Document:

Exhibit 10.73

 

[ACT Letterhead]

 

 

January 15, 2005

 

Karen Chapman

308 Ashton Lane

Mill Valley, CA 94941

 

Re:          Consulting Agreement

 

Dear Karen:

This Letter Agreement (“Agreement”)
sets forth the terms and conditions under which Karen Chapman will provide Services
(as that term is defined below) to A.C.T. Holdings, Inc. and Advanced Cell
Technology, Inc. (collectively, “ACT”) :

 

1.             Services; Warranty.  The consulting services you will provide are
described in the attached Exhibit A (the “Services”). You agree to perform the Services upon the terms
and conditions set forth in this Agreement. You agree that you shall perform
the Services in an efficient, professional and workmanlike manner, consistent with
industry standards, and shall be free from material error.  You hereby represent and warrant that none of
the Services will infringe on any copyright, trademark or any other rights of
any third party; and you hereby indemnify and agree to defend ACT against any
loss, claim or liability, including reasonable attorneys’ fees, which may arise
as a result of a breach of the foregoing warranty.  Concurrent with the execution of this
Agreement, you will enter into that certain Patent Assignment Agreement with
ACT (the “Assignment Agreement”)  with
respect to the transfer of certain Inventions (as that term is defined in the
Assignment Agreement) and that certain Confidential Information and Invention
Agreement, a copy of which is attached hereto as Exhibit B (the “CIIA”).

 

2.             Term.  This Agreement shall be for a period of three
(3) years from the date of this until termination in accordance with Paragraph
3 of this Agreement, subject to Section 3, below.

 

3.             Termination.  Either party may terminate this Agreement upon thirty
(30) days written notice to the other party in the event of a material breach
of any provision of this Agreement, provided that, the breaching party fails to
perform or cure said breach within thirty (30) days after written notice
thereof.  Either party may terminate this
Agreement upon ninety (90) days prior written notice to the other party.  Termination of this Agreement under this
Section 3 shall not affect rights and obligations accruing prior to the date of
termination or relating to this Agreement, the Assignment Agreement or

 

 

 

the CIIA pertaining to confidential
or proprietary information.  In addition,
in the event of a termination under this Agreement, you agree that for 12
months following such termination, you will not directly or indirectly consult
with or work for any other third party engaged in or proposing to engage in any
research, development or commercial activity competitive with Company or the
Services.   Nor during the same period
will you engage in such activity for his/her own account or hire any ACT
employees or anyone who was an ACT employee anytime during the term of this
Agreement or for a period of 12 months following the termination of this
Agreement.

 

4.             Payment.  In consideration of the Services, ACT will
pay you a total of $7,500 per year payable in four equal installments of $1875
on January 1st , April 1st, July 1st and
October 1st of each year under this Agreement.

 

5.             Independent
Contractor.  You will
provide the Services as an independent contractor, not as an employee.  Nothing herein or in the Assignment Agreement
or the CIIA creates any joint venture, partnership, agency, employment or other
relationship between us, and you acknowledge and agree that you shall not have
the right to bind ACT to any agreement with a third party to incur any
obligation or liability on behalf of ACT. 
You acknowledge your responsibility for and agree to comply with all
federal and state tax laws with respect to any payments you receive under this
Agreement; no fringe or employee benefits are to be provided to you by
ACT.  You further agree not to hold
yourself out as or characterize yourself as our employee for any purpose.

 

6.             Ownership of Work Product.   (a) Any Inventions, work, materials, improve­ments,
concepts, or ideas and the tangible embodiments of same made or conceived by you
in connection with and during the performance of the Services hereunder and
related to the business of ACT (collectively, the “Work”), shall be the sole
and exclusive property of ACT.  During
the performance of the Services, you agree to keep adequate written and
electronic records of your work (properly witnessed for use as invention
records when appropriate), and you agree to submit such records to ACT when
requested or at the termination of this Agreement.  You agree that you will not reproduce any portion
of such notebook records without the prior express written consent of ACT.  You agree that you will promptly and fully
report all inventions, improvements, concepts, or ideas to ACT.

 

(b)  To the extent any Work performed by you under
this Agreement is protectable under U.S. Copyright laws, such Work shall be
considered at “work made for hire” as that phrase is defined by such laws and
shall be owned by and for the express benefit of ACT.  In the event it should be established that
any such Work does not qualify as work made for hire, you agree to, and do
hereby assign to ACT all of its right, title and interest in and to such Work
including, but not limited to, all copyrights therein.  You do further hereby assign all of its
right, title and interest in and to all other Works to ACT, including without
limitation all patents, trademarks and other proprietary rights relating
thereto, and all extensions and renewals thereof.

 

 

2

 

(c)  Both during the term of this Agreement and
thereafter, you shall fully cooperate with ACT in the protection and
enforcement of any Inventions or Patent Rights or any intellectual property
rights that may derive as a result of the work performed by you during the term
of this Agreement.  This shall include
executing, acknowledging, and delivering to ACT all documents or papers that
may be necessary to enable ACT to publish or protect said inventions,
improvements, and ideas.

 

7.             Confidentiality.  All information relating to ACT’s research,
projects and business is highly confidential, and you agree to maintain it in
the strictest confidence and use it only in connection with your work for us
and not for any other purpose.  You
specifically agree not to reveal any such information to any other
persons.  The restrictions in this
paragraph shall not apply to information which: (a) you rightfully had before
you learned it from or about ACT; (b) subsequently becomes known or available
to you from a third party acting lawfully; (c) becomes generally known by
publication, commercial use or otherwise, without violation of this Agreement;
or (d) you develop independently and without reference to or reliance upon any
information from or about ACT.  You agree
to be subject to and bound by the terms and conditions of the CIIA.

8.             No
Conflict.  You
represent that you have not and will not enter into any agreement, arrangement
or understanding with any other party that would in any way conflict or
interfere with this Agreement or that would prevent you from performing
services hereunder without the prior written consent of ACT.  You represent that you have the right to
perform the consulting and advisory services for ACT as provided in this
Agreement without conflict of interest to others and without violating any
confidentiality obligations you may have to others.  ACT enters into this Agreement in reliance
upon such representation by you.  You
acknowledge and agree that the restrictions in this paragraph are necessary to
protect ACT trade secrets and proprietary information, which are essential to ACT’s
business.

9.             Remedies.
You acknowledge that any violation of the restrictions set forth in Paragraphs
6 and 7 of this Agreement may irreparably damage ACT and that such damage may
not be compensable in money. 
Consequently, you consent and agree that ACT shall have, in addition to
all other rights and remedies as may be available, the right to obtain the
issuance of an injunction from any court of competent jurisdiction enjoining
any breach of such restrictions.

10.           Miscellaneous.  This Agreement, including the Assignment
Agreement and the CIIA, sets forth our entire agreement.  It supersedes any prior agreements relating
to the same matters, whether written or oral. 
It may be amended only in writing signed by both parties.  Either party’s failure to enforce any term or
condition of this Agreement shall not be deemed a waiver of such term or
condition.  The rights and obligations of
both parties under Paragraphs 5, 6, 7 and 8 shall survive any termination or
expiration of this Agreement.  This
Agreement is governed by the laws of Massachusetts without regard to principles
of conflicts of laws.  If any provision
of this Agreement is unenforceable, it shall be deemed amended to the extent
necessary to render it enforceable and the rest of the Agreement shall remain
in effect as before.

 

 

3

 

If the foregoing
is in accordance with your understanding and is agreeable, please indicate so
by signing and returning both enclosed copies of this Agreement.  We will return one fully executed original to
you for your files.

 

 

 

ACCEPTED AND AGREED

 

	
  Karen Chapman

  	
  A.C.T. Holdings, Inc.

  
	
   

  	
  Advanced Cell Technology, Inc.

  
	
   

  	
   

  
	
  By:

  	
  /s/ Karen Chapman

  	
   

  	
  By: 

  	
  /s/ William M. Caldwell, IV

  	
   

  
	
   

  	
   

  	
  William M. Caldwell, IV,CEO

  
	
   

  	
   

  
	
  Date: January 15, 2005

  	
  Date: January 15, 2005

  
	
   

  	
   

  
						

 

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EXHIBIT A

SERVICES

 

During the term of this Agreement, Karen Chapman shall provide consulting
services to ACT with respect to the research, development, and
commercialization of stem cell and cloning technologies in the field of
regenerative medicine including, without limitation, the Patent Rights and
Inventions (as that term is defined in the Assignment Agreement).  This consulting may require travel to ACT
(Worcester, MA) from time to time. 
Reasonable travel costs will be paid by ACT.  The consulting duties will vary and involve
those items that the parties agree upon from time to time.Exhibit 10.1

 

SETTLEMENT
AGREEMENT AND MUTUAL RELEASE

 

This
SETTLEMENT AGREEMENT AND MUTUAL RELEASE (the “Settlement Agreement”),
dated as of April 20, 2005, is entered into by and among NewComm Wireless
Services, Inc., a corporation formed under the laws of the Commonwealth of
Puerto Rico (“NewComm” or the “Company”), Telefónica Móviles
S.A., a corporation organized under the laws of Spain (“TEM”),
Telefónica Móviles Puerto Rico, Inc., a corporation organized under the
laws 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 A
hereto (ClearComm and such existing shareholders, jointly, the “Other
Stockholders”).  The Other
Stockholders, together with NewComm and TEM, are collectively referred to
herein as the “Parties” and each individually as a “Party.”

 

W  I  T  N  E  S
S  E  T  H

 

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

 

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

 

WHEREAS, the
Parties have come to dispute certain of their respective rights and obligations
under the Contracts;

 

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

 

WHEREAS, the
Parties also desire to clarify, compromise, settle and resolve fully and
finally, any and all claims, rights, obligations and defenses they may have
under such Contracts.

 

NOW,
THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Settlement Agreement, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the Parties agree as
follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.1              Defined
Terms.  For purposes of this
Settlement Agreement, the following terms shall have the following meanings:

 

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

 

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

 

 

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

 

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

 

“Applicable
Law” shall mean any statute, law, rule or regulation or any judgment,
order, consent order, stipulated agreement, ordinance, writ, injunction or
decree 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 be
equal to $23,490,222 as of the Effective Date.

 

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

 

“Bridge
Loan” shall mean that certain loan agreement by and among NewComm,
ClearComm, TEM Puerto Rico, ABN Amro Bank, N.V., as Administrative Agent, and
LaSalle 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.

 

“Business
Plan” shall mean the business plan of the Company approved by the Board of
Directors on November 30, 2004, a copy of which is attached as Exhibit C
hereto and made a part hereof, as the same shall be amended from time to time
pursuant to the Shareholders Agreement.

 

“Business
Day” shall mean any day other than a Saturday, Sunday or a day on which
banks 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.

 

“Capital
Lease Obligations” shall mean the obligation of any person to pay rent or
other amounts under any lease of (or other arrangement conveying the right to
use) real or personal property, or a combination thereof, which obligations are
required to be classified and accounted for as capital leases on a balance sheet
of such Person under U.S. GAAP, and the amount of such obligations shall be the
capitalized 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.

 

“Convertible
Notes” shall mean (i) the Secured Convertible Promissory Note, (ii) the
Other 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 the
Company, as determined in accordance with U.S. generally accepted accounting
principles applied on a consistent basis, for such period plus, without duplication, (a) provision
for taxes based on income or profits for such period to the extent the same was
deducted in computing the net income, plus
(b) interest expense for such period to the extent the same was deducted
in computing the net income, plus
(c) depreciation and amortization expense for such period to the extent
the same was deducted in computing the net income, plus (d) extraordinary loss and minus (e) extraordinary gains.

 

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

 

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

 

“FCC”
shall mean the Federal Communications Commission.

 

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

 

“FCC
Licenses” shall mean each license, permit, authorization and concession
granted by the FCC and held by the Company relating to the Business.

 

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

 

“FCC
Related Debt” shall mean any outstanding installment payment owed to the
FCC as of the Effective Date with respect to the Personal Communications
Services (“PCS”) license held by NewComm, as
set forth on Exhibit D hereto.

 

“File” shall have the
meaning 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 to
any Person, including but not limited to payments to vendors, suppliers, and
providers of services, whether through oral

 

3

 

or written
arrangements, made by NewComm and acknowledged or approved in writing by any
TEM Senior Executive (ii) accounting practices, and (iii) reimbursement
of 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 deliberate
intention of obtaining an undue and unlawful financial gain for TEM or any TEM
Senior Executive or any other Affiliate of TEM and causing a financial loss to
NewComm.  It is expressly agreed that
management, strategic, technical or business decisions or such other acts or
omissions of any nature or kind whatsoever and communication of, or failure to
communicate, such decisions shall be excluded from Fraud, provided that
the foregoing shall not preclude NewComm from pursuing any right or claim it
may have against TEM under Section 2.2(a)(y) to the extent such decisions
were intended to result, and have resulted, in any acts referred to in the
preceding sentence.  Nothing contained in
this definition shall relieve, or be deemed to relieve, NewComm of its burden
of proving, by clear and convincing evidence, each of the elements of common
law fraud under Florida law.

 

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

 

“Guarantee”
shall mean any obligation, contingent or otherwise, of the guarantor
guaranteeing or having the economic effect of guaranteeing any Indebtednesses
or 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 for
the purchase or payment of) any security for the payment thereof, (b) to
purchase or lease properties, securities or services for the purpose of
assuring the owner of such Indebtedness or other obligation of the payment
thereof, (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other obligation or (d) as
an account party in respect of any letter of credit or letter of guarantee
issued to support such Indebtedness or obligation, provided that the
term Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business.

 

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

 

“Governmental
Entity” shall mean any domestic or foreign court or tribunal in any
domestic or foreign jurisdiction or any federal, state, municipal or local
government or other governmental body, agency, authority, district, department,
commission, board, bureau, or other instrumentality, arbitrator or arbitral
body (domestic or foreign), including any joint action agency, public power
authority, public utility district, or other similar political subdivision.

 

“Hedging
Agreement” shall mean any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency rate or commodity price hedging agreement.

 

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

 

4

 

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

 

“Interest
Note” shall mean that certain promissory note in a principal amount equal
to $8,597,045.07, representing the accrued interest on the Secured Convertible
Promissory Note and the Other Convertible Notes, substantially in the form
attached as Exhibit E hereto.

 

“Joint
Venture Agreement” shall mean that certain joint venture agreement into by
and between TEM, as a successor in interest to Telefónica Larga Distancia de
Puerto Rico, Inc., and ClearComm dated as of February 4, 1999, as
amended 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 or
of such asset, (b) the interest of a vendor (or any financing lease having
substantially the same economic effect as any of the foregoing) relating to
such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.

 

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

 

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

 

“Liquidation/Sale
Event” shall
mean any of the following events: (a) a Sale of the Company or (b) a
Liquidation of the Company.

 

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

 

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

 

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

 

5

 

“Lucent
Debt” shall mean any outstanding amount owed by NewComm to Lucent under the
Senior Credit Agreement.

 

“Management
Agreement” shall mean that certain management agreement by and between
NewComm and TEM, as a successor in interest to Telefónica Larga Distancia de
Puerto Rico, Inc., dated as of March 3, 1999, as amended from time to
time.

 

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

 

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

 

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

 

“NewComm
Senior Executive” shall mean any of the following individuals: Lawrence
Odell Peck and Javier O. Lamoso, solely in their respective capacities as
director and general manager of NewComm.

 

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

 

“Other
Convertible Notes” shall mean (i) that certain convertible promissory
notes issued by NewComm to TEM Puerto Rico, as a successor in interest to
Telefónica Larga Distancia de Puerto Rico, Inc., on November 2, 2000,
(ii) that certain second convertible promissory notes issued by NewComm to
TEM Puerto Rico, as a successor in interest to Telefónica Larga Distancia de
Puerto Rico, Inc., on December 15, 2000, (iii) that certain
third convertible promissory notes issued by NewComm to TEM Puerto Rico, as a
successor in interest to Telefónica Larga Distancia de Puerto Rico, Inc.,
on May 1, 2001, (iv) that certain fourth convertible promissory notes
issued by NewComm to TEM Puerto Rico, as a successor in interest to Telefónica
Larga Distancia de Puerto Rico, Inc., on May 20, 2002 and (v) that
certain fifth convertible promissory notes issued by NewComm to TEM Puerto
Rico, as a successor in interest to Telefónica Larga Distancia de Puerto Rico, Inc.,
on December 27, 2002.

 

“Other
Stockholders” 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 or
other entity.

 

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

 

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

 

6

 

Development
Ventures, LLC, a Massachusetts limited liability company, Opportunity Capital
Partners IV, L.P., a Delaware limited partnership, Power Equities, Inc., a
Delaware corporation, and NewComm dated as of March 12, 2002, as amended
from time to time.

 

“Sale of
the Company” shall mean (i) a transfer of all of the outstanding
equity interests of the Company; (ii) a transfer of substantially all of
the assets of the Company or (iii) the merger, consolidation or other
business combination of the Company with or into another Person, in each case
under circumstances in which the holders of outstanding capital stock of the
Company, immediately prior to such transaction, own less than 50% in voting
power of the outstanding capital stock of the surviving or resulting
corporation or acquirer, as the case may be, immediately following such
transaction.

 

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

 

“Secured Convertible
Promissory Note” shall mean that certain secured convertible promissory
note issued by NewComm to TEM Puerto Rico, as a successor in interest to
Telefónica Larga Distancia de Puerto Rico, Inc., on March 3, 1999, as
amended from time to time.

 

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

 

“Senior
Credit Agreement” shall mean that certain senior secured credit agreement
by and between NewComm and Lucent dated as of June 4, 2003, as amended
from time to time.

 

“Settlement
Agreement” shall have the meaning set forth in the Preamble.

 

“Shareholders
Agreement” shall mean that certain shareholders agreement by and among
NewComm, ClearComm, TEM Puerto Rico, as a successor in interest to Telefónica
Larga Distancia de Puerto Rico, Inc., and the other parties named therein
dated as of March 12, 2002, as amended from time to time.

 

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

 

“Stock
Purchase Agreement” shall mean that certain stock purchase agreement
entered into by and between TEM Puerto Rico, as a successor in interest to
Telefónica Larga Distancia de Puerto Rico, Inc., and ClearComm dated as of
March 12, 2002, as amended from time to time.

 

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

 

7

 

“Technology
Transfer Agreement” shall mean that certain technology transfer agreement
entered into by and between NewComm and TEM, as a successor in interest to
Telefónica Internacional, S.A., a corporation organized under the laws of
Spain, dated as of March 3, 1999, as amended from time to time.

 

“Technology
Transfer Fee” shall mean the annual fee (payable quarterly in arrears)
payable under the Technology Transfer Agreement equal to one percent (1%) of
the 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.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE II

MUTUAL WAIVER
AND RELEASE

 

Section 2.1              Mutual
Release.

 

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

 

8

 

money, expenses, specialties, fees and costs of any
kind and nature whatsoever (whether direct, indirect, consequential, incidental
or otherwise), known or unknown, suspected or unsuspected, in their own right
or derivatively, in law or in equity, which any of them ever had, now has, or hereafter
shall or may have, against any other of them, on account of, arising from,
relating to, or in connection with the Contracts (including, without
limitation, any act or omission or other matter or thing whatsoever arising
from, relating to, or in connection with the negotiation, execution and
performance of the Contracts) and occurring prior to and including the
Effective Date, provided, however, that the foregoing shall not
release TEM from any of its obligations under this Settlement Agreement.

 

(b)  Subject
to Section 2.2, each of TEM, for itself and, to the extent it has the
legal ability to do so, on behalf of its former, present and future officers,
directors, agents, employees, Affiliates, assigns and predecessors and
successors in interest do hereby and forever waive, release and discharge each
of NewComm and the Other Stockholders and their respective Affiliates,
officers, directors, agents, employees, assigns and predecessors and successors
in interest from any and all losses, claims, liabilities, controversies,
demands, actions, complaints, suits, causes of action of any kind and nature
whatsoever (including, without limitation, those sounding in contract or tort,
loss of profits, interference with business contracts, interference with contractual
relations, damage to business reputation, increased cost of doing business,
interference with expectancy of business advantage, in each case, current or
prospective), 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 and
nature whatsoever (whether direct, indirect, consequential, incidental or
otherwise), known or unknown, suspected or unsuspected, in their own right or
derivatively, in law or in equity, which any of them ever had, now has, or
hereafter shall or may have, against any other of them, on account of, arising
from, relating to, or in connection with the Contracts (including, without limitation,
any act or omission or other matter or thing whatsoever arising from, relating
to, or in connection with the negotiation, execution and performance of the
Contracts) and occurring prior to and including September 30, 2004, provided,
however, that the foregoing shall not release NewComm and the Other
Stockholders from any of their respective obligations under this Settlement
Agreement.

 

(c)  The
consequences of the foregoing waiver, release and discharge provisions have
been explained by each of the Parties’ respective counsel.  Each of the Parties acknowledges that it may
hereafter discover facts different from, or in addition to, those which they
now know or believe to be true, and agree that this Settlement Agreement and
the releases contained herein shall be and remain effective in all respects
notwithstanding such different or additional facts or the discovery thereof.

 

(d)  The
Parties acknowledge that the release is given for adequate, valid and
sufficient consideration, including the acceptance of the obligations set forth
in this Settlement Agreement.  In the
event after the Effective Date, any Party shall breach any provision set forth
in this Settlement Agreement (other than the release), the other Parties will
be entitled to remedies in contract for the breach of the obligations set forth
in this Settlement Agreement, however, the validity of the releases contained
herein shall not be affected. 
Notwithstanding anything to the contrary herein or any acts or events
following the Effective Date, the releases

 

9

 

contained herein are
irrevocable and, from the Effective Date shall be and remain effective in all
respects.

 

(e)  To
the extent Applicable Law would not otherwise recognize the provisions of
subsections (a) and (b) of this Section 2.2 as constituting a
full and final release applying to all unknown and unanticipated claims, as
well as those now known or disclosed, the Parties hereby expressly waive all
rights or benefits which either one or any of them may have against any other
counterparty now or in the future under any such Applicable Law.

 

(f)  In
consideration 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 of
the Management Agreement.  As a result
thereof, NewComm’s response letter to TEM dated November 10, 2004 shall be
of no further force and effect.

 

Section 2.2              Limitation
of Mutual Release.

 

(a)  It
is the intent of the Parties that the scope of the release provided for in this
Settlement Agreement shall be as broad and complete as possible and shall have
the benefits of the doctrines of res
judicata and collateral estoppel to the fullest extent allowed by
law and limited only by the provisions of this Section 2.2.  Nothing whatsoever provided or contained in
this 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 Party
from its obligations, duties, agreements and other warranties expressly
incurred or otherwise arising under this Settlement Agreement, (x) shall be
construed as, or deemed to be a release of, or to release, NewComm from its delivery
and 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 or
other claim that NewComm may have against TEM because of any Fraud committed by
TEM or any TEM Senior Executives in their performance of Management Services
under the Management Agreement, which caused damages to NewComm of $250,000
(two hundred and fifty thousand dollars) or more in the aggregate (the “Threshold
Amount”) or (z) shall be construed as, or deemed to be a release of, or to
release, TmAS from its obligations under Article V hereof.

 

(b)  In
connection with a claim of alleged Fraud by NewComm, NewComm shall have up to
one-hundred eighty (180) days from the Effective Date to deliver a notice of
claim (the “Notice of Claim”) to TEM (i) alleging with reasonable
particularity that Fraud occurred, which caused damages in excess of the
Threshold Amount and (ii) providing TEM with a full, complete and accurate
file (the “File”) containing any evidence of the alleged Fraud and other
relevant documentation (including potentially exculpatory documents) relating
to the services rendered under the Management Agreement, provided that
NewComm shall not be allowed to submit more than one Notice of Claim within the
one hundred eighty (180) day period starting from the Effective Date.  TEM shall then have forty five (45) days from
receipt of such Notice of Claim from NewComm either to accept the occurrence of
Fraud alleged by NewComm or deny it.  As
soon as reasonably practicable after the delivery of the Notice of Claim by
NewComm to TEM, NewComm shall grant TEM full and complete access to all
information, documents (including emails), records and personnel that TEM may
reasonably request to prepare TEM’s

 

10

 

response and TEM
shall be entitled to obtain copy of any such documents (including emails) and
records.

 

(c)  In
the event TEM accepts the occurrence of Fraud alleged by NewComm or wishes to
engage in settlement discussions, TEM and NewComm shall engage in efforts to
monetarily quantify as soon as reasonably practicable the amount of any
overpayment or improper payment, as the case may be, represented by the Fraud
committed.  Upon reaching an agreement in
writing of such amount, which shall be binding, final and conclusive on the
Parties, TEM shall, within five (5) Business Days after its receipt of an
executed release from NewComm (to be effective upon NewComm’s receipt of the
agreed amount), restore such amount to NewComm. 
Such amount shall be transferred in immediately available funds to such
bank accounts as shall be designated by NewComm to TEM.

 

(d)  Notwithstanding
Section 12.16, in the event (i) TEM denies the occurrence of Fraud or
(ii) upon acceptance of the occurrence of Fraud, TEM and NewComm are
unable to agree on the amount of damages within thirty (30) days from such
acceptance, such dispute shall be finally and exclusively resolved by
arbitration in accordance with the CPR Institute for Dispute Resolution Rules for
Non-Administered Arbitration of International Disputes (“CPR Rules”),
except to the extent modified herein, by a sole arbitrator (“Arbitrator”).  The Neutral Organization (as defined in the
CPR Rules) designated to perform the functions specified in Rules 5, 6 and
7 of the CPR Rules shall be the CPR Institute for Dispute Resolution (“CPR”).  TEM shall select the Arbitrator (such
Arbitrator to be reasonably acceptable by NewComm, which acceptance may not be
unreasonably withheld or delayed) within (30) thirty days after TEM’s receipt
from NewComm of a Notice of Arbitration under Rule 2 of the CPR Rules, provided
that if the Parties fail to designate an Arbitrator, TEM may apply to the CPR
to appoint one.  Judgment upon the award
rendered by the Arbitrator (the “Award”) may be entered by any court
having jurisdiction thereof.  The seat of
arbitration shall be Miami, Florida.  The
arbitration shall be conducted in the English language, and any Spanish
language documents shall be accompanied by English language translations in any
submissions to the Arbitrator.

 

(e)  In
order to expedite the arbitration proceedings, the Parties agree that (a) NewComm
shall serve a Notice of Arbitration (as defined in the CPR Rules) that
satisfies the requirements of Rule 3.3 of the CPR Rules and includes
each of the elements of a pre-hearing memorandum as set forth in Rule 12.1
of the CPR Rules (including the documents relied upon by NewComm); and (b) NewComm
shall continue to make available the File to TEM and, concurrently with its
service of a Notice of Arbitration, make available to TEM any other documents
(in hard-copy and electronic form) relevant to NewComm’s claim and not
otherwise relied upon by NewComm and included with the Notice of Arbitration; (c) within
ninety (90) days after receipt of NewComm’s Notice of Arbitration, TEM shall
serve a Notice of Defense (as defined in the CPR Rule) (including any
counterclaims) that satisfies the requirements of Rule 3.5 of the CPR Rules and
includes each of the elements of a pre-hearing memorandum as set forth in Rule 12.1
of the CPR Rules (including the documents relied upon by TEM).  Each Party further agrees to cooperate with
the Arbitrator and to (i) provide the Arbitrator with access to books, records,
personnel and representatives and (ii) deliver to the Arbitrator all
evidence and documents required by such Arbitrator and relevant and necessary,
in the sole and discretionary opinion of the Arbitrator for its determination
of the alleged Fraud and/or the amount of the damages, if any, resulting from
such Fraud.  Each Party providing
evidence, document or

 

11

 

information to the
Arbitrator shall deliver to the other Party, simultaneously herewith copies of
the exact same evidence, document or information.

 

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

 

(g)  If
the Arbitrator determines the evidence is sufficient to constitute Fraud, TEM
shall, within five (5) Business Days from receipt of the Arbitrator’s
Award, restore the Fraud Amount to NewComm (after being netted, if applicable
to the particular case, with any amount owed by NewComm to any Affiliate of TEM
under related contractual arrangements), provided that TEM shall not
have any obligation to restore such amount to NewComm until NewComm have
suffered damages resulting from such Fraud in excess of the Threshold Amount,
at which time NewComm will be entitled to indemnification for all such damages
and not only those in excess in the Threshold Amount; provided, however,
that the aggregate liability of TEM (including, without limitation, any claim
for interest) to indemnify NewComm for any and all claims of Fraud shall not
exceed $5,000,000 (five million dollars) and, provided, further,
that any damages resulting from the Fraud shall be limited to compensatory
damages and shall exclude any consequential damages or any or punitive or other
exemplary damages (including, without limitation, treble damages).  Such amount shall be transferred in immediately
available funds to such bank accounts as shall be designated by NewComm to
TEM.  In the event the Arbitrator
determines the evidence is sufficient to constitute Fraud but the Fraud Amount
is less that the Threshold Amount, NewComm shall pay all fees and expenses
relating to the work performed by the Arbitrator.  In the event the Arbitrator determines the
evidence is sufficient to constitute Fraud and the Fraud Amount is in excess of
the Threshold Amount, TEM shall pay all fees and expenses relating to the work
performed by the Arbitrator.  Each Party
agrees to pay its own legal fees and expenses incurred in connection with the
arbitration proceeding.

 

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

 

(i)  The
Parties, the Arbitrator and the Neutral Organization shall treat the fact of
the arbitration, the arbitral proceedings, any and all submissions to the
Arbitrator, and the Arbitrator’s decisions (including the Award), as
confidential, except in connection with judicial proceedings ancillary to the
arbitration, such as a judicial challenge to, or enforcement of, an award, and
unless otherwise required by Applicable Law. 
To the extent possible, any specific issues of confidentiality should be
raised with and resolved by the Arbitrator.

 

12

 

ARTICLE III

PAYMENT AND
CAPITALIZATION OF THE FEES

 

Section 3.1              Payment
of the Fees.

 

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

 

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

 

(c)  ClearComm
shall receive a convertible promissory note in the amount of $310,416.80 and
substantially in the form attached as Exhibit E hereto in full
satisfaction of the payment of the service fee due to ClearComm by NewComm
under the consulting services agreement dated May 1, 1999, accrued and not
paid until the Effective Date. The aforementioned consulting services agreement
is hereby terminated and none of the parties thereto shall have any further
right or obligation with respect thereto or the subject matter thereof whether arising
prior to, on or after the Effective Date.

 

Section 3.2              Capitalization
of the Promissory Notes.

 

(a)  On
the 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 stock
upon the terms and subject to the conditions set forth on the promissory notes
attached as Exhibit E hereto.

 

(b)  The
Parties agree to adopt and cause the shareholders and the board of directors of
the Company to adopt the resolutions necessary to execute such capitalization
on the Effective Date.

 

ARTICLE IV

CAPITALIZATION
OF LOANS

 

Section 4.1              Capitalization
of FCC Loans.  The loans granted by
ClearComm 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 purposes
of meeting the matured portion of the FCC debt (the “FCC Loans”) will be
capitalized on the Effective Date.  The
Parties agree to (i) adopt and cause the shareholders and the board of
directors of the Company to adopt the resolutions necessary to execute such
capitalization on the Effective Date and (ii) issue convertible promissory
notes for the aforementioned amounts and substantially in the form attached as Exhibit E
hereto.

 

13

 

Section 4.2              Maximum
Amount of Share Ownership.  On or
prior to the Effective Date, (i) upon conversion of the Convertible Notes
and (ii) upon capitalization of the FCC Loans pursuant to Section 4.1
hereof, TEM Puerto Rico shall receive an aggregate amount of shares of the
Company equal to forty-nine point nine percent (49.9%) and the Other
Stockholders shall hold an aggregate amount of shares of the Company equal to
fifty point one percent (50.1%) of all of the Company’s issued and outstanding
shares of capital stock on a fully diluted basis as of the date of such
conversion.

 

ARTICLE V

REVIEW AND
TERMINATION OF OTHER AGREEMENTS

 

Section 5.1              SCL
Agreements.

 

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 SCL
Agreements until the Effective Date (but excluding any amounts owed under the
2005 Maintenance Agreement), and (ii) enter into a letter agreement with
NewComm, attached hereto, which provides for an annual maintenance fee of
$450,000.  NewComm acknowledges that TmAS
is a separate legal entity and that any negotiations with respect to future
pricing terms and conditions shall have to be at arm’s length and be conducted
solely between NewComm and TmAS.

 

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

 

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

 

ARTICLE VI

PREMIUM
PAYMENT

 

Section 6.1              Payment
of the Premium.  Upon the earlier to
occur of (i) a Liquidation/Sale Event, (ii) an SPA Change of Control
or (iii) the fifth anniversary of the Effective Date, TEM Puerto Rico
shall, 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 (as
defined in the Stock Purchase Agreement), as the case may be, subject to the terms
set forth in Sections 6.2 and 6.3 hereof.

 

14

 

Section 6.2              Payment
of the Premium upon a Sale/Liquidation Event.

 

(a)  In
the 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 Other
Stockholders as of the Effective Date (the “Premium Stock”) from the
Liquidation/Sale Proceeds, subject to the terms set forth in this section.

 

(b)  In
the 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 share
ownership in the Company calculated on a fully diluted basis as of the
Liquidation/Sale Effective Date and there shall be no Premium payable.

 

(c)  In
the event the Liquidation/Sale Proceeds exceed the sum of the Base Value plus
the Additional Subscribed Value, the holder of the Premium Stock, without
regard to any change of ownership of the Premium Stock between the Effective
Date and the Liquidation/Sale Event, shall have the right and be entitled to
receive, in addition to the percentage of such proceeds corresponding to its
percentage equity ownership interest in the Company represented by the Premium
Stock an incentive/settlement premium (the “Premium”) payment from TEM
Puerto Rico of an incremental percentage of the Liquidation/Sale Proceeds
calculated as follows (such Premium to be allocated among the holders of
Premium 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 total
number of shares of Premium Stock):

 

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

 

in which,

 

“SP” refers
to the positive difference, if any, between (i) the Liquidation/Sale
Proceeds and (ii) the sum of
the Base Value plus the
Additional Subscribed Value.

 

Set forth in Exhibit F
hereto are charts illustrating the Premium payable to the Premium Stock at
various levels of dilution of the capital stock existing as of the Effective
Date.

 

(d)  With
respect to the payment of the Premium, to the extent the Liquidation/Sale
Proceeds include proceeds received by way of deferred payment pursuant to
promissory notes, earn-outs, receivables or other forms of non-cash
compensation, the Premium to be paid pursuant to Section 6.1(a) and (c) shall
be calculated and paid as follows:

 

(i)                                     with
respect to the portion of Liquidation/Sale Proceeds received by TEM Puerto Rico
in cash at the time of the completion of the Liquidation/Sale Event, on the
portion of the cash consideration received by TEM Puerto Rico as of such date
by calculating the amount of any Premium as though such cash proceeds
represented the full Liquidation/Sale Proceeds; and

 

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

 

15

 

(ii)                                  with
respect to the portion of the Liquidation/Sale Proceeds received by TEM Puerto
Rico by way of deferred payment or other non-cash consideration (including
earn-out) at the time such deferred payment or other non-cash consideration is
received by TEM Puerto Rico in cash, by calculating the amount of any Premium
in which the Liquidation/Sale Proceeds are equal to the sum of (x) the cash
proceeds received in (i) above plus (y) the cash received on a
deferred basis (discounted at a yield equivalent to U.S. treasury note for a
similar life for the time elapsed between the Liquidation/Sale Event and the
receipt of such deferred cash proceeds) and subtracting from the adjusted
Premium payable under this clause (ii) any amounts paid as Premium
pursuant to clause (i) above.

 

(e)  With
respect to the payment of the Premium, to the extent the Liquidation/Sale
Proceeds 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 actually
received by TEM Puerto Rico without giving effect to any subsequent changes in
value of such non-cash proceeds.

 

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

 

(g)  It
is acknowledged and agreed that the Premium shall under no circumstances (i) exceed
16.6% of the Liquidation/Sale Proceeds, nor (ii) exceed the proportion of
the Liquidation/Sale Proceeds payable and actually paid to TEM Puerto Rico due
to the shares of the Company’s capital stock it held at the time of the
Effective Date and that it still holds on the Liquidation/Sale Effective Date, provided
that the shares of capital stock held by TEM Puerto Rico at the time of the
Effective Date and thereafter sold to a third party, if any, shall be deemed as
if still held by TEM Puerto Rico.

 

(h)  The
Parties hereby agree that it is a condition precedent to (x) the Sale of the
Company or (y) the acquisition by ClearComm of TEM Puerto Rico’s equity
interests in NewComm under the Sale Agreement that (i) the Bridge Loan or
the Long-Term Financing, as the case may be, shall have been either repaid or
assumed and each of TEF, TEM, TEM Puerto Rico and ClearComm has been fully and
unconditionally released from its guarantee obligations thereunder and received
payment in full, including interest, as to any payments made pursuant to such
guarantees and (ii) the FCC Related Debt shall have been either repaid or
assumed and each of Telefónica S.A. and TEM has been fully and unconditionally
released from its guarantee obligations thereunder.

 

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

 

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

 

16

 

holders, at that
time, of Premium Stock, based on the appraised value of NewComm estimated by
the investment bank preparing an Equity Valuation pursuant to the procedures
set forth in Section 2.02(b) and (c) of the Stock Purchase
Agreement.  The investment bank shall be
instructed 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) be
an Equity Valuation with respect to which the investment bank would be prepared
to deliver a written fairness opinion if so requested by the parties.

 

(b)  In
the 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)  In
the event the Equity Valuation exceeds the sum
of the Base Value plus the
Additional Subscribed Value, the holder of the Premium Stock, without regard to
any change of ownership of the Premium Stock between the Effective Date and the
SPA Change of Control or fifth anniversary of the Effective Date, as the case
may be, shall have the right and be entitled to receive a Premium payment from
TEM Puerto Rico calculated as follows (such Premium to be allocated among the
holders of Premium Stock at the time of the SPA Change of Control or fifth
anniversary 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 total
number of shares of Premium Stock):

 

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

 

in which,

 

“SP” refers
to the positive difference, if any, between (i) the Equity Valuation and (ii) the
sum of the Base Value plus the
Additional Subscribed Value.

 

(d)  It
is acknowledged and agreed that the Premium shall under no circumstances (i) exceed
16.6% of the Equity Valuation, nor (ii) exceed the proportion of the
Equity Valuation attributable to TEM Puerto Rico due to the shares of the
Company’s capital stock it held at the time of the Effective Date and that it
still holds at the time of the fifth anniversary of the Effective Date or
immediately before the SPA Change of Control, as the case may be, provided
that the shares of capital stock held by TEM Puerto Rico at the time of the
Effective Date and thereafter sold to a third party, if any, shall be deemed as
if still held by TEM Puerto Rico.

 

ARTICLE VII

INVESTMENT
EXIT

 

Section 7.1              Triggering
Event.  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) (such
number being 50% of the arithmetic average of the 2005 and 2006 EBITDA figures
of NewComm as projected in the Business Plan), the Other

 

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

 

17

 

Stockholders agree, if so requested in writing by TEM (the “Exit
Notice”), to dispose of TEM’s and the Other Stockholders’ interests in
NewComm (whether by sale, exchange, merger, consolidation, transfer,
distribution or any other disposition of any kind and in an manner, by operation
of law or otherwise) in accordance with the procedure set forth in Section 2.1(d) of
the 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 Sale
Agreement) and the Liquidity Valuation (as defined in the Sale Agreement) shall
be determined pursuant to Section 2.1(b) of the Sale Agreement.  In the absence of a Sale of the Company
pursuant to Section 2.1(d) of the Sale Agreement, it is expressly
agreed among the Parties that Section 2.1(c) of the Sale Agreement
shall apply.

 

ARTICLE VIII

DEBT
REPAYMENT

 

Section 8.1              Debt
Repayment Clause.  The Parties agree
that from and after the Effective Date and for so long as the Company has any
obligations under the Bridge Loan, the Lucent Debt or the FCC Related Debt, as
applicable, 15% of the aggregate gross proceeds (other than from TEM and the
Other Stockholders) of any capital increase of the Company shall be used as
follows 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 Bridge
Loan; and

 

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

 

ARTICLE IX

REPRESENTATIONS
AND WARRANTIES

 

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

 

(a)  Due
Organization, Standing and Authority.  NewComm is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its formation.  NewComm has all necessary power and authority
to execute, deliver and perform its obligations under this Settlement Agreement
as contemplated by its formation agreements, by-laws, or other charter,
organizational or governing documents (collectively, the “Governing
Documents”).

 

(b)  Authorization
and Validity of Settlement Agreement.  The execution, delivery and performance of
this Settlement Agreement (a) are within NewComm’s powers, (b) have
been duly authorized by all necessary action on NewComm’s behalf and all
necessary consents or approvals have been obtained and are in full force and
effect and (c) do not violate any of the terms and conditions of (i) NewComm’s
Governing Documents, (ii) any Applicable Law, or (iii) any contracts
to which NewComm is a party (except with respect to (c)(i) and (ii) for
such violations that would not be reasonably expected to have a material
adverse affect on

 

18

 

NewComm’s ability to consummate the
transactions contemplated by this Settlement Agreement).

 

(c)  Enforceability.  This Settlement Agreement has been duly
executed and delivered on behalf of NewComm and constitutes a legal, valid and
binding obligation of NewComm, enforceable against it in accordance with its
terms, except that such enforceability may be limited by (a) applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors’ rights generally, and (b) equitable principles which may limit
the availability of certain equitable remedies (such as specific performance).

 

(d)  List
of Stockholders.  The
list of existing stockholders set forth on Exhibit A hereto is the
full, complete and accurate list of NewComm’s shareholders and there are no
other stockholders of NewComm other than TEM Puerto Rico, upon conversion of
the Convertible Notes and other obligations of the Company pursuant to Articles
III and IV hereof.

 

(e)  No
Knowledge of Fraud. 
Other than as set forth on Schedule 9.1(e) hereto, neither
NewComm nor any of the NewComm Senior Executives is aware of any alleged Fraud with respect to the services
rendered by TEM under the Management Agreement regarding which NewComm intends
to assert a claim pursuant to Section 2.2(b) hereof.

 

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

 

(a)  Due
Organization, Standing and Authority.  TEM is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its formation.  TEM has all necessary power and authority to
execute, deliver and perform its obligations under this Settlement Agreement as
contemplated by its Governing Documents.

 

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

 

(c)  Enforceability.  This Settlement Agreement has been duly
executed and delivered on behalf of TEM and constitutes a legal, valid and
binding obligation of TEM, enforceable against it in accordance with its terms,
except that such enforceability may be limited by (a) applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors’ rights generally, and (b) equitable principles which may limit
the availability of certain equitable remedies (such as specific performance).

 

Section 9.3              Representations
and 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.

 

19

 

(a)  Due
Organization, Standing and Authority.  TEM Puerto Rico is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
formation.  TEM Puerto Rico has all
necessary power and authority to execute, deliver and perform its obligations
under this Settlement Agreement as contemplated by its Governing Documents.

 

(b)  Authorization
and Validity of Settlement Agreement.  The execution, delivery and performance of
this Settlement Agreement (a) are within TEM Puerto Rico’s powers, (b) have
been duly authorized by all necessary action on TEM Puerto Rico’s behalf and
all necessary consents or approvals have been obtained and are in full force
and effect and (c) do not violate any of the terms and conditions of (i) TEM
Puerto Rico’s Governing Documents, (ii) any Applicable Law, or (iii) any
contracts 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 a
material adverse affect on TEM Puerto Rico’s ability to consummate the
transactions contemplated by this Settlement Agreement).

 

(c)  Enforceability.  This Settlement Agreement has been duly
executed and delivered on behalf of TEM Puerto Rico and constitutes a legal,
valid and binding obligation of TEM Puerto Rico, enforceable against it in
accordance with its terms, except that such enforceability may be limited by (a) applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors’ rights generally, and (b) equitable principles which may limit
the availability of certain equitable remedies (such as specific performance).

 

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

 

(a)  Due
Organization, Standing and Authority.  ClearComm is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its formation.  ClearComm has all necessary power and
authority to execute, deliver and perform its obligations under this Settlement
Agreement as contemplated by its Governing Documents.

 

(b)  Authorization
and Validity of Settlement Agreement.  The execution, delivery and performance of
this Settlement Agreement (a) are within ClearComm’s powers, (b) have
been duly authorized by all necessary action on ClearComm’s behalf and all necessary
consents or approvals have been obtained and are in full force and effect and (c) do
not violate any of the terms and conditions of (i) ClearComm’s Governing
Documents, (ii) any Applicable Law, or (iii) any contracts to which
ClearComm is a party (except with respect to (c)(i) and (ii) for such
violations that would not be reasonably expected to have a material adverse
affect on ClearComm’s ability to consummate the transactions contemplated by
this Settlement Agreement).

 

(c)  Enforceability.  This Settlement Agreement has been duly
executed and delivered on behalf of ClearComm and constitutes a legal, valid
and binding obligation of ClearComm, enforceable against it in accordance with
its terms, except that such enforceability may be limited by (a) applicable
bankruptcy, insolvency, reorganization, moratorium and similar

 

20

 

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

 

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

 

(a)  Due
Organization, Standing and Authority.  Each Party is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
formation.  Each Party has all necessary
power and authority to execute, deliver and perform its obligations under this
Settlement Agreement as contemplated by its Governing Documents.

 

(b)  Authorization
and Validity of Settlement Agreement.  The execution, delivery and performance of
this Settlement Agreement (a) are within each Party’s powers, (b) have
been duly authorized by all necessary action on each Party’s behalf and all
necessary consents or approvals have been obtained and are in full force and
effect and (c) do not violate any of the terms and conditions of (i) each
Party’s Governing Documents, (ii) any Applicable Law, or (iii) any
contracts to which a Party is a party (except with respect to (c)(i) and (ii) for
such violations that would not be reasonably expected to have a material
adverse affect on the Party’s ability to consummate the transactions
contemplated by this Settlement Agreement).

 

(c)  Enforceability.  This Settlement Agreement has been duly
executed and delivered on behalf of each Party and constitutes a legal, valid
and binding obligation of each Party, enforceable against it in accordance with
its terms, except that such enforceability may be limited by (a) applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors’ rights generally, and (b) equitable principles which may limit
the availability of certain equitable remedies (such as specific performance).

 

ARTICLE X

COVENANTS

 

Section 10.1                      NewComm’s
Duty to Inform TEM.  NewComm shall
notify TEM as promptly as practicable if any knowledge of any alleged Fraud
comes 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 to
the Effective Date and fails to notify TEM as promptly as practicable before
the Effective Date, then for purposes of TEM’s liability under Section 2.2
hereof, no claim for indemnification shall be made.

 

Section 10.2                      FCC
License.

 

(a)  The
Parties agree to cooperate in
good faith and as soon as reasonably practicable, but in any event  (i) prior to the expiration of the FCC
Authorization, ClearComm, NewComm and TEM Puerto Rico shall make any necessary
and appropriate filings with the FCC reflecting that ClearComm and TEM will not
be consummating the transfer of control pursuant to the terms of the FCC
Authorization; and (ii) within thirty (30) days after TEM Puerto Rico
shall have exercised the conversion feature of the Convertible Notes and TEM
Puerto Rico shall have received 49.9% of NewComm’s capital stock, ClearComm,
NewComm and TEM Puerto

 

21

 

Rico shall make any necessary
and appropriate filings with the FCC reflecting the acquisition of 49.9% of
NewComm’s capital stock by TEM Puerto Rico.

 

(b)  Upon
TEM’s decision to assume the control of NewComm pursuant to and under the terms
and conditions of the Stock Purchase Agreement, the Parties agree to cooperate
in good faith and use their commercially reasonable best efforts to take or cause
to 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 obtaining
of the authorization granted on August 12, 2004 by the FCC to the
Purchaser relating to the transfer of control of NewComm to the Purchaser) as
soon as reasonably practicable.  Each
Party agrees to use its best efforts to furnish to each other such information
and assistance and to consult with respect to the terms of any filing,
registration, application or undertaking as may be requested in connection with
the foregoing.

 

Section 10.3                      Third
Party Offer.  Each Party agrees to
inform the Board of Directors and the other Parties as soon as reasonably
practicable 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 the
Company, any sale of all or any parts of the assets of the Company or any
similar transaction involving the Company (such transaction, an “Acquisition
Transaction”).  Each Party further
agrees not to engage in any discussions or negotiations with, or provide
information to, any Person (other than the other Parties and the Board of
Directors) with respect to any Acquisition Transaction and shall promptly
communicate to the Board of Directors the material terms of such proposals and
any documents received in connection therewith.

 

Section 10.4                      Further
Assurances.

 

(a)  Each
of 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 cause
to be done, all things necessary, proper or advisable to consummate and make
effective the transactions contemplated by this Agreement, including using its
commercially reasonable best efforts to satisfy each of the conditions set
forth in Section 11.1 hereto.

 

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

 

Section 10.5                      Long-Term
Financing.

 

(a)  TEM
agrees to undertake all commercially reasonable actions necessary to refinance
the Bridge Loan on the third anniversary of the Effective Date, with two-year
term loan maturing on the fifth anniversary of the Effective Date (the “Long-Term
Financing”) and, in respect thereof, to cause TEF to guarantee the prompt
and complete payment and performance by NewComm when due (whether at stated
maturity, by acceleration or otherwise) of the Long-Term Financing (the “TEF
Guarantee”), it being understood that TEF Guarantee shall be under terms
reasonably acceptable to TEF, which in any case shall not be substantially
different from any other corporate guarantees customarily issued by TEF.

 

22

 

(b)  The
Parties acknowledge that the Long-Term Financing shall provide for no
amortization of principal, the same being payable in full on the maturity date
thereof.  In addition to the TEF
Guarantee, the Long-Term Financing shall be jointly and severally guaranteed by
ClearComm.

 

(c)  The
obligation to provide TEF Guarantee shall be subject to the satisfaction of the
following conditions:

 

(i)                                     No
law, statute, rule or regulation shall have been adopted, promulgated,
enforced or issued by any Governmental Entity having the effect of making
illegal 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 or
decree issued by a court of competent jurisdiction that prohibits the delivery
of TEF Guarantee pursuant to Section 10.5(b) hereof;

 

(ii)                                  The
execution, delivery and performance by each of the Other Stockholders of the
guarantee pursuant to Section 10.5(b) hereof shall have been duly
authorized and such guarantee shall be a legal, valid and binding obligation of
each of the Other Stockholders enforceable against each of them in accordance
with the terms of the guarantee;

 

(iii)                               Each
of the FCC Licenses shall be in full force and effect;

 

(iv)                              The
Other Stockholders shall not be in violation in any respect with any of the
provisions of this Settlement Agreement or the other agreements referred to
herein and incorporated by reference; and

 

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

 

Section 10.6                      FCC
Line of Credit.

 

(a)  TEM
agrees to undertake all commercially reasonable actions necessary to arrange a
subordinated line of credit from a commercial bank (the “Subordinated Loan
Facility”) for NewComm, the proceeds of which shall be available solely to
pay the balance of the FCC Related Debt as currently scheduled or as
extended.  Such Subordinated Loan
facility shall be in accordance with the terms set forth in Exhibit K
hereto.

 

23

 

(b)  To
the extent there is (i) a voluntary bankruptcy of NewComm, that has been
properly authorized pursuant to Section 4.7(b) of the Shareholders
Agreement, that results in an event of default under Section 9.01(h) (voluntary
bankruptcy filing) of the Subordinated Loan Facility or (ii) a default and
acceleration 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 the
lender providing the Subordinated Loan Facility with respect to either such
event of default under the Subordinated Loan Facility or, such waiver not
having been obtained, commits to obtain for NewComm alternate financing with
terms and conditions substantially similar to the Subordinated Loan Facility in
order to repay the FCC Debt (as defined in the Subordinated Loan
Facility).  To the extent that TEM
provides alternate financing pursuant to the preceding sentence, the amount of
any such financing, taken together with any amounts previously funded under the
Subordinated Loan Facility, or remaining under such facility if such default is
cured, shall not exceed in the aggregate US$40 million.

 

Section 10.7                      Third
Party Financing.  It is expressly
agreed that in the event of NewComm obtaining a non-recourse long-term
financing from a third-party (the “Third-Party Financing”) sufficient to
refinance both the Bridge Loan and the FCC Related Debt, (a) the Long-Term
Financing set forth in Section 10.5(a) will not be required and (b) each
of (i) TEF Guarantee obligations set forth in Section 10.5(a), (ii) TEF
guarantee obligations set forth in Exhibit K and (iii) TEM Puerto
Rico’s call right set forth in the Stock Purchase Agreement shall be of no further
force and effect.

 

ARTICLE XI

CONDITIONS PRECEDENT TO EFFECTIVENESS

 

Section 11.1                      Effective
Date.  This Settlement
Agreement shall become effective on the date on which each of the following
conditions precedent has been satisfied, or waived, as the case may be (such
date is referred to herein as the “Effective Date”):

 

(a)  The
representations and warranties of each Party shall be true and correct in all
respects as of the date hereof and as of the Effective Date;

 

(b)  Each
Party shall have complied in all material respects with all covenants contained
in this Settlement Agreement;

 

(c)  Each
Party hereto shall have received counterparts of this Settlement Agreement duly
executed by each of other Party;

 

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

 

(e)  The
FCC Loans shall have been capitalized;

 

(f)  TEM
and ClearComm shall have entered into a termination agreement of the Joint Venture
Agreement, a copy of which is attached as Exhibit G hereto and made
a part hereof;

 

24

 

(g)  TEM
Puerto Rico and ClearComm shall have entered into an amendment to the Stock
Purchase Agreement, a copy of which is attached as Exhibit H hereto
and made a part hereof;

 

(h)  TEM
and NewComm shall have entered into a termination agreement of the Management
Agreement, a copy of which is attached as Exhibit I hereto and made
a part hereof;

 

(i)  NewComm
and TEM shall have entered into a termination agreement of the Technology
Transfer Agreement, a copy of which is attached as Exhibit J hereto
and made a part hereof;

 

(j)  TEM shall have obtained, and NewComm shall have entered into
an extension or refinancing of the Bridge Loan, extending the maturity until
thirty six (36) months, with the benefit of joint and several guarantees of TEM
Puerto Rico and ClearComm;

 

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

 

(l)  TEM
and 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 a
part hereof;

 

(m)  TEM
Puerto Rico and the Other Stockholders shall have entered into an amendment and
restatement of the Shareholders Agreement, a copy of which is attached as Exhibit M
hereto and made a part hereof;

 

(n)  TEM
Puerto Rico and the Other Stockholders shall have entered into an amendment to
the Sale Agreement, a copy of which is attached as Exhibit N hereto
and made a part hereof; and

 

(o)  TEM
Puerto Rico and the Other Stockholders shall have modified the composition of
the Board of Directors to comply with the Shareholders Agreement, as amended
and restated.

 

ARTICLE XII

MISCELLANEOUS

 

Section 12.1                      Notices.  All notices, requests, demands, waivers and
other communications required or permitted to be given under this Settlement
Agreement shall be in writing and shall be deemed to have been duly given if
delivered personally or mailed, certified or registered mail with postage
prepaid, or sent by telegram or facsimile, as follows.

 

If to NewComm,
to:

 

NewComm
Wireless Services, Inc.

City View Plaza 48

Calle 165, Suite 700

Guyanabo,
Puerto Rico 00968

Attention: Javier O. Lamoso

Facsimile No.: (787) 749-5707

 

25

 

With a
copy to:

 

Martinez Odell & Calabria

P.O. Box 190988

Hato Rey, Puerto Rico 00919-0998

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

 

If to
TEM or TEM Puerto Rico, to:

 

Telefónica
Móviles S.A.

Calle Goya n° 24

Madrid 28001, Spain

Attention:  Antonio Hornedo

Facsimile No.: + 34 91 423 4294

 

Metro Office
Park

Building 17, Suite 600

Guyanabo, Puerto Rico 00968

Attention:  Maria D. Pizarro Figueroa

Facsimile No.: (787) 749-5880

 

With a
copy to:

 

Simpson
Thacher & Bartlett LLP

425 Lexington Avenue

New York, NY 10017

Attention: S. Todd Crider, Esq.

Facsimile No.: (212) 455-2502

 

If to
ClearComm, to:

 

ClearComm, L.P.

221 Ponce de Leon Avenue, Suite 1407

San Juan, Puerto Rico 00917-1814

Attention: Javier O. Lamoso

Facsimile No.: (787) 756-0844

 

With a
copy to:

 

Martinez Odell & Calabria

P.O. Box 190988

Hato Rey, Puerto Rico 00919-0998

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

 

26

 

If to the Other
Stockholders, to the address set forth opposite each Other Stockholder listed
on Exhibit A hereto.

 

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

 

Section 12.2                      Intended
Beneficiaries.  This Settlement
Agreement shall inure to the benefit of and be binding upon the Parties and
their respective successors and permitted assigns.  In addition, the Persons that are covered by
the release as set forth in Section 2.1(a) and (b) are intended
third 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 Person
other than the Parties (including TEM’s Affiliates) and their respective
successors and permitted assigns, any rights (whether legal or equitable),
benefits, remedies, obligations or liabilities of any nature whatsoever under
or by reason of this Settlement Agreement.

 

Section 12.3                      Entire
Agreement.  This Settlement
Agreement contains the entire agreement between the Parties with respect to the
subject matter hereof and there are no agreements, understandings,
representations or warranties between the Parties other than those set forth or
referred to herein.

 

Section 12.4                      Amendment.  This Settlement Agreement may not be amended
or modified, not may any of its provisions be waived, except in writing signed
by all the Parties.

 

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

 

Section 12.6                      Survival
of Representations.  All
representations, warranties, agreements, covenants and obligations herein are
material, shall be deemed to have been relied upon by the other Party, and
shall survive the date hereof.

 

Section 12.7                      Successors
and Assigns.  This Settlement
Agreement shall be binding upon and inure to the benefit of the Parties hereto
and their respective successors and assigns.

 

Section 12.8                      No
Admission of Liability.  Neither this
Settlement Agreement nor any act performed or document executed pursuant to or
in furtherance of this Settlement Agreement: 
(a) is or may be deemed to be or may be used as an admission or
evidence of the validity of any released claim or any wrongdoing or liability
of any Party; or (b) is or may be deemed to be or may be used as an
admission or evidence of any fault or omission of any Party in any civil,
criminal or administrative proceeding in any court, administrative agency or
other tribunal, other than in such proceedings as may be necessary to
consummate or enforce this Settlement Agreement.

 

27

 

Section 12.9                      No
Assignment of Claims.  Each Party
represents and warrants that it is the only Person who, to its knowledge, has
any interest in any claims released hereby and that none of such claims, nor
any part thereof, have been assigned, granted or transferred in any way to any
Person.

 

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

 

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

 

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

 

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

 

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

 

Section 12.15                Confidentiality.  The terms and conditions of this Settlement
Agreement, and all matters relating thereto, shall remain confidential between
the Parties and shall not be disclosed to any Person except:  (i) to the Parties and their respective
officers, directors, employees, representatives, counsel, auditors and other
professionals who need to know such information for purposes of conducting
their ordinary course of business; (ii) to any Person as required by
operation of law; or (iii) to any Person agreed to by the Parties, in
writing.  To the extent that a Party is
required or purportedly required to disclose all or any terms of this
Settlement Agreement pursuant to subparagraph (ii) above, such Party shall
immediately give written notice to the other Parties, and the Party seeking
disclosure shall, if so requested by any other Party, use its best efforts to
obtain a protective order from the court or a written guarantee of
confidentiality from any Person to whom the terms are to be disclosed to limit,
in advance, the dissemination and disclosure of this Settlement Agreement and
its terms.

 

Section 12.16                Arbitration.

 

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

 

28

 

party wishing to initiate
consideration of a dispute by such representative shall give written notice to
the other parties hereto of the existence of such dispute and of the party’s
desire to have such representative consider the dispute.  Such notice shall set forth a brief
description of the nature of the dispute to be considered.

 

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

 

(c)  The
site of the arbitration shall be Miami, Florida, or such other location as the
parties in arbitration may mutually agree in writing, any award shall be deemed
to have been made there, and the language to be used in the arbitration
proceedings shall be the English language with a simultaneous translation into
Spanish.  Any award shall be in writing
in the English language and state the reasons and contain reference to the
legal grounds upon which it is based. 
The award may be made public only with the written consent of all
parties to the arbitration; provided, however, that any ruling or
award, final or otherwise, may be cited in any subsequent dispute or proceeding
to enforce such ruling.

 

Section 12.17                Governing
Law.  The substantive rights and
obligations of the Parties arising out of, in connection with or ancillary to
this Settlement Agreement shall be governed by the substantive laws of the
State of Florida excluding conflict of laws principles.

 

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

 

29

 

IN WITNESS
WHEREOF, the Parties have signed this Settlement Agreement in multiple
counterparts.

 

	
   

  	
  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

  

 

30

 

	
   

  	
  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:

  

 

31

 

	
   

  	
  POWER EQUITIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

32

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00085-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00085-of-00352.parquet"}]]