Item 1.01 Entry into a Material Definitive Agreement.
Waiver of Certain Terms of the Merger Agreement; Amendments to PIPE Subscription
Agreements and Series Z Subscription Agreements
FirstMark Horizon Acquisition Corp. ("FirstMark") is a blank check company
incorporated in Delaware and formed for the purpose of effecting a merger,
capital stock exchange, asset acquisition, stock purchase, reorganization or
similar business combination with one or more businesses. On October 6, 2021,
FirstMark entered into an Agreement and Plan of Merger (the "Merger Agreement")
with Sirius Merger Sub, Inc., a Delaware corporation and a wholly owned direct
subsidiary of FirstMark ("Merger Sub"), Starry, Inc., a Delaware corporation
("Starry"), and Starry Group Holdings, Inc. (formerly Starry Holdings, Inc.), a
Delaware corporation and wholly owned direct subsidiary of Starry ("Holdings").
Pursuant to the Merger Agreement, and subject to the terms and conditions
contained therein, the business combination will be effected in two steps: (a)
FirstMark will merge with and into Holdings (the "SPAC Merger" and, the closing
of the SPAC Merger, the "SPAC Merger Closing," and, the time at which the SPAC
Merger becomes effective, the "SPAC Merger Effective Time"), with Holdings
surviving the SPAC Merger as a publicly traded entity (such surviving entity,
"New Starry") and becoming the sole owner of Merger Sub; and (b) at least
twenty-four (24) hours, but no more than forty-eight (48) hours, after the SPAC
Merger Effective Time, Merger Sub will merge with and into Starry (the
"Acquisition Merger" and, together with the SPAC Merger and all other
transactions contemplated by the Merger Agreement, the "Business Combination"),
with Starry surviving the Acquisition Merger as a wholly owned subsidiary of New
Starry. New Starry will have a dual-class share structure with super voting
rights for Starry's co-founder and Chief Executive Officer, Chaitanya Kanojia.
On October 6, 2021, concurrently with the execution of the Merger Agreement,
FirstMark entered into subscription agreements (the "PIPE Subscription
Agreements") with certain investors (collectively, the "PIPE Investors"),
pursuant to, and on the terms and subject to the conditions of which, the PIPE
Investors collectively agreed to subscribe for 10,900,000 shares of New Starry
Class A Common Stock (the "PIPE Subscribed Shares") for an aggregate purchase
price equal to $109.0 million (the "PIPE Investment"). Also on October 6, 2021
and concurrently with the execution of the Merger Agreement, Starry entered into
the Series Z Subscription Agreements (the "Series Z Subscription Agreements"
and, together with the PIPE Subscription Agreements, the "Subscription
Agreements") with certain investors (collectively, the "Series Z Investors")
affiliated with FirstMark's sponsor, FirstMark Horizon Sponsor LLC (the "Sponsor
Holdco"), pursuant to, and on the terms and subject to the conditions of, which
the Series Z Investors collectively agreed to subscribe for 2,100,000 shares of
Starry Series Z Preferred Stock ("Starry Series Z Subscribed Shares") at a price
of $10.00 per share for an aggregate purchase price equal to $21.0 million (the
"Series Z Investment").
Pursuant to the terms of the Merger Agreement, the consummation of the Business
Combination is subject to the satisfaction or waiver of certain customary
closing conditions. At the time of the execution of the Merger Agreement, such
closing conditions included, among others, that the amount equal to, as of
immediately prior to the effective time of the Acquisition Merger (the
"Acquisition Merger Effective Time"): (A) the funds contained in FirstMark's
trust account; plus (B) all other Cash and Cash Equivalents (as defined in the
Merger Agreement) of Holdings; minus (C) the aggregate amount of cash proceeds
required to satisfy the redemption of any shares of FirstMark's Class A common
stock pursuant to the redemption offer (to the extent not already paid as of
immediately prior to the Acquisition Merger Effective Time); plus (D) the PIPE
Investment actually received by FirstMark or Holdings at or prior to the closing
of the Acquisition Merger (the "Acquisition Merger Closing"); plus (E) net cash
proceeds actually received by Starry in consideration for the issuance of
Additional Funding Shares (as defined in the Merger Agreement) (including
pursuant to the Series Z Subscription Agreements) prior to the Acquisition
Merger Closing shall be at least $300.0 million (the "Minimum Cash Condition").
At the time of the execution of the Merger Agreement, the closing of the PIPE
Investment and the Series Z Investment was also subject to the satisfaction or
waiver of the closing of the offering of the Convertible Notes (as defined in
the PIPE Subscription Agreements). Further, the Merger Agreement provided that
Starry will use reasonable best efforts to deliver payoff letters and related
documentation with respect to certain of its indebtedness at least two business
days prior to the closing date of the Acquisition Merger. In addition, the terms
of the Merger Agreement provide that, unless otherwise approved by Starry,
FirstMark shall not permit any amendment or modification to be made to, any
waiver of, or provide consent to modify, any provision or remedy under any
Subscription Agreements.
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In connection with the consummation of the Business Combination, the parties to
the Merger Agreement have entered into a Merger Agreement Waiver (the "Merger
Agreement Waiver") and, together with the parties to the Subscription
Agreements, have entered into (as applicable) a Waiver and Amendment No. 1 to
Subscription Agreement (the "PIPE Subscription Amendment") and Waiver and
Amendment No. 1 to the Series Z Subscription Agreements (the "Series Z
Subscription Amendment"), each dated on or around March 25, 2022, pursuant to
which they have agreed to waive, among other items, the Minimum Cash Condition,
the above mentioned terms (as applicable) of the Merger Agreement and conditions
to closing of the Business Combination and certain other terms and conditions to
each of the Merger Agreement and Subscription Agreements. The parties to the
PIPE Subscription Agreements have also agreed to reduce the purchase price per
share of each PIPE Subscribed Share from $10.00 per share to $7.50 per share.
Further, the parties have agreed to increase the aggregate of number of shares
of PIPE Subscribed Shares issuable pursuant to the PIPE Subscription Agreements
from 10,900,000 to 14,533,334. Similarly, the parties to the Series Z
Subscription Agreements have also agreed to reduce the purchase price per share
of each Series Z Subscribed Share from $10.00 per share to $7.50 per share and
to increase the aggregate number of Series Z Subscribed Shares issuable pursuant
to the Series Z Subscription Agreements from 2,100,000 to 2,800,000.
In addition, on March 25, 2022, Starry and Tiger Global Private Investment
Partners IX, LP ("Tiger") entered into an additional Series Z Subscription
Agreement (the "Tiger Series Z Subscription Agreement") pursuant to which Tiger
agreed to subscribe for 1,333,333 shares of Starry Series Z Preferred Stock at a
purchase price per share of $7.50 for a purchase price equal to approximately
$10.0 million.
Amendment of the Sponsor Support Agreement
On October 6, 2021, FirstMark entered into a Support Agreement (the "Sponsor
Support Agreement"), by and among FirstMark, the Sponsor Holdco, the persons set
forth on Schedule I thereto (together with the Sponsor Holdco, the "Sponsors"),
Holdings and Starry, pursuant to which the Sponsors agreed to, among other
things, vote in favor of the Merger Agreement and the transactions contemplated
thereby, in each case, subject to the terms and conditions contemplated by the
Sponsor Support Agreement.
Pursuant to the terms of the Sponsor Support Agreement, each Sponsor agreed
that, immediately prior to the SPAC Merger Effective Time, each Sponsor shall
contribute, transfer, assign, convey and deliver to FirstMark all of each
Sponsor's right, title and interest in, to and under such Sponsor's shares of
FirstMark Class B common stock, par value $0.0001 per share ("FirstMark Class B
Common Stock") in exchange for shares of FirstMark Class A Common Stock (the
"Class B Exchange"). Pursuant to the terms of the Sponsor Support Agreement
Amendment, FirstMark, Holdings, Starry and the Sponsors have further agreed
that, in connection with the Class B Exchange, the Sponsor Holdco will exchange
and convert its 10,230,000 shares of FirstMark Class B Common Stock into a
number of shares of FirstMark Class A Common Stock equal to 6,685,613 divided by
the Class A Exchange Ratio (as defined in the Merger Agreement).
In connection with the consummation of the Business Combination, the parties to
the Sponsor Support Agreement have entered into an Amendment to the Sponsor
Support Agreement, dated March [28], 2022 (the "Sponsor Support Agreement
Amendment"), pursuant to which they have agreed to amend the Sponsor Support
Agreement such that the number of shares of New Starry Class A Common Stock that
will be subject to the First Target Earn-out Shares (as defined in the Sponsor
Support Agreement) be 2,224,167 shares, the number of shares of New Starry Class
A Common Stock that will be subject to the Second Target Earn-out Shares (as
defined in the Sponsor Support Agreement) be 951,973 shares and the number of
New Starry Class A Common Stock that will be subject to the Third Target
Earn-out Shares (as defined in the Sponsor Support Agreement) be 951,973 shares.
The foregoing description of the Merger Agreement Waiver, PIPE Subscription
. . .
Item 3.02 Unregistered Sales of Equity Securities
The disclosure set forth above in Item 1.01 of this Current Report on Form 8-K
with respect to the amendments to the PIPE Investment is incorporated by
reference in this Item 3.02. The PIPE Subscribed Shares to be issued in
connection with the PIPE Investment will not be registered under the Securities
Act, and will be issued in reliance on the exemption from registration
requirements thereof provided by Section 4(a)(2) of the Securities Act.
Important Information About the Merger and Where to Find It
In connection with the proposed business combination, Holdings, a newly formed
subsidiary of Starry, has filed a registration statement on Form S-4 (the
"Form S-4") with the Securities and Exchange Commission (the "SEC") on
November 5, 2021 (as amended on December 20, 2021, January 14, 2022, February 4,
2022 and February 9, 2022). The Form S-4 includes a proxy statement of FirstMark
and a prospectus of Holdings, referred to as a proxy statement/prospectus. The
Form S-4 has been declared effective by the SEC and the definitive proxy
statement/prospectus has been sent to all FirstMark stockholders. Additionally,
Holdings and FirstMark have also filed and may continue to file other relevant
materials with the SEC in connection with the proposed business combination,
including a supplement to the definitive proxy statement/prospectus filed on
March 7, 2022 and mailed to all FirstMark stockholders. Copies of the
Form S-4, the definitive proxy statement/prospectus and all other relevant
materials filed or that will be filed with the SEC by FirstMark or Holdings may
be obtained free of charge at the SEC's website at www.sec.gov. Before making
any voting or investment decision, investors and security holders of FirstMark
are urged to read the Form S-4, the definitive proxy statement/prospectus and
all other relevant materials filed or that will be filed with the SEC in
connection with the proposed business combination because they will contain
important information about the proposed business combination and the parties to
the proposed business combination.
Participants in the Solicitation
FirstMark, Holdings and Starry and their respective directors and executive
officers, under SEC rules, may be deemed to be participants in the solicitation
of proxies of FirstMark's stockholders in connection with the proposed business
combination. Investors and security holders may obtain more detailed information
regarding the names and interests in the proposed business combination of
FirstMark's directors and officers in FirstMark's filings with the SEC,
including FirstMark's registration statement on Form S-1, which was originally
filed with the SEC on September 18, 2020. To the extent that holdings of
FirstMark's securities have changed from the amounts reported in FirstMark's
registration statement on Form S-1, such changes have been or will be reflected
on Statements of Change in Ownership on Form 4 filed with the SEC. Information
regarding the persons who may, under SEC rules, be deemed participants in the
solicitation of proxies to FirstMark's stockholders in connection with the
business combination is included in the definitive proxy statement/prospectus
relating to the proposed business combination. You may obtain free copies of
these documents as described in the preceding paragraph.
No Offer or Solicitation
This Current Report shall not constitute a proxy statement or solicitation of a
proxy, consent or authorization with respect to any securities or in respect of
the proposed business combination. This Current Report shall also not constitute
an offer to sell or a solicitation of an offer to buy any securities of
FirstMark, Holdings or Starry, nor shall there be any sale of securities in any
state or jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of any
such state or jurisdiction. No offering of securities shall be made except by
means of a prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended.
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Cautionary Statement Regarding Forward-Looking Statements
Certain statements made in this Current Report are "forward-looking statements"
within the meaning of the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995 with respect to the proposed business combination
between FirstMark and Starry. Words such as "expect," "estimate," "project,"
"budget," "forecast," "anticipate," "intend," "plan," "may," "will," "could,"
"should," "believe," "predict," "potential," "continue," "strategy," "future,"
"opportunity," "would," "seem," "seek," "outlook" and similar expressions are
intended to identify such forward-looking statements. Forward-looking statements
are predictions, projections and other statements about future events that are
based on current expectations and assumptions and, as a result, are subject to
risks and uncertainties that could cause the actual results to differ materially
from the expected results. These statements are based on various assumptions,
whether or not identified in this Current Report. These forward-looking
statements are provided for illustrative purposes only and are not intended to
serve as, and must not be relied on by an investor as, a guarantee, an
assurance, a prediction or a definitive statement of fact or probability. Actual
events and circumstances are difficult or impossible to predict and will differ
from assumptions. These forward-looking statements include, without limitation,
Starry's and FirstMark's expectations with respect to the anticipated financial
impacts of the proposed business combination, the satisfaction of closing
conditions to the proposed business combination, and the timing of the
completion of the proposed business combination. You should carefully consider
the risks and uncertainties described in the "Risk Factors" section of
FirstMark's registration statement on Form S-1 (File No. 333-248916), its Annual
Report on Form 10-K, as amended from time to time, for the fiscal year ended
December 31, 2020, and its subsequent Quarterly Reports on Form 10-Q. In
addition, there are risks and uncertainties described in the definitive proxy
statement/prospectus filed by Holdings and other documents filed by FirstMark or
Holdings from time to time with the SEC. These filings identify and address
other important risks and uncertainties that could cause actual events and
results to differ materially from those contained in the forward-looking
statements. Most of these factors are outside Starry's, Holdings' and
FirstMark's control and are difficult to predict. Many factors could cause
actual future events to differ from the forward-looking statements in this
Current Report, including but not limited to: (1) the outcome of any legal
proceedings that may be instituted against FirstMark, Starry or Holdings
following the announcement of the proposed business combination; (2) the
inability to complete the proposed business combination, including due to the
inability to concurrently close the business combination and related
transactions, including the private placements of common stock; (3) the risk
that the proposed business combination may not be completed by FirstMark's
business combination deadline and the potential failure to obtain an extension
of the business combination deadline if sought by FirstMark; (4) the failure to
satisfy the conditions to the consummation of the proposed business combination,
including the satisfaction of the minimum trust account amount following any
redemptions by FirstMark's public stockholders; (5) the occurrence of any event,
change or other circumstance that could give rise to the termination of the
merger agreement; (6) volatility in the price of FirstMark's, Starry's or
Holdings' securities; (7) the risk that the proposed business combination
disrupts current plans and operations as a result of the announcement and
consummation of the business combination; (8) the inability to recognize the
anticipated benefits of the proposed business combination, which may be affected
by, among other things, competition, the ability of the combined company to grow
and manage growth profitably, maintain relationships with customers and
suppliers and retain key employees; (9) costs related to the proposed business
combination; (10) changes in the applicable laws or regulations; (11) the
possibility that the combined company may be adversely affected by other
economic, business, and/or competitive factors; (12) the risk of downturns and a
changing regulatory landscape in the highly competitive industry in which Starry
operates; (13) the impact of the global COVID-19 pandemic; (14) Starry's ability
to obtain or maintain rights to use licensed spectrum in any market in which
Starry operates and potential declines in the value of Starry's FCC licenses;
(15) the potential inability of Starry to raise additional capital needed to
pursue its business objectives or to achieve efficiencies regarding other costs;
(16) the enforceability of Starry's intellectual property, including its
patents, and the potential infringement on the intellectual property rights of
others, cyber security risks or potential breaches of data security; and
(17) other risks and uncertainties described in FirstMark's registration
statement on Form S-1 and Annual Report on Form 10-K, as amended from time to
time, for the fiscal year ended December 31, 2020 and its subsequent Quarterly
Reports on Form 10-Q, and in the definitive proxy statement/prospectus filed by
Holdings. These risks and uncertainties may be amplified by
. . .
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
10.1 Merger Agreement Waiver, dated March 28, 2022, by and among FirstMark,
Starry, Merger Sub and Holdings.
10.2 Form of Amendment and Waiver to PIPE Subscription Agreement
10.3 Form of Amendment to Series Z Subscription Agreement
10.4 Amendment to Sponsor Support Agreement, dated March 28, 2022, by and among
FirstMark, the Sponsors, Holdings and Starry.
10.5 Series Z Subscription Agreement, dated March 25, 2022, between Starry and
Tiger.
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