**Exhibit 10.1**

 

**SETTLEMENTAGREEMENT AND MUTUAL RELEASE**

 

ThisSETTLEMENT AGREEMENT AND MUTUAL RELEASE (the “Settlement Agreement”),dated as of April 20, 2005, is entered into by and among NewComm WirelessServices, Inc., a corporation formed under the laws of the Commonwealth ofPuerto Rico (“NewComm” or the “Company”), Telefónica MóvilesS.A., a corporation organized under the laws of Spain (“TEM”),Telefónica Móviles Puerto Rico, Inc., a corporation organized under thelaws of the Commonwealth of Puerto Rico (“TEM Puerto Rico”), ClearComm,L.P., a limited partnership organized under the laws of Delaware (“ClearComm”),and each of the other existing shareholders of NewComm listed on Exhibit Ahereto (ClearComm and such existing shareholders, jointly, the “OtherStockholders”).  The OtherStockholders, together with NewComm and TEM, are collectively referred toherein as the “Parties” and each individually as a “Party.”

 

**WITNESSETH**

 

WHEREAS, theCompany is in the business of providing wireless telecommunications servicesand other related services in Puerto Rico (the “Business”);

 

WHEREAS,certain of the Parties have entered into various agreements, as amended, listedon Exhibit B hereto, in connection with the development of suchBusiness (the “Contracts”);

 

WHEREAS, theParties have come to dispute certain of their respective rights and obligationsunder the Contracts;

 

WHEREAS, theParties desire to provide the new management of the Company with an additionalperiod of up to thirty-six months to implement a new Business Plan; and

 

WHEREAS, theParties also desire to clarify, compromise, settle and resolve fully andfinally, any and all claims, rights, obligations and defenses they may haveunder such Contracts.

 

NOW,THEREFORE, in consideration of the foregoing and the respectiverepresentations, warranties, covenants and agreements set forth in thisSettlement Agreement, the receipt and sufficiency of which are herebyacknowledged, and intending to be legally bound hereby, the Parties agree asfollows:

 

**ARTICLE I**

# **DEFINITIONS**

 

Section 1.1              DefinedTerms.  For purposes of thisSettlement Agreement, the following terms shall have the following meanings:

 

“AcquisitionTransaction” shall have the meaning set forth in Section 10.3.

 

“AdditionalSubscribed Value” shall mean the aggregate value, calculated at the time ofthe subscription of capital stock, and not adjusted for the passage of time,appreciation or depreciation, on the basis of the value recognized by theCompany in each relevant subscription,

 

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of any and allcapital paid to the Company from the first day following the Effective Date asa capital subscription, contribution or payment of any kind, whether in theform of cash, conversion of debt, in-kind payment or otherwise.

 

“Affiliates”shall mean a Person directly or indirectly controlled by, controlling or undercommon control with the other Person. For the purposes of this definition, “control” means, when used withrespect to any Person, the possession, directly or indirectly, of the power todirect or cause the direction of the management and policies of such Person,whether through the ownership of voting securities, by contract or otherwise.

 

“ApplicableLaw” shall mean any statute, law, rule or regulation or any judgment,order, consent order, stipulated agreement, ordinance, writ, injunction ordecree of any Governmental Entity.

 

“Arbitrator”shall have the meaning set forth in Section 2.2(d).

 

“Award”shall have the meaning set forth in Section 2.2(d).

 

“Base Value” shall beequal to $23,490,222 as of the Effective Date.

 

“Board of Directors”shall mean the board of directors of the Company.

 

“BridgeLoan” shall mean that certain loan agreement by and among NewComm,ClearComm, TEM Puerto Rico, ABN Amro Bank, N.V., as Administrative Agent, andLaSalle Bank National Association, as Collateral Agent, dated as of November 22,2000, as amended from time to time.

 

“Business”shall have the meaning set forth in the Recitals.

 

“BusinessPlan” shall mean the business plan of the Company approved by the Board ofDirectors on November 30, 2004, a copy of which is attached as Exhibit Chereto and made a part hereof, as the same shall be amended from time to timepursuant to the Shareholders Agreement.

 

“BusinessDay” shall mean any day other than a Saturday, Sunday or a day on whichbanks are authorized or obligated by law to be closed in any of Madrid, Spain,the City of New York, New York, or San Juan, the Commonwealth of Puerto Rico.

 

“CapitalLease Obligations” shall mean the obligation of any person to pay rent orother amounts under any lease of (or other arrangement conveying the right touse) real or personal property, or a combination thereof, which obligations arerequired to be classified and accounted for as capital leases on a balance sheetof such Person under U.S. GAAP, and the amount of such obligations shall be thecapitalized amount thereof determined in accordance with U.S. GAAP.

 

“ClearComm”shall have the meaning set forth in the Preamble.

 

“Company”shall have the meaning set forth in the Preamble.

 

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“Contracts”shall have the meaning set forth in the Recitals.

 

“ConvertibleNotes” shall mean (i) the Secured Convertible Promissory Note, (ii) theOther Convertible Notes, (iii) the promissory notes referred to in Section 3.1(a) and(b) hereof, and (iv) the Interest Note.

 

“CPR”shall have the meaning set forth in Section 2.2(d).

 

“CPR Rules”shall have the meaning set forth in Section 2.2(d).

 

“Dispute”shall have the meaning set forth in Section 12.16(a).

 

“dollar”or “$” shall mean dollars in lawful currency of the United States.

 

“EBITDA”shall mean with respect to the Company for any period, the net income of theCompany, as determined in accordance with U.S. generally accepted accountingprinciples applied on a consistent basis, for such period *plus*, without duplication, (a) provisionfor taxes based on income or profits for such period to the extent the same wasdeducted in computing the net income, *plus*(b) interest expense for such period to the extent the same was deductedin computing the net income, *plus*(c) depreciation and amortization expense for such period to the extentthe same was deducted in computing the net income, *plus* (d) extraordinary loss and *minus* (e) extraordinary gains.

 

“EffectiveDate” shall have the meaning set forth in Section 11.1.

 

“ExitNotice” shall have the meaning set forth in Section 7.1.

 

“FCC”shall mean the Federal Communications Commission.

 

“FCCAuthorization” shall mean the authorization granted on August 12, 2004by the FCC to TEM Puerto Rico relating to the transfer of control of NewComm toTEM Puerto Rico, the extension thereof granted on February 8, 2005, andany other authorization or extension thereof, as may be granted in the future.

 

“FCCLicenses” shall mean each license, permit, authorization and concessiongranted by the FCC and held by the Company relating to the Business.

 

“FCC Loans”shall have the meaning set forth in Section 4.1.

 

“FCCRelated Debt” shall mean any outstanding installment payment owed to theFCC as of the Effective Date with respect to the Personal CommunicationsServices (“PCS”) license held****by NewComm, asset forth on Exhibit D hereto.

 

“File” shall have themeaning set forth in Section 2.2(b).

 

“Fraud”shall mean any material act in bad faith of omission, concealment,misrepresentation or deceit related solely to (i) payments of any kind toany Person, including but not limited to payments to vendors, suppliers, andproviders of services, whether through oral

 

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or writtenarrangements, made by NewComm and acknowledged or approved in writing by anyTEM Senior Executive (ii) accounting practices, and (iii) reimbursementof expenses, in each case committed by TEM, at any time prior to October 1,2004, and actually and reasonably relied upon by NewComm with the deliberateintention of obtaining an undue and unlawful financial gain for TEM or any TEMSenior Executive or any other Affiliate of TEM and causing a financial loss toNewComm.  It is expressly agreed thatmanagement, strategic, technical or business decisions or such other acts oromissions of any nature or kind whatsoever and communication of, or failure tocommunicate, such decisions shall be excluded from Fraud, provided thatthe foregoing shall not preclude NewComm from pursuing any right or claim itmay have against TEM under Section 2.2(a)(y) to the extent such decisionswere intended to result, and have resulted, in any acts referred to in thepreceding sentence.  Nothing contained inthis definition shall relieve, or be deemed to relieve, NewComm of its burdenof proving, by clear and convincing evidence, each of the elements of commonlaw fraud under Florida law.

 

“FraudAmount” shall have the meaning set forth in Section 2.2(f).

 

“Guarantee”shall mean any obligation, contingent or otherwise, of the guarantorguaranteeing or having the economic effect of guaranteeing any Indebtednessesor other obligation of any Person (the “primary obligor”) in any manner,whether directly or indirectly, and including any obligation of the guarantor,direct or indirect, (a) to purchase or pay (or advance or supply funds forthe purchase or payment of) any security for the payment thereof, (b) topurchase or lease properties, securities or services for the purpose ofassuring the owner of such Indebtedness or other obligation of the paymentthereof, (c) to maintain working capital, equity capital or any otherfinancial statement condition or liquidity of the primary obligor so as toenable the primary obligor to pay such Indebtedness or other obligation or (d) asan account party in respect of any letter of credit or letter of guaranteeissued to support such Indebtedness or obligation, provided that theterm Guarantee shall not include endorsements for collection or deposit in theordinary course of business.

 

“GoverningDocuments” shall have the meaning set forth in Section 9.1(a).

 

“GovernmentalEntity” shall mean any domestic or foreign court or tribunal in anydomestic or foreign jurisdiction or any federal, state, municipal or localgovernment or other governmental body, agency, authority, district, department,commission, board, bureau, or other instrumentality, arbitrator or arbitralbody (domestic or foreign), including any joint action agency, public powerauthority, public utility district, or other similar political subdivision.

 

“HedgingAgreement” shall mean any interest rate protection agreement, foreigncurrency exchange agreement, commodity price protection agreement or otherinterest or currency rate or commodity price hedging agreement.

 

“Indebtedness”shall mean, with respect to any Person, without duplication, (a) allobligations of such Person for borrowed money or with respect to deposits oradvances of any kind, (b) all obligations of such Person evidenced bybonds, debentures, notes or similar instruments, (c) all obligations ofsuch Person upon which interest charges are customarily paid, (d) allobligations of such Person under conditional sale or other title retentionagreements relating to property acquired by such Person, (e) allobligations of such Person in respect of the

 

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deferred purchase price ofproperty or services, (f) all Indebtedness of others secured by (or forwhich the holder of such Indebtedness has an existing right, contingent orotherwise, to be secured by) any Lien on property owned or acquired by suchPerson, whether or not the Indebtedness secured thereby has been assumed, (g) allGuarantees by such Person of Indebtedness of others, (h) all Capital LeaseObligations of such Person, (i) all obligations, contingent or otherwise,of such Person as an account party in respect of letters of credit and lettersof guaranty, (j) all obligations, continent of otherwise, of such Person inrespect of bankers’ acceptances, (k) all obligations of such Person in respectof Hedging Agreements and (l) any other payment obligations similar to, orhaving the same results as, those referred to in clauses (a) through (k)above.  For the avoidance ofdoubt, Indebtedness shall include accrued and unpaid interest (as well aswithholding taxes, if applicable), including, but not limited to, on theamounts due under the Bridge Loan and the FCC Related Debt.

 

“InterestNote” shall mean that certain promissory note in a principal amount equalto $8,597,045.07, representing the accrued interest on the Secured ConvertiblePromissory Note and the Other Convertible Notes, substantially in the formattached as Exhibit E hereto.

 

“JointVenture Agreement” shall mean that certain joint venture agreement into byand between TEM, as a successor in interest to Telefónica Larga Distancia dePuerto Rico, Inc., and ClearComm dated as of February 4, 1999, asamended from time to time.

 

“Lien”shall mean, with respect to any asset, (a) any mortgage, deed of trust,lien, pledge, hypothecation, encumbrance, charge or security interest in, on orof such asset, (b) the interest of a vendor (or any financing lease havingsubstantially the same economic effect as any of the foregoing) relating tosuch asset and (c) in the case of securities, any purchase option, call orsimilar right of a third party with respect to such securities.

 

“Liquidation”shall mean any voluntary or involuntary liquidation, dissolution or winding upof the Company.

 

“Liquidation/SaleEffective Date” shall mean the date upon which the consideration payable toTEM in its capacity as shareholder of the Company is fully paid to TEM inrespect of the Liquidation/Sale Event.

 

“Liquidation/SaleEvent” shallmean any of the following events: (a) a Sale of the Company or (b) aLiquidation of the Company.

 

“Liquidation/SaleProceeds” shall mean the aggregate cash and non-cash consideration,including any proceeds received by way of deferred payment pursuant topromissory notes, earn-outs, receivables or otherwise (net of any and allout-of-pocket costs, brokers’ fees, filing fees, auditing fees and otherrelated transaction costs, fees and expenses) from the Liquidation/Sale Event *minus* the Company’s Indebtedness as ofthe time of such Liquidation/Sale Event.

 

“Long-TermFinancing”shall have the meaning set forth in Section 10.5(a).

 

“Lucent”shall mean Lucent Technologies Inc., a Delaware corporation.

 

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“LucentDebt” shall mean any outstanding amount owed by NewComm to Lucent under theSenior Credit Agreement.

 

“ManagementAgreement” shall mean that certain management agreement by and betweenNewComm and TEM, as a successor in interest to Telefónica Larga Distancia dePuerto Rico, Inc., dated as of March 3, 1999, as amended from time totime.

 

“ManagementFee” shall mean the annual fee (payable quarterly in arrears) payable underthe Management Agreement equal to the higher of (i) nine percent (9%) ofthe Company’s EBITDA as of the end of the previous calendar year and (ii) sevenhundred and fifty thousand dollars ($750,000.00).

 

“ManagementServices” shall have the meaning set forth in the Management Agreement.

 

“NewComm”shall have the meaning set forth in the Preamble.

 

“NewCommSenior Executive” shall mean any of the following individuals: LawrenceOdell Peck and Javier O. Lamoso, solely in their respective capacities asdirector and general manager of NewComm.

 

“Notice ofClaim” shall have the meaning set forth in Section 2.2(b).

 

“OtherConvertible Notes” shall mean (i) that certain convertible promissorynotes issued by NewComm to TEM Puerto Rico, as a successor in interest toTelefónica Larga Distancia de Puerto Rico, Inc., on November 2, 2000,(ii) that certain second convertible promissory notes issued by NewComm toTEM Puerto Rico, as a successor in interest to Telefónica Larga Distancia dePuerto Rico, Inc., on December 15, 2000, (iii) that certainthird convertible promissory notes issued by NewComm to TEM Puerto Rico, as asuccessor in interest to Telefónica Larga Distancia de Puerto Rico, Inc.,on May 1, 2001, (iv) that certain fourth convertible promissory notesissued by NewComm to TEM Puerto Rico, as a successor in interest to TelefónicaLarga Distancia de Puerto Rico, Inc., on May 20, 2002 and (v) thatcertain fifth convertible promissory notes issued by NewComm to TEM PuertoRico, as a successor in interest to Telefónica Larga Distancia de Puerto Rico, Inc.,on December 27, 2002.

 

“OtherStockholders” shall have the meaning set forth in the Preamble.

 

“Party”or “Parties” shall have the meaning set forth in the Preamble.

 

“Premium”shall have the meaning set forth in Section 6.2(c).

 

“Person”shall mean any individual, corporation, partnership, joint venture, trust,limited liability company, unincorporated organization, Governmental Entity orother entity.

 

“PremiumStock” shall have the meaning set forth in Section 6.2(a).

 

“SaleAgreement” shall mean that certain sale agreement by and among TEM PuertoRico, as a successor in interest to Telefónica Larga Distancia de Puerto Rico, Inc.,ClearComm, Syndicated Communications Venture Partners IV, L.P., a Delawarelimited partnership, Fleet

 

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DevelopmentVentures, LLC, a Massachusetts limited liability company, Opportunity CapitalPartners IV, L.P., a Delaware limited partnership, Power Equities, Inc., aDelaware corporation, and NewComm dated as of March 12, 2002, as amendedfrom time to time.

 

“Sale ofthe Company” shall mean (i) a transfer of all of the outstandingequity interests of the Company; (ii) a transfer of substantially all ofthe assets of the Company or (iii) the merger, consolidation or otherbusiness combination of the Company with or into another Person, in each caseunder circumstances in which the holders of outstanding capital stock of theCompany, immediately prior to such transaction, own less than 50% in votingpower of the outstanding capital stock of the surviving or resultingcorporation or acquirer, as the case may be, immediately following suchtransaction.

 

“SCL Agreements” shall mean (i) the SCL LicensingAgreement (Licenciamiento SCL)dated August 1, 2002 between TmAS and NewComm, (ii) the Agreement forthe provision of Consulting and Evolutionary Maintenance of Sw ApplicationsServices (SCL Maintenance) (Prestación de Servicios de Asesoría yMantenimiento Evolutivo de Aplicaciones Sw (Mantenimiento SCL)) dated August 1, 2002 between TmAS and NewCommand (iii) the Agreement for the provision of Sw Applications Designing,Development and Programming Services (Prestación de Servicios de Diseño, Desarrollo y programación deAplicaciones Sw) dated August 1,2002 between TmAS and NewComm.

 

“Secured ConvertiblePromissory Note” shall mean that certain secured convertible promissorynote issued by NewComm to TEM Puerto Rico, as a successor in interest toTelefónica Larga Distancia de Puerto Rico, Inc., on March 3, 1999, asamended from time to time.

 

“Seller Shares” shallhave the meaning set forth in the Stock Purchase Agreement.

 

“SeniorCredit Agreement” shall mean that certain senior secured credit agreementby and between NewComm and Lucent dated as of June 4, 2003, as amendedfrom time to time.

 

“SettlementAgreement” shall have the meaning set forth in the Preamble.

 

“ShareholdersAgreement” shall mean that certain shareholders agreement by and amongNewComm, ClearComm, TEM Puerto Rico, as a successor in interest to TelefónicaLarga Distancia de Puerto Rico, Inc., and the other parties named thereindated as of March 12, 2002, as amended from time to time.

 

“SPA Changeof Control” shall mean any change of control of the Company pursuant to andunder the terms and conditions of the Stock Purchase Agreement, in which TEMshall, directly or indirectly, hold fifty point one (50.1%) percent of thefully diluted capital stock of the Company.

 

“StockPurchase Agreement” shall mean that certain stock purchase agreemententered into by and between TEM Puerto Rico, as a successor in interest toTelefónica Larga Distancia de Puerto Rico, Inc., and ClearComm dated as ofMarch 12, 2002, as amended from time to time.

 

“SubordinatedLoan Facility” shall have the meaning set forth in Section 10.6(a).

 

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“TechnologyTransfer Agreement” shall mean that certain technology transfer agreemententered into by and between NewComm and TEM, as a successor in interest toTelefónica Internacional, S.A., a corporation organized under the laws ofSpain, dated as of March 3, 1999, as amended from time to time.

 

“TechnologyTransfer Fee” shall mean the annual fee (payable quarterly in arrears)payable under the Technology Transfer Agreement equal to one percent (1%) ofthe Company’s gross revenues as of the end of the previous calendar year.

 

“TEF”shall mean Telefónica S.A., a corporation organized under the laws of Spain.

 

“TEM”shall have the meaning set forth in the Preamble.

 

“TEFGuarantee” shall have the meaning set forth in Section 10.5(a).

 

“TEM SeniorExecutive” shall mean any of the following individuals: Federico Grosso,Claudio Hidalgo, Francisco Martinez-Davis, Luis Miguel Gilperez, Francisco RuizVinuesa, Pablo Alvarado and Maria D. Pizarro Figueroa, solely in their capacityas employees of TEM or its Affiliates.

 

“TEM PuertoRico” shall have the meaning set forth in the Preamble.

 

“Third-Party Financing”shall have the meaning set forth in Section 10.5(c).

 

“ThresholdAmount” shall have the meaning set forth in Section 2.2(a).

 

“TmAS” shall mean TelefónicaMóviles Aplicaciones y Soluciones, S.A., a company formed under the laws ofChile and a wholly owned subsidiary of TEM.

 

“U.S. GAAP”shall mean generally accepted accounting principles in the United States.

 

**ARTICLE II**

# **MUTUAL WAIVERAND RELEASE**

 

Section 2.1              MutualRelease.

 

(a)  Subject to Section 2.2,each of NewComm and the Other Stockholders, for itself and, to the extent ithas the legal ability to do so, on behalf of its former, present and futureofficers, directors, agents, employees, Affiliates, assigns and predecessorsand successors in interest do hereby and forever waive, release and dischargeTEM and its Affiliates (including, without limitation, TEM Puerto Rico), andtheir respective officers, directors, agents, employees, assigns andpredecessors and successors in interest from any and all losses, claims,liabilities, controversies, demands, actions, complaints, suits, causes ofaction of any kind and nature whatsoever (including, without limitation, thosesounding in contract or tort, loss of profits, interference with businesscontracts, interference with contractual relations, damage to businessreputation, increased cost of doing business, interference with expectancy ofbusiness advantage, in each case, current or prospective), judgments, damages,executions, obligations, contracts, agreements, covenants, controversies,promises, accounts, bonds, bills, debts, dues, sums of

 

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money, expenses, specialties, fees and costs of anykind and nature whatsoever (whether direct, indirect, consequential, incidentalor otherwise), known or unknown, suspected or unsuspected, in their own rightor derivatively, in law or in equity, which any of them ever had, now has, or hereaftershall or may have, against any other of them, on account of, arising from,relating to, or in connection with the Contracts (including, withoutlimitation, any act or omission or other matter or thing whatsoever arisingfrom, relating to, or in connection with the negotiation, execution andperformance of the Contracts) and occurring prior to and including theEffective Date, provided, however, that the foregoing shall notrelease TEM from any of its obligations under this Settlement Agreement.

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### (b)  Subjectto Section 2.2, each of TEM, for itself and, to the extent it has thelegal ability to do so, on behalf of its former, present and future officers,directors, agents, employees, Affiliates, assigns and predecessors andsuccessors in interest do hereby and forever waive, release and discharge eachof NewComm and the Other Stockholders and their respective Affiliates,officers, directors, agents, employees, assigns and predecessors and successorsin interest from any and all losses, claims, liabilities, controversies,demands, actions, complaints, suits, causes of action of any kind and naturewhatsoever (including, without limitation, those sounding in contract or tort,loss of profits, interference with business contracts, interference with contractualrelations, damage to business reputation, increased cost of doing business,interference with expectancy of business advantage, in each case, current orprospective), judgments, damages, executions, obligations, contracts,agreements, covenants, controversies, promises, accounts, bonds, bills, debts,dues, sums of money, expenses, specialties, fees and costs of any kind andnature whatsoever (whether direct, indirect, consequential, incidental orotherwise), known or unknown, suspected or unsuspected, in their own right orderivatively, in law or in equity, which any of them ever had, now has, orhereafter shall or may have, against any other of them, on account of, arisingfrom, relating to, or in connection with the Contracts (including, without limitation,any act or omission or other matter or thing whatsoever arising from, relatingto, or in connection with the negotiation, execution and performance of theContracts) and occurring prior to and including September 30, 2004, provided,however, that the foregoing shall not release NewComm and the OtherStockholders from any of their respective obligations under this SettlementAgreement.

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### (c)  Theconsequences of the foregoing waiver, release and discharge provisions havebeen explained by each of the Parties’ respective counsel.  Each of the Parties acknowledges that it mayhereafter discover facts different from, or in addition to, those which theynow know or believe to be true, and agree that this Settlement Agreement andthe releases contained herein shall be and remain effective in all respectsnotwithstanding such different or additional facts or the discovery thereof.

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### (d)  TheParties acknowledge that the release is given for adequate, valid andsufficient consideration, including the acceptance of the obligations set forthin this Settlement Agreement.  In theevent after the Effective Date, any Party shall breach any provision set forthin this Settlement Agreement (other than the release), the other Parties willbe entitled to remedies in contract for the breach of the obligations set forthin this Settlement Agreement, however, the validity of the releases containedherein shall not be affected. Notwithstanding anything to the contrary herein or any acts or eventsfollowing the Effective Date, the releases

 

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### contained herein areirrevocable and, from the Effective Date shall be and remain effective in allrespects.

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### (e)  Tothe extent Applicable Law would not otherwise recognize the provisions ofsubsections (a) and (b) of this Section 2.2 as constituting afull and final release applying to all unknown and unanticipated claims, aswell as those now known or disclosed, the Parties hereby expressly waive allrights or benefits which either one or any of them may have against any othercounterparty now or in the future under any such Applicable Law.

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### (f)  Inconsideration of the foregoing, TEM agrees to withdraw, and hereby withdraws,the Notice of Dispute (as such term is defined in the Management Agreement)dated October 28, 2004 sent to NewComm pursuant to Section 12.13.1 ofthe Management Agreement.  As a resultthereof, NewComm’s response letter to TEM dated November 10, 2004 shall beof no further force and effect.

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Section 2.2              Limitationof Mutual Release.

 

### (a)  Itis the intent of the Parties that the scope of the release provided for in thisSettlement Agreement shall be as broad and complete as possible and shall havethe benefits of the doctrines of *resjudicata* and collateral estoppel to the fullest extent allowed bylaw and limited only by the provisions of this Section 2.2.  Nothing whatsoever provided or contained inthis Article II or in any other provision of this Settlement Agreement (w)shall be construed as, or deemed to be a release of, or to release, any Partyfrom its obligations, duties, agreements and other warranties expresslyincurred or otherwise arising under this Settlement Agreement, (x) shall beconstrued as, or deemed to be a release of, or to release, NewComm from its deliveryand conversion obligations of the promissory notes delivered pursuant to Section 3.1(a) and(b) hereof or (y) shall restrict, impinge upon, or nullify any right orother claim that NewComm may have against TEM because of any Fraud committed byTEM or any TEM Senior Executives in their performance of Management Servicesunder the Management Agreement, which caused damages to NewComm of $250,000(two hundred and fifty thousand dollars) or more in the aggregate (the “ThresholdAmount”) or (z) shall be construed as, or deemed to be a release of, or torelease, TmAS from its obligations under Article V hereof.

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### (b)  Inconnection with a claim of alleged Fraud by NewComm, NewComm shall have up toone-hundred eighty (180) days from the Effective Date to deliver a notice ofclaim (the “Notice of Claim”) to TEM (i) alleging with reasonableparticularity that Fraud occurred, which caused damages in excess of theThreshold Amount and (ii) providing TEM with a full, complete and accuratefile (the “File”) containing any evidence of the alleged Fraud and otherrelevant documentation (including potentially exculpatory documents) relatingto the services rendered under the Management Agreement, provided thatNewComm shall not be allowed to submit more than one Notice of Claim within theone hundred eighty (180) day period starting from the Effective Date.  TEM shall then have forty five (45) days fromreceipt of such Notice of Claim from NewComm either to accept the occurrence ofFraud alleged by NewComm or deny it.  Assoon as reasonably practicable after the delivery of the Notice of Claim byNewComm to TEM, NewComm shall grant TEM full and complete access to allinformation, documents (including emails), records and personnel that TEM mayreasonably request to prepare TEM’s

 

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### response and TEMshall be entitled to obtain copy of any such documents (including emails) andrecords.

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### (c)  Inthe event TEM accepts the occurrence of Fraud alleged by NewComm or wishes toengage in settlement discussions, TEM and NewComm shall engage in efforts tomonetarily quantify as soon as reasonably practicable the amount of anyoverpayment or improper payment, as the case may be, represented by the Fraudcommitted.  Upon reaching an agreement inwriting of such amount, which shall be binding, final and conclusive on theParties, TEM shall, within five (5) Business Days after its receipt of anexecuted release from NewComm (to be effective upon NewComm’s receipt of theagreed amount), restore such amount to NewComm. Such amount shall be transferred in immediately available funds to suchbank accounts as shall be designated by NewComm to TEM.

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### (d)  NotwithstandingSection 12.16, in the event (i) TEM denies the occurrence of Fraud or(ii) upon acceptance of the occurrence of Fraud, TEM and NewComm areunable to agree on the amount of damages within thirty (30) days from suchacceptance, such dispute shall be finally and exclusively resolved byarbitration in accordance with the CPR Institute for Dispute Resolution Rules forNon-Administered Arbitration of International Disputes (“CPR Rules”),except to the extent modified herein, by a sole arbitrator (“Arbitrator”).  The Neutral Organization (as defined in theCPR Rules) designated to perform the functions specified in Rules 5, 6 and7 of the CPR Rules shall be the CPR Institute for Dispute Resolution (“CPR”).  TEM shall select the Arbitrator (suchArbitrator to be reasonably acceptable by NewComm, which acceptance may not beunreasonably withheld or delayed) within (30) thirty days after TEM’s receiptfrom NewComm of a Notice of Arbitration under Rule 2 of the CPR Rules, providedthat if the Parties fail to designate an Arbitrator, TEM may apply to the CPRto appoint one.  Judgment upon the awardrendered by the Arbitrator (the “Award”) may be entered by any courthaving jurisdiction thereof.  The seat ofarbitration shall be Miami, Florida.  Thearbitration shall be conducted in the English language, and any Spanishlanguage documents shall be accompanied by English language translations in anysubmissions to the Arbitrator.

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### (e)  Inorder to expedite the arbitration proceedings, the Parties agree that (a) NewCommshall serve a Notice of Arbitration (as defined in the CPR Rules) thatsatisfies the requirements of Rule 3.3 of the CPR Rules and includeseach of the elements of a pre-hearing memorandum as set forth in Rule 12.1of the CPR Rules (including the documents relied upon by NewComm); and (b) NewCommshall continue to make available the File to TEM and, concurrently with itsservice of a Notice of Arbitration, make available to TEM any other documents(in hard-copy and electronic form) relevant to NewComm’s claim and nototherwise relied upon by NewComm and included with the Notice of Arbitration; (c) withinninety (90) days after receipt of NewComm’s Notice of Arbitration, TEM shallserve a Notice of Defense (as defined in the CPR Rule) (including anycounterclaims) that satisfies the requirements of Rule 3.5 of the CPR Rules andincludes each of the elements of a pre-hearing memorandum as set forth in Rule 12.1of the CPR Rules (including the documents relied upon by TEM).  Each Party further agrees to cooperate withthe Arbitrator and to (i) provide the Arbitrator with access to books, records,personnel and representatives and (ii) deliver to the Arbitrator allevidence and documents required by such Arbitrator and relevant and necessary,in the sole and discretionary opinion of the Arbitrator for its determinationof the alleged Fraud and/or the amount of the damages, if any, resulting fromsuch Fraud.  Each Party providingevidence, document or

 

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### information to theArbitrator shall deliver to the other Party, simultaneously herewith copies ofthe exact same evidence, document or information.

###  

### (f)  Notwithstandinganything to the contrary contained in the CPR Rules, absent exceptional cause,which shall be determined by the Arbitrator, the Parties agree that (a) afinal evidentiary hearing lasting no more than two (2) Business Days shallbe conducted in Miami, Florida, or in such other place or places as the Partiesmay mutually agree, or, failing agreement, the Arbitrator shall order, andconcluded no later than six (6) months after TEM’s receipt of NewComm’sNotice of Arbitration, and (b) the Arbitrator’s Award shall be issued nolater than thirty (30) days after the conclusion of the final evidentiaryhearing and determine (x) whether the evidence is sufficient to constituteFraud and/or (y) the amount of damages resulting from the Fraud (the “FraudAmount”).

###  

### (g)  Ifthe Arbitrator determines the evidence is sufficient to constitute Fraud, TEMshall, within five (5) Business Days from receipt of the Arbitrator’sAward, restore the Fraud Amount to NewComm (after being netted, if applicableto the particular case, with any amount owed by NewComm to any Affiliate of TEMunder related contractual arrangements), provided that TEM shall nothave any obligation to restore such amount to NewComm until NewComm havesuffered damages resulting from such Fraud in excess of the Threshold Amount,at which time NewComm will be entitled to indemnification for all such damagesand not only those in excess in the Threshold Amount; provided, however,that the aggregate liability of TEM (including, without limitation, any claimfor interest) to indemnify NewComm for any and all claims of Fraud shall notexceed $5,000,000 (five million dollars) and, provided, further,that any damages resulting from the Fraud shall be limited to compensatorydamages and shall exclude any consequential damages or any or punitive or otherexemplary damages (including, without limitation, treble damages).  Such amount shall be transferred in immediatelyavailable funds to such bank accounts as shall be designated by NewComm toTEM.  In the event the Arbitratordetermines the evidence is sufficient to constitute Fraud but the Fraud Amountis less that the Threshold Amount, NewComm shall pay all fees and expensesrelating to the work performed by the Arbitrator.  In the event the Arbitrator determines theevidence is sufficient to constitute Fraud and the Fraud Amount is in excess ofthe Threshold Amount, TEM shall pay all fees and expenses relating to the workperformed by the Arbitrator.  Each Partyagrees to pay its own legal fees and expenses incurred in connection with thearbitration proceeding.

###  

### (h)  Ifthe Arbitrator determines the evidence is insufficient to constitute Fraud,NewComm shall, within five (5) Business Days from receipt of theArbitrator’s Award, pay TEM or its Affiliates as the case may be, any remainingoutstanding amounts due under such related contractual arrangements.  In addition, NewComm shall pay all fees andexpenses relating to the work performed by the Arbitrator.

###  

### (i)  TheParties, the Arbitrator and the Neutral Organization shall treat the fact ofthe arbitration, the arbitral proceedings, any and all submissions to theArbitrator, and the Arbitrator’s decisions (including the Award), asconfidential, except in connection with judicial proceedings ancillary to thearbitration, such as a judicial challenge to, or enforcement of, an award, andunless otherwise required by Applicable Law. To the extent possible, any specific issues of confidentiality should beraised with and resolved by the Arbitrator.

 

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**ARTICLE III**

# **PAYMENT ANDCAPITALIZATION OF THE FEES**

 

Section 3.1              Paymentof the Fees.

 

### (a)  TEM,as a successor in interest to Telefónica Internacional, S.A., shall receive aconvertible promissory note in the amount of $4,392,978.55 and substantially in the formattached as Exhibit E hereto in full satisfaction of the payment ofthe Technology Transfer Fee due to TEM under Section 2.1(a) of theTechnology Transfer Agreement and accrued and not paid until the EffectiveDate.

###  

### (b)  TEMshall receive a convertible promissory note in the amount of $2,239,492.21 and substantially in the formattached as Exhibit E hereto in full satisfaction of the payment ofthe Management Fee due to TEM under Section 4.1(a) of the ManagementAgreement accrued and not paid until September 30, 2004 (such date beingthe date upon which the Board of Directors decided to terminate the ManagementAgreement).

###  

### (c)  ClearCommshall receive a convertible promissory note in the amount of $310,416.80 andsubstantially in the form attached as Exhibit E hereto in fullsatisfaction of the payment of the service fee due to ClearComm by NewCommunder the consulting services agreement dated May 1, 1999, accrued and notpaid until the Effective Date. The aforementioned consulting services agreementis hereby terminated and none of the parties thereto shall have any furtherright or obligation with respect thereto or the subject matter thereof whether arisingprior to, on or after the Effective Date.

###  

Section 3.2              Capitalizationof the Promissory Notes.

 

### (a)  Onthe Effective Date, the promissory notes referred to in Section 3.1(a), (b) and(c) shall be converted in whole into fully paid shares of common stockupon the terms and subject to the conditions set forth on the promissory notesattached as Exhibit E hereto.

###  

### (b)  TheParties agree to adopt and cause the shareholders and the board of directors ofthe Company to adopt the resolutions necessary to execute such capitalizationon the Effective Date.

###  

**ARTICLE IV**

# **CAPITALIZATIONOF LOANS**

 

Section 4.1              Capitalizationof FCC Loans.  The loans granted byClearComm and TEM, amounting respectively to $11,447,758.28 and $11,396,338.88,which amounts include accrued interests as of the Effective Date, for purposesof meeting the matured portion of the FCC debt (the “FCC Loans”) will becapitalized on the Effective Date.  TheParties agree to (i) adopt and cause the shareholders and the board ofdirectors of the Company to adopt the resolutions necessary to execute suchcapitalization on the Effective Date and (ii) issue convertible promissorynotes for the aforementioned amounts and substantially in the form attached as Exhibit Ehereto.

 

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Section 4.2              MaximumAmount of Share Ownership.  On orprior to the Effective Date, (i) upon conversion of the Convertible Notesand (ii) upon capitalization of the FCC Loans pursuant to Section 4.1hereof, TEM Puerto Rico shall receive an aggregate amount of shares of theCompany equal to forty-nine point nine percent (49.9%) and the OtherStockholders shall hold an aggregate amount of shares of the Company equal tofifty point one percent (50.1%) of all of the Company’s issued and outstandingshares of capital stock on a fully diluted basis as of the date of suchconversion.

 

**ARTICLE V**

# **REVIEW ANDTERMINATION OF OTHER AGREEMENTS**

 

Section 5.1              SCLAgreements.

 

Subject to Section 5.1(b) hereof,TEM shall cause TmAS to (i) forgo the payment of $1,859,068.97,corresponding to all outstanding amounts owed to TmAS by NewComm under the SCLAgreements until the Effective Date (but excluding any amounts owed under the2005 Maintenance Agreement), and (ii) enter into a letter agreement withNewComm, attached hereto, which provides for an annual maintenance fee of$450,000.  NewComm acknowledges that TmASis a separate legal entity and that any negotiations with respect to futurepricing terms and conditions shall have to be at arm’s length and be conductedsolely between NewComm and TmAS.

 

Section 5.2              Reviewof Expenses Related to Ex-patriate Employees.  Within 30 (thirty) days from the EffectiveDate, TEM and NewComm shall cooperate in good faith to review the costs andexpenses, if any, paid by NewComm prior to the Effective Date related to thedismissal by NewComm of Claudio Hidalgo at the time of the change ofmanagement, in October and November of 2004, which costs shall besolely assumed by TEM and reimbursed to NewComm.

 

Section 5.3              Terminationof the Letter Agreements.  TheParties agree that, notwithstanding anything to the contrary contained thereinand with no further action on the part of any Party thereto, (i) theLetter Agreement between ClearComm and TEM dated June 22, 2001 and (ii) theLetter Agreement between ClearComm and TEM dated February 14, 2003 shallbe terminated and be of no further force of effect.  For the avoidance of doubt, all of TEF’s, TEM’sand ClearComm’s obligations (including, without limitation, payment obligations)under such letter agreements shall be terminated.

 

**ARTICLE VI**

# **PREMIUMPAYMENT**

 

Section 6.1              Paymentof the Premium.  Upon the earlier tooccur of (i) a Liquidation/Sale Event, (ii) an SPA Change of Controlor (iii) the fifth anniversary of the Effective Date, TEM Puerto Ricoshall, and TEM shall cause TEM Puerto Rico to, pay a Premium (as defined below)from the Liquidation/Sale Proceeds or based upon the Equity Valuation (asdefined in the Stock Purchase Agreement), as the case may be, subject to the termsset forth in Sections 6.2 and 6.3 hereof.

 

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Section 6.2              Paymentof the Premium upon a Sale/Liquidation Event.

 

### (a)  Inthe event of a Liquidation/Sale Event, TEM Puerto Rico agrees to pay a Premium,which shall attach to the shares of capital stock held by the OtherStockholders as of the Effective Date (the “Premium Stock”) from theLiquidation/Sale Proceeds, subject to the terms set forth in this section.

###  

### (b)  Inthe event the Liquidation/Sale Proceeds are less than or equal to the *sum* of the Base Value *plus* the Additional Subscribed Value,the Liquidation/Sale Proceeds shall be distributed among the Parties *pro rata* based on their respective shareownership in the Company calculated on a fully diluted basis as of theLiquidation/Sale Effective Date and there shall be no Premium payable.

###  

### (c)  Inthe event the Liquidation/Sale Proceeds exceed the *sum* of the Base Value *plus*the Additional Subscribed Value, the holder of the Premium Stock, withoutregard to any change of ownership of the Premium Stock between the EffectiveDate and the Liquidation/Sale Event, shall have the right and be entitled toreceive, in addition to the percentage of such proceeds corresponding to itspercentage equity ownership interest in the Company represented by the PremiumStock an incentive/settlement premium (the “Premium”) payment from TEMPuerto Rico of an incremental percentage of the Liquidation/Sale Proceedscalculated as follows (such Premium to be allocated among the holders ofPremium Stock at the time of the Liquidation/Sale Event on a *pro rata* basis determined by dividing (x)the total number of shares of Premium Stock held by a Person by (y) the totalnumber of shares of Premium Stock):

###  

### Premium = (SP/$15,000,000) x 0.025(1) x (“Liquidation/SaleProceeds” – Additional Subscribed Value)

###  

### in which,

###  

### “SP” refersto the positive difference, if any, between (i) the Liquidation/SaleProceeds and (ii) the *sum* ofthe Base Value *plus*theAdditional Subscribed Value.

###  

Set forth in Exhibit Fhereto are charts illustrating the Premium payable to the Premium Stock atvarious levels of dilution of the capital stock existing as of the EffectiveDate.

 

### (d)  Withrespect to the payment of the Premium, to the extent the Liquidation/SaleProceeds include proceeds received by way of deferred payment pursuant topromissory notes, earn-outs, receivables or other forms of non-cashcompensation, the Premium to be paid pursuant to Section 6.1(a) and (c) shallbe calculated and paid as follows:

###  

#### (i)                                     withrespect to the portion of Liquidation/Sale Proceeds received by TEM Puerto Ricoin cash at the time of the completion of the Liquidation/Sale Event, on theportion of the cash consideration received by TEM Puerto Rico as of such dateby calculating the amount of any Premium as though such cash proceedsrepresented the full Liquidation/Sale Proceeds; and

 

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(1)                                  Ifthe quotient of SP/15,000,000 is higher than 6.64, the product of that quotientand 0.025 shall be capped at 0.166.

 

15

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#### (ii)                                  withrespect to the portion of the Liquidation/Sale Proceeds received by TEM PuertoRico by way of deferred payment or other non-cash consideration (includingearn-out) at the time such deferred payment or other non-cash consideration isreceived by TEM Puerto Rico in cash, by calculating the amount of any Premiumin which the Liquidation/Sale Proceeds are equal to the sum of (x) the cashproceeds received in (i) above plus (y) the cash received on adeferred basis (discounted at a yield equivalent to U.S. treasury note for asimilar life for the time elapsed between the Liquidation/Sale Event and thereceipt of such deferred cash proceeds) and subtracting from the adjustedPremium payable under this clause (ii) any amounts paid as Premiumpursuant to clause (i) above.

####  

### (e)  Withrespect to the payment of the Premium, to the extent the Liquidation/SaleProceeds include non-cash proceeds, the Premium to be paid pursuant to Section 6.1(a) and(c) shall be paid in the same form and in the same proportion as actuallyreceived by TEM Puerto Rico without giving effect to any subsequent changes invalue of such non-cash proceeds.

###  

### (f)  Itis expressly agreed among the Parties that the Premium shall (i) beeffected or paid as a reduction in TEM Puerto Rico’s entitlement to theLiquidation/Sale Proceeds and (ii) be paid solely to the holders of thePremium Stock as of the date of payment of such Premium.

###  

### (g)  Itis acknowledged and agreed that the Premium shall under no circumstances (i) exceed16.6% of the Liquidation/Sale Proceeds, nor (ii) exceed the proportion ofthe Liquidation/Sale Proceeds payable and actually paid to TEM Puerto Rico dueto the shares of the Company’s capital stock it held at the time of theEffective Date and that it still holds on the Liquidation/Sale Effective Date, providedthat the shares of capital stock held by TEM Puerto Rico at the time of theEffective Date and thereafter sold to a third party, if any, shall be deemed asif still held by TEM Puerto Rico.

###  

### (h)  TheParties hereby agree that it is a condition precedent to (x) the Sale of theCompany or (y) the acquisition by ClearComm of TEM Puerto Rico’s equityinterests in NewComm under the Sale Agreement that (i) the Bridge Loan orthe Long-Term Financing, as the case may be, shall have been either repaid orassumed and each of TEF, TEM, TEM Puerto Rico and ClearComm has been fully andunconditionally released from its guarantee obligations thereunder and receivedpayment in full, including interest, as to any payments made pursuant to suchguarantees and (ii) the FCC Related Debt shall have been either repaid orassumed and each of Telefónica S.A. and TEM has been fully and unconditionallyreleased from its guarantee obligations thereunder.

###  

Section 6.3              Paymentof the Premium Irrespective of a Sale/Liquidation Event.

 

### (a)  Inthe absence of a Liquidation/Sale Event, upon the earlier to occur of (i) anSPA Change of Control and (ii) the fifth anniversary of the EffectiveDate, TEM Puerto Rico agrees, subject to the terms set forth in this section,to pay a Premium, which shall be payable to

 

16

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### holders, at thattime, of Premium Stock, based on the appraised value of NewComm estimated bythe investment bank preparing an Equity Valuation pursuant to the proceduresset forth in Section 2.02(b) and (c) of the Stock PurchaseAgreement.  The investment bank shall beinstructed that the Equity Valuation to be delivered for purposes of this Section 6.3(a) shall(i) be determined as if the Company were to be sold to a third party and (ii) bean Equity Valuation with respect to which the investment bank would be preparedto deliver a written fairness opinion if so requested by the parties.

###  

### (b)  Inthe event the Equity Valuation is less than or equal to the *sum* of the Base Value *plus* the Additional Subscribed Value,there shall be no Premium payable.

###  

### (c)  Inthe event the Equity Valuation exceeds the *sum*of the Base Value *plus* theAdditional Subscribed Value, the holder of the Premium Stock, without regard toany change of ownership of the Premium Stock between the Effective Date and theSPA Change of Control or fifth anniversary of the Effective Date, as the casemay be, shall have the right and be entitled to receive a Premium payment fromTEM Puerto Rico calculated as follows (such Premium to be allocated among theholders of Premium Stock at the time of the SPA Change of Control or fifthanniversary of the Effective Date, as the case may be, on a *pro rata* basis determined by dividing (x)the total number of shares of Premium Stock held by a Person by (y) the totalnumber of shares of Premium Stock):

 

### Premium = (SP/$15,000,000) x 0.025(2) x(Equity Valuation – Additional Subscribed Value)

 

### in which,

###  

### “SP” refersto the positive difference, if any, between (i) the Equity Valuation and (ii) thesum of the Base Value *plus*theAdditional Subscribed Value.

###  

### (d)  Itis acknowledged and agreed that the Premium shall under no circumstances (i) exceed16.6% of the Equity Valuation, nor (ii) exceed the proportion of theEquity Valuation attributable to TEM Puerto Rico due to the shares of theCompany’s capital stock it held at the time of the Effective Date and that itstill holds at the time of the fifth anniversary of the Effective Date orimmediately before the SPA Change of Control, as the case may be, providedthat the shares of capital stock held by TEM Puerto Rico at the time of theEffective Date and thereafter sold to a third party, if any, shall be deemed asif still held by TEM Puerto Rico.

###  

**ARTICLE VII**

# **INVESTMENTEXIT**

 

Section 7.1              TriggeringEvent.  In the event as of September 30,2006, the EBITDA of NewComm for the twelve-month period then ended is less than$10,970,000 (ten million nine hundred and seventy thousand dollars) (suchnumber being 50% of the arithmetic average of the 2005 and 2006 EBITDA figuresof NewComm as projected in the Business Plan), the Other

 

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(2)                                  Ifthe quotient of SP/15,000,000 is higher than 6.64, the product of that quotientand 0.025 shall be capped at 0.166.

 

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Stockholders agree, if so requested in writing by TEM (the “ExitNotice”), to dispose of TEM’s and the Other Stockholders’ interests inNewComm (whether by sale, exchange, merger, consolidation, transfer,distribution or any other disposition of any kind and in an manner, by operationof law or otherwise) in accordance with the procedure set forth in Section 2.1(d) ofthe Sale Agreement, it being understood that, for purposes of this Section 7.1,the Exit Notice shall be deemed to be the Sale Notice (as defined in the SaleAgreement) and the Liquidity Valuation (as defined in the Sale Agreement) shallbe determined pursuant to Section 2.1(b) of the Sale Agreement.  In the absence of a Sale of the Companypursuant to Section 2.1(d) of the Sale Agreement, it is expresslyagreed among the Parties that Section 2.1(c) of the Sale Agreementshall apply.

 

**ARTICLE VIII**

# **DEBTREPAYMENT**

 

Section 8.1              DebtRepayment Clause.  The Parties agreethat from and after the Effective Date and for so long as the Company has anyobligations under the Bridge Loan, the Lucent Debt or the FCC Related Debt, asapplicable, 15% of the aggregate gross proceeds (other than from TEM and theOther Stockholders) of any capital increase of the Company shall be used asfollows and allocated to repay:

 

### (a)  first,any amount outstanding under the Lucent Debt;

 

### (b)  second,upon full payment of the Lucent Debt, any amount outstanding under the BridgeLoan; and

 

### (c)  third,upon full payment of the Bridge Loan, any amount outstanding under the FCCRelated Debt.

 

**ARTICLE IX**

# **REPRESENTATIONSAND WARRANTIES**

 

Section 9.1              Representationsand Warranties of NewComm.  NewCommrepresents and warrants to the other Parties as follows, in each case, as ofthe date hereof and as of the Effective Date.

 

### (a)  DueOrganization, Standing and Authority.  NewComm is duly organized, validly existingand in good standing under the laws of the jurisdiction of its formation.  NewComm has all necessary power and authorityto execute, deliver and perform its obligations under this Settlement Agreementas contemplated by its formation agreements, by-laws, or other charter,organizational or governing documents (collectively, the “GoverningDocuments”).

 

### (b)  Authorizationand Validity of Settlement Agreement.  The execution, delivery and performance ofthis Settlement Agreement (a) are within NewComm’s powers, (b) havebeen duly authorized by all necessary action on NewComm’s behalf and allnecessary consents or approvals have been obtained and are in full force andeffect and (c) do not violate any of the terms and conditions of (i) NewComm’sGoverning Documents, (ii) any Applicable Law, or (iii) any contractsto which NewComm is a party (except with respect to (c)(i) and (ii) forsuch violations that would not be reasonably expected to have a materialadverse affect on

 

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### NewComm’s ability to consummate thetransactions contemplated by this Settlement Agreement).

 

### (c)  Enforceability.  This Settlement Agreement has been dulyexecuted and delivered on behalf of NewComm and constitutes a legal, valid andbinding obligation of NewComm, enforceable against it in accordance with itsterms, except that such enforceability may be limited by (a) applicablebankruptcy, insolvency, reorganization, moratorium and similar laws affectingcreditors’ rights generally, and (b) equitable principles which may limitthe availability of certain equitable remedies (such as specific performance).

 

### (d)  Listof Stockholders.  Thelist of existing stockholders set forth on Exhibit A hereto is thefull, complete and accurate list of NewComm’s shareholders and there are noother stockholders of NewComm other than TEM Puerto Rico, upon conversion ofthe Convertible Notes and other obligations of the Company pursuant to ArticlesIII and IV hereof.

 

### (e)  NoKnowledge of Fraud. Other than as set forth on Schedule 9.1(e) hereto, neitherNewComm nor any of the NewComm Senior Executives****is aware of any alleged Fraud with respect to the servicesrendered by TEM under the Management Agreement regarding which NewComm intendsto assert a claim pursuant to Section 2.2(b) hereof.

 

Section 9.2              Representationsand Warranties of TEM.  TEMrepresents and warrants to the other Parties as follows, in each case, as ofthe date hereof and as of the Effective Date.

 

### (a)  DueOrganization, Standing and Authority.  TEM is duly organized, validly existing andin good standing under the laws of the jurisdiction of its formation.  TEM has all necessary power and authority toexecute, deliver and perform its obligations under this Settlement Agreement ascontemplated by its GoverningDocuments.

 

### (b)  Authorizationand Validity of Settlement Agreement.  The execution, delivery and performance ofthis Settlement Agreement (a) are within TEM’s powers, (b) have beenduly authorized by all necessary action on TEM’s behalf and all necessaryconsents or approvals have been obtained and are in full force and effect and (c) donot violate any of the terms and conditions of (i) TEM’s GoverningDocuments, (ii) any Applicable Law, or (iii) any contracts to whichTEM is a party (except with respect to (c)(i) and (ii) for suchviolations that would not be reasonably expected to have a material adverseaffect on TEM’s ability to consummate the transactions contemplated by thisSettlement Agreement).

 

### (c)  Enforceability.  This Settlement Agreement has been dulyexecuted and delivered on behalf of TEM and constitutes a legal, valid andbinding obligation of TEM, enforceable against it in accordance with its terms,except that such enforceability may be limited by (a) applicablebankruptcy, insolvency, reorganization, moratorium and similar laws affectingcreditors’ rights generally, and (b) equitable principles which may limitthe availability of certain equitable remedies (such as specific performance).

 

Section 9.3              Representationsand Warranties of TEM Puerto Rico. TEM Puerto Rico represents and warrants to the other Parties as follows,in each case, as of the date hereof and as of the Effective Date.

 

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### (a)  DueOrganization, Standing and Authority.  TEM Puerto Rico is duly organized, validlyexisting and in good standing under the laws of the jurisdiction of itsformation.  TEM Puerto Rico has allnecessary power and authority to execute, deliver and perform its obligationsunder this Settlement Agreement as contemplated by its GoverningDocuments.

 

### (b)  Authorizationand Validity of Settlement Agreement.  The execution, delivery and performance ofthis Settlement Agreement (a) are within TEM Puerto Rico’s powers, (b) havebeen duly authorized by all necessary action on TEM Puerto Rico’s behalf andall necessary consents or approvals have been obtained and are in full forceand effect and (c) do not violate any of the terms and conditions of (i) TEMPuerto Rico’s Governing Documents, (ii) any Applicable Law, or (iii) anycontracts to which TEM Puerto Rico is a party (except with respect to (c)(i) and(ii) for such violations that would not be reasonably expected to have amaterial adverse affect on TEM Puerto Rico’s ability to consummate thetransactions contemplated by this Settlement Agreement).

 

### (c)  Enforceability.  This Settlement Agreement has been dulyexecuted and delivered on behalf of TEM Puerto Rico and constitutes a legal,valid and binding obligation of TEM Puerto Rico, enforceable against it inaccordance with its terms, except that such enforceability may be limited by (a) applicablebankruptcy, insolvency, reorganization, moratorium and similar laws affectingcreditors’ rights generally, and (b) equitable principles which may limitthe availability of certain equitable remedies (such as specific performance).

 

Section 9.4              Representationsand Warranties of ClearComm. ClearComm represents and warrants to the other Parties as follows, ineach case, as of the date hereof and as of the Effective Date.

 

### (a)  DueOrganization, Standing and Authority.  ClearComm is duly organized, validly existingand in good standing under the laws of the jurisdiction of its formation.  ClearComm has all necessary power andauthority to execute, deliver and perform its obligations under this SettlementAgreement as contemplated by its Governing Documents.

 

### (b)  Authorizationand Validity of Settlement Agreement.  The execution, delivery and performance ofthis Settlement Agreement (a) are within ClearComm’s powers, (b) havebeen duly authorized by all necessary action on ClearComm’s behalf and all necessaryconsents or approvals have been obtained and are in full force and effect and (c) donot violate any of the terms and conditions of (i) ClearComm’s GoverningDocuments, (ii) any Applicable Law, or (iii) any contracts to whichClearComm is a party (except with respect to (c)(i) and (ii) for suchviolations that would not be reasonably expected to have a material adverseaffect on ClearComm’s ability to consummate the transactions contemplated bythis Settlement Agreement).

 

### (c)  Enforceability.  This Settlement Agreement has been dulyexecuted and delivered on behalf of ClearComm and constitutes a legal, validand binding obligation of ClearComm, enforceable against it in accordance withits terms, except that such enforceability may be limited by (a) applicablebankruptcy, insolvency, reorganization, moratorium and similar

 

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### laws affecting creditors’ rights generally,and (b) equitable principles which may limit the availability of certainequitable remedies (such as specific performance).

 

Section 9.5              Representationsand Warranties of the Other Stockholders. Each Other Stockholder (to the exception of ClearComm) hereto representsand warrants, separately and individually, to the other Parties as follows, ineach case, as of the date hereof and as of the Effective Date.

 

### (a)  DueOrganization, Standing and Authority.  Each Party is duly organized, validlyexisting and in good standing under the laws of the jurisdiction of itsformation.  Each Party has all necessarypower and authority to execute, deliver and perform its obligations under thisSettlement Agreement as contemplated by its Governing Documents.

 

### (b)  Authorizationand Validity of Settlement Agreement.  The execution, delivery and performance ofthis Settlement Agreement (a) are within each Party’s powers, (b) havebeen duly authorized by all necessary action on each Party’s behalf and allnecessary consents or approvals have been obtained and are in full force andeffect and (c) do not violate any of the terms and conditions of (i) eachParty’s Governing Documents, (ii) any Applicable Law, or (iii) anycontracts to which a Party is a party (except with respect to (c)(i) and (ii) forsuch violations that would not be reasonably expected to have a materialadverse affect on the Party’s ability to consummate the transactionscontemplated by this Settlement Agreement).

 

### (c)  Enforceability.  This Settlement Agreement has been dulyexecuted and delivered on behalf of each Party and constitutes a legal, validand binding obligation of each Party, enforceable against it in accordance withits terms, except that such enforceability may be limited by (a) applicablebankruptcy, insolvency, reorganization, moratorium and similar laws affectingcreditors’ rights generally, and (b) equitable principles which may limitthe availability of certain equitable remedies (such as specific performance).

 

**ARTICLE X**

# **COVENANTS**

 

Section 10.1                      NewComm’sDuty to Inform TEM.  NewComm shallnotify TEM as promptly as practicable if any knowledge of any alleged Fraudcomes to its or its officers’, directors’, agents’, employees’ or Affiliates’attention prior to the Effective Date. If NewComm obtains actual knowledge of any Fraud information prior tothe Effective Date and fails to notify TEM as promptly as practicable beforethe Effective Date, then for purposes of TEM’s liability under Section 2.2hereof, no claim for indemnification shall be made.

 

Section 10.2                      FCCLicense.

 

### (a)  TheParties agree to cooperate ingood faith and as soon as reasonably practicable, but in any event  (i) prior to the expiration of the FCCAuthorization, ClearComm, NewComm and TEM Puerto Rico shall make any necessaryand appropriate filings with the FCC reflecting that ClearComm and TEM will notbe consummating the transfer of control pursuant to the terms of the FCCAuthorization; and (ii) within thirty (30) days after TEM Puerto Ricoshall have exercised the conversion feature of the Convertible Notes and TEMPuerto Rico shall have received 49.9% of NewComm’s capital stock, ClearComm,NewComm and TEM Puerto

 

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### Rico shall make any necessaryand appropriate filings with the FCC reflecting the acquisition of 49.9% ofNewComm’s capital stock by TEM Puerto Rico.

###  

### (b)  UponTEM’s decision to assume the control of NewComm pursuant to and under the termsand conditions of the Stock Purchase Agreement, the Parties agree to cooperatein good faith and use their commercially reasonable best efforts to take or causeto be taken all actions and do or cause to be done all things necessary,proper, advisable or required to obtain the FCC Authorization (including,without limitation, completing such steps as were necessary for the obtainingof the authorization granted on August 12, 2004 by the FCC to thePurchaser relating to the transfer of control of NewComm to the Purchaser) assoon as reasonably practicable.  EachParty agrees to use its best efforts to furnish to each other such informationand assistance and to consult with respect to the terms of any filing,registration, application or undertaking as may be requested in connection withthe foregoing.

###  

Section 10.3                      ThirdParty Offer.  Each Party agrees toinform the Board of Directors and the other Parties as soon as reasonablypracticable of any solicited and unsolicited third party offers, inquiries,proposals, bids or other indications of interests concerning any purchase,transfer or other disposition of any capital stock of the Company, any merger,consolidation, business combination or other similar transaction involving theCompany, any sale of all or any parts of the assets of the Company or anysimilar transaction involving the Company (such transaction, an “AcquisitionTransaction”).  Each Party furtheragrees not to engage in any discussions or negotiations with, or provideinformation to, any Person (other than the other Parties and the Board ofDirectors) with respect to any Acquisition Transaction and shall promptlycommunicate to the Board of Directors the material terms of such proposals andany documents received in connection therewith.

 

Section 10.4                      FurtherAssurances.

 

### (a)  Eachof the Parties agrees to use its commercially reasonable best efforts to take,or cause their respective Affiliates to take, all actions and to do, or causeto be done, all things necessary, proper or advisable to consummate and makeeffective the transactions contemplated by this Agreement, including using itscommercially reasonable best efforts to satisfy each of the conditions setforth in Section 11.1 hereto.

###  

### (b)  Eachof the Parties agrees to cooperate in good faith to seek an extension of theamount of the $6,000,000 principal payment due to Lucent in 2005 under theLucent Debt.

###  

Section 10.5                      Long-TermFinancing.

 

### (a)  TEMagrees to undertake all commercially reasonable actions necessary to refinancethe Bridge Loan on the third anniversary of the Effective Date, with two-yearterm loan maturing on the fifth anniversary of the Effective Date (the “Long-TermFinancing”) and, in respect thereof, to cause TEF to guarantee the promptand complete payment and performance by NewComm when due (whether at statedmaturity, by acceleration or otherwise) of the Long-Term Financing (the “TEFGuarantee”), it being understood that TEF Guarantee shall be under termsreasonably acceptable to TEF, which in any case shall not be substantiallydifferent from any other corporate guarantees customarily issued by TEF.

 

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### (b)  TheParties acknowledge that the Long-Term Financing shall provide for noamortization of principal, the same being payable in full on the maturity datethereof.  In addition to the TEFGuarantee, the Long-Term Financing shall be jointly and severally guaranteed byClearComm.

###  

### (c)  Theobligation to provide TEF Guarantee shall be subject to the satisfaction of thefollowing conditions:

###  

#### (i)                                     Nolaw, statute, rule or regulation shall have been adopted, promulgated,enforced or issued by any Governmental Entity having the effect of makingillegal or otherwise prohibiting the delivery of TEF Guarantee pursuant to Section 10.5(b),and there shall not be in effect any injunction, writ or restraining order ordecree issued by a court of competent jurisdiction that prohibits the deliveryof TEF Guarantee pursuant to Section 10.5(b) hereof;

####  

#### (ii)                                  Theexecution, delivery and performance by each of the Other Stockholders of theguarantee pursuant to Section 10.5(b) hereof shall have been dulyauthorized and such guarantee shall be a legal, valid and binding obligation ofeach of the Other Stockholders enforceable against each of them in accordancewith the terms of the guarantee;

####  

#### (iii)                               Eachof the FCC Licenses shall be in full force and effect;

####  

#### (iv)                              TheOther Stockholders shall not be in violation in any respect with any of theprovisions of this Settlement Agreement or the other agreements referred toherein and incorporated by reference; and

####  

#### (v)                                 Inthe event TEM Puerto Rico shall have delivered a Purchase Notice (as defined inthe Stock Purchase Agreement) pursuant to Section 2.03(a) of theStock Purchase Agreement, no Applicable Law or injunction enacted, entered,promulgated, enforced, issued by the FCC or any other Governmental Entity orother legal restraint or prohibition preventing TEM Puerto Rico from assumingcontrol of the Company shall be in effect or threatened (each, a “LegalRestraint”), provided that this condition shall be deemed satisfiedin the event that such Legal Restraint is caused by, attributable to or resultedfrom TEM or TEM Puerto Rico’s bad faith, willful misconduct or gross negligenceor is directly caused by, attributable to or resulted from an action of TEM orTEM Puerto Rico.

####  

Section 10.6                      FCCLine of Credit.

 

### (a)  TEMagrees to undertake all commercially reasonable actions necessary to arrange asubordinated line of credit from a commercial bank (the “Subordinated LoanFacility”) for NewComm, the proceeds of which shall be available solely topay the balance of the FCC Related Debt as currently scheduled or asextended.  Such Subordinated Loanfacility shall be in accordance with the terms set forth in Exhibit Khereto.

 

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### (b)  Tothe extent there is (i) a voluntary bankruptcy of NewComm, that has beenproperly authorized pursuant to Section 4.7(b) of the ShareholdersAgreement, that results in an event of default under Section 9.01(h) (voluntarybankruptcy filing) of the Subordinated Loan Facility or (ii) a default andacceleration under the Lucent Debt that results in a default under Section 9.01(f) (cross-default provision) of the Subordinated Loan Facility, then,TEM commits to use its reasonable best efforts to obtain a waiver from thelender providing the Subordinated Loan Facility with respect to either suchevent of default under the Subordinated Loan Facility or, such waiver nothaving been obtained, commits to obtain for NewComm alternate financing withterms and conditions substantially similar to the Subordinated Loan Facility inorder to repay the FCC Debt (as defined in the Subordinated LoanFacility).  To the extent that TEMprovides alternate financing pursuant to the preceding sentence, the amount ofany such financing, taken together with any amounts previously funded under theSubordinated Loan Facility, or remaining under such facility if such default iscured, shall not exceed in the aggregate US$40 million.

 

Section 10.7                      ThirdParty Financing.  It is expresslyagreed that in the event of NewComm obtaining a non-recourse long-termfinancing from a third-party (the “Third-Party Financing”) sufficient torefinance both the Bridge Loan and the FCC Related Debt, (a) the Long-TermFinancing set forth in Section 10.5(a) will not be required and (b) eachof (i) TEF Guarantee obligations set forth in Section 10.5(a), (ii) TEFguarantee obligations set forth in Exhibit K and (iii) TEM PuertoRico’s call right set forth in the Stock Purchase Agreement shall be of no furtherforce and effect.

 

**ARTICLE XI**

# **CONDITIONS PRECEDENT TO EFFECTIVENESS**

 

Section 11.1                      EffectiveDate.  This SettlementAgreement shall become effective on the date on which each of the followingconditions precedent has been satisfied, or waived, as the case may be (suchdate is referred to herein as the “Effective Date”):

 

### (a)  Therepresentations and warranties of each Party shall be true and correct in allrespects as of the date hereof and as of the Effective Date;

###  

### (b)  EachParty shall have complied in all material respects with all covenants containedin this Settlement Agreement;

###  

### (c)  EachParty hereto shall have received counterparts of this Settlement Agreement dulyexecuted by each of other Party;

###  

### (d)  TEMPuerto Rico shall have exercised the conversion feature of the ConvertibleNotes and TEM Puerto Rico shall have received 49.9% of NewComm’s capital stock;

###  

### (e)  TheFCC Loans shall have been capitalized;

###  

### (f)  TEMand ClearComm shall have entered into a termination agreement of the Joint VentureAgreement, a copy of which is attached as Exhibit G hereto and madea part hereof;

 

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### (g)  TEMPuerto Rico and ClearComm shall have entered into an amendment to the StockPurchase Agreement, a copy of which is attached as Exhibit H heretoand made a part hereof;

###  

### (h)  TEMand NewComm shall have entered into a termination agreement of the ManagementAgreement, a copy of which is attached as Exhibit I hereto and madea part hereof;

###  

### (i)  NewCommand TEM shall have entered into a termination agreement of the TechnologyTransfer Agreement, a copy of which is attached as Exhibit J heretoand made a part hereof;

###  

### (j)  TEM shall have obtained, and NewComm shall have entered intoan extension or refinancing of the Bridge Loan, extending the maturity untilthirty six (36) months, with the benefit of joint and several guarantees of TEMPuerto Rico and ClearComm;

###  

### (k)  TEMshall have arranged a line of credit from a commercial bank, the proceeds ofwhich shall be available solely to pay the balance of the FCC Related Debt ascurrently scheduled or as extended, which line of credit shall be in accordancewith the terms set forth in Exhibit K hereto;

###  

### (l)  TEMand NewComm shall have entered into an agreement regarding the use of the “Movistar”brand, a copy of which is attached as Exhibit L hereto and made apart hereof;

###  

### (m)  TEMPuerto Rico and the Other Stockholders shall have entered into an amendment andrestatement of the Shareholders Agreement, a copy of which is attached as Exhibit Mhereto and made a part hereof;

###  

### (n)  TEMPuerto Rico and the Other Stockholders shall have entered into an amendment tothe Sale Agreement, a copy of which is attached as Exhibit N heretoand made a part hereof; and

###  

### (o)  TEMPuerto Rico and the Other Stockholders shall have modified the composition ofthe Board of Directors to comply with the Shareholders Agreement, as amendedand restated.

###  

**ARTICLE XII**

# **MISCELLANEOUS**

 

Section 12.1                      Notices.  All notices, requests, demands, waivers andother communications required or permitted to be given under this SettlementAgreement shall be in writing and shall be deemed to have been duly given ifdelivered personally or mailed, certified or registered mail with postageprepaid, or sent by telegram or facsimile, as follows.

 

If to NewComm,to:

 

NewCommWireless Services, Inc.City View Plaza 48Calle 165, Suite 700

Guyanabo,Puerto Rico 00968Attention: Javier O. LamosoFacsimile No.: (787) 749-5707

 

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With acopy to:

 

Martinez Odell & CalabriaP.O. Box 190988Hato Rey, Puerto Rico 00919-0998Attention: Lawrence Odell Peck, Esq.Facsimile No.: (787) 753-8402

 

If toTEM or TEM Puerto Rico, to:

 

TelefónicaMóviles S.A.Calle Goya n° 24Madrid 28001, SpainAttention:  Antonio HornedoFacsimile No.: + 34 91 423 4294

 

Metro OfficeParkBuilding 17, Suite 600Guyanabo, Puerto Rico 00968Attention:  Maria D. Pizarro FigueroaFacsimile No.: (787) 749-5880

 

With acopy to:

 

SimpsonThacher & Bartlett LLP425 Lexington AvenueNew York, NY 10017Attention: S. Todd Crider, Esq.Facsimile No.: (212) 455-2502

 

If toClearComm, to:

 

ClearComm, L.P.221 Ponce de Leon Avenue, Suite 1407San Juan, Puerto Rico 00917-1814Attention: Javier O. LamosoFacsimile No.: (787) 756-0844

 

With acopy to:

 

Martinez Odell & CalabriaP.O. Box 190988Hato Rey, Puerto Rico 00919-0998

Attention: Lawrence Odell Peck, Esq.Facsimile No.: (787) 753-8402

 

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If to the OtherStockholders, to the address set forth opposite each Other Stockholder listedon Exhibit A hereto.

 

All such notices,requests, demands, waivers and communications shall be deemed to have beenreceived on the date of personal delivery or on the third Business Day after themailing thereof or, in the case of notice by facsimile, when receipt thereof isconfirmed by telephone.

 

Section 12.2                      IntendedBeneficiaries.  This SettlementAgreement shall inure to the benefit of and be binding upon the Parties andtheir respective successors and permitted assigns.  In addition, the Persons that are covered bythe release as set forth in Section 2.1(a) and (b) are intendedthird party beneficiaries of that clause. Subject to the preceding sentence, nothing in this Settlement Agreement,expressed or implied, is intended to confer or shall confer upon any Personother than the Parties (including TEM’s Affiliates) and their respectivesuccessors and permitted assigns, any rights (whether legal or equitable),benefits, remedies, obligations or liabilities of any nature whatsoever underor by reason of this Settlement Agreement.

 

Section 12.3                      EntireAgreement.  This SettlementAgreement contains the entire agreement between the Parties with respect to thesubject matter hereof and there are no agreements, understandings,representations or warranties between the Parties other than those set forth orreferred to herein.

 

Section 12.4                      Amendment.  This Settlement Agreement may not be amendedor modified, not may any of its provisions be waived, except in writing signedby all the Parties.

 

Section 12.5                      Severability.  In case any provision of this SettlementAgreement shall be determined to be invalid, illegal or unenforceable for anyreason, the remaining provisions of this Settlement Agreement shall beunaffected and unimpaired thereby, and shall remain in full force and effect,to the fullest extent permitted by Applicable Law.

 

Section 12.6                      Survivalof Representations.  Allrepresentations, warranties, agreements, covenants and obligations herein arematerial, shall be deemed to have been relied upon by the other Party, andshall survive the date hereof.

 

Section 12.7                      Successorsand Assigns.  This SettlementAgreement shall be binding upon and inure to the benefit of the Parties heretoand their respective successors and assigns.

 

Section 12.8                      NoAdmission of Liability.  Neither thisSettlement Agreement nor any act performed or document executed pursuant to orin furtherance of this Settlement Agreement: (a) is or may be deemed to be or may be used as an admission orevidence of the validity of any released claim or any wrongdoing or liabilityof any Party; or (b) is or may be deemed to be or may be used as anadmission or evidence of any fault or omission of any Party in any civil,criminal or administrative proceeding in any court, administrative agency orother tribunal, other than in such proceedings as may be necessary toconsummate or enforce this Settlement Agreement.

 

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Section 12.9                      NoAssignment of Claims.  Each Partyrepresents and warrants that it is the only Person who, to its knowledge, hasany interest in any claims released hereby and that none of such claims, norany part thereof, have been assigned, granted or transferred in any way to anyPerson.

 

Section 12.10                Interpretation.  This Settlement Agreement has been jointlydrafted by the Parties at arm’s-length and each Party has had ample opportunityto consult with independent legal counsel. No provision or ambiguity in this Settlement Agreement shall be resolvedagainst any Party solely by virtue of its participation in the drafting of thisSettlement Agreement.

 

Section 12.11                Conflict.  In the event that there existsa conflict or inconsistency between the terms of this Settlement Agreement andthe terms of any other document related to the settlement set forth herein, theterms of this Settlement Agreement shall prevail.

 

Section 12.12                Attorneys’Fees.  Each Party shall beresponsible for the payment of (a) its own costs and expenses (includingreasonable attorneys’ fees), and (b) all of its costs and expenses(including reasonable attorneys’ fees) in connection with the matters referredto in this Settlement Agreement.

 

Section 12.13                Captions.  The captions of this Settlement Agreement arefor convenience only and are not a part of this Settlement Agreement and do notin any way limit or amplify the terms and provisions of this SettlementAgreement and shall have no effect on its interpretation.

 

Section 12.14                Counterparts.  This Settlement Agreement may be executed incounterparts, by either an original signature or signature transmitted byfacsimile transmission or other similar process and each copy so executed shallbe deemed to be an original and all copies so executed shall constitute one andthe same agreement.

 

Section 12.15                Confidentiality.  The terms and conditions of this SettlementAgreement, and all matters relating thereto, shall remain confidential betweenthe Parties and shall not be disclosed to any Person except:  (i) to the Parties and their respectiveofficers, directors, employees, representatives, counsel, auditors and otherprofessionals who need to know such information for purposes of conductingtheir ordinary course of business; (ii) to any Person as required byoperation of law; or (iii) to any Person agreed to by the Parties, inwriting.  To the extent that a Party isrequired or purportedly required to disclose all or any terms of thisSettlement Agreement pursuant to subparagraph (ii) above, such Party shallimmediately give written notice to the other Parties, and the Party seekingdisclosure shall, if so requested by any other Party, use its best efforts toobtain a protective order from the court or a written guarantee ofconfidentiality from any Person to whom the terms are to be disclosed to limit,in advance, the dissemination and disclosure of this Settlement Agreement andits terms.

 

Section 12.16                Arbitration.

 

### (a)  Subjectto Section 2.2(d), any dispute, controversy or claim of any kind orcharacter arising out of, relating to or in connection with this SettlementAgreement (whether based in tort, contractual or statutory principles),including any question regarding its existence, validity or termination, orregarding a breach thereof (hereafter, “Dispute”) shall be submitted toa representative of each of the parties involved to attempt to reach anamicable resolution.  A

 

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### party wishing to initiateconsideration of a dispute by such representative shall give written notice tothe other parties hereto of the existence of such dispute and of the party’sdesire to have such representative consider the dispute.  Such notice shall set forth a briefdescription of the nature of the dispute to be considered.

###  

### (b)  Ifa Dispute is not settled within thirty (30) days after the notice is given tothe other parties seeking representative consideration of a Dispute, suchDispute shall be submitted for resolution to the American ArbitrationAssociation in accordance with the International Arbitration Rules of theAmerican Arbitration Association.  Aparty wishing to submit a Dispute to arbitration shall give written notice tosuch effect to the other parties hereto. The arbitration shall be resolved by a three-person arbitration panel.

###  

### (c)  Thesite of the arbitration shall be Miami, Florida, or such other location as theparties in arbitration may mutually agree in writing, any award shall be deemedto have been made there, and the language to be used in the arbitrationproceedings shall be the English language with a simultaneous translation intoSpanish.  Any award shall be in writingin the English language and state the reasons and contain reference to thelegal grounds upon which it is based. The award may be made public only with the written consent of allparties to the arbitration; provided, however, that any ruling oraward, final or otherwise, may be cited in any subsequent dispute or proceedingto enforce such ruling.

###  

Section 12.17                GoverningLaw.  The substantive rights andobligations of the Parties arising out of, in connection with or ancillary tothis Settlement Agreement shall be governed by the substantive laws of theState of Florida excluding conflict of laws principles.

 

*[Remainder of page intentionally left blank; signature pages follow]*

 

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IN WITNESSWHEREOF, the Parties have signed this Settlement Agreement in multiplecounterparts.

 
|   | **NEWCOMM WIRELESS SERVICES, INC.**                 |
|--------|-----------------------------------------------------|
|   |                                                |
|   |                                                |
|   | By:                                                 |   |   |
|   |                                                | Name: |
|   |                                                | Title: |
|   |                                                |
|   |                                                |
|   | **TELEFÓNICA MÓVILES S.A.**               |
|   |                                                |
|   |                                                |
|   | By:                                                 |   |   |
|   |                                                | Name: Ernesto Lopez Mozo |
|   |                                                | Title: Chief Financial Officer |
|   |                                                |
|   |                                                |
|   | By:                                                 |   |   |
|   |                                                | Name: Antonio Hornedo |
|   |                                                | Title: General Counsel |
|   |                                                |
|   |                                                |
|   | **TELEFÓNICA MÓVILES PUERTO RICO,  INC.** |
|   |                                                |
|   |                                                |
|   | By:                                                 |   |   |
|   |                                                | Name: Francisco Martinez Davis |
|   |                                                | Title: Director |
|   |                                                |
|   |                                                |
|   | By:                                                 |   |   |
|   |                                                | Name: Juan Ramon Balcells |
|   |                                                | Title: Director |

 

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|   | **CLEARCOMM, L.P.**                                      |
|--------|----------------------------------------------------------|
|   |                                                     |
|   |                                                     |
|   | By:                                                      |   |   |
|   |                                                     | Name: |
|   |                                                     | Title: |
|   |                                                     |
|   |                                                     |
|   | **OPPORTUNITY CAPITAL PARTNERS IV,  L.P.**               |
|   |                                                     |
|   |                                                     |
|   | By:                                                      |   |   |
|   |                                                     | Name: |
|   |                                                     | Title: |
|   |                                                     |
|   |                                                     |
|   | **SYNDICATED COMMUNICATIONS  VENTURE PARTNERS IV, L.P.** |
|   |                                                     |
|   |                                                     |
|   | By:                                                      |   |   |
|   |                                                     | Name: |
|   |                                                     | Title: |
|   |                                                     |
|   |                                                     |
|   | **FLEET DEVELOPMENT VENTURES, LLC**                      |
|   |                                                     |
|   |                                                     |
|   | By:                                                      |   |   |
|   |                                                     | Name: |
|   |                                                     | Title: |

 

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|   | **POWER EQUITIES, INC.** |
|--------|--------------------------|
|   |                     |
|   |                     |
|   | By:                      |   |   |
|   |                     | Name: |
|   |                     | Title: |

 

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