**Exhibit10.05**

 

SETTLEMENT AGREEMENT ANDRELEASE

 

This Settlement Agreement and Release (“Agreement”) is entered into as ofSeptember    , 2002, by and between Fidelity Leasing, a divisionof EAB Leasing Corp., successor-in-interest to Herman Miller Capital  (“Fidelity”), ZAMBA Corporation d/b/aZamba Solutions (“Zamba”), and Michael H. Carrel (“Guarantor”).

 

FACTS

 

A.            Onor about November 6, 2000, January 12, 2001, March 19, 2001, May 22, 2001, May23, 2001, and July 27, 2001, Fidelity and Zamba entered into certain EquipmentLease Agreements (the “Leases”) for certain office furniture identifiedin documents entitled “Schedule A” to such Leases and attached to each Lease(the “Equipment”).

 

B.            Fidelity alleges that the January 12, 2001, Leasehas been guaranteed by Michael H. Carrel, an officer of Zamba.

 

C.            Fidelity and Zamba have agreed to terminate the Leases,and any amendments or modifications thereto, on the terms and conditions setforth below.

 

Now, therefore, for good andvaluable consideration, the receipt and sufficiency of which is herebyacknowledged, the parties hereto agree as follows:

 

1.             Terminationof Leases.  Provided that Zambaperforms all of its obligations under Section 2 of this Agreement, the Leasesshall be deemed terminated as of the first event occurring in Section 3 of thisLeases (the “Termination Date”).

 

2.             TerminationPayment.  As a condition toFidelity’s obligations under this Agreement, and in consideration forFidelity’s agreement to terminate the Leases, Zamba shall pay to Fidelity thesum of One Hundred Twenty Thousand Dollars ($120,000) (the “Termination Payment”).  The Termination Payment shall be payable ineight increments of Fifteen Thousand Dollars ($15,000), with the first paymentto be made on October 1, 2002, and the seven subsequent payments to be made onthe fifteenth of each respective month, commencing on October 15, 2002, andending on April 15, 2003 (a “Payment”). Each Payment shallbe delivered to Fidelity’s attorney in the form of a check made payable to “TheLaw Office of Josh Jacobson P.A. IOLTA Account f/b/o Fidelity Leasing, adivision of EAB Leasing Corp.” and mailed to the following address: The LawOffice Of Josh Jacobson, P.A., 120 South Sixth Street, Suite 1515, Minneapolis,MN 55402.  Additionally, on orbefore October 31, 2002, Zamba shall make available for collection by Fidelitythe Equipment in the types and quantities listed on Exhibit 1, which isattached to this Agreement and incorporated herein by this reference.  At no additional cost to Zamba, Zamba shallreasonably cooperate with Fidelity to effectuate Fidelity’s collection of theEquipment.  Fidelity shall provide Zambawith at least one week advance notice of the date(s) and approximate time(s) itintends to collect the equipment.

 

3.             TerminationDate.  Subject to prior execution ofthis Agreement by Fidelity and Zamba, the Leases shall terminate upon receiptby Fidelity of the eighth and final Payment.

 

4.             ZambaRelease.  As of the TerminationDate, Zamba, for itself and for its affiliatedcorporations and partnerships, officers, directors, shareholders, agents,representatives, employees, attorneys, shareholders, successors in interest,personal representatives, heirs,assigns and each of them, absolutely, fully and forever releases and dischargesFidelity and Fidelity’s respective members, officers, partners, agents,representatives, employees, servants, attorneys, successors in interest,assigns and each of them, whether past, present or future, of and from any andall claims, demands, liabilities, obligations, losses, controversies, costs,expenses, attorneys’ fees and damages of every kind, nature, character ordescription whatsoever, whether in law or in equity, and whether known orunknown, suspected or unsuspected, arising out of, connected with, or in anyway related to the Leases or the Equipment. Zamba acknowledges and agrees that the release set forth above appliesto all claims relating to the Leases or the Equipment whether those claims areknown or unknown, foreseen or unforeseen.

 

5.             FidelityRelease.  Subject to the performanceby Zamba of all of its obligations under this Agreement, as of the TerminationDate, Fidelity, for itself and for itsaffiliated corporations and partnerships, members, officers, agents, representatives,employees, attorneys, shareholders, successors in interest, personalrepresentatives, heirs, assigns and each of them, absolutely, fully and foreverreleases and discharges Zamba and its officers, directors,

 
| Initialed by: |
|---------------|
| /s/ DHE       | Fidelity |
| /s/ IN        | Zamba |
| /s/ MHC       | Guarantor |

 

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shareholders, agents, representatives, employees,servants, attorneys, successors in interest, assigns and each of them, whetherpast, present or future, of and from any and all claims, demands, liabilities,obligations, losses, controversies, costs, expenses, attorneys’ fees anddamages of every kind, nature, character or description whatsoever, whether inlaw or in equity, and whether known or unknown, suspected or unsuspected,arising out of, connected with, or in any way related to the Leases or theEquipment.  Fidelity acknowledges andagrees that the release set forth above applies to all claims relating to theLeases or the Equipment whether those claims are known or unknown, foreseen orunforeseen.

 

6.             Confession of Judgment.  Zamba shall execute the attached Confession of Judgment (the “Confessionof Judgment”) in the amount of the Termination Payment, reduced by theaggregate amount of each Payment received by Fidelity prior to its submissionof the Confession of Judgment.  Upon adefault in payment by Zamba under this Agreement that is not remedied withinfifteen (15) business days of written notice of such default from Fidelity toZamba, Fidelity may submit the Confession of Judgment to the court identifiedin the Confession of Judgment.

 

7.             Fidelity Release of Guarantor.  Subject to the receipt by Fidelity of thefourth Payment, which is  to be made onDecember 15, 2002, Fidelity, for itself andfor its affiliated corporations and partnerships, members, officers, agents,representatives, employees, attorneys, shareholders, successors in interest,personal representatives, heirs, assigns and each of them, absolutely, fullyand forever releases and discharges the Guarantor of and from any and allclaims, demands, liabilities, obligations, losses, controversies, costs,expenses, attorneys’ fees and damages of every kind, nature, character ordescription whatsoever, whether in law or in equity, and whether known orunknown, suspected or unsuspected, arising out of, connected with, or in anyway related to the Leases or the Equipment. Fidelity acknowledges and agreesthat the release set forth above applies to all claims relating to the Leasesor the Equipment whether those claims are known or unknown, foreseen orunforeseen.

 

8.             Release by Guarantor.  As of the date of Fidelity’s Release of Guarantor, Guarantor, for itself and for its affiliated corporationsand partnerships, officers, directors, shareholders, agents, representatives,employees, attorneys, shareholders, successors in interest, personalrepresentatives, heirs, assigns and each of them, absolutely, fully and foreverreleases and discharges Fidelity and Fidelity’s respective members, officers,partners, agents, representatives, employees, servants, attorneys, successorsin interest, assigns and each of them, whether past, present or future, of andfrom any and all claims, demands, liabilities, obligations, losses,controversies, costs, expenses, attorneys’ fees and damages of every kind,nature, character or description whatsoever, whether in law or in equity, andwhether known or unknown, suspected or unsuspected, arising out of, connectedwith, or in any way related to the Leases or the Equipment.  Guarantor acknowledges and agrees that therelease set forth above applies to all claims relating to the Leases or theEquipment whether those claims are known or unknown, foreseen or unforeseen.

 

9.             Notices.  Any written notices to be given hereunder byeither party shall be deemed effective upon personal delivery or within threebusiness days of mailing the notice to the party to be served at the addressbelow.

 
| Fidelity:                              |   | Zamba:                |   |
|----------------------------------------|--------|-----------------------|--------|
| The Law  Office of Josh Jacobson, P.A. |   | Zamba Corporation     |   |
| 120 South Sixth Street                 |   | 3033 Excelsior Blvd.  |   |
| Suite 1515                             |   | Suite 200             |   |
| Minneapolis, MN 55402                  |   | Minneapolis, MN 55416 |   |
| Fax: 612-339-5123                      |   | Fax: 952-832-9383     |   |
| Attn: Josh Jacobson                    |   | Attn: General Counsel |   |

 
| Guarantor:            |   |   |   |
|-----------------------|--------|--------|--------|
| Michael H. Carrel     |   |   |   |
| Zamba Corporation     |   |   |   |
| 3033 Excelsior Blvd.  |   |   |   |
| Suite 200             |   |   |   |
| Minneapolis, MN 55416 |   |   |   |
| Fax: 952-832-9383     |   |   |   |

 

10.           Entire Agreement. This Agreement contains the entire agreementbetween the parties and may only be modified or amended by a writing signed byall parties.

 

11.           Governing Law.  This Agreement shall be governed in allrespects, including validity, interpretation and effect, by the laws of theState of Minnesota, except for its choice of laws principles.  Any action regarding or relating to this Agreementshall be venued in a state or federal court located in Hennepin County in theState of

 
| Initialed by: |
|---------------|
| /s/ DHE       | Fidelity |
| /s/ IN        | Zamba |
| /s/ MHC       | Guarantor |

 

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Minnesota.

 

12.           No Assignment of Claims. The parties hereto represent and warrant that theyhave not transferred or otherwise assigned, either by contract or operation oflaw, any of the claims released under this Agreement.

 

13.           No Reliance on Representations.  Each party to this Agreement represents andacknowledges that in executing this Agreement that party does not rely and hasnot relied upon any representation or statement made by the other party or byany of such other party’s agents, attorneys, or representatives with regard tothe subject matter, basis or effect of this Agreement or otherwise, other thanthose representations and statements specifically stated in this writtenAgreement.

 

14.           Counterparts and Facsimiles.This Agreement may be executed in one ormore counterparts, which shall be deemed effective upon full execution of thisAgreement by all parties.  Eachcounterpart shall be deemed an original, but all of which together shallconstitute one and the same instrument and agreement.  In addition, a copy of this Agreement executed by a party heretoand telecopied to the other party shall be deemed to constitute delivery of anoriginally executed copy of this Agreement to the other party.  A facsimile signature shall be enforceableto the same extent as an original signature.

 

15.           Authority.  Theparties executing this Agreement represent that they each have authority toenter into this Agreement, and that this Agreement is binding on such party andenforceable in accordance with its terms. The persons executing this Agreement on behalf of the parties to thisAgreement represent and warrant that they individually have authority to enterinto this Agreement on behalf of such parties.

 

IN WITNESS WHEREOF, the parties hereby execute thisAgreement.

 
| FIDELITY               | ZAMBA                  |
|------------------------|------------------------|
|                   |                   |
| Fidelity Leasing       | ZAMBA Corporation      |
|                   |                   |
| By:                    | /s/ David H. English   |   | By: | /s/ Ian Nemerov |   |
|                   |                   |
| Name: David H. English | Name: Ian Nemerov      |
|                   |                   |
| Title: Sr. VP          | Title: General Counsel |
|                   |                   |
| Date: 9/24/02          | Date: 9-27-02          |
|                   |                   |
|                   | GUARANTOR              |
|                   |                   |
|                   | Michael H. Carrel      |
|                   |                   |
|                   | By:                    | /s/ Michael H. Carrel |   |
|                   |                   |
|                   | Date: 9-27-02          |
|                        |                        |  |  |  |  |  |

 
| Initialed by: |
|---------------|
| /s/ DHE       | Fidelity |
| /s/ IN        | Zamba |
| /s/ MHC       | Guarantor |

 

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**Exhibit1**

 
| **Quantity** |   | **Type**                               |   | **Location**  |                            |   |
|--------------|--------|----------------------------------------|--------|---------------|---------------------------------|--------|
| 16           |   | Tall  Poles                            |   | Barrett       |                            |   |
| 30           |   | Short  Poles                           |   | Barrett       |                            |   |
| 69           |   | 48”  Arms                         |   | Barrett       | (17  at FSI)                    |   |
| 21           |   | 60”  Arms                         |   | Barrett       |                            |   |
| 42           |   | Boundary  Screens - 60” W         |   | Barrett       |                            |   |
| 114          |   | Boundary  Screens - 48”           |   | Barrett       |                            |   |
| 22           |   | Boundary  Screens - 36”           |   | Barrett       |                            |   |
| 21           |   | Display  Screens - 60”W           |   | Barrett       |                            |   |
| 19           |   | Display  Screens                       |   | Barrett       |                            |   |
| 50           |   | Boomerang                              |   | Barrett       |                            |   |
| 50           |   | Input  Table                           |   | Barrett       |                            |   |
| 24           |   | Pole  Shelf                            |   | Barrett       |                            |   |
| 50           |   | Tool  Rail                             |   | Barrett       |                            |   |
| 50           |   | Vertical  Tray                         |   | Barrett       |                            |   |
| 50           |   | Diagonal  Tray                         |   | Barrett       |                            |   |
| 26           |   | Horizontal  Tray                       |   | Barrett       |                            |   |
| 21           |   | Bookshelf  & Holders               |   | Barrett       |                            |   |
| 5            |   | Task  Chair - purple                   |   | Barrett       |                            |   |
| 16           |   | Kiva  Book Shelf w/oversail            |   | Barrett       |                            |   |
| 37           |   | Kiva  Pebble table                     |   | Barrett  (24) | Denver  (2)  Campbell (11) |   |
| 4            |   | Martin  Brattrud Lounge chair - purple |   | Barrett       |                            |   |
| 3            |   | Martin  Brattrud Lounge chair - green  |   | Barrett       |                            |   |
| 22           |   | Mobile  ped - Meridian                 |   | Barrett  (8)  | Denver  (2)  Campbell (12) |   |
| 4            |   | Whiteboard  - pole attached            |   | Barrett       |                            |   |
| 3            |   | Whiteboard  - Kiva mobile              |   | Barrett       |                            |   |
| 49           |   | Lockers                                |   | Barrett       |                            |   |
| 5            |   | Canopy                                 |   | Barrett       |                            |   |
| 3            |   | Ladder  shelf                          |   | Minneapolis   |                            |   |
| 3            |   | Round  Table -Bar height -Falcon       |   | Barrett       |                            |   |
| 3            |   | Versteel  Oval Table                   |   | Barrett       |                            |   |
| 4            |   | Versteel  1/4 Round table              |   | Barrett       |                            |   |
| 6            |   | Versteel  Rectangle Table              |   | Barrett       |                            |   |
| 52           |   | Keilhauer  Side Chair                  |   | Barrett  (46) | Denver  (6)                     |   |
| 21           |   | Monitor  pods                          |   | Barrett       |                            |   |
| 22           |   | Kiva  Wing Table                       |   | Barrett  (21) | Denver  (1)                     |   |
| 8            |   | Kiva  Metal Bookshelf - Mobile         |   | Barrett  (2)  | Campbell  (6)                   |   |
| 1            |   | Geiger  Brisk Reception Desk           |   | FSI           |                            |   |
| 1            |   | PeterPepper  Drum Table                |   | FSI           |                            |   |
| 1            |   | Geiger  Triuna Gallery Reception Desk  |   | Campbell      |                            |   |
| 1            |   | Geiger  Round table                    |   | Campbell      |                            |   |
| 4            |   | Bernhardt  Sinclaire Lounge Chair      |   | Campbell      |                            |   |

 
| Initialed by: |
|---------------|
| /s/ DHE       | Fidelity |
| /s/ IN        | Zamba |
| /s/ MHC       | Guarantor |

 

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**Legend**

Barrett = Edina, MNwarehouse

FSI = Plymouth, MNwarehouse

Denver = 10900 S.Parker Road, Suite 101, Parker, CO 80134-3453 office

Campbell = 655Campbell Technology Parkway, Suite 100, Campbell, CA 95008 office

Minneapolis = 3033Excelsior Blvd., Suite 200, Minneapolis, MN 55416 office

 

 

 
| Initialed by: |
|---------------|
| /s/ DHE       | Fidelity |
| /s/ IN        | Zamba |
| /s/ MHC       | Guarantor |

 

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