Employement Agreement of William Santo


    
 

    WILLIAM
      SANTO

     

    EMPLOYMENT
      AGREEMENT

     

    THIS
      EMPLOYMENT AGREEMENT (the “Employment Agreement”), dated as of March 8, 2006, is
      entered into by and between FP Technology Holdings, Inc., a Delaware corporation
      (the “Company”), and William Santo (“Executive” or “Employee”), an individual
      residing in the State of Massachusetts. In consideration of the mutual covenants
      and agreements hereinafter set forth, the parties agree as follows:

     

    
      	1.  	
              EMPLOYMENT.

            


    

     

    1.1  Position
      and Duties.
      During
      the Employment Term (as hereinafter defined) and subject to the terms and
      conditions set forth herein, the Company agrees to employ Executive as its
      Chief
      Financial Officer, reporting directly to the Company’s Board of Directors.
      Executive shall diligently, and to the best of his ability, perform all such
      duties incident to his position and use his best efforts to promote the best
      interests of the Company.

     

    1.2  Time
      to be Devoted to Employment; Location of Service.
      During
      the Employment Term, Executive shall devote his full time and energy to the
      business of the Company and shall not be engaged in any other business activity
      without the advance express written consent of the Company’s Board of Directors;
      provided however, Executive may participate in those activities listed in
      Section 5.3 hereof. Executive hereby represents that he is not a party to any
      agreement which would be an impediment to his entering into this Employment
      Agreement and that he is permitted to enter into this Employment Agreement
      and
      perform the obligations hereunder. The Company and Executive agree that the
      Executive may reside in a location proximate to San Francisco, California.
      The
      Company acknowledges the limited supply of skilled professionals in the area
      proximate to the Company’s current offices in Mankato, Minnesota. The Company
      will reimburse the Executive for the reasonable costs associated with travel
      to
      and accommodations at the Company’s Mankato, Minnesota offices, in accordance
      with Company travel policies. At the second anniversary of the Employment Term,
      the Executive and the Company shall discuss the Executive’s choice of residence
      in good faith to determine whether or not the Company and the Executive agree
      that the Executive’s choice of residence is or is not interfering with the
      performance of his duties. 

     

    
      	2.  	
              COMPENSATION
                AND BENEFITS.

            


    

     

    2.1  Annual
      Salary.
      In
      consideration of and as compensation for the services agreed to be performed
      by
      Executive hereunder, the Company agrees, beginning April 1, 2006, to pay
      Executive an annual base salary of $300,000 payable in accordance with the
      Company’s regular payroll schedule (“Base Salary”), less applicable withholdings
      and deductions.

     

    2.2  Discretionary
      Bonus.
      Following the end of each fiscal year, the Board of Directors will cause the
      Company to award to Executive a bonus (each a “Discretionary Bonus”) for such
      year in an amount to be determined by the Board in its sole judgment based
      upon
      the Executive’s and the Company’s performance and the achievement of the other
      goals and objectives approved by the Board of Directors in advance for such
      year. The Board of Directors will undertake to outline the factors upon which
      such bonus will be measured. However, it is understood that Company performance
      will be the most heavily weighted factor.

     

    2.3  Special
      Bonus.
      The
      Company will pay to the Executive, promptly after the consummation of the
      Qualified Equity Financing (as defined herein), a special cash bonus of $25,000
      (the “Special Bonus”). For purposes of this Employment Agreement, the term
“Qualified Equity Financing” shall mean an equity financing(s) consummated by
      the Company that occurs following the date of this Employment Agreement and
      prior to this Employment Agreement’s termination, which financing results in the
      receipt of gross proceeds by the Company of at least $6,000,000. 

     

    2.4  Vacation.
      The
      Executive will be entitled to up to fifteen (15) days paid vacation each year
      with salary, provided that no more than five (5) days unused vacation time
      shall
      be carried over to subsequent years of service.

    


    2.5  Participation
      in Benefit Plans.
      During
      the Employment Term, Executive shall be entitled to participate in any medical,
      dental, vision, disability, life insurance or other similar benefit plans,
      to
      the extent permitted by law, that may from time to time be adopted by Company
      in
      its sole discretion, and that are generally available to the other executive
      officers of the Company. The Company reserves the right to amend, modify or
      terminate any employee benefits at any time for any reason in its sole
      discretion. 

    


    2.6  Reimbursement
      of Expenses.
      The
      Company shall reimburse Executive for all reasonable business expenses incurred
      by Executive on behalf of the Company during the Employment Term, provided
      that:
      (i) such reasonable expenses are ordinary and necessary business expenses
      incurred on behalf of the Company, (ii) such reasonable expenses are submitted
      to the Company in a timely manner (and no more than forty five (45) days after
      incurrence by the Executive) and (iii) Executive provides the Company with
      itemized accounts, receipts and other documentation for such reasonable expenses
      as are reasonably required by the Company.

    


    2.7  Annual
      Review.
      Executive will have his performance reviewed annually by the Company’s Board of
      Directors. If merited under the circumstances, in the Company’s sole discretion,
      the Executive’s Base Salary may thereafter be increased.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	3.  	
              EMPLOYMENT
                TERM.

            


    

    


     

    3.1  Employment
      Term.
      The
“Employment Term” means the period commencing on the date of execution of this
      agreement and terminating three years thereafter. (subject to the notice
      provisions in Section 3.2) or as set forth in Section 4.1. 

     

    3.2  Notice
      of Termination Upon Expiration of Agreement.
      At
      least 30 days but not more than 120 days prior to the natural expiration of
      the
      initial Employment Term of this Employment Agreement, the Company may give
      Executive written notice that the Company is terminating this Employment
      Agreement upon such natural expiration date. If no such notice is provided,
      the
      terms of this Employment Agreement shall be automatically renewed for successive
      one-year periods. Notwithstanding the foregoing, Executive’s employment with the
      Company may be terminated by Executive or the Company as set forth in Section
      4.1.

     

    


     

    
      	4.  	
              TERMINATION
                OF EMPLOYMENT.

            


    

     

    4.1  Method
      of Termination.
      Executive’s employment pursuant to this Employment Agreement and the Employment
      Term provided for herein shall terminate upon the first of the following to
      occur:

     

    A.  On
      the
      date of the Executive’s death; or

     

    B.  On
      the
      date that written notice is given or made by the Company to Executive that
      as a
      result of any physical or mental injury or disability, he is unable to perform
      the essential functions of his job. Such notice may be issued when the Company
      has reasonably determined that Executive has become unable to perform
      substantially his services and duties hereunder because of any physical or
      mental injury, impairment, condition or disability that it is reasonably likely
      that he will not be able to resume substantially performing his services and
      duties on substantially the terms and conditions as set forth in this Employment
      Agreement within a 90-day period (a “Disability”); or

     

    C.  On
      the
      date that written notice is given or made by the Company to Executive of
      termination for Cause (as defined below). For purposes of this Employment
      Agreement, “Cause” shall mean any one of the following:

     

    D.  Gross
      negligence, gross misconduct or any material breach by Executive of his
      fiduciary duties to the Company. For purposes of this Employment Agreement,
      any
      act or acts or omission or omissions by Executive performed without the
      knowledge of the Board of Directors that have a material adverse effect on
      the
      Company, the Company’s operations, prospects, reputation or business shall be
      deemed to be such a breach of his duties and responsibilities to the Company;
      or

     

    1.  The
      conviction or indictment of Executive for a felony, in which case,
      notwithstanding anything set forth in the above paragraphs, the Company may
      immediately terminate Executive for Cause; or

     

    2.  Executive’s
      engagement in acts of embezzlement, fraud or dishonesty or other acts that
      are
      injurious to the Company, in which case, notwithstanding anything set forth
      in
      the above paragraphs, the Company may immediately terminate Executive for
      Cause.

     

    E.  Subject
      to the terms hereof, the date of Executive’s written notice to the Company’s of
      Executive’s resignation or departure from the Company for “Good Reason”. As used
      in this Employment Agreement, “Good Reason” shall mean Executive’s resignation
      or departure by reason of the occurrence of any of the following events by
      the
      Company without Executive’s express written consent, unless corrected within
      thirty-five (35) calendar days following Executive’s written notice to the
      Company of such event: (a) an unreasonable change in Executive’s position with
      the Company with regard to Executive’s responsibilities, duties or title; (b) an
      involuntary termination of Executive’s employment with the Company or its
      successor following a change in control of the Company; 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    F.  On
      the
      date that written notice is given or made by the Company to Executive of
      Executive’s termination without Cause. 

     

    4.2  Notice
      of Termination.
      Any
      termination of Executive’s employment either by the Company or by Executive
      shall be communicated by written Notice of Termination to the other party hereto
      in accordance with Section 7.1 hereof. In the case of resignation for Good
      Reason, the Notice of Termination must specify in reasonable detail the basis
      for such resignation.

     

    4.3  Date
      of Termination.
“Date
      of Termination” shall mean the date specified in any Notice of
      Termination.

     

    4.4  Effect
      of Termination for Cause, Executive’s Resignation Without Good Reason, or
      Voluntary Departure or Death or Disability.
      Upon
      (i) the termination of Executive for Cause; (ii) Executive’s
      resignation without Good Reason; or (iii) Executive’s death or disability,
      Executive will not be entitled to any additional compensation or other rights
      or
      benefits from the Company under this Agreement, and, as a result, the Company
      shall be obligated to pay Executive only that portion of his Base Salary, Bonus
      (if and only if the performance goals have been fully achieved and such
      obligation is then due and owing) and benefits that Executive has earned prior
      to the effective date of the termination of Executive’s employment with the
      Company.

     

    4.5  Effect
      of Termination without Cause or Executive’s Resignation for Good
      Reason.
      In the
      event the Company terminates Executive’s employment without Cause, or Executive
      departs or resigns for Good Reason, Executive shall be entitled to the balance
      of his then existing Base Salary for the remaining Employment Term, plus any
      earned Bonus (if and only if the performance goals have been fully achieved
      and
      such obligation is then due and owing) and the other earned benefits under
      this
      Agreement for a period of twelve (12) months paid in equal monthly installments
      over a twelve (12) month period beginning on the date of termination.


     

    PROPRIETARY
      INFORMATION AND COVENANT NOT TO COMPETE

     

    4.6  Proprietary
      Information.
      Executive shall abide the Proprietary Information and Inventions Agreement
      in
      the form of Exhibit B hereto executed by the Company and Executive dated on
      or
      about Executive’s start date, and Executive further agrees that the provisions
      of the Proprietary Information and Inventions Agreement shall survive any
      termination of his employment with the Company, regardless of whether such
      termination is with or without Cause or Good Reason.

     

    4.7  Non-Solicitation.
      During
      the term of this Employment Agreement and for two (2) years thereafter,
      Executive will not solicit any employee of the Company or any affiliate to
      leave
      the Company or any affiliate for any reason. 

     

    4.8  Non-Competition
      During Employment Term.
      During
      the Employment Term, Executive shall not directly or indirectly:

     

    A.  own,
      manage, operate, join, control or participate in the ownership, management,
      operation or control of, or be employed by or connected in any manner with,
      any
      enterprise which is engaged in any business competitive with that which the
      Company is at the time conducting or proposing to conduct and in those
      geographical locations where such business activities are being or will be
      conducted; provided,
      however,
      that
      such restriction shall not apply to any passive investment representing an
      interest of less than five percent (5%) of an outstanding class of publicly
      traded securities of any corporation or other enterprise which is not, at the
      time of such investment, engaged in a business competitive with the Company’s
      business; or

     

    B.  encourage
      or solicit any Company employee to leave the Company’s employ for any reason or
      interfere in any material manner with employment relationships at the time
      existing between the Company and its current employees.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	5.  	
              RESTRICTIVE
                COVENANT.

            


    

     

    During
      the Employment Term:

     

    5.1  Executive
      shall not directly or indirectly provide services to or through any person,
      firm
      or other entity except the Company, unless otherwise authorized by the Company
      in writing.

     

    5.2  Executive
      shall not render any substantial services of any kind or character for
      Executive’s own account or for any other person, firm or entity without first
      obtaining the Company’s written consent. 

     

    5.3  Notwithstanding
      the foregoing, Executive shall have the right to perform such incidental
      services as are necessary in connection with (i) his private passive
      investments, but only if Executive is not obligated or required to (and shall
      not in fact) devote any managerial efforts which interfere with the services
      required to be performed by him hereunder, (ii) his normal and customary
      charitable or community activities, (iii) participation in trade or professional
      organizations, (iv) his existing Board membership on and activities associated
      with _________________________________but only if such incidental services
      do
      not materially interfere with the performance of Executive’s services
      hereunder.

     

    
      	6.  	
              MISCELLANEOUS.

            


    

     

    6.1  Notices.
      All
      notices, demands and requests required by this Employment Agreement shall be
      in
      writing and shall be deemed to have been given or made for all purposes (i)
      upon
      personal delivery, (ii) one day after being sent, when sent by professional
      overnight courier service, (iii) five days after posting when sent by registered
      or certified mail, or (iv) on the date of transmission when sent by telegraph,
      telegram, telex, or other form of “hard copy” transmission (so long as written
      proof of transmission is received), to either party hereto at the address set
      forth below or at such other address as either party may designate by notice
      pursuant to this Section 7.

     

    If
      to the
      Company, to:

    


    FirePond,
      Inc.

    11
      Civic
      Center Plaza

    3rd
      Floor

    Mankato,
      MN 

    ATTN:
      Human Resources

    Facsimile:
      507-388-0401

    


    and
      a
      copy to:

    


    Allen
      Z.
      Sussman, Esq.

    Morrison
      & Foerster 

    555
      West
      Fifth Street

    Los
      Angeles, California 90013-1024

    Facsimile:
      213-892-5454


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    If
      to
      Executive, to:

    


    William
      Santo

    7
      Stonegate Lane

    Westwood,
      MA 02090

     

    6.2  Assignment.
      This
      Employment Agreement shall be binding on, and shall inure to the benefit of,
      the
      parties hereto and their respective heirs, legal representatives, successors
      and
      assigns; provided, however, that Executive may not assign, transfer or delegate
      his rights or obligations hereunder and any attempt to do so shall be
      void.

     

    6.3  Deductions.
      All
      amounts paid to Executive hereunder are subject to all withholdings and
      deductions required by law or as authorized by Executive from time to
      time.

     

    6.4  Entire
      Agreement.
      Except
      for the Proprietary Information and Inventions Agreement, this Employment
      Agreement contains the entire agreement of the parties with respect to the
      subject matter hereof, and all prior agreements, both written or oral, and
      any
      prior written employment agreements, are merged herein and are of no further
      force or effect.

     

    6.5  Amendment.
      This
      Employment Agreement may be modified or amended only by a written agreement
      authorized by the Company in writing (other than Executive) and signed by
      Executive.

     

    6.6  Waivers.
      No
      waiver of any term or provision of this Employment Agreement will be valid
      unless such waiver is in writing signed by the party against whom enforcement
      of
      the waiver is sought. The waiver of any term or provision of this Employment
      Agreement shall not apply to any subsequent breach of this Employment
      Agreement.

     

    6.7  Counterparts.
      This
      Employment Agreement may be executed in several counterparts, each of which
      shall be deemed an original, but together they shall constitute one and the
      same
      instrument.

     

    6.8  Severability.
      The
      provisions of this Employment Agreement shall be deemed severable, and if any
      part of any provision is held illegal, void or invalid under applicable law,
      such provision may be changed to the extent reasonably necessary to make the
      provision, as so changed, legal, valid and binding. If any provision of this
      Employment Agreement is held illegal, void or invalid in its entirety, the
      remaining provisions of this Employment Agreement shall not in any way be
      affected or impaired but shall remain binding in accordance with their
      terms.

     

    6.9  Governing
      Law.
      THIS
      EMPLOYMENT AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE COMPANY AND EXECUTIVE
      HEREUNDER SHALL BE DETERMINED UNDER, GOVERNED BY AND CONSTRUED IN ACCORDANCE
      WITH THE LAWS OF THE STATE OF CALIFORNIA AS APPLIED TO AGREEMENTS AMONG
      CALIFORNIA RESIDENTS ENTERED INTO AND TO BE PERFORMED ENTIRELY WITHIN
      CALIFORNIA.

     

    6.10  Arbitration.
      Company
      and Executive mutually agree that any and all disputes between Executive and
      Company, including any of its employees, officers, directors, agents or assigns,
      that arise out of or relate to the Executive’s employment or investment in the
      Company, shall be resolved through binding arbitration pursuant to the Federal
      Arbitration Act and applicable California law. This shall include, without
      limitation, any controversy, claim or dispute of any kind, including disputes
      relating to Executive’s recruitment and employment by the Company or the
      termination thereof, claims for breach of contract, claims for wages, benefits
      or compensation, claims based on tort, public policy, emotional distress,
defamation, fraud, discrimination or harassment, and claims under Title VII
      of
      the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the
      Americans with Disabilities Act, the Family and Medical Leave Act, the Employee
      Retirement Income Securities Act, the California Fair Employment and Housing
      Act, or any other federal, state or local law or regulation now in existence
      or
      hereinafter enacted and as amended from time to time concerning in any way
      the
      subject of the Executive’s employment with the Company or its termination. The
      only claims not
      covered
      by this Section are (a) claims for benefits under the unemployment insurance
      or
      workers’ compensation laws, which shall be brought according to their applicable
      laws, and (b) claims concerning Section 5.2 hereof or the validity,
      infringement, enforceability, or misappropriation of any trade secret, patent
      rights, copyright, trademark, or any other intellectual or confidential property
      held or sought by Executive or Company. Any disputes and/or claims required
      to
      be submitted to arbitration under this Section shall be conducted pursuant
      to
      the applicable rules of the American Arbitration Association (“AAA”), subject to
      any applicable discovery or other rules required by California law. The
      arbitration shall be held in Los Angeles, California. The Company shall pay
      the
      costs directly related to arbitration, including arbitrator and administrative
      fees. However, each party shall bear its own attorneys fees’ and any costs of
      expert witnesses, consultants and similar costs, unless an applicable contract
      or statute provides otherwise to the prevailing party, in which case the
      arbitrator shall make such determinations as required or permitted by law.
      The
      arbitration shall be instead of any civil litigation, meaning that the Executive
      and Company are waiving
      any right to a jury trial,
      and the
      arbitrator’s decision shall be binding to the fullest extent permitted by law
      and enforceable by any court having jurisdiction thereof.

     

    6.11  Deadline
      to accept offer:
      Unless
      withdrawn earlier by Company, this offer shall automatically expire thirty
      (30)
      days after the date issued to Executive.

     

    [Signature
      page to follow.]

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


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

     

     

     

    FP
      Technology Holdings

     

     

    By:_____________________________________
      

    


    Name:
      __________________________________

    


    Title:
      ___________________________________

    


    Date:
      ___________________________________

    


    


     

    William
      Santo

    


    


    Sign:
      _____________________________________

    


    Date:
      _____________________________________

    


    


    Date
      issued to Executive: ___________________________

    


    This
      offer shall expire 30 calendar days after the date of issuance or as otherwise
      provided in this Agreement.

    


    


    Date
      returned to Company: _________________________