SELECTICA INC (Form: 8-K, Received: 03/16/2015 16:21:45)

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report (Date of earliest event reported): March 11, 2015

SELECTICA, INC.

(Exact name of Company as specified in Charter)


Delaware (State or other jurisdiction of incorporation or organization)		000-29637 (Commission File No.)		77-0432030 (IRS Employee Identification No.)

2121 South El Camino Real

San Mateo, California 94403

(Address of Principal Executive Offices)

(650) 532-1500
(Issuer Telephone number)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Company under any of the following provisions (see General Instruction A.2 below).

☐		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR240.14a-12)

☐		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).

☐		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13(e)-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

Amendment of Business Financing Agreement

On March 11, 2014, Selectica, Inc. (the “Company”) and its wholly owned subsidiary, Selectica Sourcing Inc., entered into Amendment Number Two to Amended and Restated Business Financing Agreement (the “Amendment”) with Bridge Bank, National Association (“Bridge Bank”). The Amendment, among other things, increases the Company’s available credit under the existing credit facility with Bridge Bank (the “Credit Facility”) up to a total available credit amount of $9 million, by increasing the ABL Credit Limit to $5 million, adding a Non-Formula Sublimit of $1.9 million, and adjusting the definition of Borrowing Base to include the additional Non-Formula Sublimit.

The summary set forth above does not purport to be complete and is qualified in its entirety by reference to the Amendment included in Exhibit 10.1 to this Current Report on Form 8-K, which is incorporated by reference herein.

Limited Guaranties

In order to satisfy certain conditions for Bridge Bank to lend additional funds under the Credit Facility and enter into the Amendment, on March 11, 2014, Lloyd I. Miller, III (“Mr. Miller”), the Company’s largest stockholder, and MILFAM II L.P. (“MILFAM”), an affiliate of Mr. Miller, each entered into a Limited Guaranty (the “Guaranties”) with Bridge Bank to provide a limited, non-revocable guaranty of the Company’s Credit Facility in the amount of $1 million each, for a total guaranteed amount of $2 million. The term of the Guaranties is two years. Bridge Bank, in its sole discretion, may reduce, but not increase, the guaranteed amount under the Guaranties during the term.

The summary set forth above does not purport to be complete and is qualified in its entirety by reference to the Guaranties filed as Exhibits 10.2 and 10.3 to this Current Report on Form 8-K, which are incorporated by reference herein.

Guaranty Fee Agreement

In connection with the Guaranties, and pursuant to the binding Guarantee Term Sheet filed as an exhibit to our Current Report on Form 8-K filed on February 9, 2015, on March 11, 2015 the Company entered into a Guaranty Fee Agreement (the “Fee Agreement”) with Mr. Miller and MILFAM. Pursuant to the Fee Agreement, the Company agrees to pay Mr. Miller and MILFAM an aggregate commitment fee of $100,000 and a monthly fee during the term of the Guaranties in an amount equal to (i) 1.0% of the amount then guaranteed under the Guaranties for the first 12 months of the term and (ii) 1.5% of the amount then guaranteed under the Guaranties for the second 12 months of the term. Such commitment fee and the aggregate amount of the monthly fees are payable in cash by the Company within five business days following the termination or expiration of the Guaranties.

The summary set forth above does not purport to be complete and is qualified in its entirety by reference to the Fee Agreement filed as Exhibit 10.4 to this Current Report on Form 8-K, which is incorporated by reference herein.

Junior Secured Convertible Promissory Notes

On March 11, 2015, the Company entered into a Junior Secured Convertible Note Purchase Agreement (the “Purchase Agreement”) with Mr. Miller, MILFAM and the Lloyd I. Miller Trust A-4, an affiliate of Mr. Miller (collectively the “Investors”), pursuant to which the Company issued and sold junior secured convertible promissory notes (the “Notes”) to the Investors in the aggregate principal amount of $3 million.

The Notes are due on March 11, 2020 (the “Maturity Date”) and accrue interest at an annual rate of 8% on the aggregate unconverted and outstanding principal amount, payable quarterly. After stockholder approval, the Company has the option to pay any amounts of interest due under the Notes by converting such interest into shares of common stock of the Company (“Common Stock”), at a conversion price of $5.70 per share (as may be adjusted for any subdivision by any stock split, stock dividend, recapitalization, reorganization, scheme, arrangement or similar event occurring prior to such record date), based upon an interest rate amount calculated at 10% per year, provided that the Company is not then under default under the Notes, the Purchase Agreement, the Security Agreement (as defined below) or the Subordination Agreement (as defined below) (collectively, the “Loan Documents”) and that the Company provides prior written notice thereof to the Investors at least 10 days in advance of the payment date. Upon any default under the Notes or any other Loan Document, the Notes will bear interest at the rate of 13% per year or, if less, the maximum rate allowable under the laws of the State of New York.

The following events constitute an event of default under the Notes: (i) failure to pay when due any obligations under the Notes, (ii) any representation or warranty of the Company under the Loan Documents being untrue in any material respect as of the date made, (iii) any breach by the Company of any covenant in the Loan Documents, after a cure period, (iv) any default under the Credit Facility that is not cured or waived by Bridge Bank, (v) an assignment for the benefit of creditors, the admission in writing by the Company of the inability to pay its debts as they become due, and other events related to a voluntary or involuntary petition for bankruptcy, (vi) a material judgment or judgments are rendered against the Company, (vii) the seizure, levy or application of a writ or distress warrant on a material portion of the Company’s assets after a cure period, (viii) a material loss or destruction of Company assets for which there is less than 80% insurance coverage or (ix) the occurrence of any event that results in, or will likely result in, a material adverse effect on the assets, liabilities, results of operations, condition (financial or otherwise), business, or prospects of the Company and its subsidiaries, taken as a whole, or on the ability of the Company to perform its obligations under the Loan Documents, after a cure period.

After stockholder approval, the outstanding principal and interest under the Notes may be converted into shares of Common Stock at the sole option of the Investors at any time prior to the Maturity Date, at a conversion price of $5.70 per share (as may be adjusted for any subdivision by any stock split, stock dividend, recapitalization, reorganization, scheme, arrangement or similar event occurring prior to such record date). The Notes may not be prepaid or called by the Company prior to the Maturity Date. If such stockholder approval is not obtained by March 30, 2015, the Notes will accrue interest at a rate of 13% per year until such time the stockholder approval is obtained.

Pursuant to the terms of the Purchase Agreement, the Company has agreed not to incur any indebtedness for borrowed money in excess of $250,000 in the aggregate other than the indebtedness under the Notes, under the Credit Facility (up to a maximum amount of $11 million), or in connection with a purchase money security interest or trade debt arising in the ordinary course. Subject to certain exceptions, the Company also agrees not to incur any liens on any of its property or assets.

The Notes and the shares of Common Stock underlying the Notes have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Pursuant to the terms of the Purchase Agreement, the Company is obligated to file a registration statement with the Securities and Exchange Commission not later than 45 days after the date of issuance of the Notes, registering for resale the shares of Common Stock issuable upon conversion of the Notes.

The summary set forth above does not purport to be complete and is qualified in its entirety by reference to the Purchase Agreement and form of Note filed as Exhibits 10.5 and 10.6 to this Current Report on Form 8-K, which are incorporated by reference herein.

Security Agreement and Subordination Agreement

The Notes are secured by a second-position security interest on the Company’s assets, pursuant to the terms of the Security Agreement entered into by the Company and Mr. Miller on March 11, 2015. Under the terms of the Security Agreement, the Company also agrees to grant Mr. Miller a security interest in the Company’s subsidiaries, upon written demand from Mr. Miller at any time after the Credit Facility with Bridge Bank has been fully paid and all obligations of Bridge Bank to lend thereunder have been terminated. The Company agrees not to allow its assets to be subject to any liens or encumbrances during the term of the Security Agreement, other than certain permitted liens, including the security interests held by Bridge Bank with respect to the Credit Facility.

The Investors’ security interest is subordinated only to the senior security interest of Bridge Bank under the Credit Facility, pursuant to the terms of the Subordination Agreement entered into by the Company, the Investors and Bridge Bank on March 11, 2015.

The summary set forth above does not purport to be complete and is qualified in its entirety by reference to the Security Agreement and Subordination Agreement filed as Exhibits 10.7 and 10.8 to this Current Report on Form 8-K, which are incorporated by reference herein.

Amendment to Voting Agreement

As a condition to closing the sale and issuance of the Notes, certain of the Company’s officers, directors and stockholders (the “Voting Parties”) entered into an Amendment to Voting Agreements (the “Voting Agreement Amendment”), which amended the Voting Agreements, dated February 6, 2015 entered into by the Voting Parties in connection with our private placement financing as reported on our Current Report on Form 8-K filed on February 9, 2015. Pursuant to the Voting Agreement Amendment, the Voting Parties thereto have agreed to vote in favor of the terms of issuance and sale of the Notes and the issuance of shares of Common Stock upon the conversion of the Notes.

The summary set forth above does not purport to be complete and is qualified in its entirety by reference to the Voting Agreement Amendment filed as Exhibit 10.9 to this Current Report on Form 8-K, which is incorporated by reference herein.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item 1.01 above is incorporated by reference into this Item 2.03.

Item 3.02 Unregistered Sales of Equity Securities.

The information disclosed in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02. The sale and issuance of the Notes, and the issuance of shares of Common Stock upon conversion thereof, have been determined to be exempt from registration under the Securities Act in reliance on Section 4(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder as transactions by an issuer not involving a public offering. The Investors have represented that they are accredited investors, as that term is defined in Regulation D, and that they are acquiring the securities for investment purposes only and not with a view to or for sale in connection with any distribution thereof.

Item 3.03 Material Modification of Rights of Security Holders.

The information disclosed in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.03.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.		Description
10.1		Amended and Restated Business Financing Agreement, dated as of July 25, 2014, as amended by Amendment Number One to Amended and Restated Business Financing Agreement, dated as of December 31, 2014, as further amended by Amendment Number Two to Amended and Restated Business Financing Agreement, dated as of March 11, 2015.

10.2		Limited Guaranty, dated March 11, 2015 (Lloyd I. Miller, III).

10.3		Limited Guaranty, dated March 11, 2015 (MILFAM II L.P.).

10.4		Guaranty Fee Agreement, dated March 11, 2015.

10.5		Junior Secured Convertible Note Purchase Agreement, dated March 11, 2015.

10.6		Form of Junior Secured Convertible Promissory Note.

10.7		Security Agreement, dated March 11, 2015.

10.8		Subordination Agreement, dated March 11, 2015.

10.9		Amendment to Voting Agreements, dated March 11, 2015.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this Current Report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: March 16, 2015

	SELECTICA, INC.


	By:	/s/ Todd Spartz
	Name:	Todd Spartz
	Title:	Chief Financial Officer

EXHIBIT INDEX

Exhibit No.		Description
10.1		Amended and Restated Business Financing Agreement, dated as of July 25, 2014, as amended by Amendment Number One to Amended and Restated Business Financing Agreement, dated as of December 31, 2014, as further amended by Amendment Number Two to Amended and Restated Business Financing Agreement, dated as of March 11, 2015.

10.2		Limited Guaranty, dated March 11, 2015 (Lloyd I. Miller, III).

10.3		Limited Guaranty, dated March 11, 2015 (MILFAM II L.P.).

10.4		Guaranty Fee Agreement, dated March 11, 2015.

10.5		Junior Secured Convertible Note Purchase Agreement, dated March 11, 2015.

10.6		Form of Junior Secured Convertible Promissory Note.

10.7		Security Agreement, dated March 11, 2015.

10.8		Subordination Agreement, dated March 11, 2015.

10.9		Amendment to Voting Agreements, dated March 11, 2015.

Exhibit 10.1

AMENDED AND RESTATED BUSINESS FINANCING AGREEMENT

Borrowers:

SELECTICA, INC.

2121 South El Camino Real, Suite 1000

San Mateo, California 94403

Lender:

BRIDGE BANK, National Association

55 Almaden Boulevard, Suite 100

San Jose, CA 95113

SELECTICA SOURCING INC.

2121 South El Camino Real, Suite 1000

San Mateo, California 94403

This BUSINESS FINANCING AGREEMENT, dated as of July 25, 2014, is made and entered into between BRIDGE BANK, NATIONAL ASSOCIATION (“ Lender ”), on the one hand, and SELECTICA, INC., a Delaware corporation (“ Parent ”), and SELECTICA SOURCING INC., a Delaware corporation (“ Sourcing ”) (Parent and Sourcing are sometimes collectively referred to herein as “ Borrowers ” and each individually as a “ Borrower ”), on the other hand, with reference to the following facts:

A. Parent and Lender previously entered into that certain Business Loan Agreement, dated as of September 27, 2011 (as amended to date, the “ Prior Agreement ”), pursuant to which Lender has been providing financing to Borrowers, upon the terms and conditions set forth therein.

B. Borrowers and Lender desire to amend and restate the Prior Agreement in its entirety in accordance with the terms and conditions of this Agreement.

NOW THEREFORE, in consideration of the mutual promises set forth in this Agreement, Borrowers and Lender hereby agree as follows:

1.	REVOLVING CREDIT LINE .

1.1

Advances .

(a)

ABL Advances . Subject to the terms and conditions of this Agreement, from the date on which this Agreement becomes effective until the Maturity Date, Lender will make ABL Advances to Borrowers not exceeding the ABL Credit Limit or the Borrowing Base, whichever is less; provided that in no event shall Lender be obligated to make any ABL Advance that results in an Overadvance or while any Overadvance is outstanding.

(b)

Cash-Secured Advances . Subject to the terms and conditions of this Agreement, from the date on which this Agreement becomes effective until the Maturity Date, Lender will make Cash-Secured Advances to Borrowers not exceeding the Cash-Secured Credit Limit; provided that in no event shall Lender be obligated to make any Cash-Secured Advance unless the Cash Collateral is on deposit with Lender and subject to Lender’s first priority perfected security interest..

(c)

Revolving Advances . Amounts borrowed under this Section may be repaid and reborrowed during the term of this Agreement. It shall be a condition to each Advance that (a) an Advance Request acceptable to Lender has been received by Lender, (b) all of the representations and warranties set forth in Section 3 are true and correct on the date of such Advance as though made at and as of each such date, and (c) no Default has occurred and is continuing, or would result from such Advance.

1.2

Advance Requests . Borrowers may request that Lender make an Advance by delivering to Lender an Advance Request therefor and Lender shall be entitled to rely on all the information provided by Borrowers to Lender on or with the Advance Request. The Lender may honor Advance Requests, instructions or repayments given by any Authorized Person.

1.3

Due Diligence . Lender may audit each Borrower’s Receivables and any and all records pertaining to the Collateral, at any time and from time to time at Lender’s sole discretion (but no more frequently than annually unless an Event of Default has occurred and is continuing), and at Borrowers’ expense (not to exceed $5,000 per year unless an Event of Default has occurred and is continuing). Lender may at any time and from time to time contact Account Debtors and other persons obligated or knowledgeable in respect of Receivables to confirm the Receivable Amount of such Receivables, to determine whether Receivables constitute Eligible Receivables, and for any other purpose in connection with this Agreement. If any of the Collateral or Borrowers’ books or records pertaining to the Collateral are in the possession of a third party, Borrowers authorize that third party to permit Lender or its agents to have access to perform inspections or audits thereof and to respond to Lender's requests for information concerning such Collateral and records.

1.4

Collections .

(a)

Lender shall have the exclusive right to receive all Collections on all Receivables. Each Borrower shall (i) immediately notify, transfer and deliver to Lender all Collections such Borrower receives for deposit into the Collection Account, and (ii) immediately enter into a collection services agreement acceptable to Lender (the " Lockbox Agreement ") pursuant to which all Collections received in the Lockbox shall be deposited into the Collection Account. Each Borrower shall use the Lockbox address as the remit to and payment address for all of such Borrower's Collections Account Debtors, and each Borrower shall instruct all Account Debtors to make payments either directly to the Lockbox for deposit by Lender directly to the Collection Account, or instruct them to deliver such payments to Lender by wire transfer, ACH, or other means as Lender may direct for deposit to the Lockbox or Collection Account. It will be considered an immediate Event of Default if this does not occur or the Lockbox is not operational within 60 days of the date of this Agreement.

(b)

At Lender's option, Lender may either (i) transfer all Collections deposited into the Collection Account to Borrower's Account, or (ii) apply the Collections deposited into the Collection Account to the outstanding Account Balance, in either case, within three business days of the date received; provided that upon the occurrence and during the continuance of any Default, Lender may apply all Collections to the Obligations in such order and manner as Lender may determine. Lender has no duty to do any act other than to apply such amounts as required above. If an item of Collections is not honored or Lender does not receive good funds for any reason, any amount previously transferred to Borrower's Account or applied to the Account Balance shall be reversed as of the date transferred or applied, as applicable, and, if applied to the Account Balance, the Finance Charge will accrue as if the Collections had not been so applied. Lender shall have, with respect to any goods related to the Receivables, all the rights and remedies of an unpaid seller under the UCC and other applicable law, including the rights of replevin, claim and delivery, reclamation and stoppage in transit.

1.5

Receivables Activity Report . Within 30 days after the end of each Monthly Period, Lender shall send to Borrowers a report covering the transactions for that Monthly Period, including the amount of all Advances, Collections, Adjustments, Finance Charges, and other fees and charges. The accounting shall be deemed correct and conclusive unless Borrowers make written objection to Lender within 30 days after the Lender sends the accounting to Borrowers.

1.6

Adjustments . In the event any Adjustment or dispute is asserted by any Account Debtor, Borrowers shall promptly advise Lender and shall, subject to the Lender’s approval, resolve such disputes and advise Lender of any Adjustments; provided that in no case will the aggregate Adjustments made with respect to any Receivable exceed 5% of its original Receivable Amount unless Borrowers have obtained the prior written consent of Lender, which consent shall not be unreasonably withheld or delayed.

1.7

Recourse; Maturity . Advances and the other Obligations shall be with full recourse against Borrowers. On the Maturity Date, Borrowers will pay all then outstanding Advances and other Obligations to the Lender or such earlier date as shall be herein provided.

1.8

Letter of Credit Line. Subject to the terms and conditions of this Agreement, Lender hereby agrees to issue or cause an Affiliate to issue letters of credit for the account of Borrowers (each, a " Letter of Credit " and collectively, " Letters of Credit ") from time to time; provided that (a) the Letter of Credit Obligations shall not at any time exceed the Letter of Credit Sublimit and (b) the Letter of Credit Obligations will be treated as ABL Advances for purposes of determining availability under the ABL Credit Limit and shall decrease, on a dollar-for-dollar basis, the amount available for other ABL Advances. The form and substance of each Letter of Credit shall be subject to approval by Lender, in its sole discretion. Each Letter of Credit shall be subject to the additional terms of the Letter of Credit agreements, applications and any related documents required by Lender in connection with the issuance thereof (each, a " Letter of Credit Agreement "). Each draft paid under any Letter of Credit shall be repaid by Borrowers in accordance with the provisions of the applicable Letter of Credit Agreement. No Letter of Credit shall be issued that results in an Overadvance or while any Overadvance is outstanding. Upon the Maturity Date, the amount of Letters of Credit Obligations shall be secured by unencumbered cash on terms acceptable to Lender if the term of this Agreement is not extended by Lender.

1.9

Cash Management Services. Borrowers may use availability hereunder up to the Cash Management Sublimit for Lender's cash management services, which may include merchant services, direct deposit of payroll, business credit card, and check cashing services identified in various cash management services agreements related to such services (the " Cash Management Services "). The entire Cash Management Sublimit will be treated as an ABL Advance for purposes of determining availability under the ABL Credit Limit and shall decrease, on a dollar-for-dollar basis, the amount available for other ABL Advances. The Cash Management Services shall be subject to additional terms set forth in applicable cash management services agreements.

1.10

Foreign Exchange Facility. Borrowers may enter in foreign exchange forward contracts with Lender under which Borrowers commit to purchase from or sell to Lender a set amount of foreign currency more than one business day after the contract date (the " FX Forward Contract s "). The total FX Forward Contracts at any one time may not exceed 10 times the amount of the FX Sublimit. Ten percent (10%) of the amount of each outstanding FX Forward Contract shall be treated as an ABL Advance for purposes of determining availability under the ABL Credit Limit and shall decrease, on a dollar-for-dollar basis, the amount available for other ABL Advances. Lender may terminate the FX Forward Contracts if an Event of Default occurs. Each FX Forward Contract shall be subject to additional terms set forth in the applicable FX Forward Contract or other agreements executed in connection with the foreign exchange facility.

1.11

Overadvances . Upon any occurrence of an Overadvance, Borrowers shall immediately pay down the ABL Advances such that, after giving effect to such payments, no Overadvance exists.

2.	Fees and Finance Charges .

2.1

Finance Charges . Lender may, but is not required to, deduct the amount of accrued Finance Charge from Collections received by Lender. Within 10 days of each Month End, Borrower shall pay to Lender any accrued and unpaid Finance Charge as of such Month End.

2.2

Fees .

(a)

Termination Fee . In the event this Agreement is terminated on or before March 20, 2015, Borrowers shall pay Lender the Termination Fee.

(b)

Facility Fee . Borrowers shall pay the Facility Fee to Lender on March 20 of each year.

(c)

Minimum Monthly Interest . Within ten days after each Month End, Borrowers shall pay to Lender the Minimum Monthly Interest for the Monthly Period ending on such Month End.

(d)

Letter of Credit Fees . Borrowers shall pay to Lender fees upon the issuance of each Letter of Credit, upon the payment or negotiation of each draft under any Letter of Credit and upon the occurrence of any other activity with respect to any Letter of Credit (including without limitation, the transfer, amendment or cancellation of any Letter of Credit) determined in accordance with Lender's standard fees and charges then in effect for such activity.

(e)

Maintenance Fee . Waived.

(f)

Cash Management and FX Forward Contract Fees . Borrowers shall pay to Lender fees in connection with the Cash Management Services and the FX Forward Contracts as determined in accordance with Lender’s standard fees and charges then in effect for such activity.

(g)

Due Diligence Fee . Borrowers shall pay the Due Diligence Fee to Lender on March 20 of each year.

3.	Representations and Warranties . Each Borrower represents and warrants:

3.1

No representation, warranty or other statement of Borrower in any certificate or written statement given to Lender contains any untrue statement of a material fact or omits to state a material fact necessary to make the statement contained in the certificates or statement not misleading.

3.2

Such Borrower is duly existing and in good standing in its state of formation and qualified and licensed to do business in, and in good standing in, any state in which the conduct of its business or its ownership of property requires that it be qualified.

3.3

The execution, delivery and performance of this Agreement has been duly authorized, and does not conflict with such Borrower’s organizational documents, nor constitute an Event of Default under any material agreement by which such Borrower is bound. Such Borrower is not in default under any agreement to which or by which it is bound, which default would reasonably be expected to have a material adverse impact on Borrower’s business.

3.4

Such Borrower has good title to the Collateral and all inventory is in all material respects of good and marketable quality, free from material defects.

3.5

Such Borrower’s name, form of organization, chief executive office, and the place where the records concerning all Receivables and Collateral are kept are set forth at the beginning of this Agreement. Such Borrower is located at its address for notices set forth in this Agreement.

3.6

If such Borrower owns, holds or has any interest in, any registered copyrights, patents or registered trademarks, and licenses of any of the foregoing, such interest has been specifically disclosed and identified to Lender in writing.

4.	Miscellaneous Provisions . Each Borrower will:

4.1

Maintain its corporate existence and good standing in its jurisdictions of incorporation and maintain its qualification in each jurisdiction necessary to such Borrower's business or operations and not merge or consolidate with or into any other business organization, or acquire all or substantially all of the capital stock or property of a third party, unless (i) any such acquired entity becomes a “borrower” under this Agreement and (ii) Lender has previously consented to the applicable transaction in writing.

4.2

Give Lender at least 30 days prior written notice of changes to its name, organization, chief executive office or location of records.

4.3

Pay all its taxes including gross payroll, withholding and sales taxes when due (except with respect to taxes not yet delinquent or any taxes being disputed in good faith by such Borrower in appropriate proceedings, and for which adequate reserves have been set aside with respect thereto as required by GAAP and, by reason of such contest or nonpayment, no property is subject to a material risk of loss or forfeiture) and will deliver reasonably satisfactory evidence of payment to Lender if requested.

4.4

Maintain:

(a)

insurance reasonably satisfactory to Lender as to amount, nature and carrier covering property damage (including loss of use and occupancy) to any of such Borrower's properties, business interruption insurance, public liability insurance including coverage for contractual liability, product liability and workers' compensation, and any other insurance which is usual for such Borrower's business. Each such policy shall provide for at least thirty (30) days prior notice to Lender of any cancellation thereof.

(b)

all risk property damage insurance policies (including without limitation windstorm coverage, and hurricane coverage as applicable) covering the tangible property comprising the collateral. Each insurance policy must be for the full replacement cost of the collateral and include a replacement cost endorsement. The insurance must be issued by an insurance company reasonably acceptable to Lender and must include a lender's loss payable endorsement in favor of Lender in a form reasonably acceptable to Lender.

Upon the request of Lender, such Borrower shall deliver to Lender a copy of each insurance policy, or, if permitted by Lender, a certificate of insurance listing all insurance in force.

4.5

Immediately transfer and deliver to Lender all Collections such Borrower receives.

4.6

Not create, incur, assume, or be liable for any indebtedness, other than Permitted Indebtedness.

4.7

Immediately notify Lender if such Borrower hereafter obtains any interest in any copyrights, patents, trademarks or licenses that are significant in value or are material to the conduct of its business.

4.8

Provide the following financial information and statements in form and content reasonably acceptable to Lender, and such additional information as reasonably requested by Lender from time to time. Lender has the right to require Borrowers to deliver financial information and statements to Lender more frequently than otherwise provided below, and to use such additional information and statements to measure any applicable financial covenants in this Agreement.

(a)

Within 120 days of Parent’s fiscal year end, the annual financial statements of Borrowers, certified and dated by an authorized financial officer. These financial statements must be audited (with an opinion reasonably satisfactory to the Lender) by a Certified Public Accountant reasonably acceptable to Lender. The statements shall be prepared on a consolidated basis.

(b)

At all times, no later than 45 days after the end of each fiscal quarter of Parent (including the last period in each fiscal year), quarterly financial statements of Borrowers, certified and dated by an authorized financial officer. The statements shall be prepared on a consolidated basis, and reviewed by a Certified Public Account acceptable to Lender.

(c)

Within 60 days after the end of each month (including the last period in each fiscal year) and no later than 15 days prior to each Advance, monthly financial statements of Borrowers, certified and dated by an authorized financial officer. The statements shall be prepared on a consolidated and consolidating basis.

(d)

Promptly, upon sending or receipt, copies of any management letters and correspondence relating to management letters, sent or received by Borrowers to or from Borrowers’ auditor. If no management letter is prepared, Borrowers shall, upon Lender's request, obtain a letter from such auditor stating that no deficiencies were noted that would otherwise be addressed in a management letter.

(e)

Copies of the Form 10-K Annual Report, and Form 10-Q Quarterly Report for Parent within 5 business days of the date of filing with the Securities and Exchange Commission.

(f)

Annual financial projections specifying the assumptions used in creating the projections. Annual projections shall in any case be provided to Lender no less than 30 days after the beginning of each fiscal year.

(g)

Together with each financial statement delivered pursuant to (a), (b) and (c) above, a compliance certificate of Borrowers, signed by an authorized financial officer, signed by an authorized officer, setting forth (i) the information and computations (in sufficient detail) to establish compliance with all financial covenants at the end of the period covered by the financial statements then being furnished and (ii) whether there existed as of the date of such financial statements and whether there exists as of the date of the certificate, any default under this Agreement and, if any such default exists, specifying the nature thereof and the action Borrowers are taking and proposes to take with respect thereto.

(h)

Within 60 days after the end of each calendar month, and no later than 15 days prior to each Advance, a borrowing base certificate, in form and substance satisfactory to Lender, setting forth Eligible Receivables and Receivable Amounts thereof as of the last day of the preceding calendar month.

(i)

Within 60 days after the end of each calendar month, and no later them 15 days prior to each Advance, a detailed aging of each Borrower’s receivables by invoice date, together with payable aging, inventory analysis, deferred revenue report (showing short term vs. long term deferred revenue), billings detail, cash collections journal, credit memo report, pipeline report, and such other matters as Lender may request.

(j)

Promptly upon Lender's request, copies of invoices, supporting purchase orders, proof-of–delivery, acceptable documentation, such other books, records, statements, lists of property and accounts, budgets, forecasts or reports as to Borrowers and as to each guarantor of Borrowers’ obligations to Lender as Lender may request.

4.9

Maintain all depository and operating accounts with Lender and, in the case of any investment accounts not maintained with Lender, grant to Lender a first priority perfected security interest in and “control” (within the meaning of Section 9104 of the UCC) of such account pursuant to documentation acceptable to Lender. Notwithstanding the foregoing, Sourcing shall be permitted to maintain cash in deposit accounts other than with Lender, provided that (i) such deposit accounts are subject to a deposit account control agreement, duly executed by all parties thereto as Lender shall require to perfect and maintain perfected Lender’s security interest in such deposit accounts, all in form and substance satisfactory to Lender, and (ii) Sourcing closes such deposit accounts and transfers all funds therein to deposit accounts maintained with Lender as soon as practicable but in no event later than 180 days after the date of this Agreement.

4.10

Reserved.

4.11

Promptly provide to Lender such additional information and documents regarding the finances, properties, business or books and records of such Borrower or any guarantor or any other obligor as Lender may reasonably request.

4.12

Maintain Borrowers’ financial condition as follows in accordance with GAAP (except to the extent modified by the definitions herein):

(a)

Current Ratio not at any time less than 1.75 to 1.0, measured as of the end of each month.

Security Interest . To secure the prompt payment and performance to Lender of all of the Obligations, each Borrower hereby grants to Lender a continuing security interest in the Collateral. No Borrower is authorized to sell, assign, transfer or otherwise convey any Collateral without Lender’s prior written consent, except for (a) non-exclusive licenses and similar arrangements for the use of the property of such Borrower in the ordinary course of business, other licenses that would not result in a legal transfer of title of the licensed property but that may be exclusive, or licenses or transfers under such Borrower’s source code escrow arrangements, (b) sales or disposal of surplus, worn-out or obsolete equipment or (c) transfers of other assets of any Borrower that do not in the aggregate exceed Two Hundred and Fifty Thousand Dollars ($250,000) in the aggregate for all Borrowers during any fiscal year of Parent. For the avoidance of doubt, payments of money by any Borrower for its ordinary course business expenses (such as: the payment, in each case in the ordinary course of such Borrower’s business, of: payroll, rent, debt service, accounts payable, payments to vendors or other third parties for goods provided or services rendered to or on behalf of such Borrower) shall not be considered a sale, assignment, transfer or conveyance restricted by the provisions of this Agreement. Each Borrower agrees to sign any instruments and documents reasonably requested by Lender to evidence, perfect, or protect the interests of Lender in the Collateral. Each Borrower agrees to deliver to Lender the originals of all instruments, chattel paper and documents evidencing or related to Receivables and Collateral. No Borrower shall grant or permit any lien or security in the Collateral or any interest therein other than Permitted Liens.

Power of Attorney . Each Borrower irrevocably appoints Lender and its successors and as true and lawful attorney in fact, and authorizes Lender (a) to, whether or not there has been an Event of Default, (i) notify all Account Debtors with respect to the Receivables to pay Lender directly; (ii) receive and open all mail addressed to such Borrower for the purpose of collecting the Receivables; (iii) endorse such Borrower’s name on any checks or other forms of payment on the Receivables; (iv) execute on behalf of such Borrower any and all instruments, documents, financing statements and the like to perfect Lender’s interests in the Receivables and Collateral; (v) debit any Borrower’s deposit accounts maintained with Lender for any and all Obligations due under this Agreement; and (vi) do all acts and things necessary or expedient, in furtherance of any such purposes, and (b) to, upon the occurrence and during the continuance of an Event of Default, (x) demand, collect, receive, sue, and give releases to any Account Debtor for the monies due or which may become due upon or with respect to the Receivables and to compromise, prosecute, or defend any action, claim, case or proceeding relating to the Receivables, including the filing of a claim or the voting of such claims in any bankruptcy case, all in Lender’s name or such Borrower’s name, as Lender may choose; (y) prepare, file and sign such Borrower’s name on any notice, claim, assignment, demand, draft, or notice of or satisfaction of lien or mechanics’ lien or similar document; or (z) sell, assign, transfer, pledge, compromise, or discharge the whole or any part of the Receivables. Upon the occurrence and continuation of an Event of Default, all of the power of attorney rights granted by each Borrower to Lender hereunder shall be applicable with respect to all Receivables and all Collateral.

7.	Default and Remedies .

7.1

Events of Default . The occurrence of any one or more of the following shall constitute an Event of Default hereunder.

(a)

Failure to Pay . Borrowers fail to make a payment when due under this Agreement.

(b)

Lien Priority . Lender fails to have an enforceable first lien (except for any prior liens to which Lender has consented in writing or liens with respect to Permitted Indebtedness for purchase money indebtedness (including capital leases)) on or security interest in the Collateral.

(c)

False Information . Any Borrower (or any guarantor) has given Lender any materially false or misleading information or representations or has failed to disclose any material fact relating to the subject matter of this Agreement.

(d)

Reserved .

(e)

Bankruptcy . Any Borrower (or any guarantor) files a bankruptcy petition, a bankruptcy petition is filed against any Borrower (or any guarantor) or Borrower (or any guarantor) makes a general assignment for the benefit of creditors.

(f)

Receivers . A receiver or similar official is appointed for a substantial portion of any Borrower’s (or any guarantor’s) business, or the business is terminated.

(g)

Judgments . Any judgments or arbitration awards are entered against any Borrower (or any guarantor), or any Borrower (or any guarantor) enters into any settlement agreements with respect to any litigation or arbitration and the aggregate amount of all such judgments, awards, and agreements for all Borrowers exceeds $250,000.

(h)

Material Adverse Change . A material adverse change occurs, or is reasonably likely to occur, in any Borrower’s (or any guarantor’s) business condition (financial or otherwise), operations, properties or ability to repay the credit.

(i)

Cross-default . Any default occurs under any agreement in connection with any credit any Borrower (or any guarantor) or any of any Borrower’s Affiliates has obtained from anyone else or which any Borrower (or any guarantor) or any of any Borrower’s Affiliates has guaranteed (other than trade amounts payable incurred in the ordinary course of business and not more than 60 days past due) and such default is not cured within the time period, if any, provided in such agreement.

(j)

Default under Related Documents . Any default occurs under any guaranty, subordination agreement, security agreement, deed of trust, mortgage, or other document required by or delivered in connection with this Agreement and such default is not cured within the time period, if any, provided in such agreement, or any such document is no longer in effect.

(k)

Other Agreements . Any Borrower (or any guarantor) or any of any Borrower’s Affiliates fails to meet the conditions of, or fails to perform any obligation under any other agreement any Borrower (or any guarantor) or any of any Borrower’s Affiliates has with Lender or any Affiliate of Lender and such default is not cured within the time period, if any, provided in such agreement.

(l)

Change of Control . The holders of the capital ownership of Parent as of the date hereof cease to own and control, directly and indirectly, at least 60% of the capital ownership of Parent, or Parent ceases to own and control, directly and indirectly, 100% of the capital ownership of each other Borrower.

(m)

Other Breach Under Agreement . Borrowers fail to meet the conditions of, or fails to perform any obligation under, any term of this Agreement not specifically referred to above and such default is not cured within the time period, if any, provided in such agreement.

7.2

Remedies . Upon the occurrence of an Event of Default, (1) without implying any obligation to do so, Lender may cease making Advances or extending any other financial accommodations to Borrowers; (2) all or a portion of the Obligations shall be, at the option of and upon demand by Lender, or with respect to an Event of Default described in Section 7.1(e), automatically and without notice or demand, due and payable in full; and (3) Lender shall have and may exercise all the rights and remedies under this Agreement and under applicable law, including the rights and remedies of a secured party under the California Uniform Commercial Code, all the power of attorney rights described in Section 6 with respect to all Collateral, and the right to collect, dispose of, sell, lease, use, and realize upon all Receivables and all Collateral in any commercial reasonable manner.

Accrual of Interest . All interest and finance charges hereunder calculated at an annual rate shall be based on a year of 360 days, which results in a higher effective rate of interest than if a year of 365 or 366 days were used. If any amount due under Section 2 .2 , amounts due under Section 9, and any other Obligations not otherwise bearing interest hereunder is not paid when due, such amount shall bear interest at a per annum rate equal to the Finance Charge Percentage until the earlier of (i) payment in good funds or (ii) entry of a trial judgment thereof, at which time the principal amount of any money judgment remaining unsatisfied shall accrue interest at the highest rate allowed by applicable law.

Fees, Costs and Expenses; Indemnification . Borrowers will pay to Lender upon demand all fees, costs and expenses (including reasonable fees of attorneys and professionals and their reasonable costs and expenses) that Lender incurs or may from time to time impose in connection with any of the following: (a) preparing, negotiating, administering, and enforcing this Agreement or any other agreement executed in connection herewith, including any amendments, waivers or consents in connection with any of the foregoing, (b) any litigation or dispute (whether instituted by Lender, any Borrower or any other person) in any way relating to the Receivables, the Collateral, this Agreement or any other agreement executed in connection herewith or therewith, (c) enforcing any rights against any Borrower or any guarantor, or any Account Debtor, (d) protecting or enforcing its interest in the Receivables or the Collateral, (e) collecting the Receivables and the Obligations, or (f) the representation of Lender in connection with any bankruptcy case or insolvency proceeding involving any Borrower, any Receivable, the Collateral, any Account Debtor, or any guarantor. Borrowers shall indemnify and hold Lender harmless from and against any and all claims, actions, damages, costs, expenses, and liabilities of any nature whatsoever arising in connection with any of the foregoing except to the extent caused by the gross negligence or intentional misconduct of Lender.

10.

Integration, Severability Waiver, Choice of Law , FORUM AND VENUE .

10.1

This Agreement and any related security or other agreements required by this Agreement, collectively: (a) represent the sum of the understandings and agreements between Lender and Borrowers concerning this credit; (b) replace any prior oral or written agreements between Lender and Borrowers concerning this credit; and (c) are intended by Lender and Borrowers as the final, complete and exclusive statement of the terms agreed to by them. In the event of any conflict between this Agreement and any other agreements required by this Agreement, this Agreement will prevail. If any provision of this Agreement is deemed invalid by reason of law, this Agreement will be construed as not containing such provision and the remainder of the Agreement shall remain in full force and effect. Lender retains all of its rights, even if it makes an Advance after a default. If Lender waives a default, it may enforce a later default. Any consent or waiver under, or amendment of, this Agreement must be in writing, and no such consent, waiver, or amendment shall imply any obligation by Lender to make any subsequent consent, waiver, or amendment.

10.2

THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA. THE PARTIES HERETO AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER RELATED DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF SANTA CLARA, CALIFORNIA, OR, AT THE SOLE OPTION OF LENDER, IN ANY OTHER COURT IN WHICH LENDER SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS JURISDICTION OVER THE SUBJECT MATTER AND PARTIES IN CONTROVERSY. EACH PARTY HERETO WAIVES ANY RIGHT TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION AND STIPULATES THAT THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF SANTA CLARA, CALIFORNIA SHALL HAVE IN PERSONAM JURISDICTION AND VENUE OVER EACH SUCH PARTY FOR THE PURPOSE OF LITIGATING ANY SUCH DISPUTE, CONTROVERSY, OR PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT, OR ANY OTHER RELATED DOCUMENTS. SERVICE OF PROCESS SUFFICIENT FOR PERSONAL JURISDICTION IN ANY ACTION AGAINST BORROWERS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ITS ADDRESS SPECIFIED FOR NOTICES PURSUANT TO SECTION 11.

11.

Notices; Telephonic and Telefax Authorizations . All notices shall be given to Lender and Borrowers at the addresses or faxes set forth on the signature page of this agreement and shall be deemed to have been delivered and received: (a) if mailed, three (3) calendar days after deposited in the United States mail, first class, postage pre-paid, (b) one (1) calendar day after deposit with an overnight mail or messenger service; or (c) on the same date of confirmed transmission if sent by hand delivery, telecopy, telefax or telex. Lender may honor telephone or telefax instructions for Advances or repayments given, or purported to be given, by any one of the Authorized Persons. Borrowers will indemnify and hold Lender harmless from all liability, loss, and costs in connection with any act resulting from telephone or telefax instructions Lender reasonably believes are made by any Authorized Person. This paragraph will survive this Agreement's termination, and will benefit Lender and its officers, employees, and agents.

12.

Definitions and Construction .

12.1

Definitions . In this Agreement:

“ ABL Advance ” means an advance made by Lender to Borrower under Section 1.1(a) of this Agreement.

“ ABL C redit Limit ” means $3,000,000, which is intended to be the maximum amount of ABL Advances at any time outstanding.

“ Account Balance ” means at any time the aggregate of the Advances outstanding as reflected on the records maintained by Lender, together with any past due Finance Charges thereon.

“ Account Debtor ” has the meaning in the California Uniform Commercial Code and includes any person liable on any Receivable, including without limitation, any guarantor of any Receivable and any issuer of a letter of credit or banker’s acceptance assuring payment thereof.

“ Adjustments ” means all discounts, allowances, disputes, offsets, defenses, rights of recoupment, rights of return, warranty claims, or short payments, asserted by or on behalf of any Account Debtor with respect to any Receivable, but excluding any early payment discounts of less than 5%.

“ Advance ” means an ABL Advance or a Cash-Secured Advance.

“ Advance Rate ” means 80% or such greater or lesser percentage as Lender may from time to time establish in its sole discretion upon notice to Borrowers.

“ Advance Request ” means a writing in form and substance satisfactory to Lender and signed by an Authorized Person requesting either an ABL Advance or a Cash-Secured Advance.

“ Agreement ” means this Business Financing Agreement.

" Affiliate " means, as to any person or entity, any other person or entity directly or indirectly controlling or controlled by, or under direct or indirect common control with, such person or entity.

“ Authorized Person ” means any one of the individuals authorized to sign on behalf of Borrowers, and any other individual designated by any one of such authorized signers.

" Borrowing Base " means at any time the result of (i) the Eligible Receivable Amount multiplied by the Advance Rate, minus (ii) such reserves as Lender may deem proper and necessary from time to time. Eligible Receivables owing to Sourcing shall not be included in the Borrowing Base until Lender has received an audit of Sourcing’s Receivables, with results satisfactory to Lender.

“ Cash Collateral ” means the sum of $4,000,000 in cash collateral in which Borrowers’ have granted to Lender a first priority perfected security interest to secure the Cash-Secured Advances and all other Obligations.

" Cash Management Sublimit " means $250,000.

“ Cash-Secured Advance ” means an advance made by Lender to Borrowers under Section 1.1(b) of this Agreement.

“ Cash-Secured C redit Limit ” means $4,000,000, which is intended to be the maximum amount of Cash-Secured Advances at any time outstanding.

“ CD Rate ” means a variable per annum rate of interest equal to the rate payable by Lender for a certificate of deposit having a 30 day maturity. The CD Rate shall change daily as and when the rate payable by Lender for a certificate of deposit having a 30 day maturity changes.

“ Collateral ” means all of each Borrower’s rights and interest in any and all personal property, whether now existing or hereafter acquired or created and wherever located, and all products and proceeds thereof and accessions thereto, including but not limited to the following: (a) all accounts (including health care insurance receivables), chattel paper (including tangible and electronic chattel paper), inventory (including all goods held for sale or lease or to be furnished under a contract for service, and including returns and repossessions), equipment (including all accessions and additions thereto), instruments (including promissory notes), investment property (including securities and securities entitlements), documents (including negotiable documents), deposit accounts, letter of credit rights, money, any commercial tort claim of such Borrower which is now or hereafter identified by Borrowers or Lender, general intangibles (including payment intangibles and software), goods (including fixtures) and all of such Borrower’s books and records with respect to any of the foregoing, and the computers and equipment containing said books and records; (b) the Cash Collateral, and (c) any and all cash proceeds and/or noncash proceeds thereof, including without limitation, insurance proceeds, and all supporting obligations and the security therefore or for any right to payment.

“ Collections ” means all payments from or on behalf of an Account Debtor with respect to Receivables.

“ Compliance Certificate ” means a certificate in the form attached as Exhibit A to this Agreement by an Authorized Person that, among other things, the representations and warranties set forth in this Agreement are true and correct as of the date such certificate is delivered.

“ C redit Limit ” means $7,000,000, which is intended to be the maximum amount of Advances at any time outstanding.

“ Current Deferred Revenue ” is all amounts received or invoiced, as appropriate, in advance of performance under contracts and not yet recognized as revenue, and treated as current under GAAP.

“ Current Ratio ” means (i) the aggregate of unrestricted cash and cash equivalents, including investment grade commercial paper, maintained on deposit at Lender (or subject to a control agreement in form and substance reasonably acceptable to Lender in its sole discretion) plus Eligible Receivables, divided by (ii) an amount equal to total current liabilities minus Current Deferred Revenue.

“ Default ” means any Event of Default or any event that with notice, lapse of time or otherwise would constitute an Event of Default.

“ Due Diligence Fee ” means a payment of an annual fee equal to $1,000 due on March 20 of each year so long us any Advance is outstanding or available hereunder.

“ Eligible Receivable ” means a Receivable that satisfies all of the following:

(a)

The Receivable has been created by a Borrower in the ordinary course of such Borrower’s business and without any obligation on the part of such Borrower to render any further performance (other than warranty obligations in the ordinary course of business).

(b)

There are no conditions which must be satisfied before the applicable Borrower is entitled to receive payment of the Receivable, and the Receivable does not arise from COD sales, consignments or guaranteed sales.

(c)

The Account Debtor upon the Receivable does not claim any defense to payment of the Receivable, whether well founded or otherwise.

(d)

The Receivable is not the obligation of an Account Debtor who has asserted or may be reasonably be expected to assert any counterclaims or offsets against the applicable Borrower (including offsets for any “contra accounts” owed by such Borrower to the Account Debtor for goods purchased by such Borrower or for services performed for Borrower).

(e)

The Receivable represents a genuine obligation of the Account Debtor and to the extent any credit balances exist in favor of the Account Debtor, such credit balances shall be deducted in calculating the Receivable Amount.

(f)

The applicable Borrower has sent an invoice to the Account Debtor in the amount of the Receivable.

(g)

The applicable Borrower is not prohibited by the laws of the state where the Account Debtor is located from bringing an action in the courts of that state to enforce the Account Debtor’s obligation to pay the Receivable. The applicable Borrower has taken all appropriate actions to ensure access to the courts of the state where Account Debtor is located, including, where necessary; the filing of a Notice of Business Activities Report or other similar filing with the applicable state agency or the qualification by such Borrower as a foreign corporation authorized to transact business in such state.

(h)

The Receivable is owned by the applicable Borrower free of any title defects or any liens or interests of others except the security interest in favor of Lender, and Lender has a perfected, first priority security interest in such Receivable.

(i)

The Account Debtor on the Receivable is not any of the following: (1) an employee, Affiliate, parent or subsidiary of the applicable Borrower, or an entity which has common officers or directors with such Borrower; (2) the U.S. government or any agency or department of the U.S. government unless the applicable Borrower complies with the procedures in the Federal Assignment of Claims Act of 1940 (41 U.S.C.§15) with respect to the Receivable, and the underlying contract expressly provides that neither the U.S. government nor any agency or department thereof shall have the right of set-off against such Borrower; (3) any person or entity located in a foreign country unless (A) the Receivable is supported by an irrevocable letter of credit issued by a bank acceptable to Lender, and (B) if requested by Lender, the original of such letter of credit and/or any usance drafts drawn under such letter of credit and accepted by the issuing or confirming bank have been delivered to Lender; or (4) an Account Debtor as to which 35% or more of the aggregate dollar amount of all outstanding Receivables owing from such Account Debtor have not been paid within 90 days from invoice date.

(j)

The Receivable is not in default (a Receivable will be considered in default if any of the following occur: (i) the Receivable is not paid within 90 days from its invoice date; (ii) the Account Debtor obligated upon the Receivable suspends business, makes a general assignment for the benefit of creditors, or fails to pay its debts generally as they come due; or (iii) any petition is filed by or against the Account Debtor obligated upon the Receivable under any bankruptcy law or any other law or laws for the relief of debtors).

(k)

The Receivable does not arise from the sale of goods which remain in the applicable Borrower’s possession or under such Borrower’s control.

(l)

The Receivable is not evidenced by a promissory note or chattel paper, nor is the Account Debtor obligated to the applicable Borrower under any other obligation which is evidenced by a promissory note.

(m)

The Receivable is not that portion of Receivables due from an Account Debtor which is in excess of 35% of the applicable Borrower's aggregate dollar amount of all outstanding Receivables.

(n)

The Receivable is otherwise acceptable to Lender.

" Eligible Receivable Amount " means at any time the sum of the Receivable Amounts of the Eligible Receivables.

“ Event of Default ” has the meaning set forth in Section 7.1.

“ Facility Fee ” means a payment of an annual fee equal to 0.75 percentage points of the Credit Limit due on March 20 of each year so long us any Advance is outstanding or available hereunder.

“ Finance Charge ” means for each Monthly Period an interest amount equal to the Finance Charge Percentage of the average daily Account Balance outstanding during such Monthly Period.

“ Finance Charge Percentage ” means, (a) with respect to all ABL Advances, a rate per year equal to the Prime Rate plus one quarter of one percentage point (0.25), plus an additional 5.00 percentage points during any period that an Event of Default has occurred and is continuing, and (b) with respect to all Cash-Secured Advances, a rate per year equal to the CD Rate plus two (2) percentage points, plus an additional 5.00 percentage points during any period that an Event of Default has occurred and is continuing.

" FX Sublimit " means $250,000.

“ GAAP ” means generally accepted accounting principles consistently applied and used consistently with prior practices.

“ Lender ” means Bridge Bank, National Association, and its successors and assigns.

" Letter of Credit " has the meaning set forth in Section 1.8.

“ Letters of Credit O bligation " means, at any time, the sum of, without duplication, (i) the maximum amount available to be drawn on all outstanding Letters of Credit issued by Lender or by Lender’s Affiliate and (ii) the aggregate amount of all amounts drawn and unreimbursed with respect to Letters of Credit issued by the Lender or by Lender’s Affiliate.

“ Letter of Credit Sublimit " means $250,000.

“ Loan Documents ” means this Agreement and all other agreements, instruments and documents executed in connection herewith.

“ Maturity Date ” means March 20, 2016 or such earlier date as Lender shall have declared the Obligations immediately due and payable pursuant to Section 7.2.

“ Minimum Monthly Interest ” means for any Monthly Period the amount (if any) by which $4,000 exceeds the Finance Charge for that Monthly Period.

“ Month End ” means the last calendar day of each Monthly Period.

“ Monthly Period ” means each calendar month.

“ Obligations ” means all liabilities and obligations of Borrowers (or any of them) to Lender of any kind or nature, present or future, arising under or in connection with this Agreement or under any other document, instrument or agreement, whether or not evidenced by any note, guarantee or other instrument, whether arising on account or by overdraft, whether direct or indirect (including those acquired by assignment) absolute or contingent, primary or secondary, due or to become due, now owing or hereafter arising, and however acquired; including, without limitation, all Advances, Finance Charges, fees, interest, expenses, professional fees and attorneys’ fees.

“ Overadvance ” means at any time an amount equal to the greater of (a) the amounts (if any) by which the total amount of the outstanding ABL Advances (including deemed ABL Advances with respect to the FX Sublimit and the Letter of Credit Sublimit and, only if any Cash Management Services are outstanding, the total amount of the Cash Management Sublimit) exceeds the lesser of the ABL Credit Limit or the Borrowing Base, or (b) the amounts (if any) by which the total amount of the outstanding deemed ABL Advances with respect to the FX Sublimit and the Letter of Credit Sublimit exceeds the Subfacility Maximum.

“ Permitted Indebtedness ” means:

(a)

Indebtedness under this Agreement or that is otherwise owed to the Lender.

(b)

Indebtedness existing on the date hereof and specifically disclosed on a schedule to this Agreement.

(c)

Purchase money indebtedness (including capital leases) incurred to acquire capital assets in ordinary course of business and not exceeding $150,000 in total principal amount at any time outstanding.

(d)

Other indebtedness in an aggregate amount not to exceed $250,000 at any time outstanding; provided that such indebtedness is junior in priority (if secured) to the Obligations and provided that the incurrence of such Indebtedness does not otherwise cause and Event of Default hereunder.

(e)

Indebtedness incurred in the refinancing of any indebtedness set forth in (a) through (d) above, provided that the principal amount thereof is not increased or the terms thereof are not modified to impose more burdensome terms upon the Borrower.

(f)

Subordinated Debt.

(g)

Unsecured Indebtedness to trade creditors in the ordinary course of business not more than 120 days past due, and accrued expenses incurred in the ordinary course of business.

“ Permitted Liens ” means the following but only with respect to property not consisting of Receivables:

(a)

Liens securing any of the indebtedness described in clauses (a) through (d) of the definition of Permitted Indebtedness.

(b)

Liens for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested in good faith by appropriate proceedings, provided the same have no priority over any of Lender’s security interests.

(c)

Liens incurred in connection with the extension, renewal or refinancing of the indebtedness described in clause (e) of the definition of Permitted Indebtedness, provided that any extension, renewal or replacement lien shall be limited to the property encumbered by the existing lien and the principal amount of the indebtedness being extended, renewed or refinanced does not increase.

(d)

Liens securing Subordinated Debt.

(e)

statutory Liens, such as inchoate mechanics’, inchoate materialmen’s, landlord’s, warehousemen’s, and carriers’ liens, and other similar liens, other than those described in clause (b) above, arising in the ordinary course of business with respect to obligations which are not delinquent or are being contested in good faith by appropriate proceedings, provided that, if delinquent, adequate reserves have been set aside with respect thereto as required by GAAP and, by reason of nonpayment, no property is subject to a material risk of loss or forfeiture.

“ Prime Rate ” means the greater of 3.25% per year or the variable per annum rate of interest most recently announced by Lender as its "Prime Rate." Lender may price loans to its customers at, above, or below the Prime Rate. Any change in the Prime Rate shall take effect at the opening of business on the day specified in the public announcement of a change in Lender’s Prime Rate.

“ Receivable Amount ” means as to any Receivable, the Receivable Amount due from the Account Debtor after deducting all discounts, credits, offsets, payments or other deductions of any nature whatsoever, whether or not claimed by the Account Debtor.

“ Receivables ” means a Borrower’s rights to payment arising in the ordinary course of such Borrower’s business, including accounts, chattel paper, instruments, contract rights, documents, general intangibles, letters of credit, drafts, and bankers acceptances.

“ Subfacility Maximum ” means $500,000.

“ Subordinated Debt ” means indebtedness of Borrower that is expressly subordinated to the indebtedness of Borrower owed to Lender pursuant to a subordination agreement reasonably satisfactory in form and substance to Lender.

“ Termination Fee ” means a payment equal to 1% of the Credit Limit.

“ UCC ” means the California Uniform Commercial Code, as amended or supplemented from time to time.

12.2

Construction:

(a)

In this Agreement: (i) references to the plural include the singular and to the singular include the plural; (ii) references to any gender include any other gender; (iii) the terms “include” and “including” are not limiting; (iv) the term “or” has the inclusive meaning represented by the phrase “and/or,” (v) unless otherwise specified, section and subsection references are to this Agreement, and (vi) any reference to any statute, law, or regulation shall include all amendments thereto and revisions thereof.

(b)

Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved using any presumption against either Borrowers or Lender, whether under any rule of construction or otherwise. On the contrary, this Agreement has been reviewed by each party hereto and their respective counsel. In case of any ambiguity or uncertainty, this Agreement shall be construed and interpreted according to the ordinary meaning of the words used to accomplish fairly the purposes and intentions of all parties hereto.

(c)

Titles and section headings used in this Agreement are for convenience only and shall not be used in interpreting this Agreement.

13.

Jury Trial Waiver . THE UNDERSIGNED ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED UNDER CERTAIN CIRCUMSTANCES. TO THE EXTENT PERMITTED BY LAW, EACH PARTY, AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS, HIS OR HER CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL PARTIES, WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OTHER DOCUMENT, INSTRUMENT OR AGREEMENT BETWEEN THE UNDERSIGNED PARTIES.

14.

JUDICIAL REFERENCE PROVISION .

14.1

In the event the Jury Trial Waiver set forth above is not enforceable, the parties elect to proceed under this Judicial Reference Provision.

14.2

With the exception of the items specified in Section 14.3, below, any controversy, dispute or claim (each, a “ Claim ”) between the parties arising out of or relating to this Agreement or any other document, instrument or agreement between the undersigned parties (collectively in this Section, the “ Loan Documents ”), will be resolved by a reference proceeding in California in accordance with the provisions of Sections 638 et seq. of the California Code of Civil Procedure (“ CCP ”), or their successor sections, which shall constitute the exclusive remedy for the resolution of any Claim, including whether the Claim is subject to the reference proceeding. Except as otherwise provided in the Loan Documents, venue for the reference proceeding will be in the state or federal court in the county or district where the real property involved in the action, if any, is located or in the state or federal court in the county or district where venue is otherwise appropriate under applicable law (the “ Court ”).

14.3

The matters that shall not be subject to a reference are the following: (i) nonjudicial foreclosure of any security interests in real or personal property, (ii) exercise of self-help remedies (including, without limitation, set-off), (iii) appointment of a receiver and (iv) temporary, provisional or ancillary remedies (including, without limitation, writs of attachment, writs of possession, temporary restraining orders or preliminary injunctions). This reference provision does not limit the right of any party to exercise or oppose any of the rights and remedies described in clauses (i) and (ii) or to seek or oppose from a court of competent jurisdiction any of the items described in clauses (iii) and (iv). The exercise of, or opposition to, any of those items does not waive the right of any party to a reference pursuant to this reference provision as provided herein.

14.4

The referee shall be a retired judge or justice selected by mutual written agreement of the parties. If the parties do not agree within ten (10) days of a written request to do so by any party, then, upon request of any party, the referee shall be selected by the Presiding Judge of the Court (or his or her representative). A request for appointment of a referee may be heard on an ex parte or expedited basis, and the parties agree that irreparable harm would result if ex parte relief is not granted. Pursuant to CCP § 170.6, each party shall have one peremptory challenge to the referee selected by the Presiding Judge of the Court (or his or her representative).

14.5

The parties agree that time is of the essence in conducting the reference proceedings. Accordingly, the referee shall be requested, subject to change in the time periods specified herein for good cause shown, to (i) set the matter for a status and trial-setting conference within fifteen (15) days after the date of selection of the referee, (ii) if practicable, try all issues of law or fact within one hundred twenty (120) days after the date of the conference and (iii) report a statement of decision within twenty (20) days after the matter has been submitted for decision.

14.6

The referee will have power to expand or limit the amount and duration of discovery. The referee may set or extend discovery deadlines or cutoffs for good cause, including a party’s failure to provide requested discovery for any reason whatsoever. Unless otherwise ordered based upon good cause shown, no party shall be entitled to “priority” in conducting discovery, depositions may be taken by either party upon seven (7) days written notice, and all other discovery shall be responded to within fifteen (15) days after service. All disputes relating to discovery which cannot be resolved by the parties shall be submitted to the referee whose decision shall be final and binding.

14.7

Except as expressly set forth herein, the referee shall determine the manner in which the reference proceeding is conducted including the time and place of hearings, the order of presentation of evidence, and all other questions that arise with respect to the course of the reference proceeding. All proceedings and hearings conducted before the referee, except for trial, shall be conducted without a court reporter, except that when any party so requests, a court reporter will be used at any hearing conducted before the referee, and the referee will be provided a courtesy copy of the transcript. The party making such a request shall have the obligation to arrange for and pay the court reporter. Subject to the referee’s power to award costs to the prevailing party, the parties will equally share the cost of the referee and the court reporter at trial.

14.8

The referee shall be required to determine all issues in accordance with existing case law and the statutory laws of the State of California. The rules of evidence applicable to proceedings at law in the State of California will be applicable to the reference proceeding. The referee shall be empowered to enter equitable as well as legal relief, enter equitable orders that will be binding on the parties and rule on any motion which would be authorized in a court proceeding, including without limitation motions for summary judgment or summary adjudication. The referee shall issue a decision at the close of the reference proceeding which disposes of all claims of the parties that are the subject of the reference. Pursuant to CCP § 644, such decision shall be entered by the Court as a judgment or an order in the same manner as if the action had been tried by the Court and any such decision will be final, binding and conclusive. The parties reserve the right to appeal from the final judgment or order or from any appealable decision or order entered by the referee. The parties reserve the right to findings of fact, conclusions of laws, a written statement of decision, and the right to move for a new trial or a different judgment, which new trial, if granted, is also to be a reference proceeding under this provision.

14.9

If the enabling legislation which provides for appointment of a referee is repealed (and no successor statute is enacted), any dispute between the parties that would otherwise be determined by reference procedure will be resolved and determined by arbitration. The arbitration will be conducted by a retired judge or justice, in accordance with the California Arbitration Act §1280 through §1294.2 of the CCP as amended from time to time. The limitations with respect to discovery set forth above shall apply to any such arbitration proceeding.

14.10

THE PARTIES RECOGNIZE AND AGREE THAT ALL CONTROVERSIES, DISPUTES AND CLAIMS RESOLVED UNDER THIS REFERENCE PROVISION WILL BE DECIDED BY A REFEREE AND NOT BY A JURY. AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS, HIS OR HER OWN CHOICE, EACH PARTY KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL PARTIES, AGREES THAT THIS REFERENCE PROVISION WILL APPLY TO ANY CONTROVERSY, DISPUTE OR CLAIM BETWEEN OR AMONG THEM ARISING OUT OF OR IN ANY WAY RELATED TO, THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS.

15.

EXECUTION, EFFECTIVENESS, SURVIVAL . This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other documents executed in connection herewith constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement. This Agreement shall become effective upon the execution and delivery hereof by Borrowers and Lender and shall continue in full force and effect until the Maturity Date and thereafter so long as any Obligations remain outstanding hereunder. Lender reserves the right to issue press releases, advertisements, and other promotional materials describing any successful outcome of services provided on Borrowers’ behalf. Each Borrower agrees that Lender shall have the right to identify such Borrower by name in those materials.

16.

Other Agreements . Any security agreements, liens and/or security interests securing payment of any obligations of Borrowers (or any of them) owing to Lender or its Affiliates also secure the Obligations, and are valid and subsisting and are not adversely affected by execution of this Agreement. An Event of Default under this Agreement constitutes a default under other outstanding agreements between Borrower and Lender or its Affiliates.

17.

REVIVAL AND REINSTATEMENT OF OBLIGATIONS . If the incurrence or payment of the Obligations by any Borrower or any guarantor, or the transfer to Lender of any property should for any reason subsequently be asserted, or declared, to be void or voidable under any state or federal law relating to creditors' rights, including provisions of the United States Bankruptcy Code relating to fraudulent conveyances, preferences, or other voidable or recoverable payments of money or transfers of property (each, a " Voidable Transfer "), and if Lender is required to repay or restore, in whole or in part, any such Voidable Transfer, or elects to do so upon the reasonable advice of its counsel, then, as to any such Voidable Transfer, or the amount thereof that Lender is required or elects to repay or restore, and as to all reasonable costs, expenses, and reasonable attorneys' fees of Lender related thereto, the liability of Borrowers and such guarantor automatically shall be revived, reinstated, and restored and shall exist as though such Voidable Transfer had never been made.

18.

PATRIOT ACT NOTIFICATION . Lender hereby notifies Borrowers that pursuant to the requirements of the USA Patriot Act, Title III of Pub. L. 107-56, signed into law October 26, 2001 (" Patriot Act"), Lender is required to obtain, verify and record information that identifies Borrowers, which information includes the names and addresses of Borrowers and other information that will allow Lender to identify Borrowers in accordance with the Patriot Act.

19.

JOINT AND SEVERAL LIABILITY; SINGLE LOAN ACCOUNT .

19.1

Joint and Several Liability . Each Borrower agrees that it is jointly and severally, directly and primarily liable to Lender for payment, performance and satisfaction in full of the Obligations and that such liability is independent of the duties, obligations, and liabilities of the other Borrower. Lender may bring a separate action or actions on each, any, or all of the Obligations against any Borrower, whether action is brought against the other Borrowers or whether the other Borrowers are joined in such action. In the event that any Borrower fails to make any payment of any Obligations on or before the due date thereof, the other Borrowers immediately shall cause such payment to be made or each of such Obligations to be performed, kept, observed, or fulfilled.

19.2

Primary Obligation; Waiver of Marshaling . This Agreement and the Loan Documents to which Borrowers are a party are a primary and original obligation of each Borrower, are not the creation of a surety relationship, and are an absolute, unconditional, and continuing promise of payment and performance which shall remain in full force and effect without respect to future changes in conditions, including any change of law or any invalidity or irregularity with respect to this Agreement or the Loan Documents to which Borrowers are a party. Each Borrower agrees that its liability under this Agreement and the Loan Documents which Borrowers are a party shall be immediate and shall not be contingent upon the exercise or enforcement by Lender of whatever remedies they may have against the other Borrowers, or the enforcement of any lien or realization upon any security Lender may at any time possess. Each Borrower consents and agrees that Lender shall be under no obligation to marshal any assets of any Borrower against or in payment of any or all of the Obligations.

19.3

Financial Condition of Borrowers . Each Borrower acknowledges that it is presently informed as to the financial condition of the other Borrowers and of all other circumstances which a diligent inquiry would reveal and which bear upon the risk of nonpayment of the Obligations. Each Borrower hereby covenants that it will continue to keep informed as to the financial condition of the other Borrowers, the status of the other Borrowers and of all circumstances which bear upon the risk of nonpayment. Absent a written request from any Borrower to Lender for information, each Borrower hereby waives any and all rights it may have to require Lender to disclose to such Borrower any information which Lender may now or hereafter acquire concerning the condition or circumstances of the other Borrowers.

19.4

Continuing Liability . The liability of each Borrower under this Agreement and the Loan Documents to which Borrowers are a party includes Obligations arising under successive transactions continuing, compromising, extending, increasing, modifying, releasing, or renewing the Obligations, changing the interest rate, payment terms, or other terms and conditions thereof, or creating new or additional Obligations after prior Obligations have been satisfied in whole or in part. To the maximum extent permitted by law, each Borrower hereby waives any right to revoke its liability under this Agreement and Loan Documents as to future indebtedness, and in connection therewith, each Borrower hereby waives any rights it may have under Section 2815 of the California Civil Code.

19.5

Additional Waivers . Each Borrower absolutely, unconditionally, knowingly, and expressly waives:

(a)

(1) notice of acceptance hereof; (2) notice of any Loans or other financial accommodations made or extended under this Agreement and the Loan Documents to which Borrowers are a party or the creation or existence of any Obligations; (3) notice of the amount of the Obligations, subject, however, to each Borrower's right to make inquiry of Lender to ascertain the amount of the Obligations at any reasonable time; (4) notice of any adverse change in the financial condition of the other Borrowers or of any other fact that might increase such Borrower's risk hereunder; (5) notice of presentment for payment, demand, protest, and notice thereof as to any instruments among the Loan Documents to which Borrowers are a party; and (6) all other notices (except if such notice is specifically required to be given to Borrowers hereunder or under the Loan Documents to which Borrowers are a party) and demands to which such Borrower might otherwise be entitled.

(b)

its right, under Sections 2845 or 2850 of the California Civil Code, or otherwise, to require Lender to institute suit against, or to exhaust any rights and remedies which Lender has or may have against, the other Borrowers or any third party, or against any collateral for the Obligations provided by the other Borrowers, or any third party. Each Borrower further waives any defense arising by reason of any disability or other defense (other than the defense that the Obligations shall have been fully and finally performed and indefeasibly paid) of the other Borrowers or by reason of the cessation from any cause whatsoever of the liability of the other Borrowers in respect thereof.

(c)

(1) any rights to assert against Lender any defense (legal or equitable), set-off, counterclaim, or claim which such Borrower may now or at any time hereafter have against the other Borrowers or any other party liable to Lender; (2) any defense, set-off, counterclaim, or claim, of any kind or nature, arising directly or indirectly from the present or future lack of perfection, sufficiency, validity, or enforceability of the Obligations or any security therefor; (3) any defense such Borrower has to performance hereunder, and any right such Borrower has to be exonerated, provided by Sections 2819, 2822, or 2825 of the California Civil Code, or otherwise, arising by reason of: the impairment or suspension of Lender's rights or remedies against the other Borrowers; the alteration by Lender of the Obligations; any discharge of the other Borrowers' obligations to Lender by operation of law as a result of Lender's intervention or omission; or the acceptance by Lender of anything in partial satisfaction of the Obligations; and (4) the benefit of any statute of limitations affecting such Borrower's liability hereunder or the enforcement thereof, and any act which shall defer or delay the operation of any statute of limitations applicable to the Obligations shall similarly operate to defer or delay the operation of such statute of limitations applicable to such Borrower's liability hereunder.

(d)

Each Borrower absolutely, unconditionally, knowingly, and expressly waives any defense arising by reason of or deriving from (i) any claim or defense based upon an election of remedies by Lender including any defense based upon an election of remedies by Lender under the provisions of Sections 580a, 580b, 580d, and 726 of the California Code of Civil Procedure or any similar law of California or any other jurisdiction; or (ii) any election by Lender under Section 1111(b) of the Bankruptcy Code to limit the amount of, or any collateral securing, its claim against Borrowers. Pursuant to California Civil Code Section 2856(b):

(i)

Each Borrower waives all rights and defenses arising out of an election of remedies by the creditor, even though that election of remedies, such as a nonjudicial foreclosure with respect to security for a guaranteed obligation, has destroyed such Borrower's rights of subrogation and reimbursement against the other Borrowers by the operation of Section 580(d) of the California Code of Civil Procedure or otherwise.

(ii)

Each Borrower waives all rights and defenses that such Borrower may have because the Obligations are secured by real property. This means, among other things: (1) Lender may collect from such Borrower without first foreclosing on any real or personal property collateral pledged by the other Borrowers; and (2) if Lender forecloses on any real property collateral pledged by the other Borrowers: (A) the amount of the Obligations may be reduced only by the price for which that collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price; and (B) Lender may collect from such Borrower even if Lender, by foreclosing on the real property collateral, has destroyed any right such Borrower may have to collect from the other Borrowers. This is an unconditional and irrevocable waiver of any rights and defenses each Borrower may have because the Obligations are secured by real property. These rights and defenses include, but are not limited to, any rights or defenses based upon Section 580a, 580b, 580d, or 726 of the California Code of Civil Procedure.

(e)

Each Borrower hereby absolutely, unconditionally, knowingly, and expressly waives: (i) any right of subrogation such Borrower has or may have as against the other Borrowers with respect to the Obligations; (ii) any right to proceed against the other Borrowers or any other Person, now or hereafter, for contribution, indemnity, reimbursement, or any other suretyship rights and claims, whether direct or indirect, liquidated or contingent, whether arising under express or implied contract or by operation of law, which such Borrower may now have or hereafter have as against the other Borrowers with respect to the Obligations; and (iii) any right to proceed or seek recourse against or with respect to any property or asset of the other Borrowers.

(f)

WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR OTHER PROVISION SET FORTH IN THIS AGREEMENT, EACH BORROWER HEREBY ABSOLUTELY, KNOWINGLY, UNCONDITIONALLY, AND EXPRESSLY WAIVES AND AGREES NOT TO ASSERT ANY AND ALL BENEFITS OR DEFENSES ARISING DIRECTLY OR INDIRECTLY UNDER ANY ONE OR MORE OF CALIFORNIA CIVIL CODE SECTIONS 2799, 2808, 2809, 2810, 2815, 2819, 2820, 2821, 2822, 2825, 2839, 2845, 2848, 2849, AND 2850, CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 580a, 580b, 580c, 580d, AND 726, CALIFORNIA UNIFORM COMMERCIAL CODE SECTIONS 3116, 3118, 3119, 3419, 3605, 9504, 9505, AND 9507, AND CHAPTER 2 OF TITLE 14 OF PART 4 OF DIVISION 3 OF THE CALIFORNIA CIVIL CODE.

19.6

Settlements or Releases . Each Borrower consents and agrees that, without notice to or by such Borrower, and without affecting or impairing the liability of such Borrower hereunder, Lender may, by action or inaction:

(a)

compromise, settle, extend the duration or the time for the payment of, or discharge the performance of, or may refuse to or otherwise not enforce this Agreement and the Loan Documents, or any part thereof, with respect to the other Borrowers or any guarantor;

(b)

release the other Borrowers or any guarantor or grant other indulgences to the other Borrowers or any guarantor in respect thereof;

(c)

amend or modify in any manner and at any time (or from time to time) this Agreement or any of the Loan Documents; or

(d)

release or substitute any guarantor, if any, of the Obligations, or enforce, exchange, release, or waive any security for the Obligations or any other guaranty of the Obligations, or any portion thereof.

19.7

No Election . Lender shall have the right to seek recourse against each Borrower to the fullest extent provided for herein, and no election by Lender to proceed in one form of action or proceeding, or against any party, or on any obligation, shall constitute a waiver of Lender's right to proceed in any other form of action or proceeding or against other parties unless Lender has expressly waived such right in writing. Specifically, but without limiting the generality of the foregoing, no action or proceeding by Lender under this Agreement and the Loan Documents shall serve to diminish the liability of any Borrower under this Agreement and the Loan Documents to which Borrowers are a party except to the extent that Lender finally and unconditionally shall have realized indefeasible payment by such action or proceeding.

19.8

Indefeasible Payment . The Obligations shall not be considered indefeasibly paid unless and until all payments to Lender are no longer subject to any right on the part of any Person, including any Borrower, any Borrower as a debtor in possession, or any trustee (whether appointed pursuant to the Bankruptcy Code, or otherwise) of any Borrower's Assets to invalidate or set aside such payments or to seek to recoup the amount of such payments or any portion thereof, or to declare same to be fraudulent or preferential. Upon such full and final performance and indefeasible payment of the Obligations, Lender shall have no obligation whatsoever to transfer or assign its interest in this Agreement and the Loan Documents to any Borrower. In the event that, for any reason, any portion of such payments to Lender is set aside or restored, whether voluntarily or involuntarily, after the making thereof, then the obligation intended to be satisfied thereby shall be revived and continued in full force and effect as if said payment or payments had not been made, and any Borrower shall be liable for the full amount Lender is required to repay plus any and all costs and expenses (including attorneys' fees and attorneys' fees incurred in proceedings brought under the Bankruptcy Code) paid by Lender in connection therewith.

19.9

Single Loan Account . At the request of Borrowers to facilitate and expedite the administration and accounting processes and procedures of the Loans and Borrowings, Lender has agreed, in lieu of maintaining separate loan accounts on Lender's books in the name of each of the Borrowers, that Lender may maintain a single loan account under the name of all of both Borrowers (the " Loan Account "). All Loans shall be made jointly and severally to Borrowers and shall be charged to the Loan Account, together with all interest and other charges as permitted under and pursuant to this Agreement. The Loan Account shall be credited with all repayments of Obligations received by Lender, on behalf of Borrowers, from either Borrower pursuant to the terms of this Agreement.

19.10

Apportionment of Proceeds of Loans. Each Borrower expressly agrees and acknowledges that Lender shall have no responsibility to inquire into the correctness of the apportionment or allocation of or any disposition by any of Borrowers of (a) the Loans or any Borrowings, or (b) any of the expenses and other items charged to the Loan Account pursuant to this Agreement. The Loans and all such Borrowings and such expenses and other items shall be made for the collective, joint, and several account of Borrowers and shall be charged to the Loan Account.

20.

NO NOVATION . Borrowers and Lender hereby agree that, effective upon the execution and delivery of this Agreement by each such party, the terms and provisions of the Prior Agreement shall be and hereby are amended, restated and superseded in their entirety by the terms and provisions of this Agreement. Nothing herein contained shall be construed as a substitution or novation of the obligations of Parent outstanding under the Prior Agreement or instruments securing the same, which obligations shall remain in full force and effect, except to the extent that the terms thereof are modified hereby or by instruments executed concurrently herewith. Nothing expressed or implied in this Agreement shall be construed as a release or other discharge of Borrowers, or any guarantor from any of its obligations or liabilities under the Prior Agreement or any of the Loan Documents executed in connection therewith. Parent hereby (i) confirms and agrees that each Loan Document to which it is a party is, and shall continue to be, in full force and effect and is hereby ratified and confirmed in all respects except that on and after the effectiveness of this Agreement, all references in any such Loan Document to "the Business Finance Credit Agreement", "thereto", "thereof", "thereunder" or words of like import referring to the Prior Agreement shall mean the Prior Agreement as amended and restated by this Agreement; and (ii) confirms and agrees that to the extent that the Prior Agreement or any Loan Document executed in connection therewith purports to collaterally assign or pledge to Lender a security interest in or Lien on, any Collateral as security for the Obligations from time to time existing in respect of the Prior Agreement, such pledge, collateral assignment or grant of the security interest or Lien is hereby ratified and confirmed in all respects as a collateral assignment, pledge or grant to Lender and shall remain effective as of the first date it became effective.

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21.

NOTICE OF FINAL AGREEMENT. BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT: (A) THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES, (B) THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND (C) THIS WRITTEN AGREEMENT MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS OF THE PARTIES.

IN WITNESS WHEREOF, Borrowers and Lender have executed this Agreement on the day and year above written.

BORROWER:	LENDER:

SELECTICA, INC .,	BRIDGE BANK, NATIONAL ASSOCIATION
a Delaware corporation


By	By
Name: Todd A. Spartz Title: Chief Financial Officer	Name: Christopher Hill Title: Vice President

Address for Notices : Selectica, Inc. 2121 South El Camino Real, Suite 1000 San Mateo, California 94403 Fax: (408) 570-9705	Address for Notices : 55 Almaden Blvd. San Jose, CA 95113 Fax: (408) 423-8510

SELECTICA SOURCING INC. ,
a Delaware corporation


By
Name: Todd A. Spartz Title: Chief Financial Officer

Address for Notices : Selectica Sourcing Inc. 2121 South El Camino Real, Suite 1000 San Mateo, California 94403 Fax: (408) 570-9705

SIGNATURE PAGE TO AMENDED AND RESTATED BUSINESS FINANCING AGREEMENT

AMENDMENT NUMBER ONE TO AMENDED AND RESTATED BUSINESS FINANCING AGREEMENT AND WAIVER OF DEFAULTS

This AMENDMENT NUMBER ONE TO AMENDED AND RESTATED BUSINESS FINANCING AGREEMENT AND WAIVER OF DEFAULTS (this “ Amendment ”), dated as of December 31, 2014, is entered into by and among Bridge Bank, National Association (“ Lender ”), on the one hand, and Selectica, Inc., a Delaware corporation (“ Selectica ”), and Selectica Sourcing Inc., a Delaware corporation (“ Sourcing ,” together with Selectica, each a “ Borrower ,” and collectively “ Borrowers ”) on the other hand, with reference to the following facts:

A. Borrowers and Lender previously entered into that certain Amended and Restated Business Financing Agreement, dated as of July 25, 2014 (as amended, the “ Agreement ”);

B. Borrowers are in default of the provision of the Agreement set forth in the table set forth on Schedule A attached hereto, as at the dates indicated in such Schedule (the “ Existing Defaults” );

C. Borrowers have requested that Lender (1) waive the Existing Defaults, (2) make certain amendments to the Agreement; and

D. Lender has agreed with such requests, subject to the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing, the parties hereto hereby agree as follows:

Defined Terms . All initially capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Agreement.

Amendments to Section 4.12 . Section 4.12 is hereby amended and restated in its entirety as follows:

4.12

Maintain Borrowers' financial condition as follows in accordance with GAAP (except to the extent modified by the definitions herein):

An Asset Coverage Ratio shall not be less than 2.00 to 1.00, tested as of the end of each month, beginning with the month ended October 31, 2014.

EBITDA to not negatively deviate by more than 20% of the projections approved by Borrowers’ boards of directors with respect to the fiscal quarter ending December 31, 2014.

Amendments to Section 12.1 .

The following defined term is hereby deleted in its entirety:

“ Current Ratio ”

The following new defined terms are hereby added to Section 12.1 of the Agreement in alphabetical order:

“ Asset Coverage Ratio ” means (i) the sum of (a) Borrowers’ unrestricted cash maintained on deposit at Lender (or subject to a control agreement in form and substance reasonably acceptable to Lender in its sole discretion) (excluding proceeds of Cash-Secured Advances) plus (b) Eligible Receivables (as reported on the most recent borrowing base certificate), divided by (ii) the Obligations (excluding Cash-Secured Advances).

“ EBITDA ” means, with respect to the Borrowers on a consolidated basis, the sum of (a) net profit, plus (b) interest, plus (c) depreciation, plus (d) amortization, plus (d) stock compensation expense, each as defined in accordance with GAAP.

Amendment to Exhibit A . Exhibit A to the Agreement is hereby amended and restated in its entirety as set forth in Schedule B attached hereto.

Waiver of Existing Defaults . Upon the terms and subject to the conditions set forth in this Amendment, Lender hereby waives the Existing Defaults. This waiver of the Existing Defaults shall be effective only in this specific instance and for the specific purpose for which it is given, and shall not entitle Borrowers to any other or further waiver in any similar or other circumstances.

Conditions Precedent to Effectiveness of Amendment . The effectiveness of this Amendment and the waiver of the Existing Defaults set forth in Section 5 above are subject to and contingent upon the fulfillment of each and every one of the following conditions to the satisfaction of Lender:

Lender shall have received this Amendment, duly executed by Borrowers;

Lender shall have received an amendment fee in the amount of $12,500, which fee shall be fully-earned and non-refundable;

After giving effect to this Amendment, no Event of Default or Default shall have occurred and be continuing; and

After giving effect to this Amendment, all of the representations and warranties set forth herein and in the Agreement shall be true, complete and accurate in all respects as of the date hereof (except for representations and warranties which are expressly stated to be true and correct as of the date of the Agreement).

Representations and Warranties . In order to induce Lender to enter into this Amendment, each Borrower hereby represents and warrants to Lender that:

After giving effect to this Amendment, no Event of Default or Default is continuing;

After giving effect to this Amendment, all of the representations and warranties set forth in the Agreement and in the Agreement are true, complete and accurate in all respects (except for representations and warranties which are expressly stated to be true and correct as of the date of the Agreement); and

This Amendment has been duly executed and delivered by Borrowers, and the Agreement continues to constitute the legal, valid and binding agreements and obligations of Borrowers, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, and similar laws and equitable principles affecting the enforcement of creditors’ rights generally.

Counterparts; Telefacsimile Execution . This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Amendment. Delivery of an executed counterpart of this Amendment by telefacsimile shall be equally as effective as delivery of a manually executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by telefacsimile also shall deliver a manually executed counterpart of this Amendment but the failure to deliver a manually executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment.

Integration . The Agreement as amended by this Amendment constitutes the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and thereof, and supersedes any and all prior agreements and understandings, oral or written, relating to the subject matter hereof and thereof.

No Other Waiver . The execution of this Amendment and the acceptance of all other agreements and instruments related hereto shall not be deemed to be a waiver of any Default or Event of Default (other than the Existing Defaults), whether or not known to Lender and whether or not existing on the date of this Amendment.

Release .

Each Borrower hereby absolutely and unconditionally releases and forever discharges Lender, and any and all participants, parent corporations, subsidiary corporations, affiliated corporations, insurers, indemnitors, successors and assigns thereof, together with all of the present and former directors, officers, agents and employees of any of the foregoing, from any and all claims, demands or causes of action of any kind, nature or description, whether arising in law or equity or upon contract or tort or under any state or federal law or otherwise, which any Borrower has had, now has or has made claim to have against any such person for or by reason of any act, omission, matter, cause or thing whatsoever arising from the beginning of time to and including the date of this Amendment, whether such claims, demands and causes of action are matured or unmatured or known or unknown. Each Borrower certifies that it has read the following provisions of California Civil Code Section 1542:

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

Each Borrower understands and acknowledges that the significance and consequence of this waiver of California Civil Code Section 1542 is that even if it should eventually suffer additional damages arising out of the facts referred to above, it will not be able to make any claim for those damages. Furthermore, each Borrower acknowledges that it intends these consequences even as to claims for damages that may exist as of the date of this release but which it does not know exist, and which, if known, would materially affect its decision to execute this Agreement, regardless of whether its lack of knowledge is the result of ignorance, oversight, error, negligence, or any other cause.

Reaffirmation of the Agreement . The Agreement as amended hereby remains in full force and effect.

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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Amendment as of the date first hereinabove written.

	SELECTICA, INC ., a Delaware corporation By Name: Title:


	SELECTICA SOURCING INC. , a Delaware corporation By Name: Title:


	BRIDGE BANK, NATIONAL ASSOCIATION By Name: Title:

Amendment Number One to Amended and Restated Business Financing Agreement and Waiver of Defaults

AMENDMENT NUMBER TWO TO AMENDED AND RESTATED BUSINESS FINANCING AGREEMENT

This AMENDMENT NUMBER TWO TO AMENDED AND RESTATED BUSINESS FINANCING AGREEMENT (this “ Amendment ”), dated as of March 11, 2015, is entered into by and among Bridge Bank, National Association (“ Lender ”), on the one hand, and Selectica, Inc., a Delaware corporation (“ Selectica ”), and Selectica Sourcing Inc., a Delaware corporation (“ Sourcing ,” together with Selectica, each a “ Borrower ,” and collectively “ Borrowers ”) on the other hand, with reference to the following facts:

A. Borrowers and Lender previously entered into that certain Amended and Restated Business Financing Agreement, dated as of July 25, 2014, as amended by that certain Amendment Number One to Amended and Restated Business Financing Agreement and Waiver of Defaults, dated as of December 31, 2014 (as so amended, the “ Agreement ”);

B. Borrowers have requested that Lender (1) increase the ABL Credit Limit to $5,000,000, (2) provide an additional $1,900,000 non-formula sublimit under the ABL Credit Limit, and (3) make certain other amendments to the Agreement; and

C. Lender has agreed with such requests, subject to the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing, the parties hereto hereby agree as follows:

Defined Terms . All initially capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Agreement.

Amendments to Section 12.1 .

The following defined terms set forth in Section 12.1 of the Agreement are hereby amended and restated in their entirety as follows:

“ ABL Credit Limit ” means $5,000,000, which is intended to be the maximum amount of ABL Advances at any time outstanding.

" Borrowing Base " means at any time the result of (i) the Eligible Receivable Amount multiplied by the Advance Rate, plus (ii) the Non-Formula Sublimit, minus (iii) such reserves as Lender may deem proper and necessary from time to time.

“ Credit Limit ” means $9,000,000, which is intended to be the maximum amount of Advances at any time outstanding.

The following new defined term is hereby added to Section 12.1 of the Agreement in alphabetical order:

“ Non-Formula Sublimit ” means $1,900,000.

Conditions Precedent to Effectiveness of Amendment . The effectiveness of this Amendment is subject to and contingent upon the fulfillment of each and every one of the following conditions to the satisfaction of Lender:

Lender shall have received this Amendment, duly executed by Borrowers;

Lender shall have received a guaranty duly executed by Lloyd Miller, III, an individual, in form and substance satisfactory to Lender in Lender’s sole and absolute discretion;

Lender shall have received a guaranty duly executed by Milfam II, L.P. (“ Milfam ”), and resolutions to guaranty duly executed by Milfam, each in form and substance satisfactory to Lender in Lender’s sole and absolute discretion;

No Event of Default or Default shall have occurred and be continuing; and

All of the representations and warranties set forth herein and in the Agreement shall be true, complete and accurate in all respects as of the date hereof (except for representations and warranties which are expressly stated to be true and correct as of the date of the Agreement).

Representations and Warranties . In order to induce Lender to enter into this Amendment, each Borrower hereby represents and warrants to Lender that:

No Event of Default or Default is continuing;

All of the representations and warranties set forth in the Agreement and in the Agreement are true, complete and accurate in all respects (except for representations and warranties which are expressly stated to be true and correct as of the date of the Agreement); and

No Waiver . The execution of this Amendment and the acceptance of all other agreements and instruments related hereto shall not be deemed to be a waiver of any Default or Event of Default , whether or not known to Lender and whether or not existing on the date of this Amendment.

Release .

Reaffirmation of the Agreement . The Agreement as amended hereby remains in full force and effect.

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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Amendment as of the date first hereinabove written.

	SELECTICA, INC ., a Delaware corporation By Name: Title:


	SELECTICA SOURCING INC. , a Delaware corporation By Name: Title:

Amendment Number Two to Amended and Restated Business Financing Agreement

BRIDGE BANK, NATIONAL ASSOCIATION

Name:

Title:

Amendment Number Two to Amended and Restated Business Financing Agreement

Exhibit 10.2

LIMITED GUARANTY

as of March 11, 2015

To: BRIDGE BANK, N.A.

1. The Guaranty .

(a) For valuable consideration, the undersigned (“ Guarantor ”) hereby unconditionally guarantees and promises to pay promptly to Bridge Bank, N.A. (“ Lender ”), or order, in lawful money of the United States, any and all Indebtedness of Selectica, Inc., a Delaware corporation, and Selectica Sourcing Inc., a Delaware corporation (individually and collectively, jointly and severally the “ Borrower ”) to Lender when due, whether at stated maturity, upon acceleration or otherwise, and at all times thereafter. Except as otherwise provided in Sections 1(b) and (c), the liability of Guarantor under this Guaranty is not limited as to the principal amount of the Indebtedness guaranteed and includes, without limitation, liability for all interest, fees, indemnities (including, without limitation, hazardous waste indemnities), and other costs and expenses relating to or arising out of the Indebtedness. The liability of Guarantor is continuing and relates to any Indebtedness, including that arising under successive transactions which shall either continue the Indebtedness or from time to time renew it after it has been satisfied. This Guaranty is cumulative and does not supersede any other outstanding guaranties, and the liability of Guarantor under this Guaranty is exclusive of Guarantor’s liability under any other guaranties signed by Guarantor. If more than one individual or entity sign this Guaranty, their obligations under this Guaranty shall be joint and several.

(b) Notwithstanding anything to the contrary contained in this Guaranty, the maximum liability of Guarantor to Lender pursuant to this Guaranty shall be an amount equal to $1,000,000 (the “ Initial Guaranteed Amount ”). Lender may reduce (in its sole and absolute discretion), but not increase, the Initial Guaranteed Amount at any time during the term of this Guaranty without Guarantor’s consent (the amount guaranteed hereunder at any given time is referred to as the “ Guaranteed Amount ”)

(c) Notwithstanding anything to the contrary contained in this Guaranty, this Guaranty shall terminate on the second anniversary of its date of execution, unless prior to that date (i) demand for payment is made or (ii) the Guaranteed Amount is reduced to $0.

2. Definitions . As used herein:

(a) “ Borrower ” means the individual or the entity named in Paragraph 1 of this Guaranty and, if more than one, then any one or more of them.

(b) “ Financing Agreement ” means that certain Amended and Restated Business Financing Agreement dated as of July 25, 2014 by and between Borrower and Lender, as amended by that certain Amendment Number One to Amended and Restated Business Financing Agreement and Waiver of Defaults dated as of December 31, 2014, that certain Amendment Number Two to Amended and Restated Business Financing Agreement and Consent dated as of even date herewith, and as may be further amended or restated from time to time.

(c) “ Guarantor ” means the individual or the entity signing this Guaranty and, if more than one, then any one or more of them, jointly and severally.

(d) “ Indebtedness ” means any and all debts, liabilities, and obligations of Borrower to Lender, now or hereafter existing, whether voluntary or involuntary and however arising, whether direct or indirect or acquired by Lender by assignment, succession, or otherwise, whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, held or to be held by Lender for its own account or as agent for another or others, whether Borrower may be liable individually or jointly with others, whether recovery upon such debts, liabilities, and obligations may be or hereafter become barred by any statute of limitations, and whether such debts, liabilities, and obligations may be or hereafter become otherwise unenforceable. Indebtedness includes, without limitation, any and all obligations of Borrower to Lender for reasonable attorneys’ fees and all other costs and expenses incurred by Lender in the collection or enforcement of any debts, liabilities, and obligations of Borrower to Lender.

(e) “ Non-Formula Advances ” has the meaning given to such term in the Financing Agreement.

3. Obligations Independent . The obligations hereunder are independent of the obligations of Borrower or any other guarantor, and a separate action or actions may be brought and prosecuted against Guarantor whether action is brought against Borrower or any other guarantor or whether Borrower or any other guarantor be joined in any such action or actions. Anyone executing this Guaranty shall be bound by its terms without regard to execution by anyone else.

4. Rights of Lender . Guarantor authorizes Lender, without notice or demand and without affecting its liability hereunder, from time to time to: (a) renew, compromise, extend, accelerate, or otherwise change the time for payment, or otherwise change the terms, of the Indebtedness or any part thereof (subject only to the terms of the Financing Agreement), including increase or decrease of the rate of interest thereon, or otherwise change the terms of the Indebtedness; (b) receive and hold security for the payment of any Indebtedness and exchange, enforce, waive, release, fail to perfect, sell, or otherwise dispose of any such security; (c) apply such security and direct the order or manner of sale thereof as Lender in its discretion may determine; and (d) release or substitute any Guarantor or any one or more of any endorsers or other guarantors of any of the Indebtedness.

5. Guaranty to be Absolute . Subject to Sections 1(b) and (c), Guarantor agrees that until the Indebtedness has been paid in full and any commitments of Lender or facilities provided by Lender with respect to the Indebtedness have been terminated, Guarantor shall not be released by or because of the taking, or failure to take, any action that might in any manner or to any extent vary the risks of Guarantor under this Guaranty or that, but for this paragraph, might discharge or otherwise reduce, limit, or modify Guarantor’s obligations under this Guaranty. Subject to Sections 1(b) and (c), Guarantor waives and surrenders any defense to any liability under this Guaranty based upon any such action, including but not limited to any action of Lender described in the immediately preceding paragraph of this Guaranty. Subject to Sections 1(b) and (c), it is the express intent of Guarantor that Guarantor’s obligations under this Guaranty are and shall be absolute and unconditional.

6. Guarantor’s Waivers of Certain Rights and Certain Defenses . Guarantor waives: (a) any right to require Lender to proceed against Borrower, proceed against or exhaust any security for the Indebtedness, or pursue any other remedy in Lender’s power whatsoever; (b) any defense arising by reason of any disability or other defense of Borrower, or the cessation from any cause whatsoever of the liability of Borrower; (c) any defense based on any claim that Guarantor’s obligations exceed or are more burdensome than those of Borrower; and (d) the benefit of any statute of limitations affecting Guarantor’s liability hereunder, subject in all cases to Sections 1(b) and (c). No provision or waiver in this Guaranty shall be construed as limiting the generality of any other waiver contained in this Guaranty.

7. [Reserved].

8. Waiver of Notices . Subject to Sections 1(b) and (c), Guarantor waives all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, notices of intent to accelerate, notices of acceleration, notices of any suit or any other action against Borrower or any other person, any other notices to any party liable on the Indebtedness (including Guarantor), notices of acceptance of this Guaranty, and notices of the existence, creation, or incurring of new or additional Indebtedness.

9. Waivers of Other Rights and Defenses .

(a) Guarantor waives any rights and defenses that are or may become available to Guarantor by reason of Sections 2787 to 2855, inclusive, of the California Civil Code.

(b) Guarantor waives all rights and defenses that Guarantor may have because any of the Indebtedness is secured by real property. This means, among other things: (i) Lender may collect from Guarantor without first foreclosing on any real or personal property collateral pledged by Borrower; and (ii) if Lender forecloses on any real property collateral pledged by Borrower: (1) the amount of the Indebtedness may be reduced only by the price for which that collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price, and (2) Lender may collect from Guarantor even if Lender, by foreclosing on the real property collateral, has destroyed any right Guarantor may have to collect from Borrower. This is an unconditional and irrevocable waiver of any rights and defenses Guarantor may have because any of the Indebtedness is secured by real property. These rights and defenses include, but are not limited to, any rights or defenses based upon Section 580a, 580b, 580d, or 726 of the California Code of Civil Procedure.

(c) Guarantor waives any right or defense it may have at law or equity, including California Code of Civil Procedure Section 580a, to a fair market value hearing or action to determine a deficiency judgment after a foreclosure.

10. Security . To secure all of Guarantor’s obligations hereunder, Guarantor assigns and grants to Lender a security interest in all moneys, securities, and other property of Guarantor now or hereafter in the possession of Lender, all deposit accounts of Guarantor maintained with Lender, and all proceeds thereof. Upon default or breach of any of Guarantor’s obligations to Lender, Lender may apply any deposit account to reduce the Indebtedness, and may foreclose any collateral as provided in the Uniform Commercial Code and in any security agreements between Lender and Guarantor.

11. Subordination . Any security interest, lien, or other encumbrance that Guarantor may now or hereafter have on any property of Borrower pursuant to that certain Junior Secured Convertible Promissory Note, dated of even date herewith is hereby subordinated to any security interest, lien, or other encumbrance that Lender may have on any such property.

12. Revocation of Guaranty .

(a) Subject to Sections 1(b) and (c), Guarantor absolutely, unconditionally, knowingly, and expressly waives any right to revoke this Guaranty as to future Indebtedness and, in light thereof, all protection afforded Guarantor under Section 2815 of the California Civil Code. Subject to Sections 1(b) and (c), Guarantor fully realizes and understands that, upon execution of this agreement, Guarantor will not have any right to revoke this Guaranty as to any future Indebtedness and, thus, may have no control over such Guarantor’s ultimate responsibility for the Indebtedness. If, contrary to the express intent of this agreement, any such revocation is effective notwithstanding the foregoing waiver, Guarantor acknowledges and agrees that: (a) no such revocation shall be effective until written notice thereof has been received by Lender; (b) no such revocation shall apply to any Indebtedness in existence on such date (including any subsequent continuation, extension, or renewal thereof, or change in the interest rate, payment terms, or other terms and conditions thereof); (c) no such revocation shall apply to any Indebtedness made or created after such date to the extent made or created pursuant to a legally binding commitment of Lender which is, or is believed in good faith by Lender to be, in existence on the date of such revocation; (d) no payment by Borrower, or from any other source, prior to the date of such revocation shall reduce the obligations of such Guarantor hereunder; and (e) any payment by Borrower or from any source other than such Guarantor, subsequent to the date of such revocation, shall first be applied to that portion of the obligations, if any, as to which the revocation by such Guarantor is effective (and which are not, therefore, guarantied by such Guarantor hereunder), and, to the extent so applied, shall not reduce the obligations of such Guarantor hereunder.

(b) In the event of the death of a Guarantor, the liability of the estate of the deceased Guarantor shall continue in full force and effect as to (i) the Indebtedness existing at the date of death, and any renewals or extensions thereof, and (ii) loans or advances made to or for the account of Borrower after the date of the death of the deceased Guarantor pursuant to a commitment made by Lender to Borrower prior to the date of such death. As to all surviving Guarantors, this Guaranty shall continue in full force and effect after the death of a Guarantor, not only as to the Indebtedness existing at that time, but also as to the Indebtedness thereafter incurred by Borrower to Lender.

(c) Subject to Sections 1(b) and (c), Guarantor acknowledges and agrees that this Guaranty may be revoked only in accordance with the foregoing provisions of this paragraph and shall not be revoked simply as a result of any change in name, location, or composition or structure of Borrower, the dissolution of Borrower, or the termination, increase, decrease, or other change of any personnel or owners of Borrower.

13. Reinstatement of Guaranty . Subject to Sections 1(b) and (c), if this Guaranty is revoked, returned, or cancelled, and subsequently any payment or transfer of any interest in property by Borrower to Lender is rescinded or must be returned by Lender to Borrower, this Guaranty shall be reinstated with respect to any such payment or transfer, regardless of any such prior revocation, return, or cancellation.

14. Stay of Acceleration . In the event that acceleration of the time for payment of any of the Indebtedness is stayed upon the insolvency, bankruptcy, or reorganization of Borrower or otherwise, all such Indebtedness guaranteed by Guarantor shall nonetheless be payable by Guarantor immediately if requested by Lender.

15. No Deductions . Subject to Sections 1(b) and (c), all payments by Guarantor hereunder shall be paid in full, without setoff or counterclaim or any deduction or withholding whatsoever, including, without limitation, for any and all present and future taxes. In the event that Guarantor or Lender is required by law to make any such deduction or withholding, Guarantor agrees to pay on behalf of Lender such amount directly to the appropriate person or entity, or if the Guarantor cannot legally comply with the foregoing, Guarantor shall pay to Lender such additional amounts as will result in the receipt by Lender of the full amount payable hereunder. Guarantor shall promptly provide Lender with evidence of payment of any such amount made on Lender’s behalf.

16. Information Relating to Borrower . Guarantor acknowledges and agrees that it shall have the sole responsibility for, and has adequate means of, obtaining from Borrower such information concerning Borrower’s financial condition or business operations as Guarantor may require, and that Lender has no duty, and Guarantor is not relying on Lender, at any time to disclose to Guarantor any information relating to the business operations or financial condition of Borrower.

17. Borrower’s Authorization . Where Borrower is a corporation, partnership, trust, or limited liability company, it is not necessary for Lender to inquire into the powers of Borrower or of the officers, directors, partners, members, managers, or agents acting or purporting to act on its behalf, and any Indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder, subject to any limitations on Guarantor’s liability set forth herein.

18. Information Relating to Guarantor . Guarantor authorizes Lender to verify or check any information given by Guarantor to Lender, check Guarantor’s credit references, verify employment, and obtain credit reports. Guarantor acknowledges and agrees that the authorizations provided in this paragraph apply to any individual general partner of Guarantor and to Guarantor’s spouse and any such general partner’s spouse if Guarantor or such general partner is married and lives in a community property state.

19. Guarantor’s Covenants . Subject to Sections 1(b) and (c), until the Indebtedness has been paid in full and any commitments of Lender or facilities provided by Lender with respect to the Indebtedness have been terminated and each and every term, covenant, and condition of this Guaranty is fully performed, Guarantor agrees:

(a) to provide the following financial information and statements in form and content acceptable to Lender, and such additional information as requested by Lender from time to time:

(i) Guarantor’s annual financial statements upon request of Lender. Such statements must be in form satisfactory to Lender and be certified and dated by Guarantor and show Guarantor’s financial condition. Such statements must include, without limitation, a listing of all assets and liabilities, a listing of all sources of income and of the uses of income, the amount and sources of contingent liabilities, identification of joint owners as to listed assets, and an annual projection of sources and uses of income;

(ii) additional information as requested by Lender from time to time regarding the financial condition of any corporations, partnerships, limited liability companies, or other entities in which Guarantor owns, directly or indirectly, a material interest; and

(iii) copies of Guarantor’s federal income tax return (with all forms K-1 attached) together with a statement of any contributions made by Guarantor to any subchapter S corporation or trust, and, if requested by Lender, copies of any extensions of the filing date.

20. Taxes . Guarantor represents and warrants that it is organized and resident in the United States of America. If Guarantor must make a payment under this Guaranty, Guarantor represents and warrants that it will make the payment from one of its U.S. resident offices to a U.S. office of Lender so that no withholding tax is imposed on the payment. If notwithstanding the foregoing, Guarantor makes a payment under this Guaranty to which withholding tax applies, then Guarantor shall pay any taxes (other than taxes on net income (a) imposed by the country or any subdivision of the country in which Lender’s principal office or actual lending office is located and (b) measured by the United States taxable income Lender would have received if all payments under or in respect of this Guaranty were exempt from taxes levied by Guarantor’s country) that are at any time imposed on any such payments under or in respect of this Guaranty including, but not limited to, payments made pursuant to this paragraph. Further, Guarantor shall also pay to Lender, on demand, all additional amounts that Lender specifies as necessary to preserve the after-tax yield Lender would have received if such taxes had not been imposed.

21. Change of Status . Guarantor shall not enter into any consolidation, merger, or other combination unless Guarantor is the surviving business entity. Further, Guarantor shall not change its legal structure unless (a) Guarantor obtains the prior written consent of Lender, such consent not to be unreasonably withheld, conditioned or delayed, and (b) all Guarantor’s obligations under this Guaranty are assumed by the new business entity.

22. Notices . All notices required under this Guaranty shall be personally delivered or sent by first class mail, postage prepaid, or by overnight courier, to the addresses on the signature page of this Guaranty, or sent by facsimile to the fax numbers listed on the signature page, or to such other addresses as Lender and Guarantor may specify from time to time in writing. Notices sent by (a) first class mail shall be deemed delivered on the earlier of actual receipt or on the fourth business day after deposit in the U.S. mail, postage prepaid, (b) overnight courier shall be deemed delivered on the next business day, and (c) telecopy shall be deemed delivered when transmitted.

23. Successors and Assigns . This Guaranty (a) binds Guarantor and Guarantor’s executors, administrators, successors, and assigns, provided that Guarantor may not assign its rights or obligations under this Guaranty without the prior written consent of Lender, and (b) inures to the benefit of Lender and Lender’s indorsees, successors, and assigns. Lender may, with notice to Guarantor and without affecting Guarantor’s obligations hereunder, sell, assign, grant participations in, or otherwise transfer to any other person, firm, or corporation the Indebtedness and this Guaranty, in whole or in part. Guarantor agrees that Lender may disclose to any assignee or purchaser, or any prospective assignee or purchaser, of all or part of the Indebtedness any and all information in Lender’s possession concerning Guarantor, this Guaranty, and any security for this Guaranty.

24. Amendments, Waivers, and Severability . No provision of this Guaranty may be amended or waived except in writing; provided, however, that the Guaranteed Amount may be reduced by Lender (in its sole and absolute discretion) without the consent or approval of Guarantor. Subject to Sections 1(b) and (c), no failure by Lender to exercise, and no delay in exercising, any of its rights, remedies, or powers shall operate as a waiver thereof, and no single or partial exercise of any such right, remedy, or power shall preclude any other or further exercise thereof or the exercise of any other right, remedy, or power. The unenforceability or invalidity of any provision of this Guaranty shall not affect the enforceability or validity of any other provision of this Guaranty.

25. Costs and Expenses . Subject to Sections 1(b) and (c), Guarantor agrees to pay all reasonable attorneys’ fees, including allocated costs of Lender’s in-house counsel, and all other costs and expenses which may be incurred by Lender (a) in the enforcement of this Guaranty or (b) in the preservation, protection, or enforcement of any rights of Lender in any case commenced by or against Guarantor or Borrower under the Bankruptcy Code (Title 11, United States Code) or any similar or successor statute.

26. Governing Law and Jurisdiction . This Guaranty shall be governed by and construed under the laws of the State of California. Guarantor irrevocably (a) submits to the non-exclusive jurisdiction of any federal or state court sitting in the State of California in any action or proceeding arising out of or relating to this Guaranty and (b) waives to the fullest extent permitted by law any defense asserting an inconvenient forum in connection therewith. Service of process by Lender in connection with such action or proceeding shall be binding on Guarantor if sent to Guarantor by registered or certified mail at its address specified below.

27. Waiver of Jury Trial . EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER, HAS DETERMINED FOR ITSELF THE NECESSITY TO REVIEW THE SAME WITH ITS LEGAL COUNSEL, AND KNOWINGLY AND VOLUNTARILY WAIVES ALL RIGHTS TO A JURY TRIAL.

28. Reference Provision .

(a) In the event the Jury Trial waiver is not enforceable, the parties elect to proceed under this Judicial Reference Provision.

(b) With the exception of the items specified in Section 28(c) below, any controversy, dispute or claim (each, a “Claim”) between the parties arising out of or relating to this Agreement or any other document, instrument or agreement between the undersigned parties (collectively in this Section, the “Loan Documents”), will be resolved by a reference proceeding in California in accordance with the provisions of Sections 638 et seq. of the California Code of Civil Procedure (“CCP”), or their successor sections, which shall constitute the exclusive remedy for the resolution of any Claim, including whether the Claim is subject to the reference proceeding. Except as otherwise provided in the Loan Documents, venue for the reference proceeding will be in the state or federal court in the county or district where the real property involved in the action, if any, is located or in the state or federal court in the county or district where venue is otherwise appropriate under applicable law (the “Court”).

(c) The matters that shall not be subject to a reference are the following: (i) nonjudicial foreclosure of any security interests in real or personal property, (ii) exercise of self-help remedies (including, without limitation, set-off), (iii) appointment of a receiver and (iv) temporary, provisional or ancillary remedies (including, without limitation, writs of attachment, writs of possession, temporary restraining orders or preliminary injunctions). This reference provision does not limit the right of any party to exercise or oppose any of the rights and remedies described in clauses (i) and (ii) or to seek or oppose from a court of competent jurisdiction any of the items described in clauses (iii) and (iv). The exercise of, or opposition to, any of those items does not waive the right of any party to a reference pursuant to this reference provision as provided herein.

(d) The referee shall be a retired judge or justice selected by mutual written agreement of the parties. If the parties do not agree within ten (10) days of a written request to do so by any party, then, upon request of any party, the referee shall be selected by the Presiding Judge of the Court (or his or her representative). A request for appointment of a referee may be heard on an ex parte or expedited basis, and the parties agree that irreparable harm would result if ex parte relief is not granted. Pursuant to CCP § 170.6, each party shall have one peremptory challenge to the referee selected by the Presiding Judge of the Court (or his or her representative).

(e) The parties agree that time is of the essence in conducting the reference proceedings. Accordingly, the referee shall be requested, subject to change in the time periods specified herein for good cause shown, to (i) set the matter for a status and trial-setting conference within fifteen (15) days after the date of selection of the referee, (ii) if practicable, try all issues of law or fact within one hundred twenty (120) days after the date of the conference and (iii) report a statement of decision within twenty (20) days after the matter has been submitted for decision.

(f) The referee will have power to expand or limit the amount and duration of discovery. The referee may set or extend discovery deadlines or cutoffs for good cause, including a party’s failure to provide requested discovery for any reason whatsoever. Unless otherwise ordered based upon good cause shown, no party shall be entitled to “priority” in conducting discovery, depositions may be taken by either party upon seven (7) days written notice, and all other discovery shall be responded to within fifteen (15) days after service. All disputes relating to discovery which cannot be resolved by the parties shall be submitted to the referee whose decision shall be final and binding.

(g) Except as expressly set forth herein, the referee shall determine the manner in which the reference proceeding is conducted including the time and place of hearings, the order of presentation of evidence, and all other questions that arise with respect to the course of the reference proceeding. All proceedings and hearings conducted before the referee, except for trial, shall be conducted without a court reporter, except that when any party so requests, a court reporter will be used at any hearing conducted before the referee, and the referee will be provided a courtesy copy of the transcript. The party making such a request shall have the obligation to arrange for and pay the court reporter. Subject to the referee’s power to award costs to the prevailing party, the parties will equally share the cost of the referee and the court reporter at trial.

(h) The referee shall be required to determine all issues in accordance with existing case law and the statutory laws of the State of California. The rules of evidence applicable to proceedings at law in the State of California will be applicable to the reference proceeding. The referee shall be empowered to enter equitable as well as legal relief, enter equitable orders that will be binding on the parties and rule on any motion which would be authorized in a court proceeding, including without limitation motions for summary judgment or summary adjudication. The referee shall issue a decision at the close of the reference proceeding which disposes of all claims of the parties that are the subject of the reference. Pursuant to CCP § 644, such decision shall be entered by the Court as a judgment or an order in the same manner as if the action had been tried by the Court and any such decision will be final, binding and conclusive. The parties reserve the right to appeal from the final judgment or order or from any appealable decision or order entered by the referee. The parties reserve the right to findings of fact, conclusions of laws, a written statement of decision, and the right to move for a new trial or a different judgment, which new trial, if granted, is also to be a reference proceeding under this provision.

(i) If the enabling legislation which provides for appointment of a referee is repealed (and no successor statute is enacted), any dispute between the parties that would otherwise be determined by reference procedure will be resolved and determined by arbitration. The arbitration will be conducted by a retired judge or justice, in accordance with the California Arbitration Act §1280 through §1294.2 of the CCP as amended from time to time. The limitations with respect to discovery set forth above shall apply to any such arbitration proceeding.

(j) THE PARTIES RECOGNIZE AND AGREE THAT ALL CONTROVERSIES, DISPUTES AND CLAIMS RESOLVED UNDER THIS REFERENCE PROVISION WILL BE DECIDED BY A REFEREE AND NOT BY A JURY. AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS, HIS OR HER OWN CHOICE, EACH PARTY KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL PARTIES, AGREES THAT THIS REFERENCE PROVISION WILL APPLY TO ANY CONTROVERSY, DISPUTE OR CLAIM BETWEEN OR AMONG THEM ARISING OUT OF OR IN ANY WAY RELATED TO, THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS.

29. Remedies . All rights and remedies provided in this Guaranty and any instrument or agreement referred to herein are cumulative and are not exclusive of any rights or remedies otherwise provided by law. Any single or partial exercise of any right or remedy shall not preclude the further exercise thereof or the exercise of any other right or remedy.

30. Severability . The illegality or unenforceability of any provision of this Guaranty or any instrument or agreement referred to herein shall not in any way affect or impair the legality or enforceability of the remaining provisions of this Guaranty or any instrument or agreement referred to herein.

Executed as of the date set forth on the first page.


	LLOYD MILLER, III

Address for notices to Lender:

Address for notices to Guarantor:

Bridge Bank, National Association

Attn: Christopher Hill

55 Almaden Boulevard, Suite 100

San Jose, CA 95113

Tel: (408) [556-6502]

Fax: (408) 423-8510

Lloyd Miller, III

3300 South Dixie Highway, Suite 1-365

West Palm Beach, Florida 33405

Tel: (561) 287-5399

Fax: (619) 923-2908

Exhibit 10.3

LIMITED GUARANTY

as of March 11, 2015

To: BRIDGE BANK, N.A.

1. The Guaranty .

2. Definitions . As used herein:

(a) “ Borrower ” means the individual or the entity named in Paragraph 1 of this Guaranty and, if more than one, then any one or more of them.

(c) “ Guarantor ” means the individual or the entity signing this Guaranty and, if more than one, then any one or more of them, jointly and severally.

(e) “ Non-Formula Advances ” has the meaning given to such term in the Financing Agreement.

7. [Reserved].

9. Waivers of Other Rights and Defenses .

(a) Guarantor waives any rights and defenses that are or may become available to Guarantor by reason of Sections 2787 to 2855, inclusive, of the California Civil Code.

12. Revocation of Guaranty .

(a) to provide the following financial information and statements in form and content acceptable to Lender, and such additional information as requested by Lender from time to time:

28. Reference Provision .

(a) In the event the Jury Trial waiver is not enforceable, the parties elect to proceed under this Judicial Reference Provision.

Executed as of the date set forth on the first page.

MILFAM II L.P. ,

a Georgia limited partnership

By MILFAM LLC,

an Ohio limited liability company

Its General Partner

____________________________________

By: Lloyd Miller, III

Title: Manager

Address for notices to Lender:

Address for notices to Guarantor:

Bridge Bank, National Association

Attn: Christopher Hill

55 Almaden Boulevard, Suite 100

San Jose, CA 95113

Tel: (408) [556-6502]

Fax: (408) 423-8510

Lloyd Miller, III

3300 South Dixie Highway, Suite 1-365

West Palm Beach, Florida 33405

Tel: (561) 287-5399

Fax: (619) 923-2908

Exhibit 10.4

GUARANTY FEE AGREEMENT

This Guaranty Fee Agreement (this “ Agreement ”) sets forth the terms of a guaranty fee arrangement entered into and made effective as of March 11, 2015 (“the Effective Date ”) by and between the Guarantors, as defined below, and Selectica, Inc., a Delaware corporation (the “ Company ” and, collectively with the Guarantors, the “ Parties ” and each a “ Party ”).

RECITALS

WHEREAS, pursuant to the Limited Guaranties, dated of even date herewith (the “ Guaranties ”), entered into by each of Lloyd I. Miller, III (“ Mr. Miller ”) and MILFAM II L.P. (together with Mr. Miller, the “ Guarantors ” and each a “ Guarantor ”), the Company and Bridge Bank, National Association (“ Lender ”), the Guarantors agreed to serve as limited guarantors of $2 million of the Company’s loan from Lender made pursuant to the Amended and Restated Business Financing Agreement, dated as of July 25, 2014, as amended (the “ Credit Agreement ”) between the Company and Lender, as such guaranteed amount may be reduced in accordance with the terms of the Guaranties (such guaranteed amount as is in effect on any specific date during the term of this Agreement, the “ Guaranteed Amount ”);

WHEREAS, the Guaranties were entered into to satisfy certain conditions for Lender to lend additional funds to the Company under the Credit Agreement; and

WHEREAS, the Guarantors have agreed to guarantee the payment obligations of the Company with respect to the Guaranteed Amount under the Credit Agreement, and in consideration thereof, the Company has agreed to pay the Guarantors an arm’s length guaranty fee, as described herein.

AGREEMENT

NOW, THEREFORE, in consideration of the premises and the mutual promises hereinafter set forth, the Parties hereto agree as follows:

1. Guaranty Fees .

(a) Commitment Fee . In consideration of the Guaranties, the Company shall pay the Guarantors a commitment fee of $100,000 (the “ Commitment Fee ”), payable in cash within five (5) business days following the date of termination or expiration of this Agreement (the date of such payment, the “ Payment Date ”). The Commitment Fee shall accrue, without interest, on the Effective Date.

(b) Monthly Fee . During the term of this Agreement, the Company shall pay the Guarantors a monthly fee equal to (i) 1.0% of the Guaranteed Amount for months (including partial months) 1 through 12 following the Effective Date (including the month in which the Effective Date falls) and (ii) 1.5% of the Guaranteed Amount for months 13 through 24 following the date hereof (the “ Monthly Fee ”). The aggregate amount of the Monthly Fees shall be payable in cash on the Payment Date. The Monthly Fees shall accrue, without interest, on the first business day of each month during the term of this Agreement.

(c) Allocation of Fees . The Commitment Fee and Monthly Fees shall be allocated to each of the Guarantors as provided to the Company in writing by Mr. Miller.

2. Term . The term of this Agreement shall begin on the Effective Date and shall automatically terminate upon the expiration or termination of the Guaranties.

3. Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of New York (without regard to the principles of conflicts of laws of any jurisdiction).

4. Severability . If any provision in this Agreement shall be found or be held to be invalid or unenforceable, then the meaning of said provision shall be construed, to the extent feasible, so as to render the provision enforceable, and if no feasible interpretation would save such provision, it shall be severed from the remainder of this Agreement which shall remain in full force and effect unless the severed provision is essential and material to the rights or benefits received by any Party. In such event, the Parties shall use good faith efforts to negotiate a substitute, valid and enforceable provision or agreement that most nearly affects the Parties’ intent in entering into this Agreement.

5. Successors and Assigns . This Agreement, and the obligations and rights of the Parties hereunder, shall be binding upon and inure to the benefit of the Parties’ respective heirs, personal representatives, successors and assigns.

6. Assignment . The Company may not assign this Agreement, its rights or responsibilities hereunder, without the prior written authorization of Mr. Miller. Guarantors shall have the right to assign Monthly Fees to their respective affiliates, successors and assigns, subject only to applicable securities laws. Any assignment in derogation of the foregoing shall be void.

7. Amendment . This Agreement may not be amended or modified, nor may any of its terms be waived, except by written instruments signed by the Company and Mr. Miller.

8. Notices . Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient (a) upon receipt, when delivered personally or by courier, (b) the next business day after sent, when sent by overnight delivery service, (c) upon delivery if given by electronic mail during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, or (d) three (3) business days after being deposited in the U.S. mail as certified or registered mail, return receipt requested, with postage prepaid, if in each instance such notice is addressed to the party to be notified at such Party’s address as set forth on the signature pages hereto or as subsequently modified by written notice.

9. Sufficiency of Consideration . The Parties jointly and severally represent, warrant and covenant that each has received full and sufficient consideration for all grants made and obligations undertaken, in this Agreement.

10. Taxes . Each Party hereto shall be responsible for any and all taxes levied as a result of the performance of each Party’s respective activities under this Agreement.

11. Entire Agreement . This Agreement, along with the Guaranties, shall constitute the full and entire understanding and agreement between the Parties with regard to the subjects hereof and thereof, and any and all other written or oral agreements existing between the Parties hereto are expressly canceled, including, without limitation, that certain guarantee financing term sheet, dated February 9, 2015, by and among the Parties.

12. Headings . The headings used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

13. Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall be deemed to constitute one instrument.

IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first set forth above:

“ Company”

SELECTICA, INC.

By:

Name:

Title:

Address for notices:

Selectica, Inc.

2121 South El Camino Real, 10th Floor

San Mateo, CA 94403

Attention: Todd A. Spartz

Fax: (650) 532-1505

E-mail: tspartz@selectica.com

With a copy to:

DLA Piper LLP (US)

2000 University Avenue

East Palo Alto, CA 94303

Attention: Eric Wang

Fax: (650) 687-1205

E-mail: eric.wang@dlapiper.com

“ Guarantors”

LLOYD I. MILLER, III

Signature

MILFAM II L.P.

By: MILFAM LLC

Its: General Partner

By:

Name: Lloyd I. Miller, III

Title: Manager

Address for notices:

Mr. Lloyd I. Miller, III

3300 South Dixie Highway, Suite 1-365

West Palm Beach, Florida 33405

With a copy to:

Andrews Kurth LLP

450 Lexington Avenue

New York, New York 10017

Attn: Roger J. Griesmeyer, Esq.

Exhibit 10.5

JUNIOR SECURED CONVERTIBLE NOTE PURCHASE AGREEMENT

This Junior Secured Convertible Note Purchase Agreement (the “ Agreement ” ) is made as of March 11, 2015 by and among Selectica, Inc., a Delaware corporation (the “ Company ” ) and the persons or entities set forth on the Schedule of Purchasers attached to this Agreement as Schedule I (each a “ Purchaser ” and, collectively, the “ Purchasers ” ).

RECITALS

A. The Company desires to issue and sell, and the Purchasers desire to purchase, junior secured convertible promissory notes in substantially the form attached to this Agreement as Exhibit A (each a “ Note ” and, collectively, the “ Notes ” ).

B. Contemporaneous with the sale of the Notes, the parties hereto will execute and deliver (i) a Security Agreement in the form attached hereto as Exhibit B (the “ Security Agreement ”), pursuant to which the Notes will be secured by a second position on the Company’s assets, subject to the first priority security position granted to Bridge Bank, National Association (“ Bridge Bank ”) under that certain Business Financing Agreement, effective as of September 27, 2011, as amended (the “ Senior Credit Facility ”), between the Company and Bridge Bank and (ii) a Subordination Agreement in the form attached hereto as Exhibit C (the “ Subordination Agreement ”) with Bridge Bank.

AGREEMENT

In consideration of the mutual promises contained herein and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties to this Agreement agree as follows:

1. Purchase and Sale of Notes .

(a) Sale and Issuance of Notes . Subject to the terms and conditions of this Agreement, the Purchasers agree to purchase at the Closing (as defined below) and the Company agrees to sell and issue to the Purchasers at the Closing Notes in the aggregate principal amount of $3,000,000 (the “ Purchase Price ”), as set forth on Schedule I hereto.

(b) Closing; Delivery .

(i) The purchase and sale of the Notes (the “ Closing ”) shall take place at the offices of DLA Piper LLP (US), 2000 University Ave., East Palo Alto, California 94303, as soon as practicable after such date that each of the conditions set forth in Sections 4 and 5 hereof is satisfied or waived, or on such other date and at such other place as the parties hereto may agree upon in writing; provided, however , that the date of the Closing may be up to forty-five (45) calendar days following the date of this Agreement, at the Purchasers’ sole election (the date on which the Closing occurs is referred to herein as the “ Closing Date ” ).

(ii) At the Closing, the Company shall deliver or caused to be delivered to the Purchasers:

(1) the Notes executed by the Company;

(2) the Security Agreement and Subordination Agreement executed by the Company;

(3) such instruments, certificates or documents as reasonably requested by the Purchasers in order to perfect the Purchasers’ second position security interest in the Company’s assets, in accordance with the Security Agreement, executed by the Company ;

(4) a certificate of the Chief Executive Officer of the Company certifying the accuracy of the Company ’ s representations and warranties as of the Closing; and

(5) a certificate of the Secretary of the Company certifying the authority of the officer executing this Agreement and all agreements and other documents ancillary hereto and contemplated hereby, including the Notes, the Security Agreement and the Subordination Agreement (collectively, the “ Loan Documents ” ).

(iii) At the Closing, the Purchasers shall pay the Purchase Price for the Notes, less any fees, expenses or other amounts owed to Purchasers from the Company under Section 6(h) hereof and under Section 9.5(ii) of that certain Purchase Agreement, dated as of February 6, 2015 (the “ Purchase Agreement ”), by wire transfer in immediately available funds to a bank designated by the Company and shall deliver or cause to be delivered to the Company the Security Agreement and Subordination Agreement executed by the Purchasers.

2. Representations and Warranties of the Company . The Company hereby represents and warrants to the Purchasers that, except as set forth in the schedules delivered herewith (collectively, the “ Disclosure Schedules ”):

(a) Organization, Good Standing and Qualification . Each of the Company and its Subsidiaries (as defined below) is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has all requisite corporate power and authority to carry on its business as now conducted and to own or lease its properties. Each of the Company and its Subsidiaries is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property makes such qualification or leasing necessary unless the failure to be in good standing or so qualify has not had and could not reasonably be expected to have a Material Adverse Effect. The Company’s Subsidiaries are listed on Schedule 2(a) hereto.

For purposes of this Agreement, the following terms have the meanings set forth below:

“ Material Adverse Effect ” means a material adverse effect on (i) the assets, liabilities, results of operations, condition (financial or otherwise), business, or prospects of the Company and its Subsidiaries taken as a whole, or (ii) the ability of the Company to perform its obligations under the Loan Documents.

“ Person ” means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed herein.

“ Subsidiary ” of any Person means another Person, an amount of the voting securities, other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of its board of directors or other governing body (or, if there are no such voting interests, 50% or more of the equity interests of which) is owned directly or indirectly by such first Person.

(b) Authorization . The Company has all corporate power and authority and, except for the approval of the Proposal by its stockholders as contemplated in Section 6(j) , has taken all requisite action on the part of the Company, its officers, directors and stockholders necessary for (i) the authorization, execution and delivery of the Loan Documents, (ii) the authorization of the performance of all obligations of the Company hereunder or thereunder, and (iii) the authorization, issuance (or reservation for issuance) and delivery of the Notes and the shares of Common Stock issuable upon conversion thereof (the “ Conversion Shares ” and, together with the Notes, the “ Securities ”). The Loan Documents, upon execution and delivery thereof by the Company, will constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability, relating to or affecting creditors’ rights generally and to general equitable principles.

(c) Capitalization . Schedule 2(c) sets forth as of the date hereof (i) the authorized capital stock of the Company; (ii) the number of shares of capital stock issuable pursuant to the Company’s stock plans; and (iii) the number of shares of capital stock issuable and reserved for issuance pursuant to securities (other than the Notes) exercisable for, or convertible into or exchangeable for any shares of capital stock of the Company. All of the issued and outstanding shares of the Company’s capital stock have been duly authorized and validly issued and are fully paid, nonassessable and free of pre-emptive rights and were issued in full compliance with applicable state and federal securities law and any rights of third parties. Except as described on Schedule 2(c) , all of the issued and outstanding shares of capital stock of each Subsidiary have been duly authorized and validly issued and are fully paid, nonassessable and free of pre-emptive rights, were issued in full compliance with applicable state and federal securities law and any rights of third parties and are owned by the Company, beneficially and of record, subject to no Lien (as defined below). Except as described on Schedule 2(c) , no Person is entitled to pre-emptive or similar statutory or contractual rights with respect to any securities of the Company. Except as contemplated by the Loan Documents and except as described on Schedule 2(c) , there are no outstanding warrants, options, convertible securities or other rights, agreements or arrangements of any character under which the Company or any of its Subsidiaries is or may be obligated to issue any equity securities of any kind and except as contemplated by the Loan Documents, neither the Company nor any of its Subsidiaries is currently in negotiations for the issuance of any equity securities of any kind. Except as described on Schedule 2(c) and except for the Loan Documents, there are no voting agreements, buy-sell agreements, option or right of first purchase agreements or other agreements of any kind among the Company and any of the securityholders of the Company relating to the securities of the Company held by them. Except as described on Schedule 2(c) and except as contemplated under this Agreement, no Person has the right to require the Company to register any securities of the Company under the Securities Act of 1933, as amended (the “ 1933 Act ”), whether on a demand basis or in connection with the registration of securities of the Company for its own account or for the account of any other Person.

For purposes of this Agreement, “ Lien ” shall mean, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, encumbrance, charge or security interest of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities, in all cases, other than Permitted Liens (as defined in the Notes)

(d) Governmental Approvals . No action, consent or approval of, registration or filing with or any other action by any federal, state, local or foreign court or governmental agency, authority, instrumentality or regulatory body (collectively, “ Governmental Authority ” ) is or will be required in connection with the transactions contemplated hereby, except for (i) filings necessary to perfect liens created pursuant to the Loan Documents and (ii) such as have been made or obtained and are in full force and effect and NASDAQ listing requirements and post-sale filings pursuant to applicable state and federal securities laws which the Company undertakes to file within the applicable time periods.

(e) Accuracy of Filings . Neither the Company’s most recent Annual Report on Form 10-K for the fiscal year ended March 31, 2014 (the “ 10-K ”) nor any of the Company ’ s reports, schedules, forms, statements and other documents filed with the Securities and Exchange Commission (the “ SEC ” ) since the filing of the 10-K (collectively, the “ SEC Reports ”) at the time of filing contained any untrue statement of a material fact or omitted to state a material fact required to make the statements contained therein, in light of the circumstances in which they were made, not misleading, except to the extent that such statements have been modified or superseded by later SEC Reports filed on a non-confidential basis filed prior to the date hereof.

(f) No Material Adverse Effect . Since March 31, 2014, except as identified and described in the SEC Reports or as described in Schedule 2(f) , no Material Adverse Effect has occurred with respect to the business, assets, liabilities, operations, condition (financial or otherwise), or operating results of the Company or any Subsidiary, taken as a whole.

(g) Title to Properties . The Company and each Subsidiary has good and marketable title to all real properties and all other properties and assets owned by it, in each case free from Liens that would materially affect the value thereof or materially interfere with the use made or currently planned to be made thereof by them; the Company and each Subsidiary holds any leased real or personal property under valid and enforceable leases with no exceptions that would materially interfere with the use made or currently planned to be made thereof by them.

(h) Intellectual Property .

(i) Section 2(h) of the Disclosure Schedules sets forth all of the registered Intellectual Property (as defined below) of the Company. All Intellectual Property of the Company and its Subsidiaries necessary for the operation of the business as currently conducted or as presently proposed to be conducted is currently in material compliance with all legal requirements (including timely filings, proofs and payments of fees) and is valid and enforceable. No Intellectual Property of the Company or its Subsidiaries which is necessary for the conduct of Company’s and each of its Subsidiaries’ respective businesses as currently conducted or as currently proposed to be conducted has been or is now involved in any cancellation, dispute or litigation, and, to the Company’s knowledge, no such action is threatened. No patent of the Company or its Subsidiaries has been or is now involved in any interference, reissue, re-examination or opposition proceeding.

For purposes of this Agreement, “ Intellectual Property ” means all of the following: (A) patents, patent applications, patent disclosures and inventions (whether or not patentable and whether or not reduced to practice); (B) trademarks, service marks, trade dress, trade names, corporate names, logos, slogans and Internet domain names, together with all goodwill associated with each of the foregoing; (C) copyrights and copyrightable works; (D) registrations, applications and renewals for any of the foregoing; and (E) proprietary computer software (including but not limited to data, data bases and documentation).

(ii) All of the licenses and sublicenses and consent, royalty or other agreements concerning Intellectual Property which are necessary for the conduct of the Company’s and each of its Subsidiaries’ respective businesses as currently conducted or as currently proposed to be conducted to which the Company or any Subsidiary is a party or by which any of their assets are bound (other than generally commercially available, non-custom, off-the-shelf software application programs having a retail acquisition price of less than $10,000 per license) (collectively, “ License Agreements ”) are valid and binding obligations of the Company or its Subsidiaries that are parties thereto and, to the Company’s knowledge, the other parties thereto, enforceable in accordance with their terms, except to the extent that enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws affecting the enforcement of creditors’ rights generally, and, to the Company’s knowledge, there exists no event or condition which will result in a material violation or breach of or constitute (with or without due notice or lapse of time or both) a default by the Company or any of its Subsidiaries under any such License Agreement.

(iii) The Company and its Subsidiaries own or have the valid right to use all of the Intellectual Property that is necessary for the conduct of the Company’s and each of its Subsidiaries’ respective businesses as currently conducted or as currently proposed to be conducted and for the ownership, maintenance and operation of the Company’s and its Subsidiaries’ properties and assets, free and clear of all Liens, adverse claims or obligations to license all such owned Intellectual Property and trade secrets, confidential information and know-how (including but not limited to ideas, formulae, compositions, processes, procedures and techniques, research and development information, computer program code, performance specifications, support documentation, drawings, specifications, designs, business and marketing plans, and customer and supplier lists and related information) (collectively, “ Confidential Information ”), other than licenses entered into in the ordinary course of the Company’s and its Subsidiaries’ businesses. The Company and its Subsidiaries have a valid and enforceable right to use all third party Intellectual Property and Confidential Information used or held for use in the respective businesses of the Company and its Subsidiaries.

(iv) To the knowledge of the Company, the conduct of the Company’s and its Subsidiaries’ businesses as currently conducted does not infringe or otherwise impair or conflict with (collectively, “ Infringe ”) any Intellectual Property rights of any third party or any confidentiality obligation owed to a third party, and, to the Company’s knowledge, the Intellectual Property and Confidential Information of the Company and its Subsidiaries which are necessary for the conduct of Company’s and each of its Subsidiaries’ respective businesses as currently conducted or as currently proposed to be conducted are not being Infringed by any third party. There is no litigation or order pending or outstanding or, to the Company’s knowledge, threatened, that seeks to limit or challenge or that concerns the ownership, use, validity or enforceability of any Intellectual Property or Confidential Information of the Company and its Subsidiaries and the Company’s and its Subsidiaries’ use of any Intellectual Property or Confidential Information owned by a third party, and, to the Company’s knowledge, there is no valid basis for the same.

(v) The consummation of the transactions contemplated hereby and by the other Loan Documents will not result in the alteration, loss, impairment of or restriction on the Company’s or any of its Subsidiaries’ ownership or right to use any of the Intellectual Property or Confidential Information which is necessary for the conduct of Company’s and each of its Subsidiaries’ respective businesses as currently conducted or as currently proposed to be conducted.

(vi) The Company and its Subsidiaries have taken reasonable steps to protect the Company’s and its Subsidiaries’ rights in their Intellectual Property and Confidential Information. Each employee, consultant and contractor who has had access to Confidential Information which is necessary for the conduct of Company’s and each of its Subsidiaries’ respective businesses as currently conducted or as currently proposed to be conducted has executed an agreement to maintain the confidentiality of such Confidential Information and has executed appropriate agreements that are substantially consistent with the Company’s standard forms thereof. Except under confidentiality obligations, there has been no material disclosure of any of the Company’s or its Subsidiaries’ Confidential Information to any third party.

(i) Compliance with Laws . Except as set forth on Schedule 2(i) , there are no actions, suits or proceedings at law or in equity or by or before any Governmental Authority now pending or, to the knowledge of the Company, threatened against or affecting the Company or any Subsidiary or any business, property or rights of any of the foregoing (i) that involve this Agreement or any Loan Document or (ii) as to which, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect in the Company or any Subsidiary. Neither the Company nor any Subsidiary or any of their respective properties or assets is in violation of, nor will the continued operation of their properties and assets as currently conducted violate, any law, rule or regulation (including any applicable environmental law, ordinance, code or approval) or any restrictions of record or agreements affecting the properties, or is in default with respect to any judgment, writ, injunction, decree or order of any Governmental Authority, where such violation or default could reasonably be expected to result in a Material Adverse Effect in the Company or any Subsidiary. The Company and each Subsidiary possess adequate certificates, authorities or permits issued by appropriate Governmental Authorities necessary to conduct the business now operated by it, except where such failure has not had and could not reasonably be expected to have a Material Adverse Effect, individually or in the aggregate, and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate, authority or permit that, if determined adversely to the Company or such Subsidiary, could reasonably be expected to have a Material Adverse Effect, individually or in the aggregate.

(j) Tax Returns . The Company and each Subsidiary has timely prepared and filed (or timely filed for an extension for) all tax returns required to have been filed by the Company or such Subsidiary with all appropriate Governmental Authorities and timely paid all taxes shown thereon or otherwise owed by it, other than taxes being contested in good faith and for which adequate reserves have been made on the Company’s financial statements included in the SEC Reports. The charges, accruals and reserves on the books of the Company in respect of taxes for all fiscal periods are adequate in all material respects, and there are no material unpaid assessments against the Company or any Subsidiary nor, to the Company’s knowledge, any basis for the assessment of any additional taxes, penalties or interest for any fiscal period or audits by any federal, state or local taxing authority except for any assessment which is not material to the Company and its Subsidiaries, taken as a whole. All taxes and other assessments and levies that the Company or any Subsidiary is required to withhold or to collect for payment have been duly withheld and collected and paid to the proper Governmental Authority or third party when due, other than taxes being contested in good faith and for which adequate reserves have been made on the Company’s financial statements included in the SEC Reports. There are no tax Liens or claims pending or, to the Company’s knowledge, threatened against the Company or any Subsidiary or any of their respective assets or property. Except as described on Schedule 2(j) , there are no outstanding tax sharing agreements or other such arrangements between the Company and any Subsidiary or other corporation or entity.

(k) Solvency . Immediately after the consummation of the transactions to occur on the Closing Date and immediately following the purchase of the Notes and after giving effect to the application of the proceeds thereof as of the date thereof, (i) the fair value of the assets of the Company and its Subsidiaries, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise; (ii) the present fair saleable value of the property of the Company and its Subsidiaries will be greater than the amount that will be required to pay the current probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; and (iii) in the reasonable judgment of the Company, each of the Company and its Subsidiaries will be able to pay its debts and liabilities then-outstanding at such time.

(l) Rule 506 Compliance . To the Company’s knowledge, neither the Company nor any director, executive officer, other officer of the Company participating in the offering, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, and any promoter connected with the Company in any capacity on the date hereof (each, an “ Insider ”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the 1933 Act (a “ Disqualification Event ”), except for a Disqualification Event covered by Rule 506(d)(2)(i) or (d)(3) of the 1933 Act. The Company is not disqualified from relying on Rule 506 of Regulation D under the 1933 Act (“ Rule 506 ”) for any of the reasons stated in Rule 506(d) in connection with the issuance and sale of the Securities to the Purchasers pursuant to this Agreement. The Company has exercised reasonable care, including without limitation, conducting a factual inquiry that is appropriate in light of the circumstances, into whether any such disqualification under Rule 506(d) exists. The Company has furnished to each Purchaser, a reasonable time prior to the date hereof, a description in writing of any matters relating to the Company and the Insiders that would have triggered disqualification under Rule 506(d) but which occurred before September 23, 2013, in each case, in compliance with the disclosure requirements of Rule 506(e). The Company has exercised reasonable care, including without limitation, conducting a factual inquiry that is appropriate in light of the circumstances, into whether any such disqualification under Rule 506(d) would have existed and whether any disclosure is required to be made to the Purchasers under Rule 506(e). Any outstanding securities of the Company (of any kind or nature) that were issued in reliance on Rule 506 at any time on or after September 23, 2013 have been issued in compliance with Rule 506(d) and (e).

3. Representations and Warranties of the Purchasers . Each Purchaser hereby represents and warrants to the Company that:

(a) Organization and Existence . Such Purchaser, if such Purchaser is an entity, is a validly existing corporation, limited partnership or limited liability company and has all requisite corporate, partnership or limited liability company power and authority, and if such Purchaser is a natural person, all requisite power and authority, to invest in the Securities pursuant to this Agreement.

(b) Authorization . The execution, delivery and performance by such Purchaser of the Loan Documents to which such Purchaser is a party have been duly authorized and each will constitute the valid and legally binding obligation of such Purchaser, enforceable against such Purchaser in accordance with their respective terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability, relating to or affecting creditors’ rights generally.

(c) Purchase Entirely for Own Account . The Securities to be received by such Purchaser hereunder will be acquired for such Purchaser’s own account, not as nominee or agent, and not with a view to the resale or distribution of any part thereof in violation of the 1933 Act, and such Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same in violation of the 1933 Act, without prejudice, however, to such Purchaser’s right at all times to sell or otherwise dispose of all or any part of such Securities in compliance with applicable federal and state securities laws. Nothing contained herein shall be deemed a representation or warranty by such Purchaser to hold the Securities for any period of time. Neither such Purchaser nor any affiliate of such Purchaser is a broker-dealer registered with the SEC under the Securities Exchange Act of 1934, as amended (the “ 1934 Act ”) or an entity engaged in a business that would require it to be so registered.

(d) Investment Experience . Such Purchaser acknowledges that it can bear the economic risk and complete loss of its investment in the Securities and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment contemplated hereby.

(e) Disclosure of Information . Such Purchaser has had an opportunity to receive all information related to the Company requested by it and to ask questions of and receive answers from the Company regarding the Company, its business and the terms and conditions of the offering of the Securities. Such Purchaser acknowledges receipt of copies of the SEC Reports. Neither such inquiries nor any other due diligence investigation conducted by such Purchaser shall modify, limit or otherwise affect such Purchaser’s right to rely on the Company’s representations and warranties contained in this Agreement.

(f) Restricted Securities . Such Purchaser understands that the Securities are characterized as “restricted securities” under the U.S. federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the 1933 Act only in certain limited circumstances.

(g) Legends . It is understood that, except as provided below, certificates evidencing the Securities may bear the following or any similar legend:

(i) “The securities represented hereby have not been registered with the Securities and Exchange Commission or the securities commission of any state in reliance upon an exemption from registration under the Securities Act of 1933, as amended, and, accordingly, may not be transferred unless (i) such securities have been registered for sale pursuant to the Securities Act of 1933, as amended, (ii) such securities may be sold pursuant to Rule 144, or (iii) the Company has received an opinion of counsel reasonably satisfactory to it that such transfer may lawfully be made without registration under the Securities Act of 1933, as amended.”

(ii) If required by the authorities of any state in connection with the issuance of sale of the Securities, the legend required by such state authority.

(h) Accredited Investor . Such Purchaser is an accredited investor as defined in Rule 501(a) of Regulation D, as amended, under the 1933 Act, as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

(i) Rule 506 Compliance . Neither such Purchaser nor any of its directors, executive officers, other officers that may serve as a director or officer of any company in which it invests, general partners or managing members is subject to any Disqualification Event (as defined above), except for Disqualification Events covered by Rule 506(d)(2)(ii) or (iii) under the 1933 Act and disclosed in writing in reasonable detail to the Company.

4. Conditions of the Purchasers’ Obligations at Closing . The obligations of the Purchasers to the Company under this Agreement are subject to the fulfillment of each of the following conditions, unless otherwise waived:

(a) Representations and Warranties . The representations and warranties made by the Company in Section 2 hereof qualified as to materiality shall be true and correct at all times prior to and on the Closing Date, except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case such representation or warranty shall be true and correct as of such earlier date, and, the representations and warranties made by the Company in Section 2 hereof not qualified as to materiality shall be true and correct in all respects at all times prior to and on the Closing Date, except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case such representation or warranty shall be true and correct in all respects as of such earlier date. The Company shall have performed in all respects all obligations and covenants herein required to be performed by it on or prior to the Closing Date.

(b) Qualifications . All authorizations, approvals or permits, if any, of any Governmental Authority that are required in connection with the lawful issuance and sale of the Securities pursuant to this Agreement shall be obtained and effective as of the Closing. For the avoidance of doubt, any authorization, approval or permit of any party, including of the stockholders of the Company, that may be required for the Purchasers to convert the Notes in whole or in part pursuant to any law, regulation or rule to which the Company is then subject shall be obtained and effective as of the such time and not as of the date of the Closing; provided , however , that the failure of the Company to obtain any approval to convert the Notes as of the Stockholders Meeting Deadline (as defined in Section 6(j)) shall cause the interest rate under the Notes to increase to the Default Rate, as such term is defined in the Notes, for the period beginning on the day following the Stockholders Meeting Deadline and continuing until such time that the Company obtains stockholder approval to convert the Notes.

(c) Deliveries . The Company shall have executed the Note, Security Agreement and Subordination Agreement and shall have made all deliveries required pursuant to Section 1(b)(ii) .

5. Conditions of the Company’s Obligations at Closing . The obligations of the Company to the Purchasers under this Agreement are subject to the fulfillment of each of the following conditions, unless otherwise waived:

(a) Representations and Warranties . The representations and warranties made by the Purchasers in Section 3 hereof, other than the representations and warranties contained in Sections 3(c), (d), (e), (f), (g) and (h) (the “ Investment Representations ”), shall be true and correct in all material respects when made, and shall be true and correct in all material respects on the Closing Date with the same force and effect as if they had been made on and as of said date. The Investment Representations shall be true and correct in all respects when made, and shall be true and correct in all respects on the Closing Date with the same force and effect as if they had been made on and as of said date. The Purchaser shall have performed in all material respects all obligations and covenants herein required to be performed by them on or prior to the Closing Date.

(b) Deliveries . The Purchaser shall have executed and delivered the Security Agreement and Subordination Agreement and shall have delivered the Purchase Price for the Notes to the Company, in accordance with Section 1(b)(iii) .

6. Covenants of the Company . The Company covenants and agrees with the Purchasers that, so long as this Agreement shall remain in effect and until all Liabilities under the Notes (as defined therein) have been satisfied by the Company, unless the Purchasers shall otherwise consent in writing:

(a) Existence; Compliance with Laws . The Company and each Subsidiary shall (i) do or cause to be done all things reasonably necessary to preserve, renew and keep in full force and effect its legal existence; (ii) do or cause to be done all things reasonably necessary to obtain, preserve, renew, extend and keep in full force and effect the rights, licenses, permits, franchises, authorizations, patents, copyrights, trademarks and trade names material to the conduct of its business; maintain and operate such business in substantially the manner in which it is presently conducted and operated other than any change thereof that would not result in a Material Adverse Effect; comply in all material respects with all applicable laws, rules, regulations and decrees and orders of any Governmental Authority, whether now in effect or hereafter enacted; and at all times maintain and preserve all property material to the conduct of such business and keep such property in good repair, working order and condition; (iii) keep its insurable properties adequately insured at all times by financially sound and reputable insurers; maintain such other insurance, to such extent and against such risks, including fire and other risks insured against by extended coverage, as is customary with competitors in the same industry operating in similar locations, including public liability insurance against claims for personal injury or death or property damage occurring upon, in, about or in connection with the use of any properties owned, occupied or controlled by it; and maintain such other insurance as may be required by law; (iv) pay and discharge promptly when due (or otherwise escrow, bond or insure) all taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits or in respect of its property, before the same shall become delinquent or in default, as well as all lawful claims for labor, materials and supplies or otherwise that, if unpaid, might give rise to a Lien upon such properties or any part thereof; provided , however , that such payment and discharge (or escrow, bonding or insurance) shall not be required with respect to any such tax, assessment, charge, levy or claim so long as the validity or amount thereof shall be contested in good faith by appropriate proceedings and the Company shall have set aside on its books adequate reserves with respect thereto in accordance with generally accepted accounting principles and such contest operates to suspend collection of the contested obligation, tax, assessment or charge and enforcement of a Lien and there is no risk of forfeiture of such property; (v) solely in the case of the Company, timely and accurately file, report and otherwise disclose all matters required by any Governmental Authority, including, without limitation, all reports and forms required pursuant to rules promulgated by the SEC.

(b) Notices . The Company shall furnish to the Purchasers prompt written notice of the following: (i) any Event of Default or Default (each as defined in the Note), specifying the nature and extent thereof and the corrective action (if any) taken or proposed to be taken with respect thereto; (ii) the filing or commencement of, or any threat or notice of intention of any person or entity to file or commence, any action, suit or proceeding, whether at law or in equity or by or before any Governmental Authority, against the Company or any Subsidiary that could reasonably be expected to result in a Material Adverse Effect; (iii) any loss, damage, or destruction to the real or personal properties (or any other assets) of the Company or any Subsidiary in the amount of $150,000 or more, whether or not covered by insurance; (iv) any notices received by the Company regarding any (A) alleged material default, (B) termination of a lease or eviction from any leased premises or (C) failure to pay rent or any other material monetary obligation, each with respect to any leased property (copies of which notices shall be delivered not later than five (5) days after receipt thereof by such person); (v) any development that has resulted in, or could reasonably be expected to result in, a Material Adverse Effect; and (vi) any change (A) in its corporate name, (B) in the jurisdiction of organization or formation, (C) in its identity or corporate structure or (D) in its Federal Taxpayer Identification Number. The Company agrees not to effect or permit any change referred to in the preceding sentence unless all filings have been made under the Uniform Commercial Code or otherwise that are required in order for the Purchaser to continue at all times following such change to have a valid, legal and perfected security interest in all the assets of the Company and the Subsidiaries.

(c) Additional Collateral; Further Assurances . The Company shall execute any and all further documents, financing statements, agreements and instruments, and take all further action (including filing Uniform Commercial Code, United States Patent and Trademark Office and other financing statements not later than one (1) business day after the Closing Date) that may be required under applicable law, or that the Purchasers may reasonably request, in order to effectuate the transactions contemplated by the Loan Documents and in order to grant, preserve, protect and perfect the validity of the security interests created or intended to be created by the Notes and the other Loan Documents. Subject to any express provision of this Agreement to the contrary, the Company will cause any existing or subsequently acquired or organized subsidiary to become a guarantor by executing a guaranty in substantially the form attached hereto as Exhibit D and a joinder to each applicable Loan Document in favor of the Purchasers. In addition, from time to time, the Company shall, at its cost and expense and subject to the terms of the Notes and the Subordination Agreement, promptly secure the Notes by pledging or creating, or causing to be pledged or created, perfected security interests with respect to such of its assets and properties as the Purchasers shall designate. Such security interests and Liens will be created under the Loan Documents and other security agreements, mortgages, deeds of trust and other instruments and documents in form and substance satisfactory to the Purchasers, and the Company shall deliver or cause to be delivered to the Purchaser all such instruments and documents as the Purchaser shall reasonably request to evidence compliance with this Section 6(c) . The Company agrees to provide such evidence as the Purchaser shall reasonably request as to the perfection of each such security interest and Lien. In furtherance of the foregoing, the Company will give prompt notice to the Purchasers of the acquisition by it or any of its subsidiaries of any property (or any interest in property) having a value in excess of $100,000.

(d) Indebtedness . The Company and the Subsidiaries shall not incur, create, assume or permit to exist any indebtedness for borrowed money in excess of $250,000 in the aggregate, other than indebtedness (i) created hereunder and under the other Loan Documents, (ii) up to a maximum aggregate borrowed amount of $11,000,000 under the Senior Credit Facility, (iii) constituting or arising in connection with a purchase money security interest arising in the ordinary course of business and consistent with the Company ’ s past practice, so long as the same is not a material obligation of the Company and the Subsidiaries, taken as a whole, or (iv) constituting trade debt arising in the ordinary course of business and consistent with the Company ’ s past practices.

(e) Liens . The Company and the Subsidiaries shall not create, incur, assume or permit to exist any Lien on any property or assets now owned or hereafter acquired by it or on any income or revenues or rights in respect of any thereof, except Permitted Liens (as defined in the Note), Liens created hereunder and under the other Loan Documents, Liens for taxes not yet due or contested in compliance with this Agreement and Liens pursuant to customary security deposits under operating leases in the ordinary course of business.

(f) Restrictive Agreements . The Company and the Subsidiaries shall not enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon its ability to create, incur or permit to exist any Lien upon any of its property or assets pursuant to any Loan Document, other than as required by the Senior Credit Facility and the Subordination Agreement.

(g) Transactions with Affiliates . The Company and the Subsidiaries shall not, except for transactions between the Company and a Subsidiary, sell or transfer any property or assets to, or purchase or acquire any property or assets from, or otherwise engage in any other transactions with, any of its affiliates, except that (i) the Company or a Subsidiary may engage in any of the foregoing transactions in the ordinary course of business at prices and on terms and conditions not less favorable to the Company or such Subsidiary than could be obtained on an arm ’ s-length basis from unrelated third parties and (ii) the Company may consummate the transactions contemplated under the Purchase Agreement and the Subscription Agreement, dated as of February 6, 2015, by and between the Company and the investors set forth in each agreement.

(h) Material Adverse Effect . The Company and the Subsidiaries shall not permit the occurrence of any Material Adverse Effect, and, in the event thereof, shall take all steps necessary and desirable, in the reasonable judgment of the Purchasers, to correct such Material Adverse Effect.

(i) Unregistered Shares; Registration of Shares .

(i) The Purchasers acknowledge that the Securities have not been registered for issuance and resale. The Company agrees (promptly following the Closing Date, but no later than forty-five (45) days following the Closing Date) to file a Form S-3 or other applicable form (the “ Registration Statement ” ) including a resale prospectus covering sales of any Conversion Shares owned by the Purchasers and their affiliates, successors and assigns. The Company shall use commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable, and in any event no later than (A) five (5) business days after the SEC shall have informed the Company that no review of the Registration Statement will be made or that the SEC has no further comments on the Registration Statement or (B) the 90 ^th day after the Closing Date (the 120 ^th day if the SEC reviews the Registration Statement). The Company will pay all expenses associated with effecting the registration of the Conversion Shares, including filing and printing fees, the Company’s counsel and accounting fees and expenses, costs associated with clearing the Conversion Shares for sale under applicable state securities laws, listing fees, fees and expenses of one counsel to the Purchasers and the Purchasers’ other reasonable expenses in connection with the registration, but excluding discounts, commissions, fees of underwriters, selling brokers, dealer managers or similar securities industry professionals with respect to the Conversion Shares being sold.

(ii) The Company shall maintain the Registration Statement and the prospectuses included therein in effect for a period that will terminate upon the earlier of (i) the date on which all of the Conversion Shares covered by such Registration Statement, as amended from time to time, have been sold, and (ii) the Conversion Shares are eligible for resale pursuant to Rule 144 promulgated by the SEC. The Company further covenants to the Purchasers that upon request of the Purchaser, it shall enter into a registration rights agreement on customary terms reasonably and mutually acceptable to the parties, including the Company ’ s agreement to provide comfort letters and legal opinions in customary form as may be reasonably requested by the Purchaser; provided, however , that the terms and conditions of such registration rights agreement shall be substantially the same as those contained in the Registration Rights Agreement, dated as of February 6, 2015, between the Company and the investors named therein.

(j) Proxy Statement; Stockholders Meeting .

(i) Promptly following the Closing, the Company shall take all action necessary to call a meeting of its stockholders (the “ Stockholders Meeting ”), which shall occur not later than May 31, 2015 (the “ Stockholders Meeting Deadline ”), for the purpose of seeking approval of the Company’s stockholders for, among other things, the issuance and sale of the Securities to the Purchasers (the “ Proposal ”). In the event the Proposal is not approved by the Company’s stockholders at the Stockholders Meeting, the Company shall take all action necessary to call up to three (3) additional meetings of its stockholders (each a “ Subsequent Stockholders Meeting ”) for the purpose of seeking approval of the Proposal, to be held promptly following the completion of the Stockholders Meeting and in no event more than one year after the Closing Date to the extent reasonably practicable. In connection with the Stockholders Meeting and, if applicable, each Subsequent Stockholders Meeting, the Company will promptly prepare and file with the SEC proxy materials (including a proxy statement and form of proxy) for use at the Stockholders Meeting and, if applicable, each Subsequent Stockholders Meeting, and, after receiving and promptly responding to any comments of the SEC thereon, shall promptly mail such proxy materials (or, if permitted, notice of the availability of such proxy materials) to the stockholders of the Company. Each Purchaser shall promptly furnish in writing to the Company such information relating to such Purchaser and its investment in the Company as the Company may reasonably request for inclusion in each Proxy Statement. The Company will comply with Section 14(a) of the 1934 Act and the rules promulgated thereunder in relation to any proxy statement (as amended or supplemented, each a “ Proxy Statement ”) and any form of proxy to be sent or made available to the stockholders of the Company in connection with the Stockholders Meeting or, if applicable, each Subsequent Stockholders Meeting, and each Proxy Statement shall not, on the date that such Proxy Statement (or any amendment thereof or supplement thereto) is first mailed or made available to stockholders or at the time of the Stockholders Meeting or any Subsequent Stockholders Meeting, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein not false or misleading, or omit to state any material fact necessary to correct any statement in any earlier communication with respect to the solicitation of proxies or the Stockholders Meeting which has become false or misleading. If the Company should discover at any time prior to the Stockholders Meeting or, if applicable, any Subsequent Stockholders Meeting, any event relating to the Company or any of its Subsidiaries or any of their respective Affiliates, officers or directors that is required to be set forth in a supplement or amendment to the applicable Proxy Statement, in addition to the Company's obligations under the 1934 Act, the Company will promptly inform the Investors thereof. The date on which the Proposal is approved by the Company’s stockholders is referred to herein as the “ Approval Date .”

(ii) Subject to their fiduciary obligations under applicable law (as determined in good faith by the Company’s Board of Directors after consultation with the Company’s outside counsel), the Company’s Board of Directors shall recommend to the Company’s stockholders that the stockholders vote in favor of the Proposal (the “ Company Board Recommendation ”) at the Stockholders Meeting and, if applicable, each Subsequent Stockholders Meeting, and take all commercially reasonable action (including, without limitation, the hiring of a proxy solicitation firm of nationally recognized standing) to solicit the approval of the stockholders for the Proposal unless the Board of Directors shall have modified, amended or withdrawn the Company Board Recommendation pursuant to the provisions of the immediately succeeding sentence. The Company covenants that the Board of Directors of the Company shall not modify, amend or withdraw the Company Board Recommendation unless the Board of Directors (after consultation with the Company’s outside counsel) shall determine in the good faith exercise of its business judgment that maintaining the Company Board Recommendation would be inconsistent with its fiduciary duty to the Company’s stockholders. Whether or not the Company’s Board of Directors modifies, amends or withdraws the Company Board Recommendation pursuant to the immediately preceding sentence, the Company shall in accordance with Section 146 of the Delaware General Corporation Law and the provisions of its Certificate of Incorporation and Bylaws, (A) take all action necessary to convene the Stockholders Meeting and, if necessary, each Subsequent Stockholders Meeting as promptly as practicable, but no later than the Stockholders Meeting Deadline with respect to the Stockholders Meeting and as soon as practicable with respect to each Subsequent Stockholders Meeting, to consider and vote upon the approval of the Proposal and (B) submit the Proposal at the Stockholders Meeting or, if applicable, each Subsequent Stockholders Meeting to the stockholders of the Company for their approval. The Company represents and warrants to the Purchasers that, as of the date hereof, the Company has received executed voting agreements from stockholders holding a majority of the Company’s issued and outstanding stock to vote in favor of the Proposal.

7. Miscellaneous .

(a) Successors and Assigns . The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. Neither party may assign this Agreement without the prior written consent of the other party.

(b) Governing Law; Consent to Jurisdiction; Waiver of Jury Trial . This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to the choice of law principles thereof. Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the courts of the State of New York located in New York County and the United States District Court for the Southern District of New York for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Agreement and the transactions contemplated hereby. Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Agreement. Each of the parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court. Each party hereto irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

(c) Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

(d) Notices . Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient (i) upon receipt, when delivered personally or by courier, (ii) the next business day after sent, when sent by overnight delivery service, (iii) upon delivery if given by electronic mail during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, or (iv) three (3) business days after being deposited in the U.S. mail as certified or registered mail, return receipt requested, with postage prepaid, if in each instance such notice is addressed to the party to be notified at such party ’ s address as set forth below or as subsequently modified by written notice.

If to the Company, addressed to:

Selectica, Inc.

2121 South El Camino Real, 10th Floor

San Mateo, CA 94403

Attention: Todd A. Spartz

Fax: (650) 532-1505

E-mail: tspartz@selectica.com

With a copy to:

DLA Piper LLP (US)

2000 University Avenue

East Palo Alto, CA 94303

Attention: Eric Wang

Fax: (650) 687-1205

E-mail: eric.wang@dlapiper.com

If to any Purchaser, addressed to:

Mr. Lloyd I. Miller, III

3300 South Dixie Highway, Suite 1-365

West Palm Beach, Florida 33405

With a copy to:

Andrews Kurth LLP

450 Lexington Avenue

New York, New York 10017

Attn: Roger J. Griesmeyer, Esq.

(e) Amendments and Waivers . Any term of this Agreement may be amended or waived only with the written consent of the Company and Lloyd I. Miller, III.

(f) Confidentiality . Each party hereto agrees that, except with the prior written permission of the other party or otherwise required by law, it shall at all times keep confidential and not divulge, furnish or make accessible to anyone any confidential information, knowledge or data concerning or relating to the business or financial affairs of the other party (or its affiliates) to which such party has been or shall become privy by reason of this Agreement or any other Loan Document, discussions or negotiations relating to this Agreement or any other Loan Document, or the performance of its obligations hereunder or thereunder. This Section does not apply to information that is entirely in the public domain, previously known to the recipient of the information (as evidenced by written, dated business records of such recipient), received lawfully from a third party, or independently developed without access to such information. Notwithstanding the foregoing, the parties agree that the Company shall (i) file a Current Report on Form 8-K describing the transactions contemplated under the Loan Documents and attaching copies of the Loan Documents and (ii) prior to the issuance of any press release with respect to the transactions contemplated hereby, provide such press release to the Purchasers for their review and approval, such approval not to be unreasonably withheld. In addition, the Company will make such other filings and notices in the manner and time required by the SEC or NASDAQ.

(g) Severability . If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith, in order to maintain the economic position enjoyed by each party as close as possible to that under the provision rendered unenforceable. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.

(h) Expenses . The parties hereto shall pay their own costs and expenses related to the transactions contemplated by this Agreement, the Purchase Agreement and the Subscription Agreement, except that the Company shall pay the reasonable fees and expenses of Andrews Kurth LLP, legal counsel to the Purchasers, with respect to the transactions contemplated by this Agreement, the Purchase Agreement, the Subscription Agreement and the Limited Guaranties and the Guaranty Fee Agreement entered into by the Company, certain of the Purchasers and Bridge Bank, National Association, not to exceed $75,000 in the aggregate, regardless of whether the transactions contemplated hereby or thereby are consummated. If the Closing hereunder does not occur, then the Company shall reimburse the applicable portion of such fees and expenses not later than five (5) business days following notice by the Company or the Purchasers of their intent not to proceed with the transactions contemplated hereunder.

(i) Entire Agreement . This Agreement and the Loan Documents constitute the entire agreement between the parties hereto pertaining to the subject matter hereof, and any and all other written or oral agreements existing between the parties hereto are expressly canceled, including, without limitation, that certain convertible note financing term sheet dated February 9, 2015, by and among the parties.

(j) Subordination Agreement . This Agreement and the Loan Documents (other than the Subordination Agreement) are subject to the Subordination Agreement. In the event of any conflict between the terms and condition of this Agreement or any Loan Document, on the one hand, and the Subordination Agreement (other than the Subordination Agreement), on the other hand, the terms and conditions of the Subordination Agreement shall govern and control .

[Remainder of page intentionally blank; signature pages to follow]

IN WITNESS WHEREOF, the parties have executed this Junior Secured Convertible Note Purchase Agreement as of the date first written above.

COMPANY:

SELECTICA, INC.

By:

Name:

Title:

IN WITNESS WHEREOF, the parties have executed this Junior Secured Convertible Note Purchase Agreement as of the date first written above.

PURCHASERS:

LLOYD I. MILLER, III

Signature

MILFAM II L.P. , a Georgia limited partnership

By: MILFAM LLC

Its: General Partner

By:

Name: Lloyd I. Miller, III

Title: Manager

LLOYD I. MILLER TRUST A-4

By: MILFAM LLC

Its: Investment Advisor

By:

Name: Lloyd I. Miller, III

Title: Manager

Schedule I

Schedule of Purchasers

Name	Note Principal Amount

Lloyd I. Miller, III	$	1,000,000.00

MILFAM II L.P.	$	1,000,000.00

Lloyd I. Miller Trust A-4	$	1,000,000.00

Total	$	3,000,000.00

EXHIBIT A

Form of Note

EXHIBIT B

Security Agreement

EXHIBIT C

Subordination Agreement

EXHIBIT D

Form of Guaranty

THIS GUARANTY (" Guaranty ") is made as of this [__] day of [__], 2015, by [____________], a [___________] (the " Guarantor "), in favor of Lloyd I. Miller, III, Milfam II L.P., a Georgia limited partnership, and Lloyd I. Miller Trust A-4 (collectively, the “ Lender ”), to guarantee all Obligations (as defined below) of Selectica, Inc., a Delaware corporation and owner of one hundred percent (100%) of the equity of Guarantor (" Debtor ").

To secure the prompt and faithful payment and satisfaction of the Junior Secured Convertible Promissory Notes, dated as of March 11, 2015, and executed by Debtor in favor of Lender (the “ Notes ”), in the aggregate amount of Three Million Dollars ($3,000,000) due and owing to Lender (the " Obligations "), Guarantor unconditionally, irrevocably and absolutely guarantees the full and prompt payment and satisfaction of the Obligations when due, whether by acceleration or otherwise, and at all times thereafter. Capitalized terms not otherwise defined in this Guaranty shall have the meanings set forth in the Notes.

Lender may, from time to time, and in accordance with the terms of this Guaranty, the Notes, Note Agreement and other Loan Documents, and without notice to Guarantor, take any or all of the following actions: (a) retain or obtain a Lien against any property, including the Guarantor Collateral (as defined below), to secure any of the Obligations or this Guaranty; (b) subject to the terms of the Note Agreement, retain or obtain the primary or secondary obligation of any obligor or obligors, in addition to the Guarantor, with respect to any of the Obligations; (c) extend or renew for one or more periods all or any part of the Obligations, whether or not longer than the original periods, or modify or alter any of the terms or provisions (including, by way of example and not limitation, the interest rate, maturity, or installment amount) of any of the Obligations, or accelerate or exchange any of the Obligations, or release Debtor or compromise any of the Obligations of any guarantor or any obligor with respect to any of the Obligations; (d) release its security interest or encumbrance in, or surrender, sell, transfer, exchange, substitute, dispose of, or otherwise deal with all or any part of any collateral, including the Guarantor Collateral; (e) discharge, release, compound or settle with Debtor or any guarantor as to the Obligations; (f) file, or elect not to file, a proof of claim against the estate of any bankrupt, insolvent, incompetent or deceased Debtor, guarantor or other person or entity; or (g) apply any and all amounts received by Lender from whatever source on account of the Obligations toward the payment of the Obligations in such order as Lender may from time to time elect.

Subject to the terms of the Subordination Agreement and the Security Agreement, at any time after a default by Debtor pursuant to the Note or any Loan Document(s), Lender may sue Debtor or Guarantor or both to enforce the payment of any sum or for the performance of any of the Obligations, or for the recovery of damages, and without regard to the existence of additional causes of action. Guarantor shall pay Lender for all attorneys’ fees and expenses and costs of collection reasonably incurred by it in collecting any of the Obligations. The rights, remedies, and benefits provided to Lender shall be cumulative and shall not be exclusive of any other rights, remedies or benefits allowed by law, and may be exercised either successively or concurrently.

In connection with this Guaranty, and subject to any Permitted Liens and the terms of the Subordination Agreement, Guarantor hereby grants to Lender a continuing security interest in all assets of Guarantor whether now owned or hereafter acquired, including all proceeds therefrom (collectively, the “ Guarantor Collateral ”) to secure the payment of the Obligations, plus all interest, costs, expenses, and reasonable attorneys’ fees, which may be made or incurred by Lender in the disbursement, administration, and collection of such amounts, and in the protection, maintenance, and liquidation of the Guarantor Collateral. Other than in connection with any Permitted Liens or in accordance with the Subordination Agreement and the Security Agreement, Guarantor shall not sell, assign, transfer, pledge or otherwise dispose of or encumber any Guarantor Collateral to any third party while the Note is in effect without the prior written consent of Lender.

Guarantor shall execute and deliver to Lender, concurrently with the execution hereof, and at any time or times hereafter at the request of Lender, all financing statements, assignments, affidavits, reports, notices, schedules of accounts, letters of authority and all other documents that Lender may reasonably request, in form satisfactory to Lender, to perfect and maintain perfected Lender’s security interests in the Guarantor Collateral. In addition, Guarantor irrevocably authorizes Lender, its agents, attorneys, and representatives, to file financing statements and amendments thereto, at Guarantor’s expense, necessary to establish and maintain Lender’s perfected security interest in the Guarantor Collateral. In order to fully consummate all of the transactions contemplated hereunder, Guarantor shall make appropriate entries on its books and records disclosing Lender’s security interests in the Guarantor Collateral. Immediately upon payment or conversion of the Note, without further notice from Guarantor, Lender shall terminate any financing statements, assignments, affidavits, reports, notices, schedules of accounts, letters of authority and all other documents used to perfect and maintain perfected Lender’s security interests in the Guarantor Collateral.

If default is made in the performance or satisfaction of any of the Obligations and such default continues beyond any applicable cure periods, Lender may, at its option, and without further notice, but subject to the terms of the Subordination Agreement, declare the Obligations due and payable, or subject to any Permitted Liens and the Subordination Agreement, sell any collateral, including the Guarantor Collateral, or any part of it, or cause it to be sold at public or private sale, and Lender may become purchaser thereof at its option.

Guarantor waives demand, notice, protest, notice of acceptance of this Guaranty, notice of any loans made, extensions granted, renewals, collateral received or delivered, or other action taken in reliance on this Guaranty, all demands and notices in connection with the delivery, acceptance, performance, default or enforcement of any note, payment of which is guaranteed by this Guaranty, and all other demands and notices of any description.

This Guaranty is to be construed in accordance with and governed by the laws of the State of New York, without regard to principles of conflict of laws. Any term of this Guaranty may be amended and the observance of any term of this Guaranty may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the prior written consent of Lender. Except as may be otherwise provided herein, all notices, requests, waivers and other communications made pursuant to this Guaranty shall be made in accordance with Section 7(d) of the Note Agreement. If one or more provisions of this Guaranty are held to be unenforceable under applicable law, such provision shall be excluded from this Guaranty and the balance of the Guaranty shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms. The Guaranty may not be assigned without the prior written consent of Lender.

[Signature Page Follows]

Guarantor has executed this Guaranty as of the date set forth above.

GUARANTOR

[____________________]

By: _________________________________

Name: _______________________________

Its: _________________________________

Exhibit 10.6

THIS INSTRUMENT AND THE OBLIGATIONS EVIDENCED HEREBY ARE EXPRESSLY SUBORDINATED PURSUANT TO THAT CERTAIN SUBORDINATION AGREEMENT, DATED AS OF MARCH 11, 2015 (THE “SUBORDINATION AGREEMENT”), AMONG THE HOLDER OF THIS INSTRUMENT, THE MAKER OF THIS INSTRUMENT, AND BRIDGE BANK, NATIONAL ASSOCIATION. EACH SUCCESSIVE HOLDER OF THIS INSTRUMENT OR ANY PORTION HEREOF, OR OF ANY RIGHTS OBTAINED HEREUNDER, BY ITS ACCEPTANCE HEREOF OR THEREOF, AGREES (1) TO BE BOUND BY THE TERMS OF THE SUBORDINATION AGREEMENT, AND (2) THAT IF ANY CONFLICT EXISTS BETWEEN THE TERMS OF THIS INSTRUMENT OR ANY DOCUMENT EXECUTED IN CONNECTION WITH THE DELIVERY OF THIS INSTRUMENT AND THE TERMS OF THE SUBORDINATION AGREEMENT, THE TERMS OF THE SUBORDINATION AGREEMENT SHALL GOVERN AND BE CONTROLLING.

THIS JUNIOR SECURED CONVERTIBLE PROMISSORY NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER ANY STATE SECURITIES LAWS.

JUNIOR SECURED CONVERTIBLE PROMISSORY NOTE

$1,000,000.00

March 11, 2015

Effective Date

FOR VALUE RECEIVED, Selectica, Inc., a Delaware corporation (the “ Company ” ), promises to pay to the order of [●], or its registered assigns ( “ Lender ” ), the principal sum of One Million Dollars ($1,000,000.00) (the “ Principal Amount ” ) with interest on the outstanding Principal Amount accruing as set forth in Section 1 . Interest shall commence with the date hereof and shall continue on the outstanding principal of this Junior Secured Convertible Promissory Note (this “ Note ” ) as set forth in Section 1 until paid in accordance with the provisions hereof.

1. Interest .

(a) Interest shall accrue on the outstanding Principal Amount at the rate of eight percent (8%) per annum simple interest (computed on the basis of actual days elapsed and a fiscal year of 364 days).

(b) Accrued interest shall be payable quarterly, in arrears, on each successive three (3) month anniversary of the Effective Date. Notwithstanding the foregoing, but provided the Company is not then in default pursuant to this Note or any other Loan Document, the Company may elect to pay the interest due by converting such interest amount to Conversion Shares at the Conversion Price (as each such term is defined in Section 6(a) below) (the “ PIK Right ” ); provided, however , that the PIK Right may be exercised by the Company only following the approval of the Proposal by the Company’s stockholders; provided, further , that, if the Company elects to convert interest to Common Stock pursuant to this Section 1(b) , such interest shall be deemed to have accrued at the rate of ten percent (10%) per annum simple interest (computed on the basis of actual days elapsed and a fiscal year of 364 days). The election of the PIK Right shall be made by written notice to Lender not less than ten (10) business days prior to the date such interest payment is due, and the Company ’ s failure to so exercise the PIK Right shall be deemed a waiver of the PIK Right with respect to such interest payment. Any such conversion of interest into shares of Common Stock upon exercise of the PIK Right shall be in accordance with Section 6(c) below.

(c) Upon any default pursuant to this Note or any other Loan Document, this Note shall bear interest at the rate of the lesser of (i) thirteen percent (13%) and (ii) such maximum rate of interest allowable under the laws of the State of New York (the “ Default Rate ” ).

2. Junior Secured Convertible Note Purchase Agreement; Security .

(a) This Note is issued pursuant to, and subject in all respects to, the terms of that certain Junior Secured Convertible Note Purchase Agreement, dated as of March 11, 2015 (the “ Note Agreement ” ), by and among the Company, Lender and the other investors named therein. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Note Agreement or in the Security Agreement, dated of even date herewith (the “ Security Agreement ”), by and among the Company, Lender and the other secured parties named therein.

(b) The indebtedness evidenced by this Note is secured by all of the assets of the Company, as further described in the Security Agreement.

3. Maturity . The entire unpaid principal amount and all unpaid accrued interest (collectively, the “ Obligations ” ) shall become fully due and payable on the fifth (5th) anniversary of the date hereof (the “ Maturity Date ” ).

4. Payments .

(a) All payments of the Obligations shall be made in lawful money of the United States of America to Lender, at the address specified in the Note Agreement, or at such other address as may be specified from time to time by Lender in a written notice delivered to the Company. All payments shall be applied first to accrued interest, expenses or fees due to Lender pursuant to this Note or any other Loan Document, and thereafter to principal.

(b) Unless earlier converted pursuant to Section 6 below, the Obligations under this Note may not be prepaid by the Company prior to the Maturity Date.

5. Use of Proceeds . The Company shall use the proceeds from this Note for working capital and general corporate purposes.

6. Conversion .

(a) At any time following the approval of the Proposal by the Company’s stockholders and up to the Maturity Date, the then outstanding Obligations under this Note (or any portion thereof) may be converted into fully paid and nonassessable shares of Company Common Stock, $0.0001 par value per share (the “ Conversion Shares ”), at the sole election of Lender upon written notice to the Company (the “ Conversion Notice ”), which Conversion Notice shall state the proposed effective date of such conversion (which date shall be no fewer than ten (10) business days following the date of delivery of the Conversion Notice) (the “ Conversion Date ”). The Obligations hereunder shall convert at a conversion price equal to $5.70 per share, subject to adjustment for any stock dividend, stock split, combination or other similar recapitalization event with respect to the Company’s Common Stock (the “ Conversion Price ”).

(b) Upon the Conversion Date, Lender hereby agrees to deliver the original of this Note to the Company for cancellation (or a notice to the effect that the original Note has been lost, stolen or destroyed and an agreement acceptable to the Company whereby Lender agrees to indemnify the Company from any loss incurred by it in connection with this Note); provided, however , that upon the Conversion Date, this Note (or portion thereof) shall be deemed converted and of no further force and effect, whether or not it is delivered for cancellation as set forth in this sentence.

(c) On or before the second Trading Day following the Conversion Date (the “ Share Delivery Date ”), the Company shall, (i) provided that the Company’s transfer agent is participating in The Depository Trust Company (“ DTC ”) Fast Automated Securities Transfer Program (the “ FAST Program ”) and so long as the certificates therefor are not required to bear a legend regarding restriction on transferability, upon the request of Lender, credit such aggregate number of shares of Common Stock to which Lender is entitled pursuant to such exercise to Lender’s or its designee’s balance account with DTC through its Deposit Withdrawal Agent Commission system, or (ii), if the Company’s transfer agent is not participating in the FAST Program or if the certificates are required to bear a legend regarding restriction on transferability, issue and dispatch by overnight courier to the address as specified in the Conversion Notice, a certificate, registered in the Company’s share register in the name of Lender or its designee, for the number of shares of Common Stock to which Lender is entitled pursuant to such exercise. Upon the Conversion Date, Lender shall be deemed for all corporate purposes to have become the holder of record of the Conversion Shares with respect to which this Note (or portion thereof) has been converted, irrespective of the date such Conversion Shares are credited to the Holder’s DTC account or the date of delivery of the certificates evidencing such Conversion Shares, as the case may be.

For purposes of this Note, “ Trading Day ” means any day on which the Common Stock are traded on the The NASDAQ Capital Market or, if such market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock are then traded; provided that “ Trading Day ” shall not include any day on which the Common Stock are scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock are suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time).

(d) No fractional shares shall be issued upon conversion of this Note. In lieu of the Company issuing any fractional shares to Lender upon the conversion of this Note, the Company shall pay to Lender an amount equal to the product obtained by multiplying the Conversion Price by the fraction of a share not issued pursuant to the previous sentence.

7. Subordination . The Obligations evidenced by this Note are hereby expressly subordinated in right of payment to the prior payment in full of all of the Company’s Senior Credit Facility and any Liens on property of the Company in favor of Lender are hereby expressly subordinated in priority to any Liens on the Company’s property in favor of any holder of debt under the Senior Credit Facility, in accordance with the Subordination Agreement.

8. Default .

(a) Events of Default . For purposes of this Note, any of the following events shall constitute an “ Event of Default ” :

(i) The Company shall fail to pay when due any Obligations hereunder;

(ii) Any representation or warranty of the Company under the Note Agreement, the other Loan Documents or any agreement ancillary thereto (collectively, the “ Ancillary Agreements ” ), as applicable, shall be untrue in any material respect as of the date made;

(iii) The Company shall breach any covenant set forth in this Note or the Ancillary Agreements, taking into account applicable periods of notice and cure, if any; provided, however , that, in the event no grace or cure period is so provided, the Company shall have a period of (A) three (3) days after the earlier of the Company ’ s actual knowledge thereof and written notice of non-compliance to cure such non-compliance to the extent it relates to any monetary default and (B) twenty (20) days after the earlier of the Company ’ s actual knowledge thereof and written notice of non-compliance to cure any other non-compliance; provided that, in the event that any default described in clause (B) cannot reasonably be cured within such twenty (20) day period, then the Company shall have an additional ten (10) days in which to cure such non-compliance, so long as the Company continues to diligently pursue curing such non-compliance;

(iv) Any default occurs under the Senior Credit Facility and such default is not cured, or waived by the lender thereunder, within the time period, if any, provided under the Senior Credit Facility;

(v) The Company makes an assignment for the benefit of creditors, or admits in writing its inability to pay its debts as they become due, or files a voluntary petition for bankruptcy, or files any petition or answer seeking for itself any reorganization, arrangement, composition, readjustment, dissolution or similar relief under any present or future statute, law or regulation, or seeks or consents to or acquiesces in the appointment of any trustee, receiver or liquidator of the Company, or of all or any substantial part of the properties of the Company, or the Company or its respective directors or majority stockholders takes any action looking to the dissolution, liquidation or winding up of the Company;

(vi) An involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (i) relief in respect of the Company under Title 11 of the United States Code, as now constituted or hereafter amended, or any other federal, state or foreign bankruptcy, insolvency, receivership or similar law, (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Company or for a substantial part of the property or assets of the Company or (iii) the winding-up or liquidation of the Company or; and such proceeding or petition shall continue undismissed for thirty (30) days or an order or decree approving or ordering any of the foregoing shall be entered; or

(vii) One or more judgments shall be rendered against the Company or and the same shall remain undischarged for a period of thirty (30) consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to levy upon assets or properties of the Company or to enforce any such judgment and such judgment either (i) is for the payment of money in an aggregate amount in excess of $250,000 or (ii) is for injunctive relief and could reasonably be expected to result in a Material Adverse Effect;

(viii) If any material portion of the Collateral (as defined in the Security Agreement) is attached, seized, subjected to a writ or distress warrant, or is levied upon, or comes into the possession of any trustee, receiver or person acting in a similar capacity and such attachment, seizure, writ or distress warrant or levy has not been removed, discharged or rescinded within fifteen (15) days, or if the Company is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of its business affairs, or if a judgment or other claim becomes a lien upon any material portion of the Collateral, or if a notice of lien, levy, or assessment is filed of record with respect to any material portion of the Collateral by the United States Government, or any department, agency, or instrumentality thereof, or by any state, county, municipal, or governmental agency, and the same is not paid within fifteen (15) days after the Company receives notice thereof;

(ix) There shall occur any material event of loss, theft, damage or destruction of any Collateral for which there is less than 80% insurance coverage (subject to reasonable deductibles as determined by the Company and consistent with the Company ’ s past practices); or

(x) The occurrence of any event (financial or otherwise) resulting in, or which will likely result in, a Material Adverse Effect in the Company, as determined by Lender’s Agent in his reasonable discretion, and remains uncured for a period of fifteen (15) days following the earlier of the Company ’ s knowledge of such event and written notice of such event by Lender’s Agent to the Company (or, such longer period of time as reasonable given the circumstances if such occurrence is not reasonably curable within such thirty (30) day period and provided that the Company is taking steps to cure such occurrence during such thirty (30) day period and thereafter diligently pursues to completion).

(b) Consequences of Events of Default . Subject to the rights of Bridge Bank under the Senior Credit Facility, if any Event of Default shall occur for any reason, whether voluntary or involuntary, or continue beyond the expiration of any applicable cure period:

(i) upon notice or demand, the Lender’s Agent may declare the outstanding indebtedness under this Note, together with all other amounts due or owing to Lender pursuant to any Ancillary Agreements, to be due and payable, whereupon each of the foregoing shall be and become immediately due and payable, and the Company shall immediately pay to Lender all such indebtedness, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by the Company, anything contained herein or in any Ancillary Agreement to the contrary notwithstanding; provided , however , that upon the occurrence of an actual or deemed entry of an order for relief with respect to the Company under the United States Bankruptcy Code, then all indebtedness under this Note, together with all other amounts due or owing to Lender pursuant to any Ancillary Agreements, shall automatically be due immediately without notice of any kind;

(ii) Lender’s Agent may exercise from time to time any rights and remedies available to him under applicable law, including without limitation the right to: (A) immediate possession of the Collateral by Lender’s Agent, (B) institute legal proceedings to foreclose upon the lien and security interest granted under the Security Agreement or for the sale of all Collateral, to recover judgment for all amounts then due and owing from the Company, and to collect the same out of any Collateral or the proceeds of any sale of the Collateral, and (C) peacefully enter upon any premises (whether it be the Lender’s Agent, his agents or attorneys, or an appointment of a receiver selected or appointed by Lender’s Agent to which the Company shall consent to in all respects) where Collateral may then be located, and take possession of all or any of it and/or render it unusable and without being responsible for loss or damage to such Collateral, hold, operate, sell, lease, or dispose of all or any Collateral at one or more public or private sales, leasings or other dispositions, at places and times and on terms and conditions as Lender may deem fit, without any previous demand or advertisement (unless such demand or advertisement is expressly required by law).

The Company agrees to pay Lender’s Agent all out-of-pocket costs and expenses reasonably incurred by Lender’s Agent and Lender in any effort to collect indebtedness under this Note and to exercise remedies under the Note Agreement or any Ancillary Agreement, including, without limitation, reasonable attorneys ’ fees, and to pay interest at the Default Rate on such costs and expenses to the extent not paid when demanded. Lender’s Agent may exercise any and all of its remedies under the Note Agreement or any Ancillary Agreement contemporaneously or separately from the exercise of any other remedies hereunder or under applicable law.

9. Lost, Stolen, Destroyed or Mutilated Note . In case this Note shall be mutilated, lost, stolen or destroyed, the Company shall issue a new Note of like date, tenor and denomination and deliver the same in exchange and substitution for and upon surrender and cancellation of any mutilated Note, or in lieu of any Note lost, stolen or destroyed, upon receipt of evidence satisfactory to the Company of the loss, theft or destruction of such Note and an agreement from Lender to indemnify the Company against any claim that may be made against the Company on account of the mutilation, loss, theft or destruction of this Note.

10. Governing Law . This Note is to be construed in accordance with and governed by the laws of the State of New York, without regard to principles of conflict of laws.

11. Amendment and Waiver . Any term of this Note may be amended and the observance of any term of this Note may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consents of the Lender’s Agent and the Company.

12. Notices . Except as may be otherwise provided herein, all notices, requests, waivers and other communications made pursuant to this Note shall be made in accordance with Section 7(d) of the Note Agreement.

13. Severability . If one or more provisions of this Note are held to be unenforceable under applicable law, such provision shall be excluded from this Note and the balance of the Note shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

14. Successors and Assigns; Assignment . The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. Neither party may assign this Agreement without the prior written consent of the other party.

15. Remedies Cumulative; Failure or Indulgence Not a Waiver . The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note, the Note Agreement and the Ancillary Agreements. No failure or delay on the part of Lender in the exercise of any power, right or privilege hereunder or under this Note, the Note Agreement or any Ancillary Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.

16. Payments . Whenever any payment of cash is to be made by the Company to Lender pursuant to this Note, such payment shall be made in lawful money of the United States of America by, at the Company ’ s option, a check drawn on the account of the Company and sent via overnight courier service to Lender at the address previously provided to the Company in writing (which address shall initially be the address for Lender as set forth in the Note Agreement), electronic funds transfer, or wire transfer of immediately available funds, to an account designated in writing by Lender. Whenever any payment to be made shall otherwise be due on a day which is not a business day, such payment shall be made on the immediately succeeding Business Day and such extension of time shall be included in the computation of accrued interest.

17. Excessive Interest . Notwithstanding any other provision herein to the contrary, this Note is hereby expressly limited so that the interest rate charged hereunder shall at no time exceed the maximum rate permitted by applicable law. If, for any circumstance whatsoever, the interest rate charged exceeds the maximum rate permitted by applicable law, the interest rate shall be reduced to the maximum rate permitted, and if Lender shall have received an amount that would cause the interest rate charged to be in excess of the maximum rate permitted, such amount that would be excessive interest shall be applied to the reduction of the principal amount owing hereunder (without charge for prepayment) and not to the payment of interest, or if such excessive interest exceeds the unpaid balance of principal, such excess shall be refunded to the Company.

18. Waiver of Notice . To the extent permitted by law, the Company hereby waives demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note or the Ancillary Agreements.

[Signature Page Follows]

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by its officers, thereunto duly authorized as of the date first above written.

	SELECTICA, INC.



	By:

	Name:

	Title:

Exhibit 10.7

SECURITY AGREEMENT

This Security Agreement, dated as of March 11, 2015 (this “ Security Agreement ”), is made by and among Selectica, Inc., a Delaware corporation (“ Grantor ”), Lloyd I. Miller, III as “ Lenders’ Agent ,” and the parties listed on the signature pages hereto (each a “ Lender ” or “ Secured Party ” and, collectively, the “ Lenders ” or “ Secured Parties ”).

RECITALS

A. Each Secured Party has agreed to make certain loans to Grantor pursuant to that certain Junior Secured Convertible Note Purchase Agreement, dated as of March 11, 2015, by and among Grantor and the Secured Parties (as the same may from time to time be amended, modified or supplemented or restated, the “ Purchase Agreement ”), such advances and financial accommodation being referred to herein as the “ Loans .”

B. Each Secured Party acknowledges that the security interest granted hereunder will, upon perfection thereof, be a second priority lien on the subject assets and that the rights of the Lenders’ Agent and Secured Parties will in all respects be subject to the first priority security position granted to Bridge Bank, National Association (“ Bridge Bank ”) under that certain Business Financing Agreement, effective as of September 27, 2011, as amended (the “ Senior Credit Facility ”), between Grantor and Bridge Bank, and the Subordination Agreement to be executed and delivered by Lenders’ Agent in favor of Bridge Bank simultaneously herewith.

C. Each Secured Party is willing to make the Loans to Grantor, and consents to execution and delivery by Lenders’ Agent of the Subordination Agreement, but only upon the condition, among others, that Grantor shall have granted the security interest set forth herein the Loans and executed and delivered to such Secured Party this Security Agreement.

AGREEMENT

NOW, THEREFORE , to induce the Secured Parties to make the Loans and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, Grantor hereby represents, warrants, covenants and agrees as follows:

1. DEFINED TERMS . When used in this Security Agreement the following terms shall have the meanings set forth below (such meanings being equally applicable to both the singular and plural forms of the terms defined). Any other capitalized term used in this Security Agreement but not defined herein shall have the meaning ascribed to it under the Purchase Agreement.

“ Bankruptcy Code ” means Title XI of the United States Code.

“ Collateral ” shall have the meaning assigned to such term in Section 2 of this Security Agreement.

“ Contracts ” means all contracts (including any customer, vendor, supplier, service or maintenance contract), leases, licenses, undertakings, purchase orders, permits, franchise agreements or other agreements (other than any right evidenced by Chattel Paper, Documents or Instruments), whether in written or electronic form, in or under which Grantor now holds or hereafter acquires any right, title or interest, including, without limitation, with respect to an Account, any agreement relating to the terms of payment or the terms of performance thereof.

“ Copyright License ” means any agreement, whether in written or electronic form, in which Grantor now holds or hereafter acquires any interest, granting any right in or to any Copyright or Copyright registration (whether Grantor is the licensee or the licensor thereunder) including, without limitation, licenses pursuant to which Grantor has obtained the exclusive right to use a copyright owned by a third party.

“ Copyrights ” means all of the following now owned or hereafter acquired or created (as a work for hire for the benefit of Grantor) by Grantor or in which Grantor now holds or hereafter acquires or receives any right or interest, in whole or in part: (a) all copyrights, whether registered or unregistered, held pursuant to the laws of the United States, Australia, any State or Province thereof or any other country; (b) registrations, applications, recordings and proceedings in the United States Copyright Office or in any similar office or agency of the United States or any other country; (c) any continuations, renewals or extensions thereof; (d) any registrations to be issued in any pending applications, and shall include any right or interest in and to work protectable by any of the foregoing which are presently or in the future owned, created or authorized (as a work for hire for the benefit of Grantor) or acquired by Grantor, in whole or in part; (e) prior versions of works covered by copyright and all works based upon, derived from or incorporating such works; (f) income, royalties, damages, claims and payments now and hereafter due and/or payable with respect to copyrights, including, without limitation, damages, claims and recoveries for past, present or future infringement; (g) rights to sue for past, present and future infringements of any copyright; and (h) any other rights corresponding to any of the foregoing rights throughout the world.

“ Event of Default ” has the meaning set forth in the Notes.

“ Intellectual Property ” means any intellectual property, in any medium, of any kind or nature whatsoever, now or hereafter owned or acquired or received by Grantor or in which Grantor now holds or hereafter acquires or receives any right or interest, and shall include, in any event, any Copyright, Trademark, Patent, trade secret, customer list, internet domain name (including any right related to the registration thereof), proprietary or confidential information, mask work, source, object or other programming code, invention (whether or not patented or patentable), technical information, procedure, design, knowledge, know-how, software, data base, data, skill, expertise, recipe, experience, process, model, drawing, material or record.

“ Lenders’ Agent ” means Lloyd I. Miller, III.

“ License ” means any Copyright License, Patent License, Trademark License or other license of rights or interests, whether in-bound or out-bound, whether in written or electronic form, now or hereafter owned or acquired or received by Grantor or in which Grantor now holds or hereafter acquires or receives any right or interest, and shall include any renewals or extensions of any of the foregoing thereof .

“ Lien ” has the meaning set forth in the Purchase Agreement.

“ Loans ” has the meaning set forth in Recital A above.

“ Notes ” means, collectively, the Junior Secured Convertible Promissory Notes issued under the Purchase Agreement evidencing the Loans.

“ Patent License ” means any agreement, whether in written or electronic form, in which Grantor now holds or hereafter acquires any interest, granting any right with respect to any invention on which a Patent is in existence (whether Grantor is the licensee or the licensor thereunder).

“ Patents ” means all of the following in which Grantor now holds or hereafter acquires any interest: (a) all letters patent of the United States, Australia or any other country, all registrations and recordings thereof and all applications for letters patent of the United States, Australia or any other country, including, without limitation, registrations, recordings and applications in the United States Patent and Trademark Office or in any similar office or agency of the United States, any state or any other country; (b) all reissues, divisions, continuations, renewals, continuations-in-part or extensions thereof; (c) all petty patents, divisionals and patents of addition; (d) all patents to issue in any such applications; (e) income, royalties, damages, claims and payments now and hereafter due and/or payable with respect to patents, including, without limitation, damages, claims and recoveries for past, present or future infringement; and (f) rights to sue for past, present and future infringements of any patent.

“ Permitted Lien ” means: (i) any liens arising under Grantor’s Senior Credit Facility; (ii) purchase money security interests to secure purchase money indebtedness of Grantor, so long as such security interests arise or are created (A) in the ordinary course of business and consistent with past practices and (B) substantially contemporaneously with the purchase or acquisition by Grantor of the respective property or assets to which such security interests relate and the incurrence of the respective purchase money indebtedness which such security interests secure, secure only the respective purchase money indebtedness so incurred by Grantor to enable Grantor to so purchase or acquire such property or assets, and no other indebtedness, and encumber only the respective property or assets so purchased or acquired, and no other property or assets of Grantor; (iii) any liens arising in connection with capital leases or equipment financing arrangements of Grantor; (iv) liens acquired with liabilities assumed by Grantor in connection with acquisitions of existing businesses, business divisions, or assets, in whole or in part after the date hereof; (v) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, processor’s, landlord’s liens or other like liens arising in the ordinary course of business that are not overdue for a period of more than thirty (30) days or which are being contested in good faith by appropriate proceedings; (vi) liens arising in connection with worker’s compensation, unemployment insurance, old age pensions and social security benefits and similar statutory obligations (excluding liens arising under ERISA), provided that no enforcement proceedings in respect of such liens are pending and provisions have been made for the payment of such liens on the books of such person as may be required by generally accepted accounting principles; (vii) liens of an immaterial nature for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested in good faith by appropriate proceedings; (viii) licenses or sublicenses granted to others in the ordinary course of business if such are otherwise permitted hereunder and do not interfere in any material respect with Grantor’s business; and (ix) (A) liens incurred in the ordinary course of business to secure the performance of statutory obligations arising in connection with progress payments or advance payments due under contracts with the United States government or any agency thereof entered into in the ordinary course of business and (B) liens incurred or deposits made in the ordinary course of business to secure the performance of statutory obligations, bids, leases, fee and expense arrangements with trustees and fiscal agents, trade contracts, surety and appeal bonds, performance bonds and other similar obligations (exclusive of obligations incurred in connection with the borrowing of money, any lease-purchase arrangements or the payment of the deferred purchase price of property), provided, that in each case full provision for the payment of all such obligations;

provided, however , that, notwithstanding the foregoing, and only following the date that all Senior Debt (as defined in the Subordination Agreement) has been paid in full in cash and Bridge Bank’s obligation to lend under the Senior Credit Facility has terminated, a Permitted Lien shall not include any lien, encumbrance or other interest which would cause, or could reasonably be expected to cause, a Material Adverse Effect.

“ Pro Rata ” means, as to any Secured Party at any time, the percentage equivalent at such time of such Secured Party’s aggregate unpaid principal amount of Loans, divided by the combined aggregate unpaid principal amount of all Loans of all Secured Parties.

“ Secured Obligations ” means (a) the obligation of Grantor to repay the Secured Parties all of the unpaid principal amount of, and accrued interest on (including any interest that accrues after the commencement of bankruptcy) the Loans and (b) the obligation of Grantor to pay any fees, costs and expenses of the Secured Parties under Section 6(b) hereof or pursuant to any other provision of a Loan Document.

“ Trademark License ” means any agreement, whether in written or electronic form, in which Grantor now holds or hereafter acquires any interest, granting any right in and to any Trademark or Trademark registration (whether Grantor is the licensee or the licensor thereunder).

“ Trademarks ” means any of the following in which Grantor now holds or hereafter acquires any interest: (a) any trademarks, tradenames, corporate names, company names, business names, trade styles, service marks, logos, other source or business identifiers, prints and labels on which any of the foregoing have appeared or appear, designs and general intangibles of like nature, now existing or hereafter adopted or acquired, all registrations and recordings thereof and any applications in connection therewith, including, without limitation, registrations, recordings and applications in the United States Patent and Trademark Office or in any similar office or agency of the United States, any state or any other country (collectively, the “ Marks ”); (b) any reissues, extensions or renewals thereof; (c) the goodwill of the business symbolized by or associated with the Marks; (d) income, royalties, damages, claims and payments now and hereafter due and/or payable with respect to the Marks, including, without limitation, damages, claims and recoveries for past, present or future infringement; and (e) rights to sue for past, present and future infringements of the Marks.

“ UCC ” means the Uniform Commercial Code as the same may from time to time be in effect in the State of California (and each reference in this Security Agreement to an Article thereof (denoted as a Division of the UCC as adopted and in effect in the State of California) shall refer to that Article (or Division, as applicable) as from time to time in effect, which in the case of Article 9 shall include and refer to Revised Article 9 from and after the date Revised Article 9 became effective in the State of California); provided, however, in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of the Secured Parties’ security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of California, the term “ UCC ” shall mean the Uniform Commercial Code (including the Articles thereof) as in effect at such time in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of definitions related to such provisions.

In addition, the following terms shall be defined terms having the meaning set forth for such terms in the UCC: “Account” (including health-care-insurance receivables), “Account Grantor”, “Chattel Paper” (including tangible and electronic chattel paper), “Commercial Tort Claims”, “Commodity Account”, “Deposit Account”, “Documents”, “Equipment” (including all accessions and additions thereto), “Fixtures”, “General Intangibles” (including payment intangibles and software), “Instrument”, “Inventory” (including all goods held for sale or lease or to be furnished under a contract of service, and including returns and repossessions), “Investment Property” (including securities and securities entitlements), “Letter-of-Credit Right” (whether or not the letter of credit is evidenced by a writing), “Payment Intangibles”, “Proceeds”, “Promissory Notes”, “Securities Account”, and “Supporting Obligations”. Each of the foregoing defined terms shall include all of such items now owned, or hereafter acquired, by Grantor.

2. GRANT OF SECURITY INTEREST . As collateral security for the full, prompt, complete and final payment and performance when due (whether at stated maturity, by conversion, acceleration or otherwise) of all the Secured Obligations and to induce the Secured Parties to cause the Loans to be made, Grantor hereby assigns, conveys, mortgages, pledges, hypothecates and transfers to Lenders’ Agent for the benefit of the Secured Parties, and hereby grants to the Lenders’ Agent for the benefit of Secured Parties, a security interest in all of Grantor’s right, title and interest in, to and under the following, whether now owned or hereafter acquired, (all of which being collectively referred to herein as the “ Collateral ”), subject to the first-position rights of Bridge Bank under the Senior Credit Facility and the Subordination Agreement:

(a) All Accounts of Grantor;

(b) All Chattel Paper of Grantor;

(c) All Commercial Tort Claims of Grantor;

(d) All Contracts of Grantor;

(e) All Deposit Accounts of Grantor;

(f) All Documents of Grantor;

(g) All Equipment of Grantor;

(h) All Fixtures of Grantor;

(i) All General Intangibles of Grantor , including, without limitation, Payment Intangibles, all Intellectual Property, Copyrights, Patents, Trademarks, Licenses, designs, drawings, technical information, marketing plans, customer lists, trade secrets, proprietary or confidential information, inventions (whether or not patentable), procedures, know-how, models and data;

(j) All Instruments of Grantor, including, without limitation, Promissory Notes;

(k) All Inventory of Grantor;

(l) All Investment Property of Grantor;

(m) All Letter-of Credit Rights of Grantor;

(n) All Supporting Obligations of Grantor;

(o) All property of Grantor held by any Secured Party, or any other party for whom any Secured Party is acting as agent hereunder, including, without limitation, all property of every description now or hereafter in the possession or custody of or in transit to any Secured Party or such other party for any purpose, including, without limitation, safekeeping, collection or pledge, for the account of Grantor, or as to which Grantor may have any right or power;

(p) All other goods and personal property of Grantor, wherever located, whether tangible or intangible, and whether now owned or hereafter acquired, existing, leased or consigned by or to Grantor;

(q) All of the Grantor’s books and records including ledgers, federal and state tax returns, records regarding the Grantor’s assets or liabilities, the Collateral, business operations or financial condition, and all computer programs or storage or any equipment containing such information relating to the foregoing, and any and all claims, rights and interests in any of the above and all substitutions for, additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds of any or all of the foregoing; and

(r) To the extent not otherwise included, all Proceeds of each of the foregoing and all accessions to, substitutions and replacements for and rents, profits and products of each of the foregoing.

3. PLEDGE OF SUBSIDIARIES . In addition, and without limiting any other rights of the Secured Parties pursuant to this Security Agreement, to secure the prompt payment and satisfaction of the Notes, all obligations and liabilities of Grantor under the Purchase Agreement and all interest, reasonable costs and expenses, and reasonable attorneys’ fees which may be made or incurred by the Lender in the disbursement, administration, and collection of such amounts, following the written demand of the Lender, Grantor shall pledge, assign and grant a security interest to the Lender in all of Grantor’s right, title and interest to the equity securities of each of the subsidiaries of Grantor (and any subsidiary of Grantor acquired after the date hereof), which are set forth on SCHEDULE A , as the same shall be amended from time to time (each a “ Subsidiary ” and, collectively, the “ Subsidiaries ”), including all attendant rights in equity, economic, voting or otherwise, together with all distributions of capital, income, cash-flow, profits and all other fees and payments of any nature whatsoever arising from said interest(s) and any interest on any of the foregoing and all fees, accounts, contract rights, claims, advances and loans payable to Grantor by any Subsidiary, and all collateral therefor, and all proceeds of the foregoing, which, collectively, shall be incorporated into the Collateral; provided, however , that Grantor may not pledge, assign or grant such right, title and interest to the equity securities of the Subsidiaries to the Lender until after all Senior Debt has been paid in full in cash and Bridge Bank’s obligation to lend under the Senior Credit Facility has terminated. Following a written demand of the Lender under this Section 3, Grantor shall execute and deliver to Lender such instruments and documents, including certificates representing the pledged securities of the Subsidiaries, as the Lender may deem reasonably necessary or advisable to perfect the rights of the Lender under this Section 3.

4. REPRESENTATIONS AND WARRANTIES . Grantor hereby represents and warrants to the Secured Parties that:

(a) Except for the security interest granted to the Secured Parties under this Security Agreement and Permitted Liens, Grantor is the sole legal and equitable owner of, and holds marketable title to, each item of the Collateral in which it purports to grant a security interest hereunder.

(b) No effective security agreement, financing statement, equivalent security or lien instrument or continuation statement covering all or any part of the Collateral exists, except such as may have been filed by Grantor in favor of the Secured Parties pursuant to this Security Agreement and except for Permitted Liens.

(c) This Security Agreement creates a legal and valid security interest on and in all of the Collateral in which Grantor now has rights; this Security Agreement and the other Loan Documents are the legal, valid and binding obligations of Grantor and are enforceable in accordance with their terms.

(d) [Reserved].

(e) This Security Agreement is effective to create in favor of the Secured Parties a legal, valid and enforceable security interest in all right, title and interest of the Grantor in the Collateral, and the Lender’s Agent, for the benefit of the Secured Parties, has (or within ten (10) days following the Closing Date will have) a fully perfected security interest in all right, title and interest in all of the Collateral, subject to no other Liens (other than Permitted Liens).

(f) All filings, registrations, recordings and other actions necessary or appropriate to create, preserve and perfect the security interest granted by Grantor to the Secured Parties hereby in respect of the Collateral have been accomplished, and the security interest granted to the Secured Parties pursuant to this Security Agreement in and to the Collateral creates a valid and, together with all such filings, registrations, recordings and other actions, a perfected security interest therein prior to the rights of all other Persons therein and subject to no other Liens (other than Permitted Liens), and the Secured Parties and Lender’s Agent are entitled to all the rights, priorities and benefits afforded by the UCC or other relevant law as enacted in any relevant jurisdiction to perfected security interests, in each case to the extent that the Collateral consists of the type of property in which a security interest may be perfected by possession or control (within the meaning of the UCC), by filing a financing statement under the UCC as enacted in any relevant jurisdiction.

(g) Grantor is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and is located in Delaware for purposes of the UCC; Grantor is duly qualified to do business and in good standing in each state in which it conducts its business.

(h) Grantor’s chief executive office, principal place of business, and the place where Grantor maintains its records concerning the Collateral are presently located at the addresses set forth on the signature page hereof.

(i) The name and address of each depository institution at which Grantor maintains any Deposit Account and the account number and account name of each such Deposit Account is listed on SCHEDULE B attached hereto.

(j) The information set forth on SCHEDULES A AND B is true and accurate.

(k) None of the execution and delivery of this Security Agreement or the other Loan Documents, the consummation of the transactions contemplated hereby and thereby or the performance of the obligations of Grantor hereunder or thereunder will result in, no constitute a breach of, applicable law, the organizational documents of Grantor or any Subsidiary, the provisions of any judgment or order of any governmental body or authority or any agreement to which Grantor or any Subsidiary is a party.

(l) All action on the part of Grantor and its directors and officers necessary for the authorization, execution, delivery and performance of this Security Agreement (and all other Loan Documents) has been taken; Grantor has full right, power and authority to enter into and perform its obligations under each of the Loan Documents.

(m) The representations and warranties of Grantor contained in this Security Agreement will survive the execution and delivery of this Security Agreement and the other Loan Documents and the making of the Loans until the Secured Obligations are indefeasibly repaid in full and all other obligations of the Grantor hereunder and under the other Loan Documents have terminated.

5. COVENANTS . Grantor covenants and agrees with the Secured Parties that from and after the date of this Security Agreement and until the Secured Obligations have been performed and paid in full:

5.1 Limitation on Liens on Collateral . Grantor shall not, directly or indirectly, create, permit or suffer to exist, and shall defend the Collateral against and take such other action as is necessary to remove, any Lien on the Collateral, except (a) Permitted Liens and (b) the Lien granted to the Secured Parties under this Security Agreement. Further, Grantor shall not sell, assign, pledge, dispose of or transfer in any manner any interest in the Collateral to any party other than the Secured Parties and Bridge Bank and other than (i) in the ordinary course of business, (ii) non-exclusive licenses and similar arrangements for the use of the property of such Grantor in the ordinary course of business, other licenses that would not result in a legal transfer of title of the licensed property but that may be exclusive, or licenses or transfers under such Grantor’s source code escrow arrangements, (iii) sales or disposal of surplus, worn-out or obsolete equipment and (iv) transfers of other assets of any Grantor that do not in the aggregate exceed Two Hundred and Fifty Thousand Dollars ($250,000) in the aggregate for all Grantors during any fiscal year of Grantors.

5.2 Taxes and Assessments . Grantor shall pay when due all taxes, assessments and other charges lawfully levied or assessed upon the Collateral, and if such taxes or other assessments remain unpaid after the date fixed for the payment of the same, except to the extent and so long as (i) the same are being contested in good faith and by appropriate proceedings in a manner that will not cause any material adverse effect upon the Collateral, or the loss of any right of redemption from any sale thereunder and (ii) Grantor shall have set aside on its books adequate reserves with respect thereto; provided , however , if any lien, other than a Permitted Lien, shall be claimed which might possibly create a valid obligation having priority over the rights granted to the Secured Parties herein, the Secured Parties shall have the right, but not the obligation, with one day’s prior written notice to Grantor, pay such taxes, assessments, charges or claims, and the amount thereof shall be added to the obligations under the Note

5.3 Further Assurances . At any time and from time to time, upon the written request of the Lenders’ Agent, and at the sole expense of Grantor, Grantor shall promptly and duly execute and deliver any and all such further instruments and documents and take such further action as the Lenders’ Agent may reasonably deem necessary or desirable for the Lenders collectively to obtain the full benefits of this Security Agreement, including, without limitation, executing, delivering and causing to be filed any financing or continuation statements (including “in lieu” continuation statements) under the UCC with respect to the security interests granted hereby and obtaining deposit account control agreements in form satisfactory to the Lenders’ Agent with respect to the Deposit Accounts listed on SCHEDULE B . Grantor also hereby authorizes Lenders’ Agent to file any such financing or continuation statement (including “in lieu” continuation statements) without the signature of Grantor. Grantor approves, authorizes and ratifies any filings or recordings made by or on behalf of the Lenders in connection with the perfection of the security interest in favor of the Secured Parties, whether the same is by Lenders’ Agent or by any individual Lender. Grantor shall pay all filing, registration and recording fees or re-filing, re-registration and re-recording fees, and all reasonable expenses incident to the execution of and acknowledgement of this Security Agreement and all federal, state, county and municipal stamp taxes and other taxes, duties, imports, assessments and charges arising out of or in connection with the execution and delivery of this Security Agreement and any agreement supplemental hereto and any instruments of further assurance. Grantor shall, promptly upon request, provide to the Lenders’ Agent all information and evidence he may reasonably request concerning the Collateral to enable the Lenders to administer or enforce the provisions of this Security Agreement.

5.4 Power of Attorney . Grantor hereby irrevocably appoints the Lender’s Agent as its attorney-in-fact, with full power and authority in its place and stead and in its name or in the Secured Parties’ name to do any or all of the following after the occurrence and during the continuance of a Grantor default under any Loan Document: (a) endorse its name on any checks, notes, acceptances, money orders, drafts or other forms of payment or security that may come into the Secured Parties’ possession; (b) receive, endorse and collect all checks and other orders for the payment of money made payable to Grantor representing any dividend or distribution payable in respect of the Collateral; (c) collect any Collateral; and (d) take all actions and do all things necessary to carry out the terms of this Security Agreement, and all related documents. The powers conferred on the Lender’s Agent hereunder are solely to protect the Secured Parties’ interests in the Collateral and shall not impose any duty upon it to exercise such powers. Neither the Secured Parties nor Lender’s Agent will be liable for any acts or omissions or for any error of judgment or mistake of fact or law relating to the foregoing actions. This power of attorney is coupled with any interest and is irrevocable by Grantor. Notwithstanding the foregoing, this power of attorney may not be exercised until all Senior Debt (as defined in the Subordination Agreement) has been paid in full in cash, and Bridge Bank has released its lien on the Collateral.

5.5 Consents . Grantor will promptly upon the written request by Lender’s Agent, and in any event within thirty (30) days after such written request, use its commercially reasonable efforts to obtain a waiver or consent, in a form reasonably satisfactory to Lender’s Agent, from (i) each landlord from whom Grantor now or hereafter may lease real property where any existing or future Collateral is located and (ii) any bailee in possession of Collateral, in each case if such Collateral has an aggregate fair market value of not less than Twenty-Five Thousand Dollars ($25,000.00), indicating that such bailee or landlord holds such Collateral for the benefit of the Secured Parties and shall act upon the instructions of the Lender’s Agent, without the further consent of such Grantor.

5.6 Insurance . Grantor will at all times maintain insurance, at Grantor’s own expense, to the extent required in the Purchase Agreement, if specified, and, in any case, consistent with its prior practices and industry standards. Except to the extent otherwise permitted to be retained by Grantor or applied by Grantor pursuant to the terms of the Loan Documents, Lender’s Agent shall, at the time any proceeds of such insurance are distributed to the Secured Parties, apply such proceeds in accordance with Section 7 hereof. Grantor assumes all liability and responsibility in connection with the Collateral acquired by it and the liability of Grantor to pay the Secured Obligations shall in no way be affected or diminished by reason of the fact that such Collateral may be lost, destroyed, stolen, damaged or for any reason whatsoever unavailable to Grantor.

5.7 Existence . Grantor will maintain its existence and good standing in the State of Delaware and its qualification and good standing as a foreign corporation in each jurisdiction in which such qualification is required by applicable law. Grantor will not change its legal name or the location of its principal business office without the prior written consent of Lender’s Agent.

6. EVENTS OF DEFAULTS. The following shall constitute Events of Default under this Security Agreement:

(a) The failure of any representation or warranty made by Grantor to be true and correct;

(b) The occurrence of any Event of Default under the Purchase Agreement or the Note evidencing any Lender’s Loan;

7. RIGHTS AND REMEDIES UPON DEFAULT. Beginning on the date on which any Event of Default shall have occurred and while such Event of Default is continuing, and subject to the rights of Bridge Bank under the Senior Credit Facility and the Subordination Agreement:

(a) At the sole and absolute discretion of the Lenders’ Agent and for the benefit of the Secured Parties, the Lenders’ Agent may exercise in addition to all other rights and remedies granted to it under this Security Agreement all rights and remedies of a secured party under the UCC. Without limiting the generality of the foregoing, Grantor expressly agrees that in any such event the Lenders’ Agent, without demand of performance or other demand, advertisement or notice of any kind (except the notice specified below of time and place of public or private sale) to or upon Grantor or any other person, may (i) reclaim, take possession, recover, store, maintain, finish, repair, prepare for sale or lease, shop, advertise for sale or lease and sell or lease (in the manner provided herein) the Collateral, and in connection with the liquidation of the Collateral and collection of the accounts receivable pledged as Collateral, use any Trademark, Copyright, or process used or owned by Grantor and (ii) forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and may forthwith sell, lease, assign, give an option or options to purchase or sell or otherwise dispose of and deliver said Collateral (or contract to do so), or any part thereof, in one or more parcels at public or private sale or sales, at any exchange or broker’s board or at any Secured Party’s offices or elsewhere at such prices as it may deem commercially reasonable, for cash or on credit or for future delivery without assumption of any credit risk. Grantor further agrees, at the Lenders’ Agent’s request, to assemble its Collateral and make it available to the Lenders’ Agent for the benefit of the Secured Parties at places which the Lenders’ Agent shall reasonably select, whether at Grantor’s premises or elsewhere. The Secured Parties shall apply the net proceeds of any such collection, recovery, receipt, appropriation, realization or sale as provided in Section 6(d), below, with Grantor remaining liable for any deficiency remaining unpaid after such application. Grantor agrees that the Secured Parties need not give more than ten (10) days’ notice of the time and place of any public sale or of the time after which a private sale may take place and that such notice is reasonable notification of such matters.

(b) Grantor also agrees to pay all fees, costs and expenses of the Secured Parties, including, without limitation, reasonable attorneys’ fees, incurred in connection with the enforcement of any of its rights and remedies hereunder.

(c) Grantor hereby waives presentment, demand, protest or any notice (to the maximum extent permitted by applicable law or under the Senior Credit Facility) of any kind in connection with this Security Agreement or any Collateral.

(d) The Proceeds of any sale, disposition or other realization upon all or any part of the Collateral shall be received by the Lenders’ Agent and distributed by Lenders’ Agent to the Secured Parties to be applied to the Secured Obligations in the following order of priorities:

FIRST , to the reasonable costs, fees and expenses incurred by Lenders’ Agent but not yet paid in connection with the sale, disposition or other realization on the Collateral, including all fees, costs, expenses, liabilities in connection therewith, including reasonable attorneys’ fees;

SECOND the extent that any Secured Party has advanced to the Lenders’ Agent any amount in connection with the sale, disposition or other realization on the Collateral, then to each Secured Party in an amount sufficient to pay in full the reasonable costs of such Secured Party actually advanced by such Secured Party in connection with such sale, disposition or other realization, including all fees, costs, expenses, liabilities and advances incurred or made by any Secured Party in connection therewith, including, without limitation, reasonable attorneys’ fees;

THIRD , to the Secured Parties in amounts proportional to the Pro Rata share of the then unpaid Secured Obligations of each Secured Party;

FOURTH , upon payment in full of the Secured Obligations, to the holder of any subordinate security interest, judgment lien or other similar encumbrance affecting the Collateral, in accordance with the UCC, otherwise applicable law or as a court of competent jurisdiction may direct; and

FINALLY , thereafter to Grantor or its representatives, in accordance with the UCC or as a court of competent jurisdiction may direct.

(e) The costs of enforcing or pursuing any right or remedy hereunder, including without limitation any repossession, sale, possession and management (including, without limitation, reasonable attorneys’ fees), and distribution shall be borne Pro Rata by the Secured Parties to the extent that such costs, fees and expenses are not paid by Grantor and without prejudice to the right of Lenders’ Agent to recover the same from Grantor as provided in this Security Agreement, the Purchase Agreement and the Notes. Each Secured Party shall pay to the Lenders’ Agent promptly upon demand therefor, its Pro Rata share of all such costs.

8. MISCELLANEOUS.

8.1 Waivers; Amendments . None of the terms or provisions of this Security Agreement may be waived, altered, modified or amended except by an instrument in writing, duly executed by Grantor and the Lenders’ Agent; provided , however that Schedule A shall be deemed automatically amended to add the name of any Subsidiary acquired by Grantor after the date hereof without any executed writing required.

8.2 Termination of this Security Agreement . This Security Agreement shall automatically terminate upon the earlier of the conversion or payment and performance in full of the Secured Obligations.

8.3 Successor and Assigns . This Security Agreement and all obligations of Grantor hereunder shall be binding upon the successors and assigns of Grantor, and shall, together with the rights and remedies of the Secured Parties hereunder, inure to the benefit of the Secured Parties and their respective successors and assigns. Grantor shall not be permitted to sell, assign, transfer or otherwise convey its rights or obligations hereunder.

8.4 Counterparts; Facsimile . This Security Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. This Security Agreement and each other agreement or instrument entered into in connection herewith or therewith or contemplated hereby or thereby, and any amendments hereto or thereto, to the extent signed and delivered by means of electronic mail or a facsimile machine, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. No party hereto or to any such agreement or instrument shall raise the use of electronic mail or a facsimile machine to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of electronic mail or a facsimile machine as a defense to the formation or enforceability of a contract and each such party forever waives any such defense.

8.5 Governing Law . In all respects, including all matters of construction, validity and performance, this Security Agreement and the Secured Obligations arising hereunder shall be governed by, and construed and enforced in accordance with, the laws of the State of New York applicable to contracts made and performed in such state, without regard to the conflict of laws provisions of the State of New York or of any other state.

8.6 Entire Agreement . This Security Agreement (including its exhibits and together with the other Loan Documents) constitutes the full and entire understanding and agreement among the parties with regard to the subjects hereof (and thereof).

8.7 Severability . Should any provision of this Security Agreement be held by any court of competent jurisdiction to be void or unenforceable, such defect shall not affect the remainder of this Security Agreement, which shall continue in full force and effect.’

8.8 Subordination Agreement . This Security Agreement and the Loan Documents (other than the Subordination Agreement) are subject to the Subordination Agreement. In the event of any conflict between the terms and condition of this Security Agreement or any Loan Document (other than the Subordination Agreement), on the one hand, and the Subordination Agreement, on the other hand, the terms and conditions of the Subordination Agreement shall govern and control.

[ SIGNATURE PAGES FOLLOW ]

IN WITNESS WHEREOF , each of the parties hereto has caused this Security Agreement to be executed and delivered by its duly authorized officer on the date first set forth above.

ADDRESSES OF GRANTOR 2121 South El Camino Real, 10th Floor San Mateo, CA 94403 12800 North Meridian Street, Suite 425 Carmel, IN 46032	SELECTICA, INC. By: Name: Title:


ACCEPTED AND ACKNOWLEDGED BY: SECURED PARTIES LLOYD I. MILLER, III, AS LENDER'S AGENT AND AS A SECURED PARTY Signature MILFAM II L.P. , a Georgia limited partnership By: MILFAM LLC Its: General Partner By: Name: Lloyd I. Miller, III Title: Manager LLOYD I. MILLER TRUST A-4 By: MILFAM LLC Its: Investment Advisor By: Name: Lloyd I. Miller, III Title: Manager

Exhibit 10.8

SUBORDINATION AGREEMENT
(Miller)

This SUBORDINATION AGREEMENT, dated as of March 11, 2015 (this “Agreement”), is between each of the undersigned creditors (each, a “Creditor” and, collectively, “Creditors”), and BRIDGE BANK, NATIONAL ASSOCIATION (“Lender”), with reference to the following facts:

R E C I T A L S

A. SELECTICA, INC., a Delaware corporation (“Borrower”) has requested and/or obtained certain credit accommodations from Lender (as defined in the Business Financing Agreement) which are or may be from time to time secured by assets and property of Borrower. As used herein, “Business Financing Agreement” means that certain Amended and Restated Business Financing Agreement, dated as of July 25, 2014, among Borrower, Selectica Sourcing Inc., a Delaware corporation, and Lender, as amended to date and as may be further amended or restated from time to time. All initially capitalized terms used but not defined herein have the meanings given to such terms in the Business Financing Agreement.

B. Each Creditor has extended loans or other credit accommodations to Borrower, and/or may extend loans or other credit accommodations to Borrower from time to time, or Borrower may otherwise be indebted or liable to a Creditor.

C. In order to induce Lender to continue to extend credit to Borrower and, at any time or from time to time, at Lender’s option, to make such further loans, extensions of credit, or other accommodations to or for the account of Borrower, or to extend credit upon any instrument or writing in respect of which Borrower may be liable in any capacity, or to grant such renewals or extension of any such loan, extension of credit, or other accommodation as Lender may deem advisable, each Creditor is willing to subordinate: (i) all of each Borrower’s indebtedness and obligations to such Creditor, whether presently existing or arising in the future, under the Junior Secured Convertible Promissory Note issued by Borrower to such Creditor (the “Subordinated Debt”) to all of Borrower’s indebtedness and obligations to Lender now existing or hereafter arising under or in connection with the Business Financing Agreement, the other Loan Documents, including, without limitation, all Advances, Finance Charges, fees, interest, expenses, bank product obligations, Letter of Credit obligations, and swap obligations, together with all costs of collecting such obligations, including reasonable attorneys’ fees (the “Senior Debt”), including, without limitation, all interest, fees and other charges accruing on the Senior Debt after the commencement by or against Borrower of any Insolvency Proceeding, regardless of whether allowed in such Insolvency Proceeding; and (ii) all of each Creditor’s Liens pursuant to the Subordinated Debt, if any, in the Collateral (as defined below) to all of Lender’s Liens in the Collateral pursuant to the Senior Debt. For purposes of this Agreement, “Collateral” shall mean all the assets of Borrower, including the accounts, including health care receivables, chattel paper, general intangibles, inventory, equipment, instruments, including promissory notes, deposit accounts, investment property, documents, letter of credit rights, and any commercial tort claim of Borrower.

NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:

1. Each Creditor subordinates any Lien that such Creditor may have in the Collateral to Lender’s Lien in the Collateral. Notwithstanding the respective dates of attachment or perfection of the Lien of each Creditor and the Lien of Lender, the Lien of Lender in the Collateral shall at all times be prior to any Lien of Creditor in the Collateral.

2. All Subordinated Debt is subordinated in right of payment to all Senior Debt of Borrower to Lender.

3. No Creditor will demand or receive from Borrower (and Borrower will not pay to any Creditor) all or any part of the Subordinated Debt, by way of payment, prepayment, setoff, lawsuit or otherwise, nor will any Creditor exercise any remedy with respect to the Collateral, nor will any Creditor accelerate the Subordinated Debt, or commence, or cause to commence, prosecute or participate in any administrative, legal or equitable action against Borrower, until such time as all the Senior Debt is fully paid in cash. Nothing in the foregoing paragraph shall prohibit any Creditor from converting all or any part of the Subordinated Debt into equity securities of Borrower or from refinancing the Subordinated Debt solely with the proceeds of additional Subordinated Debt. Notwithstanding the foregoing, Borrower may make, and each Creditor may receive, cash payments (but no prepayments) of interest or principal when due on any outstanding Subordinated Debt if, and only if, Borrower has first demonstrated in writing to Lender’s reasonable satisfaction, that both immediately before and immediately after giving effect to such proposed payment on a pro forma basis, no Default or Event of Default has occurred and is continuing, or will result therefrom.

4. Each Creditor shall promptly deliver to Lender in the form received (except for endorsement or assignment by such Creditor where required by Lender) for application to the Senior Debt any payment, distribution, security or proceeds received by such Creditor with respect to the Subordinated Debt other than in accordance with this Agreement.

5. In the event of Borrower’s insolvency, reorganization or any case or proceeding under any bankruptcy or insolvency law or laws relating to the relief of debtors, these provisions shall remain in full force and effect, and Lender’s claims against Borrower and the estate of Borrower shall be paid in full before any payment is made to Creditor.

6. Until the Senior Debt is fully paid in cash, each Creditor irrevocably appoints Lender as such Creditor’s attorney-in-fact, and grants to Lender a power of attorney with full power of substitution, in the name of such Creditor or in the name of Lender, for the use and benefit of Lender, with notice to such Creditor, to perform at Lender’s option the following acts in any bankruptcy, insolvency or similar proceeding involving Borrower: (i) to file the appropriate claim or claims in respect of the Subordinated Debt on behalf of such Creditor if such Creditor does not do so prior to 30 days before the expiration of the time to file claims in such proceeding and if Lender elects, in its sole discretion, to file such claim or claims; and (ii) to accept or reject any plan of reorganization or arrangement on behalf of such Creditor and to otherwise vote such Creditor’s claims in respect of any Subordinated Debt in any manner that Lender deems appropriate for the enforcement of its rights hereunder; provided that Lender shall not be entitled to release, forgive or reduce any amount owing on the Subordinated Debt and that each Creditor may receive and retain Reorganization Subordinated Securities. As used herein, “Reorganization Subordinated Securities” means (a) any equity securities issued in substitution of all or any portion of the Subordinated Debt that are subordinated in right of payment to the Senior Debt (or any notes or other securities issued in substitution of all or any portion of the Senior Debt), and (b) any notes or other debt securities issued in substitution of all or any portion of the Subordinated Debt that are subordinated to the Senior Debt (or any notes or other securities issued in substitution of all or any portion of the Senior Debt) to the same extent that the Subordinated Debt is subordinated to the Senior Debt pursuant to the terms of this Agreement, which equity or debt securities have been provided for by a plan of reorganization that has been approved by final order of a court. All Reorganization Subordinated Securities shall be on terms reasonably satisfactory to Lender, and shall constitute Subordinated Debt that is subject to the terms of this Agreement.

7. Creditors shall have the option to purchase all Senior Debt in accordance with the terms and conditions set forth in this Section 7.

(a) Upon the occurrence and during the continuation of a Triggering Event (as herein after defined), Creditors shall have the right, but not the obligation, upon 5 Business Days' advance written notice (a "Purchase Notice") to Lender, to acquire from Lender all (but not less than all) of the right, title, and interest of Lender in and to the Senior Debt and the Loan Documents; provided that Lender remains obligated to sell the Senior Debt to Creditors pursuant to the terms and conditions of this Section 7. As used herein, “Triggering Event” means (i) an Event of Default under Section 7.1(d) or 7.1(e) of the Business Financing Agreement, (ii) the acceleration of the Senior Debt, or (iii) the exercise due to any Event of Default of any remedies by Lender under Section 7.2 of the Financing Agreement or under any other Loan Document, including any action to foreclose on any of the Collateral (“Enforcement Action”). Lender shall give Creditors prompt notice of the occurrence of any Triggering Event described in clause (ii) or (iii) of the definition thereof set forth in the prior sentence and the amount of the Senior Debt as of the date of such Triggering Event (the "Trigger Notice").

(b) Any Creditor(s) desiring to purchase all of the Senior Debt shall deliver a Purchase Notice that:

(i) is signed by such Creditor(s),

(ii) states that it is a Purchase Notice under this Section 7,

(iii) states that such Creditor(s), acting together, are irrevocably electing to purchase all of the Senior Debt in accordance with this Section 7,

(iv) designates a date (“Purchase Date”) on which the purchase will occur, that is (x) at least five but not more than fifteen Business Days after Lender's receipt of the Purchase Notice, and (y) not more than 90 days after the Triggering Event.

A Purchase Notice will be ineffective if it is received by Lender after the occurrence giving rise to the Triggering Event is waived, cured, or otherwise ceases to exist; provided that if a Triggering Event is waived, cured, or otherwise ceases to exist and thereafter a subsequent Triggering Event shall occur, then the procedures set forth in this Section 7 shall apply de novo.

(c) After its receipt of a Purchase Notice, Lender shall forbear from exercising any Enforcement Action (except to the extent reasonably necessary to protect Lender against any loss or damage that may be occasioned by Exigent Circumstances) during the period from the date of Lender’s receipt of such Purchase Notice until the first to occur of (i) payment of the purchase price for the Senior Debt pursuant to Section 7(e)(i) below and (ii) the Purchase Date. As used herein, the term "Exigent Circumstances" shall mean the occurrence or existence of any one or more of the following events or conditions:

(i) an Insolvency Proceeding is commenced by or against Borrower (other than by Lender),

(ii) a fraud, concealment of assets, or material misrepresentation has been made or committed by Borrower,

(iii) Borrower withholds from Lender any collections of Receivables or other proceeds of Collateral in violation of any Loan Document,

(iv) a Person (other than Lender) holding a Lien upon any of the Collateral shall commence any action, suit, proceeding or self-help remedy to enforce such Lien, or

(v) any other event or circumstance occurs or exists that, in the reasonable judgment of Lender, materially and imminently threatens Lender's ability promptly to realize upon all or any material part of the Collateral, such as, without limitation, fraudulent removal, concealment or abscondment thereof, destruction (to the extent not covered by insurance) or material waste of any of the Collateral.

(d) Lender shall advise the purchasing Creditor(s) of the full amount of all the Senior Debt (other than indemnification obligations for which no claim or demand for payment has been made at such time, and other than Senior Debt cash collateralized in accordance with Section 7(e)(ii) below) then outstanding and unpaid on the Business Day immediately preceding the Purchase Date, including interest calculated in accordance with Section 7(f) below (the "Purchase Price").

(e) On the Purchase Date, Lender shall (subject to the terms and conditions set forth in this Section 7) sell the Senior Debt and the Loan Documents to the purchasing Creditor(s), and such Creditor(s) shall:

(i) pay to Lender for the ratable account of Lender, as the purchase price therefor, the Purchase Price in immediately available funds,

(ii) furnish cash collateral to Lender for the ratable benefit of Issuer and Lender in such amounts as Lender determines is reasonably necessary to secure Lender, Issuer and Lender in respect of (A) any issued and outstanding Letters of Credit (but not in any event in an amount not greater than 105% of the aggregate undrawn amount of such Letters of Credit) (such cash collateral shall be applied to the reimbursement of any drawing under a Letter of Credit as and when such drawing is paid and, if a Letter of Credit expires undrawn, the cash collateral held by Lender in respect of such Letter of Credit shall be remitted to the purchasing Creditor(s)), (B) Bank Product Obligations (including contingent obligations) existing on the date of purchase and included in Senior Debt (such cash collateral shall be applied to the reimbursement of the Bank Product Obligations as and when such obligations become due and payable and, at such time as all of the Bank Product Obligations are paid in full, the remaining cash collateral held by Lender in respect of Bank Product Obligations shall be remitted to such Creditor(s)), and (C) the Retained Interest (as defined below) to the extent that Lender has knowledge that any third party claims, demands, actions, suits, proceedings, investigations, liabilities, fines, costs, penalties, or damages that are the subject of the indemnification provisions of the Business Financing Agreement have then been asserted or threatened, and

(iii) to the extent incurred up to the Purchase Date, reimburse Lender for all expenses to the extent earned or due and payable in accordance with the Loan Documents (including the reimbursement of reasonable attorneys' fees, financial examination expenses, and appraisal fees) up to the Purchase Date, provided that it is agreed that (A) Lender shall reimburse such Creditor(s) to the extent any such expenses are ultimately paid to Lender by Borrower and (B) Borrower shall be liable to such Creditor(s) for such expenses paid by such Creditor(s) to Lender.

(f) The Purchase Price and cash collateral shall be remitted by wire transfer of federal funds to such bank account of Lender as Lender may designate in writing to the purchasing Creditor(s) for such purpose. Interest shall be calculated to but excluding the Business Day on which such purchase and sale shall occur if the amounts so paid by the purchasing Creditor(s) to the bank account designated by Lender are received in such bank account prior to 2:00 p.m., Pacific time, and interest shall be calculated to and including such Business Day if the amounts so paid by such Creditor(s) to the bank account designated by Lender are received in such bank account later than 2:00 p.m., Pacific time.

(g) Such purchase shall be effected by the execution and delivery of a customary form of assignment and acceptance agreement reasonably acceptable to the purchasing Creditor(s) and Lender and shall be expressly made without representation or warranty of any kind by Lender as to the Senior Debt so purchased, or otherwise, and without recourse to Lender, except that Lender shall represent and warrant: (i) that the amount quoted by Lender as the Purchase Price represents the amount shown as owing with respect to the Senior Debt as reflected on its books and records, (ii) it owns, or has the right to transfer to the purchasing Creditor(s), the rights being transferred, and (iii) such transfer will be free and clear of Liens.

(h) [Reserved].

(i) In the event that the purchasing Creditor(s) exercise and consummate the purchase option set forth in this Section 7, this Agreement shall terminate (except for this Section 7(i)), but Lender shall retain its indemnification rights under the Loan Documents for actions or other matters arising on or prior to the date of such purchase, including any asserted or threatened third party claims, demands, actions, suits, proceedings, investigations, liabilities, fines, costs, penalties, or damages that are the subject of the indemnification provisions of the Business Financing Agreement (the "Retained Interest").

8. Except as otherwise provided in Section 9(b) below, each Creditor shall immediately affix a legend to the instruments evidencing the Subordinated Debt stating that the instruments are subject to the terms of this Agreement. No amendment of the documents evidencing or relating to the Subordinated Debt shall directly or indirectly modify the provisions of this Agreement in any manner which might terminate or impair the subordination of the Subordinated Debt or the subordination of the Lien that such Creditor may have in the Collateral as described in Section 1. By way of example, such instruments shall not be amended to (i) increase the rate of interest with respect to the Subordinated Debt, or (ii) accelerate the payment of the principal or interest or any other portion of the Subordinated Debt, other than in an event of default thereunder.

9. Borrower shall deliver to Lender true and correct copies of all instruments evidencing such Subordinated Debt bearing the conspicuous legend required by Section 8 above.

10. This Agreement shall remain effective for so long as Borrower owes any amounts to Lender. If, at any time after payment in full of the Senior Debt, any payments of the Senior Debt must be disgorged by Lender for any reason (including, without limitation, the bankruptcy of Borrower), this Agreement and the relative rights and priorities set forth herein shall be reinstated as to all such disgorged payments as though such payments had not been made and each Creditor shall immediately pay over to Lender for the account of itself all payments received with respect to the Subordinated Debt to the extent that such payments would have been prohibited hereunder. At any time and from time to time, without notice to Creditors, Lender may take such actions with respect to the Senior Debt as Lender, in its sole discretion, may deem appropriate, including, without limitation, terminating advances to Borrower, extending the time of payment, increasing applicable interest rates, renewing, compromising or otherwise amending the terms of any documents affecting the Senior Debt and any collateral securing the Senior Debt, and enforcing or failing to enforce any rights against Borrower or any other person; provided that Lender shall not increase the principal amount of the Senior Debt beyond $11,000,000, and any increase in principal beyond such amount shall not be subject to this Agreement. Subject to the foregoing proviso, no such action or inaction shall impair or otherwise affect Lender’s rights hereunder. Each Creditor waives the benefits, if any, of California Civil Code Sections 2809, 2810, 2819, 2845, 2847, 2848, 2849, 2850, 2899 and 3433.

11. This Agreement shall bind any successors or assignees of each Creditor and shall benefit any successors or permitted assigns of Lender. This Agreement is solely for the benefit of Creditors, Lender, and not for the benefit of Borrower or any other party. Each Creditor further agrees that if Borrower is in the process of refinancing a portion of the Senior Debt with a new lender, and if the new lender makes a request of such Creditor, such Creditor shall enter into a new subordination agreement with the new lender on substantially the terms and conditions of this Agreement.

12. All notices shall be given to Lender and Creditors at the addresses or faxes set forth in this Section 12 and shall be deemed to have been delivered and received: (a) one (1) calendar day after deposit with an overnight mail or messenger service; or (b) on the same date of confirmed transmission if sent by hand delivery, telecopy, telefax or telex.

If to Creditors:

c/o Lloyd I. Miller, III

3300 South Dixie Highway, Suite 1-365

West Palm Beach, Florida 33405

Phone: (561) 287-5399

E-Fax: (619) 923-2908

eric@limadvisory.com

If to Lender:

Bridge Bank

55 Almaden Blvd.

San Jose, CA 95113

Fax: (408) 423-8510

Tel: (408) 556-6502

Email: docprep@bridgebank.com

13. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

14. This Agreement shall be governed by and construed in accordance with the laws of the State of California, without giving effect to conflicts of law principles. Each Creditor and Lender submit to the exclusive jurisdiction of the state and federal courts located in Santa Clara County, California. EACH CREDITOR AND LENDER WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN.

15. REFERENCE PROVISION.

(a) In the event the Jury Trial waiver is not enforceable, the parties elect to proceed under this Judicial Reference Provision.

(b) With the exception of the items specified in the subsection (c) below, any controversy, dispute or claim (each, a “Claim”) between the parties arising out of or relating to this Agreement or any other document, instrument or agreement between the undersigned parties (collectively in this Section, the “Loan Documents”), will be resolved by a reference proceeding in California in accordance with the provisions of Sections 638 et seq. of the California Code of Civil Procedure (“CCP”), or their successor sections, which shall constitute the exclusive remedy for the resolution of any Claim, including whether the Claim is subject to the reference proceeding. Except as otherwise provided in the Loan Documents, venue for the reference proceeding will be in the state or federal court in the county or district where the real property involved in the action, if any, is located or in the state or federal court in the county or district where venue is otherwise appropriate under applicable law (the “Court”).

16. This Agreement represents the entire agreement with respect to the subject matter hereof, and supersedes all prior negotiations, agreements and commitments. Creditors are not relying on any representations by Lender or Borrower in entering into this Agreement, and each Creditor has kept and will continue to keep itself fully apprised of the financial and other condition of Borrower; provided, however, that, as of the date hereof, to the knowledge of each of Lender and Borrower, no default, event of default or Triggering Event exists with respect to the Senior Debt. This Agreement may be amended only by written instrument signed by the party asserted to be bound thereby.

17. In the event of any legal action to enforce the rights of a party under this Agreement, the party prevailing in such action shall be entitled, in addition to such other relief as may be granted, all reasonable costs and expenses, including reasonable attorneys’ fees, incurred in such action.

[ signature pages to follow ]

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

LENDER :

BRIDGE BANK, NATIONAL ASSOCIATION

By:

Name: Christopher Hill

Title: Senior Vice President

SUBORDINATION AGREEMENT

(Miller)

CREDITORS:
LLOYD I. MILLER, III


MILFAM II L.P. By: MILFAM LLC Its: General Partner By: ____________________________ Name: Lloyd I. Miller, III Title: Manager LLOYD I. MILLER TRUST A-4 By: MILFAM LLC Its: Investment Advisor By: ____________________________ Name: Lloyd I. Miller, III Title: Manager

SUBORDINATION AGREEMENT

(Miller)

The undersigned approve the terms of this Agreement.

LOAN PARTIES :

SELECTICA, INC.,
a Delaware corporation

By:

Name:

Title:

SUBORDINATION AGREEMENT

(Miller)

Exhibit 10.9

AMENDMENT TO VOTING AGREEMENTS

This Amendment to Voting Agreements (this “Amendment”) is made as of March 11, 2015, by and among Selectica, Inc., a Delaware corporation (the “Company”), and the undersigned stockholders of the Company (the “Stockholders”), for the purpose of amending the Voting Agreements, each dated February 6, 2015 (the “Voting Agreements”), by and among the Company and the Stockholders. Capitalized terms used in this Amendment shall have the same meanings given to them in the Voting Agreements unless otherwise indicated.

WHEREAS, the Company anticipates entering into a Junior Secured Convertible Note Purchase Agreement (the “Note Purchase Agreement”) pursuant to which the Company will issue Junior Secured Convertible Promissory Notes (the “Notes”) in the aggregate principal amount of $3 million to Lloyd I. Miller, MILFAM II L.P. and Lloyd I. Miller Trust A-4 (the “Convertible Note Financing”);

WHEREAS, the Notes will be convertible into shares of common stock of the Company, at a conversion price equal to $5.70 per share;

WHEREAS, it is a condition of the investors in the Convertible Note Financing that the Voting Agreements be amended to include approval of the issuance and sale of the Notes; and

WHEREAS, the Company and the Stockholders desire to amend the Voting Agreements as set forth herein.

NOW, THEREFORE, in consideration of the foregoing, the mutual promises hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Effective upon the execution of the Note Purchase Agreement and issuance of the Notes thereunder, the Voting Agreements shall be amended as follows:

(a) Section 1.1 of each Voting Agreement is hereby amended to include a subsection (C) at the end of Section 1.1 as follows: “and (C) vote (or cause to be voted) its Shares in favor of the issuance and sale of Junior Secured Convertible Promissory Notes (and any Company securities issuable upon conversion thereof) to certain investors under a Junior Secured Convertible Note Purchase Agreement, by and among such investors and the Company, and in favor of such other matters as may be necessary or advisable to consummate the transactions contemplated thereby (the “Additional Proposal”).”

(b) The first sentence of Section 3.2 of each Voting Agreement is hereby amended and restated in its entirety to read as follows:

“SECTION 3.2 Termination . This Agreement shall terminate and be of no further force and effect (i) by the written mutual consent of the parties hereto, (ii) upon the approval of the Proposal and the Additional Proposal by the Company’s stockholders at the Stockholders Meeting at which a quorum was present and acting throughout, (iii) immediately following the third Subsequent Stockholders Meeting or (iv) automatically and without any required action of the parties hereto upon termination of the Purchase Agreement and the Junior Secured Convertible Note Purchase Agreement, by and between the Company and certain Investors, in accordance with their respective terms. No such termination of this Agreement shall relieve any party hereto from any liability for any breach of this Agreement prior to termination.”

2. Except as amended hereby, the Voting Agreements remain in full force and effect.

3. This Amendment shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to the choice of law principles thereof .

4. This Amendment may be executed in any number of counterparts, each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one instrument. This Amendment shall become effective when one ore more counterparts have been signed by each party hereto and delivered to the other parties.

[Signature page follows]

IN WITNESS WHEREOF, this Amendment to Voting Agreements is entered into as of the date first above written.

“COMPANY”

SELECTICA, INC.

By:
Name:
Title: