Document:

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                                                                   EXHIBIT 10.76

                       APPLIED DATA COMMUNICATIONS, INC.
                            3324 South Susan Street
                          Santa Ana, California 92704

                              September 20, 2001

To the Board of Directors of
Applied Data Communications, Inc.

Gentlemen:

     The draft of the Applied Data Communications, Inc. ("ADC") Form 10-KSB/A
(version #18) includes, under Part III, Item 10. Executive Compensation, the
section entitled "Employment Contracts and Termination of Employment and Change-
in-Control Arrangements - Kane Compensation", Paragraph 2, a description of the
settlement between Walter J. ("Pat") Kane ("Kane"), and ADC of obligations due
Kane for the guarantees, accommodations, arrangements and compensation due Kane.

     1.  By signing this letter, we hereby agree to the terms described in the
         description in Part III, Item 10, Paragraph 2 of "Kane Compensation"
         and agree further that Kane hereby releases and discharges ADC, its
         officers, directors, agents and affiliates from any obligation or
         liability arising from past services, guarantees, accommodations and
         undertakings for ADC, except for the benefits specified in
         subparagraphs (a) and (b) of Paragraph 2 which shall continue and
         survive this release.

     2.  Kane shall indemnify and hold harmless ADC, its officers, directors,
         agents and affiliates from any obligation or liability for taxes,
         withholdings or other FICA and similar payroll deductions on account of
         past payments or allowances to Kane or any thereof arising from any
         payments or accommodations under subparagraphs (a) and (b) of Paragraph
         2 which shall continue and survive this release.

     3.  ADC shall indemnify Kane against, and hold him harmless from any claim
         or liability of ADC under obligations of ADC assumed or guaranteed by
         Kane for and at the request of ADC.

     4.  This letter is binding, but may be modified, supplemented or clarified
         by mutual agreement between us.
<PAGE>

To the Board of Directors of
Applied Data Communications, Inc.
September 20, 2001

     If you have any questions, please call.

                                               Very truly yours,

                                               /s/ Walter J. Kane
                                               ---------------------------
                                               Walter J. ("Pat") Kane

ACCEPTED:

APPLIED DATA COMMUNICATIONS, INC.

By  /s/ Barry K. Sugden, Jr.
  -------------------------------
  Barry K. Sugden, Jr., Chief Financial Officer
  and Secretary<PAGE>

                                                                   EXHIBIT 10.77

                            WALTER J. ("PAT") KANE
                       APPLIED DATA COMMUNICATIONS, INC.
                            3324 South Susan Street
                          Santa Ana, California 92704

                              September 28, 2001

Applied Data Communications, Inc.
3324 South Susan Street
Santa Ana, California 92704

Gentlemen:

     The undersigned hereby agrees to purchase from Applied Data Communications,
Inc., a Delaware corporation ("ADC"), an aggregate of seventeen thousand five
hundred (17,500) shares of Series B Preferred Stock ("Preferred Stock"), each
convertible into one hundred (100) shares of Common Stock, on the following
terms and conditions:

     1.  The purchase price for the Preferred Stock in terms of face amount of
indebtedness shall be $25.00 per share, each such share being convertible into
one hundred 100 shares of Common Stock.  The purchase price shall be payable by
cancellation of $436,800 in face amount of indebtedness at the rate of $25.00
for each share of Series B Preferred Stock issued.  Such indebtedness may
comprise an obligation to the undersigned or to another and assigned to the
undersigned for submission and cancellation by ADC and the undersigned.  The
purchase price indebtedness was compromised and agreed upon by a Settlement
Agreement dated September 20, 2001 between ADC and the undersigned, ratified and
confirmed hereby.

     2.  Within a reasonable time following the date hereof, ADC shall deliver
to the undersigned purchaser a certificate or certificates for the number of
fully paid and nonassessable shares of Preferred Stock purchased hereunder.

     3.  The undersigned understands that the shares purchased hereunder
constitute "restricted securities" under the federal securities laws inasmuch as
they are, or will be, acquired from ADC in transactions not involving a public
offering and accordingly may not, under such laws and applicable regulations, be
resold or transferred without registration under the Securities Act of 1933, as
amended (the "1933 Act") or an applicable exemption from such registration.  The
undersigned purchaser represents that he is acquiring the shares of Preferred
Stock under this agreement for investment and not for the purpose of resale or
distribution thereof.

     4.  If at any time during the period commencing on the date hereof and
ending on June 30, 2011, ADC shall determine to register for its own account or
the account of others under the 1933 Act any of its equity securities, other
than on Form S-4 or Form S-8 or their then equivalents relating to equity
securities to be issued solely in connection with any acquisition of any entity
or business, or equity securities issuable in connection with stock option or
other employee benefit plans, ADC shall send to the holder of shares written
notice of such determination and, if within twenty (20) days after receipt of
such notice, such holder shall so request in writing ("Selling Holder"), ADC
shall include in such Registration Statement all or any part of the shares
issuable or
<PAGE>

issued upon conversion of the Preferred Stock issued hereunder ("Registrable
Securities") such Selling Holder requests to be registered. The obligations of
ADC may be waived by holders holding a majority in interest of the Registrable
Securities. In the event that the managing underwriter for said offering advises
ADC in writing that the inclusion of such securities in the offering would be
materially detrimental to the offering, such securities shall nevertheless be
included in the Registration Statement, provided that the holder of the shares
that desires to have shares included in the Registration Statement agrees in
writing, for a period of ninety (90) days following such offering, not to sell
or otherwise dispose of such shares pursuant to such Registration Statement,
which Registration Statement ADC shall keep effective for a period of at least
nine (9) months following the expiration of such 90-day period.

     5.  All expenses, other than underwriting discounts and commissions and
other fees and expenses of investment bankers and other than brokerage
commissions, incurred in connection with registrations, filings or
qualifications, including, without limitation, all registration, listing and
qualification fees, printers and accounting fees and the fees and disbursements
of counsel for ADC and the Selling Holder, shall be borne by ADC; provided,
however, that ADC shall only be required to bear the fees and out-of-pocket
expenses of one legal counsel selected by the Selling Holder in connection with
such registration.

     6.  The rights to have ADC register Registrable Securities pursuant to this
agreement shall be automatically assigned by the holder to transferees or
assignees of all or any portion of such securities only if (i) the holder agrees
in writing with the transferee or assignee to assign such rights, (ii) ADC is,
within a reasonable time after such transfer or assignment, furnished with
written notice of the name and address of such transferee or assignee, (iii)
such assignment is in accordance with and permitted by law and all other
agreements between the transferor or assignor and ADC, including without
limitation, shareholder's agreements, warrants and subscription agreements, and
the transferor or assignor otherwise is not in material default of any
obligation to ADC under any such other agreement, and (iv) at or before the time
ADC received the written notice contemplated by clause (ii) of this sentence,
the transferee or assignee agrees in writing with ADC to be bound by all of the
provisions contained herein.

     7.  This agreement and the documents referred to herein constitute the
entire agreement and understanding of the parties hereto with respect to the
subject matter hereof, and supersede all prior and contemporaneous agreements
and understandings, whether oral or written, between the parties hereto with
respect to the subject matter hereof.

     8.  ADC represents and warrants that (a) the shares of Preferred Stock
purchased hereunder shall be validly issued, fully paid and nonassessable shares
of Series B Preferred Stock, each of which is convertible into one hundred (100)
shares of Common Stock, and (b) ADC is a corporation in good standing under the
laws of the State of Delaware and is fully entitled and empowered to enter into
and perform this agreement.  This agreement is binding and enforceable against
ADC in accordance with its terms.
<PAGE>

     Please acknowledge your agreement by executing the enclosed copy of this
letter and returning it to the undersigned.

     Dated as of September 28, 2001.

                              Very truly yours,

                              /s/ Walter J. Kane
                              -----------------------------
                              Walter J. ("Pat") Kane

APPLIED DATA COMMUNICATIONS, INC.

By  /s/ Barry K. Sugden, Jr.
  --------------------------
   Barry K. Sugden, Jr., Chief Financial Officer
   and Secretary<PAGE>

                                                                   EXHIBIT 10.78

                                  JOHN FUINI

                              September 20, 2001

To the Board of Directors of
Applied Data Communications, Inc.

Gentlemen:

     The draft of the Applied Data Communications, Inc. ("ADC") Form 10-KSB/A,
as it is proposed to be filed with the SEC, includes, under Part III, Item 12,
Paragraph (d) entitled "Interim Capital" ("Paragraph (d)"), a description of the
settlement between John Fuini ("Fuini") and ADC of obligations due Fuini for the
accommodations, arrangements and compensation due Fuini under the supplemental
financing arrangements described in Paragraph (d).  A copy of Paragraph (d) is
attached.

     1.  By signing this letter, we hereby acknowledge that, to our knowledge,
         the statements and disclosures in Paragraph (d) are substantially true
         and correct.

     2.  We agree to the terms described in the second and third unnumbered
         subparagraphs of Paragraph (d) and agree further that Fuini hereby
         releases and discharges ADC, its officers, directors, agents and
         affiliates from any obligation or liability arising from past services,
         accommodations and undertakings for ADC as described in the second and
         third subparagraphs of Paragraph (d). All other benefits specified in
         the first subparagraph and the last sentence of the third subparagraph
         of Paragraph (d) shall continue and survive this release.

     3.  Fuini shall indemnify and hold harmless ADC, its officers, directors,
         agents and affiliates from any obligation or liability for taxes,
         withholdings or other FICA and similar payroll deductions on account of
         past payments or allowances to Fuini or any thereof arising from any
         payments or accommodations under Paragraph (d) which shall continue and
         survive this release.

     4.  This letter is binding, but may be modified, supplemented or clarified
         by mutual agreement between us.
<PAGE>

To the Board of Directors of
Applied Data Communications, Inc.
September 20, 2001

     If you have any questions, please call.

                                           Very truly yours,

                                           /s/ John Fuini
                                           ---------------------------
                                           John Fuini

ACCEPTED AND CONFIRMED:

APPLIED DATA COMMUNICATIONS, INC.

By  /s/ Walter J. Kane
  ------------------------------------
    Walter J. ("Pat") Kane, President

By  /s/ Barry K. Sugden, Jr.
  ------------------------------------
    Barry K. Sugden, Jr., Chief Financial Officer
    and Secretary
<PAGE>

                       APPLIED DATA COMMUNICATIONS, INC.

                                 FORM 10-KSB/A
                       PART III, ITEM 12, PARAGRAPH (d)
                           ENTITLED INTERIM CAPITAL

     (d) Interim Capital.  The Company has entered into a Factoring and Security
Agreement dated July 29, 1994 with Interim Capital which is an affiliate of John
Fuini, a director of the Company.  Under the Factoring Agreement, Interim
Capital is to advance from 50% up to 70% of the value of the scheduled accounts
receivable invoices purchased, with an initial down payment on the purchase
price and with the balance, net of fees and discounts, being paid by the factor
after the scheduled accounts receivable invoices have been paid in full by the
customer.  A reserve account is also maintained as additional collateral.  Fees,
expressed as a percentage of face amount of accounts receivable invoices
purchased, as opposed to the amount of funds advanced, are based on number of
days advanced funds remain outstanding.  The discount and service fees are 2%
for each 10 day increment up to 90 days and 1% for each month after 91 days for
collection.  The Company is indebted to Interim Capital for $1,495,808,
including $425,954 accumulated factoring fees at March 31, 2001.  Approximately
$531,000 of the factored invoices were outstanding as of September 6, 2001 and
aged less than 90 days.  A sum of $890,993 was advanced by Interim Capital for
invoices that are aged over 90 days, deemed uncollectible and subject to a
repurchase payment contingent obligation of ADC in the sole discretion of
Interim Capital.

     In June and September of 1998, ADC entered into supplemental financing
arrangements with John Fuini for advances aggregating $395,000 from John Fuini
and Interim Capital.  The purposes for the arrangements included (a) obtaining
additional working capital of $150,000 in cash and (b) funding ADC's acquisition
of its first printer system.  To facilitate acquisition of Printer #1, Mr. Fuini
and Interim Capital advanced ADC $100,000 in cash and provided an uncashed
deposit check for $145,000 in lieu of an ADC letter of credit to Kammam Company
that ADC could not provide as security for the balance due on the printer.  The
advances were critical to ADC's being able to continue operation and acquire CD
print capability needed to be competitive.

     Following these supplemental arrangements, ADC entered into an agreement
with Mr. Fuini and Interim Capital under which ADC would (a) cause a return in
April 1999 to the appropriate party of the $145,000 deposit check; (b) repay
$150,000 from ADC funds derived from its portion of collected accounts
receivable during the period prior to June 30, 2000; and (c) repay the remaining
$100,000 plus accrued fees through a three-year repayment schedule expiring
August 2001.  For the supplemental financing, ADC paid or accrued charges to
John Fuini or Interim Capital as follows:  with respect to the deposit check of
$145,000 and the $100,000 cash advance for Printer #1, ADC granted John Fuini a
separate fee package and for the $150,000 working capital advance, ADC would
grant John Fuini an additional separate fee package.  Each separate fee package
consisted of a fee of $.01 per CD-ROM produced by ADC.  On September 20, 2001,
ADC entered into an agreement with Mr. Fuini that (i) the aggregate for
supplemental financing arrangements and fees due was $248,937, (ii) the
supplemental financing arrangements were terminated, and Mr. Fuini released,
cancelled and discharged such $248,937, and (iii) Mr. Fuini would accept 10,000
shares of Series B Preferred Stock.

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