Attached files
| file | filename |
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| EX-99.1(G) - EXHIBIT 99.1(G) - QSGI INC. | ex99-1g.htm |
| EX-99.1(A) - EXHIBIT 99.1(A) - QSGI INC. | ex99-1a.htm |
| EX-99.1(C) - EXHIBIT 99.1(C) - QSGI INC. | ex99-1c.htm |
| EX-99.1(F) - EXHIBIT 99.1(F) - QSGI INC. | ex99-1f.htm |
| EX-99.1(I) - EXHIBIT 99.1(I) - QSGI INC. | ex99-1i.htm |
| EX-99.1(E) - EXHIBIT 99.1(E) - QSGI INC. | ex99-1e.htm |
| EX-99.1(D) - EXHIBIT 99.1(D) - QSGI INC. | ex99-1d.htm |
| EX-99.1(B) - EXHIBIT 99.1(B) - QSGI INC. | ex99-1b.htm |
| 8-K - QSGI INC. FORM 8-K - QSGI INC. | qsgi8k.htm |
Exhibit 99.1(h)
SETTLEMENT
AGREEMENT
This
Settlement Agreement and Mutual Release (the “Settlement Agreement”) is entered
into as of June __, 2010, by and between John R. Riconda (“Riconda”), an
individual residing at 130 Soundview Terrace, Northport, New York, on the one
hand, and QSGI Inc. (a/k/a QSGI, Inc.) a Delaware Corporation, inclusive of its
bankruptcy estate and its wholly-owned subsidiaries and/or affiliates as the
same may have from time to time existed, including, but not limited to
QSGI-CCSI, Inc., a Delaware corporation (collectively, the “Debtor”
or “QSGI”), on the other..1
RECITALS
WHEREAS, Riconda has asserted
claims against QSGI, including (i) filing a lawsuit in Supreme Court of the
State of New York, New York County captioned John Riconda v. QSGI, Inc.,
QSGI-CCSI, Inc. and Victory Park Management LLC, seeking, inter alia, to compel
QSGI to turn over to Riconda all possession, right and title to the stock of
Contemporary Computer Services, Inc. (“CCSI”) and (ii) filing a Motion to Compel
Abandonment of the Stock of CCSI to Riconda, in connection with the jointly
administered Chapter 11 proceedings captioned In re: QSGI, Inc.,
Case No. 09-23658-EPK, 09-23659-WPK and 09-23660-EPK in the United States
Bankruptcy Court for the Southern District of Florida (together, the “Bankruptcy
Proceeding”);
WHEREAS, Riconda has submitted
a Proof of Claim against QSGI-CCSI in the amount of
$10,909,000;
WHEREAS, QSGI-CCSI, Inc.
listed Riconda on its “Schedule” D of secured creditors in the Bankruptcy
Proceeding as the sole secured creditor, with a claim of $10 million,
secured by the stock of CCSI;
WHEREAS, QSGI claims the right
to assert claims against Riconda in the Bankruptcy Proceeding, relating to
CCSI;
WHEREAS, Riconda and QSGI were
parties to a Stock Purchase Agreement, dated May 6, 2008 and a First Amendment
to the Stock Purchase Agreement, dated July 7, 2008, and related agreements
(collectively, the “Stock Purchase Agreements”);
WHEREAS, all of the stock of
CCSI is currently being held in escrow with Meltzer, Lippe, Goldstein &
Breitstone, LLP, as escrow agent, pending further order of a court of competent
jurisdiction;
WHEREAS, the parties desire to
settle the claims between them relating to the ownership of the stock of CCSI
and/or the Stock Purchase Agreements;
WHEREAS, the parties agree
that there is adequate consideration for each and every term and condition of
this Agreement;
NOW,
THEREFORE, IT IS AGREED THAT:
1. Consideration
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a.
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QSGI
shall abandon one-hundred percent (100%) of the capital stock of CCSI,
Inc. to Riconda and Riconda hereby releases his rights with respect to
QSGI, except as specifically set forth
herein.
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b.
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Following
court approval of this Settlement Agreement Riconda shall have no further
secured rights in and to QSGI and shall retain an unsecured claim against
QSGI in the amount of $10,159,000. The aforestated amount of
Riconda’s claim is made without being and admission and without
prejudice to any subsequent valuation of the stock of
CCSI.
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c.
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Riconda
covenants not to assist with, participate in, sue or institute any claim,
action or proceeding against QSGI, its officers, directors, employees,
agents, attorneys, inclusive of any reorganized entity that emerges from
the Bankruptcy Proceeding. This covenant shall specifically
not apply
to Marc Sherman Ed Cummings, Seth Grossman, Robert Van Hellemont, Geoff
Smith, R. Keith Elliot, John Cunningham or Eric Nelson (collectively, the
“QSGI Directors and Officers”) against whom Riconda expressly reserves all
claims and rights of action for damages he asserts he sustained in
connection with, relating to, or as a consequence of, the transaction
memorialized by the Stock Purchase Agreements and/or related
events. Further, if John Riconda’s covenant not to sue QSGI or
any reorganized entity that emerges from the Bankruptcy Proceeding is
raised as a defense by any party, or deemed by a court to constitute a
meritorious defense, to liability, or to insurance coverage for such
liability, in any future lawsuit by Riconda against the QSGI Directors and
Officers, then Riconda’s covenant not to sue QSGI (and QSGI only) shall be
null and void. Nothing in this paragraph shall affect Riconda's
covenant not to sue any reorganized entity that emerges from the
Bankruptcy Proceeding or the officers, directors, employees, agents
and attorneys of such reorganized entity, in their capacity as officers,
directors, employees, agents and attorneys of such reorganized
entity.
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d.
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Riconda
shall support and not object to any plan or proposed plan of
reorganization for QSGI filed in the Bankruptcy Proceeding, even if in
said plan he receives disparate or different treatment than other
similarly situated creditors of QSGI. Riconda noting that he will not
receive a cash payment on his unsecured claim or equity in the
re-organized entity, should the same be offered to other
unsecured creditors. Further, Riconda covenants and
agrees, and it is his intent, that he shall not, under any circumstances,
including by way of execution, have direct, indirect or beneficial claims,
rights or interests in and to the Debtor, the reorganized or
successor to the Debtor or have direct, indirect or beneficial rights as a
holder of equity in the Debtor, the reorganized Debtor or any successor
entity to Debtor.
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2. Approval
Order
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a.
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While
this Agreement is effective upon execution by all of the parties hereto,
the implementation of this Agreement is contingent upon (i) the entry of
an Order (the “Approval Order”) by the United States Bankruptcy Court for
the Southern District of Florida in the Bankruptcy Proceeding (a)
approving this Agreement and its terms and permitting and/pr compelling
the abandonment of 100% of the capital stock of CCSI to John Riconda; and
(ii) the Approval Order, as docketed by the Clerk of the Bankruptcy Court,
becoming final and no longer appealable or subject to
review. The parties shall use their best efforts to expedite
finalization and execution of this Agreement and obtain the Approval
Order. Each party agrees that it will not directly or
indirectly object to entry of the Approval Order or take appeal of the
Approval Order unless such action is taken by agreement of the
parties. QSGI shall be responsible for drafting any necessary
pleadings (including any appeals) relating to the Approval Order and will
share such drafts with Riconda for comment prior to
filing
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The
Approval Order shall not act as a bar or res judicata with
respect to any claims or proceedings brought in connection with or arising from
the Stock Purchase Agreement.
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b.
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Notwithstanding
Section 2(a) above or any other provision in this Agreement to the
contrary,, in the event the Bankruptcy Proceeding is converted or
dismissed pursuant to Section 1112 of the Bankruptcy Code, this Agreement
shall not be subject to any contingencies, and QSGI shall cause all
possession, right and title to 100% of the capital stock of CCSI to be
turned over to Riconda within ten (10) calendar days from the date such
conversion or dismissal is entered by the Bankruptcy Court. If
any such order is appealed, QSGI shall cause all possession, right and
title to 100% of the capital stock of CCSI to be turned over to John
Riconda within ten (10) calendar days from the date such order becomes
final and no longer subject to review or
appeal.
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4. No Admission of Liability;
Effect of Settlement
The parties understand and acknowledge
that this Agreement is made and accepted without any admission of liability,
fault, or the truth of the allegations made by any party against the
other.
5. Binding
Effect
This
Agreement shall be binding upon and shall inure to the benefit of the
parties. Any modifications to this Settlement Agreement must be made
in a writing signed by the Parties.
6. Full and
Knowing
The
parties certify that each has carefully read and fully understands the
provisions of this Agreement; that they have had a reasonable opportunity to ask
questions concerning this Agreement and have received answers thereto; that they
have consulted with legal counsel before signing this Agreement; and that they
have entered into this Agreement knowingly, voluntarily and without duress,
intimidation, coercion or pressure.
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7. Responsibility for Damages,
Fees and Costs
Expect as otherwise set forth in this
Agreement, each party shall be responsible for its own costs and fees, including
attorneys’ fees, however, except in the event of litigation as a result of a
breach of this agreement, in which the prevailing party shall be entitled relief
and damages in law and equity and to its attorneys fees and costs at
all pre-trail, trail and appellate levels.
8. Severability
Should
any provision of this Settlement Agreement be declared or determined by a court
to be illegal or invalid, the validity of the remaining provisions shall not be
affected thereby and said illegal or invalid provision shall be deemed not to be
a part of this Release Agreement.
9. Counterparts
This
Settlement Agreement may be executed in counterparts and facsimile or PDF
signatures shall be deemed originals.
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John
Riconda
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QSGI,
Inc.
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By:
______________________________________
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By_________________________________
Marc
Sherman
Director
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Dated:
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Dated:
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QSGI-CCSI,
Inc.
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By:
______________________________________
Marc
Sherman
Director
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_________________________________
CCSI
John
Riconda
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Dated:
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