1
EXHIBIT 10.6
SOFTWARE DEVELOPMENT AGREEMENT
This Agreement is made and entered into as of May 13, 1997 by and between
CyberCash, Inc., a corporation organized under the laws of Delaware
("CyberCash"); and CyberCash K.K., a corporation organized under the laws of
Japan ("CCKK").
In consideration of the mutual promises set forth herein, CyberCash and CCKK
hereby agree as follows:
1. DEFINITIONS.
a. In addition to the capitalized terms defined elsewhere in this
Agreement, the following capitalized terms shall have the following
meanings when used in this Agreement.
b. "Completion" has the meaning set forth in Section 4.a.
c. "Gateway Software" means the Gateway software developed and
operated by CyberCash for processing credit, coin, and check
transactions in the United States.
d. "Original Software" means the Gateway Software, Wallet Software,
and Merchant Software, currently being used in the operation of the
CyberCash services in the United States.
e. "Local Gateway" means the Gateway Software, in object code form, as
adapted and customized by CyberCash for CCKK hereunder, to handle
transactions denominated in Yen with financial institutions located
in Japan.
f. "Local Software" means the Local Gateway Software, the Local Wallet
Software, and the Local Merchant Software, in object code form.
g. "Merchant Software" means the client software used by merchants in
the operation of the CyberCash services in the United States.
h. "Project Plan" has the meaning set forth in Section 4.a hereof.
i. "Wallet Software" means the client software used by consumers in
the operation of the CyberCash services in the United States.
2. PURPOSE OF AGREEMENT.
The purposes of this Agreement shall be to enable CCKK to: (i) prepare
specifications for the Local Software localized for the Japanese
market; (ii) finance the development of the Local Software; (iii)
operate the Local Software and distribute the software necessary for
processing in the Japanese market credit transactions, CyberCoin
transactions, and electronic check transactions denominated in Yen
involving Japanese financial institutions; and (iv) engage in other
business activities in connection with the foregoing.
3. DEVELOPMENT OF LOCAL SOFTWARE.
a. Subject to the terms and conditions hereof, CyberCash shall develop
for CCKK: (i) the Local Software developed for use in Japan; and
(ii) upgrades of the Local Software.
2
CyberCash shall also provide CCKK with maintenance and support
service for the use of the Local Software and its upgrades.
b. Subject to the terms and conditions hereof, CCKK shall pay to
CyberCash:
(i) CyberCash's fully burdened costs for the performance of the
development work specified in Section 4, plus $100,000, but
not to exceed a total of US$1,100,000; and
(ii) CyberCash's fully-burdened costs (including out-of-pocket
expenses) for the incremental development work necessary to
adapt any upgrades or modifications to its Original Software
and to install such upgrades or modifications in Japan;
(iii) After CCKK has completed an initial public offering, a fair
share of CyberCash's development costs for modifying and
upgrading its technology.
c. With respect to the sum specified in paragraph 3b(i) CCKK shall
make an initial payment of US$600,000. CyberCash shall furnish CCKK
with monthly statements setting forth the progress of the work and
the cost of the time and materials incurred. After the sum of the
statements exceeds US$600,000, CCKK shall pay the outstanding
balance within 15 days of presentation.
4. SPECIFICATION OF LOCAL SOFTWARE.
a. The parties hereto shall cooperate in the preparation of a project
plan, to be completed not later than July 15, 1997, for the
development and completion of the Local Software (the "Project
Plan"). The Project Plan shall, provide for a schedule for the
development of the Local Software. The parties hereto agree to use
their best efforts to carry out all necessary activities required
to meet the objectives of the Project Plan.
b. CyberCash will use its best efforts to develop by July 15, 1997,
proposed specifications for the Local Software. The parties shall
make their best efforts to reach a prompt agreement on final
specifications within 30 days of the date the specifications are
first proposed. The Local Software shall be compliant with the
latest version of the SET Protocol available.
c. If CCKK requests modifications to the Local Software that are not
contemplated in the specifications, CyberCash shall use reasonable
efforts to accommodate such request.
d. CyberCash shall use its best efforts to complete installation and
acceptance testing of the Local Software pursuant to the Project
Plan; however, CyberCash shall have no obligation to commence
development work on the Local Software until the specifications are
finalized.
5. OWNERSHIP OF LOCAL SOFTWARE.
Upon completion of the Local Software, all rights in and to the Local
Software shall vest in CCKK, and CCKK shall have the exclusive right
to (i) operate the Local Software for processing transactions in Japan
involving Japanese financial institutions and merchants and (ii) keep
and maintain a back-up copy of the object code of the Local Software.
After the Completion, CyberCash shall have the rights to copy,
distribute, sub-license and modify the Local Software,
2
3
but only to the extent necessary for the performance of its
obligations hereunder. Except as expressly provided herein, CyberCash
shall not assert or claim any intellectual property rights or moral
rights in or to any part of the Local Software. This agreement conveys
to CCKK no rights to the Original Software or any modifications or
derivative works thereof other than the Local Software.
6. USE OF LOCAL SOFTWARE.
a. CyberCash shall make its reasonably best efforts to obtain any
licenses or permits necessary to enable CCKK to use the Local
Software, including (i) the acquisition on behalf of CCKK of
sublicenses of any software constituting a part of either of the
Local Software, without any cost to CCKK and (ii) the compliance
with any process to be taken under the applicable regulations in
the United States. If CyberCash is unable to obtain a license or
permit necessary for CCKK to use the Local Software without
additional cost, CCKK shall be responsible for paying any such
cost. A list of the third party licenses necessary to the Local
Software is attached as Exhibit A.
b. CyberCash shall grant CCKK a license to use in Japan the CyberCash
name and all trademarks and service marks of CyberCash associated
with the Local Software, free of charge. CCKK will agree to comply
with reasonable rules established by CyberCash regarding the use of
CyberCash's trademarks and service marks.
c. CyberCash shall authorize CCKK to access any other Gateways that
CyberCash currently, or in the future, operates or licenses as part
of its global Internet payments system for the purpose of
processing transactions involving a party outside of Japan or
involving currencies other than yen, subject to the terms and
conditions that CyberCash reasonably establishes for connections to
other Gateways, including compliance with its global system
operating rules and connectivity standards and the payment of
standard transaction processing fees.
7. UPGRADES
a. On and after the Completion, CyberCash shall continue to develop,
on behalf of CCKK, upgrades to the Local Software, which
functionally correspond to those made to the Original Software or
which CCKK from time to time reasonably determines necessary to its
use of the Local Software in the Japanese market. CCKK shall
provide and maintain adequate hardware and other resources for
software upgrades and testing. Upon completion of each upgrade to
the Local Software, such completed upgrade shall be considered to
be a part of the Local Software as defined in Section 1.f hereof.
b. As soon as possible after SET Protocol version 1.0 is available,
necessary revision shall be made to the Local Software so that it
is made compliant therewith.
c. CCKK shall pay CyberCash its fully-burdened incremental costs of
developing such upgrades as provided in paragraph 3b(ii), above in
accordance with the agreement of the parties.
3
4
8. MAINTENANCE
a. On and after the Completion, CyberCash shall provide CCKK with
services of maintenance releases, remote support and software
defect corrections for the Local Software (the "Maintenance and
Support Services"). CyberCash shall retain the right, in assigning
a software correction, to a release and the priority of a reported
software defect. Upon completion of each maintenance release or
software defect correction for the Local Software, such completed
maintenance release or software defect correction shall be
considered to be a part of the Local Software as defined in Section
1.f hereof.
b. CCKK shall reimburse CyberCash for its fully-burdened costs of
providing Maintenance and Support Services (which shall not exceed
US$250,000 per year) in accordance with the agreement of the
parties.
c. CyberCash shall provide Maintenance and Support Services to CCKK in
accordance with the terms of a Support Services and Maintenance
Agreement to be executed by CyberCash and CCKK before the
Completion, which shall be based on the principles set out in 8.a
and 8.b above.
9. TRAINING OF EMPLOYEES.
CyberCash shall provide initial training for personnel employed by
CCKK in the operation and maintenance of the Local Software in
accordance with the training schedule established in the Project Plan.
The training shall be provided at CyberCash's facilities and shall be
available to personnel possessing minimum qualifications specified by
CyberCash. CCKK shall pay the travel and living expenses of the
trainees, and CyberCash shall be responsible for the remaining costs
of training.
10. REPRESENTATIONS AND WARRANTIES BY CYBERCASH.
a. CyberCash hereby represents and warrants as follows:
i) CyberCash is a corporate entity duly organized and existing in
good standing under the laws of the State of Delaware, and has
the full and complete corporate power and authority to execute
and deliver, and perform its obligations under, this Agreement;
ii) the execution and delivery by CyberCash of, and the performance
by CyberCash of its obligations under, this Agreement have been
duly authorized by all necessary corporate action;
iii) the execution and delivery by CyberCash of, and the
performance by CyberCash of its obligations under, this
Agreement (i) do not require any approval of its shareholders
or the approval or consent of any holder of any indebtedness
or obligations of CyberCash; (ii) except for any necessary
export or import licenses, do not require any consent,
approval, order or authorization of, or registration with, or
the giving of prior notice to, any governmental authority with
respect to the execution and delivery of this Agreement or the
validity and enforceability thereof or the satisfaction of all
obligations hereunder; (iv) do not contravene any applicable
law or violate the articles of incorporation or by-laws
4
5
of CyberCash; and (v) do not result in any breach of, or
constitute a default under, any agreement to which CyberCash
is a party or by which it may be bound or affected;
iv) this Agreement shall constitute the legal, valid and binding
obligations of CyberCash, enforceable against it in accordance
with its terms.
v) no part of the Local Software, the Original Software, or
CyberCash's service marks and trademarks now infringe or,
during the term of this Agreement, shall infringe on any
intellectual rights of a third party;
vi) there are no outstanding claims or pending lawsuits on the
date of this Agreement in connection with any aspect of the
Original Software or CyberCash's service marks and trademarks.
b. CyberCash shall indemnify and hold CCKK harmless from and against
any damages, liabilities, costs and expenses incurred by CCKK in
connection with CyberCash's breach of the representations provided
in this Section 10.
11. CONFIDENTIALITY.
a. Confidential Information. The parties acknowledge that they, their
subsidiaries and affiliated companies are the owners of valuable
trade secrets and other confidential information and that they
license Confidential Information (as defined below) from others.
b. Non-Disclosure. All confidential information disclosed by one party
to the other party in connection with this Agreement (the
"Confidential Information") shall remain the property of and be
deemed proprietary to the disclosing party. The receiving party
agrees to receive Confidential Information in strict confidence, to
hold Confidential Information in trust for the disclosing party and
to use Confidential Information solely and exclusively in
accordance with the terms of this Agreement in order to carry out
the purposes. Notwithstanding the preceding no party to this
Agreement shall be liable for disclosure or use of Confidential
Information if the Confidential Information was properly in the
public domain at the time it was disclosed or is publicly released
in response to a subpoena, court order or other legal process under
circumstances in which a protective order or confidentiality
agreement has been requested by rejected by the appropriate
judicial or other lawful authority.
c. Injunctive Relief. The parties hereto acknowledge that their
remedies under this Agreement or otherwise available at law in the
event of a disclosure of any Confidential Information or any
default or threatened default by either party in the performance of
its obligations under this Section 11 will be inadequate and agree
that the terms of this Section 11 shall be enforceable by a decree
for the specific performance thereof by the defaulting party, or by
an injunction against any violation of its terms, or otherwise. The
parties hereto further acknowledge and agree that the covenants
contained herein are necessary for the protection of legitimate
business interests of both parties, their subsidiaries and/or
affiliated companies and are reasonable in scope and content.
5
6
12. NON-COMPETITION
The parties hereto acknowledge and recognize the highly competitive
nature of the business of CCKK and accordingly, to the extent
permitted under any applicable law, agree that neither party hereof
shall, directly or indirectly, from the date hereof until one (1) year
after termination hereof, (i) induce employees of the other party to
terminate their employment or to engage in any business directly
competing with the other party, or (ii) induce any customer of the
other party to terminate its relationship with the other party. or
(iii) engage in the business of providing Internet payment services in
Japan in competition with CCKK.
13. TERM/TERMINATION.
a. This Agreement shall become effective as of the date first above
written and shall continue in full force and effect for an
indefinite term thereafter, unless this Agreement is sooner
terminated pursuant to this Section 13.
b. Either party hereto may terminate this Agreement by giving written
notice to the other party, upon the occurrence of any of the
following events:
(i) If any note or check issued by the other party is dishonored;
(ii) If the other party receives a petition for attachment,
provisional attachment, provisional disposition or other
execution or is subject to any disposition for failure to pay
taxes
(iii) If a petition for bankruptcy, composition, company
reorganization, company liquidation, or special liquidation
is filed in respect to either party:
(iv) If either party causes damage to the other party due to a
willful act or gross negligence in connection with the
performance of its obligations under this Agreement;
provided, however, that in such event only the damaged party
may terminate this Agreement; and
(v) If the other party's actions or inactions materially breach
this Agreement.
Notwithstanding the foregoing, this Agreement may be terminated by
written agreement of the parties hereto at any time.
c. In the event that this Agreement is terminated pursuant to this
Section 13, this Agreement shall terminate without any liability or
further obligation of any party to another, except for any breach
of this Agreement prior to termination.
d. Sections 5, 10 and 11 shall survive any expiration or termination
of this Agreement.
14. FURTHER ACTS
The parties hereto shall take whatever actions or steps are necessary
to carry out and cause the performance of the various terms of this
Agreement.
6
7
15. DISPUTE RESOLUTION.
Disputes arising under this Agreement shall be resolved by arbitration
pursuant to the rules of the American Arbitration Association or such
other arbitral body as the parties shall select by mutual agreement.
This Agreement shall be interpreted in accordance with the laws of the
Commonwealth of Virginia, without regard to its rules governing choice
of law.
16. MISCELLANEOUS PROVISIONS.
a. Notices. All notices, consents, requests and other communications
hereunder shall be in writing and shall be deemed to have been duly
given when (a) delivered by hand, (b) sent by telecopier (with
receipt confirmed), provided that a copy is sent in the manner
provided in clause (c), or (c) when received by the addressee, if
sent by DHL, Federal Express, Airborne Express or other generally
recognized international express delivery service (receipt
requested), in each case to the appropriate addresses and
telecopier numbers set forth below (or to such other addresses and
telecopier numbers as a party may designate as to itself by notice
to the other parties):
(i) If to CCKK:
SoftBank Corp.
0-00-0 Xxxxxxxxxx-Xxxxxxx
Xxxx-xx
Xxxxx 000 Xxxxx
Telecopier No.: 00-0-0000-0000
Attention: Yoshitaka Kitao, Executive Vice President
(ii) If to CyberCash:
Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Telecopier No.: (000)000-0000
Attention: Xxxxx Xxxxxx
with a copy to the General Counsel
b. Headings. The headings in this Agreement are for convenience of
reference only and shall not be given any effect in the
interpretation of the Agreement.
c. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be considered an original, but
all of which together shall constitute the same instrument.
d. Assignment. All of the terms and provisions of this Agreement shall
be binding upon and inure to the benefit of and be enforceable by
the parties hereto and their respective successors and permitted
assigns. This Agreement shall not be assignable or transferable by
either party hereto without prior written consent of the other
party hereto.
e. Entire Agreement; Amendment. This Agreement sets forth the entire
understanding between the parties relating to the subject matter
contained herein and merges all prior
7
8
agreements and understandings between them. No amendment to this
Agreement shall be effective unless it is in writing and executed
by the parties hereto.
f. Severability. Any term or provision of this Agreement which is
invalid or unenforceable will be ineffective to the extent of such
invalidity or unenforceability without rendering invalid or
unenforceable the remaining rights of the person intended to be
benefited by such provision or any other provisions of this
Agreement.
g. No Waiver. The failure of a party to insist upon strict adherence
to any term of this Agreement on any occasion shall not be
considered a waiver or deprive that party of the right thereafter
to insist upon strict adherence to that term or any other term of
this Agreement. Any waiver must be in writing.
h. Incorporation. References herein to "this Agreement" and the words
"herein," "hereof" and words of similar import refer to this
Agreement, and Appendix 1 hereto, as an entirety.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, as of the date first above written.
CYBERCASH, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------
Name: Xxxxx X. Xxxxxx
Title: Executive Vice President
CYBERCASH K.K.
By: /s/ Yoshitaka Kitao
-----------------------
Name: Yoshitaka Kitao
Title: Director
8
