Sample Business Contracts

Settlement Agreement and General Release - Selectica Inc. and David Choi

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                              SETTLEMENT AGREEMENT
                               AND GENERAL RELEASE

("Agreement") is entered into by and between Selectica, Inc. (the "Company") and
David Choi ("Choi").

                              W I T N E S S E T H:

                  WHEREAS, Choi was for a time employed with the Company and
that employment terminated on or about July 12, 2002;

                  WHEREAS, Choi filed a lawsuit against the Company in the Santa
Clara Superior Court, Case No. CV-816805 ("Case No. CV-816805"), alleging
certain claims for commissions, interest, penalties and other damages against
the Company;

                  WHEREAS, on or about June 19, 2003, Choi filed a Complaint of
Discrimination with the California Department of Fair Employment and Housing,
Complaint No. E200203A1696-00-arc (the "DFEH Complaint"); and

                  WHEREAS, the parties wish to settle all disputes which may
exist between them,

                  NOW, THEREFORE, in consideration of the mutual promises
contained herein, and for other good and sufficient consideration, receipt of
which is hereby acknowledged, the parties agree as follows:

                  A. The Company agrees that provided Choi does not revoke this
Agreement during the seven day revocation period described herein, on August 29,
2003, the Company will pay Choi a lump sum payment of $550,000.00, less all
applicable withholdings, a sum to which Choi is not otherwise entitled. This
payment shall be made in a check made payable to "David Choi and Carroll,
Burdick & McDonough, LLP."

                     As further consideration for Choi's promises contained
herein, the Company shall also release Choi from any indebtedness the Company
claims he has incurred as a result of his receipt of commission payments in
connection with the Company's sale to PacifiCare, as evidenced by the
spreadsheet created by the Company and attached hereto as Exhibit A. The Company
warrants and represents that it is unaware of any other outstanding claims it
may have against Choi.

                  B. Choi for himself, his heirs, executors, administrators,
assigns, and successors, agrees as follows:

                     1. To forever fully release, remise, acquit and discharge
the Company, its predecessors and successors, and its subsidiaries, officers,
directors, agents, attorneys, employees (including without limitation, Raj
Jaswa, Sanjay Mittal, Steve Bennion, Stephen Hsu and Russell Williams) and
assigns (hereafter collectively referred to as


"Releasees"), and covenant not to sue or otherwise institute or cause to be
instituted or any way participate in (except at the request of the Company)
legal or administrative proceedings against Releasees with respect to any
matter, including, without limitation, any matter arising out of or connected
with his employment with the Company, the termination of that employment, Case
No. CV-816805 or the DFEH Complaint including any and all liabilities, claims,
demands, contracts, debts, obligations and causes of action of every nature,
kind and description, in law, equity, or otherwise, whether or not now known or
ascertained, which heretofore do or may exist.

                     2. That his employment with the Company terminated on or
about July 22, 2002; that he shall have no right to employment with the Company
after that date; and that he shall not apply for re-employment with the Company
after that date.

                     3. That prior to the execution of this Agreement, he has
received payment for all vacation earned but unused while employed by the
Company. Choi further agrees that the only payments and benefits that he is
entitled to receive from the Company in the future are those specified in
paragraph A of this Agreement.

                     4. That at all times in the future he will remain bound by
the Company Proprietary Information and Inventions Agreement that was executed
by him on April 14, 1998, a copy of which is attached as Exhibit B.

                     5. That he shall not make any negative or disparaging
remarks about the Company, its officers, employees, directors, products,
services or business practices.

                     6. That he is waiving any rights he may have had or now has
to pursue any and all remedies available to him under any employment-related
cause of action against Releasees, including without limitation, claims of
wrongful discharge, emotional distress, defamation, fraud, breach of contract,
breach of the covenant of good faith and fair dealing, violation of the
provisions of the California Labor Code, the Employee Retirement Income Security
Act, and any other laws and regulations relating to employment. Choi further
acknowledges and expressly agrees that he is waiving any and all rights he may
have had or now has to pursue any claim of discrimination, including but not
limited to, any claim of discrimination or harassment based on sex, age, race,
national origin, disability, or on any other basis, under Title VII of the Civil
Rights Act of 1964, as amended, the California Fair Employment and Housing Act,
the California Constitution, the Equal Pay Act of 1963, the Age Discrimination
in Employment Act of 1967, as amended, and all other laws and regulations
relating to employment.

                     7. That Choi will not, except as may be mandated by
statutory or regulatory requirements or as may be required by legal process,
disclose to others the fact or terms of this settlement, the amounts referred to
in this Agreement, or the fact of the payment of said amounts, except that he
may disclose that information to his attorneys, accountants to whom the
disclosure is necessary to effectuate the purposes for which he has consulted
with such professional advisors and his spouse. Choi understands that this
covenant of non-disclosure is a material inducement to the Company for the
making of this settlement and that, for the breach


thereof the Company will be entitled to pursue its legal and equitable remedies,
including, without limitation, the right to seek injunctive relief.

                     8. That within five (5) days after Choi receives payment of
the settlement amount specified in paragraph A, Choi shall file a Request for
Dismissal with Prejudice in Case No. CV-816805. Choi's legal counsel shall
deliver Notice of Entry of Dismissal with Prejudice to Gregory S. Lemmer of
Orrick, Herrington & Sutcliffe LLP, 1000 Marsh Road, Menlo Park, California

                  C. The Company and Choi, for himself, his heirs, executors,
administrators, assigns, and successors, jointly agree as follows:

                     1. That nothing contained in this Agreement shall
constitute or be treated as an admission by Releasees or Choi of liability, of
any wrongdoing, or of any violation of law.

                     2. That each party shall be solely responsible for all of
his or its attorneys' fees, costs and expenses arising out of the prosecution,
defense or settlement of the claims arising out of Case No. CV-816805, the DFEH
Complaint or any other matter settled in this Agreement.

                     3. That if any provision of this Agreement is found to be
unenforceable, it shall not affect the enforceability of the remaining
provisions and the court shall enforce all remaining provisions to the extent
permitted by law.

                     4. That except as expressly provided herein, this Agreement
shall supersede and render null and void any and all prior agreements between
the parties. The parties further agree that this Agreement constitutes the
entire agreement between the parties regarding the subject matter of this
Agreement, and that this Agreement may be modified only in a written document
executed by Choi and a duly authorized officer of the Company.

                     5. That this Agreement extends to all claims of every
nature and kind, known or unknown, suspected or unsuspected, past or present,
arising from or attributable to Choi's employment with the Company or the
termination of that employment, and that the Company and Choi hereby expressly
waive any and all rights granted to them under Section 1542 of the California
Civil Code (or any analogous state law or federal law or regulation), which
reads as follows:

                  A general release does not extend to claims which the creditor
                  does not know or suspect to exist in his favor at the time of
                  executing the release, which, if known by him, must have
                  materially affected his settlement with the debtor.

                     6. That this Agreement shall bind and benefit Choi's heirs,
executors, administrators, successors, assigns, and each of them; it shall also
bind and benefit the Company and its successors and assigns.


                     7. That this Agreement shall be deemed to have been entered
into in the State of California and shall be construed and interpreted in
accordance with the laws of that state.

                     8. That each party hereby agrees to accept and assume the
risk that any fact with respect to any matter covered by this Agreement may
hereafter be found to be other than or different from the facts it believes at
the time of this Agreement to be true, and agrees that this Agreement shall be
and will remain effective notwithstanding any such difference in fact.

                     9. That this Agreement may be executed in counterparts,
each of which shall be an original, but all of which together shall constitute
one agreement. Execution of a facsimile copy shall have the same force and
effect as execution of an original, and a facsimile signature shall be deemed an
original and valid signature.

                     10. Choi hereby acknowledges and understands and Choi
agrees that:

                        (a) Choi may have, and has had, at least twenty-one (21)
days after receipt of this Agreement within which he may review and consider it,
discuss it with an attorney of his own choosing, and decide to execute or not
execute this Agreement;

                        (b) Choi has seven (7) days after the execution of this
Agreement within which he may revoke this Agreement;

                        (c) In order to revoke this Agreement, Choi must deliver
to Russell Williams of the Company's Human Resources department, on or before
seven (7) days after the execution of this Agreement, a letter stating that he
is revoking this Agreement; and

                        (d) This Agreement shall not become effective or
enforceable until after the expiration of seven (7) days following the date Choi
executes this Agreement.

                     11. That they have read and understand this Agreement, and
that they affix their signatures hereto voluntarily and without coercion. Choi
further acknowledges that he has at least twenty-one (21) days within which to
consider this Agreement, that he was advised by the Company to consult with an
attorney of his own choosing concerning the waivers contained in and the terms
of this Agreement, and that the waivers he has made and the terms he has agreed
to herein are knowing, conscious and with full appreciation that he is forever
foreclosed from pursuing any of the rights so waived.



Dated:     8/13/03                                /s/ David Choi
        ----------------------------              ------------------------------
                                                  David Choi


/s/ Mary E. Wright
Mary E. Wright
Carroll, Burdick & McDonough, LLP

Attorneys for David Choi                          Dated: August 13, 2003

Dated:    8/13/03
        ----------------------------              Selectica, Inc.

                                                  By:   Stephen Y. Hsu
                                                  Title: V.P. Finance/Controller


Dated:     8/13/03                                /s/ David Choi
        ----------------------------              ------------------------------
                                                  David Choi


/s/ Mary E. Wright
Mary E. Wright
Carroll, Burdick & McDonough, LLP

Attorneys for David Choi                          Dated: August 13, 2003

Dated:    8/13/03
        ----------------------------              Selectica, Inc.

                                                  By:   /s/ Stephen Y. Hsu
                                                  Title: V.P. Finance/Controller