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                                                                   EXHIBIT 10.59

                            SETTLEMENT AGREEMENT AND
                        FULL AND FINAL RELEASE OF CLAIMS

                  This Settlement Agreement and Full and Final Release of Claims
("Agreement") is made and entered into between Edward A. Etzel ("Mr. Etzel") and
Verilink Corporation ("Verilink").

         1.       SEVERANCE. Mr. Etzel and Verilink have agreed to end their
employment relationship in a manner such that Mr. Etzel's employment with
Verilink will end effective March 2, 2001 ("Effective Separation Date").

         2.       CONSIDERATION. In consideration of his decision to enter into
this Agreement, Verilink will provide Mr. Etzel with the following:

                  (a)      The continuation of his current salary for a period
of six (6) months from Mr. Etzel's Effective Separation Date. In the
alternative, Verilink may at any time choose to pay Mr. Etzel a lump sum payment
equal to the outstanding balance of his remaining salary. All such payments are
subject to the applicable legal withholdings.

                  (b)      The Company will assume all further monetary
obligations regarding Mr. Etzel's property currently under construction at The
Ledges, and will relieve him of the obligation to repay all amounts currently
outstanding and advanced under the Housing Assistance Loan as described in his
offer letter dated March 27, 2000. In return for this Mr. Etzel agrees to assign
or otherwise convey in total to Verilink his interest in the property. He
further agrees to cooperate with Verilink and its legal representatives in
completing or amending any documentation necessary to effect this conveyance of
the property to Verilink now and in the future

                  (c)      The continuation of the coverage currently in effect
for Mr. Etzel and Mr. Etzel's covered dependents under the medical, dental and
vision plans for a period of six months from his Effective Separation Date.

                  (d)      The right to exercise any vested stock options for a
period of ninety (90) days following Mr. Etzel's Effective Separation Date,
pursuant to Verilink's current Stock Option Plan.

                  (e)      Whether or not Mr Etzel executes this Agreement, the
payment of any accrued, but unused, paid-time-off for the year 2001, as soon as
administratively feasible after his Effective Separation Date or within a
reasonable period after this Agreement becomes binding and effective, whichever
is later. All such payments are subject to the applicable legal withholdings.

         3.       NO OBLIGATION. Mr. Etzel agrees and understands that the
consideration described in Paragraph 2 above is not required by Verilink's
policies and procedures or by any prior agreement between Verilink and Mr.
Etzel.


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         4.       FULL AND FINAL RELEASE. In consideration of the payments being
provided to him above, Mr. Etzel, for himself, his attorneys, heirs, executors,
administrators, successors and assigns, fully, finally and forever releases and
discharges Verilink, all subsidiary and/or affiliated companies, as well as its
and their successors, assigns, officers, owners, directors, agents,
representatives, attorneys, and employees (all of whom are referred to
throughout this Agreement as "Verilink"), of and from all claims, demands,
actions, causes of action, suits, damages, losses, and expenses, of any and
every nature whatsoever, as a result of actions or omissions occurring through
the effective date of this Agreement. Specifically included in this waiver and
release are, among other things, any and all claims for severance pay benefits
under the Employee Retirement Income Security Act of 1974 (ERISA), any and all
claims of alleged employment discrimination, either as a result of the
separation of Mr. Etzel's employment, or otherwise, under the Age Discrimination
in Employment Act, the Older Workers' Benefit Protection Act; Title VII of the
Civil Rights Act of 1964, the Americans with Disabilities Act, any other
federal, state or local statute, rule, ordinance, or regulation, as well as any
claims for alleged wrongful discharge, negligent or intentional infliction of
emotional distress, breach of contract, fraud, or any other unlawful behavior,
the existence of which is specifically denied by Verilink. Nothing in this
Agreement and Release, however, is intended to waive Mr. Etzel's entitlement to
vested benefits under any pension or 401(k) plan or other benefit plan provided
by Verilink. Finally, the above release does not waive claims that Mr. Etzel
could make, if available, for unemployment or workers' compensation.

         5.       NO OTHER CLAIMS. Mr. Etzel represents that he has not filed,
nor assigned to others the right to file, nor are there pending, any complaints,
charges or lawsuits against Verilink with any governmental agency or any court,
and that he will not file, nor assign to others the right to file, or make any
further claims against Verilink at any time for actions or omissions covered by
the release in Paragraph 4 above.

         6.       OWNERSHIP AND PROTECTION OF PROPRIETARY INFORMATION.

                  (a)      Confidentiality. All Confidential Information and
Trade Secrets, as defined below, and all physical embodiments thereof received
or developed by Mr. Etzel while employed by Verilink are confidential to and are
and will remain the sole and exclusive property of Verilink. Such Confidential
Information and/or Trade Secrets includes, but is not limited to, those
developed in conjunction with the Boston initiative and with the Boston
University Photonics Center and Beacon Telco project(s). Mr. Etzel will hold
such Confidential Information and Trade Secrets in trust and strictest
confidence, and will not use, reproduce, distribute, disclose or otherwise
disseminate the Confidential Information and Trade Secrets or any physical
embodiments thereof and may in no event take any action causing or fail to take
the action necessary in order to prevent, any Confidential Information and Trade
Secrets disclosed to or developed by Mr. Etzel to lose its character or cease to
qualify as Confidential Information or Trade Secrets.

                  (i)      "Confidential Information" means data and information
relating to the Business of the Company (which does not rise to the status of a
Trade Secret) which is or has


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been disclosed to Mr. Etzel or of which Mr. Etzel became aware as a consequence
of or through his employment relationship with Verilink and which has value to
Verilink and is not generally known to its competitors. Confidential Information
shall not include any data or information that has been voluntarily disclosed to
the public by Verilink (except where such public disclosure has been made by Mr.
Etzel without authorization) or that has been independently developed and
disclosed by others, or that otherwise enters the public domain through lawful
means.

                  (ii)     "Trade Secrets" means information including, but not
limited to, technical or nontechnical data, formulas, patterns, compilations,
programs, devices, methods, techniques, drawings, processes, financial data,
financial plans, product plans or lists of actual or potential customers or
suppliers which (i) derives economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by,
other persons who can obtain economic value from its disclosure or use, and (ii)
is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy.

                  (b)      Return of Company Property. Mr. Etzel will promptly
deliver to Verilink all property belonging to Verilink, including, without
limitation, all Confidential Information and Trade Secrets (and all embodiments
thereof) then in Mr. Etzel's custody, control or possession.

                  (c)      Survival. The covenants of confidentiality set forth
in this Paragraph will apply as of the date Mr. Etzel executes this Agreement to
any Confidential Information and Trade Secrets previously disclosed by Verilink
or developed by Mr. Etzel during the course of his employment with Verilink. The
covenants restricting the use of Confidential Information will continue and be
maintained by Mr. Etzel for a period of two (2) years following the date of
execution of this Agreement. The covenants restricting the use of Trade Secrets
will continue and be maintained by Etzel following execution of this Agreement
for so long as permitted by the Alabama law.

         7.       AGREEMENT NOT TO SOLICIT CUSTOMERS OR EMPLOYEES.

                  (a)      Agreement Not to Solicit Customers or Consultants.
Mr. Etzel agrees that beginning immediately and continuing for a period of one
year from his Effective Separation Date, he will not, either directly or
indirectly, on his own behalf or in the service of or on behalf of others, (1)
solicit, divert, or appropriate or attempt to solicit, divert, or appropriate to
any third party, any individual or entity which was an actual or actively sought
prospective client, customer, or consultant of Verilink (determined at the date
Mr. Etzel was last employed by Verilink and continuing for a period of one year
from his Effective Separation Date ) and with whom Mr. Etzel had material
contact during Mr. Etzel's term of employment with Verilink; or (2) interfere in
any way with Verilink's business relationship with any person or entity.

                  (b)      Agreement Not to Solicit Employees. Mr. Etzel agrees
that beginning immediately, and continuing for a period of one year from his
Effective Separation Date, he will not, either directly or indirectly, on his
own behalf or in the service of or on behalf of others,


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solicit, divert or hire, or attempt to solicit, divert or hire, any person
employed by Verilink, and whom Mr. Etzel supervised or hired on behalf of
Verilink, whether or not such employee is a full-time employee or a temporary
employee of Verilink and whether or not such employment is pursuant to written
agreement and whether or not such employment is for a determined period or is at
will.

         8.       NON-DISPARAGEMENT. Mr. Etzel agrees that he has not and will
not make statements to clients, customers and suppliers of Verilink or to other
members of the public that are in any way disparaging or negative towards
Verilink, Verilink's products or services, or Verilink's representatives or
employees.

         9.       NON-ADMISSION OF LIABILITY OR WRONGFUL CONDUCT. This Agreement
shall not be construed as an admission by Verilink of any liability or acts of
wrongdoing or discrimination, nor shall it be considered to be evidence of such
liability, wrongdoing, or discrimination.

         10.      COMPLETE TERMINATION OF EMPLOYMENT RELATIONSHIP. Except as set
forth above, Mr. Etzel and Verilink agree as a matter of intent that, except for
vested pension benefits, if any, this Agreement terminates all aspects of the
relationship between them for all time and that Mr. Etzel will not represent
himself as an officer or employee of Verilink after the Effective Separation
Date. Mr. Etzel therefore acknowledges that he does not and will not seek
reinstatement, future employment, or return to active employee status with
Verilink or any subsidiary or affiliated company. Mr. Etzel further acknowledges
that neither Verilink nor any subsidiary or affiliated company shall be under
any obligation whatsoever to consider him for reinstatement, employment,
re-employment, consulting or other similar status at any time. This provision
will not preclude Mr. Etzel from contracting with Verilink on behalf of another
company that has employed him. It also will not preclude Verilink in the future
from considering Mr. Etzel for a position, either upon request or otherwise,
although Verilink cannot be compelled to consider Mr. Etzel for or to provide
Mr. Etzel with any position at any time.

         11.      CONFIDENTIALITY. The nature and terms of this Agreement are
strictly confidential and they have not been and shall not be disclosed by Mr.
Etzel at any time to any person other than his lawyer, his accountant, or his
immediate family without the prior written consent of an officer of Verilink,
except as necessary in any legal proceedings directly related to the provisions
and terms of this Agreement, to prepare and file income tax forms, or pursuant
to court order after reasonable notice to Verilink.

         12.      GOVERNING LAW. This Agreement shall be interpreted under the
laws of the State of Alabama.

         13.      SEVERABILITY. The provisions of this Agreement are severable,
and if any part of this Agreement except Paragraph 4 is found by a court of law
to be unenforceable, the remainder of the Agreement will continue to be valid
and effective. If Paragraph 4 is found by a court of competent jurisdiction to
be unenforceable, the parties agree to seek a determination by


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the court as to the rights of the parties, including whether Mr. Etzel is
entitled under those circumstances and the relevant law to retain the benefits
paid to him under the Agreement.

         14.      SOLE AND ENTIRE AGREEMENT. This Agreement sets forth the
entire agreement between the parties. Any prior agreements between or directly
involving the parties to the Agreement are superseded by the terms of this
Agreement and thus are rendered null and void. However, any noncompete
agreements or prior agreements between the parties related to inventions,
business ideas, and confidentiality of corporate information remain intact.

         15.      NO OTHER PROMISES. Mr. Etzel affirms that the only
consideration for him signing this Agreement is that set forth in Paragraph 2,
that no other promise or agreement of any kind has been made to or with him by
any person or entity to cause him to execute this document, and that he fully
understands the meaning and intent of this Agreement, including, but not limited
to, its final and binding effect.

         16.      REMEDIES. Mr. Etzel agrees that the covenants and agreements
contained in Sections 6 and 7 hereof are of the essence of this Agreement; that
each such covenant is reasonable and necessary to protect and preserve the
interests and properties of Verilink; that Mr. Etzel has access to and knowledge
of Verilink's business and financial plans; that irreparable loss and damage
will be suffered by Verilink should Mr. Etzel breach any such covenant and
agreement; that each such covenant and agreement is separate, distinct and
severable not only from the other of such covenants and agreements but also from
the other and remaining provisions of this Agreement; that the unenforceability
of any such covenant or agreement shall not affect the validity or
enforceability of any other such covenant or agreement or any other provision or
provisions of this Agreement; and that, in addition to other remedies available
to it, Verilink shall be entitled to specific performance of this Agreement and
to both temporary and permanent injunctions to prevent a breach or contemplated
breach by Mr. Etzel of any of the covenants or agreements.

         17.      ADVICE OF COUNSEL. Mr. Etzel acknowledges that he has been
advised by Verilink to consult with an attorney in regard to this matter. He
further acknowledges that he has been given twenty-one (21) days from the time
that he receives this Agreement to consider whether to sign it. If Mr. Etzel has
signed this Agreement before the end of this twenty-one (21) day period, it is
because he freely chose to do so after carefully considering its terms. Finally,
Mr. Etzel shall have seven (7) days from the date he signs this Agreement to
change his mind and revoke the Agreement. If Mr. Etzel does not revoke this
Agreement within seven days of his signing, this Agreement will become final and
binding on the day following such seven-day period.

         18.      SIGNATURE. The Agreement may be signed in counterpart and/or
through the use of facsimile signatures without effecting its binding nature or
effectiveness.


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         19.      LEGALLY BINDING AGREEMENT. Mr. Etzel understands and
acknowledges that (a) that this is a legally binding release; (b) that by
signing this Agreement, he is hereafter barred from instituting claims against
Verilink in the manner and to the extent set forth in Paragraph 4 and Paragraph
5 above; and (c) that this Agreement is final and binding.

                 PLEASE READ CAREFULLY. THIS AGREEMENT INCLUDES
                 A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.


         Date:      03/01/01                         /s/ Edward A. Etzel
              --------------------            ----------------------------------
                                                       Edward A. Etzel


         FOR: VERILINK CORPORATION


         Date:      03/01/01                  By:     /s/ Betsy D. Mosgrove
              --------------------            ----------------------------------
                                              Full Name
                                                      VP, HR
                                              ----------------------------------
                                              Title


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