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Master Agreement For Subcontracted Services Ibm As Prime Contractor

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CHORDIANT SOFTWARE INC | International Business Machines Corporation

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Title: Master Agreement for Subcontracted Services IBM as Prime Contractor
Governing Law: New York     Date: 2/9/2007
Industry: Software and Programming    

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Exhibit 10.44

Subcontractor Agreement #4902A2003

Master Agreement for Subcontracted Services

IBM as Prime Contractor


This Master Agreement for Subcontracted Services (called the “Subcontractor Agreement”) governs the terms under which Chordiant Software, Inc. (“Chordiant”) as a subcontractor will supply International Business Machines Corporation (“IBM”) as a prime contractor with Programs and/or Services as described within this Subcontractor Agreement. This Subcontractor Agreement is an associated contract between the Parties as contemplated by the Chordiant/IBM Master Relationship Agreement (“MRA”). This Subcontractor Agreement, however, is an independent agreement between the Parties and does not therefore incorporate terms and conditions contained within the MRA by reference.


Each Party understands that Chordiant’s obligation to provide Programs or Services under this Subcontractor Agreement is contingent upon the execution of the relevant prime contract by a Customer and IBM.


This Subcontractor Agreement is written in English and signed with the understanding that the Parties are bound by its terms. The Parties will distribute copies of this Subcontractor Agreement to their respective Subsidiaries as required. These Subsidiaries will acknowledge acceptance of these terms through a Transaction Document which incorporates this Subcontractor Agreement by reference.


1. Definitions


Combined Offering is the combination of Programs and/or Services provided by the Parties in a prime contract with a Customer containing all or a portion of the Core Competencies described in Exhibits 1 and 2 herein.


Customer is the entity who awards the prime contract for Products and Services described in the Combined Offering.


Deliverables means those Programs, Services and Materials which Chordiant prepares for or provides to IBM as prime contractor (“ Prime ”) or to the Customer directly, as authorized by IBM in a Transaction Document.


Enterprise is any legal entity (such as a corporation) and the subsidiaries it owns by more than 50 percent.


Euro Ready means that the Products and Materials provided under this Subcontractor Agreement when used in accordance with their associated documentation, and if specified in a particular Statement of Work as being Euro Ready, are capable of correctly processing, providing and/or receiving data in the Economic Monetary Union or Euro denomination, provided that all products (for example, hardware, software, and firmware) used with the hardware provided under this Subcontractor Agreement properly and accurately exchange such data with it. 







Harmful Code shall mean machine-readable instructions and data, including the original and all whole or partial copies, designed to intentionally disrupt a Program’s operations or intentionally destroy or damage a Program or data contained therein.


Inventions shall mean ideas, designs, concepts, techniques, inventions, discoveries or improvements, whether or not patentable, conceived or reduced to practice solely by one or more employees (and/or subcontractors) of one Party (" Sole Invention ") or jointly by one or more employees (and/or subcontractors) of one Party with one or more employees (and/or subcontractors) of the other Party (" Joint Invention ") as a result of activities under this Subcontractor Agreement.


Materials are literary works or other works of authorship (such as programs, program listings, documentation, reports, drawings and similar works) that Chordiant may deliver to IBM or to a Customer as part of a Service. The term “Materials” does not include Programs.


Party shall mean either IBM or Chordiant and Parties shall mean both IBM and Chordiant.


Program means Chordiant’s commercially available software and documentation required to install, support, use, and maintain it. The term does not include Materials.


Service is performance of a task such as project management, engineering, programming, consultation, education, training, installation, maintenance, site preparation, facilities management or operations support, or use of a resource (such as an informational database or a network and associated enhanced communication and support) that Chordiant makes available to IBM or to the Customer as authorized by IBM in a Transaction Document.


Specified Operating Environment is the IBM or third party equipment and Programs with which a Program is designed to operate, as described in the Program’s documentation.


Subsidiary is an entity that is owned or controlled directly or indirectly (by more than 50% of its voting stock, or if not voting stock, decision-making power) by Chordiant or IBM.



2. Subcontractor Agreement Structure


A. Transaction Documents.


The following are examples of Transaction Documents, with examples of the information they may contain:


Statements of Work (as described in Section 2.B. herein);



Documents signed by local country Subsidiaries of the Parties acknowledging their agreement to be bound by the terms of this Subcontractor Agreement and incorporating the terms of this Subcontractor Agreement by reference;



Change Orders (changes to the Statement of Work);








Invoices (item, quantity, price, and amount due);


B. Statements of Work


This Subcontractor Agreement contemplates the execution of a Master Statement of Work and future execution of one or more Statements of Work for Programs or Services to be provided by Chordiant to IBM as Prime or to Customers in connection with the Combined Offering. The Statement of Work shall specify the information outlined below:



A reference to this Subcontractor Agreement;



A description, in reasonable detail, of the Services to be performed by Chordiant, including a description of any associated Deliverables that may be delivered; These descriptions may include:



License supplements (quantity ordered, estimated shipment date, and other terms referenced in Exhibit 3);



Exhibits (eligible Programs by category, discounts schedules, and available contract periods);



Contact names, addresses and telephone numbers;



If applicable, a description of expenses to be reimbursed by IBM, including the basis for such reimbursement;



The maximum total expenditure authorized for such Statement of Work, which is understood to mean:



a dollar amount or time limit beyond which Chordiant may not invoice IBM for Services under a specific Statement of Work; and



a dollar amount or time limit beyond which Chordiant is not required to expend effort or provide Services under a specific Statement of Work without IBM’s prior written consent;



Estimated commencement and completion dates;



Inspection, test, acceptance or completion criteria, if applicable;



Shipping and invoicing instructions; and



Signatures of each Party’s respective authorized representatives.



C. Proposals.  


From time to time, IBM will be requested to submit a proposal to the Customer describing the details of the solution that IBM will provide to the Customer. As part of the proposal preparation, IBM and Chordiant will enter into a Statement of Work detailing Chordiant’s responsibilities under the proposed engagement. The Parties agree that the Statement of Work will only be effective in the event the Customer executes a contract to acquire the Combined Offering from IBM, and IBM issues a purchase order signifying authorization for Chordiant to provide Programs and/or Services to IBM or the Customer with respect to the Combined Offering.







D. Conflicting Terms.  


If there is a conflict among the terms of the various documents, the order of precedence will be: 1) the terms of a Change Order; 2) the terms of a Statement of Work or other Transaction Document; 3) the terms of the Master Statement of Work; and 4) this Subcontractor Agreement.



3. Responsibilities of the Parties


A. Mutual Responsibilities


The Parties agree that under this Subcontractor Agreement:



each is an independent contractor, and that each is responsible for the supervision, direction and control of its respective personnel;



neither may represent or act on behalf of the other, unless otherwise agreed to in writing;



neither grants the other the right to use its trademarks, trade names, service marks or other designation in any promotion or publication, without prior written consent;



neither will disclose the terms of this Subcontractor Agreement, unless both Parties agree in writing to do so, or unless required by law;



each is free to enter into similar agreements with others and to market its products and services to anyone;



each will comply with the laws and regulations (such as import and export restrictions) applicable to this Subcontractor Agreement;



all information exchanged is non-confidential, unless such information is deemed to be confidential pursuant to the terms of the Agreement for Exchange of Confidential Information (AECI). If either Party requires the exchange of confidential information, it will be made under the AECI signed by the Parties on March 27, 2002; and

8. each grants the other only the licenses specified. No other licenses (including licenses under patents) are granted.



B. Chordiant’s Other Responsibilities


Chordiant will:



supply IBM with the Programs and/or Services specified in a Transaction Document if the Customer executes a prime contract with IBM;



provide as requested to IBM and the Customer information which describes such terms as warranty, and licenses to Programs and Materials that will be delivered by Chordiant under a Statement of Work;



not deal directly with the Customer on matters that directly relate to the prime contract with the Customer unless otherwise authorized by IBM in a Transaction Document.



to notify IBM of any recurring charges that may apply beyond the duration of the prime contract and of IBM’s obligation to pay Chordiant, if any, for such recurring charges.








C. IBM’s Other Responsibilities


IBM agrees:



that the Programs and/or Services provided under this Subcontractor Agreement are not purchased for its own use or for remarketing (other than to the Customer). If it is required to deliver Programs and Services to another contractor for ultimate delivery to the Customer, it will ensure that:



its obligations under this Subcontractor Agreement (including those within the AECI) are met; and



no rights are granted to that contractor, other than to deliver the Programs or Services on its behalf;



that the licensing of Programs or the acquisition of Services relates solely to this Subcontractor Agreement and may not be used to determine attainment, discounts, or payments to it under any other agreement between the Parties;



as applicable, to provide the Customer with a copy of the relevant Chordiant customer agreement as per Section 6.A., and statement of warranty upon transfer of the Programs and Materials, to the extent such customer agreements, licenses and statements of warranty are provided by Chordiant to IBM;



to notify the Customer of any recurring charges that may apply beyond the duration of the prime contract and of the Customer’s obligation to pay Chordiant, if any for such recurring charges; and



for non-Chordiant equipment or third party equipment that Chordiant supplies that is not warranted by Chordiant or the third party, to inform the Customer, in writing, that Chordiant or the third party does not warrant it.



Notify Chordiant of the (1) the planned date of submission of a proposal to a Customer; (2) acceptance of IBM’s proposal by the Customer; and (3) the final installation site of the Products.



4. Delivery


Chordiant will deliver the Programs and Services in accordance with the delivery schedule provided in a Statement of Work or a Transaction Document. Delivery may be made by Chordiant directly or through a Subsidiary. If there are any problems with such delivery schedule, Chordiant will notify IBM within ten (10) working days after the problem becomes apparent, unless otherwise specified in a Transaction Document.


Chordiant will pay normal transportation charges for the Programs it ships.








5. Prices, Payment to the Subcontractor


The prices for the Programs and Services shall be as specified in a Statement of Work and/or Transaction Document. Chordiant may revise its prices within seven days prior to the planned date of submission of IBM's proposal to the Customer by written notice to IBM. IBM may price the Programs and Services to the Customer at whatever price it deems appropriate.


Invoices shall reference the applicable Statement of Work, this Subcontractor Agreement, any relevant Transaction Document, and purchase order number applicable to the Programs and/or Services specified in the Invoice. Payment to Chordiant will be set forth in the applicable Statement of Work and/or any relevant Transaction Document.


Payment of invoices will not be deemed acceptance of Programs, but rather such Programs will be subject to inspection, test, acceptance or rejection in accordance with the acceptance or completion criteria as specified in the relevant Statement of Work.


IBM agrees to provide Chordiant with valid reseller exemption documentation for each applicable taxing jurisdiction. Otherwise, Chordiant shall be entitled to charge all applicable state and local taxes or duties. IBM shall promptly notify Chordiant if such documentation is revoked or modified. IBM shall be liable for any claims or assessments that result from any taxing jurisdiction refusing to recognize its exemption.



6. Programs


A. License.  


Programs are owned or licensed by Chordiant or one of its Subsidiaries or a Chordiant supplier and are copyrighted and licensed (not sold) to IBM or to the Customer. Chordiant license terms for the Programs as set forth in Exhibit 3 attached hereto will be provided directly to the Customer by IBM or Chordiant at IBM’s request. IBM is not a party to such license and is not liable to the Customer or Chordiant for any breach of its terms. To the extent that the Customer requires any modification or clarification to the Chordiant license terms, Chordiant agrees to negotiate in good faith directly with the Customer. Chordiant may, as required, amend the Program license terms contained in Exhibit 3 with at least thirty days prior written notice to IBM, except that Chordiant may not amend the terms contained in Exhibit 3 Section 5. Indemnity, Warranties, Remedies without IBM’s prior written consent, which consent shall not be unreasonably withheld. Chordiant may grant license rights to IBM in addition to those set forth elsewhere in this Subcontractor Agreement for the purpose of performing services under the Customer contract; such rights will be in accordance with the terms of the applicable Statement of Work.







B. Warranty


For each Program, Chordiant will, as applicable and if necessary as agreed between the Customer and Chordiant, specify any amendments or supplements to the terms contained in Exhibit 3, such as changes to the warranty period, in a Transaction Document.

If IBM determines that a Program needs to be Euro Ready for a specific Customer engagement, the Parties agree to negotiate the terms related to such Euro Ready   warranty for that Customer at that time.


Chordiant warrants that Programs do not knowingly contain Harmful Code.


For each Program, Chordiant warrants for a period specified in Exhibit 3 or for a greater period, if any, as specified in a Transaction Document, from the date of delivery to the Customer that the Program as delivered by Chordiant, will substantially perform the functions described in the user guides and manuals for installation and use of the Program in all material respects when operated in the Specified Operating Environment. Provided that Customer or IBM gives Chordiant written notice of a breach of the foregoing warranty during the warranty period, Chordiant shall, as IBM’s and Customer’s sole and exclusive remedy, correct any reproducible errors that cause the breach of warranty in accordance with its technical support policies, or if Chordiant is unable to make the Program operate as warranted, Customer shall be entitled to terminate the Program license and Chordiant shall refund fees paid by IBM for the Program.


If Chordiant provides any Customer with a warranty more favorable than the foregoing warranty, the terms of the more favorable warranty will apply to IBM to the extent that IBM is acting on behalf of such Customer. Chordiant shall be deemed to have satisfied its warranty remedy obligations by providing such warranty remedy to EITHER IBM or the Customer.



7. Services


A . Materials



During a project, Chordiant may deliver Materials to IBM or the Customer, as specified in a Statement of Work.



The Statement of Work will specify if Materials are applicable to the project. If any such Materials are applicable, the applicable Statement of Work shall identify them as being either "Type I Materials,” "Type II Materials," “Type III Materials,” or otherwise as both Parties may agree. If not specified, Materials shall be deemed to be Type I Materials.




Type I Materials are those created in performance of a Statement of Work in which IBM or (at IBM’s request) the Customer will have all right, title and interest (including ownership of copyright). Chordiant will retain one copy of the Materials. IBM grants to Chordiant: 1) an irrevocable, nonexclusive, worldwide, paid-up right to use, execute, reproduce, display, perform, distribute (internally






and externally) copies of, and prepare derivative works based on Type I Materials and 2) the right to authorize others to do any of the foregoing.



Type II Materials are those created in performance of a Statement of Work or otherwise (such as those that preexist the project) in which Chordiant or third parties have all right, title, and interest (including ownership of copyright). Chordiant will deliver one copy of the specified Type II Materials to IBM. Chordiant grants to IBM or (at IBM’s request) authorizes IBM to grant the Customer an irrevocable, nonexclusive, worldwide, paid-up license to use, execute, reproduce, display, perform, and distribute within the Customer’s Enterprise copies of Type II Materials. In the event IBM terminates this Subcontractor Agreement or a Statement of Work, then Chordiant agrees to grant and hereby grants IBM the same license granted above to the Customer and authorizes the creation of derivative works to enable IBM to complete, or have completed, Chordiant’s obligations to IBM.



Type III Materials are those created in performance of a Statement of Work in which Chordiant will have all right, title and interest (including ownership of copyright). IBM will retain one copy of the Materials. Chordiant grants to IBM: 1) an irrevocable, nonexclusive, worldwide, paid-up right to use, execute, reproduce, display, perform, distribute (internally and externally) copies of, and prepare derivative works based on Type III Materials and 2) the right to authorize others to do any of the foregoing.


The classifications and license rights described above are independent of any rights associated with Inventions as described in and pursuant to Section 8 below (Inventions).



Each Party agrees to reproduce the copyright notice and any other notice or legend of ownership on any copies made under the licenses granted in this Section. IBM agrees that it will require a Customer to reproduce the copyright notice and any other notice or legend of ownership on any

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