THIS MUTUAL
RELEASE (“Agreement”) is made and entered into as of
this 1 st day of December, 2006, by and between Alliance
Semiconductor Corporation, a Delaware corporation
(“ALSC”), for itself and its capacity as sole limited
partner of Alliance Ventures I, L.P., Alliance Ventures II, L.P.,
Alliance Ventures III, L.P., Alliance Ventures IV, L.P. and
Alliance Ventures V, L.P. (collectively the
“Partnerships”) each of the Partnerships, and ALSC
Venture Management, LLC, a California limited liability company
(“ALSC Venture”) on one hand, and Alliance Venture
Management, LLC, a California limited liability company
(“AVM”) for itself and in its capacity as the former
sole general partner and special limited partner of each of the
Partnerships, on the other hand.
A. On May 3, 2006, Alliance Semiconductor Corporation
removed Alliance Venture Management, LLC as general partner and
named ALSC Venture Management as a new general partner. Alliance
Venture Management LLC now holds a limited partner interest in each
partnership pursuant to the provisions of California law and will
retain its capital account as computed through May 3, 2006 but
will not accrue further increases, or decreases for loss
allocations, in its capital account.
B. Pursuant to a Memorandum of Understanding dated as of
May 17, 2006 (“MOU”) the parties have agreed that
the agreement of limited partnership for each of the Partnerships
shall be amended to remove from each such partnership agreement the
provisions for allocating 15% of net profits from portfolio
investments to the general partner and to remove the existing
provisions in paragraph 4.2 regarding payment of a management fee,
and that there will be no further payments of compensation to AVM
for past or future services as general partner of the
Partnerships.
C. The parties have agreed that Alliance Venture Management,
LLC will sell its partnership interests to ALSC for $400,000 (from
all Partnerships in the aggregate), and for the allocation to ALSC
Venture of 2% (two percent) of the gross sales proceeds from the
investments in any partnership’s portfolio, including
proceeds from a liquidity event such as an IPO or a sale of the
portfolio company (which payments may be made in kind at the
applicable Partnership’s option).
D. The parties have agreed that V.R. Ranganath will be
employed or will consult with ALSC Venture for compensation of
$300,000 per year plus payment of reasonable and defined
expenses.
E. AVM, ALSC, ALSC Venture and each of the Partnerships have
agreed to enter into a complete release of all claims, known and
unknown, with respect to rights and claims concerning the
Partnerships, except for obligations created by the MOU as
described in the preceding recitals (the “MOU
Agreements”), and provided that the indemnification
provisions contained in section 5.7 of each of the partnership
agreements shall survive.
NOW
THEREFORE, for good and valuable consideration (including the
execution and delivery of the releases set forth in this
Agreement), the receipt and sufficiency of which is hereby
acknowledged, ALSC, the Partnerships and AVM hereby agree as
follows:
(a) ALSC, ALSC Venture and each of the Partnerships hereby
releases and forever discharges AVM and all of its respective
successors, assigns, managers, officers, agents, employees and
members, and each of them (collectively, the “AVM Released
Parties”), of and from any and all claims, damages, demands,
debts, liabilities, losses, obligations, suits, actions and causes
of action, of every kind and character whatsoever, at law or in
equity, whether known or unknown, which ALSC or any of the
Partnership ever had, now has or hereafter may have against any of
the AVM Released Parties, arising out of or in any way relating to
the Partnerships, all activities of the Partnership and the acts or
omissions of AVM in connection with the Partnerships since the
beginning of time through the date of this Agreement (the
“Released Matters”).
(b) AVM hereby releases and forever discharges ALSC, ALSC
Venture, each of the
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