EX-10.1



 






EXHIBIT 10.1




KNOVA SOFTWARE, INC.




SEPARATION AGREEMENT AND GENERAL RELEASE




     This Separation Agreement and General Release (this “Agreement”) is made on this
30th day of June 2005 by and between Knova Software, Inc., a Delaware corporation, and
its parents, subsidiaries and other affiliates (collectively, the “Company”), and Scott
Schwartzman (“Employee”).



RECITALS




     Whereas, the Company and Employee previously entered into an Employment Agreement, dated as of
April 2005, governing the terms of Employee’s employment with the Company (the “Employment
Agreement”);



     Whereas, the Company and Employee previously entered into a Proprietary Information Agreement,
dated as of _______ (the “Confidentiality Agreement”), regarding certain obligations
of Employee to the Company in connection with Employee’s employment with the Company;



     Whereas, the Company and Employee previously entered into those Stock Option Agreements listed
on Exhibit A hereto (collectively, the “Option Agreements”), governing the terms of option
grants for the purchase of up to an aggregate of 132,499 shares of the Company’s Common Stock
(collectively, the “Options”);



     Whereas, the parties hereto desire to terminate Employee’s employment with the Company and
desire to set forth the terms and conditions of such termination as may be provided in the
Agreements or as otherwise set forth herein.



AGREEMENT




     In consideration of the mutual premises contained herein and other good and valuable
consideration, receipt of which is hereby acknowledged, the parties to this Agreement agree as
follows:



     1. Position. Employee presently serves as the Chief Operating Officer of the Company
and, until his resignation on June 23, 2005 from such position, he served as the Chief Financial
Officer of the Company. Employee desires to reach a full and final settlement and resolution of
all past, present and future claims, controversies and disputes that he has or may have against the
Company and/or any person related in any way to his employment with the Company and/or its present
and former stockholders, directors, officers or employees.



     2. Termination Date. Employee’s last date of employment with the Company will be June
30, 2005 (the “Termination Date”). On the Termination Date, the Company shall pay to
Employee all earned but unpaid salary. The Company will also provide to Employee full



 









 




information regarding his rights to health insurance continuation and retirement benefits and
will provide reasonable assistance to Employee in preserving or obtaining such rights. Effective
as of the Termination Date, Employee shall resign as an employee and each and every officer
position he holds in the Company or any of its subsidiaries.




     3. Severance Benefits. In consideration of this Agreement, the Company agrees to:



          (a) Cash Severance Payment. Pay Employee in one lump sum payment the sum of $146,250,
which is equivalent to nine months of current base compensation (the “Severance Payment”).
The Severance Payment will be made within three business days following the Revocation Period (as
defined in Section 10(k) below) provided that Employee has not revoked this Agreement in accordance
with Section 10(k) below.




          (b) Options. The Company will accelerate vesting for that number of Employee’s
unvested options by an amount equal to the number of option shares that would have vested from the
date hereof through the one year anniversary of the date hereof pursuant to the terms of the Option
Agreements had Employee’s employment not been terminated. In addition, the Company hereby agrees
to extent the period within which Employee may exercise the vested portion of his Options
(including the option shares being accelerated hereunder) until the one year anniversary of the
Effective Date.




          (c) COBRA Benefits. In the event Employee elects to continue his health insurance
coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), pay the cost
of COBRA benefits until (i) the date which is nine months after the Termination Date, or (iii) at
such time as Employee procures alternative insurance reasonably comparable to the COBRA benefits
either through new employment arrangements or otherwise.




     4. Consulting.



          (a) Employee Obligations. In consideration of this Agreement, Employee agrees to make
himself available for up to ten hours per week to the Company on a consulting basis for the period
commencing after the Termination Date through and until August 31, 2005 (the “Consulting
Termination Date”).




          (b) Consideration. Employee shall not receive any additional consideration for
consulting services performed pursuant to Section 4(a) above other than as set forth in Section
3(b) above.




          (c) Termination. The consulting services provided for in this Section shall terminate
on the earliest to occur of the following and Employee shall have no further obligations to provide
such services: (i) the Consulting Termination Date, (ii) at such time as the Company determines, at
its convenience, that such services are no longer necessary, (iii) a merger or sale of the Company
or a transaction or series of transactions immediately after the consummation of which the existing
stockholders of the Company do not own at least 50% of the voting stock of the Company, (iv) the
liquidation, dissolution or winding up of the Company or (v) the filing by the Company for
protection under the bankruptcy laws of the United States.




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     5. Release.



          (a) Release by Employee. In consideration of this Agreement, Employee hereby
releases, acquits and forever discharges the Company, its parents, subsidiaries and affiliates, and
its and their respective officers, directors, agents, servants, employees, shareholders,
successors, assigns and affiliates, of and from any and all claims, liabilities, demands, causes of
action, costs, expenses, attorneys fees, damages, indemnities and obligations of every kind and
nature, in law, equity, or otherwise, known and unknown, suspected and unsuspected, disclosed and
undisclosed (other than any claim for indemnification Employee may have as a result of any action
against him based on his employment with the Company, or as otherwise provided in applicable
insurance policies or other agreements) arising out of or in any way related to events, acts or
conduct occurring on or prior to the date Employee executes this Agreement, arising out of or in
any way connected with this Agreement, Employee’s employment with the Company or the termination of
that employment, including but not limited to, claims of intentional and negligent infliction of
emotional distress, claims or demands related to salary, bonuses, commissions, stock, stock
options, or any other ownership interests in the Company, vacation pay, fringe benefits, expense
reimbursements, severance pay, or any other form of compensation; claims pursuant to any federal,
state or local law or cause of action including, but not limited to, the federal Civil Rights Act
of 1964, as amended; the federal Age Discrimination in Employment Act of 1967, as amended
(“ADEA”); the federal Americans with Disabilities Act of 1990; New Jersey’s Law Against
Discrimination; tort law; contract law; wrongful discharge; discrimination; fraud; defamation;
emotional distress; and breach of the implied covenant of good faith and fair dealing.




     Employee acknowledges that he may request the information required by the Older Workers
Benefit Protection Act. Employee also acknowledges that the release of claims under the ADEA is
subject to special waiver protection. Therefore, in accordance with that section, Employee
specifically agrees that he knowingly and voluntarily releases and waives any rights or claims of
discrimination under the ADEA. In particular, Employee represents and acknowledges that he
understands the following: (a) Employee is not waiving rights or claims for age discrimination
under the ADEA that may arise after the date he signs this Agreement; and (b) Employee is waiving
rights or claims for age discrimination under the ADEA in exchange for the payments described
herein.



          (b) Release by the Company. In consideration of this Agreement, the Company, on its
behalf and its officers, directors, successors, assigns and affiliates, hereby releases, acquits,
and forever discharges Employee from any and all claims, liabilities, demands, causes of action,
costs, expenses, attorneys fees, damages, indemnities and obligations of every kind and nature, in
law, equity, or otherwise, known and unknown, suspected and unsuspected, disclosed and undisclosed,
arising out of or in any way related to agreements, events, acts or conduct at any time within the
course and scope of Employee’s employment with the Company.




          (c) California Civil Code. Although the Employee and Company acknowledge and agree
that this Agreement shall be governed by New Jersey law in accordance with Section 10(b) below, if
for any reason this Agreement is deemed to be governed by




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California law, then Employee and the Company each acknowledge that it has read and
understands the language 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/HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM/HER MUST HAVE
MATERIALLY AFFECTED HIS/HER SETTLEMENT WITH THE DEBTOR.”



     If applicable, Employee and the Company each expressly waive and relinquish all benefits,
rights and protection under § 1542 and any law of any jurisdiction of similar effect with respect
to the release of any claims that Employee or the Company may have against the other party.
Employee and the Company understand and agree that claims or facts in addition to or different from
those which are now known or believed by him or it to exist may hereafter be discovered, but it is
Employee’s and the Company’s intention to settle fully and release all of the claims either party
may have against each other, whether known, unknown or suspected.



     6. Representations and Warranties by Employee.



          (a) Compensation. Employee represents and warrants that amounts paid under Section 2
above constitute the full amount of earned but unpaid salary and all accrued vacation and PTO time,
each as of the Termination Date.




          (b) Workers’ Compensation. Employee represents and warrants that he has not and will
not file or pursue a claim for Workers’ Compensation benefits arising out of his employment with
the Company, and that he has not suffered an injury in the course and scope of his employment with
the Company.




          (c) Assignment; Indemnification by Employee. Employee represents and warrants that he
has not assigned, transferred or conveyed to any person or entity any claim, demand, liability or
obligation or cause of action released by this Agreement. Employee agrees to indemnify, defend and
hold harmless the Company, and/or any present or former director, officer or employee of the
Company from any claims which may be asserted against them based on, or arising out of, any such
assignment, transfer or conveyance.




     7. Covenants.



          (a) Transition. Employee agrees to render all necessary and reasonable cooperation to
the Company to transfer his duties and responsibilities as may be directed by the Company.




          (b) Statements. Employee agrees that he will make no disparaging comments whatsoever
about the Company, its present or former directors, officers, employees or affiliated entities.
The Company agrees that its officers and directors will make no disparaging comments about
Employee.




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          (c) Publicity. Notwithstanding the restrictions set forth in the Confidentiality
Agreement, Employee shall not, unless required by compulsory legal process, disclose to any person
(or encourage or cause any third-party to disclose) in any forum or medium (including, but not
limited to, television, radio, newspaper, magazine, Internet website, electronic bulletin board,
electronic chat room or e-mail) the terms of this Agreement, the benefit being paid under it or the
fact of its payment, except that Employee may disclose this information to his spouse, as well as
his attorneys, accountants or other professional advisors to whom he must make disclosure in order
for them to render professional services to him. In all cases, however, Employee will instruct
them to maintain the confidentiality of this information.




          (d) Covenant Not to Sue. The parties hereto agree not to initiate or cause to be
initiated against any of the parties released under Section 5 above, any lawsuit, compliance
review, administrative claim, investigation or proceedings of any kind which pertain in any manner
to the claims released in Section 5 above.




     8. Confidentiality Agreement. Parties hereto agree that the terms and conditions of
the Confidentiality Agreement not otherwise inconsistent with the terms set forth herein shall
remain in full force and effect.



     9. Termination. Unless Employee has breached the terms of any representation or
warranty made by Employee contained herein or except as set forth herein, the Company shall not
have the right to terminate this Agreement prior to the satisfaction of its obligations hereunder.



     10. Miscellaneous.



          (a) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the heirs, estate, representatives, successors and assigns of each of the parties
hereto.




          (b) Governing Law. This Agreement shall in all respects be interpreted, enforced and
governed by and under the laws of the State of New Jersey, excluding conflicts of law principles
thereof.




          (c) Counterparts. This Agreement may be executed in counterparts, and by facsimile,
each of which shall be deemed an original and all of which together shall constitute one and the
same instrument.




          (d) Interpretation. In interpreting the language of this Agreement, both parties to
this Agreement shall be treated as having drafted this Agreement after meaningful negotiations.




          (e) Amendments. This Agreement may be modified only in writing signed by both parties
hereto.




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          (f) Severability. If any provision of this Agreement is held to be invalid, void, or
unenforceable, the remaining provisions shall remain in full force and effect.




          (g) Arbitration. Any dispute or controversy arising out of or relating to the
construction or application of any terms, covenants or conditions of this Agreement or any claimed
breach hereof (other than as set forth herein) shall be settled, at the request of either party, by
an arbitration proceeding conducted in accordance with the rules of the American Arbitration
Association (“AAA”), with the award determined to be appropriate by the arbitrator therein
to be final, non-appealable and binding on the parties hereto, and with judgment upon such award as
is rendered in any such arbitration proceeding available for entry and enforcement in any court
having jurisdiction over the parties hereto. The arbitrator shall be an impartial arbitrator
qualified to serve in accordance with the rules of the AAA and shall be reasonably acceptable to
each of the Company and Employee. If no such acceptable arbitrator is so appointed within 15 days
after the initial request for arbitration of such disputed matter, each of the parties hereto shall
promptly designate a person qualified to serve as an arbitrator in accordance with the rules of the
AAA, and the two persons so designated shall promptly select the arbitrator from among those
persons qualified to serve in accordance with the rules of the AAA. The arbitration shall be held
in either Mercer County, New Jersey or in such other place as may be agreed upon at the time by the
parties hereto. The expenses of the arbitration proceeding shall be borne equally by the Company
and Employee. In the event of breaches of confidentiality obligations by Employee under this
Agreement or the Agreements, the Company may seek any and all legal and equitable remedies,
including without limitation injunctive relief.




          (h) Attorneys’ Fees. If there is any dispute over the terms or obligations under this
Agreement, the prevailing party shall be entitled to recover reasonable attorneys’ fees and costs
incurred to enforce or defend this Agreement in any proceeding in which it prevails.




          (i) Entire Agreement. Unless otherwise provided herein, this Agreement is the entire
agreement of the parties hereto pertaining to the subject matter hereof and supersedes any prior or
contemporaneous negotiations or agreements between the parties hereto, whether written or oral.
Unless otherwise provided herein, all prior offer letters, agreements or understandings between the
Company and Employee relating to his employment with the Company are hereby terminated and shall be
of no further force and effect. Each of the parties hereto acknowledges either representation by
counsel throughout all negotiations which preceded the execution of this Agreement, or the
opportunity to have this Agreement reviewed by counsel prior to the execution of this Agreement.
Each of the parties hereto acknowledges that it has not relied on any promise, representation or
warranty, expressed or implied, not contained in this Agreement.




          (j) ACKNOWLEDGEMENT. EMPLOYEE ACKNOWLEDGES THAT HE HAS READ THIS ENTIRE AGREEMENT,
THAT HE HAS HAD OPPORTUNITY TO CONSULT COUNSEL TO EXPLAIN THIS AGREEMENT TO HIM, AND THAT HE
UNDERSTANDS THIS AGREEMENT AND EACH OF THE PROVISIONS CONTAINED HEREIN. EMPLOYEE FURTHER
ACKNOWLEDGES THAT NEITHER THIS AGREEMENT, NOR PAYMENT OF ANY CONSIDERATION PURSUANT TO THIS
AGREEMENT, SHALL BE TAKEN OR CONSTRUED TO BE AN ADMISSION OR





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CONCESSION OF ANY KIND WITH RESPECT TO LIABILITY OR ALLEGED WRONGDOING BY THE COMPANY. TO THE
CONTRARY, THE COMPANY ASSERTS THAT ALL ACTIONS TAKEN WITH REGARD TO EMPLOYEE WERE PROPER AND LAWFUL
AND AFFIRMATIVELY DENIES ANY WRONGDOING OF ANY KIND. EMPLOYEE ACKNOWLEDGES THAT THE COMPANY DENIES
ANY WRONGDOING OR LIABILITY RELATED TO HIM.




          (k) Enforceability. Employee has been informed by the Company and acknowledges and
understands that he has been given up to 45 days to consider the terms of this Agreement (although
he need not take the full 45 days to do so), that he may seek advice from an attorney, and that he
may revoke this Agreement at any time within seven (7) days following the date of his execution of
this Agreement (the “Revocation Period”). Any revocation within the Revocation Period must be
submitted in writing to the CEO of the Company at 10201 Torre Avenue, Suite 350, Cupertino, CA
95014, and must state “I hereby revoke my acceptance of the Separation Agreement and General
Release.” Other than with respect to Section 2 above, no payment will be made at any time prior to
the eighth day following Employee’s execution of this Agreement. In the event that Employee
revokes this Agreement within the Revocation Period, this Agreement shall be deemed null and void
with no further force and effect.




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     The parties hereto have executed this Separation Agreement and General Release as of the dates
set forth below.



	 	 	 	 	 
	 	 	COMPANY:
	 
	 	 	 	 
	 	 	KNOVA SOFTWARE, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 	 	 	 	Bruce Armstrong
	 	 	 	 	Chief Executive Officer
	 
	 	 	 	 
	 	 	Dated:
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	EMPLOYEE:
	 
	 	 	 	 
	 	 	 
	 	 	Scott Schwartzman
	 
	 	 	 	 
	 	 	Dated:
	 

	 	 	 	 





SIGNATURE PAGE TO SEPARATION AGREEMENT AND GENERAL RELEASE




 









 








EXHIBIT A




SCHEDULE OF OPTIONS