Case Doc 941 Filed 02/07/13 Entered 02/07/13 17:30:27 Desc Main Document Page 1 of 13

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1 Document Page 1 of 13 UNITED STATES BANKRUPTCY COURT DISTRICT OF MASSACHUSETTS (Eastern Division) In re: TRANS NATIONAL COMMUNICATIONS INTERNATIONAL, INC., Chapter 11 Case No WCH Debtor. MOTION BY DEBTOR FOR ORDER APPROVING AGREEMENT BY AND BETWEEN DEBTOR AND QWEST COMMUNICATIONS COMPANY, LLC AND QWEST CORPORATION REGARDING (I) ASSUMPTION AND ASSIGNMENT OF CERTAIN CONTRACTS AND (II) DISPUTED TRAFFIC RESOLUTION Trans National Communications International, Inc. (the Debtor ), the debtor and debtorin-possession in the above case, moves for entry of an order approving the Agreement Regarding (I) Assumption and Assignment of Certain Contracts and (II) Disputed Traffic Resolution (the Settlement Agreement ) by and between the Debtor, on the one hand, and Qwest Communications Company, LLC ( QCC ) and Qwest Corporation ( QC and together with the Debtor and QCC, the Parties ), on the other hand. The Settlement Agreement, among other things, resolves some or all (depending upon the assumption and assignment of the Debtor s contracts with QCC and QC) of the claims asserted by QCC and QC against the Debtor, generally resolves the increased rate dispute and the related adversary proceeding currently pending before this Court as Adversary Proceeding No WCH, and provides terms pursuant to which the Debtor may assume its contracts with QCC and QC and assign them to a buyer pursuant to Section 365 of the Bankruptcy Code, thereby enhancing the Debtor s ability to effectuate a sale of substantially all of its assets.

2 Document Page 2 of 13 On February 1, 2013, the Debtor filed a motion requesting the authority to sell substantially all of its assets (the Sale Motion ) to Blue Casa Telephone, LLC ( Blue Casa ). The Sale Motion currently contemplates, as the Debtor s asset purchase agreement with Blue Casa requires, that the Debtor s contracts with QCC and QC will be assumed and assigned to Blue Casa. Because the terms under which QCC and QC have agreed to the assumption and assignment of their contracts are contained in the Settlement Agreement and are implicated in the Sale Motion, the Debtor has separately requested that the notice period with respect to the Settlement Agreement be shortened. In further support of this motion, the Debtor avers as follows: BACKGROUND 2 1. On October 9, 2011 (the Petition Date ), the Debtor filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code (the Bankruptcy Code ) in the United States Bankruptcy Court for the District of Massachusetts (the Bankruptcy Court ) thereby commencing Case No WCH (the Bankruptcy Case ). 2. The Debtor and QCC are parties to a Wholesale Services Agreement, effective as of March 29, 2002 (and any and all amendments, annexes, exhibits, addenda, schedules, attachments, contract orders and rate change notifications thereto, the WSA ), pursuant to which QCC provides the Debtor with various telecommunications and related services. 3. The Debtor and QC are parties to various contracts and agreements including (i) Interconnection Agreements for the States of Arizona, Colorado, Idaho, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington and Wyoming; (ii) a Qwest Local Services Platform Agreement, effective as of December 12, 2010, 2 Capitalized terms not defined in this motion shall have the meanings ascribed to such terms in the Settlement Agreement.

3 Document Page 3 of 13 and (iii) tariffs filed by QC with the Federal Communications Commission and/or certain state regulatory bodies (collectively, the QC Contracts, and together with the WSA, the Contracts ), pursuant to which QC provides the Debtor with various telecommunications and related services. 4. Prior to the Petition Date, the Debtor routed to QCC s network certain toll-free calls generally lasting between 6 and 25 seconds involving a certain credit-card verification customer (the Disputed Traffic ). Due to the relatively short length of the calls comprising the Disputed Traffic, and because QCC incurs a flat-rate charge on toll-free calls regardless of the call duration, QCC asserts that it costs QCC more to provide such services than the Debtor pays for such services. 5. On September 14, 2011, QCC issued a rate change notice to the Debtor pursuant to which QCC provided thirty (30) days notice of rate increases for, inter alia, the Disputed Traffic (the Rate Change Notice ). The Debtor asserts, among other things, that QCC did not have the right to increase the rates on the Disputed Traffic. 6. On November 17, 2011, the Bankruptcy Court entered an Order Establishing Adequate Assurance of Payment to Qwest Corporation and Qwest Communications Company, LLC Under Bankruptcy Code Section 366 (the Adequate Assurance Order ) [docket no. 214] pursuant to which, among other things, the Debtor is required to provide certain assurances of post-petition payment to QCC and QC, including, but not limited to, the establishment of the Increased Rate Dispute Deposit, as such term is defined in the Adequate Assurance Order. 7. On or about December 15, 2011, the Debtor filed a Complaint for a Declaratory Judgment against QCC (the Complaint ) in the Bankruptcy Case, thereby commencing adversary proceeding # WCH (the Adversary Proceeding ).

4 Document Page 4 of On January 19, 2012, QCC filed its Answer, Affirmative Defenses and Counterclaims of QCC to Complaint. On February 15, 2012, the Debtor filed the Answer and Affirmative Defenses of the Debtor to Counterclaims Brought by QCC. 9. On August 28, 2012, the Debtor filed a second-amended Complaint. On September 26, 2012, QCC filed a motion to dismiss the Adversary Proceeding. The motion to dismiss the Adversary Proceeding is currently under advisement with the Court. 10. QCC filed two proofs of claim against the Debtor s bankruptcy estate (the Estate ) in the aggregate amount of $3,814, (the QCC Pre-Petition Claim ), which claims are listed in the Bankruptcy Court s claims register in the Bankruptcy Case as Claim Nos. 53 and QC filed a proof of claim against the Estate in the amount of $120, (the QC Pre-Petition Claim ), which claim is listed in the Bankruptcy s Court s claims register in the Bankruptcy Case as Claim No Since the Petition Date, QCC asserts that the Debtor has incurred shortfall charges under Amendment No. 38 to the WSA in the aggregate amount of $1,280, (the Post- Petition Shortfall Charges ). The Debtor disputes the Post-Petition Shortfall Charges and QCC s assertion that such charges are entitled to administrative expense claim priority. 13. Subject to Court approval, the Debtor has resolved its disputes with QCC and QC regarding QCC s and QC s claims against the Estate in a manner that (a) generally resolves the Adversary Proceeding and the issues regarding the increased rate and the Disputed Traffic and (b) provides a mechanism for the assented-to assumption and assignment of the QCC and QC contracts. The Settlement Agreement is in the best interests of the Estate and its creditors and should be approved.

5 Document Page 5 of 13 SUMMARY OF SETTLEMENT AGREEMENT 14. A summary of the terms of the Settlement Agreement follows: 3 A. The Disputed Traffic Resolution a. Within two (2) business days of the approval of the Settlement Agreement, the Debtor will pay to QCC the sum of the following amounts: (a) any unpaid amounts (at the Prior Rates) owed to QCC under the Adequate Assurance Order for the Disputed Traffic between the Petition Date and December 31, 2012 (the Interim Period ), (b) the aggregate amount that TNCI was required by the Adequate Assurance Order to deposit during the Interim Period in the "Increased Rate Dispute Deposit," and (c) the ratable portion of the payments and deposits (including, but not limited to, the amount for Disputed Traffic at the Prior Rates and the amount otherwise payable into the "Increased Rate Dispute Deposit") referred to in paragraph 2 of the Adequate Assurance Order related to the Disputed Traffic that otherwise would be paid or made on the Wednesday following the Disputed Traffic Deadline. b. The Debtor represents and warrants that (a) the Debtor has removed the Disputed Traffic from QCC s network as of the Disputed Traffic Deadline; (b) at no time after the Disputed Traffic Deadline did or will the Debtor route any Disputed Traffic to or on QCC s network; (c) as of the Disputed Traffic Deadline, TNCI is not aware of any Similar Traffic being routed to or on QCC s network; and (d) at no time after the Disputed Traffic Deadline, will TNCI route any Similar Traffic to or on QCC s network or authorize any customer to do so. c. QCC acknowledges that, as of January 1, 2013, QCC was not aware of any Similar Traffic being routed to QCC s network. d. If any Disputed Traffic is routed to or on QCC s network after the Disputed Traffic Deadline or if the Debtor routes any Similar Traffic or authorizes a customer to route Similar Traffic to QCC s network after the Disputed Traffic Deadline: i. The Debtor (a) immediately will pay for all such Disputed or Similar Traffic already routed to or on QCC s network and (b) thereafter, will pay, weekly in advance, for any future Disputed or Similar Traffic. Such payments are deemed to be payments for undisputed charges under paragraph 2 of the Adequate Assurance Order. The Debtor will make such payments directly to QCC in the amounts necessary to pay QCC s 3 The summary of the Settlement Agreement described in this motion is for convenience only. The Settlement Agreement contains additional terms and provisions, and interested parties should review the entire Settlement Agreement. If there is any inconsistency between the summary set forth in this motion and the terms and conditions of the Settlement Agreement, the Settlement Agreement shall govern.

6 Document Page 6 of 13 charges at the rates QCC in its good faith discretion deems appropriate on five (5) calendar days notice to the Debtor or, in the absence of such notice, at the rates set forth in the Rate Change Notice, for all such Disputed or Similar Traffic on QCC s network after the Disputed Traffic Deadline; and ii. The Debtor will be in default of the Settlement Agreement and the WSA, and QCC may suspend, terminate and/or disconnect any or all services provided by QCC to the Debtor as though all default, cure or similar notices had been sent to the Debtor and all applicable cure periods had expired; provided, however, that prior to such termination QCC will have filed a certification of default with the Bankruptcy Court. Nothing in the Settlement Agreement will prevent the Debtor or any other party in interest from seeking an injunction to prevent any termination of service, or prevent QCC from opposing the entry of such an injunction. e. If, unbeknownst to TNCI, any TNCI customer routes any Similar Traffic to or on QCC s network after the Disputed Traffic Deadline: i. TNCI (a) immediately will pay for all such Similar Traffic already routed to or on QCC s network and (b) thereafter, will pay, weekly in advance, for any future Similar Traffic. Such payments are deemed to be payments for undisputed charges under paragraph 2 of the Adequate Assurance Order. TNCI will make such payments directly to QCC in the amounts necessary to pay QCC s charges at the rates QCC in its good faith discretion deems appropriate on five (5) calendar days notice to TNCI or, in the absence of such notice, at the rates set forth in the Rate Change Notice, for all such Similar Traffic on QCC s network after the Disputed Traffic Deadline; and ii. TNCI will have five (5) calendar days after receipt of a notice from QCC that identifies the Similar Traffic that has been routed to or on QCC s network to remove the identified Similar Traffic from QCC s network. If TNCI fails to remove the identified Similar Traffic within five (5) calendar days after receipt of the foregoing notice, TNCI will be in default of the Settlement Agreement and QCC may suspend, terminate and/or disconnect any or all services provided by QCC to TNCI as though all default, cure or similar notices had been sent to TNCI and all applicable cure periods had expired; provided, however, that prior to such termination QCC will have filed a certification of default with the Bankruptcy Court. Nothing in the Settlement Agreement will prevent TNCI or any other party in interest from seeking an injunction to prevent any termination of service, or prevent QCC from opposing the entry of such an injunction. f. Within two (2) business days after the Approval Date, the Debtor will (a) dismiss with prejudice the Adversary Proceeding and (b) be deemed to have waived and

7 Document Page 7 of 13 released all of the estate s (and the Debtor s) claims and causes of action against any of QCC, QC, and each of their respective affiliates, as of the later of the date of the Settlement Order or the Final Closing, including, but not limited to, all claims and causes of action, whether contingent or fixed, matured or unmatured, known or unknown, statutory or at common law, at law or in equity, (i) asserted in the Adversary Proceeding, (ii) under chapter 5 of the Bankruptcy Code, or (iii) relating to or in connection with any services, credits or billing disputes; provided, however, that (a) if the WSA is not assumed and assigned to the Buyer at the Final Closing and (b) if QCC asserts the Unsegregated Disputed Rate Claim against the Debtor, the Debtor will retain all of its defenses to QCC s entitlement to the Unsegregated Disputed Rate Claim and will be able to assert such defenses as though the stipulation of dismissal had not been filed. g. QCC shall be allowed an administrative expense claim under Section 503(b)(1)(A) of the Bankruptcy Code in the amount of $250,000 (the Shortfall Administrative Expense Claim ), which allowed administrative expense claim (a) will have a payment priority pari passu, and will be paid contemporaneously, with any payment on account of the Sprint Administrative Expense Claim or, (b) if there is no Sprint Administrative Expense Claim or the Sprint Administrative Expense Claim is waived in full, will have a payment priority that is immediately subordinate to, and will be paid (to the extent funds are or become available) after, administrative expense claims allowable under Section 330 or 503(b)(1)(A) of the Bankruptcy Code (but ahead of unsecured claims (whether priority or nonpriority)). h. To the extent that the Buyer does not pay the remaining Post-Petition Shortfall Charges (the Remaining Post-Petition Shortfall Charges ), the amount of the Remaining Post-Petition Shortfall Charges is (a) an allowed unsecured, nonpriority claim in the Bankruptcy Case and (b) not subject to objection or reduction for any reason; provided, however, that, if the Contracts are assumed and assigned to Buyer at the Final Closing in accordance with the terms and conditions of the Settlement Agreement and the Definitive Agreement, QCC will be deemed to have waived its claim against the Debtor for the Remaining Post- Petition Shortfall Charges. i. Upon the Approval Date, with respect to the Estate (and without prejudice to QCC s rights with respect to the Buyer), QCC will be deemed to have waived its right to seek administrative expense claim priority for the Remaining Post- Petition Shortfall Charges. j. The QCC Prepetition Claim is (a) an allowed unsecured, nonpriority claim in the Bankruptcy Case and (b) not subject to objection or reduction for any reason; provided that, upon the payment of the QCC Pre-petition Cure Payment at the Final Closing of a sale of the Debtor s assets, QCC will be deemed to have waived its right to seek payment from the Estate on account of the QCC Prepetition Claim (without prejudice to QCC s rights with respect to the Buyer).

8 Document Page 8 of 13 k. The QC Prepetition Claim is (a) an allowed unsecured, nonpriority claim in the Bankruptcy Case and (b) not subject to objection or reduction for any reason; provided that, upon the payment of the QC Pre-petition Cure Payment at the Final Closing of a sale of the Debtor s assets, QC will be deemed to have waived its right to seek payment from the Estate on account of the QC Prepetition Claim (without prejudice to QC s rights with respect to the Buyer). l. Due to the fact that the Settlement Agreement is important to the sale process, the deadline for obtaining court approval of the Settlement Agreement is February 28, 2013, and the Parties agree that the order of approval must contain the findings of fact and decretal provisions set forth in the proposed order attached as Exhibit A. B. Assumption and Assignment of the Contracts m. The Debtor will not assign or transfer any of the services provided under any of the Contracts or any related accounts, or the economic benefits and burdens related to such services or accounts, unless and until the Contracts are assumed and assigned in accordance with the Settlement Agreement. Notwithstanding any other provision of the Settlement Agreement, the APA or any Sale Order, the Debtor will assume and assign the Contracts to the Buyer only upon satisfaction (or QCC s and QC s waiver in their discretion) of the following: i. The Debtor complies with all the requirements of Section 365 of the Bankruptcy Code, including, but not limited to, the payment in full of QCC s and QC s allowed claims; or ii. The Debtor complies with each of the following: (A) (B) (C) (D) The Debtor timely has complied with all of its obligations under the Settlement Agreement through the Final Closing; The Sale Order contains the provisions required by the Settlement Agreement; The Buyer, on the one hand, and QC and QCC, on the other hand, have executed a Definitive Agreement; The Buyer timely pays to, respectively, QCC and QC, at such time as is required by a Definitive Agreement, the QCC Pre-Petition Cure Payment, the QC Pre-Petition Cure Payment, and any other payments required by the Definitive Agreement that are due as of the Final Closing. n. The Parties agree that payment of the following will be deemed to cure all payment defaults as of the Final Closing Date: i. To QCC: Timely payment of the QCC Cure Payment (and the Disputed Traffic payments required above) and any payments then due from the Buyer relating to the Post-Petition Shortfall Charges upon assumption or under a Definitive Agreement.

9 Document Page 9 of 13 ii. To QC: Timely payment of the QC Cure Payment. o. Pending the Debtor s assumption and assignment of the Contracts, the Debtor, QCC, and QC timely will perform their respective obligations under the Contracts, the Adequate Assurance Order and the Settlement Agreement according to the terms thereof (as modified by the Settlement Agreement). Following the Final Closing Date, the Parties will comply with the true-up provisions of the Adequate Assurance Order for the month in which the Final Closing Date occurred (the Final True-Up ). The Party or Parties that owe money to any other Party or Parties on account of the Final True-Up will pay such amount within ten (10) business days after the Final True-Up. p. Except for the Other Post-Petition Amounts and any amounts that may be due on account of the Final True-Up, the Debtor s assumption of the Contracts will constitute an acknowledgement by each Party that the other Parties have complied with all of their respective obligations under the Contracts as of the Final Closing Date and that no amounts are due or owing as of the Final Closing Date from any Party. q. At the Final Closing, subject to satisfaction of the terms and conditions of the Settlement Agreement and a Definitive Agreement, the Contracts will be assumed by the Debtor and assigned to the Buyer in their entirety, except that Section 3 of Amendment No. 38 to the WSA will be deemed prospectively to be deleted from the WSA immediately after the Final Closing Date. r. Nothing in the Settlement Agreement will restrict the Debtor s ability to reject the Contracts. C. Additional Terms of the Settlement Agreement s. Notwithstanding any provision of a Sale Order or an APA, only the terms set forth in the Settlement Agreement will govern the resolution as between the Debtor, on the one hand, and QCC and QC, on the other hand, of (a) the Adversary Proceeding and the Disputed Traffic issue and (b) the assumption and assignment of the Contracts. t. The Sale Approval Date will occur on or prior to June 1, 2013 (unless extended in writing by each of QCC and QC in its discretion). The Sale Order will not conflict with the terms of the Settlement Agreement and will contain specified provisions set forth in the Settlement Agreement. u. Except as otherwise provided in the Settlement Agreement with respect to the Disputed Traffic, after the Final Closing Date, the Debtor timely will pay to QCC and QC (in accordance with and at the rates provided under the WSA) all (a) amounts (including, but not limited to, fees, taxes and other charges) owing under the Adequate Assurance Order as of the Final Closing Date and (b) amounts

10 Document Page 10 of 13 (including. but not limited to, fees, taxes and other charges) that accrued prior to the Final Closing Date and are due and payable after the Final Closing Date, for services or products that QCC and QC provided to the Debtor (the Other Post- Petition Amounts ). v. At the Closing, the Debtor will escrow from the Sale proceeds amounts sufficient to pay in full the Other Post-Petition Amounts. w. Except as otherwise provided in the Settlement Agreement, conditioned upon (a) the assumption and assignment of the Contracts at the Final Closing, and (b) the Debtor s full compliance with its obligations under the Settlement Agreement (including, but not limited to, the Debtor s post-final Closing Date obligations, if any), each of QCC and QC will be deemed to have waived and released the Debtor from any and all (x) prepetition claims, debts, credits, demands or causes of action, known or unknown, at law or in equity, that accrued or arose at any time prior to the Petition Date and (y) post-petition claims debts, credits, demands or causes of action that accrued or arose at any time prior to the date of the Settlement Agreement, solely to the extent that the foregoing relates to the Contracts, the Debtor or the Bankruptcy Case; provided, however, that nothing in the Settlement Agreement will waive or release QCC s or QC s right to (i) assert ordinary course billing disputes or (ii) the Debtor s performance under the Settlement Agreement and the Buyer s performance under the Definitive Agreement. THE SETTLEMENT AGREEMENT IS IN THE BEST INTERESTS OF THE ESTATE 15. Federal Rule of Bankruptcy Procedure 9019(a) provides, in pertinent part, that [o]n motion by the trustee and after notice and a hearing, the court may approve a compromise or settlement. See also MLBR A settlement should be approved when it is fair, equitable and in the best interests of the estate. See Protective Comm. for Indep. Stockholders of TMT Trailer Ferry, Inc. v. Anderson, 390 U.S. 414, 424 (1968). The First Circuit Court of Appeals has held that a bankruptcy court should also consider the following factors in determining whether to approve a settlement: a. The probability of success in the litigation being compromised; b. The difficulties, if any, to be encountered in the matter of collection; c. The complexity of the litigation involved and the expense, inconvenience and delay in pursuing the litigation; and

11 Document Page 11 of 13 d. The paramount interest of the creditors and a proper deference to their reasonable views. Jeffrey v. Desmond, 70 F.3d 183, 185 (1 st Cir. 1995); see also Hicks, Muse & Co., Inc. v. Brandt, 136 F.3d 45, 50 (1 st Cir. 1998). 16. Courts generally defer to a debtor in possession that is exercising its valid business judgment. See The Underwriters at Lloyds, London v. Chancellor Corp., 333 B.R. 587, 608 (Bankr. D. Mass. 2005). 17. The Debtor s dispute with QCC and QC began before this case was filed, and continued post-petition. The Adversary Proceeding is complex litigation in which QCC or the Debtor has raised, among other things, issues of jurisdiction, venue, federal communications law, regulatory law, preemption, and applicable state law. While the Debtor believes that its claims in the Adversary Proceeding are meritorious, the Adversary Proceeding will be expensive to prosecute and will take a long time to bring to a final resolution. On the other hand, QCC does not believe the Debtor s claims are meritorious, and QCC will continue vigorously to defend the Debtor s claims in the Adversary Proceeding. Moreover, any affirmative recovery against QCC in the Adversary Proceeding may be subject to setoff and/or recoupment on account of QCC s other claims against the Debtor. 18. The resolution of the two disputed administrative claims asserted by QCC the Disputed Traffic increased rate claim and the Post-Petition Shortfall Charges represent compromises of these claims by both QCC and the Debtor. In the case of the Disputed Traffic, upon assumption of the Contracts, QCC is waiving its Unsegregated Disputed Rate Claim (which is approximately one-half (1/2) of its asserted administrative claim relating to the Disputed Traffic). In the case of the Post-Petition Shortfall Charges, QCC is agreeing (a) upon approval of

12 Document Page 12 of 13 the Settlement Agreement, to a $250,000 subordinated administrative claim (i.e,, the Shortfall Administrative Claim) and a waiver of its right to seek an administrative claim for the Remaining Post-Petition Shortfall Charges (which will be an allowed unsecured claim) and (b) if the Contracts are assumed and assigned to a buyer with a Definitive Agreement, QCC further agrees to waive its allowed unsecured claim against the Estate for the Remaining Post-Petition Shortfall Charges (without prejudice to QCC s rights to recover such charges from the successful purchaser). 4 Therefore, under the Settlement Agreement, all of QCC s and QC s claims under the Contracts against the Estate, with the exception of the Shortfall Administrative Claim, are waived if the Contracts are assumed and assigned to a buyer with a Definitive Agreement in accordance with the Settlement Agreement. 19. Beyond this, the Settlement Agreement also provides a mechanism whereby the Contracts may be assumed and assigned to a buyer of substantially all of the Debtor s assets. By the Sale Motion, the Debtor is requesting such a sale to Blue Casa, which, as part of the proposed asset purchase agreement attached to the Sale Motion, requires the assumption and assignment of the Contracts. 20. Absent the agreement of some or all of the Debtor s major carriers, including QCC and QC, to agree with bidders (like Blue Casa) to a compromise of the carriers prepetition cure claims, the Debtor may be unable to consummate a sale of its assets. 21. The Settlement Agreement therefore provides additional value to the Estate by promoting the sale contemplated in the Sale Motion. 4 If the Contracts are rejected by the Debtor, notwithstanding the dismissal of the Adversary Proceeding, the Settlement Agreement provides that Qwest may assert the Unsegregated Disputed Rate Claim and that the Debtor s defenses to that claim are preserved.

13 Document Page 13 of For the foregoing reasons, the Settlement Agreement is fair and equitable and in the best interests of the Estate and its creditors, and it should be approved. NOTICE 23. Contemporaneously with this motion, the Debtor has filed a motion to shorten the notice period with respect to the Settlement Agreement and limit notice of this motion (the Notice Motion ), and will serve this motion in accordance with the Court s order on the Notice Motion. WHEREFORE, the Debtor respectfully requests that the Court enter an order, in the form attached as Exhibit A containing the provisions required by the Settlement Agreement: (a) granting this motion; (b) approving the Settlement Agreement; (c) authorizing the Debtor to effectuate the Settlement Agreement; and (d) granting to the Debtor such other and further relief as the Court deems just and proper. Respectfully submitted, TRANS NATIONAL COMMUNICATIONS INTERNATIONAL, INC. By its counsel, Date: February 7, 2013 /s/ D. Ethan Jeffery Harold B. Murphy (BBO #362610) D. Ethan Jeffery (BBO #631941) Natalie B. Sawyer (BBO #660072) MURPHY & KING P.C. One Beacon Street, 21st Floor Boston, MA Telephone: (617) Facsimile: (617) nbs@murphyking.com

14 Case Doc Filed 02/07/13 Entered 02/07/13 17:30:27 Desc Exhibit A Page 1 of 5 IN RE: TRANS NATIONAL COMMUNICATIONS INTERNATIONAL, INC. BANKRUPTCY N WCH E~~iT A To MOTION BY DEBTOR FOR ORDER APPROVING AGREEMENT BY AND BETWEEN DEBTOR ANA QWEST COMMUNICATIONS COMPANY, LLC AND QWEST CORPORATION REGARDING (I) ASSUlV~PTION AND ASSIGNMENT OF CERTAIN ~QNTRACTS AND (II) DISPUTED TRAFFIC RESOLUTION

15 Case Doc Filed 02/07/13 Entered 02/07/13 17:30:27 Desc Exhibit A Page 2 of 5 UNITED STATES BANKRUPTCY COURT DISTRICT OF MASSACI-~USETTS (Eastern D~vis~n) ) In re: ) Chapter 11 TRANS NATIONAL COMMUNICATIONS INT~R.NATIONAL, INC., ) Case No WCH Debtor. ) ORDER GRANTING MOTION BY DEBTOR FOR O~tDER APPROVING AGREEMENT REGARDING (I).ASSUMPTION AND ASSIGNMENT OF CERTAIN CONTRACTS AND (II) DISFUT~D TRAFFIC RESOLUTION Upon the motion of Trans National Communications International, Inc. (the "Debtor") seeking approval of the Agreement. Regarding (I) Assumption and Assignment of Certain Contracts and (II) Disputed Traffic Resolution, by and between the Aebtor; on the one hand, and Qwest Communications Company, LLC ("QCC") and Qwest Corporation ("QC"), on the other hand, dated as of February 5, 2013 (the "Qwest Settlement Agreement"), and after notice and an opportunity for a hearing under 11 U.S.C. 102(1), for the reasons set forth in the Motion, the Court finds that (i) it has jurisdiction over the matters raised in the motion under 28 U.S.C. 157 and 1334, (ii) this is a core proceeding under 28 U.S.C. 157(b)(2), (iii) having considered the probability of success in the Adversary Proceeding (as defined below), the complexity of the issues involved in the increased rate dispute. and the other issues in the Adversary Proceeding, the delay necessarily attending it, and the paramount interest of the creditors in resolving the increased rate dispute and the other issues in the Adversary Proceeding to enhance the Debtor's opportunity to effectuate a sale of substantially all of its assets, the Qwest Settlement Agreement is reasonable and in the best interest of the bankruptcy estate, (iv)

16 Case Doc Filed 02/07/13 Entered 02/07/13 17:30:27 Desc Exhibit A Page 3 of 5 adequate notice of the motion has been given and no further notice is necessary, and (v) good and sufficient cause exists for the granting of the relief requested, as modified herein. Therefore, IT IS H~R~BY ORDERED, ADJUDGED, AND DECREED: 1. The Motion is granted; 2.. The Qwest Settlement Agreennent is approved and deemed to be incorporated into any chapter 11 plan co~~rmed in the Debtor's bankruptcy case; 3. This Order (a) constitutes the resolution of the increased rates dispute under the Order Establishing Adequate Assurance of Payment to Qw~st Corporation and Qwest Communications Company, LLC Under Bankruptcy Code Section 366 (D.I. 214) (the ".Adequate Assurance Order") and (b) authorizes the disposition of the funds that the Adequate Assurance Order required the Debtor to deposit in the "Increased Rate. Dispute Deposit," as such term is defined in the Adequate Assurance Order; 4. Notwithstanding any provision of the Adequate Assurance Order, the Contracts,l the APA, a Definitive Agreement, or any other agreement, if any Disputed Txaffic is routed to ar on QCC's network after the. Disputed Traffic Deadline, (a) the Debtor (i) immediately will pay for all such Dis}~uted Traffic already routed to or an QCC's network end (ii) thereafter, will pay, weekly iii advance, for any ~iatlu e Disputed Traffic. Such payments.are deemed to be payments for "undisputed charges" under paragraph 2 of the Adequate Assurance Order. The i~ebtor will make such payments directly to QCC in the amounts necessary to pay QCC's charges at the rates QCC in its discretion deems appropriate on five (5) calendar days' notice to the Debtor or, in the absence of such notice, at the rates set forth in the Rate Change Notice, for all such Disputed Traffic on QCC's network after the Disputed Traffic Deadline; and (b) the Debtor will be in default of the Qwest Settlement Agreement and the WSA, and QCC may suspend, terminate and/or disconnect any or all services provided by QCC to the Debtor as though all default, cure or similar notices had been sent to the Debtor and all applicable cure periods had expired, provided, however, that prior to such termination QCC will have filed a certification of default with this Court. Nothing in the Qwest Settlement Agreement will prevent the Debtor or any other party in interest from seeking an injunction to prevent any termination of service, or prevent QCC from opposing the entry of such an injunction; 5. Notwithstanding any provision of the Adequate Ass ranee Order, the Contracts, the APA, a Definitive Agreement, or any other agreement, if the Debtor, or any customer of ' Capitalized terms that are not defined in this Order, but are defined in the Qwest Settlement Agreement, will have the meaning ascribed to such terms in the Qwest Settlement Agreement. -2-

17 Case Doc Filed 02/07/13 Entered 02/07/13 17:30:27 Desc Exhibit A Page 4 of 5 the Debtor with the Debtor's approval, routes any Similar Traffic to or on QCC's network after the Disputed Traffic Deadline, (a) the Debtor (i) immediately will pay for all such Similar Traffic already routed to or on QCC's network and (ii).thereafter, will pay, weekly in advance, for any future Similar Traffic. Such payments are deemed to be payments for "undisputed charges" under paragraph 2 of the Adequate Assurance Order. The Debtor will make such payments directly to QCC in the amounts necessary to pay QCC's charges at the rates QCC in its discretion deems appropriate on five (S) calendar days' notice to the Debtor or, in the absence of such notice, at the rates set forth in the Rate Change Notice, for all such Similar Traffic on QCC's network after tl~e Disputed Traffic Deadline; and (b) the Iaebtor will be in default of.the Qwest Settlement Agreement and the WSA, and QCC may suspend, terminate and/or disconnect any or all services provided by QCC to the Debtor as though all default, cure ar similar notices had been sent to the Debtor and all applicable cure periods had expired, urovided, however, that prior to such termination QCC will have filed a certification of default with this Court. Nothing in the Qwest Settlement.Agreement will prevent the Debtor or any other party in interest from seeking an injunction to prevent any termination of service, or prevent QCC from opposing tie entry of such an injunction; 6. Notwithstanding any provision of the Adequate Assurance Order, the contracts, the APA, a Definitive Agreement, or any other agreement, if unbeknownst to the Debtor, any customer of the Debtor routes any Similar Traffic to or on QCC's network after the Disputed Traffic Deadline, the Debtor (a)(i) immediat~~y will pay for all such Similar Traffic already routed to or on QCC's network and (ii) thereafter, will pay, weekly in advance, for any future Similar Traffic..Such payments are deemed to be payments for "undisputed charges" under paragraph 2 of the Adequate Assurance Order. The Debtor will make such payments directly to QCG in the amounts necessary to pay QCC's charges at the rates QCC in its discretion deems appropriate on five (5) calendar days' notice to the Debtor or, in the absence of such notice, at the rates set forth in the Rate Change Notice, for all such. Similar Traffic on QCC's network after the Disputed Traffic Deadline; and (b) the Debtor will have five (5) calendar days after receipt of a notice from QCC that identifies the Similar Traffic that has been routed to or on QCC's network to remove the identified Similar Traffic from QCC's network, and if the Debtor fails to remove the identified Similar Traffic within five (5) calendar days after receipt of the foregoing notice, the Debtor will be in default of the Qwest Settlement Agreement and the WSA, and QCC may suspend, terminate and/or disconnect any or all services provided by QCC to the Debtor as though all default, cure or similar notices had been sent to the Debtor and all applicable cure periods had expired; provided, however, that prior to such termination QCC will have filed a certification of default with this Court. Nothing in the Qwest Settlement Agreement will prevent the Debtor or any other party in interest from seeking an injunction t~ prevent :any termination of service, or prevent QCC from opposing the entry of such an injunction; -3-

18 Case Doc Filed 02/07/13 Entered 02/07/13 17:30:27 Desc Exhibit A Page 5 of 5 7. Within two (2) business days after entry of this Order, the Debtor will pay to QGC (by wire transfer to the QCC Account) the Disputed Traffic Payment; 8. Within two (2) business days after entry of this Order, the Debtor will (a) dismiss with prejudice. (including, the preparation, execution and filing of a stipulation of dismissal with prejudice, in form and content acceptable to QCC in its discretion) the adversary proceeding styled as Trans National Communications International, Inc. v. Qwest Communications Company, LLC, Adversary # WCH (Banks. D.Mass.) (the "Adversary Proceeding") and (b) be deemed to have. waived and released all of the estate's (and the Debtor's) claims and causes of action against any of QCC, QC, and each of their xespactiv~ affiliates, as of the later of the date of this Order or the Final Closing, including, but not limited to, all claims and.causes of action, whether contingent or fixed, matured or unmatured, known or unknown, statutory or at common law, at law or in equity, (i) asserted in the Adversary Proceeding, (ii) under chapter S of the Bankruptcy Code, or (iii) relating to or in connection with any services, credits ox billing disputes; provided, however, 'that (a) if the WSA is not assumed and assigned to the Buyer at the Final Closing and (b) if QCC asserts the Unsegregated Disputed Rate Chaim against the Debtor, the Debtor will retain all of its defenses to QCC's entitlement to the Unsegregated Disputed Rate Claim and will be able to assert such defenses as though the stipulation of dismissal had not been filed; 9. The QC Prepetition Claim, the QCC Prepetiton Claim, the Sk~ortfall Administrative Expense Claim and the Remaining Post-Petition Shortfall Charges are allowed and will be paid and/or waived as and to the extent provided in the Qwest Settlement Agreement and a Definitive Agreement; 10. The Debtor, QC and QCC will comply with their respective obligations under the Adequate Assurance Order (as modified by this Order and the Qwest Settlennent Agreement) through the date of the Final Closing; and 1 l. To the extent of any inconsistency between (i) the Adequate Assurance Order, this Order, any other court order, any agreement among the Debtor and the Buyer (or its designee), or any confirmed chapter 11 plan and (ii) the Qwest Settlement Agreement, the Qwest Settlement Agreement will govern. Dated:, 2013 Hon. William C. Hilitnan United States Bankruptcy Judge :~!