Document:

IBM Warrant

THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO SUCH SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

 

CHORDIANT SOFTWARE, INC.

WARRANT TO PURCHASE COMMON STOCK

 

No. AW-67

August 12, 2002

 

Void After August 12, 2007

 

THIS CERTIFIES THAT, for value received, International Business Machines
Corporation ("IBM") , a New York corporation, having its principal office at New
Orchard Road, Armonk, NY, or its successors and assigns (IBM and its assignee
shall be referred to herein as the "Holder"), is eligible to subscribe for and
purchase at the Exercise Price (defined below) from CHORDIANT SOFTWARE, INC., a
Delaware corporation, with its principal office at 20400 Stevens Creek Blvd.,
Suite 400, Cupertino, CA 95014, USA (the "Company") up to Two Hundred Thousand
(200,000) shares of the common stock of the Company (the "Common Stock"), as
provided herein. This Warrant shall vest and become immediately exerciseable
upon its execution and delivery by the Company. 

 

1. DEFINITIONS. As used herein, the following terms shall have the following
respective meanings:

(a) "Affiliate" means any entity, whether incorporated or not, that is
controlled by, controlling or is under common control with IBM . 

(b) "Exercise Period" means the period commencing with the date hereof and
ending at 5:00 p.m. PDT on the Expiration Date.

(c) "Exercise Price" means $2.25 per share subject to adjustment from time to
time pursuant to Section 5 below.

(d) "Exercise Shares" means the shares of the Company's Common Stock issuable
upon exercise of this Warrant. 

(e) "Expiration Date" shall mean the date five (5) years after the date of this
Warrant above.

(f) "Market Price" shall mean the following: (i) the average of the closing sale
prices for the shares of Common Stock as reported on the principal trading
exchange or the Nasdaq National Market for the Common Stock for the five (5)
consecutive trading days immediately preceding such date, or if no sale price is
so reported for such period, the last bid price for such period, or (ii) if the
foregoing does not apply, the last sale price of such security in the
over-the-counter market on the pink sheets or bulletin board for such security
on the last trading day immediately preceding such date, or if no sale price is
so reported for such security, the average of the last bid and ask price for
such security on the last trading day immediately preceding such date, or (iii)
if market value cannot be calculated as of such date on any of the foregoing
bases, the Market Price shall be the fair market value as reasonably determined
by an investment banking firm selected by the Company and reasonably acceptable
to the Holder, with the costs of the appraisal to be borne by the Company. 

(g) "Sale of the Company" means a merger or consolidation of the Company with or
into any other entity or a sale of stock of the Company, in which the
stockholders of this Company immediately before the merger or stock sale do not
hold more than 50% of the voting power of the surviving corporation immediately
after the merger or stock sale, or a sale, conveyance or disposition of
substantially all of the Company's assets. 

 

2. EXERCISE OF WARRANT. The rights represented by this Warrant may be exercised
in whole or in part at any time during the Exercise Period by delivery of the
following to the Company at its address set forth above (or at such other
address as it may designate by notice in writing to the Holder):

(a) An executed Notice of Exercise in the form attached hereto;

(b) Payment of the Exercise Price in cash or by check or wire transfer (subject
to Section 2.1 hereof); and

(c) This Warrant.

Upon the exercise of the rights represented by this Warrant, a certificate or
certificates for the Exercise Shares so purchased, registered in the name of the
Holder or persons Affiliated with the Holder, if the Holder so designates, shall
be issued and delivered to the Holder within a reasonable time after the rights
represented by this Warrant shall have been so exercised.

The person in whose name any certificate or certificates for Exercise Shares are
to be issued upon exercise of this Warrant shall be deemed to have become the
holder of record of such shares on the date on which this Warrant was
surrendered and payment of the Exercise Price was made, irrespective of the date
of delivery of such certificate or certificates, except that, if the date of
such surrender and payment is a date when the stock transfer books of the
Company are closed, such person shall be deemed to have become the holder of
such shares at the close of business on the next succeeding date on which the
stock transfer books are open.

 

2.1. Net Exercise. Notwithstanding any provisions herein to the contrary, if the
Market Price of one share of Common Stock is greater than the Exercise Price (at
the date of calculation as set forth below), in lieu of exercising this Warrant
by payment of cash, the Holder may at its option elect to receive Exercise
Shares equal to the value (as determined below) of this Warrant (or the portion
thereof being canceled) by surrender of this Warrant at the principal office of
the Company together with the properly endorsed Notice of Exercise in which
event the Company shall issue to the Holder a number of shares of Common Stock
computed using the following formula:

 

X = (Y* (A-B))/A

Where X = the number of shares of Exercise Shares to be issued to the Holder

Y = the number of shares of Exercise Shares purchasable under the Warrant or, if
only a portion of the Warrant is being exercised, the portion of the Warrant
being canceled (at the date of such calculation)

A = the Market Price of one share of the Company's Common Stock (at the date of
such calculation)

B = Exercise Price (as adjusted to the date of calculation)

2.2. Net Exercise Upon Termination. In the event that this Warrant is not
exercised in full immediately prior to the end of the Exercise Period and at
such time the then current Market Price of a share of the Common Stock is
greater than the Exercise Price, this Warrant shall be deemed automatically
exercised as to the remaining Exercise Shares immediately prior to the
termination of the Expiration Period pursuant to Section 2.1 without the
delivery of any written notice from the Holder.

 

3. COVENANTS AND REPRESENTATIONS OF THE COMPANY.

 

3.1. Covenants as to Exercise Shares. The Company covenants and agrees that all
Exercise Shares that may be issued upon the exercise of the rights represented
by this Warrant will, upon issuance, be validly issued and outstanding, fully
paid and nonassessable, and free from all taxes, liens and charges with respect
to the issuance thereof. The Company further covenants and agrees that the
Company will at all times during the Exercise Period, have authorized and
reserved, free from preemptive rights, a sufficient number of shares of its
Common Stock to provide for the exercise of the rights represented by this
Warrant. If at any time during the Exercise Period the number of authorized but
unissued shares of Common Stock shall not be sufficient to permit exercise of
this Warrant, the Company will take such corporate action as may, in the opinion
of its counsel, be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such purposes.

 

3.2. No Impairment. Except and to the extent as waived or consented to by the
Holder, the Company will not, by amendment of its Certificate of Incorporation
or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be observed
or performed hereunder by the Company, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may be necessary or appropriate in order to protect
the exercise rights of the Holder against impairment.

3.3 Listing. In connection with the Holder's exercise of Registration Rights
hereunder, the Company shall use its best efforts to promptly secure the listing
of the shares of Common Stock issuable upon exercise of this Warrant upon each
national securities exchange or automated quotation system, if any, upon which
shares of Common Stock are then listed or become listed (subject to official
notice of issuance upon exercise of this Warrant) and shall maintain such
listing for so long as any other shares of Common Stock shall be so listed.

 

3.4 Company Representations and Warrants. The Company represents and warrants
that:

(a) It (A) is a corporation duly organized, validly existing and in good
standing under the laws of the state of its organization, (B) has all requisite
power and authority to conduct its business as now conducted and to consummate
the transactions contemplated hereby and (C) is duly qualified to do business
and is in good standing in each jurisdiction in which the character of the
properties owned or leased by it or in which the transaction of its business
makes such qualification necessary, except for those jurisdictions in which
failure to do so would not have a material adverse effect on the Company or its
business. 

(b) The execution, delivery and performance by the Company of this Warrant (A)
has been duly authorized by all necessary corporate action, (B) does not and
will not contravene the Company's certificate of incorporation or bylaws and (C)
does not and will not materially contravene any applicable law or any
contractual restriction binding on or otherwise affecting the Company or any of
its properties or result in a material default under any agreement or instrument
to which the Company is a party or by which the Company or its properties may be
subject. 

(c) This Warrant has been duly executed and delivered by the Company, and is a
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency, moratorium and other laws affecting the rights of
creditors generally and general principles of equity.

(d) Assuming the accuracy of the representations made by the Holder in Section 4
hereof, no authorization, consent, approval, license, exemption or other action
by, and no registration, qualification, or designation, with, any governmental
authority is or will be necessary in connection with the execution and delivery
by the Company of this Warrant, the issuance by the Company of the Exercise
Shares, the consummation of the transactions contemplated hereby, the
performance of or compliance with the terms and conditions hereof, or to ensure
the legality, validity, and enforceability hereof except such as has been duly
and validly obtained or filed, or with respect to any filings that may or must
be made after the execution and delivery of this Warrant, as will be filed in a
timely manner. 

(e) The Company has reserved solely for issuance and delivery upon the exercise
of this Warrant, such number of shares of Common Stock to provide for the
exercise in full of this Warrant.

(f) Neither the Company, nor any of its Affiliates, nor any person acting on its
or their behalf, has directly or indirectly made any offers or sales of any
security or solicited any offers to buy any security under circumstances that
would require registration, or the filing of a prospectus qualifying the
distribution, of this Warrant being issued hereby under the Securities Act or
cause the issuance of this Warrant to be integrated with any prior offering of
securities of the Company for purposes of the Securities Act.

 

3.5 Further Assurances. The Company agrees and covenants that at any time and
from time to time it will promptly execute and deliver to the Holder such
further instruments and documents and take such further action as the Holder may
reasonably request in order to carry out the full intent and purpose of this
Warrant.

 

4. REPRESENTATIONS OF HOLDER.

 

4.1. Acquisition of Warrant for Personal Account. The Holder represents and
warrants that it is acquiring the Warrant and, to the extent it acquires, the
Exercise Shares solely for its account for investment and not with a view to or
for sale or distribution within the meaning of the Securities Act of 1933, as
amended of said Warrant or Exercise Shares or any part thereof. 

 

4.2. Securities Are Not Registered.

(a) The Holder understands that the Warrant and the Exercise Shares have not
been registered under the Securities Act of 1933, as amended (the "Act") on the
basis that no distribution or public offering of the stock of the Company is to
be effected. The Holder has no present intention of selling or otherwise
disposing of the Warrant or the Exercise Shares in violation of such laws. 

(b) The Holder recognizes that the Warrant and the Exercise Shares must be held
indefinitely unless they are subsequently registered under the Act or an
exemption from such registration is available. The Holder shall have
registration rights with respect to the Exercise Shares as set forth in Appendix
A.

(c) The Holder is aware that neither the Warrant nor the Exercise Shares may be
sold pursuant to Rule 144 adopted under the Act unless certain conditions are
met, including, among other things, the resale following the required holding
period under Rule 144 and the number of shares being sold during any three month
period not exceeding specified limitations. 

 

4.3. Information and Sophistication. The Holder acknowledges that it has
received all the information it has requested from the Company and it considers
necessary or appropriate for deciding whether to acquire the Securities. The
Holder represents that it has had an opportunity to ask questions and receive
answers from the Company regarding the terms and conditions of the offering of
the Securities and to obtain any additional information necessary to verify the
accuracy of the information given the Purchaser. The Holder further represents
that it has such knowledge and experience in financial and business matters that
it is capable of evaluating the merits and risk of this investment. 

 

4.4. Ability to Bear Economic Risk. The Holder acknowledges that investment in
the Securities involves a high degree of risk, and represents that it is able,
without materially impairing its financial condition, to hold the Securities for
an indefinite period of time and to suffer a complete loss of its investment.

 

4.5. Disposition of Warrant and Exercise Shares.

(a) The Holder further agrees not to make any disposition of all or any part of
the Warrant or Exercise Shares in any event unless and until:

(i) The Company shall have received a letter secured by the Holder from the U.S.
Securities and Exchange Commission stating that no action will be recommended to
the Commission with respect to the proposed disposition; or

(ii) There is then in effect a registration statement under the Act covering
such proposed disposition and such disposition is made in accordance with said
registration statement; or

(iii) The Holder shall have notified the Company of the proposed disposition and
shall have furnished the Company with a description of the proposed disposition,
and if reasonably requested by the Company, the Holder shall have furnished the
Company with an opinion of counsel reasonably satisfactory to the Company (which
counsel may be in-house counsel to the Holder), for the Holder to the effect
that such disposition will not require registration of such Warrant or Exercise
Shares under the Act or any applicable state securities laws.

(b) The Holder understands and agrees that all certificates evidencing the
Exercise Shares to be issued to the Holder may bear the following legend:

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE
SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED.

 

4.6. Accredited Investor Status. The Holder represents that it is an "accredited
investor" as such term is defined in Rule 501 under the Act.

 

4.7. Further Assurances. The Holder agrees and covenants that at any time and
from time to time it will promptly execute and deliver to the Company such
further instruments and documents and take such further action as the Company
may reasonably request in order to carry out the full intent and purpose of this
Warrant. 

 

5. ADJUSTMENT OF EXERCISE PRICE. Subject to Section 7, in the event of changes
in the outstanding Common Stock of the Company by reason of stock dividends,
splits, reverse splits, recapitalizations, reclassifications or the like, the
number and class of shares available under the Warrant in the aggregate and the
Exercise Price shall be correspondingly adjusted to give the Holder of the
Warrant, on exercise for the same aggregate Exercise Price, the total number,
class, and kind of shares as the Holder would have owned had the Warrant been
exercised prior to the event and had the Holder continued to hold such shares
until after the event requiring adjustment. The form of this Warrant need not be
changed because of any adjustment in the number of Exercise Shares or Exercise
Price pursuant to this Section 5. 

 

6. FRACTIONAL SHARES. No fractional shares shall be issued upon the exercise of
this Warrant as a consequence of any adjustment pursuant hereto. All Exercise
Shares (including fractions) issuable upon exercise of this Warrant may be
aggregated for purposes of determining whether the exercise would result in the
issuance of any fractional share. If, after aggregation, the exercise would
result in the issuance of a fractional share, the Company shall, in lieu of
issuance of any fractional share, pay the Holder otherwise entitled to such
fraction a sum in cash equal to the product resulting from multiplying the then
current fair market value of an Exercise Share by such fraction.

 

7. SALE OF THE COMPANY If there shall occur any Sale of the Company, then, as
part of any such Sale of the Company, lawful provision shall be made so that the
Holder of this Warrant shall have the right thereafter to receive upon the
exercise hereof the kind and amount of shares of stock or other securities or
property which such Holder would have been entitled to receive if, immediately
prior to any such reorganization, reclassification, consolidation, merger or
sale, as the case may be, such Holder had held the number of shares of Exercise
Shares which were then purchasable upon the exercise of this Warrant; provided,
however, that in the event (i) the value of the stock, securities or other
assets or property issuable or payable with respect to one share of the Common
Stock of the Company immediately theretofore purchasable and receivable upon the
exercise of the rights represented hereby (the "Merger Consideration") is in
excess of the Exercise Price hereof effective at the time of such Sale of the
Company, and (ii) the Merger Consideration consists solely of cash and/or
securities of a class that is publically traded, then this Warrant shall expire
unless exercised prior to the consummation of such Sale of the Company.
Appropriate adjustment (as reasonably determined in good faith by the Board)
shall be made in the application of the provisions set forth herein with respect
to the rights and interests thereafter of the Holder of this Warrant, such that
the provisions set forth herein shall thereafter be applicable, as nearly as is
reasonably practicable, in relation to any shares of stock or other securities
or property thereafter deliverable upon the exercise of this Warrant. The
Company shall provided to the Holder at least twenty (20) days advance notice of
any such Sale of the Company.

 

8. NO STOCKHOLDER RIGHTS. This Warrant in and of itself shall not entitle the
Holder to any voting rights or other rights as a stockholder of the Company.

 

9. TRANSFER OF WARRANT. The Holder covenants not to transfer this Warrant or the
Exercise Shares except in compliance with Section 4.5. Subject to compliance
with Section 4.5, this Warrant, the Exercise Shares and the rights granted to
the Holder hereof are freely transferable, in whole or in part, upon surrender
of this Warrant, together with an assignment form, at the office or agency of
the Company; provided that such assignment form contains a written
acknowledgment of the transferree to be bound by the conditions of this Warrant
as a Holder hereunder.

 

10. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this Warrant is lost,
stolen, mutilated or destroyed, the Company may, on such terms as to indemnity
or otherwise as it may reasonably impose (which shall, in the case of a
mutilated Warrant, include the surrender thereof), issue a new Warrant of like
denomination and tenor as the Warrant so lost, stolen, mutilated or destroyed.
Any such new Warrant shall constitute an original contractual obligation of the
Company, whether or not the allegedly lost, stolen, mutilated or destroyed
Warrant shall be at any time enforceable by anyone.

 

11. NOTICES, ETC. All notices and other communications required or permitted
hereunder shall be in writing and shall be sent by facsimile transmission,
express mail or other form of rapid communications, if possible, and if not then
such notice or communication shall be mailed by first-class mail, postage
prepaid, addressed in each case to the party entitled thereto at the following
addresses: (a) if to the Company, to Chordiant Software, Inc., 20400 Stevens
Creek Blvd., Suite 400, Cupertino, CA 95014, Attention: President and (b) if to
the Holder, to IBM , New Orchard Road, Armonk, New York 10504, Attention: Scott
Martin or at such other address as one party may furnish to the other in
writing. Notice shall be deemed effective on the date dispatched if by personal
delivery or facsimile transmission, two days after mailing if by express mail,
or three days after mailing if by first-class mail.

 

12. VALUE ADDED TAX. For the avoidance of doubt, the Company shall pay any value
added tax payable in respect of the grant of this Warrant to the Holder and the
value received by the Company for such grant. Any such tax shall be paid within
30 days of receipt of a value added tax invoice.

 

13. ACCEPTANCE. Receipt of this Warrant by the Holder shall constitute
acceptance of and agreement to all of the terms and conditions contained herein.

 

14. GOVERNING LAW. This Warrant and all rights, obligations and liabilities
hereunder shall be governed by the laws of the State of California.

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
duly authorized officer as of July [12], 2002.

CHORDIANT SOFTWARE, INC.

By: /s/ Donald J. Morrison

Title: EVP, Products & Marketing  

Agreed and Accepted:

INTERNATIONAL BUSINESS MACHINES CORPORATION

By: /s/ Pat Murphy

Title: Director, Business Development, IBM Global Services  

NOTICE OF EXERCISE

 

TO: CHORDIANT SOFTWARE, INC.

 

(1)  The undersigned hereby elects to purchase ________ shares of the Common
Stock of Chordiant Software, Inc. (the "Company") pursuant to the terms of the
attached Warrant, and tenders herewith payment of the exercise price in full,
together with all applicable transfer taxes, if any.

The undersigned hereby elects to purchase ________ shares of the Common Stock
of Chordiant Software, Inc. (the "Company") pursuant to the terms of the net
exercise provisions set forth in Section 2.1 of the attached Warrant, and shall
tender payment of all applicable transfer taxes, if any.

(2) Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:

________________________

(Name)

________________________

________________________

(Address)

(3) The undersigned represents that (i) the aforesaid shares of Common Stock are
being acquired for the account of the undersigned for investment and not with a
view to, or for resale in connection with, the distribution thereof within the
meaning of the Securities Act of 1933 as amended and that the undersigned has no
present intention of so distributing or reselling such shares; (ii) the
undersigned is aware of the Company's business affairs and financial condition
and has acquired sufficient information about the Company to reach an informed
and knowledgeable decision regarding its investment in the Company; (iii) the
undersigned is experienced in making investments of this type and has such
knowledge and background in financial and business matters that the undersigned
is capable of evaluating the merits and risks of this investment and protecting
the undersigned's own interests; (iv) the undersigned understands that the
shares of Common Stock issuable upon exercise of this Warrant have not been
registered under the Securities Act of 1933, as amended (the "Act"), by reason
of a specific exemption from the registration provisions of the Act, which
exemption depends upon, among other things, the bona fide nature of the
investment intent as expressed herein, and, because such securities have not
been registered under the Act, they must be held indefinitely unless
subsequently registered under the Act or an exemption from such registration is
available; (v) the undersigned is aware that the aforesaid shares of Common
Stock may not be sold pursuant to Rule 144 adopted under the Act unless certain
conditions are met and until the undersigned has held the shares for the number
of years prescribed by Rule 144; and (vi) the undersigned agrees not to make any
disposition of all or any part of the aforesaid shares of Common Stock unless
and until there is then in effect a registration statement under the Act
covering such proposed disposition and such disposition is made in accordance
with said registration statement, or the undersigned has provided the Company
with an opinion of counsel reasonably satisfactory to the Company (which counsel
may be in-house counsel to the undersigned), stating that such registration is
not required.

 

_______________________  

 (Signature)

 

____________________________

(Print name)

 

____________________________

(Date)

Appendix A

Registration Rights

 

(a) Piggyback Registration.

(i) Participation. If the Company elects to file a registration statement under
the Act covering the offer and sale of any Common Stock in connection with any
public offering (other than a registration statement on Form S-8 or Form S-4, or
their successors, or any other form for a similar limited purpose, or any
registration statement covering securities of the Company proposed to be issued
in exchange for securities or assets of another corporation or the resale of
such securities of the Company), the Company shall give written notice thereof
to the Holder at least twenty (20) days before filing. Subject to the
limitations of (a)(ii) and c(v) below, the Holder shall have the right to
include in such offering all or part of the Exercise Shares then held by the
Holder upon the giving of notice to the Company within ten business days of
receipt by it of notice from the Company. If the Holder notifies the Company of
its intent to include such Exercise Shares in the registration, subject to (a)(ii)
and (c)( v) below, the Company shall include in such registration statement such
number of shares of Registrable Securities as requested by the Holder. The
Holder agrees to keep any notice delivered by the Company pursuant to this
Section (a) prior to the filing of a registration statement strictly
confidential. 

(ii) Underwriters' Cutback. If, in the opinion of the underwriter or
underwriters of such offering the inclusion of all of the Exercise Shares
requested to be registered would be inappropriate, then the number of Exercise
Shares to be included in the offering shall be reduced, with the participation
in such offering to be in the following order of priority: (1) first, securities
to be issued by the Company, (2) second, any other Common Stock required to be
included pursuant to any superior registration rights granted to other holders
of Common Stock (or securities convertible into Common Stock),, and (3) third,
Exercise Shares requested to be included and any other Common Stock held by
other holders of Common Stock (or securities convertible into Common Stock) with
equivalent registration rights requested to be included, on a pro rata basis
(based upon the number of shares of Common Stock requested to be included by the
Holder and the other holders of Common Stock requesting participation in the
offering)..

(iii) Registrant Controls. The Company may decline to file a registration
statement after giving notice to any Holder, or withdraw a registration
statement after filing and after such notice, but prior to the effectiveness
thereof, provided that the Company shall promptly notify the Holder in writing
of any such action and provided further that such registrant shall bear all
reasonable expenses incurred by the Holder in connection with such withdrawn
registration statement.

(iv) Underwriting Agreement. In connection with any registration under this
Section (a) involving an underwriting, the Company shall not be required to
include any Exercise Shares in such registration unless the Holder agrees to
participate in such underwriting and include the Exercise Shares requested to be
included in the underwriting to the extent provided herein. The Holder shall
enter into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by the Company. If the Holder
disapproves of the terms of any such underwriting, such Holder may elect to
withdraw therefrom by written notice to the Company and the underwriter
delivered at least ten (10) days prior to the effective date of the
registrations statement. Any Exercise Shares excluded or withdrawn from such
underwriting shall be excluded and withdrawn from the registration.

(v) Furnishing Information. It shall be a condition precedent to the obligations
of the Company to take any action pursuant to the registration rights granted
herein that the Holder shall furnish to the Company such information regarding
itself and the Exercise Shares held by Holder as shall be required to effect the
registration of the Exercise Shares.

(b) Indemnification.

(i) Indemnification by the Company. In the event any Exercise Shares are
included in a registration statement pursuant to (a) above, the Company agrees
to indemnify and hold harmless the Holder, its officers, directors and agents,
any underwriter (as defined in the Act), and each Person, if any, who controls
Holder within the meaning of Section 15 of the Act or Section 20 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") from and
against any and all losses, claims, damages, or liabilities to which they may
become subject under the Act, the Exchange Act, or other federal or state law
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in any registration statement or final prospectus
relating to the Exercise Shares or in any amendment or supplement thereto or in
any preliminary prospectus, or arising out of or based upon any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages, liabilities or expenses arise out of, or are based
upon, any such untrue statement or omission based upon information furnished in
writing to Company by the Holder or on the Holder's behalf expressly for use
therein; and provided further, that with respect to any untrue statement or
omission made in any preliminary prospectus, the indemnity provided for in this
paragraph shall not apply to the extent that any such loss, claim, damage,
liability or expense results from the fact that a current copy of the prospectus
was not sent or given to the person asserting any such loss, claim, damage,
liability or expense at or prior to the written confirmation of the sale of the
Exercise Shares concerned if it is determined that it was the responsibility of
the Holder to provide such person with a current copy of the prospectus and such
current copy of the prospectus would have cured the defect giving rise to such
loss, claim, damage, liability or expense. The indemnity provided for herein
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or expense if such settlement is effected without the consent of the
Company. 

(ii) Indemnification by the Holder. The Holder, , if Exercise Shares are
includied in the securities as to which such registration is being effected,
agrees to indemnify and hold harmless the Company, its directors and officers,
and underwriter, and each Person, if any, who controls the Company within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act from and against any and all losses, claims, damages, or liabilities to
which they may become subject under the Act, the Securities Exchange Act of
1934, as amended, or other federal or state law arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in any
registration statement or final prospectus relating to the Exercise Shares or in
any amendment or supplement thereto or in any preliminary prospectus, or arising
out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, that occurs in reliance upon and in conformity with
information furnished in writing by the Holder or on the Holder's behalf
expressly for use in any registration statement or final prospectus relating to
the Exercise Shares (or any amendment or supplement thereto, or any preliminary
prospectus). Notwithstanding anything to the contrary contained herein, the
liability of the Holder for indemnification hereunder shall be limited to the
net proceeds from the offering received by the Holder. The indemnity provided
for herein shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or expense if such settlement is effected without the
consent of the Holder. 

(iii) Indemnification Procedures. Promptly after receipt by an indemnified party
under this Appendix A of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Appendix A, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense, in either case with counsel mutually
satisfactory to the parties, the fees and expenses of which will be paid by the
indemnifying party; provided, however, that an indemnified party shall have the
right to retain its own counsel, with the fees and expenses to be paid by the
indemnifying party, if (i) the indemnified party fails to assume or participate
in such defense, or (ii) representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due to actual or
potential differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action, if materially prejudicial to its ability to defend such action,
shall relieve such indemnifying party of any liability to the indemnified party
under this agreement, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Appendix A.

(iv) Contribution. If the indemnification provided for in this Appendix A is
held by a court of comptetent jurisdiction to be unavailable to an indemnified
party in respect of any losses, claims, damages, or liabilities referred to
herein, then each such indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such

indemnified party as a result of such losses, claims, damages, or liabilitiesas
is appropriate to reflect the relative benefits received by the indemnifying
party on the one hand and the indemnified party on the other from the offering,
or if such allocation is not permitted by applicable law, in such proportion as
is appropriate to reflect not only such relative benefits but also the relative
fault of the indemnifying party on the one hand and of the indemnified party on
the other in connection with the statements or omissions which resulted in such
losses, claims, damages, or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the indemnifying party on the
one hand and the indemnified party on the other shall be deemed to be in the
same proportion as the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by each such
party. The relative fault of the indemnifying party and on the one hand and the
indemnified party on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by such party, and the party's relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
Notwithstanding anything to the contrary contained herein, the liability of the
Holder for contribution hereunder shall be limited to the net proceeds from the
offering received by the Holder. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

(c) Miscellaneous.

(i) Registration Expenses. The Company shall bear all expenses incurred by the
Company in complying with the registration described in (a) above, including,
without limitation, all registration and filing fees, printing expenses, fees
and disbursements of counsel for the Company, blue sky fees and expenses and the
expense of any special audits incident to or required by any such registration.

(ii) Enforcement of Registration Rights. Holder shall have no right to obtain or
seek an injunction restraining or otherwise delaying any registration by the
Company as the result of any controversy that might arise with respect to the
interpretation or implementation of this agreement..

(iii) Assignment of Registration Rights. The rights of the Holder hereunder may
be assigned by each Holder to any transferee of all or any portion of the
Warrant or Exercise Sharesif: (i) the Holder agrees in writing with the
transferee or assignee to assign such rights, and a copy of such agreement is
furnished to the Company after such assignment, (ii) the Company is furnished
with written notice of (A) the name and address of such transferee or assignee,
and (B) the securities with respect to which such registration rights are being
transferred or assigned, (iii) following such transfer or assignment, the
further disposition of such securities by the transferee or assignee is
restricted under the Securities Act and applicable state securities laws, (iv)
such transfer shall have been made in accordance with the applicable
requirements of the Warrant and (v) the Company is furnished with written
acknowledgement bythe transferee, that it takes such rights as a "Holder"
subject to the terms, conditions and obligations contained herein. Upon any
transfer of less than all of its Exercise Shares, the Holder shall retain any
remaining registration rights with respect to Exercise Shares held by it.

(iv) Termination. All registration rights granted under this Appendix A shall
terminate as soon as all Exercise Shares held by and issuable to Holder (and its
affiliates) may be sold pursuant to Rule 144 promulgated under the Act during
any ninety (90) day period.

(v) Prior Rights Agreement. Notwithstanding any other provision of this Appendix
A, if the inclusion of any Exercise Shares pursuant to a request made under (a)
above would adversely affect the rights of any Holder (as such term is defined
in the Prior Rights Agreement) under the Registration Rights Agreement dated
September 28, 1999 by and between the Company and certain of its shareholders
(the "Prior Rights Agreement")) or result in a violation or breach of the Prior
Rights Agreement by the Company, the Company shall limit the number of Exercise
Shares to be included in any registration accordingly so as to comply, at all
times, with the provisions of the Prior Rights Agreement.Allen Swann CHANGE OF CONTROL AGREEMENT

CHANGE OF CONTROL AGREEMENT

THIS CHANGE OF CONTROL AGREEMENT ("Agreement") is made by and between CHORDIANT
SOFTWARE, INC. (the "Company") and Gary DanielsAllen Swann ("Executive"). This
Agreement will become effective upon its execution by both parties hereto (the
"Effective Date").

 

RECITALS

WHEREAS Executive is employed by the Company pursuant to the terms of
Executive's offer letter from the Company;

 

WHEREAS Executive has been granted restricted shares of the
Company's common stock ("Restricted Shares"), as well as option(s) to purchase
shares of the Company's common stock (the "Options"), pursuant to the applicable
restricted stock agreement(s), stock option agreement(s) and equity incentive
plan(s) (together, the "Prior Grants");

 

WHEREAS in the future, Executive may be granted additional
shares of restricted stock and/or options to purchase the Company's common
stock, subject to the Board's sole discretion (together with Prior Grants, the
"Stock Awards"); and

 

WHEREAS the Company believes it is imperative to provide
Executive with accelerated vesting of the Stock Awards, as well as other
severance benefits, in the event that Executive is terminated without Cause (as
defined herein) or resigns for Good Reason (as defined herein) in connection
with a Change of Control (as defined herein).

 

NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants contained herein, and other good and valuable consideration, the
parties hereto hereby agree as follows:

 

1. TERMINATION OF EMPLOYMENT.

(a) At-Will Employment. Unless specified otherwise in Executive's employment or
offer letter, Executive's employment is at-will, which means that the Company
may terminate Executive's employment at any time, with or without advance
notice, and with or without Cause. Similarly, Executive may resign his/her
employment at any time, with or without advance notice or Good Reason. Executive
shall not receive any compensation of any kind, including, without limitation,
severance benefits, following Executive's last day of employment with the
Company (the "Termination Date"), except as expressly provided herein, as
otherwise agreed in writing between Executive and the Chief Executive Officer of
the Company, or as provided in any plan documents governing the Stock Awards.
Executive shall devote all reasonable efforts to the performance of Executive's
duties, and shall perform such duties in good faith.

(b) Termination Related to a Change of Control. If Executive's employment is
terminated without Cause or Executive resigns for Good Reason within ninety (90)
days prior to or twelve (12) months after a Change of Control, and Executive
signs a release substantially in the form (whichever is applicable) attached
hereto as Exhibit A (the "Release"), then the Company shall provide Executive
with the following severance benefits: 

(i) The Company shall make severance payments to Executive in the form of
continuation of Executive's base salary in effect on the Termination Date for
twelve (12) months following the Termination Date (the "Severance Period").
These payments will be made on the Company's ordinary payroll dates and will be
subject to standard payroll deductions and withholdings. Notwithstanding the
preceding, Executive's severance payments specified above will be reduced by the
Company by an amount equal to what Executive is paid or entitled to under any
contractual or statutory notice period contained in any employment
letter/arrangement or by way of law, such that the total severance payments plus
any notice pay shall not exceed twelve (12) months of base salary. 

(ii) The Company will pay Executive an amount equal to Executive's annual bonus
(provided the Executive is under a non-commission, Company bonus plan). The
bonus will be calculated at one of the following rates, whichever is higher: (1)
as if both Executive and the Company achieved one hundred (100) percent of their
specified performance objectives; or (2) the actual performance of the Company
and Executive as measured against the specified performance objectives. This
amount will be paid over the entire Severance Period on the Company's ordinary
payroll dates, in equal installments, and will be subject to standard payroll
deductions and withholdings.

(iii) The Company will pay the premiums necessary to continue Executive 's life
and health insurance during the Severance Period.

(iv) Provided that Executive is not, or is no longer, an executive officer or
director of the Company, then the time period in which Executive is required to
repay any promissory note, loan or other indebtedness to the Company shall be
extended by sixty (60) months..

(v) The Company will accelerate the vesting of the Stock Awards such that the
greater of the following shall vest within ten (10) days after the date
Executive signs the Release: (a) 50% of the unvested shares as of the
Termination Date subject to the Stock Awards (after taking into account any
additional acceleration of vesting Executive may be receiving under any plan
document(s) governing the Stock Awards instituted prior to or after this
Agreement is executed, including any additional acceleration of vesting of
restricted stock under any restricted stock agreement(s)); or (b) all such
shares that would have vested if Executive had worked for the Company for twelve
(12) additional months beyond the Termination Date. This acceleration of vesting
will be in addition to any acceleration of vesting that the Executive would
otherwise receive under the Company's 2000 Nonstatutory Equity Incentive Plan,
the Company's 1999 Equity Incentive Plan, or any other plan document(s) and
including any additional acceleration of vesting of restricted stock under any
restricted stock agreement(s)). Executive shall have sixty (60) months to
exercise any vested Options in addition to any time specified in the plan
document(s) governing the Options. The Stock Awards shall continue to be
governed by the terms of the applicable restricted stock agreement(s), stock
option agreements and equity incentive plan documents.

(vi) With respect to any Prior Grant intended to be an incentive stock option,
the acceleration of the vesting of the Prior Grant and the extension of the time
that Executive shall have to exercise the Prior Grant as provided in Paragraph
1(b)(v) of this Agreement are deemed to be a modification of the Prior Grant
within the meaning of Section 424(h) of the Internal Revenue Code ("Code"). Such
modification shall result in the granting of a new option as of the date of
execution of this Agreement, including providing a new grant date for purposes
of starting the holding period specified in Section 422(a)(1) of the Code and
for purposes of the provision that the option price be not less than the fair
market value of the stock at the time such option is granted as specified in
Section 422(b)(4) of the Code. If Executive and the Company agree that the Prior
Grant shall remain an incentive stock option and if the new option meets the
requirements for incentive stock options specified in Section 422(b) of the
Code, and the $100,000 per year limitation specified in Section 422(d) of the
Code as of the date of execution of this Agreement, then the unexercised portion
of the Prior Grant shall be appropriately modified as to the date of grant and
the option price; provided, however, that the option price shall be the greater
of the original option price of the Prior Grant or the fair market value of the
stock on the date of execution of this Agreement. If Executive and the Company
do not agree that such Prior Grant shall remain an incentive stock option, then
the Prior Grant shall be deemed to be a nonstatutory stock option as of the date
of execution of this Agreement, and the Prior Grant shall be appropriately
modified to reflect such changed status.

(c) Termination For Cause Procedure. The Company may not terminate Executive's
employment for Cause unless and until Executive receives a copy of a resolution
duly adopted by the affirmative vote of at least a majority of the Board of
Directors of the Company ("Board") finding that in the good faith opinion of the
Board, Executive was guilty of the conduct constituting "Cause" and specifying
the particulars thereof in detail. The Company shall provide Executive with
reasonable notice of the Board vote and an opportunity for Executive, together
with Executive's counsel, to be heard before the Board.

 

2. DEFINITIONS.

(a) Definition of Cause. For purposes of this Agreement, "Cause" shall mean that
Executive has committed, or there has occurred, one or more of the following
events: (1) conviction of any felony or misdemeanor involving moral turpitude,
fraud or act of dishonesty against the Company; (2) a finding by the Board,
after a good faith and reasonable factual investigation, that Executive has
engaged in gross misconduct; or (3) material violation or material breach of any
Company policy or statutory, fiduciary, or contractual duty of Executive to the
Company; provided, however, that in the event that any of the foregoing events
occurs, the Company shall provide notice to Executive describing the nature of
such event and Executive shall thereafter have ten (10) days to cure such event
if such event is capable of being cured.

(b) Definition of Good Reason. For purposes of this Agreement, "Good Reason"
shall mean that any one of the following events occurs during the Executive's
employment with the Company without Executive's consent: (i) any reduction of
Executive's annual base salary (including bonus) as of the time period
immediately preceding the Change of Control, except to the extent that the
annual base salary (including bonus) of all other officers of the Company is
similarly reduced; (ii) any material reduction in the package of benefits and
incentives provided to the Executive, or any action by the Company which would
materially and adversely affect the Executive's participation or reduce the
Executive's benefits under any such plans, except to the extent that such
benefits and incentives of all other officers of the Company are similarly
reduced; (iii) any material change in Executive's position or responsibilities
(including the person or persons to whom Executive has reporting
responsibilities) that represents an adverse change from Executive's position or
responsibilities as in effect at any time within ninety (90) days preceding the
date of the Change of Control or at any time thereafter, excluding for this
purpose an isolated, insubstantial and inadvertent action not taken in bad faith
that is remedied by the Company promptly after notice thereof is given by
Executive; (iv) the Company's requiring Executive to relocate to any place
outside of a twenty-five (25) mile driving distance of Executive's current work
site, except for reasonably required travel on the business of the Company or
its affiliates that is not materially greater than such travel requirements
prior to the Change in Control or unless Executive accepts such relocation
opportunity; or (v) any failure to pay Executive any compensation or benefits to
which Executive is entitled within fifteen (15) days of the date due. Executive
may terminate his or her employment for Good Reason so long as Executive tenders
his resignation to the Company within thirty (30) days after the occurrence of
the event which forms the basis for his resignation for Good Reason. Executive
shall provide written notice to the Company describing the nature of the event
which forms the basis for Executive's resignation for Good Reason, and the
Company shall thereafter have ten (10) days to cure such event.

(c) Definition of Change of Control. For purposes of this Agreement, a "Change
of Control" means: (i) a dissolution, liquidation or sale of all or
substantially all of the assets of the Company; (ii) a merger or consolidation
in which the Company is not the surviving corporation; (iii) a reverse merger in
which the Company is the surviving corporation but the shares of the Company's
common stock outstanding immediately preceding the merger are converted by
virtue of the merger into other property, whether in the form of securities,
cash or otherwise; (iv) the acquisition by any person, entity or group within
the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or any comparable successor provisions (excluding
any employee benefit plan, or related trust, sponsored or maintained by the
Company or any Affiliate of the Company) of the beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act, or comparable
successor rule) of securities of the Company representing at least fifty percent
(50%) of the combined voting power entitled to vote in the election of
directors; or (v) an acquisition by the Company of an unaffiliated company, for
cash or stock of the Company, in which some or all of the members of senior
management of the acquired company are retained by the Company for employment by
the acquired company or the Company.

 

3. OTHER EMPLOYMENT TERMS AND CONDITIONS. The employment
relationship between the parties shall be governed by the general employment
policies and procedures of the Company, including those relating to the
protection of confidential information and assignment of inventions; provided,
however, that when the terms of this Agreement differ from or are in conflict
with the Company's general employment policies or procedures, this Agreement
shall control. 

 

4. GENERAL PROVISIONS.

(a) This Agreement, including all exhibits hereto, constitutes the complete,
final and exclusive embodiment of the entire agreement between the parties with
regard to the subject matter hereof. It is entered into without reliance on any
promise or representation, written or oral, other than those expressly contained
herein, and it supersedes any other such promises or representations.
Notwithstanding the foregoing, nothing in this Agreement shall affect the
parties' rights or obligations under the October 2002 restricted stock agreement
or any other applicable restricted stock or stock option agreements entered into
prior to or after the effective date of this Agreement or the Executive's
Employee Proprietary Information and Inventions Agreement. This Agreement cannot
be modified except in a writing signed by Executive and a duly-authorized member
of the Board.

(b) Whenever possible, each provision of this Agreement will be interpreted in
such a manner as to be effective under applicable law. The invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement. Any invalid
or unenforceable provision shall be modified so as to be rendered valid and
enforceable in a manner consistent with the intent of the parties insofar as
possible.

(c) The Executive's or the Company's failure to insist upon strict compliance
with any provision of this Agreement or the failure to assert any right the
Executive or the Company may have hereunder shall not be deemed to be a waiver
of such provision or right or any other provision or right of this Agreement.

(d) This Agreement may be executed in several counterparts, each of which shall
be deemed to be an original but all of which together will constitute one and
the same instrument. Facsimile signatures shall be deemed as effective as
originals.

(e) This Agreement is intended to bind and inure to the benefit of and be
enforceable by Executive, the Company and their respective successors, assigns,
heirs, executives and administrators, except that Executive may not assign any
of his duties hereunder and he may not assign any of his rights hereunder
without the written consent of the Company. This Agreement shall be interpreted
and enforced in accordance with the laws of the State of California.

(f) If either party hereto bring any action to enforce such party's rights
hereunder, the prevailing party in any such action shall be entitled to recover
such party's reasonable attorneys' fees and costs incurred in connection with
such action.

(g) For purposes of construction, this Agreement shall be deemed to have been
drafted by the Company, and the rule of construction of contracts that
ambiguities are construed against the drafting party shall be applied against
the Company.

(h) Any notice required to be given or delivered to the Company under the terms
of this Agreement shall be in writing and addressed to the Corporate Secretary
of the Company at its principal corporate offices. Any notice required to be
given or delivered to Executive shall be in writing and addressed to Executive
at the address indicated herein or to the last known address provided by
Executive to the Company. All notices shall be deemed to have been given or
delivered upon: personal delivery; three (3) days after deposit in the United
States mail by certified or registered mail (return receipt requested); one (1)
business day after deposit with any return receipt express courier (prepaid); or
one (1) business day after transmission by facsimile.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year written below.

 

Signed: /s/ Allen Swann

Name:
Allen Swann

Address: 

Date: April 24, 2003 

CHORDIANT SOFTWARE, INC.

 

Signed: /s/ Stephen Kelly 

Name: Stephen Kelly 

Title: Chief Executive Officer 

Date:  April 24, 2003

Exhibit A - Release Agreements

EXHIBIT A

 

RELEASE AGREEMENT FOR EMPLOYEES UNDER 40 YEARS OF AGE

In exchange for the severance benefits I am receiving to which I would not
otherwise be entitled, I hereby release, acquit and forever discharge the
Company, and its officers, directors, agents, servants, employees, attorneys,
shareholders, successors, assigns and affiliates, of and from any and all
claims, liabilities, demands, causes of action, costs, expenses, attorneys'
fees, damages, indemnities and obligations of every kind and nature, in law,
equity, or otherwise, known and unknown, suspected and unsuspected, disclosed
and undisclosed, arising out of or in any way related to agreements, events,
acts or conduct at any time prior to and including the execution date of this
Release Agreement, including but not limited to: all such claims and demands
directly or indirectly arising out of or in any way connected with my employment
with the Company or the termination of that employment; claims or demands
related to salary, bonuses, commissions, stock, stock options, or any other
ownership interests in the Company, vacation pay, fringe benefits, expense
reimbursements, severance pay, or any other form of compensation; claims
pursuant to any federal, state or local law, statute, or cause of action
including, but not limited to, the federal Civil Rights Act of 1964, as amended;
the federal Americans with Disabilities Act of 1990; the California Fair
Employment and Housing Act, as amended; tort law; contract law; wrongful
discharge; discrimination; harassment; fraud; defamation; emotional distress;
and breach of the implied covenant of good faith and fair dealing.

 

I UNDERSTAND THAT THIS RELEASE INCLUDES A RELEASE OF ALL KNOWN
AND UNKNOWN CLAIMS. In giving this release, which includes claims which may be
unknown to me at present, I acknowledge that I have read and understand Section
1542 of the California Civil Code which reads as follows: "A general release
does not extend to claims which the creditor does not know or suspect to exist
in his favor at the time of executing the release, which if known by him must
have materially affected his settlement with the debtor." I hereby expressly
waive and relinquish all rights and benefits under that section and any law of
any jurisdiction of similar effect with respect to my release of any unknown or
unsuspected claims I may have against the Company.

DATED: AGREED: 

[Employee's Name]

RELEASE AGREEMENT FOR EMPLOYEES 40 YEARS OF AGE OR OLDER

In exchange for the severance benefits I am receiving to which I would not
otherwise be entitled, I hereby release, acquit and forever discharge the
Company, and its officers, directors, agents, servants, employees, attorneys,
shareholders, successors, assigns and affiliates, of and from any and all
claims, liabilities, demands, causes of action, costs, expenses, attorneys'
fees, damages, indemnities and obligations of every kind and nature, in law,
equity, or otherwise, known and unknown, suspected and unsuspected, disclosed
and undisclosed, arising out of or in any way related to agreements, events,
acts or conduct at any time prior to and including the execution date of this
Release Agreement, including but not limited to: all such claims and demands
directly or indirectly arising out of or in any way connected with my employment
with the Company or the termination of that employment; claims or demands
related to salary, bonuses, commissions, stock, stock options, or any other
ownership interests in the Company, vacation pay, fringe benefits, expense
reimbursements, severance pay, or any other form of compensation; claims
pursuant to any federal, state or local law, statute, or cause of action
including, but not limited to, the federal Civil Rights Act of 1964, as amended;
the federal Americans with Disabilities Act of 1990; the federal Age
Discrimination in Employment Act of 1967, as amended ("ADEA"); the California
Fair Employment and Housing Act, as amended; tort law; contract law; wrongful
discharge; discrimination; harassment; fraud; defamation; emotional distress;
and breach of the implied covenant of good faith and fair dealing.

I acknowledge that I am knowingly and voluntarily waiving and releasing any
rights I may have under the ADEA, as amended. I also acknowledge that the
consideration given for the waiver and release in the preceding paragraph hereof
is in addition to anything of value to which I was already entitled. I further
acknowledge that I have been advised by this writing, as required by the ADEA,
that: (a) my waiver and release do not apply to any rights or claims that may
arise after the execution date of this Release; (b) I have been advised hereby
that I have the right to consult with an attorney prior to executing this
Release; (c) I have twenty-one (21) days to consider this Release (although I
may choose to voluntarily execute this release earlier); (d) I have seven (7)
days following my execution of this Release to revoke my agreement to it; and
(e) this Release will not be effective until the date upon which the revocation
period has expired, which will be the eighth day after this Release is executed
by me. 

 

I UNDERSTAND THAT THIS RELEASE INCLUDES A RELEASE OF ALL KNOWN
AND UNKNOWN CLAIMS. In giving this release, which includes claims which may be
unknown to me at present, I acknowledge that I have read and understand Section
1542 of the California Civil Code which reads as follows: "A general release
does not extend to claims which the creditor does not know or suspect to exist
in his favor at the time of executing the release, which if known by him must
have materially affected his settlement with the debtor." I hereby expressly
waive and relinquish all rights and benefits under that section and any law of
any jurisdiction of similar effect with respect to my release of any unknown or
unsuspected claims I may have against the Company.

DATED: AGREED: 

[Employee's Name]

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