Exhibit 10.1
CONFIDENTIAL SETTLEMENT AGREEMENT AND RELEASE
This
Settlement Agreement (the “Agreement”) is made this
ninteeth (19th) day of December 2007, being the last day on
which all parties sign this Agreement (the “Effective
Date”) by and among Verizon Federal Inc,
(“Verizon”); and Government Telecommunications, Inc.
(“GTI”) and GTI’s parent company, Applied Digital
Solutions, Inc. (“ADS”); collectively referred to
herein as the “Parties.”
WHEREAS, on
June 22, 1998, GTI and Verizon (then known as Bell Atlantic
Federal Integrated Solutions, Inc.) entered into a subcontract
under which Verizon agreed to perform work under a General Services
Administration’s (“GSA”) WACS program for GTI in
the Northeast and Mid-Atlantic states (the
“subcontract”);
WHEREAS, on
August 14, 2006, GTI filed an action against Verizon in the
Fairfax County Court of Virginia, which is pending as Civil Action
No. CL -0610233 (the “Lawsuit”), alleging among
other things, breach of contract and tortious interference in
connection with the District of Columbia Public School’s
determination to use the GSA WITS contract. On October 19,
2006, Verizon filed a counterclaim against GTI for failure to pay
invoices owed under the subcontract.
WHEREAS, the
Parties now wish to settle and resolve the dispute without
admitting liability and wish to terminate the pending
litigation.
NOW,
THEREFORE, in consideration of the respective promises set forth
here, and for other good and valuable consideration, the receipt
and sufficiency of which are acknowledged, the Parties agree as
follows.
| 1.1 |
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On or before January 15,
2008, GTI shall pay to Verizon the sum of One Million dollars
($1,000,000.00) by wire transfer into account # 199-2890, ABA#
043000261, Mellon Bank West, 3 Mellon Bank Center, Pittsburgh, PA
15259, and shall simultaneously telecopy proof of that wire
transfer to Verizon as provided in Section 5.12 of the
Agreement.
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| 1.2 |
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On or before January 15,
2009, GTI shall pay to Verizon the sum of One Million dollars
($1,000,000.00) by wire transfer into account # 199-2890, ABA#
043000261, Mellon Bank West, 3 Mellon Bank Center, Pittsburgh, PA
15259, and shall simultaneously telecopy proof of said wire
transfer to Verizon as provided in Section 5.12 of the
Agreement.
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| 1.3 |
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On or before January 15,
2010, GTI shall pay to Verizon the sum of One Million dollars
($1,000,000.00) by wire transfer into account # 199-2890, ABA#
043000261, Mellon Bank West, 3 Mellon Bank Center, Pittsburgh, PA
15259, and shall simultaneously telecopy proof of said wire
transfer to Verizon as provided in Section 5.12 of the
Agreement.
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| 1.4 |
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On or before January 15,
2011, GTI shall pay to Verizon the sum of One Million dollars
($1,000,000.00) by wire transfer into account # 199-2890, ABA#
043000261, Mellon Bank West, 3 Mellon Bank Center, Pittsburgh, PA
15259, and shall simultaneously telecopy proof of said wire
transfer to Verizon as provided in Section 5.12 of the
Agreement.
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| 1.5 |
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ADS agrees to execute the guaranty
attached as Attachment B to the Agreement.
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| 1.6 |
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The settlement shall finally
settle and resolve all claims asserted, or which could have been
asserted, by Verizon, GTI, and ADS in the Lawsuit as of the date of
this Agreement, including, but not limited to, legal
expenses.
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| 2. |
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RELEASE
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| 2.1 |
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In consideration of the settlement
and following full performance thereunder, GTI, and all of its
predecessors, successors, parents, direct subsidiaries, indirect
subsidiaries, affiliates, assigns, heirs, agents, and attorneys,
release and forever discharge Verizon, and all of its predecessors,
successors, parents, direct subsidiaries, indirect subsidiaries,
affiliates, assigns, agents, directors, officers, employees, and
shareholders from and against all actions, causes of action,
claims, suits, debts, damages, judgments, liabilities, demands and
controversies whatsoever, whether matured or unmatured, whether at
law or in equity, whether before a local, state, or federal court
or state or federal administrative agency or commission, and
whether now known or unknown, liquidated or unliquidated, that GTI
now has or may have had, or thereafter claims to have, regarding
the issues arising out of or related to the Lawsuit, on behalf of
itself, or any other person or entity, at any time prior to and
including the date of the Agreement.
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| 2.2 |
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In consideration of the settlement
and following full performance thereunder, Verizon, and all of its
predecessors, successors, direct subsidiaries, indirect
subsidiaries, assigns, heirs, agents, and attorneys hereby release
and forever discharge GTI and ADS, and all of its predecessors,
successors, parents, direct subsidiaries, indirect subsidiaries,
affiliates, assigns, agents, 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 or state or
federal administrative agency or commission, and whether now known
or unknown, liquidated or unliquidated, that Verizon now has or may
have had, or thereafter claims to have, regarding the issues
arising out of or related to the Lawsuit, on behalf of itself, or
any other person or entity, at any time prior to and including the
date of the Agreement.
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| 2.3 |
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The Parties warrant and agree that
(1) neither has assigned, pledged, hypothecated, or otherwise
divested itself or encumbered any part of Lawsuit being released
here; (2) no other person or entity has any interest in or
ownership of the Lawsuit covered by this release; and (3) the
Parties will indemnify, defend, and hold each other harmless from
and against any of all of any part of the Lawsuit so assigned,
pledged, hypothecated, divested, or encumber.
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| 3.0 |
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COMPROMISE & CONFESSED
JUDGMENT
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| 3.1 |
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It is understood and agreed
between the Parties that the Agreement is a compromise and shall
never be construed as an admission of liability, wrongdoing, or
responsibility on the part any Party, or on the part of any
Party’s predecessors, successors, assigns, agents, parents,
subsidiaries, affiliates, officers, directors, or employees.
Rather, the Parties expressly deny such liability, wrongdoing, or
responsibility.
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| 3.2 |
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GTI agrees to execute the
Confessed Judgment attached as Attachment A to the Agreement.
Verizon will provide GTI and ADS 10-days notice under
Section 5.12 before seeking to file the confessed judgment in
Fairfax County.
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| 4.0 |
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CONFIDENTIALITY
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| 4.1 |
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The Parties agree that the
Agreement and its terms are and shall be kept confidential. Except
to the extent necessary to enforce it, or to the extent that any of
the Parties reasonably believes it is legally required to disclose
its terms, the terms and conditions of the Agreement, including the
amounts of payment shall remain confidential and shall not be
disclosed. To the extent required by subpoena or other written
order of a court or government body of competent jurisdiction, the
Party being compelled to provide the information will notify the
other Party within twenty (20) business days of receipt of the
subpoena or written order.
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| 5.0 |
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MISCELLANEOUS TERMS AND
CONDITIONS
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| 5.1 |
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The Parties agree to bear their
own attorneys’ fees and costs.
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| 5.2 |
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Each Party represents and warrants
that it has the sole right and exclusive authority to execute the
Agreement, to agree to the terms and conditions set forth
here.
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