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.
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:
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1.
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Statements of Work (as described in Section
2.B. herein);
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2.
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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;
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3.
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Change Orders (changes to the Statement of
Work);
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4.
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Invoices (item, quantity, price, and amount
due);
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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:
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1.
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A reference to this Subcontractor
Agreement;
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2.
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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:
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License supplements (quantity ordered,
estimated shipment date, and other terms referenced in Exhibit
3);
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Exhibits (eligible Programs by category,
discounts schedules, and available contract periods);
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3.
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Contact names, addresses and telephone
numbers;
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4.
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If applicable, a description of expenses to be
reimbursed by IBM, including the basis for such reimbursement;
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5.
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The maximum total expenditure authorized for
such Statement of Work, which is understood to mean:
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a.
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a dollar amount or time limit beyond which
Chordiant may not invoice IBM for Services under a specific
Statement of Work; and
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b.
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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;
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6.
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Estimated commencement and completion
dates;
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7.
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Inspection, test, acceptance or completion
criteria, if applicable;
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8.
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Shipping and invoicing instructions; and
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9.
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Signatures of each Party’s respective
authorized representatives.
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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.
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:
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1.
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each is an independent contractor, and that
each is responsible for the supervision, direction and control of
its respective personnel;
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2.
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neither may represent or act on behalf of the
other, unless otherwise agreed to in writing;
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3.
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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;
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4.
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neither will disclose the terms of this
Subcontractor Agreement, unless both Parties agree in writing to do
so, or unless required by law;
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5.
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each is free to enter into similar agreements
with others and to market its products and services to anyone;
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6.
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each will comply with the laws and regulations
(such as import and export restrictions) applicable to this
Subcontractor Agreement;
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7.
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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
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8. each grants the
other only the licenses specified. No other licenses (including
licenses under patents) are granted.
B. Chordiant’s Other
Responsibilities
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1.
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supply IBM with the Programs and/or Services
specified in a Transaction Document if the Customer executes a
prime contract with IBM;
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2.
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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;
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3.
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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.
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4.
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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.
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C. IBM’s Other
Responsibilities
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1.
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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:
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a.
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its obligations under this Subcontractor
Agreement (including those within the AECI) are met; and
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b.
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no rights are granted to that contractor,
other than to deliver the Programs or Services on its behalf;
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2.
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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;
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3.
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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;
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4.
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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
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5.
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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.
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6.
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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.
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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.
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.
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.
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1.
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During a project, Chordiant may deliver
Materials to IBM or the Customer, as specified in a Statement of
Work.
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2.
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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.
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a.
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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
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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.
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b.
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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.
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c.
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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.
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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).
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3.
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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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