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Exhibit 10.65
EXECUTION COPY
BANDA ANCHA S.A.
SECURITIES PURCHASE AGREEMENT
This
Securities Purchase Agreement (this "Agreement") is made as of the
7th
day of December, 2005
BY
AND BETWEEN
BASA
Holding Iberia S.L.U., a company incorporated under the laws of
Spain
("BHI");
Clearwire Corporation, a corporation organized under the laws of
the State
of Delaware ("Parent"); and
Clearwire Europe S.a.r.l., a limited liability company organized
under the
laws of Luxembourg and an indirect subsidiary of Parent
("Clearwire").
BHI,
Parent and Clearwire shall be jointly referred to as the "Parties"
and
each of them, individually, as a "Party".
RECITALS
WHEREAS, as of the date of this Agreement, Banda Ancha S.A., a
company
incorporated under the laws of Spain (the "Company"), has a share
capital of
E4,563,862, divided in 4,563,862 shares, with a par value of E1.00
each, all of
the same class and series, totally subscribed and paid up and free
from any
lien, pledge, usufruct, charge, security interest, right of first
refusal,
option or right of others therein, or encumbrance of any nature
whatsoever
("Liens") except as provided for in the corporate By-laws.
WHEREAS, as of the date of this Agreement, BHI is the legal owner
of 100%
of the share capital of the Company, and Redes y Servicios
Liberalizados, S.A.
("RSL") is the sole shareholder of BHI.
WHEREAS, concurrently with the execution of this Agreement,
Clearwire, BHI
and the Company have entered into that certain Investment Agreement
(the
"Investment Agreement"), pursuant to which Clearwire has subscribed
for 51% of
the Company's share capital for a purchase price of E4,750,143.
WHEREAS, a condition precedent to the closing of this Agreement is
the
consummation of those transactions contemplated by that certain
Asset Purchase
Agreement between ALO (as defined below) dated of even date
herewith (the "ALO
Agreement").
WHEREAS, subject to the satisfaction of the conditions set forth
herein,
BHI desires to sell, and Clearwire desires to purchase, all of the
Company's
share capital held by BHI as of the Closing (as defined below).
NOW,
THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants, conditions and agreements
hereinafter
set forth, the Parties agree to enter into this Agreement pursuant
to the
following:
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Capitalized terms used but not otherwise defined within this
Agreement
shall have the meanings set forth below.
"Adjustment Date" means the earliest to occur after the Closing of
(i) the
closing of an initial public offering of Parent or any entity in
the chain of
ownership between the Company and Parent, or their successors (but
specifically
excluding any subsidiary of Clearwire or Parent that is not in the
direct
ownership chain between Parent and the Company) (a "Clearwire
Entity"); (ii) the
closing of a transaction in which any Clearwire Entity's shares of
common stock
are exchanged for securities that are listed on a recognized
securities exchange
or on the NASDAQ National Market; (iii) the effective date of a
Change of
Control of any Clearwire Entity after the Closing; or (iv) the
30-month
anniversary of the Closing.
"Affiliate" means for any Person, a Person controlling, controlled
by or
under common control with, such Person.
"ALO" means Alo Communicaciones, S.L.U.
"Applicable Percentage" means 49%.
"Change of Control" means (i) a sale of all or substantially the
assets of
the applicable entity or (ii) the transfer by the applicable
entity's
stockholders by means of a merger, consolidation,
reorganization,
recapitalization or otherwise, of more than 50% of the voting power
of the
applicable entity.
"Clearwire Investment" means the total amount of any investment by
Parent,
Clearwire or any of their Affiliates in the Company as of the
Adjustment Date,
including, without limitation, (i) any purchases of capital stock,
(ii) any
contributions to capital of the Company for which no additional
capital stock is
issued, and (iii) the amount of any indebtedness owed to Parent,
Clearwire or
any of their Affiliates, whether or not convertible, provided that
such debt was
incurred for legitimate business purposes of the Company.
"Clearwire Gross Share" means the amount determined by multiplying
(i) the
Company Net Value by (ii) the aggregate percentage of the Company's
outstanding
stock owned, directly or indirectly, by Parent and its Affiliates
(determined on
a fully-diluted basis after giving effect to (a) the exercise of
any then
outstanding options or warrants and (b) the conversion of any then
outstanding
securities convertible into shares of the Company's stock at a
conversion price
that is less than the Fair Market Value of the Company, on a per
share basis, on
the Adjustment Date, but not giving effect to any sale of any
shares of capital
stock of the Company held by Clearwire to any third party, such
shares to be
treated as still owned by Clearwire).
"Clearwire Net Share" means the difference between the Clearwire
Gross
Share and the sum of (i) the Purchase Price (without giving effect
to any 3.5
Tax Adjustment or 38 Tax Adjustment or claims under the
Indemnification
Agreement) and (ii) the Clearwire Investment.
"Company Net Value" means the sum of the Fair Market Value of the
Company
on the Adjustment Date less the amount of any outstanding
indebtedness of the
Company on the Adjustment Date (other than (i) indebtedness owed to
Parent or
any of Parent's Affiliates and (ii)
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indebtedness owed under any convertible securities which have a
conversion price
that is less than the Fair Market Value of the Company, on a per
share basis, on
the Adjustment Date).
"Confidential Information" means any and all information regarding
the
business, finances, operations, products, services and customers of
the
disclosing Party and its Affiliates, in written or oral form or in
any other
medium.
"Damages" means any loss, liability, claim, obligation, damage,
deficiency,
costs and expenses, fines or penalties, including reasonable
judicial and
extra-judicial fees of lawyers and attorneys at court
(procuradores) and any
other defense costs, costs of investigation, remediation or other
response
actions.
"Disqualified Transaction" means (a) a sale of Class A Common
Stock
occurring upon exercise of any options or warrants (including
without limitation
any employee stock options), (b) a sale of Class A Common Stock
pursuant to an
agreement outstanding on the date of this Agreement, (c) a sale of
Class A
Common Stock occurring in connection with an acquisition of another
entity or
assets of such other entity, or (d) a sale of Class A Common Stock
in connection
with an agreement for the performance of services to the Parent or
any of its
Affiliates.
"Fair Market Value" means, with respect to the Clearwire Stock or
shares of
Class A Common Stock, (i) the per share price of Class A Common
Stock in the
event triggering the Adjustment Date, if applicable, (ii) if
subsection (i) is
inapplicable and Parent has sold shares of Class A Common Stock
(other than in a
Disqualified Transaction) for cash to an unrelated third party
within sixty days
prior to the determination of the Fair Market Value, the price at
which the
shares of Class A Common Stock were sold in the last such
transaction occurring
prior to the determination of the Fair Market Value, or (iii), or
otherwise as
determined by Parent's board of directors in good faith. In no
event shall the
Fair Market Value be less than $5.00 per share (as appropriately
adjusted for
any Recapitalization Event) (the "Floor"); provided, however, if
there is a
third party equity financing transaction (other than a Disqualified
Transaction)
prior to the date of determination of Fair Market Value in which
shares of
Parent's Class A Common Stock are sold for an aggregate cash
consideration of
$25,000,000 or more at a per share price less than $5.00 per share
(as
appropriately adjusted for any Recapitalization Event) ("New
Shares"), then the
Floor shall be reduced to the price at which the New Shares are
sold in such
transaction, but in no event less than $2.50 per share (as
appropriately
adjusted for any Recapitalization Event). Notwithstanding the
foregoing, no
adjustment to the Floor shall be made if such adjustment to the
Floor would
trigger any adjustment under any anti-dilution rights in favor of
any of
Parent's stockholders or other security holders then
outstanding.
"Fair Market Value of the Company" means the fair market value of
the
Company on the Adjustment Date as determined by the Neutral Bank,
which
determination shall be conclusive and binding on all parties. The
Neutral Bank
shall be instructed (i) not to consider in the determination of the
fair market
value any debt that is or will be subtracted from Fair Market Value
in the
calculation of Company Net Value and (ii) to use similar principles
in
determining the Fair Market Value of the Company as used in
determining the
value of the Clearwire Entity that is a party to the transaction
triggering the
Post-Closing Adjustment, if applicable.
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"Governmental Authority" means a European Union, Spanish, federal,
state or
local court, legislature, governmental agency (including the United
States
Department of Justice), commission or regulatory or administrative
authority or
instrumentality.
"Indemnification Agreement" means that certain Indemnification
Agreement by
and among BHI, Clearwire and Parent dated of even date
herewith.
"knowledge" means,
with respect to the knowledge of BHI, the actual
knowledge of the directors and officers of BHI and the Company,
after due
inquiry into the subject matters covered by the representation and
warranties
contained in Schedule A.
"Law" means applicable common law and any statute, ordinance, code
or other
law, rule, permit, permit condition, regulation, order, decree,
technical or
other standard, requirement or procedure enacted, adopted,
promulgated, applied
or followed by any Governmental Authority.
"Neutral Bank" means the internationally recognized investment
banking firm
selected as follows: (a) Clearwire shall initially propose a slate
of three
firms; and (b) from such slate BHI shall select the firm; provided,
that, at the
time of selection such firm shall not be an Affiliate of, or have a
shareholder
or banking relationship with, either Clearwire or BHI.
"Person" means an individual, a partnership, a corporation, a
limited
liability company, an association, a joint shares company, a trust,
a joint
venture, an unincorporated organization, or a government agency or
authority.
"Recapitalization Event" means any stock split, stock dividend,
recapitalization or similar event.
"RSL
Group" means BHI, RSL or any of their respective Affiliates.
"Shares" means all of the Company's share capital held by BHI as of
the
Closing, which shall include, but not be limited to, any share
capital held by
BHI as of the date of this Agreement, any additional share capital
acquired by
BHI upon conversion of the intercompany obligations as contemplated
under
Section 2.1(f) of this Agreement and any share capital issued to
BHI or any
members of the RSL Group under the ALO Agreement.
"Transactions" means the transactions contemplated by the
Investment
Agreement, the ALO Agreement, this Agreement or any Ancillary
Agreement.
"USD" means United States Dollars.
ARTICLE 1. PURCHASE AND SALE OF SHARES
SECTION 1.1 PURCHASE AND SALE OF SHARES. On the terms and subject
to the
conditions of this Agreement, at the Closing, BHI shall sell,
assign, transfer,
convey and deliver to Clearwire free and clear of all Liens, and
Clearwire shall
purchase from BHI the Shares.
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SECTION 1.2 PURCHASE PRICE. The purchase price (the "Purchase
Price") for
the Shares shall be an amount equal to Twenty-Three Million Seven
Hundred
Fifty-One Thousand Dollars ($23,751,000).
SECTION 1.3 PAYMENT OF PURCHASE PRICE. The Purchase Price shall be
payable
at the Closing in One Thousand U.S. Dollars ($1,000.00) and
4,750,000 shares
(the "Clearwire Stock") of Parent's Class A Common Stock ("Class A
Common
Stock"), valued at $5.00 per share. At the Closing, Clearwire shall
deliver One
Thousand Dollars ($1,000.00) in cash and multiple certificates,
representing the
Clearwire Stock, duly executed by an authorized representative of
Parent;
provided, however. Parent shall retain possession of the
certificates
representing the Clearwire Stock subject to the Share Pledge
Agreements in
accordance with the terms of the Share Pledge Agreements.
SECTION 1.4 TAX ADJUSTMENT TO PURCHASE PRICE. The parties
acknowledge that
the Company is currently appealing a spectrum tax in the Audiencia
Nacional
concerning the 2001 spectrum tax for the Company's 3.5 GHz license
(the "3.5 Tax
Appeal") and the 2001 and 2002 spectrum tax for the 38 GHz license
(the "38 Tax
Appeal", and together with the 3.5 Tax Appeal, the "Tax Appeals").
Once any of
the Tax Appeals are finally determined, on the date that such Tax
Appeal is
finally decided (each, a "Tax Adjustment Date"), the Purchase Price
shall be
adjusted as set forth below.
(a) If the Company's actual tax liability as finally determined by
the
38 Tax Appeal ("Actual 38 Tax Liability") is less than
E3,750,088.14 (such
difference, the "38 Tax Adjustment"), then Parent, on behalf of
Clearwire, shall
issue to BHI additional shares of Class A Common Stock in an amount
equal to the
quotient obtained by dividing (i) the lesser of (A) the 38 Tax
Adjustment and
(B) E3,500,000 by (ii) the Fair Market Value of the Clearwire Stock
on the Tax
Adjustment Date.
(b) If the Company's actual tax liability as finally determined by
the
3.5 Tax Appeal ("Actual 3.5 Tax Liability") is greater than
E390,116.00 (such
difference, the "3.5 Tax Adjustment"), then BHI shall return to
Clearwire shares
of its Clearwire Stock in an amount equal to the quotient obtained
by dividing
(i) the lesser of (A) the 3.5 Tax Adjustment and (B) E3,500,000 by
(ii) the Fair
Market Value of the Clearwire Stock on the Tax Adjustment Date.
(c) Within five (5) business days after the determination of the
Fair
Market Value of the Clearwire Stock, the Party required to issue or
transfer
shares of Class A Common Stock, shall deliver to the other party an
original
stock certificate representing such shares, and if applicable, a
signed stock
power transferring such shares. All calculations under this Section
1.4 shall be
made in USD based on the currency exchange ratio in effect on the
Tax Adjustment
Date.
SECTION 1.5 POST-CLOSING ADJUSTMENT TO PURCHASE PRICE. On the
Adjustment
Date, the Purchase Price shall be adjusted, upwards or downwards.
The "Adjusted
Purchase Price" shall be an amount equal to the sum of (i) the
product of (a)
the Clearwire Net Share multiplied by (b) the Applicable
Percentage, minus (ii)
the positive difference, if any, between (a) the Fair Market Value
of the
Clearwire Stock on the Adjustment Date and (b) the Purchase Price.
If the
Adjusted Purchase Price is greater than the Purchase Price (such
difference, the
"Positive
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Adjustment"), then Parent shall issue to BHI additional shares of
Class A Common
Stock in an amount equal to the quotient of the Positive Adjustment
and the Fair
Market Value of the Clearwire Stock on the Adjustment Date. If the
Adjusted
Purchase Price is less than the Purchase Price (such difference,
the "Negative
Adjustment"), then BHI shall return to Clearwire shares of its
Clearwire Stock
in an amount equal to the quotient of the Negative Adjustment and
the Fair
Market Value of the Clearwire Stock on the Adjustment Date. In no
event shall
the Positive Adjustment exceed E20,000,000 and in no event shall
the Negative
Adjustment exceed E10,000,000. Within five (5) business days after
the
determination of the Fair Market Value of the Clearwire Stock, the
Party
required to issue or transfer shares of Class A Common Stock shall
deliver to
the other party an original stock certificates representing such
shares, and if
applicable, a signed stock power transferring such shares. All
calculations
under this Section 1.5 shall be made in USD based on the currency
exchange rate
in effect on the Adjustment Date. Notwithstanding anything to the
contrary
herein, if the aggregate amount of the Clearwire Investment is less
than E40
million as of the Adjustment Date, then BHI shall not be required
to pay the
Negative Adjustment, if any.
SECTION 1.6 CLOSING. The closing of the purchase and sale of the
Shares
shall take place at the offices of the Company in Madrid, at 10:00
a.m. (Spanish
time), no later than three (3) business days after the satisfaction
or waiver of
all of the Closing conditions set forth in Article 2, or at such
other time and
place as the Parties shall agree, either orally or in writing, (the
time and
place designated as the "Closing"). In no event shall the Closing
occur later
than nine (9) months after the date of this Agreement, at which
time the
Agreement shall terminate if not closed prior to such time;
provided, however,
either Party can terminate this Agreement sooner if the other Party
materially
breaches this Agreement and such breach is not cured within thirty
(30) days
after receipt of written notice of such breach from the
non-breaching Party. The
Notary Public (the "Notary") for the Closing shall be selected by
Clearwire, and
Clearwire and BHI shall each pay one-half (1/2) of the expenses of
the Notary.
ARTICLE 2.
CLOSING CONDITIONS AND DOCUMENTS
SECTION 2.1 CONDITIONS TO PARENT'S AND CLEARWIRE'S OBLIGATIONS.
The
obligations of Parent and Clearwire to consummate the Transactions
are subject
to the satisfaction or waiver on or before the Closing of each of
the following
conditions:
(a) NO BREACH. There shall not have occurred any breach by BHI of
any
representations or warranties made in this Agreement (including
without
limitation Schedule A hereto), the Investment Agreement or the
Purchase
Agreement arising from or related to facts, actions, inaction,
circumstances or
occurrences arising or occurring prior to the date of this
Agreement.
(b) PERFORMANCE. BHI shall have performed and complied with all
agreements, obligations, and conditions contained in this
Agreement, the
Investment Agreement, the Indemnification Agreement, the
Shareholders Agreement
(as defined in the Investment Agreement), the Credit Agreement (as
defined in
the Investment Agreement) or the Pledge Agreement (as defined in
the Investment
Agreement) that are required to be performed or complied with by it
on or before
the Closing.
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(c) QUALIFICATIONS. All authorizations, approvals, or permits, if
any,
of any Governmental Authority that are required by BHI in
connection with the
lawful purchase and sale at the Closing pursuant to this Agreement
shall be duly
obtained and effective as of the Closing.
(d) PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings
required by Spanish Law to BHI to complete the transactions
contemplated at the
Closing, including, without limitation, the approval of BHI's
shareholder, shall
have occurred and all documents incident thereto shall be
reasonably
satisfactory in form and substance to Clearwire's counsel. The
share capital
increase agreed by a Shareholders' Meeting held on August 5, 2005
shall have
been registered at the Mercantile Registry and evidence thereof
shall have been
provided to Parent and Clearwire.
(e) NO INJUNCTIONS OR LITIGATION. No preliminary or permanent
injunction or other order of any Governmental Authority of
competent
jurisdiction restraining or prohibiting the consummation of the
Transactions
shall be in effect. No claim or other proceeding shall be pending,
or, to the
knowledge of BHI, threatened, seeking to restrain, enjoin or
prohibit or declare
illegal, or seeking substantial damages in connection with, any
material part of
the Transactions.
(f) ELIMINATION OF INTERCOMPANY DEBT. Parent and Clearwire shall
have
received evidence, reasonably satisfactory to each, that all of the
intercompany
obligations between the Company, on one hand, and BHI, RSL or any
of their
respective Affiliates, on the other hand, including, without
limitation, the
obligations arising before June 1, 2005 (but excluding any costs
and expenses
incurred as a consequence of the Madrid launching, as well as any
intercompany
obligations arising between the signature hereof and the closing
which have not
been paid as of immediately prior to Closing pursuant to Section
3.3(b) of the
Investment Agreement) shall have been reduced to the amount of
1,372,549 Euros
(the "Permitted Intercompany Debt"). The Parties agree that the
reduction of all
of the intercompany obligations other than the Permitted
Intercompany Debt shall
be accomplished by a conversion into share capital of the Company,
which
conversion shall take place immediately prior to Closing, and not
before, except
as expressly contemplated under the Investment Agreement or as
previously
approved in writing by Clearwire.
(g) ALO TRANSFER. The transactions contemplated by the ALO
Agreement,
including the increase in share capital as payment of the purchase
price
thereunder, shall have been consummated immediately prior to
Closing, and not
before, except as previously approved by Clearwire in writing;
provided,
however, this condition shall be deemed waived if Clearwire causes
the Company
to breach its obligations to close the ALO Agreement pursuant to
the terms
thereof.
(h) TRADEMARK TRANSFER. The documents necessary to transfer all
right,
title and interest in and to the trademark no. 1.741.388 "Banda
Ancha Basa" from
RSL to the Company shall have been filed for registration with the
Spanish
Office of Patents and Trademarks ("Oficina Espanola de Patentes y
Marcas").
(i) CLOSING DELIVERIES. BHI shall have delivered the following
to
Clearwire:
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(i) a fully executed notarial deed of transfer of the Shares,
in
form reasonably acceptable to Clearwire, notarized by the Notary
and granted in
a Public Deed;
(ii) a certificate executed by the chief executive officer of
BHI
that the conditions in Section 2.1(a) and (b) have been
satisfied;
(iii) opinion of Baker & McKenzie, counsel for the Company,
dated
the date of Closing in the form attached hereto as Exhibit A;
(iv) executed consents of any third parties required by the
terms
of the agreements or relationships between the Company, BHI, RSL or
any of its
Affiliates and such third parties, including without limitation the
consent the
First Instance Court in charge of RSL suspension of payments or the
declaration
from the Supervisory Commission that the transactions contemplated
by this
Agreement will not breach the RSL Creditor's Agreement dated July
1, 2002;
provided, however, if the suspension of payments is lifted and the
Supervisory
Commission will not agree to make a decision on the foregoing
issues, BHI may
deliver a clean opinion of Baker & McKenzie, counsel for the
Company, in form
and substance satisfactory to BHI, stating that (A) the declaration
of the
aforementioned Supervisory Commission is not required, (B) the
transactions
contemplated by this Agreement will not breach the aforementioned
Creditor's
Agreement, and (C) none of the creditors would have the right to
unwind the
transactions contemplated by this Agreement;
(v) the share pledge agreements between BHI and Clearwire in
the
forms attached hereto as Exhibits B and C, pursuant to this
Agreement, the
Credit Agreement (as defined in the Investment Agreement), and
the
Indemnification Agreement, duly executed by an authorized
representative of BHI,
notarized by the Notary and placed in the Public Record (the "Share
Pledge
Agreements");
(vi) a stock power with respect to the Clearwire Stock retained
by Parent pursuant to Section 1.3, duly executed by an authorized
representative
of BHI;
(vii) a side letter agreement regarding the Parent Stockholders
Agreement between BHI and Parent in the form attached hereto as
Exhibit D, duly
executed by an authorized representative of BHI (the "Shareholder
Side Letter");
(viii) a joinder to Amended and Restated Stockholders
Agreement,
dated March 16, 2004 by and among Parent and Parent's stockholders,
and a
joinder to the Registration Rights Agreement by and among Parent
and certain of
Parent's stockholders, attached hereto as Exhibit E and Exhibit F.
respectively.
SECTION 2.2 CONDITIONS TO BHI'S OBLIGATIONS. The obligations of BHI
to
consummate the Transactions are subject to the satisfaction or
waiver on or
before the Closing of each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties
of Parent and Clearwire contained in Schedule B shall be true in
all material
respects on and as of the Closing with the same effect as though
such
representations and warranties had been made on and as of the date
of the
Closing. For purposes of this Section 2.2(a) only, all such
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representations and warranties shall be read without regard to
materiality or
material adverse effect qualifiers contained therein.
(b) PERFORMANCE. Parent and Clearwire shall have performed and
complied with all agreements, obligations, and conditions contained
in this
Agreement that are required to be performed or complied with by it
on or before
the Closing.
(c) QUALIFICATIONS. All authorizations, approvals, or permits, if
any,
of any Governmental Authority that are required by Parent or
Clearwire in
connection with the lawful purchase and sale Shares at Closing
pursuant to this
Agreement shall be duly obtained and effective as of the
Closing.
(d) CLOSING DELIVERIES. Clearwire shall have delivered the
following
to BHI:
(i) Payment of the Purchase Price in accordance with Section
1.3;
(ii) a certificate executed by the manager of Clearwire that
the
conditions in Section 2.2(a) and Section 2.2(b) have been
satisfied;
(iii) the Share Pledge Agreements, duly executed by an
authorized
representative of Clearwire, notarized by the Notary and placed in
the Public
Record; and
(iv) the Shareholder Side Letter, duly executed by an
authorized
representative of Parent.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES.
SECTION 3.1 REPRESENTATIONS AND WARRANTIES OF BHI. BHI
specifically
declares to Clearwire and Parent that the representations and
warranties of BHI
contained in Schedule A to this Agreement ("Representations and
Warranties"')
are true, accurate and complete. With respect to the assets
acquired prior to
Closing pursuant to the ALO Agreement, the representations and
warranties
applicable to such assets are exclusively those established in the
ALO Agreement
and not the representations and warranties of this Agreement, and
shall be made
as of the Closing Date and not as of the date of this Agreement.
Each of the
Representations and Warranties set out in the several paragraphs of
Schedule A
is separate and independent and, except as expressly provided to
the contrary in
this Agreement, is not limited by reference to any other paragraph
of that
Schedule or by anything in this Agreement. BHI acknowledges that
these
Representations and Warranties are essential elements for Clearwire
and Parent
to enter into this Agreement.
SECTION 3.2 REPRESENTATIONS
AND WARRANTIES OF CLEARWIRE AND PARENT.
Clearwire and Parent each declare to BHI that the representations
and warranties
contained in Schedule B to this Agreement are true, accurate and
complete. Each
of the representations and warranties set out in the several
paragraphs of
Schedule B is separate and independent and, except as expressly
provided to the
contrary in this Agreement, is not limited by reference to any
other paragraph
of that Schedule or by anything in this Agreement. Each of Parent
and Clearwire
acknowledges that these representations and warranties are
essential elements
for BHI to enter into this Agreement.
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ARTICLE 4. COVENANTS
SECTION 4.1
CONSUMMATION OF TRANSACTIONS. From and after the date of this
Agreement, each Party shall use its reasonable best efforts to
take, or cause to
be taken, all actions, and to do, or cause to be done, all things
necessary,
proper or advisable and consistent with applicable Law to perform
its
obligations under this Agreement and to consummate the Transactions
as soon as
reasonably practicable.
SECTION 4.2 CERTAIN NOTICES. From the date of this Agreement until
Closing,
each Party shall promptly notify the other Party in reasonable
detail:
(a) upon the commencement of, or the impending or threatened
commencement of, or upon obtaining knowledge of any facts that
would give rise
to, any claim, action or proceeding brought to enjoin the
consummation of the
Transactions, or against or relating to the notifying Party or its
properties or
assets, which could materially adversely affect the Transactions or
its ability
to perform its obligations hereunder;
(b) upon the occurrence of, or the impending or threatened
occurrence
of, or upon obtaining knowledge of any facts that would give rise
to, any event
which could cause or constitute a material breach of any of its
covenants or
agreements contained in this Agreement, and shall use commercially
reasonable
efforts to prevent or promptly remedy such breach; and
(c) upon the occurrence or existence of any event, condition,
circumstance or state of facts known to the notifying Party, which
has had or
could have a material adverse effect on the Transactions or its
ability to
perform its obligations hereunder, or could materially adversely
affect the
Company.
SECTION 4.3 CONFIDENTIALITY. Pursuant to this Agreement and the
performance
thereof, each Party may receive certain Confidential Information.
No Party shall
use for itself, except in performance of the Agreement, or disclose
to any
Person this Agreement or any Confidential Information, except (a)
information
that was gained independent of such Party's relationship with the
other Party
and became publicly available through no breach of any obligation
of
confidentiality by such Party; (b) information that is communicated
to a third
party with the prior written consent of such Party; or (c)
information that is
required to be disclosed pursuant to the lawful order of a
government agency or
disclosure that is required by operation of law, but in such event,
only to the
extent such disclosure is required and, to the extent reasonably
practicable,
prior written notice must be given to allow the disclosing Party to
seek a
protective order or other appropriate remedy. In the event of a
beach or
threatened breach of the terms of this section, the disclosing
Party shall be
entitled to seek an injunction prohibiting any such breach. Any
such injunctive
relief shall be in addition to, and not in lieu of, any appropriate
relief in
the way of money damages or any other remedies available at law or
in equity.
BHI acknowledges and agrees that the terms of this Agreement may be
required to
be separately stated in the consolidated financial statements of
Clearwire,
Parent and/or their respective Affiliates and that the disclosure
by Clearwire,
Parent or their respective Affiliates of such financial statements
shall not be
a breach of this Agreement. Notwithstanding the foregoing, either
party may
disclose this Agreement to its affiliates, strategic partners,
actual or
potential investors, lenders, acquirers, merger partners; and
others whom such
party deems in good faith to
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have a need to know such information for purposes of pursuing a
transaction or
business relationship with such party; provided, that, such party
has an
enforceable non-disclosure or confidentiality agreement in place
with such
Person that will provide at least the same amount of protection as
this Section
4.3. Except for information that is required to be disclosed
pursuant to the
lawful order of a government agency or disclosure that is required
by operation
of law, in which event, only to the extent such disclosure is
required and, to
the extent reasonably practicable, prior written notice must be
given to allow
the disclosing Party to seek a protective order or other
appropriate remedy, the
Parties specifically agree that any disclosure memoranda or due
diligence
information provided by Clearwire or its Affiliates to BHI or its
Affiliates, in
no event shall be disclosed to any third party, including, without
limitation,
to any auditors' committee, court or administrative authority as an
exhibit to
any documents without the express written approval of Clearwire;
provided,
however. Parent and Clearwire shall reasonably collaborate with BHI
to provide
information regarding Parent, Clearwire and its Affiliates in order
to satisfy
the condition set forth in Section 2.1(i)(iv) with respect to the
First Instance
Court or the Supervisory Commission provided that nothing obligates
Parent or
Clearwire to publicly disclose any Confidential Information or any
disclosure
memoranda.
SECTION 4.4 FURTHER
ASSURANCES. Each Party shall forthwith upon request
execute and deliver such documents and take such actions as may
reasonably be
requested by the other Party in order to effectuate the purposes of
this
Agreement, including, without limitation, voting its shares of the
Company's
common stock, waiving any applicable statutory rights or rights
contained in the
Company's Bylaws and participating in any shareholders meetings
required to
effectuate the transactions contemplated herein.
SECTION 4.5 CONSENTS.
The Parties shall use commercially reasonable efforts
and shall cooperate to prepare and file with Governmental
Authorities and other
Persons (including, without limitation, application for consent or
approval from
the First Instance Court or the Supervisory Commission as required
by Section 2.
l(i)(iv)), no later than ten (10) days following the execution of
this Agreement
(or as soon as possible with respect to the First Instance Court or
the
Supervisory Commission) all applications, notices, petitions and
other
documentation necessary or advisable to obtain such consents (it
being
understood that the failure to file within such period shall not
constitute a
breach of this Agreement). Each Party shall furnish to the other
Party all
information concerning such Party and its Affiliates reasonably
required for
inclusion in any application to be made in connection with the
Transactions or
to determine compliance with Ministry rules. BHI will timely inform
Clearwire of
the process and status of obtaining such consents.
SECTION 4.6 BHI AND CLEARWIRE'S NEGATIVE COVENANTS. From the date
of this
Agreement to the Closing Date, except as consented to in writing by
the other
Party (which consent shall not be unreasonably withheld) or as
otherwise
contemplated by this Agreement, BHI and Clearwire shall not:
(a) take any action or omit to take any action that could
reasonably
be expected to render inaccurate any representation or warranty
made by such
Party contained in this Agreement (as if such representation or
warranty was
made on each date from the date hereof to the Closing Date);
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(b) enter into any contracts or commitments that could have a
material
effect on the Company or the Transactions;
(c) commence any proceeding to merge, consolidate or liquidate
or
dissolve, or obligate itself to do so; or
(d) enter into any agreement, arrangement or understanding to,
or
otherwise offer or commit to (i) sell, transfer, assign or dispose
of the Shares
or any interest therein or portion thereof, or negotiate therefor,
or (ii)
create, incur or suffer to exist any Lien on the Shares or any
interest therein.
SECTION 4.7 ACCESS. Between the date of this Agreement and the
Closing
Date, BHI shall, during normal business hours (a) give Clearwire
and their
respective representatives and advisors access to all books,
records, offices
and other facilities and properties of the Company it has in its
possession or
control; (b) permit Clearwire and their respective representatives
and advisors
to make such inspections thereof as Clearwire may reasonably
request; and (c)
furnish Clearwire with such financial and operating data and other
information
with respect to the Company it has in its possession or control as
Clearwire may
from time to time reasonably request.
SECTION 4.8 NONCOMPETITION; NONSOLICITATION.
(a) From the Closing Date and until one year after BHI, or its
Affiliates, cease to be a stockholder of Parent, BHI, on behalf of
itself and
its Affiliates, covenants that neither BHI nor any of its
Affiliates shall
engage in, or retain, participate in or have any interest, directly
or
indirectly, in any Person (whether as an investor, agent, employee,
creditor or
in any other capacity which calls for the rendering of services,
advice, acts of
management, operation or control) that engages in any broadband
wireless access
activities in Spain, excluding (i) the resale of the Company's
products and
services pursuant to agreements between BHI, or its Affiliates, and
the Company
approved by Clearwire in its sole discretion, or (ii) the
continuation by BHI,
RSL and ALO of its non-wireless/fixed telecommunication services
business
activities existing as of the date of this Agreement.
(b) From the Closing Date and until one year after BHI, or its
Affiliates, cease to be a stockholder of Parent, BHI, on behalf of
itself and
its Affiliates, covenants that neither BHI nor any of its
Affiliates shall,
directly or indirectly, (i) employ or engage, recruit or solicit
for employment
any person who is or becomes employed by the Company, or otherwise
seek to
influence or alter any such person's relationship with the Company,
or (ii)
solicit or encourage any present or future subscriber or customer
of the Company
to terminate or otherwise alter his, her or its relationship with
the Company
(other than general solicitation by BHI, RSL and ALO of its
activities permitted
pursuant to Section 4.8(a)(ii)).
(c) The
Parties agree that the covenants contained in this Section
4.8, both as to time and area covered, are necessary to protect the
Company and
Clearwire's investment in the Company and are deemed by the parties
to be an
integral and important part of this Agreement. The Parties
acknowledge and agree
that in the event of a breach of such covenants, Clearwire would
not have an
adequate remedy at law, and Clearwire shall be entitled to
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injunctive relief in addition to any other remedies which may be
available to it
under this Agreement, at law or in equity. If any court of
competent
jurisdiction shall at any time deem any of the covenants in this
Section 4.8 too
lengthy or the area covered too extensive, the other provisions of
this Section
4.8 shall nevertheless stand, the term shall be deemed to be the
longest period
permissible by law under the circumstances and the area covered
shall be deemed
to comprise the largest territory permissible by law under the
circumstances.
The court in each case shall reduce the time period and/or area
covered to
permissible duration or size.
SECTION 4.9 PUBLICITY. Neither Party, nor any of their
respective
Affiliates, shall issue any press release or public announcement
concerning this
Agreement or the Transactions without obtaining the prior written
approval of
the other Party, which approval will not be unreasonably withheld
or delayed,
unless disclosure is otherwise required by applicable Law, provided
that, to the
extent required by applicable Law, the disclosing Party shall use
its
commercially reasonable efforts consistent with such applicable Law
to consult
with the other Party with respect to the text thereof. The Parties
shall
mutually agree on any initial public announcement, if any, of the
Transactions.
Notwithstanding the foregoing, after Closing, neither Parent,
Clearwire nor any
of their Affiliates shall be required to obtain the consent of BHI
for any press
release or public announcement concerning this Agreement or the
Transactions.
SECTION 4.10 VAT TRANSACTIONS.
(a) The Permitted Intercompany Debt shall become due and payable
by
the Company to BHI upon refund or credit to the Company of the
following value
added tax ("VAT") billed to the Company as a consequence of the
following (the
"VAT Transactions"):
(i) E416,726 equal to
the net VAT billed to the Company as a
consequence of intercompany invoicing related to the
transactions described in Schedule C;
(ii) E936,000 equal to VAT billed or to be billed to the
Company
as a consequence of the acquisition of certain assets of ALO
pursuant to the ALO Agreement; and
(iii)
E19,823 equal to the VAT billed or to be billed to the
Company as a consequence of the acquisition of certain
assets of BHI.
BHI shall be solely responsible for filing its own tax returns
with
the tax authorities, which shall include the VAT arising in the
VAT
Transactions.
(b) The Company shall pay the Permitted Intercompany Debt to BHI
in
one or more installments within a maximum term of ten (10) business
days
following the date which the Company receives payment or credit
from the
relevant Governmental Authority of any VAT borne by the Company in
the VAT
Transactions.
(c) The Company undertakes to claim the refund of the VAT credit
(once
the output VAT has been offset to the input VAT borne) regarding
the VAT
Transactions in the
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2005 4th quarter VAT return to be filed by the Company with the tax
authorities
in January 2006, at the latest.
(d) The Company's obligation to pay the Permitted Intercompany Debt
is
only dependent upon the refund, reimbursement or credit of the VAT
resulting
from the VAT Transactions and not VAT received or credited from any
other
transactions.
(e) The Permitted Intercompany Debt will be reduced and the
Company
will not be obliged to pay to BHI any amounts of VAT borne on the
VAT
Transactions in which:
(i) a firm administrative or court resolution is issued denying
the Company's right to deduct all or part of the VAT of the VAT
Transactions; or
(ii) BHI expressly accepts that all or part of the VAT of the
VAT
Transactions is not deductible or decides not to continue with any
proceedings
contesting any court or administrative decision dealing with all or
part of the
VAT borne on VAT Transactions.
(f) In the event that all or part of the VAT refund in connection
with
the VAT Transactions has not been made as of August 31, 2006, the
Company shall
give notice to BHI, and, upon the request and at the expense of
BHI, the Company
shall take commercially reasonable efforts to obtain the refund by
way of
submitting any writ before the tax authorities and enclosing any
document that
BHI may reasonably require in order to accelerate the refund.
(g) The Company shall give immediate notice to BHI of the refusal
from
the tax authorities to refund all or part of the VAT borne
corresponding to the
VAT Transactions in order to allow BHI to assume the defence of the
proceeding
at BHI's sole cost and expenses. For such purposes, the Company, at
the expense
of BHI, will provide BHI with any information that BHI may
reasonably require,
as well as reasonable access to all files and records of the
Company relating or
containing information concerning the VAT claim.
(h) In case a procedure is initiated to contest the tax
authorities
decision denying the refund of the VAT borne on VAT Transactions
and a final
resolution is issued by other administrative or court instances in
favor of such
refund, BHI shall be entitled to any interest paid by the tax
authorities that
accrued on the refunded VAT borne on VAT Transactions.
(i) In the event the Company does not comply with its
obligations
under Sections 4.10(b), (c), (f) and (g), that portion of the
Permitted
Intercompany Debt for which the Company has breached its
obligations shall be
immediately due and payable, unless BHI has expressly consented to
such actions
by the Company.
(j) For as long as the Permitted Intercompany Debt has not been
repaid
funds withdrawn by BHI under the Credit Facility Agreement up to an
amount of
such Permitted Intercompany Debt will not accrue any interest under
such Credit
Facility Agreement until the earlier of the following circumstances
occurs:
(i) The Company pays BHI the Permitted Intercompany Debt; or
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(ii) There is a final administrative or judicial decision
resolving to deny the refund of the VAT borne on VAT
Transactions.
SECTION 4.11 BOARD REPRESENTATION. Until the Adjustment Date,
Clearwire
agrees that it shall cause Alejandro-Rivas Micoud (either directly
or indirectly
through BHI) to be appointed to the Company's board of directors
and that it
shall not remove such individual unless he is removed for cause
pursuant to
applicable Law.
ARTICLE 5. REMEDIES
SECTION 5.1 INDEMNIFICATION BY BHI. The indemnification obligations
of BHI
are as set forth in the Indemnification Agreement.
SECTION 5.2 INDEMNIFICATION BY CLEARWIRE AND PARENT.
(a) Clearwire and Parent shall be liable towards BHI and shall
be
bound to indemnify BHI in full against and hold it harmless
(subject to the
subsections (b) and (c) below) from any Damages of or to BHI
arising out of or
resulting from any misrepresentations, inaccuracy or omission
contained in the
representations and warranties of Clearwire contained in Schedule
B.
(b) Each of Clearwire and Parent's liability for all claims
pursuant
to this Section 5.2 shall be extinguished by the lapse of two (2)
years from the
Closing, unless notice is sent by BHI to Clearwire and Parent
informing
Clearwire and Parent of the existence, nature and full details of a
liability
including estimated amount, arising from any breach of any of
Clearwire's
representations and warranties set forth on Schedule B within the
relevant
period.
(c) Notwithstanding anything herein to the contrary, neither
Clearwire
nor Parent shall be liable for any Damages pursuant to this Section
5.2 except
and to the extent the aggregate total amount to be claimed exceeds
the sum of
E250,000 (the "Deductible"). No single item of Damages may be used
in
calculation of the Deductible unless and until such item of Damages
exceeds the
sum of E25,000; provided, however, if the Deductible is met,
Clearwire and
Parent shall be liable for all Damages regardless if they exceed
E25,000.
ARTICLE 6. MISCELLANEOUS
SECTION 6.1 ENTIRE AGREEMENT. This Agreement and the documents and
other
agreements referred to herein constitute the entire agreement among
the parties
and no party shall be liable or bound to any other party in any
manner by any
warranties, representations, or covenants except as specifically
set forth
herein or therein.
SECTION 6.2 SURVIVAL OF WARRANTIES. The warranties,
representations, and
covenants of BHI, Clearwire and Parent contained in or made
pursuant to this
Agreement shall survive the execution and delivery of this
Agreement and the
closing of the transactions contemplated hereby or termination of
this
Agreement.
SECTION 6.3 SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein,
the terms and conditions of this Agreement shall inure to the
benefit of and be
binding upon the respective
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successors and assigns of the parties. Nothing in this Agreement,
express or
implied, is intended to confer upon any party other than the
parties hereto or
their respective successors and assigns any rights, remedies,
obligations, or
liabilities under or by reason of this Agreement, except as
expressly provided
in this Agreement.
SECTION 6.4 GOVERNING LAW. This Agreement shall be governed by,
and
construed in accordance with, the internal laws of the Kingdom of
Spain, without
reference to the choice of law principles thereof.
SECTION 6.5 ARBITRATION. All disputes arising out of or in
connection with
the present contract shall be submitted to binding arbitration
pursuant to the
provisions of this Section and under the Rules of Conciliation and
Arbitration
of the International Chamber of Commerce (the "ICC"). The
arbitration shall be
conducted in London, or another neutral location mutually agreeable
to Clearwire
and BHI. The arbitration shall be conducted in English. The
arbitration shall be
conducted before a panel of three arbitrators, comprised of one
arbitrator
appointed by each party to the dispute and one neutral arbitrator
appointed in
accordance with the Rules of Conciliation and Arbitration of the
ICC.
SECTION 6.6 EXPENSES. Except as otherwise expressly provided in
this
Agreement, whether or not the transactions are consummated, the
Parties shall
bear their respective expenses (including, but not limited to, all
compensation
and expenses of counsel, financial advisors, consultants, actuaries
and
independent accountants) incurred in connection with this Agreement
and the
Transactions. All filing fees required to be paid to any
governmental authority
will be borne by the respective Party making the filing. The
Parties shall each
bear one-half of the fees of the Notary required for the closing of
the
transactions contemplated by this Agreement; provided, however,
Clearwire agrees
to pay all of such fees with respect to the notarization of the
Indemnification
Agreement.
SECTION 6.7 TITLES AND SUBTITLES. The titles and subtitles used in
this
Agreement are used for convenience only and are not to be
considered in
construing or interpreting this Agreement.
SECTION 6.8 NOTICES. All notices or other communications hereunder
shall be
in writing and shall be deemed to have been duly given or made (i)
upon delivery
if delivered personally (by courier service or otherwise), as
evidenced by
written receipt or other written proof of delivery (which may be a
printout of
the tracking information of a courier service that made such
delivery), or (ii)
upon confirmation of dispatch if sent by facsimile transmission
(which
confirmation shall be sufficient if shown by evidence produced by
the facsimile
machine used for such transmission), in each case to the applicable
addresses
set forth below (or such other address which either Party may from
time to time
specify):
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If to BHI:
Basa Holding Iberica, S.L.U
Doctor Zamenhof, 22
28027 Madrid
Attention: Managing Director
Facsimile: 91 230 14 07
With a copy to:
Baker & McKenzie
Paseo de la Castellana 92
28046 Madrid
Attention: Maite Diez
Facsimile: 91 391 51 49
If to Parent or Clearwire:
Clearwire Corporation, or, as applicable,
Clearwire Europe S.a.r.I.
5808 Lake
Washington Blvd. Suite 300
Kirkland, WA 98033
Attention: Vice President, Legal Affairs
Facsimile: (425) 216-7900
With a copy to:
Davis Wright Tremaine LLP
2600 Century Square
1501
Fourth Avenue
Seattle, WA 98101
Attention: Julie Weston
Facsimile: 206-628-7699
SECTION 6.9 FINDER'S FEES. Each party represents that it neither is
nor
will be obligated for any finder's fee or commission in connection
with this
transaction and agrees that it shall indemnify and hold harmless
the other party
from any liability for any commission or compensation in the nature
of a
finder's fee (and the cost and expenses of defending against such
liability or
asserted liability) for which such party or any of its officers,
partners,
employees, or representatives is responsible.
SECTION 6.10 ATTORNEYS' FEES. If any action at law or in equity
is
necessary to enforce or ] interpret the terms of this Agreement or
any Ancillary
Agreement (as defined in Schedule A), the prevailing party shall be
entitled to
reasonable attorneys' fees, costs, and disbursements in addition to
any other
relief to which such party may be entitled.
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SECTION 6.11 AMENDMENTS AND WAIVERS. Any term of this Agreement may
be
amended and the observance of any term of this Agreement may be
waived (either
generally or in a particular instance and either retroactively
or
prospectively), only with the written consent of the Parties.
SECTION 6.12 SEVERABILITY. If one or more provisions of this
Agreement are
held to be unenforceable under applicable law, such provision shall
be excluded
from this Agreement and the balance of the Agreement shall be
interpreted as if
such provision was so excluded and shall be enforceable in
accordance with its
terms.
SECTION 6.13 COUNTERPARTS. This Agreement may be executed in two or
more
counterparts, each of which shall be deemed an original, but all of
which
together shall constitute one and the same instrument.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the
date
first above written.
CLEARWIRE:
CLEARWIRE EUROPE S.A.R.L.
By: /s/ Nicolas Kauser
------------------------------------
Name/Title: Title: Nicolas Kauser,
Manager
BHI:
BASA HOLDINGS IBERIA, S.L.U.
By: /s/ Alejandro Rivas-Micoud
------------------------------------
Name: Alejandro Rivas-Micoud
Title: Managing Director & Special POA
PARENT:
CLEARWIRE CORPORATION
By: /s/ Perry Satterlee
------------------------------------
Name/Title: Perry Satterlee,
Co-President
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EXECUTION COPY
SCHEDULE A
REPRESENTATIONS AND WARRANTIES OF BHI
Except as set forth on the corresponding sections in the
Disclosure
Schedule, BHI represents and warrants as follows:
SECTION 1. ORGANIZATION; GOOD STANDING; QUALIFICATION. BHI and the
Company
are companies duly organized, validly existing, and in good
standing under the
laws of the Spain, have all requisite corporate power and authority
to own and
operate their respective properties and assets and to carry on
their respective
businesses, as now conducted and as presently proposed to be
conducted. BHI has
all requisite corporate power and authority to execute and deliver
this
Agreement, the Investment Agreement, the Indemnification Agreement,
the Credit
Agreement, the Share Pledge Agreements, and any other agreement to
which BHI or
the Company is a party the execution and delivery of which is
contemplated
hereby (the "Ancillary Agreements"), and to carry out the
provisions of this
Agreement and any Ancillary Agreement. The existing Corporate
By-laws of the
Company are those registered at the Mercantile Registry at the date
hereof and
no modifications or amendments have been passed by the General
Shareholders
Meeting with regard to said Corporate By-laws which are pending
execution or
registration at the Mercantile Registry.
SECTION 2. AUTHORIZATION. All corporate action on the part of BHI,
its
respective officers, directors and stockholders necessary for the
authorization,
execution and delivery of this Agreement and any Ancillary
Agreement, the
performance of all obligations of BHI hereunder and thereunder at
the Closing
and the sale of the Shares as set forth in this Agreement when
executed and
delivered, will constitute valid and legally binding obligations of
BHI,
enforceable in accordance with their respective terms except (i) as
limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and
other laws of
general application affecting enforcement of creditors' rights
generally
vis-a-vis the Company and not BHI, RSL or any of its Affiliates,
and (ii) as
limited by laws relating to the availability of specific
performance, injunctive
relief, or other equitable remedies.
SECTION 3. TITLE TO SHARES. The Shares that are being purchased
by
Clearwire hereunder were duly and validly i
