Document:

Brett Adam Letter Agreement

 Exhibit 10.23 
  
 October 24, 2003 
  
 Mr. Brett Adam 
  

	 	Re:	Letter Agreement Regarding Versata Inc.’s Severance Plan 

  
 Dear Brett, 
  
 Versata, Inc. (“Versata” or the “Company”) has adopted a severance plan (the “Plan”), the terms of which are included below. The Plan provides for certain pay and benefits for designated
Plan Participants who otherwise qualify for such pay and benefits in, and only in, the event of occurrence of certain events as defined in the Plan itself. 
  
 We are pleased to inform you that you have been designated as a Plan Participant by the Company. Accordingly, subject to your agreement both to the terms
of this Letter Agreement and to the terms of the Plan, upon termination of your employment, you may be eligible for severance payments, health care coverage, and the exercise of vested options. 
  
 Accordingly, you hereby agree to the following: 
  
 (a) Upon your separation from employment with Versata as explained in the
Plan, as one condition of receiving any payment or benefit or the exercise of any rights under the Plan, you will execute a separation and consulting agreement and general release in the form attached to this Agreement as Exhibit A (the
“Separation and Consulting Agreement and General Release”); 
  
 (b) If you execute the Separation Agreement, the determination of whether you are entitled to the payments and benefits shall be governed by the terms of the Plan; and 
  
 (c) This Letter Agreement supercedes all existing agreements between Versata and you, as well as any and all promises,
policies, or practices by Versata, whether oral or written, that provide for severance payments or benefits from the Company to you upon or after the separation of your employment. All other terms and conditions contained in any existing employment
or other agreement with the Company will remain in full force and effect. 
  

	
	 Sincerely,

	
	/s/    JIM DOEHRMAN        
	Jim Doehrman
	Executive Vice President

  
 I have read and understand the
Plan set forth below and agree to accept and abide by all of the terms and conditions as set forth in this Letter Agreement and in the Plan. 
  

							
	 ACKNOWLEDGED and AGREED
	 	 	 	 	 	 
				
	/s/    BRETT ADAM        	 	 	 	 Date:
	 	 10/24/03

 SEVERANCE PLAN 
  
 WHEREAS, Versata, Inc (the “Company”) has adopted a severance policy (the “Plan”); and 
  
 WHEREAS, Brett Adam (“You”) previously have agreed that your
eligibility for consideration for participation in the Plan is conditional upon your execution of the Separation and Consulting Agreement and General Release; and 
  
 WHEREAS, the Plan shall apply only, 
  
 (a) in the event your term of employment were to be terminated by the Company other than for cause, or

  
 (b) in the event you were to resign from your
position(s) with the Company (such termination or resignation being hereafter referred to as termination) within sixty days after either of the following events (i) written notice to you of a determination made in good faith by the Board of
Directors that there has been a change in your duties and position that is not reasonable in view of your previous position with the Company; or (ii) a reduction in your monthly salary that is not part of a Company wide salary reduction plan), and
you take all necessary actions to effectuate such termination with the Company including taking any actions, (i.e. resignations from positions held with the Company’s subsidiaries), as required by the Company; you will receive a continuation of
your monthly salary for a three (3) month period following the effective date of termination; or 
  
 (c) in the event a Corporate transaction or change in control occur during your employment, and you were to resign from your position(s)
(such termination or resignation being hereafter referred to as termination) within sixty days after either of the following events (i) there has been a change in your duties and position that is not reasonable in view of your previous position with
the Company; or (ii) a reduction in your monthly salary, and you take all necessary actions to effectuate such termination with the Company including taking any actions, (i.e. resignations from positions held with the Company’s subsidiaries),
as required by the Company; you will receive a continuation of your monthly salary for a six (6) month period following the effective date of termination. 
  
 1. Health Care Coverage. The Company will, at its expense, provide you and your eligible dependents with continued health care
coverage under the Company’s medical/dental plan until the earlier of (i) the first date that you are covered under another employer’s health benefit program which provides substantially the same level of benefits without exclusion for
pre-existing medical conditions or (ii) the end of the severance payment period under Paragraph 1. Any further coverage to which you or your dependents may be entitled during the remainder (if any) of your COBRA coverage period under Internal
Revenue Code Section 4980B will be at your sole expense. 
  
 2. Consulting Services. You will provide and keep contact information current with the Company and will make yourself available to perform consulting services reasonably requested of you during the severance
payment period under Paragraph 1 at times consistent with your other business obligations. For the first five (5) hours of consulting services you render per month, your sole compensation will be in the form of severance payments. To the extent you
are requested to render more than five (5) hours of consulting services in any month, you will be compensated for each additional hour at a reasonable hourly rate to be agreed upon by you and the Company at the time such consulting services are to
be rendered. In no event will you be required to render more than fifteen (15) hours of consulting services per month. You will also be reimbursed for all reasonable out-of-pocket expenses incurred in rendering such services upon your submission of
appropriate documentation for those expenses. 

 4. Treatment of Options. Your outstanding options to purchase shares of the
Company’s common stock will stop vesting at the time of your termination or resignation. You will have until the earlier of (i) the expiration date of the option term or (ii) the end of the applicable severance period measured from the date
your severance payment period ends in which to exercise your options for any shares in which you are otherwise vested at the time of your termination or resignation. 
  
 5. Restrictive Covenants. During your consulting payment period under Paragraph 3:

  
 (i) You will not directly or indirectly
encourage or solicit any individual to leave the Company’s employ for any reason, or interfere in any other manner with the employment relationships at the time existing between the Company and its current or prospective employees. 

 
 (ii) You will not induce or attempt to induce any
customer, vendor, supplier, distributor, licensee or other business affiliate of the Company to cease doing business with the Company or in any way interfere with the existing business relationship between any such customer, vendor, supplier,
distributor, licensee or other business affiliate and the Company. 
  
 6. Termination for Cause. In the event of your termination for cause, you will not be entitled to receive any benefits under the Plan. 
  
 For purposes of the Plan, your services will be deemed to have been terminated for cause if such termination
occurs by reason of your commission of any act of fraud, embezzlement or dishonesty, your unauthorized use or disclosure of confidential information or trade secrets of the Company, or any other intentional misconduct on your part which adversely
affects the business or affairs of the Company in a material manner. 
  
 7. Reservation of Right to Terminate Plan. In the event the Company makes a good faith determination during the term of the Plan that you participated in activity during your employment that warranted “for
cause” termination, the Company reserves the right to immediately terminate the Plan and revoke any and all benefits accrued hereunder. 
  
 8. Death. In the event of your death while you are an employee of the Company, your estate will receive the proceeds of any life
insurance you may have purchased, but your estate will not receive any benefits under this agreement. The obligation of the Company to make payments to which you become entitled under this agreement will terminate at the end of the month in which
you die. Should you die before you exercise your outstanding options for all the vested shares purchasable thereunder, then those options may be exercised for vested shares on the date of your death, within twelve (12) months after your death, by
the executors or administrators of your estate or by persons to whom the options are transferred pursuant to your will or in accordance with the laws of inheritance. In no event, however, may any such option be exercised after the specified
expiration date of the option term. 
  
 9.
Miscellaneous. This agreement will be binding upon the Company, its successors and assigns (including, without limitation, the surviving entity in any Change in Control) and is to be construed and interpreted under the laws of the State of
California. This agreement supersedes all prior 

 
agreements between you and the Company relating to the subject of severance benefits payable upon termination of your services. The terms of this Plan may be
mutually modified in writing. 
  
 10. At Will
Service. Nothing in this agreement is intended to provide you with any right to continue as an employee of the Company (or any subsidiary) for any period of specific duration or interfere with or otherwise restrict in any way your rights or the
rights of the Company (or any subsidiary), which rights are hereby expressly reserved by each party, to terminate your services at any time for any reason whatsoever, with or without cause. 
  

									
			
	 Date: 10/24/03
	 	 	 	/S/    BRETT
ADAM        
	 	 	 	 	 	 	Brett Adam
			
	 Date: 10/24/03
	 	 	 	VERSATA, INC.
				
	 	 	 	 	 BY:
	 	/s/    JIM DOEHRMAN        
	 	 	 	 	 	 	 	 	(PRINT NAME)
					
	 	 	 	 	 	 	TITLE:	 	COO/CFO
					
	 	 	 	 	 	 	 	 	/S/    JIM
DOEHRMAN        
	 	 	 	 	 	 	 	 	SIGNATURE

 EXHIBIT A 
  
 SEPARATION AGREEMENT AND GENERAL RELEASE 
  
 This Separation Agreement and General Release (“Agreement”) is made and entered into by
“            ” (hereinafter “You”), and “Versata, Inc.” (hereinafter “the Company”). 
  
 RECITALS 
  
 WHEREAS, You were [ position ] of the Company, and your employment terminated with the Company effective [    ] and have received all
accrued and unused vacation pay from the Company; and 
  
 WHEREAS,
the Company and You also desire to part Company amicably and to settle, fully and finally, all potential claims between the Company and You, the parties enter into this Agreement. 
  
 COVENANTS 
  
 NOW, THEREFORE, in consideration of the consideration, terms and conditions as set forth, the parties agree: 
  
 1. References and Disparagement. The Company agrees that if contacted
by a prospective employer of Yours, it will confirm your dates of employment and last position held. You agree to refer all prospective employers to Jim Doehrman or his successor. You and the Company each agree not to disparage the other, and You
agree not to disparage any present or former officer, employee, or director of the Company. 
  
 3. Dismissal of the Action. If You have filed any action, including, without limitation, any California Labor Commission action, You agree to dismiss all such actions with prejudice, and for that purpose will
cause to be transmitted to counsel for the Company a fully executed dismissal with prejudice. 
  
 4. Separation Payments. Following the effective date of this Agreement and subject to your obligations described in the Severance Plan and this Agreement, during the severance period
[            ], the Company shall (i) make payments to You, each payment to equal the semi-monthly payroll payments that You were receiving as of the date of this Agreement, and (ii) the
Company shall assume a responsibility to pay for Your continuation coverage under COBRA, provided that should You become covered under a subsequent employer’s medical plan, You shall promptly inform the Company of this fact, and the Company
shall discontinue coverage the first day of the calendar month after receiving notice that You are covered. 
  
 5. Treatment of Stock. Your outstanding options to purchase shares of the Company’s common stock will stop vesting at the time of your
termination or resignation. You will have until the earlier of (i) the expiration date of the option term or (ii) the end of the severance period measured from the date your severance payment period ends in which to exercise your options for any
shares in which you are otherwise vested at the time of your termination or resignation. 
  
 6. Non-Solicitation. For a period of twelve months from your termination date, you will not directly or indirectly encourage or solicit any individual to leave the Company’s employ for any reason. For a
period of twelve months from your termination date, you will not induce or attempt to induce any customer, vendor, supplier, distributor, licensee or other business affiliate of the Company to cease doing business with the Company or in any way
interfere with the existing business relationship between any such customer, vendor, supplier, distributor, licensee or other business affiliate and the Company. 
  
 7. Confidentiality. You and the Company agree and represent that: (i) the fact of and the terms and conditions of
this Agreement, and (ii) the negotiation of this Agreement shall not be disclosed in any way, to any person, other than their legal counsel, and in the case of financial terms of this Agreement only to their CPA or tax advisor for the purposes of
tax planning only or members of Your immediate family, except: (i) with the other party’s express written consent, which the consenting party may in its sole discretion grant or deny, (ii) pursuant to subpoena, (iii) pursuant to court order,
(iv) pursuant to a valid and specific request by any government agency, or (v) pursuant to a reporting requirement on the Company. Each party agree to give notice to the other party pursuant to paragraph 13 of this Agreement within a reasonable time
(but no later than five days before the date for production or testimony) after receipt of any subpoena or other request for testimony or production of documents. 

 8. Waiver of Claims and Release. In exchange for the consideration provided in this Agreement, the
adequacy of which is hereby acknowledged, You and the Company, on behalf of Yourself and itself and their heirs, successors, and assigns, hereby fully release and forever discharge the Company on the part of You, and You on the part of the Company,
including their officers, directors, agents, employees, attorneys, parents, affiliates and/or subsidiaries, from any and all claims, actions and liabilities of any kind or character whatsoever, arising in law or in equity, known or unknown to the
releasing party, suspected or unsuspected, that such releasing party has ever had, now has or may now have against the party being released, including, without limitations, all claims directly or indirectly related to or arising out of Your
employment by the Company, and/or the termination of or Your resignation from that employment. This waiver and release specifically includes, but is not limited to, all claims, if any, whether arising in tort or in contract, related to Your
employment, including any and all claims for wrongful discharge or wrongful termination; claims for alleged violation of public policy or breach of implied covenant of good faith and fair dealing; claims for breach of fiduciary duty; claims for
negligent or intentional infliction of emotional distress; claims arising in connection with Your compensation, benefits and/or stock options; claims for breach of express or implied contract or for further monetary compensation by way of additional
salary or bonus allegedly due You by reason of Your employment with the Company; and all other claims, based on common law or federal or state statute, including claims for discrimination based on age arising under state statute or the federal Age
Discrimination in Employment Act, the Older Workers’ Benefits Protection Act, or any similar federal or state law prohibiting age discrimination. You and the Company understand and expressly agree that this Agreement and Release extends to all
claims of whatever nature and kind, known or unknown, suspected or unsuspected, vested or contingent, past, present or future, arising from or attributable to any incidents or event, occurring, in whole or in part, on or before the date of the
execution of this Agreement and that any and all rights granted here under any state or federal law or regulation limiting the effect of this Release, including the provisions of Section 1542 of the California Civil Code, ARE HEREBY EXPRESSLY
WAIVED. Section 1542 of the California Civil Code says: 
  
 A GENERAL RELEASE DOES
NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS/HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS/HER SETTLEMENT WITH THE DEBTOR. 
  
 9. Legal Counsel. You and the Company expressly warrant that You have
been supplied with and have read this Agreement, and have had an opportunity to discuss the terms of this Agreement with Your legal counsel. You further warrant that You fully understand the contents and effect of this document, approve and accepts
the terms and provisions of this Agreement, agree to be bound thereby, and sign Your own free will. 
  
 10. Return of Property. You represent and warrant that You have returned all property of the Company by. You further agree that You have not and
will not copy or cause to be copied, print out or cause to be printed out any software, programs, documents or other materials originating with or belonging to the Company or its affiliates. For purposes of this paragraph, “property”
includes, but is not limited to, all computers, cell phones, electronic devices, computers, customer lists, employee lists, manuals, handbooks, business plans, records, plans, formulas, reports, files, lists (including computer generated lists),
equipment, inventions, discoveries, products, software, programs, designs, methods, applications, or processes relating to the business of the Company. 
  
 11. Trade Secrets and Confidential Business Information. You acknowledges that You continue to be bound by Your existing legal duties with respect
to trade secrets and confidential business information of the Company including, without limitation, that certain Proprietary Information and Inventions Agreement by and between You and the Company dated (    ). 
  
 12. General. This Agreement contains the entire agreement between the
signatories and constitutes the complete, final, and exclusive embodiment of their agreement with respect to the subject matter hereof. Any modifications to the terms of this Agreement must be made in writing and signed by all parties to this
Agreement. This Agreement shall bind the heirs, personal representatives, successors, assigns of You and the Company and shall insure to the benefit of each party’s heirs, successors, and assigns. The terms and provisions (collectively
“provisions”) of this Agreement are severable. Should any provision hereof, for any reason, be deemed or held invalid or unenforceable, in whole or in part, by a court of law, that provision or portion thereof shall be deemed amended and
shall be construed so as to enable the provision(s) to be applied and enforced to the maximum lawful extent. Each side shall bear its own attorneys’ fees, expert witness fees and costs in connection with and claims asserted and this Agreement.
The parties hereto do not intend that any rules of constructions be employed or asserted in the construction or interpretation of this Agreement and that for all purposes, both parties hereto be deemed to be joint authors hereof. 
  
 13. Notices. All notices and other communications hereunder
shall be communicated to all parties in writing and shall be delivered or mailed by registered or certified mail, postage prepaid and with return receipt requested. 

 
Hand-delivered notices shall be deemed communicated when received. Mailed notices shall be deemed communicated as of three (3) full business days after
mailing, if mailed to the following respective addresses. 
  

			
	Versata, Inc.:	  	 
	 	  	Jim Doehrman
	 	  	Executive Vice President
	 	  	300 Lakeside Drive
	 	  	15th Floor
	 	  	Oakland, California 94612
	 	  	Telephone: 510-628-1529
	 	  	Facsimile:  510-286-8936
	 	  	Email:        Jim_doehrman@versata.com
		
	YOU:	  	 
		
	 	  	Telephone:
	 	  	Facsimile:
	 	  	Email:

  
 14. Acceptance. To
accept this Agreement, You must sign and date the Agreement and return it to Human Resources by [    ]. The date of Your acceptance will be the “effective date” of this Agreement. 
  
 PLEASE READ CAREFULLY. THIS SETTLEMENT AGREEMENT AND GENERAL RELEASE INCLUDES
A RELEASE OF ALL KNOWN OR UNKNOWN CLAIMS. 
  
 By signature below, the parties
assent to each and all of the terms of this Agreement. 
  

					
			
	___________________	 	 	 	  
	Date	 	 	 	[PRINT NAME]
			
	___________________	 	 	 	  
	Date	 	 	 	Jim Doehrman
	 	 	 	 	Executive Vice President

 EXHIBIT B 
  
 ACKNOWLEDGEMENT OF CONFIDENTIALITY 
  
 I, [insert name], agree not to disclose to anyone the fact of or the terms and conditions of the settlement agreement
entered into between [NAME] and Versata, Inc. 
  
 I declare under
penalty of perjury of the laws of the State of California that the foregoing is true and correct, and that this Acknowledgement was executed on this          day of
                    , 2003. 
  

	
	
	  
	[signature]
	
	  
	[printed name]Versata, Inc. Stock Option Agreement

 Exhibit 10.24 
  
 VERSATA, INC. 
 STOCK OPTION AGREEMENT 
  
 RECITALS

  
 A. The Board has adopted the Plan for the purpose of
retaining the services of selected Employees, non-employee members of the Board or the board of directors of any Parent or Subsidiary and consultants and other independent advisors in the service of the Corporation (or any Parent or Subsidiary).

  
 B. This Agreement is executed pursuant to, and is intended to
carry out the purposes of, the Plan in connection with the Corporation’s grant of an option to Optionee. 
  
 C. All capitalized terms in this Agreement shall have the meaning assigned to them in the attached Appendix. 
  
 NOW, THEREFORE, it is hereby agreed as follows: 
  
 1. Grant of Option. The Corporation hereby grants to Optionee,
as of the Grant Date, an option to purchase up to the number of Option Shares specified in the Grant Notice. The Option Shares shall be purchasable from time to time during the option term specified in Paragraph 2 at the Exercise Price. 

 
 2. Option Term. This option shall commence upon the Grant
Date and shall expire on the Expiration Date, unless sooner terminated in accordance with Paragraph 5 or 6. 
  
 3. Limited Transferability. During Optionee’s lifetime, this option shall be exercisable only by Optionee and shall not be assignable
or transferable other than by will or by the laws of descent and distribution following Optionee’s death. 
  
 4. Dates of Exercise. This option shall become exercisable for the Option Shares according to the Exercise Schedule and shall remain
exercisable until the Expiration Date or sooner termination of the option term under Paragraph 5 or 6. 
  
 5. Termination Period. This option shall be exercisable for ninety (90) days after Optionee’s Service terminates. Upon Optionee’s
death or Disability, this Option may be exercised for six (6) months after Optionee’s Service terminates. In no event may Optionee exercise this option after the Expiration Date. In the event Optionee’s Service terminates as a result of
Misconduct, all options held by Optionee will immediately terminate. 
  

 – 1 – 

 6. Corporate Transaction. 
  
 (b) In the event of a Corporate Transaction, this option shall automatically accelerate and become fully
vested and exercisable immediately prior to the effective date of the Corporate Transaction; provided, however, that this Option will not become exercisable on an accelerated basis if: 
  
 (i) This option is assumed by the successor corporation (or parent thereof) in connection with the Corporate
Transaction; or 
  
 (ii) This option is replaced
with a cash incentive program of the successor corporation that provides for the payout of the difference between the Exercise Price and the fair market value of the shares at the time of the Corporate Transaction, subject to the same Exercise
Schedule as the option. 
  
 (c) Immediately
following the consummation of the Corporate Transaction, this option will terminate and cease to be outstanding, except to the extent it is assumed or replaced by the successor corporation. 
  
 (d) If this option is assumed in connection with a Corporate
Transaction, then this option shall be appropriately adjusted, immediately after such Corporate Transaction, to apply to the number and class of securities which would have been issuable to Optionee in consummation of such Corporate Transaction had
the option been exercised immediately prior to such Corporate Transaction, and appropriate adjustments shall also be made to the Exercise Price, provided the aggregate Exercise Price shall remain the same. 
  
 (e) This Agreement shall not in any way affect the right of
the Corporation to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets. 
  
 7. Adjustment in Option Shares. Should any change be made to
the Common Stock by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting the outstanding Common Stock as a class without the Corporation’s receipt of consideration,
appropriate adjustments shall be made to (i) the total number and/or class of securities subject to this option and (ii) the Exercise Price in order to reflect such change and thereby preclude a dilution or enlargement of benefits hereunder.

  
 8. Shareholder Rights. The holder of this option
shall not have any shareholder rights with respect to the Option Shares until such person shall have exercised the option, paid the Exercise Price and become a holder of record of the purchased shares. 
  
 9. Manner of Exercising Option. 
  
 (a) In order to exercise this option with respect to all or
any part of the Option Shares for which this option is at the time exercisable, Optionee (or any other person or persons exercising the option) must take the following actions: 
  
 (i) Execute and deliver to the Corporation a Purchase Agreement for the Option Shares for which the option
is exercised. 
  

 – 2 – 

 (ii) Pay the aggregate Exercise Price for the purchased shares in one or more of the
following forms: 
  
 (A) cash or check made
payable to the Corporation; or 
  
 (B) a
promissory note payable to the Corporation, but only to the extent authorized by the Plan Administrator in accordance with Paragraph 13. 
  
 Should the Common Stock be registered under Section 12(g) of the 1934 Act at the time the option is exercised, then the Exercise Price
may also be paid as follows: 
  
 (C) in shares
of Common Stock held by Optionee (or any other person or persons exercising the option) for the requisite period necessary to avoid a charge to the Corporation’s earnings for financial reporting purposes and valued at Fair Market Value on the
Exercise Date; or 
  
 (D) to the extent the
option is exercised for vested Option Shares, through a special sale and remittance procedure pursuant to which Optionee (or any other person or persons exercising the option) shall concurrently provide irrevocable instructions (a) to a
Corporation-designated brokerage firm to effect the immediate sale of the purchased shares and remit to the Corporation, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate Exercise Price payable for
the purchased shares plus all applicable Federal, state and local income and employment taxes required to be withheld by the Corporation by reason of such exercise and (b) to the Corporation to deliver the certificates for the purchased shares
directly to such brokerage firm in order to complete the sale. 
  
 Except to the extent the sale and remittance procedure is utilized in connection with the option exercise, payment of the Exercise Price must accompany the Purchase Agreement delivered to the Corporation in connection
with the option exercise. 
  
 (iii) Furnish to
the Corporation appropriate documentation that the person or persons exercising the option (if other than Optionee) have the right to exercise this option. 
  
 (iv) Execute and deliver to the Corporation such written representations as may be requested by the Corporation in order for it to comply
with the applicable requirements of Federal and state securities laws. 
  
 (v) Make appropriate arrangements with the Corporation (or Parent or Subsidiary employing or retaining Optionee) for the satisfaction of all Federal, 

  

 – 3 – 

 
state and local income and employment tax withholding requirements applicable to the option exercise. 
  
 (b) As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or any other person or persons exercising this option) a certificate for the purchased Option Shares, with the appropriate legends affixed thereto. 
  
 (c) In no event may this option be exercised for any
fractional shares. 
  
 10. Compliance with Laws and
Regulations. 
  
 (a) The exercise of this
option and the issuance of the Option Shares upon such exercise shall be subject to compliance by the Corporation and Optionee with all applicable requirements of law relating thereto and with all applicable regulations of any stock exchange (or the
Nasdaq National Market, if applicable) on which the Common Stock may be listed for trading at the time of such exercise and issuance. 
  
 (b) The inability of the Corporation to obtain approval from any regulatory body having authority deemed by the Corporation to be
necessary to the lawful issuance and sale of any Common Stock pursuant to this option shall relieve the Corporation of any liability with respect to the non-issuance or sale of the Common Stock as to which such approval shall not have been obtained.
The Corporation, however, shall use its best efforts to obtain all such approvals. 
  
 11. Successors and Assigns. Except to the extent otherwise provided in Paragraphs 3 and 6, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the Corporation and its
successors and assigns and Optionee, Optionee’s assigns and the legal representatives, heirs and legatees of Optionee’s estate. 
  
 12. Notices. Any notice required to be given or delivered to the Corporation under the terms of this Agreement shall be in writing and
addressed to the Corporation at its principal corporate offices. Any notice required to be given or delivered to Optionee shall be in writing and addressed to Optionee at the address indicated below Optionee’s signature line on the Grant
Notice. All notices shall be deemed effective upon personal delivery or upon deposit in the U.S. mail, postage prepaid and properly addressed to the party to be notified. 
  
 13. Financing. The Plan Administrator may, in its absolute discretion and without any obligation to do so,
permit Optionee to pay the Exercise Price for the purchased Option Shares by delivering a full-recourse, interest-bearing promissory note secured by those Option Shares. The payment schedule in effect for any such promissory note shall be
established by the Plan Administrator in its sole discretion. 
  
 14. Construction. This Agreement and the option evidenced hereby are made and granted pursuant to the Plan and are in all respects limited by and subject to the terms of the Plan. All decisions of the Plan Administrator with
respect to any question or issue arising under the Plan or this Agreement shall be conclusive and binding on all persons having an interest in this option. 
  

 – 4 – 

 15. Governing Law. The interpretation, performance and enforcement of this Agreement shall
be governed by the laws of the State of California without resort to that State’s conflict-of-laws rules. 
  
 16. Shareholder Approval. If the Option Shares covered by this Agreement exceed, as of the Grant Date, the number of shares of Common Stock
which may be issued under the Plan as last approved by the shareholders, then this option shall be void with respect to such excess shares, unless shareholder approval of an amendment sufficiently increasing the number of shares of Common Stock
issuable under the Plan is obtained in accordance with the provisions of the Plan. 
  
 17. Additional Terms Applicable to an Incentive Option. In the event this option is designated an Incentive Option in the Grant Notice, the following terms and conditions shall also apply to the grant:

  
 (a) This option shall cease to qualify for
favorable tax treatment as an Incentive Option if (and to the extent) this option is exercised for one or more Option Shares: (i) more than three (3) months after the date Optionee ceases to be an Employee for any reason other than death or
Permanent Disability or (ii) more than twelve (12) months after the date Optionee ceases to be an Employee by reason of Permanent Disability. 
  
 (b) If the aggregate Fair Market Value (determined at the Grant Date) of the Common Stock for which this option would otherwise first
become exercisable in such calendar year would, when added to the aggregate value (determined as of the respective date or dates of grant) of the Common Stock and any other securities for which one or more other Incentive Options granted to Optionee
prior to the Grant Date (whether under the Plan or any other option plan of the Corporation or any Parent or Subsidiary) first become exercisable during the same calendar year, exceed One Hundred Thousand Dollars ($100,000) in the aggregate, then
this option will vest as determined by the Plan Administrator in accordance with the terms of the Plan. 
  
 (c) Should Optionee hold, in addition to this option, one or more other options to purchase Common Stock which become exercisable for the
first time in the same calendar year as this option, then the foregoing limitations on the exercisability of such options as Incentive Options shall be applied on the basis of the order in which such options are granted. 
  

 – 5 – 

  
 APPENDIX

  
 The following definitions shall be in effect under the Agreement:

  
 A. Agreement shall mean this Stock Option
Agreement. 
  
 B. Board shall mean the
Corporation’s Board of Directors. 
  
 C. Code
shall mean the Internal Revenue Code of 1986, as amended. 
  
 D.
Common Stock shall mean the Corporation’s common stock. 
  
 E. Corporate Transaction shall mean either of the following shareholder-approved transactions to which the Corporation is a party: 
  
 (i) a merger or consolidation in which securities possessing more than fifty percent (50%) of the total
combined voting power of the Corporation’s outstanding securities are transferred to a person or persons different from the persons holding those securities immediately prior to such transaction, or 
  
 (ii) the sale, transfer or other disposition of all or
substantially all of the Corporation’s assets in complete liquidation or dissolution of the Corporation. 
  
 F. Corporation shall mean Versata, Inc., a California corporation, and any successor corporation to all or substantially all of the assets
or voting stock of Versata, Inc. which shall by appropriate action adopt the Plan. 
  
 G. Disability shall mean the inability of Optionee to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment and shall be determined by the Plan
Administrator on the basis of such medical evidence as the Plan Administrator deems warranted under the circumstances. Disability shall be deemed to constitute Permanent Disability in the event that such Disability is expected to result in
death or has lasted or can be expected to last for a continuous period of twelve (12) months or more. 
  
 H. Employee shall mean an individual who is in the employ of the Corporation (or any Parent or Subsidiary), subject to the control and
direction of the employer entity as to both the work to be performed and the manner and method of performance. 
  
 I. Exercise Date shall mean the date on which the option shall have been exercised in accordance with Paragraph 9 of the Agreement.

  
 J. Exercise Price shall mean the exercise price
payable per Option Share as specified in the Grant Notice. 
  

 A-1 

 K. Exercise Schedule shall mean the exercise schedule specified in the Grant Notice
pursuant to which the option is to become exercisable for the Option Shares in a series of installments over the Optionee’s period of Service. 
  
 L. Expiration Date shall mean the date on which the option expires as specified in the Grant Notice. 
  
 M. Fair Market Value per share of Common Stock on any relevant
date shall be determined in accordance with the following provisions: 
  
 (i) If the Common Stock is at the time traded on the Nasdaq National Market, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question, as the price is reported by
the National Association of Securities Dealers on the Nasdaq National Market or any successor system. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on
the last preceding date for which such quotation exists. 
  
 (ii) If the Common Stock is at the time listed on any Stock Exchange, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question on the Stock Exchange determined by
the Plan Administrator to be the primary market for the Common Stock, as such price is officially quoted in the composite tape of transactions on such exchange. If there is no closing selling price for the Common Stock on the date in question, then
the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists. 
  
 (iii) If the Common Stock is at the time neither listed on any Stock Exchange nor traded on the Nasdaq National Market, then the Fair
Market Value shall be determined by the Plan Administrator after taking into account such factors as the Plan Administrator shall deem appropriate. 
  
 N. Grant Date shall mean the date of grant of the option as specified in the Grant Notice. 
  
 O. Grant Notice shall mean the Notice of Grant of Stock Option
accompanying the Agreement, pursuant to which Optionee has been informed of the basic terms of the option evidenced hereby. 
  
 P. Incentive Option shall mean an option which satisfies the requirements of Code Section 422. 
  
 Q. Misconduct shall mean the commission of any act of fraud,
embezzlement or dishonesty by Optionee, any unauthorized use or disclosure by Optionee of confidential information or trade secrets of the Corporation (or any Parent or Subsidiary), or any other intentional misconduct by Optionee adversely affecting
the business or affairs of the Corporation (or any Parent or Subsidiary) in a material manner. The foregoing definition shall not be deemed to be inclusive of all the acts or omissions which the Corporation (or any Parent or Subsidiary) 

  

 A-2 

 
may consider as grounds for the dismissal or discharge of Optionee or any other individual in the Service of the Corporation (or any Parent or Subsidiary).

  
 R. 1934 Act shall mean the Securities Exchange
Act of 1934, as amended. 
  
 S. Non-Statutory Option
shall mean an option not intended to satisfy the requirements of Code Section 422. 
  
 T. Option Shares shall mean the number of shares of Common Stock subject to the option. 
  
 U. Optionee shall mean the person to whom the option is granted as specified in the Grant Notice. 
  
 V. Parent shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations ending with the Corporation, provided each corporation in the unbroken chain (other than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other corporations in such chain. 
  
 W. Plan shall mean the Corporation’s 2000 Stock Option Plan. 
  
 X. Plan Administrator shall mean either the Board or a committee of the Board acting in its capacity as
administrator of the Plan. 
  
 Y. Purchase Agreement
shall mean the stock purchase agreement in substantially the form of Exhibit B to the Grant Notice. 
  
 Z. Service shall mean the Optionee’s performance of services for the Corporation (or any Parent or Subsidiary) in the capacity of an
Employee, a non-employee member of the board of directors or an independent consultant. 
  
 AA. Stock Exchange shall mean the American Stock Exchange or the New York Stock Exchange. 
  
 BB. Subsidiary shall mean any corporation (other than the Corporation) in an unbroken chain of corporations beginning with the Corporation,
provided each corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other
corporations in such chain. 
  

 A-3

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