Sprint - Nextel 2012 Annual Report Download - page 104

Table of Contents
Agreements with respect to Changes in Control
On October 15, 2012, we entered into the Merger Agreement for the SoftBank Merger. In addition, on October 15, 2012, Sprint and SoftBank
entered into the Bond Agreement.
Bond Agreement
Pursuant to the Bond Agreement, on October 22, 2012, Sprint issued a convertible bond (Bond) to New Sprint with a face amount of $3.1
billion, stated interest rate of 1%, and maturity date of October 15, 2019, which is convertible into 590,476,190 shares of Sprint common stock at $5.25
per share, or approximately 16.4% upon conversion of the Bond (based on Sprint common shares outstanding as of December 31, 2012), subject to
adjustment in accordance with the terms of the Bond Agreement. Interest on the Bond will be due and payable in cash semiannually in arrears on April
15 and October 15 of each year, commencing on April 15, 2013. The Bond will be converted into Sprint shares immediately prior to consummation of
the SoftBank Merger and may not otherwise be converted prior to the termination of the Merger Agreement. Conversion of the Bond is subject in any
case to receipt of any required approvals and, subject to certain exceptions, to receipt of waivers under the Company's existing credit facilities. Subject
to certain exceptions, SoftBank may not transfer the Bond without Sprint's consent.
Merger Agreement
Upon consummation of the SoftBank Merger, which is subject to various conditions, including Sprint stockholder and regulatory approval,
SoftBank will fund New Sprint with additional capital of approximately $17.0 billion, of which approximately $12.1 billion will be distributed to Sprint
stockholders as merger consideration with the remaining $4.9 billion held in the cash balance of New Sprint for general corporate purposes, including
but not limited to the Clearwire Acquisition. Pursuant to the terms and subject to the conditions described in the Merger Agreement, upon
consummation of the SoftBank Merger, outstanding shares of Sprint common stock, except as otherwise provided for in the Merger Agreement, will be
converted, at the election of Sprint stockholders, into (i) cash in an amount equal to $7.30 for each share of Sprint common stock or (ii) one share of
New Sprint common stock for each share of Sprint common stock, subject in each case to proration such that a stockholder may receive a combination
of cash and New Sprint common stock.
Upon consummation of the SoftBank Merger, SoftBank will receive a five
- year warrant to purchase 54,579,924 shares in New Sprint at $5.25
per share which would yield approximately $300 million in proceeds upon exercise. Upon consummation of the SoftBank Merger, (i) Sprint will become
a wholly
- owned subsidiary of New Sprint, (ii) New Sprint will be a publicly traded company, (iii) SoftBank will indirectly own approximately 70% of
New Sprint on a fully diluted basis, and (iv) the former stockholders and other equityholders of Sprint will own approximately 30% of the fully diluted
equity of New Sprint. The SoftBank Merger is subject to various conditions, including receipt of required regulatory approvals and approval of
Sprint's stockholders, and is expected to close in mid
- 2013.
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Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters