Document:

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                                                                   Exhibit 10.13

                    VALUE ADDED INDUSTRY REMARKETER AGREEMENT

THIS VALUE ADDED INDUSTRY REMARKETER AGREEMENT (the "Agreement") is between
SIEBEL SYSTEMS, INC. with its principal place of business at 1855 South Grant
Street, San Mateo, CA 94402 ("Siebel"), and CORIO, INC. ("Distributor"), with
its principal place of business at 700 Bay Street, Suite 210.
Redwood City, CA 94063

1.      DEFINITIONS

1.1     "AFFILIATE" shall mean any corporation, company or other entity
controlled by, controlling, or under common control with Distributor. Such
entity shall be deemed to be an "Affiliate" only so long as such control exists.
Upon request, Distributor agrees to confirm the Affiliate status of a particular
entity.

1.2     "ANCILLARY PROGRAMS" shall mean the third party software delivered with
the Licensed Software as specified in EXHIBIT A. an Order Form, or the
Documentation

1.2A    "APPLICATION HOSTING SERVICES" shall mean professional information
processing and hosting services provided to a Customer by Distributor at
Distributor's site in connection with such Customer's use of the License
Programs.

1.3     "CUSTOMER" or "END USER" means an entity to whom Distributor provides a
valid license to use the Licensed Software in accordance with the terms of this
Agreement for such entity's internal business purposes in accordance with the
End User License Agreement, and not for redistribution or resale.

1.4     "DOCUMENTATION" shall mean Siebel's then current on-line help, guides,
and manuals published by Siebel and made generally available by Siebel for the
Licensed Software.

1.5     "EFFECTIVE DATE" shall mean the effective date set forth at the end of
this Agreement.

1.6     "END USER LICENSE AND SERVICES AGREEMENT" shall mean Distributor's
standard license and services agreement accompanying each copy of the Licensed
Software resold under this Agreement which includes the minimum terms and
conditions set forth in EXHIBIT F and the terms relating to Distributor's
provision of Application Hosting Services.

1.7     "ERROR" shall mean the failure of the Programs to perform in all
material respects the functions described in the Documentation when operated on
a Supported Platform.

1.8     "FIRST-LINE SUPPORT" shall mean direct technical support of Licensed
Software provided to Users, as set forth in Section 3.5(a).

1.9     "INITIAL TERM" means the period commencing on the Effective Date and
continuing as set forth in EXHIBIT A, unless earlier terminated as set forth in
Section 12.

1.10    "LICENSED SOFTWARE" means the object code form of the software programs
listed on EXHIBIT A attached hereto excluding the Ancillary Programs listed on
EXHIBIT A

1.11    "MARKETING MATERIALS" means Siebel's standard brochures, data sheets,
collateral, magazines, article reprints, industry analyst reports, videotapes,
books and other marketing materials that Siebel, in its discretion, makes
available to Distributor to assist in its marketing and promotion of the
Licensed Software.

1.12    "MAINTENANCE AND SUPPORT SERVICES" shall mean the services set forth in
Section 3.4.

1.13    "ORDER FORM" shall mean the document, substantially in the form included
in the Minimum Terms of End User License Agreement set forth at EXHIBIT F, that
is signed by both the Customer and distributor and specifies the Licensed
Software licensed to a particular Customer by Distributor.

1.14    "PRE-PRODUCTION PROGRAM" shall mean a software program which is (i) not
generally licensed for commercial use by Siebel, (ii) not listed as generally
available in Siebel's marketing literature, or (iii) designated by Siebel as an
"Alpha," "Beta," or "Pre-Production" program or release. Siebel shall notify
Customer in writing that a particular software program is a Pre-Production
Program

1.15    "SECOND-LINE SUPPORT" shall mean direct technical support of Licensed
Software provided to Customers, as set forth in Section 3.4(b).

1.16    "SOLUTION" means the Licensed Software integrated with the Value Added
Offering integrated as provided in Section 3.1.

1.17    "SUBLICENSE FEE" means the sublicense fee set forth in EXHIBIT A due and
payable to Siebel for each license of the Licensed Software to a Customer.

1.18    "SUPPORTED PLATFORM" shall mean the hardware and software platforms
(e.g., database server systems, application server systems, and client systems)
that are supported by Siebel as expressly set forth in the Documentation. The
requirements for the Supported Platform are subject to change as specified by
Siebel in its discretion with ninety (90) days prior written notice to Customer
or Distributor.

1.19    "Territory" shall be the geographic area described in EXHIBIT A.

1.20    "THIRD-LINE SUPPORT" shall mean technical support of Licensed Software,
as set forth in Section 3.5(c).

1.21    "TRAINING MATERIALS" shall mean the standard generally available Siebel
training materials, as set forth in Technical Services schedule in effect at the
time such training materials are ordered by Distributor.

1.22    "UPDATES" shall mean (a) subsequent releases of the Programs that (i)
add new features, functionality, and/or improved performance, (ii) operate on
new or other databases, (iii) add new foreign language capabilities, or (iv) are
new foreign language versions of the Programs; (b) bug or Error fixes, patches,
Workarounds, and maintenance releases; (c) new point releases, including those
denoted by a change to the right of the first decimal point (e.g., v3.0 to 3.1),
and (d) new major version releases, regardless of the version name or number,
but including those denoted by (i) a change to the left of the first decimal
point (e.g., v3.0 to 4.0) and/or (ii) the addition of a date designation or a
change in an existing date designation (e.g., v1999 to 2000). Updates shall not
include separate products which Siebel offers only for an additional fee to its
customers generally, including those customers purchasing Maintenance Services.

1.23    "USER" shall mean the named or specified (by password or other user
identification) individuals authorized by Customer to use Licensed Software,
regardless of whether the individual is actively using the Licensed Software at
any given time. The maximum number of Users that may use the Licensed Software
shall be specified in an Order Form signed by Customer and Distributor. Users
may include the employees of Customer or third parties, provided that such third
party is limited to use of the Licensed Software (i) only as configured and
deployed by Customer, and (ii) solely in connection with Customer's business
operations as conducted by or through such third party, including but not
limited to the installation, administration or implementation of the Licensed
Software for Customer. Distributor agrees that it is responsible for ensuring
that any third party usage is authorized by Customer in accordance with the
terms and conditions of this Agreement. Notwithstanding the foregoing, Users
shall exclude any individuals employed by, or acting on behalf or under the
direction or control of, a direct competitor of Siebel Upon request, Siebel
shall provide Distributor with a listing of its direct competitors

1.24    "VALUE ADDED OFFERING" means the hardware, software, and/or services, as
described in EXHIBIT A, that Distributor provides to Customers in connection
with the Licensed Software.

1.25    "WORKAROUND" shall mean a resolution of an Error which enables Customer
to access similar but not equivalent functionality to that described in the
Documentation which does not introduce additional Errors to the operation of the
Licensed Software.

2.      GRANT OF RIGHTS

2.1     LICENSE GRANT. Subject to the terms and conditions of this Agreement,
Siebel hereby appoints Distributor as a distributor of the Licensed Software and
grants to Distributor the following non-transferable rights, all of which may be
exercised only by Distributor in the Territory and during the License Term. This
appointment shall be on a non-exclusive basis. These rights may not be
sublicensed except as expressly permitted in this Section 2.1.

        (a) To reproduce, exactly as provided by Siebel, object code copies of
the Licensed Software and Ancillary Programs or portions thereof solely to
exercise the rights granted in this Section 2.1;

        (b) To distribute and sublicense to Customers the right to use the
Licensed Software and Ancillary Programs or portions thereof on a limited term
basis in accordance with the terms of the End User License Agreement, subject to
the restrictions in Section 5;

[*] 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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        (c) To use the Licensed Software and Ancillary Programs for the sole
purposes of operating the Licensed Software on Distributor's computer hardware
and operating system(s) to (i) test and evaluate the Licensed Software, (ii)
train Distributor's personnel in the marketing and sales of the Licensed
Software, (iii) demonstrate and promote the Licensed Software to potential
Customers, and (v) provide First-Line Support and Second-Line Support to
Customers by using the License Software in a test environment to (1) diagnose
reported problems or performance deficiencies of the Licensed Software, and (2)
resolve such problems or deficiencies. Notwithstanding the foregoing,
Distributor may (i) not use the Licensed Software internally in a production
capacity to run any of its business operations including the sales and customer
service activities associated with its End User Customers, or (ii) use the
Siebel Tools Programs set forth in EXHIBIT A solely in accordance with the
Documentation for the limited purpose of configuring the Licensed Software for
distribution with the Value Added Offering and not for general application
development purposes,

        (d) To copy the Licensed Software for archival or backup purposes, and
to make a sufficient number of copies for the use by Distributor as permitted in
this Section 2.1, provided that all titles and trademark, copyright, and
restricted rights notices are reproduced on all such copies;

        (e) To distribute to Customers, exactly as provided by Siebel, any
Documentation, Training Materials and Marketing Materials provided by Siebel,
subject to the payment of fees set forth in Section 6.2. Distributor shall not
reproduce the Documentation, Training Materials, or Marketing Materials for any
purpose

2.2     END USER LICENSE AGREEMENT. Distributor shall enter into a written End
User License and Services Agreement with each Customer to whom Distributor
grants any rights to use Licensed Software or Ancillary Programs. Each End User
License and Services Agreement shall (i) contain the minimum terms attached
hereto as EXHIBIT F and (ii) be at least as protective of Siebel's rights and
interests as the terms of EXHIBIT F. Each End User License Agreement and
Services Agreement shall specify the maximum number of Users permitted to use
the Licensed Software. Distributor shall use its reasonable efforts to ensure
that Customer does not exceed the maximum number of Users set forth in the End
User License and Services Agreement.

2.3     SOURCE CODE ESCROW. Customer shall have the right to become a
beneficiary to the Master Preferred Escrow Agreement between Siebel and Data
Securities International, Inc., a copy of which will be provided to Customer
upon request and which will be incorporated by reference into this Agreement
when Customer executes an Acceptance Form pursuant to the Master Preferred
Escrow Agreement. All rights and licenses granted under or pursuant to this
Agreement are and shall otherwise be deemed to be, for purposes of Section
365(n) of the U.S. Bankruptcy Code, licenses of rights to "intellectual
property" as defined under section 101(56) of the U.S. Bankruptcy Code.

3.      DISTRIBUTOR OBLIGATIONS

3.1     DISTRIBUTOR'S VALUE ADDED OFFERING. Notwithstanding anything to the
contrary in this Agreement, Distributor understands and agrees that during the
License Term, Distributor shall distribute the Licensed Software to Customers
only in conjunction and concurrently with a Value Added Offering and not on a
standalone basis; provided, however, that this requirement shall not apply to
Distributor's distribution of Updates to the Licensed Software to an existing
Customer who has licensed the Licensed Software in connection with the Value
Added Offering. The Value Added Offering shall materially differentiate the
Solution from the Licensed Software; provided, however, that nothing contained
in this Section or in this Agreement shall in any way limit or restrict the
freedom of Distributor to determine the resale price for the Solution as set
forth in Section 3.2. Distributor agrees that it shall provide and maintain the
Value Added Offering in a manner consistent with generally accepted industry
standards and Distributor's best practices.

3.2     DISTRIBUTOR'S PRICING OF THE SOLUTION. Distributor shall be free to
determine list pricing and any volume or other applicable discounts for the
Solution.

3.3     INSTALLATION AND TRAINING SERVICES. Distributor shall be responsible for
conducting all activities required to install the Licensed Software at its
Customers' locations and for providing training to such Customers and any system
integrators involved in such installation. All such installation and training
shall be conducted in accordance with generally accepted industry standards and
Distributor's best practices. At Distributor's request, Siebel shall provide to
Distributor the Documentation and Training Materials at Siebel's list prices in
effect as of the date such Documentation and Training Materials are ordered.

3.4     MAINTENANCE AND SUPPORT SERVICES. Distributor shall provide Maintenance
and Support Services to all of its Customers of Licensed Software as set forth
in Sections 3.4(a) and 3.4(b) below. Distributor may require Customers to
provide the own First-Line Support: however, in no event shall Siebel be
responsible for First-Line or Second-Line Support. Subject to Distributor's
payment of the Maintenance Fees set forth in EXHIBIT A Siebel shall provide
Third-Line Support to Distributor in accordance with Siebel's then current
Maintenance and Support Services Policy. Distributor shall be responsible for
all support related to the Value Added Offering.

        (a) FIRST-LINE SUPPORT. Distributor shall either (1) provide First-Line
Support to all of its Customers of the Licensed Software or (2) inform its
Customers that they must provide their own First-Line Support. First-Line
Support means direct technical support of Licensed Software, including but not
limited to (a) a direct response to Customer and User inquiries concerning the
performance, functionality or operation of the Licensed Software, (b) a direct
response to reported problems or performance deficiencies with the Licensed
Software, (c) a diagnosis of problems or performance deficiencies of the
Licensed Software, and (d) a resolution of problems or performance deficiencies
of the Licensed Software. First Line Support includes the support described as
"First Line Support" in EXHIBIT B. First-Line Support shall include the
provision of telephone and other appropriate contact points so that Customers
may contact Distributor regarding technical and support questions and other
problems regarding use of the Licensed Software. Distributor shall inform
Customers that if, after using its reasonable commercial efforts, the Customer
is not able to answer a support question or to correct a reported problem in the
Licensed Software, the Customer may contact Distributor for Second-Line Support,
as provided below.

        (b) SECOND-LINE SUPPORT. Distributor will offer second line support
("Second-Line Support") to Customers in the form of web-based and telephone and
other support at least at the level of Second Line Support described in Siebel's
then current Maintenance and Support Services Policy. A copy of Siebel's
Maintenance Policy as of the date of this Agreement is set forth in EXHIBIT B.
Siebel reserves the right to alter such policies from time to time, in its
reasonable discretion, on ninety (90) days' prior notice to Distributor.
Distributor is hereby authorized to distribute to its Customers, as a part of
Second-Line Support, any and all Updates that Siebel provides Distributor.

        (c) THIRD-LINE SUPPORT. In consideration for the payment of Siebel
Maintenance Fees set forth in EXHIBIT A, Siebel shall provide Distributor third
line support ("Third-Line Support") for the Licensed Software in accordance with
Siebel's then current Maintenance and Support Services Policy. This shall
include web-based and telephone support to respond to questions that are due
solely to the failure of the Licensed Software to perform in any material
respect the functions described in the Documentation when operated on a
Supported Platform. Before requesting Third-Line Support, Distributor shall use
reasonable commercial efforts to resolve support questions and to correct
reported problems in the Licensed Software and to ensure that the issue is not
related to any other part of the Solution. If Distributor requests Siebel to
provide services at a customer site or at Distributor, Distributor agrees to pay
Siebel for such services in accordance with Siebel's list prices for such
services as of the date such services are delivered and to reimburse Siebel for
all its out-of-pocket expenses, including travel and accommodations, in
providing such services.

3.5     SIEBEL CERTIFICATION OF DISTRIBUTOR TECHNICAL SUPPORT STAFF. Distributor
shall hire and maintain sufficient technical support personnel as are needed to
support the Licensed Software and achieve the Customer satisfaction levels
required under Section 3.7. Distributor agrees to hire and maintain at all times
during the term of this Agreement, at a minimum, two technical support engineers
who have successfully completed the following Siebel training certification
("Siebel Certification Training"): (i) the Siebel training program as described
in Siebel's then current program description, (ii) the required competency
testing, and (iii) one week of additional training with Siebel technical support
engineers at the Siebel support center designated by Siebel. Distributor will be
responsible for all training fees and costs associated with obtaining Siebel
Certification Training. Distributor's support staff must be fluent in English
and all Customer languages spoken in the Territory.

3.6     DISTRIBUTOR MAINTENANCE REPORTING REQUIREMENTS. Distributor will
maintain proper records of Maintenance and Support Services provided to
Customers. Siebel may, at its expense, audit (using personnel with auditing
experience) any such records to verify Distributor's performance of its support
obligations. On a monthly basis, Distributor will provide Siebel a report to
Siebel containing the following new customer information: (i) Customer name,
(ii) Customer hardware and software configurations, (iii) Customer contact
names, (iv) Customer contact information, including address, telephone number,
and email address, and (v) term of Customer's Maintenance and Support Services
Agreement. Within thirty (30) days of the end of each quarter, Distributor shall
provide Siebel a report in a form specified by Siebel showing in detail (i) the
number of support calls received during such quarterly period with the
associated seventy level, (ii) the overall average response time

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by seventy level for such support calls, (iii) the overall average resolution
time by seventy level for such support calls; and (iv) other information
reasonably requested by Siebel.

3.7     CUSTOMER SATISFACTION REQUIREMENT. Siebel may, at its discretion, survey
Customers to determine the level of Customer satisfaction with the Maintenance
and Support Services and other services provided by Distributor Siebel shall
reasonably determine after consultation with Distributor the questions to be
asked in the survey and the measurement scale. If the results of the survey
indicate a level of dissatisfaction with Distributor's Customers (e.g. a gap of
more than 2 on a 10 point scale in any surveyed category where the gap
represents the difference between the importance level to the customer and
customer's satisfaction, then (i) Siebel will notify Distributor, (ii) the
parties will work together to develop a improvement plan to improve Customer
satisfaction. In the event Distributor Customer satisfaction levels fall
substantially below Siebel's (i.e. where the difference in the gap is more than
2) for two consecutive calendar quarters after Distributor has received written
notice of the deficiency, then Siebel shall have the option to terminate the
Agreement for cause upon written notice to Distributor.

3.8     SIEBEL TECHNICAL SERVICES. Siebel shall provide Technical Services to
Distributor, subject to availability, as agreed to from time to time by the
parties, in accordance with Siebel's Technical Services schedule in effect at
the time such services are ordered (available upon request). Distributor shall
pay Siebel's reasonable and actual out-of-pocket expenses associated with
Siebel's delivery of Technical Services.

3.9     CUSTOMER VISITS. Siebel may visit Distributor's Customers from time to
time upon reasonable advance notice and with Customer's approval, to stay
abreast of customer requirements and to evaluate features for potential future
products. Distributor agrees to provide Siebel reasonable assistance in
arranging such visits with Customers. Siebel agrees that it will involve
Distributor in such visits in the event Siebel reasonably determines such
involvement is reasonably appropriate.

3.10    DISTRIBUTOR WARRANTIES. Distributor represents and warrants that as of
the Effective Date and continuing throughout the License Term:

        (A) Distributor will maintain the facilities, resources and experienced
personnel necessary to market and distribute Licensed Software and to perform
the necessary installation, training and maintenance services related to such
Licensed Software and otherwise to fulfill its obligations under this Agreement;

        (B) Distributor is not precluded by any existing arrangement,
contractual or otherwise, from entering into this Agreement and performing
hereunder,

        (C) Distributor will make no representations or warranties related to
the Licensed Software in excess of Siebel's representations or warranties
contained in Section 10 of this Agreement;

        (D) Distributor has not relied on any promises or representations other
than those promises or representations expressly made in writing in this
Agreement;

        (E) If Distributor becomes aware of any actual or suspected unauthorized
use, copying or disclosure of the Licensed Software or Anciliary Programs.
Distributor will promptly notify Siebel and will assist Siebel, at Siebel's
expense and request, in the investigation and prosecution of such unauthorized
use, copying or disclosure; and

        (F) Distributor has the full right, power and authority to enter into
this Agreement and to carry out its obligations hereunder, and there are no
impediments known to Distributor which would prevent Distributor compliance with
all the terms of this Agreement.

3.11    DISTRIBUTOR INDEMNITY. Subject to the limitation of liability set forth
in Section 11 ("Limitation of Liability"), Distributor will indemnify Siebel
for, and hold Siebel harmless from, any loss, expense, damages, claims, demands,
or liability arising from any claim, suit, action or demand resulting from: (a)
the material uncured breach of any terms of this Agreement: (b) the use of the
Licensed Software and Ancillary Programs by any Customer of Distributor except
for claims which arise directly from or relate directly to material uncured
breaches of Siebel's obligations under this Agreement or fall within Siebel's
indemnification obligations under this Agreement, including but not limited to
Siebel's warranties with respect to the Licensed Software; or (c) any claim
related to the Value Added Offering.

3.12    MARKETING AND SALES EFFORTS. Distributor and Siebel shall meet to
jointly prepare a mutually agreeable marketing plan (the "Marketing Plan") to
promote and market the Licensed Software as part of a solution to Customers and
potential Customers in order to maximize the licensing and distribution of the
Licensed Software to Customers. Such Marketing Plan will include an annual
commitment by Distributor of $100,000 to be spent on the marketing efforts
described in the marketing Plan Distributor agrees further that its marketing
and advertising efforts with respect to the Licensed Software will be of the
highest quality and shall preserve the professional image and reputation of
Siebel and the Licensed Software. Within ninety (90) calendar days from the
Effective Date, Distributor agrees to appoint and train, to the reasonable
satisfaction of Siebel, sufficient sales persons and/or technical support
consultants as are needed to satisfy Distributor's obligation to use its
reasonable efforts to market and sell the Licensed Software. Distributor agrees
that its staff shall achieve a level of competence in the Licensed Software and
will participate in applicable certification programs that Siebel may establish
Each party shall appoint a channel manager to manage the relationship described
in this Agreement and to assist in addressing issues that may arise. Each party
shall use reasonable efforts to provide the other party with qualified leads
related to the products and services distributed by the other party.

3.13    POLICY CHANGES From time to time Siebel may institute new or revised
policies and procedures regarding the distribution and licensing of the Licensed
Software, Updates, Documentation and Ancillary Programs. Siebel will provide
written notice of such policies and procedures to Distributor, and Distributor
agrees to use its reasonable efforts to implement such policies and procedures.

4.      DELIVERY

Within ten (10) days of the Effective Date, Siebel will use its reasonable
efforts to deliver the License Software and Siebel's Documentation
electronically provided (i) Distributor agrees to set up a secure FTP site or to
take other reasonable measures to assist Siebel in the secure delivery of the
Licensed Software and Documentation (i.e., establishing a FTP server), and (ii)
Siebel and Distributor each will provide the other party with tangible evidence
that the Licensed Software and Documentation were electronically transmitted and
received. Siebel will provide Distributor with electronic copies any Updates
Siebel makes available as promptly as practicable following the general release
thereto, and Distributor agrees that it will incorporate such Updates into the
Licensed Software which it provide to new Customers as promptly as reasonably
possible; provided, however, Distributor shall only offer "Supported Programs"
to its Customers as such term is defined in EXHIBIT B. From time to time during
the License Term, Siebel will, upon request and subject to availability, provide
Distributor a reasonable number of copies of Marketing Materials for
distribution to potential customers.

5.      RESTRICTIONS REGARDING THE LICENSED SOFTWARE

5.1     LICENSE RESTRICTIONS. Distributor acknowledges that, except as
explicitly stated in this Agreement, the Agreement does not grant Distributor
any right or license to the Licensed Software or Ancillary Programs or any
proprietary rights therein, and no license or other rights shall be created by
implication or estoppel. In particular, but without limiting the generality of
the foregoing, no right or license in or to source code for the Licensed
Software or Ancillary Programs is granted hereunder. Distributor covenants that
it shall not prepare, and it shall not permit any others under Distributor's
control to prepare, any derivative works of the Licensed Software or Ancillary
Programs, or otherwise modify or revise any materials received from Siebel.
Distributor covenants that it shall not use, reproduce, distribute or sell the
Licensed Software or Ancillary Programs in any manner or for any purpose except
as specifically permitted under this Agreement.

5.2     PROHIBITION ON DECOMPILING. Distributor acknowledges that the Licensed
Software and Ancillary Programs contain the valuable information of Siebel and
its licensors, and Distributor agrees not to cause or permit the modification,
reverse engineering, translation, disassembly, or decompilation of, or otherwise
to attempt to derive the source code of the Licensed Software or Ancillary
Programs, whether in whole or in part. If required under applicable law, upon
Customer's request, Siebel shall provide information necessary for Customer to
achieve interoperability between the Licensed Software and other software for a
nominal administrative charge.

5.3     PROPRIETARY NOTICES. In order to protect Siebel's and its licensors'
copyright and other ownership interests in the Licensed Software and Ancillary
Programs, Distributor agrees that as a condition of its rights hereunder, each
copy of the Licensed Software or Ancillary Programs reproduced by or on behalf
of Distributor shall contain the same proprietary notices on the media, within
the code and on the Documentation which appear on the media or within the code
of the Licensed Software or Ancillary Programs, or on the Documentation
delivered by Siebel to Distributor and as otherwise reasonably required by
Siebel. Distributor will not remove or obscure any proprietary notices from any
Documentation, Training Materials, or Marketing Materials provided by Siebel.

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5.4     CHANNEL MANAGEMENT. Distributor and Siebel will meet at least monthly to
jointly review the list of qualified sales opportunities that Distributor is
pursuing to identify any potential sales channel conflicts and determine the
appropriate party to handle the sales opportunity. In the event of a
disagreement with respect to a particular sales opportunity, the resolution of
which party should be responsible for handling the sales opportunity will be
escalated within Distributor's and Siebel's respective organizations for
resolution after consideration of all relevant factors including the best
interests of the prospective customer and the resources previously allocated to
the sales opportunity by both parties. As soon as reasonably possible after
signature of this Agreement, the parties will meet to jointly establish
procedures for managing sales channel conflicts.

5.5     RESERVED TERRITORY. Notwithstanding anything to the contrary contained
in this Agreement, Siebel retains the exclusive right to distribute the Licensed
Software to the companies listed in EXHIBIT E. If Distributor wishes to license,
distribute, show, or demonstrate the Licensed Software to any Company listed on
EXHIBIT E, Distributor shall notify Siebel in writing and obtain Siebel's prior
written approval.

5.6     COMPETITIVE ACTIVITY. Distributor agrees that it will not host, license
or otherwise distribute any front office products which are directly competitive
with the Licensed Software (collectively referred to as "Competitive Activity").
Upon request, Siebel agrees to provide a listing of the front office products
that are directly competitive with the Licensed Software. Distributor shall
notify Siebel of any Competitive Activity that it or any of Distributor's
Affiliates engages in of which Distributor becomes aware. The foregoing
restriction is only applicable if the applicable configuration of Licensed
Software being considered for use by a particular Customer is (on an overall
basis, when considering all relevant factors, including but not limited to
market factors, features, functionality, performance and quality) competitive
with any other front office product(s) being considered by such Customer;
provided, however, that if a Customer or Distributor believes that the
applicable configuration of Licensed Software is not as competitive on an
overall basis as set forth above, Distributor shall provide Siebel advance
written notice along with all the information to support such belief. In
addition, in the event a Customer requires Distributor to host, license or
otherwise distribute a competitive product as part of Customer project,
Distributor shall notify Siebel and in such event Distributor may host, license
or otherwise distribute a directly competitive product, provided that
Distributor used its best efforts to promote and market the Licensed Software to
Customers and potential Customers.

6.      PAYMENT

6.1     SUBLICENSE FEES. For each copy of all or any portion of the Licensed
Software distributed to, produced, deployed, made available to or otherwise used
by a Customer pursuant to any agreement or understanding with Distributor,
Distributor shall pay the Sublicense Fees set forth in EXHIBIT A. Distributor
shall report any distribution, reproduction or use of the Licensed Software by
an Customer as set forth in Sections 6.4. In addition, Distributor shall make
the payments to Siebel for Distributor's Minimum Payments set forth in EXHIBIT A

6.2     DOCUMENTATION AND TRAINING MATERIALS. For each copy of Documentation or
Training Materials provided to Distributor by Siebel, Distributor shall pay
Siebel's list prices in effect as of the date such Documentation and Training
Materials are ordered.

6.3     PAYMENT TERMS. Sublicense Fees are payable within thirty (30) days of
the end of each calendar quarter in which they accrued, accompanied by the
report set forth in Section 6.4. Except as otherwise provided in EXHIBIT A, all
fees or other charges shall be payable thirty (30) days from receipt of the
applicable invoice.

6.4     REPORTS AND PAYMENTS. Within thirty (30) days of the end of each
calendar quarter within the License Term, Distributor shall render a report in a
form specified by Siebel, the current version of which is set forth at EXHIBIT
G, showing in detail (i) the number of copies or units of Licensed Software
reproduced, distributed, deployed or otherwise used by a Customer of Distributor
during the previous month, (ii) the amount owing Siebel therefor including the
Distributor Sublicense Fees and Distributor Maintenance Fees, and (iii) the
names and locations of the Customers. Within thirty (30) days before the end of
each calendar quarter, Distributor will use its reasonable efforts to provide
Siebel a non-binding forecast of Sublicense Fees and other fees to be due to
Siebel for that quarter.

6.5     TAXES. The specified listed in this Agreement do not include taxes,
duties or fees; if Siebel is required by the tax authorities to pay (i) sales,
use, property, value-added, or other taxes (excluding withholding taxes), (ii)
any customs or other duties, or (iii) any import, warehouse or other fees
associated with the importation or delivery of the Licensed Software,
Documentation, or Training Materials or based on the rights and licenses granted
by Siebel to Distributor in this Agreement or on Distributor's use of Licensed
Software, Documentation or Training Materials or any services provided by Siebel
to Distributor hereunder, then such taxes, duties or fees shall be billed to and
paid by Distributor. If Distributor is permitted to declare any such taxes.
Distributor shall declare and pay such taxes and Siebel shall not be required to
invoice Distributor. This Section shall not apply to taxes based on Siebel's net
income. Notwithstanding the foregoing, Siebel acknowledges that Distributor may
be required to withhold amounts in respect of taxes from the fees and charges
payable to Siebel under the local governing laws, rules and regulations and to
remit the sum to the applicable taxing authorities. Distributor shall not be
liable to Siebel in any manner for such amounts withheld and remitted, which
amounts shall be credited towards amounts due and owing to Siebel provided (i)
Distributor shall reasonably assist Siebel in obtaining the benefits of any
reduced withholding taxes under any applicable income tax treaty with the United
States, and (ii) Distributor shall timely furnish Siebel with any tax
withholding certificates and other evidence as may be required by the United
States or other relevant taxing authorities to establish that such taxes have
been paid ("Withholding Tax Documentation").

6.6     RECORDS AND INSPECTION RIGHTS. Distributor will keep and maintain proper
records and books of account relating to its distribution and sublicensing of
Licensed Software to Customers. Siebel may have an independent audit firm
inspect and audit on its behalf, any such records to verify Distributor's
compliance with its payment obligations hereunder. Any such inspection will be
conducted during regular business hours, upon at least five (5) business days
advance written notice, at Distributor's offices in a manner that does not
unreasonably interfere with Distributor's business activities. The person or
entity conducting such audit must execute an appropriate confidentiality
agreement with respect to Distributor's non-public or proprietary information.
Such inspection shall be at Siebel's cost and expense, unless the inspection
reveals that Distributor underpaid the amount actually owing by ten percent
(10%) or more, in which case Distributor shall pay such costs and expenses. Such
audits may be conducted no more than once in any twelve (12) month period. In
the event that Siebel wishes to inspect such books and records. Distributor will
make all relevant records available. Distributor shall use reasonable commercial
efforts to compel its Customers to permit Siebel to inspect the records of such
Customer as provided in this Section.

7.      LIMITED RIGHT TO USE TRADEMARKS

7.1     GRANT OF LICENSE. Siebel hereby grants to Distributor under the terms
set forth in this Section 7, a non-exclusive license to use the trademarks and
trade names set forth in EXHIBIT D (the "Trademarks"), solely in connection with
the marketing, distribution and support of the Licensed Software and only in the
manner prescribed in this Agreement. Distributor agrees that it will use the
appropriate Trademarks to refer to the Licensed Software in connection with its
marketing, distribution and support of the Licensed Software. Distributor agrees
that the Licensed Software and any related services will be marketed under the
Siebel brand name and Trademarks in the United States. Any other proposed use of
the Trademarks must be approved in writing by Siebel in advance of such use.

7.2     FORM OF USE. Distributor shall only use the Trademarks in the form(s)
approved in writing by Siebel, including the TM symbol (and, upon registration
of any registered trademark, the (R) symbol), and an indication that Siebel is
the owner of the Trademarks.

7.3     NO USE OF IDENTICAL OR SIMILAR NAMES. Distributor shall not use as its
company name or a component thereof or on other products a mark or name
identical with or confusingly similar to the Trademarks.

7.4     PRIOR SUBMISSION OF SAMPLES. Distributor shall submit to Siebel samples
of advertising or other items bearing the Trademarks prior to the use of such
advertising or other items. Siebel shall have the right to make reasonable
objections to any such sample within seven (7) days of its submission on the
grounds that Siebel believes in good faith that the use of such advertising or
other items by Distributor will be damaging to the recognition value or
reputation for quality associated with the Trademarks or that the advertising or
other items do not meet the standards of quality required by Siebel. In the
event of such an objection, Distributor shall modify the advertising or other
items in accordance with the objection of Siebel prior to the use of such
advertising or other items.

7.5     LOCAL REGISTRATION OF TRADEMARKS; NO OBJECTIONS TO VALIDITY. Siebel
will, in its sole discretion, retain the exclusive right to register the
Trademarks. Distributor agrees not to raise or cause to be raised any questions
concerning or objections to the validity of the Trademarks or to the respective
rights of Siebel.

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[*] 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>   5
7.6     NOTIFICATION OF ADVERSE USE. Distributor shall promptly notify Siebel of
any adverse use by a third party of any of the Trademarks or of a mark or name
confusingly similar to any of the Trademarks and agrees to take no action of any
kind with respect thereto except with the prior written authorization of Siebel
Distributor further agrees to provide full cooperation with any legal or
equitable action by Siebel to protect its rights, title and interest in the
Trademarks.

7.7     INFRINGEMENT PROCEEDINGS. In the event of infringement of the Trademarks
by a third party, Siebel shall have the sole right to bring proceedings
(including notifications to the Customs Department objecting to the importation
of infringing goods) against the infringing party and to retain any damages
recovered in such proceedings. Distributor shall cooperate with Siebel in the
prosecution of any such infringement proceedings. Distributor shall promptly
notify Siebel in writing of any such proceeding and shall provide complete
authority, information and assistance to Siebel in connection with such
proceeding Siebel shall have the sole and exclusive authority and obligation to
defend and/or settle any proceeding with respect to the Trademarks

8.      OWNERSHIP AND PROPRIETARY RIGHTS

Siebel and its suppliers shall retain all title, copyright and other proprietary
rights in and to the Licensed Software. Distributor does not acquire any rights,
express or implied, in the Licensed Software, other than those specified in this
Agreement. In the event that Distributor makes suggestions to Siebel regarding
new features, functionality or performance that Siebel adopts for the Licensed
Software, such new features, functionality or performance shall become the sole
and exclusive property of Siebel, free from any restriction imposed upon Siebel
by the provisions of Section 13.1.

In the event Siebel requests Distributor to furnish Siebel with engineering or
other technical resources in connection with future development work for the
Licensed Software (above and beyond suggestions to Siebel regarding new
features, functionality or performance), Distributor's development role,
compensation and ownership rights, if any, for the provision of such services
will be addressed in a separate written agreement. In the event Distributor (i)
has independently developed or acquired rights to products or other works which
it believes may be complementary to the Licensed Software, and (ii) desires
Siebel to evaluate the usefulness of such products or other works, the parties
shall enter into an evaluation and non-disclosure agreement before Distributor
makes any disclosures of proprietary or confidential information to Siebel in
connection with such products or other works.

9.      INTELLECTUAL PROPERTY INFRINGEMENT

If a third party makes a claim against Customer that the Licensed Software or
Documentation directly infringe any patent issued as of the two years following
the Effective Date or any copyright, trade secret or trademark ("IP Claim");
Siebel will defend Customer or Distributor against the IP Claim and pay all
costs, damages and expenses (including reasonable legal fees) awarded against
Customer or Distributor by a court of competent jurisdiction or agreed to in a
written settlement agreement signed by Siebel arising out of such IP Claim;
provided that: (i) Customer or Distributor promptly notifies Siebel in writing
no later than sixty (60) days after Customer's or Distributor's receipt of
notification of a potential claim, (ii) Siebel may assume sole control of the
defense of such claim and all related settlement negotiations; and (iii)
Customer or Distributor provides Siebel, at Siebel's request and expense, with
the assistance, information and authority necessary to perform Siebel's
obligations under this Section. Notwithstanding the foregoing, Siebel shall have
no liability for any claim of infringement based on (a) the use of a superseded
or altered release of Licensed Software if the infringement would have been
avoided by the use of a current unaltered release of the Licensed Software,
which Siebel provided to Distributor, (b) the modification of the Licensed
Software, or (c) the use of the Licensed Software other than in accordance with
the Documentation.

If, due to an IP Claim, (i) the Licensed Software is held by a court of
competent jurisdiction or are believed by Siebel to infringe, or (ii) Customer
or Distributor receives a valid court order enjoining Customer or Distributor
from using the Licensed Software, Siebel shall in its reasonable judgment, and
at its expense, (a) replace or modify the Licensed Software to be
non-infringing; (b) obtain for Distributor and/or its Customers a license to
continue using the Licensed Software, or (c) if Siebel cannot reasonably obtain
the remedies in (a) or (b), terminate the license for the infringing Licensed
Software and refund the license fees paid to Siebel for such Licensed Software
upon its return by Distributor. This Section 9 states Siebel's entire liability
and Distributor's exclusive remedy for any claim of infringement.

10.     LIMITED WARRANTIES AND DISCLAIMERS

10.1    LIMITED PROGRAM WARRANTY. Siebel warrants for a period of one (1) year
from the date on which the copy of the Licensed Software is first delivered to a
Customer, that the ?? modified version of the Licensed Software will perform in
all materials respects the functions described in the Documentation when
operated on a Supported Platform. The parties agree and acknowledge that the
foregoing warranty only applies to Licensed Software first delivered to
Distributor or to a Customer and not to any Updates subsequently provided to
Distributor or such Customer. In the event of a breach of this warranty
Distributor's sole and exclusive remedy and Siebel's sole liability shall be for
Siebel to use its commercially reasonable efforts to correct or provide a
Workaround for reproducible Errors that cause breach of this warranty or if
Siebel is unable to make the Program operate as warranted within a reasonable
period of time considering the seventy of the Error and its impact on the
Distributor, Distributor shall be entitled to recover the fees paid to Siebel
for the applicable Licensed Software.

10.2    LIMITED MEDIA WARRANTY. Siebel warrants that the tapes, diskettes or
other media upon which the master copy of the Licensed Software is delivered by
Siebel to Distributor to be free of defects in materials and workmanship under
normal use for one hundred and eighty (180) days from the date of delivery by
Siebel. In the event of a breach of this warranty, Distributor's sole and
exclusive remedy and Siebel's sole liability shall be the replacement of the
defective media, provided that Distributor shall acquire an RMA number from
Siebel before returning defective media to Siebel.

10.3    LIMITED SERVICES WARRANTY. Siebel warrants that any services contracted
to be performed by Siebel pursuant to this Agreement shall be performed in a
professional and workmanlike manner consistent with generally accepted industry
standards. This warranty shall be valid for one hundred and eighty (180) days
from performance of service. In the event of a breach of this warranty,
Distributor's sole and exclusive remedy and Siebel's sole liability shall be the
reperformance of the services, or if Siebel is unable to perform the services as
warranted, Distributor shall be entitled to recover the fees paid to Siebel for
the unsatisfactory services.

10.4    ANTI-VIRUS WARRANTY. Siebel represents and warrants that to the best of
its knowledge after employing reasonable technical means to detect computer
viruses, the Licensed Software does not contain any virus or other computer
software code, routines or hardware components (other than as set forth in the
Documentation) designed to disable, damage, impair, or erase the Licensed
Software or other software or data. In the event of a breach of this warranty,
Distributor's sole and exclusive remedy and Siebel's sole liability shall be to
immediately replace all copies of the affected Licensed Software. If Siebel
becomes aware of any breach of the Programs to comply with the foregoing
Anti-Virus Warranty, Siebel agrees to use its reasonable efforts to notify
Customer in writing or by other appropriate means.

10.5    ANCILLARY PROGRAM WARRANTIES. Siebel assigns to Distributor and
Distributor shall have the benefit of any and all third party warranties,
service agreements and infringement indemnities available to end users of the
Ancillary Programs; provided, however, that Distributor's sole remedy for breach
of any such warranty, indemnification, service agreement, or other rights and
causes of action shall be against the third party offering such rights and not
against Siebel.

10.6    YEAR 2000 WARRANTY. Siebel warrants that the Licensed Software, as
provided by Siebel, is capable of correctly processing, recording, storing and
presenting data containing four-digit years after December 31, 1999 in
substantially the same manner and with substantially the same functionality as
before January 1, 2000. Notwithstanding the generality of the foregoing Year
2000 warranty, Siebel warrants that the Programs, as provided by Siebel, are
capable of correctly processing, recording, storing and presenting (i) Year 2000
dates; (ii) dates before and after January 1, 2000; (iii) four digit dates
ending in 99, 00 or 01, (iv) Year 2000 as a leap year. Siebel assumes no
responsibilities or obligations to cause third-party products or services,
including but not limited to the Value Added Offering, to function with the
Licensed Software. Siebel will not be in breach of this warranty for any failure
of the Licensed Software to correctly create or process date-related data if
such failure results from the inability of any software, hardware, or systems of
Distributor or Customer or any other third party (including any underlying
database engines, operating systems, and related drivers) either to correctly
create or process date-related data or to create or process such date-related
data in a manner consistent with the method in which the Licensed Software
create or process date-related data. In the event of a breach of this warranty,
Distributor's sole and exclusive remedy and Siebel's sole liability shall be to
use its commercially reasonable efforts to correct or provide a Workaround for
reproducible Errors in the Licensed Software that cause breach of this warranty,
or if Siebel is unable to make the Licensed Software operate as warranted within
a reasonable time considering the severity of the Error and its impact on the
Distributor, Distributor shall be entitled to return the affected Licensed
Software to Siebel and recover the sublicense fees paid to Siebel for such
Licensed Software. If Siebel becomes aware of any breach of the Programs to
comply with the foregoing

                                                                          Page 5

<PAGE>   6
Year 2000 warranty, Siebel agrees to use its reasonable efforts to notify
Customer in writing or by other appropriate means

3.10    SIEBEL WARRANTIES. Siebel represents and warrants that as of the
Effective Date and continuing throughout the License Term

        (a) Siebel is not precluded by any existing arrangement, contractual or
otherwise, from entering into this Agreement and performing hereunder,

        (b) Siebel has not relied on any promises or representations other than
those promises or representations expressly made in writing in this Agreement.

        (c) Siebel has the full right, power and authority to enter into this
Agreement and to carry out its obligations hereunder, and there are no
impediments known to Siebel which would prevent Siebel compliance with all the
terms of this Agreement.

10.7    DISCLAIMERS. Distributor must report in writing (with a written notice
to Siebel as set forth in Section 13.3) any breach of the warranties (that
Distributor becomes aware of) contained in this Section 10 during the relevant
warranty period Subject to Siebel's obligations under Section 10.1 ("Limited
Program Warranty"), Siebel does not warrant that the Licensed Software will meet
Distributor's or any Customer's requirements, that the Licensed Software will
operate in the combinations which Distributor or any Customer may select for
use, that the operation of the Licensed Software will be uninterrupted or
defect-free, or that all defects will be corrected; provided, however, that if
Distributor is current on Maintenance Services fees, Siebel shall be obligated
to provide Maintenance Services. Siebel shall have no Year 2000-related
liabilities for any products or services except as expressly stated in this
Agreement. Pre-Production Programs, limited releases of Licensed Software,
Training Materials, and computer-based training products are distributed "AS IS"
THE WARRANTIES ABOVE ARE EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES, WHETHER
EXPRESS OR IMPLIED OR STATUTORY, INCLUDING WITHOUT LIMITATION THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

11.     LIMITATION OF LIABILITY

EXCEPT FOR A PARTY'S LIABILITY UNDER SECTION 9 OR 13.1, IN NO EVENT SHALL EITHER
PARTY BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES,
INCLUDING WITHOUT LIMITATION DAMAGES FOR LOSS OF PROFITS. DATA OR USE, INCURRED
BY THE OTHER PARTY OR ANY THIRD PARTY, WHETHER IN AN ACTION IN CONTRACT OR TORT,
EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES except
that in the event Distributor makes unauthorized copies of the Licensed
Software, Siebel shall be entitled to recover the full amount of any license
fees that would relate to such copies

Except for Siebel's liability under Section 9 and 13.1, Siebel's aggregate and
cumulative liability for damages hereunder shall in no event exceed the amount
of fees paid by Distributor under this Agreement, and if such damages relate to
Distributor's use of the Program or services, such liability shall be limited to
fees paid for the relevant Program or services giving rise to the liability.
Except for any breach of its obligations under Sections 2, 5, 6, 7 and 13.1, or
its obligations under Section 3.10 or 3.11, Distributor's aggregate and
cumulative liability for damages hereunder shall in no event exceed the amount
of fees paid by Distributor under this Agreement.

12.     TERM AND TERMINATION

12.1    TERM. This Agreement shall commence on the Effective Date and shall
continue in force through the Initial Term, as defined in EXHIBIT A, unless
sooner terminated as provided in this Agreement. This Agreement may be extended
after the Initial Term for one (1) year terms by mutual written agreement of the
parties. Siebel shall have no obligation to renew or extend the term of the
Agreement, and no payments, liabilities or damages shall be due Distributor, or
shall be imposed upon Siebel, for its decision to terminate or not to renew the
Agreement.

12.2    TERMINATION FOR CAUSE. Either party may terminate this Agreement, by
written notice to the other party: (a) upon the material failure of the other
party to observe, keep or perform any of the covenants, terms or conditions
herein (including the failure to pay sums owed to the other party when due), if
such default continues for sixty (60) days after written notice by the other
party, (b) upon the institution by or against either party of insolvency,
receivership or bankruptcy proceedings or any other proceedings for the
settlement of its debts, (c) upon either party's assignment for the benefit of
creditors, (d) if all or substantially all of the assets of a party are acquired
by a direct competitor of the other party, or (e) upon either party's
dissolution or ceasing to do business.

12.3    EFFECT OF TERMINATION. Upon expiration or termination of this Agreement:
(a) all licenses and rights granted to the parties shall terminate, except as
set forth below of in Section 12.5 (b) each party shall refrain from
representing themselves as a party to this Agreement: (c) any Customer
sublicenses previously granted hereunder will not be affected: and (d) any other
rights of either party which may have accrued up to the date of termination
shall not be affected Siebel shall not be obligated to provide Distributor any
Updates or Software Maintenance and Support Services to Distributor under this
Agreement past the expiration date of Distributor's support plan with its
Customer in effect as of the date of termination, provided, that (i) in no event
shall, the expiration date be longer than five (5) years from expiration of this
Agreement without Siebel's advance written consent, (ii) Siebel and its third
party partners are not restricted from providing Updates or other maintenance
and support directly to such customers if requested by such customers, and (iii)
in the event of a termination by Siebel due to an uncured material breach by
Distributor of Sections 2, 3, 5, 6, 7, 12.5, 13.1 herein or Sections 1, 3, 4 and
7 of EXHIBIT A, Siebel's support obligation shall terminate as of the effective
termination date. In the event of a termination by Siebel due to an uncured
material breach by Distributor, the parties agree to discuss and negotiate in
good faith a transitional agreement regarding the provision of Updates and
Software Maintenance and Support Services to Customers to whom Distributor is
contractually obligated to provide such Updates and Software Maintenance and
Support Services provided that Distributor is required to obtain Siebel's
advance written approval before entering into any such obligations that have a
term greater than five (5) years.

12.4    LIMITATION OF LIABILITY ON TERMINATION. Notwithstanding the foregoing,
upon expiration or lawful termination, neither party will be liable to the other
party, because of such termination, for compensation (except for accrued
compensation), reimbursement or damages on account of the loss of prospective
profits or anticipated sales or on account of expenditures, inventory,
investments, leases or commitments in connection with the business or goodwill
of Siebel or Distributor.

12.5    DISCONTINUATION OF LICENSED SOFTWARE, DOCUMENTATION, TRAINING MATERIALS,
MARKETING MATERIALS AVAILABILITY. When Siebel reasonably determines that the
market demand or other business factors for any Licensed Software,
Documentation, Training Materials or Marketing Materials no longer warrants
continued availability to end users, Siebel may at its reasonable discretion and
without liability to Distributor, remove such Licensed Software, Documentation,
Training Materials or Marketing Materials from general availability in which
case Distributor shall discontinue all marketing and distribution of such
Licensed Software, Documentation, Training Materials, Marketing Materials within
ninety (90) days of Siebel's notification to discontinue general availability
for such Licensed Software, Documentation, Training Materials or Marketing
Materials.

12.6    SURVIVAL. Sections 3.11 ("Distributor Indemnity"), 5.2 ("Prohibition on
Decompiling"), 6 ("Payments"), 7.7 ("Infringement Proceedings"), 8 ("Ownership
and Proprietary Rights"), 9 ("Infringement Indemnity"), 11 ("Limitation of
Liability"), the third sentence of Section 12.1 ("Term"), 12.3 ("Effects of
Termination"), 12.6 ("Survival") and 13 ("General") shall survive the
termination of this Agreement.

13.     GENERAL

13.1    NONDISCLOSURE. Each party may have access to information that is
confidential to the other party ("Confidential Information"). Siebel's
Confidential Information shall include, but not be limited to, the Licensed
Software, Documentation, Training Materials, Ancillary Programs, formulas,
methods, know how, processes, designs, new products, developmental work,
marketing requirements, marketing plans, customer names, prospective customer
names, the terms and pricing under this Agreement, and all information clearly
identified in writing at the time of disclosure as confidential. Distributor's
Confidential Information shall include, but not be limited to, its software
programs, formulas, methods, know-how, processes, designs, new products,
developmental work, marketing requirements, marketing plans, customer names,
prospective customer names, and all information clearly identified in writing at
the time of disclosure as confidential. Notwithstanding the foregoing, in the
event of a termination of this Agreement, Siebel shall be free to use any
Customer related information in its possession or knowledge (e.g., customer
lists or prospective customer lists, pricing) to market and promote the Licensed
Software including, without limitation, soliciting business or supporting any
business transactions with Customers or prospective end users. Confidential
Information includes all information received from third parties that either
party is obligated to treat as confidential and oral information that is
identified by either party as confidential.

                                                                          Page 6

<PAGE>   7
A party's Confidential Information shall not include information that (i) is or
becomes a part of the public domain 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; (iv) is independently developed by the
other party without use of or reference to the other party's Confidential
Information, or In addition, this Section will not be construed to prohibit
disclosure of Confidential Information to the extent that such disclosure is
required by law or valid order of a court or other governmental authority;
provided, however, that the responding party shall first have given notice to
the other party and shall have made a reasonable effort to obtain a protective
order requiring that the Confidential Information so disclosed be used only for
the purposes for which the order was issued.

The parties agree, unless required by law, not to make each other's Confidential
Information available in any form to any third party (except that Distributor
may disclose Siebel's Confidential Information to Customers provided that such
disclosure is pursuant to a written nondisclosure agreement at least as
protective of Siebel's Confidential Information as this Section 13.1) or to use
each other's Confidential Information for any purpose other than in the
performance of this Agreement Distributor shall not disclose the results of any
performance tests of the Licensed Software to any third party without Siebel's
prior written approval. Each party agrees to take all reasonable steps to ensure
that Confidential Information is not disclosed or distributed by its employees
or agents in breach of this Agreement. 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 thereafter; provided, however, that with respect to
source code, the Siebel Data Model Reference Manual, the Siebel Data Mart Data
Model Reference, and other highly sensitive confidential information clearly
identified as such at the time of disclosure by either party, the nondisclosure
obligations set forth herein shall continue indefinitely. Each party's
additional obligations regarding the Siebel Data Model Reference Manual and
Siebel Data Mart Data Model Reference are set forth in EXHIBIT C Each party
acknowledges and agrees that, due to the unique nature of Confidential
Information, there can be no adequate remedy at law for breach of this Section
13.1 and that such breach would cause irreparable harm to the non-breaching
party; therefore, the non-breaching party shall be entitled to seek immediate
injunctive relief, in addition to whatever remedies it might have at law or
under this Agreement. This Section 13.1 constitutes the entire understanding of
the parties and supersedes all prior or contemporaneous agreements,
representations or negotiations, whether oral or written, with respect to
Confidential Information.

13.2    GOVERNING LAW. This Agreement shall be governed in all respects by the
laws of the United States of America and the State of California. The parties
agree that the United Nations Convention on Contracts for the International Sale
of Goods is specifically excluded from application to this Agreement.

13.3    NOTICES. All notices required to be sent hereunder shall be in writing
and shall be deemed to have been given upon (i) the date sent by confirmed
facsimile, (ii) on the date it was delivered by courier, or (iii) if by
certified mail return receipt requested, on the date received, to the addresses
set forth above and to the attention of the signatory of this Agreement or to
such other address or individual as the parties may specify from time to time by
written notice to the other party.

13.4    DELIVERY. All materials provided by Siebel hereunder shall be delivered
to Distributor on a F.O.B. Siebel's San Francisco Bay Area basis for
destinations within the United States, or on a FCA (Incoterms 1990) Siebel's San
Francisco Bay Area Headquarters (or the address of Siebel's designee) basis for
destinations outside the United States; at which point title to the carrier
media and risk of loss or damage to the materials shall be transferred from
Siebel to Distributor. Nothing in this Section shall be deemed to transfer title
to, or provide Distributor with any rights in, the Licensed Software,
Documentation, or Training Materials, except as specifically provided in this
Agreement.

13.5    INJUNCTIVE RELIEF. It is expressly agreed that a breach of Sections 2.1
or 13.1 of this Agreement by Distributor may cause irreparable harm to Siebel
and that a remedy at law would be inadequate. Therefore, in addition to any and
all remedies available at law, Siebel will be entitled to seek an injunction or
other equitable remedies in all legal proceedings in the event of any threatened
or actual violation of any or all of the above provisions.

13.6    RELATIONSHIP BETWEEN THE PARTIES. Siebel is an independent contractor;
nothing in this Agreement shall be construed to create a partnership, joint
venture or agency relationship between the parties.

13.7    FORCE MAJEURE. Neither party shall be liable hereunder by reason of any
failure or delay in the performance of its obligations hereunder (except for the
payment of money) in account of strikes, shortages, riots, insurrection, fires,
flood, storm, explosions, acts of God war, governmental action, labor
conditions, earthquakes, material shortages, or any other cause which is beyond
the reasonable control of such party

13.8    WAIVER. The failure of either party to require performance by the other
party of any provision hereof shall not affect the full right to require such
performance at any time thereafter, nor shall the waiver by either party of a
breach of any provision hereof be taken or held to be a waiver of the provision
itself.

13.9    SEVERABILITY. In the event any provision of this Agreement is held to be
invalid or unenforceable, the remaining provisions of this Agreement will remain
in full force.

13.10   HEADINGS. The paragraph headings appearing in this Agreement are
inserted only as a matter of convenience and in no way define, limit, construe,
or describe the scope or extent of such paragraph, or in any way affect this
Agreement.

13.11   ASSIGNMENT. Neither this Agreement nor any rights or obligations of
either party hereunder may be assigned in whole or in part without the prior
written approval of the other party, which shall not be unreasonably withheld or
delayed, except that no consent shall be required in the event of an assignment
of this Agreement to a successor corporation by merger, sale of all or
substantially all of the assets or capital stock, provided that the successor
corporation (i) is not a direct competitor of the other party, and (ii) agrees
in writing to be bound by the terms of this Agreement.

13.12   COMPLIANCE WITH LAW AND REGULATIONS. Both parties shall act in strict
compliance with all applicable laws, ordinances, regulations and other
requirements of any government authority pertaining to their activities under
the Agreement and shall provide, pay for, and keep in good standing all permits,
licenses or other consents necessary for such activities.

13.13   EXPORT CONTROL. The parties agree that the export of Licensed Software
is subject to the export control laws of the United States of America and each
party agrees to abide by all such export control laws and regulations. Without
limiting the generality of the foregoing, Distributor expressly agrees that it
shall not, and shall cause its representatives to agree not to, export, directly
or indirectly, re-export, divert, or transfer the Licensed Software,
Documentation or any direct product thereof to any destination, company or
person restricted or prohibited by U.S. Export Controls.

13.14   CONFIDENTIAL AGREEMENT. Neither party will disclose any terms or the
existence of this Agreement, except that the parties may issue a jointly
approved press release announcing Distributor's rights to distribute and market
the Licensed Software. Siebel shall have the right to use Distributor's name in
customer lists or promotional documents that incorporate such lists.

13.15   COUNTERPARTS AND EXCHANGES BY FAX. This Agreement may be executed
simultaneously in two (2) or more counterparts, each of which will be considered
an original, but all of which together will constitute one and the same
instrument. The exchange of a fully executed Agreement (in counterparts or
otherwise) by fax shall be sufficient to bind the parties to the terms and
conditions of this Agreement.

13.16   MUTUAL NON-SOLICITATION/RECRUITING FEE AGREEMENT. During the term of
this Agreement, Siebel agrees not to entice, solicit, recruit, hire or engage
any employee, consultant, or independent contractor of Distributor to leave the
employ of Distributor or terminate its relationship with Distributor for any
purpose whatsoever, whether for Siebel's benefit or the benefit of a third
party. During the term of this Agreement, Distributor agrees not to entice,
solicit, recruit, any employee, consultant, or independent contractor of Siebel
for any leave the employ of Siebel or terminate its relationship with Siebel for
any purpose whatsoever, whether for Distributor's benefit or the benefit of a
third party. For each person who was employed by either party on or before
August 10, 1999, and is hired by the other party as an employee at any time
during the term of this Agreement, the party hiring such employee will pay to
the other party a recruiting fee as follows: (i) [*] for anyone who was
employed by or under contract as a representative in the sales, engineering,
product marketing, or marketing departments or as a manager, director, vice
president, or any similar or higher-ranking employee, or (ii) [*] for any
other employee. The payment shall be due and owing on the first day of work for
the party hiring such employee. Payments that have not been made by the 16th day
of the individual's work shall be delinquent and subject to 15% interest per
annum. The parties agree and acknowledge that the purpose of this mutual
non-solicitation and recruiting fee agreement is to protect and safeguard each
party's Confidential Information.

[*] 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 7

<PAGE>   8
13.17   ENTIRE AGREEMENT. This Agreement, together with the attached exhibits
which are incorporated by reference, constitutes the complete agreement between
the parties and supersedes all prior or contemporaneous agreements or
representations, written or oral, concerning the subject matter of this
Agreement and such exhibits. This Agreement may not be modified or amended
except in writing signed by a duly authorized representative of each party. No
other act. document, usage or custom shall be deemed to amend or modify this
Agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives.

The Effective Date of this Agreement shall be August 13, 1999

EXECUTED BY: CORIO, INC.

/s/ Signature Illegible
Signature:

Name
     -------------------------------------
Title:
       -----------------------------------
Date:
      ------------------------------------

EXECUTED BY: SIEBEL SYSTEMS, INC.
/s/ Signature Illegible
Signature:
Name: Kevin A. Johnson
      ------------------------------------
Title: Vice President, Legal Affairs
      ------------------------------------
Date: August 13, 1999
      ------------------------------------

                                                                          Page 8

<PAGE>   9
                                    EXHIBIT A

                                LICENSED SOFTWARE

1.      FEES.

        (A) SUBLICENSE FEES FOR SIEBEL FOR WORKGROUPS Subject to the additional
        terms set forth in subsection (b) below Distributor may sublicense
        Siebel for Workgroups software to Customers with (i) an installed base
        of no greater than [*] Users, or (ii) with annual revenue which does not
        exceed [*]. The Sublicense Fees payable by Distributor to Siebel in
        consideration of the use of the Licensed Programs by Customers in
        accordance with and during the term of their respective End User License
        and Services Agreements will be the respective amounts set forth in the
        table below, based upon the perpetual license list prices per User of
        [*] for the Siebel Sales for Workgroups Product, [*] for the Siebel
        Advance Selling Pack, [*] for Siebel Product Configurator, [*] for
        Siebel Server Pack for Workgroups, [*] for Siebel eSales for Workgroups,
        [*] for Siebel eChannel for Workgroups and [*] for the combination of
        Siebel eSales and Siebel eChannel for Workgroups. The parties agree that
        such Sublicense Fees shall be subject to adjustment in proportion to
        adjustments in Siebel s published perpetual license list price therefor.
        The Sublicense Fee will accrue upon the earlier of (i) the delivery of
        the Licensed Programs to the Customer or (ii) the reproduction,
        deployment or use of the Licensed Programs by the Customer. Siebel may
        offer Gold- or Platinum-level Third Line Support to Distributor in
        accordance with terms to be mutually agreed to by the parties in good
        faith following the execution of this Agreement. [*]

        The parties agree that the minimum committed term of an End User License
        and Services Agreement with a fixed number of named and/or concurrent
        users as applicable shall be three (3) years and the maximum committed
        term of a End User License and Services Agreement shall be five (5)
        years.

   (b)  Sublicense Fees for Customers Excluding User of Annual Revenue
Limitations: In the event that Customer exceeds the [*] User or [*] annual
revenue limitations during the term of Customer's End User License and Services
Agreement, Distributor may continue to host such Customer under one of the
following options:

          (i)  Hosted Enterprise Applications. If Distributor has hosted the
          Customer on Siebel for Workgroups for a minimum of twelve (12) months,
          Customer may license comparable Siebel Enterprise Application products
          as hosted by Distribution for the duration of Customer's agreement
          with Distributor, subject to the payment of the applicable monthly
          sublicense fees to Siebel. Within thirty days of the signature of this
          Agreement, the parties will agree upon the comparable Siebel
          Enterprise Applications to be distributed and the [*].

          (ii)  Continuation Of Siebel For WorkGroups License. Subject to the
          payment of all applicable monthly fees, Customer may continue to
          license Siebel for Workgroups during the term of Customer's agreement
          with Distributor for users in excess of User and annual revenue
          limitations, provided that the maximum period of time that a Customer
          may exceed one of the limitations shall be [*] years. Thereafter,
          Distributor has the option to convert the Customer to using the
          comparable Siebel Enterprise Application products under a hosting
          arrangement with Distributor. For example, a Customer that exceeds the
          User or annual revenue limitation in June of 2000 may continue to
          license Siebel for Workgroups through June 2002 and thereafter
          Distributor may covert such Customer to using the comparable Siebel
          Enterprise Application products under a hosting arrangement with
          Distributor. Notwithstanding any of the foregoing, if a Customer (i)
          requests Distributor to license the Licensed Software for a period
          longer than two years after such Customer has exceeded either the User
          or annual revenue limitations, and (ii) is not willing in covert to
          using comparable Siebel Enterprise Application products as hosted by
          Distributor, then Distributor may submit a request to Siebel to extend
          Distributor's ability to continue licensing the Siebel for Workgroups
          products and Siebel will make such determination in its sole
          discretion.

In no event will Distributor be allowed to distribute Siebel Enterprise
Applications to new customers for which Distributor has not provided Siebel for
Workgroups.

[*] 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 9

<PAGE>   10
[*]

(C) TARGET QUOTA. Distributor shall use its best efforts to achieve the
following revenue targets for the listed time period. If Distributor does not
meet the minimum Target Quota of [*] for any of the three annual periods
specified below, Siebel may terminate this Agreement for cause pursuant to
Section 12.2; provided, however, that in Year 1 only, Distributor has the
option to elect to pay Siebel on or before August 30, 2000 any shortfall
between the Minimum Target Quota of [*] and the actual Sublicense Fee Payments
to Siebel, in which case such payment shall serve as noncontingent and
nonrefundable prepayments of Sublicense Fees that may become due to Siebel for
each copy of the Licensed Software licensed or distributed hereunder during the
Initial Term of the Agreement.

<TABLE>
<CAPTION>
                                            Target Quota
Time Period                                 (Net Sublicense Fee Payment to Siebel)
-----------                                 --------------------------------------
<S>                                         <C>
Year 1 (August 1, 1999 - July 31, 2000)     [*]
Year 2 (August 1, 2000 - July 31, 2001)     To be determined, but not less than [*]
Year 3 (August 1, 2001 - July 31, 2002)     To be determined, but not less than [*]
</TABLE>

------------
(1) In Year 1 only, Distributor shall be entitled to count any license fees paid
to Siebel for Distributor's internal use of Siebel software programs under a
license agreement entered into between the parties.

2. INITIAL TERM. The Initial Term of the Agreement shall begin on the Effective
Date and end on the third anniversary thereafter; provided, however, that the
Agreement may be extended for additional one (1) year terms upon the mutual
agreement of the parties.

3. VALUE ADDED OFFERING. Distributor (either directly or indirectly) shall offer
a hardware, software and connectivity solution for Application Hosting Services
for Customers in connection with such Customers' use of the Licensed Programs;
which shall include, the provision of all hardware (other than client-side
hardware), software (other than the Licensed Programs), connectivity and
services (including but not limited to installation, consulting, training,
system management, First Line Support and Second Line Support). The "Value Added
Offering" shall consist of whatever components of the foregoing that are
purchased from Distributor by Customer, but shall include at a minimum the
Application Hosting Services.

4. TERRITORY. Distributor's Territory shall be worldwide but limited to (i)
companies with annual revenue under [*] and (ii) Customers with a maximum of
[*] Users per product. This maximum is meant to apply to the entire User
community within a Customer. Siebel agrees that it will consider limited
exceptions to such [*] User maximum on a case by case basis.

5. LICENSED SOFTWARE The Licensed Software shall consist of the following
software programs:

<TABLE>
<CAPTION>
             PROGRAMS LICENSED                             VERSION
             -----------------                             -------
<S>                                                   <C>
Siebel Sales for Workgroups                           Siebel 99.5 (v5.x)
Siebel Service for Workgroups (1),(5)                        TBD
Siebel Call Center for Workgroups (1),(5)                    TBD
Siebel Advance Selling Pack for Workgroups            Siebel 99.5 (v5.x)
Product Configurator for Workgroups                   Siebel 99.5 (v5.x)
Server Pack for Workgroups                            Siebel 99.5 (v5.x)
eSales for Workgroups (3),(4)                                TBD
eChannel for Workgroups (3),(4)                              TBD
eService for Workgroups (5)                                  TBD
</TABLE>

(1) This product is not generally available and will be provided when and if it
is made generally available. Siebel intends to release these products in the
fourth calendar quarter.

(2) This Program is licensed on a per-server basis, not a Named User basis.
Distributor's Order Form will set forth the number of application servers on
which Customer may copy, install, and use these Programs. Distributor may copy,
install and use these Programs on additional servers only upon payment of
additional Program License Fees.

(3) This product is not generally available and will be provided when and if it
is made generally available. Siebel intends to release this product in the third
calendar quarter ending September 30, 1999.

(4) This Program is licensed on a concurrent User basis, not a Named User basis.
Distributor's Order Form will set forth the maximum number of Users that may
concurrently use or access the Programs. Distributor may copy, install and use
these Programs for additional concurrent Users only upon payment of additional
Program License Fees. The number of concurrent Users at any given time is
determined by counting any and all Users who has accessed one or more screens,
views or information contained within a Siebel program within the previous 10
minute period.

(5) This product is not generally available and will be provided when and if it
is made generally available. On a case by case limited basis, Siebel will, upon
written request from Distributor, consider, in its sole discretion, permitting
Distributor an ability to develop and implement existing customers using
Siebel's comparable Enterprise offering (and the data schema) provided
Distributor may only deploy the functionality and customizations developed using
such Siebel's comparable Enterprise offering as part of the Workgroups product
once it is made available to Distributor.

[*] 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 10

<PAGE>   11
6. ANCILLARY PROGRAMS(5). The Ancillary Programs currently consist of the
following software programs and such other programs as may be listed in Siebel's
Documentation from time to time.

<TABLE>
<CAPTION>
                         PRODUCT                                      VERSION
-----------------------------------------------------------------------------
<S>                                                                   <C>
Adobe Acrobat Reader                                                   v3.0
-----------------------------------------------------------------------------
Intersolv DataDirect Closed ODBC Driver (for Oracle RDBMS only)(5)     v2.x
-----------------------------------------------------------------------------
MS ODBC Drivers                                                        v2.5
-----------------------------------------------------------------------------
</TABLE>

(5) The Ancillary Programs and any related requirements are subject to change as
    specified by Siebel in its discretion on thirty (30) days prior written
    notice to Distributor. Distributor may license the Ancillary Programs from
    any other third party and shall not be obligated to license the Ancillary
    Programs from Seibel.

7. ADDITIONAL TERMS AND CONDITIONS:

7.1 DISTRIBUTOR'S RESOURCE COMMITMENT. As soon as reasonably practicable after
    the Effective Date of this Agreement, Distributor will dedicate on a
    full-time basis the following personnel resources to support the Licensed
    Software and Distributor's obligations under this Agreement [*].

7.2 SALES AND TECHNICAL TRAINING FUNDS. As soon as reasonably practicable after
    the Effective Date of this Agreement, Distributor will secure a budget to
    contribute a minimum of $[*] during the first year of this Agreement to a
    fund to be used for the training of its sales and professional services and
    technical staff. Contributions to this training fund during the second and
    third years of this Agreement shall be a mutually agreed to by the parties.

7.3 CERTIFIED DISTRIBUTOR/SIEBEL INTERFACES. As soon as reasonably possible
    after signature of this Agreement, the parties will establish a joint
    project team to define and develop pre-tested, certified interfaces between
    the Licensed Software and Distributor's software applications. Distributor
    will commit the appropriate levels of engineering and product strategy
    resource necessary to complete the interfaces under a mutually agreed upon
    development schedule. Within thirty (30) days after the execution of this
    Agreement, Siebel and Distributor shall enter into a separate joint
    development agreement regarding the development of a basic functioning data
    interface which agreement shall provide, among other things, for the
    following: (i) Siebel's resources to be assigned to the development of the
    interface; (ii) a timetable for the delivery of the interface in the Fall of
    1999; (iii) the joint ownership of such interface; and (iv) the ability of
    both Siebel and Distributor to market and distribute such interface on a
    royalty free basis.

[*] 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 11

<PAGE>   12
                                    EXHIBIT B

                               MAINTENANCE POLICY

At any given time, provided that Distributor has paid the applicable
Maintenance Services fees, Siebel shall provide support for (a) the then
current version of the Licensed Software enumerated in Order Forms executed
pursuant to an applicable Software License and Services Agreement, and (b) the
immediately preceding version of such Licensed Software, but only for a period
of six (6) months following the release of the then current version that is
made generally available, provided that all such Licensed Software is are then
generally available from Siebel and operated on a Supported Platform. Such
Licensed Software is referred to in this Policy as the "Supported Programs."

1. MAINTENANCE

Maintenance covers Supported Programs during both implementation and production
use of such Programs. Siebel will use reasonable commercial efforts to cure, as
described below, reported and verifiable Errors in Supported Programs so that
such Programs perform in all material respects the functions described in the
associated Documentation. Siebel recognizes four severity levels of Supported
Program Errors or issues:

     Severity 1 - Critical Business Impact. Customer's production use of the
Supported Programs is stopped or so severely impacted that the Customer cannot
reasonably continue work. Siebel will begin work on the Program Error within
one hour of notification during Technical Support's normal business hours and
will engage development staff until an acceptable Workaround is achieved.

     Severity 2 - Significant Business Impact. Important Program features are
unavailable with no acceptable Workaround. Customer's implementation or
production use of the Supported Programs is continuing but not stopped;
however, there is a serious impact on the Customer's productivity and/or
service levels. Siebel will begin work on the Program Error within two hours of
notification during Technical Support's normal business hours and will engage
development staff until an acceptable Workaround is achieved.

     Severity 3 - Some Business Impact. Important Program features are
unavailable but a Workaround is available, or less significant Program features
are unavailable with no reasonable Workaround. Customer's work, regardless of
the environment or product usage, has minor loss of operational functionality
or implementation resources. Siebel will provide initial response regarding the
requested information or documentation clarification within 24 hours of
notification during Technical Support's normal business hours and will consider
a Workaround, if appropriate, and Supported Program enhancements for inclusion
in a subsequent Program Update.

     Severity 4 - Minimal Business Impact. Customer requests information, an
enhancement, or documentation clarification regarding the Supported Programs
but there is no impact on the operation of the Supported Programs. Customer's
implementation or production use of the Supported Programs is continuing and
there is no work being impeded at the time. Siebel will provide initial
response regarding the requested information or documentation clarification
within 48 hours of notification during Technical Support's normal business
hours and will consider Supported Program enhancements for inclusion in a
subsequent Program Update.

Siebel will provide Distributor with a single copy of the fix or Workaround on
suitable media. Distributor will distribute the fix or Workaround to Supported
Programs as necessary.

2. UPDATES

Siebel shall, from time to time, in its sole discretion, make Updates to
Supported Programs available to Distributor at no additional charge except for
media and handling charges. If a Customer transfers the Supported Program to a
hardware and/or software platform which is not supported by Siebel at the time
of such transfer, Siebel shall continue to provide to Distributor Updates which
operate on a Supported Platform and Siebel shall have no further obligation to
fix Errors which occur when the Program is run on any platform other than the
Supported Platform. Notwithstanding the foregoing, Distributor shall remain
obligated to pay for Maintenance Services ordered by Distributor prior to such
transfer.

3. SUPPORT

3.1 Customer shall establish and maintain the organization and processes to
provide First Line Support for the Supported Programs directly to Users.

3.2 If after reasonable commercial efforts Customer is unable to diagnose or
resolve problems or performance deficiencies of the Supported Programs,
Customer shall contact Distributor for Second Line Support and Distributor
shall provide support for the Supported Programs in accordance with Siebel's
then current policies and procedures for Second Line Support.

3.3 Distributor shall establish and maintain the organization and processes to
provide Second Line Support for the Supported Programs to Customer. Second Line
Support shall be provided to Customer only if, after reasonable commercial
efforts, Customer is unable to diagnose and/or resolve problems of performance
deficiencies of the Supported Programs. Second Line Support shall be provided
to up to two designated Siebel trained representatives of Customer.

3.4 Second Line Support shall be provided by Distributor through (i) telephone
support during local normal business hours, (ii) electronic mail, and (iii)
through the World Wide Web to the extent such support is technically and
reasonably feasible.

3.5 Siebel shall provide Distributor Third-Line Support for the Supported
Programs in accordance with Siebel's then current Maintenance and Support
Services Policy. Distributor shall provide Siebel with the necessary remote
access (e.g. modem) to Customer's Supported Platform so that Siebel may, at its
option, provide remote diagnostic capability. Siebel does not assure
performance of the maintenance services described herein if such remote access
is not provided by Distributor when requested by Siebel. Siebel shall not
provide Third Line Support directly to Users.

4. EXCLUDED SERVICES

The following services are outside the scope of Siebel's Maintenance Services:

4.1 Service for Supported Programs which have been subject to unauthorized
modification by Customer or Distributor.

4.2 Service for Supported Programs for which all required maintenance releases
have not been implemented by Customer or Distributor.

5.3 Service which becomes necessary due to: (i) failure of computer hardware or
equipment or programs not covered by this schedule; or (ii) any cause or causes
beyond the reasonable control of Siebel (e.g., floods, fires, loss of
electricity or other utilities), negligence of Customer, Distributor or any
third party, operator error, improper use of hardware or software or attempted
maintenance by unauthorized persons.

5.4 Services performed at the Customer's or Distributor's site unless the
parties mutually agree otherwise.

                                                                         Page 12

<PAGE>   13
                                    EXHIBIT C

                                  DOCUMENTATION

DESCRIPTION OF DOCUMENTATION:
Siebel's Documentation includes on-line help for all licensed Users, and one (1)
electronic copy (of the installation and Upgrade Guide, Administration Guide and
Release Notes as well as the Documentation that applies to the Licensed
Software. Additional Documentation may be provided by Distributor at its
standard rates, if any, if a Customer requests a copy of the Siebel Data Model
Reference Manual (the "Data Model"), Siebel will provide Customer with the Data
Model upon execution by Distributor, Customer and Siebel of a Non-Disclosure
Agreement in substantially the same form as EXHIBIT C1 below.

                                   EXHIBIT C1

 DATA MODEL REFERENCE MANUAL SUPPLEMENTAL CONFIDENTIALITY TERMS AND CONDITIONS:

The following additional terms and conditions apply to Siebel's provision of
the Siebel Data Model Reference Manual (the "Data Model") to Customer. The Data
Model shall be governed by the terms that apply to Programs under the
Agreement, except that with respect to the Data Model, the nondisclosure
obligations set forth in Section 9.1 ("Nondisclosure") of the Agreement shall
not be limited to the period equal to the term of the Agreement plus three (3)
years, but shall continue perpetually.

1.  AUTHORIZED EMPLOYEES AND AUTHORIZED CONTRACTORS. Customer may disclose the
Data Model only to employees and contractors who (i) require access thereto for
a purpose authorized by the Agreement, and (ii) have personally signed the
Access Log which is set forth as the initial page of the Data Model. Such
employees and contractors are hereby designated "Authorized Employees" and
"Authorized Contractors." Notwithstanding the foregoing, if (i) Siebel
reasonably believes that any employee or contractor is engaged in the
integration, customization or other development-related activities of products
similar to or competitive with Siebel's products either for its own benefit or
for the benefit of a third party ("Similar Product Development"), and Customer
cannot assure Siebel to its reasonable satisfaction that such employee or
contractor, while engaged in supporting such development activities, will be
able to refrain from commingling or sharing any portion of the Data Model with
any such Similar Product Development, or (ii)Siebel reasonably believes that
the Data Model may not be properly safeguarded by any employee or contractor,
Siebel shall notify Customer in writing and, upon receipt of such notification,
Customer shall immediately terminate such employee's or contractor's access to
the Data Model. Customer shall promptly provide Siebel the original of the
Access Log upon request. In the event Siebel disapproves of an employee or
contractor in accordance with the foregoing, Siebel shall provide Customer
prompt notice of such disapproval no later than fifteen (15) days following
Customer's having provided Siebel with the original of the Access Log. Siebel
shall be deemed to have accepted all employees and contractors who have signed
the Access Log until Siebel notifies Customer to the contrary. Any breach of
the Agreement by an employee or contractor of Customer shall be deemed to be a
breach by Customer.

2.  PROCEDURES FOR HANDLING THE DATA MODEL. Siebel shall ensure that the Data
Model will be appropriately identified as Siebel's Confidential Information
before being made available to Customer hereunder. Customer shall ensure that
the same degree of care is used to prevent the unauthorized use, dissemination,
or publication of the Data Model as Customer uses to protect its own
confidential trade secret information of a like nature (i.e., other
highly-sensitive proprietary technical data and information of Customer such as
source code). Customer shall not disclose any portion of the Data Model to
third parties, with the exception of Authorized Employees and Authorized
Contractors as set forth in Section 1 above. Customer shall maintain one master
copy of the Data Model and Customer will designate one employee ("Data Model
Access Coordinator") who shall be responsible for controlling all access to
such master copy. All hard copies of the Data Model must be kept in a locked
drawer, cabinet or room at all times when not in use. Customer may not
reproduce any portion of the Data Model for any purpose. If Customer wishes to
obtain additional hard copies of the Data Model, Siebel shall provide Customer
additional copies, as reasonably necessary, at Siebel's then-current price.

3.  TRADE SECRETS. The Data Model and any part thereof constitute trade secrets
of Siebel and/or its suppliers, and will be used by Customer only in accordance
with the terms of this Agreement. Customer shall take prompt and appropriate
action to prevent unauthorized use or disclosure of the Data Model by the
Authorized Employees and Authorized Contractors.

                                                                         Page 13
<PAGE>   14
                                    EXHIBIT D

                                   TRADEMARKS

[*]

[*] 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 14
<PAGE>   15
                                    EXHIBIT E

[*]

1       Company shall include the parent companies, subsidiaries, overseas
branches and overseas offices of the Companies listed above and any company
which is involved in the sale or distribution of the products offered by the
Companies listed above. Siebel reserves the right to add additional companies
(who commercially distribute or otherwise offer a product that is directly
competitive with the Licensed Software) to this list from time to time during
this Agreement with the consent of Distributor which consent shall not be
unreasonably withheld or delayed. For purposes of adding additional companies to
this Exhibit after the Effective Date, the above listed companies are
illustrative of the type of companies who commercially distribute or otherwise
offer a product that is competitive with the Licensed Software.

[*] 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 15

<PAGE>   16
                                    EXHIBIT F

                   MINIMUM TERMS OF END USER LICENSE AGREEMENT

Distributor agrees that the End User License and Services Agreement will contain
the following minimum terms and condition with respect to the Licensed Software,
and that such agreements will not include any additional terms and conditions
which are inconsistent with such minimum terms and conditions. Siebel
acknowledges that the End-User License and Services Agreement will contain terms
reflecting aspects of the Solutions other than the Licensed Software.

1.   DEFINITIONS.

     1.1  "ANCILLARY PROGRAM" shall mean the third party software specified in
     the Documentation and in one or more Order Forms issued pursuant to this
     Agreement and which are delivered with or embedded in the Program.

     1.2  "COMMENCEMENT DATE" of each Program License shall mean the date on
     which End User and Distributor enter into an Order Form pursuant to which
     End User acquires the right to use Program Licenses for such Program(s)
     during the term of and as set forth in this Agreement.

     1.3  "MAINTENANCE AND SUPPORT SERVICES" shall mean Program support provided
     under Distributor's policies in effect on the date Maintenance and Support
     Services are ordered, subject to the payment by End User of the applicable
     fees for such support. Distributor reserves the right to alter such
     policies from time to time using reasonable discretion.

     1.5  "ORDER FORM(S)" shall mean the document (substantially in the form of
     ATTACHMENT 1) by which End User orders Program Licenses and related
     services and which is executed by the parties. Each Order Form shall
     reference the Effective Date of this Agreement and shall, upon signature by
     both parties, be deemed to have been incorporated into this Agreement.

     1.6  "PROGRAM(S)" shall mean the Programs all as described in one or more
     Order Forms issued pursuant to this Agreement; the media upon which such
     software is delivered to End User; and Updates. Programs shall not include
     Ancillary Programs.

     1.7  "PROGRAM LICENSE" shall constitute each license granted to End User
     pursuant hereto for a User to use a Program as specified in one or more
     Order Forms.

     1.8  "TRAINING MATERIALS" shall mean any Siebel Systems' training materials
     provided in connection with any training courses ordered by Customer and
     delivered as set forth in this Agreement.

     1.9  "UPDATE(S)" shall mean a subsequent release of the Program which is
     generally made available for Program Licenses receiving Maintenance and
     Support Services, at no additional charge. Updates shall not include any
     release, option or future product which Distributor licenses separately or
     only offers for an additional fee, or any upgrade in features,
     functionality or performance of the Programs which Distributor licenses
     separately or only offers for an additional fee; provided, however, that so
     long as the End User is current on maintenance fee obligations. Updates
     shall include all (i) bug fixes, patches, and maintenance releases, (ii)
     new point releases of the Ordered Programs denoted by a change to the right
     of the first decimal point (e.g., v4.1 to 4.2, v3.0 to 3.1), and (iii) new
     major version releases of the Ordered Programs denoted by a change to the
     left of the first decimal point (e.g., v4.2 to 5.0, v4.0 to 3.0) as set
     forth herein.

     1.10 "USER(S)" shall mean the named or specified (by password or other user
     identification) individuals authorized by End User to use specified
     Programs, regardless of whether the individual is actively using the
     Programs at any given time. The maximum number of Users that may use or
     access the Programs shall be specified in an Order Form(s) signed by End
     User and Distributor. "Users" may include the employees of End User and
     third parties (other than employees or agents of entities that could
     reasonably be believed to be direct competitors or Siebel Systems, Inc.)
     provided that such third party is limited to use of the Programs (i) only
     as configured and deployed by End User and solely in connection with End
     User's business operations as conducted by or through such third party,
     including but not limited to the installation, administration or
     implementation of the Programs for End User, and (iii) made subject to a
     written agreement with such third party which contains provisions which are
     consistent with the provisions of Sections 2.1, 2.2 and 4.1.

     1.11 "USER SYSTEM" shall mean the computer hardware and operating systems
     operated by Users in the course of their employment with End User,
     including notebook and portable computers.

2.   PROGRAM LICENSE.

     2.1  LICENSE GRANT. Subject to the terms and conditions of this Agreement,
     Distributor hereby grants to End User the following nontransferable,
     nonexclusive, rights and licenses for End User's own internal business
     operations, solely during the term of this Agreement, as follows:

          A.   TO USE. (i) to use the Programs and Ancillary Programs solely
     through remote access to Distributor's server system; (ii) to use the
     Documentation solely for purposes of supporting End User's use of the
     Programs; (iii) to use the Training Materials solely for purposes of
     supporting Users who attend Siebel Systems' training courses; and (iv) to
     have third parties (e.g., system integrators) install, integrate, and
     implement the Programs and Ancillary Programs for the End User;

          B.   TO COPY. (i) to copy the on-line help Documentation as reasonably
     necessary to support its Users.

     2.2  LICENSE RESTRICTIONS AND EXCLUSIONS. The rights granted in Section 2.1
     are subject to the following restrictions: (i) End User may use the
     Ancillary Programs only in combination with the Programs and solely for
     purposes of installing and/or operating the Programs; End User may not use
     the Ancillary Programs as stand-alone applications; (ii) End User may not
     reverse engineer, disassemble, decompile, or otherwise attempt to derive
     the source code of the Programs or Ancillary Programs; provided that, if
     required under applicable law, upon End User's request, Distributor shall
     provide information necessary for End User to achieve interoperability
     between the Programs and other software for a nominal administrative
     charge; (iii) End User may not sublicense or use the Programs or Ancillary
     Programs for commercial time-sharing, rental, or service bureau use, or to
     train persons other than named Users, unless previously agreed in writing
     by Distributor; and (iv) with regard to any and all copies of the
     Documentation, End User shall only make exact copies of the versions as
     originally delivered by Distributor, End User shall ensure that each copy
     contains all titles, trademarks, and copyright and restricted rights
     notices as in the original, and all such copies shall be subject to the
     terms and conditions of this Agreement.

     2.3  RETENTION OF RIGHTS. Distributor and its suppliers (including Siebel
     Systems) reserves all rights with respect to Programs, Documentation and
     Training Materials not expressly granted to End User in this Agreement.
     Without limiting the generality of the foregoing, End User acknowledges and
     agrees that: (i) except as specifically set forth in this Agreement,
     Distributor and its suppliers retain all rights, title and interest in and
     to the Programs, Ancillary Programs, Documentation, and Training Materials
     and End User  acknowledges and agrees that it does not acquire any rights,
     express or implied, therein; (ii) any configuration or deployment of the
     Programs shall not affect or diminish Distributor's or Siebel Systems'
     rights, title, and interest in and to the Programs; and (iii) if End User
     suggests any new features, functionality, or performance for the Programs
     that Siebel Systems subsequently incorporates into the Programs, such new
     features, functionality, or performance shall be the sole and exclusive
     property of Siebel Systems and shall be free from any confidentiality
     restrictions that might otherwise be imposed upon Siebel Systems.

     2.4  TRANSFER AND ASSIGNMENT.

          No rights granted hereunder with respect to the Programs,
     Documentation or Training Materials, nor the use of any of the Programs,
     may be sold, leased, assigned, or otherwise transferred, in whole or in
     part, by End User, and any such attempted assignment shall be void and of
     no effect; provided, however, that End User may assign rights with respect
     to the Programs, Documentation, or Training Materials in connection with a
     merger, acquisition or sale of all or substantially all of its assets
     unless the surviving entity is a direct competitor of Distributor or
     Siebel.

     2.5  THIRD PARTY BENEFICIARY. End User is hereby notified that Siebel
     Systems Inc., a Delaware corporation located at 1855 South Grant Street,
     San Mateo, CA 94402 is a third-party beneficiary to the provisions of this
     Agreement related to the Programs, Documentation and Training Materials and
     that the provisions of this Agreement related to End User's use of the
     Programs are made expressly for the benefit of Siebel and are enforceable
     by Siebel in addition to Distributor.

3.   TERM AND TERMINATION.

     3.1  TERM. Each Program License granted under this Agreement shall commence
     on the applicable Commencement Date and shall remain in effect during the
     term of this Agreement, provided Customer has timely paid all fees and has
     fulfilled all other material obligations under this Agreement.

     3.2  TERMINATION BY DISTRIBUTOR. Distributor may terminate this Agreement
     or any Program License upon written notice if End User breaches this
     Agreement and fails to correct the breach within thirty (30) days
     following written notice from Distributor specifying the breach.

     3.3  HANDLING OF PROGRAMS UPON TERMINATION. If a Program License granted
     under this Agreement terminates, End User shall (a) cease using the
     applicable Programs, documentation, and related Confidential Information
     and (b) certify to Distributor within thirty (30) days after termination
     that End User has destroyed, or has returned to Distributor, the Programs,
     documentation and related Confidential Information and all copies thereof.
     This requirement applies to copies in all forms, partial and complete, in
     all types of media and computer memory, and whether or not modified or
     merged into other materials.

     3.4  SURVIVAL. The parties rights and obligations under Section 2.2(iii),
     2.3, 2.4, 3 and 4 shall survive termination of this Agreement.

4.   GENERAL TERMS.

     4.1  NONDISCLOSURE. By virtue of this Agreement, the parties may have
     access to information that is confidential to one another ("Confidential
     Information"). Distributor's Confidential Information shall include the
     Programs, formulas, methods, know-how, processes, designs, new products,
     development work, marketing requirements, marketing plans, customer names,
     prospective customer names, the terms and pricing under this Agreement, and
     all information clearly identified in writing at the time of disclosure as
     confidential.

     A party's Confidential Information shall not include information that (a)
     is or becomes a part of the public domain through no act or omission of the
     other party; (b) 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; (c) is lawfully disclosed to the
     other party by a third party without restriction on disclosure; or (d) is
     independently developed by the other party. End User shall not disclose the
     results of any performance tests of the Programs to any third party without
     Siebel's prior written approval.

     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, provided, however, that with
     respect to the Siebel Data Model Reference Manual, the Siebel Data Mart
     Data Model Reference (in the event such Data Model Reference Manuals are
     disclosed to Customer), and other highly sensitive confidential information
     clearly identified as such at the time of disclosure by either party
     ("Highly Sensitive Confidential Information"), the nondisclosure
     obligations set forth herein shall continue indefinitely. Customer's
     additional obligations regarding the Siebel Data Model Reference Manual and
     Siebel Data Mart Data Model Reference shall be set forth in a separate
     nondisclosure agreement that must be entered into directly with Siebel
     Systems before the Data Model is provided to Customer by Siebel Systems.
     The parties agree, unless required by law, not to make each other's
     Confidential Information available in any form to any third party or to use
     each other's Confidential Information for any purpose other than in the
     performance of this Agreement. 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 acknowledges and agrees that, due to the unique
     nature of Confidential Information, there can be no adequate remedy at law
     for breach of this Section 4.1 and that such breach would cause irreparable
     harm to the non-breaching party; therefore, the non-breaching party shall
     be entitled to seek immediate injunctive relief, in addition to whatever
     remedies it might have at law or under this Agreement.

     4.2  DISCLAIMER OF IMPLIED WARRANTIES. Distributor does not warrant that
     (i) the Programs will meet End User's requirements, (ii) the Programs will
     operate in the combinations which End User may select for use, (iii) the
     operation of the Programs will be uninterrupted or error-free, or (iv) all
     Program Errors will be corrected. Limited Production Programs,
     pre-production releases of Programs, and Training Materials are distributed
     "AS IS". THE WARRANTY WITH RESPECT TO THE PROGRAMS, DOCUMENTATION, OR
     TRAINING MATERIALS IS EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES,
     WHETHER EXPRESS OR IMPLIED OR STATUTORY, INCLUDING WITHOUT LIMITATION THE
     IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

                                                                         Page 16

<PAGE>   17
[*]

[*] 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 17

<PAGE>   18
[*]

[*] 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 18

<PAGE>   19
                                    EXHIBIT G

                             ROYALTY REPORTING FORM

                            DISTRIBUTOR SALES/ROYALTY

1.   Sales Date: Month                 Year                  Name of Distributor
2.   End User:
Company               Title                              Note/Comments
Name
Division              Tel No
Contact               Fax No
Address

3.   Version of Programs ________________4.Client Operating system:_________
5.   Database Server Hardware____________6.RDBMS (Version) _________________
7.   Database Server Location____________
8.   Royalties/Fees

                      License

[Royalty Reporting Form -- Illegible]
Number of Users List Price(USD) Total Sales Price(USD) Royalty%

                      Maintenance New [ ] Renewal [ ]
List Price (USD)  Total (USD)          Royalty (USD)        Note
Siebel Sales and Service Enterprise
Siebel Encyclopedia
Siebel Office
Siebel Calendar
Siebel TeleBusiness
Siebel Remote
Siebel Reports
Siebel EIS
Siebel Anywhere
Siebel System Software

                                                              Royalty Total
                                                           Term of maintenance
                                                        ____month___date____year

10.  Training Material Royalty

                                                   Training Material

Material Name    List Price (USD)      Copy Transfer    Royalty (USD)

                                                                 Page 19<PAGE>

                                                                   Exhibit 10.31
                                                                   -------------
                             EMPLOYMENT AGREEMENT
                             --------------------

                                    Parties
                                    -------

     The parties to this Agreement, made as of the 18th day of May 2000, are K-
Swiss Inc., a Delaware corporation (the "Company" or "K-Swiss"), and Steven B.
Nichols (the "Executive").

                                   Recitals
                                   --------

     WHEREAS, the Executive possesses an intimate knowledge of the footwear
business and the business and affairs of the Company, its policies, methods,
personnel and operations.

     WHEREAS, K-Swiss and the Executive are parties to an Employment Agreement
made as of March 1, 1995, (the "1995 Agreement"), which expires December 31,
2000 and whereas the Board of Directors of K-Swiss desires to assure K-Swiss of
the Executive's continued employment in an executive capacity and to compensate
him therefor.

     WHEREAS, the Executive is willing to commit himself to serve K-Swiss on the
terms herein provided.

     Therefore, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein contained, the parties hereto
agree as follows:

                                   Agreement
                                   ---------

1.   Employment.
     ----------

     (a)  The Company hereby agrees to employ the Executive, and the Executive
hereby agrees to serve the Company, all on the terms and conditions set forth
herein.

     (b)  The employment of the Executive by the Company pursuant to this
Agreement shall be for the period commencing on January 1, 2001 (the
"Commencement Date") and expiring on the date set forth in Section B of Appendix
I hereto (the "Expiration Date"), unless such employment shall have been sooner
terminated as hereinafter set forth.

2.   Position and Duties.
     -------------------

     The Executive shall serve in the capacity or capacities set forth in
Section A of Appendix I hereto, shall be accountable to, and shall also have
such other powers, duties and responsibilities as may from time to time be
prescribed by, the Board of Directors, provided that such other duties and
responsibilities are consistent with the Executive's position.

     The Executive shall perform and discharge, faithfully, diligently and to
the best of his ability, such duties and responsibilities.  The Executive shall
devote
<PAGE>

substantially all his working time and efforts to the business and affairs of
the Company.

3.   Compensation.
     ------------

     (a)  Salary.  During each year of his employment hereunder from the
          ------
Commencement Date, the Executive shall receive an annual base salary equal to:
(i) $767,431 (the annual salary payable to Executive with respect to the year
commencing January 1, 2000 pursuant to the 1995 Agreement) (the "2000 Base
Salary") plus (ii) the 2000 Base Salary multiplied by a percentage increase, if
any, in the Consumer Price Index - Los Angeles - Anaheim - Riverside, California
Area - All Items (the "CPI") during the period from January 1, 2000 to December
31, 2000; provided that with respect to each year commencing on January 1, 2002
and thereafter, the base salary in effect for such year shall equal the base
salary in effect for the immediately preceding year multiplied by a factor equal
to the sum of:  (x) 100%, plus (y) the percentage increase, if any, in the CPI
during the period of time from January 1 to December 31 of the year immediately
preceding the year for which such adjustment is being computed.  All amounts
payable pursuant to this Section 3(a) at the then applicable rate shall
hereinafter be referred to as "Salary." Salary shall be payable in substantially
equal monthly installments, less any amount required to be withheld under
applicable law.  Except as otherwise provided in this Agreement, the Salary
shall be pro-rated for any period of service less than a full year.

     (b)  EVA Bonus Awards.  The Executive shall be entitled to receive as
          ----------------
further compensation, in addition to the Salary payable pursuant to Section
3(a), amounts, if any, payable to Executive pursuant to the K-Swiss Inc. EVA
Bonus Plan, as it may be amended from time to time by the K-Swiss Inc. Board of
Directors ("EVA Awards").  Each year during the term of this Agreement, the
Compensation and Stock Option Committee of the Board of Directors (or a similar
Board committee) shall establish in writing, not later than 90 days after the
commencement of the period of service to which such performance goal relates,
objective performance goals for Executive.  The Bonus Target Percentage which
shall apply to Executive each year during the term of this Agreement pursuant to
the EVA Bonus Plan shall be 60% of Executive's Salary.

     (c)  Stock Options.  On May 18, 2000, the Company shall grant to the
          -------------
Executive options to purchase 50,000 shares of the Company's Class A Common
Stock.  Each such option shall have an exercise price equal to the closing price
of the Company's Class A Common Stock on May 18, 2000 on the NASDAQ National
Market, which shall be deemed to equal the fair market value of the
Corporation's Class A Common Stock on the date of grant.  The options so granted
shall vest 10% per month, commencing on February 1, 2002.  Such options shall be
subject to the Company's Non-Qualified Stock Option Agreement in use on the date
of grant.

     (d)  Expenses.  During the term of his employment hereunder, the Executive
          --------
shall be entitled to receive prompt reimbursement for all reasonable business
expenses incurred by him on behalf of the Company (in accordance with the
policies and procedures established by the Board of Directors from time to time
for the Company's senior executive officers) in performing services hereunder,
provided that the Executive properly accounts therefor in accordance with
requirements for federal income tax deductibility and the Company's policies and
procedures.

                                       2
<PAGE>

     (e)  Fringe Benefits.  During the term of his employment hereunder, the
          ---------------
Executive shall be entitled to participate in or receive benefits under any life
insurance, health, pension, retirement and accident plans or arrangements made
generally available by the Company to its executives and key management
employees, subject to and on a basis consistent with the terms, conditions and
overall administration of such plans and arrangements.  Notwithstanding anything
else in this Agreement to the contrary the Executive shall receive the following
benefits, which shall be in lieu of any similar benefits which may be received
by the other executives of the Company:

          (i)   Term Life Insurance.  During the term of this Agreement, the
                -------------------
     Company will either:  (a) purchase and maintain term life insurance in the
     policy amount of $1,500,000 (with the proceeds thereof payable to the
     estate of the Executive or to such other beneficiary or beneficiaries as
     the Executive may designate in writing), provided that the Executive
     satisfies any requirements, such as an annual physical examination, that
     may be required as a condition of obtaining such insurance, or (b) at the
     Executive's election, pay to the Executive an amount of cash sufficient for
     the purchase and maintenance of term life insurance as described in
     subdivision (a) above.  In addition, to the extent that, but for
     subdivision (b) of the immediately preceding sentence, any portion of the
     cost of the insurance described in subdivision (a) of said sentence would
     be excluded from the Executive's gross income for federal and/or state
     income tax purposes, the Company will pay to the Executive an additional
     amount of cash compensation sufficient to place the Executive in the same
     after-tax economic position as that in which the Executive would be if
     subdivision (b) were not a part of said sentence.

          (ii)  Disability.  The Company will purchase disability insurance
                ----------
     (with the proceeds thereof payable to the Executive) covering the Executive
     if the Executive is permanently disabled as a result of any illness, injury
     or accident, physical or mental, and is unable to perform satisfactorily
     his duties hereunder on a full time basis for six consecutive months, that
     will provide for coverage in an amount mutually satisfactory to the parties
     hereto.

          (iii) Travel Insurance.  The Company will purchase travel insurance
                ----------------
     (with the proceeds thereof payable to the Executive) covering Executive
     while on Company business in the amount of $1,000,000.

          (iv)  Automobile.  The Company shall provide the Executive with the
                ----------
     use of a top-of-the-line General Motors or equivalent car, and the Company
     shall pay all taxes, insurance, repairs and operating expenses in
     connection therewith.

          (v)   Health.  The Company will purchase health insurance covering
                ------
     Executive and his family with coverage substantially equivalent to the
     Prudential Out of Area Health Plan.

     (f)  Vacations.  During the term of his employment hereunder, the Executive
          ---------
shall be entitled to the number of paid vacation days in each calendar year
determined by the Board of Directors from time to time for the Company's senior
executive officers, but not less than four weeks in any fiscal year, and shall
also be entitled to all paid holidays given by the Company to its employees.

                                       3
<PAGE>

4.   Offices
     -------

     The Executive agrees to serve without additional compensation, if elected
or appointed thereto, in one or more offices and as a director of K-Swiss or of
any subsidiary of K-Swiss; provided, however, that the Executive shall not be
                           --------  -------
required to serve as an officer or director of any such subsidiary if such
service would expose him to adverse physical hazards or adverse financial
consequences.

5.   Unauthorized Disclosure; Inventions.
     -----------------------------------

     (a)  Unauthorized Disclosure.  The Executive shall not, without the written
          -----------------------
consent of the Board of Directors or a person duly authorized thereby, disclose
to any person, other than an employee or professional adviser of the Company or
other person to whom disclosure is in the reasonable judgment of the Executive
necessary or appropriate in connection with the performance by the Executive of
his duties as an executive officer of the Company, any information obtained by
him while in the employ of the Company the disclosure of which he knows or, in
the exercise of reasonable care, should know may be damaging to the Company;
provided, however, that such information shall not include any information known
--------  -------
generally to the public (other than as a result of unauthorized disclosure by
the Executive); and provided, further, that the Executive's duties under this
                    --------  -------
subsection (a) shall not extend to any disclosures that may be required by law
in connection with any judicial or administrative proceeding or inquiry, as may
be required by federal and/or state securities law, or as may otherwise be
required by the rules of any exchange or association which lists the Company's
securities.

     (b)  Proprietary Rights. Any and all inventions, discoveries, developments,
          ------------------
methods, processes, compositions, works, concepts and ideas (whether or not
patentable or copyrightable) conceived, made, developed, created or reduced to
practice by the Executive (whether at the request or suggestion of the Company
or otherwise, whether alone or in conjunction with others, and whether during
regular hours of work or otherwise) during the period of his employment by the
Company and for three months thereafter, which may be directly or indirectly
useful in, or relate to, the business of or products manufactured or sold by the
Company or any of its subsidiaries of affiliates or any business or products
contemplated by the Company while the Executive is employed by the Company,
shall be promptly and fully disclosed by the Executive to an appropriate
executive officer of the Company and shall be the Company's exclusive property
as against the Executive, and the Executive shall promptly deliver to an
appropriate executive officer of the Company all papers, drawings, models, data
and other material relating to any of the foregoing proprietary rights,
conceived, made, developed or created by him as aforesaid.

     The Executive shall, upon the Company's request and without any payment
therefor (except for Company Policy Awards), execute any documents necessary or
advisable in the opinion of the Company's counsel to assign his right, title and
interest in the foregoing proprietary rights and to direct issuance of patents
or copyrights to the Company with respect to such proprietary rights as are to
be the Company's exclusive property as against the Executive under this
subsection (b) or to vest in the Company title to such proprietary rights as
against the Executive, the expense of securing any such patent or copyright,
however, to be borne by the Company.

                                       4
<PAGE>

6.   Non-Competition.
     ---------------

     The Executive agrees that for a period of twelve (12) months following the
Date of Termination, unless the Date of Termination is the Expiration Date, he
will not directly or indirectly own, manage, operate, control or participate in
the ownership, management, operation or control of, or be connected as an
officer, employee, partner, director or otherwise with, or have any financial
interest in, or aid or assist anyone else in the conduct of, or solicit any
employees of the Company on behalf of, any entity or business which competes
directly with any business conducted by the Company or by any group, division or
subsidiary of the Company, in any area where such business is being conducted or
is proposed to be conducted at the Date of Termination; provided, however, that
                                                        --------  -------
this provision shall not apply if Executive or the Company terminates his
employment on the Expiration Date.  It is understood and agreed that, for the
purposes of the foregoing provisions of this Section 6, (i) no business shall be
deemed to be a business conducted by the Company or any group, division or
subsidiary of the Company, unless not less than five percent (5%) of the
Company's consolidated gross sales or operating revenues is derived from, or not
less than five percent (5%) of the Company's consolidated assets are devoted to,
such business; and (ii) no business conducted by any entity by which the
Executive is employed or in which he is interested or with which he is connected
or associated shall be deemed competitive with any business conducted by the
Company unless it is one from which five percent (5%) or more of its
consolidated gross sales or operating revenues is derived, or to which five
percent (5%) or more of its consolidated assets are devoted; provided, however,
                                                             --------  -------
that if the actual gross sales or operating revenues or assets of such entity
derived from or devoted to such business is equal to or in excess of 10% of the
most nearly comparable figure for the Company, such business of such entity
shall be deemed to be competitive with a business of the Company.  Furthermore,
ownership of not to exceed five percent (5%) of the voting stock of any publicly
held corporation shall not constitute a violation of this Section 6, and
ownership of a partial equity interest in Nichols Foot Form also shall not
constitute a violation of this Section 6.

7.   Termination.
     -----------

     (a)  Death.  The Executive's employment hereunder shall terminate upon his
          -----
death.

     (b)  Incapacity.  If in the reasonable judgment of the Board of Directors,
          ----------
as a result of the Executive's incapacity due to physical or mental illness or
otherwise, the Executive shall for six consecutive months during the term of
this Agreement have been unable to perform satisfactorily all of his duties
hereunder on a full-time basis, the Company may, by a unanimous vote of the
members of the Board of Directors (other than the Executive), terminate the
Executive's employment hereunder by notice to the Executive.

     (c)  Termination by the Executive.  The Executive may terminate his
          ----------------------------
employment hereunder upon thirty days' prior written notice to the Company for
Good Reason.  For purposes of this Agreement, "Good Reason" shall mean (A) any
removal of the Executive from the position indicated in Section A of Appendix I
hereof, except in connection with termination of the Executive's employment for
Cause, or (B) a reduction in the Executive's Salary or any other willful action
by the Company that is materially inconsistent with the terms of this Agreement.

                                       5
<PAGE>

     (d)  Cause.  The Company may, by a unanimous vote of the members of the
          -----
Board of Directors other than the Executive, terminate the Executive's
employment hereunder for Cause.  The Company shall give the Executive ten (10)
days notice of a Board of Directors meeting at which termination for Cause will
be considered, and the Executive shall have the opportunity to be heard at such
meeting.  If appropriate, the Board of Directors shall give the Executive a
reasonable period of time in which to cure any deficiencies under this Section
7(d).  For the purposes of this Agreement, the Company shall have "Cause" to
terminate the Executive's employment hereunder upon the Executive's (A) material
failure, refusal or gross neglect to perform and discharge his duties and
responsibilities hereunder, or willful action that is materially inconsistent
with the terms hereof, or material breach of his fiduciary duties as an officer
or member of the Board of Directors of the Company or any subsidiary or
affiliate, or (B) gross and willful misconduct that is materially injurious to
the Company, or (C) conviction of a felony involving the personal dishonesty of
the Executive (unless such conviction is reversed in any final appeal thereof).

     (e)  Date of Termination; Term of Employment.  The term "Date of
          ---------------------------------------
Termination" shall mean the earlier of (i) the Expiration Date or (ii) if the
Executive's employment is terminated (A) by his death, the date of his death, or
(B) for any other reason, the date on which such termination is to be effective
pursuant to the notice of termination given by the party terminating the
employment relationship.  For all purposes of this Agreement, references to the
"term" of the Executive's employment hereunder shall mean the period commencing
on the Commencement Date and ending on the Date of Termination.

8.   Compensation Upon Termination.
     -----------------------------

     (a)  Death.  Notwithstanding any other provision of this Agreement, if the
          -----
Executive's employment shall be terminated by reason of his death, the Company
shall pay to such person as the Executive shall have designated in a notice
filed with the Company, or, if no such person shall have been designated, to his
estate, (i) in substantially equal monthly installments, for a period of one
year from the date of his death, his full Salary, and (ii) an EVA Award for the
year during which the Executive died, and, if his death occurs after June 30 in
any year prior to 2005, an EVA Award for the year immediately following the year
in which the Executive's death occurred.  This amount shall be exclusive of and
in addition to any payments the Executive's widow, beneficiaries or estate may
be entitled to receive pursuant to any employee benefit plan or life insurance
policy maintained by the Company for the benefit of the Executive.

     (b)  Incapacity.  Notwithstanding any other provision of this Agreement, if
          ----------
the Executive's employment shall be terminated by reason of his incapacity, and
such incapacity is not covered by the disability insurance referred to in
Section 3(e)(ii) hereof, the Company shall continue to pay the Executive (i) his
full Salary for one year, in monthly installments as provided in Section 3
hereof, and (ii) an EVA Award for the year during which he first became
incapacitated (the "Initial Incapacity Date"), and, if the Initial Incapacity
Date occurs after June 30 in any year prior to 2005, an EVA Award for the year
immediately following the year in which the Initial Incapacity Date occurred.

     (c)  Cause.  Notwithstanding any other provision of this Agreement, if the
          -----
Company shall terminate the Executive's employment for Cause, the Company shall
pay the Executive his full Salary through the Date of Termination at the rate

                                       6
<PAGE>

in effect at the time notice of termination is given as provided in Section 7(e)
above, and the Company shall have no further obligations to the Executive under
this Agreement.

     (d)  Good Reason.  If the Executive shall terminate his employment for Good
          -----------
Reason, then the Company shall pay to the Executive his Salary and EVA Awards
through the Date of Termination at the rate in effect at the time notice of
termination is given.  In addition, in lieu of any further payments to the
Executive for periods subsequent to the Date of Termination, the Company shall
pay as liquidated damages, or severance pay, or both, to the Executive, in
substantially equal monthly installments, from the Date of Termination to the
Expiration Date, an amount calculated at an annual rate equal to the annual
Salary and EVA Awards that the Executive would have received if his employment
had not been terminated.

9.   Binding Agreement.
     -----------------

     This Agreement and all rights of the Executive hereunder shall inure to the
benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.  If the Executive should die while any amounts would
still be payable to him hereunder if he had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to the Executive's devisee, legatee or other designee or, if
there be no such designee, to the Executive's estate.

10.  Board of Directors.
     ------------------

     The term "Board of Directors" shall mean the Board of Directors of K-Swiss.

11.  Notices.
     -------

     For purposes of this Agreement, notices and all other communications to
either party hereunder provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by United
States certified or registered mail, return receipt requested, postage prepaid,
addressed, in the case of the Company, to them at K-Swiss Inc., 31248 Oak Crest
Drive, Westlake Village, California 91361, Attention: Secretary, or, in the case
of the Executive, to the Executive at the address set forth in Section C of
Appendix I hereto; or to such other address as either party shall designate by
giving like notice of such change to the other party.

12.  Miscellaneous.
     -------------

     No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is approved by either a majority of the
Compensation and Stock Option Committee of the Board of Directors of the Company
(or another Committee of the board fulfilling the same functions) (the
"Committee") or by a majority of the Board of Directors of the Company
(excluding the Executive) and agreed to in writing signed by the Executive and
such officer as may be specifically authorized by the Committee or the Board of
Directors, as the case may be.  No waiver by either party hereto at any time of
any breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of

                                       7
<PAGE>

similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement. Nothing contained in
this Agreement shall impair, modify or in any way change the 1995 Agreement or
the Amended and Restated Registration Rights Agreement attached as Appendix II
to the Employment Agreement made as of April 30, 1993 between Executive and the
Company, both of which shall remain in full force and effect. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the domestic substantive laws of the State of Delaware without giving effect
to any choice or conflict of laws provision or rule that would cause the
application of the domestic substantive laws of any other state.

13.  Validity.
     --------

     The invalidity or unenforceability of any provision or provisions of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect, and in the event
that any provision hereof shall be determined to be invalid or unenforceable for
any reason, such provision shall be construed by limiting it so as to be valid
and enforceable to the fullest extent compatible with and possible under
applicable law.

14.  Counterparts.
     ------------

     This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together will constitute one
and the same instrument.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first above written.

                              K-SWISS INC.

                              By: /s/ George Powlick          .
                                  -----------------------------
                                  Title: Vice President Finance
                                  and Chief Financial Officer

                              EXECUTIVE:

                                  /s/ Steven B. Nichols       .
                              ---------------------------------
                              Steven B. Nichols

                                       8
<PAGE>

                                  APPENDIX I

                               STEVEN B. NICHOLS

A.   The Executive shall serve the Company as its President, Chief Executive
     Officer and Chairman of the Board.

B.   Expiration Date:  December 31, 2005.

C.   Address of Executive:  Steven B. Nichols

                              K-Swiss Inc.
                              31248 Oak Crest Drive
                              Westlake Village, CA 91361

                              /s/ GP________________________________

                              __________________________________
                              __________________________________

                                       9

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