Opinion
Case No. 02-13533 (AJG), (Jointly Administered).
July 22, 2005
Ian Gazes, Esquire (IJG 7564), Gazes Associates, LLC, Attorneys for PSINet.
Anastasia Kelly, Executive Vice President and General Counsel.
ORDER APPROVING SETTLEMENT AGREEMENT
Upon the annexed Settlement Agreement by and between MCI, Inc. and PSINet Liquidating LLC, and all papers, pleadings and proceedings heretofore had herein, and no notice hereof being required, it is hereby
ORDERED, that the Settlement Agreement annexed hereto be and hereby is approved in its entirety.
SETTLEMENT AGREEMENT
This Settlement Agreement (this "Agreement") is made this 20th day of July, 2005, by and between MCI, Inc., a corporation organized under the laws of the State of Delaware, with its principal place of business at 22001 Loudoun County Parkway, Ashburn, Virginia 20147 and PSINet Liquidating LLC, as successor in interest to PSINet, Inc. and its affiliates ("PSINet"). The signatories to this Agreement will hereafter be referred to jointly as the "Parties."
PREAMBLE
WHEREAS, on May 31, 2001, PSINet, Inc. and certain of its direct and indirect subsidiaries commenced chapter 11 cases in the United States Bankruptcy Court for the Southern District of New York, captioned In re PSINet, Inc., et al., Case No. 01-13213-REG (the "PSINet Bankruptcy");
WHEREAS, on July 8, 2002, MCI, Inc. and/or one or more of its direct or indirect subsidiaries, filed a Request for Payment of Administrative Claim and filed various proofs of claim in the PSINet Bankruptcy (the "MCI Claims"), to which PSINet has objected;
WHEREAS, on July 21, 2002 and November 8, 2002, WorldCom, Inc. and certain of its direct and indirect domestic subsidiaries, (collectively, "MCI") commenced chapter 11 cases in the United States Bankruptcy Court for the Southern District of New York, captioned In re WorldCom, Inc., et al., Case No. 02-13533-ajg (the "WorldCom Bankruptcy"); WHEREAS, on November 20, 2002, PSINet filed Proof of Claim number 1616 (the "PSINet Proof of Claim") in the WorldCom Bankruptcy asserting preference claims, to which MCI has objected;
WHEREAS, disputes have arisen between the Parties concerning the MCI Claim and the PSINet Proof of Claim; and
WHEREAS, the Parties wish to compromise, resolve and settle the claims and causes of action that were or could have been asserted by the Parties in the PSINet Bankruptcy and the WorldCom Bankruptcy.
NOW, THEREFORE, in consideration of the releases and mutual promises contained herein and other good and valuable consideration exchanged among the Parties, and in the settlement of the PSINet preference action pending against MCI, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:
1.0 SETTLEMENT
1.1 The PSINet Proof of Claim shall be withdrawn from the WorldCom Bankruptcy with prejudice.
1.2 The MCI Claim shall be allowed in the PSINet Bankruptcy as an administrative claim in the amount of $2,000,000, which shall be paid within five business days after entry of final non-appealable orders of both the Bankruptcy Courts presiding over the PSINet Bankruptcy and the WorldCom Bankruptcy approving this agreement. 2.0 COMPROMISE
2.1 The Parties agree and acknowledge that this Agreement is the result of a compromise and shall never be construed as an admission of any liability, wrongdoing, or responsibility on their parts or on the parts of their predecessors, successors, assigns, agents, parents, subsidiaries, affiliates, officers, directors, or employees. Indeed, the Parties expressly deny any such liability.
3.0 PAYMENT IN FULL
3.1 The payment hereunder shall be in full and final satisfaction of any and all proofs of claim or administrative claims that could have been filed by the Parties in the PSINet Bankruptcy and the WorldCom Bankruptcy, and in full and final satisfaction of any amounts listed by MCI in its schedules as owing, or that may have been owing to PSINet.
4.0 RELEASES
4.1 In consideration of the payments set forth hereunder, PSINet hereby releases MCI, Inc., the MCI debtors and their predecessors, successors, parents, direct subsidiaries, indirect subsidiaries, affiliates, assigns, agents, their current and former directors, officers, employees, representatives insurers and shareholders (collectively the "Released MCI Parties"), from any and all claims, proofs of claim, debts, demands, damages, attorney's fees, judgments, liabilities, causes of action, or controversies of any kind whatsoever, whether at law or in equity whatsoever, whether matured or unmatured, whether before a local, state or federal court or state or federal administrative agency or commission, or arbitration administrator, and whether now known or unknown, liquidated or unliquidated, that PSINet has, may have had, asserted, or may have asserted against the Released MCI Parties on behalf of itself, or any other person or entity, at any time prior to and including the date of this Agreement; provided however, that nothing contained in this release shall prevent the Parties from asserting or pursuing any claim to enforce the terms of this Agreement.
4.2 In consideration of the payments set forth hereunder, and effective upon receipt of such payment, MCI, Inc. hereby releases PSINet, Inc. and its predecessors, successors, parents, direct subsidiaries, indirect subsidiaries, affiliates, assigns, agents, their current and former directors, officers, employees, representatives insurers and shareholders (collectively the "Released PSINet Parties"), from any and all claims, proofs of claim, debts, demands, damages, attorney's fees, judgments, liabilities, causes of action, or controversies of any kind whatsoever, whether at law or in equity whatsoever, whether matured or unmatured, whether before a local, state or federal court or state or federal administrative agency or commission, or arbitration administrator, and whether now known or unknown, liquidated or unliquidated, that MCI, Inc. has, may have had, asserted, or may have asserted against the Released PSINet Parties, on behalf of itself, or any other person or entity at any time prior to and including the date of this Agreement; provided however, that nothing contained in this release shall prevent the Parties from asserting or pursuing any claim to enforce the terms of this Agreement.
5.0 MISCELLANEOUS TERMS AND CONDITIONS
5.1 This document contains the complete Agreement between the Parties.
5.2 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.
5.3 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.
5.4 This Agreement shall be binding upon 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 or she is authorized to execute this Agreement and to bind the Parties hereto.
5.5 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.
5.6 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. 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.
5.7 The Parties acknowledge that they have had the opportunity to consult with legal counsel of their choosing prior to entering into this Agreement and that they enter this Agreement knowingly and voluntarily.
5.8 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 any Party.
5.9 In the event that any Party breaches any term of this Agreement and another Party is required to employ counsel to enforce its rights, the prevailing Party shall recover its attorneys' fees and costs incurred therein.
5.10 Any notices required under this Agreement shall be served upon the Parties via overnight priority mail as follows:
Notices to MCI, Inc.:
Brian H. Benjet Director, Corporate and Financial Litigation MCI, Inc. 1133 19th Street Washington, D.C. 20036 Telephone No. (202) 736-6409 Telecopier No. (202) 736-6072
Notices to PSINet:
Andrew Goldman, Esq. Wilmer Cutler Pickering Hale and Dorr LLP 399 Park Avenue New York, NY 10022 Telephone No. (212) 230 8836 Telecopier No. (212) 230 8888
5.11 This Agreement shall be governed, in all respects, under the laws of the State of New York, irrespective of its choice of law rules.
5.12 The preamble provisions are incorporated into this agreement by reference as if they are a part of this agreement.
IN WITNESS WHEREOF, we have hereunto set our hands and seals as of the date above written.