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                                                                   Exhibit 10.12


                              EMPLOYMENT AGREEMENT

This Employment Agreement ("Agreement") is entered into as of the 20th day of
August, 2002 (the "Effective Date"), between Firepond, Inc. (the "Company") and
Christian Misvaer (the "Executive").

The purpose of this Agreement will be to memorialize the terms and conditions of
employment for the Executive.

NOW THEREFORE, in consideration of the mutual promises contained in this
Agreement and for other good and valuable consideration, the sufficiency of
which is hereby agreed, the Company and the Executive agree as follows:

1. EMPLOYMENT.

The Company agrees to employ and engage the services of the Executive as the
General Counsel and Secretary of the Company and the Executive agrees to serve
the Company in such capacity.

2. GENERAL EMPLOYMENT TERMS.

Executive is employed by the Company "at will" meaning either the Company or the
Executive may terminate his employment at any time for any or for no reason. The
Executive shall be employed full time and devote normal business hours to the
business and affairs of the Company, use his best efforts to promote the
interests of the Company, and perform faithfully and efficiently the
responsibilities assigned to him. While employed by Company, Executive shall not
engage in other employment, except with the prior consent of the Company's Board
of Directors. The Company may not require the Executive to perform services
under this Agreement outside a 50-mile radius of Boston, Massachusetts, without
the Executive's consent, other than normal business travel consistent with his
executive level responsibilities.

3. COMPENSATION.

3.1 BASE SALARY. Executive shall receive an annual base salary of US $120,000.00
("Base Salary"). The Base Salary shall be payable in cash, subject to applicable
withholdings, in accordance with the current payroll policies of the Company.

3.2 INCENTIVE COMPENSATION BONUS. As further compensation, the Executive will be
eligible to participate in the Company's Executive Incentive Plan approved by
the Board of Directors and the bonus for which the Executive will be eligible
under such plan will be 40% of the Executive's Base Salary. This plan may be
altered, amended or terminated at any time in the discretion of the Company.

3.3 EMPLOYEE BENEFITS. In addition, the Executive shall be eligible for all
employee benefits offered to the Company's employees. In particular, the
Executive will be entitled to the following benefits:

      (a) Vacation and Sick Leave. The Executive shall be eligible to
      participate in the


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      Company's standard vacation and sick leave benefit plan and the number of
      vacation days afforded to Executive under the terms of this plan shall be
      20 days per year.

      (b) Business Expense Reimbursement. The Executive shall receive
      reimbursement of legitimate and reasonable business expenses incurred by
      the Executive on behalf of the Company, pursuant to the written policies
      of the Company in this regard.

      (c) 401(k) Plan. The Executive is eligible to participate in the 401(k)
      retirement benefit plan made available to the employees of the Company
      pursuant to the terms and conditions of such plan.

      (d) Insurance Plans. The Executive is eligible to participate in the life,
      health, dental, short and long-term disability plans made available to the
      employees of the Company pursuant to the terms and conditions of such
      plans.

      (e) Changes to Employee Benefit Plans. Nothing in this Agreement shall
      prevent the Company from changing, modifying, amending or terminating the
      employee benefit plans of the Company so as to eliminate, reduce or
      otherwise change any benefits payable under this Agreement.

      (f) Indemnification. Executive will be entitled to the benefit of the
      indemnification provisions contained in the Certificate of Incorporation
      and By-Laws of the Company applicable to its officers (copies of which
      have been provided to the Executive) and the Executive may also be a party
      to any standard indemnification agreement for the Company's executive
      officers that may be adopted by the Company.

3.4. STOCK OPTIONS. The Executive may be eligible for stock option grants from
time to time as determined in the discretion of the Board of Directors. All such
option grants shall be governed by the terms and conditions of the Company stock
option plan under which the grant is made as well as the standard Stock Option
Agreement (containing the Board of Directors approved change of control
language) which must be signed by the Executive and the Company prior to such
grants being effective.

4. TERMINATION.

4.1 CAUSE. The Company may terminate the Executive's employment for Cause. For
purposes of this Agreement, "Cause" shall mean (A) any act of dishonesty or
knowing and willful breach of fiduciary duty by the Executive; (B) commission of
a felony involving moral turpitude or unlawful, dishonest, or unethical conduct
that a reasonable person would consider damaging to the reputation of the
Company or any conduct which is in violation of the Company's policies; (C) any
material breach of any provision of this Agreement, or any other agreements
between the Executive and Company, by the Executive; or (D) insubordination or
refusal to perform assigned duties consistent with duties of the Executive's
position or to comply with the reasonable directions of the Company's Board of
Directors. If the Executive's employment is terminated for Cause, the Company
shall pay the Executive his full accrued Base Salary through the date of
termination at the rate in effect at the time of such termination, and the
Company shall have no further obligation to the Executive under this Agreement
or under any other agreements or plans. All other compensation including,
without limitation, bonuses, severance and/or stock option grants shall be
forfeited if the Executive is terminated for Cause.

4.2 NOT FOR CAUSE. In the event Executive's employment is terminated for any
reason by the Company, other than for Cause as set forth in Section 4.1 above,
or in the event the Executive's


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responsibilities or compensation is materially diminished, Executive shall be
entitled to receive severance equivalent to six (6) months of Executive's Base
Salary paid bi-monthly in accordance with the Company's normal payroll
practices, including applicable tax withholdings, commencing immediately upon
termination. Company shall continue and pay on behalf of Executive the employer
portion of the standard Company health and dental insurance premiums during the
six-month severance period. Further, Company shall pay to the Executive all
accrued and remaining vacation time through the termination date. Executive's
participation in any other Company benefit plan including, without limitation,
Company's 401k Plan, life, and disability insurances, will cease on the
Separation Date. In return for the foregoing, Executive shall execute Company's
standard Separation Agreement and General Release.

5. MISCELLANEOUS.

5.1 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties and supersedes any prior understandings or agreements between the
parties, written or oral, to the extent they relate in any way to the subject
matter hereof. The Company's standard stock option agreements and the Company's
standard Employee Agreement Regarding Inventions, Confidentiality and
Non-Competition as executed by the Executive, or executed in the future by the
Executive, shall be made a part of this Agreement. In the event there are any
inconsistencies between this Agreement and the foregoing agreements, the terms
of this Agreement shall take precedence.

5.2 NO ASSIGNMENT; ASSUMPTION. This Agreement is personal to the Executive and
shall not be assignable by the Executive. This Agreement shall inure to the
benefit of and be binding upon any successor to the business or assets of the
company which assumes this Agreement, whether expressly or by operation of law.

5.3 GOVERNING LAW. This is a Massachusetts contract and shall be construed under
and be governed in all respects by the laws of Massachusetts, without giving
effect to any conflict of laws principles of Massachusetts law. Any legal action
or suit related in any way to this Agreement shall be brought exclusively in the
courts of Massachusetts. Both parties agree that the courts of Massachusetts are
the exclusive convenient forum for the resolution of disputes.

5.4 AMENDMENTS. No amendments of any provision of this Agreement shall be valid
unless the same shall be in writing and signed by both the Company and the
Executive.

5.5 SEVERABILITY. Any term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any other situation or
in any other jurisdiction.

5.6. RELOCATION. In addition, the Executive's letter agreements in regard to
relocation dated March 14, 2000 and June 12, 2000 shall remain in full force and
effect pursuant to their terms, provided, however, that the June 12, 2000 letter
shall be amended to provide that Executive shall receive a lump sum payment
equivalent to the original relocation allowance ($24,950.00) grossed up for
taxes ($39,500.00) in the event his employment is terminated by the Company for
any reason other than Cause.


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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

/s/ CHRISTIAN J. MISVAER
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Executive

Firepond, Inc.
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Company

Name: /s/ KLAUS P. BESIER
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Title: CEO
       ---


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