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MASTER PROFESSIONAL SERVICES AGREEMENT

Consulting Services Agreement

MASTER 

PROFESSIONAL SERVICES AGREEMENT
 | Document Parties: CHORDIANT SOFTWARE INC | Citicorp Credit Services, Inc. You are currently viewing:
This Consulting Services Agreement involves

CHORDIANT SOFTWARE INC | Citicorp Credit Services, Inc.

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Title: MASTER PROFESSIONAL SERVICES AGREEMENT
Governing Law: California     Date: 2/9/2007
Industry: Software and Programming     Sector: Technology

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Exhibit 10.50

MASTER

PROFESSIONAL SERVICES AGREEMENT

 

 

Commencement Date:

April 3, 2006

 

 

Party:

CONTRACTOR

CLIENT

Name:

Chordiant Software, Inc.

Citicorp Credit Services, Inc. (USA)

Address:

20400 Stevens Creek Blvd.

Cupertino, CA 95014

14000 Citi Cards Way

Jacksonville, FL 32258

State of Incorporation:

Delaware

Delaware

 

 

IN CONSIDERATION of the mutual covenants and undertakings contained herein, and intending to be legally bound, Contractor and Client (as designated above) agree as follows.

 

1.   DEFINITIONS

 

1.1   Specific Words or Phrases. For purposes of this Agreement, each word or phrase listed below shall have the meaning designated. Other words or phrases used in this Agreement may be defined in the context in which they are used, and shall have the respective meaning there designated.

 

Acceptance Criteria ” means the applicable Specifications and Documentation, together with such other test data, test conditions and exception conditions as may be specifically set forth or incorporated by reference in the Work Order.

 

Affiliate ” means and includes any entity that directly or indirectly controls, is controlled by, or is under common control with Client, where “control” means the ownership of, or the power to vote, at least twenty percent (20%) of the voting stock, shares or interests of an entity. An entity that otherwise qualifies under this definition will be included within the meaning of “Affiliate” even though it qualifies after the execution of this Agreement.

 

Agreement ” means the terms of this Master Professional Services Agreement (sometimes referred to as “Master Agreement”), together with the appendices and other exhibits attached hereto or incorporated herein by reference; provided, however, that for each particular Work Order, reference to “Agreement” shall be construed solely as a reference to the agreement that arises as a result of the execution of the Work Order, which agreement shall be a two party agreement between Contractor and the specific entity (either the entity designated above as “Client” or an Affiliate) that executes the Work Order.

 

Client ” means, for the general purposes of the Master Agreement, the entity designated above as “Client”. However, for the particular purposes of any agreement that arises as a result of a Work Order, reference to “Client” shall be construed solely as a reference to the specific entity (either the entity designated above as “Client” or an Affiliate) that executes the Work Order.

 

Contractor” means the entity designated above as “Contractor”.

 

Defect ” means a defect, failure, malfunction, or nonconformity in a Deliverable that prevents the Deliverable from operating in accordance with the applicable Acceptance Criteria.

 

Deliverable(s) ” means and includes the item(s) described on the applicable Work Order that is to be developed or prepared by Contractor and furnished to Client.

 

" Intellectual Property Rights " means all trade secrets, patents and patent applications, trade marks (whether registered or unregistered and including any goodwill acquired in such trade marks), service marks, trade names, business names, internet domain names, e-mail address names, copyrights (including rights in computer software), moral rights, database rights, design rights, rights in know-how, rights in confidential information, rights in inventions (whether patentable or not) and all other intellectual property and proprietary rights (whether registered or unregistered, and any application for the foregoing), and all other equivalent or similar rights which may subsist anywhere in the world.

 

Party ” means either Contractor or Client, individually as the context so requires; and “ Parties ” means Contractor and Client, collectively.

 

“Personnel ” means and includes a Party’s or an Affiliate’s directors, officers, employees, agents, auditors, consultants, and subcontractors.

 

Project ” means the particular project described on a Work Order.

 

Services ” means the services described on a Work Order that are to be furnished by Contractor to Client.

 

" Specifications " means and includes the description of functional, technical, design and performance characteristics of the Deliverables agreed to by the Parties (including any requirements or characteristics specified in, or incorporated by reference into the applicable Work Order), and all modifications to the foregoing that are made from time to time by written agreement of the Parties.

 

Work Order ” means a transactional document (which may be entitled “Work Order”, “Statement of Work”, or “Project Schedule” and in all such cases is intended to be considered a “Work Order” for all purposes under this Agreement) that is entered into pursuant to this Master Agreement by and between Contractor and either the entity designated above as “Client” or an Affiliate and describes the Services or Deliverables to be provided by Contractor to such Client / Affiliate.

 

1.2   Common Words. The following words shall be interpreted as designated: (i) “or” connotes any combination of all or any of the items listed; (ii) where “including” is used to refer to an example or begins a list of items, such example or items shall not be exclusive; and, (iii) “specified” requires that an express statement is contained in the relevant document.

 

2.

TERM AND TERMINATION

 

2.1   Master Agreement. This Master Agreement shall commence as of the Commencement Date designated above, and shall continue in effect thereafter, unless superceded or otherwise terminated by agreement of the Parties. For the avoidance of doubt, termination of the Master Agreement shall not result in the termination of any Work Order, each Work Order being terminable only in accordance with its own provisions.

 

2.2    Work Orders. A Work Order shall become effective only when duly signed on behalf of the Parties to be bound thereby, and shall continue in effect through the earlier of: (i) the date the Services have been satisfactorily completed or the Deliverables have been accepted and all applicable warranty and license periods have expired or otherwise terminated, or (ii) the date of termination specified by either Party in accordance with the following conditions.

 

2.2.1  

Client may terminate any Work Order with or without cause, at any time in its sole discretion, upon five (5) days prior written notice to Contractor. In the event Client terminates a Work Order without cause, Client will pay Contractor the reasonable value for: (i) Services properly performed by Contractor prior to the effective date of termination, (ii) services performed by Contractor pursuant to Section 2.3 , and, (iii) reimbursable expenses incurred by Contractor pursuant to Section 9.4 .

 

2.2.2  

Contractor may only terminate a Work Order if Client defaults in any material obligation and fails to cure the default within thirty (30) days after Client has received Contractor’s notice of the default.

 

For the avoidance of doubt, notice of termination for any Work Order shall not be construed to be notice of termination for any other Work Order.

 

2.3   Orderly Transfer. Upon the termination of a Work Order for any reason whatsoever (including a default by either Party), Contractor will provide such information, cooperation and assistance to Client, as Client may reasonably request, to assure an orderly return or transfer to Client or Client’s designee of all proprietary data (and related records and files) and materials of Client, and all Work Product for which payment has been or is made, in their then current condition.

 

2.4   Retention of Archival Copy. If Client’s right to use any software provided by Contractor or any other Contractor Materials is terminated for any reason whatsoever, then Client shall nevertheless be entitled to retain copies of such software, Contractor Materials, and related documentation for archival purposes and to satisfy Client’s obligations under all applicable laws.

 

3.    PROJECT IMPLEMENTATION

 

3.1   Provision of Services and Deliverables . This Master Agreement does not by itself commit Client or any Affiliates to purchase any services or products. Rather, this Master Agreement merely sets forth the terms and conditions that will govern the provision of Services or Deliverables to Client or an Affiliate as a result of the execution of a Work Order by Contractor and Client or the Affiliate.

 

3.2    Work Orders . Work Orders may be entered into with Contractor under this Master Agreement by either the entity designated above as “Client” or any Affiliate. The entity that executes a Work Order with Contractor shall be considered the “Client” for all purposes of the Work Order; and the Work Order shall be considered a two party agreement between Contractor and such entity. Each Work Order shall be substantially in the form of Appendix A ,   shall incorporate by reference the provisions of this Master Agreement as though such provisions were set forth therein in their entirety, and shall set forth: (i) a description of the Services or Deliverables to be furnished by Contractor, (ii) the fees to be paid by Client for the Services or Deliverables, (iii) the applicable Acceptance Criteria, (iv) the name of the project manager for Client and the name of the project manager for Contractor, and, (v) such additional terms and conditions as may be mutually agreed upon by Contractor and the respective Client.

 

4.   RELATION OF PARTIES

 

4.1   Client and Affiliates. Contractor acknowledges that Client and each of the Affiliates may use or benefit from the use of any Services performed, or Deliverables prepared and furnished, by Contractor as part of a Project.

 

4.2   Project Managers and Status Reports. For each Project, each Party will designate a suitably qualified project manager who will represent such Party and be responsible for assigning, scheduling and supervising such Party’s Personnel. During a Project, Contractor’s project manager will provide Client's project manager with status reports (at intervals determined by Client). Status reports may contain the following: (i) a summary of the current status of the Project (including specific progress made since the immediately preceding status report); (ii) a summary of the status of, or progress made on, all problems identified in previous status reports (and not previously reported as corrected); (iii) a summary of any problems identified since the preceding status report and any recommended remedial action; and, (iv) the amount of any anticipated delay in the completion of any milestone beyond the applicable date specified in the Work Order, the cause of such delay and any recommended remedial action.

 

4.3   Independent Contractor. Contractor will perform all Services as an independent contractor. Neither this Agreement nor Contractor’s performance of Services shall create an association, partnership, joint venture, or relationship of principal and agent, master and servant, or employer and employee, between Client and Contractor; and neither Party will have the right, power or authority (whether expressed or implied) to enter into or assume any duty or obligation on behalf of the other Party.

 

4.4   Contractor’s Personnel. Contractor will (if requested by Client at any time before or during any Project) furnish information substantiating the qualifications of any individual who Contractor intends to assign, or has assigned, to a Project. Client will be entitled to review such information in order to confirm the qualifications. After an individual has been assigned to a Project, Contractor will not reassign such individual in connection with any assignment other than the Project without the prior written consent of Client, which shall not be unreasonable withheld. In addition, Contractor will assign its Personnel to Projects in a manner that minimizes disruptions caused by the need for reorientation. Contractor further warrants that Contractor’s Personnel will not hold themselves out as employees or agents of Client, nor seek to be treated as employees of Client for any purpose, including claims of entitlement to fringe benefits provided by Client, or for disability income, social security taxes or benefits, Federal unemployment compensation taxes, State unemployment insurance benefits or Federal income tax withholding at source. Contractor will file all applicable tax returns for all of its Personnel assigned hereunder in a manner consistent with its status as an independent contractor of services; and Contractor will make all required payments and deposits of taxes in a timely manner.  

 

4.5   Replacement of Contractor Personnel. Any individual who is assigned by Contractor to a Project may be temporarily replaced by Contractor if such individual does not report to work due to illness, accident or other events outside of Contractor’s control. Upon written notice to Contractor, Client shall be entitled to require Contractor to replace any individual who is assigned by Contractor to a Project and bar such individual from performing any Services for Client if Client determines in its reasonable discretion that the individual is unacceptable for any reason, including if the individual (i) is not compatible with Client employees connected with the Project , (ii) fails to comply with any applicable laws, ordinances, regulations, codes, or with Client’s security or work place policies or procedures (whether or not specified herein), or (iii) fails (in Client’s sole determination) to perform assignments in a professional and competent manner. Contractor further agrees to bar any such individual from performing any Services for Client immediately upon it becoming aware of such noncompliance.   If one of Contractor’s Personnel is removed from a Project either by Contractor or for cause at the request of Client, then Contractor will (at its expense) provide the training and orientation required to enable the replacement Personnel to perform as required. All replacement Personnel must be acceptable to Client in the sole exercise of Client’s discretion.

 

 

5.

CLIENT’S POLICIES AND PROCEDURES

 

5.1   General. Contractor will ensure (i) that its Personnel comply with the corporate policies promulgated by Client or an Affiliate that are designed to adhere to applicable laws and regulations, and with the security and work place policies and procedures in effect for any facility of Client or an Affiliate where the Services are performed (including Information Security Standards and any supplementary practices or procedures provided by Client to Contractor), and (ii) that all Services are performed in a manner that will minimize any interference with Client’s or an Affiliate’s normal business operations.

 

5.2    Equipment and Network Security. If access to Client’s or an Affiliate’s computer systems, other equipment or personal property (“Client’s Systems”) is required in order for Contractor to fulfill its obligations to Client, then Client shall determine the nature and extent of such access. If Client or an Affiliate provides Contractor with remote access to Client’s Systems, then any and all information relating to such remote access shall be considered Client’s Confidential Information and shall be subject to the obligations of confidentiality set forth in Section 12 below. In addition, any and all access to Client’s Systems shall be subject to the following.

 

5.2.1

Client’s Systems shall be used solely to perform Services for Client, and shall not be used for any purpose other than the legitimate business purposes of Client.

5.2.2  

Access to Client’s Systems shall be restricted to Contractor’s Personnel who need access in order for Contractor to fulfill its obligations under this Agreement; and no access rights will be transferred to any other individuals without the prior written consent of Client.

 

5.2.3  

Contractor will ensure that its Personnel do not attempt to break Client’s or an Affiliate’s security systems, or attempt to obtain access to any programs or data beyond the scope of the access granted by Client in writing.

5.2.4

Without limiting any of its other rights, Client reserves (for itself and its Affiliates) the rights to restrict and monitor the use of Client’s Systems, and to access, seize, copy and disclose any information, data or files developed, processed, transmitted, displayed, reproduced or otherwise accessed in conjunction with such use. Client or an Affiliate may exercise its rights reserved hereunder: (i) to verify the performance of Services or the quality of Deliverables; (ii) to assure compliance by Contractor’s Personnel with Client’s or the Affiliate’s policies and procedures; (iii) to investigate conduct that may be illegal or may adversely affect Client, an Affiliate or its or their employees; or (iv) to prevent inappropriate or excessive personal use of Client’s Systems. Contractor will advise its Personnel concerning the rights reserved hereunder.

 

5.3   Drug Abuse Policy. Contractor will ensure that its Personnel who are assigned to perform Services at Client’s facilities comply with Client’s Drug Abuse Policy and that its Personnel do not sell, distribute, manufacture, process, possess, use or become under the influence of illegal drugs or illicit narcotics (non-prescriptive medication). The phrases “illegal drugs” and “illegal narcotics” shall have the meaning applied by the state or country in which the business is conducted. Based on the nature or scope of the assignment, Client may require Contractor’s Personnel to be tested (at Client's direction but at Contractor’s expense) for illegal drugs or illegal narcotics as a condition to performing Services for Client. If an individual refuses to submit to the test or the individual’s test results are positive, such individual will not be permitted to perform any Services for Client.

 

5.4   Fingerprinting. Contractor will not assign, or retain on assignment, any person to provide Services for Client that Contractor knows or has reason to believe has a criminal background. Based on the nature or scope of the assignment, Client may require Contractor’s Personnel to be fingerprinted and to pass successfully a criminal background check (at Contractor’s expense) as a condition for performing Services for Client.

 

5.5   Working Hours. Contractor’s Personnel will observe the working hours, work rules and holiday schedule of Client when working on Client’s facilities, unless otherwise directed or agreed by Client. The adherence by Contractor’s Personnel to such working hours, work rules and holiday schedules shall not justify any failure by Contractor to comply with agreed upon schedules and deadlines. Contractor acknowledges that Client’s normal, professional workday consists of eight (8) working hours, exclusive of time required for personal breaks and meals.

 

5.6    Diversity Initiative . Licensor acknowledges that Licensee has implemented a Supplier Diversity Program which, among other initiatives, encourages the use of minority and women-owned (“Diverse Suppliers”) businesses as suppliers and subcontractors to the fullest extent possible consistent with the efficient performance of its business strategies. To assist Licensee in complying with these goals, if Licensor currently provides any reports tracking its use of Diverse Suppliers in the provision of products, goods or services, to any other of its customers, then Licensor will provide (at no additional cost to Licensee) copies of such reports, whenever they are prepared and updated, to Licensee. Licensee shall keep and treat such reports in accordance with the Licensee’s confidentiality obligations herein. These reports should be forwarded to the attention of the Citigroup Supplier Diversity Program, 333 West 34th Street, New York, NY 10001, attention Director, Supplier Diversity Program.

 

6.    ACCEPTANCE

 

6.1   Applicability. The provisions of this Section 6 shall only apply to Services and/or Deliverables that Contractor has agreed to provide and/or develop on a fixed-cost basis, unless otherwise specified by the Parties on the Work Order.

 

6.2   Acceptance Test. After a Deliverable has been furnished to Client, Client will be entitled to test the Deliverable to determine if it operates in accordance with, and otherwise conforms to, the Acceptance Criteria. Contractor will provide (at no additional cost to Client) such assistance as Client may reasonably require to conduct the acceptance test. If the period or procedures for the acceptance test are not specified on the Work Order, then (i) Client will have ninety (90) days from the date the Deliverable is received by Client to conduct the test, and (ii) Client may use its own internal test procedures. No Deliverable shall be deemed to have been accepted unless Client notifies Contractor that the Deliverable has successfully passed the acceptance test. Acceptance of a Deliverable shall not be deemed to constitute a waiver by Client of any rights it may have based on Contractor’s warranties.

 

6.3   Acceptance or Rejection. If Client determines that a Deliverable successfully operates in accordance with, and otherwise conforms to, the Acceptance Criteria, Client will notify Contractor that Client accepts the Deliverable. If Client determines that a Deliverable does not operate in accordance with, or otherwise conform to, the applicable Acceptance Criteria, then Client will provide Contractor with a notice describing the Defect. Contractor will have ten (10) days from the date it receives Client’s notice of Defect to correct (at no additional cost to Client) the Deliverable. If Contractor redelivers a Deliverable, then Client will be entitled to repeat the testing process. If (through no fault of Client) Contractor fails to deliver, within the ten (10) day period, a Deliverable that conforms to the Acceptance Criteria, then Client may reject the Deliverable and terminate the applicable Work Order (in whole or in part) upon notice to Contractor, without financial liability or obligation (for the portion terminated).

 

6.4   Project Completion. A Project shall be deemed to have been successfully completed only upon Client’s acceptance of all Services or Deliverables. If (through no fault of Client) all of the Services and Deliverables have not been furnished in an acceptable manner by the date set forth as the “Completion Date” on the Work Order, Client may terminate the Work Order (in whole or in part) upon notice to Contractor, without financial liability or obligation (for the portion terminated).

 

7.

PROPRIETARY RIGHTS

 

7.1   Work Product. Except as otherwise specifically provided in Sections 7.4, 7.5 and 7.6 below, the phrase “Work Product” shall mean and include the Deliverables, all ideas, concepts, know-how, techniques, inventions, discoveries, improvements, specifications, designs, methods, devices, systems, reports, studies, computer software (in object or source code), programming and other documentation, flow charts, diagrams and all other information or tangible material of any nature whatsoever (in any medium and in any stage of development or completion) relating to the subject matter of this Agreement or the applicable Work Order, that are conceived, designed, practiced, prepared, produced or developed by Contractor or any of its Personnel which is not a derivative work of any Contractor Materials (as such term is defined below) and which is not a derivative work of any Licensed Software (as such term is defined below): (i) during the course of the Project; (ii) based upon knowledge or information learned or gained from Client; or, (iii) resulting from the use of Client’s facilities, Personnel, or materials. To the fullest extent permitted under law, all Work Product shall be the property of Client and shall be deemed to be a “work made for hire” (as defined in Section 101 of Title 17 of the United States Code). Contractor shall keep and maintain adequate and current written records of all Work Products made by Contractor or its Personnel. The records will be in the form of notes, sketches, drawings, or any other format that may be specified by Client, and will be available to and remain the sole property of Client at all times. Contractor will retain ownership of all derivative works of its Contractor Materials and of its Licensed Software; provided however that Client is hereby granted by Contractor a perpetual, worldwide, irrevocable, royalty-free, non-exclusive license to use, execute, distribute, reproduce, display, modify, prepare derivative works of and perform, any Deliverables which are or contain any derivative works of Contractor Materials or of Licensed Software, subject to any of Contractor’s and Client’s rights and obligations under the Master Software License and Support Agreement (the “License Agreement”) between the parties dated as of February 1, 2006. Notwithstanding the foregoing, Contractor’s rights to use derivative works of its Contractor Materials and of its Licensed Software and Client’s right to use Work Product remains subject to each party’s obligations under Section 12 of this Agreement. Notwithstanding anything to the contrary herein, the Parties may specify alternate or different ownership and/or license rights in any applicable Work Order.

 

7.2   Assignment of Rights to Work Product . To the extent any Work Product is (for any reason whatsoever) determined not to be “work made for hire”, Contractor hereby irrevocably and exclusively assigns, transfers and conveys to Client all Intellectual Property Rights, in and to any and all Work Product. Contractor acknowledges that neither it nor its Personnel will retain any Intellectual Property Rights in the Work Product. Contractor will require each of its Personnel who provide Services or work on Deliverables, or may in any way be involved or responsible or claim to be involved or responsible in the conception, design, practice, preparation, production or development of the Work Product, to be bound by a written Non-Disclosure and Work Product Assignment Agreement in the form attached as Appendix B , or in the form of non-disclosure and work product assignment agreement regularly used by Contractor . Contractor will furnish executed originals of all such agreements to Client prior to commencing any work hereunder. Contractor acknowledges and agrees that: (i) the assignment to Client of the Work Product and the Intellectual Property Rights therein shall extend throughout the world, shall be in perpetuity and shall not lapse for any reason whatsoever, including Client not exercising the rights assigned to it; (ii) the assignment to Client of the Work Product and the Intellectual Property Rights therein shall be an integral part of this Agreement; and, (iii) no amount(s) shall be payable by Client to Contractor for the assignment of the Work Product and the Intellectual Property Rights therein, other than the amount(s) payable by Client to Contractor under the relevant Work Order. If Contractor obtains patent rights on any derivative works to its Contractor Materials or its Licensed Software that constitute all or part of the Deliverables, then Contractor agrees that it will not assert any claim of infringement of such patent rights against Client (or any of Client’s subsidiaries or affiliates), or any of Client’s agents, employees, distributors, resellers, customers and suppliers.

 

7.3   Legend. Contractor acknowledges that all or part of the Work Product may be copyrighted, trademarked, or patented solely by Client or its designee. Contractor will assist Client, or its designee, at the expense of Client, in every proper way to secure the Intellectual Property Rights in the Work Product and will disclose to Client all pertinent information and data, and execute all applications, specifications, oaths, assignments and all other instruments which Client shall deem necessary in order to obtain and secure the Intellectual Property Rights in and to the Work Product.   All items provided to Client, or developed hereunder, or which otherwise qualify as Client’s property, shall be marked as follows: “ © (year) by (Legal name of Client or Affiliate) . All rights reserved. ” Any Work Product that is software will be programmed to display the foregoing legends in the opening screens produced at the initiation of any session in which such software may be accessed by a videographic device, as well as on such reports and print pages.

 

7.4    Contractor Materials. Client acknowledges that in developing or furnishing a Deliverable (or any other Work Product), or in performing Services, Contractor may utilize pre-existing proprietary methodologies, tools, models, software, procedures, documentation, know-how and processes owned by Contractor (“Contractor Materials”). Client further acknowledges that Contractor may modify or improve the Contractor Materials during the course of a Project. Client agrees that all such modifications or improvements shall be included within the meaning of “Contractor Materials”, unless otherwise specifically agreed by the Parties. If any Contractor Materials are incorporated into a Deliverable or furnished in conjunction with a Deliverable, Contractor will be conclusively deemed to have (at no additional cost) granted to Client and its Affiliates a perpetual, worldwide, irrevocable, royalty-free, non-exclusive license to (i) use, execute, reproduce, display, perform, distribute, and prepare derivative works of the Contractor Materials in conjunction with the use of the Work Product or other Deliverable, and (ii) authorize or sublicense others from time to time to do any or all of the foregoing subject to any of Contractor’s and Client’s rights and obligations under the License Agreement.

 

7.5   Third Party Intellectual Property . If Contractor intends to develop a Deliverable in a manner that requires Client to use any software or other intellectual property of a third party (“Third Party Materials”) in order to use such Deliverable, then Contractor will (i) provide Client with prior notice, specifying in reasonable detail the nature of the Deliverable’s dependency on the Third Party Materials, and (ii) arrange for Client to obtain (for no additional cost or on such terms as may be acceptable to Client) a perpetual, irrevocable, royalty-free, non-exclusive right and license to use the Third Party Materials in connection with Client’s or an Affiliates’ use of the Deliverable.

 

7.6   License Rights Under Separate Agreement . The Parties specifically acknowledge and agree that the respective rights of the Parties hereto in any of Contractor’s proprietary software, any third party software, and any other intellectual property that Client has licensed (or agrees to license) under the License Agreement (the “Licensed Software”) shall be determined in accordance with the provisions of the License Agreement and shall not be included within the meaning of the phrase “Contractor Materials”, as defined in Section 7.4 ; provided that the creation of any derivative works of such Licensed Software shall be determined in accordance with the provisions of this Agreement.

 

7.7   Use of Knowledge Capital.  

 

7.7.1.   In every case, each party will retain the right to all of its ideas, skills, tools, techniques, and processes (“Knowledge Capital”). To the extent that Knowledge Capital of Contractor has been incorporated into or is embedded in the Work Product, Client will have a perpetual, nonexclusive, world-wide, royalty-free right to use, execute, modify, reproduce, display, perform, and prepare derivative works based on such Knowledge Capital, subject to the requirements of Section 12.

 

 

7.7.2.    Each party acknowledges and agrees: (i) that the other party has the right to re-use any of its know-how, ideas, concepts, methods, processes, or similar information, however characterized, whether in tangible or intangible form, at any time and without limitation subject to the limitations of Section 12 and the parties respective Intellectual Property Rights, and (ii) that each party retains ownership of any and all of its Intellectual Property Rights that existed prior to the Commencement Date including, but not limited to, all methods, processes, utilities, tools, concepts, designs, reports, programs, and templates.

 

7.8   Application Development . In the event that the Parties agree to engage in an application development project, they will execute an Application Development Addendum in the form attached hereto as Appendix C .

 

8.    TRAINING

 

If a Deliverable requires Client’s Personnel to be trained in order to properly use the Deliverable, Contractor will provide on-site training in the use of such Deliverable for all users designated by Client's project manager, at a time or times and at rates mutually agreed to by the Parties, unless such training is already contemplated within the scope of Services set forth in the Work Order.

 

9.  

FEES AND PAYMENT TERMS

 

9.1   Project Fees. The Project fees payable by Client for the Services and Deliverables properly furnished by Contractor pursuant to this Agreement, shall be designated (or determined based on the rates designated) on the applicable Work Order.

 

9.2   Pricing Adjustments. Subject to any terms to the contrary in any applicable Work Order, unless separately agreed to by the Parties, Contractor will not increase its time and materials rates for Services provided to Client or an Affiliate by more than the lesser of: (i) five percent (5%) for each twelve (12) month period following the first year to which the applicable Work Order pertains; and (ii) the percentage rate of increase in the CPI (all items) for Urban Wage Earners and Clerical Workers from the preceding calendar year as determined by the United States Bureau of Labor Statistics.

 

9.3   Taxes. Contractor may invoice Client for sales and use taxes properly levied against or upon (i) the furnishing of the Services or Deliverables to Client by Contractor pursuant to this Agreement, or (ii) Client’s use thereof. However, Client shall not be obligated to pay any penalties, interest, or late charges imposed as a result of Contractor's failure to remit such taxes to the taxing authority on a timely basis. In addition, if Contractor fails to provide Client with timely notice of any tax audit that could result in an increase in the amount of sales or use taxes assessed hereunder, then Client shall not be required to pay any additional taxes assessed as a result of such audit. Contractor shall be solely responsible for the payment of all other taxes, including personal property taxes, franchise taxes, corporate excise or corporate privilege, property or license taxes, all taxes relating to Contractor’s Personnel, and all taxes based on the net income or gross revenues of Contractor.

 

9.4   Reimbursable Expenses. To the extent applicable, Contractor will only be reimbursed for expenses that have been incurred at the request of Client or have been approved in advance by Client’s Project Manager and that are reasonable, warranted and cost effective. For each item of expense for which reimbursement is requested, Contractor will submit substantiating documentation in accordance with Client’s policies. All approved business expenses and pass-through charges will be reimbursed at cost (as actually incurred), without mark-up.

 

9.5   Non-Reimbursable Fees and Expenses. Contractor acknowledges it is being retained because of its expertise. Accordingly, Contractor will not request payment or reimbursement for time spent educating Contractor’s Personnel, or for any costs or fees associated with training Contractor’s Personnel (including time required for orientation of replacement Personnel). Contractor will not request payment for any charges reflecting duplication of services or costs (including more than one of Contractor’s Personnel attending the same meeting, or conversations among Contractor’s Personnel), unless such duplication is essential for Contractor’s proper performance of its obligations. Contractor will provide Client with details from its time and expense system (currently Databasics). Contractor will not be reimbursed for charges incurred for or by its support staff, for any overhead items, or for the time spent preparing invoices. Nevertheless, in the event that Client requests additional expense report documentation, then an administrative fee, if any, may be charged to the Client.

 

9.6   Terms of Payment. No amount arising under this Agreement shall be due from Client prior to Client’s receipt of a fully executed copy of this Agreement and the applicable Work Order, and Client’s receipt of an invoice: (i) referencing this Agreement and the applicable Work Order; (ii) separately itemizing the charges for the Services, Deliverables or other items covered therein, and setting forth, in reasonable detail, the basis for the charges; and (iii) including, in the case of any reimbursable expenses or other charges (including taxes), receipts or other documentation acceptable to Client. Unless otherwise specified on a Work Order, Contractor may invoice Client monthly for the fees and expenses incurred under the Work Order. All invoices shall be submitted to Client at the billing address designated on the applicable Work Order. Each properly and accurately prepared invoice shall be payable within sixty (60) days after its receipt by Client. Client will not be liable for interest or other late fees on past due invoices. Contractor specifically covenants that it will not use any methods of electronic repossession for any reason. All payments made by Customer shall be in U.S. Dollars and directed to:

 

Chordiant Software Inc.

P.O. Box 49291

San Jose, CA 95161-9291

 

Or wire to:

Comerica Bank

Chordiant Software, Inc.

Account#: 1891571372

Routing #: 121137522

 

 

9.7   Disputed Invoices. Client may withhold payments for any item(s) on Contractor's invoice that Client reasonably disputes in good faith.  Client shall provide to Contractor written notice of its intention to withhold payment, including the reason(s) for Client's reasonable dispute of the invoice (the “Dispute Notice”).  Following receipt of the Dispute Notice, Contractor shall review the invoice in question and, if appropriate, send Client a corrected invoice.  If Contractor does not agree with Client's reasons for withholding payment or, if sent, the corrected invoice does not resolve the dispute to Client's satisfaction, then either party shall notify in writing the other party of the fact that the dispute continues (the “Response Notice”).

 

The parties shall use commercially reasonably efforts to resolve or settle the dispute within ninety (90) days from the date of the Response Notice. Within thirty (30) days from the date of receipt of the Response Notice, executives of both companies shall first meet in person to negotiate in good faith a resolution or settlement of the dispute. Contractor’s executive(s) shall be at the President or CEO level, and Client’s executive(s) shall be either the CIO of Citigroup N.A. Consumer Group or senior executive(s) designated by such person.

 

Pending settlement or resolution of the issue(s), Client's non-payment of these items shall not constitute default by Client, and shall not entitle Contractor to suspend or delay its performance of Services for a period of one (1) year from the end of the ninety (90) day period of executive conferences; provided that Client continues to pay all undisputed invoices in accordance with the provisions of Section 9.6.   After expiration of such one (1) year period, Contractor may suspend its performance of services covered by the disputed item(s).

 

10.   REPRESENTATIONS AND WARRANTIES

 

10.1    Authority and Non-Infringement. Contractor represents and warrants that Contractor has all rights and authority required to enter into this Agreement and each Work Order, and to perform the Services and furnish the Deliverables contemplated by this Agreement, free from all liens, claims, encumbrances, security interests and other restrictions. Subject to the applicable terms and conditions of this Agreement and the applicable Work Order, Client and Affiliates will be entitled to use and enjoy the benefit of all Services and Deliverables without adverse interruption or disturbance by Contractor or by any entity asserting a claim under or through Contractor. Contractor further represents and warrants that the Services, Deliverables and all other materials of whatsoever nature furnished under this Agreement, and the use thereof by Client or the Affiliates in accordance with the terms and conditions of this Agreement, will not infringe (whether directly, contributorily, by inducement or otherwise), misappropriate or violate the Intellectual Property Rights of any third party, or violate the laws, regulations or orders of any governmental or judicial authority. The sole and exclusive remedy for a breach of the warranty against infringement contained in this Section 10.1 is infringement indemnity set forth in Section 14.

 

10.2   Personal Dealings and Non-Subornation . Contractor warrants that no officer, director, employee of Client, or any of their immediate family members, (i) has received or will receive anything of value of any kind from Contractor or its Personnel in connection with this Agreement, or (ii) has a business relationship of any kind with Contractor or its Personnel. Contractor further warrants that Contractor has not and will not make (or offer to make) any payments to, or confer (or offer to confer) any benefit upon, any employee, agent or fiduciary of any third party, with the intent to influence the conduct of such employee, agent or fiduciary in any manner relating to the subject of this Agreement.

 

10.3   Conformity to Specifications. Contractor warrants that at the time of delivery and thereafter throughout the applicable warranty period, each Deliverable will conform to the applicable Acceptance Criteria. If not specified by the Parties on the Work Order, the warranty period for a Deliverable performance shall be the ninety (90) day period commencing from the date Client accepts the Deliverable. In addition, the warranty period for a Deliverable will be extended by the aggregate time Client is unable to effectively use the Deliverable during the specified warranty period as a result of a Defect. If Contractor receives notice of a Deliverable Defect during the warranty period, then Contractor will (at no additional charge) correct the Defect. If Contractor is unable or unwilling to correct a Defect that has been identified by Client during the warranty period, then Client may terminate the applicable Work Order (in whole or in part) upon notice to Contractor, without financial liability or obligation (for the portion terminated).

 

10.4   Standard of Service. Contractor warrants that the Services will be performed and the Deliverables will be prepared in a timely and professional manner, in conformity with standards generally accepted in the Software industry, by qualified and skilled individuals. If Contractor fails to provide the Services as warranted and Client so notifies Contractor within thirty (30) days after the date Contractor declares the Services to have been completed, then Contractor will re-perform the Services at no additional charge. If Contractor is unable or unwilling to re-perform the Services as warranted, then Client shall be entitled to recover the fees paid to Contractor for the deficient Services.

 

10.5   Disabling Devices. Contractor represents and warrants that prior to delivering any software to Client, Contractor will test the software and


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