SETTLEMENT AGREEMENT
This
SETTLEMENT AGREEMENT (the “Agreement”) is entered into by and between Oblio
Telecom, Inc. (“Oblio”), Titan Global Holdings, Inc. (“Titan”) and AT&T
Corp. (“AT&T”) (collectively the “Parties”).
RECITALS:
WHEREAS
on or about August 16, 2001, AT&T and Oblio entered into a Purchase Order
for AT&T Wholesale Enhanced Prepaid Card Service (the “Purchase Order”),
pursuant to which AT&T agreed to provide Oblio certain PPC Service,
including, among other things, to provide dollar-based PINs to Oblio to be
associated with pre-paid calling cards produced by Oblio to be activated for
use
on AT&T’s prepaid network;
WHEREAS,
Oblio is a wholly owned subsidiary of Titan;
WHEREAS,
a dispute arose between Oblio and AT&T over AT&T’s refusal to honor
Oblio’s request for a refund of certain Universal Service Fund (“USF”) pass
through charges which Oblio alleged it paid pursuant to the Purchase Order
and
Oblio’s refusal to timely pay AT&T on certain outstanding
invoices;
WHEREAS,
on or about December 5, 2006, Oblio filed a Demand for Arbitration (the
“Demand”) against AT&T with the American Arbitration Association (the
“Arbitration”);
WHEREAS,
on or about January 16, 2007, AT&T filed its Answer and Counterclaims to the
Demand (the “Counterclaims”);
WHEREAS,
on or about April 16, 2007 Oblio filed a Petition with the Federal
Communications Commission (‘FCC”) seeking a declaratory ruling that AT&T
violated certain provisions of the Federal Communications Act with respect
to
its alleged refusal to honor Oblio’s reseller exemption for USF pass through
charges (the “ FCC Petition”);
WHEREAS
on or about May 7, 2007 Arbitrator Xxxxxx X. Xxxx issued a stay of Oblio’s
Demand pending resolution of the FCC Petition and further ruled that a hearing
on the Counterclaims would proceed;
WHEREAS,
on July 24, 2007, Arbitrator Xxxxxx X. Xxxx issued a Partial Final Award ruling
on AT&T’s Counterclaims (the “Order and Award”);
WHEREAS,
on August 28, 2007, AT&T filed a Petition to Confirm Partial Arbitration
Award in the United States District Court for the Southern District of New
York,
Civil Action Xx. 00 XXX 0000 (xxx “Petition to Confirm”);
WHEREAS,
the Parties desire to settle and resolve with prejudice the Demand,
Counterclaim, Petition and Order and Award and all disputes or potential
disputes or causes of action which are in any way related to, connected with,
arise out of, or could have been raised in connection with the subject matter
of
the Demand, Counterclaim, Petition and Order and Award and fully and finally
settle all disputes between the parties upon the terms set forth herein;
and
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NOW
THEREFORE, Oblio,
Titan and AT&T, in consideration of the mutual promises and covenants
contained herein, the Settlement Payments referenced below, and for other good
and valuable consideration described herein, the receipt and legal sufficiency
of which are hereby acknowledged, the parties hereby agree and stipulate as
follows:
1.
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PAYMENTS
BY OBLIO.
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In
full
and final settlement of the Partial Award, Oblio agrees to execute a Promissory
Note in the form appended hereto as Exhibit 1 (the “Note”) and to make the
following payments to AT&T:
A. On
or
before 5:00 p.m. C.S.T. on October 15, 2007, Oblio shall wire transfer the
amount of $100,000.00 to the bank account designated by AT&T in the Note
(the “Account”);
B. Beginning
on November 1, 2007, and continuing through March 1, 2008, Oblio shall make
monthly payments via wire transfer to the Account in the amount of $100,000.00;
C. In
the
event that Oblio fails to make a payment as set forth above, Oblio shall not
be
deemed to be in default of this Agreement unless Oblio fails to make said
payment within ten (10) calendar days of written notice from AT&T that said
payment has not been received. For purposes of this Agreement e-mail
notification as indicated in Section 8 herein shall constitute written
notice.
2. |
OBLIO
RELEASE
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Upon
execution of this Agreement and in return for other good and valuable
consideration described herein, Oblio, Titan and their respective affiliates
and
parents and subsidiary corporations and each of their predecessors, successors,
and assigns, representatives, officers, directors, heirs, and anyone claiming
any right through them or under them (the “Oblio Releasors”), hereby fully,
finally, and forever release and discharge AT&T , together with each of its
past and present respective affiliates, parent and subsidiary corporations,
shareholders, officers, directors, employees, successors, assigns, heirs, and
representatives (the “AT&T Released Parties”), of and from any and all
claims, causes of action, lawsuits, charges, liabilities, administrative
proceedings, debts, accounts, dues, reckonings, bonds, bills, covenants,
contracts, controversies, agreements, promises, variances, trespasses, extents,
executions, sums of money, damages, judgments, and demands of any nature
whatsoever, in law or in equity, both known and unknown, asserted or not
asserted, foreseen and unforeseen, which the Oblio Releasors ever had, now
have,
or may ever have against any of the AT&T Released Parties arising from the
beginning of time up to and including the date of this Settlement Agreement,
which are in any way related to, connected with, arise out of, or could have
been raised in connection with the subject matter of the Purchase Order, Demand
and/or FCC Petition, provided that nothing in this release shall be construed
to
release the AT&T Released Parties from any obligations under this Settlement
Agreement.
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3. |
AT&T
RELEASE
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Except
for the obligations set forth in this Settlement Agreement, AT&T, together
with each of its past and present respective affiliates, parent and subsidiary
corporations, shareholders, officers, directors, employees, successors, assigns,
heirs, and representatives (the “Oblio Released Parties”), hereby fully,
finally, and forever releases and discharges the Oblio Released Parties of
and
from any and all claims, causes of action, lawsuits, charges, liabilities,
administrative proceedings, debts, accounts, dues, reckonings, bonds, bills,
covenants, contracts, controversies, agreements, promises, variances,
trespasses, extents, executions, sums of money, damages, judgments, and demands
of any nature whatsoever, in law or in equity, both known and unknown, asserted
or not asserted, foreseen and unforeseen, which the AT&T ever had, now has,
or may ever have against any of the Oblio Released Parties arising from the
beginning of time up to and including the date of this Settlement Agreement,
which are in any way related to, connected with, arise out of, or could have
been raised in connection with the subject matter of the Purchase Order,
Counterclaim and/or Petition and Order and Award, provided that nothing in
this
release shall be construed to release the Oblio Released Parties from any
obligations under this Settlement Agreement.
4. |
DISMISSAL
OF DEMAND AND COUNTERCLAIM
|
Contemporaneously
with the execution of this Settlement Agreement, Oblio and AT&T,
individually or though their counsel to the Arbitration, shall execute the
Stipulations of Dismissal With Prejudice (the “Stipulations”) in the form
annexed hereto as Exhibit 2, and shall deliver the executed Stipulation to
the
American Arbitration Association.
5. |
WITHDRAWAL
OF FCC PETITION
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Within
three (3) business days of the execution of this Settlement Agreement, Oblio
shall submit a letter to the Office of Secretary of the FCC notifying the FCC
of
Oblio’s desire to withdraw the FCC Petition with prejudice.
6. |
DISMISSAL
OF PETITION.
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Within
seven (7) days of the execution of this Agreement by the Parties, AT&T shall
file a Stipulation of Dismissal of its Petition to Confirm Partial Arbitration
Award in the United States District Court for the Southern District of New
York,
Civil Action Xx. 00 XXX 0000.
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0.
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XXXX
OWNERS OF CLAIMS
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The
Parties represent and warrant that they are the only persons who are entitled
to
any recovery for any cause whatsoever for damages, expenses, or losses incurred
as a result of the circumstances made the basis of this Agreement. The
Parties represent and warrant that they have not assigned or transferred all
or
part of the claims, demands, actions, or causes of action arising from or in
any
way relating to the circumstances and conditions made the basis of this action,
to any person, firm, or corporation. The Parties represent and warrant that
they
are the full and sole owners of the claims, demands, actions, or causes of
action arising from or in any way relating to the circumstances and conditions
made the basis of this Agreement.
8. |
NOTICE
|
Any
notices made to either party shall be by U.S. mail, postage prepaid or
alternatively by electronic mail as follows:
To
Oblio:
Oblio
Telecom, Inc.
Attn:
Xxxxx X. Chance
0000
Xxx
Xxx Xxxxx, Xxxxx 000
Xxxxxxxxxx,
Xxxxx 00000
(000)
000-0000 (Fax)
xxxxxxx@xxxxxxxx.xxx (e-mail)
With
a
copy to:
C.
Xxxx
Xxxxxx III
Xxxxxx
& Xxxxx, LLP
0000
Xxxxxxx Xxxx., Xxxxx 000
Xxxxxx,
Xxxxx 00000
xxxx.xxxxxx@xxxxxxxxxxxx.xxx
(e-mail)
To
AT&T:
Xxxx
X.
Xxxxxxx
000
Xx.
Xxxxxx Xxxxxx
Xxxx
000X
Xxxxxxxxxx,
XX 00000
xxxxxxxx@xxx.xxx
With
a
copy to:
Xxxxxx
Xxxxxxx, Esq.
AT&T
Corp.
Xxx
XX&X Xxx Xx. 0X000
Xxxxxxxxxx,
XX 00000
xxxxxxxx@xxx.xxx
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9. |
TERMS
|
The
Parties agree that the releases and agreements set forth herein are good,
valuable and valid consideration for this Agreement, failure of which shall
constitute a breach of this Agreement for which damages and specific performance
may be sought. Time is of the essence.
10. |
ENTIRE
AGREEMENT
|
This
Agreement contains the entire agreement among the Parties relating to the
subject matter hereof and supersedes any and all other negotiations,
representations, understandings and agreements. All prior and contemporaneous
negotiations, understandings and agreements between the Parties are deemed
abandoned and waived to the extent that they are not stated in this Agreement.
This Agreement may be amended only by a written agreement signed by each party,
and a breach of this Agreement may be waived only by a written waiver signed
by
the party granting the waiver. The waiver of any breach of this Agreement shall
not operate or be construed as a waiver of any other similar, prior or
subsequent breach of this Agreement.
11. |
ATTORNEY’S
FEES AND COSTS
|
All
attorney’s fees and costs associated with this Agreement will be borne by the
party incurring same.
12. |
BINDING
EFFECT
|
The
terms
hereof are contractual and not merely recitals. All agreements, representations,
covenants, terms and conditions of this Agreement shall survive its execution
and be fully binding upon the Parties, and their respective heirs, personal
representatives, successors and assigns.
13. |
SEVERABILITY
|
In
the
event that any one or more of the provisions contained in this Agreement shall,
for any reason, be held to be invalid, illegal or unenforceable, in any respect,
such invalidity, illegality or unenforceability shall not affect any of the
remaining provisions, and this Agreement shall be construed as if such invalid,
illegal, or unenforceable provision had never been contained herein.
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14. |
COUNTERPARTS
|
This
Agreement may be executed for all purposes in any number of identical
counterparts, and each party may execute any such counterpart, each of which
shall be deemed an original for all purposes. A photocopy or facsimile copy
of
this Agreement, and any signature to this Agreement, shall be deemed to be
as
effective as the original for all purposes.
15. |
GOVERNING
LAW
|
This
Agreement is to be performed in New York County, New York and shall in all
respects be governed by, construed and enforced in accordance with the laws
of
the State of New York.
16. |
HEADINGS
|
The
paragraph headings of this Agreement are inserted for convenience of reference
only and shall not control or affect the meaning, intention, construction or
effect of the Agreement.
17. |
EFFECTIVE
DATE
|
The
Effective Date of this Agreement shall be October 11, 2007.
SIGNED on
this 12th
day
of October, 2007.
OBLIO TELECOM, INC. | ||
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By: |
/s/Xxxx
Xxxxxx
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Xxxx Xxxxxx, President |
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Titan Global Holdings, Inc. | ||
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By: | /s/ Xxxxx X. Xxxxx | |
Xxxxx X. Xxxxx, Chairman |
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AT&T CORP. | ||
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By: | /s/ Xxxxxx Nova | |
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Title:
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Senior Vice President Distribution | |
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