Exhibit 10.16


    Exhibit
      10.16

    SETTLEMENT
      AGREEMENT AND RELEASE

     

    This
      Settlement Agreement and Release (this “Agreement") is made and entered into as
      of the 15th
      day of
      July, 2004, between Angelina Beitia (“Employee”) and ClearOne Communications
      Corporation (“ClearOne”), who shall be referred to as the “Parties”, or
      individually as a “Party”.

     

    DEFINITIONS

    


    1. The
      term
“Employee” shall mean Employee and his or her heirs, assigns, and legal
      representatives.

    


    2. The
      phrase "ClearOne Released Parties" shall mean ClearOne and any and all business
      units, committees, groups, and their present, former or future parents,
      affiliates, subsidiaries, employees, agents, directors, owners, officers,
      attorneys, successors, predecessors, and assigns.

    


    3. The
      "Released Claims" shall mean any type or manner of suits, claims, demands,
      allegations, charges, damages, or causes of action whatsoever in law or in
      equity under federal, state, municipal or local statute, law, ordinance,
      regulation, constitution, or common law, whether known or unknown, which
      Employee has ever had or now has against the ClearOne Released Parties. This
      includes but is not limited to any action for costs, interest or attorney's
      fees, which arise in whole or in part from Employee's employment relationship
      with ClearOne, from the ending of that relationship, and from any other conduct
      by or dealings of any kind between Employee and the ClearOne Released Parties,
      which occurred prior to the execution of this Agreement. This also includes
      but
      is not limited to any and all claims, rights, demands, allegations and causes
      of
      action for alleged wrongful discharge, breach of alleged employment contract,
      breach of the covenant of good faith and fair dealing, termination in violation
      of public policy, intentional or negligent infliction of emotional distress,
      fraud, misrepresentation, defamation, interference with prospective economic
      advantage, failure to pay wages due or other monies owed, failure to pay pension
      benefits, conversion, breach of duty, interference with existing economic
      relations, punitive damages, retaliation, discrimination on the basis of age
      in
      violation of the Age Discrimination and Employment Act of 1967, as amended
      ("ADEA"), negligent
      employment, negligent supervision, claims under Title VII of the Civil Rights
      Act of 1964, harassment
      or discrimination on the basis of sex, race, color, citizenship, religion,
      age,
      national origin, or disability, or other protected classification under the
      federal, state, municipal or local laws of employment, including those arising
      under the common law, and any alleged violation of the Employee Retirement
      Income Security Act of 1974 ("ERISA"), the Fair Labor Standards Act ("FLSA"),
      the Occupational Safety and Health Act ("OSHA"), and any other law.


    


      RECITALS

    


    A. WHEREAS,
      the Parties desire to settle and compromise the Released Claims and to enter
      into this Agreement.


    
      
        
          


           

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      COVENANTS

    

    


    NOW,
      THEREFORE, for good and valuable consideration, the receipt and sufficiency
      of
      which are hereby acknowledged, and in consideration of the mutual covenants
      set
      forth in this Agreement, the Parties agree as follows:

    


    1. Employee’s
      employment with ClearOne shall end effective June 30, 2004. Employee is not
      entitled to receive any further compensation or benefits from ClearOne after
      this date.

    


    2. Notwithstanding
      the provisions of section 1, above, after his or her execution of this Agreement
      and in accordance with the terms of this Agreement, beginning after the
      effective date of termination of Employee’s employment, ClearOne will make total
      payment to Employee in the amount of $100,000.00. Regular payroll and tax
      withholdings and deductions shall be applied and shall reduce this gross amount
      accordingly. Employee acknowledges that this sum constitutes consideration
      for
      Employee’s execution and adherence to the provisions of this Agreement. Employee
      understands and agrees that he or she would not receive the amounts specified
      herein except for his or her execution of this Agreement and the fulfillment
      of
      the promises contained herein. The ClearOne Released Parties make no
      representations whatsoever to Employee concerning the taxable status of the
      payment of the settlement amount. Employee assumes full and sole responsibility
      for any tax consequences related to the settlement amount. Employee understands
      and agrees to indemnify and hold harmless the ClearOne Released Parties from
      any
      taxes, assessments, withholding obligations, penalties or interest payments
      that
      they may incur at any time by reason of demand, suit or proceeding brought
      against them for any taxes or assessments or withholdings arising out of the
      payment of the settlement amount. Employee acknowledges he or she has been
      fully
      compensated by the terms of this Agreement for releasing the Released
      Claims.

    


    3. (a)
      ClearOne Communications shall indemnify
      and defend Angelina Beitia (“Indemnitee”) to the fullest extent permitted by the
      Utah Revised Business Corporation Act (as the same exists on the date hereof)
      if
      Indemnitee is or was a party or is threatened to be made a party to any
      threatened, pending or completed action, suit or proceeding, whether civil,
      criminal, administrative or investigative by reason of the fact that Indemnitee
      is or was an officer, employee or agent of the Company or a subsidiary of the
      Company, by reason of any action or inaction on the part of Indemnitee while
      an
      officer, employee or agent or by reason of the fact that Indemnitee is or was
      serving at the request of the Company as a director, officer, employee or agent
      of another corporation, partnership, joint venture, trust or other enterprise,
      against expenses (including reasonable attorneys' fees), judgments, fines and
      amounts paid in settlement (if such settlement is approved in advance by the
      Company, which approval shall not be unreasonably withheld) actually and
      reasonably incurred by Indemnitee in connection with such action, suit or
      proceeding. The termination of any action, suit or proceeding by judgment,
      order, settlement, conviction, or upon a plea of nolo
      contendere or
      its
      equivalent, shall not, of itself, create a presumption (i) that Indemnitee
      did
      not act in good faith and in a manner which Indemnitee reasonably believed
      to be
      in the best interests of the Company, or (ii) with respect to any criminal
      action, suit or proceeding, that Indemnitee had reasonable cause to believe
      that
      Indemnitee's conduct was unlawful.


    
      
        
          


           

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    (b)
      The
      Company shall, to the fullest extent permitted by the Utah Revised Business
      Corporation Act (as the same exists on the date hereof) advance all reasonable
      expenses incurred by Indemnitee in connection with the investigation, defense,
      settlement or appeal of any civil or criminal action, suit or proceeding
      referenced in subsection (a). Indemnitee hereby undertakes to repay such amounts
      advanced only if, and to the extent that, it shall ultimately be determined
      that
      Indemnitee is not entitled to be indemnified by the Company as authorized
      hereby. The advances to be made hereunder shall be paid by the Company to
      Indemnitee within thirty (30) days following delivery of a written request
      therefor by Indemnitee to the Company.

    


    (c)
      Indemnitee shall, as a condition precedent to her right to be indemnified or
      be
      advanced expenses under this Agreement, give the Company notice in writing
      as
      soon as practicable of any claim made against Indemnitee for which
      indemnification will or could be sought under this Agreement. Notice to the
      Company shall be directed to the Chief Executive Officer of the Company at
      the
      address for its principal executive offices (or such other address as the
      Company shall designate in writing to Indemnitee). In addition, Indemnitee
      shall
      give the Company such information and cooperation as it may reasonably require
      and as shall be within Indemnitee's power.

    


    (d)
      If,
      at the time of the receipt of a notice of a claim pursuant to subsection 3(b)
      of
      this Agreement, the Company has director and officer liability insurance in
      effect, the Company shall give prompt notice of the commencement of such action,
      suit or proceeding to the insurers in accordance with the procedures set forth
      in the respective policies. The Company shall thereafter take all necessary
      or
      desirable action to cause such insurers to pay, on behalf of the Indemnitee,
      all
      amounts payable as a result of such action, suit or proceeding in accordance
      with the terms of such policies.

    


    4. Employee
      shall not pursue, or authorize anyone on his or her behalf to pursue, the
      Released Claims in any way in any court. Employee represents that he or she
      has
      not filed and there is not pending with any governmental agency or any state
      or
      federal court, any other claims, complaints, charges, or lawsuits of any kind
      against the ClearOne Released Parties. Employee agrees that he or she will
      not
      make any filings with any court at any time hereafter for any matter, claim
      or
      incident, known or unknown, which occurred or arose out of occurrences on or
      prior to the date of this Agreement; provided, however, this shall not limit
      the
      Parties from filing a lawsuit for the sole purpose of enforcing their rights
      under this Agreement. Each of the Parties shall bear their own costs and
      attorneys' fees in this dispute.


    
      
        
          


           

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    5.
      Employee hereby waives, releases, remises and discharges each and every one
      of
      the ClearOne Released Parties from liability with respect to the Released
      Claims. Employee acknowledges that he or she understands he or she is prohibited
      from any further relief on the Released Claims. Employee hereby promises and
      covenants never to institute any suit or action at law or in equity against
      the
      ClearOne Released Parties regarding or relating to the Released Claims.
      Specifically and without limitation, Employee understands and agrees that he
      or
      she is waiving and forever discharging the ClearOne Released Parties from any
      and all claims, causes of action or complaints he or she may have or have ever
      had, which have or may have arisen prior to the execution of this
      Agreement.

    


    6. Employee
      represents and warrants that he or she is the sole owner of the Released Claims,
      that the Released Claims have not been assigned, transferred, or disposed of
      in
      fact, by operation of law or in any manner whatsoever, and that he or she has
      the full right and power to grant, execute and deliver the full and complete
      releases, undertakings, and agreements herein contained.

    


    7. Employee
      agrees that the existence and terms of this Agreement shall be and remain
      confidential. Employee acknowledges that this confidentiality provision is
      an
      essential element of the consideration he provides to ClearOne for entering
      into
      this Agreement. Therefore, Employee agrees not to discuss or describe any
      information concerning ClearOne, the circumstances of the ending of Employee's
      employment with ClearOne or the existence of the terms of this Agreement to
      anyone, except as required by law or permitted herein. 

    


    8. Employee
      reaffirms and agrees to observe and abide by the terms of the Confidentiality
      and Invention Assignment Agreement (“Confidentiality Agreement”) he or she
      signed with ClearOne. Employee certifies and represents that he or she has
      fully
      complied with all terms of the Confidentiality Agreement to date and has
      returned to ClearOne all records or documents or other property of ClearOne
      within his or her possession. Employee understands that his or her receipt
      of
      the consideration provided under this Agreement is expressly conditioned on
      Employee’s compliance with the obligations in this paragraph.

    


    9. Employee
      agrees to forfeit all rights and claims to ClearOne stock options granted at
      any
      time prior to June 30, 2004. 

    


    10. Employee
      agrees not to disparage, orally or in writing, ClearOne, its officers,
      employees, management, operations, products, designs, or any other aspects
      of
      ClearOne’s affairs to any third person or entity. 

    


    11. Employee
      agrees that for one year following Employee’s separation from employment with
      ClearOne, Employee shall not, directly or indirectly, in any capacity (including
      but not limited to, as an individual, a sole proprietor, a member of a
      partnership, a stockholder, investor, officer, or director of a corporation,
      an
      employee, agent, associate, or consultant of any person, firm or corporation
      or
      other entity) hire any person from, attempt to hire any person from, or solicit,
      induce, persuade, or otherwise cause any person to leave his or her employment
      with ClearOne. 

    



    
      
        
          


           

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    12. 
      Employee
      agrees that for one year following Employee’s separation from employment with
      ClearOne, Employee shall not, directly or indirectly, in any capacity, solicit
      the business of any customer of ClearOne except on behalf of ClearOne, or
      attempt to induce any customer of ClearOne to cease or reduce its business
      with
      ClearOne; provided that following Employee’s separation from employment with
      Company he or she may solicit a customer of ClearOne to purchase goods or
      services that do not compete directly or indirectly with those then offered
      by
      ClearOne. 

    


    13. Any
      breach of Employee’s obligations under this Agreement shall, in addition to all
      other remedies available to ClearOne, result in the immediate release of
      ClearOne from any obligations it has to provide further payments under this
      Agreement. In addition, ClearOne may pursue such additional legal or equitable
      remedies as may be available to it.

    


    14. This
      Agreement does not constitute and shall not be construed as an admission by
      ClearOne of any breach of any alleged agreements or duties, or of any wrongdoing
      toward Employee or any other person, including any alleged breach of contract
      or
      violation of any federal, state, or local law, regulation, or ordinance.
      ClearOne specifically disclaims any liability to Employee for wrongdoing of
      any
      kind. 

    


    15. The
      Parties agree that this Agreement may be used in evidence in a subsequent
      proceeding in which any of the Parties alleges a breach of this
      Agreement.

    


    16. The
      parties shall attempt in good faith to resolve any dispute arising out of or
      relating to this Agreement by negotiation. The parties recognize that
      irreparable injury to ClearOne will result from a material breach of this
      Agreement, and that monetary damages will be inadequate to rectify such injury.
      Accordingly, notwithstanding anything to the contrary, ClearOne shall be
      entitled to one or more preliminary or permanent orders: (i) restraining or
      enjoining any act which would constitute a material breach of this Agreement,
      and (ii) compelling the performance of any obligation which, if not performed,
      would constitute a material breach of this Agreement, and to attorney’s fees in
      connection with any such action

    


    17. Employee
      affirms he or she is not relying on any representations or statements made
      by
      the ClearOne Released Parties which are not specifically included in this
      Agreement. Employee acknowledges he or she has been informed in writing by
      this
      Agreement that he or she has the right to consult with legal counsel regarding
      this release and confirms Employee has consulted with counsel to the extent
      desired concerning the meaning and consequences of this Agreement. 

    


    18. This
      Agreement constitutes the entire agreement between the Parties with relation
      to
      the subject matter hereof. Any prior negotiations or correspondence relating
      to
      the subject matter hereof shall be deemed to have merged into this Agreement
      and
      to the extent inconsistent herewith shall be deemed to be of no force or
      effect.

    


    19. This
      Agreement may be executed in any number of counterparts, each of which when
      executed and delivered shall be an original, but all of such counterparts shall
      constitute one and the same instrument.


    
      
        
          


           

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    20. This
      Agreement shall be interpreted and enforced in accordance with the laws of
      the
      State of Utah, and/or when applicable, of the United States. By entering into
      this Agreement, the Parties submit themselves and their principals individually
      to personal jurisdiction in the courts in the State of Utah and agree that
      Utah
      is the only appropriate venue for any action brought to interpret or enforce
      any
      provision of this Agreement, or which may otherwise arise under or relate to
      the
      subject matter of this Agreement.

    


    21. The
      provisions of this Agreement are severable, and if any part of it is found
      to be
      unenforceable, the other parts and/or paragraphs shall remain fully valid and
      enforceable. Should any provisions of this Agreement be determined by any court
      or administrative body to be invalid, the validity of the remaining provisions
      is not affected thereby and the invalidated part shall be deemed not a part
      of
      this Agreement. Any court or administrative body shall construe and interpret
      this Agreement as enforceable to the full extent available under applicable
      law.
      This Agreement shall survive the termination of any arrangements contained
      in
      it.

    


    22. Employee
      acknowledges and understands this is a legal contract and that he or she signs
      this Agreement knowingly, freely and voluntarily and has not been threatened,
      coerced or intimidated into making the same. Employee acknowledges that he
      or
      she has had ample and reasonable time to consider this Agreement and the effects
      and import of it and that he or she has fully dwelt on it in his or her mind
      and
      has had such counsel and advice, legal or otherwise, as Employee desires in
      order to make this Agreement. EMPLOYEE, BY SIGNING THIS AGREEMENT, ACKNOWLEDGES
      IT CONTAINS A RELEASE OF KNOWN AND UNKNOWN CLAIMS. Employee has read and fully
      considered this Agreement and understands and desires to enter into it. The
      terms of this agreement were derived through mutual compromise and are fully
      understood. Employee acknowledges that he or she has been offered at least
      twenty one (21) days to consider the impact of this Agreement and its release
      of
      his or her rights to bring suit against the ClearOne Released Parties and after
      due consideration has decided to enter into this Agreement at this time.
      Employee further understands that he or she may revoke this Agreement for a
      period of up to seven (7) days following signature and execution of the same.
      This Agreement shall not become effective or enforceable until the revocation
      period has expired. Any revocation within this period must be signed and
      submitted in writing to the undersigned representative of ClearOne and must
      state, "I hereby revoke my acceptance of the Agreement." Employee understands
      that if he or she revokes this Agreement, he or she is not entitled to receive
      the consideration provided by this Agreement. 

    


    


    


    


    


    


    


    


    


    


    



    
      
        
          


           

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    Employee
      has until Thursday, August 5, 2004 to accept terms and conditions by signing
      below. If Employee does not accept such terms and conditions by such date,
      this
      offer shall expire at that
      time.

    


    


    IN
      WITNESS WHEREOF, the Parties have executed this Agreement as of the date first
      set forth above.

    


    EMPLOYEE

     

     

    /s/
      Angelina
      Beitia                                            
   

    


    CLEARONE
      COMMUNICATIONS CORP.

    


    


                                   /s/
      DeLonie N.
      Call                                              



    DeLonie
      N. Call

    Vice
      President, Human Resources