<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 14, 1999.
REGISTRATION NO. 333-92545
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
SELECTICA, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
-------------------------
<TABLE>
<S> <C> <C>
DELAWARE 7372 77-0432030
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
2890 ZANKER ROAD, SUITE 101, SAN JOSE CA 95134
(408) 570-9700
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
RAJEN JASWA
CHIEF EXECUTIVE OFFICER AND CHAIRMAN OF THE BOARD
SELECTICA, INC.
2890 ZANKER ROAD, SUITE 101, SAN JOSE CA 95134
(408) 570-9700
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
-------------------------
COPIES TO:
<TABLE>
<S> <C>
ROBERT V. GUNDERSON, JR., ESQ. MARK A. BERTELSEN, ESQ.
BENNETT L. YEE, ESQ. JOSE F. MACIAS, ESQ.
ANDREW BAW, ESQ. BETSEY SUE, ESQ.
THEODORE G. WANG, ESQ. JON C. AVINA, ESQ.
PARKER E. HOBSON, ESQ. BROOKE D. COLEMAN, ESQ.
GUNDERSON DETTMER STOUGH WILSON SONSINI GOODRICH & ROSATI
VILLENEUVE FRANKLIN & HACHIGIAN, LLP PROFESSIONAL CORPORATION
155 CONSTITUTION DRIVE 650 PAGE MILL ROAD
MENLO PARK, CALIFORNIA 94025 PALO ALTO, CALIFORNIA 94304
(650) 321-2400 (650) 493-9300
</TABLE>
-------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] ____________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ____________
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SUCH SECTION 8(a), MAY DETERMINE. THE INFORMATION IN THIS
PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES
UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE
SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY
STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
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- --------------------------------------------------------------------------------
<PAGE> 2
EXPLANATORY NOTE
This Amendment No. 1 to the Form S-1 Registration Statement is being filed
for the sole purpose of filing additional exhibits.
<PAGE> 3
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table presents the costs and expenses, other than
underwriting discounts and commissions, payable by us in connection with the
sale of common stock being registered. All amounts are estimates except the SEC
registration fee and the NASD filing fees.
<TABLE>
<S> <C>
SEC Registration fee........................................ $19,800
NASD fee.................................................... 8,000
Nasdaq National Market listing fee..........................
Printing and engraving expenses.............................
Legal fees and expenses.....................................
Accounting fees and expenses................................
Blue sky fees and expenses..................................
Custodian and transfer agent fees...........................
Miscellaneous fees and expenses.............................
-------
Total............................................. $
=======
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law authorizes a court to
award or a corporation's board of directors to grant indemnification to
directors and officers in terms sufficiently broad to permit indemnification
under limited circumstances for liabilities, including reimbursement for
expenses incurred, arising under the Securities Act of 1933, as amended (the
"Securities Act"). Article VI, Section 6.1 of our bylaws provides for mandatory
indemnification of our directors, officers and employees to the maximum extent
permitted by the Delaware General Corporation Law. Our Certificate of
Incorporation provides that, under Delaware law, our officers and directors
shall not be liable for monetary damages for breach of the officers' or
directors' fiduciary duty as officers or directors to our stockholders and us.
This provision in the Certificate of Incorporation does not eliminate the
officers' or directors' fiduciary duty, and in appropriate circumstances,
equitable remedies like injunctive or other forms of non-monetary relief will
remain available under Delaware law. In addition, each officer or director will
continue to be subject to liability for breach of the officer's or director's
duty of loyalty to us for acts or omissions not in good faith or involving
intentional misconduct, for knowing violations of law, for actions leading to
improper personal benefit to the officer or director and for payment of
dividends or approval of stock repurchases or redemptions that are unlawful
under Delaware law. The provision also does not affect an officer's or
director's responsibilities under any other law, such as the federal securities
laws or state or federal environmental laws. We have entered into
indemnification agreements with our officers and directors, a form of which is
attached as Exhibit 10.1 and incorporated by reference. The indemnification
agreements provide our officers and directors with further indemnification to
the maximum extent permitted by the Delaware General Corporation Law. Reference
is made to Section 7 of the underwriting agreement contained in Exhibit 1.1 to
this prospectus, indemnifying officers and directors of ours against limited
liabilities.
II-1
<PAGE> 4
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Since June 1996, we have issued and sold the following securities:
1. We granted direct issuances or stock options to purchase 5,770,035
shares of our common stock at exercise prices ranging from $0.10 to $4.38
per share to employees, consultants, directors and other service providers
under our 1996 Stock Plan.
2. We issued and sold an aggregate of 3,180,019 shares of our common
stock to employees, consultants, and other service providers for aggregate
consideration of approximately $2,332,406 under direct issuances or
exercises of options granted under our 1996 Stock Plan.
3. In July 1996, we issued and sold 1,500,000 shares of our Series A
Preferred Stock for an aggregate purchase price of approximately $137,501
to Rajen Jaswa under a stock purchase agreement.
4. In July 1996, we issued an aggregate of 2,700,000 shares of our
common stock to Dr. Sanjay Mittal in exchange for 3,250,000 shares of
Catalogics and past services.
5. In October 1996, we issued 200,000 shares of our Series A
Preferred Stock and 89,900 shares of our common stock to Vasudev Bhandarkar
in exchange for the fixed assets of Alma Enterprises.
6. In January 1997, we issued and sold 3,750,000 shares of our Series
B Preferred Stock for an aggregate purchase price of approximately
$1,001,330 to a group of investors under a stock purchase agreement.
7. From July 24, 1997 through October 1, 1997, we issued and sold
3,253,126 shares of our Series C Preferred Stock for an aggregate purchase
price of approximately $2,999,382 to a group of investors under a stock
purchase agreement.
8. On April 17, 1998 we issued a warrant to purchase 32,609 shares of
our Series C Preferred Stock with an exercise price of $0.92 per share to
Imperial Bank. The warrant was subsequently amended on July 1, 1998 to be
exercisable for 20,408 shares of our Series D Preferred Stock with an
exercise price of $1.47 per share.
9. From June 17, 1998 through July 27, 1998 we issued and sold
4,863,935 shares of our Series D Preferred Stock for an aggregate purchase
price of approximately $7,149,984 to a group of investors under a stock
purchase agreement.
10. On February 11, 1999, we issued a warrant to purchase 187,129
shares of our Series E Preferred Stock with an exercise price of up to
$4.38 per share to Deutsche Bank Securities. Upon consummation of the
initial public offering, we will terminate the warrant unless it is
previously exercised in accordance with its terms.
11. On May 14, 1999, we issued warrants to purchase 15,000 shares of
our Series E Preferred Stock with an exercise price of $4.38 per share to a
group of investors under a note and warrant purchase agreement. On November
15, 1999, two holders exercised their respective warrants to purchase an
aggregate of 5,250 shares of Series E Preferred Stock. Upon consummation of
the initial public offering, we will terminate the remaining warrants
unless they are previously exercised in accordance with their terms.
12. From June 16, 1999 through October 12, 1999 we issued and sold
6,141, 646 shares of our Series E Preferred Stock for an aggregate purchase
price of approximately $26,912,693 to a group of investors under a stock
purchase agreement.
II-2
<PAGE> 5
The sale of the above securities was deemed to be exempt from registration
under the Securities Act in reliance upon Section 4(2) of the Securities Act or
Regulation D promulgated thereunder, or Rule 701 promulgated under Section 3(b)
of the Securities Act as transactions by an issuer not involving any public
offering or transactions under compensation benefit plans and contracts relating
to compensation as provided under Rule 701. The recipients of securities in each
transaction represented their intentions to acquire the securities for
investment only and not with a view to or for sale in connection with any
distribution and appropriate legends were affixed to the share certificates
issued in these transactions. All recipients had adequate access, through their
relationships with us, to information about us.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
1.1* Form of Underwriting Agreement.
3.1* Amended and Restated Certificate of Incorporation of the
Registrant.
3.2* Form of Second Amended and Restated Certificate of
Incorporation to be filed immediately following the closing
of the offering made under this Registration Statement.
3.3* Bylaws of the Registrant.
4.1* Reference is made to Exhibits 3.1, 3.2 and 3.3.
4.2* Form of Registrant's Common Stock certificate.
4.3** Amended and Restated Investor Rights Agreement dated June
16, 1999.
4.4** Warrant to Purchase Stock between the Registrant and
Imperial Bank, dated April 17, 1998; First Amendment to
Warrant between the Registrant and Imperial Bank, dated July
1, 1998.
5.1* Opinion of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP.
10.1* Form of Indemnification Agreement.
10.2** 1996 Stock Plan.
10.3** 1999 Employee Stock Purchase Plan.
10.4** 1999 Equity Incentive Plan.
10.5** Lease between Spieker Properties L.P. and the Registrant,
dated December 8, 1997.
10.6** Lease between John Arrilliga Survivors Trust and the Richard
T. Perry Separate Property Trust as Landlord and the
Registrant as Tenant, dated October 1, 1999.
10.7+ Major Account License Agreement between the Registrant and
Fujitsu Network Communications, dated November 4, 1998.
10.8+ Agreement for Web Site Design and Development Service
between the Registrant and BMW of North America, dated July
15, 1998.
10.9+ Major Account License Agreement between the Registrant and
the Fireman's Fund Insurance Company, dated June 24, 1999.
10.10+ Major Account License Agreement between the Registrant and
LoanMarket Resources, dated June 30, 1999.
10.11+ Major Account License Agreement between the Registrant and
Aspect Telecommunications, dated May 17, 1999.
10.12+ A Consulting Engagement Proposal from the Registrant to
3Com, dated July 29, 1999.
10.13+ A Consulting Engagement Proposal from the Registrant to
3Com, dated August 10, 1999.
10.14** Employment Agreement between the Registrant and Rajen Jaswa
dated as of July 1, 1997.
10.15** Employment Agreement between the Registrant and Dr. Sanjay
Mittal dated as of July 1, 1997.
10.16** Offer letter from the Registrant to Stephen Bennion dated as
of September 16, 1999.
10.17** Offer letter from the Registrant to Daniel A. Carmel dated
as of July 23, 1999.
</TABLE>
II-3
<PAGE> 6
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
23.1** Consent of Ernst & Young LLP, independent auditors.
23.2* Consent of Counsel. Reference is made to Exhibit 5.1.
24.1** Power of Attorney. Reference is made to page II-5.
27.1** Financial Data Schedule.
</TABLE>
- ---------------
* To be filed by amendment.
** Previously filed.
+ Confidential treatment requested.
ITEM 17. UNDERTAKINGS
We undertake to provide to the underwriters at the closing specified in the
underwriting agreement, certificates in the denominations and registered in the
names as required by the underwriters to permit prompt delivery to each
purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant under the Delaware General Corporation Law, the Certificate of
Incorporation or our bylaws, the underwriting agreement, or otherwise, we have
been advised that in the opinion of the Securities and Exchange Commission this
indemnification is against public policy as expressed in the Securities Act, and
is, therefore, unenforceable. In the event that a claim for indemnification
against these liabilities, other than the payment by us of expenses incurred or
paid by a director, officer, or controlling person of ours in the successful
defense of any action, suit or proceeding, is asserted by a director, officer or
controlling person in connection with the securities being registered in this
offering, we will, unless in the opinion of our counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether this indemnification by us is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of this issue.
We undertake that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by us under Rule 424(b)(1) or (4) or 497(h) under
the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered, and the offering of these securities at that time shall be deemed
to be the initial bona fide offering.
(b) The following financial schedule is filed with this registration
statement:
Schedule II -- Valuation and Qualifying Accounts
II-4
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this Amendment No. 1 to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of San Jose, State of California, on this 14th day of December, 1999.
SELECTICA, INC.
By: /s/ RAJEN JASWA
--------------------------------------
Rajen Jaswa
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 to the Registration Statement has been signed by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated:
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<C> <S> <C>
* Chief Executive Officer and
- --------------------------------------------- President (Principal Executive
Rajen Jaswa Officer) and Chairman of the
Board
* Chief Technology Officer, Vice
- --------------------------------------------- President Engineering, Director
Sanjay Mittal
* Chief Financial Officer
- --------------------------------------------- (Principal Financial and
Stephen Bennion Accounting Officer)
* Director
- ---------------------------------------------
Betsy S. Atkins
* Director
- ---------------------------------------------
Robin Richards Donohoe
* Director
- ---------------------------------------------
Michael Lyons
* Director
- ---------------------------------------------
Thomas Neustaetter
* Director
- ---------------------------------------------
John Fisher
*By: /s/ RAJEN JASWA December 14, 1999
- ---------------------------------------------
Rajen Jaswa
Attorney-in-Fact
*By: /s/ STEPHEN BENNION December 14, 1999
- ---------------------------------------------
Stephen Bennion
Attorney-in-Fact
</TABLE>
II-5
<PAGE> 8
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNT
SELECTICA, INC.
SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
BALANCE ADDITIONS
AS OF CHARGED TO BALANCE AS
BEGINNING COSTS AND OF END
DESCRIPTION OF PERIOD EXPENSES DEDUCTIONS OF PERIOD
----------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Year ended March 31, 1997
Deducted from asset accounts:
Allowance for doubtful accounts........... $ -- $ -- $ -- $ --
Year ended March 31, 1998
Deducted from asset accounts:
Allowance for doubtful accounts........... $ -- $ 29,750 $ -- $ 29,750
Year ended March 31, 1999
Deducted from asset accounts:
Allowance for doubtful accounts........... $ 29,750 $ 74,250 $ -- $104,000
Six months ended September 30, 1999
Deducted from asset accounts:
Allowance for doubtful accounts........... $104,000 $150,000 $ -- $254,000
</TABLE>
<PAGE> 9
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
1.1* Form of Underwriting Agreement.
3.1* Amended and Restated Certificate of Incorporation of the
Registrant.
3.2* Form of Second Amended and Restated Certificate of
Incorporation to be filed immediately following the closing
of the offering made under this Registration Statement.
3.3* Bylaws of the Registrant.
4.1* Reference is made to Exhibits 3.1, 3.2 and 3.3.
4.2* Form of Registrant's Common Stock certificate.
4.3** Amended and Restated Investor Rights Agreement dated June
16, 1999.
4.4** Warrant to Purchase Stock between the Registrant and
Imperial Bank, dated April 17, 1998; First Amendment to
Warrant between the Registrant and Imperial Bank, dated July
1, 1998.
5.1* Opinion of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP.
10.1* Form of Indemnification Agreement.
10.2** 1996 Stock Plan.
10.3** 1999 Employee Stock Purchase Plan.
10.4** 1999 Equity Incentive Plan.
10.5** Lease between Spieker Properties L.P. and the Registrant,
dated December 8, 1997.
10.6** Lease between John Arrilliga Survivors Trust and the Richard
T. Perry Separate Property Trust as Landlord and the
Registrant as Tenant, dated October 1, 1999.
10.7+ Major Account License Agreement between the Registrant and
Fujitsu Network Communications, Inc., dated November 4,
1998.
10.8+ Agreement for Web Site Design and Development Service
between the Registrant and BMW of North America, Inc., dated
July 15, 1998.
10.9+ Major Account License Agreement between the Registrant and
the Fireman's Fund Insurance Company, dated June 24, 1999.
10.10+ Major Account License Agreement between the Registrant and
LoanMarket Resources, LLC., dated June 30, 1999.
10.11+ Major Account License Agreement between the Registrant and
Aspect Telecommunications, dated May 17, 1999.
10.12+ A Consulting Engagement Proposal from the Registrant to
3Com, dated July 29, 1999.
10.13+ A Consulting Engagement Proposal from the Registrant to
3Com, dated August 10, 1999.
10.14** Employment Agreement between the Registrant and Rajen Jaswa
dated as of July 1, 1997.
10.15** Employment Agreement between the Registrant and Dr. Sanjay
Mittal dated as of July 1, 1997.
10.16** Offer letter from the Registrant to Stephen Bennion dated as
of September 16, 1999.
10.17** Offer letter from the Registrant to Daniel A. Carmel dated
as of July 23, 1999.
23.1** Consent of Ernst & Young LLP, independent auditors.
23.2* Consent of Counsel. Reference is made to Exhibit 5.1.
24.1** Power of Attorney. Reference is made to page II-5.
27.1** Financial Data Schedule.
</TABLE>
- ---------------
* To be filed by amendment.
** Previously filed.
+ Confidential treatment requested.
<PAGE> 1
EXHIBIT 10.7
SELECTICA, INC.
MAJOR ACCOUNT LICENSE AGREEMENT
This Agreement, dated as of November 4, 1998 (the "Effective Date"), is
made and entered into by and between Selectica, Inc. ("SELECTICA") a California
corporation with its principal offices at 2890 Zanker Road, Suite 101, San Jose,
CA 95134, and Fujitsu Network Communications, Inc.("Customer" or "FNC"), a
California corporation with its principal offices at 2801 Telecom Parkway,
Richardson, TX 75082. SELECTICA and Customer agree as follows:
SECTION 1. DEFINITIONS
Whenever used in this Agreement, the following terms will have the
following specified meanings:
1.1 "DOCUMENTATION" means the documentation specified in Exhibit A
attached hereto and licensed to Customer hereunder, together with any and all
new releases, corrections and updates furnished by SELECTICA to Customer under
this Agreement.
1.2 "SOFTWARE" means the computer software specified in Exhibit A attached
hereto, in object code form, together with any and all Upgrades furnished by
SELECTICA to Customer under this Agreement.
1.3 "UPGRADES" means all releases, updates and corrections of the Software
licensed to Customer hereunder, in object code form, which are
published and generally made commercially available by SELECTICA to
its licensees of the Software with a change in the integer, tenths or
hundredths digit of the version number (e.g., a change from version
x.xx to y.xx or x.yx or x.xy). Upgrades shall not include any release,
update or correction that has been customized by SELECTICA for use by
any particular licensee of the Software other than Customer or which
is made by SELECTICA solely to adopt or reflect the trade dress of any
third party.
1.4 "WORK AUTHORIZATION" means the documentation created by Selectica to
be approved by FNC to specify the requirements for the deliverables,
and which shall contain a general statement of intended use of the
configurator, a complete description of each deliverable and a
specific list of features required in the deliverable and the
applicable time table.
SECTION 2. SOFTWARE DELIVERY AND LICENSE
2.1 DELIVERABLES. Upon execution of this Agreement, SELECTICA shall
deliver to Customer the Software licensed hereunder to Customer.
2.2 GRANT. SELECTICA hereby grants Customer a nonexclusive,
nontransferable, perpetual license to:
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
1
<PAGE> 2
(a) Install and use the Software ordered by Customer hereunder
for internal processing requirements of Customer and for distribution to
Customer's customers on the number of servers and/or seats authorized under this
Agreement. The number of servers and/or seats initially authorized hereunder is
set forth in Exhibit A. Customer may increase the number of authorized servers
or seats from time to time in unit quantities and upon payment to SELECTICA of
the applicable amount as set forth in Exhibit B.
(b) Reproduce the Documentation for the Software ordered by
Customer hereunder and/or incorporate all or any portion of the Documentation in
training materials prepared by the Customer, in each case solely for the use of
the Customer and Customer's customers and provided that the copyright notices
and other proprietary rights legends of SELECTICA are included on each copy of
the Documentation and such materials.
(c) Reproduce and make one copy of the Software for archival and
backup purposes.
2.3 RESTRICTIONS. Customer shall use the Software and Documentation only
for the purposes specified in section 2.2 and in accordance with the following:
(a) Customer shall not modify or prepare derivative works of the
Software or Documentation except as expressly permitted in Section 2.2;
(b) Customer shall not reverse engineer, disassemble or decompose
the Software, except to the extent that such acts may not be prohibited under
applicable law;
(c) Customer shall not remove, obscure, or alter any notice of
patent, copyright, trade secret, trademark, or other proprietary rights notices
present on any Software and Documentation;
(d) Customer shall not sublicense, sell, lend, rent, lease, or
otherwise transfer all or any portion of the Software or the Documentation to
any third party except as may be permitted in Section 9.4 hereof, with the
exception that Customer shall have the right and license to distribute Selectica
Object Code for ACE Desktop to Customer's customers and Customer's employees and
agents in order for such customers and employees to run The Fujitsu Configurator
(as defined in Exhibit D).
(e) Customer shall not use the Software or the Documentation to
provide fee based services to an unaffiliated third party which are
substantially similar to the services described on Exhibit D.
2.4 COMPLIANCE WITH LAWS. SELECTICA and Customer shall each comply with
all applicable laws, regulations, rules, orders and other requirements, now or
hereafter in effect, of any applicable governmental authority, in their
performance of this Agreement. Without limiting the generality of the foregoing,
Customer will comply with all export laws and
2
<PAGE> 3
regulations of the United States in dealing with the Software including its
export and use of the Software outside the United States.
2.5 PROPRIETARY RIGHTS. The Software and Documentation contains
valuable patent, copyright, trade secret, trademark and other proprietary rights
of SELECTICA. Except for the license granted under Section 2.2, SELECTICA
reserves all rights to the Software and Documentation. No title to or ownership
of any Software or proprietary rights related to the Software or Documentation
is transferred to Customer under this Agreement, except as set forth in Section
2.7.
2.6 PROTECTION AGAINST UNAUTHORIZED USE. Customer shall promptly notify
SELECTICA of any unauthorized use of the Software or Documentation of which
Customer is aware. In the event of any unauthorized use by any of Customer's
employees, agents or representatives, Customer shall use its commercially
reasonable best efforts to terminate such unauthorized use and to retrieve any
copy of the Software or Documentation in the possession or control of the person
or entity engaging in such unauthorized use. SELECTICA may, at its option and
expense, participate in any such proceeding and, in such an event, Customer
shall provide such authority, information and assistance related to such
proceeding as SELECTICA may reasonably request.
2.7 It is agreed by SELECTICA that Customer's custom graphical user
interface, and Customer Knowledge Database, and all associated hardware,
software and documentation will remain the property of Customer, and SELECTICA
is granted no license thereto. SELECTICA grants to Customer all right, title and
interest in and to all work product and Deliverables resulting from the Services
performed as set forth in Exhibit D including, without limitation, the Fujitsu
Configurator.
SECTION 3. SUPPORT SERVICES, TRAINING AND MAINTENANCE
3.1 SUPPORT SERVICES AND TRAINING. Provided Customer has paid
SELECTICA the applicable maintenance fee specified in Exhibit B, SELECTICA will
provide Customer with the maintenance services and training set forth below.
SELECTICA reserves the right to change or discontinue from time to time all or
any part of the services or systems described below upon prior written notice to
Customer provided (a) such notice is received by Customer at least six months
prior to the effective date of any such discontinuation and (b) the effective
date of any such discontinuation is on the anniversary date of the maintenance
agreement.
(a) Telephone/Fax Support. During the maintenance period, SELECTICA
will provide Customer with telephone support during the hours of 8 a.m. to 5
p.m. (PST), Monday through Friday, excluding holidays observed by SELECTICA.
SELECTICA will provide after-hours answering service to record inquiries from
Customer, and SELECTICA will use reasonable commercial efforts to respond to any
such inquiries within one (1) business day of receipt. Customer will ensure that
only person(s) properly trained in the operation and usage of the Software and
designated by Customer as a contact in accordance with paragraph 3.1(c) below
will utilize such telephone support. SELECTICA will provide such telephone
assistance in connection with the (i) installation and operational use of the
Software and Documentation; (ii) identification and verification of the causes
of suspected errors or malfunctions in the Software; and (iii) providing of
detours for identified Software errors or malfunctions, where
3
<PAGE> 4
reasonably available to SELECTICA. Further, upon request by SELECTICA, Customer
will allow SELECTICA to perform on-line diagnostics of the Software.
(b) Internet Access. SELECTICA shall furnish SELECTICA's electronic
mail system by which Customer may send questions to SELECTICA about software.
SELECTICA will use reasonable efforts to respond to such inquiries within (1)
business day of receipt.
(c) Training Services. SELECTICA will authorize a maximum of two
Customer employees selected by Customer to contact SELECTICA for telephone
and/or fax Support. Each contact must have completed SELECTICA's Training Course
("Training Course"), and will be designated as either the primary or backup
contact.
3.2 MAINTENANCE. Provided Customer has paid SELECTICA the applicable
maintenance fee specified in Exhibit B, SELECTICA will furnish to Customer
within a reasonable time after publication, one (1) copy of all Upgrades.
3.3 OTHER SERVICES. SELECTICA will furnish to Customer professional
services ("Services" or "Professional Services") including, without limitation,
the Software customization and/or additional maintenance services, training,
and/or professional services identified in Exhibits C and D, as may be amended
from time to time, and other Exhibits as may be added describing additional
services to be performed, if any, on the terms and conditions in this Agreement
and below:
a) Customer will pay SELECTICA for the Services actually rendered as set
forth in Exhibits C and D and for all preapproved, actual and reasonable
travel, lodging and other out-of-pocket expenses incurred in the course of
performing the Services. SELECTICA shall submit invoices identifying the
Work Authorization, the Services provided, applicable Billing Rate(s) and
expenses. Any taxes incurred in connection with Services (other than taxes
imposed on SELECTICA's earnings generally or referred to in Section b
below) will be billed to, and paid by Customer in addition to Project Fees
and Expenses. Payment is due within thirty (30) days of receipt of the
invoice provided that FNC does not reasonably dispute such invoice.
SELECTICA may suspend work and withhold Deliverables in the event a
properly submitted and valid invoice is not paid within thirty days of
notice of nonpayment, and may charge interest at a rate of one percent per
month on any outstanding balance more than forty-five days overdue.
b) SELECTICA is an independent contractor, and no Work Authorization shall
be construed to create an employment relationship between the parties,
whether for tax or any other purpose. Neither party shall have the right to
bind the other to any agreement with a third party or to incur any
obligation or liability on behalf of the other party. SELECTICA and its
personnel shall not be considered employees of Customer. SELECTICA will,
during the term of this Agreement, maintain at SELECTICA's expense all
necessary insurance for its personnel, including but not limited to
worker's compensation, disability, unemployment insurance, and general
liability insurance. SELECTICA will provide Customer with certification of
insurance upon request. SELECTICA will be responsible for employment taxes,
worker's compensation, disability, or unemployment compensation insurance,
premiums or claims levied upon or attributable to the services rendered by
SELECTICA, and SELECTICA's personnel, including but not limited to, all
state and federal FICA, worker's
4
<PAGE> 5
compensation, disability, or unemployment, withholding taxes, premiums and
claims. SELECTICA will not subcontract any of the work without the express
written consent of FNC. SELECTICA will execute any documents reasonable
requested by FNC in order to perform the work, including, without
limitation, those required under contracts with third parties.
c) Either party may terminate a Work Authorization at any time on fifteen
(15) days prior written notice; provided that upon termination Customer
shall pay SELECTICA for Services, work-in-progress and expenses incurred
prior to the effective date of termination. Upon the termination of a Work
Authorization, the parties shall return any Confidential Information
received in tangible form, and SELECTICA shall deliver to Customer all
documents and other materials received from Customer in the course of
providing Services under the Work Authorization and, to the extent paid for
by Customer, copies of all Deliverables or portions of Deliverables
prepared pursuant to the Work Authorization.
3.4 SOURCE CODE DELIVERY. SELECTICA shall release the source code of the
Software and of the Deliverables, if applicable, if:
(a) SELECTICA is unwilling or unable to support and/or maintain the
Software and applicable Deliverables as outlined in Section 3 of this agreement,
ceases operations in the area of the Software, or Customer reasonably believes
that any of the above may occur and SELECTICA does not provide evidence to the
contrary within five (5) days of receipt of notice from Customer describing its
concerns; or
(b) SELECTICA has filed for bankruptcy, a bankruptcy notice has been
filed against it, or a receiver has been appointed.
(c) In the event of a successor corporation, all responsibilities
regarding this agreement will follow and become the responsibilities of the
"Newco" or successor corporation.
SECTION 4. COMPENSATION
4.1 LICENSE FEE. Customer will pay SELECTICA the Software license fee
specified in Exhibit B.
4.2 MAINTENANCE FEE. In consideration for SELECTICA's services set
forth in Section 3.1 and Section 3.2, Customer agrees to pay SELECTICA the
maintenance fee in the amount and in accordance with the terms of Exhibit A for
the first twelve (12) month period commencing on the Effective Date. Customer
may renew the services described in Section 3.1 and Section 3.2 thereafter on an
annual basis by payment of the maintenance fee before the beginning of each new
twelve (12) month period. SELECTICA reserves the right to change the maintenance
fee from time to time after the end of the first twelve (12) month period after
the Effective Date provided that SELECTICA may only increase the fee by five
percent (5%) of the current year maintenance fee and SELECTICA may only increase
the fee one time per year to be effective at the end of the current maintenance
year. SELECTICA shall give Customer at least
5
<PAGE> 6
sixty (60) days prior written notice of any such change. SELECTICA reserves the
right to charge Customer a reinstatement fee to resume such maintenance services
if Customer has not continuously maintained such services in effect in
accordance with the terms of this Section 4.2.
4.3 PAYMENT. All fees, charges and other sums payable to SELECTICA
under this Agreement will be due and payable on the dates specified in Exhibit
B, or within thirty (30) days after receipt of an invoice if no date is
specified in Exhibit B. All monetary amounts are specified and shall be paid in
the lawful currency of the United States of America. Customer shall pay all
amounts due under this Agreement to SELECTICA at the address set forth herein or
such other location as SELECTICA designates in writing. Any amount not paid when
due will bear interest at the rate of one and one half percent (1.5%) per month
or, the maximum rate permitted by law, whichever is less, determined and
compounded on a daily basis from the date due until the date paid. All fees,
charges and other sums payable to SELECTICA under this Agreement do not include
any sales, use, excise or other applicable taxes, tariffs or duties (excluding
any applicable federal and state taxes based on SELECTICA's net income), payment
of which shall be the sole responsibility of Customer.
SECTION 5. TERM AND TERMINATION
5.1 TERM. The term of this Agreement and the license set forth in
Section 2.2 shall commence on the Effective Date and shall end upon the
termination of this Agreement pursuant to Section 5.2 or Section 5.3.
5.2 TERMINATION BY CUSTOMER. Customer may terminate this Agreement
and the license granted hereunder at any time by returning to SELECTICA all
copies of the Software and the documentation in its possession or control, or
providing written notice certifying destruction of such, subject to verification
of the same by SELECTICA to SELECTICA's satisfaction in its sole discretion.
Such termination shall not relieve Customer of any of its outstanding financial
obligations to SELECTICA. If Customer's termination of this Agreement is due to
a breach of this Agreement by SELECTICA, Customer shall have, in addition to the
remedies specified in this Agreement, all rights and remedies under law and
equity.
5.3 TERMINATION BY SELECTICA. If Customer defaults in the performance
of or compliance with any of its obligations under this Agreement, and such
default has not been remedied or cured within thirty (30) days after SELECTICA
gives Customer written notice specifying the default or longer if the nature of
the default is such that more than thirty (30) days are required for the cure
thereof, and Customer fails to commence its effort to cure such breach or
default within such thirty (30) day or extended period and to diligently
prosecute the same to completion thereafter to SELECTICA's reasonable
satisfaction, SELECTICA may terminate this Agreement and the license granted
hereunder, in addition to its other rights and remedies under law.
5.4 POST TERMINATION. Upon termination of this Agreement, Customer
shall promptly cease the use of the Software and Documentation and destroy (and
in writing certify such destruction) or return to SELECTICA all copies of the
Software and Documentation then in Customer's possession or control.
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<PAGE> 7
5.5 SURVIVAL. Sections 2.5, 2.7, 4, 5.4, 6.1, 7, 8 and 9 shall
survive the termination of this Agreement, in addition to all other sections
which by their nature are intended to survive.
SECTION 6. WARRANTIES AND REMEDIES
6.1 PERFORMANCE WARRANTY AND REMEDY. SELECTICA warrants to Customer
that when operated in accordance with the Documentation and other instructions
provided by SELECTICA, the Software will perform substantially in accordance
with the functional specifications set forth in the Documentation for a period
of ninety (90) days after delivery of the Software to the Customer. If the
Software fails to comply with the warranty set forth in this Section 6.1,
SELECTICA will use reasonable commercial efforts to correct the noncompliance
provided that: Customer notifies SELECTICA of the noncompliance within (90)
ninety days after delivery of the Software to the Customer. If after the
expenditure of reasonable efforts, SELECTICA is unable to correct any such
noncompliance, SELECTICA shall refund to Customer all of the license fee paid by
Customer to SELECTICA for such Software in full satisfaction of Customer's
claims relating to such noncompliance upon Customer's return of said Software.
SELECTICA warrants and represents that neither the Software or Documentation
infringes any copyright, trademark, patent, trade secret, or other intellectual
property right of any third party, and that it has the unqualified right to
grant the licenses granted to Customer hereunder.
6.2 WARRANTY LIMITATIONS. The warranties set forth in Section 6.1
apply only to the latest release of the Software made available by SELECTICA to
Customer. Such warranties do not apply to any noncompliance of the Software
resulting from misuse, casualty loss, use or combination of the Software with
any products, goods, services or other items furnished by anyone other than
SELECTICA, any modification not made by or for SELECTICA or approved by
SELECTICA, or any use of the Software by Customer in contradiction of the terms
of this Agreement.
6.3 SERVICE WARRANTY AND REMEDY. Selectica warrants that the Services
will be performed as described in the Work Authorization and strictly conform to
the specifications therein by appropriately trained and qualified personnel
using reasonable skill and diligence; provided, however, that (i) Selectica
shall have received written notice of the work that Customer claims does not
conform to the foregoing warranty within ninety days of the delivery of the work
to the customer as specified in the Work Authorization, and (ii) Customer's sole
remedy and Selectica's sole obligation in the event of a breach of the foregoing
warranty shall be, at Customer's option, to either re-perform promptly the
nonconforming work or to refund the Project Fees and Expenses incurred by the
Customer for the nonconforming work.
SECTION 7. INTELLECTUAL PROPERTY RIGHTS INDEMNITY
SELECTICA shall indemnify, hold harmless and, at its own expense,
defend or, at its opinion, settle, any claim or action brought against Customer
on the issue of infringement of any United States copyright, trademark, patent,
trade secret, or other intellectual property right of any third party by the
Software, Documentation or materials or Services as used or provided within the
scope of this Agreement, and to pay all damages and costs, including reasonable
legal fees,
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<PAGE> 8
which may be assessed against Customer under any such claim or action. SELECTICA
shall be released from the foregoing obligation unless Customer provides
SELECTICA with (i) written notice within thirty (30) days of the date Customer
first becomes aware of such a claim or action, or possibility thereof; (ii) sole
control and authority over the defense or settlement thereof; and (iii)
reasonable information and assistance to settle and/or defend any such claim or
action. Without limiting the foregoing, if a final injunction is, or SELECTICA
or Customer believes, is likely to be, entered prohibiting the use of the
Software or Documentation by Customer as contemplated herein, SELECTICA will, at
its sole option and expense, either (a) procure for Customer the right to use
the infringing Software as provided herein or (b) replace the infringing
Software with noninfringing, functionally equivalent products, or (c) suitably
modify the infringing Software so that it is not infringing without affecting
its functionality; or (d) in the event (a), (b) and (c) are not commercially
reasonable, terminate the license, accept return of the infringing Software and
refund to Customer the full license fee paid therefor. Except as specified
above, SELECTICA will not be liable for any costs or expenses incurred without
its prior written authorization. Notwithstanding the foregoing, SELECTICA
assumes no liability for infringement claims arising from (i) combination of the
Software with the other products not provided by SELECTICA or (ii) any
modifications to the Software unless such modification was made by or approved
by SELECTICA. THE FOREGOING PROVISIONS OF THIS SECTION 7 STATE THE ENTIRE
LIABILITY AND OBLIGATIONS OF SELECTICA AND THE EXCLUSIVE REMEDY OF CUSTOMER,
WITH RESPECT TO ANY ACTUAL OR ALLEGED INFRINGEMENT OF ANY PATENT, COPYRIGHT,
TRADE SECRET, TRADEMARK OR OTHER INTELLECTUAL PROPERTY RIGHT BY THE SOFTWARE.
SECTION 8. DISCLAIMER WARRANTY AND LIMITATION OF LIABILITY
8.1 DISCLAIMER OF WARRANTIES. EXCEPT AS SET FORTH IN SECTIONS 6.1, 6.3,
AND 9.10, SELECTICA MAKES NO WARRANTIES WHETHER EXPRESSED, IMPLIED OR STATUTORY
REGARDING OR RELATING TO THE SOFTWARE OR THE DOCUMENTATION OR ANY MATERIALS OR
SERVICES FURNISHED OR PROVIDED TO CUSTOMER UNDER THIS AGREEMENT. SELECTICA
SPECIFICALLY DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY, AND FITNESS
FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE SOFTWARE, DOCUMENTATION AND ANY
OTHER MATERIALS AND SERVICES PROVIDED BY SELECTICA HEREUNDER.
8.2 LIMITATION OF LIABILITY. EXCEPT AS SET FORTH IN SECTIONS 7 AND 9.10, IN
NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY LOSS OF PROFITS, LOSS OF USE,
BUSINESS INTERRUPTION, LOSS OF DATA, COST TO RECOVER, OR FOR ANY INDIRECT,
SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND IN CONNECTION WITH OR
ARISING OUT OF THE FURNISHING, RECEIPT, PERFORMANCE OR USE OF THE SOFTWARE,
DOCUMENTATION OR ANY MATERIALS OR SERVICES PERFORMED HEREUNDER, WHETHER ALLEGED
AS A BREACH OF CONTRACT OR TORTUOUS CONDUCT, INCLUDING NEGLIGENCE, EVEN IF SUCH
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
SECTION 9. MISCELLANEOUS
8
<PAGE> 9
9.1 NONDISCLOSURE OF AGREEMENT. Customer shall not disclose the terms of
this Agreement except as required by law or governmental regulation without
SELECTICA's prior written consent, except that Customer may disclose the terms
of this Agreement on a confidential basis to Customer's accountants, attorneys,
parent organizations and financial advisors and lenders as well as to Customer's
customers to whom the Software and Documentation is distributed. SELECTICA shall
not disclose any confidential information provided to it under this Agreement
except as required by law or governmental regulation without Customer's prior
written consent. Confidential information means any information SELECTICA would
reasonably believe to be confidential including, without information,
information with respect to its customers, products and pricing. If required by
law or government regulation to disclose confidential information, SELECTICA
shall first notify Customer and give Customer an opportunity to seek protection
of the confidential information.
9.2 REFERENCE ACCOUNT. Customer consents to SELECTICA's identification of
Customer as a user of the Software and will cooperate with SELECTICA in
furnishing nonconfidential information about Customer's software use for
informational and promotional use by SELECTICA. No public press releases or
other public forum information exchange about Customer's use of SELECTICA's
Software will be implemented without prior written permission of Customer.
9.3 NOTICES. Any notice or other communication under this Agreement given
by either party to the other will be deemed to be properly given if given in
writing and delivered in person or by facsimile, if acknowledged received by
return facsimile or followed within one day by a delivered or mailed copy of
such notice, or if mailed, properly addressed and stamped with the required
postage, to the intended recipient at its address specified in this Agreement.
Either party may from time to time change its address for notices under this
Section by giving the other party notice of the change in accordance with this
Section 9.3. Any notice of a legal nature shall also be given to the other
party's legal department, if any.
9.4 ASSIGNMENT. Customer may not assign (directly, by operation of law or
otherwise) this Agreement or any of its rights under this Agreement without the
prior written consent of SELECTICA except that Customer may assign all, but not
part, of this Agreement and the Software and Documentation then in its
possession or control to the successor of Customer in a merger or other similar
corporate reorganization outside of the course of Customer's normal business
operations or to the purchaser of substantially all of Customer's assets,
provided such successor or purchaser agrees in writing to comply with the terms
of this Agreement. Subject to the foregoing, this Agreement is binding upon,
inures to the benefit of and is enforceable by the parties and their respective
successors and assigns.
9.5 NONWAIVER. Any failure of either party to insist upon or enforce
performance by the other party of any of the provisions of this Agreement or to
exercise any rights or remedies under this Agreement will not be interpreted or
construed as a waiver or relinquishment of such party's right to assert or rely
upon such provision, right or remedy in that or any other instance.
9.6 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement, and
supersedes any and all prior agreements, between SELECTICA and Customer relating
to the Software, Documentation, services and other items subject to this
Agreement. No amendment of this Agreement will be valid unless set forth in a
written instrument signed by both parties.
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<PAGE> 10
9.7 GOVERNING LAW AND ARBITRATION. The rights and obligations of the
parties under this Agreement shall not be governed by the 1980 UN Convention on
Contracts for the International Sale of Goods, but instead shall be governed by
and construed under the laws of the State of California, including its Uniform
Commercial Code, without reference to conflict of laws principles. Any dispute
or claim arising out of or in connection with this Agreement or the performance,
breach, or termination thereof, shall be finally settled by arbitration in San
Jose, California by three arbitrators under the rules of arbitration of (i) the
International Chamber of Commerce, if Customer's address set forth herein is
outside the United States, or (ii) by the American Arbitration Association
utilizing its Commercial Rules if such address is in the United States. Judgment
on the award rendered by the arbitrators may be entered in any court having
jurisdiction thereof. Notwithstanding the foregoing, either party may apply to
any court of competent jurisdiction for injunctive relief without breach of this
arbitration process.
9.8 LANGUAGE. This Agreement is in the English language only, which
language shall be controlling in all respects, and all versions hereof in any
other language shall not be binding to the parties hereto. All communications
and notices to be made or given pursuant to this Agreement shall be in the
English language.
9.9 APPLICABILITY OF PROVISIONS LIMITING SELECTICA'S LIABILITY. The
provisions of this Agreement under which the liability of SELECTICA is excluded
or limited, shall not apply to the extent that such exclusions or limitations
are declared illegal or void under any applicable laws, unless the illegality or
invalidity is cured under such laws by the fact that the law of California
governs this Agreement.
9.10 YEAR 2000 COMPLIANCE WARRANTY. SELECTICA represents and warrants that
the Software as delivered will operate prior to, during, and after, the calendar
year 2000 A.D. without error relating to date data, specifically including but
not limited to any error relating to calculations, sorting, interpretation,
processing or acceptance of date data which represents or references different
centuries or more than one century. The Year 2000 Compliance Warranty set forth
in this Section shall begin as of the date of this Agreement and end on the date
after March 1, 2002, subsequent to which the Software has operated without a
breach of the Year 2000 Compliance Warranty for a consecutive one-year period
(the "Year 2000 Warranty Period"). If the Software fails to comply with the
warranty set forth in this Section 9.10, SELECTICA will use reasonable
commercial efforts to correct the noncompliance, provided that Customer notifies
SELECTICA of the noncompliance within the Year 2000 Warranty Period. If after
the expenditure of reasonable efforts, SELECTICA is unable to correct any such
noncompliance, SELECTICA shall refund to Customer all of the license fee paid by
Customer to SELECTICA for such Software. The warranty provisions of Section 6
and the limitation of liability and disclaimer of warranty provisions of Section
8 shall not be deemed to limit SELECTICA's obligations under this Section 9.10.
9.11 FORCE MAJEURE. Neither party will be liable for, or be considered to
be in breach of or default under this Agreement, other than monetary
obligations, as a result of any cause or condition beyond such party's
reasonable control.
In Witness Whereof, the parties have executed this Agreement by their duly
authorized representatives.
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<PAGE> 11
<TABLE>
<S> <C>
SELECTICA, INC. FUJITSU NETWORK COMMUNICATIONS, INC.
-------------------------------------------
("SELECTICA) ("Customer")
By: /s/ [SIGNATURE ILLEGIBLE] By: /s/ [SIGNATURE ILLEGIBLE]
------------------------------ -----------------------------
Print name: [ILLEGIBLE] Print name: [ILLEGIBLE]
------------------------------ -----------------------------
Title: Title: VICE PRESIDENT OF
REGIONAL SALES MANAGER BUSINESS MANAGEMENT
------------------------------ -----------------------------
Date: 11/19/98 Date: 11-19-98
------------------------------ -----------------------------
Address: 2890 Zanker Road Address: 2801 Telecom Pkwy.
------------------------------ -----------------------------
Suite 101
------------------------------ -----------------------------
San Jose, CA 95134 Richardson, TX 75082
------------------------------ -----------------------------
Telephone #: (408) 570-9700 Telephone #: (972) 474-7727
------------------------------ -----------------------------
Facsimile #: (408) 570-9705 Facsimile #: (972) 689-6972
------------------------------ -----------------------------
</TABLE>
11
<PAGE> 12
EXHIBIT A
DESCRIPTION OF SOFTWARE AND DOCUMENTATION
ACE DESKTOP - STAND ALONE CONFIGURATION AND QUOTING SOLUTION.
ACE STUDIO - GRAPHICAL MODELING ENVIRONMENT.
ELECTRONIC DOCUMENTATION ON ALL PRODUCTS.
USER GUIDES, ADMINISTRATION GUIDES AND TECHNICAL GUIDES AS APPLICABLE TO
SPECIFIC PRODUCTS.
The number of licensed servers/seats is 3000 Desktop Seats and 2 seats of
Studio.
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<PAGE> 13
EXHIBIT B
---------
LICENSE AND MAINTENANCE FEES
----------------------------
1. License Fee. PACKAGE ONE
<TABLE>
<S> <C>
ACE Desktop $[*]
ACE Desktop Seats $[*] per year (No limit on seats, Maintenance included)
Payable on April 1, 2000 and annually each year thereafter
ACE Studio $[*]
-----------
TOTAL LICENSE FEE $[*]
</TABLE>
2. Maintenance Fee. Maintenance fees are equal to [*]% of the license fee
specified in this Exhibit B and are due in advance on an annual basis.
<TABLE>
<S> <C> <C>
Annual maintenance and upgrade support $[*]
TOTAL LICENSE AND MAINTENANCE FEES $[*]
ACE DESKTOP SEATS $[*]
TOTAL ADDITIONAL SERVICES AND TRAINING $[*]
--------------
TOTAL OF EXHIBIT B & C $[*] $[*]
-------------------------------------- -------------- -----------
</TABLE>
PAYMENT SCHEDULE:
- ----------------
$[*] - Net 30 Days - Agreement Date
$[*] - Net 30 Days Delivery Product Set A
$[*] - Net 30 Days Delivery Product Set B
$[*] - Net 30 Days Delivery Product Set C
$[*] - ACE DESKTOP SEATS PAYABLE APRIL 1, 2000, ANNUALLY
THEREAFTER.
OOP (TRAVEL AND OUT OF POCKET EXPENSE IS ESTIMATED BETWEEN [*]-[*]%
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
13
<PAGE> 14
EXHIBIT B
---------
LICENSE AND MAINTENANCE FEES
----------------------------
<TABLE>
<S> <C> <C>
2. LICENSE FEE. PACKAGE TWO, SUBJECT TO BUDGET APPROVAL
-----------
ACE Enterprise $[*]
ACE Quote Server $[*]
MAINTENANCE FEE.
---------------
ACE Enterprise $[*]
ACE Quote Server $[*]
PSO FEE.
-------
ACE Enterprise $[*]
- -------------------- -----------
TOTAL PACKAGE TWO $[*]
3. LICENSE FEE. PACKAGE THREE, SUBJECT TO BUDGET APPROVAL
ANALYSIS TOOLS $[*] Design only
4. LICENSE FEE. PACKAGE FOUR, SUBJECT TO BUDGET APPROVAL
ERP INTEGRATION $[*] Design only
5. LICENSE FEE. PACKAGE FIVE, SUBJECT TO BUDGET APPROVAL
ACE MOBILE SERVER $[*]
ACE MOBILE DOCKER $[*]
Maintenance Fee.
ACE Mobile Docker $[*]
TOTAL PACKAGE FIVE $[*]
</TABLE>
NOTE: TO MAINTAIN ABOVE PRICING PACKAGE TWO MUST BE APPROVED AS OUTLINED IN
EXHIBIT "D" OF THIS AGREEMENT BY APRIL 30, 1999, PACKAGE THREE MUST BE APPROVED
AS OUTLINED IN EXHIBIT "D" OF THIS AGREEMENT BY JUNE 30, 1999, PACKAGE FOUR AND
FIVE MUST BE APPROVED AS OUTLINED IN EXHIBIT "D" OF THIS AGREEMENT BY SEPTEMBER
30, 1999.
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
14
<PAGE> 15
15
<PAGE> 16
EXHIBIT C
---------
ADDITIONAL SERVICES AND TRAINING
--------------------------------
DEFINED AS PER "PACKAGE-1 ENGAGEMENT", ATTACHED HERETO AS EXHIBIT D.
<TABLE>
<S> <C>
1. Professional Services Per Exhibit D Not to exceed $[*]
Fulfillment Services Per Exhibit D $[*]
Does not include cost of material and postage
-----------
Additional Services and Training Total $[*]
</TABLE>
Training for five Customer employees is at no charge.
2. PROFESSIONAL SERVICES. PACKAGE TWO, SUBJECT TO BUDGET APPROVAL
<TABLE>
<S> <C> <C>
ACE ENTERPRISE $[*] WEB CONFIGURATION IMPLEMENTATION
</TABLE>
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
16
<PAGE> 17
EXHIBIT D
[FUJITSU LOGO]
FUJITSU NETWORK BUILDER II
PACKAGE-1 ENGAGEMENT
AND
BRIEF DESCRIPTION OF OTHER POTENTIAL PACKAGES
STATEMENT OF WORK &
WORK AUTHORIZATION
(VERSION 1.0)
PREPARED FOR
FUJITSU NETWORK COMMUNICATIONS, INC.
BY:
[SELECTICA LOGO]
<PAGE> 18
2890 ZANKER ROAD, SAN JOSE, CA
<PAGE> 19
1. SCOPE
1.1 PROJECT DESCRIPTION
Selectica, Inc. intends to create and deploy a configurator to replace Fujitsu
Network Communication's iFNB (Fujitsu Network Builder). This Statement of Work
details the work that Selectica intends to do for this project, specifically
the aspects required in Package-1 of this deployment.
1.2 BACKGROUND
This proposal is based on the discussions between Selectica and Fujitsu
Network Communications (FNC) regarding Selectica's technology, products and
services, and Selectica's current understanding of FNC's needs. Selectica and
FNC seek to create a business relationship and use Selectica's products to
create a configurator deployable at FNC's customer locations fulfilling FNC's
business and architectural objectives.
1.3 PROJECT PACKAGES
There are 5 Packages identified and proposed in this engagement. They are:
1.3.1 THE STANDALONE CONFIGURATOR PACKAGE (PACKAGE 1)
The Standalone Configurator Package will support the 6 products in the iFNB, and
6 new products to be defined. A fulfillment process will be created to provide
the configurator to the anticipated users of the application. This configurator
is considered the "The Fujitsu Configurator."
Components in this package for FNC's Customers:
ACE Desktop To allow FNC's customer's to load and run FNC's
configuration models. This product along with the
GUI definitions and model Knowledge bases will be
the deliverable sent to FNC's customers.
Components for FNC:
ACE Desktop Same as above
ACE Studio Model Builder, GUI Builder, Etc. - For FNC
employees to have access to models and the model
building process
PSO Consulting Services For the development of configuration models and
GUIs (Graphical User Interfaces)
Fulfillment Services For the delivery of FNC's configuration Models and
GUIs and the ACE Desktop to FNC's customers. This
includes developing the process to manage the
fulfillment, maintaining the customer information,
etc.
Training Train FNC employees on tools to enable them to
better communicate project definitions. (These
tools will belong to FNC)
The fees for the above are described on Exhibits B and C to the Agreement
subject to the billing rates for the Professional Services as described
herein.
- --------------------------------------------------------------------------------
Selectica Inc. and FNC Confidential Page 1
<PAGE> 20
1.3.2 THE INTERNET CONFIGURATOR PACKAGE (PACKAGE 2)
The Internet Configurator will make this configurator available on FNC's
Internet platform and accessible via the Web.
Components for FNC:
ACE Enterprise Server and ACE Enterprise Manager
To allow users to create configurations with a
centrally managed configuration engine and create
and store quotes and orders centrally through ACE
Quoter.
ACE Quoter (ACE Quote Server)
To manage stored quotes centrally.
PSO Consulting Services
To convert the existing interface to the web based
environment. Also customize the quote server to FNC
requirements.
The above work is subject to budget approval as described on Exhibit B and C. If
FNC desires Selectica to commence the above work, the parties will mutually
agree on a detailed statement of work similar to that set forth for package 1 in
Section 1.4 and such statement of work will incorporate the terms and conditions
of the Major Account License Agreement.
1.3.3 BUSINESS ANALYSIS TOOLS PACKAGE (SCOPE AND DEFINE) (PACKAGE 3)
Subsequent to the Internet Deployment, the Business Analysis Tools Package will
scope out and define a set of tools and reports derived from data available
through the configurator, to assist FNC's management in its decision making
process.
Components for FNC:
PSO Consulting Services
Define scope, requirements and costing -- for the
development of a FNC specific set of analysis tools
that leverage the configuration engine and perform
analysis according to FNC's specific business model.
The above work is subject to budget approval as described on Exhibit B. If FNC
desires Selectica to commence the above work, the parties will mutually agree on
a detailed statement of work similar to that set forth for package 1 in Section
1.4 and such statement of work will incorporate the terms and conditions of the
Major Account License Agreement.
1.3.4 SYSTEMS INTEGRATION PACKAGE (SCOPE AND DEFINE) (PACKAGE 4)
The System's Integration Package intends to define the scope of the linkage of
the configurator and the data it needs and provides to and from the SAP ERP and
Aurum's SFA system in place at FNC.
Components for FNC:
ACE Connector for AurumACE Connector for SAP
Or
Middleware connector to SAPMiddeware connector to Aurum
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PSO Consulting Services
The above work is subject to budget approval as described on Exhibit B. If
FNC desires Selectica to commence the above work, the parties will
mutually agree on a detailed statement of work similar to that set forth
for package 1 in Section 1.4 and such statement of work will incorporate
the terms and conditions of the Major Account License Agreement.
1.3.5 MOBILE USER INTEGRATION PACKAGE (PACKAGE 5)
Components for FNC Customers:
Upgrade to ACE Mobile (ACE Mobile Docker)
To provide Fujitsu's customers with the ability to
connect and synchronize with the ACE Mobile Server.
Components for FNC:
ACE Mobile Server To provide centrally managed synchronization of
information needed to perform configurations and to
provide centrally managed collection of information
resulting from configurations.
ACE Quote Server (same as in the Internet Package defined in section
1.3.2)
To manage and store quotes as well as maintaining
version information on quotes.
The above work is subject to budget approval as described on Exhibit B. If
FNC desires Selectica to commence the above work, the parties will
mutually agree on a detailed statement of work similar to that set forth
for package 1 in Section 1.4 and such statement of work will incorporate
the terms and conditions of the Major Account License Agreement.
1.4 DELIVERABLES
Based on the discussions with FNC Product Management team, Selectica proposes
to participate in an engagement and deliver the following as part of this
engagement. Such Deliverables are a description of the services and
deliverables which are included in Package 1 and a summary of the Deliverables
is provided in Section 3.1.
1.4.1 THE KNOWLEDGE-BASE
Selectica will construct the knowledge base (the repository of product
attributes, features and rules pertaining to the accurate and complete
interrelationships between them) for the following FNC product sets:
Set A
o FLASH 192(TM) (OC 192)
o FACTR(R)
o FLASHWAVE(TM) 320G/40G
o FLASHWAVE(TM) Metro
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Set B
o FLM 6 (OVTG)
o FLM 150 (OC-3, OC-12)
o FLM 600 (OC-12)
o FLM 2400 (OC-48)
o SPEEDPORT (TM)
Set C
o ADX 150
o ADX 600
o ADX 2400
All trademarks and registered trademarks above are owned by Fujitsu Network
Communications, Inc. All Rights Reserved.
1.4.2 THE CONFIGURATION APPLICATION
Selectica will create a Java application front-end that runs in a standalone
environment, to configure the products specified in section 1.4.1 The
knowledge-base. This application will allow users to answer pertinent need
related questions, and produce the recommended inventory of FNC parts and
accessories as a solution. The major characteristics of this application are:
o User-name/password access to allow authorized users get pricing
information.
o Product/shelf internals and attributes views and printing of these
views
o Configuration, Quotes printing and export to Excel
o Ability to save and restore configurations to a file
1.4.3 FULFILLMENT
Selectica will deliver a secure fulfillment process to distribute the
configurator to qualified FNC customers. The fulfillment process will assure
that the FNC pricing information sensitivity is preserved and not compromised.
This will include but not be limited to the encryption of the customer data
file(s) before fulfillment such that the user cannot read the file directly.
At no additional charge, Selectica will provide a representative for support to
handle all first line support from FNC's customers. This support will address
the following:
1. Distribution in mass or targeted customers for fulfillment for both the
application and the product and pricing data.
2. Selectica will take all incoming calls for user and password ID
distribution.
Fulfillment calls will be taken by Selectica from 8 a.m. to 5 p.m. (PST),
Monday through Friday, excluding holidays observed by Selectica. Selectica will
provide after-hours answering service to record inquiries, and Selectica will
use reasonable commercial efforts to respond to any such inquiries within one
(1) business day of receipt.
1.4.4 ADDITIONAL SUPPORT
Additionally, for the limited time specified below, Selectica will take all
incoming calls for technical support (related to the deliverables) from the
customer and the customer's customers. This service will be provided at no
additional charge through September 30, 1999.
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Support calls will be taken by Selectica from 8 a.m. to 5 p.m. (PST), Monday
through Friday, excluding holidays observed by Selectica. Selectica will
provide after-hours answering service to record inquiries, and Selectica will
use reasonable commercial efforts to respond to any such inquiries within one
(1) business day of receipt.
In the month of August, Selectica will present to FNC it's findings on the
level and the cost that will be needed to maintain aforementioned support.
The level of resources required for providing the support will be presented
with, options and associated costs, if any, that will need to be funded
commencing October 1, 1999.
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2. FACTORS AFFECTING DEVELOPMENT
2.1 ASSUMPTIONS, CONSTRAINTS, AND DEPENDENCIES
The purpose of this section is to document internal and external factors that
will affect the project plan and its execution. Proper steps will be taken to
ensure that all assumptions are fulfilled, dependencies addressed, and
expectations properly set to take into account the project's constraints.
2.1.1 Assumptions
Selectica assumes that FNC personnel will be available to assist with all the
product knowledge required to deliver the scope of work defined in this
document. Selectica will provide the ACE Studio development tools for the
Selectica team. Selectica also assumes that FNC will provide a server for
project management, a server for Web Development Testing (during the development
of the Web Package) and a production quality server for Web Deployment (during
deployment of the Web Package). FNC will make available all related
documentation and any associated resources, throughout the course of this
engagement. FNC management will provide timely decisions, essential for the
timely completion of the deliverables.
2.1.2 Constraints
The functionality mentioned in the deliverables will have to either work within
or work around the limitations of the environment. These include browser
capabilities, product capabilities, interface capabilities etc. Selectica will
test the configurator on Netscape 4.0.5 Gold (or better and Internet Explorer
4.0 browsers on Windows NT, 95 and 98 platforms. Any other platform and browser
compatibility (beyond Internet Explorer 4.0 or Netscape 4.0.5 Gold) testing
required will need to be scoped separately and may require additional testing
and/or FNC resources.
2.1.3 Dependencies
In order for the development process to be successful, Selectica personnel will
work closely with FNC personnel at appropriate times. Logistically, most of the
development work is envisioned at FNC premises in Richardson. Other tasks such
as, but not limited to, project management, information gathering, application
and navigation flow design and reviews may be conducted at FNC premises in
Richardson as well as Selectica. While it is a goal to minimize travel-related
expenses; it is anticipated that engineering and application work may require
Selectica personnel to travel between the San Jose headquarters and the
Richardson site from time to time.
FNC will provide Selectica consultant's office space, network and communications
facility in the Richardson office, in proximity to the key personnel FNC assigns
to assist Selectica during this project.
2.2 CHANGE CONTROL PROCEDURES
Final design or user-interface changes, if any, will need to be made early in
the project. In order to meet the achieved delivery date of this project, we do
not expect major scope changes during the engagement. If there is a valid
business need for a scope change, then a change request will be required. Change
requirements will be considered outside the scope of this project/proposal and
will be reviewed during or after the project has been completed.
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Selectica and FNC Confidential Page 6
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3. PROPOSAL
3.1 DELIVERABLES
As specified in section 1.4 Deliverables, The deliverables from this engagement
are as follows:
* The knowledge base for the specified FNC's products.
* The stand-alone application to configure FNC products.
* A fulfillment process to deliver the configuration application to FNC's
customers.
3.2 TIME AND FEES
Based on our discussions and the information available today, Selectica can
begin this engagement upon contract approval, and authorization of this
Statement of Work. The estimated effort for the Package-1 engagement will be
detailed in a project plan that will be developed within the first 2 weeks of
engagement.
As of Oct. '98, FNC management's high-level milestone goal for the Package-1
are:
Jan/Feb '99 1st set of products in configurators
(Set A - refer to section 1.4.1)
Mar '99 Fulfillment process accepted and in production
Apr/May '99 2nd set of products in configurator and fulfilled
(Set B - in section 1.4.1)
TBD 3rd set of products in configurator and fulfilled
(Set C - in section 1.4.1)
The detailed project plan will establish a complete acceptance schedule and
milestone summary for the Package-1 engagement.
Selectica's normal billing rates are $[*]/hr for project management and $[*]/hr
for engineering implementation services. Selectica will bill FNC for
professional services and out of pocket expenses according to the payment
schedule outlined in the contract.
This time, scope and fees estimate parallels the assumptions made herein and may
change (higher or lower) depending on a number of factors including, but not
limited to the final scope of project modifications requested by management and
project team, and unforeseen problems with proposed plan and additional
discovery. However, any changes and/or modifications to the agreed upon scope of
this project will be documented and approved by FNC's project and business
leadership prior to commencing on any additional work. Additional effort beyond
the original scope will be billed on a time and material basis at Selectica's
on-going consulting rates.
3.3 MAINTENANCE
Selectica will provide bug fixes for the configurator for the first ninety days
of the Package-1 configurator deployment at no additional charge. Further
updates and additions such as new products and releases will be implemented at
Selectica's normal consulting rates on a time and material basis.
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Selectica and FNC Confidential Page 7
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
<PAGE> 26
3.4 PROJECT RESPONSIBILITIES AND RESOURCES PROFILE
Selectica anticipates 1 project manager and a team of 3-5 consulting personnel
for the duration of the project. Should the expected staffing profile change
during the implementation, Selectica will inform FNC, justify and seek approval
for additional resources required.
Selectica's project manager will be responsible for the overall Selectica
deliverable management. Additionally, the project manager will be responsible
for project documentation such as (but not limited to) specifications, designs,
plans, scope, and schematics. The project manager will create and maintain the
project plan, and communicate project status and plan variances to affected and
interested parties. The project manager will coordinate with FNC management and
project team members. The project manager will arrange and seek reviews and
approvals as scheduled and defined in the project plan. The project manager will
also be responsible for dissemination of all information, status and call
reports, change management and conducting quality audits.
Selectica's other team members will be responsible for design, implementation
and testing of the FNB-II database and knowledge-base, user interface,
documentation, testing, integration and deployment activities.
3.5 TRAINING
Selectica is scheduled to provide training on the Selectica products and the
application being developed to key FNC personnel. As Package-1 proceeds, FNC
and Selectica management will determine the duration, logistics and schedule of
training.
3.6 FNC RESPONSIBILITIES & DELIVERABLES
FNC is responsible for the final deployment success of the configuration
application to its user community. Selectica can best assist FNC in this
endeavor by providing the appropriate personnel to provide timely information,
review and testing of the configurator. FNC responsibilities include:
o Appoint a FNC project manager for this engagement. The project manager
will be the central point of contact for Selectica for all product,
configurator, schedule and resource-related issues, reviews, and decision
making. The project manager will ensure access to and time with personnel
with critical product and selling knowledge.
o Provide any or all product and attribute information, including necessary
pricing and part-number data feeds (in electronic format) as necessary to
help build the knowledge base.
o Brainstorm with Selectica application developers on the higher level needs
analysis issues and questions that drive the configurator. This is a
critical aspect of the configurator and drives both the user interface and
the knowledge-base development.
o Assemble a user team to review all designs and flows for the configurator.
The users are in the best position to evaluate what works for them. This
team would be responsible for timely reviews and acceptances of all
deliverables.
o Selectica will provide a graphic artist to create the graphics for the
interface. Selectica recommends that FNC provide a resource to help
coordinate the look and feel of the configuration application and insure
that FNC's standards are met. Selectica expects to work closely with the
graphic designers during this process to ensure that the application being
developed and the flow meets Fujitsu's requirements and adheres to the
standards and best practices encouraged for the deployment.
o Provide a test team to create functional and acceptance test plans, test
scenarios and then perform acceptance and final testing.
o Provide hardware and common system software resources required by the
development team (see 2.1.1).
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3.7 BEYOND PACKAGE-1
Selectica intends to actively engage in the definition and specification of
Package-2, 3, 4 and 5 during and beyond Package-1. The work and project plan for
these Packages will commence in the Feb/Mar '99 time frame.
3.8 STATEMENT OF WORK ACCEPTANCE
FOR FNC NETWORK COMMUNICATIONS, INC.:
ACCEPTED BY: /s/ [Signature Illegible] DATE: 11-19-98
--------------------------- ---------------------
NAME (PRINT): [Name Illegible] CONTACT: (972) 479-7727
--------------------------- ---------------------
TITLE: Vice President of
Business Management
--------------------------
FOR SELECTICA, INC.:
ACCEPTED BY: /s/ [Signature Illegible] DATE: 11-19-98
--------------------------- ---------------------
NAME (PRINT): [Name Illegible] CONTACT: (972) 869-7649
--------------------------- ---------------------
TITLE: Regional Sales Manager
---------------------------
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Selectica Inc. and FNC Confidential Page 9
<PAGE> 1
EXHIBIT 10.8
AGREEMENT FOR WEB SITE DESIGN AND DEVELOPMENT SERVICES
Selectica, Inc.
2890 Zanker Road, Suite 101
San Jose, CA 95134
Telephone: 408.570.9700
Fax: 408.570.9705
ATTN: Vas Bhandarkar
Effective Date: 7/15/98
This Agreement for Web Site Design and Development Services ("Agreement") is
made and entered into as of the Effective Date above, between BMW of North
America, Inc. ("BMW") a New Jersey corporation, having offices at 300 Chestnut
Ridge Road, Woodcliff Lake, NJ 07675, and Selectica, Inc. ("Selectica"), a
California corporation, having offices at 2890 Zanker Road, Suite 101, San Jose,
CA 95134.
1. DEFINITIONS.
a. "BMW Virtual Center Application" or "the Application" shall mean an
Internet application created for BMW in accordance with the
Specifications that provides a virtual buying experience on the
Internet for customers.
b. "BMW Materials" shall mean items set forth in Exhibit 5 as used in BMW
Virtual Center Application.
c. "Selectica Materials" shall mean the items set forth in Exhibit 6.
d. "Specifications" shall mean the specifications for the BMW Virtual
Center Application as set forth in Exhibit 9.
e. "Affiliate" of a party shall mean an entity directly or indirectly
controlling, controlled by or under common control with that party
where control means the ownership or control, directly or indirectly,
of more than fifty percent (50%) of all of the voting power of the
shares (or other securities or rights) entitled to vote for the
election of directors or other governing authority, as of the date of
this Agreement or hereafter during the term of this Agreement;
provided that such entity shall be considered an Affiliate only for
the time during which such control exists, or a BMW dealer ("Center"),
or a dealer of an Affiliate ("Affiliate Dealer"). BMW may extend the
benefits granted in this Agreement to its Affiliates (for so long as
they remain Affiliates), provided that all such Affiliates become
bound in writing (for Selectica's benefit) to BMW's obligations under
this Agreement and that BMW assumes full responsibility for compliance
by such Affiliates with such obligations.
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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2. SCOPE OF SERVICES.
Selectica shall use reasonable efforts to provide, under the provisions of
this Agreement, the services that are mutually agreed upon and described on
Exhibit 1 (Project Description/Scope of Work). BMW understands that the
Application is intended to work with certain BMW Materials and that
Selectica's performance is dependent on BMW's delivery of such BMW
Materials. Accordingly, BMW will provide Selectica with such BMW Materials
and other requested assistance in accordance with the timetable set forth
in the Exhibit 5 and any dates or time periods relevant to performance by
Selectica hereunder shall be appropriately and equitably extended to
account for any delays due to BMW. Subject to the above, Selectica shall
use commercially reasonable efforts to adhere to the deadlines, benchmarks
and milestones set forth in Exhibit 1.
3. EXHIBITS.
Exhibits are numbered for identification and include a complete description
of services to be performed, deliverables or other materials to be
produced, the schedule for completion of each of the foregoing, the
applicable fixed charges, and any additional terms the parties mutually
agree to include. BMW may extend the benefits granted in this Agreement to
its Affiliates (for so long as they remain Affiliates), provided that all
such Affiliates become bound in writing (for Selectica's benefit) to BMW's
obligations under this Agreement and that BMW assumes full responsibility
for compliance by such Affiliates with such obligations.
4. WORK POLICY/PERSONNEL.
a. Each party will designate a Project Manager to serve as the main
contact between them. The scope and specific conduct of Selectica's
services, not outlined in an Exhibit, must be coordinated with BMW's
Project Manager at all times. Selectica shall also use commercially
reasonable efforts to coordinate such efforts with Fallon McElligott's
designated Project Manager. Selectica will use its reasonable efforts
to ensure the continuity of Selectica's employees assigned to perform
services hereunder.
b. On a periodic basis, Selectica will submit written status reports
describing its activities during the preceding period, including: the
current status of activities (with an explanatory narrative when
appropriate). The precise content and format of the status report
shall be determined by the parties subsequent to the execution of this
Agreement. Upon reasonable request and at BMW's expense, Selectica
will meet with BMW management to review the status of Selectica's
activities.
c. Selectica personnel will use reasonable efforts to observe and comply
with BMW's reasonable and standard security procedures, rules,
regulations and policies, when working at BMW's site. Selectica will
use its reasonable efforts to minimize any disruption to BMW's normal
business operations at all times. If necessary, BMW will only provide
working space, resources and materials to Selectica. If any Selectica
employee performing services on the BMW site is found to be reasonably
unacceptable to BMW for any reason, BMW shall be the sole judge as to
acceptability of behavior on its site. Unless otherwise agreed to in
writing, neither party will solicit the employment of the other
party's personnel during the term of this Agreement and for a period
of six (6) months thereafter.
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<PAGE> 3
d. Selectica agrees and represents that it is an independent contractor
and its personnel are not BMW's agents or employees for federal tax
purposes or any other purposes whatsoever, and are not entitled to any
BMW employee benefits. Selectica assumes sole and full responsibility
for their acts and Selectica and its personnel have no authority to
make commitments or enter into contracts on behalf of, bind or
otherwise obligate BMW in any manner whatsoever. Selectica, and not
BMW, is solely responsible for the compensation of personnel assigned
to perform services hereunder, and payment of worker's compensation,
disability and other income and other similar benefits, unemployment
and other similar insurance and for withholding income and other taxes
and social security.
5. ACCEPTANCE.
The BMW Virtual Center Application shall be subject to a verification of
acceptability by BMW to ensure that it substantially conforms to the
Specifications. If the Application fails to substantially conform to the
applicable Specifications, BMW shall notify Selectica, within ten (10)
business days after receiving the Application, specifying such failures in
sufficient detail to allow Selectica to reproduce them, and Selectica will,
at no additional cost, use commercially reasonable efforts to conform the
Application to the Specifications and the acceptance/rejection/correction
provisions above shall be reapplied; provided that upon the fifth or any
subsequent rejection, either party may at any time thereafter, at its
option and without obligation or liability of any kind, terminate this
Agreement. In addition, Selectica warrants and represents that it will use
commercially reasonable efforts to replace or repair any defect,
malfunction or problem caused by a failure to conform to the Specifications
for a period of one (1) year from the date of delivery of the Application
(i.e. completion of Phase 2B).
6. OWNERSHIP.
a. As between the parties, Selectica exclusively shall have all right,
title and interest (including all patent rights, copyrights, trade
secret rights, mask work rights and other rights throughout the world
(collectively "Intellectual Property Rights")) in the Selectica
Materials and the portions of the Application not owned by BMW as
provided below ("Selectica Inventions"). Except as expressly provided
in this Agreement, BMW will have no right or license in the foregoing.
b. As between the parties, BMW exclusively shall have all right, title
and interest (including all patent rights, copyrights, trade secret
rights, mask work rights and other rights throughout the world
(collectively "Intellectual Property Rights")) in the BMW Materials
and the portion of the Application specifically and exclusively
relevant to BMW products ("BMW Inventions"). Except as necessary to
perform its obligations under this Agreement, Selectica will have no
right or license in the foregoing.
c. The parties hereby make any assignments necessary to accomplish the
foregoing ownership provisions. Each party has and will have
appropriate agreements with all such employees and contractors
necessary to fully effect the provisions of this Section 6.
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<PAGE> 4
i. A party being assigned any proprietary right under this Agreement
will have the exclusive right to, and, at such party's expense,
the assigning party agrees to assist such party in every proper
way (including, without limitation, becoming a nominal party) to,
evidence, record and perfect the assignment and to apply for and
obtain recordation of and from time to time enforce, maintain and
defend such proprietary right.
d. BMW shall be granted a license to Selectica intellectual property
rights incorporated into the Application to the extent necessary to
use the Application as contemplated by this Agreement.
e. BMW further acknowledges that nothing herein shall be construed to
restrict, impair or deprive Selectica of any of its rights or
proprietary interest in technology or products that existed prior to
and independent of the performance of services or provision of
materials under this Agreement. In addition, nothing in this Agreement
or otherwise shall be construed to prevent Selectica from using
general know-how, expertise, skill and understanding possessed prior
to or gained during the course of performing services hereunder.
f. Furthermore, in the event that the Selectica Materials developed or
created hereunder is software, Selectica will use all commercially
reasonable efforts with the intent that (i) any new agreements with
third party software developers shall contain provisions which provide
that said software shall function in a manner consistent with said
software's specifications for a period of time at least one (1) year
from the date of acceptance, and that in the event said software does
not function in a manner consistent with said specifications, the
developer shall use all commercially reasonable efforts to make any
and all necessary corrections and modifications during said one year
period without cost or charge to BMW, (ii) said agreements shall also
contain a representation that any such software shall not have a self
help code designed to disable a computer program or an unauthorized
code designed to permit access by an unauthorized person to the
software to harm the software and (iii) said agreements shall also
have a provision that indemnifies both BMW and Selectica for damages
in the event that contractor, person or entity developing or creating
the software hereunder is in breach of any warranty.
7. TRADEMARKS.
Except for the approved creation, production and publication of the subject
matter of the Agreement, Selectica shall not use the trade names,
trademarks, service marks, logos, or any other proprietary designations of
BMW without BMW's prior written consent.
8. INTELLECTUAL PROPERTY LICENSE.
a. Subject to all the terms of this Agreement and payment of all fees,
Selectica grants BMW a worldwide, perpetual, nonsublicensable,
nontransferable right to use the BMW Virtual Center Application in the
nonsource code form provided by Selectica only on the number of
servers specified in Exhibit 7. Notwithstanding the foregoing, BMW may
request any number of additional servers provided it pays the amounts
set forth in Exhibit 7 as "Additional per Server Charge". BMW will
maintain the copyright notice and any other notices that appear on the
Application on any copies and any media. BMW may allow its
distributors access to the Application. BMW will not (and will not
allow any third party to) (i) reverse engineer or attempt to discover
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<PAGE> 5
any source code or underlying ideas or algorithms of the Application
(except to the extent that applicable law prohibits reverse
engineering restrictions), (ii) provide, lease, lend, use for
timesharing or service bureau purposes or otherwise use or allow
others to use a Application for the benefit of any third party, or
(iii) use any Application, or allow the transfer, transmission,
export, or re-export of any Application or portion thereof in
violation of any export control laws or regulations administered by
the U.S. Commerce Department, OFAC, or any other government agency.
b. BMW hereby grants Selectica a worldwide, nonsublicensable,
nontransferable license to modify, adapt, and prepare derivative works
of the BMW Materials, or have its contractors do so on its behalf, as
necessary to develop the Application or any additional work requested
by BMW as provided herein and for no other purpose.
9. REPRESENTATIONS AND COVENANTS.
a. Selectica warrants that the Services provided by it as described in
this Agreement will be of professional quality conforming to generally
accepted practices governing the development and design of web sites.
b. In addition to any other express or implied warranty made in this
Agreement, Selectica hereby represents and warrants that as it relates
to the BMW Virtual Center Application provided by Selectica pursuant
to the Services designated in this Agreement:
i. Selectica warrants to BMW that the occurrence of the date January
1, 2000 will not, by itself cause the BMW Virtual Center
Application to materially fail to perform century date change
2000 date conversion and capability (including, but not limited
to date, data century recognition, calculations which accommodate
same century and multi-century formulas and date-values, correct
sorting, ordering and date data interface values that reflect the
century), failure to automatically compensate for and manage and
manipulate data involving dates (including single century
formulas and multi-century formulas) or to otherwise operate in
accordance with the published specifications for such BMW Virtual
Center Application; provided that all other software, hardware
and products used in combination with the BMW Virtual Center
Application properly exchange date data with the BMW Virtual
Center Application.
ii. Notwithstanding anything else contained in this Agreement, this
warranty shall be deemed to be a warranty for current and future
performance and shall apply for as long as maintenance fees are
being paid by BMW. For the purpose of any applicable Statute of
Limitation or Statute of Repose, discovery of any breach of this
warranty shall be deemed to have been made when Selectica has
actually experienced each such breach of this warranty; and
iii. A disclaimer of any other express or implied warranties contained
in this Agreement will not be deemed to be a disclaimer of this
warranty.
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c. Selectica further warrants, covenants and represents that, in its
performance hereunder, that it shall not knowingly introduce, through
data transmission via modem or any other medium, any virus, worm,
trap, trap door, back door, any contaminant, or disabling devices,
including, but not limited to, timer, clock, counter, or other
limiting routings, codes, commands, or instructions intended to damage
or disable the software used by BMW, or other BMW information, or
other BMW property other than in accordance with the specifications
("Harmful Code"). In the event that Selectica introduces Harmful Code,
then, as BMW's sole and exclusive remedy, Selectica shall at no cost
to BMW use reasonable efforts to provide and install a new copy of
software without Harmful Code.
d. Notwithstanding anything else contained in this Agreement, this
warranty shall be deemed to be a warranty for current and future
performance and shall apply until for so long as maintenance fees are
being paid by BMW. For the purpose of any applicable Statute of
Limitation or Statute of Repose, discovery of any breach of this
warranty shall be deemed to have been made when the BMW has actually
experienced each such breach of this warranty.
10. CHARGES AND TERMS OF PAYMENT.
a. The applicable charges shall be specified in Exhibit 7. Unless
otherwise agreed upon by the parties, in no event shall any charges
exceed the charges as they are set forth in the attached Exhibit 7. In
addition, BMW shall remit to Selectica approved out-of-pocket costs
consistent with the procedures set forth in Exhibit 3 (Billing
Procedures) attached hereto. No costs for any out-of-pocket services,
(such services to include, but not necessarily be limited to, the
creation of advertising copy, photography, layout, design,
typesetting, or any other services related to, or necessary to
support, Selectica's duties and responsibilities as described
hereunder), rendered by Selectica shall be subject to any mark-up or
increase. Notwithstanding the above, if there is a conflict between
this Agreement and the BMW Billing Procedures, the terms of this
Agreement shall supersede and govern.
b. BMW will pay all taxes levied against or upon the services provided
hereunder, or arising out of this Agreement, exclusive, however, of
taxes based on Selectica's income, which shall be paid by Selectica.
BMW agrees to pay directly any tax for which it is responsible or will
reimburse Selectica upon receipt of proof of payment.
c. Selectica will use all commercially reasonable efforts to maintain
complete and accurate accounting records in connection with services
performed and materials provided hereunder, in accordance with
generally accepted accounting principles, to substantiate its charges.
BMW shall have the right to appoint an independent certified public
accountant, who is not compensated based on the results of the audit
and who is acceptable to Selectica (which acceptance shall not be
unreasonably withheld), to inspect the records of Selectica in order
to verify the charges set forth in the accounting records. Such audit
may only be performed once a year, upon reasonable prior notice and
during regular business hours and at BMW's expense. Unless necessary
to establish in a court of law BMW's right to payment of fees
hereunder, BMW's auditor shall hold all information obtained in strict
confidence, shall not disclose such information to any other person or
entity without Selectica's prior written consent and shall not
disclose to BMW any information regarding Selectica's business other
than any noncompliance by Selectica with the fee payment provisions
hereof. The terms of this provision shall survive the termination of
this Agreement for a period of five (5) years.
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d. Each payment pursuant to this Agreement will be made in U.S. dollars
in and from the United States and will be made no later than thirty
(30) days from the date of invoice sent to BMW on or after the
occurrence of the event specified in Exhibit 7 for which payment is
due.
11. WARRANTIES.
a. Selectica warrants that: (i) it has the authority and the right to
enter into this Agreement, to perform services and provide the BMW
Virtual Center Application hereunder, and that its obligations
hereunder are not in conflict with any other Selectica obligations;
(ii) all services will be performed in a competent and professional
manner, and will substantially conform, in all material respects, to
BMW's requirements expressly set forth in this Agreement; (iii) to its
knowledge, neither the BMW Virtual Center Application, nor the
performance of any services by Selectica infringe upon or violate the
rights of any third party and to its knowledge, BMW shall receive free
and clear title to all deliverables assigned to it pursuant to Section
6; and (iv) at the time of acceptance, the BMW Virtual Center
Application will substantially conform to the Specifications and as
BMW's sole and exclusive remedy for a breach of the foregoing,
Selectica shall use all commercially reasonable efforts to correct and
repair, at no cost to BMW, any defect, malfunction or non-conformity
that prevents the BMW Virtual Center Application from conforming to
the Specifications.
b. Furthermore, Selectica warrants and represents that it shall not use
the BMW Materials which it develops for BMW hereunder in the use and
development of any software and software code for any other
manufacturer or distributor of automobiles, motorcycles or
recreational vehicles.
c. Any warranty in this Agreement shall not apply to: (i) altered or
damaged or any portion of the Application incorporated with or into
other software; (ii) the Application if it was subjected to
negligence, abuse or misapplication by BMW.
d. EXCEPT AS EXPRESSLY PROVIDED HEREIN, SELECTICA MAKES NO WARRANTIES TO
ANY PERSON OR ENTITY WITH RESPECT TO THE BMW VIRTUAL CENTER
APPLICATION, SELECTICA MATERIALS OR ANY DELIVERABLE OR ANY SERVICES OR
LICENSES AND DISCLAIMS ALL IMPLIED WARRANTIES, INCLUDING WITHOUT
LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE AND NON-INFRINGEMENT.
12. TERM AND TERMINATION.
a. This Agreement shall commence as of the Effective Date and shall
continue in full force and effect thereafter unless and until Exhibit
1 has been terminated or Milestone 5 has been completed, or as
otherwise provided hereunder.
b. In the event of any material breach of this Agreement by either party,
the other party may terminate this Agreement, by giving thirty (30)
days written notice to such other party; provided, however, that any
such termination shall not be effective if such other party has cured
the breach of which it has been notified prior to the expiration of
said thirty (30) days.
c. Subject to Section 12(d), upon any termination of this Agreement (i)
all rights and licenses of the parties shall cease, (ii) each party
shall turn over to the other all of the other party's, Materials and
Confidential Information and (iii) Sections 1, 6, 9, 12(d), 13, 14,
15, 16, 17, 20, 21, 22 shall survive any termination of this
Agreement, (iv)
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termination hereunder shall not affect any rights of Selectica to
payments already accrued.
d. Notwithstanding the above, if BMW terminates this Agreement pursuant
to Section 12(b) and provided, and for so long as, BMW is and remains
in compliance with the terms of this Agreement, the licenses granted
in Section 8 shall survive termination.
13. LIMITATION OF LIABILITY.
NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT OR OTHERWISE, AND EXCEPT
FOR BODILY INJURY OR A BREACH OF SECTION 14, 16 OR 9, NEITHER PARTY SHALL
BE LIABLE OR OBLIGATED WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT
OR UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR
EQUITABLE THEORY (I) FOR ANY AMOUNTS IN EXCESS IN THE AGGREGATE OF THE FEES
PAID TO IT HEREUNDER (II) FOR ANY COST OF PROCUREMENT OF SUBSTITUTE GOODS,
TECHNOLOGY, SERVICES OR RIGHTS; (III) FOR ANY INCIDENTAL OR CONSEQUENTIAL
DAMAGES; (IV) FOR INTERRUPTION OF USE OR LOSS OR CORRUPTION OF DATA; OR (V)
FOR ANY MATTER BEYOND ITS REASONABLE CONTROL.
14. INDEMNIFICATION.
a. Selectica, at its own expense, will defend and/or handle any claim or
action against any BMW Affiliate for actual or alleged infringement of
any U.S. patent, copyright, intellectual or industrial property right
or any other similar right (including, but not limited to,
misappropriation of trade secrets) based on the BMW Virtual Center
Application and/or any deliverables furnished to BMW pursuant to this
Agreement. Selectica agrees to give BMW prompt written notice of any
such claim or action that could have an adverse impact on BMW's use or
possession of same. As a condition to Selectica's obligations in this
Section 14, Selectica shall have the right to conduct the defense of
any such claim or action and all negotiations for its settlement;
provided, however, that BMW may participate, at its expense, in such
defense or negotiations to protect its interests. Selectica shall not
be liable for any costs, expenses, damages or fees incurred by BMW in
defending such action or claim, unless authorized by Selectica in
advance and in writing. Selectica further agrees to indemnify and hold
each of BMW and BMW Affiliates harmless from and against any and all
liabilities, loses, damages, costs and expenses (including reasonable
attorneys' fees) associated with any such claim or action. As a
condition to the foregoing, BMW must promptly notify Selectica in
writing of any claim or action and cooperate with, and provides all
available information, assistance and authority to, Selectica to
defend or settle the action.
b. If the Application is, or in the opinion of Selectica is likely to
become, the subject of a claim, suit or proceeding of infringement,
Selectica may in its sole discretion (a) procure, at no cost to BMW,
the right to continue using the Application; (b) replace or modify the
Application to render it non-infringing, provided there is no material
loss of functionality; or (c) if, in Selectica's reasonable opinion,
neither (a) nor (b) above are commercially feasible, terminate the
license and refund the amounts paid by BMW for the Application (as
depreciated on a straight-line basis over a period of 60 months). The
foregoing obligations of Selectica do not apply with respect to
software programs or portions or components thereof (i) not supplied
by Selectica; (ii) which are modified by BMW other than as authorized
by Selectica, if the alleged infringement relates to such
modifications; (iii) combined with software or hardware
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products not conforming to Selectica's published system requirements,
processes or materials where the alleged infringement relates to such
combination, (iv) where BMW continues the allegedly infringing
activity after being notified thereof or after being informed and
provided with modifications that would have avoided the alleged
infringement; or (v) where BMW's use of the Applications is not
strictly in accordance with the purpose for which this license has
been granted.
c. BMW represents that it has obtained the necessary consents, permits
and approvals necessary to use the BMW Materials or any photographs,
images or artwork which BMW secures and provides to Selectica, and
shall assume royalty or other payments necessary to secure right,
title and interest, or the necessary licensing rights in such
photographs, images or artwork which BMW has obtained independent of
Selectica. BMW agrees to indemnify and hold Selectica, its officers,
employees and agents, harmless, including reasonable attorneys' fees,
from and against any demand, claim, damage, judgment, action, cause of
action, royalty payment made or brought against Selectica arising out
of the purportedly unauthorized use of, or a claim of infringement
related to, the BMW Materials or any photographs, images or artwork
described above in this paragraph.
15. CONFIDENTIAL INFORMATION.
a. Each party (the "Receiving Party") agrees to regard and preserve as
confidential all technical, financial and business information related
to the business and activities of the other party (the "Disclosing
Party"), that may be obtained by such party from any source or may be
developed as a result of this Agreement ("Confidential Information" of
the Disclosing Party). The Receiving Party agrees to hold such
Confidential Information in trust and confidence for the Disclosing
Party and not to disclose such Confidential Information to any person,
firm or enterprise, or use (directly or indirectly) any such
information for its own benefit or the benefit of any other party,
unless authorized by The Disclosing Party in writing, and even then,
to limit access to and disclosure of such Confidential Information to
The Receiving Party's employees on a "need to know" basis only.
Confidential Information shall not be considered confidential to the
extent, but only to the extent, that such information is: (i) already
known by the Receiving Party free of any restriction at the time it is
obtained; (ii) subsequently learned by the Receiving Party from an
independent third party, free of any restriction; (iii) available
publicly.
b. Each party acknowledges and agrees that, in the event of a breach or
threatened breach of any of the foregoing provisions, the other party
will have no adequate remedy in damages and, accordingly, shall be
entitled to injunctive relief against such breach or threatened
breach; provided, however, that no specification of a particular legal
or equitable remedy shall be construed as a waiver, prohibition or
limitation of any legal or equitable remedies in the event of a breach
hereof.
16. ADVERTISING.
Neither party will use the other party's name or marks, refer to or
identify the other party in any advertising or publicity releases or
promotional or marketing correspondence to others without such other
party's written approval (such approval shall not be unreasonably
withheld).
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17. GOVERNING LAW AND INTERPRETATION.
This Agreement shall be construed and enforced under the substantive laws
of the State of California. Headlines are for reference only and shall not
affect the meaning of any terms. If any provision of this Agreement is held
invalid, illegal or unenforceable, the remaining provisions will continue
unimpaired.
18. INSURANCE.
Unless otherwise agreed upon, Selectica agrees to obtain and maintain
adequate worker's compensation, disability, unemployment insurance and the
like for those of its employees performing services under this Agreement.
Selectica agrees to obtain and maintain comprehensive general and vehicular
liability insurance for claims for damages because of bodily injury
(including death) and property damage caused by or arising out of acts or
omissions of its employees. The minimum limits of such insurance shall be
one million dollars ($1,000,000) for each person, one million dollars
($1,000,000) for each accident involving bodily injury and one million
dollars ($1,000,000) involving property damage for each accident. Each such
insurance policy shall name BMW as co-insured and additional loss payee and
shall provide for at least thirty (30) days prior notice to BMW in the
event of any modification or cancellation. Selectica will also notify BMW
at least thirty (30) days in advance if Selectica desires to modify or
cancel any such insurance. Upon request, Selectica shall furnish BMW with
certificates of insurance to evidence its compliance with the provisions
hereof.
Selectica shall also obtain and maintain a policy or policies of errors and
omissions, product liability and property damage which shall include BMW as
a named insured. Selectica shall supply BMW with a certificate of such
insurance within twenty (20) days after notice of the execution of this
Agreement, which shall state that the carrier undertakes to give BMW twenty
(20) days advance notice of cancellation. The policy limits shall be in the
amount of not less than five million dollars ($5,000,000) for each
occurrence.
19. ASSIGNMENT.
Except to an entity that succeeds to all or substantially all the business
or assets of a Party, neither party may assign, transfer or subcontract the
performance of its services, or any of its rights and/or obligations,
without the other party's prior written consent, and any attempt to do so
shall be void, except BMW may assign this Agreement, and/or any of its
rights or obligations to any BMW Affiliate, without Selectica's consent and
upon written notice to Selectica.
20. SUBCONTRACTING.
Selectica shall be solely responsible for all its obligations and
responsibilities hereunder notwithstanding any subcontracting.
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21. NOTICES.
All notices shall be in writing and delivered personally or properly
mailed, first class mail, to the addresses of the parties set forth at the
beginning of this Agreement, to the attention of the undersigned, with a
copy to the signatories of this Agreement, at the same address, or to such
other address or addressee as either party may designate by written notice.
Any such notice shall be deemed given on the date delivered or when placed
in the mails as specified.
22. ENTIRETY.
This Agreement, together with the Exhibits, contains the entire agreement
between the parties and supersedes any prior or inconsistent agreements,
negotiations, representations and promises, written or oral. No
modification to this Agreement nor any failure or delay in enforcing any
term, exercising any option or requiring performance shall be binding or
construed as a waiver unless agreed to in writing by the parties hereto.
23. EMPLOYEE NON-COMPETITION.
During the term of this Agreement, Selectica employees that are assigned to
develop the BMW Application shall not agree to perform services or provide
material or information, directly or indirectly, to for or in support of
any Competitor of BMW in connection with a Competitive Project that is
substantially similar in form, substance, purpose or intent as performed or
provided under this Agreement. For purposes of this Section, "Competitor"
is defined as any manufacturer or distributor of automobiles, motorcycles,
or recreational vehicles and "Competitive Project" is defined as any task
or work effort whose intent or result is or will be substantially similar
to any contemplated by this Agreement.
24. ESCROW.
a. Selectica agrees within a reasonable time after execution of this
Agreement both parties shall enter into an agreement upon the terms
set forth in Exhibit 10 (Escrow Agreement) with Fort Knox ("Escrow
Agent") unless otherwise agreed upon by the parties wherein Selectica
shall provide the source code for the BMW Virtual Center Application
("Source Code") to said Escrow Agent. BMW shall bear all costs
associated with escrow.
b. Escrow Agent shall hold such Source Code throughout the term of this
Agreement, and any renewal or extension of said Agreement, and shall
release said Source Code to BMW in the event of, and only in the event
a release condition specified below ("Release Condition") and in
accordance with the terms of the Escrow Agreement. The circumstances
that shall give rise to a Release Condition are set forth below, and
only those circumstances as mentioned hereinafter
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shall give rise circumstances which trigger the filing for release as
set forth in the Escrow Agreement.
i. Selectica becomes subject to any administrative or
governmental action or measure which terminates its business (without
a successor).
ii. Selectica substantially and continuously fails to meet the
support obligations set forth in this Agreement solely due to the
fault of Selectica and such failure gives rise to a right on the part
of BMW to terminate said Agreement.
iii. Selectica makes, or initiates the process making, a general
assignment for the benefit of creditors, or any involuntary petition
to obtain an order for relief against Selectica is filed under the US
Bankruptcy Code provided it is not vacated within 120 days from the
date of filing, or a receiver or custodian of bankruptcy is appointed
for Selectica provided such appointment is not vacated within 120 days
from the date of such appointment.
c. In the event of one or more of the occurrences set forth above in
Section 24(b)(i), (ii) or (iii) BMW may activate the release process as
specified in the Escrow Agreement.
d. Upon release of the Source Code pursuant to the Escrow Agreement,
BMW shall have a non-exclusive, perpetual, non-transferable license to the
Source Code only for the purposes of operating, maintaining and supporting
users of the Application and only for so long as a Release Condition
exists.
BMW OF NORTH AMERICA, INC. SELECTICA, INC.
By: /s/ JAMES L. McDOWELL By: /s/ VASUDER K. BHANDARKAR
---------------------------------- ----------------------------------
Name: James McDowell Name: Vas Bhandarkar
Title: VICE PRESIDENT,MARKETING Title: VICE PRESIDENT, MARKETING
------------------------------- -------------------------------
Date: NOVEMBER 18, 1998 Date: OCTOBER 28, 1998
-------------------------------- --------------------------------
BMW OF NORTH AMERICA, INC.
By: /s/ VICTOR H. DOOLAN
----------------------------------
Name: Victor H. Doolan
--------------------------------
Title: PRESIDENT
-------------------------------
Date: DECEMBER 3, 1998
--------------------------------
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EXHIBIT 1 - PROJECT DESCRIPTION/SCOPE OF WORK
Selectica, Inc.
2890 Zanker Road, Suite 101
San Jose, CA 95134
Telephone: 408.570.5700
Fax: 408.570.9705
ATTN: Judy Yamada
Date: 7/15/98
This Exhibit is issued pursuant to the above-referenced Agreement between BMW OF
North America, Inc. and Selectica, Inc. Any term not otherwise defined herein
shall have the meaning specified in the Agreement.
BMW Project Manager: Carol Burrows Location: BMW of North America, Inc.
300 Chestnut Ridge Road
Woodcliff Lake, NJ 07675
Selectica Project Manager: Judy Yamada Location: Selectica, Inc.
2890 Zanker Road, Suite 101
San Jose, CA 95134
PROJECT DESCRIPTION
Selectica shall use commercially reasonable efforts to create the BMW Virtual
Center Application for BMW. The project shall be divided into phases. Phase 2A
is the test phase for the E-46 (For purposes of this Agreement, E-46 shall mean
BMW models 323i and 328i). This phase will introduce Selectica's configurator at
the BMW site and, under the Virtual Center, create the front- and back-end
infrastructure to incorporate the configurator into BMW's site, tested
simultaneously with the E-46 model introduction. Selectica shall also create the
configuration infrastructure for the Virtual Center for the configuration of
other BMW models, pricing and availability information.
The configurator shall include building the E-46 configuration model to include
all of the applicable rules and constraints involving model specifications,
options and pricing. The configurator shall integrate Selectica's technology
into the Graphical User Interfaces templates created by the advertising agency,
Fallon McElligott, to allow customers to "Build their own BMW" and Lead Transfer
System (Pick a Retailer). It shall also deploy the "Store & Restore"
functionality, customizing the configuration results schema to match the
quotation specific requirements of BMW and its dealers. Finally, this phase also
involves the design for the "Harvest" Database schema to incorporate all the
product, pricing, retailer, availability data pertaining to BMW models, and an
update mechanism and process for timely reflection at the Virtual Center.
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SCOPE OF WORK AND PROJECT RESPONSIBILITIES
Selectica shall employ one full time project manager and four or five dedicated
full time personnel for the term of the Agreement. Should the expected staffing
profile change during the implementation, Selectica shall inform BMW, justify
and seek approval from BMW for additional resources required.
Selectica's project manager will be responsible for the overall Selectica
deliverable management. Additionally, the project manager shall be responsible
for project documentation such as (but not limited to) specifications, designs,
plans, scope, and schematics. Selectica's project manager shall create and
maintain the project plan, and communicate project status and plan variances to
affected and interested parties. The project manager shall closely coordinate
with Fallon McElligott, or such other agency BMW, at its discretion, may
designate, and BMW management and other project team members. The project
manager will arrange and seek reviews and approvals as scheduled and defined in
the project plan. The project manager will also be responsible for dissemination
of all information, status and call reports, change management and conducting
quality audits. Selectica's project manager shall be: Judy Yamada.
Selectica's other team members will be responsible for design, implementation
and testing of the E-46 requirements and related database and knowledge-base,
user interface and site integration and deployment activities.
MILESTONE IMPLEMENTATIONS
E-46 CONFIGURATOR DESIGN AND IMPLEMENTATION - MILESTONE 1
Selectica Tasks and Deliverables:
o Review configurator schematic and navigation to ensure compatibility and
feasibility with Selectica configuration architecture.
o Define E-46 configurator knowledge base scope and acceptance criteria.
o Create E-46 configuration model design. Review E-46 model, incorporate
changes, and obtain design approval based on acceptance criteria.
o Implement the E-46 configuration model. Rework and modify E-46 model based
on testing results.
o Create test plan for E-46 configuration model. Create test scripts, conduct
tests and report test results. Retest iteratively as fixes are available.
o Incorporate Selectica tags into templates. Rework modifications based on
testing results.
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o Deploy E-46 configuration model on development server at Fallon. Conduct
system and integration tests.
o Cutover production server to deploy E-46 configurator at Virtual Center.
o Estimated resources: 3-4 Persons
o Project manager
o Knowledge engineer
o User interface engineer
o Test engineer
o Estimated person-weeks: 15
STORE AND RESTORE DESIGN AND IMPLEMENTATION - MILESTONE 2
Selectica Tasks and Deliverables
o Define Store and Restore scope and acceptance criteria.
o Create Store & Restore quote object and mapping design. Review data mapping
and quote object, incorporate changes, and obtain design approval based on
acceptance criteria.
o Implement the quote object. Rework and modify quote object based on testing
results.
o Create test plan for Store and Restore facility. Create test scripts,
conduct tests and report test results. Retest iteratively as fixes are
available.
o Incorporate Selectica tags into Store and Restore templates. Rework
modifications based on testing results.
o Deploy Store and Restore facility on development server at Fallon. Conduct
system and integration tests.
o Cutover production server to deploy Store and Restore at Virtual Center.
o Estimated resources: 3-4 Persons
o Project manager
o Database engineer
o User interface engineer
o Test engineer
o Estimated person-weeks: 13
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OTHER IMPLEMENTATIONS
HARVEST DATABASE DESIGN AND IMPLEMENTATION - MILESTONE 3
Selectica Tasks and Deliverables
o Gather and analyze existing schemas and actual data for Model, Standard
Features, Options Description, Pricing, Prospects, Retailers and Inventory.
o Create Harvest Database Scope document. Review, incorporate changes and get
approval.
o Design and develop the schema for the Harvest database. Review, incorporate
changes and get approval based on acceptance criteria.
o Build Harvest Database table creation and indexing scripts.
o Create test plan, scripts for the Harvest Database creation and loading.
Conduct tests, rework scripts and retest.
o Estimated resources: 2-3 Persons
o Project manager
o Database engineer
o Test engineer
o Estimated person-week: 12
LEAD TRANSFER SYSTEM (PICK A RETAILER) DESIGN AND IMPLEMENTATION - MILESTONE 4
Selectica Tasks and Deliverables
o Define Lead Transfer System (LTS) scope and acceptance criteria.
o Create LTS model. Incorporate changes, and obtain design approval based on
acceptance criteria.
o Implement the LTS model. Rework and modify based on testing results.
o Create test plan for LTS. Create test scripts, conduct tests and report
test results. Retest iteratively as fixes are available.
o Incorporate Selectica tags into LTS templates. Rework modifications based
on testing results.
o Deploy LTS model and facility on development server at Fallon. Conduct
system and integration tests.
o Cutover production server to deploy LTS at Virtual Center
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o Estimated resources: 3-4 Persons
o Project manager
o Knowledge engineer
o User interface engineer
o Test engineer
o Estimated person-week: 5
DEVELOPMENT SERVER INSTALLATION, SETUP AND UPDATES
NETWORK & SECURITY SETUP AND UPDATES
Selectica Tasks and Deliverables
o Install and test Selectica software (ACE Enterprise Server, ACE Enterprise
Manager, and ACE Quote Server) on Selectica servers and Fallon servers
(first time). Install updates periodically to keep server up to date.
o Install and test Oracle server.
o Install Backup software. Implement backup policy and procedures. Create
backup scripts and execute periodically.
o Populate Harvest database for initial testing.
o Out of pocket travel and expenses consistent with BMW Travel Policy
Selectica Staff Resources Estimate Out of Pocket Expenses
o Estimated resources: 1-2
o Project manager
o Network administrator
o Estimated person-week: 4
o Estimated Out of pocket expenses
<TABLE>
<S> <C>
Space and Furniture: $ 4,000
Backup software: $ 1,000
Webload testing software: $ 5,000
Network routing: $ 3,000
Security software: $ 2,000
Offsite backup: $ 2,000
Other: $ 3,000
Estimated sub-total $ 20,000
</TABLE>
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TRAINING
Selectica Tasks and Deliverables
o Train Fallon/BMW on Selectica software components and installation.
o Train Fallon/BMW on Selectica's configurator product. Does not include
Train the trainer or ACE Certification.
o Estimated resources: 1 Person
o Project Manager/Trainer
o Estimated person-week: 2
o Out of pocket travel and expenses consistent with BMW Travel Policy
o Materials--actual cost not to exceed $1,000
PHASE 2B - MILESTONE 5
(FUNCTIONALITY NOT COVERED IN PHASE 2A)
Phase 2A will deploy only 2 1999 E-46 BMW sedan models.
Phase 2B covers:
o All remaining 1999 Models (in order sequence of development)
o 1999 7 Series
o 1999 5 Series Sedans and Wagons
o All E-53 Models (Up to and including Year 2000 Models)
o All M Series Models (Up to and including Year 2000 M5 Series)
o All Z Series Models (Up to and including Year 2000 2.3 Model
"Facelift")
o All 3 Series Coupe and Convertible Models and 318 ti Models (Up to and
including 1999 models)
Specific dates, deadlines and deliverables are set forth in Exhibit
5--Deliverables
Phase 2A does not cover the estimate for the following:
o Payment estimator
o Automatic translator
o Pre-owned vehicle locator
o Configurator generated management or marketing trending or analysis
reports, except, Selectica shall provide BMW with reports of site visits
traffic and configuration combinations that it systematically generates.
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EXHIBIT 2 - EMPLOYEES AND NON-DISCLOSURE AGREEMENT
The following list of Selectica employees have executed the Proprietary
Information and Inventions Agreement, the form of which is set forth below:
Employee
SELECTICA, INC.
PROPRIETARY INFORMATION
AND INVENTIONS AGREEMENT
The following confirms an agreement between me (___________________), and
Selectica, Inc., a California corporation (the "Company"), which is a material
part of the consideration for my employment by the Company:
1. The Company shall own all right, title and interest (including patent
rights, copyrights, trade secret rights, designs, mask work rights and
other rights throughout the world) in any inventions, works of authorship,
mask works, ideas or information made or conceived or reduced to practice,
in whole or in part, by me during the term of my employment with the
Company to the fullest extent allowed by California Labor Code Section 2870
(which is attached as Appendix A) (collectively "Inventions") and I will
promptly disclose all Inventions to the Company. I hereby make all
assignments necessary to accomplish the foregoing. I shall further assist
the Company, at the Company's expense, to further evidence, record and
perfect such assignments, and to perfect, obtain, maintain, enforce, and
defend any rights specified to be so owned or assigned. I hereby
irrevocably designate and appoint the Company as its agents and
attorneys-in-fact to act for and in my behalf to execute and file any
document and to do all other lawfully permitted acts to further the
purposes of the foregoing with the same legal force and effect as if
executed by me. If I wish to clarify that something created by me prior to
my employment that relates to the Company's business is not within the
scope of this Agreement, I have listed it on Appendix B.
2. To the extent allowed by law, paragraph 1 includes all rights of paternity,
integrity, disclosure and withdrawal and any other rights that may be known
as or referred to as "moral rights" (collectively "Moral Rights"). To the
extent I retain any such Moral Rights under applicable law, I hereby waive
such Moral Rights and consent to any action consistent with the terms of
this Agreement with respect to such Moral Rights. I will confirm any such
waivers and consents from time to time as requested by the Company.
3. I agree that all Inventions and all other business, technical and financial
information I develop, learn or obtain during the term of my employment
that relate to the Company or the business or demonstrably anticipated
business of the Company or that are received by or for the Company in
confidence, constitute "Proprietary Information." I will hold in confidence
and not disclose or, except within the scope of my employment, use any
Proprietary Information. However, I shall not be obligated under this
paragraph with
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respect to information I can document is or becomes readily publicly
available without restriction through no fault of mine. Upon termination of
my employment, I will promptly return to the Company all items containing
or embodying Proprietary Information (including all copies), except that I
may keep my personal copies of (i) my compensation records, (ii) materials
distributed to shareholders generally and (iii) this Agreement.
4. During the period of my employment with the Company and for six months
thereafter, I will not encourage or solicit any employee or consultant of
the Company to leave the Company for any reason (except for the bona fide
firing of Company personnel within the scope of my employment).
5. I agree that during the term of my employment with the Company (whether or
not during business hours), I will not engage in any activity that is in
any way competitive with the business or demonstrably anticipated business
of the Company, and I will not assist any other person or organization in
competing or in preparing to compete with any business or demonstrably
anticipated business of the Company.
6. I have not entered into, and I agree I will not enter into, any agreement
either written or oral in conflict with this Agreement or my employment
with the Company. I will not violate any agreement with or rights of any
third party or, except as expressly authorized by the Company in writing,
use or disclose my own or any third party's confidential information or
intellectual property when acting within the scope of my employment or
otherwise on behalf of the Company.
7. I agree that this Agreement is not an employment contract for any
particular term and that I have the right to resign and the Company has the
right to terminate my employment at will, at any time, for any or no
reason, with or without cause. In addition, this Agreement does not purport
to set forth all of the terms and conditions of my employment, and, as an
employee of the Company, I have obligations to the Company which are not
set forth in this Agreement. However, the terms of this Agreement govern
over any inconsistent terms and can only be changed by a subsequent written
agreement signed by the President of the Company.
8. I agree that my obligations under paragraphs 1, 2, 3 and 4 of this
Agreement shall continue in effect after termination of my employment,
regardless of the reason or reasons for termination, and whether such
termination is voluntary or involuntary on my part, and that the Company is
entitled to communicate my obligations under this Agreement to any future
employer or potential employer of mine. My obligations under paragraphs 1,
2 and 3 also shall be binding upon my heirs, executors, assigns, and
administrators and shall inure to the benefit of the Company, it
subsidiaries, successors and assigns.
9. Any dispute in the meaning, effect or validity of this Agreement shall be
resolved in accordance with the laws of the State of California without
regard to the conflict of laws provisions thereof. I further agree that if
one or more provisions of this Agreement are held to be illegal or
unenforceable under applicable California law, such illegal or
unenforceable portion(s) shall be limited or excluded from this Agreement
to the minimum extent required so that this Agreement shall otherwise
remain in full force and effect and enforceable in accordance with its
terms.
10. I HAVE READ THIS AGREEMENT CAREFULLY AND I UNDERSTAND AND ACCEPT THE
OBLIGATIONS WHICH IT IMPOSES UPON ME WITHOUT RESERVATION. NO
20
<PAGE> 21
PROMISES OR REPRESENTATIONS HAVE BEEN MADE TO ME TO INDUCE ME TO SIGN THIS
AGREEMENT. I SIGN THIS AGREEMENT VOLUNTARILY AND FREELY, IN DUPLICATE, WITH
THE UNDERSTANDING THAT ONE COUNTERPART WILL BE RETAINED BY THE COMPANY AND
THE OTHER COUNTERPART WILL BE RETAINED BY ME.
_____________, 199_ Employee
----------------------------
Signature
----------------------------
Name (Printed)
Accepted and Agreed to:
- ---------------------------------
By:
------------------------------
21
<PAGE> 22
APPENDIX A
Section 2870. Application of provision providing that employee shall assign or
offer to assign rights in invention to employer.
(a) Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in
an invention to his or her employer shall not apply to an invention
that the employee developed entirely on his or her own time without
using the employer's equipment, supplies, facilities, or trade secret
information except for those inventions that either:
(1) Relate at the time of conception or reduction to practice of the
invention to the employer's business, or actual or demonstrably
anticipated research or development of the employer; or
(2) Result from any work performed by the employee for his employer.
(b) To the extent a provision in an employment agreement purports to
require an employee to assign an invention otherwise excluded from
being required to be assigned under subdivision (a), the provision is
against the public policy of this state and is unenforceable
22
<PAGE> 23
APPENDIX B
PRIOR MATTER EXCLUDED FOR CLARIFICATION
23
<PAGE> 24
EXHIBIT 3 -- BMW BILLING PROCEDURES FOR OUT-OF-POCKET EXPENSES
A. Except as otherwise set forth herein, Selectica shall submit to BMW by no
later than the fifteenth (15th) business day of each month, in arrears, a
written invoice for any out-of-pocket expenses incurred by Selectica
pursuant to its performance under this Agreement. Each monthly invoice
shall detail each and every out-of-pocket cost and expense Selectica
believes to be reimbursable by BMW in accordance with the terms and
conditions of this Agreement. Selectica shall establish and maintain such
financial reporting systems and procedures as may be necessary and
appropriate to ensure accurate and timely submission of monthly invoices
consistent with BMW's financial and auditing reporting requirements.
Procedures necessary to effectuate the foregoing shall be agreed to by the
parties. Selectica agrees to use all commercially reasonable efforts to
establish and maintain and, from time to time in accordance with BMW's
reasonable requests, modify the aforementioned financial reporting systems
and procedures to ensure that BMW's financial and audit requirements and
objectives are satisfied.
BMW recognizes that Selectica has established certain invoicing procedures
with respect to Selectica services for an array of clients, and that the
invoicing requirements set forth herein may not conform to Selectica's
current procedures. Upon execution of this Agreement the parties hereto
shall promptly meet to review Selectica's current invoicing procedures.
Selectica and BMW may, but shall not be required, to modify the invoicing
requirements set forth herein, provided that any such modification (i) does
not limit BMW's ability to rigorously monitor Selectica's financial and
other performance contemplated herein, (ii) is fully compatible with BMW's
fiscal and other corporate policies, procedures and requirements, (iii)
does not unreasonably inconvenience BMW or Selectica personnel, and (iv)
does not increase the cost of BMW performance contemplated herein. Any
modification to the invoicing requirements set forth herein shall be
evidenced by a writing signed by both parties, attached hereto and
incorporated by reference herein.
B. A cost or expense for which reimbursement by BMW to Selectica requires
submission by Selectica of documentary or other substantiation thereof
shall not be reflected on a monthly invoice until and unless such necessary
substantiation is submitted therewith. BMW shall not be obligated to
reimburse Selectica for any cost or expense reflected on any invoice for
which necessary substantiation is not submitted therewith, nor for any cost
or expense reflected on any invoice received by BMW more than two hundred
(200) days after such cost or expense was incurred by Selectica. The
foregoing notwithstanding, Selectica shall exercise diligent effort to
submit to BMW for reimbursement costs and expenses within ninety (90) days
after such cost or expense is incurred by Selectica.
C. Each monthly invoice to BMW must be of sufficient detail to enable BMW to
understand the scope and nature of all services reflected therein. Each
monthly invoice which is timely submitted to BMW shall be payable within
thirty (30) days following the BMW's receipt thereof. In the event a
monthly invoice is not timely submitted, such invoice shall be payable by
BMW no later than thirty (30) days subsequent to the second (2nd) day of
the following month. In the event a dispute arises concerning one or more
items reflected in a monthly invoice, BMW shall be obligated to timely pay
all non-disputed
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<PAGE> 25
charges and the parties shall then negotiate in good faith to achieve a
mutually satisfactory resolution of the dispute.
D. In addition to setting forth those costs and expenses for which Selectica
seeks reimbursement by BMW, in the event Selectica finds that the budgeted
amount set forth in the payment plan set forth in Exhibit 7 is modified,
(such modification to be mutually agreed upon by the parties), the monthly
invoice shall provide for chronological tracking of budget by budgeted item
and in summary, for said full year of service, including but not limited
to, indications of original budgeted amount for media purchases, subsequent
adjustments thereto, year to date expenditures, projected full year
expenditure against forecast and the like in sufficient detail to enable
BMW to satisfy BMW's financial and audit obligations and objectives.
E. In monthly invoices, Selectica shall bill BMW at Selectica's actual cost,
without mark-up or profit and net discount or commission, including any
prepayment, for reasonable and substantiated expenses, including media
purchases, incurred consistent with the conditions set forth herein.
25
<PAGE> 26
EXHIBIT 4 -- BMW TRAVEL POLICY
ATTACHED TO THIS PAGE
26
<PAGE> 27
EXHIBIT 5 -- DELIVERABLES
MILESTONE 1: SELECTICA DELIVERABLE - E46 CONFIGURATOR
Approximate completion: Oct 8, 1998
Selectica Milestone 1 contingent upon timely completion and delivery of
following BMW deliverables to Selectica by the following dates:
<TABLE>
<S> <C>
Deliver E46 Configurator Re-design 9-28-98
Deliver E46 Configurator HTML Pages 9-28-98
Provide E46 configurator rules 9-28-98
</TABLE>
MILESTONE 2: SELECTICA DELIVERABLE - STORE & RESTORE
Approximate completion: October 29, 1998
Selectica Milestone 2 contingent upon completion and delivery of following BMW
deliverables to Selectica by the following dates:
<TABLE>
<S> <C>
Deliver Store & Restore Design 10-19-98
Deliver Store & Restore HTML Pages 10-19-98
Deliver revised Guestbook 10-19-98
</TABLE>
MILESTONE 3: SELECTICA DELIVERABLE - HARVEST DATABASE
Approximate completion: December 15, 1998
Selectica Milestone 3 contingent upon completion and delivery of following BMW
deliverables to Selectica by the following dates:
<TABLE>
<S> <C>
Deliver dealer schema & data 12-5-98
Provide BMW database schema 12-5-98
Provide BMW data in electronic format 12-5-98
</TABLE>
27
<PAGE> 28
MILESTONE 4: SELECTICA DELIVERABLE - LEAD TRANSFER (PICK A RETAILER)
Approximate completion: 12-3-98
Selectica Milestone 4 contingent upon completion and delivery of following BMW
deliverables to Selectica by the following:
<TABLE>
<S> <C>
Create comprehensive schema and technical 11-23-98
specification of Lead Transfer systems
Program automated email and fax functions 11-23-98
Test functionality of entire system prior
to BMW testing 11-23-98
Create and program online customer satisfaction
survey and reporting capability 11-23-98
</TABLE>
MILESTONE 5: SELECTICA DELIVERABLE - COMPLETION AND DELIVERY OF:
Selectica Milestone 5 completion contingent upon obtaining required data of
above stated models of aforementioned BMW models.
o All remaining 1999 Models (in order sequence of development)
o 1999 7 Series
o 1999 5 Series Sedans and Wagons
o All E-53 Models (Up to and including Year 2000 Models)
o All M Series Models (Up to and including Year 2000 M5 Series)
o All Z Series Models (Up to and including Year 2000 2.3 Model
"Facelift")
o All 3 Series Coupe and Convertible Models and 318 ti Models (Up to and
including 1999 models)
28
<PAGE> 29
EXHIBIT 6 -- SELECTICA MATERIALS
The ACE KBS database repository schema
ACE KBS, KnowledgeBases, Knowledge Language, Knowledge Language Format
ACE Enterprise, ACE Integrated Modeling Environment
ACE Studio (Model Builder, GUI Builder)
ACE Quoter, ACE Mobile, ACE Desktop, ACE Server Manager
ACE Tester, ACE Verifier, ACE Composer
ACE Mobile Manager, ACE Mobile Docker
29
<PAGE> 30
EXHIBIT 7 -- COMPENSATION AND PAYMENT SCHEDULE
<TABLE>
<CAPTION>
PAYMENT SCHEDULE:
- -----------------
<S> <C>
REMITTED PRIOR TO CONTRACT EXECUTION $[*]
ON OR ABOUT 9-4-98
DUE AT CONTRACT EXECUTION $[*]
(INCLUDES MAINTENANCE FOR 1998 OF [*]
DUE AT COMPLETION OF MILESTONE 1 $[*]
DUE AT COMPLETION OF MILESTONE 2 $[*]
DUE AT THE COMPLETION OF MILESTONE 3 $[*]
DUE AT THE END OF THE COMPLETION OF MILESTONE 4 $[*]
DUE AT THE COMPLETION OF MILESTONE 5 $[*]
TOTAL $[*]*
==========
DUE UPON DELIVERY OF THE AUTO TRANSLATION FUNCTIONALITY
(IF COMPLETED) -- COSTS INCURRED NOT TO EXCEED $[*]*
DUE UPON DELIVERY OF THE VEHICLE LOCATOR FUNCTIONALITY
(IF COMPLETED) -- COSTS INCURRED NOT TO EXCEED $[*]*
</TABLE>
*TO BE BILLED TO BMW BASED UPON:
PROJECT MANAGER - BILLING RATE OF $[*] PER HOUR
PROJECT ENGINEER - BILLING RATE OF $[*] PER HOUR
OUT OF POCKET COSTS SHALL INCLUDE, BUT NOT NECESSARILY BE LIMITED TO HOTEL,
TRAVEL, MEALS INCURRED BY SELECTICA IN PERFORMING THE SERVICES HEREUNDER OR AS
SET FORTH IN EXHIBIT 1. SUCH OUT-OF-POCKET REIMBURSEMENTS SHALL BE CONSISTENT
WITH EXHIBIT 4 (AS APPLICABLE).
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
30
<PAGE> 31
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
One Time License Fee Per Server Charge
(Paid according to No. of for Additional
PRODUCT LICENSES plan above) Servers Servers
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ACE Enterprise Dual CPU (Production) $[*] 3 $[*]
- ----------------------------------------------------------------------------------------------------------
ACE Enterprise Single CPU $[*] 1 $[*]
Testbed/Development)
- ----------------------------------------------------------------------------------------------------------
ACE Enterprise Single Service Manager $[*] 1 $[*]
(Max. 16)
- ----------------------------------------------------------------------------------------------------------
ACE Integrated Modeling Environment (IME) $[*] 1 $[*]
- ----------------------------------------------------------------------------------------------------------
ACE Quote Server $[*] 1 $[*]
- ----------------------------------------------------------------------------------------------------------
Total Phase 2A Product Licenses--Total $[*] (incorporated in the above
payment schedule)
- ----------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
1998 MAINTENANCE FEE
ACE Enterprise Dual CPU (Production)
ACE Enterprise Single CPU Testbed/Development)
ACE Enterprise Single Service Manager (Max. 16)
ACE Integrated Modeling Environment (IME)
ACE Quote Server
Total Phase 2A Product Maintenance -- 1998 -- $[*]
(incorporated in the above payment schedule)
1999 MAINTENANCE FEE
ACE Enterprise Dual CPU (Production)
ACE Enterprise Single CPU Testbed/Development)
ACE Enterprise Single Service Manager (Max. 16)
ACE Integrated Modeling Environment (IME)
ACE Quote Server
Total Phase 2A Product Maintenance -- 1999 -- $[*]
(To be paid in 4 equal installments at the inception of each calendar quarter)
</TABLE>
BMW RETAINS THE RIGHT AND DISCRETION TO DETERMINE WHETHER IT SHALL SELECT
SELECTICA AS A MAINTENANCE SERVICE PROVIDER FOR CALENDAR YEAR 1999. IN THE EVENT
BMW ELECTS TO DO SO, IT SHALL NEGOTIATE AND CONSUMMATE A SEPARATE MAINTENANCE
AGREEMENT WITH SELECTICA, THE FORM OF WHICH IS ATTACHED HERETO AS EXHIBIT 11.
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
31
<PAGE> 32
<TABLE>
<S> <C>
2000 MAINTENANCE FEE
ACE Enterprise Dual CPU (Production)
ACE Enterprise Single CPU Testbed/Development)
ACE Enterprise Single Service Manager (Max. 16)
ACE Integrated Modeling Environment (IME)
ACE Quote Server
Total Phase 2A Product Maintenance -- 2000 -- $[*]
========
(To be paid in 4 equal installments at the inception of each calendar quarter)
</TABLE>
BMW RETAINS THE RIGHT AND DISCRETION TO DETERMINE WHETHER IT SHALL SELECT
SELECTICA AS A MAINTENANCE SERVICE PROVIDER FOR CALENDAR YEAR 2000. IN THE EVENT
BMW ELECTS TO DO SO, IT SHALL NEGOTIATE AND CONSUMMATE A SEPARATE MAINTENANCE
AGREEMENT WITH SELECTICA, THE FORM OF WHICH IS ATTACHED HERETO AS EXHIBIT 11.
SELECTICA SHALL PROVIDE BMW WITH NOTICE IN WRITING ON OR ABOUT OCT. 1 1999 THAT
THE CURRENT MAINTENANCE AGREEMENT HAS EXPIRED. BMW SHALL THEN HAVE 30 DAYS TO
NOTIFY SELECTICA WHETHER IT SHALL HAVE SELECTICA HAS BEEN SELECTED AS A
MAINTENANCE SERVICE PROVIDER FOR CALENDAR YEAR 2000. IF BMW DOES NOT RESPOND
WITHIN THE REQUISITE 30 DAY PERIOD, THE MAINTENANCE AGREEMENT SHALL BE RENEWED
FOR THE CALENDAR YEAR 2000.
<TABLE>
<S> <C>
2001 MAINTENANCE FEE
ACE Enterprise Dual CPU (Production)
ACE Enterprise Single CPU Testbed/Development)
ACE Enterprise Single Service Manager (Max. 16)
ACE Integrated Modeling Environment (IME)
ACE Quote Server
Total Phase 2A Product Maintenance -- 2001 -- $[*]
========
(To be paid in 4 equal installments at the inception of each calendar quarter)
</TABLE>
BMW RETAINS THE RIGHT AND DISCRETION TO DETERMINE WHETHER IT SHALL SELECT
SELECTICA AS A MAINTENANCE SERVICE PROVIDER FOR CALENDAR YEAR 2001. IN THE EVENT
BMW ELECTS TO DO SO, IT SHALL NEGOTIATE AND CONSUMMATE A SEPARATE MAINTENANCE
AGREEMENT WITH SELECTICA, THE FORM OF WHICH IS ATTACHED HERETO AS EXHIBIT 11.
SELECTICA SHALL PROVIDE BMW WITH NOTICE IN WRITING ON OR ABOUT OCT. 1 2000 THAT
THE CURRENT MAINTENANCE AGREEMENT HAS EXPIRED. BMW SHALL THEN HAVE 30 DAYS TO
NOTIFY SELECTICA WHETHER IT SHALL HAVE SELECTICA HAS BEEN SELECTED AS A
MAINTENANCE SERVICE PROVIDER FOR CALENDAR YEAR 2001. IF BMW DOES NOT RESPOND
WITHIN THE REQUISITE 30 DAY PERIOD, THE MAINTENANCE AGREEMENT SHALL BE RENEWED
FOR THE CALENDAR YEAR 2001.
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
32
<PAGE> 33
<TABLE>
<S> <C>
2002 MAINTENANCE FEE
ACE Enterprise Dual CPU (Production)
ACE Enterprise Single CPU Testbed/Development)
ACE Enterprise Single Service Manager (Max. 16)
ACE Integrated Modeling Environment (IME)
ACE Quote Server
Total Phase 2A Product Maintenance -- 2002 -- $[*]
========
(To be paid in 4 equal installments at the inception of each calendar quarter)
</TABLE>
BMW RETAINS THE RIGHT AND DISCRETION TO DETERMINE WHETHER IT SHALL SELECT
SELECTICA AS A MAINTENANCE SERVICE PROVIDER FOR CALENDAR YEAR 2002. IN THE EVENT
BMW ELECTS TO DO SO, IT SHALL NEGOTIATE AND CONSUMMATE A SEPARATE MAINTENANCE
AGREEMENT WITH SELECTICA, THE FORM OF WHICH IS ATTACHED HERETO AS EXHIBIT 11.
SELECTICA SHALL PROVIDE BMW WITH NOTICE IN WRITING ON OR ABOUT OCT. 1 2001 THAT
THE CURRENT MAINTENANCE AGREEMENT HAS EXPIRED. BMW SHALL THEN HAVE 30 DAYS TO
NOTIFY SELECTICA WHETHER IT SHALL HAVE SELECTICA HAS BEEN SELECTED AS A
MAINTENANCE SERVICE PROVIDER FOR CALENDAR YEAR 2002. IF BMW DOES NOT RESPOND
WITHIN THE REQUISITE 30 DAY PERIOD, THE MAINTENANCE AGREEMENT SHALL BE RENEWED
FOR THE CALENDAR YEAR 2002.
<TABLE>
<S> <C>
IMPLEMENTATION SERVICES
Phase 2A--E46 Configurator in Virtual Center
Phase 2A Training
Phase 2A BMW Configuration Maintenance
Total $[*]
========
(incorporated in the above payment schedule)
</TABLE>
<TABLE>
<S> <C>
Phase--2B--Configurator
o All remaining 1999 Models (in order sequence
of development)
o 1999 7 Series
o 1999 5 Series Sedans and Wagons
o All E-53 Models (Up to and including Year 2000
Models)
o All M Series Models (Up to and including Year
2000 M5 Series)
o All Z Series Models (Up to and including Year
2000 2.3 Model "Facelift")
o All 3 Series Coupe and Convertible Models and
318 ti Models (Up to and including 1999 models)
Total: $[*]
========
(incorporated in the above payment schedule)
</TABLE>
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
33
<PAGE> 34
**FOR INFORMATIONAL PURPOSES ONLY**
Selectica's standard list price is as follows:
<TABLE>
<CAPTION>
SOFTWARE PRODUCT LICENSE LIST PRICE
- ------------------------ ----------
<S> <C>
ACE Enterprise Dual CPU $200,000
ACE Enterprise Single CPU $100,000
ACE Enterprise Server Manager $250,000
ACE Integrated Modeling Environment (IME) $150,000
ACE Quote Server $200,000
</TABLE>
34
<PAGE> 35
EXHIBIT 8 -- TECHNOLOGY ESCROW AGREEMENT
Account Number _____________
This Technology Escrow Deposit Agreement including any Attachments and Addenda
("Agreement") is effective this ____ day of ___________, 19__, by and between
Escrow Holder ("Escrow Holder"), Selectica ("Licensor") and BMW ("Licensee").
Notices to Licensor, Licensee and Escrow Holder should be sent to the parties as
identified in the attached Attachment A.
WHEREAS, Licensor and Licensee have entered into a WebSite Design and
Development Services Agreement of even date herewith (the "License Agreement");
WHEREAS, Licensor and Licensee desire this Technology Escrow Agreement to be
supplementary to said contract pursuant to 11 U.S.C. Section 365(n);
WHEREAS, availability of or access to certain proprietary data relating to the
proprietary technology and other materials is critical to Licensee in the
conduct of its business;
WHEREAS, Licensor has deposited or will deposit with Escrow Holder the related
proprietary data to provide for retention and controlled access for Licensee
under certain specified conditions:
NOW THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, and in consideration of the promises, mutual covenants and
conditions contained herein, the parties hereto agree as follows:
1. LICENSOR DEPOSIT ACCOUNT.
Following the execution of this Agreement and the payment of the set-up and
deposit fees to Escrow Holder, Escrow Holder shall open a "Deposit Account"
for Licensor. The items placed in the Deposit Account constitute the
"Deposit." The opening of the Deposit Account means that Escrow Holder
shall establish an account ledger in the name of the Licensor and that
Licensor shall receive renewal notices as provided in Section 7. Unless and
until Licensor makes an Initial Deposit (as defined below) with Escrow
Holder, Escrow Holder shall have no obligation to Licensor except as
defined by this Section.
2. INITIAL DEPOSIT.
The "Initial Deposit" will consist of all material initially supplied by
Licensor to Escrow Holder as specified by an accompanying document called a
"Description of Deposit Materials" hereinafter referred to as an Attachment
B. Escrow Holder shall issue to Licensor and Licensee a copy of the initial
Attachment B within ten (10) days of acceptance by Escrow Holder of the
Initial Deposit.
35
<PAGE> 36
3. DEPOSIT CHANGES.
The Licensor will keep the Deposit updated with supplemental or replacement
materials ("Deposit Changes") to the extent required by the License
Agreement.
(a) Supplemental Deposit. A "Supplemental Deposit" will include any
materials added to the Deposit. Licensor will submit any Supplemental
Deposit accompanied by an Attachment B. Within ten (10) days of
acceptance by Escrow Holder of such Supplemental Deposit, Escrow
Holder shall notify Licensor and Licensee by issuing a copy of the
Attachment B.
(b) Replacement Deposit. "Replacement Materials" replace the existing
Deposit defined by Attachment B(s). Licensor will submit any
Replacement Materials accompanied by an Attachment B. Within ten (10)
days of acceptance by Escrow Holder of such Replacement Materials,
Escrow Holder shall notify Licensor and Licensee by issuing a copy of
the Attachment B. Escrow Holder will destroy or return to Licensor all
materials that are replaced by the Replacement Materials.
4. DEPOSIT INSPECTION.
Upon the receipt of the Initial Deposit materials and any Deposit Changes,
Escrow Holder will visually match the listed items on the Attachment B to
the labeling of such materials. Escrow Holder shall not be responsible for
verifying the contents or validating the accuracy of Licensor's labeling.
Acceptance of the Deposit will occur only when Escrow Holder concludes that
the Deposit Inspection is complete; which acceptance shall not be
unreasonably withheld.
5. LICENSE REGISTRATION ACCOUNT.
Following the execution of this Agreement and the payment of the set-up,
deposit and registration fee to Escrow Holder, Escrow Holder shall open a
"Registration Account" for Licensee. The opening of the Registration
Account means that Escrow Holder shall establish an account ledger in the
name of the Licensee and that Licensee shall receive renewal notices as
provided in Section 7. Unless and until Licensor makes an Initial Deposit
of Materials with Escrow Holder, Escrow Holder shall have no obligation to
Licensee except as defined by this section.
6. DEPOSIT OBLIGATIONS OF CONFIDENTIALITY.
Escrow Holder agrees to establish a receptacle in which it shall place the
Deposit (meaning the Initial Deposit, Supplemental Deposits and Replacement
Deposits to the extent then applicable) and shall put the receptacle under
the control of one or more of its officers, selected by Escrow Holder,
whose identity shall be available to Licensor and Licensee at all times.
Escrow Holder shall exercise a professional level of care in carrying out
the terms of this Agreement.
(a) Escrow Holder acknowledges Licensor's assertion that the Deposit shall
contain proprietary data of Licensor and that Escrow Holder has an
obligation to preserve and protect that confidentiality.
(b) Escrow Holder may duplicate the Deposit only as necessary to preserve
and safely store the Deposit, and to provide copies thereof, as
authorized herein, to Licensee. Escrow Holder shall reproduce on all
copies of the Deposit made by Escrow Holder
36
<PAGE> 37
any proprietary or confidentiality notices contained in the Deposit
originally deposited with it by Licensor.
(c) Except as expressly provided in this Agreement, Escrow Holder agrees
that it shall not divulge, disclose, otherwise make available to third
parties, or make any use whatsoever of the Deposit, or of any
information provided to it by Licensor in connection with this
Agreement, without the express prior written consent of Licensor. This
obligation will continue indefinitely notwithstanding termination of
this Agreement.
7. TERM OF AGREEMENT.
This Agreement will have a term consistent with the term of the License
Agreement. In the event that the renewal fees are not received within
thirty (30) days prior to the expiration date, Escrow Holder shall so
notify Licensor and Licensee of the thirty (30) day expiration period. If
the renewal fees are not received within the subsequent thirty (30) days,
this Agreement will expire without further notice and without liability of
Escrow Holder to the parties of this Agreement. Licensee has the right to
pay renewal fees and other related fees. In the event Licensee pays the
renewal fees and Licensor is of the opinion that any necessary condition
for renewal is not met, Licensor may so notify Escrow Holder, and Licensee
in writing. The resulting dispute will be resolved pursuant to the dispute
resolution process defined in Section 12.
8. EXPIRY.
Except as otherwise expressly provided in this Agreement, upon non-renewal
or other termination of this Agreement, all duties and obligations of
Escrow Holder to Licensor and Licensee will terminate. Thereafter, if
Licensor requests the return of the Deposit, Escrow Holder shall return the
Deposit to Licensor, but only after all outstanding invoices and the
deposit return fees are paid. If the fee(s) are not received by the
anniversary date of this Agreement, Escrow Holder shall, at its option,
destroy or return the Deposit to Licensor.
9. FILING FOR RELEASE OF DEPOSIT BY LICENSEE.
Upon notice to Escrow Holder by Licensee (in the form of an affidavit or
declaration by an officer of Licensee) of the occurrence of a release
condition as defined in Section 24 of the License Agreement, and payment of
the filing for release fee, Escrow Holder shall so notify Licensor by
certified mail with a copy of the notice from the Licensee. If Licensor
provides contrary instruction within ten (10) working days of the mailing
of the notice to Licensor, Escrow Holder shall not deliver the Deposit to
the Licensee except as provided below.
(a) "Contrary instruction" means the filing of an affidavit or declaration
with Escrow Holder by an officer of Licensor stating that a Release
Condition has not occurred, or has been cured. Escrow Holder will send
a copy of the affidavit or declaration by certified mail to the
Licensee who is filing for the release of the Deposit materials. Upon
receipt of contrary instruction, Escrow Holder shall not deliver a
copy of the Deposit and shall continue to store the Deposit until
otherwise directed by Licensor and Licensee jointly, or until
resolution of the dispute pursuant to Section 1.12.
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<PAGE> 38
10. RELEASE OF DEPOSIT TO LICENSEE.
Release conditions are those conditions specified for release of escrow in
Section 24 of License Agreement.
(a) If after following the procedure in Section 9, Escrow Holder does not
receive contrary instruction from Licensor, Escrow Holder is
authorized to release the Deposit, or if more than one Licensee is
registered to the Deposit, a copy of the Deposit, to the Licensee
filing for release following receipt of any fees due to Escrow Holder.
11. CONDITIONS FOR USE FOLLOWING RELEASE.
Following a release as provided in Section 10, Licensee shall have the
non-exclusive right to use the released material as and only as authorized
by Section 24 of the License Agreement. Additionally, Licensee shall be
required to maintain the confidentiality of the released materials and
technology in accordance with the terms of the License Agreement.
12. DISPUTES.
In the event of a dispute as to which this section applies, Escrow Holder
shall so notify Licensor and Licensee in writing. Such dispute will be
settled by arbitration (which arbitration shall be binding and enforceable
in any court of competent jurisdiction for purposes of this Agreement only)
in accordance with the rules of the American Arbitration Association (AAA).
Licensor and Licensee will each select one arbitrator and a third
arbitrator will be selected unanimously by the two arbitrators selected by
the parties. If the two arbitrators selected by the parties are unable to
select the third arbitrator within ten (10) days of the appointment of the
two arbitrators, the parties consent to the selection of the third
arbitrator by the AAA administrator.
13. INDEMNIFICATION.
Licensor and Licensee agree to defend and indemnify Escrow Holder and hold
Escrow Holder harmless from and against all claims, actions and suits,
whether in contract or in tort, and from and against any and all
liabilities, losses, damages, costs, charges, penalties, counsel fees, and
other expenses of any nature (including, without limitation, settlement
costs) incurred by Escrow Holder as a result of performance of this
Agreement except in the event of a judgment or arbitration decision which
specified that Escrow Holder acted with gross negligence or willful
misconduct.
14. AUDIT RIGHTS.
Escrow Holder agrees to keep records of the activities undertaken and
materials prepared pursuant to this Agreement. Licensor and Licensee will
be entitled at reasonable times, during normal business hours and upon
reasonable notice to Escrow Holder, during the term of this Agreement to
inspect the records of Escrow Holder with respect to this Agreement.
(a) Licensor or Licensee will be entitled, upon reasonable notice to
Escrow Holder and during normal business hours, at the facilities
designated by Escrow Holder, accompanied by a designated employee of
Escrow Holder, to inspect the physical
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status and condition (but not contents) of the Deposit. The Deposit
may not be changed by Licensor or Licensee during the audit.
15. DESIGNATED REPRESENTATIVE.
Licensor and Licensee each agree to designate one individual to receive
notices from Escrow Holder and to act on behalf of Licensor and Licensee
respectively with respect to the performance of their obligations as set
forth in this Agreement and to notify Escrow Holder immediately, in the
manner stipulated in Attachment A, in the event of any change from one
designated representative to another.
16. GENERAL.
Subject to the terms of this Agreement, Escrow Holder may act in reliance
upon any written instruction, instrument, or signature reasonably believed
to be genuine and may assume that any person giving any written notice,
request, advice or instruction in connection with or relating to this
Agreement has been duly authorized to do so. Escrow Holder is not
responsible for failure to fulfill its obligations under this Agreement due
to causes beyond its control.
(a) This Agreement is to be governed by, and construed in accordance with
the laws of the State of California without regard to the conflicts of
laws provisions thereof.
(b) Except for the License Agreement, this Agreement, including the
Attachments and Addenda hereto, constitutes the entire Agreement
between the parties concerning the subject matter hereof, and will
supersede all previous communications, representations,
understandings, and agreements, either oral or written, between the
parties. Licensor and Licensee acknowledge that Escrow Holder has no
knowledge of the terms and conditions contained in the License
Agreement and that Escrow Holder's only obligations shall be as set
forth herein or in any other writing signed by Escrow Holder, Licensor
and Licensee.
(c) If any provision of this Agreement is held by any court to be invalid
or unenforceable, that provision will be limited or severed from this
Agreement to the minimum extent necessary so that this Agreement shall
otherwise remain in full force and effect and enforceable.
17. FEES.
All service fees will be due in full at the time of the request for
service. Renewal fees will be due in full upon the receipt of invoice
unless otherwise specified by the invoice. For the purpose of annual
renewal fees the effective date of this Agreement will be the anniversary
date. Invoiced fees must be paid within sixty (60) days of receipt of
invoice or Escrow Holder may terminate this Agreement. If payment is not
timely received by Escrow Holder, Escrow Holder shall have the right to
accrue and collect interest at the rate of one and one-half percent per
month (18% per annum) from the date of invoice for all later payments, or,
if lower, the maximum rate allowed by law.
All fees will be those specified in Escrow Holder's standard Schedule of Fees in
effect at the time of renewal, or request for service, except as otherwise
agreed. For any increase in Escrow Holder's standard fees, Escrow Holder shall
notify Licensor and Licensee at least ninety (90) days prior to any renewal of
this Agreement. For any service not listed on the Schedule of Fees, Escrow
Holder shall provide a quote prior to rendering such service.
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LICENSOR:
----------------------------------------
Dated:
----------------------------------------
By:
----------------------------------------
(Print Name)
----------------------------------------
Title
LICENSEE:
----------------------------------------
Dated:
----------------------------------------
By:
----------------------------------------
(Print Name)
----------------------------------------
Title
ESCROW HOLDER:
----------------------------------------
Dated:
----------------------------------------
By:
----------------------------------------
(Print Name)
----------------------------------------
Title
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ATTACHMENT A
TECHNOLOGY ESCROW AGREEMENT
<TABLE>
<S> <C>
Account Number ______
Notices to Licensor Regarding
Agreement Terms and Conditions should
be addressed to: Invoices should be addressed to:
Licensor:
- ------------------------------------- -------------------------------------
Address:
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
Designated
Representative:
---------------------- -------------------------------------
Phone:
------------------------------- -------------------------------------
Notices to Licensee Regarding
Agreement Terms and Conditions
should be addressed to: Invoices should be addressed to:
Licensee:
- ------------------------------------- -------------------------------------
Address:
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
Designated
Representative:
---------------------- -------------------------------------
Phone:
------------------------------- -------------------------------------
</TABLE>
All requests from Licensor or Licensee to change the designated representative
must be given in writing to the other parties and signed by an officer of
Licensor or Licensee as the case may be.
<TABLE>
<S> <C>
All Contracts, Deposit Materials
and Official Notifications to Invoice Inquiries and Remittance of
Escrow Holder should be addressed to: Fees to Escrow Holder addressed to:
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
</TABLE>
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ATTACHMENT B
Description of Deposit Materials
Deposit Account Number
--------------------------------------------------------
Deposit Account Name
--------------------------------------------------------
Licensor, pursuant to a Deposit Agreement, hereby deposits the below described
materials into the above referenced Deposit Account by providing them to Escrow
Holder. The Deposit Type is: (check box that applies)
___ Initial Deposit ___ Supplemental ___ Replacement
If Replacement then Destroy Deposit ___ or Return Deposit ____
If no Deposit Type has been checked the materials will be deemed to be an
Initial or Supplemental Deposit.
DEPOSIT MATERIALS
<TABLE>
<S> <C>
Name Version
--------------------------------------- ------------------
Date CPU/OS Compiler
--------------------------------------- ----- -------
Application
-------------------------------
Utilities needed
--------------------------
Special operating instructions
-------------
- -------------------------------------------
I certify that the above described
materials were delivered/sent to the Receipt of the materials acknowledged.
Escrow Holder.
By By
----------------------------------- -----------------------------------
Name Name
--------------------------------- ---------------------------------
Title Title
-------------------------------- --------------------------------
For For Escrow Holder
---------------------------------- Date
Date --------------------------------
--------------------------------- ATTACHMENT B NO.
--------------------
</TABLE>
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EXHIBIT 9 - SPECIFICATIONS
The goal of the BMW Virtual Center Application is to provide a better, more
customized online shopping experience for BMW prospects.
Selectica is responsible for the development and deployment of the car
configurator in the Virtual Center and managing the project resources for the
configurator tool. Selectica's responsibilities include the Harvest Database
schema design and implementation, addition of models to the configurator, the
maintenance of the configurator tool and addition of new configuration
capabilities.
The following are the major functions supported in the BMW Virtual Center:
1. THE CAR CONFIGURATOR: The E-46 car configurator allows users to configure
the BMW cars as set forth in Exhibit 1. online on the BMW Web site. The
configurator allows users to correctly pick exterior and interior colors,
packages and trim and other options, guiding customers through appropriate
and available choices, based on previous selections. The customer will be
presented the MSRP pricing. Selectica will deploy the ACE Enterprise
software to facilitate the configuration process.
2. STORE AND RESTORE: Once a car configuration is complete, the user is able
to save the configuration and retrieve it at a later date to work on it
further. Selectica will deploy the ACE Quote Server that handles the saving
and retrieval of configuration quotes. This functionality is required to
enable the Lead Transfer System of the BMW Virtual Center.
3. HARVEST DATABASE SCHEMA DESIGN: In order to effectively maintain the BMW
Virtual Center for configuration of all models, the data for all the models
will need to exist in a central repository. This repository is called the
"Harvest Database". Selectica will design the Harvest Database to include
any information that is required by the Virtual Center configurator.
4. LEAD TRANSFER SYSTEM (PICK A RETAILER): This functionality will permit
prospective customer leads generated on the Virtual Center to be
transferred to BMW, or any BMW designee, or to its Centers and Affiliate
Centers.
5. ALL REMAINING MODELS CONFIGURATION: Selectica will incorporate into the BMW
Virtual Center BMW automobiles as set forth in Exhibit 1 for which the data
is available in Harvest Data Base format or interim database format.
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EXHIBIT 10 - BMW MATERIALS
The HTML template customizations for BMW
(generated by Fallon for tagging by Selectica)
The Harvest Database data and schema
The BMW KBS generated from BMW data and knowledge base schema
Database schema for the Application
Content of server tags specifically designed to accommodate BMW requirements
For purposes of the above, "schema" shall mean the table of fields taken as
a whole as presented on the Application.
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EXHIBIT 11 - MAINTENANCE AGREEMENT
In the event BMW elects to do so, it will negotiate and consummate a separate
Maintenance Agreement.
45
<PAGE> 1
EXHIBIT 10.9
SELECTICA, INC.
MAJOR ACCOUNT LICENSE AGREEMENT
This Agreement, dated as of June 24, 1999 (the "Effective Date"), is
made and entered into by and between Selectica, Inc. "2890 Zanker Road, Suite
101, San Jose, California, 95134 ("SELECTICA"), and Fireman's Fund Insurance
Company, 777 San Marin Drive, Novato, CA 94998-2000 ("Customer"). SELECTICA and
Customer agree as follows:
SECTION 1. DEFINITIONS
Whenever used in this Agreement, the following terms will have the
following specified meanings:
1.1 "DOCUMENTATION" means the documentation specified in Exhibit A
attached hereto and licensed to Customer hereunder, together with any and all
new releases, corrections and updates furnished by SELECTICA to Customer under
this Agreement.
1.2 "SOFTWARE" means the computer software specified in Exhibit A
attached hereto, in object code form, together with any and all Upgrades
furnished by SELECTICA to Customer under this Agreement.
1.3 "UPGRADES" means all releases, updates and corrections of the
Software licensed to Customer hereunder, in object code form, which are
published and generally made commercially available by SELECTICA to its
licensees of the Software with a change in the integer, tenths or hundredths
digit of the version number (e.g., a change form version x.xx to y.xx or x.yx or
x.xy). Upgrades shall not include any release, update or correction that has
been customized by SELECTICA for use by any particular licensee of the Software
or which is made by SELECTICA solely to adopt or reflect the trade dress of any
third party.
SECTION 2. SOFTWARE DELIVERY AND LICENSE
2.1 DELIVERABLES. Upon execution of this Agreement, SELECTICA shall
deliver to Customer one reproducible master copy of the Software licensed
hereunder to Customer, in object code form, and one copy of the Documentation.
2.2 GRANT. SELECTICA hereby grants Customer a nonexclusive,
nontransferable license to:
(a) Install and use the Software ordered by Customer hereunder
for internal processing requirements of Customer on the number of Customer's
servers and/or users then authorized under this Agreement. The number of servers
and/or users
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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<PAGE> 2
initially authorized hereunder is set forth in Exhibit A. Customer may increase
the number of authorized servers and/or users from time to time in unit
quantities and upon payment to SELECTICA of the applicable amount as set forth
in Exhibit B.
(b) Reproduce the Documentation for the Software ordered by
Customer hereunder and/or incorporate all or any portion of the Documentation in
training materials prepared by the Customer, in each case solely for the use of
the Customer and provided that the copyright notices and other proprietary
rights legends of SELECTICA are included on each copy of the Documentation and
such materials.
(c) Reproduce and make one copy of the Software for archival and
backup purposes.
2.3 RESTRICTIONS. Customer shall use the Software and Documentation only
for the purposes specified in section 2.2 and in accordance with the following:
(a) Customer shall not modify or prepare derivative works of the
Software or Documentation except as expressly permitted in Section 2.2;
(b) Customer shall not reverse engineer, disassemble or decompose
the Software, except to the extent that such acts may not be prohibited under
applicable law;
(c) Customer shall not remove, obscure, or alter any notice of
patent, copyright, trade secret, trademark, or other proprietary rights notices
present on any Software Documentation;
(d) Customer shall not sublicense, sell, lend, rent, lease, or
otherwise transfer all or any portion of the Software or the Documentation to
any third party except as may be permitted in Section 9.4 hereof; and
(e) Customer shall not use the Software or the Documentation to
provide services to third parties, or otherwise use the same on a "service
business" basis.
2.4 COMPLIANCE WITH LAWS. SELECTICA and Customer shall each comply with
all applicable laws, regulations, rules, orders and other requirements, now or
hereafter in effect, of any applicable governmental authority, in their
performance of this Agreement. Without limiting the generality of the foregoing,
Customer will comply with all export laws and regulations of the United States
in dealing with the Software including its export and use of the Software
outside the United States.
2.5 PROPRIETARY RIGHTS. The Software Documentation contains valuable
patent, copyright, trade secret, trademark and other proprietary rights of
SELECTICA. Except for the license granted under Section 2.2, SELECTICA reserves
all rights to the Software and Documentation. No title to or ownership of any
Software or proprietary
2
<PAGE> 3
rights related to the Software or Documentation is transferred to Customer under
this Agreement.
2.6 PROTECTION AGAINST UNAUTHORIZED USE. Customer shall promptly notify
SELECTICA of any unauthorized use of the Software or Documentation which comes
to Customer's attention. In the event of any unauthorized use by any of
Customer's employees, agents or representatives, Customer shall use its best
efforts to terminate such unauthorized use and to retrieve any copy of the
Software or Documentation in the possession or control of the person or entity
engaging in such unauthorized use. SELECTICA may, at its option and expense,
participate in any such proceeding and, in such an event, Customer shall provide
such authority, information and assistance related to such proceeding as
SELECTICA may reasonably request.
2.7 RECORDS. Customer shall ensure that each copy it makes of all or any
portion of the Software or the Documentation includes the notice of copyright or
other proprietary rights legends appearing in or on the Software or the
Documentation delivered to Customer by SELECTICA; shall keep accurate records of
the reproduction and location of each copy; and upon request of SELECTICA, shall
provide SELECTICA with complete access to such records and to Customer
facilities, computers and the Software and Documentation for the purpose of
auditing and verifying Customer's compliance with this Agreement.
SECTION 3. SUPPORT SERVICES, TRAINING AND MAINTENANCE
3.1 SUPPORT SERVICES AND TRAINING. Provided Customer has paid SELECTICA
the applicable maintenance fee specified in Exhibit B, SELECTICA will provide
Customer with the maintenance services and training set forth below. SELECTICA
reserves the right to change or discontinue from time to time all or any part of
the services or systems described below
(a) Telephone/Fax Support. For a period of one (1) year after the
date of this Agreement, SELECTICA will provide Customer with telephone support
during the hours of 6 a.m. to 5 p.m. (PST), Monday through Friday, excluding
holidays observed by SELECTICA. SELECTICA will provide after-hours answering
service to record inquiries from Customer and SELECTICA will use reasonable
commercial efforts to respond to any such inquiries within one (1) business day
of receipt. Customer will ensure that only person(s) properly trained in the
operation and usage of the Software and designated by SELECTICA as a contact in
accordance with paragraph 3.1(c) below will utilize such telephone support.
SELECTICA will provide such telephone assistance relation to the (i)
installation and operational use of the Software; (ii) identification and
verification of the causes of suspected errors or malfunctions in the Software;
and (iii) providing of detours for identified Software errors or malfunctions,
where reasonably available to SELECTICA. Further, upon request by SELECTICA,
Customer will allow SELECTICA to perform on-line diagnostics of the Software.
3
<PAGE> 4
(b) Internet Access. SELECTICA shall furnish Customer with access
to (i) SELECTICA's homepage on which SELECTICA will from time to time publish
information regarding any then existing defects and other problems related to
the Software and detours then discovered, together with information about future
Software enhancements and related SELECTICA products and (ii) SELECTICA's
electronic mail system by which Customer may send questions to SELECTICA about
software. SELECTICA will use reasonable efforts to respond to such inquiries
within one (1) business day of receipt. Customer shall be responsible for
procuring at its expense all hardware (including modem) and software necessary
to access SELECTICA's electronic mail system and for paying all telephone and
other charges incurred by Customer in connection with the use of such system.
(c) Training Services. SELECTICA will authorize a maximum of two
Customer employees to contact SELECTICA for telephone and/or fax Support. Each
contact must have completed SELECTICA's Training Course ("Training Course"), and
will be designated as either the primary or backup contact.
3.2 MAINTENANCE. Provided Customer has paid SELECTICA the applicable
maintenance fee specified in Exhibit B, SELECTICA will furnish to Customer
within a reasonable time after publication, one (1) copy of all Upgrades.
3.3 OTHER SERVICES. SELECTICA will furnish to Customer the Software
customization and/or additional maintenance services and/or training identified
in Exhibit C, if any, on the terms and conditions specified therein.
SECTION 4. COMPENSATION
4.1 LICENSE FEE. Customer will pay SELECTICA the Software license fee
specified in Exhibit B.
4.2 MAINTENANCE FEE. In consideration for SELECTICA's services set forth
in Section 3.1 and 3.2, Customer agrees to pay SELECTICA the maintenance fee in
the amount and in accordance with the terms of Exhibit B for the first twelve
(12) month period commencing on the Effective Date. Customer may renew the
services described in Section 3.1 and 3.2 thereafter on an annual basis by
payment of the maintenance fee before the beginning of each new twelve (12)
month period. SELECTICA reserves the right to change the maintenance fee from
time to time after the end of the first twelve (12) month period after the
Effective Date. SELECTICA shall give Customer at least sixty (60) days prior
written notice of any such change. SELECTICA reserves the right to charge
Customer a reinstatement fee to resume such maintenance services if Customer has
not continuously maintained such services in effect in accordance with the terms
of this Section 4.2.
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<PAGE> 5
4.3 PAYMENT. All fees, charges and other sums payable to SELECTICA under
this Agreement will be due and payable on the dates specified in Exhibit B, or
within thirty (30) days after invoice date if no date is specified in Exhibit B.
All monetary amounts are specified and shall be paid in the lawful currency of
the United States of America. Customer shall pay all amounts due under this
Agreement to SELECTICA at the address set forth herein or such other location as
SELECTICA designates in writing. Any amount not paid when due will bear interest
at the rate of one and one half percent (1.5%) per month or, the maximum rate
permitted by law, whichever is less, determined and compounded on a daily basis
from the date due until the date paid. All fees, charges and other sums payable
to SELECTICA under this Agreement do not include any sales, use, excise or other
applicable taxes, tariffs or duties (excluding any applicable federal and state
taxes based on SELECTICA's net income), payment of which shall be the sole
responsibility of Customer.
SECTION 5. TERM AND TERMINATION
5.1 TERM. The term of this Agreement and the license set forth in
Section 2.2 shall commence on the Effective Date and shall end upon the
termination of this Agreement pursuant to Section 5.2 or 5.3.
5.2 TERMINATION BY CUSTOMER. Customer may terminate this Agreement and
the license by returning to SELECTICA all copies of the Software and the
documentation in its possession or control, or providing written notice
certifying destruction of such, subject to verification of the same by SELECTICA
to SELECTICA's satisfaction in its sole discretion. Such termination shall not
relieve Customer of any of its outstanding financial obligations to SELECTICA.
5.3 TERMINATION BY SELECTICA. If Customer defaults in the performance of
or compliance with any of its obligations under this Agreement, and such default
has not been remedied or cured within thirty (30) days after SELECTICA gives
Customer written notice specifying the default or, if the nature of the default
is such that more than thirty (30) days are required for the cure thereof, and
Customer fails to commence its effort to cure such breach or default within such
thirty (30) days and to diligently prosecute the same to completion thereafter
to SELECTICA's satisfaction in its sole discretion, SELECTICA may terminate this
Agreement and the license, in addition to its other rights and remedies under
law.
5.4 POST TERMINATION. Upon termination of this Agreement, Customer shall
promptly cease the use of the Software and Documentation and destroy (and in
writing certify such destruction) or return to SELECTICA all copies of the
Software and Documentation then in Customer's possession or control.
5.5 SURVIVAL. Sections 2.5, 4, 5.4, 7, 8 and 9 shall survive the
termination of this Agreement.
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<PAGE> 6
SECTION 6. WARRANTIES AND REMEDIES
6.1 PERFORMANCE WARRANTY AND REMEDY. SELECTICA warrants to Customer that
when operated in accordance with the Documentation and other instructions
provided by SELECTICA, the Software will perform substantially in accordance
with the functional specifications set forth in the Documentation for a period
of ninety (90) days after delivery of the Software to the Customer. If the
Software fails to comply with the warranty set forth in this Section 6.1,
SELECTICA will use reasonable commercial efforts to correct the noncompliance
provided that: Customer notifies SELECTICA of the noncompliance within (90)
ninety days after delivery of the Software to the Customer, and SELECTICA is
able to reproduce the noncompliance as communicated by Customer to SELECTICA. If
after the expenditure of reasonable efforts, SELECTICA is unable to correct any
such noncompliance, SELECTICA may refund to Customer all or an equitable portion
of the license fee paid by Customer to SELECTICA for such Software in full
satisfaction of Customer's claims relating to such noncompliance upon Customer's
return of said Software.
6.2 WARRANTY LIMITATIONS. The warranties set forth in Section 6.1 apply
only to the latest release of the Software made available by SELECTICA to
Customer. Such warranties do not apply to any noncompliance of the software
resulting from misuse, casualty loss, use or combination of the Software with
any products, goods, services or other items furnished by anyone other than
SELECTICA, any modification not made by or for SELECTICA, or any use of the
Software by Customer in contradiction of the terms of this Agreement.
SECTION 7. INTELLECTUAL PROPERTY RIGHTS INDEMNITY
SELECTICA agrees, at its own expense, to defend or, at its opinion, to
settle, any claim or action brought against Customer on the issue of
infringement of any United States copyright or trade secret of any third party
by the Software as used within the scope of this Agreement, and to pay all
damages and costs, including reasonable legal fees, which may be assessed
against Customer under any such claim or action. SELECTICA shall be released
from the foregoing obligation unless Customer provides SELECTICA with (i)
written notice within fifteen (15) days of the date Customer first becomes aware
of such a claim or action, or possibility thereof; (ii) sole control and
authority over the defense or settlement thereof; and (iii) proper and full
information and assistance to settle and/or defend any such claim or action.
Without limiting the forgoing, if a final injunction is, or SELECTICA believes,
in its sole discretion, is likely to be, entered prohibiting the use of the
Software by Customer as contemplated herein, SELECTICA will, at its sole option
and expense, either (a) procure for Customer the right to use the infringing
Software as provided herein or (b) replace the infringing Software with
noninfringing, functionally equivalent products, or (c) suitably modify the
infringing Software so that it is not infringing; or (d) in the event (a), (b)
and (c) are not
6
<PAGE> 7
commercially reasonable, terminate the license, accept return of the infringing
Software and refund to Customer an equitable portion of the license fee paid
therefor. Except as specified above, SELECTICA will not be liable for any costs
or expenses incurred without its prior written authorization. Notwithstanding
the foregoing, SELECTICA assumes no liability for infringement claims arising
from (i) combination of the Software with the other products not provided by
SELECTICA, but not covering the Software alone, or (ii) any modifications to the
Software unless such modification was made by SELECTICA. THE FOREGOING
PROVISIONS OF THIS SECTION 7 STATE THE ENTIRE LIABILITY AND OBLIGATIONS OF
SELECTICA AND THE EXCLUSIVE REMEDY OF CUSTOMER, WITH RESPECT TO ANY ACTUAL OR
ALLEGED INFRINGEMENT OF ANY PATENT, COPYRIGHT, TRADE SECRET, TRADEMARK OR OTHER
INTELLECTUAL PROPERTY RIGHT BY THE SOFTWARE.
SECTION 8. DISCLAIMER WARRANTY AND LIMITATION OF LIABILITY
8.1 DISCLAIMER OF WARRANTIES. EXCEPT AS SET FORTH IN SECTION 6.1,
SELECTICA MAKES NO WARRANTIES WHETHER EXPRESSED, IMPLIED OR STATUTORY REGARDING
OR RELATING TO THE SOFTWARE OR THE DOCUMENTATION OR ANY MATERIALS OR SERVICES
FURNISHED OR PROVIDED TO CUSTOMER UNDER THIS AGREEMENT. SELECTICA SPECIFICALLY
DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSES, AND SATISFACTORY QUALITY WITH RESPECT TO THE SOFTWARE, DOCUMENTATION
AND ANY OTHER MATERIALS AND SERVICES PROVIDED BY SELECTICA HEREUNDER, AND WITH
RESPECT TO THE USE OF THE FORGOING.
8.2 LIMITATION OF LIABILITY. EXCEPT AS SET FORTH IN SECTION 7, IN NO
EVENT WILL SELECTICA BE LIABLE FOR ANY LOSS OF PROFITS, LOSS OF USE, BUSINESS
INTERRUPTION, LOSS OF DATA, COST TO RECOVER, OR FOR ANY INDIRECT, SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND IN CONNECTION WITH OR ARISING
OUT OF THE FURNISHING, PERFORMANCE OR USE OF THE SOFTWARE, DOCUMENTATION OR ANY
MATERIALS OR SERVICES PERFORMED HEREUNDER, WHETHER ALLEGED AS A BREACH OF
CONTRACT OR TORTUOUS CONDUCT, INCLUDING NEGLIGENCE, EVEN IF SELECTICA HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN ADDITION, SELECTICA WILL NOT BE
LIABLE FOR ANY DAMAGES CAUSED BY DELAY IN THE DELIVERY OR FURNISHING OF THE
SOFTWARE, DOCUMENTATION, OR OTHER MATERIALS OR SERVICES. SELECTICA's LIABILITY
UNDER THIS AGREEMENT FOR DAMAGES WILL NOT, IN ANY EVENT, EXCEED THE AMOUNTS PAID
BY THE CUSTOMER TO SELECTICA UNDER THIS AGREEMENT FOR THE ITEMS GIVING RISE TO
SUCH LIABILITY.
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<PAGE> 8
SECTION 9. MISCELLANEOUS
9.1 NONDISCLOSURE OF AGREEMENT. Customer shall not disclose the terms of
this Agreement or the ongoing business relationship initiated by this Agreement
except as required by law or governmental regulation without SELECTICA's prior
written consent, except that customer may disclose the terms of this Agreement
on a confidential basis to Customer's accountants, attorneys, parent
organizations and financial advisors and lenders.
9.2 REFERENCE ACCOUNT. Customer consents to SELECTICA's identification
of Customer as a user of the Software and will cooperate with SELECTICA in
furnishing nonconfidential information about Customer's software use for
informational and promotional use by SELECTICA. No public press releases or
other public forum information exchange about Customer's use of SELECTICA's
Software will be implemented without prior written permission of Customer.
9.3 NOTICES. Any notice or other communication under this Agreement
given by either party to the other will be deemed to be properly given if given
in writing and delivered in person or facsimile, if acknowledged received by
return facsimile or followed within one day by a delivered or mailed copy of
such notice, or if mailed, properly addressed and stamped with the required
postage, to the intended recipient at its address specified in this Agreement.
Either party may from time to time change its address for notices under this
Section by giving the other party notice of the change in accordance with this
Section 9.3.
9.4 ASSIGNMENT. Customer may not assign (directly, by operation of law
or otherwise) this Agreement or any of its rights under this Agreement without
the prior written consent of SELECTICA except that Customer may assign all, but
not part, of this Agreement and the Software and Documentation then in its
possession or control to the successor of Customer in a merger or other similar
corporate reorganization outside of the course of Customer's normal business
operations or to the purchaser of substantially all of Customer's assets,
provided such successor or purchaser agrees in writing to comply with the terms
of this Agreement. Subject to the foregoing, this Agreement is binding upon,
inures to the benefit of and is enforceable by the parties and their respective
successors and assigns.
9.5 NONWAIVER. Any failure of either party to insist upon or enforce
performance by the other party of any of the provisions of this Agreement or to
exercise any rights or remedies under this Agreement will not be interpreted or
construed as a waiver or relinquishment of such party's right to assert or rely
upon such provision, right or remedy in that or any other instance.
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<PAGE> 9
9.6 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement,
and supersedes any and all prior agreements, between SELECTICA and Customer
relating to the Software, Documentation, services and other items subject to
this Agreement. No amendment of this Agreement will be valid unless set forth in
a written instrument signed by both parties.
9.7 GOVERNING LAW AND ARBITRATION. The rights and obligations of the
parties under this Agreement shall not be governed by the 1980 UN Convention on
Contracts for the International Sale of Goods, but instead shall be governed by
and construed under the laws of the State of California, including its Uniform
Commercial Code, without reference to conflict of laws principles. Any dispute
or claim arising out of or in connection with this Agreement or the performance,
breach, or termination thereof, shall be finally settled by arbitration in San
Jose, California by three arbitrators under the rules of arbitration of (i) the
International Chamber of Commerce, if Customer's address set forth herein is
outside the United States, or (ii) by the American Arbitration Association if
such address is in the United States. Judgment on the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof.
Notwithstanding the foregoing, either party may apply to any court of competent
jurisdiction for injunctive relief without breach of this arbitration process.
9.8 LANGUAGE. This Agreement is in the English language only, which
language shall be controlling in all respects, and all versions hereof in any
other language shall not be binding to the parties hereto. All communications
and notices to be made or given pursuant to this Agreement shall be in the
English language.
9.9 APPLICABILITY OF PROVISIONS LIMITING SELECTICA'S LIABILITY. The
provisions of this Agreement under which the liability of SELECTICA is excluded
or limited, shall not apply to the extent that such exclusions or limitations
are declared illegal or void under any applicable laws, unless the illegality or
invalidity is cured under such laws by the fact that the law of California
governs this Agreement.
9.10 YEAR 2000 COMPLIANCE WARRANTY. SELECTICA represents and warrants
that the Software as delivered will operate prior to, during, and after, the
calendar year 2000 A.D. without error relating to date data, specifically
including but not limited to any error relating to calculations, sorting,
interpretation, processing or acceptance of date data which represents or
references different centuries or more than one century, provided that all
hardware, firmware and other software used in conjunction with the Software
properly exchanges accurate and properly formatted date data with the Software.
The Year 2000 Compliance Warranty set forth in this Section shall begin as of
the date of this Agreement and end on the date after January 1, 2000, subsequent
to which the Software has operated without a breach of the Year 2000 Compliance
Warranty for a consecutive six month period (the "Year 2000 Warranty Period").
If the Software fails to comply with the warranty set forth in this Section 12,
SELECTICA will use reasonable commercial efforts to correct the noncompliance,
provided that Customer notifies SELECTICA of the noncompliance within the Year
2000 Warranty Period, and
9
<PAGE> 10
SELECTICA is able to reproduce the noncompliance as communicated by Customer to
SELECTICA. If after the expenditure of reasonable efforts, SELECTICA is unable
to correct any such noncompliance, SELECTICA may refund to Customer all or an
equitable portion of the license fee paid by Customer to SELECTICA for such
Software in full satisfaction of Customer's claims relating to such
noncompliance upon Customer's return of said Software.
9.11 SOURCE CODE ESCROW
SELECTICA agrees to keep, and maintain current, a copy of the source code and
relevant materials (hereinafter referred to as "Escrow Materials") for the
Software in Escrow with Fort Knox (the "Escrow Agent"). A copy of the Escrow
Materials for each maintenance release or new version of the Software licensed
hereunder will also be delivered to the Escrow Agent to be held in escrow;
provided, however, that SELECTICA need not update the Escrow Materials more
frequently than either twice per year or upon release of a new version of the
Software.
SELECTICA shall enter into an agreement with the Escrow Agent, under
which Customer shall be a beneficiary, setting out the terms of this Section
9.11, and further providing that upon notification by Customer of the occurrence
of an event described in Paragraph (a) below and Customer's requesting delivery
of the Escrow Materials, the Escrow Agent shall give notice thereof to
SELECTICA. If SELECTICA does not challenge the request within thirty (30) days
of receipt of such notice, the Escrow Agent may proceed; otherwise, the matter
shall be referred to arbitration, as described in the escrow agreement.
(a) SELECTICA's agreement with the Escrow Agent shall provide that a
copy of the Escrow Materials for the Software will be delivered to Customer by
the Escrow Agent in the event that (i) SELECTICA (or its successors or assigns)
ceases doing business as a going concern, (ii) an involuntary bankruptcy
petition is not discharged within sixty (60) days after SELECTICA receives
notice of the filing of the petition or (iii) SELECTICA discontinues supporting
the software for any reason.
(b) Upon delivery of the Escrow Materials to Customer, Customer shall
have a nontransferable, nonexclusive license to use the Escrow Materials to
support and maintain the Software for existing sublicenses and for no other
purpose Customer shall retain a right to deploy additional licenses for use
subject to the license provisions of this agreement. SELECTICA shall retain all
ownership right, title and interest in and to the Escrow Materials, including
all patents, copyrights, trademarks, trade secrets and other intellectual
property rights inherent therein. Customer shall maintain the Escrow Materials
in the strictest confidence and disclose them to employees only as necessary to
exercise its rights granted herein. The object code derived from the source code
is subject to the same restrictions as apply to the Software distributed under
this Agreement.
10
<PAGE> 11
9.12 FORCE MAJEURE. Neither party will be liable for, or be considered
to be in breach of or default under this Agreement, other than monetary
obligations, as a result of any cause or condition beyond such party's
reasonable control.
9.13 ACCEPTANCE. Neither this Agreement nor any of its EXHIBITs will
become effective until accepted by SELECTICA at its offices in San Jose,
California.
In Witness whereof, the parties have executed this Agreement by their duly
authorized representatives.
AMENDMENT DATED JUNE 17, 1999 IS ATTACHED HERETO
SELECTICA, INC. Fireman's Fund Insurance Company
--------------------------------------------
("SELECTICA) ("Customer")
By: /s/ CHARLES B. PENDELL By: /s/ STEPHEN LEVANDOWSKI
---------------------- -----------------------
Print name: Charles B. Pendell Print name: Stephen Levandowski
---------------------- ----------------------
Title: VICE PRESIDENT, SALES Title: VP, LID SYSTEMS
---------------------- ----------------------
Date: 6-27-99 Date: 6-24-99
---------------------- ----------------------
Address: 2890 Zanker Road Address: 777 San Maria Dr
---------------------- ----------------------
Suite 101 Novato, CA 94998
---------------------- ----------------------
San Jose, CA 95134
---------------------- ----------------------
Telephone #: (408) 570-9700 Telephone #: (415) 899-4932
---------------------- ----------------------
Facsimile #: (408) 570-9705 Facsimile #: (415) 899-6048
---------------------- ----------------------
11
<PAGE> 12
EXHIBIT A
DESCRIPTION OF SOFTWARE AND DOCUMENTATION
LICENSED SERVERS
Description Quantity Licensed
- -------------------------------------------------------------------------------
ACE Enterprise, including Documentation
Single CPU ______________
Dual CPU One
Single CPU-Test and Development One
Server Manager ______________
ACE Quoter, including Documentation
Single CPU ______________
Dual CPU One
ACE Connector, including Documentation______________
LICENSED USERS
ACE Studio - Number of Licensed Users
Including Documentation Six
ACE Mobile - Number of Licensed Users
Including Documentation ______________
SELECTICA agrees to complete certification of the Selectica ACE Enterprise and
Selectica ACE Quoter products running on International Business Machines AIX
platform within sixty (60) days of Effective Date. Customer agrees to assist
SELECTICA in this certification process by gaining SELECTICA access to an IBM
AIX server for certification purposes.
12
<PAGE> 13
EXHIBIT B
LICENSE AND MAINTENANCE FEES
1. License Fee.
<TABLE>
<CAPTION>
<S> <C>
ACE Enterprise Server - Dual Processor $[*]
ACE Quote Server-Dual Processor $[*]
ACE Studio (6 pack) $[*]
ACE Enterprise Test and Development Server $[*]
Total Software License Fee $[*]
</TABLE>
2. Maintenance Fee. Maintenance fees are equal to [*]% of the current published
product license list price, and are due in advance on an annual basis.
Maintenance fees for the use of the Software on any additional servers or
workstations licensed subsequent to the Effective Date will be payable
concurrently with the additional server or user license fee on a pro-rated
annual basis.
Annual maintenance and upgrade support $[*]
3. On-site Training Class - Five Day Class, up to ten (10) attendees: $[*]
plus expenses
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
13
<PAGE> 14
AMENDMENT TO
THE SELECTICA, INC. MAJOR ACCOUNT LICENSE AGREEMENT
BY AND BETWEEN
SELECTICA, INC.
AND
FIREMAN'S FUND INSURANCE COMPANY
Amendment Dated June 17, 1999
The Selectica, Inc. Major Account License Agreement ("Agreement") by and between
Selectica, Inc. ("Selectica") and Fireman's Fund Insurance Company ("Customer")
is hereby amended in the following respects.
1. In the second line of (a) of 2.2 Grant after "Customer" insert "and
Customer's subsidiaries"
2. Delete the last three lines of 2.7 Records beginning with "and" and ending
with "Agreement"
3. Delete the last sentence of the first paragraph of 3.1 Support Services
and Training and replace it with "With the mutual agreement of the parties,
Selectica may change or discontinue from time to time all or any part of the
services or systems described below"
4. In the second line of (c) Training Services of 3.1 Support Services and
Training after "employees" insert "and their designated backups"
5. Insert as a new "3.4 User Groups: Selectica agrees to introduce Customer
to other Selectica customers upon request by Customer for the purposes of
formation of a Selectica users group."
6. In the second line of 4.2 Maintenance Fee before "Customer" insert
"Selectica shall invoice for and"
7. In the fourth line of 4.2 Maintenance Fee delete "on the Effective Date"
and replace it with "immediately after the expiration of the ninety day warranty
as stated in 6.1 Performance Warranty and Revenue"
8. Delete the second and third sentences of 4.2 Maintenance Fee and replace
it with "After the first twelve month period commencing immediately after the
expiration of the ninety day warranty as stated in 6.1 Performance Warranty and
Revenue, the term of maintenance shall automatically renew for successive annual
terms unless Customer provides Selectica with written notice of termination of
maintenance at least thirty days prior to the commencement of any annual renewal
maintenance term. Selectica reserves the right to change the maintenance fee
effective at the beginning of any annual renewal term of maintenance but in no
event shall the annual maintenance fee exceed the immediately preceding year's
annual maintenance by more than five percent or the increase in the U.S.
Consumer Price Index published by the U.S. Bureau of Labor Statistics during the
twelve month period immediately preceding such notice to the Customer, whichever
is the lesser of the two. Selectica shall invoice Customer for any annual
maintenance fee as stated in Exhibit B. In the event that Customer terminates
maintenance under this Agreement such maintenance termination shall not affect
the license grant to the Customer for the Software as provided herein."
1
<PAGE> 15
9. Delete the first sentence of 4.3 Payment and replace it with "All fees,
charges and other sums payable to Selectica under this Agreement will be
invoiced to Customer in accordance with the invoicing schedule in Exhibit B and
Customer shall pay such invoices within thirty days of receipt."
10. Delete the fourth sentence of 4.3 Payment.
11. Delete the last sentence of 4.3 Payment and replace it with "Selectica
shall invoice for, and Customer will pay, as hereinafter stated, all taxes
lawfully levied arising out of this Agreement, exclusive, however, of taxes
based on Selectica's income, and franchise taxes, or taxes on any withholding at
the source obligation of Selectica which taxes shall be paid by Selectica.
Customer shall pay such invoices within thirty days of receipt."
12. Delete the paragraph of 5.3 Termination by Selectica and replace it with
"In the event of any material breach of this Agreement by either party hereto,
the other party may (reserving cumulatively all other remedies and rights under
this Agreement and in law and in equity) terminate this Agreement in whole or in
part by giving thirty (30) days' prior written notice thereof; provided,
however, that this Agreement shall not terminate at the end of said thirty (30)
days' notice period if the party in breach has cured the breach of which it has
been notified prior to the expiration of said thirty (30) days."
13. At the end of 5.5 Survival after "Agreement" insert "for a period of five
years"
14. In the third line of 6.1 Performance Warranty and Remedy before
"instructions" insert "written" and delete "substantially"
15. In the fifth line of 6.1 Performance Warranty and Remedy delete "delivery"
and replace it with "installation"
16. In the sixth and seventh lines of 6.1 Performance Warranty and Remedy
delete the phrase "use reasonable commercial efforts to" and replace it with "at
no additional cost to Customer"
17. In the eighth line of 6.1 Performance Warranty and Remedy delete "delivery"
and replace it with "installation"
18. Delete the last sentence that starts with "If after the expenditure" of 6.1
Performance Warranty and Remedy.
19. To 6.1 Performance Warranty and Remedy add "Selectica warrant to Customer,
subject to interruption via court order, that: (a) Selectica has the right to
license the Software covered hereunder; (b) Customer shall quietly and
peacefully possess the items of Software covered hereunder subject to and in
accordance with the provisions of this Agreement; (c) Customer's use and
possession of such Software will not be interrupted or otherwise distributed by
any person asserting a claim under or through Selectica"
20. In the second line of Section 7 Intellectual Property Rights Indemnity
after Customer insert "its parent, their subsidiary and affiliated companies"
21. In the fifth line of Section 7 Intellectual Property Rights Indemnity after
Customer insert "its parent, their subsidiary and affiliated companies"
22. After the first sentence of Section 7 Intellectual Property Rights
Indemnity insert "Selectica further agrees to indemnify and hold Customer, its
parent, their subsidiary and
2
<PAGE> 16
affiliated companies, harmless from and against any and all liabilities,
losses, damages, costs and expenses (including reasonable attorneys' fees)
associated with any such claim or action incurred by Customer in accordance with
this Section."
23. In the second sentence of Section 7 Intellectual Property Rights
Indemnity delete the phrase "Selectica shall be released from the foregoing
obligation unless" and delete "provides" and replace it with "shall provide"
24. In (iii) of the second sentence of Section 7 Intellectual Property Rights
Indemnity after "assistance" insert "at Selectica's expense."
25. In the third sentence of Section 7 Intellectual Property Rights Indemnity
delete the phrase "an equitable portion of"
26. In the first line of 8.1 Disclaimer of Warranty after 6.1 insert "AND
SECTION 9.10"
27. Delete the last sentence of 8.2 Limitation of Liability and replace it
with "SELECTICA SHALL BE LIABLE FOR AND SHALL INDEMNIFY AND HOLD CUSTOMER
HARMLESS AGAINST ANY LOSS OR DAMAGE ARISING FROM THE FAULT OR NEGLIGENCE OF
SELECTICA, ITS OFFICERS, EMPLOYEES, AGENTS AND REPRESENTATIVES. CUSTOMER SHALL
BE LIABLE FOR AND SHALL INDEMNIFY AND HOLD SELECTICA HARMLESS AGAINST ANY LOSS
OR DAMAGE ARISING FROM THE FAULT OR NEGLIGENCE OF CUSTOMER, ITS OFFICERS,
EMPLOYEES, AGENTS AND REPRESENTATIVES. IN NO EVENT SHALL CUSTOMER BE LIABLE FOR
INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES. NOTWITHSTANDING THE
FOREGOING IN THIS PARAGRAPH, EXCEPT FOR ANY SELECTICA LIABILITY UNDER SECTION
6.1, SECTION 7, SECTION 9.10, SECTION 9.14 AND ANY SELECTICA LIABILITY FOR
PERSONAL INJURY AND PROPERTY DAMAGE, SELECTICA'S LIABILITY UNDER THIS AGREEMENT
FOR DAMAGES WILL NOT, IN ANY EVENT, EXCEED THE AMOUNTS PAID BY THE CUSTOMER TO
SELECTICA UNDER THIS AGREEMENT AND THE MASTER AGREEMENT FOR CONSULTING
SERVICES."
28. In the fifth line of 9.1 Nondisclosure of Agreement after "organizations"
insert "subsidiaries"
29. Delete the paragraph of 9.2 Reference Account and replace it with
"Selectica shall not use the name and/or logo or Customer, its parent, their
subsidiary or affiliated companies in any publicity releases, promotional
materials, announcements, customer listing, testimonials or advertising without
securing prior written approval of Customer. The parties hereby agree to the
joint issuance of a press release announcing this Agreement with the content of
such press release to be mutually agreed to by the parties."
30. At the end of 9.4 Assignment add "Selectica many not assign (directly, by
operation of law or otherwise) this Agreement or any of its rights under this
Agreement without the prior written consent of Customer except that Selectica
may assign all, but not part, of this Agreement to the successor of Selectica in
a merger or other similar corporate reorganization outside of the course of
Selectica normal business operations or to the purchaser of substantially all of
Selectica's assets, provided such successor or purchaser agrees in writing to
comply with the terms of this Agreement. Subject to the
3
<PAGE> 17
foregoing, this Agreement is binding upon, inures to the benefit of and is
enforceable by the parties and their respective successors and assigns."
31. In the title of 9.7 delete "and Arbitration"
32. In the first sentence of 9.7 Governing Law delete the phrase "including
its Uniform Commercial Code"
33. Delete the second, third and fourth sentences of 9.7 Governing Law.
34. Delete the second sentence of 9.10 Year 2000 Compliance Warranty and
replace it with "The Year 2000 Compliance Warranty set forth in this section
shall begin as of the effective date of this Agreement and shall continue until
the Agreement is terminated as provided herein."
35. In the third sentence of 9.10 delete 12 and replace it with 9.10 and
delete the phrase "use reasonable commercial efforts to" and delete the phrase
"within the Year 2000 Compliance Warranty"
36. Delete the fourth sentence of 9.10 Year 2000 Compliance Warranty.
37. At the beginning of the first paragraph of 9.11 Source Code Escrow
insert "At no additional cost to Customer"
28. In the third line of (b) of 9.11 Source Code Escrow delete "for
existing sublicenses"
39. At the end of 9.12 Force Majeure add "Performance times under this
Agreement shall be considered extended for a period of time equivalent to the
time lost because of any delay which is excusable under this Section. If any
such excusable delay shall last for a period of more than sixty (60)
consecutive calendar days, the party not relying on the excusable delay, at its
option, may terminate this Agreement without financial liability or penalty of
any kind. Both parties will remain liable for any costs and expenses already
incurred, services performed or items invoiced and delivered at time of
termination."
40. AS a new 9.14 Customer Confidential Information add "During the term of
this Agreement and for a period of five (5) years from either the date of
expiration or date of termination of this Agreement, whichever occurs later,
Selectica will regard and preserve as confidential all information related to
the business of Customer, its parent, their subsidiary and affiliated
companies, or its or their clients, that may be obtained by Selectica from any
source as a result of this Agreement. Selectica will not, without first
obtaining Customer's written consent, disclose to any person, firm, or
enterprise, or use for its benefit, any information relating to the pricing,
methods, processes, financial data, lists, apparatus, statistics, programs,
research, development or related information of Customer, its parent, their
subsidiary or affiliated companies, or its or their clients, concerning past,
present or future business activities of said entities."
41. At the beginning of the first sentence of the last paragraph of Exhibit
A insert "At no additional cost to Customer"
42. To the last paragraph of Exhibit A add "In addition, at no additional
cost to Customer, Selectica shall ensure that the Software supports DB2
databases. The Software is being delivered to Customer in the NT version."
4
<PAGE> 18
43. To 1 License Fee of Exhibit B add "The Total Software License fee shall
be invoiced by Selectica to Customer after delivery of the Software to
Customer. The delivery date for the Software is June 30, 1999. Selectica shall
not deliver the Software prior to the delivery date for the Software."
44. In Exhibit B delete the first sentence of 2 Maintenance Fee and replace
it with "The maintenance fee for the first twelve month period of maintenance
shall be invoiced by Selectica to Customer after expiration of the ninety day
warranty period. Selectica shall invoice Customer for any annual maintenance
fee thereafter no earlier than thirty days prior to the commencement date of
the applicable annual maintenance renewal term."
45. After "support" in 2 Maintenance Fee of Exhibit B insert "for the first
twelve month maintenance period maintenance fee"
46. At the beginning of 3 of Exhibit B insert "At Customer's option, in
accordance with the terms of the Master Agreement for Consulting Services
attached hereto as Exhibit C, Customer may order"
In the event of any inconsistency between the terms of the Agreement and the
terms of this Amendment, this Amendment will prevail in all respects.
IN WITNESS WHEREOF, the parties hereto each acting under due and proper
authority have executed this Amendment as of the day, month and year written
below.
SELECTICA, INC. FIREMAN'S FUND INSURANCE COMPANY
By [Signature Illegible] By [Signature Illegible]
---------------------------------- -------------------------------------
Title Vice President, Sales Title VP, CID Systems
------------------------------- ----------------------------------
Date 6-23-99 Date 6-24-99
------------------------------- ----------------------------------
APPROVED
AS TO FORM
GCO/CONTRACTS
Jan
-------------
5
2
<PAGE> 19
EXHIBIT C
ADDITIONAL SERVICES AND TRAINING
SEE ATTACHED MASTER AGREEMENT FOR CONSULTING SERVICES.
14
<PAGE> 20
MASTER AGREEMENT FOR CONSULTING SERVICES
THIS MASTER AGREEMENT FOR CONSULTING SERVICES is made and entered into as of
June 16, 1999 by and between Fireman's Fund Insurance Company, (hereinafter
referred to as "Customer") and Selectica, Inc. (hereinafter referred to as
"Consultant").
ARTICLE 1
GENERAL DESCRIPTION OF OBJECTIVES AND SCOPE OF SERVICES
1.1 Consultant agrees to provide to Customer those technical assistance
and/or related services as are described on any Schedules attached hereto (the
"Schedules"). In the event of any conflict between the terms and conditions of
this Agreement and the terms and conditions of any Schedule, the terms of such
Schedule shall govern.
1.2 A statement of the scope of work (the "Statement") shall be attached
to each Schedule as an Attachment A and shall be incorporated therein and made
a part thereof.
1.3 The scope of Consultant's work effort must be coordinated with the
appropriate personnel designated by Customer and shall at all times be subject
to the parameters established by Customer from time to time.
ARTICLE 2
FEES
2.1 Consultant agrees to invoice Customer, monthly in arrears (unless
otherwise stated in the Schedule), for the services provided to Customer by
Consultant under any Schedule in accordance with the rate(s) set forth in the
Schedule.
2.2 The charges invoiced to Customer by Consultant in accordance with
this Article 2, except for any amounts disputed by Customer, shall be payable
by Customer within thirty (30) days of Customer's receipt of each said invoice.
In the case of a dispute between Customer and Consultant over charges that have
been billed to Customer, Customer may withhold amounts equal to the disputed
amount from Consultant billings until the parties settle such dispute.
Consultant shall continue to perform all of its obligations under the Agreement
during any period in which Customer withholds any disputed portion of
Consultant's bills. All invoices shall include Consultant's tax identification
number.
2.3 There shall be added to any charges under this Agreement amounts equal
to any applicable taxes, however designated, levied or based on such charges or
on this Agreement for the services rendered hereunder, including, but not
limited to, sales and use taxes, state and local privilege or excise taxes
based on revenue or sales, and any taxes, or amounts in lieu thereof, paid or
payable by Consultant in respect to the foregoing, exclusive of taxes based on
the income of Consultant and/or any taxes on any withholding at the source
obligation of Consultant which shall be the responsibility of Consultant.
ARTICLE 3
CONSULTANT EMPLOYEE
3.1 In the event that the Consultant employee assigned to perform
services under any Schedule is unacceptable to Customer, for performance
reasons Customer shall notify Consultant of such fact in writing and the named
employee shall be forthwith removed from performing services under that
Schedule. Customer is the sole judge as to performance capability. In the event
that the Consultant
<PAGE> 21
employee assigned to perform services under any Schedule is found to be not
acceptable to Customer for any other reason, Customer shall notify Consultant
of such fact and Consultant shall immediately take appropriate corrective
action. In the event that any such corrective action requires such Consultant
employee to be removed by Consultant from performing services for Customer
hereunder, Consultant agrees to promptly provide a qualified replacement, if
requested by Customer.
3.2 Consultant agrees to use its reasonable efforts to insure the
continuity of the Consultant employee assigned to perform services under any
Schedule. Any reassignment by Consultant of the employee assigned to perform
services under any Schedule must be with Customer's prior written consent, such
consent not to be unreasonably withheld. In the event Consultant replaces the
employee assigned to perform services under any Schedule, Consultant will
provide a replacement acceptable to Customer as soon thereafter as is
reasonably possible.
3.3 Personnel supplied by Consultant hereunder are the employees of
Consultant and are not Customer's personnel or agents, and Consultant assumes
full responsibility for their acts. Consultant shall be solely responsible for
the payment to the Consultant employees assigned to perform services hereunder,
of compensation (including the withholding and remitting of income taxes,
social security taxes and Medicare taxes; providing for workers' compensation,
disability insurance benefits, unemployment insurance benefits, and the like);
and any and all claims of lawsuits made by Consultant's employees relating to
their employment by Consultant. Consultant shall inform its employees that they
are not entitled to any Customer employee benefits.
ARTICLE 4
TITLE
4.1 It is understood that Consultant's development of all deliverables to
be provided hereunder is to be a "work made for hire" within the meaning of 17
United States Code Section 101 as it may be amended from time to time. All
rights, including all copyright ownership rights, in the deliverables to be
provided hereunder shall be the sole and exclusive property of Customer. It is
further understood that Consultant hereby transfers and assigns to Customer any
and all interests or rights that Consultant has, or may acquire, in all
deliverables to be provided hereunder, including, but not limited to, copyright
rights and protection under 17 United States Code Section 106 as it may be
amended from time to time. It is further understood that Consultant, its
employees, agents, and/or representatives shall not copyright, patent, trade
secret, use, sell or distribute the deliverables to be provided hereunder.
4.2 The Consultant shall give Customer and any person designated by
Customer, at Customer's expense, such reasonable assistance as may be required
to perfect the rights described in this Article 4.
4.3 The Consultant shall immediately upon the effective date of
completion or termination of each Schedule turn over to Customer all materials
developed pursuant to such Schedule including, but not limited to, working
papers, narrative descriptions, reports and data.
ARTICLE 5
CONFIDENTIAL INFORMATION
5.1 Confidential information shall mean any information obtained by
Consultant, from or disclosed to Consultant by Customer which relates to the
past, present and future research, development and business activities of
Customer (or any of Customer's divisions, parent, subsidiaries or affiliated
companies) under any Schedule. Consultant shall hold all such confidential
information in trust and confidence for Customer during the term of this
Agreement and for a period of five (5) years from the
<PAGE> 22
date of its acquisition by Consultant and, except as may be authorized by
Customer in writing, Consultant shall not disclose to any person, firm or
enterprise, or use for its benefit, any such confidential information. Upon
termination of this Agreement, Consultant shall deliver to Customer all items
including, but not limited to, drawings, blueprints, descriptions, or other
papers or documents, which may contain any such confidential information. The
parties agree that information is not confidential and Consultant shall have no
obligation with respect to particular information to the extent, but only to the
extent, that such information: (a) is already known to Consultant at the time it
is obtained by Consultant from Customer, free from any obligation to keep such
information confidential; (b) is or becomes publicly known through no wrongful
act of Consultant; (c) is rightfully received from a third party without
restriction and without breach of this Agreement; or (d) is independently
developed by Consultant without use of any confidential information of Customer.
ARTICLE 6
WARRANTY
6.1 Consultant warrants and represents that each of its employees
assigned to perform technical assistance and/or related services under any
Schedule shall have the proper skill, training and background so as to be able
to perform in a competent and professional manner.
6.2 Neither the execution by Contractor of this Agreement or any
Schedule nor the consummation by Contractor of the transactions contemplated
hereby conflicts with or results in a breach of any of the provisions of any
agreement or other instrument to which Contractor is a party or by which it is
bound, or constitutes a default under any thereof.
ARTICLE 7
LIABILITY
7.1 Consultant shall be liable for and shall indemnify and hold
Customer harmless against any loss or damage arising from the fault or
negligence of Consultant, its officers, employees, agents and representatives.
7.2 Customer shall be liable for and shall indemnify and hold
Consultant harmless against any loss or damage arising from the fault or
negligence of Customer, its officers, employees, agents or representatives.
7.3 IN NO EVENT SHALL EITHER PARTY HERETO BE LIABLE, ONE TO THE
OTHER, FOR INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES, OR LOSS OF PROFITS.
ARTICLE 8
TERM OF AGREEMENT
8.1 This Agreement shall commence on the date first above written and
shall continue in effect thereafter until completion of the Consultant's
performance hereunder unless and until terminated as hereinafter set forth.
8.2 In the event of any material breach of this Agreement by either
party hereto, the other party may (reserving cumulatively all other remedies and
rights under this Agreement and in law and in equity, terminate this Agreement
by giving ten (10) days' prior written notice thereof, provided, however, that
this Agreement shall not terminate at the end of said ten (10) days' notice
period if the party in breach has cured the breach of which it has been notified
prior to the expiration of said ten (10) days.
<PAGE> 23
8.3 Notwithstanding any other provision of this Agreement to the
contrary, Customer may terminate this Agreement or any Schedule hereunder by
giving Consultant written notice of its election to terminate said Agreement or
Schedule. In case, of any termination, Customer agrees to pay Consultant for
all costs up until the effective date of termination at the costs to be agreed
upon by the parties.
ARTICLE 9
ASSIGNMENT
9.1 Neither party may assign this Agreement or any of its rights and/or
obligations hereunder without the prior written consent of the other party, and
any such attempted assignments shall be void.
ARTICLE 10
NOTICES
10.1 Any notices or other communications required or permitted to be given
or delivered hereunder shall be in writing (unless otherwise specifically
provided here) and shall be deemed given if delivered personally or mailed by
first-class mail, postage prepaid.
to: Fireman's Fund Insurance Company
777 San Marin Drive
Novato, California 94998
Attention: Manager: IT Financial Administration
and to: Selectica, Inc.
2890 Zanker Road, Suite 101
San Jose, CA 95134
Attention: Ashish Mathur
ARTICLE 11
GOVERNING LAW
11.1 The validity of this Agreement, the construction and enforcement of
its terms, and the interpretation of the rights and duties of the parties,
shall be governed by the laws of the State of California.
ARTICLE 12
INSURANCE
12.1 Consultant shall acquire and maintain in full force and effect
insurance coverage with carriers authorized to do business in California
throughout the term of this Agreement. Coverage is required in the following
categories to the limits shown.
<TABLE>
<CAPTION>
Category of Insurance Limit
--------------------- -----
<S> <C>
A. Worker's Compensation Statutory Compliance
B. Comprehensive General Liability $1,000,000.00
(Bodily Injury and Property Damage)
C. Comprehensive Auto Liability $1,000,000.00
(Bodily Injury and Property Damage)
</TABLE>
<PAGE> 24
(Owned and Non-Owned)
Consultant shall provide Customer with proof of insurance by furnishing
Customer with Certificates of Insurance, or in the alternative, Consultant may
provide a verified copy of the declaration page and/or endorsement of the
relevant policy(ies) to the limits set forth above.
ARTICLE 13
AMENDMENT, MODIFICATION OR WAIVER OF AGREEMENT
13.1 No amendments, modifications, supplements to or waiver of this
Agreement or any of its provisions shall be binding upon the parties hereto
unless made in writing and duly signed by both parties. A failure of either
party to this Agreement to enforce at any time any of the provisions of this
Agreement, or to exercise any option which is herein provided, or to require at
any time performance by either party to this Agreement of any of the provisions
hereof, shall in no way be construed to be a waiver of such provisions of this
Agreement.
ARTICLE 14
SEVERABILITY
14.1 In the event any one or more of the provisions of this Agreement
shall for any reason be held to be invalid, illegal or unenforceable, the
remaining provisions of this Agreement shall be unimpaired, and the invalid,
illegal or unenforceable, provision shall be replaced by a mutually acceptable
provision.
ARTICLE 15
ADVERTISING OR PUBLICITY
15.1 Neither Consultant nor Customer shall use the name of the other in
publicity releases or advertising without securing the prior written approval
of the other.
ARTICLE 16
COMPLETE AGREEMENT
16.1 This Agreement and the Exhibits and Attachments hereto constitute the
entire agreement between the parties and supersedes all previous agreements,
promises, proposals, representations, understandings and negotiations, whether
written or oral, between the parties respecting the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto, each acting under due and proper
authority, have executed this Agreement as of the day, month, and year first
above written.
SELECTICA, INC. FIREMEN'S FUND INSURANCE
COMPANY
By /s/ [Signature Illegible] By /s/ [Signature Illegible]
----------------------------------- -----------------------------------
Title Vice President, Sales Title VP, CID Systems
-------------------------------- --------------------------------
Date 6-23-99 Date 6-24-99
--------------------------------- ---------------------------------
<PAGE> 25
SCHEDULE 1
This Schedule is issued pursuant to the Master Agreement for Consulting Services
("Agreement") dated as of June 16, 1999 and between Selectica, Inc.
("Consultant") and Fireman's Fund Insurance Company ("Customer"). Any term not
otherwise defined herein, shall have the meaning ascribed to it in the
Agreement.
777 San Marin Drive 2890 Zanker Road, Suite 101
Novato, CA 94998 San Jose, CA 95134
- --------------------------------------------------------------
(Customer Location) (Consultant Location)
Scott Kelly Ashish Mathur
- --------------------------------------------------------------
(Customer Project Manager) (Consultant Project Manager)
Schedule Commencement Date: June 25, 1999
Term of Schedule: Approximately 10 working days from commencement date
SKILL LEVEL HOURLY RATE
- ----------- -----------
Project Manager [*]
Consultant [*]
The above Rates apply to the scope of work as defined in this Schedule and the
Attachment A. Any additional requests for services shall be defined in an
additional Schedule(s) and signed by both parties.
Consultant shall invoice Customer, monthly in arrears, for reasonable
out-of-pocket expenses necessarily and actually incurred by Consultant in the
performance of its services under this Agreement, provided that (i) Customer has
given its prior written consent to any such expenditures, and (ii) Consultant
submits supporting documentation and appropriate vouchers for such expenses.
Customer shall not reimburse Consultant for travel time. It is understood that
Customer shall not reimburse Consultant for travel and living expenses incurred
by a Consultant employee in performing services at a Customer facility located
in the same metropolitan area as that employee's home base. It is also
understood that any air transportation reimbursable hereunder shall be
coach-economy and that any entertainment by or on behalf of Consultant employees
shall be at no cost to Customer.
Notwithstanding the duration of the time between the Commencement Date and the
Completion Date shown herein, Customer may terminate this Schedule in accordance
with Article 8.3 of the Agreement.
TOTAL COST AUTHORIZED UNDER THIS SCHEDULE IS NOT TO EXCEED $[*] plus
expenses as authorized.
SELECTICA, INC. FIREMAN'S FUND INSURANCE
COMPANY
By /s/ [ILLEGIBLE] By /s/ [ILLEGIBLE]
-------------------------- ---------------------------
Title Vice President, Sales Title VP, CID Systems
----------------------- ------------------------
Date 6-23-99 Date 6-24-99
------------------------ -------------------------
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
<PAGE> 26
Attachment A to Schedule 1
To Master Agreement for Consulting Services
Between SELECTICA, Inc.
And Fireman's Fund Insurance Company
Dated June 16, 1999
STATEMENT OF SCOPE OF WORK
TMM Estimation Assessment Project
Objective
The intent of the project estimation assessment is to finalize the requirements
and develop the functional specification and high level schedule for the TMM
Risk Assessment application that Consultant intends to build for Customer. The
TMM Risk Assessment application assists underwriters to identify, qualify,
assess the acceptability of lines of coverage and evaluate credits against
profit goals.
A. Deliverables:
Consultant will provide the following deliverables for this project:
1. A functional specification for the phase-1 deployment of the TMM risk
assessment application
2. A high-level milestone based schedule for the phase-1 deployment
B. Scope of Work:
Deliverable 1. will include the development of a functional specification for
the TMM risk assessment application covering, but not limited to the following
areas specifically as it pertains to the phase-1 deployment:
1. Application flow
2. Security & Authentication
3. User Interface navigation and flow
4. Output & reports
5. Help
6. Custom formats
7. Knowledge-base
8. Save & restore
9. Database connectivity
10. Data sources including interfaces
11. Back-end and systems integration
12. Deployment platforms and sequencing
Responsibilities
Consultant is responsible to develop the functional specification and the
high-level milestone based schedule. Customer will assist Consultant by
providing personnel, resources and documentation necessary to complete the
functional specification in a timely manner.
<PAGE> 27
SRR# 936165
SCHEDULE 2
This Schedule is issued pursuant to the Master Agreement for Consulting
Services ("Agreement") dated as of June 16, 1999 by and between Selectica, Inc.
("Consultant") and Fireman's Fund Insurance Company ("Customer"). Any term not
otherwise defined herein, shall have the meaning ascribed to it in the
Agreement.
777 San Marin Drive 2890 Zanker Road, Suite 101
Novato, CA 94998 San Jose, CA 95134
(Customer Location) (Consultant Location)
Michael Barry Ashish Mathur
(Customer Engagement Manager) (Consultant Engagement Manager)
- - Commencement Date: August 2, 1999 Completion Date: Upon Completion of
Deliverables and Acceptance
- - Scope of Work: see Attachment A
- - Price: $[*]
- - Bonus: An additional $[*] will be paid to Consultant if the following
("Bonus Criteria") are met:
1. The Delivered System must be delivered no later than October 15, 1999
and
2. The Delivered System must successfully pass acceptance as detailed under
Acceptance below no later than October 15, 1999
- - Invoicing Schedule:
<TABLE>
<CAPTION>
# MILESTONE AMOUNT TERMS
- -- -------------------------- ----------- -------------------
<S> <C> <C> <C>
1. Signing of Schedule $[*] due upon receipt of
invoice
2. Delivery and Acceptance of $[*] net 30 from receipt
Deliverables 1, 2, 3, and 4 OR $[*] of invoice
if Bonus Criteria
are met
</TABLE>
The above payments apply to the scope of work as defined in this Schedule and
the Attachment A. Any additional requests for services shall be defined in an
additional Schedule(s) and signed by both parties.
- - Acceptance:
When the Deliverables 1, 2, 3, and 4 as detailed in the attached Statement of
Work (the "Delivered System") has been installed at Customer's site and has
been made ready for use, Customer will begin acceptance testing (see
"Application Acceptance Period & Criteria section of Attachment A). The
acceptance test process will continue until the end of the business day of
October 15, 1999. The acceptance test will be conducted for the purpose of
demonstrating that the Delivered System performs the functions as set forth in
the Acceptance Criteria as defined in the Application Acceptance Period &
Criteria section of Attachment A. In the event that the Delivered System is not
successfully passing the acceptance test Customer shall notify Consultant in
writing as soon as reasonably possible specifying in reasonable detail in what
respects the Delivered System is failing to perform. Consultant shall correct
any deficiencies at no additional cost (except for actual out of pocket
expenses). No later than the end of the
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
<PAGE> 28
business day on October 15, 1999 Customer shall notify Consultant in writing of
Customer's acceptance or non-acceptance of the Delivered System. If Customer
fails to notify Consultant of it's acceptance or non-acceptance by the end of
the business day of October 15, 1999 the Delivered System shall be deemed to be
accepted by Customer.
If the Delivered System has not been accepted by Customer at the end of
business on October 15, 1999 Consultant shall continue to correct any
deficiencies at no additional cost (except for actual out of pocket expenses)
until the Delivered System is deemed accepted by Customer such notification to
be given to Consultant in writing at the time of acceptance.
- - Expenses:
Consultant shall invoice Customer, monthly in arrears, for reasonable
out-of-pocket expenses necessarily and actually incurred by Consultant in the
performance of its services under this Agreement, provided that (i) Customer has
given its prior written consent to any such expenditures, and (ii) Consultant
submits supporting documentation and appropriate vouchers for such expenses.
Customer shall not reimburse Consultant for travel time. It is understood that
Customer shall not reimburse Consultant for travel and living expenses incurred
by a Consultant employee in performing services at a Customer facility located
in the same metropolitan area as that employee's home base. It is also
understood that any air transportation reimbursable hereunder shall be
coach-economy and that any entertainment by or on behalf of Consultant employees
shall be at no cost to Customer.
Notwithstanding the duration of the time between the Commencement Date and the
Completion Date shown herein, Customer may terminate this Schedule in accordance
with Article 8.3 of the Agreement.
TOTAL COST AUTHORIZED UNDER THIS SCHEDULE IS NOT TO EXCEED $[*] plus
expenses as authorized.
SELECTICA, INC. FIREMAN'S FUND INSURANCE COMPANY
By /s/ [Signature Illegible] By /s/ [Signature Illegible]
-------------------------------- -------------------------------------
Title Vice President, Professional Title Vice President, IT CID
Services ----------------------------------
-----------------------------
Date Sep 10, 1999 Date 09-08-99
------------------------------ -----------------------------------
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
<PAGE> 29
Attachment A to the Schedule 2
To the Master Agreement for Consulting Services
Between Selectica, Inc.
And Fireman's Fund Insurance Company
Dated June 16, 1999
RSM - FFIC's RISK SCORE MODEL
Statement of Work
PREPARED FOR FIREMAN'S FUND INSURANCE COMPANY
BY:
[LOGO] SELECTICA
2890 Zanker Road, San Jose, CA
<PAGE> 30
RSM PROPOSAL PREPARED FOR FIREMAN'S FUND INSURANCE COMPANY
TABLE OF CONTENTS
PROJECT DESCRIPTION AND SCOPE.................................................4
BACKGROUND..................................................................4
SCOPE.......................................................................4
Security model............................................................4
User Interface............................................................4
Knowledge base............................................................5
Deployment................................................................5
Quoter....................................................................5
Database repository.......................................................5
Output Reports............................................................6
FACTORS AFFECTING DEVELOPMENT...............................................6
Assumptions, Constraints, and Dependencies................................6
Assumptions...............................................................6
Constraint................................................................6
Dependencies..............................................................6
Change Control Procedures.................................................7
PROPOSAL....................................................................7
Deliverable...............................................................7
Application Development Services..........................................7
Effort Estimate & Work Plan...............................................7
Milestones................................................................8
Training and Maintenance..................................................8
Project Responsibilities and Resources Profile............................8
FFIC Responsibilities & Deliverables......................................9
Application Acceptance Period & Criteria.................................10
Activity.................................................................10
Date.....................................................................10
Proposal Acceptance......................................................10
EXHIBIT A CHANGE REQUEST FORM.............................................11
EXHIBIT B RESOURCE PROFILE................................................12
Fireman's Fund Team......................................................12
EXHIBIT C REQUIREMENTS LIST...............................................14
General Requirements.....................................................14
- Page 2 -
<PAGE> 31
RSM PROPOSAL PREPARED FOR FIREMAN'S FUND INSURANCE COMPANY
Description..............................................................14
Priority.................................................................14
Key Functions............................................................14
KBS......................................................................15
Risk Evaluation Assessment...............................................16
Risk Evaluation Declinations.............................................16
Risk Evaluation Key Functions............................................17
Data Mining and Storage..................................................18
Data Reference and Support...............................................18
GUI......................................................................18
System Access............................................................18
User Authorization and Access............................................19
Exceptions...............................................................19
Help Key Functions.......................................................19
- Page 3 -
<PAGE> 32
RSM PROPOSAL PREPARED FOR FIREMAN'S FUND INSURANCE COMPANY
PROJECT DESCRIPTION AND SCOPE
This proposal describes the scope of the first phase of engagement between
Fireman's Fund Insurance Company ("FFIC") and Selectica, Inc. ("Selectica"),
targeted to create RSM - a Risk Score Model for FFIC. Selectica intends to
provide the appropriate Advanced Configurator Engine (ACE) product set for this
application, assist FFIC staff to develop the application (includes actual
hands-on development of specific sections), and train FFIC personnel for
continuing long-term application maintenance. Refer to the detailed functional
specifications attached for any further information. The acceptance criteria is
identified in the Requirements List which is Appendix C to this document.
Pilot implementation scheduled for October 18th, 1999, is a fully functioning
Risk Scoring Model with interfaces to reference data, a populated knowledgebase
(KBS) and the GUI screens. Specific deliverables for this engagement are listed
in the "Deliverable" section in this document.
The phase from the Pilot to nationwide implementation will be a treated as a
separate project and will include monitoring of the deliverables from a pilot
operation in the North West region and additional functional enhancements that
may be identified during the pilot development phase. A separate statement of
work, functional specification, and a work/project plan for this phase is
planned as a task in the Pilot project plan.
BACKGROUND
FFIC's Commercial business is focused around selling insurance policies for the
Target Middle Market ("TMM") for the various coverages such as General
Liability, Auto, Workers Compensation, and Umbrella coverage. As part of its
Operational Efficiency strategy, FFIC now needs to provide a Risk scoring
mechanism, focused first on the intranet access for its underwriters (FFIC
employees), then integrated with its producers (the brokers who are their major
revenue channel), and finally for direct sales on FFIC's e-Commerce program.
SCOPE
FFIC envisions RSM as a risk score advisor for its employees, targeted in this
first phase, towards its internal underwriters nation wide. FFIC currently
identifies the necessity to generate segmental analysis for a maximum of 10
states at any given point. FFIC also identifies that in the current phase any
adjustment and segmental analysis for California, Oregon, Washington, Nevada,
Alaska and standard states will need to be supported. This capability will be
extended to other states if additional time becomes available in the development
plan. The detailed functional specifications contain the specifics for this
capability.
SECURITY MODEL
The Portal security logon mechanism will be used to gain access to the TMM site,
which is passed on to RSM. The current phase will allow the model to validate a
user through the portal system which is used to identify the user with the RSM
system. The users do not have hierarchical access rights assigned inside the
system. All the Risk Scores generated by any valid user will be accessible by
all the users of the system.
USER INTERFACE
The user will gain access to the Application via the standard FFIC browser
through a link on the TMM home Site. The user interface will adhere to the
current TMM Home Site standards. The mockup of the user interface is contained
in the Functional Specifications. The navigation is designed with the minimum
amount of refreshes of the screen which will enable and enhance the speed of
operation covering categories of questions, results and links to service
specifications. The User will be allowed to exit to the TMM home site.
- Page 4 -
<PAGE> 33
RSM PROPOSAL PREPARED FOR FIREMAN'S FUND INSURANCE COMPANY
For Post Pilot of Phase I, based on the feed back received from the user group,
changes may be identified which may require a redevelopment of part of the user
interface. Any identified changes will be processed via the Change Control
process identified later in this document.
KNOWLEDGE BASE
The Knowledge base ("KBS") is the core business model developed using the Ace
Model builder tool. Maintenance and enhancement of the model will be
accomplished via the Ace Model-builder tool. It will support extracted data for
the parameter and rules/constraints from the Selectica database which will be
developed and populated for the RSM project only. These products suite is
available to FFIC according the Annual maintenance contract agreed to on June
24th, 1999.
DEPLOYMENT
Deployment environment is at FFIC Computer's hosting site in Novato,
California. The platform for deployment will be dual-CPU PII 450-500 MHz
machines with 512MB of memory, 3x9 Hot pluggable, Raid controlled disk drives.
Disaster Recovery will be supported via standard tape backup of the databases
and drive images. Support will be provided by FFIC for daily operations and
Selectica support will be provided as agreed to in the contract dated June 24,
1999.
QUOTER
The Ace Quoter implementation will be done on a DB2 database on a Windows NT
platform by 10/18/99. This implementation requires engineering development
effort by Selectica to support DB2. The implementation on the AIX DB2 platform
will be done by 01/14/2000. The additional engineering work by Selectica has
been agreed to in the contract dated June 24th, 1999.
DATABASE REPOSITORY
The application will connect to a DB2 database for data required for developing
the Knowledge base parameters and rules/constraints for the four lines of
businesses. This DB2 database will be developed as part of the RSM project.
This database will have tables populated from various sources.
CUSTOM "PLUG INS":
"Plug Ins" is additional functional piece of program written in JAVA language,
which is referred to the Ace Enterprise server as an external entity. These
"plug in" components are executed on the server only.
o Generic data retrieval "plug in" needs to be developed to fulfill all
FFIC Runtime Database search requirements. This piece of program is
developed and integrated by FFIC.
The rest of the "plug in"
o Quote Lock "plug in."
o Search ability required across quote cart container and quote
container.
o Copy quote functionality needs a plug-ins / stored procedure to be
developed.
BACK END SYSTEM INTEGRATION
No Back End integration is required in this Phase as we are not integrating
into any legacy systems. The data, which is part of the RSM system, are part of
the DB2 Quote repository, in a meta data format, is available for FFIC for any
further process they may seem appropriate. No interface with any FFIC
systems/applications are required for the Pilot phase.
OUTPUT REPORTS
Segmentals for all the policies accepted needs to be generated as reports in
HTML format and an output of them will be stored in a PDF format as a blob
field in a DB2 database. Support will be
- Page 5 -
<PAGE> 34
RSM PROPOSAL PREPARED FOR FIREMAN'S FUND INSURANCE COMPANY
provided to extract information from the meta data to monitor the pilot risk
assessments and for model verification.
FACTORS AFFECTING DEVELOPMENT
ASSUMPTION, CONSTRAINTS, AND DEPENDENCIES
The purpose of this section is to document internal and external factors that
will affect the project plan and its execution. Proper steps will be taken to
ensure that all assumptions are fulfilled, dependencies addressed and that
expectations are properly set that take into account the project's constraints.
ASSUMPTIONS
Selectica assumes that FFIC will be available to assist with all the service
knowledge required to deliver the scope of work defined in this document.
Selectica will provide access to the software components produced by Selectica
required during the engagement. Selectica also assumes that FFIC will provide
any other hardware or software required to successfully execute this project.
Selectica also assumes that FFIC will make available all related documentation
and any associated resources, throughout the course of this engagement, and
that FFIC management will provide timely decisions, essential for the
completion of the deliverables on time.
Software:
o ACE Enterprise, Ace Quote Server, Ace Studio and ACE Enterprise
Manager software
o Windows NT 4.0 (with service pack 4), HTTP server (IIS)
o Servlet engine (JRUN 1.2.2)
o DB2
Hardware (for development) may include but is not limited to:
o 1 server to host the http server, and the ACE Enterprise server.
Hardware (for production) may include but is not limited to:
o 1 server to host the http server, and the ACE Enterprise server.
To ensure that the application will be deployed on the AIX platform Selectica
requires FFIC to provide the deployment hardware at their premises at San Jose
at least 3 months prior to the actual deployment, i.e.: latest by 31/09/99.
Selectica also assumes that FFIC will provide resources for the creative design,
navigation and flow and content of the RSM application HTML pages. Selectica
will assist in the review and adaptation of these HTML templates to the RSM
knowledge base and engine.
CONSTRAINT
The functionality mentioned in the deliverables will have to either work within
or work around the limitations of the environment. These include browser
capabilities, product capabilities, interface capabilities etc. Selectica
suggests that the testing environment be restricted to Netscape 4.x and
Internet Explorer 4.x (JavaScript 1.2 compliant versions only) on Windows NT,
95 and 98 platforms.
DEPENDENCIES
In order for the development process to be successful, Selectica personnel will
work closely with FFIC personnel during the complete period of engagement.
Logistically, most of the development work is envisioned at FFIC premises.
Other tasks such as but not limited to engineering development, UDF /
plug-in development, application and navigation flow design and reviews may be
done at Selectica premises as necessary. The complete project will be deployed
at FFIC hosting facility, currently targeted in Novato, California or Phoenix,
Arizona.
- Page 6 -
<PAGE> 35
RSM PROPOSAL PREPARED FOR FIREMAN'S FUND INSURANCE COMPANY
CHANGE CONTROL PROCEDURES
Final design or user-interface changes, if any, will need to be made early in
the project. In order to meet the achieved delivery date of this project, we do
not expect any scope changes during the engagement. If there is a valid business
need for a scope change, then a written change request will be required. Change
requirements will be considered outside the scope of this project/proposal and
will be reviewed during or after the project has been completed. All changes to
scope will be communicated in the change request form - See Exhibit A.
PROPOSAL
DELIVERABLE
The Selectica consulting deliverable for the first phases engagement is:
1. Design and creation of RSM features and compatibility database
2. Design and co-development of RSM knowledge base
3. Design and co-development of RSM HTML pages
4. Selectica-tagged HTML application pages
5. Selectica agrees to install their ACE Product suite on the planned AIX
production machine as part of these billed tasks. This task will be
completed after the October 15th, 1999, planned implementation date.
APPLICATION DEVELOPMENT SERVICES
Selectica will provide the implementation services to design RSM application and
compatibility database, co-develop its knowledge base, co-design/develop HTML
pages, and co-tag the application HTML templates, and test and deploy the
application. Selectica envisions an initial 5-10 person-days effort to help
FFIC create the detailed requirements and functional specification for FFIC.
Selectica expects that FFIC and its creative content team are present,
available and participating in this specification process. Selectica also
expects that this team reviews and approves the specification and schedule
before actual design and implementation activity start.
EFFORT ESTIMATE & WORK PLAN
The go-live date for the pilot of Phase I is scheduled for the October 18th
1999. The detailed efforts are scheduled from August 2nd 1999 to October 18th
1999. Refer to the detailed project plan for further detail.
MILESTONES
Selectica schedule milestones will be based on the Commencement Date as stated
in the Schedule. The milestones are spread over a 3 month timeframe, sequenced
roughly as follows:
- Assessment results approved currently scheduled for August 16th 1999.
- Project commencement is Scheduled for August 2nd 1999.
- Functional specification review and approval by August 16th 1999.
- User Interface review and approval within August 16th 1999
TRAINING
Throughout the term of this effort Selectica will train FFIC Team members and
the system administrator as per the Exhibit B. The FFIC team members will be
developing the "KBS", the HTML GUI and the Database and advanced knowledge will
be transferred during the process of joint Selectica/FFIC development.
-Page 7-
<PAGE> 36
RSM PROPOSAL PREPARED FOR FIREMAN'S FUND INSURANCE COMPANY
PROJECT RESPONSIBILITIES AND RESOURCES PROFILE
Selectica anticipates 1-project manager/business analysts and 4-6 consulting
engineers for the duration of the project.
FFIC's project manager will be responsible for the overall project deliverable
management. The Selectica project manager will primarily report to FFIC project
manager. The FFIC project manager will be responsible for project documentation
such as (but not limited to) specifications, designs, plans, scope, and
schematics. The project managers will create and maintain the project plan, and
communicate project status and plan variances to affected and interested
parties. The FFIC project manager will coordinate with FFIC management and
project team members. The project managers will arrange and seek reviews and
approvals as scheduled and defined in the project plan. The project managers
will also be responsible for dissemination of all information, status and call
reports, change management and scheduling quality audits. The business analyst
will be responsible for all functional specifications and requirements analysis
documents. Selectica's team members and FFIC's team members will be responsible
for design, implementation and testing of RSM and related database and
knowledge-base, user interface and site integration and deployment activities.
FFIC RESPONSIBILITIES & DELIVERABLES
FFIC is responsible for the final deployment success of the configuration
application to the user community. Selectica can best assist in this endeavor
by providing the appropriate personnel to provide timely information, review
and testing of the application, In particular:
o Appoint a FFIC project manager for this engagement. The project manager
will be the central point of contact for Selectica for all product,
schedule and resource-related issues, reviews, and decision making. The
project manager is also responsible to provide access to and time with
personnel with critical product and selling knowledge.
o Participate in the functional specification and requirements analysis and
provide timely review and approval.
o Assemble a user team to review all designs and flows for FFIC. The users
are in the best position to evaluate what works for them. This team would
be responsible for timely reviews and acceptances of all deliverables.
o Provide graphic and web designers to create the HTML template for FFIC.
Selectica expects to work closely with this team during this process to
ensure that the application being developed and the flow meets Selectica's
requirements and adheres to the standards and best practices encouraged for
Selectica's deployments. FFIC's responsibilities in the design and
development include:
o Develop the HTML templates for the application.
o Develop the knowledge-base.
o Develop any copy, help-text and help-system and any graphic elements
and databases.
o Provide engineers to help design and implement the knowledge base as
identified in Exhibit B.
o Provide a test team to create functional and acceptance test plans, test
scenarios and then perform acceptance and final testing.
- Page 8 -
<PAGE> 37
RSM PROPOSAL PREPARED FOR FIREMAN'S FUND INSURANCE COMPANY
APPLICATION ACCEPTANCE PERIOD & CRITERIA
The FFIC TMM RSM business unit manager (Carol Zychowski) will base application
acceptance upon approval of those requirements listed in Exhibit C with a
priority of "HIGH" (the "Acceptance Criteria"). These requirements will be
deemed to be critical or "show stoppers". Requirements with a priority of
"MEDIUM" or "LOW" are not mandatory for acceptance. Any scope changes requested
during the application development period are not subject to be part of the
application acceptance.
The acceptance period schedule will be:
<TABLE>
<CAPTION>
ACTIVITY DATE
<S> <C>
Start of Acceptance test 10/04/99
End of Acceptance test 10/08/99
Last date to report any 10/08/99
problems to SELECTICA
All 'High' Priority repairs 10/12/99
complete
Start Final Testing 10/13/99
End Final Testing 10/14/99
Decision on Acceptance 10/15/99
</TABLE>
- Page 9 -
<PAGE> 38
<TABLE>
<CAPTION>
RSM PROPOSAL PREPARED FOR FIREMAN'S FUND INSURANCE COMPANY
EXHIBIT A CHANGE REQUEST FORM
<S> <C> <C>
CHANGE REQUEST SUMMARY
Date Summary of Change Reason for Change
- -------------------------------------------------------------------------------------------------------------------
September 8,
1999
- -------------------------------------------------------------------------------------------------------------------
CHANGE REQUEST
- -------------------------------------------------------------------------------------------------------------------
(attach complete specification as necessary)
- -------------------------------------------------------------------------------------------------------------------
CHANGE IMPACT ANALYSIS
- -------------------------------------------------------------------------------------------------------------------
(attach engineering response as necessary)
- -------------------------------------------------------------------------------------------------------------------
IMPACT RATING --------------------------------------------------------------------------------
AREAS IMPACTED
DIFFICULTY FACTOR: --------------------------------------------------------------------------------
(High, Medium, Low) [X] Area (check all that apply) Owner Due Date
--------------------------------------------------------------------------------
[ ] KBS Development
--------------------------------------------------------------------------------
[ ] GUI Development
--------------------------------------------------------------------------------
[ ] Quote Development
--------------------------------------------------------------------------------
[ ] Output/Reports Development
--------------------------------------------------------------------------------
NOTES: [ ] Database Connectivity
--------------------------------------------------------------------------------
[ ] Backend Interfaces
--------------------------------------------------------------------------------
[ ] Front-end Interfaces
--------------------------------------------------------------------------------
[ ] Security Development
--------------------------------------------------------------------------------
[ ] Online Help Development
RELEVANCY TO OBJECTIVE: --------------------------------------------------------------------------------
[ ] Deployment
--------------------------------------------------------------------------------
[ ] Engineering Gap
--------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
CHANGE IMPACT APPROVAL
- -------------------------------------------------------------------------------------------------------------------
This form must be filled out and signed for each customer change request. A Selectica Project Manager's signature
does not indicate a guarantee that the change request will be implemented. All change requests should be added to
the project plan to determine anticipated impacts. Anticipated impacts should be stated in the section above. The
signature below represents authorization by the customer to complete the work required.
------------------------------ ------------------------------
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
- Page 10 -
<PAGE> 39
RSM PROPOSAL PREPARED FOR FIREMAN'S FUND INSURANCE COMPANY
- -------------------------------------------------------------------------------
Selectica Inc., Project Manager Client Project Manager
- -------------------------------------------------------------------------------
EXHIBIT B Resource Profile
FIREMAN'S FUND TEAM
ENGAGEMENT MANAGEMENT
Michael Barry
PROJECT MANAGEMENT
Scott B Kelly
Carol Zychowski
BUSINESS ANALYST/DEVELOPERS
John Cox
Ken Davidson
Annie Barton
John Boultinghouse
Frank Svoboda
Dan Kurth
Kaye Schleich
Ashfaque Mohammed
John Orvis
Jim Gallagher
Rolfe Dlugy-Hegwer
METHODOLOGY
Angie Flynn
QUALITY ASSURANCE
Linda Holte
Angela Simons
ARCHITECTURE
Clint Courier
SYSTEM ADMINISTRATOR
Louis Kullesied
- Page 11 -
<PAGE> 40
RSM PROPOSAL PREPARED FOR FIREMAN'S FUND INSURANCE COMPANY
SELECTICA TEAM
ENGAGEMENT MANAGEMENT
Ashish Mathur
PROJECT MANAGEMENT
Indramohan Sahadevan
ENGINEERING
Aparna Subramaniam
Umesh Patil
Jimmy Young
BUSINESS ANALYST/DEVELOPERS
Shekar Varma
Terri Macaluso
Sridhar Kolluri
Pramod Venkataramani
Kirti Desmukh
Vishahan Iyer
SYSTEM ADMINISTRATOR
Michael Ann
- Page 12 -
<PAGE> 41
RSM PROPOSAL PREPARED FOR FIREMEN'S FUND INSURANCE COMPANY
EXHIBIT C REQUIREMENTS LIST
GENERAL REQUIREMENTS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
REQUIREMENT DESCRIPTION PRIORITY RELEASE
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
KEY FUNCTIONS
- -----------------------------------------------------------------------------------------------------------------------
1. Interface to producer database Define interface to a producer TBD Future
database that can capture producer
code based on producer name.
- -----------------------------------------------------------------------------------------------------------------------
2. Provide data storage in DB2/UDB. Store RSM Tables and account HIGH October
Documentation in DB2/UDB format
- -----------------------------------------------------------------------------------------------------------------------
3. Provide user maintainable parameters Provide user maintainable HIGH October
method for maintenance of and
changes to parameter values
- -----------------------------------------------------------------------------------------------------------------------
4. Risk evaluation document medium Display Risk Score Model HIGH October
Documentation using HTML
- -----------------------------------------------------------------------------------------------------------------------
5. Create and display Risk Scoring Provide the ability to create and HIGH October
Documentation display Risk Scoring Documentation
(RQA, etc.)
- -----------------------------------------------------------------------------------------------------------------------
6. RSM shall support 4 lines of business Support 4 lines of business: HIGH October
General Liability, Auto, Workers
Compensation, and Property.
- -----------------------------------------------------------------------------------------------------------------------
7. Automate look-up of data Values and Automate look-up of data Values HIGH October
data Relationships and data Relationships
- -----------------------------------------------------------------------------------------------------------------------
8. Maintain the single model version for all All users will have same HIGH October
users for both production and training production version of the RSM
(HTML, Knowledgebase and
reference data)
- -----------------------------------------------------------------------------------------------------------------------
9. Provide Partial key search Provide partial key search for the TBD Future
customer name filter
- -----------------------------------------------------------------------------------------------------------------------
10. Provide Management Reports Provide Management Reports TBD Future
- -----------------------------------------------------------------------------------------------------------------------
11. Provide ad-hoc reports Provide ad-hoc reports LOW October
- -----------------------------------------------------------------------------------------------------------------------
12. Provide for the downloading of Account Account information shall be TBD Future
Information downloaded from FFIC Sources
based on the information entered
by the user
- -----------------------------------------------------------------------------------------------------------------------
13. Notify user if invalid data is entered Validations shall be performed MEDIUM October
on all data inputs to the Risk
Score Model
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
SELECTICA, INC. CONFIDENTIAL
- Page 13 -
<PAGE> 42
RSM PROPOSAL PREPARED FOR FIREMAN'S FUND INSURANCE COMPANY
<TABLE>
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
14. Provide for user maintained questions Format and structure questions HIGH October
and answers shall be such that changes to
text, answer format, and quantity
of questions do not involve any
redesigning
- --------------------------------------------------------------------------------------------------------
15. Record all data entered Record RSM session in relational HIGH Future
data store
- --------------------------------------------------------------------------------------------------------
16. Display Account Information Display the account information HIGH October
including office, region, lines of
coverage, and D&B number
- --------------------------------------------------------------------------------------------------------
17. Provide storage and retrieval of Provide segmental automobile, MEDIUM October
segmental auto, GL, Property and WC General Liability, Property and
rating and RQA Forms Workers Compensation rating
and RQA forms
- --------------------------------------------------------------------------------------------------------
18. Provide search capability Provide capability to search for MEDIUM October
prior entered Risk Assessments
by Customer
- --------------------------------------------------------------------------------------------------------
19. Uniform & consistent formats will be Provide consistent data entry for HIGH October
used for data entry field formats, consistency of field
edits and consistency of data
presentation within all screen in
the Risk Score Model
- --------------------------------------------------------------------------------------------------------
20. Provide only one data entry field for Provide only one data entry field HIGH October
each data element for each data element
- --------------------------------------------------------------------------------------------------------
21. Capture all user entered data All data to be stored in DB2 HIGH October
database
- --------------------------------------------------------------------------------------------------------
22. Evaluate New and Renewal policies Provide ability to process both HIGH October
New and Renewal policies
KBS
- --------------------------------------------------------------------------------------------------------
23. Synchronization and data integrity System shall have the ability to MEDIUM October
synchronize and ensure data
integrity
- --------------------------------------------------------------------------------------------------------
24. Provide system management tool to Provide management of system MEDIUM October
manage ACE components configuration administration for
remote locations
- --------------------------------------------------------------------------------------------------------
25. Provide Launching of RSM application Launch RSM application via a HIGH October
bookmark or URL
- --------------------------------------------------------------------------------------------------------
26. ACE Enterprise and KBS shall be used Selectica's ACE Enterprise shall HIGH October
for risk evaluation use the KBS rules to evaluate
the risk as defined in the TMM
Account Model
- --------------------------------------------------------------------------------------------------------
</TABLE>
- Page 14 -
<PAGE> 43
RSM PROPOSAL PREPARED FOR FIREMAN'S FUND INSURANCE COMPANY
<TABLE>
<S> <C> <C> <C> <C>
RISK EVALUATION ASSESSMENT
- -------------------------------------------------------------------------------------------------------
27. Provide capping for incurred losses Provide capability to cap incurred HIGH October
losses for each risk assessment
- -------------------------------------------------------------------------------------------------------
28. Support Worker's Comp codes per TMM Support Worker's Comp codes HIGH October
Account Model per TMM Account Model
- -------------------------------------------------------------------------------------------------------
29. RSM to access Dun and Bradstreet RSM to access Dun and HIGH October
information for each risk. Bradstreet information for each
risk
- -------------------------------------------------------------------------------------------------------
30. Provide search capability based on Dun Provide search capability based HIGH October
and Bradstreet name on Dun and Bradstreet name
- -------------------------------------------------------------------------------------------------------
RISK EVALUATION DECLINATIONS
- -------------------------------------------------------------------------------------------------------
31. Generate Declination Messages in Provide a full set of declination MEDIUM October
override process Messages on override of model
assessment.
- -------------------------------------------------------------------------------------------------------
32. Display Account Summary Screen For all assessments the account HIGH October
summary screen will be displayed.
Any navigation from the screen
will be by user choice
- -------------------------------------------------------------------------------------------------------
33. Generate Declination letter Generate a declination (form?) or TBD Future
reject (is this the same as
declination) form(?)
- -------------------------------------------------------------------------------------------------------
34. Provide User Override for Declinations If Declined, the user can override HIGH October
the declination
- -------------------------------------------------------------------------------------------------------
35. Display Declination Details If operations has declined based HIGH October
on score, the declination details
are displayed first:
completed forms are displayed to
the user for modification -
second: identify and display
complete credit structure by line,
with range of acceptable credits
and lines which are declined or
not quoted
- -------------------------------------------------------------------------------------------------------
</TABLE>
- Page 15 -
<PAGE> 44
RSM PROPOSAL PREPARED FOR FIREMAN'S FUND INSURANCE COMPANY
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
RISK EVALUATION KEY FUNCTIONS
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
36. Record the edit/update history Develop an access/update TBD Future
for each evaluation document history to identify the owner
of an evaluation and other
associated parties; their roles,
and who created and/or updated
an evaluation.
- --------------------------------------------------------------------------------------------
37. Display Evaluation Results Display risk evaluation results HIGH October
for and for overall risk
assessment
- --------------------------------------------------------------------------------------------
38. Perform risk evaluation Perform Risk Evaluation on HIGH October
individual Line Of Business
and for total account
- --------------------------------------------------------------------------------------------
39. Provide SIC Search capability Search SIC reference dB at HIGH October
industry level.
- --------------------------------------------------------------------------------------------
40. Select a Writing Company Select a writing company based HIGH October
on the risk quality and
headquarter state
- --------------------------------------------------------------------------------------------
41. Display user's answers to Risk Display the answers to questions HIGH October
Qualification questions answered by the user to the
qualification questions
- --------------------------------------------------------------------------------------------
42. Provide Quoter Access Support archive from, and TBD Future
retrieval to, Quoter after
verifying the authority of the
user executing the commands.
- --------------------------------------------------------------------------------------------
43. Restriction of Quoter Quoter Access shall be restricted HIGH October
Access To System Administrators.
- --------------------------------------------------------------------------------------------
44. Provide delete Support delete function for MEDIUM October
function for Quoter evaluations in Quoter
- --------------------------------------------------------------------------------------------
45. Calculate company deviation Select pricing level for each HIGH October
by Line of Business individual Line Of Business
based on determined company
selection.
- --------------------------------------------------------------------------------------------
46. Calculate credits and debits Calculate segmental Credits and HIGH October
segmental Debits at the
segmental Category and
headquarter State level and
display limits for each state.
- --------------------------------------------------------------------------------------------
</TABLE>
- Page 16 -
<PAGE> 45
RSM PROPOSAL PREPARED FOR FIREMAN'S FUND INSURANCE COMPANY
<TABLE>
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
47. Perform iterative scoring and calculations Perform iterative scoring and HIGH October
calculations that change with
user input
- -------------------------------------------------------------------------------------------------------
48. Define Max Years for Loss Analysis The maximum number of years to MEDIUM October
be used in/for the Loss
analysis shall be 10
- -------------------------------------------------------------------------------------------------------
49. Produce SNAP and segmental Produce different SNAP HIGH October
documentation forms. and segmental documentation.
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
DATA MINING AND STORAGE
- -------------------------------------------------------------------------------------------------------
50. Provide Data Storage from each Risk All valid and invalid policies HIGH October
Scoring session entered into the Risk Score
Model shall be stored.
- -------------------------------------------------------------------------------------------------------
51. Retain data for 120 days Retain data for 120 days before HIGH October
automatically locking risk
assessment
- -------------------------------------------------------------------------------------------------------
52. Provide Data Mining Interface for An interface shall be developed HIGH October
Profit analysis for the purpose of data extraction
to provide data to perform data
mining analysis
- -------------------------------------------------------------------------------------------------------
DATA REFERENCE AND SUPPORT
- -------------------------------------------------------------------------------------------------------
53. Build Reference Databases IT and Business shall build the HIGH October
RSM reference databases in
accordance with the schema.
- -------------------------------------------------------------------------------------------------------
54. Identify Reference Data The sources of reference data HIGH October
will be identified per schema of
the data prototype
- -------------------------------------------------------------------------------------------------------
55. Prevent display of internally stored Prevent display of internally MEDIUM October
parameter values stored parameter values
- -------------------------------------------------------------------------------------------------------
GUI
- -------------------------------------------------------------------------------------------------------
56. The Critical screen flow needs to be The critical screen navigation HIGH October
established and documented. needs to be finalized and
documented and then made
available to training.
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
SYSTEM ACCESS
- -------------------------------------------------------------------------------------------------------
57. Develop Firewall pass-through Access of RSM through Firewall TBD Future
shall occur
- -------------------------------------------------------------------------------------------------------
</TABLE>
- Page 17 -
<PAGE> 46
<TABLE>
<CAPTION>
RSM PROPOSAL PREPARED FOR FIREMAN'S FUND INSURANCE COMPANY
- --------------------------------------------------------------------------------------------
USER AUTHORIZATION AND ACCESS
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
58. Provide User Authentication User Access shall be HIGH October
authenticated through Client
logon or Portal.
- --------------------------------------------------------------------------------------------
59. Provide access to RSM to internal Provide access to RSM to HIGH October
FFIC employees at TMM FFIC internal to FFIC Locations or
Locations or through a modem external via a modem.
- --------------------------------------------------------------------------------------------
60. Provide access to TMM RSM to users Provide access to RSM users TBD Future
external to FFIC Locations external* to FFIC TMM Locations
(Producers)
- --------------------------------------------------------------------------------------------
61. Provide access to General Public Insurance buyers from the TBD Future
general public shall have access
through the internet.
- --------------------------------------------------------------------------------------------
62. Provide access to FFIC licensed FFIC licensed producers shall TBD Future
Producers gain access to the model
through one of two facilities:
1: an extra-net 2: the corporate
web site
- --------------------------------------------------------------------------------------------
63. Selectica shall verify user access The user ID is passed as a HIGH October
to RSM string to Selectica to validate
the user has access to the Risk
Score Model
- --------------------------------------------------------------------------------------------
EXCEPTIONS
- --------------------------------------------------------------------------------------------
64. Exception Identification/Handling Identify and handle exceptions MEDIUM October
consistent with the TMM Account
Model.
- --------------------------------------------------------------------------------------------
65. Notify user of undesirable or Notify user of undesirable or MEDIUM October
exception accounts exception accounts when first
identified by the RSM
- --------------------------------------------------------------------------------------------
66. Notify user if LOB or Account is Notify user if LOB or Account MEDIUM October
outside of Underwriting Appetite is outside of underwriting
appetite
- --------------------------------------------------------------------------------------------
67. Record Exceptional Conditions Provide flexible responses to MEDIUM October
user input to ensure additional
information is recorded on
accounts with exceptional
conditions
- --------------------------------------------------------------------------------------------
68. Provide multiple navigation paths Provide multiple navigation HIGH October
paths (and flexible use of
screens) based on user input
- --------------------------------------------------------------------------------------------
HELP KEY FUNCTIONS
- --------------------------------------------------------------------------------------------
69. Provide page sensitive filed Help Provide on-line Help for each HIGH October
page which may include Tips,
Suggestions, "How to..", Work
Flow and Application Overviews,
and a Glossary
- --------------------------------------------------------------------------------------------
- Page 18 -
</TABLE>
<PAGE> 47
RSM PROPOSAL PREPARED FOR FIREMAN'S FUND INSURANCE COMPANY
- Page 19 -
<PAGE> 1
EXHIBIT 10.10
SELECTICA, INC.
MAJOR ACCOUNT LICENSE AGREEMENT
This Agreement, dated as of June 30, 1999 (the "Effective Date"), is
made and entered into by and between SELECTICA, Inc. 2890 Zanker Road, Suite
101, San Jose, California, 95134 ("SELECTICA"), and LOANMARKET RESOURCES, LLC,
640 North LaSalle Street, Suite 590, Chicago, Illinois, 60610 ("Customer").
SELECTICA and Customer agree as follows:
SECTION 1. DEFINITIONS
Whenever used in this Agreement, the following terms will have the
following specified meanings:
1.1 "DOCUMENTATION" means the documentation specified in Exhibit A
attached hereto and licensed to Customer hereunder, together with any and all
new releases, corrections and updates furnished by SELECTICA to Customer under
this Agreement.
1.2 "SOFTWARE" means the computer software specified in Exhibit A
attached hereto, in object code form, together with any and all Upgrades
furnished by SELECTICA to Customer under this Agreement.
1.3 "UPGRADES" means all releases, updates and corrections of the
Software licensed to Customer hereunder, in object code form, which are
published and generally made commercially available by SELECTICA to its
licensees of the Software with a change in the integer, tenths or hundredths
digit of the version number (e.g., a change form version x.xx to y.xx or x.yx or
x.xy). Upgrades shall not include any release, update or correction that has
been customized by SELECTICA for use by any particular licensee of the Software
or which is made by SELECTICA solely to adopt or reflect the trade dress of any
third party.
SECTION 2. SOFTWARE DELIVERY AND LICENSE
2.1 DELIVERABLES. Upon execution of this Agreement, SELECTICA shall
deliver to Customer one reproducible master copy of the Software licensed
hereunder to Customer, in object code form, and one copy of the Documentation.
2.2 GRANT. SELECTICA hereby grants Customer a nonexclusive,
nontransferable license to:
(a) Install and use the Software ordered by Customer hereunder for
internal and service bureau processing requirements as defined in Exhibit "C" on
the number of Customer's servers and/or users then authorized under this
Agreement. The
1
<PAGE> 2
number of servers and/or users initially authorized hereunder is set forth in
Exhibit A. Customer may increase the number of authorized servers and/or users
from time to time in unit quantities and upon payment to SELECTICA of the
applicable amount as set forth in Exhibit B.
(b) Reproduce the Documentation for the Software ordered by
Customer hereunder and/or incorporate all or any portion of the Documentation in
training materials prepared by the Customer, in each case solely for the use of
the Customer and provided that the copyright notices and other proprietary
rights legends of SELECTICA are included on each copy of the Documentation and
such materials.
(c) Reproduce and make copies of the Software strictly for
archival and backup purposes as required for archival and regulatory purposes.
(d) Allow multiple lenders to participate in Customer's
LPO-Online application as described in Exhibit C of this Agreement.
2.3 RESTRICTIONS. Customer shall use the Software and Documentation only
for the purposes specified in section 2.2 and in accordance with the following:
(a) Customer shall not modify or prepare derivative works of the
Software or Documentation except as expressly permitted in Section 2.2;
(b) Customer shall not reverse engineer, disassemble or decompose
the Software, except to the extent that such acts may not be prohibited under
applicable law;
(c) Customer shall not remove, obscure, or alter any notice of
patent, copyright, trade secret, trademark, or other proprietary rights notices
present on any Software Documentation;
(d) Customer shall not sublicense, sell, lend, rent, lease, or
otherwise transfer all or any portion of the Software or the Documentation to
any third party except as may be permitted in Section 9.4 and Exhibit's B and C
hereof; and
2.4 COMPLIANCE WITH LAWS. SELECTICA and Customer shall each comply with
all applicable laws, regulations, rules, orders and other requirements, now or
hereafter in effect, of any applicable governmental authority, in their
performance of this Agreement. Without limiting the generality of the foregoing,
Customer will comply with all export laws and regulations of the United States
in dealing with the Software including its export and use of the Software
outside the United States.
2
<PAGE> 3
2.5 PROPRIETARY RIGHTS. The Software and Documentation contains valuable
patent, copyright, trade secret, trademark and other proprietary rights of
SELECTICA. Except for the license granted under Section 2.2, SELECTICA reserves
all rights to the Software and Documentation. No title to or ownership of any
Software or proprietary rights related to the Software or Documentation is
transferred to Customer under this Agreement.
2.6 PROTECTION AGAINST UNAUTHORIZED USE. Customer shall promptly notify
SELECTICA of any unauthorized use of the Software or Documentation which comes
to Customer's attention. In the event of any unauthorized use by any of
Customer's employees, agents or representatives, Customer shall use its best
efforts to terminate such unauthorized use and to retrieve any copy of the
Software or Documentation in the possession or control of the person or entity
engaging in such unauthorized use. SELECTICA may, at its option and expense,
participate in any such proceeding and, in such an event, Customer shall provide
such authority, information and assistance related to such proceeding as
SELECTICA may reasonably request.
2.7 RECORDS. Customer shall ensure that each copy it makes of all or any
portion of the Software or the Documentation includes the notice of copyright or
other proprietary rights legends appearing in or on the Software or the
Documentation delivered to Customer by SELECTICA; shall keep accurate records of
the reproduction and location of each copy; and upon request of SELECTICA no
more than once per year, shall provide SELECTICA with complete access to such
records and to Customer facilities, computers and the Software and Documentation
for the purpose of auditing and verifying Customer's compliance with this
Agreement.
SECTION 3. SUPPORT SERVICES, TRAINING AND MAINTENANCE
3.1 SUPPORT SERVICES AND TRAINING. Subject to payment of the applicable
revenues and fees specified in Exhibit B, SELECTICA will provide Customer with
the maintenance services and training set forth below during the term of this
Agreement. With Customer approval which shall not be unreasonably withheld,
SELECTICA reserves the right to change from time to time all or any part of the
services or systems described below.
(a) Telephone/Fax Support. SELECTICA will provide Customer with
twenty-four hour telephone support, seven days per week, excluding holidays
observed by SELECTICA. SELECTICA will provide holiday answering service to
record inquiries from Customer and SELECTICA will use reasonable commercial
efforts to respond to any such inquiries within one (1) business day of receipt.
Customer will ensure that only person(s) properly trained in the operation and
usage of the Software and designated by SELECTICA as a contact in accordance
with paragraph 3.1(c) below will utilize such telephone support. SELECTICA will
provide such telephone assistance relation to the (i) installation and
operational use of the Software; (ii) identification and verification of the
causes of suspected errors or malfunctions in the Software; and (iii) providing
of detours
3
<PAGE> 4
for identified Software errors or malfunctions, where reasonably available to
SELECTICA. Further, upon request by SELECTICA, Customer will allow SELECTICA to
perform on-line diagnostics of the Software.
(b) Internet Access. SELECTICA shall furnish Customer with access
to (i) SELECTICA's homepage on which SELECTICA will from time to time publish
information regarding any then existing defects and other problems related to
the Software and detours then discovered, together with information about future
Software enhancements and related SELECTICA products and (ii) SELECTICA's
electronic mail system by which Customer may send questions to SELECTICA about
software. SELECTICA will use reasonable efforts to respond to such inquiries
within one (1) business day of receipt. Customer shall be responsible for
procuring at its expense all hardware (including modem) and software necessary
to access SELECTICA's electronic mail system and for paying all telephone and
other charges incurred by Customer in connection with the use of such system.
(c) Training Services. SELECTICA will authorize a maximum of two
Customer employees to contact SELECTICA for telephone and/or fax Support. At
least one contact must have completed SELECTICA's Training Course ("Training
Course"), and will be designated as either the primary or backup contact.
(d) LPO-Online Support. SELECTICA will provide support and
service for the LPO-Online application during the term of this Exhibit B.
3.2 MAINTENANCE. Provided Customer has paid SELECTICA the applicable
fees specified in Exhibit B, SELECTICA will furnish to Customer within a
reasonable time after publication, one (1) copy of all Upgrades.
3.3 ESCALATION. Maintenance services will be subject to the "Call
Process and Escalation Matrix" attached as "Exhibit D".
3.4 OTHER SERVICES. SELECTICA will furnish to Customer the Software
customization and/or additional maintenance services and/or training identified
in Exhibit C, if any, on the terms and conditions specified therein.
SECTION 4. COMPENSATION
4.1 LICENSE FEE. Customer will pay SELECTICA the fees as specified in
Exhibit B.
4.2 MAINTENANCE FEE. In consideration for SELECTICA's services set forth
in Section 3.1 and 3.2, Customer agrees to pay SELECTICA the fees in the amount
and in accordance with the terms of Exhibit B. SELECTICA reserves the right to
charge Customer a reinstatement fee to resume such maintenance services if
Customer has not
4
<PAGE> 5
continuously maintained such services in effect in accordance with the terms of
this Section 4.2.
4.3 PAYMENT. All fees, charges and other sums payable to SELECTICA under
this Agreement will be due and payable on the dates specified in Exhibit B, or
within thirty (30) days after receipt of invoice by Customer if no date is
specified in Exhibit B. All monetary amounts are specified and shall be paid in
the lawful currency of the United States of America. Customer shall pay all
amounts due under this Agreement to SELECTICA at the address set forth herein or
such other location as SELECTICA designates in writing. Any amount not paid when
due will bear interest at the rate of one and one half percent (1.5%) per month
or, the maximum rate permitted by law, whichever is less, determined and
compounded on a daily basis from the date due until the date paid. All fees,
charges and other sums payable to SELECTICA under this Agreement do not include
any sales, use, excise or other applicable taxes, tariffs or duties (excluding
any applicable federal and state taxes based on SELECTICA's net income), payment
of which shall be the sole responsibility of Customer.
SECTION 5. TERM AND TERMINATION
5.1 TERM. The term of this Agreement and the license set forth in
Section 2.2 shall commence on the Effective Date and shall end upon the
termination of this Agreement pursuant to Section 5.
5.2 TERMINATION BY CUSTOMER. Customer may terminate this Agreement and
the license by returning to SELECTICA all copies of the Software and the
Documentation in its possession or control, or providing written notice
certifying destruction of such, subject to verification of the same by SELECTICA
to SELECTICA's satisfaction in its sole discretion. Such termination shall not
relieve Customer of any of its outstanding financial obligations to SELECTICA.
5.3 TERMINATION FOR CAUSE. If either party defaults in the performance
of or compliance with any of its obligations under this Agreement, and such
default has not been remedied or cured within thirty (30) days after receipt of
written notice specifying the default or, if the nature of the default is such
that more than thirty (30) days are required for the cure thereof, and the
defaulting party fails to commence its effort to cure such breach or default
within such thirty (30) days and to diligently prosecute the same to completion
thereafter to the notifying party's satisfaction in its sole discretion, the
notifying party may terminate this Agreement and the license, in addition to its
other rights and remedies under law. If Customer terminates this Agreement,
Customer shall return to SELECTICA all copies of the Software and the
Documentation in its possession or control, or provide written notice certifying
destruction of such, subject to verification of the same by SELECTICA to
SELECTICA's satisfaction in its sole discretion. Such termination shall not
relieve Customer of any of its outstanding financial obligations to SELECTICA.
In the case of termination due to breach by SELECTICA, Customer shall
5
<PAGE> 6
receive a pro-rata refund of maintenance fees for the remaining maintenance term
paid for beyond the termination date.
5.4 POST TERMINATION. Upon termination of this Agreement, Customer shall
promptly cease the use of the Software and Documentation and destroy (and in
writing certify such destruction) or return to SELECTICA all copies of the
Software and Documentation then in Customer's possession or control.
5.5 SURVIVAL. Sections 2.5, 4, 5.4, 7, 8 and 9 shall survive the
termination of this Agreement.
SECTION 6. WARRANTIES AND REMEDIES
6.1 PERFORMANCE WARRANTY AND REMEDY. SELECTICA warrants to Customer that
when operated in accordance with the Documentation and other instructions
provided by SELECTICA, the Software will perform in accordance with the
functional specifications set forth in the Documentation for a period of one
hundred and twenty (120) days after delivery of the Software to the Customer. If
the Software fails to comply with the warranty set forth in this Section 6.1,
SELECTICA will use reasonable commercial efforts to correct the noncompliance
provided that: Customer notifies SELECTICA of the noncompliance within (120) one
hundred and twenty days after delivery of the Software to the Customer, and
SELECTICA is able to reproduce the noncompliance as communicated by Customer to
SELECTICA. If after the expenditure of reasonable efforts, SELECTICA is unable
to correct any such noncompliance, SELECTICA will refund to Customer an amount
equal to the total of all license and support and maintenance paid to SELECTICA
on or after the effective date reduced by one thirty-sixth (1/36) for each month
past the Effective Date of this Agreement in full satisfaction of Customer's
claims relating to such noncompliance upon Customer's return of said Software.
6.2 WARRANTY LIMITATIONS. The warranties set forth in Section 6.1 apply
only to the latest release of the Software made available by SELECTICA to
Customer. Such warranties do not apply to any noncompliance of the software
resulting from misuse, use or combination of the Software with any products,
goods, services or other items furnished by anyone other than SELECTICA, any
modification not made by or for SELECTICA, or any use of the Software by
Customer in contradiction of the terms of this Agreement.
SECTION 7. INTELLECTUAL PROPERTY RIGHTS INDEMNITY
SELECTICA agrees, at its own expense, to defend or, at its opinion, to
settle, any claim or action brought against Customer on the issue of
infringement of any United States copyrights, trade secrets, patents, trademarks
and other proprietary rights of any third party by the Software as used within
the scope of this Agreement, and to pay all
6
<PAGE> 7
damages and costs, including reasonable legal fees, which may be assessed
against Customer under any such claim or action. SELECTICA shall be released
from the foregoing obligation unless Customer provides SELECTICA with (i)
written notice within fifteen (15) days of the date Customer first becomes aware
of such a claim or action, or possibility thereof; (ii) sole control and
authority over the defense or settlement thereof; and (iii) proper and full
information and assistance to settle and/or defend any such claim or action.
Without limiting the forgoing, if a final injunction is, or SELECTICA believes,
in its sole discretion, is likely to be, entered prohibiting the use of the
Software by Customer as contemplated herein, SELECTICA will, at its sole option
and expense, either (a) procure for Customer the right to use the infringing
Software as provided herein or (b) replace the infringing Software with
noninfringing, functionally equivalent products, or (c) suitably modify the
infringing Software so that it is not infringing; or (d) in the event (a), (b)
and (c) are not commercially reasonable, terminate the license, accept return of
the infringing Software and refund to Customer an equitable portion of the
license fee paid therefor. Except as specified above, SELECTICA will not be
liable for any costs or expenses incurred without its prior written
authorization. Notwithstanding the foregoing, SELECTICA assumes no liability for
infringement claims arising from (i) combination of the Software with the other
products not provided by SELECTICA, but not covering the Software alone, or (ii)
any modifications to the Software unless such modification was made by
SELECTICA. THE FOREGOING PROVISIONS OF THIS SECTION 7 STATE THE ENTIRE LIABILITY
AND OBLIGATIONS OF SELECTICA AND THE EXCLUSIVE REMEDY OF CUSTOMER, WITH RESPECT
TO ANY ACTUAL OR ALLEGED INFRINGEMENT OF ANY PATENT, COPYRIGHT, TRADE SECRET,
TRADEMARK OR OTHER INTELLECTUAL PROPERTY RIGHT BY THE SOFTWARE.
SECTION 8. DISCLAIMER WARRANTY AND LIMITATION OF LIABILITY
8.1 DISCLAIMER OF WARRANTIES. EXCEPT AS SET FORTH IN SECTION 6.1,
SELECTICA MAKES NO WARRANTIES WHETHER EXPRESSED, IMPLIED OR STATUTORY REGARDING
OR RELATING TO THE SOFTWARE OR THE DOCUMENTATION OR ANY MATERIALS OR SERVICES
FURNISHED OR PROVIDED TO CUSTOMER UNDER THIS AGREEMENT. SELECTICA SPECIFICALLY
DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSES, AND SATISFACTORY QUALITY WITH RESPECT TO THE SOFTWARE, DOCUMENTATION
AND ANY OTHER MATERIALS AND SERVICES PROVIDED BY SELECTICA HEREUNDER, AND WITH
RESPECT TO THE USE OF THE FORGOING.
8.2 LIMITATION OF LIABILITY. EXCEPT AS SET FORTH IN SECTION 7, IN NO
EVENT WILL EITHER PARTY BE LIABLE FOR ANY LOSS OF PROFITS, LOSS OF USE, BUSINESS
INTERRUPTION, LOSS OF DATA, COST TO RECOVER, OR FOR ANY INDIRECT, SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND IN CONNECTION WITH OR
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ARISING OUT OF THE FURNISHING, PERFORMANCE OR USE OF THE SOFTWARE, DOCUMENTATION
OR ANY MATERIALS OR SERVICES PERFORMED HEREUNDER, WHETHER ALLEGED AS A BREACH OF
CONTRACT OR TORTUOUS CONDUCT, INCLUDING NEGLIGENCE, EVEN IF EITHER PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN ADDITION, NEITHER PARTY WILL
BE LIABLE FOR ANY DAMAGES CAUSED BY DELAY IN THE DELIVERY OR FURNISHING OF THE
SOFTWARE, DOCUMENTATION, OR OTHER MATERIALS OR SERVICES. EITHER PARTY'S
LIABILITY UNDER THIS AGREEMENT FOR DAMAGES WILL NOT, IN ANY EVENT, EXCEED THE
AMOUNTS PAID UNDER THIS AGREEMENT FOR THE ITEMS GIVING RISE TO SUCH LIABILITY.
SECTION 9. MISCELLANEOUS
9.1 NONDISCLOSURE OF AGREEMENT. Neither party shall disclose the terms
of this Agreement except as required by law or governmental regulation without
the other party's prior written consent, except that both party's may disclose
the terms of this Agreement on a confidential basis to their respective
accountants, attorneys, parent organizations and financial advisors and lenders.
9.2 REFERENCE ACCOUNT. Customer consents to SELECTICA's identification
of Customer as a user of the Software and will cooperate with SELECTICA in
furnishing nonconfidential information about Customer's software use for
informational and promotional use by SELECTICA. No public press releases or
other public forum information exchange about Customer's use of SELECTICA's
Software will be implemented without prior written permission of Customer.
Customer and SELECTICA agree to the issuance of a public press release
announcing this Agreement.
9.3 NOTICES. Any notice or other communication under this Agreement
given by either party to the other will be deemed to be properly given if given
in writing and delivered in person or facsimile, if acknowledged received by
return facsimile or followed within one day by a delivered or mailed copy of
such notice, or if mailed, properly addressed and stamped with the required
postage, to the intended recipient at its address specified in this Agreement.
Either party may from time to time change its address for notices under this
Section by giving the other party notice of the change in accordance with this
Section 9.3.
9.4 ASSIGNMENT. Each party shall not assign (directly, by operation of
law or otherwise) this Agreement or any of its rights under this Agreement
without the prior written consent of the other party, not to be unreasonably
withheld, except that each party may assign all, but not part, of this Agreement
and the Software and Documentation then in its possession or control to the
successor of Customer in a merger or other similar corporate reorganization
outside of the course of Customer's normal business operations
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or to the purchaser of substantially all of Customer's assets, provided such
successor or purchaser agrees in writing to comply with the terms of this
Agreement. Subject to the foregoing, this Agreement is binding upon, inures to
the benefit of and is enforceable by the parties and their respective successors
and assigns.
9.5 NONWAIVER. Any failure of either party to insist upon or enforce
performance by the other party of any of the provisions of this Agreement or to
exercise any rights or remedies under this Agreement will not be interpreted or
construed as a waiver or relinquishment of such party's right to assert or rely
upon such provision, right or remedy in that or any other instance.
9.6 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement,
and supersedes any and all prior agreements, between SELECTICA and Customer
relating to the Software, Documentation, services and other items subject to
this Agreement. No amendment of this Agreement will be valid unless set forth in
a written instrument signed by both parties.
9.7 GOVERNING LAW AND ARBITRATION. The rights and obligations of the
parties under this Agreement shall not be governed by the 1980 UN Convention on
Contracts for the International Sale of Goods, but instead shall be governed by
and construed under the laws of the State of Illinois, including its Uniform
Commercial Code, without reference to conflict of laws principles. Any dispute
or claim arising out of or in connection with this Agreement or the performance,
breach, or termination thereof, shall be finally settled by arbitration in
Chicago, Illinois by three arbitrators under the rules of arbitration of (i) the
International Chamber of Commerce, if Customer's address set forth herein is
outside the United States, or (ii) by the American Arbitration Association if
such address is in the United States. Judgment on the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof.
Notwithstanding the foregoing, either party may apply to any court of competent
jurisdiction for injunctive relief without breach of this arbitration process.
9.8 LANGUAGE. This Agreement is in the English language only, which
language shall be controlling in all respects, and all versions hereof in any
other language shall not be binding to the parties hereto. All communications
and notices to be made or given pursuant to this Agreement shall be in the
English language.
9.9 APPLICABILITY OF PROVISIONS LIMITING SELECTICA'S LIABILITY. The
provisions of this Agreement under which the liability of SELECTICA is excluded
or limited, shall not apply to the extent that such exclusions or limitations
are declared illegal or void under any applicable laws, unless the illegality or
invalidity is cured under such laws by the fact that the law of Illinois governs
this Agreement.
9.10 YEAR 2000 COMPLIANCE WARRANTY. SELECTICA represents and warrants
that the Software as delivered will operate prior to, during, and after, the
calendar year 2000 A.D. without error relating to date data, specifically
including but not
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limited to any error relating to calculations, sorting, interpretation,
processing or acceptance of date data which represents or references different
centuries or more than one century, provided that all hardware, firmware and
other software used in conjunction with the Software properly exchanges accurate
and properly formatted date data with the Software. The Year 2000 Compliance
Warranty set forth in this Section shall begin as of the date of this Agreement
and end on the date after January 1, 2000, subsequent to which the Software has
operated without a breach of the Year 2000 Compliance Warranty for a consecutive
six month period (the "Year 2000 Warranty Period"). If the Software fails to
comply with the warranty set forth in this Section 12, SELECTICA will use
reasonable commercial efforts to correct the noncompliance, provided that
Customer notifies SELECTICA of the noncompliance within the Year 2000 Warranty
Period, and SELECTICA is able to reproduce the noncompliance as communicated by
Customer to SELECTICA. If after the expenditure of reasonable efforts, SELECTICA
is unable to correct any such noncompliance, SELECTICA may refund to Customer
all or an equitable portion of the license fee paid by Customer to SELECTICA for
such Software in full satisfaction of Customer's claims relating to such
noncompliance upon Customer's return of said Software.
9.11. SUCCESSORS AND ASSIGNS: This Agreement shall be bindings on each
party's successors and assigns.
9.11 FORCE MAJEURE. Neither party will be liable for, or be considered
to be in breach of or default under this Agreement, other than monetary
obligations, as a result of any cause or condition beyond such party's
reasonable control.
9.12 ACCEPTANCE. Neither this Agreement nor any of its EXHIBITs will
become effective until accepted by SELECTICA at its offices in San Jose,
California.
In Witness whereof, the parties have executed this Agreement by their duly
authorized representatives.
SELECTICA, INC.
----------------------------------------
("SELECTICA) ("Customer") Loan Market Resources, LLC
By: ILLEGIBLE By: ILLEGIBLE
--------------------- -----------------------
Print name: CHARLES B. PENDELL Print name: CARY G. RENGER
--------------------- -----------------------
Title: VICE PRESIDENT SALES Title: PRESIDENT
--------------------- -----------------------
Date: 6-30-99 Date: 6-30-99
--------------------- -----------------------
Address: 2890 Zanker Road Address: 640 North LaSalle
--------------------- -----------------------
Suite 101 Suite 590
--------------------- -----------------------
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--------------------- -------------------------
San Jose, CA 95134 Chicago, Illinois 60610
--------------------- -------------------------
Telephone #: (408) 570-9700 Telephone #: (312) 337-5625
--------------------- -------------------------
Facsimile #: (408) 570-9705 Facsimile #: (312) 337-9563
--------------------- -------------------------
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EXHIBIT A
DESCRIPTION OF SOFTWARE AND DOCUMENTATION
ACE ENTERPRISE(TM)
ACE Enterprise is a leading high performance Electronic Commerce configuration
server solution that enables companies to realize the full potential of
customized one-to-one selling on the Internet. ACE Enterprise is a
multi-threaded, multi-platform, 100% Java product and sales configuration server
that simplifies the selection and configuration of complex goods and services
online. Embedded within an electronic commerce application, ACE Enterprise
provides an interactive, guided, consultative commerce environment. The server
ensures that user selection is error-free by eliminating incorrect options,
offering dynamic feedback and online guidance, helping the users to find a
correct solution that meets their requirements.
Administrative and development documentation is provided electronically and in
hard copy format.
SYSTEM REQUIREMENTS:
Software:
OS - Sun Solaris, HP-UX, AIX, and NT 4.0 (with service pack) Java Runtime
environment (JRE) 1.1.6 from Sun Microsystems
Hardware:
Pentium II 233 MHz CPU or greater
Sun Ultra SPARC
Sun E10000 in a Clustering Environment (3Com will help with certification)
Hewlett Packard NetServer
Other hardware platforms running JRE 1.1.6
Netscape 3.0 or Internet Explorer Browser 3.0 or greater to run administration
applet console
HTTP Server Support:
Java Web Server from JavaSoft
Netscape Fast Track and Enterprise servers from Netscape with JRun (Netscape
WebServer 3.6.1 included in a multi-processor and multi threaded configuration
(3Com to assist in certification)
Internet Information Server from Microsoft with Jrun
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ACE SERVER MANAGER(TM)
ACE Server Manager allows for load balancing and remote service of any and all
ACE Enterprise Servers.
Administrative and development documentation is provided electronically and in
hard copy format.
SYSTEM REQUIREMENTS:
Software:
OS - Sun Solaris, HP-UX, AIX, and NT 4.0 (with service pack) Java Runtime
environment (JRE) 1.1.6 from Sun Microsystems
Hardware:
Pentium II 233 MHz CPU or greater
Sun Ultra SPARC
Sun E10000 in a Clustering Environment (3Com will help with certification)
Hewlett Packard NetServer
Other hardware platforms running JRE 1.1.6
Netscape 3.0 or Internet Explorer Browser 3.0 or greater to run administration
applet console
HTTP Server Support:
Java Web Server from JavaSoft
Netscape Fast Track and Enterprise servers from Netscape with JRun (Netscape
WebServer 3.6.1 included in a multi-processor and multi threaded configuration
(3Com to assist in certification)
Internet Information Server from Microsoft with JRun
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ACE QUOTER(TM)
ACE Quoter enables companies to deploy a single quoting solution to generate
quotes online with ACE Enterprise, on an Intranet with ACE Desktop, and on a
remote sales person's laptop with ACE Mobile. ACE Quoter transforms scattered
sales data into your virtual corporate storage facility for all customer quotes
and configurations. ACE Quoter manages any quote generated from ACE client
products--ACE Enterprise (HTML), ACE Desktop (Java) and ACE Mobile (Java)--in a
secure repository. The ACE Quoter has a built-in security mechanism that manages
access through user and group privileges.
Administrative and development documentation is provided electronically and in
hard copy format.
SYSTEM REQUIREMENTS:
Software:
OS - Sun Solaris, HP-UX, AIX, and NT 4.0 (with service pack) Java Runtime
environment (JRE) 1.1.6 from Sun Microsystems
Hardware:
Pentium II 233 MHz CPU or greater
Sun Ultra SPARC
Sun E10000 in a Clustering Environment (3Com will help with certification)
Hewlett Packard NetServer
Other hardware platforms running JRE 1.1.6
Netscape 3.0 or Internet Explorer Browser 3.0 or greater to run administration
applet console
HTTP Server Support:
Java Web Server from JavaSoft
Netscape Fast Track and Enterprise servers from Netscape with JRun (Netscape
WebServer 3.6.1 included in a multi-processor and multi threaded configuration
(3Com to assist in certification)
Internet Information Server from Microsoft with JRun
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ACE STUDIO(TM)
ACE Studio is the premier graphical modeling environment for developing,
deploying and managing configuration applications for the enterprise. It
provides product experts with an easy-to-use integrated modeling environment
(IME(TM)) for building and deploying configuration applications without doing
any programming. The IME contains all of the modules necessary in any
development environment for modeling, testing and debugging, and creating
graphical user interfaces--all through a WYSIWYG interface.
Administrative and development documentation is provided electronically and in
hard copy format.
SYSTEM REQUIREMENTS:
Intel Pentium II 233 MHz or faster
Microsoft Windows NT 4.0
64 MB RAM minimum recommended
300 MB available hard disk space
Microsoft IE 4.0 or higher (msjava.dll 5.0 or higher for ACE HTML Editor only)
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LICENSED SERVERS
Description Quantity Licensed
- --------------------------------------------------------------------------------
ACE Enterprise, including Documentation
Dual CPU 1
Single CPU-Test and Development 1
Server Manager 0
ACE Quoter, including Documentation
Dual CPU 1
ACE Connector 0
LICENSED USERS
ACE Studio - Number of Licensed Users
Including Documentation 6
ACE Mobile - Number of Licensed Users
Including Documentation 0
NOTE: SELECTICA AGREES THAT ABOVE SOFTWARE LICENSES WILL SUPPORT 200
SIMULTANEOUS USERS WITH AN AVERAGE RESPONSE TIME OF NO MORE THAN FIVE (5)
SECONDS FROM THE TIME AN HTML REQUEST IS RECEIVED BY THE SELECTICA ACE
ENTERPRISE OR ACE QUOTER SERVER, UNTIL THE TIME THE RECEIVING ACE SERVER
PRESENTS AN OUTGOING HTML PAGE TO THE WEB SERVER.
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EXHIBIT B
LICENSE AND MAINTENANCE FEES
1. License Fee. $[*]
Loan Market Resources (Customer) agrees to pay SELECTICA incorporated ([*]%) [*]
percent of LPO-Online Net revenue until a total of $[*] has been paid to
SELECTICA. After a total of $[*] has been paid to SELECTICA, Customer will pay
SELECTICA ([*]%) [*] percent of LPO-Online Net Revenue. Customer will provide
SELECTICA with access to Customer financial statements to verify revenue
recognition. Payments will be made to SELECTICA on a quarterly basis.
The above revenue sharing provisions are subject to the following definitions.
LPO-Online is defined as the loan marketing and processing system SELECTICA will
construct for Customer, to be deployed within Customer owned Web site.
LPO-Online will satisfy the specifications defined in the document entitled
"LPO-Online Specifications" as provided by Customer to SELECTICA and
incorporated into Exhibit C of this Agreement.. LPO-Online Net Revenue is
defined as total revenues directly generated through the operation of
LPO-Online, including brokerage fees, referral fees, usage fees or other
revenues, less total expenses directly associated with acquiring loan
applications entered to LPO-Online, including referral fees, sales commissions,
and marketing expenses.
If Customer sells LPO-Online via either direct sale, or in the case of the
merger or acquisition of Customer, SELECTICA's claim to revenue will survive and
be assumed by the acquiring entity or Customer will pay SELECTICA ([*]%) [*]
percent of the total proceeds from the sale, merger or acquisition.
SELECTICA will have no claim to Customer revenues other than LPO-Online Net
Revenue as defined above. Moreover, SELECTICA will also have no claim to
Customer assets other than LPO-Online as defined above.
SELECTICA agrees to develop a mutually agreed upon licensing arrangement which
will allow Customer to license the work product defined in Exhibit "C" and
defined as LPO-Online in this Agreement to third party companies who may wish to
license and "private label" the LPO-Online application for their business
purposes.
2. License Fee Adjustment and License Fee Termination
Beginning on the second anniversary of the execution of this agreement, if the
total revenue paid to SELECTICA is less than $[*] per quarter, SELECTICA will
have the option to a) renegotiate the annual fee and/or service base for this
agreement; b) renegotiate this Agreement to a standard software license and
maintenance agreement, or c) terminate this agreement and discontinue support of
the LPO-Online application.
3. Maintenance Fee.
Subject to this Exhibit "B", Item 2, SELECTICA agrees to provide ongoing support
services, training and maintenance as outlined in Section "3" of this Agreement
as reasonably required. In
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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addition, SELECTICA will provide the mutually defined and agreed to professional
services necessary to enhance the LPO-Online application on a periodic basis.
4. Future Purchases: During the initial thirty-six (36) month period
following acceptance of this Agreement, SELECTICA agrees to discount
additional software purchase requirements by [*]% from then-current
published pricing. Payment guidelines for any such purchases will be
mutually agreed-to at time of order.
5. Customer shall have the option to convert the current revenue sharing
and payment plan to an "outright purchase" within a period of 150 days
of the Effective Date, via payment of the $[*] license fee. In
this case, both party's agree to negotiate ongoing annual Software
maintenance and LPO-Online application support fees.
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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EXHIBIT C
ADDITIONAL SERVICES AND TRAINING
A LOANMARKET RESOURCES PRODUCT
[GRAPHIC]
LPO-ONLINE IMPLEMENTATION PROPOSAL
(VERSION 1.0)
PREPARED FOR LOANMARKET RESOURCES BY:
SELECTICA, Inc.
[GRAPHIC]
2890 Zanker Road, San Jose, CA
(408) 570-9700
www.SELECTICA.com
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AN IMPLEMENTATION PROPOSAL FOR LOAN PRODUCTION OFFICE-ONLINE
BY: SELECTICA, INC.
PROJECT DESCRIPTION AND SCOPE
This proposal covers the scope of the engagement between LoanMarket Resources
L.L.C. ("Customer") and SELECTICA, Inc. ("SELECTICA") targeted to create the LPO
application, as specified in the "LPO-Online" document, consumer site
description document, and administration site description document published at
http://207.208.82.192, and the Customer specification attached to this Exhibit
C. SELECTICA intends to provide the ACE product set and consulting services
necessary to develop this application. This document describes the breakdown of
the functionality envisioned for this application in several packages
(independently developed and integrated feature sets). SELECTICA intends to
deploy fully usable packages in a phased manner and build the application
incrementally. This will allow Customer to get the application to production
early, garner user feedback and modify interfaces for maximum acceptances during
the application development life cycle.
BACKGROUND
Loan Production Office-Online ("LPO-Online") will enable consumer loan
originators, including mortgage bankers and brokers, finance companies, banks
and credit unions to leverage the Internet and automate customer relationship
development and management processes.
LPO-Online is an integrated front-office/back-office application: FRONT-OFFICE:
A Web-based store-front enabling loan originators to effectively merchandise
their products and gather applications from consumers shopping on the Web. Loan
officers operating in branch, phone center or decentralized environments can
also use this storefront as a sales automation tool.
BACK-OFFICE: An application processing system which, upon receipt of an
application, automatically procures a copy of the borrower's credit report, then
matches the borrower's needs and qualifications against the originator's array
of loan programs to identify the best loans available to the borrower.
LPO-ONLINE PACKAGES
LPO has 2 major users:
- Borrowers who want to borrow and want to get the lowest rate
available and optimize their portfolio
- Loan Originators who provide programs to attract consumers and get
the highest rate possible
Borrowers enter the LPO-Online site and "hunt" for a program that best suits
their needs. They may be expert "borrowers" or need guidance in the selection
process. Borrowers need to provide personal information (an application) that
allows the system to find the "best match" between their needs, profile and loan
program.
Loan Originators enter the LPO-Online site to provide information regarding
their loan programs they want to offer. They use the site to maintain the loan
programs, modifying them as necessary or adding new ones and deleting old ones.
The LPO-Online application packages are:
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THE BORROWER PACKAGE
The Borrower Package contains the following modules:
- Loan Advisor (What Do I Qualify For?) that guides borrowers through
differing loan program and qualification choices.
- Loan Application (including express application) that incrementally
builds up the borrower information necessary to match a loan program
and the consumer's ability to secure it. The Loan application will
also allow an express application entry as envisioned in LOP-Online.
- Loan What-ifs that allow borrowers to specify thresholds and
determine loan programs that best meet the requirements
- Loan Portfolio Manager that automates the process of creating
strategies for borrowers.
THE LOAN ORIGINATOR PACKAGE
The Loan Originator Package contains the Loan Program Definition module that
allows lenders to input loan program characteristics such as product features,
underwriting guidelines, credit limit, pricing and loan valuation.
LPO-Online Phases
SELECTICA envisions that LPO is developed in phases to successively build and
cover the feature set for the Consumer and Loan Originator packages.
PHASE-1
- Borrower Loan Advisor
- Borrower Loan Application (with Save & Restore)
- Manual Loan Originator Loan Program Entry
PHASE-2
- Borrower Loan What-ifs
- Loan Originator Program definition (with Save & Restore)
PHASE-3
- Borrower Loan Portfolio Manager
- Loan Originator Reports & Analysis
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FACTORS AFFECTING DEVELOPMENT
ASSUMPTIONS, CONSTRAINTS, AND DEPENDENCIES
The purpose of this section is to document internal and external factors that
will affect the project plan and its execution. Proper steps will be taken to
ensure that all assumptions are fulfilled, dependencies taken care of, and that
expectations are properly set that take into account the project's constraints.
ASSUMPTIONS
SELECTICA assumes that Customer will be available to assist with all the product
knowledge required to deliver the scope of work defined in this document.
SELECTICA will provide access to the software components produced by SELECTICA
required during the engagement. SELECTICA also assumes that Customer will
provide any other hardware or software required to successfully execute this
project. SELECTICA also assumes that Customer will make available all related
documentation and any associated resources, throughout the course of this
engagement, and that Customer management will provide timely decisions,
essential for the completion of the deliverables on time.
Software may include but is not limited to:
- ACE Enterprise, ACE Quoter, ACE Enterprise Manager software
- HTTP server (e.g. IIS)
- Servlet engine (e.g. JRUN)
- Oracle 7.3.4 or higher
Hardware (for development) may include but is not limited to:
- 3 servers to host the http server, the ACE Enterprise server and the
database server respectively
- Server's hardware specification is based on the anticipated
production environment
SELECTICA also assumes that Customer will provide resources for the creative
design, navigation and flow and content of the LPO-Online application HTML
pages. SELECTICA will assist in the review and adaptation of these HTML
templates to the LPO-Online knowledge base and engine.
CONSTRAINTS
The functionality mentioned in the deliverables will have to either work within
or work around the limitations of the environment. These include browser
capabilities, product capabilities, interface capabilities etc. SELECTICA will
test the LPO-Online on Netscape and Internet Explorer 4.x JavaScript 1.2
compliant browsers on Windows NT, 95 platforms.
DEPENDENCIES
In order for the development process to be successful, SELECTICA personnel will
work closely with Customer personnel at appropriate times. Logistically, most of
the development work is envisioned at SELECTICA premises. Other tasks such as,
but not
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limited to, project management, information gathering, application and
navigation flow design and reviews may be conducted at Customer premises as
necessary. The completed project will be deployed at Customer's hosting facility
or SELECTICA's Internet Data Center in San Jose.
CHANGE CONTROL PROCEDURES
Final design or user-interface changes, if any, will need to be made early in
the project. In order to meet the achieved delivery date of this project, we do
not expect any scope changes during the engagement. If there is a valid business
need for a scope change, then a written change request will be required. Change
requirements will be considered outside the scope of this project/proposal and
will be reviewed during or after the project has been completed.
PROPOSAL
DELIVERABLE
The deliverables from this engagement are as follows (for each Phase):
- Borrower and Loan Originator knowledge base
- HTML based front end, tagged to integrate with the knowledge base
- Quote server database
The entire deliverable will be packaged into an application enabled through
Customer's site.
APPLICATION DEVELOPMENT SERVICES
SELECTICA will provide the implementation services to create the Customer
Borrower and Loan Originator knowledge base, tag the application HTML templates,
and test and deploy the application. SELECTICA envisions a 15-20 person-days
effort to help Customer create the detailed requirements and functional
specification for LPO-Online. This includes reviewing the demo application
provided by Customer, determining the rules and constraints within each
attribute of the borrower profile, loan application and loan program, as well as
the complete navigation and flow of the user interface. SELECTICA expects that
Customer and its creative content team are present, available and participating
in this specification process. SELECTICA also expects that this team reviews and
approves the specification and schedule before actual design and implementation
start. This will help better estimate the time required to design, implement,
test and deploy the application. It is anticipated that a detailed schedule will
be available at the end of the Functional Specification activity.
EFFORT ESTIMATE
A rough estimate of the effort in person-days for this engagement is as follows:
PHASE-0 FUNCTIONAL SPECIFICATION AND DETAILED REQUIREMENTS
(FOR PHASE-1, 2)
Business Analyst/Project Management 20
PHASE 1 BORROWER'S INTERFACE
Engineering 80
Deployment 10
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Project Management 40
PHASE 2 LOAN ORIGINATOR'S INTERFACE
Engineering 60
Deployment 10
Project Management 30
PHASE 3 ANALYSIS & REPORTS (PORTFOLIO MANAGER, LENDER REPORTS)
Engineering 60
Deployment 10
Project Management 20
Business Analyst (Functional Specification) 10
---------------------------------------------------------
TOTAL IMPLEMENTATION SERVICES 230
PROJECT MANAGEMENT/BUSINESS ANALYSIS 120
FEES
Based on the discussions with Customer, SELECTICA can begin this engagement
subject to the License Fees as outlined in Exhibit "B" of this Agreement..
SELECTICA's normal billing rates are $[*]/hr for project management and business
analysis and $[*]/hr for engineering implementation services on a time and
material basis. SELECTICA also bills for reasonable costs and other out of
pocket expenses incurred in connection with travel separately as incurred. Such
reasonable and customary expenses will be submitted on a timely basis to
Customer, and will be included in the total License Fee of $[*].
This time, scope and fees estimate parallels the assumptions made herein and may
change (higher or lower) depending on a number of factors including, but not
limited to the final scope of project, modifications requested by Customer
management, and unforeseen problems with proposed plan and additional discovery.
However, any changes and/or modifications to the agreed upon scope of this
project will be documented and approved by Customer's project and business
leadership prior to commencing on any additional work. Additional effort beyond
the original scope will be included in the License Fee at SELECTICA's on-going
consulting rates.
MILESTONES
A high-level suggested milestones summary for the engagement is:
Month-1 Funding & SELECTICA proposal approval
PHASE-0: SPECIFICATION & REQUIREMENTS ANALYSIS
Project schedule
Application navigation
Month-2 Phase-1 pilot review
Month-3 PHASE-1 DEPLOY
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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Month-4 Phase-2 pilot review
Phase-3 Functional Specification
Month-5 PHASE-2 DEPLOY
Phase-3 pilot review
Month-6 PHASE-3 DEPLOY
PROJECT RESPONSIBILITIES AND RESOURCES PROFILE
SELECTICA anticipates 1 project manager, 1 business analyst and 3-4 consulting
engineers and database analyst for the duration of the project. Should the
expected staffing profile change during the course of implementation, SELECTICA
will inform Customer to justify and seek approval for additional resources
required.
SELECTICA's project manager will be responsible for the overall SELECTICA
deliverable management. Additionally, the project manager will be responsible
for project documentation such as (but not limited to) specifications, designs,
plans, scope, and schematics. The project manager will create and maintain the
project plan, and communicate project status and plan variances to affected and
interested parties. The project manager will coordinate with Customer's
management and project team members. The project manager will arrange and seek
reviews and approvals as scheduled and defined in the project plan. The project
manager will also be responsible for dissemination of all information, status
and call reports, change management and conducting quality audits. The business
analyst will be responsible for all functional specifications and requirements
analysis documents.
SELECTICA's other team members will be responsible for design, implementation
and testing of the LPO-Online and related database and knowledge-base, user
interface and site integration and deployment activities.
CUSTOMER RESPONSIBILITIES & DELIVERABLES
Customer is responsible for the final deployment success of the configuration
application to its user community. SELECTICA can best assist in this endeavor by
providing the appropriate personnel to provide timely information, review and
testing of LPO-Online. In particular:
- Appoint an Customer project manager for this engagement. The project
manager will be the central point of contact for SELECTICA for all
product, schedule and resource-related issues, reviews, and decision
making. The project manager is also responsible to provide access to
and time with personnel with critical product and selling knowledge.
- Participate in the functional specification and requirements
analysis and provide timely review and approval.
- Assemble a user team to review all designs and flows for LPO-Online.
The users are in the best position to evaluate what works for them.
This team would be responsible for timely reviews and acceptances of
all deliverables.
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<PAGE> 26
- Provide graphic and web designers to create the HTML templates for
LPO-Online. SELECTICA expects to work closely with this team during
this process to ensure that the application being developed and the
flow meets SELECTICA's requirements and adheres to the standards and
best practices encouraged for SELECTICA's deployments. Customer's
responsibilities in the design and development include:
- Develop the HTML templates for the application.
- Develop any copy, help-text and help-system and any graphic
elements.
- Provide a test team to create functional and acceptance test plans,
test scenarios and then perform acceptance and final testing.
26
<PAGE> 27
TERMS AND CONDITIONS
This proposal assumes acceptance of SELECTICA Inc. "Consulting Services: General
Terms and Conditions" as provided in this Exhibit C..
SELECTICA INC. CONSULTING SERVICES: GENERAL TERMS AND CONDITIONS
- --------------------------------------------------------------------------------
1. The services that SELECTICA will perform for LOANMARKET RESOURCES, the
Client (the "Services") are described on the attached Statement of Work and
Authorization, and in any further Work Authorizations entered into by
SELECTICA and Client referencing this Work Authorization.
2. Per Exhibit "B" of this Agreement, Client will pay SELECTICA for Services
actually rendered at the Billing Rate stated in the applicable Work
Authorization, and for all actual and reasonable travel, lodging and other
out-of-pocket expenses incurred in the course of performing the Services.
Expenses will be incurred and documented in accordance with SELECTICA's
standard policies, which will be reviewed with Client at Client's request
and, if appropriate, modified at the request of Client to conform to
Client's standard expense policies. SELECTICA shall submit invoices
identifying the Work Authorization, the Services provided, applicable
Billing Rate(s) and expenses. Any taxes incurred in connection with Services
(other than taxes imposed on SELECTICA's earnings generally or referred to
in Section 3 below) will be billed to, and paid by Client in addition to
Project Fees and Expenses. Payment is due within thirty (30) days of the
invoice date. SELECTICA may suspend work and withhold Deliverables in the
event a properly submitted and valid invoice is not paid within thirty days
of notice of nonpayment, and may charge interest at a rate of one percent
per month on any outstanding balance more than forty-five days overdue.
3. SELECTICA is an independent contractor, and no Work Authorization shall be
construed to create an employment relationship between the parties, whether
for tax or any other purpose. Neither party shall have the right to bind the
other to any agreement with a third party or to incur any obligation or
liability on behalf of the other party. SELECTICA and its personnel shall
not be considered employees of Client. SELECTICA will, during the term of
this Agreement, maintain at SELECTICA's expense all necessary insurance for
its personnel, including but not limited to worker's compensation,
disability, unemployment insurance, and general liability insurance.
SELECTICA will provide client with certification of insurance upon request.
SELECTICA will be responsible for employment taxes, worker's compensation,
disability, or unemployment compensation insurance, premiums or
27
<PAGE> 28
claims levied upon or attributable to the services rendered by SELECTICA,
and SELECTICA's personnel, including but not limited to, all state and
federal FICA, worker's compensation, disability, unemployment, withholding
taxes, premiums and claims.
4. Subject only to payment of applicable Project fees, expenses and taxes,
Client is granted an irrevocable, unlimited, world wide, freely transferable
right and license to install, reproduce, use, modify, create derivative
works of any software corrections, scripts, triggers, other modifications or
enhancements, technical documentation, reports, analysis or other
deliverables to be developed or prepared by SELECTICA and provided to Client
as part of the Services ("Deliverables").
5. SELECTICA warrants that the Services will be performed as described in the
Work Authorization by appropriately trained and qualified personnel using
reasonable skill and diligence; provided, however, that (i) SELECTICA shall
have received written notice of the work that Client claims does not conform
to the foregoing warranty within thirty days of the date on which the work
was completed, and (ii) Client's sole remedy and SELECTICA's sole obligation
in the event of a breach of the foregoing warranty shall be to either
re-perform the nonconforming work or to refund the Project Fees and Expenses
incurred by the Client for the nonconforming work. EXCEPT FOR THE FOREGOING
SENTENCE, SELECTICA DOES NOT MAKE ANY GUARANTY, WARRANTY OR REPRESENTATION,
EXPRESSED OR IMPLIED (INCLUDING, WITHOUT LIMITATION, ANY WARRANTY AS TO
QUALITY, PERFORMANCE, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
NONINFRINGEMENT).
6. SELECTICA shall defend any claim, suit or proceeding, and pay any settlement
amounts or damages awarded by a court of final jurisdiction, against Client
arising out of claims by third parties that a Deliverable infringes any
copyright, patent, trade secret or other intellectual property right. The
foregoing indemnification obligation (i) shall only apply to a Deliverable
for which client has paid all applicable fees; and (ii) shall not apply to
any claim of infringement based on any modification of the Deliverable or
the combination, operation or use of the Deliverable with materials not
supplied by SELECTICA. In the event of a claim of infringement, SELECTICA
shall have the option, at its expense (i) to procure for Client the right to
continue using the infringing Deliverable, (ii) to replace such Deliverable
with a non-infringing product substantially similar in features and
functionality, (iii) to modify such Deliverable to make it non-infringing
without materially affecting features or functionality, or (iv) to grant to
Client a refund of the fees for such Deliverable in exchange for its return
and the termination of the license to it. This section constitutes the
entire and exclusive obligation of SELECTICA with respect to any
infringement of any intellectual property right.
7. As a condition to the foregoing, the Client must (i) promptly notify
SELECTICA in writing of the claim, suit or proceeding for which
indemnification is sought, (ii)
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<PAGE> 29
permit SELECTICA to have sole control, and (iii) reasonably cooperate with
SELECTICA in the defense or settlement of the claim, suit or proceeding.
8. NEITHER PARTY SHALL BE LIABLE FOR (I) SPECIAL, INDIRECT, INCIDENTAL,
CONSEQUENTIAL, TORT OR COVER DAMAGES, INCLUDING, WITHOUT LIMITATION, DAMAGES
RESULTING FROM LOSS OF PROFITS, DATA, BUSINESS OR GOODWILL, WHETHER OR NOT
ADVISED OR AWARE OF THE POSSIBILITY OF SUCH DAMAGES, (II) ANY CLAIM THAT
AROSE MORE THAN THREE YEARS PRIOR TO THE INSTITUTION OF SUIT THEREON, OR
(III) MONETARY DAMAGES IN EXCESS OF THE FEES AND EXPENSES PAID BY CLIENT
UNDER THE WORK AUTHORIZATION OR AUTHORIZATIONS THAT DIRECTLY RELATE TO THE
CLAIM OR CLAIMS OUT OF WHICH THE DAMAGES HAVE ARISEN. The amount of any
monetary damages to which SELECTICA may be entitled is in addition to, and
not in lieu of, the fees, expenses and other amounts due SELECTICA from
Client. The limitation on the amount of monetary damages shall not apply to
the indemnification obligations set forth in Section 6 above.
9. Either party may terminate a Work Authorization at any time on fifteen (15)
days prior written notice; provided that upon termination Client shall pay
SELECTICA for Services, work-in-progress and expenses incurred prior to the
effective date of termination. Upon the termination of a Work Authorization,
the parties shall return any Confidential Information received in tangible
form, and SELECTICA shall deliver to Client all documents and other
materials received from Client in the course of providing Services under the
Work Authorization and, to the extent paid for by Client, copies of all
Deliverables or portions of Deliverables prepared pursuant to the Work
Authorization. The General Terms and Conditions shall survive the
termination of any Work Authorization.
10. The Services have been specially ordered and commissioned by Customer as a
"Work Made for Hire" and the Deliverables may be incorporated in existing
Customer works as a compilation or collective work. The parties agree that
all copyrights in the Deliverables shall be owned by Customer. However, the
parties acknowledge that certain intellectual property of SELECTICA,
including copyrights and trademarks, which existed prior to the Agreement
and prior to the Services ("Pre-Existing Assets") may be incorporated in the
Deliverables, and SELECTICA shall own and retain all Pre-Existing Assets in
such elements of the Deliverables. The parties acknowledge that the
intellectual property rights in and to the Software referenced in the
License Agreement shall be Pre-Existing Assets. Subject only to payment of
applicable Project fees, expenses and taxes, Customer is granted an
irrevocable, unlimited (subject to the provisions of Exhibit A to the
License Agreement), world wide, royalty free, non-exclusive, freely
transferable right and license to use the Pre-Existing Assets only in
conjunction with the Deliverables. No other rights in or to the Pre-Existing
Assets, including but not limited to any right to use them independently of
the Deliverables, are granted or implied. Subject to the foregoing
provisions of this
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<PAGE> 30
Section 4 of this Exhibit C, SELECTICA hereby assigns to Customer, its
successors and assigns, all rights, title and interest in and to the
Deliverables including, without limitation the following: (i) any U.S.
copyrights that SELECTICA may acquire in the Deliverables and all copyrights
and equivalent rights in the Deliverables throughout the world; and (ii) all
rights in and title to any inventions, ideas, designs, concepts, techniques,
discoveries, or improvements, whether or not patentable, which are first
developed in the course of SELECTICA's creation of the Deliverables,
including but not limited to all trade secrets, utility and design patent
rights; and (iii) any documents, magnetically or optically encoded media, or
other materials created by SELECTICA under this Agreement. Subject to the
provisions of this Section 10, SELECTICA shall execute and deliver such
instruments and take such other action as may be requested by Customer to
perfect or protect Customer's rights in the Deliverables and to carry out
the assignments contemplated above.
11. General Terms and Conditions and the applicable Work Authorization
constitute the entire agreement between the parties and supersede all
previous negotiations, agreements, and other communications, whether oral or
written, relating to the subject matter of this Agreement. Any variance from
or addition to the terms of this agreement contained in any purchase order
or other written notification will be of no effect. This agreement may not
be assigned by either party without the prior written consent of the other,
except for assignments to affiliated entities, may be modified in any way
except in writing signed by both parties and shall be governed by California
law. The invalidity or unenforceability of one or more provisions of this
agreement shall not affect the validity or enforceability of any of the
other provisions and this agreement shall be construed in all respects as if
such invalid or unenforceable provisions were omitted.
Exhibit D
CALL PROCESS AND ESCALATION MATRIX
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Severity Criteria Response Time Acting Party Notify Field Engineering
Management, Notified (Field
Technical Account Engineer
Support Manager on Site if
necessary)
- -------------------------------------------------------------------------------------------------
1. Down system, one (1) hour Field Account after six (6) after
100% of users Engineer/Support hours forty-eight (48)
affected Engineer hours
- -------------------------------------------------------------------------------------------------
2. System up, one (1) hour Field Account after after
critical features Engineer/Support twenty-four (24) seventy-two (72)
(backup, login, Engineer hours hours
checkin, search)
inoperable, NO
WORKAROUND
- -------------------------------------------------------------------------------------------------
</TABLE>
30
<PAGE> 31
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
four (4) hour Field Account after 24 hours after 1 week
3. System up, response time Engineer/Support
critical features Engineer
inoperable,
WORKAROUND
- -------------------------------------------------------------------------------------------------
4. Non-Critical four (4) hour Field Account See call process See call process
feature inoperable response time Engineer/Support
Engineer
- -------------------------------------------------------------------------------------------------
5. User question; four (4) hour Field Account See call process See call process
enhancement response time Engineer/Support
Engineer
- -------------------------------------------------------------------------------------------------
</TABLE>
31
<PAGE> 32
CALL PROCESS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
PROCESS STEPS RESPONSE TIME ACTING PARTY NEXT ACTION
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Initial Call Best Effort (4 hours) Field Account Severity evaluation
Engineer/Support (See severity
Engineer criteria)
- -------------------------------------------------------------------------------------------------
Severity Evaluation 1 hour Field Account If 1, 2 or 3 see
Engineer/Support ESCALATION MATRIX.
Engineer If 4 or 5, see
PROBLEM
DETERMINATION.
- -------------------------------------------------------------------------------------------------
PROBLEM DETERMINATION 2-4 weeks Field Account Field, Technical
Engineer/Support Support Manager
Engineer notified
- -------------------------------------------------------------------------------------------------
Plan for resolution, or Dependent upon problem Field Account
schedule to fix Engineer, Technical
Support Manager,
Support Engineer
- -------------------------------------------------------------------------------------------------
</TABLE>
32
<PAGE> 1
EXHIBIT 10.11
MAJOR ACCOUNT LICENSE AGREEMENT
This Agreement, dated as of May 17, 1999 (the "Effective Date"), is
made and entered into by and between Selectica, Inc. 2890 Zanker Road, Suite
101, San Jose, California, 95134 ("SELECTICA"), and Aspect Telecommunications,
1730 Fox Drive San Jose, CA 95131("Customer"). SELECTICA and Customer agree as
follows:
SECTION 1. DEFINITIONS
Whenever used in this Agreement, the following terms will have the
following specified meanings:
1.1 "DOCUMENTATION" means the documentation specified in Exhibit A
attached hereto and licensed to Customer hereunder, together with any and all
new releases, corrections and updates furnished by SELECTICA to Customer under
this Agreement.
1.2 "SOFTWARE" means the computer software specified in Exhibit A
attached hereto, in object code form, together with any and all Upgrades
furnished by SELECTICA to Customer under this Agreement.
1.3 "UPGRADES" means all releases, updates and corrections of the
Software licensed to Customer hereunder, in object code form, which are
published and generally made commercially available by SELECTICA to its
licensees of the Software with a change in the integer, tenths or hundredths
digit of the version number (e.g., a change form version x.xx to y.xx or x.yx or
x.xy). Upgrades shall not include any release, update or correction that has
been customized by SELECTICA for use by any particular licensee of the Software
or which is made by SELECTICA solely to adopt or reflect the trade dress of any
third party.
SECTION 2. SOFTWARE DELIVERY AND LICENSE
2.1 DELIVERABLES. Upon execution of this Agreement, SELECTICA shall
deliver to Customer one reproducible master copy of the Software licensed
hereunder to Customer, in object code form, and one copy of the Documentation.
2.2 GRANT. SELECTICA hereby grants Customer a worldwide irrevocable,
nonexclusive, nontransferable, perpetual license to:
(a) Install and use the Software ordered by Customer hereunder
for internal processing requirements of Customer on the number of Customer's
servers and/or users then authorized under this Agreement. The number of servers
and/or users initially authorized hereunder is set forth in Exhibit A. Customer
may increase the
1
<PAGE> 2
number of authorized servers and/or users from time to time in unit quantities
and upon payment to SELECTICA of the applicable amount as set forth in Exhibit
B.
(b) Reproduce the Documentation for the Software ordered by
Customer hereunder and/or incorporate all or any portion of the Documentation in
training materials prepared by the Customer, in each case solely for the use of
the Customer and provided that the copyright notices and other proprietary
rights legends of SELECTICA are included on each copy of the Documentation and
such materials.
(c) Reproduce and make one copy of the Software for archival and
backup purposes.
2.3 RESTRICTIONS. Customer shall use the Software and Documentation
only for the purposes specified in section 2.2 and in accordance with the
following:
(a) Customer shall not modify or prepare derivative works of the
Software or Documentation except as expressly permitted in Section 2.2;
(b) Customer shall not reverse engineer, disassemble or decompose
the Software, except to the extent that such acts may not be prohibited under
applicable law;
(c) Customer shall not remove, obscure, or alter any notice of
patent, copyright, trade secret, trademark, or other proprietary rights notices
present on any Software Documentation;
(d) Customer shall not sublicense, sell, lend, rent, lease, or
otherwise transfer all or any portion of the Software or the Documentation to
any third party except as may be permitted in Section 9.4 hereof; and
(e) Customer shall not use the Software or the Documentation to
provide services to third parties, or otherwise use the same on a "service
business" basis.
2.4 COMPLIANCE WITH LAWS. SELECTICA and Customer shall each comply
with all applicable laws, regulations, rules, orders and other requirements, now
or hereafter in effect, of any applicable governmental authority, in their
performance of this Agreement. Without limiting the generality of the foregoing,
Customer will comply with all export laws and regulations of the United States
in dealing with the Software including its export and use of the Software
outside the United States.
2.5 PROPRIETARY RIGHTS. The Software Documentation contains valuable
patent, copyright, trade secret, trademark and other proprietary rights of
SELECTICA. Except for the license granted under Section 2.2, SELECTICA reserves
all rights to the Software and Documentation. No title to or ownership of any
Software or proprietary rights related to the Software or Documentation is
transferred to Customer under this Agreement.
2
<PAGE> 3
2.6 PROTECTION AGAINST UNAUTHORIZED USE. Customer shall promptly
notify SELECTICA of any unauthorized use of the Software or Documentation
licensed to the Customer hereunder which comes to Customer's attention. In the
event of any unauthorized use by any of Customer's employees, agents or
representatives, Customer shall use its commercially reasonable efforts to
terminate such unauthorized use and to retrieve any copy of the Software or
Documentation in the possession or control of the person or entity engaging in
such unauthorized use. SELECTICA may, at its option and sole expense, monitor
any such proceeding and, in such an event, Customer shall provide such
information related to such proceeding as SELECTICA may reasonably request.
2.7 RECORDS. Customer shall ensure that each copy it makes of all or
any portion of the Software or the Documentation includes the notice of
copyright or other proprietary rights legends appearing in or on the Software or
the Documentation delivered to Customer by SELECTICA; shall keep accurate
records of the reproduction and location of each copy. SELECTICA may audit, at
its sole expense and no more than once a year, Customer's use of the Software,
provided that it gives Customer thirty (30) days prior written notice. Any such
audit shall be conducted during regular business hours at Customer's facilities
and shall not unreasonably interfere with Customer's business activities. All
information disclosed by Customer during the course of the audit shall be
Confidential Information subject to the provisions of Section 9.15.
2.8 PRE-IMPLEMENTATION TESTING AND ACCEPTANCE. The pre-implementation
testing and acceptance of the Software shall be performed as specified in
Exhibit A.
SECTION 3. SUPPORT SERVICES, TRAINING AND MAINTENANCE
3.1 SUPPORT SERVICES AND TRAINING. Provided Customer has paid
SELECTICA the applicable maintenance fee specified in Exhibit B, SELECTICA will
provide Customer with the maintenance services and training set forth below.
SELECTICA shall continue to offer such maintenance services and training for at
least thirty-six (36) months from the installation date of the Software ordered.
After such period, SELECTICA reserves the right to change or discontinue from
time to time all or any part of the services or systems described below,
provided that SELECTICA gives Customer at least six (6) months prior written
notice of such change in, or discontinuance of, such services or systems.
Software problems shall be classified with their corresponding response times,
resolutions and solutions as follows: LEVEL 1: the production development system
is down and the product is unusable resulting in total disruption/product
outage, response time 2 hours; resolution: 24 hours workaround with engineering
working around the clock if a patch is required; solution: fix/incorporate into
next release and provide workaround if necessary. -LEVEL 2: a major
feature/function failure exists and operation is severely restricted and there
is no convenient workaround, response time 4 hours; resolution: 48 hours
workaround with fix delivered in monthly patch release; solution:
fix/incorporate into next release and provide workaround if necessary. -LEVEL 3:
a minor feature/function failure exists; response time 8 hours;
3
<PAGE> 4
resolution: workaround with fix delivered in the next release; solution: provide
fix or workaround which may be in next major release. -LEVEL 4: a minor problem
exists-i.e. documentation, information, enhancement request; response time 24
hours; resolution: answer technical information requests and forward issues to
appropriate groups; solution: update with next release.
(a) Telephone/Fax Support.SELECTICA will provide Customer with
telephone support twenty-four hours a day, seven days per week. Customer will
ensure that only person(s) properly trained in the operation and usage of the
Software and designated by SELECTICA as a contact in accordance with paragraph
3.1(e) below will utilize such telephone support. SELECTICA will provide such
telephone assistance relation to the (i) installation and operational use of the
Software; (ii) identification and verification of the causes of suspected errors
or malfunctions in the Software; and (iii) providing of detours for identified
Software errors or malfunctions, where reasonably available to SELECTICA.
(b) Internet Access. SELECTICA shall furnish Customer with access
to (i) SELECTICA's homepage on which SELECTICA will from time to time publish
information regarding any then existing defects and other problems related to
the Software and detours then discovered, together with information about future
Software enhancements and related SELECTICA products and (ii) SELECTICA's
electronic mail system by which Customer may send questions to SELECTICA about
software. SELECTICA will use reasonable efforts to respond to such inquiries
within one (1) business day of receipt.
(c) Training Services. SELECTICA will authorize a maximum of two
Customer employees to contact SELECTICA for telephone and/or fax Support. Each
contact must have completed SELECTICA's ACE Basic, ACE Basic Plus and ACE
Intensive training courses ("Training Course"), and will be designated as either
the primary or backup contact. The Training Course features are described in the
most current version of the Selectica Course Description brochure.
3.2 MAINTENANCE. Provided Customer has paid SELECTICA the applicable
maintenance fee specified in Exhibit B, SELECTICA will furnish to Customer
within[thirty (30) days after publication, one (1) copy of all Upgrades.
3.3 OTHER SERVICES. SELECTICA will furnish to Customer the Software
customization and/or additional maintenance services and/or training identified
in Exhibit C, if any, on the terms and conditions specified therein.
SECTION 4. COMPENSATION
4.1 LICENSE FEE. Customer will pay SELECTICA the Software license fee
according to the payment schedule as specified in Exhibit B.
4
<PAGE> 5
4.2 MAINTENANCE FEE. In consideration for SELECTICA's services set
forth in Section 3.1 and 3.2, Customer agrees to pay SELECTICA the maintenance
fee in the amount and in accordance with the terms of Exhibit B for the first
twelve (12) month period commencing on the Effective Date. Customer may renew
the services described in Section 3.1 and 3.2 thereafter on an annual basis by
payment of the maintenance fee before the beginning of each new twelve (12)
month period After the end of the second twelve (12) month period after the
Effective Date, SELECTICA may increase the maintenance fee for subsequent
maintenance periods, but the overall increase in the maintenance fee for any
twelve (12) month period shall not exceed the increase during the previous
twelve (12) month period for the published United States Consumer Price Index.
SELECTICA shall give Customer at least sixty (60) days prior written notice of
any such change. SELECTICA reserves the right to charge Customer a reinstatement
fee to resume such maintenance services if Customer has not continuously
maintained such services in effect in accordance with the terms of this Section
4.2.
4.3 PAYMENT. All fees, charges and other sums payable to SELECTICA
under this Agreement will be due and payable on the dates specified in Exhibit
B, or within thirty (30) days after invoice date if no date is specified in
Exhibit B. Except for the invoice for payments specified in Exhibit B, all
invoices shall be issued after the date of acceptance. All monetary amounts are
specified and shall be paid in the lawful currency of the United States of
America. Customer shall pay all amounts due under this Agreement to SELECTICA at
the address set forth herein or such other location as SELECTICA designates in
writing. Any amount not paid when due will bear interest at the rate of one and
one half percent (1.5%) per month or, the maximum rate permitted by law,
whichever is less, determined and compounded on a daily basis from the date due
until the date paid. All fees, charges and other sums payable to SELECTICA under
this Agreement do not include any sales, use, excise or other applicable taxes,
tariffs or duties (excluding any applicable federal and state taxes based on
SELECTICA's net income), payment of which shall be the sole responsibility of
Customer. Customer shall have the right to challenge, at its sole control and
expense, the validity of all applicable taxes and SELECTICA shall assist
Customer as necessary, without any additional cost to SELECTICA, in contesting
such taxes.
SECTION 5. TERM AND TERMINATION
5.1 TERM. The term of this Agreement and the license set forth in
Section 2.2 shall commence on the Effective Date and shall end upon the
termination of this Agreement pursuant to Section 5.2 or 5.3.
5.2 TERMINATION BY CUSTOMER. Customer may terminate this Agreement
and the license for any reason by providing SELECTICA with sixty (60) days prior
written notice.
5
<PAGE> 6
5.3 TERMINATION FOR CAUSE. If either party defaults in the
performance of or compliance with any of its material obligations under this
Agreement, and such default has not been remedied or cured within thirty (30)
days after the other party gives the breaching party written notice specifying
the default or, if the nature of the default is such that more than thirty (30)
days are required for the cure thereof, and the breaching party fails to
commence its effort to cure such breach or default within such thirty (30) days
and to diligently prosecute the same to completion thereafter to the other
party's satisfaction in its sole discretion, the other party may terminate this
Agreement and the license, in addition to its other rights and remedies under
law. In the case of termination due to breach by SELECTICA, Customer shall
receive a pro-rata refund of maintenance fees for the remaining maintenance term
paid for beyond the termination date.
5.4 POST TERMINATION. Upon termination of this Agreement, Customer
shall promptly cease the use of the Software and Documentation and destroy (and
in writing certify such destruction) or return to SELECTICA all copies of the
Software and Documentation then in Customer's possession or control.
5.5 SURVIVAL. Sections 2.5, 5.4, 7, 8 and 9 shall survive the
termination of this Agreement. Customer shall pay SELECTICA only for those fees
still owing up until the date of termination.
SECTION 6. WARRANTIES AND REMEDIES
6.1 PERFORMANCE WARRANTY AND REMEDY. SELECTICA warrants to Customer
that when operated in accordance with the Documentation and other instructions
provided by SELECTICA, the Software will perform in all material respects in
accordance with the functional specifications set forth in the Documentation
(without the need for customization or modification, or delivery of additional
services) for a period of ninety (90) days after the date of installation of the
Software at the Customer site. SELECTICA also warrants that it shall promptly
provide Customer with current, complete and accurate documentation and other
user materials, and that all such documentation and user materials shall contain
information sufficient to explain the operation of the Software. If the Software
fails to comply with the warranty set forth in this Section 6.1, SELECTICA will
use reasonable commercial efforts to correct the noncompliance provided that:
Customer promptly notifies SELECTICA of the noncompliance of the Software to the
Customer, and SELECTICA is able to reproduce the noncompliance as communicated
by Customer to SELECTICA. If after the expenditure of reasonable efforts,
SELECTICA is unable to correct any such noncompliance, SELECTICA shall refund to
Customer the license fee paid by Customer to SELECTICA for such Software in full
satisfaction of Customer's claims relating to such noncompliance upon Customer's
return of said Software.
6
<PAGE> 7
6.2 PERFORMANCE WARRANTY LIMITATIONS. The warranties set forth in
Section 6.1 do not apply to any noncompliance of the software resulting from
misuse, casualty loss, use or combination of the Software with any products,
goods, services or other items furnished by anyone other than SELECTICA (unless
otherwise approved by SELECTICA), any modification not made by or for SELECTICA
(unless otherwise approved by SELECTICA), or any use of the Software by Customer
in contradiction of the terms of this Agreement (unless otherwise approved by
SELECTICA).
6.3 ADDITIONAL SOFTWARE WARRANTIES. SELECTICA further warrants that:
(1) the SELECTICA Software shall be free from any and all defects in material of
the media in which the Software is delivered; and (2) SELECTICA has checked for
viruses in the Software using commercially available virus checking software
consistent with standard industry practice; and (3) that the Software does not
and shall not contain at the time issued or delivered by SELECTICA to Customer a
device for monitoring the use of the Software at any time, or contain any
program, routine, device, or other undisclosed feature, including, without
limitation, time-bomb, virus, software lock, drop dead device, malicious logic,
worm, Trojan horse, or trap door that is designed to delete, disable,
deactivate, interfere with or otherwise harm the Software or Customer's
hardware, data, or other software, or that is intended to provide access or
produce modifications not authorized by the Customer (collectively "Disabling
Procedures"). Such Disabling Procedures warranty is intended to apply regardless
of whether such Disabling Procedures are authorized by SELECTICA to be included
in such Software. If SELECTICA incorporates into the Software any software or
routines supplied by other vendors, licensors, or contractors, SELECTICA shall
obtain comparable warranties from such providers or SELECTICA shall take
appropriate action to ensure that such Software or routines are free of
Disabling Procedures. If the Software fails to comply with the warranty set
forth in this Section 6.3, SELECTICA will use reasonable commercial efforts to
correct the noncompliance. If after the expenditure of reasonable efforts,
SELECTICA is unable to correct any such noncompliance, SELECTICA, in addition to
all other remedies that might be available, shall refund to Customer all or an
equitable portion of the license fee paid by Customer to SELECTICA for such
Software. Notwithstanding the foregoing remedies, SELECTICA agrees to notify the
Customer immediately upon discovery of any Disabling Procedures that are or may
be included in the Software that have been issued or delivered to the Customer,
and if the Disabling Procedures are discovered or reasonably suspected to be
present in the Software, SELECTICA agrees to take action immediately, at its own
expense, to identify and eradicate (or to equip Customer to identify and
eradicate) such Disabling Procedures and carry out any recovery necessary to
remedy any impact of such Disabling Procedures.
6.4 PASS-THROUGH WARRANTY. SELECTICA warrants that it shall
pass-through or assign to Customer any and all third party warranties which
SELECTICA receives in connection with any Software licensed to the Customer, to
the extent that Customer's agreements with such third parties permit such
pass-through.
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<PAGE> 8
6.5 SERVICES WARRANTY. SELECTICA warrants that it shall perform the
consulting, training, support, maintenance and all other professional services
hereunder in a timely, professional and workmanlike manner, using individuals of
suitable training and skill, in accordance with the highest industry standards.
In addition to any other remedies available to Customer for breach of this
warranty, SELECTICA shall promptly re-perform the services as warranted, or if
unable to do so, refund the applicable fees paid for the unsatisfactory
services.
SECTION 7. INTELLECTUAL PROPERTY RIGHTS INDEMNITY
SELECTICA agrees, at its own expense, to defend, indemnify and hold
harmless Customer for , and at its opinion to settle, any and all claims,
demands, litigation, liabilities or actions brought against Customer on the
issue of infringement of any United States or United Kingdom patent, copyright,
trademark, trade secret or any other intellectual property right of any third
party by the Software as used within the scope of this Agreement, and to pay all
damages, expenses and costs, including reasonable attorney's fees, which may be
assessed against Customer under any such claim, demand, litigation, liability or
action. SELECTICA shall be released from the foregoing obligation unless
Customer provides SELECTICA with (i) prompt written notice after Customer first
becomes aware of such a claim, demand, litigation, liability or action; (ii)
sole control and authority over the defense or settlement thereof (Customer
shall, at its sole expense, have the right to employ separate counsel to monitor
the defense and settlement of the claim thereof); and (iii) proper and full
information as is reasonable, and reasonable assistance to settle and/or defend
any such claim or action. Without limiting the forgoing, if a final injunction
is, or SELECTICA believes, in its sole discretion, is likely to be, entered
prohibiting the use of the Software by Customer as contemplated herein,
SELECTICA will, at its sole option and expense, either (a) procure for Customer
the right to use the infringing Software as provided herein or (b) replace the
infringing Software with noninfringing, functionally equivalent products, or (c)
suitably modify the infringing Software so that it is not infringing, with no
loss of functionality; or (d) in the event (a), (b) and (c) are not commercially
reasonable, terminate the license, accept return of the infringing Software and
refund to Customer the license fee paid therefor, reduced by an amount equal to
the depreciated portion of the payments calculated on a five (5) year straight
line basis. Except as specified above, SELECTICA will not be liable for any
costs or expenses incurred without its prior written authorization, not to be
unreasonably withheld. Notwithstanding the foregoing, SELECTICA assumes no
liability for infringement claims arising from (i) combination of the Software
with the other products not provided by SELECTICA, but not covering the Software
alone, unless SELECTICA has approved of such combination or (ii) any
modifications to the Software unless such modification was approved by, or was
made, by SELECTICA. THE FOREGOING PROVISIONS OF THIS SECTION 7 STATE THE ENTIRE
LIABILITY AND OBLIGATIONS OF SELECTICA AND THE EXCLUSIVE REMEDY OF
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<PAGE> 9
CUSTOMER, WITH RESPECT TO ANY ACTUAL OR ALLEGED INFRINGEMENT OF ANY PATENT,
COPYRIGHT, TRADE SECRET, TRADEMARK OR OTHER INTELLECTUAL PROPERTY RIGHT BY THE
SOFTWARE.
SECTION 8. DISCLAIMER WARRANTY AND LIMITATION OF LIABILITY
8.1 DISCLAIMER OF WARRANTIES. EXCEPT AS SET FORTH ININ THIS AGREEMENT
AND ALL ATTACHMENTS REFERENCED HEREIN, SELECTICA MAKES NO WARRANTIES WHETHER
EXPRESSED, IMPLIED OR STATUTORY REGARDING OR RELATING TO THE SOFTWARE OR THE
DOCUMENTATION OR ANY MATERIALS OR SERVICES FURNISHED OR PROVIDED TO CUSTOMER
UNDER THIS AGREEMENT. SELECTICA SPECIFICALLY DISCLAIMS ALL IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSES, AND SATISFACTORY QUALITY
WITH RESPECT TO THE SOFTWARE, DOCUMENTATION AND ANY OTHER MATERIALS AND SERVICES
PROVIDED BY SELECTICA HEREUNDER, AND WITH RESPECT TO THE USE OF THE FORGOING.
8.2 LIMITATION OF LIABILITY. EXCEPT AS SET FORTH IN SECTION 7, IN NO
EVENT WILL EITHER PARTY BE LIABLE FOR ANY LOSS OF PROFITS, LOSS OF USE, BUSINESS
INTERRUPTION, LOSS OF DATA, COST TO RECOVER, OR FOR ANY INDIRECT, SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND IN CONNECTION WITH OR ARISING
OUT OF THE FURNISHING, PERFORMANCE OR USE OF THE SOFTWARE, DOCUMENTATION OR ANY
MATERIALS OR SERVICES PERFORMED HEREUNDER, WHETHER ALLEGED AS A BREACH OF
CONTRACT OR TORTUOUS CONDUCT, INCLUDING NEGLIGENCE, EVEN IF THE OTHER PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. EXCEPT AS SET FORTH IN SECTION
7, EACH PARTY'S LIABILITY UNDER THIS AGREEMENT FOR DAMAGES WILL NOT, IN ANY
EVENT, EXCEED THE AGGREGATE AMOUNT PAID BY THE CUSTOMER TO SELECTICA UNDER THIS
AGREEMENT.
SECTION 9. MISCELLANEOUS
9.1 NONDISCLOSURE OF AGREEMENT. Each party shall not disclose the
terms of this Agreement or the ongoing business relationship initiated by this
Agreement except as required by law or governmental regulation without the other
party's prior written consent, except that each party may disclose the terms of
this Agreement on a confidential basis to its accountants, attorneys, parent
organizations and financial advisors and lenders.
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9.2 This item not used.
9.3 NOTICES. Any notice or other communication under this Agreement
given by either party to the other will be deemed to be properly given if given
in writing and delivered in person or facsimile, if acknowledged received by
return facsimile or followed within one day by a delivered or mailed copy of
such notice, or if mailed, properly addressed and stamped with the required
postage, to the intended recipient at its address specified in this Agreement.
Either party may from time to time change its address for notices under this
Section by giving the other party notice of the change in accordance with this
Section 9.3.
9.4 ASSIGNMENT. Each party shall not assign (directly, by operation
of law or otherwise) this Agreement or any of its rights under this Agreement
without the prior written consent of the other party, not to be unreasonably
withheld, except that each party may assign all, but not part, of this Agreement
and the Software and Documentation then in its possession or control to the
successor of Customer in a merger or other similar corporate reorganization
outside of the course of Customer's normal business operations or to the
purchaser of substantially all of Customer's assets, provided such successor or
purchaser agrees in writing to comply with the terms of this Agreement.
Notwithstanding the foregoing, SELECTICA shall not in any instance assign its
service obligations under Section 3 and Exhibit C of this Agreement without the
prior written consent of the Customer. Subject to the foregoing, this Agreement
is binding upon, inures to the benefit of and is enforceable by the parties and
their respective successors and assigns.
9.5 NONWAIVER. Any failure of either party to insist upon or enforce
performance by the other party of any of the provisions of this Agreement or to
exercise any rights or remedies under this Agreement will not be interpreted or
construed as a waiver or relinquishment of such party's right to assert or rely
upon such provision, right or remedy in that or any other instance.
9.6 ENTIRE AGREEMENT. This Agreement and all of its Exhibits
referenced herein constitute the entire agreement, and supersede any and all
prior agreements, between SELECTICA and Customer relating to the Software,
Documentation, services and other items subject to this Agreement. No amendment
of this Agreement will be valid unless set forth in a written instrument signed
by both parties.
9.7 GOVERNING LAW, JURISDICTION ANDNON-BINDING MEDIATION. The rights
and obligations of the parties under this Agreement shall not be governed by the
1980 UN Convention on Contracts for the International Sale of Goods, but instead
shall be governed by and construed under the laws of the State of California,
including its Uniform Commercial Code, without reference to its conflict of laws
principles. In the event of any controversy, claim or dispute between the
parties arising out of or relating to this Agreement, such controversy, claim or
dispute may be tried solely in a state or federal court for Santa Clara County,
California, and the parties hereby irrevocably
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consent to the jurisdiction and venue of such courts. Except as otherwise
provided in this Agreement, no civil action with respect to any dispute, claim
or controversy arising out of or in connection with this Agreement may be
commenced until the matter has been submitted to JAMS/ENDISPUTE, or its
successor, for mediation. Either party may commence mediation by providing to
JAMS/ENDISPUTE and the other party a written request for mediation, setting
forth the subject of the dispute and the relief requested. The parties will
cooperate with JAMS/ENDISPUTE and each other in selecting a mediator from
JAMS/ENDISPUTE's panel of neutrals, and in scheduling the mediation proceedings.
The parties agree to participate in the mediation in good faith, and to share
equally its costs. All conduct and statements, whether oral or written, made in
the course of the mediation by any of the parties, their agents, employees,
experts and attorneys, and by the mediator and any JAMS/ENDISPUTE employees, are
confidential, privileged and inadmissible for any purpose, including
impeachment, in any litigation or other proceeding between the parties, provided
that evidence that is otherwise admissible or discoverable shall not be rendered
inadmissible or non-discoverable as a result of its use in the mediation.
Notwithstanding the foregoing, either party may seek equitable relief from a
court of competent jurisdiction prior to the mediation in order to protect its
Intellectual Property Rights. Except for such an action to obtain equitable
relief, neither party may commence a civil action with respect to the matters
submitted to mediation until after the completion of the initial mediation
session, or 45 days after the date of filing the written request for mediation,
whichever occurs first. Mediation may continue after the commencement of a civil
action, if the parties so desire. The provisions of this Section 9.7 may be
enforced by any court of competent jurisdiction, and the party seeking
enforcement shall be entitled to an award of all costs, fees and expenses,
including attorneys' fees, to be paid by the party against whom enforcement is
ordered.
9.8 LANGUAGE. This Agreement is in the English language only, which
language shall be controlling in all respects, and all versions hereof in any
other language shall not be binding to the parties hereto. All communications
and notices to be made or given pursuant to this Agreement shall be in the
English language.
9.9 APPLICABILITY OF PROVISIONS LIMITING SELECTICA'S LIABILITY. The
provisions of this Agreement under which the liability of each party is excluded
or limited, shall not apply to the extent that such exclusions or limitations
are declared illegal or void under any applicable laws, unless the illegality or
invalidity is cured under such laws by the fact that the law of California
governs this Agreement.
9.10 YEAR 2000 COMPLIANCE WARRANTY. SELECTICA represents and warrants
that the Software as delivered will operate prior to, during, and after, the
calendar year 2000 A.D. without error relating to date data, specifically
including but not limited to any error relating to calculations (including leap
year calculations), sorting, interpretation, processing or acceptance of date
data which represents or references different centuries or more than one century
and loss of functionality with respect to the introduction of records containing
dates falling on or after January 1, 2000, provided that all hardware, firmware
and other software used in conjunction with the Software properly
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exchanges accurate and properly formatted date data with the Software. SELECTICA
represents and warrants that the Software only responds to four-digit year
values in the range of 0000 to 9999. SELECTICA further warrants that for any
technical support provided by SELECTICA for the Software, the level of such
technical support shall not be materially impacted by the Year 2000. SELECTICA
shall promptly notify Company in writing if it discovers that any of the
Software, or any portions thereof, are not Year 2000 Compliant. If the Software
fails to comply with the warranty set forth in this Section 12, SELECTICA will
use reasonable commercial efforts to correct the noncompliance by repair,
replacement, reconfiguration, or workaround (with no loss of functionality),
provided that Customer notifies SELECTICA of the noncompliance within the Year
2000 Warranty Period, and SELECTICA is able to reproduce the noncompliance as
communicated by Customer to SELECTICA. If after the expenditure of reasonable
efforts, SELECTICA is unable to correct any such noncompliance, SELECTICA may
refund to Customer the license fee paid by Customer to SELECTICA for such
Software in full satisfaction of Customer's claims relating to such
noncompliance upon Customer's return of said Software. The foregoing Year 2000
Compliance Warranty shall expire on December 31, 2000.
9.11 SOURCE CODE ESCROW
SELECTICA agrees to keep, and maintain current, a copy of the source code and
relevant materials (hereinafter referred to as "Escrow Materials") for the
Software in Escrow with Fort Knox (the "Escrow Agent"). A copy of the Escrow
Materials for each maintenance release or new version of the Software licensed
hereunder will also be delivered to the Escrow Agent to be held in escrow;
provided, however, that SELECTICA need not update the Escrow Materials more
frequently than either twice per year or upon release of a new version of the
Software.
SELECTICA shall enter into an agreement with the Escrow Agent, under
which Customer shall be a beneficiary, setting out the terms of this Section
9.11, and further providing that upon notification by Customer of the occurrence
of an event described in Paragraph (a) below and Customer's requesting delivery
of the Escrow Materials, the Escrow Agent shall give notice thereof to
SELECTICA. If SELECTICA does not challenge the request within thirty (30) days
of receipt of such notice, the Escrow Agent may proceed; otherwise, the matter
shall be referred to arbitration, as described in the escrow agreement.
(a) SELECTICA's agreement with the Escrow Agent shall provide
that a copy of the Escrow Materials for the Software will be delivered to
Customer by the Escrow Agent in the event that (i) SELECTICA (or its successors
or assigns) ceases doing business as a going concern, (ii) an involuntary
bankruptcy petition is not discharged within sixty (60) days after SELECTICA
receives notice of the filing of the petition or (iii) SELECTICA discontinues
supporting the software for any reason.
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(b) Upon delivery of the Escrow Materials to Customer, Customer
shall have a nontransferable, nonexclusive license to use the Escrow Materials
to support and maintain the Software for existing sublicenses and for no other
purpose Customer shall retain a right to deploy additional licenses for use
subject to the license provisions of this agreement. SELECTICA shall retain all
ownership right, title and interest in and to the Escrow Materials, including
all patents, copyrights, trademarks, trade secrets and other intellectual
property rights inherent therein. Customer shall maintain the Escrow Materials
in the strictest confidence and disclose them to employees only as necessary to
exercise its rights granted herein. The object code derived from the source code
is subject to the same restrictions as apply to the Software distributed under
this Agreement.
9.12 FORCE MAJEURE. Neither party will be liable for, or be
considered to be in breach of or default under this Agreement as a result of any
cause or condition beyond such party's reasonable control.
9.13 SEVERABILITY. In the event that any provision of this Agreement
(or any portion hereof) is determined by a court of competent jurisdiction to be
illegal, invalid, or otherwise unenforceable, such provision (or part thereof)
will be enforced to the extent possible consistent with the stated intention of
the parties, or, if incapable of such enforcement, will be deemed to be severed
and deleted from this Agreement, while the remainder of this Agreement will
continue in full force and remain in effect according to its stated terms and
conditions.
9.14 PREVAILING PARTIES. In any suit or proceeding between the
parties, arising out of or involving this Agreement, the prevailing party shall
be entitled to recover its costs and expenses related to such suit or
proceeding, including reasonable attorney's fees. The provisions of this Section
9.14 shall survive expiration, cancellation or termination of this Agreement.
9.15 CONFIDENTIAL INFORMATION. By virtue of this Agreement, the
parties may have access to information that is confidential to one another
("Confidential Information"). Confidential Information will be limited to:
planning, pricing and offerings for products and services; other product
information including but not limited to configuration and packaging details;
terms and pricing under this Agreement; all information clearly identified or
marked as confidential; and all information identified elsewhere in this
Agreement as Confidential Information. A party's Confidential Information will
not include information that: (i) is or becomes generally known to the public
through no act or omission of the other party; (ii) was in the other party's
lawful possession prior to the disclosure and had not been obtained by the other
party either directly or indirectly from the disclosing party; (iii) is lawfully
disclosed to the other party by a third party without restriction on disclosure;
or (iv) is independently developed by the other party without use of or
reference to the other party's Confidential
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Information. The parties agree to hold each other's Confidential Information in
confidence during the term of this Agreement and for a period of three (3) years
after termination of this Agreement. The parties agree, unless required by law,
not to make each other's Confidential Information available in any form to any
third party for any purpose except to the extent necessary to exercise its
rights under this Agreement and to treat Confidential Information of the other
party with the same degree of care with which it would treat its own
confidential information of a like nature, and in no case with less than a
reasonable degree of care. It shall not be a breach of this section if
Confidential Information is disclosed pursuant to subpoena or other compulsory
judicial or administrative process, provided the party served with such process
promptly notifies the other party and provides reasonable assistance so that the
other party may seek a protective order against public disclosure. Each party
agrees to limit the disclosure of Confidential Information to those of its
employees and agents who have a need to know such Confidential Information, and
each party agrees to take all reasonable steps to ensure that Confidential
Information is not disclosed or distributed by its employees or agents in
violation of the terms of this Agreement. Each party agrees not to use the other
party's Confidential Information for any purpose other than the performance of
this Agreement.
9.16 RELATIONSHIP OF THE PARTIES. This Agreement shall not be
construed as creating an agency, partnership, joint venture or any other form of
association, for tax purposes or otherwise, between the parties; the parties
shall at all times be and remain independent contractors. Except as expressly
agreed by the parties in writing, neither party shall have any right or
authority, express or implied, to assume or create any obligation of any kind,
or to make any representation or warranty, on behalf of the other party or to
bind the other party in any respect whatsoever.
9.17 TITLES AND HEADINGS/CLERICAL ERRORS. The title and section
headings of this Agreement are inserted for convenience only and are not
intended to affect the meaning or interpretation of this Agreement. Clerical
errors are subject to correction by mutual agreement of the parties.
9.18 ACCEPTANCE. Neither this Agreement nor any of its EXHIBITs will
become effective until signed by the authorized officers of both parties
designated below at their offices in San Jose, California.
SECTION 10 INSURANCE
10.1 INSURANCE. SELECTICA shall provide Customer, prior to the
commencement of this Agreement, with a signed original Certificate of Insurance.
Customer shall be named as Additional Insured on all liability coverages.
SELECTICA shall maintain insurance throughout the life of this Agreement as
follows:
PRIMARY LIABILITY. Commercial General Liability insurance shall be
with limits
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not less than $2,000,000 Per Occurrence and $2,000,000 General Aggregate.
PROFESSIONAL LIABILITY. There shall be at least $5,000,000 of Professional
Liability to cover errors or omissions. This shall include Electronic Errors and
Omissions coverage for hardware and software. AUTO LIABILITY. Primary Automobile
Liability shall be with limits not less than $1,000,000 per occurrence covering
owned and non-owned vehicles. EXCESS LIABILITY. Excess liability shall be
provided on an umbrella form excess of the primary liability policies, with
limits not less than $5,000,000 each occurrence. WORKMEN'S COMPENSATION. The
Employer's Liability limits shall be $1,000,000. All of the foregoing policies
shall be on an "occurrence" basis unless otherwise expressly stated. All such
coverages shall remain in full force and effect during the initial term of the
Agreement and any renewal thereof. Customer shall be notified 30 days prior to
any coverage cancellation.
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In Witness whereof, the parties have executed this Agreement by their duly
authorized representatives.
SELECTICA, INC. ASPECT TELECOMMUNICATIONS
--------------------------------------------
("SELECTICA") ("Customer")
By: /s/ [ILLEGIBLE] By: /s/ KATHY CRUZ
--------------------------------- -------------------------------------
Print name: [ILLEGIBLE] Print name: KATHY CRUZ
------------------------- -----------------------------
Title: VICE PRESIDENT Title: SENIOR VICE PRESIDENT-CIO
------------------------------ ----------------------------------
Date: 5-25-99 Date 24 MAY 1999
------------------------------- ------------------------------------
Address: 2890 Zanker Road Address: 1730 Fox Drive
---------------------------- --------------------------------
Suite 101
---------------------------- --------------------------------
San Jose, CA 95134 San Jose, CA 95131
---------------------------- --------------------------------
Telephone #: (408) 570-9700 Telephone #: 408-325-4180
------------------------ ----------------------------
Facsimile #: (408) 570-9705 Facsimile #: 408-325-4004
------------------------ ----------------------------
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EXHIBIT A
DESCRIPTION OF SOFTWARE AND DOCUMENTATION
LICENSED SERVERS
<TABLE>
<CAPTION>
Description Quantity Licensed
- ----------- -----------------
<S> <C>
ACE Enterprise Server, including Documentation
Single CPU None
Dual CPU 1 (One)
ACE Enterprise Pro Server, including Documentation
Single CPU None
Dual CPU 1 (One)
Single CPU-Test and Development 1 (One)
Server Manager None
ACE Quoter, including Documentation
Single CPU None
Dual CPU 1 (One)
ACE Connector (Oracle) 1 (One)
LICENSED USERS
ACE Studio - Number of Licensed Users
Including Documentation 4(Four)
ACE Mobile Docker - Number of Licensed Users
Including Documentation 250
ACE Framework - Number of Licensed Users
Including Documentation 250
</TABLE>
Note 1: Additionally purchased seats of ACE Mobile shall be priced at $[*]
per seat.
Note 2: Customer shall have the right to install an additional 4 ACE Studio
seats above the licensed four (4) during the twelve month period following the
acceptance date of the software. If these four seats of ACE Studio are installed
during the twelve (12) month period following "Acceptance", these seats shall be
considered "licensed".
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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Note 3: If during the initial twenty-four month period following "acceptance",
Customer elects to deinstall the ACE Mobile Seats from the Customer
workstations, and reimplement the software on those user environments as an
"HTML" application utilizing the ACE Enterprise Server as the Internet
application server, Customer shall have the licensed right to install the
licensed ACE Enterprise Server and licenced ACE Quoter Server on Four-processor
servers, rather than the licensed dual processor servers.
Note 4: It is understood by Customer and SELECTICA that Customer shall receive
the Selectica Software products defined as ACE Application Framework and ACE
Studio HTML Editor when these products are made generally available to the
marketplace by Selectica. There shall be no extra charge for software licensing
or annual maintenance for these Software products. Selectica is utilizing both
of these Selectica Software products in the development of the Aspect Statement
of Work.
PRE-IMPLEMENTATION TESTING AND ACCEPTANCE OF THE SOFTWARE.
Prior to the delivery of the Software to the Customer, Selectica shall develop
testing procedures and provide them to Customer for its approval, such approval
not to be unreasonably withheld. Such testing procedures shall be sufficient to
test the functionality of the Software in Customer's operating environment and
using Customer's data. Within ten (10) days after installation of the Software
is completed, such testing procedures shall be applied and, if such procedures
are satisfied and the Software otherwise conforms to the requirements of this
Agreement, Selectica shall so certify to Customer. Unless Customer has notified
Selectica of a material defect in the Software that has not yet been cured, the
Software shall be deemed accepted thirty days after the date of receipt by
Customer of such certification. Acceptance of the Software shall not affect any
warranties still in effect under this Agreement. Customer shall incur no
additional fees under these pre-implementation testing and acceptance
provisions.
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EXHIBIT B
LICENSE AND MAINTENANCE FEES
1. License Fee. $[*]
2. Maintenance Fee. Maintenance fees are due in advance on an annual basis.
Maintenance fees for the use of the Software on any additional servers or
workstations licensed subsequent to the Effective Date will be payable
concurrently with the additional server or user license fee on a pro-rated
annual basis.
Annual maintenance and upgrade support $[*]
Note: Per Section 4.2 of this Agreement, maintenance fees of $[*]
annually will remain fixed at $[*] per annum for Year #1 and Year
#2 beginning August 1, 1999. Effective August 1, 2001, annual
maintenance fee increases will be limited to the annual increase for
the preceding 12 month period in the United States Consumer Price
Index.
3. PAYMENT SCHEDULE:
Selectica will invoice for payments shown in this Exhibit A upon receipt of the
accepted Agreement. Customer agrees to remit payments according to the following
payment schedule:
<TABLE>
<S> <C> <C>
May 26, 1999 Software $[*]
Aug 1, 1999 Annual Maintenance $[*]
</TABLE>
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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EXHIBIT C
ADDITIONAL SERVICES AND TRAINING
SELECTICA INC. CONSULTING SERVICES: GENERAL TERMS AND CONDITIONS
- --------------------------------------------------------------------------------
1. The services that Selectica will perform as a "Work for Hire" for
Customer (the "Services") are described on the attached Statement of
Work and Authorization, and in any further Statement of Works entered
into by Selectica and Customer referencing this Statement of Work, in
accordance with the terms and conditions of this Exhibit C and the Major
Account License Agreement (License Agreement) that this Exhibit C is
incorporated by reference thereto.
2. Customer will pay Selectica for Services actually rendered at the
Billing Rate stated in the applicable Statement of Work, and for all
reasonable travel, lodging and other out-of-pocket expenses incurred in
the course of performing the Services. Expenses will be incurred and
documented in accordance with Customer's standard policies. Selectica
shall submit invoices identifying the Statement of Work, the Services
provided, applicable Billing Rate(s) and expenses. Any taxes incurred in
connection with Services (other than taxes imposed on Selectica's
earnings generally or referred to in Section 3 below) will be billed to,
and paid by Customer in addition to Project Fees and Expenses. SELECTICA
shall render monthly invoices for the Service Fees earned for the
proceeding month. Payment is due within thirty (30) days of the invoice
date for a correct, complete and accurate invoice accompanied by
appropriate backup documentation reasonably requested by Customer.
Selectica may suspend work and withhold Deliverables in the event a
properly submitted and valid invoice is not paid within thirty days of
notice of nonpayment, and may charge interest at a rate of one percent
per month on any outstanding balance more than forty-five days overdue.
3. Selectica is an independent contractor, and no Statement of Work shall
be construed to create an employment relationship between the parties,
whether for tax or any other purpose. Neither party shall have the right
to bind the other to any agreement with a third party or to incur any
obligation or liability on behalf of the other party. Selectica and its
personnel shall not be considered employees of Customer. SELECTICA shall
not have the right to subcontract any and all Services under this
Agreement to third parties unless Customer has approved such
subcontracting in writing. Selectica will, during the term of this
Agreement, maintain at Selectica's expense all necessary insurance for
its personnel, including but not limited to worker's compensation,
disability, unemployment insurance, and general liability insurance.
Selectica will provide Customer with certification of insurance upon
request. Selectica will be responsible for employment taxes, worker's
compensation, disability, or unemployment compensation insurance,
premiums or claims levied
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upon or attributable to the services rendered by Selectica, and
Selectica's personnel, including but not limited to, all state and
federal FICA, worker's compensation, disability, unemployment,
withholding taxes, premiums and claims.
4. Under the Services provided hereunder, Selectica may develop or prepare
and provide Customer with software corrections, scripts, triggers, other
modifications or enhancements, technical documentation, reports,
analysis or other deliverables ("Deliverables"). Selectica shall
complete and deliver the Deliverables to Customer according to the
delivery schedule and in conformance with the specifications described
in the applicable Statement of Work. Customer shall evaluate such
Deliverables and shall submit a written acceptance or rejection of to
Selectica within fifteen (15) days after Customer's receipt of the
Deliverables. Conformity to specifications and Selectica's warranties
herein shall solely determine Customer's right to accept or reject any
Deliverable. If rejected, Selectica shall promptly correct the
Deliverable. If Selectica fails to correct the Deliverable within
fifteen (15) days after notice of rejection, Customer may terminate the
applicable Statement of Work to this Agreement and receive a full refund
of amounts paid under such Statement of Work. If, subject to the fixed
cost bid criteria incorporated into the Statement of Work, the
Deliverable is not delivered on the due date specified in the applicable
Statement of Work, or if the Deliverable does not meet the
specifications in such Statement of Work, then Customer may, at its
option, and upon written notice to Selectica, terminate the applicable
Statement of Work for a full refund of amounts paid under such Statement
of Work.
5. The Services have been specially ordered and commissioned by Customer as
a "Work Made for Hire" and the Deliverables may be incorporated in
existing Customer works as a compilation or collective work. The parties
agree that all copyrights in the Deliverables shall be owned by
Customer. However, the parties acknowledge that certain intellectual
property of Selectica, including copyrights and trademarks, which
existed prior to the Agreement and prior to the Services ("Pre-Existing
Assets") may be incorporated in the Deliverables, and Selectica shall
own and retain all Pre-Existing Assets in such elements of the
Deliverables. The parties acknowledge that the intellectual property
rights in and to the Software referenced in the License Agreement shall
be Pre-Existing Assets. Subject only to payment of applicable Project
fees, expenses and taxes, Customer is granted an irrevocable, unlimited
(subject to the provisions of Exhibit A to the License Agreement), world
wide, royalty free, non-exclusive, freely transferable right and license
to use the Pre-Existing Assets only in conjunction with the
Deliverables. No other rights in or to the Pre-Existing Assets,
including but not limited to any right to use them independently of the
Deliverables, are granted or implied. Subject to the foregoing
provisions of this Section 4 of this Exhibit C, Selectica hereby assigns
to Customer, its successors and assigns, all rights, title and interest
in and to the Deliverables including, without limitation the following:
(i) any U.S. copyrights that Selectica may acquire in the Deliverables
and all copyrights and equivalent rights in the Deliverables throughout
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the world; and (ii) all rights in and title to any inventions, ideas,
designs, concepts, techniques, discoveries, or improvements, whether or
not patentable, which are first developed in the course of Selectica's
creation of the Deliverables, including but not limited to all trade
secrets, utility and design patent rights; and (iii) any documents,
magnetically or optically encoded media, or other materials created by
Selectica under this Agreement. Subject to the provisions of this
Section 4, Selectica shall execute and deliver such instruments and take
such other action as may be requested by Customer to perfect or protect
Customer's rights in the Deliverables and to carry out the assignments
contemplated above. 6. Selectica warrants that the Services will be
performed as described in the Statement of Work by appropriately trained
and qualified personnel using reasonable skill and diligence performed
in a professional workmanlike manner in accordance with the highest
industry standards; provided, however, that (i) Selectica shall have
received written notice of the work that Customer claims does not
conform to the foregoing warranty within thirty days of the date on
which the work was completed, and (ii) Customer's sole remedy and
Selectica's sole obligation in the event of a breach of the foregoing
warranty shall be to either re-perform the nonconforming work or to
refund the Project Fees and Expenses incurred by the Customer for the
nonconforming work. EXCEPT FOR THE FOREGOING SENTENCE, SELECTICA DOES
NOT MAKE ANY GUARANTY, WARRANTY OR REPRESENTATION, EXPRESSED OR IMPLIED
(INCLUDING, WITHOUT LIMITATION, ANY WARRANTY AS TO QUALITY, PERFORMANCE,
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NONINFRINGEMENT).
7. Selectica shall defend, indemnify and hold harmless Customer from any
claim, suit or proceeding, and pay any settlement amounts or damages and
costs (including reasonable attorney's fees) awarded by a court of final
jurisdiction, against Customer arising out of claims, suits or
proceedings by third parties that a Deliverable infringes any copyright,
patent, trademark, trade secret or any other intellectual property
right. The foregoing indemnification obligation (i) shall only apply to
a Deliverable for which Customer has paid all applicable fees; and (ii)
shall not apply to any claim of infringement based on any modification
of the Deliverable (unless approved by Selectica) or the combination,
operation or use of the Deliverable with materials not supplied by
Selectica (unless approved by Selectica). In the event of a claim of
infringement, Selectica shall have the option, at its expense (i) to
procure for Customer the right to continue using the infringing
Deliverable, (ii) to replace such Deliverable with a non-infringing
product substantially similar in features and functionality in all
material respects, (iii) to modify such Deliverable to make it
non-infringing without materially affecting features or functionality,
or (iv) to grant to Customer a refund of the fees for such Deliverable
in exchange for its return. This section constitutes the entire and
exclusive obligation of Selectica with respect to any infringement of
any intellectual property right.
8. As a condition to the foregoing, the Customer must (i) promptly notify
Selectica in writing of the claim, suit or proceeding for which
indemnification is sought, (ii)
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<PAGE> 24
permit Selectica to have sole control, and (iii) reasonably cooperate
with Selectica in the defense or settlement of the claim, suit or
proceeding. Customer shall have the right to retain its own counsel, at
its sole expense, to monitor the claim, suit or proceeding.
9. NEITHER PARTY SHALL BE LIABLE FOR (I) SPECIAL, INDIRECT, INCIDENTAL,
CONSEQUENTIAL, TORT OR COVER DAMAGES, INCLUDING, WITHOUT LIMITATION,
DAMAGES RESULTING FROM LOSS OF PROFITS, DATA, BUSINESS OR GOODWILL,
WHETHER OR NOT ADVISED OR AWARE OF THE POSSIBILITY OF SUCH DAMAGES, OR
(II) MONETARY DAMAGES IN EXCESS OF THE AGGREGATE FEES AND EXPENSES PAID
BY CUSTOMER UNDER THE STATEMENT OF WORK OR AUTHORIZATIONS THAT DIRECTLY
RELATE TO THE CLAIM OR CLAIMS OUT OF WHICH THE DAMAGES HAVE ARISEN. The
amount of any monetary damages to which Selectica may be entitled is in
addition to, and not in lieu of, the fees, expenses and other amounts
due Selectica from Customer. The limitation on the amount of monetary
damages shall not apply to the indemnification obligations set forth in
Section 7 above.
10. Either party may terminate a Statement of Work at any time on thirty
(30) days prior written notice; provided that upon termination Customer
shall pay Selectica for Services, work-in-progress and expenses incurred
prior to the effective date of termination. Upon the termination of a
Statement of Work, the parties shall return any Confidential Information
received in tangible form, and Selectica shall deliver to Customer all
documents and other materials received from Customer in the course of
providing Services under the Statement of Work and, to the extent paid
for by Customer, copies of all Deliverables or portions of Deliverables
prepared pursuant to the Statement of Work. The General Terms and
Conditions shall survive the termination of any Statement of Work.
11. General Terms and Conditions and the applicable Statement of Work
constitute the entire agreement between the parties and supersede all
previous negotiations, agreements, and other communications, whether
oral or written, relating to the subject matter of this Agreement. Any
variance from or addition to the terms of this agreement contained in
any purchase order or other written notification will be of no effect.
This agreement may not be assigned by either party without the prior
written consent of the other, except for assignments by Customer to
affiliated entities, may not be modified in any way except in writing
signed by both parties and shall be governed by California law. The
invalidity or unenforceability of one or more provisions of this
agreement shall not affect the validity or enforceability of any of the
other provisions and this agreement shall be construed in all respects
as if such invalid or unenforceable provisions were omitted. The terms
and conditions of the referenced License Agreement shall also apply.
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<PAGE> 25
11. YEAR 2000 COMPLIANCE WARRANTY. SELECTICA represents and warrants
that the Deliverables as delivered will operate prior to, during, and after, the
calendar year 2000 A.D. without error relating to date data, specifically
including but not limited to any error relating to calculations (including leap
year calculations), sorting, interpretation, processing or acceptance of date
data which represents or references different centuries or more than one century
and loss of functionality with respect to the introduction of records containing
dates falling on or after January 1, 2000, provided that all hardware, firmware
and other software used in conjunction with the Deliverables properly exchanges
accurate and properly formatted date data with the Deliverables. SELECTICA
represents and warrants that the Deliverables only respond to four-digit year
values in the range of 0000 to 9999. SELECTICA further warrants that for any
technical support provided by SELECTICA for the Deliverables, the level of such
technical support shall not be materially impacted by the Year 2000. SELECTICA
shall promptly notify Customer in writing if it discovers that any of the
Deliverables, or any portions thereof, are not Year 2000 Compliant. If the
Deliverables fail to comply with the warranty set forth in this Section 11,
SELECTICA will use reasonable commercial efforts to correct the noncompliance by
repair, replacement, reconfiguration, or workaround (with no loss of
functionality), provided that Customer notifies SELECTICA of the noncompliance
within the Year 2000 Warranty Period, and SELECTICA is able to reproduce the
noncompliance as communicated by Customer to SELECTICA. If after the expenditure
of reasonable efforts, SELECTICA is unable to correct any such noncompliance,
SELECTICA may refund to Customer the license fee paid by Customer to SELECTICA
for such Deliverables in full satisfaction of Customer's claims relating to such
noncompliance upon Customer's return of said Deliverables. The foregoing Year
2000 Compliance Warranty shall expire on December 31, 2000.
ACT
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Aspect's Configuration Tool
Statement of Work
(VERSION 1.0)
[SELECTICA LOGO]
PROPOSAL FOR ACT - ASPECT'S CONFIGURATION TOOL
BY: SELECTICA, INC.
__________
Introduction
Aspect Telecommunications is embarking on a replacement project for Quote IT,
their current configuration and quoting tool. The first phase of this project
has a deliverable date of Aug 1. This statement of work covers the scope of the
functionality that Selectica can deliver in its fixed bid for the project. For
purposes of this document, Selectica will refer to the project as ACT or
Aspect's Configuration Tool.
Objective
ACT, Aspect's Configuration Tool is targeted to an audience knowledgeable on
Aspect products and includes Aspect's product managers, pricing managers, direct
sales force and around 10 distributors. ACT will run on a standalone computer
such as a laptop, and will be capable of uploading quotes to a centralized Quote
repository. ACT will present Aspect's new packaging of products as the primary
interface for configuration, and build new systems and add-ons. The first phase
of ACT will be deployed Aug 1, 1999.
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<PAGE> 27
Project Manager:
Selectica shall assign Sara Kern as the Project Manager for the Services
provided under, and for the duration of, this Statement of Work. Other Selectica
resources are to be named and approved by Aspect's project manager five days
after the effective date of the License Agreement. All assigned personnel shall
not be re-assigned from this project unless Customer has provided its prior
written approval.
Deployment
The system will be deployed for remote users on a mobile platform. The minimum
mobile platform requirements are:
<TABLE>
<S> <C>
Platform: Win 95/Win NT P166 MHz CPU
RAM: 32M
Hard Disk: 2G with up to 30M of free disk space
CD ROM drive
Browser: Netscape 4.x or Internet Explorer 4.x (latest
versions recommended)
</TABLE>
System
The system will allow users to configure new systems (multi-site and module at a
time), services and add-ons. It will generate a high level quote with line item
consolidation for the following areas:
- - Customer Relationship Management
- - Customer Self Service
- - Customer Interaction
- - Platforms
- - Services
- - Addons
NOTE: CUSTOMER DATAMART (IS SCHEDULED FOR A LATER PHASE). ADDONS WILL ALLOW
QUOTES FOR EXISTING CUSTOMERS WHO MAY WISH TO ADD TO EXISTING SYSTEMS.
THESE AREAS WILL COVER EXISTING PRODUCTS COVERED BY QUOTE IT, AND MODEL CODES
THAT ARE AVAILABLE IN THE JUNE 1 PRICE BOOK:
Output
The system will generate a Word template based quote that can be printed (like
Quote IT) using the existing templates and (a modified version of) the existing
program "parser" generating this output.
The configuration can also be saved and retrieved for later modifications.
Synchronization of Quotations
The system will have the ability to upload quotes created on the remote platform
up to a centralized server.
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<PAGE> 28
Pricing Data
There are 2 categories of prices:
1. For existing customers requiring add-on products, pricing is driven off
the old cost of goods sold.
2. For new customers, new systems and new system add-ons, pricing is driven
off a new list price and new cost of goods sold.
Aspect will provide an excel spreadsheet with the model codes and list prices.
This file will contain the following minimum fields (all fields that are
necessary to derive the final quote):
Model Code, COGS, Description, Market Uplift %, Uplift % by country (same for
all model codes for a country), Transfer rate by country, Tariff % by country,
etc. and support related information. Distributors will also be covered in this
file.
Customer Data
Region specific customer data will be used to present customer lists customer
id, Bill To and Ship To addresses.
Discounts
Discount options available today in the current Quote it! Tool will be available
in ACT. This includes customer level default, line-level, group and overall
discounts.
Service Configuration
Service will be quoted as part of new system configurations. The Service
configuration requirements and rules are currently being evaluated and
understood by Aspect. The interface and impact of this on ACT are expected to be
non-trivial.
Security
All knowledgebase files will be encrypted. All price files will be encrypted as
well. Price files will be unlocked via a pass-code.
Responsibilities
Aspect is responsible for:
- - Documentation of Rules
- - Help System Development
- - User Interface Design
- - All reviews
- - Testing
- - Flattened Price Files in the format specified for both formats
- - Customer Information files (regionalized)
- - Deployment of ACT to Aspect sales force
Selectica is responsible for:
- - Knowledge-base development
- - User interface development
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<PAGE> 29
- - Integration with framework
- - Packaging ACT for simple download (or CD) installation.
- - Oracle order entry integration
Web Deployment: Selectica has agreed to include this and feels that it can
deploy the Web application by Aug 31, 1999.
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<PAGE> 30
Future Phase(s)
- - Customer Datamart (3rd quarter release)
- - Upgrades
- - Change Orders
- - Free-form (outside price list) add-ons
Fixed Price Bid: Subject to the "Fixed Price Bid Criteria" incorporated into
this Exhibit "C", Selectica agrees to fix price bid this Statement of Work at
$[*].
Payment Schedule:
<TABLE>
<S> <C> <C>
Milestone #1 : acceptance of GUI design (approximately 15-Jun-99) 25% $[*]
Milestone #2 : successful completion of Beta testing (approximately 15-Jul-99) 25% $[*]
Milestone #3 : successful implementation and acceptance of all deliverables (1-Aug-99) 50% $[*]
</TABLE>
FIXED COST BID CRITERIA
TOTAL PROJECT ELAPSED TIME: TEN WEEKS FROM MAY 24, 1999
Fixed Cost Bid Based on Following Criteria:
1) Aspect Telecommunications provides all product names, model numbers, and
data/rules for all products involved in this project by end of business
day Tuesday June 1, 1999. For product configurations this will include any
existing functional spec documentation, augmented with notes as necessary
to describe variation of the current rules/products from original spec.
For product pricing both old and new pricing models will be provided in an
excel spreadsheet. Pricing formulas for International will be provided.
For services/support pricing Aspect will provide a description on the
support options offered and the pricing rules that support the options.
2) The user application interface will be approved by Aspect no later than
Tuesday June 15 (layouts, navigation, color & font etc). If approved with
changes, Aspect must submit clear design change requirements for update by
Selectica within two business days.
3) No product changes, including rules, pricing, or product numbers will be
allowed during the development period unless approved in writing by
Selectica Project Manager and the Aspect Project Manager.
4) Aspect Telecommunications agrees to provide sign-off approval of design
changes, product design, or product recommendations by the following day
end of business day.
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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<PAGE> 31
5) Aspect shall provide at least four complete work environments for
Selectica project personnel. Selectica will work primarily at the Aspect
location based on space availability at Aspect. Selectica agrees to
provide workspace for the Aspect project manager at Selectica site.
6) Selectica agrees to complete the mobile application for deployment to the
Aspect Salesforce by August 1, 1999. Selectica agrees to create a web
interface for use by web-users after the initial mobile deployment at no
additional charge to Aspect by August 31.
If Aspect is unable to provide information or approvals as outlined above,
Selectica shall have the right to adjust professional services charges for
weekend, overtime, and extensions of hours required to meet project deadlines
after giving 2 business days notice to the Aspect Project Manager and having
obtained approval of such expenses in advance. Aspect agrees that delays caused
by Aspect will cause overall project delays, and shall not be the responsibility
of Selectica. In case of project delay due to above conditions, Aspect shall not
withhold monies due to Selectica.
Selectica Project Management and Consulting Engineer rates for future sizing
efforts will be in effect for a period of twelve months from the acceptance date
of the Agreement between Selectica and Aspect. The rates are as follows:
<TABLE>
<S> <C>
Project Management $[*]/hour
Consulting Engineer $[*]/hour
</TABLE>
Selectica agrees to provide Aspect Telecommunications with a "Minimum/Maximum"
quotation on any product or product line which falls outside the time guidelines
of the Agreement.
TERMINATION OF STATEMENT OF WORK. Subject to the Fixed Price Criteria under this
Statement of Work, if the Deliverables hereunder are not delivered by August 1,
1999, or such Deliverables fail to meet the specifications under this Statement
of Work on August 1, 1999, then Customer may immediately terminate this License
Agreement and all of its Exhibits and receive a full refund for the Software
License fees, Maintenance Fees and Services Fees paid to Selectica thereunder.
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
31
<PAGE> 32
[GRAPHIC]
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<PAGE> 33
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
*REPORT DATE: 05/21/99 TICKET RECENT PRICE P/E RATIO DIVIDEND YIELD
----------------------------------------------------------------------
ASPECT TELECOMMUNICATIONS CORPORATION ASPT 8.563 99.61 NA
----------------------------------------------------------------------
SHARES OUTSTANDING: 48,859,000 ISSUE TYPE 52 WEEK HIGH 37,188 99.61 ANNUAL DIVIDEND
MARKET VALUE: 418,355,000
EXCHANGE: Nasdaq National Market C 52 WEEK LOW 6.000 N/E NA
- -----------------------------------------------------------------------------------------------------------------------------------
Major Shareholders ??? ??? to Major ??? Stock FYE ??? ???
- -----------------------------------------------------------------------------------------------------------------------------------
ENTITIES AFFILIATED WITH PMR CORP. 14.90% 12/31 PROFITABILITY 1997 LEVERAGE 1997
MASSACHUSETTS FINANCIAL SERVICES CO. 12.80% ------------ Net Inc/Comm. Equity 0.13 Total Liab/Total Assets 0.28
Net Inc/Total Assets 0.09 Total Liab/Inv. Cap. 0.37
Net Income/Inv. Cap. 0.13 Total Liab/Comm. Equity 0.38
Pretax Inc/Net Sales 0.15 Interest Coverage Ratio 206.73
Net Income/Net Sales 0.09 Current Debt/Equity 0.02
Cash Flow/Net Sales 0.14 LTD/Equity 0.02
SG&A/Net Sales 0.27 Total Debt/Equity 0.05
ASSET UTILIZATION LIQUIDITY
Receivables Turnover 4.50 Quick Ratio 2.43
Inventory Turnover 31.74 Current Ratio 2.77
Inventory Day Sales 11.34 Res./Curr. Assets 0.33
Net Sales/Work Cap. 2.30 Inv./Curr. Assets 0.05
Net Sales/PP&E 6.65
-------------------------------------------------------------------------
- ----------------------------------------------
PER SHARE OVERVIEW
- ----------------------------------------------
DATE EARNINGS DIVIDEND P/E RATIO
03/31/99 0.08 NA 82.81
09/30/98 -0.48 NA N/E
06/30/98 -0.62 NA N/E
03/31/98 0.72 NA 37.24
12/31/97 0.67 NA 31.16
09/30/97 0.79 NA 29.59
06/30/97 0.87 NA 25.57
03/31/97 0.82 NA 23.78
- ----------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME STATEMENT (MILLIONS) 03/31/99 09/30/98 06/30/98 03/31/98 QUARTERLY REVENUE YEAR OVER YEAR*
Total Revenues (Net Sales) 100.09 137.95 126.09 113.46
Cost of Goods Sold 53.39 60.14 56.32 48.34
Selling and Admin Expenses 45.94 40.41 35.62 31.08
Operating Income -18.75 17.94 18.03 21.00
Amortization & Depreciation NA NA NA NA [GRAPH]
Internet Expense NA NA NA NA
Pretax Income -18.97 18.37 9.22 23.41
Other Income NA NA NA NA
Net Income before Extraordinary
Items/Disc Oper -13.28 11.24 1.69 13.90
Net Income -13.28 11.24 1.69 13.90
- -----------------------------------------------------------------------------------------------------------------------------------
BALANCE SHEET (MILLIONS) FIVE YR SALES TO NET INCOME
ASSETS
Cash & Short Term Investments 208.74 205.76 82.94 146.81
Receivables - Total 96.22 141.41 106.59 94.87
Inventories - Total 22.33 14.22 12.28 13.27
TOTAL CURRENT ASSETS 352.53 378.86 216.53 271.09
Net Property, Plans, and
Equipment 69.00 69.43 67.60 62.16
TOTAL ASSETS 545.08 583.49 415.85 377.41
- ------------------------------------------------------------------------------------------- [GRAPH]
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts Payable 14.97 16.16 16.50 12.12
Debt in Current Liabilities 1.90 4.50 6.80 6.15
Total Current Liabilities 107.82 101.39 99.18 86.61
Long-Term Debt - Total NA NA 5.78 6.61
TOTAL LIABILITIES 267.52 261.07 104.96 93.22
- -----------------------------------------------------------------------------------------------------------------------------------
Minority Interests NA NA NA NA ANNUAL SUMMARY DATA
Preferred Stock NA NA NA NA ----------------------------------------
Common Stock 135.97 172.39 172.30 147.90 Year Sales* Net Income* EPS
Retained Earnings 143.17 150.78 139.54 137.85 12/93 106.47 11.48 0.27
Treasury Stock NA NA NA NA 12/94 147.24 17.57 0.41
Total Stockholders' Equity 277.56 322.42 310.90 284.19 12/95 198.97 23.99 0.55
Total Liabilities and 12/96 308.70 37.63 0.79
Stockholders' Equity 545.08 583.49 415.85 377.41 12/97 390.64 35.18 0.67
- -------------------------------------------------------------------------------------------
CASH FLOW SUMMARY (MILLIONS) Growth
Net Cash Provided by Operations 23.78 11.67 24.28 6.49 Rates 40.63 43.35 46.29
Net Cash Provided by Investments -10.48 -185.49 -74.15 -56.08
Net Cash Provided by Financing -7.62 142.45 -2.25 1.94
- -----------------------------------------------------------------------------------------------------------------------------------
COMPANY DESCRIPTION PRIMARY SIC CODE: 3661 I/B/E/S(R) FORECAST DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Develops, manufactures, markets and supports systems for call EPS-99 DPS-99 EPS-00 DPS-00
transaction processing, call center automation and networking, Mean Estimate -0.81 -- 0.02 --
and interactive voice response; And provides consulting, Number of Estimates 9 -- 9 --
training, and systems integration services which help Projected P/E Ratio 0.00 -- 361.18 --
companies plan, staff and manage call centers effectively. Year/Year Growth (%) -194.19 -- -102.47 --
------------------------------------------------------------------
OWNERSHIP
------------------------------------------------------------------
TYPE DATE (Q.M) OWNERS HELD (000S) %OWN
INST 03/31/99(Q) 97 37,425 73.15
INSIDERS 02/28/99(M) 26 623 1.21
------------------------------------------------------------------
ADDRESS
------------------------------------------------------------------
1730 FOX DRIVE TEL 408-325-2200
CITY: STATE ZIP
SAN JOSE CA 95131-2312
- -----------------------------------------------------------------------------------------------------------------------------------
Copyright (C) Disclosure Inc., 1999. All rights reserved. Provided by nasdaq-amex.com. No copies may be sold or re-distributed.
User assumes all risk of any errors.
* The date on which the information contained in this report was compiled. Report does not reflect the most current information on
this company. Refer to Company News.
</TABLE>
<PAGE> 1
EXHIBIT 10.12
[SELECTICA LOGO]
2890 Zanker Road, Suite 101
San Jose, CA 95134
Main: (408) 570-9700
Fax: (408) 570-9705
www.selectica.com
July 29, 1999
Ms. Amita Dhawan
3Com Corporation
5400 Bayfront Plaza
Santa Clara, CA 95052-8145
Amita,
I am pleased to present this consulting engagement proposal to 3Com on behalf of
Selectica. The purpose of this document is to provide investment estimate to
3Com for consulting work that Selectica has and will provide to 3Com with
regards to our Internet Selling System and 3Com's use within the IOM project.
The items addressed within this document are focused on a phase 1 delivery.
Identification of phase 2 can begin immediately following the acceptance of this
document.
Below is a list of each project Selectica has been asked to complete within the
Phase 1 scope and the respective investment estimate and delivery timeframe. The
project plan will be finalized between 3Com and Selectica once this agreement
has been approved and a purchase order has been delivered to Selectica.
NIC WIZARD The NIC Wizard will quickly guide the customer to the NIC that meets
the customer's requirements and will seamlessly deliver the choice to Open
Market Transact for order processing. Two selection paths are provided: 1) The
user who knows what he/she needs can select from a list of NICs; 2) The user who
needs help is guided through a series of questions about requirements to an end
choice. Selectica will expand on the current NIC Wizard application to include
the Megahertz cards The development of this wizard will follow Selectica's
process structure and require 3Com approval along the way. The functions
included, but not limited to the development of this application are analysis
and discovery, design, development, installation and configuration, change
management, support, testing, and project management. We anticipate that this
project will require a headcount of 1 to 1 1/2 consulting engineering resources,
1/4 graphical designer resources, along with project management time. The
estimated investment for the NIC Wizard is $[*]. The expected delivery date
is August 30, 1999.
COPPERHEAD (S400) CONFIGURATOR
EWD will be releasing the PathBuilder S400 product line (code name Copperhead),
the next generation voice/data convergence switch. Unlike existing EWD
platforms, Copperhead consists of numerous combinations based on the choice of
data modules, voice modules and software packages. This product configuration
requires the use of Configure To Order process (CTO) in order to provide the
customer with the flexibility of combining any modules together and also to keep
the number of SKUs at a manageable level. The development of the configurator
will follow Selectica's process structure and require 3Com approval along the
way. The functions included, but not limited to the development of this
application are analysis and discovery, design, development, installation and
configuration, planning (non-PM), change management, support, testing, and
project management. We anticipate that this project will require a headcount of
2 to 3 consulting engineering resources, 1/4 graphical designer resources, along
with project management time. The estimated investment for the Copperhead
configurator is $[*]. The expected delivery date is August 30, 1999.
MODEM WIZARD The Modem Wizard will quickly guide the customer to the modem that
meets the customer's requirements and will seamlessly deliver the choice to Open
Market Transact for order processing. Two selection paths are provided: 1) The
user who knows what he/she needs can select from a
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
<PAGE> 2
list of modems; 2) The user who needs help is guided through a series of
questions about requirements to an end choice. The development of this wizard
will follow Selectica's process structure and require 3Com approval along the
way. The functions included, but not limited to the development of this
application are analysis and discovery, design, development, installation and
configuration, planning (non-PM), change management, support, testing, and
project management. We anticipate that this project will require a headcount of
1 to 1 1/2 consulting engineering resources, 1/4 graphical designer resources,
along with project management time. The estimated investment for the Modem
Wizard is $[*]. The expected delivery date is August 30, 1999
CARRIER TOTAL ACCESS CONFIGURATOR The Carrier configurator is used by 3Com sales
people, resellers and major customers to construct orders of Carrier systems,
parts/accessories, and services. It displays on-going promotions as well. The
tool provides two paths 1. Users who want to order specific configurations,
parts/accessories and services can construct an order directly. 2. Users have a
specific business requirement (for example, they need support for 5000
simultaneous user connections) are guided by the tool to the appropriate
configuration. They are given the opportunity to compare their configuration
with current promotions and can substitute their configuration with a
promotional configuration if they prefer the pricing. - Selectica will complete
and add the requested functionality and finalize the deliverable configurator
pending final approval from the business group as well as GIS. The completion of
the Carrier application will follow Selectica's process structure and require
3Com approval along the way. The functions included, but not limited to the
development of this application are analysis and discovery, design, development,
installation and configuration, planning (non-PM), change management, support,
testing, and project management. We anticipate that this project will require a
headcount of 1 to 1 1/2 consulting engineering resources, 1/4 graphical designer
resources along with project management time. The estimated investment for the
completion of the Carrier Total Access Control application is $[*].
The expected delivery date is August 30, 1999
ISDN FINDER The ISDN Wizard will quickly guide the customer to the
Router/Terminal Adapter that meets the customer's requirements and will
seamlessly deliver the choice to Open Market Transact for order processing. Two
selection paths are provided: 1) The user who knows what he/she needs can select
from a list of equipment; 2) The user who needs help is guided through a series
of questions about requirements to an end choice. The customer order will be
passed to Open Market Transact for order processing. The development of this
wizard will follow Selectica's process structure and require 3Com approval along
the way. The functions included, but not limited to the development of this
application are analysis and discovery, design, development, installation and
configuration, planning (non-PM), change management, support, testing, and
project management. We anticipate that this project will require a headcount of
1 to 1 1/2 consulting engineering resources, 1/4 graphical designer resources,
along with project management time. The estimated investment for the ISDN Finder
is $[*]. The expected delivery date is August 30, 1999
OPEN MARKET/INSO INTEGRATION & INFRASTRUCTURE This integration will connect each
of the wizards and configurators, to Open Market Transact for order processing.
This effort will require additional research on the interface, coordination with
Deloitte & Touche, the addition of dynamic forms to each of the wizards and
configurators. If it is determined that API-to-API communication is required,
this will entail additional effort. There are still levels of detail that need
to be completed and finalized for the Open Market Integration, including the
level of security required for the integration . Additionally, Selectica will
work with INSO and 3Com on the integration between Selectica and INSO to meet
the stated business and technical requirements.
Infrastructure tasks for Selectica include configuration design; functional,
performance and fail over testing; support for system compatibility testing;
software staging; software production deployment; operational testing. There are
still levels of detail that need to be completed and finalized for the
infrastructure process For this reason, we must present a range in terms of
estimated investment of $[*]. We anticipate a resource level that will require
2-3 engineering people along with project management time. The expected delivery
date is August 30, 1999.
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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The total estimated investment by 3Com for phase 1 delivery is $[*] Selectica is
confident it will deliver on the dates identified above and will work with 3Com
to incorporate those dates into the overall project plan. Selectica will only
bill against the purchase order, with approved hourly work approved by 3Com
prior to billing.
In order to deliver on time, it is Selectica's expectation to receive a purchase
order for the above phase 1 work no later than July 30, 1999. Thank you for the
opportunity to present this consulting engagement proposal and to continue to
build the relationship between 3Com and Selectica.
Regards,
Philip Peterson
Selectica, Inc.
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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EXHIBIT 10.13
[SELECTICA LOGO]
2890 Zanker Road, Suite 101
San Jose, CA 95134
Main: (408) 570-9700
Fax: (408) 570-9705
www.selectica.com
August 10, 1999
Mr. Michael Greene
3Com Corporation
5400 Bayfront Plaza
Santa Clara, CA 95052-8145
Michael,
I am pleased to present this consulting engagement proposal to 3Com on behalf of
Selectica. The purpose of this document is to provide investment estimate to
3Com for consulting work that Selectica will provide to 3Com with regards to our
Internet Selling System and 3Com's use within the IOM project. The items
addressed within this document are focused on post phase 1 delivery.
Below is a list of each project Selectica has been asked to complete within the
Phase 2 scope and the respective investment estimate. The project plan will be
finalized between 3Com and Selectica once this agreement has been approved and a
purchase order has been delivered to Selectica.
SUPERSTACK II HUBS, SWITCHES & PBX WIZARD The Wizard will quickly guide the
customer to the product that meets the customer's requirements and will
seamlessly deliver the choice to Open Market Transact for order processing. Two
selection paths are provided: 1) The user who knows what he/she needs can select
from a list of SuperStack II Hubs, Switches & PBX products; 2) The user who
needs help is guided through a series of questions about requirements to an end
choice. The development of this wizard will follow Selectica's process structure
and require 3Com approval along the way. The functions included, but not limited
to the development of this application are analysis and discovery, design,
development, installation and configuration, change management, support,
testing, and project management. We anticipate that this project will require a
headcount of 1 to 1 1/2 consulting engineering resources, 1/4 graphical designer
resources, along with project management time. The estimated investment for the
SuperStack II Hubs, Switches & PBX Wizard is $[*].
DIGITAL PHONES WIZARD. The Wizard will quickly guide the customer to the product
that meets the customer's requirements and will seamlessly deliver the choice to
Open Market Transact for order processing. Two selection paths are provided: 1)
The user who knows what he/she needs can select from a list of SuperStack II
Hubs, Switches & PBX products; 2) The user who needs help is guided through a
series of questions about requirements to an end choice. The development of this
wizard will follow Selectica's process structure and require 3Com approval along
the way. The functions included, but not limited to the development of this
application are analysis and discovery, design, development, installation and
configuration, change management, support, testing, and project management. We
anticipate that this project will require a headcount of 1 to 1 1/2 consulting
engineering resources, 1/4 graphical designer resources, along with project
management time. The estimated investment for the Digital Phone Wizard is
$[*]
OFFICECONNECT WIZARD The Wizard will quickly guide the customer to the product
that meets the customer's requirements and will seamlessly deliver the choice to
Open Market Transact for order processing. Two selection paths are provided: 1)
The user who knows what he/she needs can select from a list of SuperStack II
Hubs, Switches & PBX products; 2) The user who needs help is guided through a
series of questions about requirements to an end choice. The development of this
wizard will follow Selectica's process structure and require 3Com approval along
the way. The functions included, but not limited to the development of this
application are analysis and discovery, design, development, installation
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
<PAGE> 2
and configuration, change management, support, testing, and project management.
We anticipate that this project will require a headcount of 1 to 1 1/2
consulting engineering resources, 1/4 graphical designer resources, along with
project management time. The estimated investment for OfficeConnect Wizard is
$[*]
ACCESS BUILDER 6100 & 6200 CONFIGURATORS This product configuration requires the
use of Configure To Order process (CTO) in order to provide the customer with
the flexibility of combining any modules together and also to keep the number of
SKUs at a manageable level. The development of the configurator will follow
Selectica's process structure and require 3Com approval along the way. The
functions included, but not limited to the development of this application are
analysis and discovery, design, development, installation and configuration,
planning (non-PM), change management, support, testing, and project management.
We anticipate that this project will require a headcount of 2 to 3 consulting
engineering resources, 1/4 graphical designer resources, along with project
management time. The estimated investment for the Access Builder 6100 & 6200
configurators is $[*].
CORE BUILDER 3500, 9000 & 9400 CONFIGURATORS This product configuration requires
the use of Configure To Order process (CTO) in order to provide the customer
with the flexibility of combining any modules together and also to keep the
number of SKUs at a manageable level. The development of the configurator will
follow Selectica's process structure and require 3Com approval along the way.
The functions included, but not limited to the development of this application
are analysis and discovery, design, development, installation and configuration,
planning (non-PM), change management, support, testing, and project management.
We anticipate that this project will require a headcount of 2 to 3 consulting
engineering resources, 1/4 graphical designer resources, along with project
management time. The estimated investment for the Core Builder 3500, 9000 & 9400
Configurators is $[*].
PATH BUILDER S310/330, S500, S600 & S700 CONFIGURATORS This product
configuration requires the use of Configure To Order process (CTO) in order to
provide the customer with the flexibility of combining any modules together and
also to keep the number of SKUs at a manageable level. The development of the
configurator will follow Selectica's process structure and require 3Com approval
along the way. The functions included, but not limited to the development of
this application are analysis and discovery, design, development, installation
and configuration, planning (non-PM), change management, support, testing, and
project management. We anticipate that this project will require a headcount of
2 to 3 consulting engineering resources, 1/4 graphical designer resources, along
with project management time. The estimated investment for the Path Builder
S310/330, S500, S600 & S700 Configurators is $[*]
NET BUILDER II CONFIGURATOR This product configuration requires the use of
Configure To Order process (CTO) in order to provide the customer with the
flexibility of combining any modules together and also to keep the number of
SKUs at a manageable level. The development of the configurator will follow
Selectica's process structure and require 3Com approval along the way. The
functions included, but not limited to the development of this application are
analysis and discovery, design, development, installation and configuration,
planning (non-PM), change management, support, testing, and project management.
We anticipate that this project will require a headcount of 2 to 3 consulting
engineering resources, 1/4 graphical designer resources, along with project
management time. The estimated investment for the Net Builder II Configurator is
$[*]
The total estimated investment by 3Com for phase 2 delivery is $[*]. Selectica
will work with 3Com to incorporate dates into the overall project plan.
Selectica will only bill against the purchase order, with approved hourly work
approved by 3Com prior to billing. In order to deliver on time, it is
Selectica's expectation to receive a purchase order for the above phase 2 work
no later than August 31, 1999. Thank you for the opportunity to present this
consulting engagement proposal and to continue to build the relationship between
3Com and Selectica.
Regards,
Philip Peterson
Selectica, Inc.
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
