Exhibit 10.5
SETTLEMENT AGREEMENT
SETTLEMENT AGREEMENT entered into this 16th day of January, 2001 by and
between Xxxxx Xxxxxx ("Xxxxxx"), Xxxx Xxxxxx ("Xxxxxx") and New England
Technologies, Inc. ("NETI"), on the one hand, and IntelleSale, Inc. (formerly
known as XxxxxxxXxxx.xxx, Inc.) ("Intellesale"), Applied Digital Solutions, Inc.
(formerly known as Applied Cellular Technology, Inc.) ("ADSX"), Bostek, Inc.
("Bostek"), Micro Components International Incorporated ("Micro"), Xxxx Xxxxxxx
("Xxxxxxx"), Xxxxxx X. Xxxxxxxx ("Xxxxxxxx"), Xxxxxxx Xxxxxxx ("Xxxxxxx"), and
Xxxxxxx X. Xxxxxx ("Xxxxxx"), on the other hand. Limont and Xxxxxx are sometimes
hereinafter referred to collectively as the "Plaintiffs" and individually as a
"Plaintiff". Intellesale and ADSX are sometimes hereinafter referred to
collectively as the "Initial Defendants" and individually as an "Initial
Defendant"; Bostek, Micro, Sherman, Cummings, Xxxxxxx and Xxxxxx are sometimes
hereinafter referred to collectively as the "Subsequent Parties" and
individually as a "Subsequent Party"; and the Initial Defendants and the
Subsequent Parties are sometimes hereinafter referred to collectively as the
"Defendants" and individually as a "Defendant".
WHEREAS, Intellesale, as buyer, ADSX, as guarantor, and the Plaintiffs,
as sellers, executed an Agreement of Purchase and Sale, dated as of June 4,
1999, as amended (the "Agreement"), and the Plaintiffs and Bostek executed
separate Employment and Non-Compete Agreements, dated as of June 30, 1999
("Employment and Non-Compete Agreements").
WHEREAS, the Plaintiffs commenced a civil action in the United States
District Court for the District of Delaware entitled Xxxxx Xxxxxx and Xxxx
Xxxxxx v. XxxxxxxXxxx.xxx, Inc. and Applied Digital Solutions, Inc. Civil Action
No. 00-126-RRM, and in connection therewith asserted various claims against the
Initial Defendants, which, in turn, asserted various counterclaims against the
Plaintiffs (the "Delaware Action").
WHEREAS, Intellesale, Bostek, and Micro commenced a civil action in the
Plymouth Superior Court in Massachusetts entitled XxxxxxxXxxx.xxx, Inc., Bostek,
Inc. and Micro Components International Incorporated v. Xxxxx Xxxxxx and Xxxx
Xxxxxx, Civil Action No. 00-0571-B, and in connection therewith asserted various
claims against the Plaintiffs (the "Massachusetts State Action").
WHEREAS, the Plaintiffs commenced a civil action in the Plymouth
Superior Court in Massachusetts, which was subsequently removed to the United
States District Court for the District of Massachusetts and there entitled Xxxxx
Xxxxxx and Xxxx Xxxxxx v. Xxxx Xxxxxxx, Xxxxxx X. Xxxxxxxx, Xxxxxxx Xxxxxxx, and
Xxxxxxx X. Xxxxxx, Civil Action No. 11805-RWZ, and in connection therewith
asserted various claims against Sherman, Cummings, Xxxxxxx and Xxxxxx (the
"Massachusetts Federal Action") (collectively, with the Delaware Action and
Massachusetts State Action, the "Civil Actions").
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WHEREAS, the parties hereto have denied any liability whatsoever and
have agreed to enter into this Settlement Agreement solely in order to avoid
further time and expenses;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and for other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, the Plaintiffs, on the one hand, and the
Defendants, on the other hand, hereby agree as follows:
1. Subject to the terms and conditions set forth herein, ADSX hereby
agrees to issue and sell to the Plaintiffs, and the Plaintiffs agree to purchase
from ADSX, at the Closing (as hereinafter defined) (a) 985,222 shares of Common
Stock of ADSX (the "Tranche A Shares") in consideration of the execution and
delivery to ADSX by the Plaintiffs of a Non-Interest Bearing, Non-Negotiable,
Non-Recourse, 30 Day Promissory Note in the original principal amount of
$2,000,000 in the form of Exhibit A-1 hereto (the "Tranche A Note"), subject to
adjustment as hereinafter provided, and (b) 1,970,443 shares of Common Stock of
ADSX (the "Tranche B Shares") in consideration of the execution and delivery to
ADSX by the Plaintiffs of a Non-Interest Bearing, Non-Negotiable, Non-Recourse,
Fourteen Month Promissory Note in the original principal amount of $4,000,000 in
the form of Exhibit A-2 hereto (the "Tranche B Note") and the Collateral
Assignment by the Plaintiffs to ADSX of the Tranche A Shares and the Tranche B
Shares pursuant to the terms of a Pledge Agreement in the form of Exhibit B
hereto (the "Pledge Agreement"). The Tranche A Note and the Tranche B Note are
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sometimes hereinafter referred to collectively as the "Notes" and individually
as a "Note". From time to time during the term of either Note, the Plaintiffs
shall have the right (but not the obligation, except as provided in the Tranche
A Note) to make payments or prepayments of the principal amount of either Note.
Each payment or prepayment of the Notes shall be accompanied by a statement from
the Plaintiffs specifying to which Note such payment or prepayment should be
applied. Simultaneously with each such payment or prepayment, in accordance with
the terms of the Pledge Agreement, a pro rata portion of the Tranche A Shares or
the Tranche B Shares, as applicable, shall be released from the lien created by
the Pledge Agreement and certificates for such released Tranche A Shares or
Tranche B Shares, as applicable, shall be delivered to the Plaintiffs together
with separate stock powers endorsed to the Plaintiffs (signature guaranteed)
together with all other documents necessary to enable the Plaintiffs to freely
trade such released Tranche A Shares or Tranche B Shares. The Notes and the
Pledge Agreement will be executed at the Closing and delivered to ADSX. The
certificates for the Tranche A Shares and the Tranche B Shares, together with
duly endorsed stock xxxxxx, xxxx be executed at the Closing and delivered to
Xxxxxxxxx Traurig, LLP, counsel to the Plaintiffs (the "Escrow Agent"), to be
held in escrow pursuant to the terms of the Escrow Agreement attached hereto as
Exhibit C. Not less than 10 days prior to the Closing, ADSX shall notify the
Plaintiffs and the Escrow Agent of the proposed date of the Closing.
Plaintiffs agree that so long as they own Shares, they will vote such
shares in accordance with the recommendations of management. The Tranche A
Shares and the Tranche B Shares (sometimes hereinafter referred to collectively
as the "Shares") are shares of the Common Stock of ADSX as constituted on the
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date hereof, but if, and whenever, prior to the issuance by ADSX of a stock
certificate(s) for all of such Shares, ADSX shall (i) effect a subdivision or
consolidation of the shares of the Common Stock of ADSX outstanding, the payment
of a stock dividend on the Common Stock of ADSX, or other increase or reduction
in the number of shares of the Common Stock of ADSX outstanding without
receiving compensation per share therefor in money equivalent to the closing
price of a share of Common Stock of ADSX on the date of the transaction in
question, or (ii) issues any options, warrants or other rights to acquire shares
of Common Stock of ADSX for less consideration per share than an amount in money
equivalent to the closing price of a share of Common Stock of ADSX on the date
of the transaction in question (collectively, a "Dilution Event"), then, (a) in
the event of an increase in the number of such shares outstanding, the number of
the Shares to be purchased by the Plaintiffs hereunder shall be proportionately
increased, and (b) in the event of a reduction in the number of such shares
outstanding, the number of Shares shall be proportionately reduced.. As used in
this paragraph, the "date of the transaction in question" shall mean the date
that the transaction is agreed upon by definitive agreement.
ADSX hereby represents and warrants to the Plaintiffs that ADSX has
filed on a timely basis all filings required to be made under the Securities
Exchange Act of 1934 and the rules and regulations thereunder (the "1934 Act"),
except as would not have a material adverse effect on ADSX, and that all
information required to be disclosed by ADSX under the 1934 Act has been
disclosed. Plaintiffs acknowledge that they have requested not to be apprised of
any material nonpublic information about ADSX and that in entering this
Settlement Agreement they are not relying on ADSX to have provided information
other than that information required to have been disclosed in the Form 10-Q for
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the third quarter of 2000 or any Form 8-K that was required to have been filed
after November 15, 2000.
2. It is the intention of the parties that the Shares shall be freely
tradeable immediately following the Closing. ADSX shall use its best efforts to
cause the Shares to be registered under the Securities Act of 1933 and the rules
and regulations of the Securities and Exchange Commission thereunder (the
"Securities Act") by March 30, 2001. In connection therewith ADSX will comply
with, and each of the other Defendants will use their respective best efforts to
cooperate with, the following obligations:
(a) prepare and file with the Commission a registration
statement with respect to the Shares on or before March 15, 2001 and
use its reasonable best efforts to cause such registration statement to
become and remain effective for not less than the term of the Tranche B
Note;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities
Act with respect to the sale or other disposition of all securities
covered by such registration statement whenever the seller or sellers
of such securities shall desire to sell or otherwise dispose of the
same;
(c) furnish to Plaintiffs and to the duly authorized
underwriter of each Plaintiff such number of copies of a prospectus,
including copies of a preliminary prospectus, prepared in conformity
with the requirements of the Securities Act, and such other documents
as the Plaintiffs or such underwriters may reasonably request in order
to facilitate the public sale or other disposition of the securities to
be sold by the Plaintiffs;
(d) use its reasonable best efforts to register or qualify the
securities covered by such registration statement (by exemption or
otherwise) under such state securities or "Blue Sky" laws of such
jurisdictions as each Plaintiff shall reasonably request, and do any
and all other acts and things which may be reasonably necessary or
advisable under such securities or "Blue Sky" laws to enable the
Plaintiffs to consummate the public sale or other disposition in such
jurisdictions of the securities to be sold by the Plaintiffs, provided
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that ADSX shall not for any such purpose be required to consent to the
general service of process in any such jurisdiction;
(e) before filing the registration statement or prospectus or
amendments or supplements thereto, furnish to counsel selected by each
Plaintiff copies of all such documents proposed to be filed, and
provide such counsel with a reasonable opportunity to comment thereon;
(f) in the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in
usual and customary form, with the managing underwriter of such
offering;
(g) notify each Plaintiff at any time when a prospectus
relating thereto is required to be delivered under the Securities Act
of the happening of any event as a result of which the prospectus
included in such registration statement, as then in effect, includes an
untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing;
(h) at or prior to the effectiveness of the registration of
the Shares, cause all Shares registered pursuant hereto to be listed on
each securities exchange or quotation system on which similar
securities issued by ADSX are then listed;
(i) provide a transfer agent and registrar for all Shares
registered pursuant hereto and a CUSIP number for all such Shares, in
each case not later than the effective date of such registration; and
(j) at the request of either Plaintiff in connection with an
underwritten offering, furnish on the date or dates provided for in the
underwriting agreement: (i) an opinion of counsel, addressed to the
underwriters and the Plaintiffs, covering such matters as such counsel,
underwriters and sellers may reasonably agree upon, including such
matters as are customarily furnished in connection with an underwritten
offering and (ii) a letter or letters from the independent certified
public accountants of ADSX addressed to the underwriters and the
Plaintiffs, covering such matters as such accountants, underwriters and
sellers may reasonably agree upon, in which letter(s) such accountants
shall state, without limiting the generality of the foregoing, that
they are independent certified public accountants within the meaning of
the Securities Act and that in their opinion the financial statements
and other financial data of ADSX included in the registration
statement, the prospectus(es), or any amendment or supplement thereto,
comply in all material respects with the applicable accounting
requirements of the Securities Act.
(k) take all such other actions as either Plaintiff or the
underwriters, if any, reasonably request in order to expedite or
facilitate the registration and disposition of the Shares.
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The Plaintiffs agree to use their best efforts to cooperate with ADSX
in carrying out the foregoing obligations of ADSX.
3. The closing of the sale and purchase of the Shares (the "Closing")
shall take place immediately following the effectiveness of the registration of
the Shares pursuant to Section 2 hereof and the compliance by the Defendants
with their obligations under such Section. At the Closing, in addition to any
other instruments or documents referred to herein:
(a) ADSX shall deliver to the Plaintiffs separate
certificates representing the Tranche A Shares (2 ADSX
certificates representing 50% each of the total amount of
Tranche A Shares, one in the name of each Plaintiff) and the
Tranche B Shares (40 ADSX certificates, 19 in the name of
Xxxxxx for 50,000 shares each, 1 in the name of Xxxxxx in the
amount of 35,222 shares, 19 in the name of Limont for 50,000
shares each, and 1 in the name of Limont in the amount of
35,222 shares), duly endorsed or with duly executed signature
guaranteed stock powers attached. The Shares shall be free and
clear of any lien, claim or encumbrance other than the pledge
of the Tranche B Shares under the Pledge Agreement.
(b) The Plaintiffs will execute and deliver to ADSX
the Notes and the Pledge Agreement.
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(c) The Plaintiffs shall deliver to the Escrow Agent
the Certificates representing the Tranche A Shares and the
Tranche B Shares duly endorsed in blank or with duly executed
signature guaranteed stock powers endorsed in blank attached.
(d) Limont and Xxxxxx will collectively deliver to
the Escrow Agent $2,000,000 as security for the Tranche A
Note.
4. Simultaneously herewith, the Plaintiffs shall cause their attorneys
to execute the Stipulations of Dismissal attached hereto as Exhibits D, E, and F
and the Defendants shall cause their attorneys to execute the Stipulations of
Dismissal attached hereto as Exhibits D, E and F.
5. The fully executed Stipulations of Dismissal described in Paragraph
4 above shall be held in escrow by the Escrow Agent under the Escrow Agreement
pending completion of the Closing. Following the Closing, the Plaintiffs shall
cause their attorneys to file with the United States Court for the District of
Delaware, the United States Court for the District of Massachusetts, and
Plymouth County Superior Court, the Stipulations of Dismissal attached hereto as
Exhibits D, E, and F.
6. In the event that the Closing has not occurred by April 9, 2001,
then the maturity under the Tranche B Note shall be extended by one month for
each full week after April 9, 2001 that the Closing is delayed (other than due
to the failure of a closing condition within the control of the Plaintiffs) up
to a maximum extension of maturity of nine months. In the event that the Tranche
B Note is so extended, the Plaintiffs shall execute a replacement note for the
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Tranche B Note setting forth the extended maturity date for the Tranche B Shares
and such replacement note shall be deemed to be the Tranche B Note for all
purposes hereunder. In the event that the Closing has not occurred by June 15,
2001 (the "Deadline")(other than due to the failure of a closing condition
within the control of the Plaintiffs) the Plaintiffs shall have the right to
terminate this Settlement Agreement by providing written notice to the
Defendants at any time prior to the date on which all the conditions for Closing
(other than a condition within the control of the Plaintiffs) have been
satisfied. The Plaintiffs shall have the right in their sole and exclusive
discretion to extend the Deadline on one or more occasions by giving ADSX
written notice thereof and such extended date(s) shall be deemed to be the
Deadline for the purposes of this Agreement. ADSX agrees that prior to the
Deadline it shall not attempt to register or participate in the registration of
any shares of its capital stock under the Securities Act (other than the Shares
and other than the shares of Common Stock currently being registered pursuant to
a pending Registration Statement). In the event that the Plaintiffs terminate
this Settlement Agreement pursuant to this paragraph, then this Settlement
Agreement (except paragraphs 9 and 14-22) and each other document, instrument,
stipulation, or agreement executed in connection herewith, shall be deemed null
and void and the Plaintiffs shall, consistent with this Paragraph, have the
right to proceed with the prosecution of the Civil Actions. Notwithstanding the
foregoing, in the event that the Closing does not occur due to a breach by the
Defendants (or any of them) of their obligations under this Settlement
Agreement, the Plaintiffs may, as an alternative right and remedy, seek to
recover from the Defendants for such breach. In the event that the Plaintiffs
elect this remedy, the Stipulations of Dismissal will nonetheless be filed with
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the appropriate courts and the claims of both parties in the Civil Actions may
not be pursued. During the period from the date hereof until the earlier to
occur of the Closing or the termination date, the parties hereto agree to stay
the prosecution of the Civil Actions and to jointly file any and all pleadings
in the actions necessary to accomplish the foregoing. Notwithstanding anything
in Paragraph 6 to the contrary, if, in connection with the registration of the
Shares with the Commission, the Commission issues a comment letter that comments
on the structure of the transaction, the price of the Shares or the manner of
payment therefor, the dates set forth in this Paragraph 6 shall be extended by
the period of time from the date such comment letter is received until the date
the Commission informs ADS (in writing or otherwise) that its comments have been
resolved.,. Provided, however, that, in the event the Commission has not
approved the registration by June 15, 2001 because of the comments identified in
this paragraph (but not for reasons unrelated to those issues) Plaintiffs will
agree to an extension of the June 15, 2001 deadline, which extension shall not
be unreasonably withheld.
7. Except for claims arising out of this Settlement Agreement, and
subject to the condition precedent that the Closing has occurred, the Plaintiffs
and NETI, on the one hand, and the Defendants, on the other hand, hereby remise,
release and forever discharge the other and their representatives, employees,
officers, directors, shareholders, members, agents, affiliates, attorneys and
their successors and assigns, from any and all debts, demands, actions, causes
of action, suits, promissory notes, claims against collateral, sums of money,
accounts, bonds, covenants, contracts, controversies, agreements, promises,
damages, executions and liabilities, and any and all other claims of any kind,
nature and description whatsoever, both known and unknown, both in LAW and
EQUITY, which they have or ever had against the other from the beginning of the
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world to this date, including, without limitation, all claims set forth in the
Civil Actions, and any and all claims associated with or in connection with the
Agreement, Employment and Non-Compete Agreements and any documents, instruments
or agreements entered into in connection therewith, and all claims associated
with or in connection with the negotiation of this Settlement Agreement.
The parties hereto further acknowledge and agree that they will not
(except as otherwise provided in this Agreement or as otherwise provided by law)
initiate any action in, or file any civil or criminal complaint against each
other with, any local, state or federal court, administrative board, or agency,
with respect to any transaction occurring from the beginning of the world to
this date.
8. The parties hereto hereby acknowledge and agree that any and all
rights, duties, indemnification or obligations which they may have had under the
Agreements, Employment and Non-Compete Agreements and any documents, instruments
and agreements entered into in connection therewith and any indemnification
rights that the Plaintiffs may have had by statute, Articles of Incorporation or
Bylaws, as officers, directors, or employees of Bostek or Micro are hereby
extinguished in perpetuity and have no further force or effect. The parties
agree that this Settlement Agreement supersedes the underlying Agreement and
Employment and Non-Compete Agreements in full force.
9. ADSX, Intellesale, Bostek and Micro unconditionally assign without
representation or recourse all of their rights and interest against Miami Micro
Distributors, Inc. ("MMDI"), Reliant Innovations, Inc. ("Reliant"), Xxxx Xxxxxx
("Xxxxxx"), Xxx Xxxxxxx ("Xxxxxxx") and Xxxx Xxxxxxx ("Xxxxxxx") (collectively,
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"Reliant Defendants"), including, without limitation, all of their rights to
file counterclaims in the case pending in the Circuit Court for the 17th
Judicial Circuit in and for Broward County, Florida entitled Reliant
Innovations, Inc. x. Xxxxxx, Inc., Case No.: 00003256 (the "Reliant Action").
ADSX and Intellesale expressly agree that they will not assert in the Reliant
Action or elsewhere (other than in the Delaware Action in the event it is not
dismissed) that the transaction consummated by the Bostek division of
Intellesale in August of 1999 with the Reliant Defendants constituted anything
other than a good faith effort by the Plaintiffs to produce a profit for
Intellesale. Furthermore (other than in the Delaware Action in the event it is
not dismissed), ADSX and Intellesale will not assert that such transaction was
in any way related to the subsequent payment by Xxxxxxx and Xxxxxxx to the
Plaintiffs personally. The Plaintiffs waive and release any right to
indemnification in connection with the matters alleged in the Reliant Action.
The Plaintiffs agree to immediately undertake the defense and
prosecution of the Reliant Action and to indemnify ADSX, Intellesale, Bostek,
Micro, and their respective officers, directors, and employees, for any judgment
(including any judgment which attorneys' fees and costs incurred by MMDI or
Reliant) entered against them in that action. ADSX and Intellesale shall provide
their full cooperation to the Plaintiffs, as well as their attorneys, in
connection with the Reliant Action, including, without limitation, making any
witness or document available to the Plaintiffs without cost to the Plaintiffs.
The Plaintiffs shall furnish to the Defendants any non-privileged information
concerning the Reliant Action as the Defendants may reasonably request and the
Defendants shall furnish to the Plaintiffs any non-privileged information
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concerning the Reliant Action as the Plaintiffs may reasonably request. This
Paragraph shall survive termination pursuant to Paragraph 6.
10. The Plaintiffs shall provide their full cooperation to the
Defendants, as well as their attorneys, in connection with the defense or
response to any claim asserted by third parties against Bostek and/or Micro with
respect to any transaction occurring prior to April 30, 2000, including, without
limitation, making any witness or document available to the Defendants without
cost to the Defendants.
11. The Tranche A Shares and Tranche B Shares will be acquired for
Xxxxxx'x and Xxxxxx'x own accounts, not as nominees or agents, for investment
purposes and not with a view to, or for offer or sale in connection with
directly or indirectly, any distribution in violation of the Securities Act of
1933, as amended (the "1933 Act") or any other applicable securities law and
with no intention of participating in the formulation, determination of
direction of the basic business decisions of ADSX. Neither Xxxxxx nor Limont is
a registered broker dealer or engaged in the business of being a broker dealer.
Each of Xxxxxx and Xxxxxx acknowledges that he can bear the economic risk and
complete loss of his investment in the Tranche A Shares and Tranche B Shares and
has such knowledge and experience in financial or business matters that he is
capable of evaluating the merits and risks of the investment contemplated
hereby. Xxxxxx and Limont acknowledge that ADSX filed its most recent Form 10-Q
on or about November 15, 2000. Each of Xxxxxx and Xxxxxx is an accredited
investor as defined in Rule 501(a) of Regulation D, as amended, under the 1933
Act.
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12. The parties hereto agree that they will execute such other and
further agreements that they or their attorneys determine are reasonably
necessary in order to effectuate the intent of this Settlement Agreement.
13. This Settlement Agreement contains the entire understanding and
agreement between the parties and incorporates and merges therein all prior
discussions, understandings and agreements, express or implied, oral or written,
between the parties. The Plaintiffs acknowledge and agree that Xxxxxxx Xxxxxxxx
and the Subsequent Parties did not orally provide them with any information
about ADSX, the ADSX Common Stock, or its prospects in the course of settlement
negotiations and that they are not entering this Settlement Agreement because
of, or in reliance on, any statement made by Xx. Xxxxxxxx or the Subsequent
Parties. This Settlement Agreement may be amended only by a written instrument
signed by all parties.
14. The parties executing this Settlement Agreement warrant and
represent that they are duly authorized to enter into this Settlement Agreement.
15. This Settlement Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
16. The parties hereto further understand and acknowledge that the
parties hereby released do not admit liability for any of the alleged claims or
damages in the Civil Actions nor admit any liability for any wrongdoing
whatsoever, said liability being expressly denied, and that the consideration
furnished herein is in compromise and settlement only.
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17. No party has assigned, transferred, or granted, or purported to
assign, transfer, or grant to any third party any rights to or claims in the
Civil Actions or Arbitration, or any right or claim which is the subject of this
Settlement Agreement.
18. Each party to this Settlement Agreement has had the opportunity to
receive and has retained independent legal counsel with respect to this
Settlement Agreement and the advisability of executing same.
19. This Settlement Agreement shall be binding upon and shall inure to
the parties and their successors and assigns.
20. In case any one or more of the provisions contained in this
Settlement Agreement should be held or determined to be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected thereby.
21. The parties hereto agree that, prior to the institution of any
civil action concerning any dispute arising out of or in connection with this
Settlement Agreement and the transactions contemplated hereby, including,
without limitation, any action arising out of or in connection with the Notes
and/or Pledge Agreement, they will promptly submit such dispute to non-binding
mediation before the American Arbitration Association in accordance with its
rules then in effect. The mediation shall occur in Wilmington, Delaware.
22. This Settlement Agreement shall be governed by and construed and
enforced in accordance with the law of the State of Delaware. Each of the
parties hereto hereby irrevocably and unconditionally consents to submit to the
exclusive jurisdiction of the United States District Court for District of
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Delaware for any action arising out of or in connection with this Settlement
Agreement and the transactions contemplated hereby, including, without
limitation, any action arising out of or in connection with the Notes and/or
Pledge Agreement (and agrees not to commence any action relating thereto except
in such courts), and further agrees that service of any process, summons, notice
or document by U.S. registered mail to its respective address set forth in this
Settlement Agreement shall be effective service of process for any action
brought against that party. Each of the parties hereto hereby irrevocably and
unconditionally waives any objection to the laying of venue of any action
arising out of this Settlement Agreement or the transactions contemplated
hereby, including, without limitation, any action arising out of or in
connection with the Notes and/or Pledge Agreement, in the United States District
Court for the District of Delaware, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in such court that any
such action brought in such court has been brought in an inconvenient forum.
[Remainder of Page Intentionally Left Blank;
Signature Pages to Follow]
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IN WITNESS WHEREOF, the parties set their hands and seals, as of the
dates set forth above.
NEW ENGLAND TECHNOLOGIES, APPLIED DIGITAL SOLUTIONS, INC.
INC.
___________________________
-------------------------------
By: By:
INTELLESALE, INC.
---------------------------- -------------------------------
Xxxxx Xxxxxx By:
BOSTEK, INC
---------------------------- -------------------------------
Xxxx Xxxxxx By:
MICRO COMPONENTS INTERNATIONAL
INCORPORATED
-------------------------------
By:
-------------------------------
Xxxx Xxxxxxx
-------------------------------
Xxxxxx X. Xxxxxxxx
-------------------------------
Xxxxxxx Xxxxxxx
-------------------------------
Xxxxxxx X. Xxxxxx
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