Attached files
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| EX-10.1 - EX.10.1 - FIRST LIEN SR. INCREMENTAL NOTES AGMT. - NextWave Wireless Inc. | mm06-0310_8ke101.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): May 27, 2010
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NEXTWAVE
WIRELESS INC.
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(Exact
name of registrant as specified in its
charter)
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Delaware
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000-51958
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20-5361360
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(State
or other jurisdiction of incorporation)
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(Commission
file number)
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(I.R.S.
employer identification no.)
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10350
Science Center Drive, Suite 210
San
Diego, California 92121
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(Address
of principal executive offices) (Zip code)
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Registrant’s
telephone number, including area code: (858)
731-5300
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Not
Applicable
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(Former
name or former address, if changed since last
report.)
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Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01 Entry
into a Material Definitive Agreement.
As
previously disclosed in the Current Report on Form 8-K of NextWave Wireless Inc.
(the “Company”) filed with the SEC on March 16, 2010, the Company previously
entered into a commitment letter (the “Commitment Letter”) with affiliates of
Avenue Capital Management II, L.P. (“Avenue Capital”) and Solus Core
Opportrunity Master Fund Ltd. (“Solus”), pursuant to which such entities were
obligated to provide up to $25 million in additional financing through the
purchase of additional First Lien Notes. Such financing would be
provided at the Company’s request and remained subject to the execution of
definitive documentation.
On May
27, 2010 (the “Closing Date”), pursuant to definitive documentation as
contemplated by the Commitment Letter, NextWave Wireless LLC, a wholly-owned
subsidiary of the Company (“NextWave LLC”) issued additional Senior Secured
First Lien Notes due 2011 (the “Incremental Notes”) in the aggregate principal
amount of $18,000,000, on the same financial and other terms applicable to
NextWave LLC’s existing Senior Secured First Lien Notes due 2011 (together with
the Incremental Notes, the “First Lien Notes”), as described in more detail
below (the “Incremental Notes Issuance”). As previously disclosed in
the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended April
3, 2010, in April 2010, the Company issued $7.0 million in Incremental Notes
pursuant to the Commitment Letter (the “April Issuance”). The April
Issuance and the Closing Date issuance resulted in the Company’s receipt of $25
million in aggregate proceeds, thereby utilizing all available financing
committed pursuant to the Commitment Letter.
On the
Closing Date, the Company and NextWave LLC entered into a First Lien Senior
Incremental Notes Agreement (the “Incremental Agreement”), among the Company, as
parent guarantor, NextWave LLC, as issuer, NextWave Broadband Inc., NW Spectrum
Co., AWS Wireless Inc. and WCS Wireless License Subsidiary, LLC, as subsidiary
guarantors (in such capacity, together with the Company, collectively, the
“Guarantors”), the note purchasers party thereto (the “Incremental Purchasers”),
and acknowledged by The Bank of New York Mellon, as collateral
agent. The Incremental Agreement is filed with this Form 8-K as
Exhibit 10.1 hereto. A substantially identical agreement was entered
into to effectuate the April Issuance, which agreement was not separately
material to the Company and is not filed herewith.
The
Incremental Purchasers were Avenue Capital and Solus. The Incremental
Purchase Agreement amends the existing purchase agreement for the First Lien
Notes (the “First Lien Purchase Agreement”), originally described in the
NextWave LLC’s Current Report on Form 8-K filed with the SEC on July 17, 2006,
solely by increasing the outstanding indebtedness thereunder by the aggregate
face value of the Incremental Notes.
The
Incremental Notes are governed by the terms of the Incremental Agreement and the
First Lien Purchase Agreement and constitute “Notes” as defined in the First
Lien Purchase Agreement. Robert Symington, a Senior Portfolio Manager
with Avenue Capital, is a member of the Board of Directors of the
Company. As of May 27, 2010, affiliates of Avenue Capital owned shares of our issued and
outstanding common stock such that Avenue Capital would be considered a related
party and Avenue-managed funds held approximately $98 million in
principal amount of the First Lien Notes (prior to issuance of the Incremental
Notes), representing approximately 53% of such indebtedness and approximately
$116 million in principal amount of the existing Senior-Subordinated Second Lien
Notes due 2011 of NextWave LLC (“Second Lien Notes”), representing approximately
78% of such indebtedness. As of May 27, 2010, affiliates of Solus
owned shares of our issued and
outstanding common stock such that Solus would be considered a related party
and Solus-managed funds held approximately $32 million in principal
amount of First Lien Notes (prior to issuance of the
Incremental
Notes),
representing approximately 15% of such indebtedness and approximately $33
million in principal amount of Second Lien Notes, representing approximately 22%
of such indebtedness.
The
Incremental Notes are subject to the following terms that are material to the
Company:
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·
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As
with all other First Lien Notes, Interest on the Incremental Notes will be
payable quarterly at a rate of 15% per annum payable, at NextWave LLC’s
option, in cash or through the issuance of additional First Lien
Notes.
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·
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As
with all other First Lien Notes, the Incremental Notes will mature on July
17, 2011, subject to an extension to October 17, 2011 if certain
conditions are met, including the pendency of asset sales that would yield
net proceeds sufficient to repay all then-outstanding First Lien
Notes.
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·
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As
with all other First Lien Notes, the Incremental Notes will constitute
senior obligations of NextWave LLC.
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·
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The
net proceeds realized from all asset sales will be applied first to the
mandatory redemption of the Priority Notes described in the First Lien
Purchase Agreement, second to the mandatory redemption of the Incremental
Notes, and third, subject to NextWave LLC’s ability to retain up to $37.5
million in net proceeds, to the remaining First Lien Notes outstanding, in
each case at a redemption price equal to the principal amount of such
First Lien Notes plus accrued and unpaid interest to the date of
redemption. In the event of a change of control of the Company,
NextWave LLC is required to offer to repurchase the First Lien Notes at a
price equal to 102% of the principal amount of the First Lien Notes
repurchased plus accrued and unpaid interest to the date of
repurchase.
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·
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NextWave
LLC must, at least three weeks prior to the beginning of each fiscal
quarter, deliver to the holders of the First Lien Notes a budget forecast
for the six-consecutive-month period commencing on the first day of such
fiscal quarter, each such budget forecast to be consistent with all
previously delivered budgets and in a form reasonably satisfactory to
Avenue Capital (each a “Six-Month Budget”), and with respect to each such
six-month period, shall provide the holders of the First Lien Notes a
monthly report, as of the end of each month and within two business days
of each month-end, indicating its actual cash balance as compared to the
applicable month-end amount for such Six-Month Budget and verifying that
(i) its actual cash balance has not deviated in a negative amount from the
related Closing Date Budget or Six-Month Budget, as applicable, by more
than 10% for such date (the “Budget Condition”) and (ii) it has maintained
at all times a minimum cash balance of at least $1 million (the “Minimum
Balance Condition”).
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·
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As
previously disclosed, the First Lien Purchase Agreement provides that
failure to satisfy the Minimum Balance Condition and/or the Budget
Condition shall be an event of default, subject to certain grace periods
applicable to the Budget Condition,
and
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·
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All
other terms of the existing First Lien Notes and the First Lien Purchase
Agreement are applicable to the Incremental
Notes.
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The First
Lien Notes are guaranteed by the Guarantors pursuant to the Guaranty (the
“Guaranty”), dated as of July 17, 2006, among the Guarantors and the Collateral
Agent. In addition, the First Lien Notes are guaranteed by the
Company pursuant to the Parent Guaranty (the “Parent Guaranty”), dated as
of July
17, 2006, between the Company and the Collateral Agent. Pursuant to
both the Guaranty and the Parent Guaranty, the First Lien Notes are guaranteed
on a senior secured basis and constitute senior obligations of the
guarantors.
Pursuant
to the Pledge and Security Agreement (the “Security Agreement”), dated as of
July 17, 2006, among the Company, NextWave LLC, and NextWave Broadband Inc., NW
Spectrum Co., AWS Wireless Inc. and WCS Wireless License Subsidiary, LLC, as
grantors (in such capacity, collectively, the “Grantors”), and the Collateral
Agent, executed for the benefit of each holder of the First Lien Notes, the
obligations under the First Lien Notes are secured by first priority liens on,
and security interests in certain collateral which consists of FCC licenses and
spectrum leases held by certain Company subsidiaries, the capital stock of
certain material Company subsidiaries, certain securities accounts, and proceeds
of the foregoing.
Item
2.03 Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant.
As of the
Closing Date, the aggregate $25 million of First Lien Notes issued to date in
connection with the funding in full under the Commitment Letter constitute a
direct financial obligation of the Company. The terms of payment,
acceleration, recourse and other material terms described above under Item 1.01
are incorporated herein by reference.
Item
9.01 Financial
Statements and Exhibits.
(d)
Exhibits.
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Exhibit No.
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Description
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10.1
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First
Lien Senior Incremental Notes Agreement, dated May 27,
2010.
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, NextWave Wireless
Inc. has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
Date: June
3, 2010
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NEXTWAVE
WIRELESS INC.
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By:
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/s/ Francis J. Harding | ||
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Francis
J. Harding
Executive
Vice President and Chief Financial
Officer
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EXHIBIT
INDEX
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Exhibit No.
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Description
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10.1
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First
Lien Senior Incremental Notes Agreement, dated May 27,
2010.
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