Sprint - Nextel 2012 Annual Report Download - page 19

Table of Contents
provisions that could affect the decisions of a third party considering making an alternative acquisition proposal to the SoftBank Merger.” Further,
upon termination of the Clearwire Acquisition Agreement, under specified circumstances, Sprint may be required to pay a termination fee of $120
million (payable in cancellation of indebtedness), and under certain circumstances, Clearwire may also be entitled to receive from Sprint a supplemental
prepayment for LTE services on January 15, 2014 in the amount of $100 million (conditioned upon the completion of site build
- out targets pursuant to a
commercial agreement currently in effect between Sprint and Clearwire and credited against certain of Sprint's obligations under such agreement).
Further, a failed or significantly delayed SoftBank Merger or Clearwire Acquisition may result in negative publicity and a negative
impression of Sprint in the investment community. Any disruptions to Sprint's business resulting from the announcement and pendency of the
SoftBank Merger or the Clearwire Acquisition and from intensifying competition from its competitors, including any adverse changes in its
relationships with its customers, vendors, suppliers and employees or recruiting and retention efforts, could continue or accelerate in the event of a
failed transaction. In addition, Sprint will not have the right to a termination fee from Clearwire if the Clearwire Acquisition Agreement is terminated,
regardless of the actual amount of Sprint's damages or costs incurred in connection with the Clearwire Acquisition. There can be no assurance that
Sprint's business, these relationships or its financial condition will not be negatively impacted, as compared to the condition prior to the
announcement of the SoftBank Merger, if the SoftBank Merger or the Clearwire Acquisition are not consummated.
If SoftBank's financing for the SoftBank Merger is not funded, the SoftBank Merger may not be completed. In the event of a financing failure,
and the termination of the Merger Agreement under certain circumstances, Sprint's remedies are limited to receipt of the $600 million reverse
termination fee, which may not reflect the actual damages incurred by Sprint if the SoftBank Merger is not completed.
SoftBank intends to fund the cash required in connection with the SoftBank Merger and related transactions largely with debt financing.
On December 18, 2012, SoftBank entered into a credit agreement with its lenders for the debt financing for the SoftBank Merger. To the extent one or
more of the lenders is unwilling to, or unable to, fund its portion of the debt financing commitments under the credit agreement, the other lenders are
not obligated to assume the unfunded commitments and SoftBank may be required to seek alternative financing or fund such portion of the
commitments itself. The lenders' debt financing commitments are subject to the satisfaction of various conditions, including conditions relating to any
of Sprint's outstanding indebtedness that may become payable as a result of the SoftBank Merger, the satisfaction or waiver of the conditions to the
SoftBank Merger, the execution of satisfactory documentation and other customary closing conditions, among others. The lenders' commitments to
provide the debt financing under the credit agreement expire on November 18, 2013.
Under the Merger Agreement, SoftBank is obligated to use its reasonable best efforts (i) to obtain the debt financing on the terms set forth
in the debt commitment letters that its lenders executed in connection with the debt financing and upon which the credit agreement is based and (ii) in
the event the debt financing is not available, to obtain alternative financing on financial terms no more favorable to SoftBank and subject to conditions
not less favorable to SoftBank. In the event that all or any portion of the debt financing is not available under the credit agreement, financing
alternatives may not be available on acceptable terms, in a timely manner or at all. If SoftBank is unable to obtain the funding from its lenders, or any
alternative financing, the completion of the SoftBank Merger may be jeopardized.
Under certain circumstances, Sprint may seek to require SoftBank to issue a borrowing certificate, borrowing notice or similar document
pursuant to the SoftBank debt financing documents in order to permit the SoftBank Merger closing to occur. Sprint will have the right to terminate the
Merger Agreement and SoftBank will be required to pay Sprint a $600 million reverse termination fee if (a) the SoftBank Merger is not consummated
within 11 business days following Sprint's notice to SoftBank that all conditions to closing have been satisfied or (b) during the 30 business day
period beginning on April 15, 2013, the credit agreement has been terminated and SoftBank is not party to an alternative debt commitment letter or
definitive financing documents which, in either case, provide for debt financing to be available from April 15, 2013 until October 15, 2013. SoftBank will
also be required to pay a reverse termination fee if the Merger Agreement is terminated at the end date or by Sprint due to a breach by SoftBank and, at
the time of such termination, all of the closing conditions are satisfied (other than delivery of the parties' closing certificates) and there was an uncured
financing failure. If the Merger Agreement is terminated under any circumstance that entitles Sprint to receive the reverse termination fee, the right to
receive the reverse termination fee is Sprint's only remedy and Sprint cannot otherwise seek damages from SoftBank for the
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