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, ha
ving 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.
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.
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.
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
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
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.
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.
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).
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.
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.
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
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
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
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.
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
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
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
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 a