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EXHIBIT 10.16

                              SETTLEMENT AGREEMENT

         This Settlement Agreement (the "Agreement") is made as of the 11th day
of December 1998, among Richard duFosse ("Former Officer") and Spectrum
Information Technologies, Inc. (the "Company").

         WHEREAS, Former Officer and Company have entered into an Employment
Agreement, as amended (the "Employment Agreement"), pursuant to which Company
may have incurred, and may in the future incur, certain obligations to Former
Officer;

         WHEREAS, the Employment Agreement provides for the employment of Former
Officer by Company and provides that Former Officer is entitled to certain
benefits in the event that Former Officer is terminated without just cause;

         WHEREAS, in connection with the Stock Purchase Agreement of even date
hereof between the Company and Powers & Co., Former Officer is deemed to have
been terminated without cause under the Employment Agreement, and the Company is
obligated, but has insufficient assets, to pay its entire obligations associated
with such termination; and, the Company desires to pay Former Officer and Former
Officer desires to accept a partial severance payment pursuant the terms and
conditions of this Agreement in full settlement of such obligations.

         NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto hereby agree as follows:

I. MUTUAL RELEASE AND WAIVER

         Former Officer agrees to release, remise, acquit and discharge the
Company, its officers, agents, employees, guarantors, consultants, independent
contractors, attorneys, advisers, successors and assigns (the "Spectrum Group"),
jointly and severally, from any and all claims, known or unknown, which Former
Officer, his heirs, successors, or assigns have, or may now or in the future
have, against any member of the Spectrum Group and any and all liability which
any member of the Spectrum Group has, or may now or in the future have to Former
Officer, whether denominated claims, demands, causes of action, obligations,
damages or liabilities, arising from any and all bases, including but not
limited to any claims under any policy, agreement, arrangement or practice of or
with any member of the Spectrum Group or any federal, state, or local law or
regulation, relating to any matter, cause or thing whatsoever from the beginning
of the world to the date of this Agreement; BUT EXCLUDING ANY CLAIMS FOR (I)
INDEMNIFICATION PURSUANT TO FORMER OFFICER'S EMPLOYMENT AGREEMENT AND THE
COMPANY'S CERTIFICATE OF INCORPORATION OR BY-LAWS, (II) THE PERFORMANCE BY THE
COMPANY OF ITS OBLIGATIONS PURSUANT TO THE STOCK PURCHASE AGREEMENT, INCLUDING
THOSE RELATED TO STOCK OPTIONS AND THOSE SET FORTH HEREIN, AND (III) ANY
BENEFITS THAT HAVE ACCRUED PURSUANT TO THE COMPANY'S EMPLOYEE BENEFIT PLANS,
INCLUDING ITS 401K PLAN. These releases specifically include, but are not
limited to, claims under the Civil Rights Act of 1964, as amended by the Civil
Rights Act of 1991, and any other federal or state civil rights claims,
including claims of age discrimination and other rights and claims arising under
the Age Discrimination in Employment Act and the Older Workers Benefit
Protection Act. This release is for any relief, no matter how denominated,
including, but not limited to, wages, back pay, front pay, benefits,
compensatory damages or punitive damages. Former Officer further agrees that he
will not file or permit to be filed on his behalf any such claim.
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         The Spectrum Group agrees to release, remise, acquit and discharge
Former Officer and his heirs, successors and assigns (the "Former Officer
Group"), jointly and severally, from any and all claims, known or unknown, which
the Spectrum Group has, or may now or in the future have, against any member of
the Former Officer Group and any and all liability which any member of the
Former Officer Group has, or may now or in the future have to the Spectrum
Group, whether denominated claims, demands, causes of action, obligations,
damages or liabilities, arising from any and all bases, including but not
limited to any claims under any policy, agreement, or arrangement or any
federal, state, or local law or regulation, relating to any matter, cause or
thing whatsoever from the beginning of the world to the date of this mutual
release and waiver; BUT EXCLUDING ANY CLAIMS FOR THE PERFORMANCE BY THE FORMER
OFFICER OF HIS OBLIGATIONS PURSUANT TO THE STOCK PURCHASE AGREEMENT, INCLUDING
THOSE SET FORTH HEREIN. This release is for any relief, no matter how
denominated. The Spectrum Group further agrees that it will not file or permit
to be filed on its behalf any such claim.

II. IDENTIFIED CONSIDERATION

         On the date hereof, the Company shall pay to Former Officer a cash
payment of $48,754 less applicable withholding taxes and other deductions
required by law and issue to Former Officer an option to purchase 59,281 shares
of the Company's common stock substantially in the form of Exhibit F to the
Stock Purchase Agreement. Further, the Company and Former Officer each
acknowledge that they have entered into this Agreement in consideration for the
mutual release evidenced hereby and other good and valuable consideration.

         The Company has purchased Directors' and Officers' six year run-off
insurance coverage for the benefit of the Company's former directors and
officers, including Former Officer. The Company agrees that it will not cancel
or impair in any way any of the former directors' and officers', including
Former Officer's, entitlement to such insurance coverage.

         The Company is duly authorized to enter this Agreement pursuant to a
resolution of the Company's Board of Directors duly adopted at its meeting on
December 10, 1998.

III. NO ADMISSION

         No party hereto admits any liability of any sort to any other party and
nothing herein is intended to, or shall be deemed to, constitute an admission of
liability of any kind by any party. Neither Former Officer nor the Spectrum
Group shall make any statements of any kind regarding the other party that could
reasonably be interpreted as derogatory or disparaging.

IV. THIRD-PARTY BENEFICIARY RIGHTS

         The parties hereto agree that the terms of this Agreement shall inure
to the benefit of and shall be enforceable by each member of the Spectrum Group
and the Former Officer Group, each of whom is intended to be a third-party
beneficiary hereof, and its respective successors and assigns.

V. GENERAL PROVISIONS

         (a) This Agreement constitutes the entire understanding of Former
Officer and the Company with respect to the subject matter hereof, and
supersedes all prior understandings, written or oral, except as expressly
provided herein. The terms of this Agreement may be changed, modified or
discharged only by an instrument in writing signed by the parties hereto. A
failure of a party to insist on strict compliance with


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any provision of this Agreement shall not be deemed a waiver of such
provision or any other provision hereof. In the event that any provision of
this Agreement is determined to be so broad as to be unenforceable, such
provision shall be interpreted to be only so broad as is enforceable.

         (b) This Agreement shall be construed, enforced and interpreted in
accordance with and governed by the laws of the State of New York without
reference to the principles and conflicts of law. The courts of New York shall
have jurisdiction to entertain any action arising hereunder.

         (c) Former Officer acknowledges that he has been given more than 21
days to consider this agreement and eight days to revoke his agreement hereto.

VI. KNOWING AND VOLUNTARY WAIVER

         Former Officer and the Company each agree and acknowledge that they
have read this Agreement, have consulted with an attorney of his or its choosing
with respect hereto and completely understands the terms and consequences hereof
and that the execution of this Agreement is his or its knowing, free and
voluntary act.

VII. SURVIVAL

         Notwithstanding anything to the contrary contained herein, Former
Officer's obligations regarding ownership of employee developments,
confidentiality and return of materials as set forth in the Company's Policy
Statement on Confidential Information and Work Product shall survive the
execution and delivery of this Agreement.


                       /s/ Richard Dufosse
                       -----------------------------------------------
                       Richard duFosse


                       SPECTRUM INFORMATION TECHNOLOGIES, INC.


                       /s/ Donald J. Amoruso
                       -----------------------------------------------
                       By:  Donald J. Amoruso, Chief Executive Officer