Document:

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Licensee    The Procter & Gamble Company         Agreement Number    1299-100
         -----------------------------------                      --------------

                                                                    Exhibit 10.7

                        PLUMTREE SOFTWARE INCORPORATED
                        ------------------------------

                          SOFTWARE LICENSE AGREEMENT
                          --------------------------

This software license agreement (the "Agreement") made and entered into this
17th day of December, 1999, by and between Plumtree Software Incorporated
(hereinafter referred to as "Plumtree") and The Procter & Gamble Company, an
Ohio corporation with offices in Cincinnati, Ohio on behalf of itself, its
subsidiaries, its affiliates, and joint ventures worldwide, existing now or in
the future, as further defined per paragraph 6.a. (hereinafter referred to as
"Licensee"). This Agreement includes the attached Maintenance Service Terms and
Conditions and the attached Software Copy and Use Restrictions that reference
this Agreement by its agreement number.

1.   DEFINITIONS
     -----------
(a)  "Documentation" means, collectively, the operation instructions, user
manuals, help files and all technical information and materials, in written or
electronic form, provided by Plumtree to Licensee and that are intended for use
in connection with the Software.

(b)  "Server Location" means the address at which the Server Software is to be
installed, as indicated in the applicable Product Schedule.

(c)  "Software" means each Plumtree Software program in object code format set
forth in a Product Schedule, including any updates, modifications, or new
releases of such software program that Plumtree provides to Licensee from time
to time.

2.   GRANT OF LICENSE
     ----------------
Plumtree grants to Licensee or its affiliates' authorized employees and any
agents or contractors using the software in the performance of service for
Licensee or its affiliates a non-exclusive perpetual right to install and use
the Software in accordance with this Agreement. The Software is licensed by
Plumtree, not sold.

3.   COPY AND USE RESTRICTIONS
     -------------------------
(a)  Licensee's use of the Software is subject to the terms on the attached
Software Copy and Use Restrictions.

(b)  Licensee may copy the Software as reasonably necessary for backup, archival
or offsite disaster recovery purposes. Licensee shall have the right to copy,
install, and use older versions of the Software in place of the licensed version
of the Software. Documentation may not be copied.

(c)  Licensee may not, nor allow any third party to: (i) decompile, disassemble,
or reverse engineer the Software except to the extent expressly permitted by
applicable law without Plumtree's consent; (ii) remove any product
identification or proprietary rights notices; (iii) lease, lend, use the
Software for timesharing or service bureau purposes; (iv) except with Plumtree's
prior written permission, publish any performance or benchmark tests or analysis
relating to the Software; or (v) otherwise use or copy the Software except as
expressly provided herein.

4.   LICENSE FEES
     ------------
Invoices shall be prepared and sent in accordance with the instructions on
Licensee's Purchase Order. Invoices that do not follow these instructions are
subject to potentially significant delays in payment. Plumtree will mail
invoices for all licensee fees and other charges covered by this Agreement to
the billing address(es) furnished by Licensee. Upon receipt Licensee will
process all invoices for payment on a net [***] from receipt of Plumtree's
correct invoice at Licensee's offices, but in no case before the Licensee
accepts the software and has received an executed copy of this Agreement. Late
payments will bear interest at the rate of 1.5% per month, or, if lower, the
maximum rate allowed by law. Licensee is responsible for all taxes, charges or
duties including, without limitation, sales, use, value added, royalty or
withholding taxes imposed by a federal, state, provincial, local or other
government entity on software or services provided under this Agreement.
Licensee shall pay all state taxes directly to the State of Ohio, due to its
Direct Tax Payment Permit, if Plumtree is obligated to collect taxes, then the
appropriate amount will be added to Licensee's invoice.

5.   MAINTENANCE SERVICES.  The terms governing any Software maintenance and
     --------------------
support services purchased by Licensee are set out on the attached Maintenance
Terms and Conditions.

6.   TRANSFER OF RIGHTS
     ------------------
(a)  Licensee may not transfer, assign or delegate its rights or duties under
this Agreement without the prior written consent of Plumtree; provided however,
that Licensee may assign its rights in whole or in part to any affiliates of
Licensee, this includes any entity which is acquired by The Procter & Gamble
company during the term of this Agreement and including, for a period of six (6)
months after any divestiture, any entity which is devested by The Procter &
Gamble Company during the term of this Agreement (i) to any entity that acquires
substantially all of Licensee's stock or assets or (ii) to the surviving
corporation of any merger, consolidation or reorganization to which Licensee is
a party. No such assignment shall be effective unless (i) Licensee notifies
Plumtree of the assignment in writing and (ii) the assignee agrees in writing to
abide by the terms of this Agreement. Any assignment in violation of the
foregoing shall be void.

7.   TERMINATION
     -----------
(a)  Plumtree may terminate this Agreement if Licensee fails to cure any
material breach of this Agreement within thirty (30) days of receiving notice of
such breach from Plumtree. Upon any such termination, all of Licensee's right to
use the Software shall immediately cease and Licensee shall promptly return to
Plumtree or destroy all copies of the Software and Documentation.

(b)  Any obligations to pay fees incurred under Sections 4 and 5 prior to
termination and the provisions of Sections 8, 9, 10 and 12 shall survive
termination of the Agreement for any reason. Termination is not an exclusive
remedy and all other remedies will be available whether or not the Agreement is
terminated.

8.   LIMITED WARRANTY AND DISCLAIMER
     -------------------------------
(a)  Plumtree warrants that, when delivered and for a period of [***]
thereafter, the Software licensed hereunder will materially conform to
Plumtree's then current Documentation for such Software. Plumtree further
warrants that all Software delivered to Licensee hereunder will record, store,
process and present calendar dates falling on or after January 1, 2000, in the
same manner, and with substantially similar functionality, as such Software on
or before December 31, 1999.

[***] Denotes language for which Plumtree has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as amended.
<PAGE>

(b)  The preceding warranty will not apply if: (i) the Software is not used in
accordance with the Documentation; (ii) the Software or any part thereof has
been modified without the prior written consent of Plumtree; or (iii) a defect
in the Software has been caused by any of Licensee's malfunctioning equipment.

(c)  ANY LIABILITY OF PLUMTREE WITH RESPECT TO ANY SOFTWARE OR THE PERFORMANCE
THEREOF UNDER ANY THEORY WILL BE LIMITED EXCLUSIVELY TO PRODUCT REPAIR OR
REPLACEMENT OR, IF SUCH REPAIR OR REPLACEMENT IS INADEQUATE AS A REMEDY OR, IN
PLUMTREE'S OPINION, IMPRACTICAL, TO A REFUND OF THE LICENSE FEE PAID FOR SUCH
SOFTWARE. PLUMTREE DISCLAIMS ALL OTHER WARRANTIES OR CONDITIONS, EITHER EXPRESS
OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OR CONDITIONS OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

9.   LIMITATION OF REMEDIES AND DAMAGES
     ----------------------------------
Regardless of the basis of recovery claimed, whether under any contract,
negligence, strict liability or other theory, Plumtree's aggregate liability,
with respect to any and all subject matters of the Agreement or any attachment,
Product Schedule, or terms and conditions related thereto will be only for (A)
indemnification payments referred to in Section 10 below, (B) bodily injury
(including death) and damage to real and tangible personal property and (C) the
amount of any other direct damages or loss up to the amount of the license fee
paid by Licensee for the Software.  PLUMTREE SHALL NOT BE LIABLE FOR LOSS OF OR
DAMAGE TO RECORDS OR DATA; COST OF PROCUREMENT OF SUBSTITUTE GOODS, SERVICES OR
TECHNOLOGY; OR ANY SPECIAL, INDIRECT, INCIDENTAL OR  CONSEQUENTIAL DAMAGES
INCLUDING BUT NOT LIMITED  TO LOSS OF PROFITS, EVEN IF PLUMTREE HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES.

10.  INTELLECTUAL PROPERTY INDEMNITY
     -------------------------------
(a)  Plumtree shall defend and hold Licensee harmless from any claim by a third
party that the Software infringes any United States patent, trade secret or
copyright of that third party, provided: (i) Plumtree is promptly notified of
the claim; (ii) Plumtree receives reasonable cooperation from Licensee in
protecting its rights related thereto; and (iii) Plumtree has the opportunity to
assume sole control over the defense and all negotiations for a settlement or
compromise. Plumtree will not be responsible for any settlement it does not
approve in writing. The foregoing obligation of Plumtree does not apply with
respect to Software or portions or components thereof: (i) not supplied by
Plumtree; (ii) made in whole or in part in accordance with Licensee's
specifications; (iii) which are modified by Licensee, if the alleged
infringement relates to such modification; (iv) combined with other products
(hardware or software), processes or materials where the alleged infringement
relates to such combination; or (v) where Licensee continues the allegedly
infringing activity after being notified thereof and provided modifications that
would have avoided the alleged infringement.

(b)  In the event the Software is held by a court of competent jurisdiction to
constitute an infringement and its use is enjoined, Plumtree shall, at its sole
option, either: (i) procure for Licensee the right to continue use of the
Software; (ii) provide a modification to the Software so that its use becomes
non-infringing, or (iii) replace the Software with software which is
substantially similar in functionality and performance. If none of the foregoing
alternatives is reasonably available to Plumtree, Plumtree shall refund the
residual value of the License fees paid by Licensee for the infringing Software,
depreciated over a three (3) year period from the date of delivery of the
Software to Licensee. This Section 10 states Plumtree's sole liability and
Licensee's exclusive remedy for infringement claims.

11.  U.S. GOVERNMENT USERS
     ---------------------
This paragraph is intently deleted.

12.  NON-DISCLOSURE
    --------------
The parties agree that software supplied by Plumtree and all technical and
business information received from either party will be maintained in strict
confidence with the exception of that which is (a) already known to the public,
(b) supplied to another party on a non-confidential basis, or ( c ) the same in
substance as that rightfully obtained from a third party. Without the prior
written consent of Licensee, which shall not be unreasonably withheld,
Licensee's name will not be used as a reference, on a client list, in
advertising, or in any way that might disclose the nature of the work. Licensee

13.  GENERAL
     -------
(a)  Licensee is responsible for the cost of shipping, for payment of all
applicable sales, use and other taxes and all applicable export and import fees,
customs duties and similar charges (other than taxes based on Licensor's net
income) arising from the payment of license or maintenance fees or the delivery
or license of, the Software or maintenance services. Licensee will make all
payments without reduction for any withholding taxes, which taxes shall be
Licensee's sole responsibility, and Licensee will provide Plumtree with such
evidence as Plumtree may reasonably request to establish that such taxes have
been paid.

(b)  Any dispute arising out of or relating to this Agreement or the breach
thereof shall be governed by the laws of the State of Ohio without regard to or
application of choice of laws, rules or principles. Both parties herby consent
to the exclusive jurisdiction of such courts, and expressly waive any objections
or defense based upon lack of personal jurisdiction or venue. The prevailing
party shall be entitled to recover its reasonable attorneys fees and cost
incurred in connection with any action or proceeding between Plumtree and
Licensee arising out of or related to this Agreement.

(c)  All notices delivered under the Agreement shall be in writing and deemed
given upon receipt when delivered personally or upon confirmation of receipt
following delivery of (i) overnight courier service or (ii) registered or
certified mail, return receipt requested, postage prepaid, in each cased
addressed to the Legal Department at the address indicated in the last executed
Product Schedule, or at such other address of which one party is notified by the
other in writing.

(d)  If a provision of the Agreement or portion thereof is found to be invalid
or unenforceable under applicable law, it shall be omitted from the Agreement
without invalidating the remainder of such provision or the remaining provisions
of the Agreement

(e)  The Software is subject to U.S. export control laws and regulations and
Licensee agrees to comply with all such applicable laws and regulations.

(f)  The provisions of the Agreement shall be binding upon and inure to the
benefit of the parties, their successors and permitted assigns.

(g)  The Agreement, including the attached Exhibits or Attachments, represents
the entire agreement between the parties, and expressly supersedes and cancels
any prior oral or written agreements on the subjects herein. Each party
acknowledges that it is not entering into the Agreement on the basis of any
representations not expressly contained herein. Other than as specified herein,
the Agreement may only be supplemented or

                                       2
<PAGE>

modified by an amendment in writing executed by the parties. No additional or
conflicting term in a purchase order or other document shall have any effect.

Agreed by the authorized representatives of the parties.

Licensee:  The Procter & Gamble Company
           --------------------------------------

By:        /s/ CONNIE M. FUGATT
           --------------------------------------

Name:      Connie M. Fugatt
           --------------------------------------

Title:     Section Manager, Global IT Purchases
           --------------------------------------

Date:      December 17, 1999
           --------------------------------------

              PLUMTREE SOFTWARE, INCORPORATED

By:        /s/ JOHN KUNZE
           --------------------------------------

Name:                    John Kunze
           --------------------------------------

Title:                     CEO
           --------------------------------------

Date:              12/21/99
           --------------------------------------

                                       3
<PAGE>

Licensee    The Procter & Gamble Company        Agreement Number    1299-100
            ----------------------------                            --------

                      SOFTWARE COPY AND USE RESTRICTIONS
                      ----------------------------------

This attachment relates to and is incorporated into the above-referenced
Software License Agreement between Plumtree Software Incorporated ("Plumtree")
and the named Licensee (the "Agreement"). Capitalized terms not specifically
defined below have the same meaning as in the Agreement.

1.   Software Copy and Use. The following product specific restrictions apply to
Licensee's use of the Software.

(a)  Licensee may use and install the software to support the following number
of users: (i) (Refer to Product Schedule No. 001, per this Agreement Number.
(b)
2.   THIS ATTACHMENT IS AN ADDITIONAL PART OF THE AGREEMENT AND DOES NOT CHANGE
OR SUPERSEDE ANY TERM OF THE AGREEMENT EXCEPT TO THE EXTENT UNAMBIGUOUSLY
CONTRARY THERETO.
<PAGE>

Licensee  The Procter & Gamble Company      Agreement Number    1299-100
          ----------------------------                          --------

                   MAINTENANCE SERVICE TERMS AND CONDITIONS
                   ----------------------------------------

This attachment relates to and is incorporated into the above-referenced
Software License Agreement between Plumtree Software Incorporated ("Plumtree")
and the named Licensee (the "Agreement"). Capitalized terms not specifically
defined below have the same meaning as in the Agreement.

1.   MAINTENANCE SERVICES. In consideration for the fees described in Section 4
below, Plumtree will provide the services described below ("Maintenance
Services").

(a)  Standard Telephone Support. During normal business hours (6:00 am. to 6:00
     --------------------------
p.m. Pacific Time, holidays excepted) Plumtree shall provide Licensee technical
assistance by telephone with the installation and use of the Software, the
identification of Software and/or Documentation problems and the reporting of
Bugs. Licensee shall designate two contacts per server to request and receive
telephone support services from Plumtree. Additional Licensee contacts can be
designated in the Product Schedule for a mutually agreed to fee by both parties.
Licensee shall notify Plumtree in writing of any changes to the designated
Licensee contacts.

(b)  Supplemental Support.  Standard telephone support does not include
     --------------------
assistance with Plumtree Server API, Plumtree Server Active Server Pages and
other products for which separate fees are charged, as indicated in the Product
Schedule. Licensee may designate contacts to receive telephone support services
specific to use of Plumtree Server API, Plumtree Server Active Server Pages or
such other products, as indicated on the Product Schedule, for a mutually agreed
to fee by both parties for each contact.

(c)  Software Updates. Plumtree will make available to Licensee each minor and
     ----------------
major functional release of the Software, that Plumtree makes generally
available without additional charge to its maintenance customers and which is
intended to replace a prior Software release. Plumtree shall make available to
Licensee one (1) copy of the machine-readable Software for each Server Location.
A major functional release is indicated by a change in the first digit of a
version number, e.g. from 4.0.0 to 5.0.0; a minor functional release is
indicated by a change in the second digit, e.g. from 4.0.0 to 4.1.0. Maintenance
releases, which are indicated by a change in the third digit of a version
number, e.g. from 5.0.1 to 5.0.2, are provided as needed in response to Licensee
inquiry.

(d)  Bug Fixes. Plumtree shall exercise commercially reasonable efforts to
     ---------
correct any reproducible malfunction of the Software reported to Plumtree by
Licensee that prevents the Software from performing in accordance with the
operating specifications described in the then current Documentation (a "Bug").

2.   CONDITIONS OF SERVICE
(a)  Retirement of Releases. Plumtree provides Maintenance Services for a
     ----------------------
Software product version from the date the version becomes generally available
until such version is retired. Plumtree retires prior commercial releases of the
Software (i.e. discontinue problem determination and Bug fixes) as follows: (i)
one month after the commercial release of the subsequent maintenance release;
(ii) no sooner than two (2) months after the commercial release of a new minor
functional release; (iii) no sooner than six (6) months after the commercial
release of a new major functional release. In all events, however, Plumtree will
provide telephone support services with respect to questions regarding the "how-
to" use of a retired release of the Software for six (6) months following its
retirement.

(b)  Use of Software.  Licensee's use of any Software provided by Plumtree as
     ---------------
part of Maintenance Services shall be governed by the terms of the Agreement.
Plumtree may change the services included in Maintenance Service at any time,
effective as of the commencement of any renewal period.

3.   TERM AND TERMINATION
(a)  Term. Maintenance Service shall be provided for a term of one (1) year from
     ----
the delivery date of Software under Licensee's initial Product Schedule and
shall be extended each year for one (1) additional year unless terminated by
either party as provided herein.

(b)  Termination.  Licensee may terminate Maintenance Service at the end of the
     -----------
term by giving written notice to Plumtree at least thirty (30) days prior to the
end of any such term. Should Licensee no longer need the Software purchased
under this Agreement, Licensee shall have the right to discontinue payment of
any maintenance or support fees under this Agreement. In the event advance
payment has been made for maintenance or support during a period for which use
is discontinued, Licensee shall be entitled to a pro-rata refund from Plumtree
for the period for which the maintenance or support are not used. Plumtree may
suspend or cancel Maintenance Service if Licensee fails to make payment pursuant
to Section 4 below. Either party may terminate Maintenance Service if the other
party breaches any material term or condition of the Maintenance Service terms
and conditions and the breach is not remedied within thirty (30) days after
receiving written notice of the breach. In the event the Agreement is
terminated, Maintenance Service will also terminate automatically.

4.   FEES AND PAYMENT

(a)  Fees. The fee for the first year of Maintenance Service for any Software
     ----
licensed is specified in the applicable Product Schedule. The applicable fee for
any renewal period shall be negotiated in good faith by both parties. For
Software licensed after Licensee's initial order, the term of Maintenance
Service will be set, and the fee will be pro-rated, so that the coverage periods
for all Software licensed to Licensee and covered by Maintenance Services will
coincide. When ordered, Maintenance Service must be ordered for all of the
Software on a Product Schedule.

(b)  Payment.  Maintenance Service fees will be billed on an annual basis,
     -------
payable in advance and due within net [***] from receipt of Plumtree's correct
invoice.

(c)  Lapse of Coverage.  In the event that coverage for Maintenance Service
     -------------------
lapses as a result of either termination by Licensee for any reason or by
Plumtree for Licensee's non-payment, renewal of such service will require
payment by Licensee of a reinstatement fee to Plumtree equal to [***] of the sum
of the fees for any previously unpaid contract period(s) plus full payment for
the subsequent annual period.

5.   EXCLUSIONS. Plumtree shall have no obligation to support:
(a)  Software modified without Plumtree's written consent;
(b)  Use of the Software other than in accordance with the Documentation;
(c)  Software installed on any computer hardware or in combination with other
software, except as specified in the Documentation.

6.   LIMITATION OF LIABILITY. Plumtree's aggregate liability for damages from
any cause of action whatsoever relating to Plumtree's obligations to provide
Maintenance Service shall be limited to the amount paid by Licensee for such
services for the

[***] Denotes language for which Plumtree has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as amended.
<PAGE>

applicable year. Plumtree's liability shall be further limited as provided in
the Agreement.

7.   SERVICE CONTRACTS. THESE TERMS AND CONDITIONS CONSTITUTE A SERVICE CONTRACT
AND NOT A PRODUCT WARRANTY. THIS ATTACHMENT IS AN ADDITIONAL PART OF THE
AGREEMENT AND DOES NOT CHANGE OR SUPERSEDE ANY TERM OF THE AGREEMENT EXCEPT TO
THE EXTENT UNAMBIGUOUSLY CONTRARY THERETO.
<PAGE>

                           PRODUCT SCHEDULE NO. 002
                           ------------------------
                      (REPLACES PRODUCT SCHEDULE NO. 001)
                      -----------------------------------

1.   Product:       Plumtree Server Version 3.5 and all Plumtree technology
                    developed over a [***] period

                    Number of Users licensed: Enterprise Wide for up to [***]
                    users
                    Additional users beyond [***] may be purchased at unlimited
                    amounts for a price of [***] per user. Procter and Gamble
                    will notify Plumtree on the first day of a calendar quarter
                    if additional users are requested.

2.   License Fee:   Product                                 Price
                    -------                                 -----
                    All Plumtree technology developed       [***] per year
                    over a [***] period

                    Fixed fees may be required to support any licensed
                    technologies in new, non-corporate portal products. Fees
                    will be payable to Plumtree at an amount equal to [***].
                    Service and maintenance terms of this contract provide for
                    any new versions of the corporate portal product.

3.   Duration:      [***] beginning [***] and ending [***]

                    As of [***] Procter and Gamble will own the Enterprise Wide
                    License for up to [***] users.

4.   Support Fees:

     .    Maintenance is included in the [***] per year license fee for the
          [***] period from [***] to [***].
     .    Procter and Gamble may purchase a Maintenance Contract commencing on
          [***]. The initial contract will cover a term of [***] through [***].
          [***] the terms of the Service and Maintenance Agreement will extend
          [***].
     .    Maintenance fee as of [***] is calculated as [***] of yearly license
          fee of [***].
     .    Maintenance for the term of [***] through [***] in the amount of [***]
          shall be due [***] days following receipt of valid invoice.
     .    Subsequent years' maintenance shall be per "Maintenance Service Terms
          and Conditions" attachment of the Software License Agreement of which
          this Product Schedule is made a part.

5.   Payment Schedule: Plumtree shall invoice Procter and Gamble for [***] in
     [***], [***] in [***], and [***] in [***]. Thereafter, Plumtree shall
     invoice Procter and Gamble [***] per calendar quarter for the remaining
     years of the contract, ending [***]. Procter and Gamble shall pay within
     thirty (30) days of receipt of invoice.

6.   Services: Implementation Services shall be invoiced at an amount not to
     exceed [***] through [***]. Effective [***], Professional Services may be
     purchased at a rate of [***] per hour for each Plumtree Application
     Consultant.

7.   Co-Development: Plumtree and Procter and Gamble will dedicate development
     resources to a co-development effort. Procter and Gamble resources may be
     hosted in San Francisco at Plumtree facilities. Co-development plans will
     be made quarterly. Plans will be mutually agreed to and tracked. Plumtree
     will provide between one and two resources on a continual basis for the
     duration of this contract.

LICENSOR:  PLUMTREE SOFTWARE           LICENSEE:  CUSTOMER

     /s/ JOHN KUNZE                         /s/ CONNIE M. FUGATT
-----------------------------          ----------------------------------
Authorized Signature                   Authorized Signature

         John Kunze                             Connie M. Fugatt
-----------------------------          ----------------------------------
Name                                   Name

             CEO                                 Section Manager
-----------------------------          ----------------------------------
Title                                  Title

          6/28/00                                  June 21, 2000
-----------------------------          ----------------------------------
Date                                   Date

[***] Denotes language for which Plumtree has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as amended.<PAGE>
                                                                  Exhibit 10.9

                            PLUMTREE SOFTWARE, INC.
                         235 Pine Street, 16/th/ Floor
                        San Francisco, California 94104

July 27, 1998

John Kunze
325 University Avenue
Menlo Park, CA 94025

Dear John:

     I am delighted to extend to you this employment offer as President and
Chief Executive Officer of Plumtree Software, Inc. (the "Company") reporting to
the Board of Directors. This letter outlines commitments that we have verbally
communicated.

     Your base salary will be $200,000 per annum, payable in accordance with the
Company's standard practices. For the year ended December 31, 1999, you will be
eligible to receive a bonus in addition to your base salary in an amount of up
to $100,000, or fifty percent of your base salary. Payment of the bonus will be
payable following that year end to the extent that you and the Company realize
objectives to be established by you and the Board of Directors for that fiscal
year (the "CEO Objectives"). Realization of such goals will reasonably and
conclusively be determined by the Board of Directors. No bonus will be payable
for the year ended December 31, 1998. In addition, in the event that your
employment is terminated without cause, as reasonably and conclusively
determined by the Board of Directors, the Company will pay you an additional (i)
twelve months of base salary at the time of termination, if terminated prior to
one year from your employment commencement date, or (ii) six months of base
salary at the time of termination, if terminated any time thereafter. For the
purposes of this letter: (a) "cause" means a willful act or omission involving
material injury to the Company, gross misconduct or fraud; willful disobedience
of reasonable directives of the Board; or conviction of a felony, and (b) your
employment will be deemed to have been terminated by the Company without cause
if you resign following any material reduction in your compensation and
benefits, title or duties (measured against those described herein) or the
Company's requirement that you move your primary business location more than
fifty miles from San Francisco.
<PAGE>

     In addition, you will receive options to purchase 921,363 shares of the
Company's Common Stock (the "First Option") pursuant to the Company's 1997
Equity Incentive Plan (the "Plan"). Twenty-five percent of such options will
vest upon your commencement of employment with the Company; provided, that the
Company shall have a right of repurchase of these shares at the exercise price
in the event that you terminate your employment or the Company terminates your
employment for cause, as reasonably and conclusively determined by the Board of
Directors, during the first year of your employment. The remaining options will
vest in equal amounts commencing after twelve months of continuous employment at
the rate of 1/36th of such remaining options per month. All such options will
vest after four years of employment at the Company. The exercise price of such
options will be equal to the fair market value of the Company's Common Stock, as
determined by the Board of Directors, at a meeting of the Board of Directors
following your acceptance of this offer.

     You also will receive options to purchase 230,341 shares of the Company's
Common Stock pursuant to the Plan (the "Second Option," and, together with the
First Option, the "Options"). These options will commence vesting on January 1,
2000 in the event that you and the Company realize all of the CEO Objectives.
Realization of such objectives will reasonably and conclusively be determined by
the Board of Directors. In such event, upon twelve months of continuous
employment thereafter, (January 1, 2001), 25% of such options will vest. The
remaining options will vest in equal amounts thereafter at the rate of 1/36th of
such remaining options per month. The exercise price of such options will be
equal to the fair market value of the Company's Common Stock, as determined by
the Board of Directors, at a meeting of the Board of Directors following your
acceptance of this offer. If the CEO Objectives are not met by you, the option
will vest in its entirety on the seventh anniversary of the option grant date if
you then are a continuing employee of the Company. The CEO Objectives will be
determined promptly upon your acceptance of this offer and attached to the
Second Option.

     Fifty percent (50%) of the then unvested shares subject to the Options will
be accelerated in the event of a Change of Control of the Company, as
hereinafter defined; provided, that no shares shall vest with respect to the
Second Option in the event that the Change of Control occurs or is agreed to
prior to December 31, 1999; and provided further, that no shares of either
Option shall be accelerated in the event that the Company determines that such
acceleration may prohibit the Company from accounting for the Change of Control
transaction as a "pooling of interests." For purposes of this paragraph, a
Change of Control shall be as set forth in the Com-

                                       2
<PAGE>

pany's Articles of Incorporation, which includes (i) an acquisition of the
Company by means of a merger or other form of corporate reorganization in which
outstanding shares of the Company are exchanged for securities or other
consideration issued, or caused to be issued, by the acquiring corporation or
its subsidiary (other than a mere reincorporation transaction) or (ii) a sale of
all or substantially all of the assets of the Company.

     The Company presently provides medical and dental coverage for its
employees and their eligible dependents at no additional cost. In addition, the
Company presently provides its employees with vision, life, accidental death
and dismemberment and disability salary continuation insurance. Benefit coverage
begins on the date of your employment with the Company.

     As a condition to your employment, you will be required to sign an Employee
Confidentiality Agreement. In accordance with applicable law, you also will be
required to demonstrate employment eligibility, which includes verification of
your identity and of your authorization to work in the United States. The
Company will request this documentation on your first day at work, and such
documentation must be provided no later than three business dates thereafter.

     Please understand that your employment will be voluntarily entered into and
for no specific period. As a result, you will be free to resign at any time, for
any reason, or for no reason. Similarly, the Company will be free to terminate
your employment or this at-will employment relationship with you at any time,
with or without cause, subject to the last two sentences of the second paragraph
set forth above.

     The terms described in this letter shall be the terms of your employment
and shall supercede any prior discussions, writings or commitments. Any
additions or modifications must be in writing and signed by you and the
appropriate officer of the Company. The Options shall be subject to the terms
and conditions of the Options and the Plan, which terms and conditions shall be
consistent with but supercede and replace the terms of this letter.

     As we have discussed, you will be elected to the Company's Board of
Directors upon commencement of your employment with the Company.

                                       3
<PAGE>

     We are confident that you have the talent, dedication and enthusiasm to
help us realize our plans at Plumtree. While we recognize that there is much
work to be done, we look forward to building this Company with you.

Very truly yours,

/s/ Pierre Lamond
------------------------------
Pierre Lamond
Acting Chief Executive Officer

ACCEPTED AND AGREED:

/s/ John Kunze
------------------------------
John Kunze

                                       4

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