Exh 10.5
SETTLEMENT AGREEMENT AND MUTUAL RELEASE
This Settlement Agreement and Mutual Release is entered into by and
between Tricord Systems, Inc. ("Tricord") and Audio Highway, Inc. ("Audio
Highway") this 24th day of April, 1998.
WHEREAS, Audio Highway contends that Tricord made misrepresentations
which permit Audio Highway to withhold payment for the computer parts and
permit Audio Highway to rescind the purchase; and
WHEREAS, Audio Highway initiated a lawsuit against Tricord in Federal
District Court for the Northern District of California (the "Lawsuit") and
Tricord asserted Counterclaims against Audio Highway; and
WHEREAS, Tricord and Audio Highway are desirous of resolving their
disputes.
NOW, THEREFORE, the parties hereto agree as follows:
1. Audio Highway agrees to pay Tricord $147,857 upon the signing of this
Settlement Agreement and Mutual Release. Payments to be wire transferred
to Tricord according to the following schedule: An initial $47,857 payment
not later than 31 May 1998. Four equal payments of $25,000 due 30, 60, 90
and 120 days respectively after the initial payment (30 June 1998, 31 July
1998, 31 August 1998, and 30 September 1998).
2. Tricord agrees to release and dismiss with prejudice its claims, including
interest, against Audio Highway.
3. Audio Highway agrees to release and dismiss with prejudice its claims
against Tricord.
4. Audio Highway and Tricord agree to pay their own attorneys' fees and costs.
5. As additional consideration for the payments defined in paragraph 1,
Tricord will provide the following upgrades and services to Audio Highway.
The upgrades will be provided after Tricord receives the third Audio
Highway payment (31 July 1998) as set forth in paragraph 1.
a. Upgrade the 8 CPU 166MHz computer system to an 8 CPU 200MHz
configuration.
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b. Upgrade each of the two 2-CPU 100MHz computer systems to 4-CPU 100MHz
configuration.
c. Provide two days of on-site installation and consulting service to
upgrade the systems. Provide a senior field engineer experienced in
computers and networks.
d. Provide one seat in the course for Certified Tricord Engineer (CTE)
training. Schedule to be mutually agreed.
6. Audio Highway and Tricord will mutually agree on the schedule for the
upgrades and training as set forth in paragraph 5.
7. By execution of this Settlement Agreement and Mutual Release, Tricord does
hereby forever and fully discharge and release Audio Highway, including
where applicable, its shareholders, employees, representatives, agents,
attorneys, successors and assigns, from any and all liability, claims
demands, actions, causes of action, suits, grievances, arbitrations, costs,
disbursements, attorneys' fees and all other claims of every kind and
nature whatsoever, whether in law or in equity, and however arising out of
or related to the subject matters of the Lawsuit, which against Audio
Highway it ever had, now has, or in the future may have, up to the date of
this Settlement Agreement and Mutual Release concerning or arising out of
all matters that were asserted, or could have been asserted, by Tricord in
the Lawsuit.
8. By execution of this Settlement Agreement and Mutual Release, Audio Highway
hereby forever and fully discharges and releases Tricord, its shareholders,
employees, representatives, agents, attorneys, successors and assigns, from
any and all liability, claims, demands, actions, causes of action, suits,
grievances, arbitrations, costs, disbursements, attorneys' fees and all
other claims of every kind and nature whatsoever, whether in law or in
equity, and however arising out of or related to the subject matters of the
Lawsuit, which against Tricord it ever had, now have, or in the future may
have, up to the date of this Settlement Agreement and Mutual Release
concerning or arising out of all matters that were asserted, or could have
been asserted, by Audio Highway in the Lawsuit.
9. It is a further condition of the consideration hereof, and is the intention
of the parties in executing this instrument that the same shall be
effective as a bar as to each and every claim, demand and cause of action
hereinabove specified and, in furtherance of this intention, the parties
hereby expressly waive any and all rights or benefits conferred by the
provisions of Section 1542 of the California Civil Code and expressly
consent that this Agreement shall be given full force and effect according
to each and all of its express terms and conditions, including those
relating to unknown and
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unsuspected claims, demands and causes of actions, if any, or specifically
relating to any claims, demands and causes of actions hereinabove
specified. Section 1542 provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR"
The parties acknowledge that they may hereafter discover claims or facts in
addition to or different from those which they now know or believe to exist
with respect to the subject matter of this Agreement and which, if known or
suspected at the time of executing this Agreement, may have materially
affected this settlement. Nevertheless, the parties hereby waive any
right, claim or cause of action that might arise as a result of such
different or additional claims or facts. The parties acknowledge that they
understand the significance and consequence of such release and such
specific waiver of Section 1542.
10. Audio Highway and Tricord represent that they have not assigned or in any
way conveyed or encumbered to any person or entity any claim or part of any
claim they may have had against the other.
11. It is understood and agreed that the parties are settling disputed claims
and that nothing set forth in this Settlement Agreement and Mutual Release
is intended as or may be construed as an admission of fault, liability or
wrongdoing of Audio Highway or Tricord.
12. This Settlement Agreement and Mutual Release sets forth the entire
agreement and understanding of the parties with respect to the Lawsuit and
supersedes all prior agreements, arrangements and understandings between
the parties with respect to the settlement of the Lawsuit.
13. This Settlement Agreement and Mutual Release shall not be amended or
modified except in writing signed by the parties.
14. The parties agree that they have fully consulted with their counsel
regarding the effect of this Settlement Agreement and Mutual Release.
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15. The undersigned signatories on behalf of the respective parties are duly
authorized to execute this Settlement Agreement and Mutual Release as a
document fully binding upon the company on behalf of which it is signed.
Dated: April 24, 1998 Tricord Systems, Inc.
By: /s/ C. E. Pearsall
Its Vice President for Engineering
Dated: April 24, 1998 AUDIO HIGHWAY
By: /s/ N. M. Schulhof
Its President
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