SETTLEMENT AND REDEMPTION AGREEMENT
Exhibit 10.1
SETTLEMENT AND REDEMPTION AGREEMENT
THIS SETTLEMENT AND REDEMPTION AGREEMENT (this “Agreement”), dated as of August 19,
2011, effects settlement and release of claims and disputes among (a) GTSI Corp., a Delaware
corporation (“GTSI”), (b) The Eyak Corporation, a corporation organized under the laws of
the State of Alaska in accordance with the Alaska Native Claims Settlement Act (“Eyak”),
(c) Global Technology Group, LLC, an Alaska limited liability company (“Global” and,
together with Eyak, the “Continuing Members”), and (d) Eyak Technology, LLC, a Delaware
limited liability company (the “Company”), as well as the redemption of GTSI’s limited
liability company interests in the Company and the resolution of any claims, known or unknown,
between the Parties and their affiliates. The Company, GTSI and the Continuing Members may
hereinafter be referred to individually as a “Party” or collectively as the
“Parties.”
R E C I T A L S
A. The Company was formed pursuant to a Certificate of Formation filed with the Secretary of
State of the State of Delaware on January 2, 2002. The Company is governed by the Amended
Operating Agreement of the Company, dated as of June 14, 2002 (the “Operating Agreement”).
B. GTSI owns a thirty-seven percent (37%) Percentage Interest (as defined in the Operating
Agreement) in the Company (the “GTSI Interest”). The Continuing Members own the remaining
Percentage Interests in the Company.
C. Pursuant to Section 10.2 of the Operating Agreement, GTSI desires to sell and the Company
desires to redeem, purchase and acquire the GTSI Interest, all in accordance with the terms and
conditions of this Agreement (the “Redemption”). Following the Redemption, the Continuing
Members will continue as members of the Company.
D. Eyak currently owns 100 shares of the common stock of GTSI and by letters dated November 1,
2010 and June 24, 2011 to GTSI from Eyak’s counsel (collectively, the “Shareholder
Demands”), Eyak demanded specific action by GTSI’s board of directors with respect to the
Company (the “Derivative Claims”).
E. The Company, the Continuing Members and GTSI are parties to an arbitration proceeding
before the American Arbitration Association (“AAA”), entitled Eyak Technology, LLC v. GTSI
Corp., Case No. 75 117 00388 which remains pending (the “Arbitration”).
F. The Company, the Continuing Members, GTSI, Xxxxx Xxxxxxxx, Xxxxxx Xxxxx, Xxx Xxxxxx, Xxx
Xxxx and Xxxxx Le are parties to an action pending in the Court of Chancery of the State of
Delaware entitled GTSI Corp. v. Eyak Technology, LLC, et al., Civil Action No. 5815-VCL (the
“Chancery Court Action” and, together with the Arbitration, the “Settled
Litigation”).
G. The Company, the Continuing Members and GTSI have each made various demands of each other,
including demands regarding the conduct of business, the operations of their respective boards of
directors, Freedom of Information Act (“FOIA”) demands and requests pursuant to the
Operating Agreement (collectively, the “Demands”).
H. The Parties desire to release, settle, resolve and otherwise completely dispose of all
claims and disputes regarding all matters raised in the Derivative Claims, the Settled Litigation
and the Demands (collectively, the “Disputes”).
NOW, THEREFORE, in consideration of the promises and the respective representations,
warranties and covenants hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the
Parties hereby incorporate the Recitals set forth above and agree as follows:
1. Purchase of the GTSI Interest.
1.1 Purchase Price. The Company hereby agrees to pay directly to GTSI the total
amount of Twenty Million Dollars ($20,000,000), in cash (the “Purchase Price”) for the GTSI
Interest and all rights of GTSI under the Operating Agreement. The Purchase Price shall be paid by
the Company to GTSI by wire transfer on the Closing Date (as defined in Section 9 hereof).
1.2 Redemption, Purchase and Sale of the GTSI Interest. For and in consideration of
the payment of the Purchase Price, upon the Closing, (i) GTSI shall sell, assign, transfer, and
deliver to the Company, and (ii) the Company shall redeem and purchase from GTSI, GTSI’s entire
right, title, and interest in and to the GTSI Interest and all rights and obligations of GTSI under
the Operating Agreement. The GTSI Interest and the rights and obligations under the Operating
Agreement shall be transferred by GTSI free and clear of any and all liabilities, liens, pledges,
claims, mortgages, deeds of trust, collateral assignments, security interests, litigations,
options, calls, contracts, conditional or other sales agreements and encumbrances whatsoever and of
any and all other claims (collectively, “Liens”). The Redemption shall become effective
upon receipt of the Purchase Price by GTSI. The Parties acknowledge and agree that upon the
Redemption, (i) all rights, interests and claims of GTSI arising from the GTSI Interest, including,
without limitation, any right to distributions now existing or that may hereafter arise pursuant to
Section 4 of the Operating Agreement and all other rights under the Operating Agreement, shall be
transferred, sold and assigned to the Company and GTSI shall cease to have any right thereto or
otherwise, and (ii) any past, existing and future obligations of GTSI under the Operating Agreement
shall cease and be extinguished.
2. Releases.
2.1 Release of GTSI. Effective upon the Closing, the Continuing Members and the
Company, for themselves and their respective successors and assigns, irrevocably and expressly
release and discharge fully and forever GTSI and its Related Parties (collectively, the “GTSI
Releasees”) from any and all claims, demands, damages, lawsuits, and causes of action, whether
known, unknown or unforeseen, arising on or before the Closing Date, which any of the Continuing
Members or the Company has, or may have, against the GTSI Releasees for any reason whatsoever in
law or in equity, under federal, state, or other law, whether the same be upon statutory claim,
contract, tort or other basis arising out of or relating to (i) the Disputes; (ii) any and all
obligations of the GTSI Releasees under the Operating Agreement, the Mentor-Protégé Agreement, or
any other agreement between or among any of the Parties concerning any Party’s interests in or
relationship with the Company; (iii) any claim, allegation or cause of action, whether direct or
derivative, that was or could have been raised in the Disputes; (iv) any claim or cause of action,
whether direct or derivative, arising from or relating to the operations of the Company or any
Party’s Percentage Interest in the Company; (v) any other fiduciary duties
that any of the GTSI Releasees may owe to the Company or either of the Continuing Members;
(vi) any request pursuant to FOIA or any equivalent request for information from any government
agency naming any GTSI Releasee or requesting information relating to any GTSI Releasee; and (vii)
any claim alleging violations of federal or state securities laws, common-law fraud or deceit;
provided, however, that the release herein shall not apply to or affect (x) any
GTSI Releasee’s obligations under this Agreement, (y) the Confidentiality Agreement, dated April 7,
2011 (the “April Confidentiality Agreement”), or the Confidentiality Agreement, dated July
22, 2011 (the “July Confidentiality Agreement” and together with the April Confidentiality
Agreement, the “Confidentiality Agreements”), or (z) the Confidentiality Order, entered by
the Arbitrator in the Arbitration (the “Confidentiality Order”), and shall not release any
Party’s obligation not to disclose documents or information under any of the Confidentiality
Agreements or the Confidentiality Order.
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2.2 Release of the Continuing Members and the Company. Effective upon the Closing,
GTSI, for itself and its respective successors and assigns, irrevocably and expressly releases and
discharges fully and forever the Continuing Members, the Company and each of their respective
Related Parties (collectively, the “Company Releasees”) from any and all claims, demands,
damages, lawsuits, and causes of action, whether known, unknown or unforeseen, arising on or before
the Closing Date, which GTSI has, or may have, against the Company Releasees for any reason
whatsoever in law or in equity, under federal, state, or other law, whether the same be upon
statutory claim, contract, tort or other basis arising out of or relating to (i) the Disputes; (ii)
any and all obligations of the Company Releasees under the Operating Agreement, the Mentor-Protégé
Agreement, or any other agreement between or among any of the Parties concerning any Party’s
interests in or relationship with the Company; (iii) any claim, allegation or cause of action,
whether direct or derivative, that was or could have been raised in the Disputes; (iv) any claim or
cause of action, whether direct or derivative, arising from or relating to the operations of the
Company or any Party’s Percentage Interest in the Company; (v) any other fiduciary duties that any
of the Company Releasees may owe to GTSI; (vi) any request pursuant to FOIA or any equivalent
request for information from any government agency naming any Company Releasee or requesting
information relating to any Company Releasee, including without limitation GTSI’s FOIA requests,
filed on October 5, 2010 and November 9, 2010, respectively (the “Initial Requests”); and
(vii) any claim alleging violations of federal or state securities laws, common-law fraud or
deceit; provided, however, that the release herein shall not apply to or affect (x)
any Company Releasee’s obligations under this Agreement, (y) the Confidentiality Agreements, or (z)
the Confidentiality Order, and shall not release any Party’s obligation not to disclose documents
or information under any of the Confidentiality Agreements or the Confidentiality Order.
2.3 Release of Derivative Claims. Effective upon the Closing, Eyak, for itself and
its successors and assigns, withdraws its Shareholder Demands and irrevocably and expressly
releases and discharges fully and forever the GTSI Releasees from any and all claims, demands,
damages, law suits and causes of action, whether known, unknown or unforeseen, arising on or before
the Closing Date, which Eyak has, or may have, against the GTSI Releasees for (i) any claim,
whether direct or derivative, arising from or in connection with Eyak’s ownership of the common
stock of GTSI, the Shareholder Demands or the Derivative Claims, (ii) any claim, allegation or
cause of action, whether direct or derivative, that was or could have been raised in the
Shareholder Demands or the Derivative Claims, and (iii) any other stockholder claim or cause of
action, whether direct or derivative, arising from or relating to the operations of GTSI.
2.4 Related Parties. “Related Parties” means, with respect to any Party, such
Party’s subsidiaries, shareholders (excluding, with respect to GTSI, Eyak), employees,
representatives, attorneys, advisors, successors and present and former directors and officers.
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3. Dismissal of Disputes.
3.1 Immediately following the Closing, each of GTSI, the Continuing Members and the Company
shall dismiss with prejudice, and without any award of costs or attorneys’ fees to either side, the
Arbitration, and shall file with AAA the motion to dismiss, in the form attached hereto as
Exhibit A. Each Party shall bear its own attorneys’ fees and expenses and shall be
responsible for its share of any outstanding fees or costs due to AAA in connection with the
Arbitration.
3.2 Immediately following the Closing, Eyak hereby agrees to direct its attorneys to execute
and deliver to GTSI a letter in the form attached hereto as Exhibit B and shall cease all
activity, preparation and actions that would result in the filing or pursuit of the Derivative
Claims.
3.3 Immediately following the Closing, each of GTSI, the Continuing Members and the Company
hereby agree to dismiss with prejudice, and without any award of costs or attorneys’ fees to either
side, the Chancery Court Action, and shall file the stipulation of dismissal and executed versions
of the associated waivers of notice and consents of each of GTSI, Eyak and Global in the form
attached hereto as Exhibit C. The Company agrees to obtain the consent of Xxxxx Xxxxxxxx,
Xxxxxx Xxxxx, Xxx Xxxxxx, Xxx Xxxx and Xxxxx Le to this dismissal of the Chancery Court Action.
3.4 Each Party waives any right to challenge, appeal or otherwise seek to overturn any
decision rendered in the Settled Litigation.
4. Confidentiality. Each of the Parties agrees that it will keep the negotiation and
provisions of this Agreement and all correspondence and discussion with respect to the Disputes in
strictest confidence and that it will not, without the prior written approval of the other Parties,
make any press release or other public announcement concerning the transactions contemplated hereby
that is inconsistent in any material respect with the scope and content of the press release and
the Current Report on Form 8-K prepared by GTSI and reviewed and approved by the Company prior to
the date hereof (such documents, the “GTSI Release and 8-K”) and the press release prepared
by the Company and reviewed and approved by GTSI prior to the date hereof (such document, the
“Company Release”), except that (a) the Parties may disclose this Agreement and information
related hereto in confidence to their respective attorneys, accountants, auditors, tax preparers
and financial advisors (such persons to treat this Agreement and any such information
confidentially in accordance with this Section 4 and such disclosing Party to be responsible for
any breach hereof by any such person), (b) the Parties may disclose this Agreement and other
information related thereto as necessary to fulfill applicable government, public company reporting
and any other legally required obligations, including, without limitation, disclosure to the
Securities and Exchange Commission (the “SEC”) and the U.S. Small Business Administration
(“SBA”) and each of the respective representatives of any such government agency, and to
make presentations to and to respond to questions by stockholders, lenders, analysts, or similar
parties, in all cases consistent in all material respects with the scope and content of the GTSI
Release and 8-K and the Company Release, (c) the Parties may disclose this Agreement and
information related hereto insofar as such disclosure
may be necessary to enforce its terms, and (d) the Parties may disclose this Agreement and
information related hereto to the extent necessary or appropriate (x) based on any request, demand
or subpoena from a government authority, and (y) in connection with disclosure obligations relating
to bids and proposals of a Party or any of its subsidiaries. Notwithstanding anything to the
contrary set forth herein, any and all financial information regarding the Company or either of the
Continuing Members disclosed to GTSI pursuant to the Confidentiality Agreements or the
Confidentiality Order shall be governed by the July Confidentiality Agreement and the
Confidentiality Order.
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5. No Reliance. Each Party acknowledges that, with respect to every aspect of this
Agreement, including but not limited to the Redemption, the releases contemplated by Section 2
hereof, and the dismissals and covenants contemplated by Section 3 and Section 10 hereof, each
Party has relied solely and exclusively on the advice and assistance of its own attorneys and other
advisors and that it has not and is not relying on the statements, representations or documents
provided by the other Parties unless specifically identified in Section 6, Section 7 or Section 8
(as applicable) below.
6. Representations and Warranties of the Company. The Company represents and warrants
as of the date hereof to GTSI as follows:
6.1 Power and Authority. The Company is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware. The Company has the
full limited liability company power and authority to (a) execute and deliver this Agreement, (b)
perform its obligations hereunder, (c) redeem, purchase and receive from GTSI the GTSI Interest,
(d) fulfill the obligations imposed herein upon the Company, and (e) consummate the transactions
contemplated herein.
6.2 Authorization. The execution, delivery and performance of this Agreement by the
Company, and the Company’s consummation of the transactions contemplated hereby, have been approved
by (i) all of the members of the Company other than GTSI and (ii) the Board (as defined in the
Operating Agreement).
6.3 Enforceability. This Agreement constitutes the legal, valid, and binding
obligation of the Company, enforceable against the Company in accordance with its terms.
6.4 Insolvency. The Company is not insolvent and will not become insolvent as a
result of entering into this Agreement and fulfilling its obligations hereunder.
6.5 No Conflicts. The execution, delivery and performance of this Agreement by the
Company do not and will not (i) result in a violation of any law applicable to the Company, or (ii)
result in a material breach of, conflict with or default under, any term or provision of any note,
mortgage, bond, security agreement, loan agreement, guaranty, pledge or other instrument, contract,
agreement or commitment to which the Company is a party or by which the Company or any of the
Company’s assets or properties, are subject or bound.
6.6 Acknowledgement. The Company acknowledges that the Purchase Price was determined
by arms’ length negotiations between the Parties.
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6.7 New Contracts. Since June 30, 2011 through the business day immediately preceding
the Closing Date, (i) the Company has not been awarded any new prime contract vehicles by the U.S.
government or any instrumentality thereof; (ii) the Company has not been awarded any individual
task order under prime contract vehicles that existed prior to June 30, 2011 by the U.S. government
or any instrumentality thereof in excess of $1,600,000 and (iii) the Company has not entered into
new subcontract arrangements with prime contractors (excluding teaming agreements entered into in
the ordinary course of business); provided that the Company was party to a teaming
agreement with a prime contractor that was awarded by the U.S. Department of Veteran Affairs
Veterans Affairs Transformation Twenty-One Total Technology Acquisition Program in July 2011.
6.8 No Inducements. Neither GTSI nor any other party has made any oral or written
representation, inducement, promise or agreement to the Company in connection with the matters
herein, other than as expressly set forth in this Agreement, and in entering into this Agreement,
the Company is not relying upon any representation or statement of fact not expressly set forth in
this Agreement.
6.9 FOIA Requests. There are no pending requests by or on behalf of the Company or
any of its subsidiaries for information or documents relating to any GTSI Releasee pursuant to FOIA
or any equivalent claims for information from any government agency.
6.10 Disclaimer. Except as expressly set forth in this Xxxxxxx 0, xxxx of the
Company, nor (except as set forth in Section 7, as to the Continuing Members) any of the Company’s
Related Parties, nor any person or entity acting on behalf of any of them, nor any of their
respective affiliates, makes any representation or warranty of any kind, express or implied, at law
or in equity.
7. Representations and Warranties of the Continuing Members. Each of the Continuing
Members hereby represents and warrants, severally, but not jointly, to GTSI as of the date hereof
as follows:
7.1 Power and Authority. Eyak is duly organized, validly existing and in good
standing under the laws of the State of Alaska in accordance with the Alaska Native Claims
Settlement Act and has full corporate power and authority to (a) execute and deliver this
Agreement, (b) perform its obligations hereunder, (c) fulfill the obligations imposed herein upon
Eyak, and (d) consummate the transactions contemplated herein. Global is duly organized, validly
existing and in good standing under the laws of the State of Alaska and has full corporate power
and authority to (a) execute and deliver this Agreement, (b) perform its obligations hereunder, (c)
fulfill the obligations imposed herein upon Global, and (d) consummate the transactions
contemplated herein.
7.2 Authorization. The execution, delivery and performance of this Agreement by Eyak,
and Eyak’s consummation of the transactions contemplated hereby, have been duly authorized by all
requisite corporate or other action of Eyak. The execution, delivery and performance of this
Agreement by Global, and Global’s consummation of the transactions contemplated hereby, have been
duly authorized by all requisite corporate or other action of Global.
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7.3 Enforceability. This Agreement constitutes the legal, valid, and binding
obligation of each of the Continuing Members, enforceable against each of the Continuing Members in
accordance with its terms.
7.4 No Conflicts. The execution, delivery and performance of this Agreement by each
of the Continuing Members do not and will not (i) result in a violation of any law applicable to
such Continuing Member, or (ii) result in a material breach of, conflict with or default under, any
term or provision of any note, mortgage, bond, security agreement, loan agreement, guaranty, pledge
or other instrument, contract, agreement or commitment to which such Continuing Member is a party
or by which such Continuing Member or any of such Continuing Member’s assets or properties are
subject or bound.
7.5 No Inducements. Neither GTSI nor any other party has made any oral or written
representation, inducement, promise or agreement to the Continuing Members in connection with the
matters herein, other than as expressly set forth in this Agreement, and in entering into this
Agreement, the Continuing Members are not relying upon any representation or statement of fact not
expressly set forth in this Agreement.
7.6 Disclaimer. Except as expressly set forth in this Xxxxxxx 0, xxxx of the
Continuing Members, nor (except as set forth in Section 6, as to the Company) any of the Continuing
Members’ Related Parties, nor any person or entity acting on behalf of any of them, nor any of
their respective affiliates, makes any representation or warranty of any kind, express or implied,
at law or in equity.
8. Representations and Warranties of GTSI. GTSI hereby represents and warrants to the
Continuing Members and the Company as of the date hereof as follows:
8.1 Power and Authority. GTSI is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. GTSI has full corporate power and
authority to (a) execute and deliver this Agreement, (b) perform its obligations hereunder, (c)
sell, assign, transfer and deliver the GTSI Interest to the Company, (d) fulfill the obligations
imposed herein upon GTSI, and (e) consummate the transactions contemplated herein.
8.2 Authorization. The execution, delivery and performance of this Agreement by GTSI,
and GTSI’s consummation of the transactions contemplated hereby, have been duly authorized by all
requisite corporate or other action of GTSI, including by GTSI’s Board of Directors.
8.3 Enforceability. This Agreement constitutes the legal, valid, and binding
obligation of GTSI, enforceable against GTSI in accordance with its terms.
8.4 No Inducements. None of the Company or the Continuing Members or any other party
has made any oral or written representation, inducement, promise or agreement to GTSI in connection
with the matters herein, other than as expressly set forth in this Agreement, and in entering into
this Agreement, GTSI is not relying upon any representation or statement of fact not expressly set
forth in this Agreement.
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8.5 Ownership of the GTSI Interest. GTSI is the sole owner and holder of, and has the
full and entire right, title, and interest in and to the GTSI Interest to be redeemed, purchased
and
sold hereunder, free and clear of any and all Liens, which GTSI Interest constitutes (a) one
hundred percent (100%) of all of the limited liability company interests of the Company owned by
GTSI and its Related Parties (excluding persons and entities that are Related Parties of GTSI
solely by reason of being employees or shareholders of GTSI), and (b) a thirty-seven percent (37%)
Percentage Interest (as defined in the Operating Agreement) of the Company. Other than the GTSI
Interest, GTSI neither owns nor holds any other interest in the Company or any affiliate of the
Company (other than GTSI and its subsidiaries), nor does GTSI have any other right (whether or not
currently exercisable) thereto.
8.6 FOIA Requests. Other than the Initial Requests, there are no pending requests by
or on behalf of GTSI or any of its subsidiaries for information or documents relating to any
Company Releasee pursuant to FOIA or any equivalent claims for information from any government
agency.
8.7 Insolvency. GTSI is not insolvent and will not become insolvent as a result of
entering into this Agreement and fulfilling its obligations hereunder.
8.8 No Conflicts. The execution, delivery and performance of this Agreement by GTSI
do not and will not (i) result in a violation of any law applicable to GTSI, or (ii) result in a
material breach of, conflict with or default under, any term or provision of any note, mortgage,
bond, security agreement, loan agreement, guaranty, pledge or other instrument, contract, agreement
or commitment to which GTSI is a party or by which GTSI or any of GTSI’s assets or properties are
subject or bound.
8.9 Certain Acknowledgements. GTSI acknowledges that it has conducted its own
independent review and analysis of and, based thereon, has formed an independent judgment
concerning, the GTSI Interest, the value of the GTSI Interest, and the business, assets, condition,
operations and prospects of the Company. GTSI, or its advisors, has been afforded the opportunity
to conduct due diligence on the Company and has been provided with information and materials they
deem sufficient to evaluate the merits of the Redemption and the other transactions contemplated
hereby. GTSI is a publicly-traded company and each of GTSI and its financial advisors has the
expertise, knowledge and experience in financial and business matters to enable it to utilize the
information made available to it in connection with the Redemption and the other transactions
contemplated hereby, to evaluate the merits and risks of the Redemption and the other transactions
contemplated hereby, and to make an informed decision with respect thereto and such an evaluation
and informed decision has been made. With respect to any estimate, projection, budget or forecast
delivered by or on behalf of the Company and/or either Continuing Member to GTSI related to the
GTSI Interest or the business of the Company, GTSI acknowledges that (i) there are uncertainties
inherent in attempting to make such estimates, projections, budgets and forecasts, (ii) GTSI is
aware that actual results may differ materially, and (iii) none of the Company or either Continuing
Member makes or shall be deemed to have made any representation or warranty with respect to any
such estimate, projection, budget or forecast or otherwise.
8.10 Disclaimer. Except as expressly set forth in this Xxxxxxx 0, xxxx of GTSI, nor
any of GTSI’s Related Parties, nor any person or entity acting on behalf of any of them, nor any of
their respective affiliates, makes any representation or warranty of any kind, express or implied,
at law or in equity.
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9. Closing Date. The closing hereunder shall take place simultaneous with the
execution of this Agreement in McLean, Virginia (the “Closing”, and the date thereof, the
“Closing Date”) and may take place by conference call. At the time of the Closing and as a
condition to the obligations of the Company and the Continuing Members hereunder, GTSI shall
deliver to the Company and the Continuing Members a copy of the opinion received from its financial
advisor that purchase of the GTSI Interest by the Company is fair from a financial point of view to
the shareholders of GTSI; provided that such opinion may not be relied upon by the Company
or the Continuing Members and the Company, the Continuing Members and their respective
representatives shall keep the contents of such opinion confidential in accordance with the terms
of Section 4 hereof. To the extent permitted by applicable law and GAAP, the Parties will treat
the Closing as being effective as of 11:59 p.m. on the Closing Date.
10. Warranty and Covenant Not to Xxx. Each Party warrants that only it owns the
claims being released by such Party herein, and that no assignment or subrogation of such claim has
been made by such Party. Except with respect to disputes arising from a breach of this Agreement,
the July Confidentiality Agreement or the Confidentiality Order, each Party agrees not to file,
charge, claim, xxx, or cause or permit to be filed, charged, or claimed any action for any form of
relief, whether in law or equity, against any other Party relating to, arising out of, or based on
the subject matter of any of the claims released pursuant to Section 2 of this Agreement.
11. No Admission. The Parties agree that this Agreement is executed by the Parties to
compromise disputed claims and that the existence of this Agreement shall not constitute, or be
construed as, an admission of any violation or breach of any agreement, law, order, ordinance,
regulation or enactment, or of wrongdoing of any kind by any Party, and each Party specifically
denies any such violation or wrongdoing on its part.
12. Return of Documents; Continuation of Confidentiality Obligations.
12.1 Promptly upon occurrence of the dismissals contemplated by Section 3 hereof, each Party
shall return to each other Party or certify in writing that it has destroyed any information
obtained from each such other Party, whether pursuant to discovery or either of the Confidentiality
Agreements, excluding any documents obtained through the Initial Requests. Each Party’s
obligations not to disclose information under the Confidentiality Agreements and the
Confidentiality Order shall survive this Agreement. None of the foregoing shall prevent a Party
from retaining copies or electronic versions of any document filed with the Arbitrator or the
Delaware Court of Chancery, or used in connection with the preparation, issuance or Board
consideration of the fairness opinion provided to GTSI.
12.2 The Parties hereby agree that the July Confidentiality Agreement shall be deemed to have
superseded the April Confidentiality Agreement and that all information provided under the April
Confidentiality Agreement shall be governed by and subject to the July Confidentiality Agreement.
All information provided by the Company under either of the Confidentiality Agreements shall be
subject to and used in accordance with the terms of the July Confidentiality Agreement.
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13. Non-Disparagement.
13.1 From the Closing Date until the three (3) year anniversary thereof, the Company and the
Continuing Members each agree that none of their respective officers or directors will engage in
any conduct that involves the making or publishing of written or oral statements or remarks
(including, without limitation, the repetition or distribution of derogatory rumors, allegations,
negative reports or comments) that are directly or indirectly disparaging or damaging to the
integrity, reputation or good will of GTSI or any of its officers, directors or subsidiaries. This
provision is not applicable to statements made in connection with (i) enforcement of this
Agreement, (ii) truthful testimony obtained through subpoena, (iii) truthful information provided
pursuant to investigation or request by any governmental body, including, without limitation,
truthful disclosure to the SEC, the SBA, the Department of Justice and respective representatives
of such agencies and truthful information disclosed to fulfill applicable public company disclosure
obligations and disclosure obligations in connection with bids and proposals of the Company or any
of its subsidiaries, and (iv) presentations to and to responses made to questions by stockholders,
lenders and analysts and similar parties, all such disclosures in accordance with Section 4 hereof.
13.2 From the Closing Date until the three (3) year anniversary thereof, GTSI agrees that none
of its officers or directors will engage in any conduct that involves the making or publishing of
written or oral statements or remarks (including, without limitation, the repetition or
distribution of derogatory rumors, allegations, negative reports or comments) that are directly or
indirectly disparaging or damaging to the integrity, reputation or good will of any of the Company
or the Continuing Members or any of their respective officers, directors or subsidiaries. This
provision is not applicable to statements made in connection with (i) enforcement of this
Agreement, (ii) truthful testimony obtained through subpoena, (iii) truthful information provided
pursuant to investigation or request by any governmental body, including, without limitation,
truthful disclosure to the SEC, the SBA, the Department of Justice and respective representatives
of such agencies and truthful information disclosed to fulfill applicable public company disclosure
obligations and disclosure obligations in connection with bids and proposals of GTSI or any of its
subsidiaries, and (iv) presentations to and to responses made to questions by stockholders, lenders
and analysts and similar parties, all such disclosures in accordance with Section 4 hereof.
14. FOIA.
14.1 For a period of three (3) years after the Closing, the Company agrees that it and its
subsidiaries and representatives (on its behalf) shall not, directly or indirectly, make or pursue
any request pursuant to FOIA or any equivalent request for information from any government agency
naming any GTSI Releasee or requesting information relating to any GTSI Releasee; provided,
however, that if in connection with any governmental investigation of or third party legal
proceeding against the Company, which was first discovered (including any investigation by a
government agency or of occurrences or circumstances, in each case not currently known by the
Company) following the Closing, the Company determines, based upon advice of counsel, that
obtaining documents covered by the preceding clause could lead to relevant information that could
assist in its defense, then the Company may file a FOIA request to pursue such documents, after
prior written notice to GTSI, which notice shall include a copy of such FOIA request.
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14.2 GTSI and its subsidiaries agree not to appeal or continue to pursue requests, documents,
claims or actions under the Initial Requests. For a period of three (3) years after the Closing,
GTSI agrees that it and its subsidiaries and representatives (on its behalf) shall not, directly or
indirectly, make or pursue any request pursuant to FOIA or any equivalent request for information
from any government agency naming any Company Releasee or requesting information relating to any
Company Releasee; provided, however, that if in connection with any governmental
investigation of or third party legal proceeding against GTSI, which was first discovered
(including any investigation by a government agency or of occurrences or circumstances, in each
case not currently known by GTSI) following the Closing, GTSI determines, based upon advice of
counsel, that obtaining documents covered by the preceding clause could lead to relevant
information that could assist in its defense, then GTSI may file a FOIA request to pursue such
documents, after prior written notice to the Company, which notice shall include a copy of such
FOIA request.
15. Tax and Financial Matters.
15.1 The Company and the Continuing Members agree to cause the Company to close its books as
of the close of business on the Closing Date so as to determine the share of each Member’s (as
defined in the Operating Agreement) (including GTSI) profits or losses for the period from January
1, 2011 through the Closing Date.
15.2 The Company shall engage Xxxxxxx LLC to perform an audit of financial statements of the
Company for the period from January 1, 2011 through the close of business on the Closing Date. The
Company shall make such audited financial statements available to GTSI within ninety (90) days
after the Closing for inclusion in GTSI’s financial statements and Form 10-K filing with the SEC.
16. General Provisions.
16.1 Expenses. Each Party shall pay all of its own costs and expenses (including
attorneys’ and accountants’ fees and other out-of-pocket expenses) in connection with the
prosecution of the Settled Litigation, the pursuit or defense of the Disputes, the negotiation and
execution of this Agreement, the performance of its obligations hereunder and the consummation of
the transactions contemplated hereby.
16.2 Amendment and Waiver. No amendment, modification or waiver of any of the
provisions of this Agreement shall be effective against any Party unless such modification,
amendment or waiver is approved in writing by such Party. No course of dealing between the Parties
or any delay in exercising any rights hereunder shall operate as a waiver of any rights.
16.3 Parties in Interest; Successors and Assigns. No Party may assign this Agreement
without the prior written consent of the other Parties. This Agreement shall be binding upon and
shall inure to the benefit of the Parties and their respective successors and assigns.
16.4 Entire Agreement. This Agreement, together with the Confidentiality Agreements
and the Confidentiality Order, constitute the entire agreement between the Parties on the subject
matter hereof. Where used herein, the singular shall apply to the plural, the plural to the
singular, and one gender to the other or the neuter where the context so requires.
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16.5 Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision hereof, which
shall remain in full force and effect.
16.6 Counterparts. This Agreement may be executed either as one document or in
separate counterparts, whether originals or copies of originals transmitted by facsimile or other
electronic means, each of which will be deemed an original, and all of which, when taken together,
will constitute one and the same Agreement.
16.7 Governing Law. The law of the Commonwealth of Virginia shall govern all
questions concerning the construction, validity, interpretation and enforceability of this
Agreement and the performance of the obligations imposed by this Agreement, without giving effect
to any choice of law or conflict of law rules or provisions (whether of Virginia or any other
jurisdiction) that would cause the application of the laws of any jurisdiction other than the
Commonwealth of Virginia.
16.8 Venue. Each of the Parties irrevocably consents to the exclusive jurisdiction
and venue of the United States District Court for the Eastern District of Virginia and any state
court located within Fairfax County, Commonwealth of Virginia. Each of the Parties agrees: (i)
that each of the United States District Court for the Eastern District of Virginia and any state
court located within Fairfax County, Commonwealth of Virginia shall be deemed to be a convenient
forum; (ii) to the service of process in any such legal proceeding in the United States District
Court for the Eastern District of Virginia or any state court located within Fairfax County,
Commonwealth of Virginia by the mailing of such process by registered or certified mail, postage
prepaid, at its address for notices provided for herein; (iii) not to assert (by way of motion, as
a defense or otherwise), in any such legal proceeding commenced in the United States District Court
for the Eastern District of Virginia or any state court located within Fairfax County, Commonwealth
of Virginia, any claim that any of the Parties is not subject to personal jurisdiction of such
court or that such legal proceeding has been brought in an inconvenient forum; and (iv) that the
venue of such proceeding is proper and that this Agreement may be enforced in or by the United
States District Court for the Eastern District of Virginia and any state court located within
Fairfax County, Commonwealth of Virginia.
16.9 Waiver of Jury Trial. EACH OF THE PARTIES IRREVOCABLY WAIVES THE RIGHT TO A JURY
TRIAL IN CONNECTION WITH ANY LEGAL PROCEEDING RELATING TO OR ARISING OUT OF THIS AGREEMENT.
16.10 No Other Consideration. The Parties affirm that the terms stated herein are the
only consideration for their executing this Agreement, and that no other representations, promises,
or agreements of any kind have been made by any person or entity to cause them to execute this
Agreement.
16.11 Acknowledgment. In entering into this Agreement, the Parties acknowledge that
they are represented by counsel of their choice, or had the opportunity to be represented by
counsel of their choice. The Parties affirm that they have read the Agreement in its entirety,
have had a full and fair opportunity to consider and understand its terms, and to be advised by
their counsel. The Parties further acknowledge that they execute the Agreement of their own free
will and without coercion.
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16.12 Notices. All notices, requests, demands and other communications shall be in
writing and shall be deemed to have been duly given if delivered personally or if sent by a
nationally recognized overnight delivery service or by registered or certified mail, return receipt
requested, properly addressed and postage prepaid to the address set forth below.
| THE EYAK CORPORATION | ||
0000 Xxxxxx Xxxx Xxxxx
|
X.X. Xxx 000 | |
Xxxxx 000
|
Xxxxxxx, XX 00000 | |
Xxxxxxx, XX 00000
|
Attn: President | |
Attn: Xxxxxxxx Xxxxxxxx, President
|
Telecopier: 000-000-0000 | |
Telecopier: 000-000-0000 |
||
with a copy to: |
||
with a copy to: |
||
| THE EYAK CORPORATION | ||
| 000 X. Xxxxxx Xxxx., Xxxxx 000 | ||
0000 Xxxxxx Xxxx Xxxxx
|
Xxxxxxxxx, XX 00000 | |
Suite 100
|
Attn: Xxxxxxx Xxxx, Corporate Counsel | |
Xxxxxxx, XX 00000
|
Telecopier: 000-000-0000 | |
Attn: Xxx Ugialoro, General Counsel |
||
Telecopier: 000-000-0000
|
EYAK TECHNOLOGY, LLC | |
| 000 X. Xxxxx Xxxxxx | ||
GLOBAL TECHNOLOGY GROUP, LLC
|
Xxxxxxxxx, XX 00000 | |
0000 X Xxxxxx, Xxxxx 000
|
Xxxx: President | |
Xxxxxxxxx, XX 00000
|
Telecopier: 000-000-0000 | |
Attn: Xxxxxxx Xxxxxxx |
||
Telecopier: 907-279-2757
|
with a copy to: |
|
| EYAK TECHNOLOGY, LLC | ||
| 00000 Xxxxxx Xxxxx Xxxxx Xxxxx 000 | ||
| Xxxxxx, XX 00000 | ||
| Attn: President | ||
| Telecopier: 000-000-0000 |
16.13 No Brokers. Each of the Parties represents and warrants to the other
Parties (except, as to GTSI, for Xxxxxxx Xxxxx Financial, Inc. and, as to the Company, for Xxxxxxxx
Xxxxx) that it has not employed any broker in carrying out the negotiations relating to this
Agreement. Each Party shall indemnify and hold harmless the other Parties from and against any
claim for brokerage or other commission arising out of the Redemption contemplated hereby.
16.14 Survival of Representations, Warranties and Covenants. The representations and
warranties contained in this Agreement shall survive until the nine (9) month anniversary of the
Closing; except that the representations and warranties contained in sections 6.1, 6.2, 6.3, 7.1,
7.2, 7.3, 8.1, 8.2, 8.3, 8.5 and 8.9 shall survive until their applicable statute of limitations,
and each covenant and agreement contained in this Agreement, shall survive the Closing and be
enforceable in accordance with its terms until such covenant or agreement has been fully performed.
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16.15 Further Assurances. Each of the Parties agrees to execute and deliver to the
other Parties such other documents and instruments as may be reasonably requested in furtherance of
the performance of the terms, covenants, and conditions of this Agreement. The Parties further
agree to cooperate in carrying out this Agreement, including, without limitation, the amendment of
the Operating Agreement to reflect the Redemption and the removal of GTSI as a party thereto.
(Signature page follows)
IN WITNESS WHEREOF, each of the Parties has executed and delivered this Agreement as of the
date first above written.
| GTSI CORP. | ||||||
| By: | ||||||
| Title: | ||||||
| THE EYAK CORPORATION | ||||||
| By: | ||||||
| Title: | ||||||
| GLOBAL TECHNOLOGY GROUP, LLC | ||||||
| By: | ||||||
| Title: | ||||||
| EYAK TECHNOLOGY, LLC | ||||||
| By: | ||||||
| Title: | ||||||
