Wood

BACKGROUND

Stratos agreed to help develop products for Ahaza as part of a relationship that eventually soured. Alleging that Ahaza owed it money for work performed, Stratos threatened to sue Ahaza for breach of contract and other causes of action. Instead of heading to court, Stratos and Ahaza in 2001 entered into a Settlement Agreement and Release (“Agreement”). The Agreement provided that Ahaza would pay to Stratos $380,000 immediately, and $35,000 per month for the follow- ing year. Payments were due on the fifteenth day of each month. If Ahaza failed to pay within ten days of receiving notice of payment due, the entire remaining balance would immediately become due. The Agreement also provided that if Ahaza became subject to bankruptcy proceedings, the entire remaining balance would immediately become due, without notice or opportunity to cure.

Both any underlying contract for services and the 2001 Agreement were the first such transactions between Ahaza and Stratos, as far as the record shows. There is no evidence in the record of Ahaza’s and Stratos’s interactions prior to the Agreement.1 It is undisputed, however, that pursuant to the 1 Stratos’s summary judgment motion…