SETTLEMENT AGREEMENT. This Settlement Agreement ( Agreement ) is entered into among (i) the United States of

Transcription

1 SETTLEMENT AGREEMENT This Settlement Agreement ( Agreement ) is entered into among (i) the United States of America, acting through the United States Department of Justice (the United States ), (ii) Atlantic Diving Supply, Inc. (a/k/a ADS, Inc.); ADS Tactical, Inc. (f/k/a Tactical Holdcorp, Inc.); Mar-Vel International, Inc.; Tactical Exporters, Inc.; and Tactical Distributors, LLC (collectively, ADS ), and (iii) Ameliorate Partners, LLP ( Relator ), through their authorized representatives. Collectively, all of the above will be referred to as the Parties. RECITALS A. ADS provides military, operational, and tactical equipment and other products to the United States Department of Defense and other government agencies pursuant to federal procurement contracts. ADS Tactical, Inc. is the corporate parent and sole owner of ADS, Inc. Mar-Vel International, Inc.; Tactical Exporters, Inc.; and Tactical Distributors, LLC are wholly owned subsidiaries of ADS, Inc. B. On November 27, 2013, Relator filed an action in the United States District Court for the District of Columbia, captioned United States ex rel. Ameliorate Partners, LLP v. ADS Tactical, Inc., et al., Case Number [Under Seal], pursuant to the qui tam provisions of the False Claims Act ( FCA ), 31 U.S.C. 3730(b) (the Civil Action ). The complaint in the Civil Action was amended on May 23, 2014, and further amended on July 2, The second amended complaint in the Civil Action alleges, inter alia, that certain companies defined as ADS Affiliated Defendants, including ADS, and certain other companies defined as other affiliated entities (herein collectively referred to as the Alleged ADS Affiliates ) violated the False Claims Act and other laws in connection with bidding for and performing under Federal contracts.

2 C. The United States contends that it has certain civil claims against ADS arising out of conduct during the time period January 1, 2006, through August 1, 2016, that is set forth in this Paragraph below (referred to herein as the Covered Conduct ): (i) The United States alleges ADS and the Alleged ADS Affiliates falsely represented that they qualified as small business concerns and made affirmative, willful, and intentional certifications of small business size and status when, in fact, they were not qualified as such, including due to alleged affiliation with a number of commonly-controlled companies. ADS and the Alleged ADS Affiliates are alleged to have improperly bid on and received certain set-aside contracts for which they were not eligible because competition on those contracts had been restricted to qualified small businesses. It is further contended that ADS and the Alleged ADS Affiliates knowingly or recklessly submitted, or caused to be submitted, false claims for payment under contracts that were set aside for, or restricted to, concerns that qualified as small businesses under applicable statutes and regulations (including Federal Acquisition Regulation ) and for which ADS and the Alleged ADS Affiliates allegedly were not qualified. (ii) The United States alleges that ADS and the Alleged ADS Affiliates have participated in illegal bid collusion or rigging schemes that inflated or distorted prices, or otherwise harmed the Government. (iii) The United States alleges that ADS and the Alleged ADS Affiliates controlled the management of MJL Enterprises, LLC ( MJL ) for purposes of 13 C.F.R , and as a result of such alleged control, MJL falsely represented itself as qualified service disabled veteran owned small business concern under 15 U.S.C. 657b, when, in fact, it was not qualified as such. ADS, the Alleged ADS Affiliates, and MJL are alleged to have thereby improperly bid on and received certain set-aside contracts for which they were not -2-

3 eligible because competition had been restricted to qualified veteran owned small business concerns. As a result of this alleged conduct, ADS, the Alleged ADS Affiliates, and MJL knowingly or recklessly, submitted, or caused to be submitted, false claims for payment under these contracts intended for qualified service disabled veteran owned small business concerns. (iv) ADS and the Alleged ADS Affiliates are further alleged to have controlled the management of SEK Solutions, LLC ( SEK ), and that ADS and the Alleged ADS Affiliates, together with SEK, controlled Karda Systems, LLC ( Karda ). As a result of such alleged control, for purposes of 13 C.F.R and , SEK and Karda did not qualify as socially or economically disadvantaged businesses under SBA s 8(a) Program, 15 U.S.C. 637(a), and additionally, in the case of SEK, under the woman-owned small business program, 15 U.S.C ADS, the Alleged ADS Affiliates, SEK, and Karda are alleged to have thereby improperly bid on and received certain set-aside contracts for which they were not eligible because competition for such contracts was restricted to qualified 8(a) and woman-owned small business concerns. As a result of this alleged conduct, ADS, the Alleged ADS Affiliates, SEK, and Karda knowingly or recklessly submitted, or caused to be submitted, false claims for payment under these contracts intended for qualified 8(a) and woman-owned small business concerns. (v) ADS and the Alleged ADS Affiliates are alleged to have fraudulently induced, or participated in the fraudulent inducement, of the Government to award certain contracts set aside for certain businesses (specifically, Small Business Concerns, Service- Disabled Veteran-Owned Small Businesses, Women-Owned or Economically Disadvantaged Small Businesses, and firms in the Small Business Administration s 8(a) Business Development -3-

4 Program) by the alleged conduct detailed in this Paragraph C and to have allegedly colluded and conspired together and with other co-conspirators to carry out such conduct. (vi) ADS and the Alleged ADS Affiliates are also alleged to have paid or received improper kickbacks or bribes and are further alleged to have received non-public information relating to federal procurements that gave ADS and the Alleged ADS Affiliates an unfair competitive advantage. D. This Agreement is neither an admission of liability by ADS nor a concession by the United States that its claims are not well founded. E. Relator claims entitlement under 31 U.S.C. 3730(d) to a share of the proceeds of this Agreement and to Relator s reasonable expenses, attorneys fees and costs. To avoid the delay, uncertainty, inconvenience, and expense of protracted litigation of the above claims, and in consideration of the mutual promises and obligations of this Agreement, the Parties agree and covenant as follows: TERMS AND CONDITIONS 1. ADS shall pay to the United States the sum of $16,000,000, plus interest accrued thereon at the rate of 3% per annum from April 28, 2017, and continuing until and including the day before the final payment is made under this Agreement (the Settlement Amount ). Each of Atlantic Diving Supply, Inc. (a/k/a ADS, Inc.); ADS Tactical, Inc. (f/k/a Tactical Holdcorp, Inc.); Mar-Vel International, Inc.; Tactical Exporters, Inc.; and Tactical Distributors, LLC agrees to be jointly and severally liable for the Settlement Amount and the payments due under this Agreement. The Settlement Amount shall be paid as follows: a. Within the later of seven (7) days after the Effective Date of this Agreement and ADS s receipt of written payment instructions provided by the Department of Justice, ADS shall pay the United States the amount of $6,000,000, plus accrued interest, and -4-

5 thereafter make principal payments with interest according to the payment schedule attached as Attachment A (the Payment Schedule ). b. All payments set forth in the Payment Schedule shall be made to the United States by electronic funds transfer pursuant to written instructions to be provided by the Department of Justice. The entire balance of the Settlement Amount, or any portion thereof, plus any interest accrued on the principal as of the date of any prepayment, may be prepaid without penalty. 2. Conditioned upon the United States receiving the initial payment in the amount of $6,000,000 from ADS, plus accrued interest, as described in Paragraph 1.a, above, and set forth in the Payment Schedule, and as soon as feasible after receipt, the United States shall pay $1,080,000, plus 18% of accrued interest, to Relator by electronic funds transfer. Contingent upon the United States receiving each additional payment from ADS identified in the Payment Schedule, as soon as feasible after receipt of each payment, the United States agrees to pay to the relator 18% of each such payment, as set forth in the Payment Schedule. No other relator payments shall be made by the United States with respect to the matters covered by this Agreement. 3. Following the Effective Date of the Agreement and receipt of written instructions from Relator, ADS agrees to pay to Relator an agreed sum pursuant to 31 U.S.C. 3730(d) for expenses and attorney s fees and costs ( Attorneys Fees Claims ) arising from the filing of the Civil Action. 4. Subject to the exceptions in Paragraph 6 (concerning excluded claims), and conditioned upon ADS s full payment of the Settlement Amount, and subject to Paragraph 17 (concerning bankruptcy proceedings commenced within 91 days of the Effective Date of this -5-

6 Agreement or any payment made under this Agreement), the United States releases Atlantic Diving Supply, Inc. (a/k/a ADS, Inc.); ADS Tactical, Inc. (f/k/a Tactical Holdcorp, Inc.); Mar- Vel International, Inc.; Tactical Exporters, Inc.; Tactical Distributors, LLC; and ADS International, Inc., and any of their successors or assigns (the ADS Released Entities ) from any civil or administrative monetary claim the United States has or may have against the ADS Released Entities arising out of the Covered Conduct (which is defined in the Recitals, incorporated by reference in this Paragraph, and intended to be a binding and enforceable part of the Agreement) under the False Claims Act, 31 U.S.C ; the Program Fraud Civil Remedies Act, 31 U.S.C ; the anti-fraud section of the Contract Disputes Act, 41 U.S.C. 7103(c); the Truth in Negotiations Act, 41 U.S.C. 3503; or any other statutory provision creating a cause of action for civil damages or penalties for which the Civil Division of the Department of Justice has actual or present authority to assert and compromise pursuant to 28 C.F.R. Part 0, Subpart I, 0.45(d); or common law theories of breach of contract, fraudulent inducement, payment by mistake, unjust enrichment, and fraud. Notwithstanding any other term of this Agreement, successors or assigns of Atlantic Diving Supply, Inc. (a/k/a ADS, Inc.); ADS Tactical, Inc. (f/k/a Tactical Holdcorp, Inc.); Mar-Vel International, Inc.; Tactical Exporters, Inc.; Tactical Distributors, LLC; and ADS International, Inc. are not released from liability for the successors or assigns own conduct. 5. The Relator and the Relator s Counsel, for themselves and their predecessors, successors, heirs, attorneys, agents, and assigns, hereby irrevocably and unconditionally release, acquit and forever discharge the ADS Released Entities from any claims or liability, including attorney s fees, costs, and expenses of every kind and however denominated; any claims arising from the filing of the Civil Action, or under 31 U.S.C. 3730(d); and any claim that the Relator, -6-

7 the Relator s Counsel, or any of the Relator s and Relator s Counsel s predecessors, successors, heirs, attorneys, agents, or assigns has asserted, could have asserted, or may assert in the future against the ADS Released Entities, or its partners, predecessors, successors, heirs, attorneys, agents, or assigns related, directly or indirectly, to the allegations in the Civil Action, including the Covered Conduct, the Relator s investigation, and any claim for retaliation, including any claim or relief under Title 31, Section 3730(h). 6. Notwithstanding the releases given in Paragraphs 4 and 5 of this Agreement, or any other term of this Agreement, the following claims of the United States are specifically reserved and are not released: a. Any liability arising under Title 26, U.S. Code (Internal Revenue Code); b. Any criminal liability; c. Except as explicitly stated in this Agreement, any administrative liability, including the suspension and debarment rights of any federal agency; d. Any liability to the United States (or its agencies) for any conduct other than the Covered Conduct; e. Any liability based upon obligations created by this Agreement; f. Any liability of individuals; g. Any liability for express or implied warranty claims or other claims for defective or deficient products or services, including quality of goods and services; h. Any liability for failure to deliver goods or services due; and i. Any liability for personal injury or property damage or for other consequential damages arising from the Covered Conduct. -7-

8 7. Relator and its partners, predecessors, successors, heirs, attorneys, agents, and assigns shall not object to this Agreement and shall agree and confirm that this Agreement is fair, adequate, and reasonable under all the circumstances, pursuant to 31 U.S.C. 3730(c)(2)(B). Conditioned upon Relator s receipt of the payments described in Paragraph 2, Relator and its partners, predecessors, successors, heirs, attorneys, agents, and assigns fully and finally release, waive, and forever discharge the United States, its agencies, officers, agents, employees, and servants, from any claims arising from the filing of the Civil Action or under 31 U.S.C. 3730, and from any claims to a share of the proceeds of this Agreement and/or the claims against the ADS Released Entities set forth in Civil Action. 8. Relator, for itself, and for its partners, predecessors, successors, heirs, attorneys, agents, and assigns releases the ADS Released Entities from any liability due to Relator, or its partners, predecessors, successors, heirs, attorneys, agents, or assigns, arising from the filing of the Civil Action, or under 31 U.S.C. 3730(d) for expenses or attorney s fees and costs. 9. ADS has provided sworn financial disclosure statements and other documents submitted in connection with the financial disclosures (collectively the Financial Statements ) to the United States and the United States has relied on the accuracy and completeness of those Financial Statements in reaching this Agreement. ADS warrants that the Financial Statements were complete, accurate, and current as of the date of each statement. If ADS and the United States agree, or, in the absence of agreement, there is a judicial determination, that ADS had an interest in asset(s) that should have been but were not disclosed in the Financial Statements, or that ADS misrepresented facts on, or in connection with, the Financial Statements, and if such nondisclosure or misrepresentation changes the estimated net worth set forth in the Financial Statements by $1,000,000 or more, the United States may at its option: (a) rescind this -8-

9 Agreement and file suit based on the Covered Conduct, or (b) let the Agreement stand and collect the full Settlement Amount plus one hundred percent (100%) of the value of the previously undisclosed assets. ADS agrees not to contest any collection action undertaken by the United States pursuant to subsection (b) of this Paragraph, and immediately to pay the United States all reasonable costs incurred in such an action, including attorneys fees and expenses. 10. In the event that the United States rescinds this Agreement pursuant to Paragraph 9 (concerning disclosure of assets), the ADS Released Entities agree not to plead, argue, or otherwise raise any defenses under the theories of statute of limitations, laches, estoppel, or similar theories, to any civil or administrative claims that (a) are filed by the United States within 90 calendar days of written notification to ADS that this Agreement has been rescinded, and (b) relate to the Covered Conduct, except to the extent these defenses would have been available before the complaint was dismissed as to ADS and such defenses were available on February 3, Each of the ADS Released Entities waives and shall not assert any defenses each may have to any criminal prosecution or administrative action relating to the Covered Conduct that may be based in whole or in part on a contention that, under the Double Jeopardy Clause in the Fifth Amendment of the Constitution, or under the Excessive Fines Clause in the Eighth Amendment of the Constitution, this Agreement bars a remedy sought in such criminal prosecution or administrative action. Nothing in this paragraph or any other provision of this Agreement constitutes an agreement by the United States concerning the characterization of the Settlement Amount for purposes of the Internal Revenue laws, Title 26 of the United States Code. -9-

10 12. Each of the ADS Released Entities fully and finally releases the United States, its agencies, officers, agents, employees, and servants, from any claims (including attorney s fees, costs, and expenses of every kind and however denominated) that the ADS Released Entities have asserted, could have asserted, or may assert in the future against the United States, its agencies, officers, agents, employees, and servants, related to the Covered Conduct and the United States investigation. 13. In consideration of the promises and undertakings herein, the ADS Defendants hereby irrevocably and unconditionally release, acquit and forever discharge Relator, Relator s Counsel, Relator s heirs, successors, assigns, attorneys, executors, administrators and/or estate (the Relator Releasees ), from any and all charges, complaints, claims, liabilities, obligations, promises, agreements, controversies, damages, actions, causes of action, suits, rights, demands, costs, losses, debts, and expenses (including attorneys fees and costs actually incurred), known or unknown, that directly or indirectly arise out of, relate to, or concern the Civil Action or Attorneys Fees Claims, which the ADS Defendants have, own, or hold, or at any time heretofore had, owned, or held against the Relator Releasees up to the date on which it executes this Agreement. 14. a. Unallowable Costs Defined: All costs (as defined in the Federal Acquisition Regulation, 48 C.F.R ) incurred by or on behalf of ADS, and its present or former officers, directors, employees, shareholders, and agents in connection with: (1) the matters covered by this Agreement; (2) the United States audits and civil and any criminal investigations of the matters covered by this Agreement; -10-

11 (3) ADS s investigation, defense, and corrective actions undertaken in response to the United States audits and civil and any criminal investigations in connection with the matters covered by this Agreement (including attorney s fees); (4) the negotiation and performance of this Agreement; and/or (5) the payments ADS makes to the United States pursuant to this Agreement and any payments that ADS may make to Relator, including costs and attorneys fees, are unallowable costs for government contracting purposes (hereinafter referred to as Unallowable Costs ). b. Future Treatment of Unallowable Costs: Unallowable Costs will be separately determined and accounted for by ADS, and ADS shall not charge such Unallowable Costs directly or indirectly to any contract with the United States. c. Treatment of Unallowable Costs Previously Submitted for Payment: Within 90 days of the Effective Date of this Agreement, ADS shall identify and repay by adjustment to future claims for payment or otherwise any Unallowable Costs included in payments previously sought by ADS or any of its subsidiaries or affiliates from the United States. ADS agrees that the United States, at a minimum, shall be entitled to recoup from ADS any overpayment plus applicable interest and penalties as a result of the inclusion of such Unallowable Costs on previously-submitted requests for payment. The United States, including the Department of Justice and/or the affected agencies, reserves its rights to audit, examine, or reexamine ADS s books and records and to disagree with any calculations submitted by ADS or any of its subsidiaries or affiliates regarding any Unallowable Costs included in payments -11-

12 previously sought by ADS, or the effect of any such Unallowable Costs on the amount of such payments. 15. ADS agrees to cooperate fully and truthfully with the United States investigation of individuals and entities not released in this Agreement. Upon reasonable notice, ADS shall encourage, and agrees not to impair, the cooperation of its directors, officers, and employees, and shall use its best efforts to make available, and encourage, the cooperation of former directors, officers, and employees for interviews and testimony, consistent with the rights and privileges of such individuals. 16. ADS warrants that it has reviewed its financial situation and that it currently is solvent within the meaning of 11 U.S.C. 547(b)(3) and 548(a)(1)(B)(ii)(I), and shall remain solvent following payment to the United States of the Settlement Amount under the schedule contemplated herein. Further, the Parties warrant that, in evaluating whether to execute this Agreement, they (a) have intended that the mutual promises, covenants, and obligations set forth constitute a contemporaneous exchange for new value given to ADS, within the meaning of 11 U.S.C. 547(c)(1), and (b) conclude that these mutual promises, covenants, and obligations do, in fact, constitute such a contemporaneous exchange. Further, the Parties warrant that the mutual promises, covenants, and obligations set forth herein are intended to and do, in fact, represent a reasonably equivalent exchange of value that is not intended to hinder, delay, or defraud any entity to which ADS was or became indebted to on or after the date of this transfer, within the meaning of 11 U.S.C. 548(a)(1). 17. Bankruptcy, Insolvency, Reorganization, or Relief of Debtors. If within 91 days of the Effective Date of this Agreement or of any payment made under this Agreement, ADS commences, or a third party commences, any case, proceeding, or other action under any law -12-

13 relating to bankruptcy, insolvency, reorganization, or relief of debtors (a) seeking to have any order for relief of ADS s debts, or seeking to adjudicate ADS as bankrupt or insolvent; or (b) seeking appointment of a receiver, trustee, custodian, or other similar official for ADS or for all or any substantial part of ADS s assets, ADS agrees as follows: a. ADS s obligations under this Agreement may not be avoided pursuant to 11 U.S.C. 547, and ADS shall not argue or otherwise take the position in any such case, proceeding, or action that: (i) ADS s obligations under this Agreement may be avoided under 11 U.S.C. 547; (ii) ADS was insolvent at the time this Agreement was entered into, or became insolvent as a result of the payment made to the United States; or (iii) the mutual promises, covenants, and obligations set forth in this Agreement do not constitute a contemporaneous exchange for new value given to ADS. b. If ADS s obligations under this Agreement are avoided for any reason, including, but not limited to, through the exercise of a trustee s avoidance powers under the Bankruptcy Code, the United States, at its sole option, may rescind the releases in this Agreement and bring any civil and/or administrative claim, action, or proceeding against ADS for the claims that would otherwise be covered by the releases provided in Paragraph 4 above. ADS agrees that (i) any such claims, actions, or proceedings brought by the United States are not subject to an automatic stay pursuant to 11 U.S.C. 362(a) as a result of the action, case, or proceedings described in the first clause of this Paragraph, and ADS shall not argue or otherwise contend that the United States claims, actions, or proceedings are subject to an automatic stay; (ii) ADS shall not plead, argue, or otherwise raise any defenses under the theories of statute of limitations, laches, estoppel, or similar theories, to any such civil or administrative claims, actions, or proceeding that are brought by the United States within 90 calendar days of written notification -13-

14 to ADS that the releases have been rescinded pursuant to this Paragraph, except to the extent such defenses would have been available before the complaint was dismissed as to ADS and such defenses were available on February 3, 2017; (iii) the United States has a valid claim against ADS in the amount of $200,000,000 for which each of Atlantic Diving Supply, Inc. (a/k/a ADS, Inc.); ADS Tactical, Inc. (f/k/a Tactical Holdcorp, Inc.); Mar-Vel International, Inc.; Tactical Exporters, Inc.; and Tactical Distributors, LLC is jointly and severally liable, and ADS agrees to a consent judgment in the amount of $200,000,000 in the case, action, or proceeding referenced in the first clause of this Paragraph, as well as in any other case, action, or proceeding, against each of Atlantic Diving Supply, Inc. (a/k/a ADS, Inc.); ADS Tactical, Inc. (f/k/a Tactical Holdcorp, Inc.); Mar-Vel International, Inc.; Tactical Exporters, Inc.; and Tactical Distributors, LLC on a joint and several basis. c. Each of Atlantic Diving Supply, Inc. (a/k/a ADS, Inc.); ADS Tactical, Inc. (f/k/a Tactical Holdcorp, Inc.); Mar-Vel International, Inc.; Tactical Exporters, Inc.; and Tactical Distributors, LLC acknowledges that its agreements in this Paragraph are provided in exchange for valuable consideration provided in this Agreement. 18. Time is of the essence as to all payments of the Settlement Amount as set forth in the Payment Schedule. 19. In the event (i) that ADS fails to make a payment set forth in the Payment Schedule by the date such payment is due in accordance with the Payment Schedule ( Payment Default ), or (ii) any lender or financial institution that extends a line of credit, loan, or funds to ADS declares a default under the terms of its agreement with ADS ( Lending Default ), ADS shall be in default of this Agreement. -14-

15 a. In the event of a Payment Default, the United States will provide written notice of the Default ( Notice of Payment Default ) to ADS, and ADS shall have an opportunity to cure the Default within five (5) days from the date the Notice of Payment Default is sent ( Payment Default Cure Period ) by paying the outstanding balance plus interest of any amounts then-due under the Payment Schedule. Notice of Payment Default will be delivered to the following individuals by , mail, hand delivery, and/or express means of delivery: Emmet Flood, Esq. and Greg Bowman, Esq. Williams & Connolly LLP, th Street, N.W., Washington D.C , or to such other representative as the Parties shall agree to in writing. If ADS fails to cure the Payment Default within the Payment Default Cure Period as described in this subparagraph, the entire unpaid balance of the Settlement Amount, plus any accrued interest, shall become immediately due and payable, and ADS agrees to the entry of a consent judgment in the Civil Action or a separate action in the amount of the unpaid balance of the Settlement Amount plus accrued interest against each of Atlantic Diving Supply, Inc. (a/k/a ADS, Inc.); ADS Tactical, Inc. (f/k/a Tactical Holdcorp, Inc.); Mar-Vel International, Inc.; Tactical Exporters, Inc.; and Tactical Distributors, LLC on a joint and several basis. b. In the event of a Lending Default, ADS shall immediately notify the United States (by and mail to the signatories for the United States below) within five (5) business days of learning of such Lending Default ( Notice of Lending Default ). ADS may cure the Lending Default within fourteen (14) days of the occurrence of such Lending Default ( Lending Default Cure Period ) by either (1) paying the entire unpaid balance of the Settlement Amount plus accrued interest; or (2) providing the United States with evidence that ADS is no longer in default under the terms of its agreement with a lender or financial institution. If ADS fails to cure the Lending Default within the Lending Default Cure Period as described in this -15-

16 subparagraph, the entire unpaid balance of the Settlement Amount, plus any accrued interest, shall become immediately due and payable, and ADS agrees to the entry of a consent judgment in the Civil Action or a separate action in the amount of the unpaid balance of the Settlement Amount plus accrued interest against each of Atlantic Diving Supply, Inc. (a/k/a ADS, Inc.); ADS Tactical, Inc. (f/k/a Tactical Holdcorp, Inc.); Mar-Vel International, Inc.; Tactical Exporters, Inc.; and Tactical Distributors, LLC on a joint and several basis. c. Forbearance by the United States in declaring Default, seeking a consent judgment, or executing on a judgment shall not constitute a waiver by the United States. 20. This Agreement is intended to be for the benefit of the Parties only. 21. Upon receipt of the initial payment of $6,000,000, plus accrued interest, as prescribed by the Payment Schedule, the United States and Relator shall promptly sign and file in the Civil Action a joint notice of dismissal of any and all claims against each of the ADS Released Entities named in the Civil Action as follows: the dismissal shall be (i) with prejudice as to the United States and Relator s claims as to the Covered Conduct, and (ii) without prejudice to the United States and with prejudice as to Relator as to all other claims, including but not limited to (i) Relator s claim for a Relator s Share of the Settlement Amount pursuant to 31 U.S.C. 3730(d)(1); and (ii) Relator s claims for reasonable attorneys fees, expenses, and costs pursuant to 31 U.S.C. 3730(d)(1). The joint notice of dismissal contemplated by this Paragraph shall not affect in any way the pendency of claims in the Civil Action against defendants or entities other than the ADS Released Entities. 22. Except with regard to Relator s entitlement to its reasonable attorneys fees and costs pursuant to 31 U.S.C. 3730(d)(1), each Party shall bear its own legal and other costs -16-

17 incurred in connection with this matter, including the preparation and performance of this Agreement. 23. Each party and signatory to this Agreement represents that it freely and voluntarily enters in to this Agreement without any degree of duress or compulsion. 24. This Agreement is governed by the laws of the United States. 25. The exclusive jurisdiction and venue for any dispute relating to this Agreement is the United States District Court for the District of Columbia. 26. For purposes of construing this Agreement, this Agreement shall be deemed to have been drafted by all Parties to this Agreement and shall not, therefore, be construed against any Party for that reason in any subsequent dispute. 27. This Agreement constitutes the complete agreement between the Parties. This Agreement may not be amended except by written consent of the Parties. 28. The undersigned counsel represent and warrant that they are fully authorized to execute this Agreement on behalf of the persons and entities indicated below. 29. This Agreement may be executed in counterparts, each of which constitutes an original and all of which constitute one and the same Agreement. 30. Facsimiles of signatures shall constitute acceptable, binding signatures for purposes of this Agreement. 31. This Agreement is binding on ADS s successors, transferees, heirs, attorneys, and assigns. 32. This Agreement is binding on Relator s successors, transferees, heirs, attorneys, and assigns. -17-

18 33. All parties consent to the United States disclosure of this Agreement, and information about this Agreement, to the public. 34. This Agreement is effective on the date of signature of the last signatory to the Agreement (the Effective Date ). [Signature Pages Follow] -18-

19

20 BY: Jonathan H. Gold Trial Attorney Commercial Litigation Branch, Civil Division United States Department of Justice Assistant United States Attorney U.S. Attorney's Office for the District of Columbia Clare P. Wuerker Assistant United States Attorney U.S. Attorney's Office for the Eastern District of Virginia Counselfor the United States

21

22

23 RELATOR AMELIORATE PARTNERS, LLP AND ITS PARTNERS DATED: August 4, 2017 BY: W. Scott Simmer Simmer Law Group PLLC Counsel for Relator Ameliorate Partners LLP and Relator s partners -21-

24 ATTACHMENT A PAYMENT SCHEDULE Notes: 1. Interest starts to accrue on the entire unpaid balance on April 28, The upfront payment will also include interest at 3% of the outstanding balance from April 28, 2017 through the payment date. 3. 8/14/2017 refers to the upfront payment (schedule assumes for convenience that upfront payment is made on August 14). Actual upfront payment due date and amount of interest owed is governed by the terms of the Settlement Agreement. -22-