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): June 11, 2013 (June 10, 2013)
SPRINT NEXTEL CORPORATION
(Exact name of registrant as specified in its charter)
Kansas | 1-04721 | 48-0457967 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
6200 Sprint Parkway,
Overland Park, Kansas 66251
(Address of principal executive offices, including zip code)
(800) 829-0965
(Registrants telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
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 (see General Instructions A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
x | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 | Entry Into a Material Definitive Agreement. |
SoftBank Merger Agreement Amendment
On June 10, 2013, Sprint Nextel Corporation, a Kansas corporation (the Company), entered into the Third Amendment to Agreement and Plan of Merger, dated as of October 15, 2012, as amended on November 29, 2012, and April 12, 2013 (the Amendment and, such agreement as so amended, the Merger Agreement) by and among SoftBank Corp., a Japanese kabushiki kaisha (SoftBank); Starburst I, Inc., a Delaware corporation and a direct wholly owned subsidiary of SoftBank (HoldCo); Starburst II, Inc., a Delaware corporation and a direct wholly owned subsidiary of HoldCo (New Sprint or Parent); Starburst III, Inc., a Kansas corporation and a direct wholly owned subsidiary of Parent (Merger Sub); and the Company. Pursuant to the Merger Agreement, at the effective time of the merger (the Effective Time), Merger Sub will merge with and into the Company, with the Company surviving the merger as a wholly owned subsidiary of Parent (the SoftBank Merger). Upon consummation of the SoftBank Merger, Parent will be renamed Sprint Corporation.
The Amendment increases by $4.5 billion the aggregate cash consideration payable in the SoftBank Merger to the Companys stockholders from $12.14 billion to $16.64 billion. Of this amount, $1.5 billion is being funded by new cash contributed by SoftBank, and $3.0 billion is being funded by reducing from $4.9 billion to $1.9 billion the portion of SoftBanks aggregate cash contribution that will remain in New Sprints cash balances immediately following the Effective Time. As a consequence, the total cash contributed by SoftBank to New Sprint at the completion of the SoftBank Merger will be increased from $17.04 billion to $18.54 billion.
The Companys stockholders will have the option to elect cash in the amount of $7.65 (a $0.35 increase from the $7.30 option under the Merger Agreement prior to the Amendment) or one share of New Sprint common stock, for each share of the Companys common stock owned by them (subject to proration).
In connection with the Amendment, the Company and SoftBank agreed to amend certain other provisions in the Merger Agreement to, among other things:
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provide that immediately following the Effective Time, SoftBank (through its ownership of HoldCo) will own approximately 78% of the fully diluted equity of New Sprint (increased from approximately 70%), and the former stockholders and other equityholders of the Company will own approximately 22% of the fully diluted equity of New Sprint (decreased from approximately 30%); |
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provide that the Companys special stockholders meeting scheduled for June 12, 2013 will be convened and then immediately adjourned to June 25, 2013; |
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terminate certain waiver letters previously granted by Parent to the Company permitting discussions between the Company and DISH Network Corporation (DISH) in connection with DISHs previously announced unsolicited proposal to acquire the Company (the DISH Proposal); |
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increase the amount of the termination fee that the Company is required to pay Parent under specified circumstances (including in connection with a Superior Offer, as defined in the Merger Agreement) from $600 million to $800 million; |
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increase the maximum amount the Company may be required to reimburse Parent for its fees and expenses incurred in connection with the Merger Agreement in certain circumstances from $75 million to $200 million; |
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make various other changes, including to amend the definition of Superior Offer, and amend the conditions under which the Company may terminate the Merger Agreement; and |
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require the Company to adopt a stockholder rights plan no later than June 17, 2013. |
Other than as expressly modified pursuant to the Amendment, the Merger Agreement, which was filed as Exhibit 2.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission (the SEC) by the Company on October 15, 2012, remains in full force and effect as originally executed on October 15, 2012, as amended. The foregoing description of the Amendment is not complete and is qualified in its entirety by reference to the Amendment, which is filed as Exhibit 2.1 hereto and is incorporated herein by reference.
Bond Purchase Agreement Amendment
On June 10, 2013, the Company entered into the First Amendment to Bond Purchase Agreement, dated as of October 15, 2012 (the Bond Purchase Agreement Amendment, and, such agreement as so amended, the Bond Purchase Agreement), by and between Parent and the Company. The Bond Purchase Agreement Amendment provides that the standstill provisions included in the Bond Purchase Agreement applicable to SoftBank (and Parent) terminate at any time the Merger Agreement is terminated (except if the Merger Agreement is terminated by the Company as a result of certain breaches of representations, warranties, covenants or agreements by SoftBank) and provides Parent in lieu of converting the bond previously issued pursuant to the terms of the Bond Purchase Agreement (the Bond), the right to cause the Company (or any successor to the Company) to purchase the Bond, upon certain qualifying termination events, at a price that consists of the principal and accrued interest of the Bond, as well as the net value of the Companys common stock determined based on the difference of $5.25 from the volume-weighted average price of the common stock over a period of 30-day trading days period ending on the qualifying termination date. In addition, the Bond Purchase Agreement Amendment provides that various provisions in the Bond Purchase Agreement will apply to the Companys counterparty in the event of certain transactions constituting a change of control of the Company.
Other than as expressly modified pursuant to the Bond Purchase Agreement Amendment, the Bond Purchase Agreement, which was filed as Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC by the Company on October 15, 2012, remains in full force and effect as originally executed on October 15, 2012. The foregoing description of the Bond Purchase Agreement Amendment is not complete and is qualified in its entirety by reference to the Bond Purchase Agreement Amendment, which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
Item 8.01 | Other Events. |
In connection with the Merger Agreement Amendment, the Company has terminated discussions and negotiations with, and has ceased providing due diligence information to, DISH and its representatives with respect to the DISH Proposal. The Company agreed to comply with the provisions of the Merger Agreement with respect to any revised proposal, inquiry or offer that may be received from DISH following the execution of the Merger Agreement Amendment.
On June 10, 2013, the Company issued a press release announcing that it had entered into the Amendment and the Bond Purchase Agreement Amendment and disclosing the termination of discussions
with DISH. A copy of the press release is filed as Exhibit 99.1 hereto and incorporated herein by reference.
Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
Exhibit
|
Description |
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2.1 | Third Amendment to Agreement and Plan of Merger, dated as of June 10, 2013, by and among Sprint Nextel Corporation, SoftBank Corp., Starburst I, Inc., Starburst II, Inc. and Starburst III, Inc.* | |
10.1 | First Amendment to Bond Purchase Agreement, dated as of June 10, 2013, by and between Sprint Nextel Corporation and Starburst II, Inc.* | |
99.1 | Press Release, dated June 10, 2013. |
* | This filing excludes schedules and exhibits pursuant to Item 601(b)(2) of Regulation S-K, which the registrant agrees to furnish supplementally to the Securities and Exchange Commission upon request by the Commission. |
Cautionary Statement Regarding Forward Looking Statements
This document includes forward-looking statements within the meaning of the securities laws. The words may, could, should, estimate, project, forecast, intend, expect, anticipate, believe, target, plan, providing guidance and similar expressions are intended to identify information that is not historical in nature.
This document contains forward-looking statements relating to the proposed transactions between Sprint Nextel Corporation (Sprint) and SoftBank Corp. (SoftBank) and its group companies, including Starburst II, Inc. (Starburst II), and the proposed acquisition by Sprint of Clearwire Corporation (Clearwire). All statements, other than historical facts, including, but not limited to: statements regarding the expected timing of the closing of the transactions; the ability of the parties to complete the transactions considering the various closing conditions; the expected benefits of the transactions such as improved operations, enhanced revenues and cash flow, growth potential, market profile and financial strength; the competitive ability and position of SoftBank or Sprint; and any assumptions underlying any of the foregoing, are forward-looking statements. Such statements are based upon current plans, estimates and expectations that are subject to risks, uncertainties and assumptions. The inclusion of such statements should not be regarded as a representation that such plans, estimates or expectations will be achieved. You should not place undue reliance on such statements. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others, that (1) one or more closing conditions to the transactions may not be satisfied or waived, on a timely basis or otherwise, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the transactions or that the required approval by Sprints stockholders for the SoftBank transaction or Clearwires stockholders for the Clearwire transaction may not be obtained; (2) there may be a material adverse change of Sprint or the business of Sprint may suffer as a result of uncertainty surrounding the transactions; (3) the transactions may involve unexpected costs, liabilities or delays; (4) the legal proceedings that may have been initiated, as well as any additional legal proceedings that may be initiated, related to the transactions; and (5) other risk factors as detailed from time to time in Sprints, Starburst IIs and Clearwires reports filed with the SEC, including Sprints and Clearwires Annual Reports on Form 10-K for the year ended December 31, 2012 and Quarterly Reports
on Form 10-Q for the quarter ended March 31, 2013, and other factors that are set forth in the proxy statement/prospectus contained in Starburst IIs Registration Statement on Form S-4, which was declared effective by the SEC on May 1, 2013, and in other materials that will be filed by Sprint, Starburst II and Clearwire in connection with the transactions. There can be no assurance that the transactions will be completed, or if completed, that such transactions will close within the anticipated time period or that the expected benefits of the transactions will be realized.
All forward-looking statements contained in this document and the documents referenced herein are made only as of the date of the document in which they are contained, and none of Sprint, SoftBank or Starburst II undertakes any obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events except as required by law. Readers are cautioned not to place undue reliance on any of these forward-looking statements.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
SPRINT NEXTEL CORPORATION | ||||||
Date: June 11, 2013 | By: | /s/ Charles Wunsch | ||||
Name: | Charles Wunsch | |||||
Title: |
Senior Vice President, General Counsel and Corporate Secretary |
Exhibit Index
Exhibit
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Description |
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2.1 | Third Amendment to Agreement and Plan of Merger, dated as of June 10, 2013, by and among Sprint Nextel Corporation, SoftBank Corp., Starburst I, Inc., Starburst II, Inc. and Starburst III, Inc.* | |
10.1 | First Amendment to Bond Purchase Agreement, dated as of June 10, 2013, by and between Sprint Nextel Corporation and Starburst II, Inc.* | |
99.1 | Press Release, dated June 10, 2013. |
* | This filing excludes schedules and exhibits pursuant to Item 601(b)(2) of Regulation S-K, which the registrant agrees to furnish supplementally to the Securities and Exchange Commission upon request by the Commission. |
Exhibit 2.1
Execution Copy
THIRD AMENDMENT TO
AGREEMENT AND PLAN OF MERGER
This Third Amendment (this Amendment ) to the Merger Agreement (defined below) is made as of June 10, 2013, by and among: SoftBank Corp., a Japanese kabushiki kaisha ( SoftBank ); Starburst I, Inc., a Delaware corporation and a direct wholly owned subsidiary of SoftBank ( HoldCo ); Starburst II, Inc., a Delaware corporation and a direct wholly owned subsidiary of HoldCo ( Parent ); Starburst III, Inc., a Kansas corporation and a direct wholly owned subsidiary of Parent ( Merger Sub ); and Sprint Nextel Corporation, a Kansas corporation (the Company , and together with SoftBank, HoldCo, Parent and Merger Sub collectively referred to as the Parties ).
RECITALS
WHEREAS, the Parties entered into that certain Agreement and Plan of Merger dated as of October 15, 2012, and amended such Agreement and Plan of Merger pursuant to (a) that certain First Amendment to Agreement and Plan of Merger dated as of November 29, 2012, and (b) that certain Second Amendment to Agreement and Plan of Merger dated as of April 12, 2013 (such Agreement and Plan of Merger, as so amended, the Merger Agreement );
WHEREAS, the Parties desire to further amend the Merger Agreement in order to reflect certain additional understandings reached among the Parties; and
WHEREAS, (a) contemporaneously with entering into this Amendment, Parent and the Company are entering into an amendment to that certain Bond Purchase Agreement dated as of October 15, 2012, and (b) this Amendment contemplates that the Company will adopt a stockholder rights plan in substantially the form attached as Exhibit A hereto (the Rights Plan ).
NOW, THEREFORE, in consideration of the foregoing and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and pursuant to Section 9.1 of the Merger Agreement, the Parties hereby agree as follows:
1. INTERPRETATION
This Amendment is made and delivered pursuant to the Merger Agreement. Except as otherwise provided herein, capitalized terms used but not defined in this Amendment have the meanings ascribed to them in the Merger Agreement or in the Parent Charter (as defined in the Merger Agreement).
2. AMENDMENTS TO MERGER AGREEMENT
2.1 Increase in Aggregate Cash Consideration.
(a) Each reference to $12,140,000,000 in Recital E , the definition of Aggregate Cash Consideration in Section 2.6(a)(i) , Section 5.13(h) and Section 7.10 of the Merger Agreement is hereby replaced by a reference to $16,640,000,000.
(b) Each reference to $17,040,000,000 in Recital E , Section 5.13(h) and Section 7.10 of the Merger Agreement is hereby replaced by a reference to $18,540,000,000.
(c) As a consequence of the changes set forth in Section 2.1(a) and Section 2.1(b) of this Amendment, each reference to $4,900,000,000 in Recital E , Section 5.13(h) and Section 7.10 of the Merger Agreement is hereby replaced by a reference to $1,900,000,000.
2.2 Change in HoldCo Number.
(a) The reference to 2.294 in the definition of HoldCo Number in Section 1.2(b)(v) of the Merger Agreement is hereby replaced by a reference to 3.477752.
(b) As a consequence of the change set forth in Section 2.2(a) of this Amendment, (i) each reference to 69.642% in Recital D and Section 1.2(b) of the Merger Agreement is hereby replaced by a reference to 77.667%, and (ii) each reference to 30.358% in Recital D and Section 1.2(b) of the Merger Agreement is hereby replaced by a reference to 22.333%.
(c) In addition, clause (3) of the definition of HoldCo Number in the Merger Agreement is hereby amended and restated to read in its entirety as follows: the aggregate number of shares of Company Common Stock issuable upon the conversion of Company RSUs outstanding immediately prior to the Effective Time.
2.3 Per Share Amount. In the definition of Per Share Amount set forth in Recital D of the Merger Agreement, clause (i) is hereby amended and restated to read in its entirety as follows:
(i) cash in an amount equal to $7.65 (the Per Share Amount ),
2.4 Stock Splits, etc. Section 2.5(b) of the Merger Agreement is hereby amended and restated to read as follows:
Between the date of this Agreement and the Effective Time, if the outstanding shares of Company Common Stock are changed into a different number or class of shares by reason of any stock split, division or subdivision of shares, stock dividend, reverse stock split, consolidation of shares, reclassification, recapitalization or other similar transaction, or any Rights (as defined in the Rights Plan) are exercised, any Rights are exchanged or any dividends or distributions are made, set aside, paid or declared with respect to the Companys Preferred Stock that would be issued upon the exercise of the Rights, then without limiting any provisions of the Parent Charter (including any provisions that relate to the calculation of the number of shares of Parent Common Stock to be held by HoldCo), the Merger Consideration and similarly dependent terms will be adjusted to the extent necessary or appropriate to achieve the same economic outcome.
2.5 Expenses; Termination Fees.
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(a) Each reference to $600,000,000 in Section 8.3(c) and Section 8.3(e) of the Merger Agreement is hereby replaced by a reference to $800,000,000.
(b) The reference to $75,000,000 in Section 8.3(c) of the Merger Agreement is hereby replaced by a reference to $200,000,000.
(c) The first sentence of Section 8.3(b) of the Merger Agreement is hereby amended and restated to read as follows:
If (i) this Agreement is terminated by Parent or the Company pursuant to Section 8.1(b) , (ii) at or prior to the time of the termination of this Agreement a proposal or offer for a Specified Acquisition Transaction shall have been publicly disclosed, announced, commenced, submitted or made, (iii) at the time of the termination of this Agreement, the conditions set forth in Sections 6.7 and 7.6 shall have been satisfied but a final vote by the holders of Company Common Stock on the adoption of this Agreement shall not have taken place, and (iv) on or prior to the first anniversary of such termination, a definitive agreement (which shall not include a confidentiality agreement, letter of intent or other similar agreement that does not obligate the parties thereto, subject to the satisfaction or waiver of the conditions set forth therein, to consummate a Specified Acquisition Transaction) relating to a Specified Acquisition Transaction is entered into, then the Company will pay to Parent, contemporaneously with entering into such definitive agreement, a nonrefundable fee in the amount of $800,000,000 in cash (it being understood that in no event shall the Company be required to pay a fee of $800,000,000 on more than one occasion pursuant to this Section 8.3 ), minus any amount actually previously paid by the Company to Parent pursuant to Section 8.3(c)(ii) , on or prior to the date of consummation of such Specified Acquisition Transaction.
(d) Section 8.3(d) of the Merger Agreement is hereby amended and restated to read as follows:
If (i) this Agreement is terminated by Parent or the Company pursuant to Section 8.1(d) , (ii) prior to the adoption of this Agreement by the Required Company Vote a proposal or offer for a Specified Acquisition Transaction shall have been publicly disclosed, announced, commenced, submitted or made, and (iii) on or prior to the first anniversary of such termination, a definitive agreement (which shall not include a confidentiality agreement, letter of intent or other similar agreement that does not obligate the parties thereto, subject to the satisfaction or waiver of the conditions set forth therein, to consummate a Specified Acquisition Transaction) relating to a Specified Acquisition Transaction is entered into, then the Company will pay to Parent, contemporaneously with entering into such definitive agreement, a nonrefundable fee in the amount of $800,000,000 in cash (it being understood that in no event shall the Company be required to pay a fee of $800,000,000 on more than one occasion pursuant to this Section 8.3 ), minus any amount actually previously paid by the Company to Parent pursuant to Section 8.3(c)(ii) .
2.6 Elections.
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(a) The second sentence of Section 2.7(a) of the Merger Agreement is hereby amended and restated to read as follows:
All elections in accordance with this Section 2.7 ( Elections ) will be made on a form designed for that purpose and mutually acceptable to the Company and Parent (a Form of Election ) and mailed to holders of record of shares of the Company Common Stock commencing no later than June 14, 2013, or such other date as Parent and the Company mutually agree in writing (the Election Record Date ).
(b) The first sentence of Section 2.7(b) of the Merger Agreement is hereby amended and restated to read as follows:
A Form of Election must be properly completed, signed, and actually received by the Exchange Agent not later than 5:00 p.m. New York City time on the date five Business Days prior to the Effective Time, or at such other time as Parent and the Company mutually agree in writing (such time hereinafter referred to as the Election Deadline ) in order to be effective.
2.7 Confidentiality Agreements. The proviso to Section 5.3(b) of the Merger Agreement is hereby amended and restated to read as follows:
provided , however , that (A) prior to furnishing, or causing to be furnished, any such nonpublic information to such Person, the Company (I) gives Parent written notice that it is furnishing such nonpublic information to such Person and (II) receives from such Person an executed confidentiality agreement containing customary limitations on the use and disclosure of all nonpublic written and oral information furnished to such Person and such Persons Representatives by or on behalf of the Company, the terms of which (x) are at least as restrictive as the terms contained in the Confidentiality Agreement as in effect immediately prior to the execution of this Agreement, (y) require that such Person disclose in writing to the Company the names of any persons and entities (other than Representatives of such Person (as defined in this Agreement)) to whom such Person proposes to provide or make available any nonpublic information, before providing such information to any such person or entity, and (z) prohibit such Person from providing or making available any nonpublic information to any actual or potential source of equity financing, co-bidder or similar party without the Companys prior written consent, and (B) contemporaneously with furnishing any such nonpublic information to such Person, the Company furnishes such nonpublic information to Parent (to the extent that such nonpublic information has not been previously so furnished).
2.8 Status of Acquisition Inquiries. Section 5.3(c) of the Merger Agreement is hereby amended and restated to read as follows:
The Company will promptly (and in no event later than 24 hours after receipt) advise Parent orally and in writing of the receipt of any Acquisition Inquiry (including the identity of the Person making or submitting such Acquisition Inquiry and a summary of all material terms thereof) received by the Company, and provide Parent with a copy of
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such Acquisition Inquiry if it is in writing. The Company will keep Parent promptly (and in no event later than 24 hours) informed with respect to (i) all material changes with respect to the status of any such Acquisition Inquiry, (ii) any material modification thereto and (iii) any proposed material modification thereto made by the Person making or submitting such Acquisition Inquiry, and including a summary of all material terms of any such actual or proposed modification thereto. The Company agrees that it will not enter any confidentiality agreement with any Person subsequent to the date of this Agreement that prohibits the Company from providing such information to Parent. For the avoidance of doubt, prior to consenting to or otherwise permitting any Person making an Acquisition Inquiry providing or making available any nonpublic information to any actual or potential source of equity financing, co-bidder or similar party, the Company must disclose to Parent the names of any such source of equity financing, co-bidder or similar party and the general nature of their proposed involvement in the transaction contemplated by such Acquisition Inquiry.
2.9 Superior Offer. The definition of Superior Offer set forth in Exhibit A to the Merger Agreement is hereby amended and restated to read in its entirety as follows:
Superior Offer means an unsolicited bona fide written offer by a Third Party for a transaction (a) described in clause (a) of the definition of Acquisition Transaction (except substituting 50% for 20% therein) or providing for such Third Partys acquisition of all or substantially all of the consolidated assets of the Company and its Subsidiaries taken as a whole, (b) that is on terms and conditions that the Company Board (or a committee thereof) in good faith determines (after consultation with its outside legal counsel and financial advisors), after taking into account all relevant factors as the Company Board considers to be appropriate (including all material legal, financial and regulatory aspects of the transaction contemplated by such Superior Offer), to be more favorable from a financial point of view to the Companys stockholders than the Merger and the other Contemplated Transactions (taken as a whole), (c) with respect to which the Company Board (or a committee thereof) has in good faith taken into consideration the financial impact on the Companys stockholders of (i) any reasonably anticipated delay in the closing of such transaction beyond the anticipated Closing Date of the Merger, (ii) any reasonably anticipated request or requirement by any Governmental Body that the Company or such third party or any of their respective Affiliates take or agree to take any of the actions described in Section 5.8(e) , and (iii) the value of any stock consideration in such transaction not being guaranteed as of the closing date, (d) with respect to which the cash consideration and other amounts (including costs associated with the proposed acquisition) payable at closing are subject to fully committed financing from recognized financial institutions, and (e) is otherwise reasonably capable of being consummated on the terms proposed. Notwithstanding the foregoing, in order for a written offer to be considered a Superior Offer for purposes of the right to terminate this Agreement in accordance with Sections 5.5(e) and 8.1(j) (but, for the avoidance of doubt, not for purposes of effecting a Change in Company Board Recommendation in accordance with Section 5.5(c) ), the Company Board (or a committee thereof) must, prior to 11:59 p.m., New York City time, on June 18, 2013, both (x) make all determinations provided in Section 5.5(c)(i)(C) with respect to such written offer in accordance with the Agreement, and (y) give written notice of those determinations to Parent.
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2.10 Notices. Section 9.9 of the Merger Agreement is hereby amended by adding the following as an additional copy party for notices to the Company:
Shearman & Sterling LLP
599 Lexington Avenue
New York, New York 10022
USA
Attention: Peter D. Lyons
Robert M. Katz
Facsimile: +1 212 848 7179
2.11 Triggering Event. The definition of Triggering Event set forth in Exhibit A to the Merger Agreement is hereby amended and restated to read in its entirety as follows:
Triggering Event means any of the following: (a) the Company Board shall have failed to include in the Prospectus/Proxy Statement, or shall have amended the Prospectus/Proxy Statement to exclude, the Company Board Recommendation; (b) the Company Board shall have effected or publicly announced a Change in Company Board Recommendation; (c) the Company shall have entered into any letter of intent or similar document or any Company Contract contemplating any Acquisition Transaction (other than a confidentiality agreement contemplated by Section 5.3(b) ) or any offer or proposal with respect to any Acquisition Transaction; or (d) a tender or exchange offer relating to the outstanding Company Common Stock shall have been commenced and the Company shall not have sent to its stockholders, prior to the earlier of (x) the date 10 Business Days after the commencement of such tender or exchange offer or (y) the day prior to the date of the Company Stockholders Meeting, a statement disclosing that the Company recommends rejection of such tender or exchange offer, provided that in the case of clause (y) above, that (A) the Company shall have had a minimum of five calendar days from the commencement of such tender or exchange offer to consider such tender or exchange offer and (B) Parent shall have consented to the Company adjourning the Company Stockholders Meeting to permit such five calendar day period to elapse.
2.12 Date of Company Stockholders Meeting.
(a) Section 5.5(a) of the Merger Agreement is hereby amended and restated to read as follows:
The Company will take all action necessary under all applicable Legal Requirements and in accordance with its Charter Documents to call, give notice of and hold a meeting of the holders of Company Common Stock to vote on the adoption of this Agreement (the Company Stockholders Meeting ). The Company Stockholders Meeting will be convened on June 12, 2013, and immediately adjourned until June 25, 2013 (subject to any extension reasonably necessary to comply with applicable Legal Requirements, including (x) amending any disclosure document to
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be delivered to holders of Company Common Stock in connection with the Company Stockholders Meeting or otherwise acting to address any oral or written comments made by the SEC and (y) any delay pursuant to an order of a court of competent jurisdiction). The Company will cause all proxies solicited in connection with the Company Stockholders Meeting to be solicited in compliance with all applicable Legal Requirements. SoftBank (subject to and without limiting its rights in the event of a Change in Company Board Recommendation pursuant to Section 5.5(c) ) and (unless the Company shall have made a Change in Company Board Recommendation pursuant to Section 5.5(c) ) the Company will each use their respective best efforts to solicit adoption of this Agreement, as amended, by the Companys stockholders, including by jointly preparing letters, presentations and other solicitation materials, jointly conducting meetings with significant stockholders and taking such other actions as SoftBank may request in good faith (subject in each case to the Companys determination in good faith that such solicitation and any materials used therein comply with applicable Legal Requirements).
(b) Section 5.5(f) of the Merger Agreement is hereby amended and restated to read as follows:
Notwithstanding the terms of Section 5.5(a) , if on June 25, 2013, or any subsequent date for which the Company Stockholders Meeting is scheduled following any adjournment or postponement (any such date, a Company Meeting Original Date ), the Company has not received proxies representing a sufficient number of shares of Company Common Stock to adopt this Agreement, whether or not a quorum is present, the Company will cause the Company Stockholders Meeting to be postponed or adjourned to a date that is the sooner of 10 Business Days after such Company Meeting Original Date and two Business Days prior to the End Date (as defined in Section 8.1(b) ), or to such other date as Parent and the Company may mutually determine.
2.13 Termination Rights.
(a) Section 8.1(f) of the Merger Agreement is hereby amended and restated to read as follows:
by Parent, upon written notice to the Company, if there shall have been a breach of any representation, warranty, covenant or agreement on the part of the Company contained in this Agreement or any representation or warranty of the Company shall have become untrue after the date hereof, which breach or untrue representation or warranty (i) would, individually or in the aggregate with all other such breaches and untrue representations and warranties, give rise to the failure of a condition set forth in Section 6.1 or Section 6.2 and (ii) is incapable of being cured prior to the End Date by the Company or is not cured within 30 days of written notice of such breach from Parent to the Company;
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(b) Section 8.1(j) of the Merger Agreement is hereby amended and restated to read as follows:
by the Company (at any time prior to the earlier of (i) adoption of this Agreement by the Required Company Vote or (ii) 11:59 p.m. New York City time on June 25, 2013), upon written notice to Parent, in order to enter into a definitive agreement with a Third Party providing for a Superior Offer in accordance with Section 5.5(e) ; or;
3. COVENANTS AND OTHER RELATED MATTERS
3.1 Determinations by Company Board and Special Committee. Contemporaneously with the public announcement of this Amendment, the Company will make public statements to the effect that the Company Board and a special committee of the Company Board (the Special Committee ) have each unanimously (after consultation with their respective outside legal counsel and their respective financial advisors) (a) approved this Amendment and determined that the Merger and the Merger Agreement (as amended by this Amendment) are advisable, (b) recommended that the Companys stockholders vote to adopt the Merger Agreement (as amended by this Amendment), and (c) determined that no Acquisition Inquiry submitted by DISH Network Corporation ( DISH ) to the Company through the date of this Amendment constitutes, or is reasonably likely to lead to, a Superior Offer (as defined in the Merger Agreement prior to the date of this Amendment). Such public statements will also disclose (x) the termination of all discussions and negotiations with DISH with respect to all Acquisition Inquiries submitted by DISH prior to the date of this Amendment consistent with Section 3.3 of this Amendment, and (y) the Companys agreement to adopt the Rights Plan on or prior to June 17, 2013.
3.2 Supplement to the Prospectus/Proxy Statement.
(a) As promptly as practicable after the date of this Amendment, and in no event later than June 14, 2013 (or if the required pro forma financial statements are not available on such date, not later than the first date thereafter on which such pro forma financial statements become available), or such other date as Parent and the Company mutually agree in writing, Parent and the Company will prepare, file with the SEC and cause to be mailed to the holders of Company Common Stock a supplement to the Prospectus/Proxy Statement disclosing the matters that are the subject of this Amendment, together with any other related disclosures (new or amended) that are necessary or appropriate in to reflect such matters, make any required filings with other Governmental Bodies with respect to this Amendment and otherwise implement this Amendment in a manner that does not require or result in a delay in the Company Stockholders Meeting beyond June 25, 2013 (subject to any delay necessitated by the date on which such pro forma financial statements become available) or require or result in a change in the record date for stockholders entitled to vote at the Company Stockholders Meeting. Without limiting the foregoing, the Company will include in the supplement to the Prospectus/Proxy Statement a description of each of the determinations made by the Company Board and the Special Committee as described in Section 3.1 of this Amendment.
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(b) Disclosures with respect to (i) the Special Committees and the Company Boards determinations regarding the terms of, and transactions contemplated by, this Amendment and the Acquisition Inquiry submitted to the Company by DISH, (ii) discussions and negotiations conducted by the Company and its Representatives with DISH and its Representatives, (iii) financial scenarios and projections made available to Parent or DISH and (iv) such other information as the Company shall determine in its reasonable discretion is appropriate to satisfy Legal Requirements shall be deemed necessary and appropriate for purposes of the first sentence of Section 3.2(a) of this Amendment.
3.3 Termination of Discussions and Negotiations.
(a) Immediately following the execution of this Amendment, the Company will, and will cause the other Acquired Corporations and will instruct each of their respective Representatives immediately to, (a) cease and cause to be terminated any and all discussions or negotiations between the Company, any other Acquired Corporation or any of their respective Representatives, on the one hand, and any Person (other than the Parent Entities and their respective Representatives), on the other hand, with respect to any Acquisition Inquiry pending as of the date of this Amendment, (b) terminate in full any access of such Person and its Representatives to nonpublic information, and (c) require the return or destruction of all nonpublic information furnished by the Company or its Representatives to any Person or its Representatives under any confidentiality or non-disclosure agreement entered into prior to the date of this Amendment in connection with any Acquisition Inquiry. For the avoidance of doubt, in the event that any Person has made any Acquisition Inquiry prior to the date of this Amendment, the provisions of the Merger Agreement will thereafter apply fully to such Person (or such Persons Affiliates) as if such Person had not previously made any Acquisition Inquiry.
(b) Without limiting the provisions of clause (a) above, effective immediately upon the execution of this Amendment, those certain waiver letters dated as of April 26, 2013, and May 20, 2013, between Parent and the Company (the Waiver Letters ) are hereby terminated and the waivers granted by Parent pursuant to the Waiver Letters will be of no further force or effect. Accordingly, from and after the date of this Amendment, the Company will not be entitled to take any of the actions permitted by either of the Waiver Letters unless and until the Company is (or becomes) otherwise entitled to take such actions pursuant to (and in accordance with) the terms of the Merger Agreement.
(c) Promptly following the execution of this Amendment, the Company shall be permitted to send DISH a written notice addressing the matters set forth in Section 3.3(a) of this Amendment and advising DISH of the amendments to the Merger Agreement and the Bond Purchase Agreement contemplated by this Amendment, provided that the Company shall give Parent a reasonable opportunity to review and comment on such notice in advance of sending and shall consider in good faith any comments reasonably proposed by or on behalf of Parent.
3.4 Rights Plan.
(a) The Company will adopt the Rights Plan on or prior to June 17, 2013, and will publicly announce adoption of the Rights Plan promptly following such adoption. The Company will comply with all of its obligations under the Rights Plan. SoftBank, HoldCo, Parent and Merger Sub each acknowledges that the adoption of the Rights Plan shall not result in any breach of the representation and warranty set forth in Section 3.5 of the Merger Agreement or the covenant set forth in Section 5.2 of the Merger Agreement.
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(b) Without limiting any of the rights of any of SoftBank, HoldCo, Parent or Merger Sub, whether under the Merger Agreement (as amended by this Amendment), the Bond Purchase Agreement or any agreement entered into in connection with either thereof or otherwise, including to convert the Bond or take any other actions, the Company will from time to time make all determinations and take all actions necessary, or as may be reasonably requested by Parent, to ensure, for purposes of the Rights Plan, that none of SoftBank, HoldCo, Parent and Merger Sub, and none of their respective Affiliates and Associates, are deemed to acquire or to have acquired Beneficial Ownership of any shares of Company Common Stock that are reserved for issuance under the Bond Purchase Agreement or that are acquired at or following the Closing in accordance with the terms of the Merger Agreement to be or become an Acquiring Person for purposes of any such shares of Company Common Stock. The Company will not take any action that would allow any Person (other than SoftBank, HoldCo, Parent or Merger Sub, or any of their respective Affiliates or Associates) to acquire Beneficial Ownership of 17% or more of the shares of Company Common Stock without causing a Distribution Date and a Stock Acquisition Date under the Rights Plan, and will not otherwise amend or waive any provision of the Rights Plan or redeem any of the Rights issued under the Rights Plan; provided , however , that the foregoing restrictions shall not apply in the event that the Company Board has effected a Change in Company Board Recommendation in accordance with Section 5.5(c) .
(c) The Company will promptly (and in no event later than 24 hours after the Company learns of any such event) notify Parent in writing of (i) the occurrence of a Distribution Date, (ii) any Person becoming an Acquiring Person or (iii) the receipt by or on behalf of the Company of any request for, or inquiry regarding, any waiver or amendment of any of the provisions of or exemptions under the Rights Plan, including a reasonably detailed description of the facts and circumstances underlying or relating to any such event.
(d) Terms used in this Section 3.4 and not otherwise defined in this Amendment have the meanings ascribed to them in the Rights Plan.
4. REPRESENTATIONS AND WARRANTIES
4.1 Additional Representations of the Company. The Company hereby represents and warrants to the Parent Entities as follows:
(a) The Company has all requisite corporate power and authority to enter into this Amendment and, subject to the adoption of the Merger Agreement by the Required Company Vote, to carry out its obligations under the Merger Agreement (as amended by this Amendment) and to consummate the transactions contemplated by the Merger Agreement (as amended by this Amendment).
(b) The execution and delivery of this Amendment by the Company and the consummation by the Company of the transactions contemplated by the Merger Agreement (as amended by this Amendment) have been duly authorized by all requisite corporate action on the part of the Company (other than obtaining the Required Company Vote).
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(c) This Amendment has been duly executed and delivered by the Company and, assuming the due authorization, execution and delivery of this Amendment by each of the Parent Entities, constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency, reorganization or moratorium laws or other similar Legal Requirements, now or hereafter in effect, affecting creditors rights generally, and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.
(d) As of June 7, 2013, (i) 3,022,802,604 shares of Company Common Stock have been issued and are outstanding, (ii) 50,407,081 shares of Company Common Stock are subject to issuance pursuant to Company Options; (iii) 72,370,877 shares of Company Common Stock are reserved for future issuance pursuant to the Company ESPP; (iv) 15,140,896 shares of Company Common Stock are reserved for future issuance pursuant to Company Equity Awards; and (v) 141,944,839 shares of Company Common Stock are reserved for future issuance pursuant to equity awards not yet granted under the Company Equity Plans. As of June 7, 2013, the Company held no shares of its capital stock in treasury.
(e) Except as set forth in (1) Section 4.1(d) of this Amendment, (2) Parts 3.5(b) and 3.5(c) of the Company Disclosure Schedule and (3) the Bond Purchase Agreement, the Warrant Agreement and the Rights Plan, there is no: (i) outstanding subscription, option, call, warrant or right (whether or not currently exercisable) to acquire any shares of the capital stock or other voting securities of any of the Acquired Corporations; (ii) outstanding security, instrument or obligation that is or may become convertible into or exchangeable for any shares of the capital stock or other voting securities of any of the Acquired Corporations; or, other than any Company Plan, Contract under which the Company is or may become obligated to sell or otherwise issue any shares of its capital stock or any other voting securities.
4.2 Additional Representations of the Parent Entities. Each of the Parent Entities hereby represents and warrants to the Company as follows:
(a) Such Parent Entity has all requisite corporate power and authority to enter into this Amendment and to carry out its obligations under the Merger Agreement (as amended by this Amendment) and to consummate the transactions contemplated by the Merger Agreement (as amended by this Amendment).
(b) The execution and delivery of this Amendment by such Parent Entity and the consummation by such Parent Entity of the transactions contemplated by the Merger Agreement (as amended by this Amendment) have been duly authorized by all requisite corporate action on the part of such Parent Entity.
(c) This Amendment has been duly executed and delivered by such Parent Entity and, assuming the due authorization, execution and delivery of this Amendment by the Company, constitutes the valid and binding obligation of such Parent Entity, enforceable against
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such Parent Entity in accordance with its terms, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency, reorganization or moratorium laws or other similar Legal Requirements, now or hereafter in effect, affecting creditors rights generally, and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.
5. GENERAL
5.1 Savings. Subject to and without limiting the change to the definition of Superior Offer herein insofar as it relates to Section 5.5(c)(i) of the Merger Agreement, nothing set forth in this Amendment shall be construed to limit the ability of the Company Board to effect a Change in Company Board Recommendation in accordance with Section 5.5(c) of the Merger Agreement or the ability of the Company to make disclosures in accordance with Section 5.3(f) of the Merger Agreement.
5.2 Full Force and Effect. Except to the extent specifically amended herein or supplemented hereby, the Merger Agreement remains unchanged and in full force and effect, and this Amendment will be governed by and subject to the terms of the Merger Agreement, as amended by this Amendment. From and after the date of this Amendment, each reference in the Merger Agreement to this Agreement, hereof, hereunder or words of like import, and all references to the Merger Agreement in any and all agreements, instruments, documents, notes, certificates and other writings of every kind of nature (other than in this Amendment or as otherwise expressly provided) will be deemed to mean the Merger Agreement, as amended by this Amendment, whether or not this Amendment is expressly referenced.
5.3 Other Terms. Section 9.4 , Section 9.5 , Section 9.9 (as amended by this Amendment) and Section 9.10 of the Merger Agreement will apply to this Amendment, mutatis mutandis , as if set forth herein.
5.4 Counterparts . This Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be duly executed as of the date first written above.
SOFTBANK CORP. | STARBURST I, INC. | |||||||
By: | /s/ Masayoshi Son | By: | /s/ Ronald D. Fisher | |||||
Name: | Masayoshi Son | Name: | Ronald D. Fisher | |||||
Title: | Chairman & CEO | Title: | President | |||||
SPRINT NEXTEL CORPORATION | STARBURST II, INC. | |||||||
By: | /s/ Charles Wunsch | By: | /s/ Ronald D. Fisher | |||||
Name: | Charles Wunsch | Name: | Ronald D. Fisher | |||||
Title: | SVP, GC & Corp. Sec. | Title: | President | |||||
STARBURST III, INC. | ||||||||
By: | /s/ Ronald D. Fisher | |||||||
Name: | Ronald D. Fisher | |||||||
Title: | President |
[Signature Page to the Third Amendment to the Merger Agreement]
Exhibit 10.1
EXECUTION COPY
FIRST AMENDMENT TO
BOND PURCHASE AGREEMENT
This First Amendment (this Amendment ) to the BPA (defined below) is made as of June 10, 2013 by and between: Starburst II, Inc. (the Purchaser ), a Delaware corporation and Sprint Nextel Corporation, a Kansas corporation (the Company and, together with the Purchaser, the Parties ).
RECITALS
WHEREAS, the Parties entered into that certain Bond Purchase Agreement as of October 15, 2012 (the BPA ); and
WHEREAS, the Parties desire to amend the BPA in order to reflect certain additional understandings reached between the Parties.
NOW, THEREFORE, in consideration of the foregoing and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and pursuant to Section 14.3 of the BPA, the Parties hereby agree as follows:
1. INTERPRETATION
This Amendment is made and delivered pursuant to the BPA. Capitalized terms used but not defined in this Amendment have the meanings ascribed to them in the BPA.
2. AMENDMENTS TO THE BPA
2.1 Recitals. The first sentence of the Recitals of the BPA is hereby amended and restated, in its entirety, to read as follows:
The Company desires to issue and sell and the Purchaser desires to purchase a convertible senior bond in substantially the form attached to this Agreement as Exhibit A as it may be amended, supplemented or modified pursuant to the terms of this Agreement from time to time (the Bond ), which will be convertible on the terms stated herein into equity securities of the Company.
2.2 Standstill and Non-Solicitation . Section 6.3(a) of the BPA is hereby amended and restated, in its entirety, to read as follows:
Except with respect to the consummation of the Merger, until the earliest of (i) the date that this Agreement is terminated, (ii) the date the Purchaser no longer holds in excess of 5% of the Common Stock (or Bonds convertible into more than 5% of the Common Stock), and (iii) a Fall Away Event, the Purchaser, for itself and the Parent Entities and their respective Affiliates, covenants and agrees with the Company that it will not in any manner, directly or indirectly (unless requested by the Company) effect or seek (including entering into any discussions, negotiations, agreements or understandings with any third person whether publicly or otherwise) to effect, or encourage any individual, corporation, partnership, limited liability company, association, trust or any other entity or organization, including a government or political subdivision or any agency or instrumentality thereof (any of the foregoing, with respect to this Section 6.3(a) only, a Person ) to participate in,
effect or seek (whether publicly or otherwise) to effect: (i) any acquisition of beneficial ownership by any Person of any securities, rights or options to acquire any securities, or any assets or businesses, of the Company or any of its Subsidiaries; provided that the Parent Entities may acquire beneficial ownership of Common Stock if upon such acquisition the aggregate beneficial ownership of Common Stock by the Parent Entities would not at any time be in excess of 19.95% of the number of shares of Common Stock that is then outstanding; (ii) any tender offer, exchange offer, merger, acquisition or other business combination involving the Company or any of its Subsidiaries, or any similar extraordinary transaction involving the purchase of all or substantially all the of assets of the Company; or (iii) any recapitalization, restructuring, liquidation or dissolution with respect to the Company or any of its Subsidiaries or any similar extraordinary transaction involving a dividend or distribution of assets of the Company. Notwithstanding anything in this Agreement to the contrary, (A) from and after such time that the Purchaser first receives a Change Notice, or otherwise learns that the Company Board is considering effecting a Change in Company Board Recommendation, this Section 6.3(a) shall have no force or effect and shall not in any way restrict or otherwise apply to the Purchaser, the Parent Entities or their Affiliates, provided that, notwithstanding the foregoing, prior to any Fall Away Event, none of the Parent Entities nor any of their Affiliates shall be permitted to acquire or agree to acquire, directly or indirectly, alone or as a part of a group (as such term is used in Section 13(d) of the Exchange Act), any outstanding Common Stock or rights or options to acquire outstanding Common Stock or any derivative interests in outstanding Common Stock, in each case, in an amount that, when taken together with the Common Stock into which the Purchasers Bond is convertible, exceeds 19.95% of the number of shares of Common Stock that is then outstanding; and (B) notwithstanding clause (A) above, all of the restrictions contained in this Section 6.3(a) will lapse with respect to the Purchaser, the Parent Entities or their Affiliates, at such time as any person or group (as defined in Section 13(d) of the Securities Exchange Act of 1934) not affiliated with the Purchaser, the Parent Entities or their Affiliates, has commenced a bona fide tender offer to acquire at least 50.1% of the Companys outstanding voting securities. However, from and after any termination of the Merger Agreement pursuant to Section 8.1(g) of the Merger Agreement, this Section 6.3(a) shall again apply to the Purchaser, the Parent Entities and their Affiliates pursuant to the terms hereof, but only until the earliest of (i) the date that this Agreement is terminated, and (ii) the date that the Purchaser no longer holds in excess of 5% of the Common Stock (or Bonds convertible into more than 5% of the Common Stock). Notwithstanding anything in this Agreement to the contrary, upon any Fall Away Event and without any further action on the part of the Purchaser, the Parent Entities, the Company or any other party, all of the restrictions and limitations applicable to the Purchaser, the Parent Entities or their Affiliates set forth in this Section 6.3(a) will automatically lapse, and will have no force or effect and will not in any way limit, restrict or otherwise apply to the Purchaser, the Parent Entities or their Affiliates.
2.3 Right to Convert. A new clause (g) is added to Section 10.1 of the BPA which shall read as follows:
(g) Notwithstanding anything herein to the contrary, if, within three (3) Business Day after any Qualifying Termination Event, the Purchaser has
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delivered to the Company a notice (the Make Whole Put Notice ) electing, in whole but not in part, to receive the Make Whole Put Amount, then (i) the Purchasers right to convert the Bond pursuant to this Section 10.1 will be suspended, and (ii) the Company will pay (or cause to be paid by any successor thereto or any direct or indirect parent of such successor) to the Purchaser the Make Whole Put Amount at the Make Whole Payment Time by wire transfer of immediately available funds to the account designated by the Purchaser in a written notice delivered to Company prior to the Make Whole Payment Time; provided, however , that in the event that (x) the Qualifying Agreement is terminated or (y) the transaction contemplated by such Qualifying Agreement is otherwise not consummated for any reason by June 10, 2014 (and in the case of this clause (y) the Purchaser has delivered a written notice after June 10, 2014 to the Company revoking such Make Whole Put Notice), then (1) the Make Whole Put Notice will be deemed automatically withdrawn as of the date of such termination or receipt of such written notice from the Purchaser, as applicable, and (2) the suspension of Purchasers right to convert the Bond described above will be terminated and Purchaser shall again have its full rights under this Agreement to convert the Bond pursuant to this Section 10.1 as if the Make Whole Put Notice had never been delivered by the Purchaser. Except as provided in clause 10.1(g)(i) above, the delivery of the Make Whole Put Notice will have no effect whatsoever on the rights or powers of the Purchaser under this Agreement, it being understood that, the obligations of the parties under the Agreement will terminate upon payment of the Make Whole Put Amount, in full, in accordance with, and subject to the provisions of, Section 13.1 . Notwithstanding anything herein to the contrary, in no event will the Make Whole Put Amount be paid to the Purchaser prior to the Make Whole Payment Time without the Purchasers prior written consent.
2.4 Transfer Restrictions. The second sentence of Section 11 is hereby amended and restated, in its entirety, to read as follows:
Any shares of Common Stock issued upon conversion, including in connection with a Synthetic Sale, in whole or in part, of the Bond, may be transferred as provided herein and pursuant to applicable law; provided , however , that other than sales of shares of Common Stock pursuant to Section 9 or pursuant to, or in connection with, a Synthetic Sale, no such transfer of shares of Common Stock issued upon conversion of the Bond may be effected (and any such transfer will be invalid) to the extent that the transferee would, immediately following such transfer, be the direct or indirect beneficial owner, as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended, of more than 5% of the voting power of the Companys outstanding equity.
2.5 Termination. Section 13. 1 of the BPA is hereby amended by (1) deleting the word or at the end of clause (c) thereof, (2) replacing the period at the end of clause (d) thereof with ; or and adding the following clause (e) immediately following clause (d) thereof:
(e) automatically, without any further action by the Purchaser or the Company, upon payment of the Make Whole Put Amount, in full, as contemplated by Section 10.1(g) hereof; provided, however, that this Agreement will automatically be reinstated if the Purchaser is required to disgorge the Make Whole Put Amount in connection with any bankruptcy or insolvency proceeding involving the Company (or any successor thereto).
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2.6 Assignability; Third-Party Beneficiaries. The first sentence of Section 14.8 of the BPA is hereby amended and restated, in its entirety, to read as follows:
This Agreement will be binding upon, will be enforceable by and inure solely to the benefit of, the parties hereto and their respective successors and assigns; provided , however , that the Company may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each holder of the Bond (and any attempted assignment or transfer by the Company without such consent will be null and void and of no effect); provided, further , that notwithstanding the foregoing to the contrary, in the event of the consummation of a transaction resulting in a Change of Control (other than pursuant to the Merger Agreement), Sections 6.1 , 6.2 , 6.4 , 10.1 , 10.2 , 10.6 , 12.1 , 14.2 , 14.10 and Articles 7 , 8 and 9 of this Agreement shall apply mutatis mutandis to the Person (including any parent entity of such Person) that is the counterparty in such Change of Control transaction, and any references to the Company in such provisions shall be understood to mean, and shall be interpreted to include, such Person (including any parent entity of such Person).
2.7 Annex A .
(a) The following defined terms are hereby added to Annex A in alphabetical order:
Daily VWAP of the Common Stock means, for any VWAP Trading Day, the per-share volume-weighted average price as displayed under the heading Bloomberg VWAP on Bloomberg page S.N <equity> AQR (or any equivalent successor page) in respect of the period from the scheduled open of trading on the principal trading market for the Common Stock to the scheduled close of trading on such market, or if such volume-weighted average price is unavailable, the market value of one share of Common Stock using a volume-weighted method as determined by a nationally recognized independent investment banking firm retained by the Company for this purpose. Daily VWAP will be determined without regard to afterhours trading or any other trading outside of the regular trading session trading hours.
Fall Away Event means any termination of the Merger Agreement (other than a termination of the Merger Agreement by the Company pursuant to Section 8.1(g) of the Merger Agreement).
Make Whole Payment Time means the time (i) in the case of termination of the Merger Agreement pursuant to Section 8.1(j) of the Merger Agreement, on the date upon which the transaction contemplated by the applicable Qualifying Agreement is consummated, immediately prior to the consummation of such transaction, and (ii) in the case of a termination of the Merger Agreement pursuant to Section 8.1(b) or Section 8.1(d) of the Merger Agreement that constitutes a Qualifying Termination Event, on the date upon which the transaction contemplated by the applicable Qualifying Agreement is consummated, immediately prior to the consummation of such transaction.
Make Whole Put Notice has the meaning set forth in Section 10.1(g) of the Agreement.
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Make Whole Put Amount means the sum of (a) the principal amount of the Bond, plus (b) all accrued and unpaid interest on the Bond through the Make Whole Payment Time, plus (c) the Net Share Value.
Market Disruption Event means (a) a failure by the primary national securities exchange or market in which the Common Stock is listed or admitted to trading to open during its regular trading session or (b) the occurrence or existence prior to 1:00 p.m. on any Trading Day for the Common Stock for an aggregate one half hour period of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the stock exchange or otherwise) in the Common Stock or in any options, contracts or future contracts relating to the Common Stock.
Net Share Value equals the amount obtained by multiplying (a) the number of shares of Common Stock that would have been issuable pursuant to Section 10.2 of the Agreement if the Bond had been converted on the date of the Make Whole Put Notice, by (b) the amount that results from subtracting (x) the quotient obtained by dividing (i) $1,000 by (ii) the Conversion Rate from (y) the average of the Daily VWAPs of the Common Stock over the thirty (30) consecutive VWAP Trading Day period ending on the day that the Merger Agreement is terminated pursuant to Section 8.1(b), Section 8.1(d) or Section 8.1(j), as applicable, of the Merger Agreement.
Qualifying Agreement means (i) as it relates to any termination of the Merger Agreement pursuant to Section 8.1(j) of the Merger Agreement, the definitive acquisition agreement entered into by the Company with a third party in connection with such termination, and (ii) in the case of a termination of the Merger Agreement pursuant to Section 8.1(b) or Section 8.1(d) of the Merger Agreement that constitutes a Qualifying Termination Event, any definitive acquisition agreement entered into by the Company prior to June 10, 2014 relating to a Change of Control of the Company.
Qualifying Termination Event means any termination of the Merger Agreement pursuant to (i) Section 8.1(j) of the Merger Agreement, or (ii) Sections 8.1(b) or 8.1(d) of the Merger Agreement, where (x) in each case for purposes of this clause (ii) at or prior to the time of such termination a proposal or offer for a Specified Acquisition Transaction (as such term in defined in the Merger Agreement) shall have been publicly disclosed, announced, commenced, submitted or made and (y) in the case of termination of the Merger Agreement pursuant to Section 8.1(b), the conditions set forth in Section 6.7 and Section 7.6 of the Merger Agreement shall have been satisfied but a final vote by the holders of the Companys common stock on the adoption of the Merger Agreement shall not have taken place.
VWAP Trading Day means a day during which (i) trading in the Common Stock generally occurs on the principal U.S. national or regional securities exchange or market on which the Common Stock is listed or admitted for trading and (ii) there is no Market Disruption Event. If the Common Stock is not so listed or traded, then VWAP Trading Day means a Business Day.
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(a) The following definitions set forth in Annex A are hereby amended and restated in their entirety as follows:
Common Stock means (i) the Series 1 common stock, $2.00 par value per share, of the Company, or (ii) in the event of the consummation of a transaction resulting in a Change of Control (other than pursuant to the Merger Agreement), other than for purposes of determining amounts payable upon conversion (which shall be determined pursuant to Sections 10.1 through Section 10.5 (as the same shall be modified pursuant to the agreement contemplated by Section 10.5 )), such portion of the Reference Property as shall consist of shares of capital stock. For the avoidance of doubt, in connection with the consummation of the first transaction resulting in a Change of Control (other than pursuant to the Merger Agreement), Common Stock as used in Sections 10.4 and 10.5 shall mean the Series 1 common stock, $2.00 par value per share, of the Company.
Conversion Date means the date a holder of the Bond complies with the procedures for conversion set forth in Section 10.3 of the Agreement.
Merger Agreement means the Agreement and Plan of Merger, dated as of October 15, 2012, by and among SoftBank, Holdco, the Purchaser, Merger Sub, and the Company, as it may be amended from time to time.
2.8 Allonge. Concurrent with the execution of this Amendment, the Parties shall enter into the Form of Allonge to the Sprint Nextel Corporation Convertible Bond set forth on Exhibit A attached to this Amendment (the Allonge ).
3. REPRESENTATIONS AND WARRANTIES
3.1 Additional Representations of the Company. The Company hereby represents and warrants to the Purchaser as follows:
(a) The transactions hereunder are within the corporate or other equivalent power of the Company and have been duly authorized by all necessary corporate action.
(b) This Amendment has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
3.2 Additional Representations of the Purchaser. The Purchaser hereby represents and warrants to the Company as follows:
(a) The transactions hereunder are within the corporate or other equivalent power of the Purchaser and have been duly authorized by all necessary corporate action.
(b) This Amendment, when executed and delivered by the Purchaser, will constitute a valid and legally binding obligation of the Purchaser, enforceable in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and any other laws of general application affecting enforcement of creditors rights generally, and as limited by laws relating to the availability of a specific performance, injunctive relief, or other equitable remedies.
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4. GENERAL
4.1 Full Force and Effect. Except to the extent specifically amended herein or supplemented hereby, the BPA remains unchanged and in full force and effect, and this Amendment will be governed by and subject to the terms of the BPA, as amended by this Amendment. From and after the date of this Amendment, each reference in the BPA to this Agreement, hereof, hereunder or words of like import, and all references to the BPA in any and all agreements, instruments, documents, notes, certificates and other writings of every kind of nature (other than in this Amendment or as otherwise expressly provided) will be deemed to mean the BPA, as amended by this Amendment, whether or not this Amendment is expressly referenced.
4.2 Other Terms. Sections 14.4 , 14.5 , 14.9 and 14.11 of the BPA will apply to this Amendment, mutatis mutandis , as if set forth herein.
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IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be duly executed as of the date first written above.
STARBURST II, INC. | ||
By: | /s/ Ronald D. Fisher | |
Name: | Ronald D. Fisher | |
Title: | President | |
SPRINT NEXTEL CORPORATION | ||
By: | /s/ Charles Wunsch | |
Name: | Charles Wunsch | |
Title: | SVP, GC & Corp. Sec. |
[Signature Page to the First Amendment to the Bond Purchase Agreement]
FORM OF ALLONGE
By this Allonge to the Sprint Nextel Corporation Convertible Bond (the Allonge ), that certain Sprint Nextel Corporation Convertible Bond, dated as of October 22, 2012 (the Bond ), payable to the order of Starburst II, Inc., a Delaware Corporation, is hereby amended as follows:
1. The third paragraph of the Bond (fourth paragraph inclusive of the legend) is hereby amended and restated in its entirety as follows:
Subject to the terms of the Bond Purchase Agreement, in the event of a Change of Control, the holder of this Bond shall have the right, at the holders option, to require the Company to repurchase such holders Bond, including any portion thereof which is $1,000 in principal amount or any integral multiple of $1,000, at a price equal to the sum of (a) the principal amount of the Bond (or such portion thereof), plus (b) all accrued and unpaid interest through the date that such repurchase is consummated. Notwithstanding the foregoing, in the event of a Qualifying Termination Event, including if such Qualifying Termination Event may also result in a Change of Control, the holder of this Bond shall have the right, at the holders option by delivery of a Make Whole Put Notice, to require the Company to pay the Make Whole Put Amount at the Make Whole Payment Time pursuant to the terms of the Bond Purchase Agreement.
Except, as herein expressly amended, the Bond is ratified and confirmed in all respects and shall remain in full force and effect in accordance with its terms.
This Allonge will be governed by, and construed in accordance with, the laws of the State of New York, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof.
[Remainder of page intentionally left blank; signature page follows]
[Exhibit A to the First Amendment to the Bond Purchase Agreement]
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed and delivered.
Dated: June 10, 2013 | SPRINT NEXTEL CORPORATION | |||||
By: | /s/ Joseph J. Euteneuer | |||||
Name: | Joseph J. Euteneuer | |||||
Title: | CFO | |||||
By: | /s/ Charles Wunsch | |||||
Name: | Charles Wunsch | |||||
Title: | SVP, GC & Corp. Sec. |
[Signature Page to Allonge]
Exhibit 99.1
Sprint Contacts:
Media:
Scott Sloat, 240-855-0164
Scott.sloat@sprint.com
Doug Duvall, 517-287-5183
Douglas.duvall@sprint.com
Investors:
Brad Hampton, 800-259-3755
investor.relations@sprint.com
Softbank Contacts:
Japan Media:
SoftBank Press office
+ 81 3 6889 2300
US Media:
Jim Barron +1.212.687.8080
Megan Bouchier +1.415.618.8750
Paul Kranhold +1.415.618.8750
SPRINT AND SOFTBANK AMEND MERGER AGREEMENT TO DELIVER
GREATER VALUE TO SPRINT STOCKHOLDERS
Increases Cash Consideration Paid to Sprint Stockholders at Closing by $4.5 Billion
Sprints Special Committee and Board of Directors Unanimously Approve Amended
Merger Agreement
Sprints Special Committee Unanimously Determines that DISH Preliminary Proposal
Not Reasonably Likely to Lead to a Superior Offer
Sprint to Adjourn June 12, 2013 Stockholder Meeting until June 25, 2013
OVERLAND PARK, Kan and TOKYO JUNE 10, 2013 Sprint Nextel Corporation (NYSE: S) (Sprint) and SoftBank Corp. (TSE: 9984) (SoftBank) announced today that they have amended the previously announced merger agreement (the Merger Agreement) between the two companies to deliver greater cash consideration and increased certainty to Sprint stockholders. Sprints Special Committee and Board of Directors have unanimously approved the amended Merger Agreement and have unanimously recommended to stockholders to vote FOR the revised SoftBank transaction. Sprint and SoftBank anticipate closing the SoftBank transaction in early July 2013, as previously communicated.
Under the amended Merger Agreement, SoftBank will deliver an additional $4.5 billion of cash to Sprint stockholders at closing, bringing the total cash consideration available to Sprint stockholders to $16.64 billion.
| The cash available to stockholders has increased by $1.48 per share, from $4.02 to $5.50, based on the June 7, 2013 share count (assuming full proration). |
| The $4.5 billion of additional cash at closing will be funded by a reallocation of $3 billion of SoftBanks previously proposed $4.9 billion primary investment in New Sprint and by $1.5 billion of incremental capital from SoftBank. |
| The price at which SoftBank will acquire shares from current Sprint shareholders will be increased from $7.30 per share to $7.65 per share, a 52% premium to the unaffected trading price prior to announcement in October 2012. |
As part of the amended Merger Agreement, the pricing of SoftBanks $1.9 billion primary investment will be increased by 19% from the previously agreed $5.25 per share to $6.25 per share. Pro forma for the transaction, the current Sprint stockholders resulting equity ownership in a stronger, more competitive New Sprint will be 22% while Softbank will own approximately 78%.
Softbank will continue to invest $1.9 billion in New Sprint at closing, which in addition to the $3.1 billion convertible debt investment made by SoftBank in October 2012, brings SoftBanks total investment in Sprint to $5.0 billion. SoftBank and Sprint believe that the reallocation of primary capital to Sprint stockholders is warranted given the companies refined operating and capital expenditures synergy expectations resulting from extensive due diligence over the past nine months, as well as Sprints improving profitability and execution of its Network Vision plan.
Sprint also announced today that its Special Committee and Board of Directors have unanimously determined that the proposal submitted by DISH Network Corporation (DISH) on April 15, 2013 is not reasonably likely to lead to a superior offer under the Merger Agreement. Sprint has engaged with DISH since April 15 and, after receiving waivers from SoftBank under the Merger Agreement, allowed DISH due diligence to commence on May 21. Despite the Special Committees diligence, DISH has not put forward an actionable offer. As a consequence of the lack of progress with DISH and the improved terms from SoftBank, the Special Committee ended its discussions with DISH and will request that DISH destroy all of the Sprint confidential information made available in the course of its diligence.
The amended agreement announced today delivers more upfront cash to Sprint stockholders, while still achieving our goal of creating a well-capitalized Sprint that is better positioned to bring meaningful competition to the US market, said SoftBank Chairman and CEO, Masayoshi Son. Our transaction offers significant value for Sprint stockholders and the opportunity to realize that value in just a few weeks, without the risks associated with any other potential transaction. We look forward to working with the Sprint management team to accelerate the build out of a nationwide LTE network, increase competition in the US market and drive subscriber growth in the years ahead.
Chairman of the Special Committee of the Sprint Board of Directors, Larry Glasscock, said, As amended, the SoftBank transaction provides a significant cash premium, maximizes value and certainty for Sprint stockholders, and enhances Sprints long-term value by creating a company with an improved balance sheet, greater financial flexibility and a stronger competitive position. The amended agreement allows Sprint shareholders to receive substantial cash and to begin to participate in Softbank upside on an expedited and low-risk basis. We believe this preserves the timing and closing certainty of the original Softbank transaction.
Glasscock continued, We have expended substantial time and energy engaging with DISH over the past nine weeks, including an extensive due diligence process, but these efforts did not lead, in the Special Committees view, to a proposal that was reasonably likely to lead to a proposal superior to SoftBanks.
The revised merger agreement creates a deadline of June 18, 2013 for DISH to provide its best and final offer and for the completion of deliberations by the Special Committee and notice to SoftBank.
The Special Committee made its decision and recommendation after long and careful deliberation. Specific steps taken by the Special Committee include:
| Proactively hired network and spectrum consultants and regulatory counsel (in addition to its previously announced financial and legal advisors) to independently advise it on certain matters and these individuals participated in the extensive due diligence that was performed on DISH and its spectrum and network plans; |
| Directed Sprint to respond to nearly all of DISHs numerous requests for written diligence materials; |
| Enabled representatives of the Committee and Sprint, as well as members of Sprint management, to engage in multiple in-person meetings with DISH as well as numerous conference calls to discuss a wide variety of diligence subjects such as network deployment, HR, IT, marketing and tax, and; |
| Participated in numerous calls between the Committee and Sprint and their advisors and DISH and its advisors. |
Additional terms of the agreement:
| Amend the definition of Superior Offer to exclude any proposal that is not fully financed pursuant to binding commitments from recognized financial institutions. |
| Require Sprint to adopt a shareholder rights plan. |
| Increase the non-refundable fiduciary termination fee payable by Sprint to SoftBank in certain circumstances from $600 million to $800 million. |
To give Sprint stockholders time to evaluate the amended agreement, Sprint and SoftBank have agreed to adjourn the Special Meeting of Stockholders to be convened on June 12, 2013 until June 25, 2013. Supplemental proxy materials will be filed with the SEC and distributed to
stockholders in the near future and such materials and an election form will be distributed to stockholders in the near future.
Consummation of the Sprint-SoftBank merger remains subject to various conditions to closing, including receipt of approval of the Federal Communications Commission and adoption of the merger agreement by Sprints stockholders. Sprint and SoftBank anticipate the merger will be consummated in July 2013, subject to the remaining closing conditions.
All holders of record of Sprint common stock at the close of business on April 18, 2013 are eligible to vote at the special stockholders meeting. If you have any questions or need assistance in voting your shares, please call Sprints proxy solicitor and the information agent for the offering, Georgeson Inc., toll free at 1-866-741-9588 (banks and brokers call 212-440-9800). You can also contact SoftBanks proxy solicitor Morrow & Co., LLC toll free at 1-800-662-5200 (banks and brokers call 203-658-9400). Proxy materials and other important information relevant to the SoftBank-Sprint transaction can be found at: www.SoftbankSprintTransaction.com.
The Raine Group LLC is serving as lead financial advisor to SoftBank. Mizuho Secuirites, Goldman Sachs, Deutsche Bank, JP Morgan and Credit Suisse also served as advisors. SoftBanks legal advisors include Morrison & Foerster LLP as lead counsel, Mori Hamada & Matsumoto as Japanese counsel, Dow Lohnes PLLC as regulatory counsel, Potter Anderson Corroon LLP as Delaware counsel, and Foulston & Siefkin LLP as Kansas counsel.
The Special Committee of the Sprint Board of Directors is being advised by Bank of America Merrill Lynch, Shearman & Sterling LLP, Bingham and Spectrum Management Consulting. Citigroup Global Markets Inc., Rothschild Inc. and UBS Investment Bank are co-lead financial advisors for Sprint. Sprints legal advisors include Skadden, Arps, Slate, Meagher and Flom LLP as lead counsel, Lawler, Metzger, Keeney and Logan as regulatory counsel, and Polsinelli PC as Kansas counsel.
Cautionary Statement Regarding Forward Looking Statements
This document includes forward-looking statements within the meaning of the securities laws. The words may, could, should, estimate, project, forecast, intend, expect, anticipate, believe, target, plan, providing guidance and similar expressions are intended to identify information that is not historical in nature.
This document contains forward-looking statements relating to the proposed transactions between Sprint Nextel Corporation (Sprint) and SoftBank Corp. (SoftBank) and its group companies, including Starburst II, Inc. (Starburst II), and the proposed acquisition by Sprint of Clearwire Corporation (Clearwire). All statements, other than historical facts, including, but not limited to: statements regarding the expected timing of the closing of the transactions; the ability of the parties to complete the transactions considering the various closing conditions; the expected benefits of the transactions such as improved operations, enhanced revenues and cash flow, growth potential, market profile and financial strength; the competitive ability and position of SoftBank or Sprint; and any assumptions underlying any of the foregoing, are forward-looking statements. Such statements are based upon current plans, estimates and expectations that are subject to risks, uncertainties and assumptions. The inclusion of such
statements should not be regarded as a representation that such plans, estimates or expectations will be achieved. You should not place undue reliance on such statements. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others, that (1) there may be a material adverse change of SoftBank; (2) the proposed financing may involve unexpected costs, liabilities or delays or may not be completed on terms acceptable to SoftBank, if at all; and (3) other factors as detailed from time to time in Sprints, Starburst IIs and Clearwires filings with the Securities and Exchange Commission (SEC), including Sprints and Clearwires Annual Reports on Form 10-K for the year ended December 31, 2012 and Quarterly Reports on Form 10-Q for the quarter ended March 31, 2013, and other factors that are set forth in the proxy statement/prospectus contained in Starburst IIs Registration Statement on Form S-4, which was declared effective by the SEC on May 1, 2013, and in other materials that will be filed by Sprint, Starburst II and Clearwire in connection with the transactions, which will be available on the SECs web site (www.sec.gov). There can be no assurance that the transactions will be completed, or if completed, that such transactions will close within the anticipated time period or that the expected benefits of such transactions will be realized.
All forward-looking statements contained in this document and the documents referenced herein are made only as of the date of the document in which they are contained, and none of Sprint, SoftBank or Starburst II undertakes any obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events except as required by law. Readers are cautioned not to place undue reliance on any of these forward-looking statements.
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