolidated Net Income, such other non-cash expenses to
include, without limitation, impairment charges associated with
goodwill, wireless licenses, other indefinite-lived assets and
long-lived assets, and stock-based compensation awards;
minus
(4) non-cash items increasing such Consolidated Net Income
(including, without limitation, foreign exchange gains) for such
period, other than the accrual of revenue consistent with past
practice;
in each case, on a consolidated basis and determined in
accordance with GAAP.
Notwithstanding the preceding, the provision for taxes based on
the income or profits of, the Fixed Charges of and the
depreciation and amortization and other non-cash expenses of, a
Restricted Subsidiary of the Parent will be added to
Consolidated Net Income to compute Consolidated Cash Flow of the
Parent (a) in the same proportion that the Net Income of
such Restricted Subsidiary was added to compute such
Consolidated Net Income of the Parent and (b) solely for
the purpose of determining the amount available for Restricted
Payments under clause (3)(i) of paragraph (A) of
Certain Covenants Limitation on Restricted
Payments, only to the extent that a corresponding amount
would be permitted at the date of determination to be dividended
or distributed to the Parent by such Restricted Subsidiary
without any prior governmental approval (that has not been
obtained), and without direct or indirect restriction pursuant
to the terms of its charter and all agreements, instruments,
judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Subsidiary or holders of its
capital stock, unless such restriction has been legally waived
or is contained in any agreement governing Indebtedness that is
permitted by the covenant described under Certain
Covenants Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries, provided, that
the restrictions on the declaration or payment of dividends or
similar distributions contemplated by this clause (b) shall
not include approvals required by the board of directors or
shareholders of the Restricted Subsidiary, the requirement to
obtain audited financial statements and any other requirements
that are administrative in nature and in the good faith judgment
of the Parent would be satisfied; provided further, that
amounts shall not be excluded by this clause (b) to the
extent they are paid or could be paid in cash to the specified
person or a Restricted Subsidiary thereof by dividend,
distribution or other payment (including, without limitation,
making loans, repaying indebtedness or paying under intercompany
arrangements).
Consolidated Leverage Ratio means on any
Transaction Date, the ratio of:
(1) the aggregate amount of Indebtedness of the Parent and
its Restricted Subsidiaries on a consolidated basis outstanding
on such Transaction Date, to
(2) the aggregate amount of Consolidated Cash Flow of the
Parent and its Restricted Subsidiaries for the Four Quarter
Period
In determining the Consolidated Leverage Ratio:
(1) pro forma effect shall be given to any Indebtedness
that is to be incurred or repaid on the Transaction Date;
61
(2) pro forma effect shall be given to Asset Dispositions
and Asset Acquisitions (including giving pro forma effect to the
application of proceeds of any Asset Disposition) that occur
during the Reference Period as if they had occurred and such
proceeds had been applied on the first day of such Reference
Period;
(3) pro forma effect shall be given to asset dispositions
and asset acquisitions (including giving pro forma effect to the
application of proceeds of any asset disposition) that have been
made by any person that has become a Restricted Subsidiary of
the Parent or has been merged with or into the Parent or any
Restricted Subsidiary during such Reference Period and that
would have constituted Asset Dispositions or Asset Acquisitions
had such transactions occurred when such person was a Restricted
Subsidiary, as if such asset dispositions or asset acquisitions
were Asset Dispositions or Asset Acquisitions that occurred on
the first day of such Reference Period.
To the extent that pro forma effect is given to an Asset
Acquisition or Asset Disposition, such pro forma calculation
shall be based upon the four full fiscal quarters immediately
preceding the Transaction Date of the person, or division,
operating unit or line of business of the person, that is
acquired or disposed of for which financial information is
available, and Consolidated Cash Flow will be calculated on a
pro forma basis in accordance with
Regulation S-X
under the Securities Act, but without giving effect to
clause (3) of the proviso set forth in the definition of
Consolidated Net Income.
Consolidated Net Income means, with respect
to any specified person for any period, the aggregate of the Net
Income of such person and its Subsidiaries for such period, on a
consolidated basis, determined in accordance with GAAP;
provided that:
(1) the Net Income of any person that is not a Restricted
Subsidiary or that is accounted for by the equity method of
accounting will be included only to the extent of the amount of
dividends or distributions paid in cash to the specified person
or a Restricted Subsidiary thereof;
(2) solely for the purpose of determining the amount
available for Restricted Payments under clause (3)(i) of
paragraph (A) of Certain Covenants
Limitation on Restricted Payments, the Net Income of any
Restricted Subsidiary will be excluded to the extent that the
declaration or payment of dividends or similar distributions by
that Restricted Subsidiary of that Net Income is not at the date
of determination permitted without any prior governmental
approval (that has not been obtained) or, directly or
indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary
or holders of its capital stock, unless such restriction with
respect to the payment of dividends or similar distributions has
been legally waived or is contained in any agreement governing
Indebtedness that is permitted by the covenant described under
Certain Covenants Dividend and Other Payment
Restrictions Affecting Restricted Subsidiaries,
provided, that the restrictions on the declaration or
payment of dividends or similar distributions contemplated by
this clause (2) shall not include approvals required by the
board of directors or shareholders of the Restricted Subsidiary,
the requirement to obtain audited financial statements and any
other requirements that are administrative in nature and in the
good faith judgment of the Parent would be satisfied;
provided further, that the Net Income of a Restricted
Subsidiary shall not be excluded by this clause (2) to the
extent it is paid or could be paid in cash to the specified
person or a Restricted Subsidiary thereof by dividend,
distribution or other payment (including, without limitation,
making loans, repaying indebtedness or paying under intercompany
arrangements).
(3) the Net Income of any person acquired during the
specified period for any period prior to the date of such
acquisition will be excluded;
(4) the cumulative effect of a change in accounting
principles will be excluded; and
(5) notwithstanding clause (1) above, the Net Income
or loss of any Unrestricted Subsidiary will be excluded, whether
or not distributed to the specified person or one of its
Subsidiaries.
Continuing Directors means, as of any date of
determination, any member of the board of directors of the
Parent or the Issuer, as applicable who:
(1) was a member of such board of directors on the Issue
Date; or
62
(2) was nominated for election or elected to such board of
directors with the approval of a majority of the Continuing
Directors who were members of such board of directors at the
time of such nomination or election or, in the case of the
Issuer, was nominated for election or elected by the Parent.
Credit Facilities means, one or more debt
facilities, commercial paper facilities or indentures, in each
case with banks or other institutional lenders or a trustee,
providing for revolving credit loans, term loans, receivables
financing (including through the sale of receivables to such
lenders or to special purpose entities formed to borrow from
such lenders against such receivables), letters of credit or
issuances of notes, in each case, as amended, restated,
modified, renewed, refunded, replaced or refinanced in whole or
in part from time to time.
Default means any event that is, or with the
passage of time or the giving of notice or both would be, an
Event of Default.
Disqualified Stock means any capital stock
that, by its terms (or by the terms of any security into which
it is convertible, or for which it is exchangeable, in each case
at the option of the holder thereof), or upon the happening of
any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the
option of the holder thereof, in whole or in part, on or prior
to the date that is one year after the date on which the Notes
mature. Notwithstanding the preceding sentence, any capital
stock that would constitute Disqualified Stock solely because
the holders thereof have the right to require the Parent to
repurchase such capital stock upon the occurrence of a change of
control or an asset sale will not constitute Disqualified Stock
if the terms of such capital stock provide that the Parent may
not repurchase or redeem any such capital stock pursuant to such
provisions unless such repurchase or redemption complies with
the covenant described above under the caption
Certain Covenants Restricted
Payments. The term Disqualified Stock will
also include any options, warrants or other rights that are
convertible into Disqualified Stock or that are redeemable at
the option of the holder, or required to be redeemed, prior to
the date that is one year after the date on which the Notes
mature.
Domestic Restricted Subsidiary means any
Restricted Subsidiary of the Parent other than a Restricted
Subsidiary that is (1) a controlled foreign
corporation under Section 957 of the Internal Revenue
Code (a) whose primary operating assets are located outside
the United States and (b) that is not subject to tax under
Section 882(a) of the Internal Revenue Code because of a
trade or business within the United States or (2) a
Subsidiary of an entity described in the preceding clause (1).
Equity Interests means capital stock and all
warrants, options or other rights to acquire capital stock (but
excluding any debt security that is convertible into, or
exchangeable for, capital stock).
Equity Offering means any public or private
placement of capital stock (other than Disqualified Stock) of
the Parent (other than pursuant to a registration statement on
Form S-8
or otherwise relating to equity securities issuable under any
employee benefit plan of the Parent) to any person other than
any Subsidiary of the Parent.
Existing Indebtedness means the aggregate
amount of Indebtedness of the Parent and its Restricted
Subsidiaries (other than Indebtedness under the Notes) in
existence on the Issue Date.
Fair Market Value means the price that would
be paid in an arms-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 an officer of the Parent or by the board of
directors of the Parent, evidenced by an Officers
Certificate or board resolution, as applicable.
First Tier Restricted Subsidiary means
each Restricted Subsidiary of the Parent (other than the
Issuer), the capital stock of which is held directly by the
Parent.
Fixed Charges means, with respect to any
specified person for any period, the sum, without duplication,
of:
(1) the consolidated interest expense of such person and
its Restricted Subsidiaries for such period, whether paid or
accrued, including, without limitation, amortization of debt
issuance costs and original issue discount, non-cash interest
payments, the interest component of any deferred payment
obligations, the interest component of all payments associated
with Capital Lease Obligations, imputed interest with respect to
Attributable Debt, commissions, discounts and other fees and
charges incurred in respect of letter of credit or
63
bankers acceptance financings, and net of the effect of
all payments made or received pursuant to Hedging Obligations;
plus
(2) the consolidated interest of such person and its
Restricted Subsidiaries that was capitalized during such period;
plus
(3) any interest expense on Indebtedness of another person
that is Guaranteed by such person or any of its Restricted
Subsidiaries or secured by a Lien on assets of such person or
any of its Restricted Subsidiaries whether or not such Guarantee
or Lien is called upon; plus
(4) the product of (a) all dividends, whether paid or
accrued and whether or not in cash, on any series of
Disqualified Stock of such person or Disqualified Stock or
preferred stock of any of its Restricted Subsidiaries other than
dividends on Equity Interests payable solely in Equity Interests
(other than Disqualified Stock) of the Parent or to the Parent
or a Restricted Subsidiary of the Parent, times (b) a
fraction, the numerator of which is one and the denominator of
which is one minus the then current combined federal, state and
local statutory tax rate of such person (if such person is part
of a consolidated group, then such tax rate shall be computed on
a standalone basis for such person), expressed as a decimal, in
each case, on a consolidated basis and in accordance with GAAP.
Foreign Restricted Subsidiary means any
Restricted Subsidiary of the Parent that is not a Domestic
Restricted Subsidiary.
Four Quarter Period means, with respect to
any specified Transaction Date, the four fiscal quarters
immediately prior to the Transaction Date for which internal
financial statements of the Parent are available.
GAAP means generally accepted accounting
principles set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of
Certified Public Accountants and in the statements and
pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as have been approved
by a significant segment of the accounting profession, which
were in effect on the Issue Date.
Government Securities means securities that
are direct obligations of the United States of America for the
timely payment of which its full faith and credit is pledged.
Guarantee means, as to any person, a
guarantee other than by endorsement of negotiable instruments
for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of
a pledge of assets or through letters of credit or reimbursement
agreements in respect thereof, of all or any part of any
Indebtedness of another person.
Guarantors means:
(1) the Initial Guarantors; and
(2) any other Subsidiary that executes a Note Guarantee in
accordance with the provisions of the applicable Indenture; and
their respective successors and assigns until released from
their obligations under the Note Guarantee and the applicable
Indenture in accordance with the terms of that Indenture.
Hedging Obligations means, with respect to
any specified person, the obligations of such person under:
(1) interest rate swap agreements, interest rate cap
agreements, interest rate collar agreements and other agreements
or arrangements with respect to interest rates;
(2) commodity swap agreements, commodity option agreements,
forward contracts and other agreements or arrangements with
respect to commodity prices; and
(3) foreign exchange contracts, currency swap agreements,
currency option agreements and other agreements or arrangements
with respect to foreign currency exchange rates.
Holder means a person in whose name a Note is
registered.
Incur means, with respect to any
Indebtedness, to incur, create, issue, assume, Guarantee or
otherwise become directly or indirectly liable for or with
respect to, or become responsible for, the payment of,
contingently or
64
otherwise, such Indebtedness (and Incurrence and
Incurred will have meanings correlative to the
foregoing); provided that (1) any Indebtedness of a
person existing at the time such person becomes a Restricted
Subsidiary of the Parent will be deemed to be Incurred by such
Restricted Subsidiary at the time it becomes a Restricted
Subsidiary of the Parent and (2) neither the accrual of
interest nor the accretion of original issue discount nor the
payment of interest in the form of additional Indebtedness with
the same terms and the payment of dividends on Disqualified
Stock or preferred stock in the form of additional shares of the
same class of Disqualified Stock or preferred stock (to the
extent provided for when the Indebtedness or Disqualified Stock
or preferred stock on which such interest or dividend is paid
was originally issued) will be considered an Incurrence of
Indebtedness; provided that in each case the amount
thereof is for all other purposes included in the Fixed Charges
and Indebtedness of the Parent or its Restricted Subsidiaries as
accrued.
Indebtedness means, with respect to any
specified person, any indebtedness of such person, whether or
not contingent and without duplication:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in
respect thereof);
(3) in respect of bankers acceptances;
(4) in respect of Capital Lease Obligations and
Attributable Debt;
(5) in respect of the balance deferred and unpaid of the
purchase price of any property or services, except any such
balance that constitutes an accrued expense or trade payable;
(6) representing Hedging Obligations;
(7) representing Disqualified Stock valued at the greater
of its voluntary or involuntary maximum fixed repurchase price
plus accrued dividends; or
(8) in the case of a Subsidiary of such person,
representing preferred stock valued at the greater of its
voluntary or involuntary maximum fixed repurchase price plus
accrued dividends.
In addition, the term Indebtedness includes
(x) all Indebtedness of others secured by a Lien on any
asset of the specified person (whether or not such Indebtedness
is assumed by the specified person), provided that the
amount of such Indebtedness will be the lesser of (a) the
Fair Market Value of such asset at such date of determination
and (b) the amount of such Indebtedness, and (y) to
the extent not otherwise included, the Guarantee by the
specified person of any Indebtedness of any other person. For
purposes hereof, the maximum fixed repurchase price
of any Disqualified Stock or preferred stock which does not have
a fixed repurchase price will be calculated in accordance with
the terms of such Disqualified Stock or preferred stock, as
applicable, as if such Disqualified Stock or preferred stock
were repurchased on any date on which Indebtedness will be
required to be determined pursuant to the Indentures.
The amount of any Indebtedness outstanding as of any date will
be the outstanding balance at such date of all unconditional
obligations as described above and, with respect to contingent
obligations, the maximum liability upon the occurrence of the
contingency giving rise to the obligation, and will be:
(1) the accreted value thereof, in the case of any
Indebtedness issued with original issue discount; and
(2) the principal amount thereof, together with any
interest thereon that is more than 30 days past due, in the
case of any other Indebtedness.
Initial Guarantors means the Parent and all
Domestic Restricted Subsidiaries existing on the Issue Date.
Initial Purchasers means, for the 10% Old
Notes, Morgan Stanley & Co. Incorporated and
J.P. Morgan Securities Inc. and, for the 8.875% Old Notes,
Morgan Stanley & Co. Incorporated, Credit Suisse
Securities (USA) LLC, Deutsche Bank Securities Inc. and Goldman,
Sachs & Co.
Investments means, with respect to any
person, all direct or indirect investments by such person in
other persons (including Affiliates) in the form of loans or
other extensions of credit (including Guarantees), advances,
65
capital contributions (by means of any transfer of cash or other
property to others or any payment for property or services for
the account or use of others), purchases or other acquisitions
for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be
classified as investments on a balance sheet prepared in
accordance with GAAP.
If the Parent or any Restricted Subsidiary of the Parent sells
or otherwise disposes of any Equity Interests of any direct or
indirect Restricted Subsidiary of the Parent such that, after
giving effect to any such sale or disposition, such person is no
longer a Restricted Subsidiary of the Parent, the Parent will be
deemed to have made an Investment on the date of any such sale
or disposition equal to the Fair Market Value of the Investment
in such Subsidiary not sold or disposed of. The acquisition by
the Parent or any Restricted Subsidiary of the Parent of a
person that holds an Investment in a third person will be deemed
to be an Investment by the Parent or such Restricted Subsidiary
in such third person in an amount equal to the Fair Market Value
of the Investment held by the acquired person in such third
person.
Issue Date means the date of original
issuance of the Notes under the applicable Indenture.
Lien means, with respect to any asset, any
mortgage, lien, pledge, charge, security interest or encumbrance
of any kind in respect of such asset, whether or not filed,
recorded or otherwise perfected under applicable law, including
any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to
sell or give a security interest in and any filing of or
agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction.
Moodys means Moodys Investors
Service, Inc. and its successors.
Net Income means, with respect to any
specified person, the net income (loss) of such person,
determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however:
(1) any gain or loss, together with any related provision
for taxes on such gain or loss, realized in connection with:
(a) any sale of assets outside the ordinary course of
business of such person; or (b) the disposition of any
securities by such person or any of its Restricted Subsidiaries
or the extinguishment of any Indebtedness of such person or any
of its Restricted Subsidiaries; and
(2) any extraordinary gain or loss, together with any
related provision for taxes on such extraordinary gain or loss.
Net Proceeds means the aggregate cash
proceeds, including payments in respect of deferred payment
obligations (to the extent corresponding to the principal, but
not the interest component, thereof) received by the Parent or
any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale
or other disposition of any non-cash consideration received in
any Asset Sale), net of (1) the direct costs relating to
such Asset Sale, including, without limitation, legal,
accounting, investment banking and brokerage fees, and sales
commissions, and any relocation expenses incurred as a result
thereof, (2) taxes paid or payable as a result thereof, in
each case, after taking into account any available tax credits
or deductions and any tax sharing arrangements, (3) amounts
required to be applied to the repayment of Indebtedness or other
liabilities secured by a Lien on the asset or assets that were
the subject of such Asset Sale or required to be paid as a
result of such sale, (4) any reserve for adjustment in
respect of the sale price of such asset or assets established in
accordance with GAAP, (5) in the case of any Asset Sale by
a Restricted Subsidiary of the Parent, payments to holders of
Equity Interests in such Restricted Subsidiary in such capacity
(other than such Equity Interests held by the Parent or any
Restricted Subsidiary thereof) to the extent that such payment
is required to permit the distribution of such proceeds in
respect of the Equity Interests in such Restricted Subsidiary
held by the Parent or any Restricted Subsidiary thereof and
(6) appropriate amounts to be provided by the Parent or its
Restricted Subsidiaries as a reserve against liabilities
associated with such Asset Sale, including, without limitation,
pension and other post-employment benefit liabilities,
liabilities related to environmental matters and liabilities
under any indemnification obligations associated with such Asset
Sale, all as determined in accordance with GAAP; provided
that (a) excess amounts set aside for payment of taxes
pursuant to clause (2) above remaining after such taxes
have been paid in full or the statute of limitations therefor
has expired and (b) amounts initially held in reserve
pursuant to clause (6) no longer so held, will, in the case
of each of subclause (a) and (b), at that time become Net
Proceeds.
66
Note Guarantee means a Guarantee of the Notes
pursuant to the Indentures.
Obligations means any principal, interest,
penalties, fees, indemnifications, reimbursements, damages and
other liabilities payable under the documentation governing any
Indebtedness.
Officers Certificate means a
certificate signed on behalf of the Issuer or the Parent, as the
case may be by at least two Officers of the Issuer or the Parent
as the case may be, one of whom must be the principal executive
officer, the principal financial officer, the treasurer or the
principal accounting officer of the Issuer or the Parent, as the
case may be, that meets the requirements of the Indentures.
Old Notes means the Issuers original
unregistered 10% Senior Notes due 2016 that were issued in
a private offering on August 18, 2009.
Permitted Business means the
telecommunications business and related activities and services
including any business conducted or proposed to be conducted (as
described in the prospectus) by the Parent and its Restricted
Subsidiaries on the Issue Date, (which include, without
limitation, the delivery or distribution of wireless
telecommunications services (including voice, data or video
services) and the acquisition, holding or exploitation of any
license relating to the delivery of such wireless
telecommunications services) and other businesses related,
ancillary or complementary thereto.
Permitted Investments means:
(1) any Investment in the Parent or a Restricted Subsidiary
of the Parent;
(2) any Investment in Cash Equivalents;
(3) any Investment by the Parent or any Restricted
Subsidiary of the Parent in a person, if as a result of such
Investment:
(a) such person becomes a Restricted Subsidiary of the
Parent; or
(b) such person is merged, consolidated or amalgamated with
or into, or transfers or conveys substantially all of its assets
to, or is liquidated into, the Parent or a Restricted Subsidiary
of the Parent;
provided that such persons primary business is a
Permitted Business;
(4) any Investment made as a result of the receipt of
non-cash consideration from an Asset Sale that was made pursuant
to and in compliance with the covenant described above under the
caption Repurchase at the Option of
Holders Asset Sales;
(5) Investments acquired as a capital contribution to, or
in exchange for, or out of the net cash proceeds of a
substantially concurrent sale (other than to a Restricted
Subsidiary of the Parent) of, Equity Interests (other than
Disqualified Stock) of, the Parent; provided that the
amount of any such Equity Interests or net proceeds that are
utilized for any such acquisition or exchange will be excluded
from clause (3)(ii) of paragraph (A) of the covenant
described above under the caption Certain
Covenants Restricted Payments;
(6) Hedging Obligations that are Incurred for the purpose
of fixing, hedging or swapping interest rate, commodity price or
foreign currency exchange rate risk (or to reverse or amend any
such agreements previously made for such purposes), and not for
speculative purposes, and that do not increase the Indebtedness
of the obligor outstanding at any time other than as a result of
fluctuations in interest rates, commodity prices or foreign
currency exchange rates or by reason of fees, indemnities and
compensation payable thereunder;
(7) stock, obligations or securities received in
satisfaction of judgments;
(8) advances to customers or suppliers in the ordinary
course of business that are, in conformity with GAAP, recorded
as accounts receivable, prepaid expenses or deposits on the
balance sheet of the Parent or its Restricted Subsidiaries and
endorsements for collection or deposit arising in the ordinary
course of business;
(9) commission, payroll, travel and similar advances to
officers and employees of the Parent or any of its Restricted
Subsidiaries that are expected at the time of such advance
ultimately to be recorded as an expense in conformity with GAAP;
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(10) loans and advances to employees, officers or directors
of the Parent or any of its Restricted Subsidiaries made in the
ordinary course of business, provided that such loans and
advances do not exceed $5 million at any one time
outstanding;
(11) Investments existing on the Issue Date;
(12) other Investments in any person primarily engaged in a
Permitted Business (including joint ventures and Unrestricted
Subsidiaries) having an aggregate Fair Market Value (measured on
the date each such Investment was made and without giving effect
to subsequent changes in value), when taken together with all
other outstanding Investments made pursuant to this
clause (12) since August 18, 2009, not to exceed 20%
of consolidated total assets of the Parent (determined as of the
end of the most recent fiscal quarter of the Parent for which
internal financial statements of the Parent are
available); and
(13) other Investments, having an aggregate Fair Market
Value (measured on the date each such Investment was made and
without giving effect to subsequent changes in value), when
taken together with all other outstanding Investments made
pursuant to this clause (13) since August 18, 2009,
not to exceed $350 million.
Permitted Liens means:
(1) Liens on the assets securing Indebtedness Incurred
under clause (1) of the second paragraph of the covenant
described above under the caption Incurrence
of Indebtedness;
(2) Liens in favor of the Parent, the Issuer or any
Subsidiary Guarantor;
(3) Liens on property of a person existing at the time such
person is merged with or into or consolidated with the Parent,
the Issuer or any Subsidiary Guarantor; provided that
such Liens were in existence prior to the contemplation of such
merger or consolidation or other event and do not extend to any
assets other than those of the person that is merged into or
consolidated with the Parent, the Issuer or the Subsidiary
Guarantor, as the case may be;
(4) Liens on property existing at the time of acquisition
thereof by the Parent, the Issuer or any Subsidiary Guarantor,
provided that such Liens were in existence prior to the
contemplation of such acquisition and do not extend to any
property other than the property so acquired by the Parent, the
Issuer or such Subsidiary Guarantor;
(5) Liens securing the Notes and any Note Guarantee;
(6) Liens existing on the Issue Date (other than any Liens
securing Indebtedness Incurred under clause (1) of the
second paragraph of the covenant described under the caption
Certain Covenants Incurrence of
Indebtedness) and any renewals or extension thereof,
provided that property or assets covered thereby is not
expanded in connection with such renewal or extension;
(7) Liens securing Permitted Refinancing Indebtedness;
provided that such Liens do not extend to any property or
assets other than the property or assets that secure the
Indebtedness being refinanced;
(8) Liens on property or assets used to defease or to
satisfy and discharge Indebtedness; provided that
(a) the Incurrence of such Indebtedness was not prohibited
by the applicable Indenture and (b) such defeasance or
satisfaction and discharge is not prohibited by the applicable
Indenture;
(9) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (4) of the second
paragraph of the covenant described under the caption
Certain Covenants Incurrence of
Indebtedness; provided that any such Lien
(a) covers only the assets acquired, constructed or
improved with such Indebtedness and (b) is created within
365 days of such acquisition, construction or improvement;
(10) Liens incurred or deposits made in the ordinary course
of business in connection with workers compensation,
unemployment insurance or other social security obligations;
(11) Liens, deposits or pledges to secure the performance
of bids, tenders, contracts (other than contracts for the
payment of Indebtedness), leases, or other similar obligations
arising in the ordinary course of business;
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(12) survey exceptions, encumbrances, easements or
reservations of, or rights of other for, rights of way, zoning
or other restrictions as to the use of properties, and defects
in title which, in the case of any of the foregoing, were not
incurred or created to secure the payment of Indebtedness, and
which in the aggregate do no materially adversely affect the
value of such properties or materially impair the use for the
purposes of which such properties are held by the Parent or any
of its Restricted Subsidiaries;
(13) judgment and attachment Liens not giving rise to an
Event of Default and notices of lis pendens and associated
rights related to litigation being contested in good faith by
appropriate proceedings and for which adequate reserves have
been made;
(14) Liens, deposits or pledges to secure public or
statutory obligations, surety, stay, appeal, indemnity,
performance or other similar bonds or obligations; and Liens,
deposits or pledges in lieu of such bonds or obligations, or to
secure such bonds or obligations, or to secure letters of credit
in lieu of or supporting the payment of such bonds or
obligations;
(15) Liens in favor of collecting or payor banks having a
right of setoff, revocation, refund or chargeback with respect
to money or instruments of the Parent or any Subsidiary thereof
on deposit with or in possession of such bank;
(16) any interest or title of a lessor, licensor or
sublicensor in the property subject to any lease, license or
sublicense (other than any property that is the subject of a
Sale and Leaseback Transaction);
(17) Liens for taxes, assessments and governmental charges
not yet delinquent or being contested in good faith and for
which adequate reserves have been established to the extent
required by GAAP;
(18) Liens arising from precautionary financing statements
or similar documents regarding operating leases or consignments;
(19) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties
in connection with the importation of goods;
(20) Liens on cash collateral not in excess of
$150 million in the aggregate at any time securing letters
of credit;
(21) carriers, warehousemens, mechanics,
landlords, materialmens, repairmens or other
like Liens arising in the ordinary course of business in respect
of obligations not overdue for a period in excess of
60 days or which are being contested in good faith by
appropriate proceedings promptly instituted and diligently
prosecuted; provided, however, that any reserve or other
appropriate provision as will be required to conform with GAAP
will have been made for that reserve or provision.
Permitted Refinancing Indebtedness means any
Indebtedness of the Parent or any of its Restricted Subsidiaries
issued in exchange for, or the net proceeds of which are used to
extend, refinance, renew, replace, defease or refund other
Indebtedness of the Parent or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that:
(1) the amount of such Permitted Refinancing Indebtedness
does not exceed the amount of the Indebtedness so extended,
refinanced, renewed, replaced, defeased or refunded (plus all
accrued and unpaid interest thereon and the amount of any
reasonably determined premium necessary to accomplish such
refinancing and such reasonable expenses incurred in connection
therewith);
(2) such Permitted Refinancing Indebtedness has a Weighted
Average Life to Maturity equal to or greater than the Weighted
Average Life to Maturity of, the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded;
(3) if the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded is subordinated in right
of payment to the Notes or any Note Guarantee, such Permitted
Refinancing Indebtedness has a final maturity date later than
the final maturity date of the Notes and is subordinated in
right of payment to the Notes or such Note Guarantee, as
applicable, on terms at least as favorable, taken as a whole, to
the Holders of
69
Notes as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded;
(4) if the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded is pari passu in
right of payment with the Notes or any Note Guarantee, such
Permitted Refinancing Indebtedness is pari passu with, or
subordinated in right of payment to, the Notes or such Note
Guarantee; and
(5) if the obligor on the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded is
(a) the Parent, such Indebtedness is Incurred by the
Parent, (b) the Issuer or a Subsidiary Guarantor, such
Indebtedness is incurred by the Parent, the Issuer or a
Subsidiary Guarantor or (c) a Restricted Subsidiary that is
not a Subsidiary Guarantor or the Issuer, such Indebtedness may
be Incurred by the Parent or any of its Restricted Subsidiaries.
Permitted Subordinated Indebtedness means
Indebtedness of the Parent, the Issuer or any Subsidiary
Guarantor that is expressly subordinated in right of payment to
the Notes or the Note Guarantee and that, by its terms (or by
the terms of any security into which it is convertible, or for
which it is exchangeable, in each case at the option of the
holder thereof), or upon the happening of any event, matures or
is mandatorily redeemable, pursuant to a sinking fund obligation
or otherwise, or redeemable at the option of the holder thereof,
in whole or in part, no earlier than on or after the date that
is one year after the date on which the Notes mature.
Notwithstanding the preceding sentence, any Indebtedness of the
Parent, the Issuer or any Subsidiary Guarantor that would not
constitute Permitted Subordinated Indebtedness solely because
the holders thereof have the right to require the Parent, the
Issuer or any Guarantor to repurchase such Indebtedness upon the
occurrence of a change of control or an asset sale will
nonetheless constitute Permitted Subordinated Indebtedness if
the terms of such Indebtedness provide that the Parent, the
Issuer or the Subsidiary Guarantor, as the case may be, may not
repurchase or redeem any such Indebtedness pursuant to such
provisions unless such repurchase or redemption complies with
the covenant described above under the caption
Certain Covenants Restricted
Payments.
Priority Debt means all Secured Indebtedness
of the Parent, the Issuer or any Subsidiary Guarantor and all
Indebtedness of any Restricted Subsidiary of the Parent that is
not the Issuer or a Subsidiary Guarantor, other than
(i) the Notes in the event the Notes become secured and
(ii) Secured Indebtedness secured pursuant to the covenant
described above under the caption Certain
Covenants Liens where the Notes are secured on
an equal and ratable or senior basis.
Priority Debt Leverage Ratio means on any
Transaction Date, the ratio of:
(1) the aggregate amount of Priority Debt on a consolidated
basis outstanding on such Transaction Date, to
(2) the aggregate amount of Consolidated Cash Flow of the
Parent and its Restricted Subsidiaries for the Four Quarter
Period;
In determining the Priority Debt Leverage Ratio:
(A) pro forma effect shall be given to any Indebtedness
that is to be incurred or repaid on the Transaction Date;
(B) pro forma effect shall be given to Asset Dispositions
and Asset Acquisitions (including giving pro forma effect to the
application of proceeds of any Asset Disposition) that occur
during the Reference Period as if they had occurred and such
proceeds had been applied on the first day of such Reference
Period; and
(C) pro forma effect shall be given to asset dispositions
and asset acquisitions (including giving pro forma effect to the
application of proceeds of any asset disposition) that have been
made by any person that has become a Restricted Subsidiary of
the Parent or has been merged with or into the Parent or any
Restricted Subsidiary during such Reference Period and that
would have constituted Asset Dispositions or Asset Acquisitions
had such transactions occurred when such person was a Restricted
Subsidiary, as if such asset dispositions or asset acquisitions
were Asset Dispositions or Asset Acquisitions that occurred on
the first day of such Reference Period.
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To the extent that pro forma effect is given to an Asset
Acquisition or Asset Disposition, such pro forma calculation
shall be based upon the four full fiscal quarters immediately
preceding the Transaction Date of the person, or division,
operating unit or line of business of the person, that is
acquired or disposed of for which financial information is
available, and Consolidated Cash Flow will be calculated on a
pro forma basis in accordance with
Regulation S-X
under the Securities Act, but without giving effect to
clause (3) of the proviso set forth in the definition of
Consolidated Net Income.
Reference Period means, with respect to any
specified Transaction Date, the period beginning on the first
day of the Four Quarter Period and ending on such Transaction
Date.
Replacement Assets means (1) capital
expenditures or other non-current assets that will be used or
useful in a Permitted Business, (2) substantially all the
assets of a Permitted Business or (3) Voting Stock of any
person engaged in a Permitted Business that, when taken together
with all other Voting Stock of such person owned by the Parent
and its Restricted Subsidiaries, constitutes a majority of the
Voting Stock of such person and such person will become on the
date of acquisition thereof a Restricted Subsidiary.
Restricted Investment means an Investment
other than a Permitted Investment.
Restricted Subsidiary of a person means any
Subsidiary of such person that is not an Unrestricted Subsidiary.
S&P means Standard &
Poors, a division of The McGraw-Hill Companies, and its
successors.
Sale and Leaseback Transaction means, with
respect to any person, any transaction involving any of the
assets or properties of such person, whether now owned or
hereafter acquired, whereby such person sells or otherwise
transfers such assets or properties and then or thereafter
leases such assets or properties or any part thereof or any
other assets or properties which such person intends to use for
substantially the same purpose or purposes as the assets or
properties sold or transferred.
Secured Indebtedness means any Indebtedness
secured by a Lien upon property or assets of the Parent or any
of its Restricted Subsidiaries.
Significant Subsidiary means any Subsidiary
that would constitute a significant subsidiary
within the meaning of Article 1 of
Regulation S-X
of the Securities Act.
Stated Maturity means, with respect to any
installment of interest or principal on any series of
Indebtedness, the date on which such payment of interest or
principal was scheduled to be paid in the original documentation
governing such Indebtedness, and will not include any contingent
obligations to repay, redeem or repurchase any such interest or
principal prior to the date originally scheduled for the payment
thereof.
Subsidiary means, with respect to any
specified person:
(1) any corporation, association or other business entity
of which more than 50% of the total voting power of the Voting
Stock is at the time owned or controlled, directly or
indirectly, by such person or one or more of the other
Subsidiaries of that person (or a combination thereof); and
(2) any partnership (a) the sole general partner or
the managing general partner of which is such person or a
Subsidiary of such person or (b) the only general partners
of which are such person or one or more Subsidiaries of such
person (or any combination thereof).
Subsidiary Debt Leverage Ratio means on any
Transaction Date, the ratio of:
(1) the aggregate amount of Priority Debt and, without
duplication, any Indebtedness of the Issuer and the Subsidiary
Guarantors on a consolidated basis outstanding on such
Transaction Date, to
(2) the aggregate amount of Consolidated Cash Flow of the
Parent and its Restricted Subsidiaries for the Four Quarter
Period.
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In determining the Subsidiary Debt Leverage Ratio:
(1) pro forma effect shall be given to any Indebtedness
that is to be incurred or repaid on the Transaction Date;
(2) pro forma effect shall be given to Asset Dispositions
and Asset Acquisitions (including giving pro forma effect to the
application of proceeds of any Asset Disposition) that occur
during the Reference Period as if they had occurred and such
proceeds had been applied on the first day of such Reference
Period;
(3) pro forma effect shall be given to asset dispositions
and asset acquisitions including giving pro forma effect to the
application of proceeds of any asset disposition) that have been
made by any person that has become a Restricted Subsidiary of
the Parent or has been merged with or into the Parent or any
Restricted Subsidiary during such Reference Period and that
would have constituted Asset Dispositions or Asset Acquisitions
had such transactions occurred when such person was a Restricted
Subsidiary, as if such asset dispositions or asset acquisitions
were Asset Dispositions or Asset Acquisitions that occurred on
the first day of such Reference Period.
To the extent that pro forma effect is given to an Asset
Acquisition or Asset Disposition, such pro forma calculation
shall be based upon the four full fiscal quarters immediately
preceding the Transaction Date of the person, or division,
operating unit or line of business of the person, that is
acquired or disposed of for which financial information is
available, and Consolidated Cash Flow will be calculated on a
pro forma basis in accordance with
Regulation S-X
under the Securities Act, but without giving effect to
clause (3) of the proviso set forth in the definition of
Consolidated Net Income.
Subsidiary Guarantor means any Restricted
Subsidiary of the Parent that guarantees the Issuers
Obligations under the Notes in accordance with the terms of the
Indentures, and its successors and assigns, until released from
its obligations under such Guarantee and the Indentures in
accordance with the terms of the Indentures.
Transaction Date means, with respect to the
incurrence of any Indebtedness by the Parent or any of its
Restricted Subsidiaries, the date such Indebtedness is to be
incurred, with respect to any Restricted Payment, the date such
Restricted Payment is to be made, and with respect to the
incurrence of any Lien by the Parent or any of its Restricted
Subsidiaries, the date such Lien is to be incurred.
Treasury Rate means (i) for the 10%
Exchange Notes, the yield to maturity at the time of computation
of United States Treasury securities with a constant maturity
(as compiled and published in the most recent Federal Reserve
Statistical Release H.15 (519) which has become publicly
available at least two business days prior to the date fixed for
prepayment (or, if such Statistical Release is no longer
published, any publicly available source for similar market
data)) most nearly equal to the then remaining term of the 10%
Exchange Notes to August 15, 2013; provided,
however, that if the then remaining term of the 10%
Exchange Notes to August 15, 2013 is not equal to the
constant maturity of a United States Treasury security for which
a weekly average yield is given, the Treasury Rate will be
obtained by linear interpolation (calculated to the nearest
one-twelfth of a year) from the weekly average yields of United
States Treasury securities for which such yields are given,
except that if the then remaining term of the 10% Exchange Notes
to August 15, 2013 is less than one year, the weekly
average yield on actually traded United States Treasury
securities adjusted to a constant maturity of one year will be
used and (ii) for the 8.875% Exchange Notes, the yield to
maturity at the time of computation of United States Treasury
securities with a constant maturity (as compiled and published
in the most recent Federal Reserve Statistical Release H.15
(519) which has become publicly available at least two
business days prior to the date fixed for prepayment (or, if
such Statistical Release is no longer published, any publicly
available source for similar market data)) most nearly equal to
the then remaining term of the 8.875% Exchange Notes to
December 15, 2014; provided, however, that if
the then remaining term of the 8.875% Exchange Notes to
December 15, 2014 is not equal to the constant maturity of
a United States Treasury security for which a weekly average
yield is given, the Treasury Rate will be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year)
from the weekly average yields of United States Treasury
securities for which such yields are given, except that if the
then remaining term of the 8.875% Exchange Notes to
December 15, 2014 is less than one year, the weekly average
yield on actually traded United States Treasury securities
adjusted to a constant maturity of one year will be used.
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Unrestricted Subsidiary means any Subsidiary
of the Parent (other than the Issuer) that is designated by the
board of directors of the Parent as an Unrestricted Subsidiary
pursuant to a board resolution in compliance with the covenant
described under the caption Certain Covenants
Designation of Restricted and Unrestricted
Subsidiaries, and any Subsidiary of such Subsidiary.
Voting Stock of any person as of any date
means the capital stock of such person that is ordinarily
entitled to vote in the election of the board of directors of
such person.
Weighted Average Life to Maturity means, when
applied to any Indebtedness at any date, the number of years
obtained by dividing:
(1) the sum of the products obtained by multiplying
(a) the amount of each then remaining installment, sinking
fund, serial maturity or other required payments of principal,
including payment at final maturity, in respect thereof, by
(b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making
of such payment; by
(2) the then outstanding principal amount of such
Indebtedness.
Wireless Licenses means broadband personal
communications service licenses or other licenses for the
provision of wireless telecommunications services or operation
of wireless telecommunications systems issued from time to time
by the applicable government agency or other authority in the
jurisdictions where the Parent and its Restricted Subsidiaries
operate.
CERTAIN
FEDERAL INCOME TAX CONSIDERATIONS
The following summary describes the material U.S. federal
income tax consequences of the exchange of Old Notes for the
Exchange Notes pursuant to this exchange offer.
This summary does not discuss all of the aspects of
U.S. federal income taxation which may be relevant to
investors in light of their particular circumstances. In
addition, this summary does not discuss any state or local
income or foreign income or other tax consequences. This summary
is based upon the provisions of the Internal Revenue Code of
1986, as amended (the Code), Treasury Regulations,
rulings and judicial decisions, all as in effect as of the date
of this prospectus and all of which are subject to change or
differing interpretation, possibly with retroactive effect. We
have not requested, and do not plan to request, any rulings from
the Internal Revenue Service concerning the tax consequences of
the exchange of the Old Notes for the Exchange Notes or the
ownership or disposition of the Exchange Notes. The statements
set forth below are not binding on the Internal Revenue Service
or on any court. Thus, we can provide no assurance that the
statements set forth below will not be challenged by the
Internal Revenue Service, or that they would be sustained by a
court if they were so challenged.
The discussion below deals only with the Exchange Notes held as
capital assets within the meaning of the Code, and does not
address holders of the Exchange Notes that may be subject to
special rules. Holders that may be subject to special rules
include:
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some U.S. expatriates;
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banks, thrifts or other financial institutions;
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regulated investment companies or real estate investment trusts;
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insurance companies;
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tax-exempt entities;
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S Corporations;
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broker-dealers or dealers in securities or currencies;
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traders in securities;
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holders whose functional currency is not the U.S. dollar;
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persons that hold the Exchange Notes as part of a straddle,
hedge, conversion or other risk reduction or constructive sale
transaction; and
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persons subject to the alternative minimum tax provisions of the
Code.
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If a partnership or other entity taxable as a partnership holds
the Exchange Notes, the tax treatment of a partner in the
partnership will generally depend on the status of the partner
and the activities of the partnership. Such partner should
consult its tax advisor as to the tax consequences of the
partnership owning and disposing of the Exchange Notes.
You should consult your own tax advisor regarding the particular
U.S. federal, state and local and foreign income and other
tax consequences of exchanging the Old Notes for the Exchange
Notes.
The
Exchange
The exchange of the Old Notes for the Exchange Notes in the
exchange offer will not be treated as an exchange
for federal income tax purposes, because the Exchange Notes will
not be considered to differ materially in kind or extent from
the Old Notes. Accordingly, the exchange of Old Notes for
Exchange Notes will not be a taxable event to holders for
federal income tax purposes. Moreover, the Exchange Notes will
have the same tax attributes as the Old Notes and the same tax
consequences to holders as the Old Notes have to holders,
including without limitation, the same issue price, adjusted
issue price, adjusted tax basis, original issue discount and
holding period.
PLAN OF
DISTRIBUTION
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 such
Exchange Notes. This prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer
in connection with resales of Exchange Notes received in
exchange for securities where such securities were acquired as a
result of market-making activities or other trading activities.
NII Capital and the Guarantors have agreed that, beginning on
the date of consummation of the exchange offer and ending on the
close of business
180-days
after the consummation of the exchange offer, they will make
this prospectus, as amended or supplemented, available to any
broker-dealer for use in connection with any such resale. In
addition, until approximately October , 2010,
all dealers effecting transactions in the Exchange Notes may be
required to deliver a prospectus.
The company will not receive any proceeds from any sale of
Exchange Notes by brokers-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 such methods
of resale, at market prices prevailing at the time of resale, at
prices related to such prevailing market prices or at negotiated
prices. Any such resale may be made directly to purchasers or to
or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such
broker-dealer
and/or the
purchasers of any such Exchange Notes. Any broker-dealer that
resells Exchange Notes that were received by it for its own
account pursuant to the exchange offer and any broker or dealer
that participates in a distribution of such Exchange Notes may
be deemed to be an underwriter within the meaning of
the Act and any profit of any such resale of Exchange Notes and
any commissions or concessions received by any such persons may
be deemed to be underwriting compensation under the Act. 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 Act.
For a period of
180-days
after the consummation of the exchange offer, NII Capital and
the Guarantors have agreed to promptly send a reasonable number
of additional copies of this prospectus and any amendment or
supplement to this prospectus to any broker-dealer that requests
such documents in the Letter of Transmittal. NII Capital and the
Guarantors have agreed to pay all expenses incident to the
exchange offer (including the expenses of one counsel for the
holder of the securities) other than commissions or concessions
of any brokers or dealers and will indemnify the holders of the
securities (including any broker-dealers) against certain
liabilities, including liabilities under the Act.
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LEGAL
MATTERS
Certain legal matters relating to the Exchange Notes offered
hereby will be passed upon for NII Holdings and NII Capital by
Williams Mullen, Richmond, Virginia.
EXPERTS
The financial statements incorporated in this Prospectus by
reference to NII Holdings, Inc.s Current Report on
Form 8-K
dated March 8, 2010 and managements assessment of the
effectiveness of internal control over financial reporting
(which is included in Managements Report on Internal
Control over Financial Reporting) incorporated in this
Prospectus by reference to the Annual Report on
Form 10-K
of NII Holdings, Inc. for the year ended December 31, 2009
have been so incorporated in reliance on the reports of
PricewaterhouseCoopers LLP, an independent registered public
accounting firm, given on the authority of said firm as experts
in auditing and accounting.
WHERE YOU
CAN FIND MORE INFORMATION
This prospectus is part of a registration statement on
Form S-4
that NII Capital, NII Holdings and the guarantors filed with the
Securities and Exchange Commission pursuant to the Securities
Act of 1933, as amended, and the rules and regulations
thereunder, which is referred to collectively as the Securities
Act. The registration statement covers the Exchange Notes being
offered and the Exchange Note guarantees by NII Holdings and the
other guarantors and encompasses all amendments, exhibits,
annexes, and schedules to the registration statement. This
prospectus does not contain all the information in the exchange
offer registration statement. For further information about NII
Capital, NII Holdings, the other guarantors and the exchange
offer, reference is made to the registration statement.
NII Capital and the guarantors other than NII Holdings are not
subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, pursuant to
Rule 12h-5
thereunder. NII Holdings is, however, subject to the
informational requirements of the Securities Exchange Act of
1934, as amended. Accordingly, NII Holdings files reports, proxy
statements and other information with the SEC. You may read and
copy any document that NII Holdings files at the SECs
public reference room facility located at
100 F Street, NE, Room 1580,
Washington, D.C. 20549. Please call the SEC at
l-800-SEC-0330 for further information on the public reference
room. The SEC maintains an Internet site at
http://www.sec.gov
that contains reports, proxy and information statements and
other information regarding issuers, including NII Holdings,
that file documents with the SEC electronically through the
SECs electronic data gathering, analysis and retrieval
system known as EDGAR.
In this document NII Capital, NII Holdings and the other
guarantors incorporate by reference the information
that NII Holdings files with the SEC, which means that they can
disclose important information to you by referring to that
information. The information incorporated by reference is
considered to be a part of this prospectus, and later
information filed with the SEC will update and supersede this
information. NII Capital, NII Holdings and the other guarantors
incorporate by reference the documents listed below, to the
extent they have been filed with the SEC:
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NII Holdings annual report on
Form 10-K
for the year ended December 31, 2009;
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NII Holdings current reports on
Form 8-K
filed February 16, 2010 and March 8, 2010; and
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NII Holdings definitive proxy statement for the annual
meeting of stockholders to be held on May 11, 2010.
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NII Capital, NII Holdings and the other guarantors also
incorporate by reference all documents filed by NII Holdings to
the extent they have been filed with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 (other than those furnished
pursuant to Item 2.02 or Item 7.01 in any current
report on
Form 8-K
or other information deemed to have been furnished
rather than filed in accordance with the SECs rules)
(1) after the date of this prospectus and (2) until
this offering has been completed. Information in this prospectus
supersedes related information in the documents listed above,
and information in subsequently filed documents supersedes
related information in both this prospectus and the incorporated
documents.
75
We will promptly provide, without charge to you, upon written or
oral request, a copy of any or all of the documents incorporated
by reference in this prospectus, other than exhibits to those
documents, unless the exhibits are specifically incorporated by
reference in those documents. Requests should be directed to
Investor Relations, NII Holdings, Inc., 1875 Explorer Street,
Suite 1000, Reston, Virginia 20190,
(703) 390-5100,
or you may visit the investor relations section of our website
at www.nii.com/investor relations.html. The
information contained on our website is not part of this
prospectus.
This prospectus or information incorporated by reference herein,
contains summaries of certain agreements that we have filed as
exhibits to various filings we have made with the SEC, as well
as certain agreements that we will enter into in connection with
the offering of the Exchange Notes described in this prospectus.
The descriptions of these agreements contained in this
prospectus or information incorporated by reference herein do
not purport to be complete and are subject to, or qualified in
their entirety by reference to, the definitive agreements.
Copies of the definitive agreements will be made available
without charge to you by making a written or oral request to us.
76
PART II
INFORMATION
NOT REQUIRED IN PROSPECTUS
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Item 20.
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Indemnification
of Directors and Officers.
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Article Seven of the Amended and Restated Certificate of
Incorporation of NII Holdings, which we refer to as the NII
Certificate, provides that, to the fullest extent permitted by
the Delaware General Corporation Law, referred to as the DGCL,
as it now exists or may hereafter be amended, no director shall
be personally liable to the corporation or any of its
stockholders for monetary damages for breach of any fiduciary or
other duty as a director provided that this provision shall not
eliminate or limit the liability of a director (1) for any
breach of the directors duty of loyalty to the corporation
or its stockholders, (2) for acts or omissions not in good
faith or that involve intentional misconduct or a knowing
violation of law, (3) under Section 174 of the DGCL,
or (4) for any transaction from which the director derived
an improper personal benefit.
Under Article Seven of the NII Certificate, any person who
was or is a party or is threatened to be made a party to or is
involved in any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative and whether by or in the right of the corporation
or otherwise (a proceeding), by reason of the fact
that he or she, or a person of whom he or she is the legal
representative, is or was a director or officer of the
corporation or is or was serving at the request of the
corporation as a director, officer, employee, partner (limited
or general) or agent of another corporation or of a partnership,
joint venture, limited liability company, trust or other
enterprise, including service with respect to an employee
benefit plan, shall be (and shall be deemed to have a
contractual right to be) indemnified and held harmless by the
corporation (and any successor to the corporation by merger or
otherwise) to the fullest extent authorized by, and subject to
the conditions and (except as provided herein) procedures set
forth in the DGCL, as the same exists or may hereafter be
amended (but any such amendment shall not be deemed to limit or
prohibit the rights of indemnification hereunder for past acts
or omissions of any such person insofar as such amendment limits
or prohibits the indemnification rights that said law permitted
the corporation to provide prior to such amendment), against all
expenses, liabilities and losses (including attorneys
fees, judgments, fines, ERISA taxes or penalties and amounts
paid or to be paid in settlement) reasonably incurred or
suffered by such person in connection therewith; provided,
however, that the corporation shall indemnify any such
person seeking indemnification in connection with a proceeding
(or part thereof) initiated by such person only if such
proceeding (or part thereof) was authorized by the board of
directors of the corporation. Persons who are not directors or
officers of the corporation and are not serving at the request
of the corporation may be similarly indemnified in respect of
such service to the extent authorized at any time by the board
of directors of the corporation. The indemnification conferred
also includes the right to be paid by the corporation the
expenses (including attorneys fees) incurred in the
defense of or other involvement in any proceeding in advance of
its final disposition; provided, however, that payment of
expenses (including attorneys fees) incurred by a person
in advance of the final disposition of a proceeding shall be
made only upon delivery to the corporation of an undertaking by
or on behalf of such person to repay all amounts so paid in
advance if it shall ultimately be determined that such director
or officer is not entitled to be indemnified under the
provisions of Article Seven of the NII Certificate.
Section 7.1 of NII Holdings bylaws (the
Bylaws) provides that each person who was or is a
party or is threatened to be made a party to or is involved in
any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative and
whether by or in the right of the corporation or otherwise (a
proceeding), by reason of the fact that he or she,
or a person of whom he or she is the legal representative, is or
was a director or officer of the corporation or is or was
serving at the request of the corporation as a director,
officer, employee, partner (limited or general) or agent of
another corporation or of a partnership, joint venture, limited
liability company, trust or other enterprise, including service
with respect to an employee benefit plan, shall be (and shall be
deemed to have a contractual right to be) indemnified and held
harmless by the corporation (and any successor to the
corporation by merger or otherwise) to the fullest extent
authorized by, and subject to the conditions and (except as
provided herein) procedures set forth in the DGCL, as the same
exists or may hereafter be amended (but any such amendment shall
not be deemed to limit or prohibit the rights of indemnification
hereunder for past acts or omissions of any such person insofar
as such amendment limits or prohibits the indemnification rights
that said law permitted the corporation to provide prior to such
amendment), against all expenses, liabilities and losses
II-1
(including attorneys fees, judgments, fines, ERISA taxes
or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in connection
therewith; provided, however, that the corporation shall
indemnify any such person seeking indemnification in connection
with a proceeding (or part thereof) initiated by such person
only if such proceeding (or part thereof) was authorized by the
board of directors of the corporation. Persons who are not
directors or officers of the corporation and are not so serving
at the request of the corporation may be similarly indemnified
in respect of such service to the extent authorized at any time
by the board of directors of the corporation. The
indemnification conferred in Section 7.1 of the Bylaws also
includes the right to be paid by the corporation the expenses
(including attorneys fees) incurred in the defense of or
other involvement in any such proceeding in advance of its final
disposition; provided, however, that payment of expenses
(including attorneys fees) incurred by a person in advance
of the final disposition of a proceeding shall be made only upon
delivery to the corporation of an undertaking by or on behalf of
such person to repay all amounts so paid in advance if it shall
ultimately be determined that such person is not entitled to be
so indemnified under Section 7.1 of the Bylaws.
Section 7.4 of the Bylaws provides that the corporation
shall have power to purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee, partner (limited
or general) or agent of another corporation or of a partnership,
joint venture, limited liability company, trust or other
enterprise, against any liability asserted against such person
or incurred by such person in any such capacity, or arising out
of such persons status as such, and related expenses,
whether or not the corporation would have the power to indemnify
such person against such liability under the provisions of the
DGCL.
Section 102 of the DGCL allows a corporation to eliminate
the personal liability of directors of a corporation to the
corporation or its stockholders for monetary damages for a
breach of fiduciary duty as a director, except where the
director breached his duty of loyalty, failed to act in good
faith, engaged in intentional misconduct or knowingly violated a
law, authorized the payment of a dividend or approved a stock
repurchase in violation of the DGCL or obtained an improper
personal benefit.
Section 145 of the DGCL provides, among other things, that
a company may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or
completed action, suit or proceeding (other than an action by or
in the right of the company) by reason of the fact that the
person is or was a director, officer, agent or employee of the
company or is or was serving at the companys request as a
director, officer, agent, or employee of another corporation,
partnership, joint venture, trust or other enterprise, against
expenses, including attorneys fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred by
the person in connection with such action, suit or proceeding.
The power to indemnify applies (a) if such person is
successful on the merits or otherwise in defense of any action,
suit or proceeding, or (b) if such person acted in good
faith and in a manner he or she reasonably believed to be in the
best interest, or not opposed to the best interest, of the
company, and with respect to any criminal action or proceeding,
had no reasonable cause to believe his or her conduct was
unlawful. The power to indemnify applies to actions brought by
or in the right of the company as well, but only to the extent
of defense expenses (including attorneys fees but
excluding amounts paid in settlement) actually and reasonably
incurred and not to any satisfaction of judgment or settlement
of the claim itself, and with the further limitation that in
such actions no indemnification shall be made in the event of
any adjudication of negligence or misconduct in the performance
of his or her duties to the company, unless the court believes
that in the light of all the circumstances indemnification
should apply.
Section 174 of the DGCL provides, among other things, that
a director, who willfully or negligently approves of an unlawful
payment of dividends or an unlawful stock purchase or
redemption, may be held liable for such actions. A director who
was either absent when the unlawful actions were approved or
dissented at the time may avoid liability by causing his or her
dissent to such actions to be entered in the books containing
the minutes of the meetings of the board of directors at the
time such action occurred or immediately after such absent
director receives notice of the unlawful acts.
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Item 21.
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Exhibits
and Financial Statement Schedules.
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See the Exhibit Index following the signature
pages hereto.
II-2
(a) The undersigned registrants hereby undertake:
(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 SEC 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 (a)(1)(i), (a)(1)(ii) and
(a)(1)(iii) do not apply if the information required to be
included in a post-effective amendment by these paragraphs is
contained in periodic reports filed by the registrants pursuant
to Section 13 or Section 15(d) of the Securities and
Exchange Act of 1934 that are incorporated by reference in the
registration statement, or is contained in a form of prospectus
filed pursuant to Rule 424(b) that is part of the
registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act, 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 registrants hereby undertake that, for
purposes of determining any liability under the Securities Act
of 1933, each filing of the registrants annual report
pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plans 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 may be permitted to directors, officers
and controlling persons of the registrants pursuant to the
foregoing provisions, or otherwise, the registrants have been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrants of expenses incurred
or paid by a director, officer or controlling person of the
registrants 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
registrants 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.
II-3
(d) The undersigned registrants hereby undertake to respond
to requests for information that is incorporated by reference
into the prospectus pursuant to Item 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 registrants hereby undertake to supply
by means of a post-effective amendment all information
concerning a transaction and the company being acquired involved
therein, that was not subject of and included in the
registration statement when it became effective.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, NII
Capital Corp. certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on
Form S-4
and has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in
Fairfax County, Commonwealth of Virginia, on March 5, 2010.
NII CAPITAL CORP.
GOKUL HEMMADY
Vice President and Treasurer
(On behalf of the registrant and as
Principal Financial Officer and Principal
Accounting Officer)
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons
in the capacities and on the dates indicated.
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Signature
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Title
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Date
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/s/ Steven
P. Dussek
Steven
P. Dussek
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President and Director
(Principal Executive Officer)
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March 5, 2010
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/s/ Steven
M. Shindler
Steven
M. Shindler
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Director
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March 5, 2010
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/s/ Gary
D. Begeman
Gary
D. Begeman
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Director
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March 5, 2010
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II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, NII
Holdings, Inc. certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on
Form S-4
and has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in
Fairfax County, Commonwealth of Virginia, on March 5, 2010.
NII HOLDINGS, INC.
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By:
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/s/ Teresa
S. Gendron
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TERESA S. GENDRON
Vice President and Controller
(On behalf of the registrant and as
Principal Accounting Officer)
POWER OF
ATTORNEY
Each of the undersigned hereby appoints, Steven M. Shindler,
Steven P. Dussek, Gokul Hemmady, Gary Begeman, Daniel
Feriman and Teresa Gendron, and each of them individually, as
attorney and agent for the undersigned, with full power of
substitution, for and in the name, place and stead of the
undersigned, to sign and file with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, any and
all amendments (including post-effective amendments) to this
registration statement and any and all applications, instruments
and other documents to be filed with the Securities and Exchange
Commission pertaining to the registration of securities covered
hereby, with full power and authority to do and perform any and
all acts and things as may be necessary or desirable in
furtherance of such registration.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons
in the capacities and on the dates indicated.
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Signature
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Title
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Date
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/s/ Steven
M. Shindler
Steven
M. Shindler
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Executive Chairman of the Board of Directors
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March 5, 2010
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/s/ Steven
P. Dussek
Steven
P. Dussek
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Chief Executive Officer and Director (Principal Executive
Officer)
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March 5, 2010
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/s/ Gokul
Hemmady
Gokul
Hemmady
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Vice President and Chief Financial Officer (Principal Financial
Officer)
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March 5, 2010
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/s/ George
A. Cope
George
A. Cope
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Director
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March 5, 2010
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/s/ Raymond
P. Dolan
Raymond
P. Dolan
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Director
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March 5, 2010
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/s/ Donald
Guthrie
Donald
Guthrie
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Director
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March 5, 2010
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II-6
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Signature
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Title
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Date
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/s/ Charles
M. Herington
Charles
M. Herington
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Director
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March 5, 2010
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/s/ Carolyn
Katz
Carolyn
Katz
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Director
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March 5, 2010
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/s/ Rosendo
G. Parra
Rosendo
G. Parra
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Director
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March 5, 2010
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/s/ John
W. Risner
John
W. Risner
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Director
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March 5, 2010
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II-7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
Nextel International (Services), Ltd. certifies that it has
reasonable grounds to believe that it meets all of the
requirements for filing on
Form S-4
and has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in
Fairfax County, Commonwealth of Virginia, on March 5, 2010.
NEXTEL INTERNATIONAL (SERVICES), LTD.
GOKUL HEMMADY
Vice President and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons
in the capacities and on the dates indicated.
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Signature
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Title
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Date
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/s/ Steven
P. Dussek
Steven
P. Dussek
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President (Principal Executive Officer)
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March 5, 2010
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/s/ Gokul
Hemmady
Gokul
Hemmady
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Vice President, Treasurer and Director (Principal Financial
Officer and Principal Accounting Officer)
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March 5, 2010
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/s/ Steven
M. Shindler
Steven
M. Shindler
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Director
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March 5, 2010
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/s/ Gary
D. Begeman
Gary
D. Begeman
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Director
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March 5, 2010
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II-8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, NII
Aviation, Inc. certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on
Form S-4
and has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in
Fairfax County, Commonwealth of Virginia, on March 5, 2010.
NII AVIATION, INC.
GOKUL HEMMADY
Vice President and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons
in the capacities and on the dates indicated.
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Signature
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Title
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Date
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/s/ Steven
P. Dussek
Steven
P. Dussek
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President and Director
(Principal Executive Officer)
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March 5, 2010
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/s/ Gokul
Hemmady
Gokul
Hemmady
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Vice President, Treasurer and Director (Principal Financial
Officer and Principal Accounting Officer)
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March 5, 2010
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/s/ Gary
D. Begeman
Gary
D. Begeman
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Director
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March 5, 2010
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II-9
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, NII
Funding Corp. certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on
Form S-4
and has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in
Fairfax County, Commonwealth of Virginia, on March 5, 2010.
NII FUNDING CORP.
GOKUL HEMMADY
Vice President and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons
in the capacities and on the dates indicated.
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Signature
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Title
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Date
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/s/ Steven
P. Dussek
Steven
P. Dussek
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President (Principal Executive Officer)
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March 5, 2010
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/s/ Gokul
Hemmady
Gokul
Hemmady
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Vice President, Treasurer and Director (Principal Financial
Officer and Principal Accounting Officer)
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March 5, 2010
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/s/ Steven
M. Shindler
Steven
M. Shindler
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Director
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March 5, 2010
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/s/ Gary
D. Begeman
Gary
D. Begeman
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Director
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March 5, 2010
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II-10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, NII
Mercosur, LLC certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on
Form S-4
and has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in
Fairfax County, Commonwealth of Virginia, on March 5, 2010.
NII MERCOSUR, LLC
By: NII HOLDINGS, INC., as sole Member and Manager
GARY D. BEGEMAN
Vice President, General Counsel and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons
in the capacities and on the dates indicated.
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Signature
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Title
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Date
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/s/ Steven
P. Dussek
Steven
P. Dussek
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Principal Executive Officer
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March 5, 2010
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/s/ Gokul
Hemmady
Gokul
Hemmady
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Principal Financial Officer and Principal Accounting Officer
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March 5, 2010
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II-11
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, NII
Global Holdings, Inc. certifies that it has reasonable grounds
to believe that it meets all of the requirements for filing on
Form S-4
and has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in
Fairfax County, Commonwealth of Virginia, on March 5, 2010.
NII GLOBAL HOLDINGS, INC.
GOKUL HEMMADY
Vice President and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons
in the capacities and on the dates indicated.
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Signature
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Title
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Date
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/s/ Steven
P. Dussek
Steven
P. Dussek
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President and Director
(Principal Executive Officer)
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March 5, 2010
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/s/ Gokul
Hemmady
Gokul
Hemmady
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Vice President, Treasurer and Director (Principal Financial
Officer and Principal Accounting Officer)
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March 5, 2010
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/s/ Gary
D. Begeman
Gary
D. Begeman
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Director
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March 5, 2010
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II-12
EXHIBIT INDEX
For periods before December 21, 2001, references to NII
Holdings, Inc. refer to Nextel International, Inc. the former
name of NII Holdings. All documents referenced below were filed
pursuant to the Securities Exchange Act of 1934 by NII Holdings,
file number 0-32421, unless otherwise indicated.
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Exhibit
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Number
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Exhibit Description
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2
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.1
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Revised Third Amended Joint Plan of Reorganization under
Chapter 11 of the Bankruptcy Code for NII Holdings and
NII Holdings (Delaware), Inc. (incorporated by reference to
Exhibit 2.1 to NII Holdings
Form 8-K,
filed on November 12, 2002).
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4
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.1
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Indenture governing our 2.75% convertible notes due 2025, dated
as of August 15, 2005, by and between NII Holdings and
Wilmington Trust Company, as Indenture Trustee
(incorporated by reference to Exhibit 4.1 to NII
Holdings
Form 10-Q,
filed on November 9, 2005).
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4
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.2
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Indenture governing our 3.125% convertible notes due 2012, dated
June 5, 2007, by and between NII Holdings, Inc. and
Wilmington Trust Company, as Indenture Trustee
(incorporated by reference to Exhibit 4.1 to NII
Holdings
Form 10-Q,
filed August 6, 2007).
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4
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.3
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Indenture, dated August 18, 2009, among NII Capital Corp.,
NII Holdings, Inc., Airfone Holdings, Inc., McCaw International
(Brazil), Ltd., Nextel International (Services), Ltd., Nextel
International (Uruguay), Inc., NII Aviation, Inc., NII Mercosur,
LLC, and NII Funding Corp., and Wilmington Trust Company
(incorporated by reference to Exhibit 4.1 to NII
Holdings
Form 8-K,
filed August 18, 2009).
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4
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.4
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Registration Rights Agreement, dated August 18, 2009, among
NII Capital Corp., NII Holdings, Inc., Airfone Holdings, Inc.,
McCaw International (Brazil), Ltd., Nextel International
(Services), Ltd., Nextel International (Uruguay), Inc., NII
Aviation, Inc., NII Mercosur, LLC, and NII Funding Corp. and
Morgan Stanley & Co. Incorporated and J.P. Morgan
Securities Inc. (incorporated by reference to Exhibit 4.2
to NII Holdings
Form 8-K,
filed August 18, 2009).
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4
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.5
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Indenture, dated December 15, 2009, among NII Capital
Corp., NII Holdings, Inc., Airfone Holdings, Inc., McCaw
International (Brazil), Ltd., Nextel International (Services),
Ltd., Nextel International (Uruguay), Inc., NII Aviation, Inc.,
NII Mercosur, LLC, NII Funding Corp., NII Global Holdings, Inc.
and Wilmington Trust Company (incorporated by reference to
Exhibit 4.1 to NII Holdings
Form 8-K,
filed December 15, 2009).
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4
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.6
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Registration Rights Agreement, dated December 15, 2009,
among NII Capital Corp., NII Holdings, Inc., Airfone Holdings,
Inc., McCaw International (Brazil), Ltd., Nextel International
(Services), Ltd., Nextel International (Uruguay), Inc., NII
Aviation, Inc., NII Mercosur, LLC, NII Funding Corp., NII Global
Holdings, Inc., Morgan Stanley & Co. Incorporated,
Credit Suisse Securities (USA) LLC, Deutsche Bank Securities
Inc. and Goldman, Sachs & Co. (incorporated by
reference to Exhibit 4.2 to NII Holdings
Form 8-K,
filed December 15, 2009).
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4
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.7
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Form of Letter of Transmittal relating to 10% Senior Notes
due 2016 (filed herewith).
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4
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.8
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Form of Letter of Transmittal relating to 8.875% Senior
Notes due 2019 (filed herewith).
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4
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.9
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Form of Letter to Depository Trust Company Participants
relating to 10% Senior Notes due 2016 (filed herewith).
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4
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.10
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Form of Letter to Depository Trust Company Participants
relating to 8.875% Senior Notes due 2019 (filed herewith).
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4
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.11
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Form of Letter to Clients from Broker-Dealers relating to
10% Senior Notes due 2016 (filed herewith).
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4
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.12
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Form of Letter to Clients from Broker-Dealers relating to
8.875% Senior Notes due 2019 (filed herewith).
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4
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.13
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Form of Notice of Guaranteed Delivery relating to
10% Senior Notes due 2016 (filed herewith).
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4
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.14
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Form of Notice of Guaranteed Delivery relating to
8.875% Senior Notes due 2019 (filed herewith).
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5
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.1
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Opinion of Williams Mullen (filed herewith).
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8
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.1
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Opinion of Williams Mullen as to certain tax matters (filed
herewith).
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12
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.1
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Computation of Earnings to Fixed Charges (filed herewith).
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23
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.1
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Consent of Williams Mullen (included in Exhibit 5.1).
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23
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.2
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Consent of Williams Mullen (included in Exhibit 8.1).
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23
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.3
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Consent of PricewaterhouseCoopers LLP (filed herewith).
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24
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.1
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Power of Attorney for NII Holdings, Inc. (See page II-6 of this
Registration Statement).
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25
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.1
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Form T-1
Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939 of Wilmington
Trust Company, as the Trustee under the Indentures (filed
herewith).
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