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                                                                   EXHIBIT 10.26

                        RELEASE AND SETTLEMENT AGREEMENT


         THIS AGREEMENT dated this 19th day of January, 2001 by and between
SAVAGE ARMS, INC. (hereinafter referred to as "Savage") and INTELECT
COMMUNICATIONS, INC. (hereinafter referred to as "Intelect").

         WHEREAS, Savage is a wholly owned subsidiary of Savage Sports
Corporation, a corporation organized and existing under the laws of the state of
Delaware with its principal place of business in Westfield, Hampden County,
Massachusetts; and

         WHEREAS, Intelect is a corporation organized and existing under the
laws of the state of Delaware, with its principal place of business in
Richardson, Texas; and

         WHEREAS, on or about June 21, 2000, Savage commenced an action against
Intelect in the Superior Court Department of the Trial Court in Hampden County,
Massachusetts, in which it seeks, inter alia, a declaration that Intelect is
obligated to indemnify Savage for Savage's costs, expenses and liabilities
incurred in connection with certain litigation commonly known and referred to by
Savage and Intelect as "the Emhart Litigation, the Taylor Litigation and the
Gower Litigation", as well as all future product liability claims (the
"Action"); and

         WHEREAS, Intelect has at all times and in all pleadings filed in the
Action denied liability to Savage; and

         WHEREAS, the parties desire to avoid further controversy and to resolve
amicably the Action without further litigation.



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         NOW THEREFORE, in consideration of the mutual promises hereinafter set
forth and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Savage and Intelect agree as follows:

         1. Intelect and its affiliates shall defend Savage and indemnify and
         hold harmless Savage and its affiliates, directors, officers, agents,
         employees, stockholders, heirs, executors, administrators, legal
         representatives, predecessors, successors and assigns from all demands,
         claims, suits, actions, judgments, requests for relief, or proceedings
         related to or arising out of the Taylor Litigation, and in connection
         with the Gower Litigation, for up to twenty-five percent (25%) of the
         attorneys' fees, related costs and final judgment obligations, if any,
         ultimately attributable to Savage, to the extent such fees, costs
         and/or liability awards in such litigation matters are not covered or
         extinguished by available insurance coverage. The obligation to defend
         shall include, without limitation, legal fees, litigation expenses and
         costs, investigative expenses and costs, appeal costs (including bonds)
         incurred to the date of this Agreement and which may be incurred in the
         future. Intelect shall also reimburse Ronald Coburn for the reasonable
         time he dedicates in responding to those liability claims asserted
         against Intelect and/or Savage involving any Savage firearm that was
         manufactured during the time that Intelect or its predecessors owned
         the operations of Savage Arms. Intelect shall reimburse Mr. Coburn at
         the rate he has historically charged for such services or an amount
         that is reasonably related thereto.



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         2. Intelect shall pay to Savage the sum of One Million One Hundred
         Fifty-two Thousand Two Hundred Thirty-two and 11/100 Dollars
         ($1,125,396.04) as follows:

                  a. Upon Execution of this Agreement       -    $568,896.04

                  b. Future Payments:

                         April 1, 2001                      -      79,500.00
                         July 1,2001                        -      79,500.00
                         September 1, 2001                  -      79,500.00
                         January 1,2002                     -      79,500.00
                         April 1,2002                       -      79,500.00
                         July 1,2002                        -      79,500.00
                         September 1, 2002                  -      79,500.00

                  All payments made by Intelect pursuant to this paragraph shall
         be credited against the judgment as defined in paragraph 5 of this
         Agreement.

         3. Savage will have Intelect listed as a named insured on three
         insurance policies purchased in connection with the Emhart Litigation:
         a primary liability policy with One Million Dollars ($1,000,000.00)
         coverage for an initial term of five (5) years, an umbrella policy in
         the amount of Five Million Dollars ($5,000,000.00) and a fully paid up
         tail policy in the amount of Five Million Dollars ($5,000,000.00),
         retroactive to the commencement of such policies. Intelect shall
         further pay to Savage its proportionate share of the renewal premium
         for the primary liability policy as set forth above, upon presentation
         of a statement by Savage, but in no event later than thirty (30) days
         prior to the due



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         date for such insurance premiums. It is understood that the primary
         liability policy, under the requirements of the settlement by Savage of
         the Emhart Litigation, must be maintained by continuous payment of
         premiums five years in advance. Savage and Intelect hereby agree that
         the deductible for the liability policy may be increased to Five
         Hundred Thousand Dollars ($500,000.00), to reduce premium costs. It is
         also agreed that, based on such deductible, the current premium due for
         the fifth year of the policy is anticipated to be approximately Three
         Hundred Thousand Dollars ($300,000.00), of which Intelect will be
         responsible for One Hundred Eighty Thousand Dollars ($180,000.00) and
         Savage responsible for One Hundred Twenty Thousand Dollars
         ($120,000.00). If the premium for the fifth year of the policy is less
         than $300,000.00, Savage and Intelect's shares of the premium shall be
         the same percentage as they would have been if the premium had been
         $300,000.00. In the event that the premium for the fifth year of the
         policy is in excess of $300,000.00, Savage shall pay $120,000.00 and
         Intelect shall pay the balance of the premium. Intelect agrees that it
         shall be responsible for payment of any deductible up to Five Hundred
         Thousand Dollars ($500,000.00), in the event of any claim requiring
         payment of part or all of such deductible and involving any Savage
         firearm that was manufactured during the time that Intelect or its
         predecessors owned the operations of Savage Arms.

         4. Intelect will be involved and consulted in the process of selecting
         liability insurance on an annual basis. It is further agreed that for
         all subsequent years, the premium cost for the primary liability policy
         will be allocated between Savage



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         and Intelect, based on an actuarial determination reasonably made by
         Savage's insurance brokers. Savage agrees to make reasonable efforts to
         obtain primary liability coverage for future years as required under
         the Emhart Settlement Agreement at the then-lowest cost available in
         the insurance market. Savage will use its best efforts to convince
         Black & Decker in the future to forego the strict insurance
         requirements of five years advance coverage as required under the
         Emhart settlement agreement.

         5. Intelect shall enter into an agreement for judgment in the present
         action between the parties pending in the Hampden County,
         Massachusetts, Superior Court, in the form attached hereto as Exhibit
         "A". So long as there is not an Event of Default as defined in
         paragraph 6 hereof, Savage shall forebear from taking any action to
         record, enforce, or otherwise execute upon the judgment.

         6. The occurrence of any one or more of the following events shall
         constitute an "Event of Default":

                  a.       Intelect fails to pay when due any amount due under
                           this Agreement and such failure to pay is not cured
                           within fifteen (15) days of Intelect receiving
                           written notice from Savage of an overdue payment;

                  b.       The filing by Intelect or any successor entity of any
                           voluntary petition seeking liquidation,
                           reorganization, arrangement, readjustment of debts or
                           for any other relief under the Bankruptcy Code or
                           under any other act or law pertaining to insolvency
                           or debtor relief, whether state, federal or foreign,
                           now or hereafter existing;




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                  c.       The filing against Intelect or any successor entity
                           of any involuntary petition seeking liquidation,
                           reorganization, arrangement, readjustment of debts or
                           for any other relief under the Bankruptcy Code or
                           under any other act or law pertaining to insolvency
                           or debtor relief, whether state, federal or foreign,
                           now or hereafter existing, which petition is not
                           dismissed within sixty (60) days of the date of
                           filing;

                  d.       A custodian, trustee, receiver or assignee for the
                           benefit of creditors is appointed or takes possession
                           of all or any material portion of the assets of
                           Intelect or any of its Affiliates and such
                           appointment is not set aside within sixty (60) days
                           of the date of its issuance.

         7.       Upon and at any time after the occurrence and during the
                  continuance of any Event of Default, Savage may take any or
                  all of the following actions:

                  a.       Declare all or any part of the amounts due under this
                           Agreement to be immediately due and payable whereupon
                           such outstanding amounts shall become immediately due
                           and payable without further demand or other notice of
                           any kind;

                  b.       Take any and all actions available to it to enforce
                           the Judgment.

         8.       This Agreement constitutes the entire understanding between
                  Savage and Intelect with respect to the Action and any
                  promises, representations or warranties not herein contained
                  shall have no force and effect.

         9.       This Agreement may be amended, modified, supplemented or
                  changed in whole or in part only by an agreement in writing
                  and executed by each of




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                  the parties hereto. Any of the terms and conditions of this
                  Agreement may be waived in whole or in part, but only by an
                  agreement in writing and executed by the party that is
                  entitled to the benefit thereof.

         10.      Intelect and Savage acknowledge and agree that the October
                  3,1995 Stock Purchase Agreement and the January 3,1997
                  Commitment Agreement remain fully enforceable according to
                  their terms and the terms of this Agreement are intended to
                  supplement and amend such Agreements. The terms of this
                  Agreement shall not cause a novation nor shall it extinguish,
                  terminate or impair the respective rights and obligations of
                  Intelect and Savage under the 1995 Stock Purchase Agreement
                  and 1997 Commitment Agreement. Except to the extent
                  inconsistent with the terms of this Agreement, all other
                  provisions of the 1995 Stock Purchase Agreement and the 1997
                  Commitment Agreement shall remain unchanged and in full force
                  and effect.

         11.      RELEASES

                  Except as to any claims and obligations arising out of the
         October 3,1995 Stock Purchase Agreement, the January 3,1997 Commitment
         Agreement and this Release and Settlement Agreement, Savage hereby
         releases and discharges Intelect and its affiliates, predecessors,
         successors, assigns, officers, directors, employees, agents and
         attorneys from all actions, causes of actions suits, debts, dues, sums
         of money, accounts, reckonings, covenants, contracts, controversies,
         agreements, promises, damages, judgments, executions, claims and
         demands whatsoever, in law or equity, known or unknown, foreseen or




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         unforeseen, which Savage and any of its assigns, affiliates,
         predecessors, successors, directors, shareholders, employees, agents,
         representatives, attorneys and insurers ever had, now have, or
         hereafter can, shall, or may have from, upon, or by reason of any
         matter, cause or thing whatsoever at any point in time up to and
         including the date of the Release and Settlement Agreement.

                  Except as to any claims and obligations arising out of the
         October 3,1995 Stock Purchase Agreement, the January 3,1997 Commitment
         Agreement and this Release and Settlement Agreement, Intelect hereby
         releases and discharges Savage and its affiliates, predecessors,
         assigns, officers, directors, employees, agents and attorneys from all
         actions, causes of action, suits, covenants, contracts, controversies,
         agreements, promises, damages, judgments, executions, claims and
         demands whatsoever, in law or equity, known or unknown, foreseen or
         unforeseen, which Intelect and any of its assigns, affiliates,
         predecessors, successors, directors, shareholders, employees, agents,
         representatives, attorneys and insurers ever had, now have, or
         hereafter can, shall, or may have from, upon, or by reason of any
         matter, cause or thing whatsoever at any point in time up to and
         including the date of this Release and Settlement Agreement.

         12. The terms of this Agreement and the discussions leading up to it
         concerning it shall be kept strictly confidential, should not be
         disclosed to any person other than the parties' business and legal
         advisors, or government agencies on an as-needed basis, for any reason,
         except on written consent of all




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         parties or pursuant to a lawful court order as to which all parties to
         this Agreement have had prior notice and opportunity to be heard.

         13. This Agreement represents settlement of a disputed claim, and by
         entering into the Agreement, Intelect is not admitting to any liability
         or fault.

         14. This Agreement is binding upon and inures to the benefit of the
         parties hereto and their respective affiliates, directors, officers,
         agents, employees, stockholders, heirs, executors, administrators,
         legal representatives, predecessors, successors and assigns.

         15. This Agreement may be assigned by Savage to any of its Affiliates.

         16. The parties hereto represent that they have authority to enter into
         this Agreement, and acknowledge and agree that no other promises,
         covenants or agreements have been made by or on behalf of any of them
         in order to induce the execution of this Agreement.

         17. This Agreement shall be delivered in the Commonwealth of
         Massachusetts and shall be governed, construed and interpreted in all
         respects in accordance with the law of the Commonwealth of
         Massachusetts without regard to the conflict of laws and principles
         thereof.

         18. Any notice, request, instruction or other document or communication
         required or permitted to be given under this Agreement shall be in
         writing to the following addresses:

                Intelect Communications, Inc.
                Attn: Robert P. Capps
                1240 East Campbell Road
                Richardson, TX 75081




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                with a copy to:

                Richard D. Anigian, Esq.
                Haynes and Boone, LLP
                901 Main Street, Suite 3100
                Dallas, TX 75202

                Savage Arms, Inc.
                Attn: Ronald Coburn
                100 Springdale Road
                Westfield, MA 01085


         NOW THEREFORE, the parties hereto set their hands and seals.

                                        SAVAGE ARMS, INC.

                                        By
                                          --------------------------------------
                                               Ronald Coburn, Its President



                                        INTELECT COMMUNICATIONS, INC.



                                        By /s/ ROBERT P. CAPPS
                                          --------------------------------------
                                               Robert P. Capps, Its Executive
                                                        Vice President



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