Item 1.01
|
Entry into a Material Definitive Agreement.
|
On February 20, 2020, T-Mobile US, Inc.
(T-Mobile), Sprint Corporation (Sprint) and the other parties to the Business Combination Agreement (as defined below) entered into Amendment No. 2 (the Amendment) to
the Business Combination Agreement, dated as of April 29, 2018 (the Business Combination Agreement), by and among T-Mobile, Sprint, Huron Merger Sub LLC, Superior Merger Sub Corporation,
Starburst I, Inc., Galaxy Investment Holdings, Inc., and for the limited purposes set forth therein, Deutsche Telekom AG (Deutsche Telekom), Deutsche Telekom Holding B.V. and SoftBank Group Corp. (SoftBank), as amended by
Amendment No. 1 to the Business Combination Agreement, dated July 26, 2019. As previously disclosed, the Business Combination Agreement provides for T-Mobile and Sprint to combine their respective
businesses, on the terms and subject to the conditions set forth in the Business Combination Agreement (the Merger Transactions).
The Amendment extends the Outside Date (as defined in the Business Combination Agreement) to July 1, 2020, and further provides that the
closing of the Merger Transactions will occur on the first business day of the first month (other than the third month of any calendar quarter) where such first business day is at least three business days following the satisfaction or waiver of all
of the conditions to the closing of the Merger Transactions (such date, the Closing Date). In addition, the Amendment modifies the commitments of the parties with respect to actions that may be required to be taken in order to obtain any
remaining governmental consents or avoid an action or proceeding by any governmental entity in connection with the Merger Transactions, subject to certain limitations.
Pursuant to the Amendment, SoftBank has also agreed to indemnify T-Mobile and its subsidiaries
following the closing of the Merger Transactions against (i) any monetary losses arising out of or resulting from certain specified matters and (ii) the loss of value to T-Mobile and its subsidiaries
arising out of or resulting from cessation of access to spectrum of Sprint or its subsidiaries (Lost Spectrum) under certain circumstances, subject to limitations and qualifications contained in the Amendment.
Concurrently with entry into the Amendment, T-Mobile, SoftBank and Deutsche Telekom entered into a
letter agreement (the Letter Agreement). Pursuant to the Letter Agreement, SoftBank has agreed to cause its applicable affiliates to surrender to T-Mobile, for no additional consideration, an
aggregate of 48,751,557 shares of T-Mobile Common Stock (such number of shares, the SoftBank Specified Shares Amount), effective immediately following the Effective Time (as defined in the Business
Combination Agreement). Immediately following such surrender, Deutsche Telekom and SoftBank are expected to hold approximately 43% and 24%, respectively, of the fully diluted shares of T-Mobile Common Stock,
with the remaining approximately 33% of the fully diluted shares of T-Mobile Common Stock held by public stockholders. The Letter Agreement further provides that if the trailing
45-day volume-weighted average price per share of T-Mobile Common Stock on the NASDAQ Global Select Market is equal to or greater than $150.00 at any time during the
period commencing on the second anniversary of the Closing Date and ending on December 31, 2025 (or, if the Closing Date is on or after May 1, 2020 and SoftBank so elects no later than June 1, 2020, $150.00 at any time during the
period commencing on the second anniversary of the Closing Date and ending on the fifth anniversary of the Closing Date or $160.00 at any time during the period following the fifth anniversary of the Closing Date and ending on the sixth anniversary
of the Closing Date), T-Mobile will issue to SoftBank, for no additional consideration, a number of shares of T-Mobile Common Stock equal to the SoftBank Specified
Shares Amount, subject to the terms and conditions set forth in the Letter Agreement.
In connection with the foregoing arrangements, the
Amendment provides for certain modifications to the percentage thresholds applicable to SoftBanks ownership with respect to its director representation rights in the Stockholders Agreement (as defined in the Business Combination
Agreement) to be entered into in connection with the closing of the Merger Transactions (which modifications will no longer apply in the event that T-Mobile is obligated to issue the SoftBank Specified Shares
Amount).
The foregoing description of the Amendment (including the modifications to the form of the Stockholders Agreement) and the
Letter Agreement is not complete and is qualified in its entirety by reference to the full text of the Amendment and the Letter Agreement, copies of which are filed as Exhibit 2.1 and Exhibit 10.1, respectively, hereto and are incorporated herein by
reference.
The completion of the Merger Transactions remains subject to certain closing conditions pursuant to the Business Combination
Agreement, as amended. T-Mobile and Sprint currently anticipate that the Merger Transactions will close as early as April 1, 2020.