EXHIBIT 10.22
SETTLEMENT AND RELEASE
AGREEMENT
This Settlement
and Release Agreement (“Agreement”), effective as of
October 7, 2009, is entered into by and between ClearOne
Communications, Inc. (“ClearOne” or “the
Company”) and Edward D. Bagley (“Bagley”)
(ClearOne and Bagley shall sometimes be hereinafter referred to
collectively as the “Parties”).
WHEREAS, in
February 2004 ClearOne and Bagley jointly filed an action in the
United States District Court for the District of Utah, Central
Division, against National Union Fire Insurance Company of
Pittsburgh, Pennsylvania (“National Union”) and
Lumbermens Mutual Insurance Company (“Lumbermens”),
which had issued directors and officers liability insurance
policies to the Company for the period of October 29, 2002 to
October 29, 2003, alleging that National Union and Lumbermens had
breached their legal obligations under the policies and were
therefore liable to ClearOne and Bagley for compensatory and
punitive damages (the “Insurance Coverage
Litigation”);
WHEREAS, in
connection with the Insurance Coverage Litigation, ClearOne and
Bagley entered into a Joint Prosecution and Defense Agreement in
April 2004, wherein (as amended) ClearOne agreed to pay all
litigation expenses, including attorney’s fees, of counsel
for both the Company and Bagley except for litigation expenses
which were solely related to Bagley’s claims in the Insurance
Coverage Litigation;
WHEREAS, in
February 2005, ClearOne and Bagley entered into a confidential
settlement agreement with Lumbermens, whereby Lumbermens paid a
significant lump-sum cash payment (the “Lumbermens Settlement
Payment”) to ClearOne and Bagley in exchange for ClearOne and
Bagley dismissing and releasing all of their respective claims
agains
