a5467918ex10-4.htm


    Exhibit
      10.4

     

    RETIREMENT
      AND BOARD SERVICE ABOARD SERVICE AGREEMENT

     

    This
      Retirement and Board Service Agreement (the “Agreement”)
      dated as of June 26, 2007, is made by and between ANTs software
      inc., a Delaware corporation (the “Company”) and Francis K.
      Ruotolo (“Executive”).  Its purpose is to set forth the
      parties’ agreement regarding the cessation of employment status of the Executive
      with the Company, the continuation of the Executive’s service on the Company’s
      Board of directors, the mutual termination of the Executive’s Employment
      Agreement with the Company dated on March 23, 2007, the provision of the
      benefits Executive is to receive, and the provision of the mutual waivers and
      releases the parties are giving each other.

     

    Whereas,
      both parties agree and acknowledge receipt of sufficient consideration for
      the
      mutual promises and undertakings contained in this Agreement;

     

    The
      parties agree as follows:

     

    1.  Retirement.  Executive
      understands and agrees that he is retiring as an employee of the Company
      effective as of June 26, 2007.  That certain Employment Agreement
      dated March 23, 2007 by and between the Executive and the Company is hereby
      mutually terminated.

     

    2.  Continuation
      of Board Service.  Executive shall continue as a member
      of the Company’s Board of directors and shall continue as Chairman of the Board
      of directors of the Company.  In addition to the retirement benefits
      set forth below, the Company will pay to Executive non-executive Chairman board
      fees of $25,000 per annum.

     

    3.  Retirement
      Benefits.  In consideration for the releases provided
      herein and subject to the waiting period and other requirements set forth in
      paragraph 7, below, the Company shall pay Executive, as retirement benefits
      and
      on a 1099 basis, ten equal quarterly payments of fifty thousand dollars
      ($50,000) each, for an aggregate amount of Five Hundred Thousand dollars
      ($500,000), with the first such payment due on July 1, 2007 and the remaining
      payments paid in quarterly installments on October 1, January 1, April 1, and
      July 1 for each succeeding quarter until paid in full.  Company shall
      deposit $500,000 into a mutually agreeable escrow for such funds to be held
      in
      trust, to be paid out as required hereby.  The escrow agent shall be
      selected by Executive and the escrow shall be structured in such a manner that
      (i) it may not be revoked by the Company, and (ii) the funds deposited into
      the
      account shall not be considered part of the Company’s general funds, and shall
      be beyond the reach of the Company’s creditors.  All interest on such
      trust funds shall accrue to the benefit of Executive and be paid out with the
      final payment made.  All of Executive’s stock options shall be and
      continue unaffected by this Agreement.  The Company acknowledges and
      agrees that all of Executive’s stock options are fully vested and that such
      options shall be exercisable up to that date which is three months following
      cessation of Executive’s service on the Company’s Board of
      directors.  Company will provide to Executive, continuation health
      coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of
      1985
      (COBRA) for a period of eighteen months and at Executive’s cost.

     

    4.  General
      Mutual Release.  In exchange for the
      consideration provided in this Agreement, the adequacy of which is hereby
      acknowledged, each party hereto, on behalf of himself or itself and his or
      its
      heirs, successors and assigns, hereby fully releases and forever discharges
      the
      other party hereto, including each of their officers, directors, agents,
      employees, attorneys, parents, affiliates and/or subsidiaries, from any and
      all
      claims, actions and liabilities of any kind or character whatsoever, arising
      in
      law or in equity, known or unknown, suspected or unsuspected, that such party
      has ever had, now has or may now have against the other party, including,
      without limitation, all claims directly or indirectly related to or arising
      out
      of Executive’s employment by the Company, the performance of his duties during
      that employment, and/or the termination of or his resignation from that
      employment.  This waiver and release specifically includes, but is not
      limited to, all claims, if any, whether arising in tort or in contract, related
      to Executive’s employment, including any and all claims for wrongful discharge
      or wrongful termination; claims for alleged violation of public policy or breach
      of implied covenant of good faith and fair dealing; claims for breach of
      fiduciary duty; claims for negligent or intentional infliction of emotional
      distress; claims arising in connection with Executive’s compensation, benefits,
      warrants and/or stock options; claims for breach of express or implied contract
      or for further monetary compensation by way of additional salary or bonus
      allegedly due Executive by reason of his employment with the Company; and all
      other claims, based on common law or federal or state statute, including claims
      for discrimination based on age arising under state statute or the federal
      Age
      Discrimination in Employment Act, the Older Workers’ Benefits Protection Act, or
      any similar federal or state law prohibiting age discrimination.

     

     

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

     

    Each
      party
      further understands and expressly agrees that this Agreement specifically
      extends to all claims, whether those claims are presently known to the party
      or
      not, or suspected by the party or not.  By signing below, each party
      expressly waives the benefits of Section 1542 of the California Civil Code,
      which provides:

     

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

     

    Executive
      agrees that he has not assigned or transferred, in whole or in part, any of
      the
      claims, actions or liabilities released by him herein.

     

    5.  No
      Admission of Liability.  The parties deny that either one
      of them has any liability to the other.  Neither this Agreement, nor
      the consideration the parties are receiving under it, shall be deemed or
      construed as an admission of liability by any party.

     

    6.  Confidentiality.  Each
      party agrees that the terms and conditions of this Agreement are and shall
      remain strictly confidential, and that none of them, nor anyone acting on his
      or
      its behalf, will disclose those terms and conditions to any third
      party:  (i) except that the Company may disclose the general terms as
      required under securities laws, (ii) except for Executive’s tax or legal
      advisors or his spouse, or (iii) unless compelled by law to do so.

     

    7.  Waiting
      Period.  Executive acknowledges that the Company
      has specifically advised him to consult with an attorney of his own choosing
      in
      order to review this Agreement and advise him of his rights concerning
      it.  Executive further acknowledges that the Company has further
      advised him that he has twenty-one (21) days from the date this Agreement was
      originally presented to him in which to consider whether to sign it, and that
      if
      he chooses to do so, he will be given an additional seven (7) days from the
      date
      he signs it in which to revoke it.  Unless revoked by Executive, this
      Agreement shall become effective the day immediately after the expiration of
      the
      seven (7) day period set forth above (the “Effective
      Date”).  Executive understands and agrees that this Agreement will not
      become effective before the Effective Date.  The offer contained in
      this Agreement will expire and may not be accepted by Executive following the
      expiration of twenty-one (21) days after this Agreement was first presented
      to
      him.

     

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

       

    

    8.  Indemnification.  Each
      party shall indemnify, defend and hold harmless the other and his or its
      assignees against, and in respect of, any and all claims, demands, losses,
      costs, expenses, obligations, liabilities, damages, recoveries and deficiencies,
      including interest, penalties and reasonable attorneys’ fees (collectively
“Losses”) that the other or he or its assignees may incur which arise, result
      from or relate to any breach or failure by such party to perform any of such
      party’s covenants contained in this Agreement.

     

    9.  Voluntary
      Agreement.  Executive expressly acknowledges and warrants
      that he has read and fully understands this Agreement; that he has had the
      opportunity to consult with legal counsel of his own choosing in order to have
      the terms and conditions of this Agreement fully explained to him; that he
      is
      not executing this Agreement in reliance on any promises, representations or
      inducements other than those set forth herein; that he understands he is giving
      up legal rights by signing this Agreement; and that he is executing it
      voluntarily, free of any duress or coercion, after due deliberation, with a
      full
      understanding of what it means to do so.

     

    10.  Other
      Provisions.

    


    10.1  Binding
      Effect.  This Agreement shall be binding upon and inure to the
      benefit of the respective heirs, executors, representatives, successors and
      assigns of the parties hereto.

     

    10.2  Further
      Assurances.  The parties shall execute and deliver such
      instruments and take such other actions as may be reasonably necessary in order
      to carry out the intent of this Agreement.

     

    10.3  Counterparts.  This
      Agreement may be executed in any number of separate counterparts, each of which
      shall be deemed to be an original and all of which together shall be deemed
      to
      be one and the same instrument.

     

    10.4  Headings.  The
      subject headings of the sections and subsections of this Agreement are included
      for purposes of convenience only and shall not affect the construction or
      interpretation of any of its provisions.

     

    10.5  Waivers.  Any
      party to this Agreement may waive any right it may have hereunder or any breach
      or default hereunder by any other party hereto; provided that no such waiver
      will be effective against the waiving party unless it is in writing and
      specifically refers to this Agreement.  No waiver will be deemed to be
      a waiver of any subsequent or other right, breach or default of the same or
      similar nature.

     

    10.6  Entire
      Agreement.  This Agreement, including the documents and things
      anticipated to be delivered hereby embodies the entire agreement and
      understanding of the parties hereto with respect to the subject matter hereof,
      and supersedes all prior or contemporaneous agreements or understandings
      (whether written or oral) among the parties, in respect to the subject matter
      contained herein.  This Agreement may not be modified, amended or
      terminated except by written agreement signed by both parties specifically
      referring to this Agreement.

     

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    10.7  Governing
      Law.  This Agreement is deemed to have been made in the State of
      California and shall be governed by, and construed in accordance with, the
      laws
      of the State of California for contracts made and to be performed within
      California.

     

    10.8  Assignment.  Executive
      may not assign this Agreement, or assign his rights or delegate his duties
      hereunder, without the prior written consent of the Company.

     

    10.9  Severability.  Any
      provision of this Agreement which is illegal, invalid or unenforceable shall
      be
      ineffective to the extent of such illegality, invalidity or unenforceability,
      without affecting in any way the remaining provisions hereof.

     

    10.10  No
      Rules of Construction.  No rules of construction are intended by
      the parties hereto or shall be invoked in the interpretation hereof and, for
      all
      purposes, the parties hereto shall all be deemed to be joint authors
      hereof.

     

    10.11  Notices.  All
      notices, demands and other communications provided for hereunder shall, unless
      otherwise stated herein, be in writing and shall be personally delivered or
      sent
      by nationally recognized overnight courier, with delivery
      acknowledged.

     

    10.12  Remedies.  The
      remedies herein provided are cumulative and not exclusive of any remedies
      provided by law.  The party against whom enforcement is sought shall
      pay on demand all losses, costs and expenses, if any, of the party seeking
      enforcement (including attorneys’ and other professionals' fees actually
      incurred) in connection with the enforcement of this Agreement.

    


    IN
      WITNESS WHEREOF,
      the parties hereto have caused this Agreement to be executed by their respective
      officers or representatives thereunto duly authorized, this Agreement to become
      effective as of the date first above written.

     

     

    
      	 	
              ANTS
                SOFTWARE INC.

              a
                Delaware Corporation

            	 
	 	 	 	 
	
               

            	
              
                By:

              

            	/s/
              Joe Kozak	 
	 	 	
              Joe
                Kozak, Chief Executive Officer

            	 


    

     

    


    
      	 	 	 	 
	
               

            	
               

            	/s/
              Francis K. Ruotolo	 
	 	 	
              Francis
                K. Ruotolo

            	 




    


    
 

    -4-