SETTLEMENT AND MUTUAL GENERAL RELEASE OF CLAIMS
Exhibit
10.1
This
Settlement and Mutual General Release of Claims (“Release”) is made as of June
29, 2005, by and between Pacific Decision Sciences Corporation, a Delaware
Corporation, and Applied Digital Solutions (hereinafter collectively “PDSC”) on
the one hand, and Xxxx Xxxxx, an Accountancy Corporation and Xxxx Xxxxx
(hereinafter collectively “Xxxxx”) on the other hand; with reference to the
following facts:
A. PDSC
has
previously filed an action in the Orange County Superior Court entitled
Pacific
Decision Sciences Corporation, etc. v. Xxxx Xxxxx, an Accountancy
Corporation,
et
al. bearing Case No. 00XX00000 which is now scheduled to commence trial on
October 24, 2005 before the Xxxxxxxxx Xxxx X. Xxxxxx in Dept. C15 (hereinafter
referred to as to “Action”). The Action states causes of action for professional
negligence, breach of fiduciary duty, and fraud and deceit. Xxxxx filed an
Answer to the Action denying any and all of the allegations and raising certain
affirmative defenses. Xxxxx continues to deny the allegations of the
Action.
B. On
or
about June 1, 2005, PDSC and Xxxxx, and their respective counsel of record,
attended a voluntary mediation with the Xxx. Xxxxx Xxxxx (Xxx.) of JAMS. At
that
time, the parties began settlement negotiations but were unable to reach
settlement during the mediation. However, the parties continued their settlement
negotiations thereafter resulting in an agreement to settle the Action on June
29, 2005.
C. On
June
29, 2005, PDSC and Xxxxx, through their respective counsel of record, entered
into a “short form” agreement to settle the action. Said “short form” agreement
is attached hereto as Exhibit “A” and is incorporated herein by reference. In
the “short form” agreement, the
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parties,
through their respective counsel of record, agreed to enter into a “long form”
settlement agreement. This Release shall constitute such “long form”
agreement.
D. PDSC
and
Xxxxx desire to settle their disputes and to release each other from any and
all
Claims (as hereinafter defined) including, but not limited to, those made in
the
Action, with the understanding that said release does not constitute any
admission of wrongdoing or tortious conduct on the part of the
parties.
NOW,
THEREFORE, the parties hereto do hereby agree as follows:
1. Mutual
General Release:
In
consideration for the payment of the money required to be paid by paragraph
2 of
this Release and the other promises and obligations set forth in this Release,
and except for the rights, interests and obligations created by this Release,
PDSC, on the one part, and Xxxxx, on the other part, do hereby fully release
and
forever discharge each other, as well as their respective insurers, successors,
predecessors, heirs, attorneys, assigns, accountants, partners, employees,
spouses, families, officers, directors, managers, members, representative,
agents, affiliates, including Xxxxxxx Xxxxxxxxx, (collectively “Beneficiaries”)
from any and all rights and duties and all claims, demands and causes of action,
including but not limited to all claims for attorneys’ fees, damages, debts,
liabilities, accounts, accountings, reckonings, obligations, guarantees,
suretyships, costs, expenses, liens, actions, controversies, and contracts
of
every kind and nature whatsoever, whether now known or unknown, suspected or
unsuspected (collectively “Claims”), which PDSC and Xxxxx, their legal
successors and/or assigns may now have, own or hold or which at any time
heretofore any of them may ever have had, owned or held, or could, shall or
may
hereafter have, own or hold against the other party and/or the other parties’
Beneficiaries through the date of this Release. From and after the date of
this
Release, neither PDSC nor Xxxxx,
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nor
their
predecessors, successors or assigns, shall have any Claims of any kind or nature
against each other, or the other parties’ Beneficiaries, directly or indirectly,
with respect to any matter, cause, fact, thing, act or omission existing, done
or omitted to be done, or services performed, at any time whatsoever to and
including the date hereof, other than to enforce the terms of this
Agreement.
2. Payment
of Money:
On or
before July 29, 2005, Xxxxx, through CAMICO Mutual Insurance Company shall
cause
to deliver a settlement check, money order, or draft in the sum of five hundred
forty thousand dollars ($540,000) made payable to the Pacific Decision Sciences
Corporation. Said settlement funds shall be delivered to counsel for
PDSC.
3. Release
and Waiver:
PDSC
and Xxxxx intend, in executing this Release and doing the acts called for
herein, that this Release shall be effective as a release and waiver of all
Claims, except for the rights, interests and obligations created by this Release
including, but not limited to, known, unknown, or suspected Claims. The parties
agree that this Release is a full and final accord and satisfaction and
settlement of and a bar to each and every Claim each may have against the other.
All parties acknowledge that they are aware that they or their attorneys may
hereafter discover facts different from or in addition to the facts which they
now know or believe to be true and further that they are familiar with
Civil
Code §1542
of
the State of California, which provides as follows:
“A
general release does not extend to a claim which the creditor does not know
or
suspect to exist in his favor at the time of executing the
release,
which if known by him must have materially affected his settlement with the
debtor.”
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Each
of
the parties expressly waives and relinquishes any and all of their rights and/or
benefits under Civil
Code
§1542. Each of the parties acknowledges that this waiver is the intentional
relinquishment of a known right and that, in agreeing to this waiver, each
party
hereby intentionally relinquishes the rights waived.
4. Entire
Agreement:
This
Release constitutes the entire and final, complete and exclusive statement
of
the terms of the parties’ agreement and understanding concerning the subject
matter hereof and supersedes and replaces any and all prior negotiations and
proposed agreements, written and/or oral, relating thereto.
5. Choice
of Law and Venue:
This
Release shall be governed by and construed under the laws of the State of
California, to whose jurisdiction the parties do hereby submit, provided,
however, that in the event that any law or laws of the State of California
shall
require otherwise and dictate that the laws of another state or jurisdiction
be
applied in any proceeding, such California law or laws shall be superseded
by
this paragraph and the remaining laws of the State of California shall
nonetheless be applied in such proceeding. In the event that any action is
instituted in connection with this Agreement, the parties agree that any action
shall be commenced and maintained in Orange County, California.
6. Attorneys’
Fees and Costs:
Any
party
which breaches its obligations under this Release shall be liable for reasonable
attorneys’
fees and costs as determined by the Court if litigation is commenced to enforce
its rights under this Release.
7. Other
Terms:
This
Release may be pleaded as a full and complete defense to, and the parties hereby
consent that it may be used as the basis for, an injunction against any action,
Petition or other proceeding based on claims released by this
Release.
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8.
No
Admission:
This
Release is the compromise of disputed claims. All parties deny liability.
Neither this Release nor payment is to be considered an admission of liability
on the part of any signatory hereto.
9.
Authority:
Each
of
the undersigned signatories represents that it has the authority to enter into
this Release on behalf of the party for whom it signs this Release and further
represents that no portion of any interest in any Claim released or transferred
hereby has been encumbered or assigned, sold or transferred to any person,
firm
or entity. Each of the parties shall indemnify and hold the other party harmless
from any breach of the provisions of this paragraph.
10. Benefit:
This
Release and each of its provisions shall inure to the benefit of the signatories
hereto and their respective Beneficiaries.
11. Counterparts:
This
Release may be signed in counterparts and when so signed, shall be deemed one
instrument. Each of the parties acknowledges that this Release has been entered
into on the basis that it has had ample time to investigate to determine whether
or not to enter into this Release. Each of the parties, on the basis of their
own investigation, has independently determined that it is in that party’s best
interest to enter into this Release regardless of whether or not the facts
are
as that party supposes them to be. Each party represents to the other party
that
in entering into this Release it is not relying on the representation of any
other party or person. Each of the parties is represented by counsel with
respect to the Claims and this Release and is relying upon the advice of its
counsel in entering into this Release. Each of the parties agrees that this
Release is not rescindable and each of the parties waives its right to
rescission of this Release. In waiving this right to rescission, each of the
parties acknowledges that it understands that it is intentionally waiving a
known right to rescind.
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12. Severability:
The
parties hereto understand and agree that if any term and/or provision herein
is
deemed unenforceable as a result of any arbitration or other legal proceeding,
that all remaining terms and provisions of this Release shall remain in full
force and effect.
13. Confidentiality:
a. The
parties expressly agree that they shall keep the terms of the settlement and
this Release strictly confidential. In this regard, the parties and their
attorneys agree not to disclose, divulge, publish, broadcast, state or otherwise
indicate to anyone (other than their counsel, accountants, auditors and/or
tax
preparers) the terms of this Release, including but not limited to the amount
of
the monetary consideration paid hereunder and the substance of any negotiations
preceding this Release. The parties may respond to inquiries regarding the
resolution of the claims only by stating that such claims were amicably resolved
to the parties’ mutual satisfaction, or words of similar
effect.
b. Notwithstanding
the foregoing, nothing herein shall prohibit or restrict the parties from
informing their attorneys, accountants, auditors and/or tax preparers of the
terms of this Release, or from disclosing, if required by reasonable
interpretation of law or securities regulations, to any governmental or
regulatory authority, the terms of settlement. The parties understand that,
as
part of a consolidated group with a public company (Applied Digital Solutions,
Inc.), PDSC has an obligation to make securities filings with the SEC that
disclose the settlement and some or all of its terms. In addition, nothing
herein shall prohibit any party from complying with a valid subpoena or court
order requiring production of this Release or disclosure of the terms of this
Release. Other than objecting to production or disclosure on grounds of the
confidentiality provision of this
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Release,
no party shall bear any obligation to seek an order barring production of this
Release or disclosure of its terms.
APPROVED:
|
XXXX
XXXXX, AN ACCOUNTANCY CORPORATION
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Dated:
July 11, 2005
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By:
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/s/
Xxxx Xxxxx,
CPA
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Xxxx
Xxxxx, CPA
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Dated:
July 11, 2005
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By:
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/s/
Xxxx Xxxxx,
CPA
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Xxxx
Xxxxx, CPA
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PACIFIC
DECISION SCIENCES CORPORATION
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Dated:
July 22, 2005
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By:
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/s/
Xxxxx
Wasieluski
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Its
Authorized Representative
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APPLIED
DIGITAL SOLUTIONS
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Dated:
July 8, 2005
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By:
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/s/
Xxxxxxx
Xxxxxxx
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Its
Authorized Representative
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Exhibit
A
[Letterhead
of JMBM]
June
29,
2005
VIA
FACSIMILE AND ELECTRONIC MAIL
Xxxxxxx
X. Xxxx, Esq.
Xxxxxxx,
Xxxxxxxxx & Xxxx
11900
Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Re:
Pacific Decision Sciences Corp. x. Xxxxx
Dear
Xx.
Xxxx:
This
letter confirms the settlement we have reached in the above-entitled matter
pursuant to our discussions over the last two days. The material terms of our
agreement are as follows:
1. You
and I
represent to each other that we have the authority required from each of our
clients to agree to the foregoing settlement. This document, when executed
by
each of us, constitutes a binding settlement agreement between the parties
within the meaning of Section 664.6 of the California Code of Civil Procedure.
The attorneys agree in good faith to prepare and execute a mutually agreeable
release agreement hereafter.
2. Within
thirty (30) days from today’s date, CAMICO Mutual Insurance Company shall pay to
Pacific Decision Sciences Corporation the amount of Five Hundred Forty Thousand
Dollars ($540,000.00). Xxxx Xxxxx, the insured, expressly approves of this
settlement and payment.
3. The
parties will provide each other along with their employees and affiliates with
complete mutual general releases. In addition to the parties to this lawsuit,
these releases shall expressly apply to Xxxxxxx Xxxxxxxxx, Applied Digital
Solutions and (within reason) any other affiliates of the parties. Such release
shall contain a waiver of Section 1542 of the Civil Code. If the parties cannot
agree on the terms of the release, such dispute shall be submitted to Xxx.
Xxxxx
Xxxxx at JAMS for resolution.
4. The
payment amount (with exceptions for any accounting and/or reporting obligations
of PDSC or Applied Digital Solutions) shall be subject to a standard
confidentiality provision.
Xxxxxxx
X. Xxxx, Esq.
June
29,
2005
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5. PDSC
shall dismiss the pending lawsuit with prejudice within five days after payment
of the settlement amount.
6. Each
of
us will cooperate with the other in the preparation of a long form settlement
agreement, which shall incorporate the foregoing terms and provide for the
customary terms of any settlement of this magnitude. The execution of the long
form settlement agreement contemplated hereby shall supersede this short form
agreement. The purpose of the short form agreement and the later mutual release
agreement to be executed by the parties shall be to end any and all disputes
between the parties.
Very
truly yours,
/s/
Melvin N.A. Xxxxxxxx
Xxxxxx
N.A. Avanzado
Jeffer,
Mangels, Xxxxxx & Marmaro LLP
ACCEPTED
AND AGREED
By: /s/
Xxxxxxx X.
Xxxx
Xxxxxxx
X. Xxxx
Xxxxxxx,
Xxxxxxxxx & Xxxx
Attorneys
for Defendants
