EXHIBIT 10(n)
PLAN AND AGREEMENT OF REORGANIZATION
This Plan and Agreement of Reorganization (this "Plan and Agreement") is
made this 24th day of January 2000, by and among Antilles Wireless Cable T.V.,
Inc., a U.S. Virgin Islands corporation ("AWC, Inc."), Calypso-Com Ltd., a
U.S. Virgin Islands corporation ("Calypso-Com"), Wireless World, LLC, a U.S.
Virgin Islands limited liability company ("Wireless World"), Atlantic
Tele-Network, Inc., a Delaware corporation ("ATN"), and Cornelius B. Prior,
Jr., an individual who is a bona fide resident of the U.S. Virgin Islands
("Prior").
Certain other capitalized terms used herein and not otherwise defined
shall have the meanings set forth in Section 12.
Whereas, AWC, Inc., Calypso-Com and Hubbard MDS of Virgin Islands, Inc.,
a U.S. Virgin Islands corporation ("Hubbard"), are the sole partners in
Antilles Wireless Cable T.V. Company, a Virgin Islands general partnership
("Antilles Wireless");
Whereas, Calypso-Com has exercised an option to purchase all of Hubbard's
interest in Antilles Wireless on or before the Closing Date;
Whereas, ATN is the sole member of Wireless World;
Whereas, Prior is the sole stockholder of AWC, Inc. and Calypso-Com; and
Whereas, the parties hereto desire that (i) AWC, Inc. and Calypso Com
transfer their entire partnership interests in Antilles Wireless (including
the present partnership interest of Hubbard) to Wireless World on the terms
and conditions provided in this Plan and Agreement, (ii) that AWC, Inc. and
Calypso-Com shall liquidate on the Closing Date, and (iii) that all of the
consideration payable hereunder for the Transfer shall be paid to Prior as and
for a liquidating distribution of AWC, Inc. and Calypso-Com.
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NOW, THEREFORE, intending to be legally bound hereby, the parties agree
as follows:
1. The Transfer.
1.1.Effectiveness; Consideration. On the Closing Date AWC, Inc. and
Calypso-Com shall sell, assign and transfer their entire partnership interests
in Antilles Wireless (including the present partnership interest of Hubbard)
to Wireless World (the "Transfer"), in exchange for the payment to Prior of
$1,500,000 in cash and 242,424 shares of ATN common stock (which shares have a
value of $2,000,000 based on the closing price of a share of ATN common stock
on the American Stock Exchange on October 31, 1999); provided, however, that
if $1,500,000 shall be more than 55% of the total consideration payable to
Prior under this Section 1.1 (with the shares of ATN common stock issuable
hereunder being valued at the closing price of ATN common stock on the
American Stock Exchange on the last day prior to the Closing Date that such
stock shall have traded on such exchange (the "Closing Date Value")), then the
cash consideration payable under this Section 1.1 shall be reduced, and the
number of shares of ATN common stock shall be increased (at the rate of one
share for each $8.25 reduction in the cash consideration) so that the cash
consideration payable to Prior under this Section is equal to 55% of the total
such consideration when the shares of common stock issuable hereunder are
valued at the Closing Date Value.
1.2 Certain Indebtedness. At October 31, 1999, Antilles Wireless was
indebted to ATN in the amount of $ 237,897, including accrued interest, which
indebtedness, together with interest on the principal amount thereof at the
rate of 8.0% per annum from October 31, 1999 until the date of payment has
been repaid to ATN. Antilles Wireless has required and will require additional
cash for its operations from October 31, 1999 to the Closing Date (as defined
in Section 2). If ATN shall make any advances to Antilles Wireless after
October 31, 1999, such advances shall bear interest at the rate of 8.0% per
annum, shall be repayable by Prior to ATN upon demand if this Plan and
Agreement shall terminate without the Transfer occurring, and shall not be
subtracted from the amounts payable hereunder to Prior if the Transfer shall
occur. Any amounts advanced by Prior to Antilles Wireless, AWC, Inc. or
Calypso-Com after October 31, 1999 shall bear interest at the rate of 8.0% per
annum and shall be repaid by ATN to Prior, together with accrued interest, on
the effectiveness of the Transfer.
1.3 Gross Profit Adjustment. If, after giving effect to the Transfer, the
various businesses of Antilles Wireless and Wireless World conducted through
use of the Licenses (as defined in Section 2) (including, without limitation,
wireless distribution of TV programming, wireless internet access and wireless
data transmission and telephony businesses) shall generate an aggregate Gross
Profit (as defined below) of less than $6,000,000 for the Measurement Period
(as defined below), then Prior shall return to ATN cash equal to (a)
one-fourth of the deficiency in such Gross Profit up to a maximum repayment of
$1,500,000 (ie, in the event of an aggregate Gross Profit of zero or less)
plus (b) interest on such 25% of the deficiency amount at the Prime Rate for
the period from the Closing Date to the date of return of such cash to ATN. At
the Closing Prior shall pledge to ATN 242,424 shares of ATN common stock as
collateral security for his obligations pursuant to this Section 1.3 and
Section 8.2 hereof. If, after giving effect to the Transfer, the various
businesses of Antilles Wireless and Wireless World conducted through use of
the Licenses shall generate an aggregate Gross Profit in excess of $12,000,000
for the Measurement Period, then ATN shall issue to Prior additional shares of
ATN common stock having a value (determined in accordance with Section 1.3.4
hereof) equal to (a) one-fourth of the amount of such excess Gross Profit up
to a maximum additional payment of $1,500,000 (ie, in the event of an
aggregate Gross Profit of $18,000,000 or more) plus (b) interest on such 25%
of the excess amount at the Prime Rate for the period from the Closing Date to
the date of issuance of such additional ATN common stock to Prior. For
purposes of this Section 1.3:
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1.3.1 "Gross Profit" shall mean (a) after giving effect to the Transfer,
the revenues of Antilles Wireless and Wireless World from the conduct of any
business through the use of the Licenses, including, without limitation,
wireless distribution of TV programming, wireless internet access and wireless
data transmission and telephony businesses, minus (b) (i) in the case of the
distribution of TV programming, internet access and data transmission
businesses, all programming costs, T-1 costs, access charges, and gateway
costs for providing such services, and (ii) in the case of telephony or other
businesses conducted through the use of the Licenses, all costs of sales, all
determined in accordance with United States generally accepted accounting
principles ("GAAP") on a basis consistent with the determination of gross
profit reported in the Financial Statements (as defined in Section 3.3).
1.3.2 the "Measurement Period" shall mean the calendar years 2000, 2001
and 2002; provided that if the business operations of Wireless World shall be
significantly interrupted by reason of a hurricane or other act of God, the
Measurement Period shall be extended for a period equal to the period of such
significant interruption.
1.3.3 the "Prime Rate" shall mean a variable rate per annum equivalent at
all times to the prime rate then in effect of the Chase Manhattan Bank, N.A.,
which rate shall change whenever the prime rate of said bank changes.
1.3.4 for purposes of issuing additional shares of ATN common stock to
Prior under this Section 1.3. such additional shall be valued at the average
closing price of ATN common stock on the American Stock Exchange (or if not
then listed on the American Stock Exchange, on the principal securities market
on which it is then listed or traded) for the last ten trading days in the
Measurement Period.
2. Closing. The closing of the transaction herein contemplated shall take
place at the offices of ATN in St. Thomas, U.S. Virgin Islands, within 5
business days after ATN and Calypso-Com shall have obtained the approval of
the Federal Communications Commission (the "FCC") to the transfer from Hubbard
to Wireless World of the MMDS and LMDS licenses currently held by Antilles
Wireless (the "Licenses"). Prior shall bear all costs and expenses (including,
without limitation reasonable attorneys' fees and filing fees) related to such
transfer of the Licenses. The date on which the closing occurs is herein
referred to as the Closing Date.
3. Representations and Warranties of Prior. Prior represents and warrants
to Wireless World and ATN as follows:
3.1 Organization and Ownership. Antilles Wireless is a partnership duly
formed, validly existing and in good standing under the laws of the U.S.
Virgin Islands. Antilles Wireless has the legal power to own its properties
and to carry on its business as now being conducted and is duly qualified to
do business and is in good standing as a partnership in each jurisdiction in
the which the failure to be so qualified would not have a Material Adverse
Effect. For purposes of this Plan and Agreement, the term "Material Adverse
Effect" means any change, event or effect that would reasonably be likely to
have a material adverse effect on the business, assets (including intangible
assets), financial condition, future prospects or results of operations of
Antilles Wireless. Each of AWC, Inc. and Calypso-Com is a corporation duly
organized and existing and in good standing under the laws of the U.S. Virgin
Islands. Prior is the owner of all of the outstanding capital stock of AWC,
Inc. and Calypso-Com. AWC, Inc., Calypso-Com and Hubbard are the sole partners
in Antilles Wireless, and Calypso-Com has exercised an option to purchase all
of Hubbard's interest in Antilles Wireless on or before the Closing Date for
$40,000 (payable in cash or ATN common stock).
3.2 Authorization. This Plan and Agreement and the transactions
contemplated herein have been duly authorized by all necessary partnership
action on the part of AWC, Inc., Calypso-Com and Hubbard, as the sole partners
of Antilles Wireless, and corporate action on the part of the board of
directors and stockholders of AWC, Inc. and Calypso-Com.
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3.3 Financial Statements. Prior has furnished ATN unaudited financial
statements of Antilles Wireless as at October 31, 1999 and for the ten months
then ended (the "Financial Statements"). Said financial statements fairly
present the financial position of Antilles Wireless at said date and its
results of operations for the nine months then ended in accordance with GAAP,
subject to normal audit adjustments which would not result in any material
adverse change in said financial condition or results of operations. Except
(i) as reflected in such Financial Statements or (ii) incurred since October
31, 1999, in the ordinary course of business consistent with past practice
(none of which are material), Antilles Wireless has no liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise)
which individually or in the aggregate are reasonably likely to have a
Material Adverse Effect. AWC, Inc. and Calypso-Com have, and on the Closing
Date will have, no assets or liabilities, contingent or otherwise, except for
their respective interests in Antilles Wireless and except for the obligation
of Calypso-Com to acquire Hubbard's interest in Antilles Wireless for $40,000
payable in cash or by delivery of ATN common stock.
3.4 No Changes. Since October 31, 1999, Antilles Wireless' business has
been conducted in the ordinary course consistent with past practice and
Antilles Wireless has made no distributions to its partners and there has been
no action, event, occurrence, development, change in method of doing business
or state of circumstances or facts that, individually or in the aggregate, has
had or could reasonably be expected to have a Material Adverse Effect.
3.5 Restrictions on Business Activities. There is no agreement
(non-compete or otherwise), commitment, judgment, injunction, order or decree
to which Antilles Wireless, AWC, Inc. or Calypso-Com is a party or otherwise
binding upon any of them which has the effect of prohibiting any business
practice, any acquisition of property (tangible or intangible) by Antilles
Wireless or the conduct of Antilles Wireless' business as currently conducted
or proposed to be conducted which would have a Material Adverse Effect.
3.6 Title; Sufficiency of Assets. On the effectiveness of the Transfer
Wireless World will acquire good and valid title to the Licenses and all of
the assets and properties of Antilles Wireless, free and clear of all
mortgages, conditional sales agreements, charges, liens or encumbrances. The
assets to be acquired by Wireless World pursuant to the Transfer constitute
all of the assets of Prior and his Affiliates and Hubbard which are used in
connection with the business of Antilles Wireless.
3.7 Litigation. There are no legal or administrative proceedings of any
kind now pending or to the knowledge of Prior threatened which in any manner
involve Antilles Wireless or any of its assets or properties.
3.8 Contracts. Except as set forth in Schedule 3.8 hereto, Antilles
Wireless is not a party to any written or oral (i) contract with any labor
union representing persons who perform services for or in connection with
Antilles Wireless, (ii) bonus, pension, profit sharing retirement, share
purchase, stock option, hospitalization, insurance or other plan providing
employee benefits to persons who performed services for or in connection with
Antilles Wireless, (iii) lease, whether as lessor or as lessee, with respect
to any real property or personal property used or useful in connection with
Antilles Wireless, (iv) commitment of or pertaining to Antilles Wireless
involving more than $20,000, (v) employment contract with any person who
performs services for or in connection with Antilles Wireless which contract
cannot be terminated in 30 days or less without cost, or (vi) contract
pertaining to Antilles Wireless which is not made in the ordinary course of
business of Antilles Wireless.
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3.9 Compliance with Laws; Permits. To the best of the knowledge and
belief of Prior, Antilles Wireless has complied with and is in compliance with
all laws, regulations and Orders applicable to it, and is not in default in
any respect under any contract to which it is a party pertaining to it. Other
than the Licenses, Antilles Wireless holds all permits, licenses, variances,
orders and approvals from any Governmental Body which are material to the
operation of its business as presently conducted or proposed to be conducted
following the Closing Date.
3.10 Consents and Approvals; No Conflicts. Except as set forth in
Schedule 3.10 hereto (the "Required Consents"), neither the execution,
delivery and performance of this Plan and Agreement by Prior or AWC, Inc. or
Calypso-Com, nor the consummation of the transactions contemplated hereby, (i)
requires Prior or AWC, Inc. or Calypso-Com to obtain any consent, approval,
permit or action of or waiver from, or make any filing with, or give any
notice to, any Governmental Body or any other Person, (ii) violates, conflicts
with or results in a breach or default under (after the giving of notice, with
the passage of time, or both), or permits the termination of, any contract,
right or other obligation or restriction relating to or which affects Antilles
Wireless to which Prior or AWC, Inc. or Calypso-Com or Antilles Wireless is a
party or by which any of them may be bound or subject, or results in the
creation of any lien upon any of the assets of Antilles Wireless, (iii)
violates or conflicts with any Order against, or binding upon, Prior or AWC,
Inc. or Calypso-Com or Antilles Wireless or upon any of the assets of Antilles
Wireless, or (iv) violates or results in the revocation or suspension of any
License. 3.11 Year 2000. Antilles Wireless is Year 2000 Compliant and, to the
best of Prior's knowledge, its respective suppliers are or will be Year 2000
Compliant at January 1, 2000, except in each case, for such failures to be
Year 2000 Compliant that individually or in the aggregate are not reasonably
likely to have a Material Adverse Effect. For purposes of this Plan and
Agreement, the term "Year 2000 Compliant," with respect to a computer system
or software program, means that such computer system or program: (A) is
capable of recognizing, processing, managing, representing, interpreting and
manipulating correctly date-related data for dates earlier and later than
January 1, 2000; (B) has the ability to provide date recognition for any data
element without limitations; (C) has the ability to function automatically
into and beyond the Year 2000 without human intervention and without any
change in operations associated with the advent of the Year 2000; (D) has the
ability to interpret data, dates and time correctly into and beyond the Year
2000; (E) has the ability not to product noncompliance in existing data, not
otherwise corrupt such data, into and beyond the Year 2000; (F) has the
ability to process correctly after January 1, 2000, data containing dates and
times before that date; and (G) has the ability to recognize all "leap year"
dates, including February 29, 2000.
3.12 Brokers. No broker, investment banker, financial advisor or other
Person is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission, or the reimbursement of expenses, in connection
with the transactions contemplated by this Plan and Agreement.
3.13 Taxes. Antilles Wireless has filed or has caused to be filed all tax
returns and reports required to be filed by it and such returns and reports
are complete and correct in all material respects. Antilles Wireless has paid
or caused to be paid all taxes due and owing through the date hereof.
3.14 Investment Representations.
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(a) Prior understands that the shares of ATN common stock to be issued to
Prior under this Plan and Agreement are intended to be exempt from
registration under the Securities Act of 1933, as amended (the "Act") by
virtue of Section 4(2) of the Act and that he may not sell, transfer, assign,
pledge, dispose of, grant a security interest, mortgage, hypothecate, encumber
or permit or suffer any encumbrance on all or any portion of such common stock
(collectively, a "Transfer") unless such common stock is registered under the
Act or an exemption from such registration is available. Prior also
understands that the Transfer of such ATN common stock is also restricted by
State securities laws.
(b) Prior is acquiring the ATN common stock to be issued to him hereunder
for his own account as principal for investment and not with a view to resale
or distribution in whole or in part, and he has no present agreement,
understanding or arrangement to sell, assign or otherwise dispose of all or
any part of such shares of ATN common stock.
3.15 Tax Status. AWC, Inc. and Calypso-Com have been sub-chapter S
corporations pursuant to the Internal Revenue Code as amended, as applicable
in the U.S. Virgin Islands, based on timely filed elections of such status
with the Virgin Islands Bureau of Internal Revenue with effect from their
respective dates of incorporation.
4. Representations and Warranties of ATN.
4.1 Organization and stock ownership. Wireless World is a limited
liability company duly organized and existing and in good standing under the
laws of the U.S. Virgin Islands. All of the equity interests in Wireless World
are owned by ATN. ATN is a corporation duly organized and existing and in good
standing under the laws of the state of Delaware.
4.2 Due Authorization. This Plan and Agreement and the transactions
contemplated herein have been duly authorized by all necessary corporate
action on the part of Wireless World and ATN.
4.3 ATN Common Stock. The shares of ATN common stock to be issued to
Prior pursuant to this Plan and Agreement will, when issued, be duly
authorized, validly issued, fully paid and nonassessable shares of common
stock of ATN.
4.4 No Conflicts. Neither the execution, delivery and performance of this
Plan and Agreement by Wireless World or ATN, nor the consummation of the
transactions contemplated hereby, (i) requires Wireless World or ATN to obtain
any consent, approval, permit or action of or waiver from, or make any filing
with, or give any notice to, any Governmental Body, or any other Person except
for FCC approval with regard to transfer of the Licenses and the listing on
the American Stock Exchange of the shares of ATN common stock to be issued to
Prior hereunder, (ii) violates, conflicts with or results in a breach or
default under (after the giving of notice, with the passage of time, or both),
or permits the termination of, any contract, right or other obligation or
restriction to which Wireless World or ATN is a party, or (iii) violates or
conflicts with any Order of any Governmental Body against, or binding upon,
Wireless World or ATN.
5. Covenants of AWC, Inc., Calypso-Com and Prior Pending the Closing.
AWC, Inc., Calypso-Com and Prior, jointly and severally, covenant that, during
the period from the date of this Plan and Agreement to the Closing Date:
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5.1 they will not permit Antilles Wireless to engage in any transaction
or make any commitment or expenditure (except as otherwise expressly
contemplated herein) other than in the ordinary course of business consistent
with past practice or to make any distributions to its partners;
5.2 they will not permit Antilles Wireless to take any action which would
cause any of the representations and warranties contained in Section 3 hereof
not to be true and correct as of the Closing Date as if such representations
and warranties were restated as of such Date;
5.3 they will afford Wireless World and ATN and their representatives,
agents and employees access at all reasonable times to the properties, books
and records of Antilles Wireless.
6. Conditions Precedent to the Obligations of Wireless World and ATN.
6.1 The obligations of Wireless World and ATN to consummate the Transfer
are subject to the fulfillment, or waiver by ATN, of the following conditions
precedent at or before the Closing Date:
6.1.1 Representations and Warranties. The representations and warranties
of Prior contained in this Plan and Agreement that are qualified as to
materiality shall be true and correct, and those that are not so qualified or
contained in any certificate or other writing delivered pursuant hereto shall
be true and correct in all material respects when made and again at and as of
the Closing Date as if made at and as of such Date. ATN and Wireless World
shall have received a certificate signed by Prior to such effect.
6.1.2 Performance. AWC, Inc., Calypso-Com and Prior shall have performed
and complied with all agreements, obligations and covenants required by this
Plan and Agreement to be performed or complied with by them on or prior to the
Closing Date. ATN and Wireless World shall have received a certificate signed
by Prior to such effect.
6.1.3 No Adverse Change. During the period from October 31, 1999 to the
Closing Date, there shall not have been any material adverse change in the
financial condition or results of operations of Antilles Wireless or any
material damage, destruction, casualty or other change to or affecting the
assets of Antilles Wireless.
6.1.4 Required Consents and License Transfers. Prior shall have delivered
written evidence to ATN that all Required Consents shall have been obtained
and that the Licenses have been validly transferred to Wireless.
6.1.5 No Injunction or Litigation. No provision of any applicable law and
no Order shall prohibit the consummation of the transaction herein provided
for, and no litigation shall have been instituted against Antilles Wireless or
any of the parties hereto, which seeks to restrain, prevent, change or delay
in any material respect the transactions herein provided for or seeks to
challenge any of the material terms or provisions of this Plan and Agreement
or seeks material damages in connection with such transactions.
6.1.6 Purchase of Hubbard Interest. Calypso-Com shall have completed the
purchase of Hubbard's interest in Antilles Wireless with consideration
supplied by Prior or paid out of the consideration otherwise payable to Prior
hereunder on the Closing Date.
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6.1.7 Financial Condition. Prior shall have delivered written evidence to
ATN that at and as of the Closing Date (x) Antilles Wireless' total partners'
equity shall not have declined during the period from October 31, 1999 to the
Closing Date by more then $70,000 per month, and (y) Antilles Wireless'
working capital shall not have declined during the period from October 31,
1999 to the Closing Date by more than (i) $40,000 per month plus (ii) the
aggregate amount of capital expenditures made by Antilles Wireless during such
period with the approval of a majority of the Board of Directors of ATN. Each
of the foregoing shall be determined in accordance with GAAP on a basis
consistent with the Financial Statements.
6.1.8 Legal Opinions. ATN shall have received the opinion or opinions of
Marjorie Rawls Roberts, Esq., Fried, Frank, Harris, Shriver & Jacobson or
Donelan, Cleary, Wood & Maser, counsel to Antilles Wireless, Prior, AWC, Inc.
and Calypso-Com, which opinion shall be satisfactory to ATN in its reasonable
discretion, to the effect that at the Closing Date: (i) Antilles Wireless is a
partnership duly formed, validly existing and in good standing under the laws
of the U.S. Virgin Islands, (ii) to the knowledge of such counsel, AWC, Inc.
and Calypso-Com are the sole partners of Antilles Wireless; (iii) each of AWC,
Inc. and Calypso-Com has all requisite power and authority to enter into this
Plan and Agreement and perform its obligations hereunder, and the execution,
delivery and performance of this Plan and Agreement by each of them has been
duly and validly authorized by all requisite legal action and this Plan and
Agreement has been duly executed and delivered by each of them; (iv) this Plan
and Agreement is valid and binding upon each of Prior, AWC, Inc. and
Calypso-Com and is enforceable against each of them in accordance with its
terms; (v) following the Transfer, Wireless World will have all FCC and U.S.
Virgin Islands Governmental Body Permits (including Licenses) necessary to
conduct the business heretofore conducted by Antilles Wireless; and (vi) the
Transfer will vest in Wireless World title to all assets of Antilles Wireless.
6.1.9 Pledge. Prior shall have executed and delivered to ATN a security
and pledge agreement, in form and substance reasonably satisfactory to ATN,
pursuant to which 242,424 shares of ATN common stock are pledged as collateral
security for Prior's obligations under Sections 1.3 and 8.2 hereof, which
shares will be returned to Prior promptly after final determination of the
Measurement Period Gross Profit unless a proper unsatisfied claim has
theretofore been made by ATN under Section 1.3 or 8.2 hereof.
6.1.10 Tax Comfort. ATN shall have obtained reasonably satisfactory
assurance that the Transfer will not have significant adverse tax consequences
to either ATN or Wireless World.
7. Conditions Precedent to Obligations of AWC, Inc., Calypso-Com and
Prior. The obligations of AWC, Inc., Calypso-Com and Prior to consummate the
Transfer are subject to the fulfillment, or waiver by Prior, of the following
conditions precedent at or before the Closing Date:
7.1 Representations and Warranties. The representations and warranties of
Wireless World and ATN contained in this Agreement or in any certificate or
other writing delivered pursuant hereto shall be true and correct in all
material respects when made and again at and as of the Closing Date as if made
at and as of such Date. AWC, Inc., Calypso-Com and Prior shall have received a
certificate signed on ATN's behalf by an executive officer thereof to such
effect.
7.2 Performance. Wireless World and ATN shall have performed and complied
with all agreements, obligations and covenants required by this Plan and
Agreement to be performed or complied with by them on or prior to the Closing
Date. AWC, Inc., Calypso-Com and Prior shall have received a certificate
signed on ATN's behalf by an executive officer thereof to such effect.
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7.3 No Injunction or Litigation. No provision of any applicable law and
no Order shall prohibit the consummation of the transaction herein provided
for, and no litigation shall have been instituted or pending against Antilles
Wireless or any of the parties hereto which seeks to restrain, prevent, change
or delay in any material respect the transactions herein provided for or seeks
to challenge any of the material terms or provisions of this Plan and
Agreement or seeks material damages in connection with such transactions.
7.4 Tax Ruling. Prior shall have received a ruling letter from the Bureau
of Internal Revenue of the U.S. Virgin Islands, in form and substance
reasonably satisfactory to Prior, to the effect that neither Prior nor AWC,
Inc. nor Calypso-Com will recognize any taxable income on consummation of the
transactions contemplated by this Plan and Agreement except that Prior will
recognize capital gain in an amount equal to the lesser of (i) the cash
received by him pursuant to Section 1.1 hereof and (ii) the amount by which
the value of the total consideration received by Prior pursuant to Section 1.1
hereof exceeds his basis for his total investment in AWC, Inc. and
Calypso-Com.
8. Indemnification
8.1 Survival of Representations and Warranties. The representations and
warranties of Prior contained in this Plan and Agreement or in any certificate
or other writing delivered pursuant hereto shall survive the Closing hereunder
and any investigation of the affairs of AWC, Inc., Calypso-Com or Antilles
Wireless and any knowledge of facts determined or determinable by Wireless
World or ATN until the end of the Measurement Period, except for the
representations and warranties set forth in Sections 3.1, 3.2, 3.4. and 3.6
(including all indemnification obligations related to such sections) which
shall survive until, and all claims with respect thereto shall be made within,
60 days after expiration of the applicable statute of limitations.
8.2 Obligation of Prior to Indemnify. Prior shall indemnify, defend and
hold harmless Wireless World and ATN and their respective directors, officers,
managers, employees, Affiliates, successors and assigns from and against any
and all claims, losses, liabilities, damages, judgments, settlements, costs of
investigation or other expenses (including interest, penalties and reasonable
attorneys' fees and disbursements and expenses incurred in enforcing this
indemnification or in any litigation between the parties or with third
parties) collectively, the "Losses", suffered or incurred by Wireless World or
ATN or any of the foregoing persons arising out of any breach of the
representations, warranties, covenants and agreements of Prior contained in
this Plan and Agreement or in any certificate or other writing delivered
pursuant hereto.
8.3 Obligation of Wireless World and ATN to Indemnify. Wireless World and
ATN hereby, jointly and severally, agree to indemnify, defend and hold
harmless Prior and his successors and assigns from and against any and all
Losses, suffered or incurred by Prior or his successors and assigns arising
out of any breach of the representation, warranties, covenants and agreements
of Wireless World or ATN contained in this Plan and Agreement or in any
certificate or other writing pursuant hereto.
8.4 Notice and Opportunity to Defend Third Party Claims.
(i) Promptly after receipt by any party hereto (the "Indemnitee") of
notice of any demand, claim, or circumstance which would or might give rise to
a claim or the commencement (or threatened commencement) of any action,
proceeding or investigation (an "Asserted Liability") that may result in a
Loss, the Indemnitee shall give prompt notice thereof (the "Claims Notice") to
the party or parties obligated to provide indemnification pursuant to this
Section 8 (the "Indemnifying Party"). The Claims Notice shall describe the
Asserted Liability in reasonable detail and shall indicate the amount
(estimated, if necessary, and to the extent feasible) of the Loss that has
been or may be suffered by the Indemnitee.
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(ii) The Indemnifying Party may elect to defend, at its own expense and
with its own counsel satisfactory to Indemnitee, any Asserted Liability,
unless (i) the Asserted Liability seeks an Order, injunction or other
equitable or declaratory relief against the Indemnitee, or (ii) the Indemnitee
shall have reasonably concluded that (x) there is a conflict of interest
between the Indemnitee and the Indemnifying Party in the conduct of such
defense, or (y) the Indemnitee shall have one or more defenses not available
to the Indemnifying Party; provided, however, that the Indemnifying Party
shall not be permitted to make such election if the Indemnifying Party fails
to provide Indemnitee with evidence reasonably acceptable to Indemnitee that
the Indemnifying Party will have the financial resources to defend against the
Asserted Liability and fulfill its indemnification obligations hereunder. If
the Indemnifying Party elects to defend such Asserted Liability, it shall
within thirty (30) calendar days (or sooner, if the nature of the Asserted
Liability so requires) notify the Indemnitee of its intent to do so, and the
Indemnitee shall cooperate, at the expense of the Indemnifying Party, in the
defense of such Asserted Liability. If the Indemnifying Party assumes the
defense against any Asserted Liability it will be conclusively established for
purposes of this Agreement that such Asserted Liability is within the scope
of, and subject to, indemnification. If the Indemnifying Party elects not to
defend the Asserted Liability, is not permitted to defend the Asserted
Liability by reason of the first sentence of this Section 8.4(ii), fails to
notify the Indemnitee of its election as herein provided or contests its
obligation to indemnify under this Agreement with respect to such Asserted
Liability, the Indemnitee may pay, compromise or defend such Asserted
Liability at the sole cost and expense of the Indemnifying Party.
Notwithstanding the foregoing, neither the Indemnifying Party nor the
Indemnitee may settle or compromise any claim over the reasonable written
objection of the other, provided, however, that the Indemnitee may settle or
compromise any claim as to which the Indemnifying Party has failed to notify
the Indemnitee of its election as herein provided or is contesting its
indemnification obligations hereunder. In any event, the Indemnitee and the
Indemnifying Party may participate, at their own expense, in the defense of
such Asserted Liability. If the Indemnifying Party chooses to defend any
Asserted Liability, the Indemnitee shall make available to the Indemnifying
Party any books, records or other documents within its Control that are
necessary or appropriate for such defense. Any expenses of any Indemnitee for
which indemnification is available hereunder shall be paid upon written demand
therefor.
9. Expenses. Whether or not the transactions herein provided for shall be
consummated at the Closing, each of the parties hereto shall bear its own
expenses in connection with the negotiation, execution, delivery and
performance of this Agreement except as otherwise expressly provided herein;
provided, however, that Prior shall be responsible for the expenses of
Antilles Wireless, AWC, Inc. and Calypso-Com which he shall pay in full on or
before the Closing Date.
10. Entire Agreement; No Third-Party Beneficiaries. This Agreement
contains the entire agreement among the parties hereto with respect to the
subject matter hereof and supercedes all prior agreements, written or oral
with respect thereto and is not intended to confer upon any Person other than
the parties hereto any rights or remedies. This Agreement may be modified,
superceded, canceled, renewed or extended only by a written instrument signed
by the parties hereto. The provisions of this Agreement may be waived only by
a writing signed by the party making such waiver. No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of any party of any such
right, power or privilege preclude any further exercise thereof or the
exercise of any other such right, power or privilege.
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11. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the U.S. Virgin Islands applicable to agreements
made and to be performed entirely within such territory, without regard to the
conflict of laws and rules thereof.
12. Definitions. The following terms, as used herein, have the following
definitions:
"Affiliate" of any Person means any other Person directly or indirectly
through one or more Intermediary Persons, Controlling, Controlled by or under
common Control with such person.
"Control" with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, by or through
stock ownership, agency or otherwise.
"Governmental Body" means any Federal, state, territorial, local, or
foreign government, any Court, administrative, regulatory or other
governmental agency, commission or authority or any nongovernmental
self-regulatory agency, commission or authority.
"Order" means any permanent or temporary order, injunction, judgement, or
decree of any Governmental Body.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity, including a government or political subdivision
or an agency or instrumentality thereof.
13. Headings. The descriptive headings contained in this Plan and
Agreement are included for convenience of reference only and shall not in any
way affect the meaning or interpretation of this Agreement.
14. Counterparts. This Plan and Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same plan and
agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties.
15. Assignment. Neither this Agreement nor any of the rights, interests
or obligations under this Plan and Agreement shall be assigned, in whole or in
part, by operation of law or otherwise by any of the parties hereto without
the prior written consent of the other party, except that each of ATN and/or
Wireless World may assign all or any of its rights, interests or obligations
hereunder to any Affiliate of such party.
16. Termination provision. This Plan and Agreement may be terminated any
time prior to the Closing Date:
(a) by mutual written consent of Prior and ATN;
(b) by ATN or Prior if the Transfer shall not have been consummated by
February 29, 2000; provided, however, that the right to terminate this Plan
and Agreement shall not be available to any party whose failure to perform any
of its obligations under this Plan and Agreement results in the failure of the
Transfer to be consummated by such time;
(c) by ATN, if either Prior, AWC, Inc. or Calypso-Com shall have breached
or failed to perform in any material respect any of their respective
representations, warranties, covenants or other agreements contained in this
Plan and Agreement, which breach or failure to perform (i) would give rise to
the failure of a condition set forth in Section 6 and (ii) has not been or is
incapable of being cured by Prior without 20 calendar days after his receipt
of written notice from ATN;
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(d) by Prior, if ATN shall have breached or failed to perform in any
material respect any of its representations, warranties, covenants or other
agreements contained in this Plan and Agreement, which breach or failure to
perform (i) would give rise to the failure of a condition set forth in Section
7 and (ii) has not been or is incapable of being cured by ATN without 20
calendar days after its receipt of written notice from Prior.
17. Effect of Termination. In the event of termination of this Plan and
Agreement by either ATN or Prior as provided in Section 16, this Plan and
Agreement shall forthwith become void and there shall be no liability or
obligation on the part of ATN, Prior, AWC, Inc. or Calypso-Com, provided that
each party shall remain liable for any intentional or willful breaches of such
party's representations, warranties, covenants or other agreements contained
in this Plan and Agreement prior to its termination; provided, further, that
the provisions of Section 9 shall remain in full force and effect and survive
any termination of this Plan and Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
Antilles Wireless Cable T.V., Inc. Wireless World, LLC
By:/s/Cornelius B. Prior, Jr. By:/s/Steven M. Ross
- --------------------------- -----------------
Steven M. Ross
Chief Financial Officer
Calypso-Com Ltd. Atlantic TeleNetwork, Inc.
By:/s/Cornelius B. Prior, Jr. By:/s/Steven M. Ross
- -------------------------- -----------------
Cornelius B. Prior, Jr. Steven M. Ross
Chief Financial Officer
10(n)-12