Exhibit 10.05

Settlement and Release Agreement

             This is a Settlement and Release Agreement (“Agreement”) between
Zamba Corporation (“Zamba”) and Paul Edelhertz (“Edelhertz”) providing for
Edelhertz’ friendly transition from the Zamba payroll to a more traditional
Chairman role.

1.          Effective Date. The Effective Date of this Agreement shall be the
sixteenth (16th) day following Zamba’s receipt of an unmodified version of this
document bearing Edelhertz’ original signature. May 22, 2001, will be considered
the last date on which Edelhertz will be on the regular Zamba payroll
(“Transition Date”), and no payment will be provided by Zamba after that date
except as stated in this Settlement and Release Agreement.

2.          Consideration. In exchange for Edelhertz’ written consent to this
Agreement, Zamba agrees to pay Edelhertz on a salary continuation basis through
the earlier of December 31, 2001, or until Employee begins receiving regular
income from consulting or employment (the “Pay Period”); (ii) except as set
forth at the end of this Section 2, allow Edelhertz’ existing stock options to
continue to vest according to their current schedules for so long as Edelhertz
remains a member of the Board of Directors of Zamba; and (iii) enter into that
certain Stock Option Agreement attached hereto and incorporated herein as
Exhibit A.

             Salary continuation will be based on Edelhertz’ current base
salary, and will not include bonuses, commissions, amounts realized from the
exercise of stock options, or any other form of monetary or non-monetary
compensation, except as expressly set forth in this Agreement. For Edelhertz’
consent to be valid, he must return this Agreement in a signed and unmodified
manner to Zamba, in accordance with the terms of this Agreement.  Settlement pay
will be reduced by usual and customary withholdings and deductions.  Edelhertz
acknowledges that none of the consideration or benefits set forth in this
Agreement are to be made until this Agreement is properly executed and returned
to Zamba, and that any payments that are tolled because the Agreement is not
executed will be paid in the payroll following execution and return of this
Agreement.  Following the end of the Pay Period, Zamba will also pay Edelhertz
the value of his accrued yet unused Personal Time Off (“PTO”) as of that date. 
PTO shall not continue to accrue following the Transition Date.  Notwithstanding
anything else in this Agreement regarding his stock options, Edelhertz
acknowledges and agrees that, as further consideration for Zamba’s consent to
this Agreement, all stock options granted by Zamba to him in December 2000 shall
be cancelled and of no further effect, and Edelhertz will take all such actions
as may be reasonably requested by Zamba to effectuate such cancellation.

3.          Benefits.  Until the Transition Date, Zamba will continue Edelhertz’
benefits on the same basis as Edelhertz currently receives.  Following the
Transition Date, Edelhertz will be eligible to continue his benefits as provided
under the Continuing Omnibus Budget Reconciliation Act (“COBRA”), provided that
during the Pay Period, Zamba will continue to pay the premiums for Edelhertz’
benefits as such are currently being paid by Zamba, subject to prior receipt
from Edelhertz of the same contributions that Edelhertz currently makes through
salary withholding.

4.          No Other Remuneration.  Edelhertz acknowledges and agrees that he is
not entitled to any remuneration from Zamba, except as provided in this
Agreement, that a material portion of the payments and other benefits contained
in this Agreement are good and valuable consideration to which he would not be
entitled in the absence of this Agreement, and, provided that Zamba does not
breach this Agreement, that he will not seek any further compensation from
Zamba, or its current or former officers, directors, shareholders, employees,
attorneys, successors and assigns for any claimed damages, expenses, costs, fees
or other liability of any kind in connection with his employment with Zamba and
the termination of that employment.

5.          Release.  Edelhertz accepts the valuable benefits of this Agreement,
and acknowledges that Zamba owes him nothing else.  In return, Edelhertz
releases and forever discharges Zamba, and any company associated or affiliated
with Zamba, and Zamba’s officers, directors, shareholders, employees, agents and
anybody else who works for or with Zamba, of and from any and all legal claims,
rights, demands, actions, obligations, and causes of action of any and every
kind, nature and character, known or unknown, which Edelhertz may now have, or
has ever had, arising from or in any way connected to Edelhertz’ employment with
Zamba, and the termination of that employment.

             Notwithstanding any other federal, state or local statute,
regulation, rule or order, Edelhertz agrees that this Release applies to any and
all legal claims of any kind whatsoever, whether statutory, common law,
constitutional, or otherwise, including but not limited to: all “wrongful
discharge” and ”constructive damage” claims; all claims related to any contracts
of employment, express or implied; any claims for defamation, misrepresentation,
fraud, or breach of the covenant of good faith and fair dealing, express or
implied; any claim for negligent or intentional infliction of emotional
distress; any claim for negligence; any claims for attorneys’ fees or costs; any
tort claims of any nature; any claims under federal, state, or municipal statute
or ordinance; any other contract, tort, and employment discrimination claims,
including those under the Age Discrimination in Employment Act, the Older
Workers’ Benefit Protection Act, Title VII of the Civil Rights Act of 1964, the
Civil Rights Act of 1991, 42 U.S.C. Section 1981, the Americans with
Disabilities Act (the “ADA”), the Employee Retirement Income and Security Act,
the Federal Rehabilitation Act of 1973, the Federal Family and Medical Leave
Act, the Worker Adjustment and Retraining Notification Act, Massachusetts
General Laws Chapter 151B, as amended, and any and all other age, sex and
disability claims recognized under the Minnesota Human Rights Act and all other
federal, state, and local laws.

             Edelhertz acknowledges and agrees that for his waiver, he received
consideration in exchange, in excess of anything of value to which he may
already have been entitled.  Edelhertz further acknowledges that he was and
hereby is advised to consult with an attorney prior to executing this
Agreement.  Edelhertz also acknowledges that he was given a reasonable period of
time to consider whether or not to sign this Agreement starting from the date
Edelhertz first receives a copy of this Agreement.

             Edelhertz also promises not to sue or start any other legal
proceedings against any party he released above.  Edelhertz understands that
while he is giving up legal claims he may think he has, Zamba would dispute
those claims, vigorously defend itself, and not pay Edelhertz any of the
benefits of this Agreement.  Thus, this Agreement will avoid costly and lengthy
legal disputes, and allows Zamba and Edelhertz to compromise any differences
they may have and buy the peace.

6.          No Claims Previously Made by Edelhertz.       Edelhertz represents
that he has not filed any complaints, claims, or actions against Zamba, or its
current or former officers, directors, shareholders, Employees, attorneys,
successors and assigns, or representatives with any state, federal, or local
agency or court, and that he will not do so at any time after the Effective
Date.

7.          No Admission of Liability.  This Agreement and compliance with this
Agreement shall not be construed as an admission by Zamba of any liability to
Edelhertz, whatsoever.  Zamba specifically disclaims any liability to Edelhertz
for any matter arising from or in any way connected with Edelhertz’ employment
with Zamba and the Transition of that employment.

8.          Rescission Notice.  Within fifteen calendar days after signing this
Agreement, Edelhertz has the right to rescind only that provision of this
paragraph releasing Zamba from liability for charges or actions brought pursuant
to the ADEA, Title VII, ADA and Minnesota Human Rights Act.  To be effective,
the rescission must be in writing and delivered to Zamba, at 3033 Excelsior
Blvd., Suite 200, Minneapolis, MN 55416.  If delivered by mail, the rescission
must be:

A. Postmarked within the 15-day period; B. Properly addressed to Zamba; and C.
Sent by certified mail, return receipt requested.

             In the event Edelhertz rescinds this Agreement, Zamba has no
obligations to him under this Agreement, and Edelhertz agrees to repay Zamba any
funds already paid to him under this Agreement.  This Agreement shall not become
effective until the 15-day rescission period has elapsed.

9.          Confidentiality.  It is the intent of the parties that the terms
upon which this agreement is based will be forever treated as confidential. 
Edelhertz may disclose the terms of this Agreement only to his spouse, attorney,
accountant, and tax advisor or preparer.  Zamba may disclose the terms of this
Agreement to those of its agents or Employees who have a legitimate need to know
such terms. Both parties agree not to make any disparaging or negative
statements about the other party or the employment relationship between
Edelhertz and Zamba, either in the employment or personal context.  Edelhertz
shall not in any way assist or encourage any individual to pursue a claim
against Zamba.

10.        Covenants of Non-Competition and Non-Solicitation.  Edelhertz held a
position of trust with Zamba, which allowed Edelhertz access to extremely
confidential information regarding Zamba’s clients, employees and employment
practices.  Therefore, as a separate covenant of this Agreement, Edelhertz
agrees that, for a period beginning on the Effective Date and continuing for one
(1) year following the end of the Pay Period, Edelhertz shall not (a) directly
or indirectly solicit, do business with, deliver products to, render services to
or adversely affect Zamba’s relationship with any client or prospective client
of Zamba; or (b) solicit for employment or discuss employment opportunities with
any of Zamba’s personnel.  These covenants apply to Edelhertz regardless of
whether he is acting in his individual capacity or as an employee, contractor,
advisor, director, officer, or partner of any third party.  Further, Edelhertz
expressly acknowledges the confidentiality of Zamba’s client and employment
information, including the names of Zamba’s clients and employees and their
contact information, needs, wants, tasks, skills, compensation, and opinions
about Zamba, and agrees not to disclose such confidential information to any
third party, regardless of Edelhertz’ relationship with such third party, for so
long as such information remains confidential.

11.        Voluntary Agreement.  Both Zamba and Edelhertz enter into this
Agreement voluntarily, after having had the opportunity to review it and consult
with advisors, including legal counsel, of their choice.  This Agreement sets
forth the entire agreement between the parties regarding the subject matter
herein, superseding any and all other agreements, understandings, memoranda, or
proposals, whether written or oral, between the parties regarding the same or
similar subject matter.

12.        No Reliance on Representations.  Each party to this Agreement
represents and acknowledges that in executing this Agreement that party does not
rely and has not relied upon any representation or statement made by the other
party or by any of such other party’s agents, attorneys, or representatives with
regard to the subject matter, basis or effect of this Agreement or otherwise,
other than those representations and statements specifically stated in this
written Agreement.

13.        Successors and Assigns.  This Agreement shall be binding upon the
parties to this Agreement and upon their respective heirs, administrators,
representatives, executors, successors, and assigns, and shall inure to the
benefit of those parties and each of them and to their respective heirs,
administrators, representatives, executors, successors, and assigns.

14.        Severability.  Should any provision of this Agreement be declared or
be determined by any court of competent jurisdiction to be illegal, invalid, or
unenforceable, the legality, validity, and enforceability of the remaining
parts, terms, or provisions shall not be affected thereby, and said illegal,
unenforceable, or invalid part, term, or provision shall be deemed not to be a
part of this Agreement.

15.        Interpretation of Agreement.  This Agreement shall be interpreted in
accordance with the plain meaning of its terms and not strictly for or against
any of the parties.

16.        Legal Expenses.  In the event of litigation or arbitration between
the parties arising out or relating to this Agreement, the prevailing party will
be entitled to recover court or arbitration costs and reasonable fees of
attorneys, accountants and expert witnesses incurred by such party in connection
with the action or arbitration, including such costs and fees incurred because
of any appeals.  The prevailing party also shall be entitled to recover all such
costs and fees that may be incurred in enforcing any judgment or award, and this
provision shall not be merged into any judgment but shall survive any judgment.

17.        Specific Performance. Each party agrees that a breach of this
Agreement would cause irreparable harm to the other party, and therefore agrees
that the non-breaching party may seek a temporary restraining order, a temporary
or permanent injunction or any other equitable relief by initiating a court
action upon a breach or threatened breach of this Agreement.

18.        Governing Law.  This Agreement shall be governed in all respects,
including validity, interpretation and effect, by the laws of the State of
Minnesota, except for its choice of laws principles.

 

\s\ Paul Edelhertz

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Date: August 2, 2001

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Paul Edelhertz               \s\ Michael Carrel

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Date: August 2, 2001

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Zamba Corporation  

Exhibit A
STOCK OPTION AGREEMENT

 

             THIS STOCK OPTION AGREEMENT is made as of this ______ day of
________________, _______, by and between PAUL EDELHERTZ (Edelhertz) and ZAMBA
CORPORATION, a Delaware corporation (Zamba).

             IN CONSIDERATION of the mutual promises of the parties hereto and
the mutual benefits to be gained by the performance herein, the parties agree as
follows:

1.) Grant of Option – Edelhertz hereby grants to Zamba an option to purchase an
aggregate of Two Hundred Fifty Thousand (250,000) shares of the common stock of
Zamba owned by him (collectively “the Shares”) for an agreed upon amount (“the
Purchase Price”).  Zamba hereby grants to Edelhertz an option to put the Shares
to Zamba for the same Purchase Price. Unless otherwise agreed, Zamba must
exercise the option to purchase all of the shares if it desires to purchase any
of the shares, and Edelhertz must put to Zamba all of the shares if he desires
to put any of the shares.     2.) Purchase Price – The Purchase Price shall be
equal to the total cumulative amount due and payable (i.e., principal and
interest) on a Promissory Note dated December 26, 2000, between Zamba and
Edelhertz, as of the date of the exercise of an option under this Agreement    
3.) Exercise of Options – If Edelhertz or Zamba desire to execute one of the
foregoing options, they may do so by written notice to the other.  The notice
shall:       (a) State the election to exercise the option; and   (b) Be signed
by the party exercising the option.       Within fifteen (15) days following the
date of such notice, Edelhertz shall deliver, assign and transfer to Zamba,
stock certificates representing 250,000 shares of Zamba. Representing full
payment for the Shares, Zamba shall release Edelhertz from any further
obligations on a Promissory Note dated December 26, 2000, and treat such note as
paid in full and deliver evidence of such to Edelhertz.     4.) Adjustment
Provision – If there is any capital reorganization or reclassification of the
capital stock of Zamba, or stock dividend, or any consolidation or merger of
Zamba with any other entity, the options granted herein shall apply to all new
shares acquired by Edelhertz with respect to the Shares.  Thus, by way of
example, if there is a stock split, the options described in the Agreement shall
apply not only to the Shares, but also to the additional shares acquired by
Edelhertz with respect to the Shares, without any increase in the purchase
price.  This adjustment shall not, however, apply to any other shares of Zamba
that may be acquired by Edelhertz through purchase.

 

5.) Term of Options – If neither of the options described in this Agreement are
exercised within ten (10) years from the date hereof, then either party shall
have the right to terminate both options at any time thereafter upon delivery of
thirty (30) days’ prior written notice to the other.  If neither party exercised
their option within thirty (30) days or receipt of such notice, all options
described herein shall expire.     6.) Representations of Edelhertz – Edelhertz
represents and warrants that he is the owner, beneficially and of record, of all
the Shares, free and clear of all liens and encumbrances; that the sale of the
Shares to Zamba will not result in or constitute a breach of any term or
provision of any agreement to which Edelhertz is a party; that Edelhertz has the
right, power, legal capacity, and authority to enter into and perform his
obligations under this Agreement, and no approval or consent of another person
is necessary in connection with it; and that Edelhertz shall take no action that
will result in these representations being untrue at any time prior to the
purchase of the Shares by Zamba.     7.) Miscellaneous –       (a) Counterparts
– This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the same
instrument.   (b) Amendments – This Agreement may be amended in whole or in part
at any time by a written instrument setting forth such changes and signed by all
of the parties hereto.   (c) Benefit – This Agreement shall be binding upon and
inure to the benefit of all of the parties hereto, their heirs, executors,
administrators, successors and assigns, and the parties hereby agree for
themselves and their heirs, executors, administrators, successors and assigns to
execute any instrument and to perform any acts which may be necessary or proper
to carry out the purposes of this Agreement.   (d) Situs – This Agreement was
executed in Minneapolis, Minnesota and shall be governed by the laws of the
State of Minnesota.   (e) Entire Agreement – This Agreement sets fort the entire
understanding between the parties, there being no terms, conditions, warranties
or representations other than those contained herein.

 

             IN WITNESS WHEREOF, the parties have duly executed this Agreement
as of the day and year first above written.

 

\s\ Paul Edelhertz

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PAUL EDELHERTZ   \s\ Michael Carrel

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ZAMBA CORPORATION By:   Michael Carrel

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