exv10w58



 






Exhibit 10.58



MUTUAL GENERAL RELEASE AND GLOBAL SETTLEMENT AGREEMENT




     This Mutual General Release and Global Settlement Agreement (the “Agreement”) is entered into
between Maxtor Corporation (“Maxtor”) and Quantum Corporation (“Quantum”), collectively referred to
as the Parties, and is effective as of December 23, 2004.



RECITALS




     A. WHEREAS, the Parties entered into an agreement effective as of March 19, 2003 (the
“Standstill Agreement”) which Standstill Agreement was subsequently amended eleven times, the last
of which amendment was effective November 30, 2004;



     B. WHEREAS, Paragraph 11 of the Standstill Agreement contains a global settlement option which
Quantum has elected to exercise subject to certain modifications as set forth in this Agreement;



     NOW, THEREFORE, for good and valuable consideration, the Parties agree as follows:



     1. Quantum hereby exercises its global settlement option under Paragraph 11, subparagraphs
(i)-(v) of the Standstill Agreement, subject to the modifications set forth below.




	 	a.  	The parties waive the requirement that Quantum deliver written notice
to Maxtor as described in paragraph 11 of the Standstill Agreement and agree that
by signing this Agreement, Quantum has effectively exercised the election under
paragraph 11 of the Standstill Agreement.
	 
	 	b.  	Maxtor shall have no obligation to make any filings with the IRS to
obtain any payroll tax refunds in connection with payroll tax payments made by
Quantum with respect to former Quantum employees transferred to Maxtor.
	 
	 	c.  	Quantum shall be entitled to receive any refund, and shall be
responsible for any deficiency, including interest, with respect to the resolution
of the Internal Revenue Service audit of Quantum for the fiscal years ending March
31, 1997 through and including March 31, 1999: provided, however, that if the Form
870 previously signed by Quantum is subsequently rejected by the United States
Government, then Maxtor shall be responsible for negotiating a new agreement (with
the cooperation of Quantum) and Maxtor shall be responsible for any resulting tax
liability pursuant to the terms of the Tax Sharing and Indemnity Agreement among
Quantum, Maxtor and Insula Corporation dated April 2, 2001 (“Tax Sharing
Agreement”) prior to modification by this Agreement.
	 
	 	d.  	Section 1 of the Tax Sharing Agreement shall be terminated in its
entirety.
	 
	 	e.  	Maxtor’s liability under Section 3(a) of the Tax Sharing Agreement from
the date hereof shall not exceed $8,760,000; provided that in all other respects
Section 3(a) shall remain in effect. Sections 3(c) and 3(d) of the Tax Sharing
Agreement shall not be terminated or otherwise affected by this Agreement.
Quantum’s agreement to this limitation of liability under Section 3(a) of the Tax
Sharing Agreement is




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	 	   	conditioned on the following: (i) Maxtor’s acknowledgment hereby that the items
detailed on the spreadsheet attached as Exhibit A are subject to indemnification by
Maxtor; and (ii) Maxtor’s representation hereby that it is not aware of any claims
that it may be obligated to indemnify Quantum for pursuant to Section 3(a) of the
Tax Sharing Agreement, other than the items detailed on the spreadsheet attached as
Exhibit A.
	 
	 	f.  	Maxtor and Quantum will continue to pay one-half (1/2) of the letter of
credit fees as more fully set forth in Paragraph 8 of the Standstill Agreement
until such time as the letter of credit is released.
	 
	 	g.  	Maxtor and Quantum shall jointly control the Quantum Internal Revenue
Service audit for the fiscal years ending March 31, 2000 through and including
March 31, 2002, and shall share equally the costs and fees associated with such
defense. Maxtor’s costs and expenses incurred under this Section 1(g) will not act
to reduce or otherwise affect the liability cap provided in Section 1(e) of this
Agreement. Maxtor intends to use Gray Cary and David Colker to assist with the
defense of this audit, and Quantum consents to such representation.
	 
	 	h.  	Maxtor and Quantum shall negotiate in good faith during the first
quarter of calendar year 2005 a “buy out” by Maxtor of its limited indemnity
obligation set forth in Paragraph 1(e) above.





     2. The Parties hereby settle all “Claims” as defined in the first recital to the Standstill
Agreement.



     3. Each Party agrees not to bring any further claims against the other Party under the
Transitional Services Agreement among Quantum, Maxtor and Insula Corporation dated April 2, 2001,
or under the Closing Implementation Agreement among Quantum, Maxtor and Insula Corporation dated
April 2, 2001, (the foregoing two agreements hereinafter being referred to as the “Agreements
Subject to Mutual Releases”).



     4. Maxtor hereby fully and forever releases and discharges Quantum and each of its agents,
employees and affiliates, from (i) the Claims as defined in the first recital to the Standstill
Agreement and (ii) any and all known, unknown, anticipated or unanticipated, suspected or
unsuspected, fixed, conditional or contingent actions or causes of action at law or in equity,
suits, debts, demands, claims, contracts, covenants, liens, liabilities, losses, costs, expenses or
damages of every kind, nature and description: (a) arising under the Agreements Subject to Mutual
Releases; (b) arising under Section 1 or Section 3(a) of the Tax Sharing Agreement, except claims
brought to enforce the rights and obligations set forth in Paragraphs 1(a) through and including
1(h) above; (c) relating to misallocated, non-transferred, or incorrectly transferred assets or
liabilities, or challenges to any balance sheets (including without limitation claims regarding the
amount of cash transferred) relating to the separation of the HDD and DSS businesses; and (d)
concerning severance, stock options, restricted stock or reimbursement of payables arising in the
ordinary course of business relating to the separation of the HDD and DSS businesses.



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     5. Quantum hereby fully and forever releases and discharges Maxtor and each of its agents,
employees and affiliates, from (i) the Claims as defined in the first recital to the Standstill
Agreement and (ii) any and all known, unknown, anticipated or unanticipated, suspected or
unsuspected, fixed, conditional, or contingent actions or causes of action at law or in equity,
suits, debts, demands, claims, contracts, covenants, liens, liabilities, losses, costs, and
expenses or damages of every kind, nature and description: (a) arising under the Agreements Subject
to Mutual Releases; (b) arising under Section 1 or Section 3(a) of the Tax Sharing Agreement,
except claims brought to enforce the rights and obligations set forth in Paragraphs 1(a) through
and including 1(h) above; (c) relating to misallocated, non-transferred, or incorrectly transferred
assets or liabilities, or challenges to any balance sheets (including without limitation claims
regarding the amount of cash transferred) relating to the separation of the HDD and DSS businesses;
and (d) concerning severance, stock options, restricted stock or reimbursement of payables arising
in the ordinary course of business relating to the separation of the HDD and DSS businesses.



     6. With respect to the covenants contained in Paragraphs 4 and 5 of this Agreement, each of
the Parties hereto expressly understands and agrees that this Agreement fully and finally releases
and forever resolves the matters released and discharged in Paragraphs 4 and 5, including those
which may be unknown, unanticipated and/or unsuspected, and upon the advice of legal counsel, each
hereby expressly waives all benefits under Section 1542 of the California Civil Code as well as
under any other statutes or common law principles of similar effect, to the extent that such
benefits may contravene the provisions of Paragraphs 4 and 5 of this Agreement. Each of the
Parties hereto acknowledges that it has read and understands Section 1542 of the California Civil
Code, which provides as follows:




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.



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     7. This Agreement will be binding upon and will inure to the benefit of the successors,
assignees, and transferees of the Parties. Each Party represents (i) that it has the requisite
corporate power and authority to enter into this Agreement and to consummate the transactions
contemplated hereunder, and (ii) that the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of such Party.



     8. This Agreement is governed by California law. The Parties acknowledge and agree that this
Agreement is a confidential settlement document and is subject to all protections and privileges
applicable to confidential settlement documents under the laws of California, any other state, or
the United States. The terms of this Agreement are confidential and may not be disclosed or
described to anyone other than the Parties or their legal advisors, except as required by law or to
enforce the terms of this Agreement; a Party will be given reasonable prior notice if the other
Party is required to disclose the terms of this Agreement.



     9. This Agreement may be executed into counterparts, each of which shall be deemed to be an
original, but all of which will constitute one and the same Agreement.



     In Witness Whereof, the Parties have executed this Agreement as of the date first
written above.



Quantum Corporation



By: /s/ Shawn D. Hall

Its: Vice President, General Counsel



Maxtor Corporation



By: /s/ William O. Sweeney

Its: Vice President, Acting General Counsel




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