LQID Liquid Avatar Technologies Inc.

LQ Corporation Announces Settlement of Litigation LQ Corporation, Inc. (OTC Bulletin Board: LQID), fka Liquid Audio, Inc., Announced Today the Settlement of Litigation NEW YORK, Feb. 24 /PRNewswire-FirstCall/ -- On Friday, February 20, 2004 an Orderwas entered in the United States District Court for the Western District of Pennsylvania ending a lawsuit by SightSound, Inc. (the "SightSound Litigation") against CDNow Online, Inc. ("CDNow"), a former customer of LQ Corporation, Inc.'s ("LQ") predecessor, Liquid Audio, Inc. and predecessor of BeMusic, Inc. ("BeMusic"). The SightSound Litigation alleged that CDNow infringed one of more of three U.S. Patents. As a result of the entry of the Order and pursuant to a separate agreement between SightSound and BeMusic executed on February 12, 2004, SightSound dismissed the SightSound Litigation and released all claims against LQ. Entry of the Order also made effective a settlement Agreement and Mutual Release executed on February 13, 2004 by LQ and BeMusic (the "settlement Agreement"). The Settlement Agreement finally resolves a claim by BeMusic seeking indemnification from LQ relating to the SightSound Litigation and terminates an agreement entered by LQ and BeMusic on January 24, 2003 which required LQ to maintain $2.0 Million in available cash on hand to pay up to 50% of reasonable attorney fees and costs in connection with the defense of the SightSound Litigation and $5.0 million in available cash on hand to apply towards the satisfaction ofany adverse judgment in respect of which of it was determined that LQ would be obligated to indemnify BeMusic. Under the terms of the Settlement Agreement, LQ paid $1,452,000 to BeMusic and approximately $314,000 in legal fees relating to the SightSound Litigation. These payments were in addition to $335,827 previously paid by LQ pursuant to the January 24, 2003 agreement in consideration of attorney fees relating to the SightSound Litigation. As a result of the Settlement Agreement, LQ has no further obligation to maintain available cash on hand in connection with the January 24, 2003 agreement or the SightSound Litigation. Neither party to the Settlement Agreement admitted any wrongdoing or any indemnification obligation in connection with SightSound Litigation. Cautionary Language Statements made in this release, other than those concerning historical information, should be considered forward-looking and subject to various risks and uncertainties. Such forward looking statements are made based on management's belief as well as assumptions made by, and information currently available to, management pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Liquid Audio, Inc.'s actual results may differ materially from the results anticipated in these forward- looking statements as result of variety of factors, including those identified in Liquid Audio Inc.'s annual report on Form 10-K and its quarterly reports on Form 10-Q filed with the Securities and Exchange Commission. DATASOURCE: LQ Corporation, Inc. CONTACT: Melvyn Brunt of LQ Corporation, Inc., +1-212-974-5730

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