Document:

EX-4.3 WAFERTECH 2004 EMPLOYEE STOCK OPTIONS PLAN

 

Exhibit 4.3

WAFERTECH

2004 EMPLOYEE STOCK OPTIONS PLAN

	1.	 	Purpose
	 
	 	 	The purpose of the WaferTech 2004 Employee Stock Options Plan (the “Plan”) is to promote
the interests of the Company and its shareholders by attracting and retaining the high-tech
talents/professionals of the Company and its subsidiaries by means of incentives in the
form of stock options.
	 
	2.	 	Definitions

	 	(a)	 	“Board” shall mean the Board of Directors of the Company.
	 
	 	(b)	 	“Committee” shall mean the committee appointed by the Board, in accordance
with Section 3(a) hereof, to administer the Plan.
	 
	 	(c)	 	“Common Stock” shall mean the voting common stock of Taiwan Semiconductor
Manufacturing Company Limited (“TSMC”).
	 
	 	(d)	 	“Company” shall mean WaferTech, LLC, a Delaware limited liability company.
	 
	 	(e)	 	“Employee” shall mean any individual who is employed by the Company.
	 
	 	(f)	 	“Exercise Price” of the options shall be the closing price of the common
 shares of TSMC on the date that the options are granted as may be subsequently
adjusted pursuant to Section 8 herein.
	 
	 	(g)	 	“Option” shall mean an option to purchase Common Stock granted pursuant to
the Plan.
	 
	 	(h)	 	“Optionee” shall mean any person who holds an Option pursuant to the Plan.
	 
	 	(i)	 	“Outside Director” shall mean a non-employee member of the Board who (1) is
not a current employee of the Company; and (2) does not receive compensation for prior
services (other than benefits under a tax-qualified retirement plan) from the Company
during a taxable year in which he or she serves on the Committee.
	 
	 	(j)	 	“Plan” shall mean this WaferTech 2004 Employee Stock Options Plan as it may
be amended from time to time.
	 
	 	(k)	 	“Purchase Price” shall mean at any particular time the Exercise Price times
the number of Shares for which an Option is being exercised.
	 
	 	(l)	 	“Share” shall mean one share of authorized Common Stock.
	 
	 	(m)	 	“TSMC Plan” shall mean the TSMC 2004 Employee Stock Options Plan.

 

 

	3.	 	Administration.

	 	(a)	 	The Committee

	 	 	The Plan shall be administered by a Committee of Outside Directors that shall consist of
not less than two members, who during the one year prior to service as an administrator of
the Plan, shall not have been granted or awarded equity securities pursuant to the Plan.

	 	(b)	 	Powers of the Committee

	 	 	Subject to the provisions of the Plan, the TSMC Plan, and applicable laws and regulations,
the Committee shall have the authority, in its discretion and on behalf of the Company:

	 	(i)	 	to grant Options;
	 
	 	(ii)	 	to determine the Exercise Price per Share of Options to be granted;
	 
	 	(iii)	 	to determine the Employees to whom, and the time or times at which, Options
shall be granted and the number of Shares for which an Option will be exercisable;
	 
	 	(iv)	 	to interpret the Plan;
	 
	 	(v)	 	to prescribe, amend, and rescind rules and regulations relating to the Plan;
	 
	 	(vi)	 	to determine the terms and provisions of each Option granted and, with the
consent of the holder thereof, modify or amend each Option;
	 
	 	(vii)	 	to accelerate or defer, with the consent of the Optionee, the exercise date
of any Option;
	 
	 	(viii)	 	to authorize any person to execute on behalf of the Company any instrument required
to effectuate the grant of an Option previously granted by the Committee;
	 
	 	(ix)	 	with the consent of the Optionee, cancel and regrant an Option previously
granted by the Committee; and
	 
	 	(x)	 	to make all other determinations deemed necessary or advisable for the
administration of the Plan.
	 
	 	(c)	 	Committee’s Interpretation of the Plan

	 	 	The interpretation and construction by the Committee of any provision of the Plan or of any
Option granted hereunder shall be final and binding on all parties claiming an interest in
an Option granted under the Plan. No member of the Committee shall be liable for any
action or determination made in good faith with respect to the Plan or any Option.
	 
	4.	 	Period and Nature of the Option Grant
	 
	 	 	The Committee on behalf of the Company may grant the Options in one or more tranches within
one (1) year after the TSMC Plan has become effective. The actual dates of grant will be
determined by the Committee. Options shall be evidenced by written stock option agreements
between the Optionee and the Company in such form as the Committee shall from time to time
determine. No Option or purported Option shall be a valid and binding obligation of the
Company unless so evidenced in writing.

 

 

	5.	 	Optionee
	 
	 	 	Each Optionee shall be a regular full-time Employee of the Company, or in a subsidiary in
which the Company’s shareholding with voting rights, directly or indirectly, is more than
fifty percent (50%). Whether an Employee is entitled to receive Options, and the number of
Options to be received, shall be subject to approval by the Committee, and based on job
grade, performance, contribution, special achievement and/or years of employment. In
connection therewith, the Committee shall seek the advice and counsel of the Chairman and
Compensation Committee of the Board of Directors of TSMC. The number of Shares subject to
Options granted to any one Optionee in any tranche shall not exceed ten percent (10%) of
the total number Shares subject to Options granted in that tranche, and the total number of
Shares subject to Options to be exercised by any one Optionee within each fiscal year shall
not exceed one percent (1%) of the outstanding common shares of TSMC at the year-end.
	 
	6.	 	Maximum Number of Options to be Granted
	 
	 	 	The maximum number of Options authorized to be granted with respect to the Plan shall be
Eleven Million (11,000,000) units, with one (1) unit entitled to subscribe to one (1)
Share. The number of Shares for which an Option is exercisable at any time shall not exceed
the number of Shares remaining available for issuance under the Plan. No Option shall be
granted with respect to the Plan, however, if the aggregate number of Shares issued or
issuable to all past and present Optionees under the Plan would thereupon exceed eleven
million (11,000,000 ) Shares, which is the maximum aggregate number of Shares that have
been authorized by TSMC for issuance under the Plan. The Committee shall consult with a
designated officer of TSMC prior to granting any Options with respect to the Plan to ensure
compliance with the foregoing limitation. The limitations established by this Section 6
shall be subject to adjustment in the manner provided in Section 8 hereof upon the
occurrence of an event specified therein.
	 
	7.	 	Terms and Conditions

	 	(a)	 	Exercise Price

	 	 	The Exercise Price of the Options is defined in Section 2(f) hereof.

	 	(b)	 	Vesting Schedule

	 	 	An Optionee may not exercise his or her Option for any Shares until the Option, in regard
to such Shares, has vested. Each stock option grant agreement shall include a vesting
schedule in accordance with this Section which shall show when the Option becomes
exercisable. The vesting schedule shall not impose upon the Company any obligation to
retain the Optionee in its employ or under contract for any period of time or otherwise
change the employment-at-will status of an Optionee who is an employee of the Company. The
Options will not vest in the first two (2) years (“Waiting Period”) and may be exercised in
accordance with the following schedule. Except as may be shortened in the Plan or by the
Committee, the options shall be valid for ten (10) years from the date of grant and may not
be transferred, except by inheritance, enforceable court order, or in accordance with
applicable law, rule or regulation. The following is the vesting schedule:

	 	 	 	 	 	 	 	 
	 
	 	Years after Grant	 	 	Percent Vesting	 
	 	2 years

	 	 	 	50	%	 
	 	3 years

	 	 	 	75	%	 
	 	4 years and after

	 	 	 	100	%	 
	 

 

 

	 	(c)	 	After the Company grants an Option to an Optionee, the Committee shall, in
its sole discretion, have the right to revoke and cancel unvested Options in the event
that the Optionee commits serious misconduct or violates his/her employment contract
or policies of the Company.
	 
	 	(d)	 	Termination of Employment

	 	 	If an Optionee’s employment with the Company is terminated for any reason, the Optionee
shall exercise his/her vested Options in accordance with the following provisions, subject
to the ten-year limit set forth in Section 7(b) above:

	 	(i)	 	Voluntary Termination or Terminated by the Company in Accordance with
applicable state or Federal laws —
	 
	 	 	 	If an Optionee’s employment by the Company is either voluntarily terminated by the
Optionee or by the Company in accordance with applicable state or Federal laws, the
Optionee’s Options vested in accordance with the schedule set forth in Section 7(b)
above must be exercised within three (3) months from the employment termination
date. Any Options unvested as of the employment termination date or not exercised
within three (3) months from the employment termination date shall expire and become
invalid.
	 
	 	(ii)	 	Retirement —
	 
	 	 	 	If an Optionee’s employment by the Company is terminated because the Optionee
retires in accordance with the then current policies of the Company, all Options
granted to the Optionee as of the employment termination date shall completely vest
and be exercisable following the Waiting Period, regardless of the vesting schedule
set forth in Section 7(b) above. The Optionee shall exercise all Options within one
(1) year from the later of: (x) the date of retirement; or, (y) the end of the
Waiting Period, whichever date is later. Any Options not exercised within the time
frame set forth in the immediately preceding sentence shall expire and become
invalid.
	 
	 	(iii)	 	Temporarily on Leave Without Pay —
	 
	 	 	 	If the Optionee is approved to be temporarily on leave without pay in accordance
with the then current policies of the Company or applicable law, rule or regulation,
his/her vested Options shall be exercised within three (3) months from the effective
date of the temporary leave; otherwise, the right to exercise options shall be
deferred until the Optionee’s reinstatement. For unvested Options, the accumulation
of years of employment with respect to the vesting schedule set forth in Section
7(b) above shall suspend during the period of the Optionee’s temporary leave and
shall resume after the Optionee’s reinstatement, subject to the ten-year limit set
forth in Section 7(b) above.
	 
	 	(iv)	 	Death —
	 
	 	 	 	If an Optionee dies while employed by the Company, his/her Options vested in
accordance with the schedule set forth in Section 7(b) above, as of the date of
his/her death, shall be exercised by the Optionee’s inheritor within one (1) year
from the death of the Optionee. Any Options unvested upon the death of the Optionee
or not exercised within one (1) year of his/her death shall expire and become
invalid.

 

 

	 	(v)	 	Death or Disability Caused by Work Injury —

	 	(1)	 	Regardless of the vesting schedule set forth in Section 7(b)
above, if an Optionee ceases to be employed by the Company due to any permanent
total disability caused by a work related injury, on such date all Options
he/she were granted shall immediately vest and become exercisable, subject only
to the Waiting Period. The Optionee shall exercise his/her vested Options
within one (1) year from the later of: (x) the date he/she ceases to be
employed by the Company; or, (y) the end of the Waiting Period, whichever date
is later. Any Options not exercised within the time frame set forth in the
immediately preceding sentence shall expire and become invalid.
	 
	 	(2)	 	Regardless of the vesting schedule set forth in Section 7(b)
above, if an Optionee ceases to be employed by the Company due to his/her death
caused by a work related injury, on such date all Options they were granted
shall immediately vest and become exercisable by the Optionee’s inheritor,
subject only to the Waiting Period. The inheritor shall exercise the Options
within one (1) year from the later of: (x) the death of the Optionee; or, (y)
the end of the Waiting Period, whichever date is later. Any Options not
exercised within the time frame set forth in the immediately preceding sentence
shall expire and become invalid.

	 	(vi)	 	Transfer to Affiliates —
	 
	 	 	 	If an Optionee is transferred to an affiliate of TSMC or of the Company, due to the
necessity of the operations of the Company, the rights of the Optionee and
obligations of the Company with respect to the Options granted shall not be affected
by such transfer.
	 
	 	(vii)	 	Invalidated Options
	 
	 	 	 	Any invalidated options shall be cancelled.

	8.	 	Adjustments of the Exercise Price and Number of Granted Options

	 	(a)	 	The Exercise Price of each Option shall be subject to adjustment in
accordance with the following formula (to be rounded to the nearest tenth) upon the
occurrence of events relating to changes in paid-in capital of TSMC, as a result of
capitalization of retained earnings or capital reserves.
	 
	 	 	 	NEP = OEP  ́ [N/(N+ n)]               Where: NEP = the Exercise Price after such adjustment

	 	 	 	OEP = the Exercise Price before such adjustment
	 
	 	 	 	N = the number of outstanding common Shares before issue (the number of treasury
Shares which have not been transferred or cancelled, or convertible bonds, shall
not be included)
	 
	 	 	 	n = the number of new common Shares arising from the capitalization of retained
earnings or capital reserves

	 	(b)	 	The Exercise Price will not be adjusted in case of issuance of new Common
Stock in connection with mergers involving either the Company or TSMC.

 

 

	9.	 	Issuance of Additional Options
	 
	 	 	Upon the occurrence of TSMC’s capitalization of retained earnings or capital reserves, in
addition to adjusting the exercise price in accordance with provisions set forth in Section
8(a) above, the Company will issue additional options in proportion to the increase of
paid-in capital (only integral options will be issued and any fractional options resulting
therefrom will be disregarded) at the adjusted price to holders of existing unvested or
unexercised options, provided that there are sufficient common shares reserved for granting
the options as specified in the Articles of Incorporation of TSMC.
	 
	10.	 	Procedures for Exercising Options

	 	(a)	 	Subject to the Company’s Insider Trading Policy, except during a period in
which the exercise of Options is not permitted by relevant laws and regulations, the
Optionee may exercise his/her Options in accordance with the vesting schedule set
forth in Section 7(b) above by submitting a written notice (the “Exercise Notice”) to
the Company.
	 
	 	(b)	 	The Company shall inform the Optionee of the payment needed for exercising
the Options to a designated bank upon the receipt of the Exercise Notice, and the
Purchase Price shall be payable in full in cash. The Exercise Notice shall not be
withdrawn once given.
	 
	 	(c)	 	The Company shall cause TSMC to register the Optionee and his/her shares in
the shareholders record upon confirmation of payment.

	11.	 	Miscellaneous

	 	(a)	 	The Plan, and its amendments, shall become effective when the TSMC Plan is
approved by the relevant authority and upon approval from the Committee.
	 
	 	(b)	 	Any other matters not set forth in the Plan shall be dealt with in accordance
with the applicable laws and regulations by the Committee, whose decisions regarding
the Plan and its administration shall be final.EXHIBIT 10.1

                            INDEMNIFICATION AGREEMENT

     THIS AGREEMENT is made and entered into this 4th day of January, 2005
between ANTs software inc., a Delaware corporation ("Corporation") and Robert
Henry Kite ("Director").

                                WITNESSETH THAT:

     WHEREAS, Director, a member of the Board of Directors of the Corporation,
performs a valuable service in such capacity for Corporation; and

     WHEREAS, the Amended and Restated Certificate of Incorporation of the
Corporation authorize and permit contracts between Corporation and the members
of its Board of Directors providing for indemnification, among other things, of
such directors; and

     WHEREAS, in accordance with the authorization as provided by the Delaware
General Corporation Law, as amended ("Code"), Corporation may purchase and
maintain a policy or policies of Directors and Officers Liability Insurance ("D
& O Insurance"), covering certain liabilities which may be incurred by its
directors and officers in the performance as directors and officers of the
Corporation; and

     WHEREAS, as a result of recent developments affecting the terms, scope and
availability of D & O Insurance there exists general uncertainty as to the
extent of protection afforded members of the Board of Directors by such D & O
Insurance and by statutory and bylaw indemnification provisions; and

     WHEREAS, in order to induce Director to serve or continue to serve as the
case may be, as a member of the Board of Directors of Corporation, Corporation
has determined that it is in its best interests to enter into this contract with
Director;

     NOW, THEREFORE, in consideration of Director's continued service as a
director after the date hereof, the parties hereto agree as follows:

     1. Indemnity of Director. Corporation hereby agrees to hold harmless and
indemnify Director to the full extent authorized by the provisions of the Code,
as it may be amended from time to time.

     2. Additional Indemnity. Subject only to the limitations set forth in
Section 3 hereof, Corporation hereby further agrees to hold harmless and
indemnify Director:
<PAGE>
     (a) against any and all expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by
Director in connection with any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (including
an action by or in the right of Corporation) to which Director is, was or at any
time becomes a party, or is reasonably thought to be threatened to be made a
party, by reason of the fact that Director is, was or at any time becomes a
director, officer, employee or agent of Corporation, or is or was serving or at
any time serves at the request of Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise; and

     (b) otherwise to the fullest extent as may be provided to Director by
Corporation under the non-exclusive provisions of the Amended and Restated
Certificate of Incorporation of the Corporation, the bylaws of the Corporation,
and the Code.

     3. Limitations on Additional Indemnity.

     (a) No indemnity pursuant to Section 2 hereof shall be paid by Corporation
for any of the following:

     (i) to the extent the aggregate of losses to be indemnified exceeds the sum
of (A) such losses for which the Director is indemnified pursuant to Section 1
hereof and (B) any settlement pursuant to any D & O Insurance purchased and
maintained by Corporation;

     (ii) in respect to remuneration paid to Director if it shall be determined
by a final judgment without right of appeal, or other final adjudication that
such remuneration was in violation of law;

     (iii) on account of any suit in which judgment is rendered against Director
for an accounting of profits made from the purchase or sale by Director of
securities of Corporation pursuant to the provisions of Section 16(b) of the
Securities Exchange Act of 1934 and amendments thereto or similar provisions of
any federal, state or local statutory law;

     (iv) on account of Director's acts or omissions that involve intentional
misconduct or a knowing and culpable violation of law;

     (v) on account of any proceeding (other than a proceeding referred to in
Section 8(b) hereof) initiated by the Director unless such proceeding was
authorized by the uninterested directors of the Corporation; or

     (vi) if a final decision without right of appeal by a Court having
jurisdiction in the matter shall determine that such indemnification is not
lawful.

     (b) In addition to those limitations set forth above in paragraph (a) of
this Section 3, no indemnity pursuant to Section 2 hereof in an action by or in
the right of Corporation shall be paid by Corporation for any of the following:

                                       2
<PAGE>
     (i) on account of acts or omissions that Director believed or believes to
be contrary to the best interests of the Corporation or its shareholders or that
involve the absence of good faith on the part of Director;

     (ii) with respect to any transaction from which Director derived an
improper personal benefit;

     (iii) on account of acts or omissions that show a reckless disregard for
Director's duties to the corporation or its shareholders in circumstances in
which Director was aware, or should have been aware, in the ordinary course of
performing a Director's duties, of a risk of serious injury to Corporation or
its shareholders;

     (iv) on account of acts or omissions that constitute an unexcused pattern
of inattention that amounts to an abdication of Director's duties to the
Corporation or its shareholders;

     (v) to the extent prohibited by Section 144 of the Delaware general
Corporation Law, entitled "Interested Directors; Quorum;"

     (vi) in respect of any claim, issue or matter as to which Director shall
have been adjudged to be liable to Corporation in the performance of Director's
duties to Corporation and its shareholders, unless and only to the extent that
the court in which such proceeding is or was pending shall determine upon
application that, in view of all the circumstances of the case, Director is
fairly and reasonably entitled to indemnity for expenses and then only to the
extent that such court shall determine;

     (vii) of amounts paid in settling or otherwise disposing of a pending
action without court approval; and

     (viii) of expenses incurred in defending a pending action which is settled
or otherwise disposed of without court approval.

     4. Contribution. If the indemnification provided in Sections 1 and 2 is
unavailable and may not be paid to Director for any reason other than those set
forth in Section 3 (excluding subsections 3(b)(vii) and (viii)), then in respect
of any threatened, pending or completed action, suit or proceeding in which
Corporation is jointly liable with Director (or would be if joined in such
action, suit or proceeding), Corporation shall contribute to the amount of
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred and paid or payable by Director in
such proportion as is appropriate to reflect (i) the relative benefits received
by Corporation on the one hand and Director on the other hand from the
transaction from which such action, suit or proceeding arose, and (ii) the
relative fault of Corporation on the one hand and of Director on the other in
connection with the events which resulted in such expenses, judgments, fines or
settlement amounts, as well as any other relevant equitable considerations. The
relative fault of Corporation on the one hand and of Director on the other shall
be determined by reference to, among other things, the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent the
circumstances resulting in such expenses, judgments, fines or settlement
amounts. Corporation agrees that it would not be just and equitable if
contribution pursuant to this Section 4 were determined by pro rata allocation
or any other method of allocation which does not take account of the foregoing
equitable considerations.

                                       3
<PAGE>
     5. Continuation of Obligations. All agreements and obligations of
Corporation contained herein shall continue during the period Director is a
director, officer, employee or agent of Corporation (or is or was serving at the
request of Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise) and shall
continue thereafter so long as Director shall be subject to any possible claim
or threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that Director
was a director of Corporation or serving in any other capacity referred to
herein.

     6. Notification and Defense of Claim. Promptly after receipt by Director of
notice of the commencement of any action, suit or proceeding, Director will, if
a claim in respect thereof is to be made against Corporation under this
Agreement, notify Corporation of the commencement thereof; but the omission so
to notify Corporation will not relieve it from any liability which it may have
to Director otherwise than under this Agreement. With respect to any such
action, suit or proceeding as to which Director notifies Corporation of the
commencement thereof:

     (a) Corporation will be entitled to participate therein at its own expense;

     (b) Except as otherwise provided below, to the extent that it may wish,
Corporation jointly with any other indemnifying party similarly notified will be
entitled to assume the defense thereof, with counsel satisfactory to Director.
After notice from Corporation to Director of its election so as to assume the
defense thereof, Corporation will not be liable to Director under this Agreement
for any legal or other expenses subsequently incurred by Director in connection
with the defense thereof other than reasonable costs of investigation or as
otherwise provided below. Director shall have the right to employ its counsel in
such action, suit or proceeding but the fees and expenses of such counsel
incurred after notice from Corporation of its assumption of the defense thereof
shall be at the expense of Director unless (i) the employment of counsel by
Director has been authorized by Corporation, (ii) Director shall have reasonably
concluded that there may be a conflict of interest between Corporation and
Director in the conduct of the defense of such action or (iii) Corporation shall
not in fact have employed counsel to assume the defense of such action, in each
of which case the fees and expenses of counsel shall be at the expense of
Corporation. Corporation shall not be entitled to assume the defense of any
action, suit or proceeding brought by or on behalf of Corporation, which is
against or involves Director, or as to which Director shall have made the
conclusion provided for in (ii) above; and

     (c) Corporation shall not be liable to indemnify Director under this
Agreement for any amounts paid in settlement of any action or claim effected
without its written consent. Corporation shall not settle any action or claim in
any manner which would impose any penalty or limitation on Director without
Director's written consent. Neither Corporation nor Director will unreasonably
withhold its consent to any proposed settlement.

                                       4
<PAGE>
     7. Advancement and Repayment of Expenses.

     (a) In the event that Director employs his own counsel pursuant to Section
6(b)(i) through (iii) above, Corporation shall advance to Director, prior to any
final disposition of any threatened or pending action, suit or proceeding,
whether civil, criminal, administrative or investigative, any and all reasonable
expenses (including legal fees and expenses) incurred in investigating or
defending any such action, suit or proceeding within ten (10) days after
receiving copies of invoices presented to Director for such expenses.

     (b) Director agrees that Director will reimburse Corporation for all
reasonable expenses paid by Corporation in defending any civil or criminal
action, suit or proceeding against Director in the event and only to the extent
it shall be ultimately determined by a final judicial decision (from which there
is no right of appeal) that Director is not entitled, under applicable law, the
Bylaws, this Agreement or otherwise, to be indemnified by Corporation for such
expenses.

     8. Enforcement.

     (a) Corporation expressly confirms and agrees that it has entered into this
Agreement and assumed the obligations imposed on Corporation hereby in order to
induce Director to become or continue as a director of Corporation, and
acknowledges that Director is relying upon this Agreement in continuing in such
capacity.

     (b) In the event Director is required to bring any action to enforce rights
or to collect moneys due under this Agreement and is successful in such action,
Corporation shall reimburse Director for all of Director's reasonable fees and
expenses in bringing and pursuing such action.

     9. Separability. Each of the provisions of this Agreement is a separate and
distinct agreement and independent of the others, so that if any provision
hereof shall be held to be invalid or unenforceable for any reason, such
invalidity or unenforceability shall not affect the validity or enforceability
of the other provisions hereof.

     10. Governing Law. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of California.

     11. Binding Effect. This Agreement shall be binding upon Director and upon
Corporation, its successors and assigns, and shall inure to the benefit of
Director, his heirs, personal representatives and assigns and to the benefit of
Corporation, its successors and assigns.

                                       5
<PAGE>
     12. Amendment and Termination. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless in writing signed by
both parties hereto.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the day and year first above written.

                                        ANTS SOFTWARE INC.
                                        a Delaware corporation

                               By:      /s/ Kenneth Ruotolo
                                        ----------------------------
                                        Kenneth Ruotolo, Chief Financial Officer

                          Address:      801 Mahler Road, Suite G
                                        Burlingame, CA 94010

                                         /s/ Robert Kite
                                         ---------------------------
                                         Robert Henry Kite

                         Address:        6910 East Fifth Avenue
                                         Scottsdale, Arizona 85251

                                       6

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