Document:

exv4w1

 

Exhibit 4.1

QUICKSILVER RESOURCES INC.,

THE SUBSIDIARY GUARANTORS PARTIES HERETO

AND

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

as TRUSTEE

 

THIRD SUPPLEMENTAL INDENTURE

Dated as of September 26, 2006

 

 

          This THIRD SUPPLEMENTAL INDENTURE, dated as of September 26, 2006 (this “Supplemental
Indenture”), among Quicksilver Resources Inc., a Delaware corporation (the “Company”), the
Subsidiary Guarantors (as defined in the Indenture referred to herein) and JPMorgan Chase Bank,
National Association, as Trustee.

W I T N E S S E T H

          WHEREAS, the Company and the Trustee entered into an Indenture (the “Original Indenture”),
dated as of December 22, 2005, as supplemented by a First Supplemental Indenture, dated as of March
16, 2006, among the Company, the Subsidiary Guarantors party thereto and the Trustee (the “First
Supplemental Indenture”) and a Second Supplemental Indenture, dated as of July 31, 2006, among the
Company, the Subsidiary Guarantors party thereto and the Trustee (the “Second Supplemental
Indenture” and, together with the Original Indenture and the First Supplemental Indenture, the
“Indenture”), pursuant to which the Company has issued $350,000,000 of aggregate principal amount
of
71/8% Senior Subordinated Notes due 2016 (the “Notes”);

          WHEREAS, Section 6.01(a) of the First Supplemental Indenture provides that Section 10.01 of
the Original Indenture applies to the Notes;

          WHEREAS, Section 10.01(h) of the Original Indenture provides that, without the consent of any
Holders, the Company, when authorized by a Board Resolution, and the Trustee may enter into one or
more indentures supplemental to the Indenture to cure any ambiguity, to correct or supplement any
provision of the Indenture which may be defective or inconsistent with any other provision of the
Indenture, or to make any other provisions with respect to matters or questions arising under the
Indenture, provided that any action pursuant to Section 10.01(h) will not adversely affect the
interests of the Holders of Securities of any Series in any material respect; and

          WHEREAS, the Board has approved an amendment to Section 3.11 of the First Supplemental
Indenture to be effected pursuant to this Supplemental Indenture;

          NOW THEREFORE, in consideration of the foregoing, the Company, the Subsidiary Guarantors and
the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the
Notes as follows:

ARTICLE 1

          Section 1.01. Effect. This Supplemental Indenture is supplemental to the Indenture
and does and shall be deemed to form a part of, and shall be construed in connection with and as
part of, the Indenture for any and all purposes.

          Section 1.02. Effective Time. This Supplemental Indenture shall become effective
immediately upon its execution and delivery by the Company, the Subsidiary Guarantors and the
Trustee.

ARTICLE 2

          Section 2.01. Amendment. The fifth paragraph of Section 3.11 of the First
Supplemental Indenture is hereby amended to read in its entirety as follows:

     The Company may not permit any Subsidiary Guarantor to consolidate with or
merge with or into any Person (other than another Subsidiary Guarantor) and may not
permit the conveyance, transfer or lease of substantially all of the assets of any
Subsidiary Guarantor (other than to another Subsidiary Guarantor) unless:

     (1) (a) the Person formed by the consolidation or into which the Subsidiary
Guarantor merged or to which all or substantially all of the Subsidiary Guarantor’s
properties and assets are transferred is a corporation, partnership, limited
liability company, business trust, trust or other legal entity organized and validly
existing under the laws of the United States, any state

 

 

thereof, or the District of
Columbia and such Person (if not such Subsidiary Guarantor) will expressly assume,
by supplemental indenture, all the obligations of such Subsidiary Guarantor under
its Subsidiary Guarantee; (b) immediately after the transaction and the Incurrence
or anticipated Incurrence of any Indebtedness to be Incurred in connection
therewith, no Event of Default exists; and (c) the Company will deliver to the
Trustee an Officers’ Certificate and an Opinion of Counsel, each to the effect that
the conditions set forth above have been satisfied; or

     (2) the transaction is made in compliance with Section 3.07 of this First
Supplemental Indenture.

ARTICLE 3

          Section 3.01. Ratification of Indenture. Except as specifically modified herein, the
Indenture and the Notes are in all respects ratified and confirmed (mutatis mutandis) and shall
remain in full force and effect in accordance with their terms.

          Section 3.02. Defined Terms. All capitalized terms used but not defined herein shall
have the same respective meanings ascribed to them in the Indenture.

          Section 3.03. Trustee. Except as otherwise expressly provided herein, no duties,
responsibilities or liabilities are assumed, or shall be construed to be assumed, by the Trustee by
reason of this Supplemental Indenture. This Supplemental Indenture is executed and accepted by the
Trustee subject to all of the terms and conditions set forth in the Indenture with the same force
and effect as if those terms and conditions were repeated at length herein and made applicable to
the Trustee with respect hereto.

          Section 3.04. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

          Section 3.05. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them together represent
the same agreement.

          Section 3.06. Headings. The headings herein are inserted for convenience of reference
only and are not intended to be part of, or to affect the meaning or interpretation of, this
Supplemental Indenture.

          Section 3.07. Recitals by the Company. The recitals hereto are statements only of the
Company and shall not be considered statements of or attributable to the Trustee.

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     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be
duly executed as of the date first above written.

	 	 	 	 	 
	 	QUICKSILVER RESOURCES INC.

 	 
	 	By:  	/s/ John C. Cirone
 	 
	 	 	Name:  	John C. Cirone 	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	MERCURY MICHIGAN, INC.,

as Subsidiary Guarantor

 	 
	 	By:  	/s/ John C. Cirone
 	 
	 	 	Name:  	John C. Cirone 	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	TERRA ENERGY LTD.,

as Subsidiary Guarantor

 	 
	 	By:  	/s/ John C. Cirone
 	 
	 	 	Name:  	John C. Cirone 	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	GTG PIPELINE CORPORATION,

as Subsidiary Guarantor

 	 
	 	By:  	/s/ John C. Cirone
 	 
	 	 	Name:  	John C. Cirone 	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	COWTOWN PIPELINE FUNDING, INC.,

as Subsidiary Guarantor

 	 
	 	By:  	/s/ John C. Cirone
 	 
	 	 	Name:  	John C. Cirone 	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	COWTOWN PIPELINE MANAGEMENT, INC.,

as Subsidiary Guarantor

 	 
	 	By:  	/s/ John C. Cirone
 	 
	 	 	Name:  	John C. Cirone 	 
	 	 	Title:  	Senior Vice President 	 
	 

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	 	TERRA PIPELINE COMPANY,

as Subsidiary Guarantor

 	 
	 	By:  	/s/ John C. Cirone
 	 
	 	 	Name:  	John C. Cirone 	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	BEAVER CREEK PIPELINE, L.L.C.,

as Subsidiary Guarantor

 	 
	 	By:  	/s/ John C. Cirone
 	 
	 	 	Name:  	John C. Cirone 	 
	 	 	Title:  	Senior Vice President 	 
	 

	 	 	 	 	 	 	 
	 	 	COWTOWN PIPELINE L.P.,

as Subsidiary Guarantor	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	COWTOWN PIPELINE MANAGEMENT, INC.,
its general partner	 	 

	 	 	 	 	 
	 	 	 
	 	By:  	             /s/ John C. Cirone
 	 
	 	 	Name:  	John C. Cirone 	 
	 	 	Title:  	Senior Vice President 	 
	 

	 	 	 	 	 	 	 
	 	 	COWTOWN GAS PROCESSING L.P.,	 	 
	 	 	as Subsidiary Guarantor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	COWTOWN PIPELINE MANAGEMENT, INC.,
its general partner	 	 

	 	 	 	 	 
	 	 	 
	 	By:  	             /s/ John C. Cirone
 	 
	 	 	Name:  	John C. Cirone 	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,

     as Trustee
	 	By:  	/s/ Mauri Cowen
 	 
	 	 	Name:  	Mauri J. Cowen 	 
	 	 	Title:  	Vice President 	 
	 

4exv10w1

 

Exhibit 10

FAIR ISAAC CORPORATION

TRANSITION AGREEMENT

WITH THOMAS G. GRUDNOWSKI

     THIS TRANSITION AGREEMENT (the “Agreement”) is made and entered into as of November 1, 2006
(the “Effective Date”) by and between Fair Isaac Corporation, a Delaware corporation (the
“Company”), and Thomas G. Grudnowski, a resident of Minnesota (“Grudnowski”).

BACKGROUND

     A. The Company and Grudnowski entered into an Employment Agreement dated January 30, 2004 (the
“2004 Employment Agreement”), pursuant to which Grudnowski has been employed by the Company as its
Chief Executive Officer.

     B. The Company and Grudnowski entered into an Employee Confidentiality Agreement and
Non-Disclosure Agreement dated December 2, 1999 (the “Confidentiality Agreements”).

     C. As of the Effective Date, Grudnowski currently holds options to purchase a total of
1,806,666 shares of common stock of the Company and unvested options to purchase a total of 445,834
shares of common stock of the Company (collectively, the “Options”).

     D. Grudnowski has also served as a director on the Company’s Board of Directors (the “Board”).

     E. The parties have agreed that it is in their mutual interests that Grudnowski resign (1) as
Chief Executive Officer of the Company, (2) as a director on the Board, and (3) from any other
officer or director position held by Grudnowski with the Company or any of its subsidiaries or
affiliates, effective November 1, 2006 (the “Resignation Date”).

     F. The parties have agreed that following the Resignation Date Grudnowski shall remain
employed with the Company under the terms of this Agreement through January 31, 2007 (the
“Termination Date”), in order to facilitate a smooth transition for the Company.

     G. The parties desire to resolve all present and potential issues between them relating to
Grudnowski’s employment and termination of his employment, compensation and options, and have
agreed to a full resolution of any such issues as set forth in this Agreement.

     NOW THEREFORE, in consideration of the mutual promises and provisions contained in this
Agreement and in the Release referred to below, the parties, intending to be legally bound, agree
as follows:

 

 

AGREEMENT

     1. Resignation. Grudnowski hereby confirms his resignation as Chief Executive Officer
of the Company, as a director of the Board, and from any other officer or director position with
the Company or any of its subsidiaries or affiliates effective as of the Resignation Date.
Grudnowski confirms that his resignation as a director of the Company did not arise from any
disagreement he has with the Company on any matter relating to the Company’s operations, policies
or practices. A press release announcing Grudnowski’s resignation was made by the Company on
November 1, 2006, with the text set forth in Exhibit A.

     2. Earned Compensation. The Company shall pay Grudnowski earned Base Salary through
the Resignation Date in accordance with Section 4(a) of the Employment Agreement. In addition, the
Company shall pay Grudnowski an Incentive Award for fiscal year ended September 30, 2006, in the
gross amount of $660,000, pursuant to Section 4(b) of the Employment Agreement, at such time as the
Incentive Award would be paid pursuant to the Company’s normal practices as to such awards in the
past, but not earlier than the expiration of the rescission period set forth in Section 14 of this
Agreement and in the Release. The Company and Grudnowski acknowledge and agree that Grudnowski is
not eligible for an annual option grant pursuant to Section 4(c)(ii) of the Employment Agreement or
to any other incentive compensation for the period ending on the Resignation Date. The Company
shall pay Grudnowski for all earned and unused vacation time as of the Resignation Date, in the
amount of $14,942.13, no later than November 30, 2006.

     3. Transition Term.

           (a) Scope of Engagement. Subject to the terms and conditions of this Agreement, Grudnowski
agrees to remain in the employ of the Company, and the Company agrees to continue Grudnowski’s
employment, for the period from the Resignation Date through January 31, 2007 (the “Transition
Term”). During the Transition Term, Grudnowski shall have no direct reports; his responsibility
and authority shall be limited to such transition assistance and special project matters as may be
requested by the Chair of the Board and/or the Company’s Chief Executive Officer.

           (b) Pay and Benefits. Grudnowski’s Base Salary shall be continued through the Transition Term
at the rate in effect immediately prior to November 1, 2006. In addition, during the Transition
Term Grudnowski shall participate in such other employee benefit plans and programs for which he
may be eligible and in which he participated prior to the Resignation Date, pursuant to the terms
and conditions of such plans; provided, however, that Grudnowski shall not accrue any additional
vacation time, and shall not be eligible for any incentive, bonus, option or other compensation
award except as specifically set forth in this Agreement. Grudnowski’s right to continued Base
Salary and benefits shall cease immediately and automatically upon expiration of the Transition
Term. In connection with the Termination Date, Grudnowski shall receive notice of post-employment
rights and benefits consistent with the departure from the Company of a senior executive of the
Company.

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           (c) Expenses. The Company shall reimburse Grudnowski for all reasonable and necessary
out-of-pocket business, travel and entertainment expenses incurred by him in the performance of his
duties and responsibilities for the Company, subject to the Company’s normal policies and
procedures for expense verification and documentation. Request for reimbursement of expenses shall
be submitted by Grudnowski with supporting documentation to the Company’s Vice President of Human
Resources.

     4. Stock Options. Grudnowski acknowledges and agrees that the spreadsheet set forth
as Exhibit B is an accurate list of all option grants received by Grudnowski during his employment
with the Company, including the currently outstanding vested and unvested Options. The Options
shall continue to be governed by the terms and conditions set forth in the applicable written stock
option agreements signed by Grudnowski and the Company. For purposes of Grant Nos. 008231, 006151
and 005331, the parties agree that Grudnowski’s employment with the Company is terminating by
mutual written agreement between the Company and Grudnowski for reasons other than for Cause;
provided, however, that Grudnowski agrees that he is hereby waiving and forfeiting any and all
right to the 187,500 unvested shares subject to Grant No. 005331, and the options to purchase such
unvested shares shall immediately expire effective on the Effective Date.

     5. Release. At the same time Grudnowski signs this Agreement, he also will sign a
Release, in the form attached to this Agreement as Exhibit C (the “Release”), in favor of the
Company and its affiliates, divisions, subsidiaries, committees, trustees, directors, officers,
employees, agents, predecessors, successors, and assigns. This Agreement will not be interpreted
or construed to limit the Release in any manner. The existence of any dispute related to the
interpretation of this Agreement or the alleged breach of this Agreement will not nullify or
otherwise affect the validity or enforceability of the Release.

     6. Severance Pay. In exchange for Grudnowski’s obligations and commitments under this
Agreement, including without limitation in order to ensure a smooth transition, to allow
accessibility to Grudnowski’s experience and knowledge of the Company’s business operations and
industry, and to prevent future employment of Grudnowski with a competitor of the Company, the
Company shall pay to Grudnowski severance pay in the aggregate amount of two times Grudnowski’s
Base Salary as of the Resignation Date. The severance pay shall be payable to Grudnowski in a lump
sum on or about August 3, 2007.

     7. Non-Disclosure, Non-Competition and Non-Solicitation Agreements.

           (a) Confidential Information. Grudnowski acknowledges entering into the Confidentiality
Agreements and hereby reaffirms his commitments and obligations under the Confidentiality
Agreements. Nothing in this Agreement is intended to modify, amend, cancel or supersede the
Confidentiality Agreements in any manner.

           (b) Restrictive Covenant. Grudnowski agrees that during the Transition Term and for a period
of twenty-four (24) consecutive months following the Transition Term, Grudnowski shall not, in
North America or any other location where the Company or any of its

3

 

subsidiaries is currently doing
business, directly or indirectly engage or participate in the ownership, management, operation, or
control, or invest in, be employed or perform any services for any person, firm, corporation or
other entity operating a business that competes with, is preparing to compete with, or is engaged
in any material aspect of the business of the Company or any of the Company’s subsidiaries.
Grudnowski may, nevertheless, as a passive investor, own less than 2% of the outstanding shares of
capital stock of any corporation listed on a national securities exchange or publicly traded in the
over-the-counter market that competes with the Company.

           (c) Covenant Not to Hire or Recruit. Grudnowski recognizes that the Company’s work force
constitutes an important and vital aspect of its business. Grudnowski agrees that during the
Transition Term and for a period of twenty-four (24) consecutive months following the Transition
Term, Grudnowski shall not, directly or indirectly, solicit, request, advise, induce or influence
any person who is then employed or engaged by the Company or by any of its subsidiaries (as an
agent, employee, independent contractor, or in any other capacity), or who was an employee of the
Company or any of its subsidiaries at any time during the Transition Term, to terminate his or her
employment, agency or relationship with the Company, any of its subsidiaries or any successor
thereto.

           (d) Acknowledgement. Grudnowski agrees that the restrictions and agreements contained in this
Section 7 are reasonable and necessary to protect the legitimate interests of the Company and that
any violation of this Section 7 will cause substantial and irreparable harm to the Company that
would not be quantifiable and for which no adequate remedy would exist at law and accordingly
injunctive relief will be available for any violation of this Section 7.

           (e) Blue-Pencil Doctrine. If the duration or geographical extent of, or business activities
covered by, this Section 7 are in excess of what is valid and enforceable under applicable law,
such provision will be construed to cover only that duration, geographical extent, or activities
that are valid and enforceable. Grudnowski acknowledges the uncertainty of the law in this respect
and expressly stipulates that this Section 7 be given the construction which renders its provisions
valid and enforceable to the maximum extent (not exceeding its express terms) possible under
applicable laws.

     8. Return of Property. Grudnowski agrees that all property in Grudnowski’s possession
belonging to the Company or any of its subsidiaries, including without limitation, all documents,
reports, manuals, memoranda, computer print-outs, customer lists, credit cards, keys,
identification, products, access cards, and all other property relating in any way to the business
of the Company (“Company Property”) are the exclusive property of the Company, even if Grudnowski
authored, created, or assisted in authoring or creating such Company Property. Grudnowski shall
return to the Company all Company Property within ten (10) business days
following the Resignation Date. Grudnowski agrees to return to the Company any and all Company
Property that may be provided to him by the Company during the Transition Term immediately upon the
end of the Transition Term, or at such earlier time as the Company may

4

 

reasonably request. The
Company agrees that it will return to Grudnowski all property in its possession belonging to
Grudnowski that is not Company Property.

     9. Indemnification. Notwithstanding Grudnowski’s resignation as an officer and
director of the Company or termination of his employment upon the conclusion of the Transition
Term, with respect to events that occurred during his tenure as an employee, officer or director of
the Company, Grudnowski will be entitled, as a former employee, officer or director of the Company,
to the same rights that are afforded to other current or former employees, officers, or directors
of the Company, now or in the future, to indemnification and advancement of expenses as provided in
the charter documents of the Company and under applicable law, and to indemnification and a legal
defense to the extent provided from time to time to current officers and directors by any
applicable general liability and/or directors’ and officers’ liability insurance policies
maintained by the Company.

     10. Cooperation.

           (a) Agreement to Assist and Cooperate. At the Company’s reasonable request and upon
reasonable notice, Grudnowski will, from time to time and without further consideration, during and
following the Transition Term, timely execute and deliver such acknowledgements, instruments,
certificates, and other ministerial documents (including without limitation, certification as to
specific actions performed by Grudnowski in his capacity as an officer or director of the Company)
as may be necessary or appropriate to formalize and complete the applicable corporate records. In
addition, at the Company’s reasonable request and upon reasonable notice, Grudnowski will, during
the Transition Term and without further consideration, discuss and consult with the Company
regarding business matters that he was directly and substantially involved with while employed by
the Company.

           (b) Claims Involving the Company. Grudnowski agrees that he will, at any future time, be
available upon reasonable notice from the Company, with or without subpoena, to be interviewed,
review documents or things, give depositions, testify, or engage in other reasonable activities in
connection with any litigation or investigation, with respect to matters that Grudnowski has or may
have knowledge of by virtue of his employment by or service to the Company or any related entity.
In performing his obligations under this Section 10(b) to testify or otherwise provide information,
Grudnowski will honestly, truthfully, forthrightly, and completely provide the information
requested. Grudnowski will comply with this Agreement upon notice from the Company that the
Company or its attorneys believe that his compliance would be helpful in the resolution of an
investigation or the prosecution or defense of claims. In the event that Grudnowski’s services
under Section 10(a) or 10(b) exceed five (5) hours in any calendar month following the Transition
Term, the Company shall compensate Grudnowski for such additional services at the hourly rate of
$200.

           (c) Communications. Inquiries and communications initiated by Grudnowski to the Company
regarding Company business shall be directed to the Chair of the Board or to the Company’s Chief
Executive Officer or to any person they designate.

5

 

     11. Non-disparagement. Grudnowski will not malign, defame, or disparage the
reputation, character, image, products, or services of the Company, or the reputation or character
of the Company’s directors, officers, employees, or agents. The Company (by and through the
current members of the Board and the current executive officers of the Company) will not at any
time disparage, defame or besmirch the reputation, character or image of Grudnowski. Nothing in
this Agreement is intended to prevent or interfere with any party making any required or reasonable
communications with, or providing information to, any governmental, law enforcement, or stock
exchange agency or representative, or in connection with any governmental investigation, court,
administrative or arbitration proceeding.

     12. Taxes. The Company may take such action as it deems appropriate to insure that
all applicable federal, state, city and other payroll, withholding, income or other taxes arising
from any compensation, benefits or any other payments made pursuant to this Agreement, and in order
to comply with all applicable federal, state, city and other tax laws or regulations, are withheld
or collected from Grudnowski. This Agreement is intended to satisfy the requirements of Section
409A(a)(2), (3) and (4) of the Internal Revenue Code of 1986, as amended (“Code”), including
current and future guidance and regulations interpreting such provisions. Grudnowski acknowledges
and agrees that the Company has made no assurances or representations to him regarding the tax
treatment of any consideration provided for in this Agreement and that the Company has advised him
to obtain his own personal tax advice. Except for any tax amounts withheld by the Company from the
payments or other consideration hereunder and any employment taxes required to be paid by the
Company, Grudnowski shall be responsible for payment of any and all taxes owed in connection with
the consideration provided for in this Agreement.

     13. Time to Consider Agreement. Grudnowski understands that he may take twenty-one
(21) calendar days after the date he receives this Agreement and the Release to decide whether to
sign this Agreement and the Release. Grudnowski represents that if he signs this Agreement and the
Release before the expiration of the twenty-one (21) day period, it is because he has decided that
he does not need any additional time to decide whether to sign this Agreement and the Release.

     14. Right to Rescind or Revoke. Grudnowski understands that he has the right to
rescind or revoke this Agreement and the Release for any reason within fifteen (15) calendar days
after he signs them. Grudnowski understands that this Agreement and the Release will not become
effective or enforceable unless and until Grudnowski has not rescinded them and the applicable
rescission period has expired. Grudnowski understands that if he rescinds or revokes this Agreement
or the Release, the rescission must be in writing and hand-delivered or mailed to the Company in
the manner set forth in the Release.

     15. Full Compensation. Grudnowski acknowledges and understands that the payments made
and other consideration provided by the Company under this Agreement will fully compensate
Grudnowski for and extinguish any and all of the potential claims Grudnowski is releasing in the
Release, including without limitation, his claims for attorneys’ fees and costs and any and all
claims for any type of legal or equitable relief.

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     16. No Admission of Wrongdoing. Grudnowski and the Company each understand and agree
that this Agreement and the Release do not constitute an admission by any party that such party has
violated any local ordinance, state or federal statute, or principle of common law, that any party
has engaged in any unlawful or improper conduct, or that either party has been treated unfairly.
Neither party will characterize this Agreement, the Release or the exchange of any consideration in
accordance with this Agreement as an admission that any party has engaged in any unlawful or
improper conduct.

     17. Legal Representation. Grudnowski acknowledges that he is hereby advised by the
Company to consult with his own attorney before executing this Agreement and the Release, that he
has had a full opportunity to consider this Agreement and the Release, that he has had a full
opportunity to ask any questions that he may have concerning this Agreement, the Release, or the
settlement of his potential claims against the Company, and that he has not relied upon any
statements or representations made by the Company or its attorneys, written or oral, other than the
statements and representations that are explicitly set forth in this Agreement or the Release.

     18. Assignment. The rights and obligations of the Company under this Agreement shall
inure to the benefit of and shall be binding upon the successors and assigns of the Company.
Grudnowski may not assign this Agreement or any rights or obligations hereunder. Any purported or
attempted assignment or transfer by Grudnowski of this Agreement or any of Grudnowski’s duties,
responsibilities, or obligations hereunder shall be void.

     19. Notices. For purposes of this Agreement, notices provided in this Agreement shall
be in writing and shall be deemed to have been given when personally served, sent by courier or
mailed by United States registered or certified mail, return receipt requested, postage prepaid, to
the last known residence address of Grudnowski as stated in the employment records of the Company
or, in the case of the Company, to its principal office, to the attention of the Board, or to such
other address as either party may have furnished to the other in writing in accordance herewith,
except that notice of change of address shall be effective only upon receipt.

     20. Construction and Severability. The validity, interpretation, performance, and
enforcement of this Agreement shall be governed by the laws of the State of Minnesota without
regard to conflicts-of-laws provisions that would require application of any other law. In the
event any provision of this Agreement shall be held illegal or invalid for any reason, said
illegality or invalidity will not in any way affect the legality or validity of any other provision
hereof. It is the intention of the parties hereto that the Company be given the broadest possible
protection respecting its confidential information and trade secrets; and respecting competition
and solicitation of employees by Grudnowski following his separation by the Company.

     21. Remedies.

           (a) Remedies. Grudnowski acknowledges that it would be difficult to fully compensate
the Company for monetary damages resulting from any breach by him of the provisions of Sections 7
and 8 hereof. Accordingly, in the event of any actual or threatened

7

 

breach of any such provisions,
the Company shall, in addition to any other remedies it may have, be entitled to injunctive and
other equitable relief to enforce such provisions, and such relief may be granted without the
necessity of proving actual monetary damages.

           (b) Jurisdiction and Venue. Grudnowski and the Company consent to jurisdiction of the
courts of the State of Minnesota and/or the federal district courts, District of Minnesota, for the
purpose of resolving all issues of law, equity, or fact arising out of or in connection with this
Agreement. Any action involving claims of a breach of this Agreement or the Release shall be
brought solely in such courts. Each party consents to personal jurisdiction over such party in the
state and/or federal courts of Minnesota and hereby waives any defense of lack of personal
jurisdiction. Venue, for the purpose of all such suits, shall be in Hennepin County, State of
Minnesota.

     22. Entire Agreement. This Agreement sets forth the entire agreement between the
Company and Grudnowski with respect to his employment by the Company, the termination of such
employment, and the Transition Term, and there are no undertakings, covenants, or commitments other
than as set forth in this Agreement, the Release, the written Stock Option Agreements applicable to
the Options, the Confidentiality Agreements and any qualified employee benefit plans sponsored by
the Company in which Grudnowski is a participant. This Agreement may not be altered or amended,
except by a writing executed by the party against whom such alteration or amendment is to be
enforced. Except as specifically provided herein, this Agreement terminates and supersedes any and
all prior understandings or agreements between the parties, including, but not limited to, the
Employment Agreement, the Management Agreement and the Summary of Terms between Grudnowski and the
Company dated November 1, 2006.

     23. Counterparts. This Agreement may be simultaneously executed in any number
of counterparts, and such counterparts executed and delivered, each as an original, shall
constitute but one and the same instrument.

     24. Captions and Headings. The captions and paragraph headings used in this Agreement
are for convenience of reference only, and shall not affect the construction or interpretation of
this Agreement or any of the provisions hereof.

     25. Survival. The parties expressly acknowledge and agree that the provisions of this
Agreement which by their express or implied terms extend beyond the termination of Grudnowski’s
employment hereunder, including without limitation Sections 7 and 8 shall continue in full force
and effect, notwithstanding Grudnowski’s resignation or the expiration of
the Transition Term. In addition, the representations and warranties contained herein shall
survive the execution and delivery hereof and the consummation of the transactions contemplated
hereby.

     26. Waivers. No failure on the part of either party to exercise, and no delay in
exercising, any right or remedy hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise of any right or remedy hereunder preclude any other or further exercise

8

 

thereof, or the exercise of any other right or remedy granted hereby or by any related document or
by law. No single or partial waiver of rights or remedies hereunder, nor any course of conduct of
the parties, shall be construed as a waiver of rights or remedies by either party (other than as
expressly and specifically waived). Any waiver of rights or obligations hereunder shall be in
writing signed by the waiving party.

     27. Reliance By Third Parties. This Agreement is intended for the exclusive benefit
of the parties hereto and their respective heirs, executors, administrators, personal
representatives, successors, and permitted assigns, and no other person or entity shall have any
right to rely on this Agreement or to claim or derive any benefit therefrom, absent the express
written consent of the party to be charged with such reliance or benefit.

[signature page follows]

9

 

     IN WITNESS WHEREOF, the parties have signed this Transition Agreement as of the date set
forth above.

	 	 	 	 	 
	FAIR ISAAC CORPORATION	 	THOMAS G. GRUDNOWSKI
	By:	 	 /s/ A. George Battle
 
A. George Battle Chair, Board of Directors	 	/s/ Thomas G. Grudnowski 

Signature

10

 

Exhibit A

Fair Isaac Announces Fourth Quarter and Fiscal 2006 Results,

New Stock Repurchase Authorization, and

Departure of Chief Executive Officer

MINNEAPOLIS—November 1, 2006—Fair Isaac Corporation (NYSE:FIC), the leading provider of
analytics and decision technology, today announced the financial results for its fourth quarter and
fiscal year ended September 30, 2006. In addition, the board of directors authorized a new $500
million share repurchase program.

The board of directors of Fair Isaac Corporation also announced today that Thomas G. Grudnowski has
stepped down as chief executive officer and board member, effective immediately. Charles M.
Osborne, Fair Isaac’s chief financial officer, has been named chief executive officer on an interim
basis.

“Tom Grudnowski came to Fair Isaac to revitalize and reinvigorate the company. He brought a
strategic vision and put in place a plan that has given this company the capabilities to compete
and win. We thank Tom for his significant leadership over the past seven years as we look forward
to continued execution of the company’s strategy,” said A. George Battle, chairman, on behalf of
the board.

The board will begin a search for a new chief executive officer immediately. The interim chief
executive officer, Mr. Osborne, has been the chief financial officer of the company since May 2004
and has over 32 years of business leadership experience. He will also retain his chief financial
officer responsibilities. The company has made no additional structural changes or executive
leadership changes at this time.

Fourth Quarter Fiscal 2006 Results

The company reported fourth quarter revenues of $207.3 million in fiscal 2006 versus $203.3 million
reported in the prior year period. Net income for the fourth quarter of fiscal 2006 totaled $22.1
million, or $0.35 per diluted share, versus $35.7 million, or $0.53 per diluted share, reported in
the prior year period.

Fourth quarter fiscal 2006 results included share-based compensation expense of $7.4 million
after-tax, or $0.12 per diluted share, due to the adoption of SFAS 123(R), and costs associated
with the previously announced lease exit of $8.3 million after-tax, or $0.13 per diluted share.

Fiscal 2006 Results

The company reported revenues of $825.4 million versus $798.7 million in the prior year period.
Net income for fiscal 2006 totaled $103.5 million, or $1.59 per diluted share, versus $134.5
million, or $1.86 per diluted share, reported in the prior year.

Fiscal 2006 results included share-based compensation expense of $26.6 million after-tax, or $0.41
per diluted share, due to the adoption of SFAS 123(R), and restructuring and acquisition-related
costs of $12.7 million after-tax, or $0.19 per diluted share.

Fiscal 2005 results included a decrease in diluted earnings per share of $0.09 related to the
adoption of EITF Issue No. 04-8, and an increase in diluted earnings per share of $0.14 related to
revisions made to tax liabilities.

Fourth Quarter Fiscal 2006 Revenues Highlights

Revenues for fourth quarter fiscal 2006 across each of the company’s four operating segments were
as follows:

 

 

	 	•	 	Strategy Machine® Solutions revenues increased to $111.6 million in the fourth quarter
compared to $109.6 million in the prior year quarter, or by 1.8%, primarily due to an
increase in revenues from fraud, originations, and collections and recovery solutions,
offset by a decline associated with insurance solutions and consumer scoring products.
	 
	 	•	 	Scoring Solutions revenues were $45.5 million in the fourth quarter compared to $47.8
million in the prior year quarter, or a decrease of 4.8%, primarily due to a decrease in
revenues derived from risk scoring services at the credit reporting agencies.
	 
	 	•	 	Professional Services revenues increased to $37.0 million in the fourth quarter from
$33.4 million in the prior year quarter, or by 10.9%, primarily due to an increase in
revenues from strategic consulting services and implementation services for EDM products.
	 
	 	•	 	Analytic Software Tools revenues increased to $13.2 million in the fourth quarter
compared to $12.6 million in the prior year quarter, or by 5.1%, due to an increase in
revenues generated from sales of the Blaze AdvisorTM product.

Fiscal 2006 Revenues Highlights

Revenues for fiscal 2006 across each of the company’s four operating segments were as follows:

	 	•	 	Strategy Machine® Solutions revenues increased to $457.2 million from $453.7 million in
the prior year period, or by 0.8%, primarily due to growth in fraud solutions, consumer
scoring products and collections and recovery solutions, offset by a decline associated
with marketing services and insurance solutions.
	 
	 	•	 	Scoring Solutions revenues increased to $177.2 million from $167.3 million in the prior
year period, or by 5.9%, primarily due to an increase in revenues from risk scoring
services at the credit reporting agencies, and PreScore® Service.
	 
	 	•	 	Professional Services revenues increased to $145.3 million from $129.6 million in the
prior year period, or by 12.1%, primarily due to an increase in revenues from strategic
consulting services and implementation services for EDM products, offset by a decline in
consulting services related to precision marketing.
	 
	 	•	 	Analytic Software Tools revenues were $45.7 million compared to $48.0 million in the
prior year period, or a decrease of 4.8%, due to a decline in revenues generated from sales
of the Blaze AdvisorTM product.

Bookings Highlights

The bookings for the fourth quarter were $112.6 million versus $109.7 million in the same period
last year. The company defines a “new booking” as estimated future contractual revenues, including
agreements with perpetual, multi-year and annual terms. Management regards the volume of new
bookings achieved as one indicator of future revenues, but they are not comparable to, nor should
they be substituted for, an analysis of the company’s revenues.

Balance Sheet and Cash Flow Highlights

Cash and cash equivalents, and marketable security investments were $267.8 million at September 30,
2006, as compared to $288.1 million at September 30, 2005. Significant changes in cash and cash
equivalents from September 30, 2005 include cash provided by operations of $199.0 million for
fiscal
2006 and $64.2 million received from the exercise of stock options and stock issued under an
employee stock purchase plan. Cash used during fiscal 2006 includes $31.4 million related to
purchases of property and equipment and $256.5 million to repurchase company stock.

 

 

Outlook

The company expects revenues for first quarter fiscal 2007 of approximately $210.0 million and
earnings per diluted share, to be approximately $0.48. The company expects revenues for fiscal 2007
of approximately $870.0 million and earnings per diluted share, to be approximately $2.10. The
earnings per diluted share, guidance include compensation expense related to SFAS 123(R).

New Stock Repurchase Program

Fair Isaac also announced today that its Board of Directors has approved a common stock repurchase
program to acquire up to $500 million of the company’s outstanding common stock. This new program
replaces the Company’s previous repurchase program announced on August 29, 2006, which had
authorized the company to acquire up to $250 million of outstanding stock. Under the previous
program, Fair Isaac purchased approximately 2.4 million shares of its common stock, at an aggregate
cost of approximately $85.3 million. The stock repurchase program, which is open-ended, allows the
company to repurchase its shares from time to time in the open market and in negotiated
transactions.

Company to Host Conference Call

The company will host a conference call today at 5:00 p.m. Eastern Time (4:00 p.m. Central
Time/2:00 p.m. Pacific Time) to discuss its fourth quarter and fiscal 2006 results, and outlook for
fiscal 2007. The call can be accessed live on the Investor Relations section of the company’s Web
site at www.fairisaac.com, and a replay will be available approximately two hours after the
completion of the call through November 29, 2006.

About Fair Isaac Corporation

Fair Isaac Corporation (NYSE:FIC) makes decisions smarter. The company’s solutions and technologies
for Enterprise Decision Management give businesses the power to automate more processes, and apply
more intelligence to every customer interaction. Through increasing the precision, consistency and
agility of their decisions, Fair Isaac clients worldwide increase sales, build customer value, cut
fraud losses, manage credit risk, reduce operational costs, meet changing compliance demands and
enter new markets more profitably. Founded in 1956, Fair Isaac powers hundreds of billions of
decisions each year in financial services, insurance, telecommunications, retail, consumer branded
goods, healthcare and the public sector. Fair Isaac also helps millions of individuals manage their
credit health through the www.myfico.com website. Visit Fair Isaac online at
www.fairisaac.com.

 

 

Exhibit B

Stock
Option Summary

(Tom Grudnowski — as of October 28, 2006)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Value of	 	 	 	 	 	 	 
	Grant	 	 	 	 	 	 	 	 	 	Shrs	 	 	Exercise	 	 	Exercised/	 	 	 	 	 	 	 	 	 	 	Unvested at	 	 	Shrs	 	 	Shrs	 
	Number	 	Grant Date	 	 	Plan/Type	 	 	Granted	 	 	Price	 	 	Released	 	 	Vested	 	 	Unvested	 	 	$36.50/Shr	 	 	Outstanding	 	 	Exercisable	 
	008231
	 	 	10/20/2005	 	 	1992/NQ	 	 	200,000	 	 	$	41.0700	 	 	 	0	 	 	 	66,666	 	 	 	133,334	 	 	$	0	 	 	 	200,000	 	 	 	66,666	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	006151
	 	 	10/20/2004	 	 	1992/NQ	 	 	150,000	 	 	$	28.8000	 	 	 	0	 	 	 	100,000	 	 	 	50,000	 	 	$	385,000	 	 	 	150,000	 	 	 	100,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	005331
	 	 	1/30/2004	 	 	1992/NQ	 	 	562,500	 	 	$	39.5800	 	 	 	0	 	 	 	375,000	 	 	 	187,500	 	 	$	0	 	 	 	562,500	 	 	 	375,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	003047
	 	 	11/26/2002	 	 	1992/NQ	 	 	300,000	 	 	$	28.4733	 	 	 	0	 	 	 	225,000	 	 	 	75,000	 	 	$	602,003	 	 	 	300,000	 	 	 	225,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	002997
	 	 	11/16/2001	 	 	CEOT/NQ	 	 	56,250	 	 	$	25.8222	 	 	 	0	 	 	 	56,250	 	 	 	0	 	 	$	0	 	 	 	56,250	 	 	 	56,250	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	002998
	 	 	11/16/2001	 	 	1992/NQ	 	 	168,750	 	 	$	25.8222	 	 	 	0	 	 	 	168,750	 	 	 	0	 	 	$	0	 	 	 	168,750	 	 	 	168,750	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	002367
	 	 	5/1/2001	 	 	CEOT/NQ	 	 	168,750	 	 	$	21.0667	 	 	 	0	 	 	 	168,750	 	 	 	0	 	 	$	0	 	 	 	168,750	 	 	 	168,750	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	002366
	 	 	2/6/2001	 	 	1992/NQ	 	 	168,750	 	 	$	17.7778	 	 	 	0	 	 	 	168,750	 	 	 	0	 	 	$	0	 	 	 	168,750	 	 	 	168,750	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	001858
	 	 	12/3/1999	 	 	1992/NQ	 	 	135,000	 	 	$	12.5926	 	 	 	0	 	 	 	135,000	 	 	 	0	 	 	$	0	 	 	 	135,000	 	 	 	135,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	001798
	 	 	8/23/1999	 	 	CEO/NQ	 	 	1,417,500	 	 	$	9.6297	 	 	 	1,075,000	 	 	 	1,417,500	 	 	 	0	 	 	$	0	 	 	 	342,500	 	 	 	342,500	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Totals:	 	 	3,327,500	 	 	 	 	 	 	 	1,075,000	 	 	 	2,881,666	 	 	 	445,834	 	 	$	987,003	 	 	 	2,252,500	 	 	 	1,806,666	 

 

 

Exhibit C

RELEASE BY 

THOMAS G. GRUDNOWSKI

Definitions. I intend all words used in this Release by Thomas G. Grudnowski (“Release”)
to have their plain meanings in ordinary English. Specific terms that I use in this Release have
the following meanings:

	 	A.	 	I, me, and my include both me and anyone who has or
obtains any legal rights or claims through me.
	 
	 	B.	 	FIC means Fair Isaac Corporation, any company related to Fair Isaac
Corporation. in the present or past (including without limitation, its predecessors,
parents, subsidiaries, affiliates, joint venture partners, and divisions), and any
successors of Fair Isaac Corporation.
	 
	 	C.	 	Company means FIC; the present and past officers, directors,
committees, shareholders, and employees of FIC; any company providing insurance to FIC
in the present or past; the present and past fiduciaries of any employee benefit plan
sponsored or maintained by FIC (other than multiemployer plans); the attorneys for FIC;
and anyone who acted on behalf of FIC or on instructions from FIC.
	 
	 	D.	 	Agreement means the Transition Agreement between FIC and me that I am
executing on the same date on which I execute this Release, including all of the
documents attached to the Agreement.
	 
	 	E.	 	My Claims mean all of my rights that I now have to any relief of any
kind from the Company, including without limitation:

	 	1.	 	all claims arising out of or relating to my employment with FIC
or the termination of that employment;
	 
	 	2.	 	all claims arising out of or relating to the statements,
actions, or omissions of the Company;
	 
	 	3.	 	all claims for any alleged unlawful discrimination, harassment,
retaliation or reprisal, or other alleged unlawful practices arising under any
federal, state, or local statute, ordinance, or regulation, including without
limitation, claims under Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Americans with Disabilities Act, 42
U.S.C. § 1981, the Employee Retirement Income Security Act, the Fair Credit
Reporting Act, the Equal Pay Act, the Worker Adjustment and Retraining
Notification Act, the Family and Medical Leave Act, the Sarbanes-Oxley Act, the
Minnesota Human Rights Act, the Minneapolis Civil Rights Ordinance, and
workers’ compensation non-interference or non-retaliation statutes (such as
Minn. Stat. § 176.82);

C- 2

 

	 	4.	 	all claims for alleged wrongful discharge; breach of contract;
breach of implied contract; failure to keep any promise; breach of a covenant
of good faith and fair dealing; breach of fiduciary duty; estoppel; my
activities, if any, as a “whistleblower”; defamation; infliction of emotional
distress; fraud; misrepresentation; negligence; harassment; retaliation or
reprisal; constructive discharge; assault; battery; false imprisonment;
invasion of privacy; interference with contractual or business relationships;
any other wrongful employment practices; and violation of any other principle
of common law;
	 
	 	5.	 	all claims for compensation of any kind, including without
limitation, bonuses, commissions, stock-based compensation or stock options,
vacation pay, and expense reimbursements;
	 
	 	6.	 	all claims for back pay, front pay, reinstatement, other
equitable relief, compensatory damages, damages for alleged personal injury,
liquidated damages, and punitive damages; and
	 
	 	7.	 	all claims for attorneys’ fees, costs, and interest.
	 
	 	 	 	However, My Claims do not include any claims that the law does not allow to
be waived; I may have to receive benefits under any employee benefit plan of the
Company in which I am now a participant; any claims that may arise after the date on
which I sign this Release; any claims for breach of the Agreement; or any rights I
may have to indemnification from the Company under applicable law, the charter
documents of the Company, or any related insurance policy maintained by the Company.

Agreement to Release My Claims. I will receive consideration from FIC as set forth in the
Agreement if I sign and do not rescind this Release as provided below. I understand and
acknowledge that such consideration includes valuable consideration in addition to anything of
value that I would be entitled to receive from FIC if I did not sign this Release or if I rescinded
this Release. In exchange for that consideration I give up and release all of My Claims. I will
not make any demands or claims against the Company for compensation or damages relating to My
Claims. The consideration that I am receiving is a fair compromise for the release of My Claims.

Additional Agreements and Understandings. Even though FIC will provide consideration for
me to settle and release My Claims, the Company does not admit that it is responsible or legally
obligated to me. In fact, the Company denies that it is responsible or legally obligated to me for
My Claims, denies that it engaged in any unlawful or improper conduct toward me, and denies that it
treated me unfairly.

Advice to Consult with an Attorney. I understand and acknowledge that I am hereby being
advised by the Company to consult with an attorney prior to signing this Release and I have done

C- 3

 

so. My decision whether to sign this Release is my own voluntary decision made with full knowledge
that the Company has advised me to consult with an attorney.

Period to Consider the Release. I understand that I have 21 days from the day that I
receive this Release, not counting the day upon which I receive it, to consider whether I wish to
sign this Release. If I sign this Release before the end of the 21-day period, it will be my
voluntary decision to do so because I have decided that I do not need any additional time to decide
whether to sign this Release. I also agree that any changes made to this Release or to the
Agreement before I sign it, whether material or immaterial, will not restart the 21-day period.

My Right to Rescind this Release. I understand that I may rescind this Release at any time
within 15 days after I sign it, not counting the day upon which I sign it. This Release will not
become effective or enforceable unless and until the 15-day rescission period has expired without
my rescinding it.

Procedure for Accepting or Rescinding the Release. To accept the terms of this Release, I
must deliver the Release, after I have signed and dated it, to FIC by hand or by mail within the
21-day period that I have to consider this Release. To rescind my acceptance, I must deliver a
written, signed statement that I rescind my acceptance to FIC by hand or by mail within the 15-day
rescission period. All deliveries must be made to FIC at the following address:

			
	 
	 	Richard Deal
	
	 	Fair Isaac Corporation
	 
	 	901 Marquette Avenue
	 
	 	Suite 3200
	 
	 	Minneapolis, MN 55402

If I choose to deliver my acceptance or the rescission of my acceptance by mail, it must be (1)
postmarked within the period stated above; and (2) properly addressed to FIC at the address stated
above.

Interpretation of the Release. This Release should be interpreted as broadly as possible
to achieve my intention to resolve all of My Claims against the Company. If this Release is held
by a court to be inadequate to release a particular claim encompassed within My Claims, this
Release will remain in full force and effect with respect to all the rest of My Claims.

My Representations. I am legally able and entitled to receive the consideration being
provided to me in settlement of My Claims. I have not been involved in any personal bankruptcy or
other insolvency proceedings at any time since I began my employment with FIC. No child support
orders, garnishment orders, or other orders requiring that money owed to me by FIC be paid to any
other person are now in effect.

I have read this Release carefully. I understand all of its terms. In signing this Release, I
have not relied on any statements or explanations made by the Company except as specifically set
forth in the Agreement. I am voluntarily releasing My Claims against the Company. I intend this
Release and the Agreement to be legally binding.

Dated: November 3, 2006

	 	 	 	 	 
	 	 	 
	 	  	 	 
	 	 	Thomas G. Grudnowski        	 
	 	 	 	 
	 

C- 4

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