SETTLEMENT AGREEMENT
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This Settlement Agreement (this "Agreement") is made this 18th day of
February 2005, by MCI WorldCom Network Services, Inc. assignee of MCI WorldCom
Communications Inc., UUNet Technologies, Inc., and MCI International Inc.
successor by merger of WorldCom Int'l Data Services, Inc., their respective
parent entity, affiliates and subsidiaries (collectively referred to as "MCI"),
all corporations organized under the laws of the State of Delaware with the
principal place of business at 00000 Xxxxxxx Xxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxxx
00000, and GTC Telecom Corp., formerly known as GenX LLC d/b/a Preferred
Discount Plan (collectively "GTC"), a corporation organized under the laws of
the State of Nevada, with its principal place of business at 0000 Xxxxxx Xxxxxx,
Xxxxx X-0, Xxxxx Xxxx, Xxxxxxxxxx 00000. The signatories to this Agreement will
hereafter be referred to jointly as the "Parties" or individually as "Party".
This Agreement is made as a compromise between the Parties for the complete
and final settlement of their claims, differences, and causes of action with
respect to the disputes described below.
PREAMBLE
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WHEREAS, MCI provided telecommunication services to GTC pursuant to a
Telecommunications Service Agreement between MCI WorldCom Network Services Inc.
and GENX LLC dated August 20, 1999, Digital Services Agreement between MCI
WorldCom Network Services Inc. and GTC Telecom Inc, successor in interest to
GENX, LLC dated November 20, 2002 and that certain Internet Services Resellers
Agreement between GTC Telecom Inc. and UUNet Technologies Inc. dated May 20,
2002 (Services);
WHEREAS, GTC has outstanding account balances with respect to the Services
however, has been unable to make timely payments as required by MCI. (the
"Dispute");
WHEREAS, MCI disconnected said Services on or about July 12, 2004: WHEREAS,
MCI and GTC desire to avoid the necessity, expense, inconvenience, and
uncertainty of litigation and instead to resolve and settle all claims and
disputes between them arising out of, or in any way related to the Dispute;
NOW, THEREFORE, in consideration of the releases and mutual promises
contained herein and other good and valuable consideration exchanged between MCI
and GTC, the receipt and sufficiency of which is hereby acknowledged, the
Parties agree as follows:
1.0 SETTLEMENT
1.1 GTC shall pay to MCI the amount of Seven Hundred and Fifty Thousand
Dollars and no/100 ($750,000.00) ("Settlement Payment"), on or before March 31,
2005.
1.2 All payments made by GTC pursuant to this Agreement shall be sent in
the form of a certified check payable to: "MCI WorldCom Network Services Inc"
priority overnight mail to:
Bank One
000 Xxxx Xxxxxx Xxxxxx, 0xx Floor Mailroom,
Attention: Lockbox 93825-MCI
Xxxxxxx, Xxxxxxxx, 00000
1.3 Upon receipt of the Settlement Payment, MCI shall release its
security agreement dated October 24, 2004 with GTC by promptly filing UCC
releases in all states where it previously filed UCC-1's.
1.4 The Parties' performance of all obligations set forth in this Agreement
shall finally settle and resolve, among other things, all claims asserted or
which could have been asserted by MCI or GTC as of the date of this Agreement
regarding the Dispute. The parties agree to bear their own costs associated with
the Dispute, including, but not limited to, filing costs, attorneys' fees, and
expenses.
2.0 COMPROMISE
The Parties agree and acknowledge that this Agreement is the result of a
compromise between the Parties for the complete and final settlement of their
claims, differences, and causes of action regarding the Dispute, and shall never
be construed as an admission by MCI or GTC of any liability, wrongdoing, or
responsibility on the part of either of the Parties or on the part of either of
the Parties' predecessors, successors, assigns, agents, parents, subsidiaries,
affiliates, directors, officers, or employees. In fact, the Parties expressly
deny any such liability, wrongdoing, or responsibility.
3.0 RELEASE
3.1 In consideration hereof, GTC and all its predecessors, successors,
parents, direct subsidiaries, indirect subsidiaries, affiliates, assigns, heirs,
agents, transferees, directors, officers, employees, and attorneys hereby
release and forever discharge MCI and all its predecessors, successors, parents,
direct subsidiaries, indirect subsidiaries, affiliates, assigns, heirs, agents,
transferees, directors, officers, employees, and shareholders from and against
all actions, causes of action, claims, suits, debts, damages, judgments,
liabilities, and demands whatsoever, whether matured or unmatured, whether at
law or in equity, whether before a local, state, or federal court, state or
federal administrative agency or commission, or arbitration tribunal, regardless
of location and whether now known or unknown, liquidated or unliquidated, that
GTC now has or may have had, or thereafter claims to have regarding issues
arising out of or related to the Dispute or any other creditor debtor matter
between the Parties, on behalf of itself, or any other person or entity, at any
time prior to and including the date of this Agreement.
3.2 In consideration hereof, MCI and all its predecessors, successors,
parents, direct subsidiaries, indirect subsidiaries, affiliates, assigns, heirs,
agents, transferees, directors, officers, employees, and attorneys hereby
release and forever discharge GTC and all its predecessors, successors, parents,
direct subsidiaries, indirect subsidiaries, affiliates, assigns, heirs, agents,
transferees, directors, officers, employees, and shareholders from and against
all actions, causes of action, claims, suits, debts, including but not limited
to those accounts on Exhibit "A," damages, judgments, liabilities, and demands
whatsoever, whether matured or unmatured, whether at law or in equity, whether
before a local, state, or federal court, state or federal administrative agency
or commission, or arbitration tribunal, regardless of location and whether now
known or unknown, liquidated or unliquidated, that MCI now has or may have had,
or thereafter claims to have regarding issues arising out of or related to the
Dispute or any other creditor debtor matter between the Parties, on behalf of
itself, or any other person or entity, at any time prior to and including the
date of this Agreement.
3.3 The Parties acknowledge that they are entering into this Agreement
based on their own investigation of the facts, and are not relying on any
representations or warranties except as may have been expressly made herein.
4.0 CONFIDENTIALITY
The Parties agree that neither of them will disclose the contents of this
Agreement, the details or terms of the settlement except (i) to the extent as
required by any governmental agency including but not limited to audit and
reporting required by the SEC and the Xxxxxxxx-Xxxxx Act; (ii) otherwise
required to be disclosed by law; (iii) required by indemnifying parties; (iv) or
necessary in any legal proceedings in order to enforce any provision of this
Agreement. The Parties agree that they will notify each other in writing,
within five (5) days of receipt of any subpoena, court order or other
administrative order requiring disclosure herein or within five (5) calendar
days of seeking indemnification. Notwithstanding the above, the Parties
acknowledge that GTC will file a Current Report on Form 8-K detailing the
material terms of this Agreement, as required by SEC regulations, within four
(4) business days of the execution of this Agreement.
5.0 MISCELLANEOUS TERMS AND CONDITIONS
5.1 The Parties hereby confirm and ratify the accuracy and truthfulness
of the above Preamble of this Agreement, and hereby incorporate by reference the
Preamble as though it were fully set forth herein.
5.2 This document contains the complete Agreement between the Parties with
respect to its subject matter and supercedes any and all prior agreements,
understanding, promises, warranties, and representations made by each Party to
the other concerning the subject matter.
5.3 This Agreement may be executed in identical counterparts, each of
which shall constitute an original and all of which shall constitute one and the
same Agreement. A Party may deliver this Agreement by transmitting a facsimile
copy of this Agreement to the other Party. A facsimile copy of this Agreement,
including the executed signature page thereof, shall be deemed an original.
5.4 The Parties represent that neither have not filed or caused to be
filed any complaints or other actions against the other respectively, or against
any of its predecessors, successors, parents, direct subsidiaries, indirect
subsidiaries, affiliates, assigns, heirs, agents, transferees, directors,
officers, employees, and shareholders with any local, state, or federal court,
state or federal administrative agency or commission, or arbitration tribunal,
regardless of location.
5.5 The Parties hereby agree that they will not make any claim or
demand, or commence any action against any third party who might claim
contribution, indemnity, or other relief over against the said Parties.
5.6 This Agreement may be modified only by a written document signed by
the Parties. No waiver of this Agreement or of any of the promises,
obligations, terms, or conditions hereof shall be valid unless it is written and
signed by the Party against whom the waiver is to be enforced.
5.7 The Parties agree to execute and exchange any such further
documentation as may be reasonably required to give effect to the Agreement.
5.8 This Agreement shall be binding upon and inure to the benefit of the
Parties thereto, their predecessors, successors, parents, subsidiaries,
affiliates, assigns, agents, directors, officers, employees, and attorneys. Each
of the signatories of this Agreement represents and warrants that he is
authorized to execute this Agreement and to bind the Parties hereto.
5.9 If any part or any provision of this Agreement shall be finally
determined to be invalid or unenforceable under applicable law by a court of
competent jurisdiction, that part or provision shall be ineffective to the
extent of such invalidity or unenforceability only, without in any way affecting
the remaining parts of said provision or the remaining provisions of this
Agreement.
5.10 The Parties hereby warrant and represent that they have not assigned
or in any way transferred or conveyed all or any portion of the claims covered
by this Agreement, and to their knowledge, no other person or entity has a right
to any claim that purports to be settled by this Agreement. The Parties
acknowledge and agree that this warranty and representation is an essential and
material term of this Agreement, without which they would not have entered into
it. The Parties each agree to defend and to hold each other harmless against the
claims of any other person or entity asserting a claim or right that purports to
be settled by the Agreement.
5.11 The Parties acknowledge that they have had the opportunity to consult
with legal counsel of their choosing prior to entering into this Agreement, that
they know and understand this Agreement's contents, and that they are executing
this Agreement knowingly and voluntarily. Each Party acknowledges that it has
not relied on or made any promise or representation to the other Party that is
not contained within this Agreement.
5.12 The Parties cooperated in the drafting of this Agreement, and in the
event that it is determined that any provision herein is ambiguous, that
provision shall not be presumptively construed against either Party.
5.13 In the event that either Party breaches any term of this Agreement and
the other Party is required to employ counsel to enforce its rights, the
prevailing Party shall recover its attorneys' fees and costs incurred therein.
5.14 Any notices required under this Agreement shall be served upon the
Parties via telecopier and overnight priority mail as follows:
Notices to MCI:
Xxxxxxx X. Del Xxxx
Vice President /Chief Legal Counsel
MCI, Inc.
0000 00xx Xxxxxx, XX
Xxxxxxxxxx, XX 00000
Telephone No. (000) 000-0000
Telecopier No. (000) 000-0000
Xxxxxxxxx X. Xxxxxxxxx
Associate Counsel
MCI, Inc.
0000 00xx Xxxxxx, XX
Xxxxxxxxxx, XX 00000
Telephone No. (000) 000-0000
Telecopier No. (000) 000-0000
Notices to GTC:
Vi Xxx
General Counsel
GTC Telecom Corporation
0000 Xxxxxx Xxxxxx, Xxxxx X-0
Xxxxx Xxxx, Xxxxxxxxxx 00000
Telephone No. (000) 000-0000
Telecopier No. (000) 000-0000
5.15 This Agreement shall be governed, in all respects, under the laws
of the State of Oklahoma, irrespective of its choice of law rules. Any legal
action or preceeding with respect to this Agreement may be brought in the Courts
of the State of Oklahoma in and for the County of Tulsa or U.S. District Court
for the Northern District of Oklahoma. By execution hereof, the parties hereby
submit to such jurisdiction and expressly waive whatever rights may correspond
to either of them by reason of the present of future domicile.
5.16 The undersigned represents and warrants that he or she is
authorized to execute this Agreement and to bind the Party whom he or she
represents thereto.
IN WITNESS WHEREOF, we have hereunto set our hands and seals as of the date
above written.
MCI:
By: /s/ Xxxxxxxxx X. Xxxxx Date: 3/06/05
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Xxxxxxxxx Xxxxx
Executive Vice President & General Counsel
GTC:
By: /s/ Xxxxxx X. XxXxxxxx Date: 2/18/05
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Xxxxxx X. XxXxxxxx
Chief Financial Officer
Exhibit "A"
List of Accounts
Promissory Note, as Amended MCI WorldCom Network Services, Inc. $4,550,437.05
Account No. 0000000 MCI WorldCom Network Services, Inc. $ 549.56
Account No. 0000000000 UUNet Technologies, Inc. $1,181,828.32
Account No. xu95686 MCI WorldCom Network Services, Inc. $ 483,330.65
Account No. 0000000 MCI WorldCom Network Services, Inc. $ 642.22
Account No. R2014888 MCI WorldCom Network Services, Inc. $ 1,447.51
Account No. 00000000 MCI International, Inc. $ 11,340.96
Account No. 00000000 MCI International, Inc. $ 0
