SOFTWARE LICENSE AND SERVICES AGREEMENT

Exhibit 10.43

[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

(a)    “CIGNA Entities” means (i) Customer and Customer subsidiaries, divisions and affiliates, as well as any divested or spun off Customer entities or divisions, (ii) business partners, members, suppliers or customers of the entities set forth in (i) and (iii) healthcare providers; provided that all individual users of such partners, members, suppliers, customers and healthcare providers shall be considered users for purposes of counting the Number of Concurrent Users.

(b)    “ CIGNA Agent ” means International Business Machines Corporation or such other third party service provider or providers designated by Customer.

(c)    “ Number of Concurrent Users ” means the peak sum of simultaneous users at any given time within a twelve (12) month period.

(d)    “Delivery Date” means the date on which Chordiant delivers the Software to Customer or its designee, or if no delivery is necessary, the Effective Date set forth above or on the relevant Order Form.

(e)    “Designated Contact” means the contact person or group designated by Customer who shall coordinate all Support requests to Chordiant.

(f)    “Documentation” means all documentation, technical manuals, operator and user guides and manuals, flow diagrams, file descriptions and other written information describing the functions, operational characteristics and specifications of the Software or other technology, or explaining how to install, use, maintain or support the Software or other technology. Documentation is provided in CD-ROM or bound form, whichever is generally available.

(g)    “Error” means a reproducible error, defect or problem in the Supported Program or Documentation which causes the Supported Program not to operate substantially in accordance with the Documentation

(h)    “License Fee” means the license fee(s) payable by Customer or CIGNA Agent pursuant to Section 8 and as set forth in any particular Order Form. 

(i)    “Order Form” means the document in hard copy form by which Customer orders Software licenses, and which is agreed to by the parties, or which is agreed to between Chordiant and a CIGNA Agent (and where the licensed Software is listed on Schedule A hereto). The Order Form shall reference the Effective Date and be governed by the terms of this Agreement.

(j)    “Resolution” means a modification or workaround to the Supported Program and/or Documentation provided by Chordiant to Customer that resolves an Error without additional cost to Customer or adverse impact to the CIGNA Entities.

(k)    “Services” means work performed by Chordiant for Customer pursuant to a Statement of Work agreed to by the parties under this Agreement.

(l)    “Software” means the software referenced in a particular Order Form in object code form, which consists of proprietary Chordiant software, and Third Party Software and Open Source Code Software embedded therein, and the media, Documentation and any Updates thereto. Additionally, the Customer shall be provided with certain source code elements of the proprietary Chordiant software pursuant to Section 2.6 and may be provided with the entire source code of the proprietary Chordiant software from the Source Code escrow pursuant to Section 2.7, if appropriate. 

(m)    “Support” means ongoing maintenance and support services provided by Chordiant and/or CIGNA pursuant to the terms of this Agreement as set forth on Exhibit A hereto, and, if more favorable to Customer, Chordiant’s current support policies. In any event, Chordiant shall be responsible for providing Minor Release Updates, Major Release Updates and Patch Updates as part of Support (and at no additional charge) under its contract with IBM and/or this Agreement.

(n)    “ Supported Program ” or “ Supported Software ” shall mean, at any given time, the then-current release and the two immediately preceding point releases from the current release of the Software in use by any of the CIGNA Entities. For example, if the most current release is 5.5, Chordiant must support 5.3, 5.4 and 5.5 or if the most current release is 6.1, then Chordiant must support 5.9, 6.0 and 6.1 (and once the current release is 6.2, then support 6.0, 6.1 and 6.2).

(o)    “Support Fee” means the support fee(s) payable by Customer or a CIGNA Agent pursuant to Section 3, if any, and as set forth in any particular Order Form. During the term of Chordiant’s services contract with IBM, IBM will pay Chordiant the Support Fee directly and Chordiant shall provide Support through IBM. In the event that the contract between IBM and Customer or the services agreement between IBM and Chordiant terminates, then Chordiant shall provide Support at fees consistent with the fees charged to IBM by Chordiant during the term of the CIGNA and IBM services agreement. Upon Customer’s request (subject to Customer having obtained IBM’s consent), Chordiant shall make such pricing information available to Customer; provided that such Support Fee may be increased from the previous year’s Support Fee by the lesser of 5% or the actual increase in the Consumer Price Index (CPI) for the previous twelve (12) month period as published by the Wall Street Journal.

(p)    “Support Hours” means the support hours specified on Schedule A for either the Standard Support period or the Premier Support period, as specified on the particular Order Form.

(q)    “Support Period” means the period during which Customer is entitled to receive Support on a Supported Program, which shall be a period of twelve (12) months beginning from the Delivery Date or, if applicable, twelve (12) months from the expiration of the preceding Support Period unless otherwise agreed in writing by the parties.

(r)    “Supported Environment” means the application server or servers on which the Documentation states the Software can operate.

(s)    “Third Party Software” means the software of Sun Microsystems, Corticon Technologies, Inc., Desiderata Software and Flux Corporation which is embedded in the Software and any other third party software embedded in the Software.

(t)    “Update” means any new release, version, enhancement, update, correction, patch, bug-fix or other modifications (regardless of how characterized) to the Software that are distributed, designed, developed or created by or for Chordiant, but excluding any Customizations or Additions. Chordiant shall provide such Major Release Updates, Minor Release Updates and Patch Updates to Customer and/or a CIGNA Agent at no additional fee at the same time as Chordiant provides them to other users or licensees of the Software as and when developed for general release. Additional Documentation is provided for Major Release Updates and Minor Release Updates. Such additional Documentation shall contain a description of any Open Source Code Software contained in the Update.

2.   Software License.

2.1   Rights Granted.

(a) Chordiant hereby grants to the CIGNA Entities a worldwide, irrevocable, perpetual, non-exclusive, fully-paid, royalty-free, license to reproduce, use, modify, enhance, perform, display, distribute and sublicense to CIGNA Entities and/or CIGNA Agents, directly and indirectly, through one or more tiers of sublicensees, and make derivative works of the Software listed on Schedule A hereto (and any amendments to Schedule A and any Order Forms subsequently entered into between Customer and Chordiant) for use in connection with the business operations of the CIGNA Entities.

(b) The license granted in this Section 2.1 includes the object code version of the licensed Software (including all Third Party Software) and includes all Updates of the Software to be provided to Customer promptly upon release. Additionally, the license includes certain source code elements of the proprietary Chordiant software pursuant to Section 2.6 and may include the entire source code of the proprietary Chordiant software from the Source Code escrow pursuant to Section 2.7, if appropriate.

(c) Customer shall have the right to make such copies of the Software as Customer deems reasonably necessary, including for back-up, testing, disaster recovery, development or archival purposes. All titles, trademarks and copyright or other restricted rights notices shall be reproduced in any such copies.

(d) Customer shall have the right to allow third parties to use the Software for the operations of the CIGNA Entities (for example, third parties involved with disaster recovery, the integration of the Software with the systems of CIGNA Entities, development and production), so long as Customer is responsible for use of the Software is in accordance with the terms of this Agreement (unless the third party has a direct agreement with Chordiant in which case CIGNA shall not be responsible and Chordiant shall look to its agreement with such third party).

(e) Notwithstanding anything contrary in this Agreement, the CIGNA Entities and their agents, contractors and third party service providers (and their affiliates and subcontractors), wherever located, may access, use , modify, enhance, create derivatives works of and install the Software solely for the benefit of the business operations of the CIGNA Entities. The Software may be installed at the locations, facilities and systems owned or leased by the CIGNA Entities and their agents, contractors and third party service providers (and their affiliates and subcontractors) solely for the benefit of the business operations of the CIGNA Entities.

2.2   Restrictions

(a) Chordiant has obtained the right for the CIGNA Entities to use any Sun Microsystems, Inc. software or any other third party software that is embedded in the Software in connection with any use of the Software as contemplated by Section 2.1.

(b) Customer agrees not to engineer, disassemble, de-compile, or any other attempt to derive source code from the Software for which source code was not provided pursuant to Section 2.6 or from the Third Party Software, except to the extent required to obtain interoperability with either independently created software or as specified by law.

(c) Chordiant and its suppliers shall retain all title, copyright and other proprietary rights in the Software. Customer does not acquire any rights, express or implied, in the Software, other than those specified in this Agreement.   Customer agrees that it shall not publish any results of benchmark tests run on the Software, other than for the internal use of the CIGNA Entities.

(a) Customer may use the Software on any Supported Environment available as of the Effective Date or thereafter without the payment of an additional license fee so long as Customer’s usage of the Software does not exceed the scope of the license it acquired for use.

    (b) If Customer divests part of its business or an Affiliate ceases to be an Affiliate (in each instance the “Former Business”), Customer may sublicense use of the Software, assign a designated number of licenses to that Former Business or provide services to such Former Business with respect to the use of the Software to the Former Business; provided that the continued use of the Software by or for the Former Business shall be considered a part of the underlying license for the purpose of counting the Number of Concurrent Users and the number of CPUs in use.

2.4   Verification. At Chordiant’s written request, not more frequently than annually, Customer shall furnish Chordiant with a signed certification verifying that the Software is being used pursuant to the provisions of this Agreement and applicable Order Form. Chordiant (or Chordiant’s designee) may audit Customer's use of the Software. Any such audit shall be conducted at Chordiant’s cost and expense during regular business hours at Customer's facilities and shall not unreasonably interfere with Customer's business activities. Chordiant agrees that its employees shall comply with Customer’s reasonable security and confidentiality requirements during the audit. If an audit reveals that Customer has underpaid fees to Chordiant, Customer shall be invoiced directly for such underpaid fees based on the rates set forth in the applicable Order Form. Payment of such underpaid fees shall be Chordiant’s sole and exclusive remedy in the event of an underpayment by Customer.

2.5   Customizations and Additions. Modifications, enhancements and derivatives works of the Software, including certain software objects applicable to the business of the CIGNA Entities, are referred to herein as “Customizations”. Additions, bolt-ons or other software that interacts or interfaces with the Software are referred to herein as “Additions”. Any Customizations made by Customer either directly or through their third parties other than Chordiant shall be owned by Customer (“Customer Customizations”). All right, title and interest to any Customizations made by Chordiant on behalf of Customer or CIGNA Agents, either directly or indirectly (“Chordiant Customizations”), shall be owned by Chordiant. Chordiant hereby grants Customer a license to such Chordiant Customizations on the same terms and conditions as those set forth in Section 2 pertaining to the originally licensed Software, and such Chordiant Customizations shall be considered licensed Software under this Agreement. Any Additions shall be owned by Customer, and Chordiant hereby assigns all rights, title and interests to such Additions to Customer . To the extent that Customer desires to have Chordiant incorporate such Customer Customizations or Additions (collectively, “Customer Specific Objects”) into Chordiant’s Software (and Chordiant agrees, in its sole discretion, to incorporate such Customer Specific Objects), Customer shall promptly deliver to Chordiant the source and object code versions (including documentation) of such Customer Specific Objects, and any updates or modifications thereto, and hereby grants Chordiant a perpetual, irrevocable, worldwide, fully-paid, royalty-free, non-exclusive, license to reproduce, modify, use, perform, display, distribute and sublicense, directly and indirectly, through one or more tiers of sublicensees, such Customer Specific Objects (provided that any use by Chordiant shall be on an “as-is” basis” at Chordiant’s sole risk, with no obligation on the part of Customer to maintain or support).

2.6   Additional Software Restrictions.  

(a) Customer acknowledges that any Software licensed under this Agreement shall primarily be in object code format. However, Customer acknowledges that certain licensed Software may include source code based files. Customer acknowledges that the Software, its structure, organization and any human-readable versions of a software program (“Source Code”) constitute valuable trade secrets that belong to Chordiant and/or its suppliers.

(b) To the extent that Chordiant includes such Source Code within its Software, such Source Code shall be deemed licensed Software under the terms of this Agreement and the Order Form. Customer may modify the Source Code in accordance with Section 2.5 and as Customer otherwise deems necessary or useful in support of Customer’s authorized use of the Software.

(c) Customer agrees that it shall only disclose the Source Code to authorized employees of CIGNA Entities and authorized third parties and contractors of CIGNA Entities who (i) require access thereto for a purpose authorized by this Agreement, and (ii) are subject to confidentiality obligations to protect third party confidential information.

(d) Customer shall use the same degree of care is to prevent the unauthorized use, dissemination, or publication of the source code (i.e., human readable) of the Software (the “Source Code”) and the Software as Customer uses to protect its own confidential information of a like nature, but in no event shall the safeguards for protecting such Source Code, and the Software be less than a reasonably prudent business would exercise under similar circumstances. Customer shall take prompt and appropriate action in an effort to prevent unauthorized use or disclosure of such Source Code and the Software, including, without limitation, storing such Source Code only on secure central processing units or networks and requiring passwords and other reasonable physical controls on access to such Source Code.

2.7   Source Code Escrow. Within 30 days of the Effective Date Chordiant shall take such steps as are necessary to enable Customer to obtain the Source Code that it not been provided under the terms of the Escrow Agreement between Chordiant and Iron Mountain Intellectual Property Management, Inc., as successor-in-interest to Source File LLC, as Escrow Agent, a copy of which has been provided to Customer, in the event that Chordiant undergoes a change of control, assigns all or part of this Agreement, enters into a voluntary or involuntary receivership arrangement, bankruptcy or other insolvency proceedings, or otherwise ceases to be in business or ceases to maintain or otherwise support the Software for Customer. Chordiant shall not cancel said agreement during the term of this Agreement without the prior written consent of Customer. In the event that during the term of this Agreement the Source Code is changed, Chordiant shall provide updated Source Code and any supporting documentation to the Escrow Agent. Customer's use of the Source Code is limited to support and maintenance of the Software and is otherwise subject to the terms of this Agreement. Customer acknowledges that the Software Source Code does not include the source code for the Third Party Software.

3.   Maintenance and Support Services.

3.1   Maintenance and Support Services. If annual Support services are purchased by IBM on behalf of Customer, then such Support services shall be provided by Chordiant (through IBM) to Customer pursuant to the terms of Chordiant’s services agreement with IBM (which shall at a minimum include the services and obligations set forth in this Agreement). If annual Support services are purchased directly by Customer, then such Support services shall be provided by Chordiant to Customer under the terms of this Agreement or, if more favorable to Customer, Chordiant’s support policies in effect on the date Support is ordered by Customer.   For as long as Customer or a CIGNA Agent notifies Chordiant that it wishes to purchase Support, Chordiant shall offer to provide such Support. Notwithstanding the foregoing, Chordiant shall provide Support under its agreement with IBM for Customer for as long as the services agreement between Chordiant and IBM is in place (or such longer period as support has been paid for by IBM), and IBM has paid the then current Support Fee. If, during the term of Customer’s services agreement with IBM, IBM has not paid any undisputed Support Fees within 60 days after the commencement of the then current renewal Support Period, then Chordiant shall notify Customer in writing of such failure. If Chordiant does not receive payment of the then current undisputed Support Fee within 30 days following receipt of notice to Customer, from either Customer or IBM, then Chordiant, in its sole discretion, may either terminate the provision of Support hereunder or agree with Customer to continue to provide Support. Support is intended to ensure that the Software operates in accordance with its Documentation on an ongoing basis.

3.2 Update Policy . Additionally, as part of Support, Chordiant shall provide Customer with Updates, if and when such Updates made available by Chordiant.

3.3   Reinstatement. Once Support has been terminated in writing by Customer for a particular Supported Program, it can be reinstated only if Customer pays a fee equal to the Support Fees that would have been payable for the period of time during which Support was terminated for such Supported Program. All Support provided to IBM under the services agreement shall count as if Customer had obtained the Support itself (and no break in support shall have occurred).

4.   Consulting Services.

4.1   Consulting Services. In the event that Chordiant provides Services directly for Customer, Chordiant shall provide Services in accordance with a Statement of Work to be mutually agreed to by Chordiant and Customer. Chordiant shall charge Customer for Services performed pursuant to this Agreement on a time and materials basis at the rates set forth in the applicable Statement of Work. If a dollar limit is stated in the applicable Statement of Work for time and materials Services, the limit shall be deemed an estimate for Customer’s budgeting and Chordiant’s resource scheduling purposes; after the limit is expended, Chordiant shall continue to provide the Services on a time and materials basis, if requested by the Customer or as otherwise agreed to by the parties. Customer shall reimburse Chordiant for pre-approved actual, reasonable travel and lodging expenses incurred in conjunction with the provision of Services in accordance with Chordiant’s or Customer’s internal travel policy, as agreed upon by the parties.

4.2 Representative. Chordiant shall designate a Chordiant employee to oversee and direct Chordiant’s Services (the “Chordiant Project Manager”). Chordiant’s Project Manager shall work at the direction of the Customer project manager. Customer’s project manager shall be completely responsible for the management and direction of the Customer project. Chordiant may subcontract any portion of the work to be performed under the Agreement.

4.3   Customer’s Duties.

At no cost, Customer shall provide Chordiant with (a) adequate access to Customer’s facility to perform all work required under this Agreement; (b) all necessary safety training regarding Customer’s facility, and (c) reasonable onsite facilities, including secure storage space, a designated work area with adequate heat and lighting, and access to any needed telephone lines, communication facilities or other equipment.

4B. Intellectual Property Rights.

4B.1 Rights to Developments.  

a.   With regard to any Customizations or Additions developed by Chordiant for Customer or CIGNA Agents, either directly or indirectly, the provisions of Section 2.5 shall apply.

b. With regard to other deliverables or work product developed or provided by Chordiant for Customer or CIGNA Agents, either directly or indirectly, subject to paragraph a above,

i. to the extent that any of Chordiant’s pre-existing intellectual property rights (“Chordiant IP”) are embedded in any deliverable developed or provided by Chordiant to Customer or CIGNA Agents or in any CIGNA owned or licensed intellectual property (other than the Software), Chordiant hereby grants to Customer an unlimited, worldwide, perpetual, irrevocable, fully paid-up, nonexclusive, unlimited license to use and sublicense, and to permit third parties to use, the Chordiant Intellectual Property that is incorporated or embedded in any such deliverable or intellectual property for so long as such Chordiant IP remains embedded or incorporated in such deliverable or intellectual property and is not separately commercially exploited by Customer.

ii. Chordiant shall own all modifications and enhancements to, and derivatives of, Chordiant IP that are developed by Chordiant during the provision of any Services (collectively, “Chordiant New Intellectual Property”). Chordiant hereby grants to Customer an unlimited, worldwide, perpetual, irrevocable, fully paid-up license to use (and allow Customer’s agents and third parties to use) any Chordiant New Intellectual Property.

iii. Subject to the foregoing ownership and assignment rights set forth in this Section 4B.1, which take precedent over this subparagraph iii, Customer shall own, and Chordiant hereby perpetually assigns to Customer, all rights, title and interests in work product that are developed or provided by Supplier in connection with the provision of any Supplier Services.

4B.2 Chordiant’s Duties.

All current and future employees and agents of and consultants to Chordiant with access to or involved in the performance of Services have executed and delivered or shall execute and deliver to Chordiant a proprietary rights agreement with Chordiant substantially consistent with the form attached as Exhibit C hereto pursuant to which such employee or consultant agrees to confidentiality and intellectual property assignment terms sufficient to enable Chordiant to meet its obligations to Customer under this Agreement.

5.   Term and Termination.

5.1   Term. This Agreement shall be terminated under this Section 5 (“Term and Termination”) or as otherwise specified in the applicable Order Form. Notwithstanding any termination of this Agreement, all software licenses are irrevocable and perpetual.

5.2   Termination by Customer. Customer may terminate any Software license at any time; however, termination shall not relieve Customer’s obligations specified in Section 5.4 (“Effect of Termination”).

5.3   Termination by Chordiant. Chordiant may terminate this Agreement upon written notice if Customer materially breaches this Agreement and fails to correct the breach within 30 days following written notice specifying the breach; provided that any license previously licensed hereunder shall remain in effect during the term provided for in the license grant, and Section 2 shall survive termination of the Agreement in addition to the provisions of Section 5.4 for the duration of such term.

5.4   Effect of Termination. Termination of this Agreement or any license shall not limit either party from pursuing other remedies available to it, including injunctive relief, nor shall such termination relieve Customer’s obligation to pay all fees that have accrued under any Order Form or Statement of Work. The parties’ rights and obligations under Sections 2.2 and 2.6 (“Restrictions”) , 5 (“Term and Termination”), 6  (“Indemnity, Warranties, Remedies”), 7  (“Limitation of Liability”), 8  (“Payment Provisions”), 9 (“Confidentiality”) and 10  (“Miscellaneous”) shall survive termination. Except for termination pursuant to Section 5.3, upon termination, Customer shall cease using, and shall return or destroy as directed b