**EXHIBIT 10.17**

 

**SEPARATION AGREEMENT AND RELEASE**

 

This Separation Agreement and Release (“Agreement”) effective as ofSeptember 30, 2004 is made by and between Robert H. Kill (“Kill”) and CipricoInc. (the “Company”).

 

**R E C I T A L S**

 

WHEREAS, Kill was employed by the Company as its Chief ExecutiveOfficer (CEO) and President pursuant to an Employment Agreement dated May 1,2003 (the “Employment Agreement”);

 

WHEREAS, Kill notified the Company of his intention to resign hisposition as CEO and President, effective March 18, 2004.

 

WHEREAS, from March 19, 2004 through the date of Kill’s execution ofthis Agreement, Kill remained employed by the Company.

 

WHEREAS, Kill and the Company wish to enter into this Agreement tomemorialize their mutual agreement regarding the end of his employment withthe  Company.

 

NOW, THEREFORE, in consideration of the premises and the  mutual promises and covenants contained inthis Agreement, the Company and Kill agree:

 

**A G R E E M E N T**

 

1.             **Employment Agreement.**  Pursuant to Paragraph 8.01(a) of Kill’sEmployment Agreement, Kill’s employment pursuant to his Employment Agreementand the Employment Agreement will terminate by mutual agreement effective September30, 2004.  Notwithstanding anythingherein to the contrary, the parties hereby agree that Paragraphs 5, 6, 7 and 9of Kill’s Employment Agreement survive the termination of Kill’s employment andthe termination of the Employment Agreement forever and that Paragraphs 3.03and 3.04 of Kill’s Employment Agreement survive the termination of Kill’semployment and the termination of the Employment Agreement for a period of one(1) year from the effective date of this Agreement.

 

2.             **Separation Payment.**  Specifically in consideration of Kill signingthis Agreement and subject to the limitations, obligations, and otherprovisions contained in this Agreement, the Company shall pay Kill $16,250.00on the first day of each month for twelve (12) calendar months beginningOctober 1, 2004 and ending September 1, 2005, less authorized and requireddeductions and withholdings.

 

3.             **COBRA Premiums.**  Specifically in consideration of Kill signingthis Agreement and subject to the limitations, obligations, and otherprovisions contained in this Agreement, the Company shall pay through September30, 2005, the entire premium for Kill’s health and dental insurance coverageunder the Company’s group health and dental insurance plans.  The Company will discontinue payments underthis Paragraph 3 before September 30, 2005 if, and at such time as, Kill (1) iscovered or eligible to be covered under the health and/or dental insurancepolicy of a new employer, or (2) ceases to participate, for whatever reason, inthe Company’s group insurance plans. Notwithstanding the foregoing, the COBRA period for continuation of hisinsurance coverage under Company’s group plans will begin on October 1, 2004.

 

4.             **Use of Office and Telephone.** So long as Kill serves as the Company’sChairman of the Board, Kill may use, free of charge, office space and thetelephone at the Company’s offices.

 

5.**             Releaseof Claims by Kill.**  Specificallyin consideration of the separation pay and benefits described in this Agreement(Paragraphs 3 and 4), by signing this Agreement, Kill, for himself and anyonewho has or obtains legal rights or claims through him, agrees to the following:

 

a.             Killhereby does release, agree not to sue, and forever discharges the Company (asdefined below) of and from any and all manner of claims, demands, actions,causes of action, administrative claims, liability, damages, claims forpunitive or liquidated damages, claims for attorney’s fees, costs anddisbursements, individual or class action claims, or demands of any kindwhatsoever, Kill has or might have against them or any of them, whether knownor unknown,

 

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in law or equity, contract ortort, arising out of or in connection with Kill’s employment with the Company,or the termination of that employment, and however originating or existing,from the beginning of time through the date of Kill signing this Agreement.

 

b.             Thisrelease includes, without limiting the generality of the foregoing, any claimsKill may have for wages, bonuses, commissions, penalties, compensation,deferred compensation, vacation pay, paid time off, separation pay or benefits,defamation, invasion of privacy, negligence, emotional distress, breach ofcontract, estoppel, improper discharge (based on contract, common law, orstatute, including any federal, state or local statute or ordinance prohibitingdiscrimination or retaliation in employment), violation of the United StatesConstitution, the Minnesota Constitution, the Age Discrimination in EmploymentAct, 29 U.S.C. § 621 etseq., the Minnesota Human Rights Act,Minn. Stat. § 363.01 etseq., Title VII of the Civil Rights Act,42 U.S.C. § 2000e etseq., the Americans with Disabilities Act,42 U.S.C. § 12101 etseq., the Employee Retirement IncomeSecurity Act of 1976, 29 U.S.C. § 1001 etseq., the Family andMedical Leave Act, 29 U.S.C. § 2601 etseq., the WorkerAdjustment and Retraining Notification Act, 29 U.S.C. 210l, etseq.,any claim arising under Minn. Stat. Chapters 177 and 181, Minn. Stat. § 176.82,and any claim for retaliation, harassment or discrimination based on sex, race,color, creed, religion, age, national origin, marital status, sexualorientation, disability, status with regard to public assistance or any otherprotected class, or sexual or other harassment. Kill hereby waives any and all relief not provided for in this Agreement.  By Kill’s signing this Agreement, Kill agreesthat the payments and benefits provided to Kill under this Agreement fullycompensates Kill for and extinguish any and all claims arising out of Kill’semployment, separation from employment or otherwise with the Company.  Kill understands and agrees that, by signingthis Agreement, he waives and releases any past, present, or future claim toemployment with the Company and agrees not to seek employment with the Company.

 

c.             Killaffirms that he has not caused or permitted, and to the full extent permittedby law will not cause or permit to be filed, any charge, complaint, or actionof any nature or type against the Company, including but not limited to anyaction or proceeding raising claims arising in tort or contract, or any claimsarising under federal, state, or local laws, including discriminationlaws.  If Kill files, or has filed on hisbehalf, a charge, complaint, or action, Kill agrees that the payments andbenefits described above in Paragraphs 3, 4 and 5 are in complete satisfaction ofany and all claims in connection with such charge, complaint, or action andKill waives, and agrees not to take, any award of money or other damages fromsuch charge, complaint, or action.  Inthe event there is outstanding a charge, complaint, or action, Kill agrees toseek immediate withdrawal and dismissal with prejudice.  In the event that for any reason said charge,complaint, or action is not withdrawn, Kill agrees not to testify, providedocuments, or otherwise participate, or to permit others to voluntarilyparticipate on Kill’s behalf, in any investigation or litigation arising therefrom or associated therewith and to execute such other papers or documents asthe Company’s counsel determines may be necessary or desirable to have any suchcharge, complaint or action dismissed with prejudice.  Kill and the Company acknowledge and agreethat this Paragraph will not prohibit either party from testifying orresponding pursuant to a court order or a subpoena issued by a governmentagency and which appears valid in its face, or pursue or take any action asotherwise required or permitted by law.

 

d.             Killis not, by signing this Agreement, releasing or waiving (1) any vested interesthe may have in any profit sharing plan or pension plan by virtue of his employmentwith the Company, (2) any rights or claims that are not specifically releasedherein or that may arise after the Agreement is signed, (3) the post-employmentbenefits and payments specifically promised to Kill under this Agreement, or(4) the right to institute legal action for the purpose of enforcing theprovisions of this Agreement.

 

e.             TheCompany, as used in this Agreement, shall mean Ciprico Inc. and its parent,subsidiaries, divisions, affiliated entities, insurers, and its and their presentand former officers, directors, shareholders, trustees, employees, agents,attorneys, representatives and consultants, and the successors and assigns ofeach, whether in their individual or official capacities, and the current andformer trustees or administrators of any pension or other benefit planapplicable to the employees or former employees of Ciprico Inc., in theirofficial and individual capacities.

 

6.             **Notice of Right to Consult Attorney and Twenty-One(21) Day Consideration Period.** By signing this Agreement, Kill acknowledges and agrees that the Companyhas informed him that (1) he has the right to consult with an attorney of hischoice prior to signing this Agreement, and (2) he is entitled to twenty-one(21) days from the receipt of this Agreement to consider whether the terms areacceptable to him.  The Companyencourages Kill to use the full 21-day period to consider this Agreement but hehas the right, if he chooses, to sign this Agreement prior to the expiration ofthe twenty-one (21) day period.

 

7.             **Notification of Rights under the Minnesota HumanRights Act (Minn. Stat. Chapter 363) and the Federal Age Discrimination inEmployment Act (29 U.S.C. § 621 et seq.).** Kill is hereby notified of his right torescind the release of claims contained in Paragraph 6 with regard to claimsarising under the Minnesota Human Rights Act, Minnesota Statutes Chapter 363,within fifteen (15) calendar days of Kill signing this Agreement, and withregard to Kill’s rights arising under the federal Age Discrimination inEmployment Act, 29 U.S.C. § 621 etseq., within seven (7)calendar

 

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days of Kill signing thisAgreement.  The two rescission periodsshall run concurrently.  In order to beeffective, the rescission must (a) be in writing; (b) delivered to ThomasS. Wargolet, Vice President of Finance, Ciprico Inc., 17400 Medina Road, Suite800, Plymouth, MN 55447 by hand or mail within the required period; and (c) ifdelivered by mail, the rescission must be postmarked within the requiredperiod, properly addressed to Thomas S. Wargolet, as set forth above, and sentby certified mail, return receipt requested. This Agreement will be effective upon the expiration of the 15-dayperiod without rescission.  Killunderstands that if he rescinds any part of this Agreement in accordance withthis Paragraph 7, he will not receive the separation pay and other benefitsdescribed in Paragraphs 3 and 4 and he will be obligated to return any suchbenefits and payments if already received.

 

8.             **Remedies.**  If Kill breaches any term of this Agreement,the Company shall be entitled to its available legal and equitable remedies,including but not limited to suspending and recovering any and all payments andbenefits made or to be made under this Agreement.  If the Company seeks and/or obtains relieffrom an alleged breach of this Agreement, all of the provisions of thisAgreement shall remain in full force and effect.

 

9.             **Non-Admission.**  It is expressly understood that thisAgreement does not constitute, nor shall it be construed as, an admission bythe Company of any liability or unlawful conduct whatsoever.  The Company specifically denies any liabilityor unlawful conduct.

 

10.           **Successors and Assigns.**  This Agreement is personal to Kill and maynot be assigned by Kill without the written agreement of the Company.  The rights and obligations of this Agreementshall inure to the successors and assigns of the Company.

 

11.           **Enforceability.** If a court finds any term of this Agreement tobe invalid, unenforceable, or void, the parties agree that the court shallmodify such term to make it enforceable to the maximum extent possible.  If the term cannot be modified, the partiesagree that the term shall be severed and all other terms of this Agreementshall remain in effect.

 

12.           **Entire Agreement.**  Except as noted with regard to the survivingprovisions of Kill’s Employment Agreement, this Agreement states the entireAgreement of the parties with respect to the subject matter hereof.  No modification, release, discharge or waiverof any provision of this Agreement shall by of any force or effect unless madein writing and signed by the parties hereto. The parties acknowledge that they have not relied on any representationsor statements, whether oral or written, other than the express statements ofthis Agreement, in signing this Agreement.

 

13.           **Law Governing.** This Agreement shall be governed and construedin accordance with the laws of the State of Minnesota.

 

14.           **Claims Involving the Company.**  At the Company’s request, Kill will cooperatewith the Company in any future claims or lawsuits involving the Company, whereKill has knowledge of the underlying facts. In addition, Kill will not voluntarily aid, assist, or cooperate withany claimants or plaintiffs or their attorneys or agents in any claims orlawsuits commenced in the future against the Company; provided, however, thatnothing in this Agreement will be construed to prevent Kill from testifying atan administrative hearing, a deposition, or in court in response to a lawfulsubpoena or as otherwise required by law, in any litigation or proceedinginvolving the Company.

 

15.           **Acknowledgement of Reading and Understanding;Consultation with Counsel.** Kill, by signing this Agreement, acknowledges and agrees that Kill hascarefully read and understood all provisions of this Agreement, and that Killhas entered into this Agreement knowingly and voluntarily.  Kill further acknowledges that the Companyhas advised Kill to consult with counsel prior to signing this Agreement, andKill acknowledges that Kill has consulted with or had the opportunity toconsult with legal counsel.

 

IN WITNESS HEREOF, the parties have executed this Agreement in themanner appropriate for each on the dates written below.

 

 
|   | **CIPRICO  INC.**        |                             |
|--------|--------------------------|----------------------------------|
|   |                     |                             |
|   | By:                      | /s/   James  W. Hansen |   |   |
|   |                     | Its:                             | Chief  Executive Officer |   |   |
|   |                     | Dated:                           | 09/30/04 |   |   |
|   |                     |                             |
|   |                     |                             |
|   |  /s/ Robert H. Kill |                             |   |
|   | Robert H.  Kill          |                             |
|   | Dated:                   | 09/30/04                         |   |   |
|        |                          |                                  |  |  |  |  |  |  |  |  |  |

 

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