Exhibit 10.1

 

EXECUTION COPY

 

SETTLEMENT AGREEMENT

 

 

This SETTLEMENT AGREEMENT is made and entered into as of April 22, 2016 (the
“Agreement”) by and among Guidance Software, Inc., a Delaware corporation (the
“Company”), and each of the parties listed on Exhibit A hereto (each, an
“Investor” and collectively, the “Investors”).  The Company and the Investors
are referred to herein as the “Parties.”

 

WHEREAS, the Investors beneficially own the number of shares of the Company’s
common stock, par value $0.001 per share (the “Common Stock”) listed on
Exhibit A hereto;

 

WHEREAS, on March 30, 2016, the Company filed a definitive proxy statement with
the Securities and Exchange Commission (the “SEC”) nominating and recommending
for election six director candidates (the “Company Proxy Statement”) for
election to the Company’s Board of Directors (the “Board”) at the Company’s 2016
annual meeting of stockholders (including any adjournment thereof, the “2016
Annual Meeting”); and

 

WHEREAS, on March 30, 2016, Shawn H. McCreight, John P. Colbert, Jonathan R.
Mather, Michael J. McConnell and Roberto Medrano (the “Participants”) filed a
definitive proxy statement with the SEC nominating and recommending for election
five director candidates (the “McCreight Proxy Statement”) for election to the
Board at the 2016 Annual Meeting.

 

WHEREAS, the Company and the Investors have reached an agreement with respect to
certain matters related to the 2016 Annual Meeting, including the Company Proxy
Statement and the McCreight Proxy Statement and certain other matters, as
provided in this Agreement.

 

NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereto
hereby agree as follows:

 

Section 1.        Settlement Covenants.

 

(a)        Resignation of Directors.  The Investors and Company hereby
acknowledge and agree Christopher Poole and Shawn McCreight will resign,
effective immediately, from the Board.

 

(b)        Election of New Directors.  The Investors and the Company hereby
acknowledge and agree that, immediately following the events described in
Section 1(a) above, John P. Colbert and Michael J. McConnell (such nominees or
any replacement nominees nominated by the Investors pursuant to this Agreement,
the “Investor Nominees”) will (i) promptly submit director and officer
questionnaires to the Nominating and Governance Committee of the Board (the
“Nominating Committee”), the form of which is attached hereto as Exhibit B; the
Nominating Committee will promptly review such questionnaires; promptly
following such review, the Nominating Committee will nominate the Investor
Nominees to serve as members of the Board; and promptly following such
nomination, the Board will elect the

 

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Investor Nominees to the Board seats vacated pursuant to Section 1(a) above to
serve as members of the Board and (ii) elect one of the Investor Nominees to
serve on each committee of the Board existing on the date hereof or formed
following the date hereof but before the 2018 Annual Meeting; provided, however,
that no nomination or election of a particular Investor Nominee shall be
required if the Board reasonably determines in good faith, after consultation
with outside legal counsel, that such Investor Nominee would not qualify as
“independent” under applicable NASDAQ rules or Rule 10A-3(b) of the Exchange
Act, has been involved in any of the events enumerated in Items 2(d) or (e) of
Schedule 13D under the Exchange Act or Item 401(f) of Regulation S-K under the
Exchange Act or is subject to any order, decree or judgment of any governmental
authority prohibiting service as a director of any public company, in which case
the Investors shall withdraw the designation of such Investor Nominee and shall
designate another individual as an Investor Nominee, which replacement will also
be subject to the requirements of this Section 1(b).  The Investors will take
all necessary action to cause any Investor Nominee to consent to such reference
and background checks and to provide such information (including information
necessary to determine such Investor Nominee’s independence status as well as
information necessary to determine any disclosure obligations of the Company) as
the Board or its Nominating and Corporate Governance Committee may reasonably
request in connection with the Company’s disclosure obligations or in connection
with the Company’s legal, regulatory or stock exchange requirements
(collectively, the “Nomination Information”), which requests shall be of the
same type and scope as the Company requests of all other nominees to the Board.

 

(c)        Nomination Rights.  Subject to compliance by the Investor Nominees
with Section 1(b) above, the Company agrees, to the fullest extent permitted by
applicable law (including with respect to any standard of conduct required of
directors under Delaware law), to include in the slate of nominees recommended
by the Board (or the Nominating and Corporate Governance Committee of the Board)
for election at the Company’s 2017 annual meeting of stockholders (including any
adjournment thereof, the “2017 Annual Meeting”), the Investor Nominees, and to
nominate, recommend and use its reasonable best efforts to solicit the vote of
stockholders of the Company to elect to the Board such slate of directors (which
efforts shall, to the fullest extent permitted by applicable law, include the
inclusion in any proxy statement prepared, used, delivered or publicly filed by
the Company to solicit the vote of its stockholders in connection with any such
meeting and the recommendation of the Board that the stockholders of the Company
vote in favor of the slate of directors, including the Investor Nominee(s)).

 

(d)       Vacancies.  Subject to compliance by the Investor Nominees with
Section 1(b) above, prior to the Company’s 2018 annual meeting of stockholders
(including any adjournment thereof, the “2018 Annual Meeting”), the Investors
shall have the exclusive right to designate nominees to fill any and all
vacancies created by reason of the death, resignation or removal (in accordance
with the Company’s certificate of incorporation) of any Investor Nominee;
provided, such replacement nominees may not be Shawn McCreight or any family
member of Shawn McCreight, and, subject to compliance with Section 1(b) above
and the approval of the Board (not to be unreasonably withheld), the Board will
promptly elect such nominees to the Board to serve for the remainder (if any) of
the term of such prior Investor Nominees who vacated such Board seats.

 

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(e)        Proxy Solicitation.  The Investors and the Company hereby acknowledge
and agree that immediately following the execution hereof, the Investors will
stop soliciting proxies for any purpose, including in support for the McCreight
Proxy Statement, and will publicly announce that they are supporting the
election of the directors nominated by the Board.

 

(f)        Litigation.  The Investors and the Company hereby acknowledge and
agree that, pursuant to Section 7 of this Agreement, immediately following the
execution hereof, any active or pending litigation and/or arbitration between
Investors and/or their Affiliates and the Company and/or its Affiliates will be
dismissed with prejudice.

 

(g)        Pursuit of Strategic Alternatives.  The Investors and the Company
hereby acknowledge and agree that the Board is currently searching for an
appropriate advisor to provide advice to the Board related to strategic
alternatives and that upon retention of such advisor, the Board will consider
such strategic alternatives in accordance with their duties as members of the
Board.

 

(h)        Director Fiduciary Duties; Duty of Confidentiality.  The Investors
understand and acknowledge that the Investor Nominees, in their capacity as
directors of the Company, will (i) owe fiduciary duties to the Company and its
stockholders and (ii) be subject to corporate governance guidelines and other
policies of general application to all directors, which duties and policies
include a duty of confidentiality.

 

(i)         Expenses.  The Company will reimburse the Investors for their
documented out-of-pocket expenses incurred in connection with their nomination
of director candidates and related matters, in an amount not to exceed $650,000,
within 3 business days hereof.

 

Section 2.        2016 and 2017 Annual Meetings.

 

(a)        The Company agrees to use its commercially reasonable efforts to hold
the 2016 Annual Meeting on May 11, 2016.

 

(b)        The Investors agree to vote by proxy and vote all shares of Common
Stock beneficially owned by each Investor (i) at the 2016 Annual Meeting, on the
white proxy card, for each proposal as recommended by the Board in the Company
Proxy Statement, (ii) at the 2017 Annual Meeting, in favor of a new equity
incentive plan to be approved by the Company’s stockholders, provided that such
plan will not provide in excess of 2,000,000 shares to be issued pursuant to
such plan, or, in the event that such Plan provides for more than 2,000,000 but
less than or equal to 3,000,000 shares to be issued pursuant to such Plan, the
Investors agree to abstain from voting either for or against such plan and
(iii) at the 2017 Annual Meeting, in favor of any “say-on-pay” proposals voted
on at such meeting.  Such proxy will be voted in accordance with this Agreement
as soon as practicable with respect to the 2016 Annual Meeting.

 

Section 3.        Standstill.

 

(a)        Each Investor agrees that, from the date of this Agreement until the
expiration of the Standstill Period, neither it nor any of its Affiliates or
Associates will, and it

 

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will cause each of its Affiliates and Associates not to, directly or indirectly,
in any manner, acting alone or in concert with others:

 

(i)         submit any shareholder proposal (pursuant to Rule 14a-8 promulgated
by the Securities and Exchange Commission (the “SEC”) under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise) or any
notice of nomination or other business for consideration, or nominate any
candidate for election to the Board (including by way of Rule 14a-11 of
Regulation 14A), other than as expressly permitted by this Agreement;

 

(ii)        engage in, directly or indirectly, any “solicitation” (as defined in
Rule 14a-1 of Regulation 14A) of proxies (or written consents) or otherwise
become a “participant in a solicitation” (as such term is defined in Instruction
3 of Schedule 14A of Regulation 14A under the Exchange Act) in opposition to the
recommendation or proposal of the Board, or recommend or request or induce or
attempt to induce any other person to take any such actions, or seek to advise,
encourage or influence any other person with respect to the voting of the Common
Stock (including any withholding from voting) or grant a proxy with respect to
the voting of the Common Stock or other voting securities to any person other
than to the Board or persons appointed as proxies by the Board;

 

(iii)       seek to call, or to request the call of, a special meeting of the
Company’s stockholders, or make a request for a list of the Company’s
stockholders or for any books and records of the Company;

 

(iv)       form, join in or in any other way participate in a “partnership,
limited partnership, syndicate or other group” within the meaning of
Section 13(d)(3) of the Exchange Act with respect to the Common Stock or deposit
any shares of Common Stock in a voting trust or similar arrangement or subject
any shares of Common Stock to any voting agreement or pooling arrangement, other
to the extent such a group may be deemed to result with the Company or any of
its Affiliates of Associates as a result of this Agreement;

 

(v)        vote for any nominee or nominees for election to the Board, other
than those nominated or supported by the Board;

 

(vi)       except as specifically provided in Section 1(a) of this Agreement,
seek to place a representative or other Affiliate, Associate or nominee on the
Board or seek the removal of any member of the Board or a change in the size or
composition of the Board;

 

(vii)      other than at the direction of the Board, seek, propose, or make any
statement, in each case publicly, with respect to, or solicit, negotiate with,
or provide any information to any person, in each case publicly, with respect
to, a merger, consolidation, acquisition of control or other business
combination, tender or exchange offer, purchase, sale or transfer of assets or
securities, dissolution, liquidation, reorganization, change in structure or
composition of the Board, change in the executive officers of the Company,
change in capital structure, recapitalization, dividend, share repurchase or
similar transaction involving the Company, its subsidiaries or its business,
whether or not any such transaction involves a change of control of the Company;

 

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(viii)     acquire, announce an intention to acquire, offer or propose to
acquire, or agree to acquire, directly or indirectly, by purchase or otherwise,
beneficial ownership of any (A) interests in any of the Company’s indebtedness
or (B) Common Stock of the Company representing in the aggregate (amongst the
Investors and their Affiliates and Associates) in excess of 29.7% of the
Company’s outstanding Common Stock; provided, however, nothing herein shall
prevent the Investors from confidentially seeking a waiver to acquire in excess
of 29.7% of the Company’s outstanding Common Stock;

 

(ix)       commence, encourage or support any derivative action in the name of
the Company or any class action or other litigation against the Company with
respect to any facts or events occurring or arising prior to the date hereof or
relating to any potential strategic transactions pursued by the Company;

 

(x)        disclose publicly, or privately in a manner that could reasonably be
expected to become public, any intention, plan or arrangement inconsistent with
the foregoing;

 

(xi)       take any action challenging the validity or enforceability of any
provisions of this Section 3; or

 

(xii)      enter into any agreement, arrangement or understanding concerning any
of the foregoing (other than this Agreement) or encourage or solicit any person
to undertake any of the foregoing activities.

 

Notwithstanding anything to the contrary in this Agreement, including this
Section 3, nothing in this Agreement shall be deemed to prohibit any Investor
from (A) voting for or against (1) any acquisition of any material assets or
businesses of the Company or any of its subsidiaries, (2) any tender offer or
exchange offer, merger, acquisition or other business combination involving the
Company or any of its subsidiaries, or (3) any recapitalization, restructuring,
liquidation, dissolution or other extraordinary transaction with respect to the
Company or any of its subsidiaries, (B) communicating privately with the Board
or the Chief Executive Officer of the Company regarding any matter, (C) making
any public statement or announcement with respect to a transaction as described
in clause (A) of this paragraph proposed by the Company that requires a vote of
the stockholders and that is publicly announced by the Company after the date of
this Agreement, or (D) other than as provided by Section 2(a), voting for or
against any matter requiring shareholder approval.

 

(b)        As used in this Agreement:

 

(i)         the terms “Affiliate” and “Associate” shall have the respective
meanings set forth in Rule 12b-2 promulgated by the SEC under the Exchange Act;

 

(ii)        the terms “beneficial owner” and “beneficial ownership” shall have
the same meanings as set forth in Rule 13d-3 promulgated by the SEC under the
Exchange Act;

 

(iii)       the terms “person” or “persons” shall mean any individual,
corporation (including not-for-profit), general or limited partnership, limited
liability company, joint venture, estate, trust, association, organization or
other entity of any kind or nature; and

 

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(iv)       the term “Standstill Period” shall mean the period commencing on the
date of this Agreement, and ending on the commencement of the director
nomination window for the 2018 Annual Meeting.

 

Section 4.        Representations and Warranties of the Company.  The Company
represents and warrants to the Investors that (a) the Company has the corporate
power and authority to execute the Agreement and to bind it thereto, (b) this
Agreement has been duly and validly authorized, executed and delivered by the
Company, constitutes a valid and binding obligation and agreement of the
Company, and is enforceable against the Company in accordance with its terms,
except as enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or similar laws
generally affecting the rights of creditors and subject to general equity
principles and (c) the execution, delivery and performance of this Agreement by
the Company does not and will not violate or conflict with (i) any law, rule,
regulation, order, judgment or decree applicable to it, or (ii) result in any
breach or violation of or constitute a default (or an event which with notice or
lapse of time or both could become a default) under or pursuant to, or result in
the loss of a material benefit under, or give any right of termination,
amendment, acceleration or cancellation of, any organizational document, or any
material agreement, contract, commitment, understanding or arrangement to which
the Company is a party or by which it is bound.

 

Section 5.        Representations and Warranties of the Investors.  Each
Investor, on behalf of itself, represents and warrants to the Company that
(a) as of the date hereof, such Investor beneficially owns only the number of
shares of Common Stock as described opposite its name on Exhibit A and Exhibit A
includes all Affiliates of any Investors that own any securities of the Company
beneficially or of record, (b) this Agreement has been duly and validly
authorized, executed and delivered by such Investor, and constitutes a valid and
binding obligation and agreement of such Investor, enforceable against such
Investor in accordance with its terms, except as enforcement thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or similar laws generally affecting the rights of
creditors and subject to general equity principles, (c) such Investor has the
authority to execute the Agreement on behalf of itself and the applicable
Investor associated with that signatory’s name, and to bind such Investor to the
terms hereof and (d) the execution, delivery and performance of this Agreement
by such Investor does not and will not violate or conflict with (i) any law,
rule, regulation, order, judgment or decree applicable to it, or (ii) result in
any breach or violation of or constitute a default (or an event which with
notice or lapse of time or both could become a default) under or pursuant to, or
result in the loss of a material benefit under, or give any right of
termination, amendment, acceleration or cancellation of, any organizational
document, agreement, contract, commitment, understanding or arrangement to which
such member is a party or by which it is bound.

 

Section 6.        Mutual Non-Disparagement.

 

(a)        Each Investor agrees that, during the Standstill Period, it will not,
and it will cause each of its Affiliates and Associates not to, directly or
indirectly, in any capacity or manner, make, express, transmit speak, write,
verbalize or otherwise communicate in any way (or cause, further, assist,
solicit, encourage, support or participate in any of the foregoing), any remark,
comment, message, information, declaration, communication or other statement of
any

 

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kind, whether verbal, in writing, electronically transferred or otherwise,
(i) publicly, or in the case of any of the foregoing with customers,
stockholders or employees of the Company, publicly or privately, that might
reasonably be construed to be derogatory or critical of, or negative toward, the
Company or any of its directors, officers, Affiliates, subsidiaries, employees,
agents or representatives (collectively, the “Company Representatives”), or
(ii) that reveals, discloses, incorporates, is based upon, discusses, includes
or otherwise involves any confidential or proprietary information of the Company
or its subsidiaries or Affiliates, or (iii) publicly, or in the case of any of
the foregoing with customers, stockholders or employees of the Company, publicly
or privately, to malign, harm, disparage, defame or damage the reputation or
good name of the Company, its business or any of the Company Representatives.

 

(b)        The Company hereby agrees that, during the Standstill Period, it will
not, and it will cause each of its Affiliates not to, directly or indirectly, in
any capacity or manner, make, express, transmit, speak, write, verbalize or
otherwise communicate in any way (or cause, further, assist, solicit, encourage,
support or participate in any of the foregoing), any remark, comment, message,
information, declaration, communication or other statement of any kind, whether
verbal, in writing, electronically transferred or otherwise, (i) publicly, or in
the case of any of the foregoing with customers, stockholders or employees of
the Company, publicly or privately, that might reasonably be construed to be
derogatory or critical of, or negative toward, any Investor or any of its agents
or representatives (collectively, the “Investor Representatives”), or (ii) that
reveals, discloses, incorporates, is based upon, discusses, includes or
otherwise involves any confidential or proprietary information of any Investor
or its subsidiaries or Affiliates, or (iii) publicly, or in the case of any of
the foregoing with customers, stockholders or employees of the Company, publicly
or privately, to malign, harm, disparage, defame or damage the reputation or
good name of any Investor or Investor Representatives.

 

(c)        Notwithstanding the foregoing, nothing in this Section 6 or elsewhere
in this Agreement shall prohibit any Party from making any statement or
disclosure required under the federal securities laws or other applicable laws;
provided, that such Party must provide written notice to the other Parties at
least two business days prior to making any such statement or disclosure
required by under the federal securities laws or other applicable laws that
would otherwise be prohibited the provisions of this Section 6, and reasonably
consider any comments of such other Parties.

 

Section 7.        Cross Releases.

 

(a)        Each Investor, for the benefit of the Company and each of the
Company’s controlling persons, officers, directors, stockholders, agents,
affiliates, employees, attorneys, advisors and assigns, past and present, in
their capacity as such (the Company and each such person being a “Company
Released Person”), hereby forever fully waives, discharges and releases, and
covenants not to sue, any of the Company Released Persons for any and all
claims, causes of action, actions, judgments, liens, debts, contracts,
indebtedness, damages, losses, liabilities, rights, interests and demands of
whatsoever kind or character (collectively, “Claims”) based on any event, fact,
act, omission, or failure to act by the Company Released Persons, whether known
or unknown, occurring or existing prior to the execution of this Agreement;
provided, however, this waiver and release and covenant not to sue shall not
include any Claims arising out of or related to any obligations under, or breach
of, this Agreement.

 

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(b)        The Company, for the benefit of each Investor and Participant and
their respective controlling persons, officers, directors, stockholders, agents,
affiliates, employees, attorneys, advisors and assigns, past and present, in
their capacity as such (each such person being a “Investor Released Person”),
hereby forever fully waives, discharges and releases and covenants not to sue,
for any Claim based on any event, fact, act, omission or failure to act by such
Investor Released Person, whether known or unknown, occurring or existing prior
to the execution of this Agreement; provided, however, this waiver and release
and covenant not to sue shall not include any Claims arising out of or related
to any obligations under, or breach of, this Agreement or the Confidential
Separation Agreement and General Release of All Claims, dated January 15, 2016,
by and between Shawn McCreight and the Company, other than Section 9(d) thereof,
which is explicitly superseded by Section 6 of this Agreement.

 

(c)        It is the intention of the parties that the foregoing release set
forth above in subsections (a) and (b) of this paragraph shall be effective as a
bar to all matters released herein.  In furtherance and not in limitation of
such intention, the release described herein shall be, and shall remain in
effect as, a full and complete release, notwithstanding the discovery or
existence of any additional or different facts or claims.  It is expressly
understood and agreed that this Agreement is intended to cover and does cover
not only all known facts and/or claims but also any further facts and/or claims
not now known or anticipated, but which may later develop or should be
discovered, including all the effects and consequences thereof. To further
effectuate this intention, each party hereto acknowledges its awareness of
California Civil Code Section 1542, which reads as follows:

 

“A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his or her settlement with
the debtor.”

 

It is the intention of each party hereto to waive their respective rights under
that section and any statute, rule, and legal doctrine of similar import for any
and all matters released herein.  In waiving the provisions or Section 1542 of
the California Civil Code, each party hereto expressly acknowledges and
understands that it may hereafter discover facts in addition to or different
from those which it now believes to be true with respect to the subject matter
of the matters released herein, but expressly agrees that it has taken these
possibilities into account in electing to participate in this Agreement, and
that the release given herein shall be and remain in effect as a full and
complete release notwithstanding the discovery or existence of any such
additional or different facts, as to which each party hereto expressly assumes
the risk.

 

Section 8.        Company Policies. By the 2016 Annual Meeting, each of the
Investor Nominees will have reviewed the Company’s policies, procedures, and
guidelines applicable to members of the Board and will have agreed to abide by
the provisions thereof during his service as a director of the Company,
including, without limitation, the Code of Business Conduct and Ethics, Insider
Trading Policy, Board Confidentiality Policy, Reg. FD Policy, and the Company’s
Governance Guidelines.

 

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Section 9.        Compensation. Each of the Investor Nominees shall be
compensated for his services as a director and shall be reimbursed for his
expenses on the same basis as all other non-employee directors of the Company
and shall be eligible to be granted equity-based compensation on the same basis
as all other non-employee directors of the Company.

 

Section 10.      Indemnification and Insurance. Each of the Investor Nominees
shall be entitled to the same rights of indemnification and directors’ and
officers’ liability insurance coverage as the other non-employee directors of
the Company as such rights may exist from time to time.  The form
indemnification agreement for directors is attached hereto as Exhibit C.

 

Section 11.      Demand Letters.  Immediately following the execution hereof,
the Investors shall be deemed to have withdrawn their demand letters sent to the
Company on February 16, 2016, April 7, 2016 and April 12, 2016.

 

Section 12.      Public Filings.

 

(a)        The Investors shall promptly file and amendment to the Schedule 13D
reporting entry into this agreement, amending applicable items to conform to
their obligations hereunder and appending or incorporating by reference this
Agreement as an exhibit thereto. The Investors shall provide the Company with a
reasonable opportunity to review and comment on such amendment in advance of
filing, and shall consider in good faith any such comments of the Company with
respect thereto.

 

(b)        The Company shall provide the Investors with a reasonable opportunity
to review and comment on (i) any Form 8-K with respect to the execution and
delivery of this Agreement by the parties hereto and (ii) any Section 14 filings
with respect to the 2016 Annual Meeting or the 2017 Annual Meeting, in each case
in advance of such filing, and shall consider in good faith any such comments of
the Investors with respect thereto.

 

Section 13.      Public Announcements.  Promptly following the execution of this
Agreement, the Company and the Investors shall jointly issue a mutually
agreeable press release (the “Press Release”) announcing this Agreement,
substantially in the form attached hereto as Exhibit D.  Prior to the issuance
of the Press Release, neither the Company nor the Investors shall issue any
press release or public announcement regarding this Agreement or take any action
that would require public disclosure thereof without the prior written consent
of the other Party.  No Party or any of its Affiliates shall make any public
statement (including, without limitation, in any filing required under the
Exchange Act) concerning the subject matter of this Agreement inconsistent with
the Press Release.

 

Section 14.      Specific Performance.  Each of the Investors, on the one hand,
and the Company, on the other hand, acknowledges and agrees that irreparable
injury to the other Party hereto may occur in the event any of the provisions of
this Agreement are not performed in accordance with their specific terms or are
otherwise breached and that such injury would not be adequately compensable in
monetary damages.  It is accordingly agreed that the Investors or any Investor,
on the one hand, and the Company, on the other hand (the “Moving Party”), shall
each be entitled to specific enforcement of, and injunctive or other equitable
relief to prevent any violation of, the terms hereof, and the other party hereto
will not take action, directly or

 

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indirectly, in opposition to the Moving Party seeking such relief on the grounds
that any other remedy or relief is available.

 

Section 15.      Notice.  Any notices, consents, determinations, waivers or
other communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered: (i) upon
receipt, when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically
generated and kept on file by the sending party); or (iii) one (1) business day
after deposit with a nationally recognized overnight delivery service, in each
case properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:

 

To the Company:

 

Guidance Software, Inc.

1055 E. Colorado Blvd.

Pasadena, CA

Fax:

(626) 316-5922

Attn:

Alfredo Gomez, General Counsel

 

with a copy to (which shall not constitute notice):

 

Latham & Watkins LLP

350 South Grand Avenue

Los Angeles, CA 90017

E-mail: julian.kleindorfer@lw.com

Attention: Julian Kleindorfer

 

To the Investors:

 

Shawn H. McCreight

3060 San Pasqual Street

Pasadena, CA 91107

Email: Shawn@McCreights.net

 

with a copy to (which shall not constitute notice):

 

Morrison & Foerster

425 Market Street

San Francisco, CA 94105

Fax: (415)268-7522

Attn: Murray Indick, Esq.

 

 

Section 16.      Governing Law.  This Agreement shall be governed by, and
construed in accordance with, the Law of the State of Delaware, without regard
to conflict of law principles thereof.

 

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Section 17.      Exclusive Jurisdiction.  Each Party to this Agreement
(i) irrevocably and unconditionally submits to the personal jurisdiction of the
state courts of the State of Delaware and the federal courts of the United
States of America located in the State of Delaware, (ii) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or other request
for leave from any such court, (iii) agrees that any actions or proceedings
arising in connection with this Agreement or the transactions contemplated by
this Agreement shall be brought, tried and determined only in the state and
federal courts for or in the State of Delaware, (iv) waives any claim of
improper venue or any claim that those courts are an inconvenient forum and
(v) agrees that it will not bring any action relating to this Agreement or the
transactions contemplated hereunder in any court other than as specified in
clause (iii) of this Section 17.

 

Section 18.      Waiver of Jury Trial.  EACH PARTY ACKNOWLEDGES AND AGREES THAT
ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LEGAL ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY TO THIS
AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT
SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH
PARTY HAS CONSIDERED AND UNDERSTANDS THE IMPLICATIONS OF THIS WAIVER, (C) SUCH
PARTY MAKES THIS WAIVER VOLUNTARILY AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 18.

 

Section 19.      Receipt of Adequate Information; No Reliance; Representation by
Counsel.  Each Party acknowledges that it has received adequate information to
enter into this Agreement, that is has not relied on any promise, representation
or warranty, express or implied not contained in this Agreement and that it has
been represented by counsel in connection with this Agreement.  Accordingly, any
rule of law or any legal decision that would provide any party with a defense to
the enforcement of the terms of this Agreement against such party shall have no
application and is expressly waived.  The provisions of the Agreement shall be
interpreted in a reasonable manner to effect the intent of the Parties.

 

Section 20.      Severability.  If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement shall remain in full force and effect. Any
provision of this Agreement held invalid or unenforceable only in part or degree
shall remain in full force and effect to the extent not held invalid or
unenforceable.  The Parties further agree to replace such invalid or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the purposes of such invalid or
unenforceable provision.

 

Section 21.      Entire Agreement.  This Agreement constitutes the entire
agreement among the parties relating to the matters contemplated hereby and
supersede any other

 

11

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agreements, whether written or oral, that may have been made or entered into by
or among any of the parties hereto or any of their respective Affiliates
relating to the matters contemplated hereby.  No representations, warranties,
covenants, understandings, agreements, oral or otherwise, relating to the
matters contemplated by this Agreement exist between the parties except as
expressly set forth in this Agreement.  For avoidance of doubt, Section 6 of
this Agreement supersedes Section 9(d) of the Confidential Separation Agreement
and General Release of All Claims, dated January 15, 2016, by and between Shawn
McCreight and the Company.

 

Section 22.      Amendment.  This Agreement may be modified, amended or
otherwise changed only in a writing signed by all of the Parties.

 

Section 23.      Legend Removal.  The Company covenants that, upon request by
any Investor to remove the restrictive legends from shares of Common Stock of
the Company held by the Investors and receipt of an opinion of reputable counsel
of such Investor that such Investor is not an Affiliate of the Company (it being
understood that Morrison & Foerster LLP will be acceptable to the Company for
such purposes), the Company will promptly deliver any required legal opinions
and instructions to the transfer agent to remove legends on shares of Common
Stock of the Company held by the Investors.

 

Section 24.      Successors and Assigns; No Third Party Beneficiaries.  This
Agreement shall bind the successors and permitted assigns of the Parties, and
inure to the benefit of any successor or permitted assign of any of the parties;
provided, however, that no party may assign this Agreement without the prior
written consent of the other Parties.  No provision of this Agreement is
intended to confer any rights, benefits, remedies, obligations, or liabilities
hereunder upon any person other than the Parties hereto and their respective
successors and assigns.

 

Section 25.      Counterparts.  This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.  This Agreement
shall become effective when each Party hereto shall have received a counterpart
hereof signed by the other Parties hereto.  Counterparts delivered by electronic
transmission shall be deemed to be originally signed counterparts.

 

(Signature page follows)

 

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IN WITNESS WHEREOF, the Parties hereto have duly executed and delivered this
Agreement as of the date first above written.

 

 

GUIDANCE SOFTWARE, INC.

 

 

 

 

 

By:

/s/ Patrick Dennis

 

Name: Patrick Dennis

 

Title: CEO

 

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INVESTORS:

 

 

MCCREIGHT LIVING TRUST UA 31-MAR-06

 

 

 

 

 

By

:/s/ Shawn H. McCreight

 

Name: Shawn H. McCreight

 

Title: Trustee

 

 

 

 

 

 

 

SHAWN H. MCCREIGHT

 

 

 

/s/ Shawn H. McCreight

 

 

 

 

 

 

 

JENNIFER MCCREIGHT

 

 

 

/s/ Jennifer McCreight

 

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EXHIBIT A

 

Investor

 

Shares of Common Stock
Beneficially Owned

 

 

 

 

 

 

McCreight Living Trust UA 31-Mar-06
Shawn H. McCreight
Jennifer McCreight

 

9,086,384

 

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EXHIBIT B

 

D&O Questionnaire attached

 

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EXHIBIT C

 

Form Indemnification Agreement attached

 

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EXHIBIT D

 

Press Release attached

 

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