Strategic Relationship and Software License Agreement

EXHIBIT 10.6


STRATEGIC RELATIONSHIP


AND SOFTWARE LICENSE AGREEMENT


BY


AND


BETWEEN


HEWLETT-PACKARD COMPANY


AND


CLEARCOMMERCE CORPORATION


DATED


SEPTEMBER 30,1999


STRATEGIC RELATIONSHIP
AND
SOFTWARE LICENSE AGREEMENT


This Strategic Relationship and Software License Agreement (this "Agreement") is made as of September 30, 1999 ("Effective Date") by and between HEWLETT- PACKARD COMPANY, a Delaware Corporation and its subsidiaries, divisions and affiliates ("HP"), and CLEARCOMMERCE CORPORATION, a Delaware corporation ("ClearCommerce").


WHEREAS, HP and ClearCommerce have entered into a Bundled Software License Agreement dated March 31, 1999 ("Bundled Software License Agreement) and ClearCommerce License Purchase Form No. 98-1203 executed by HP on March 29, 1999 (collectively the "Prior Agreements") for the licensing of certain ClearCommerce products to HP; AND


WHEREAS, HP and ClearCommerce desire to expand their relationship into a strategic relationship which covers all ClearCommerce products and services; AND


WHEREAS, HP and ClearCommerce desire to supercede the Prior Agreements with this Agreement;


NOW THEREFORE, the parties hereby agree as follows:


I . DEFINITIONS


1.1. "Program" means ClearCommerce's software program(s) listed and
-------
described in Exhibit A hereto, including all Enhancements and
---------
localized versions thereto as further set forth below.


1.2. "Enhancements" mean all bug fixes, error corrections, updates,
------------
modifications, new features, new functionalities, upgrades or
versions of the Program or Documentation.


1.3. "Documentation" means the manuals and other documentation that
-------------
ClearCommerce ordinarily makes available with a Program and any
other documentation and information regarding the Program which HP
reasonably requests for evaluation and use of the Program as
contemplated herein, including those items listed and described in


Exhibit A hereto.
---------


1.4. "Complete Copy" of a Program includes (i) a master copy of the
-------------
Program in object code form (as specified on, Exhibit A hereto) on
---------
the media described on Exhibit A that satisfies all functional
---------
specifications set forth in the Documentation, (ii) copies of all
tools, software programs, and documentation used to certify the
correct operation of the Program, and (iii) all Documentation and
technical manuals for the Program in the form(s) and on the media
described in Exhibit A.
---------


1.5. "HP Product(s)" means any HP product, in all its supported
-------------
configurations and with all associated peripherals.


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1.6. "Subsidiaries" will mean an entity controlled by or under common
------------
control with a party to this Agreement, through ownership or control
of more than fifty percent (50% ) of the voting power of the shares
or other means of ownership or control, provided that such control
continues to exist.


1.7. "Commerce for The Millennium Program ('CFTM') shall mean HP's
--------------------------------------------
electronic commerce solution for service providers to deliver e-
commerce services to businesses.


1.8. "Store License" is defined as a per storefront license under the
-------------
CFTM for a set or open ended number of months, such that a Merchant
(as defined below) with two (2) storefronts will require two (2)
Store Licenses.


1.9. "Store-Months" will consist of one (1) month of license per Store
------------
License under the CFTM.


1.10. "Merchant" is a business entity that is selling goods or services
--------
via the Internet under the CFTM.


2. DELIVERY AND ACCEPTANCE


2.1. Delivery. ClearCommerce agrees to deliver to HP a Complete Copy of
--------
each Program listed in Exhibit A not already received and tested by
---------
HP no later than ten (10) days after the execution of this
Agreement.


2.2. Acceptance. HP will be entitled to test and evaluate any Program by
----------
whatever means it deems appropriate consistent with ClearCommerce's
rights in the Program, and ClearCommerce hereby grants to HP any
licenses necessary for HP to perform its evaluation. Such licenses
will include the right of HP to use third party subcontractors to
achieve the foregoing. HP and ClearCommerce agree that after the
initial license order represented by the License Fee specified in
Exhibit C. the acceptance criteria for the initial HP Proposed
---------
Enhancements under Section 5.3 shall be as stated in Section 1 of
Exhibit B. Acceptance criteria for future Program Enhancements will
---------
be discussed and mutually agreed to by the parties. If HP returns a
Program for rework, ClearCommerce agrees to correct the listed
defects and resubmit the Program for re-evaluation under the same
acceptance procedure. In the event HP rejects a Program after the
initial license order, it will give ClearCommerce written notice of
rejection stating the reasons for its unacceptability; and this
Agreement will terminate with respect to that Program.


2.3. Enhancements. ClearCommerce agrees to deliver to HP a complete
------------
copy of any Enhancement within five (5) days of its release to
manufacturing by ClearCommerce. HP will have the right to test and
evaluate the Enhancements under the acceptance procedure described
above.


3. RIGHTS GRANTED AND RESTRICTIONS


3.1. License to the Program. ClearCommerce hereby grants to HP, under
----------------------
ClearCommerce's intellectual property rights, a non-exclusive,
worldwide license to use, reproduce, display,


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distribute, import and disclose the Program in object code format for
use either as a standalone product, or in conjunction with an HP
Product, or to integrate and distribute with HP Products or other
third party products. Such use limitation will not apply in the case
of Enhancements for distribution to customers for support and
maintenance purposes. Such license will include the right of HP to
continue distributing Program versions that are first distributed by
HP and subsequently updated or upgraded to a new release during the
Term of the Agreement. Such license will include the right of HP to
sublicense distributors, resellers, and other third parties to
achieve the foregoing. ClearCommerce warrants that HP's distribution
rights are worldwide and shall use its best efforts to ensure that
ClearCommerce's existing or subsequent third party distribution
arrangements do not infringe HP's distribution rights.


3.2. License to the Documentation. ClearCommerce hereby grants to HP,
----------------------------
under ClearCommerce's intellectual property rights, a non-exclusive,
worldwide license to use, reproduce, display, translate, import,
disclose, distribute, modify and prepare derivative works or
compilations of (a) the Documentation; and (b) modifications,
derivative works and compilations based upon the Documentation for
use with a Program. These rights are exercisable in any medium. Such
license will include the right of HP to sublicense distributors,
resellers, and other third parties to achieve the foregoing. The
right to modify and prepare derivative works and compilations is
granted solely for the purposes of combining Documentation of more
than one program, condensing Documentation, and formatting and
preparing Documentation for user accessibility.


3.3. License to Photograph (Marketing Materials). ClearCommerce hereby
-------------------------------------------
grants to HP, under ClearCommerce's intellectual property rights, a
non-exclusive, worldwide license to capture visual images of the
Program screen displays and packaging, the Documentation and the CD-
ROM, if any, and to use, reproduce, display, perform, distribute,
import and modify such photographs and modifications and images
solely in connection with HP's marketing and support of the Program
and training with respect to the Program. Such license will include
the right of HP to sublicense distributors, resellers, and other
third parties to achieve the foregoing.


3.4. Restrictions. HP will not disassemble or otherwise modify any
------------
Program without written authorization from ClearCommerce, except as
necessary to ascertain interfaces or as permitted by law.


3.5. Localized Versions.
------------------


3.5.1. The licenses granted hereunder with respect to the Program
and associated Documentation will include all localized
versions thereof available from ClearCommerce. Upon the
request of HP, ClearCommerce agrees to localize the Program
for additional countries upon a schedule to be agreed upon in
good faith by the parties.


3.5.2. In the event that ClearCommerce fails to make commercially
available such a localized version of the Program under the
schedule agreed upon, then ClearCommerce hereby grants to
HP, on terms to be reasonably agreed upon in


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good faith; a non-exclusive license to modify the Program in
order to localize the Program; and the exclusive, worldwide
right to use, reproduce, display and distribute such localized
versions developed by HP, in object code form, to end users
directly or through HP's third party channels of distribution.
Notwithstanding the foregoing, ClearCommerce may pay HP's costs
for its localization efforts in which case the aforementioned
worldwide license to use, reproduce, display and distribute
shall not be exclusive. HP may subcontract its localization
efforts subject to confidentiality restrictions reasonably
satisfactory to ClearCommerce. Under such license,
ClearCommerce will provide HP with reasonable technical
assistance, all necessary source code of the Program and any
related compilers, utilities, listings or other materials
necessary for HP to create a localized version of the Program,
which source code HP agrees to treat as Confidential
Information of ClearCommerce under Section 10 herein for a
period of ten (10) years from the date of receipt.


3.6. Trademarks. Neither party is granted any ownership in or license to
----------
the trademarks, marks or trade names (collectively, "Marks") of the
other party. Notwithstanding the foregoing, ClearCommerce
acknowledges that HP may use ClearCommerce's name and the name of
the Program in the course of marketing and distributing, such
Program as bundled with the HP Product.


3.7. Ownership. Subject to the rights and licenses granted to HP
-----------
hereunder, ClearCommerce retains all right, title and interest in
the Programs and Documentation, including all copyrights.


3.8. Copyright Notices. HP agrees that it will not remove any copyright
-----------------
Notices, proprietary markings, trademarks or tradenames of
ClearCommerce from the Program or Documentation. ClearCommerce and
HP agree that a second HP copyright notice in HP's standard
copyright notice form may be added to any authorized HP
modification.


3.9. Software License Terms. HP will be entitled to use its then current
----------------------
standard form software license terms for marketing and licensing the
Programs under this agreement. HP will use reasonable efforts to
include any specific Program information which affects how Programs
are licensed to licensees in Program documentation provided by HP.


4. SALES AND MARKETING


4.1. Sales Model. Upon execution of the Agreement, HP and ClearCommerce
------------
agree to establish a co-selling program for a period of at least
twelve (12) months. ClearCommerce agrees that its sales force, or
other ClearCommerce sales channels will receive the same compensation
regardless of whether HP or ClearCommerce closes the sale of the
Programs. HP and ClearCommerce will meet within thirty (30) days of
execution of the Agreement to mutually agree upon the rules of
engagement for the co-selling program, including revenue and
commission allocations for the HP and ClearCommerce sales forces.


Notwithstanding the above, HP and ClearCommerce agree that upon
execution of the Agreement, any sales of the Programs to HP
subsidiaries and divisions shall be credited


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exclusively to HP, excluding any sales that were in progress and
generated exclusively by ClearCommerce prior to execution of the
Agreement.


4.2. Sales Training. ClearCommerce agrees to provide sales assistance to
--------------
HP personnel, including twenty (20) days of sales training classes
and such additional sales training as is mutually agreed upon by the
parties, and marketing material such as Program Documentation,
coursework, reviewer guides, competitive product analyses and
product literature. ClearCommerce grants HP the right to reproduce
such marketing material for internal use and external distribution.


5. PROGRAM MAINTENANCE AND SUPPORT


5.1. Maintenance and Support.
-----------------------


5.1.1. ClearCommerce agrees to provide HP and its customers with
ongoing maintenance and support for the Programs under the
terms as set forth in Exhibit D hereto. ClearCommerce
---------
agrees to maintain such number of qualified personnel as is
necessary to provide such timely and knowledgeable maintenance
and support service. HP shall have the right to subcontract all
or part of the HP Support (as defined in Exhibit D) obligations
---------
to third parties.


5.1.2. Notwithstanding the above, HP may continue to obtain training
and support from ClearCommerce for the CFTM Program on mutually
agreeable terms.


5.2. New HP Products. The parties intend that during the term of this
---------------
Agreement, the Program will be compatible with future releases and
revisions of the HP Products, including new or revised versions of
the operating systems for the HP Products, provided that such new HP
Products support the Program. Upon request by HP, ClearCommerce
agrees to use its best efforts to provide HP, at no additional
charge, with the Program adapted for use with such new HP Products
within ninety (90) days after notification from HP or within a
mutually agreed timeframe, provided that HP makes available to
ClearCommerce such hardware, software and technical support
reasonably necessary for ClearCommerce to develop and qualify such
adapted Program.


5.3. HP Proposed Enhancements. ClearCommerce agrees to perform
------------------------
functionality Enhancements to the Programs for HP in accordance with
the requirements and timeframes set forth in Exhibit B. Any future
---------
Enhancements proposed by HP will be discussed by the parties and
undertaken on mutually agreeable terms. Notwithstanding any change
in control of ClearCommerce, ClearCommerce agrees to continue making
Enhancements to the Programs in accordance with the above terms.


5.4. Escrow Agreement. At HP's request, ClearCommerce agrees to enter
---------------- into a source code escrow agreement substantially in the form attached hereto as Exhibit F with HP and an independent escrow agent as may be mutually agreed upon. HP and ClearCommerce agree to share equally in the escrow fees payable to maintain such escrow account.


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6. CLEARCOMMERCE OBLIGATIONS FOR HOSTING AND MERCHANT ENGINE VERSION
3.7


6.1 Obligations. ClearCommerce shall dedicate its engineering and other
-----------
resources, as required to migrate the CFTM Hosting Engine licenses
from Version 3.7 to Version 3.8 by November 1, 1999, and to integrate
the BroadVision system to the Merchant Engine, Version 3.8 by
November 1, 1999.


7. PAYMENT


7.1. Payment. HP agrees to pay ClearCommerce according to Exhibit C.
------- ---------


7.2. Audit. Upon fifteen (15) days prior written notice to HP,
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ClearCommerce may, at its own expense, appoint a nationally
recognized independent auditor, to whom HP has no reasonable
objection, to audit and examine such records at HP's offices during
normal business hours, solely for the purpose of confirming the
accuracy of royalty payments hereunder. Such audit may be made no
more often than once every twelve (12) calendar month period. In the
event that an audit reveals an overpayment by HP, ClearCommerce
agrees to promptly refund or credit HP for such overpaid amount. In
the event that such audit reveals an underpayment by HP, HP agrees to
promptly pay ClearCommerce the amount of such underpayment. This
right of audit will be subject to ClearCommerce's auditor executing
HP's standard Confidential Disclosure Agreement.


7.3. Fee Warrant. ClearCommerce warrants that the amounts payable
-----------
hereunder by HP are no greater than those for any other licensee
under similar terms and conditions, and ClearCommerce agrees to pass
on to HP the lowest rate or price it has given to such other
licensee, commencing effectively on the date it so grants the lower
rate or price to any other licensee.


7.4. Taxes. ClearCommerce will be solely responsible for taxes on
-----
royaltie paid to ClearCommerce under this Agreement, including all
state and local use, sales, withholding, property (ad valorem) and
similar taxes.


8. WARRANTY AND INTELLECTUAL PROPERTY PROTECTION


8.1. General Warranty. ClearCommerce warrants that it has full power and
----------------
authority to grant HP the rights granted herein and that each Program
and accompanying Documentation are free of any and all restrictions,
settlements, judgments or adverse claims.


8.2. Program Warranty. ClearCommerce warrants that the Program referred to
----------------
herein will operate in accordance with and substantially conform to
the Documentation, manuals, any specifications provided or agreed to,
and any relevant data sheet or promotional literature distributed by
ClearCommerce.


8.3. Year 2000 Compliance Warranty. ClearCommerce warrants that all
-----------------------------
Programs will be


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"Year 2000 Compliant." Year 2000 Compliant Programs will
perform without error, loss of data, or loss of functionality
on account of any inability to process, calculate, compare or
sequence date data accurately. In addition, Year 2000 Compliant
Programs will not cause any HP Products in which they may be
used to fail in any of the ways described above. This Year 2000
Compliance warranty will remain in effect through December 31,
2000, notwithstanding any other warranty period specified in
this Agreement.


8.4. No Infringement. ClearCommerce warrants that the Program,
---------------
accompanying Documentation, trademarks, copyrights and trade
names referred to in this Agreement do not violate or infringe
any patent, copyright, trademark, trade secret or other
proprietary right of any third party and that ClearCommerce is
not aware of any facts upon which such a claim for infringement
could be based. ClearCommerce will promptly notify HP if it
becomes aware of any claim or any facts upon which a claim
could be based.


8.5. Intellectual Property Protection.
--------------------------------


8.5.1. ClearCommerce will, at HP's option, defend and hold
harmless HP, its subsidiaries, and customers from any
claim, suit, or proceeding alleging that the Program,
or any combination of the Program with an HP Product,
(provided that the HP Product is not the sole cause of
the claim, suit or proceeding) or any documentation, or
any part thereof, or any product provided as part of
ClearCommerce's support services furnished by
ClearCornmerce under this Agreement constitutes an
infringement of any third party's patent, copyright,
trademark, trade name, other proprietary right, or
unauthorized trade secret use. ClearCommerce agrees to
pay all damages and costs awarded with respect to such
claim or agreed to in any settlement of that claim.


8.5.2. In case any Program or Documentation or any part
thereof in such suit is held to constitute an
infringement and its use is enjoined, ClearCommerce
will, at its own expense and at its option (i) procure
for HP and its customers the right to continue use, or
(ii) if applicable, replace the same with, a
noninfringing program and documentation of equivalent
function and performance, or (iii) modify them so they
become noninfringing without detracting from function
or performance.


8.5.3. HP will give ClearCommerce prompt notice of any such
claim or action, and will give ClearCommerce the
authority, information, and reasonable assistance (at
ClearCommerce's expense) necessary to defend. If
ClearCommerce does not diligently pursue resolution of
the claim nor provide HP with reasonable assurances
that it will diligently pursue resolution, then HP may,
without in any way limiting its other rights and
remedies, defend the claim.


8.5.4. Notwithstanding the foregoing, ClearCommerce will have
no responsibility for claims arising solely and
directly from (i) unauthorized modifications of the
Program made by HP if such claim would not have arisen
but for such modifications, or (ii) unauthorized
combination or use of the Program with products not
contemplated herein if such claim would not have arisen
but for such combination or use.


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8.5.5. THIS SECTION 8.5 STATES THE ENTIRE LIABILITY OF CLEARCOMMERCE
WITH RESPECT TO ANY CLAIM OF INFRINGEMENT OF INTELLECTUAL
PROPERTY RIGHTS BY THE PROGRAMS OR DOCUMENTATION.


8.6. Warranty Disclaimer. EXCEPT AS EXPRESSLY PROVIDED HEREIN,
-------------------
CLEARCOMMERCE MAKES NO OTHER WARRANTIES, EI ...