3. The Settlement Agreement

The principal terms of the Settlement Agreement between Broadvox and CPSD are as follows:

Broadvox has agreed to file an amendment to this application, which adequately discloses the regulatory history of the company and that of its officers, directors, and/or shareholders holding a 10 percent or greater ownership interest in the company.

Broadvox and CPSD consent to a Commission decision in this proceeding which grants approval of the amended application, subject to Commission approval of the Settlement Agreement and inclusion of the following paragraphs in the ordering paragraphs of the Commission decision:

1) Payment of Fine - A requirement that Broadvox pay a fine of $5,000 to the Commission within 10 days of the issuance of a Commission decision granting the amended application.

2) No Further Involvement of Yesil in Ownership or Management of Broadvox - A satisfied requirement that Broadvox present proof that Yesil no longer has any legal, beneficial, or equitable interest in Broadvox or its affiliates.

1) Violation of Rule 1.1 - Broadvox admits that it violated Rule 1.1 by failing to disclose the bankruptcy of NeTel, Inc., if not the regulatory history and other cited matters related to telecommunications carriers in which Yesil had an ownership interest or management role, even if Broadvox's nondisclosure of these facts was inadvertent, as claimed by Broadvox.

2) No Further Admissions by Broadvox - Except for the violation of Rule 1.1 stated above, nothing in the Settlement Agreement shall constitute, or be considered as, an admission of liability or wrongdoing by Broadvox.

D. Enforcement

1) Material Breach of Settlement Agreement - Each material breach of the Settlement Agreement constitutes a separate violation and entitles the Commission to take any necessary action to enforce its orders.

2) Final Release and Settlement - After payment of the $5,000 fine described above, the Settlement Agreement shall release Broadvox from, and constitute a final settlement of, any and all costs, direct or indirect, presently known or unknown, accruing to or incurred by the Commission, including without limitation CPSD, during the course of its investigation and review in this proceeding.

E. Jurisdiction of Commission / Applicability of State Law

Broadvox and CPSD agree that the Commission has primary jurisdiction over any interpretation, enforcement, or remedies pertaining to the Settlement Agreement, to the extent provided by law. The Settlement Agreement shall be governed by and interpreted in accordance with California law and Commission rules and regulations.

F. Legal Effect of Settlement Agreement

1) Binding on all Parties - The Settlement Agreement is binding on all parties to this action.

2) Settlement Agreement Is Not Commission Precedent - Except as set forth above, the parties agree that pursuant to Rule 12.5, the Settlement Agreement shall not constitute approval of, or precedent regarding, any principle or issue in this or any future proceeding.

If the Commission approves the Settlement Agreement, CPSD shall neither initiate nor continue any enforcement action or seek any further administrative or other penalties against Broadvox based on the nondisclosures cited above. This provision shall not apply if Broadvox breaches the Settlement Agreement or the Commission order approving it. This provision shall not prohibit the Commission from considering the Rule 1.1 violation admitted by Broadvox in the Settlement Agreement, if the Commission finds that Broadvox commits subsequent violations of Rule 1.1, other Commission Rules, regulations, or sections of the Public Utilities Code applicable to Broadvox's operations.

Broadvox and CPSD agree not to take any action inconsistent with fully supporting the Settlement Agreement.

CPSD agrees that it will not further protest this application based on the investigation or allegations of Broadvox's nondisclosures cited above, so long as Broadvox does not further violate the Commission's Rules, regulations, or sections of the Public Utilities Code applicable to Broadvox's operations.

If, pursuant to Rule 12.4, the Commission materially modifies or negates any provision of the Settlement Agreement, the parties must consent to such change. A party is deemed to have consented to the Commission modification unless within 15 days following the date of the Commission's proposed modifications (or longer if specified by the Commission), that party notifies the other party and files with the Commission its objection to the modification(s). After the 10th day following the filing of the objection, if the objecting party has not withdrawn, cancelled, or modified its objection, the Settlement Agreement will be deemed rescinded. If this Settlement Agreement is rescinded following Broadvox's payment of all or part of the fine discussed above, the amount paid by Broadvox shall be refunded within 15 days of rescission.

The Settlement Agreement is binding on the parties, their successors, assignees, executors, and administrators.

Upon entering into the Settlement Agreement, the parties state, acknowledge, and agree that:

1) Investigation of Applicable Facts and Law - Each party has investigated the facts and law applicable to the matters described in the Settlement Agreement.

2) No Reliance on Statements, Promises, or Representations Outside of Settlement Agreement - No party has relied or presently relies upon any oral or written statement, promise or representation by any other party, except as specifically set forth in the Settlement Agreement.

3) Settlement Is Fair / No Fraud, Duress or Undue Influence by Opposing Party - The Settlement Agreement is fair and is not the result of any fraud, duress, or undue influence by any other party.

4) Parties' Understanding of Rights and Duties Under Settlement Agreement / Review of Settlement Agreement by Legal Counsel - Each party has read and fully understands its rights, privileges, and duties under the Settlement Agreement, and has had its attorney or other authorized person review the Settlement Agreement.

5) Parties' Free and Voluntary Entry Into Settlement Agreement - The provisions of the Settlement Agreement are adequate, reasonable, and mutually agreed upon, and each party is entering into the Settlement Agreement freely and voluntarily.

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