Karat Services Agreement (current MSA)
Karat Services Agreement
Effective Date: June 29, 2023
PLEASE READ THE TERMS SET FORTH HEREIN CAREFULLY BEFORE USING THE SERVICES OFFERED BY KARAT, INC. (“KARAT”). BY MUTUALLY EXECUTING ONE OR MORE ORDER FORMS (AS DEFINED BELOW), YOU (“CUSTOMER”) AGREE TO BE BOUND BY THESE TERMS (TOGETHER WITH ALL ORDER FORMS, THE “AGREEMENT”) TO THE EXCLUSION OF ALL OTHER TERMS. IF THE TERMS OF THIS AGREEMENT ARE CONSIDERED AN OFFER, ACCEPTANCE IS EXPRESSLY LIMITED TO SUCH TERMS.
1. Order Forms; Services
1.1 Order Forms.
An “Order Form” is an order form, statement of work or other document that (a) references this Agreement, (b) describes certain services and/or products to be provided by Karat to Customer hereunder, as well as certain responsibilities of Customer, and (c) is mutually executed by authorized representatives of both parties. Upon mutual execution, each Order Form will be incorporated into and form a part of the Agreement. In the event of a conflict between an Order Form and this Agreement, the Order Form shall control with respect to the subject matter of such Order Form only.
1.2 Services; Customer Responsibilities.
Subject to the terms and conditions of this Agreement and the applicable Order Form, Karat will provide authorized users of Customer with access to certain Karat Materials (as defined below) and access to the Karat platform (the “Karat Platform,” and collectively with the Karat Materials, “Services”) during the applicable Order Form’s Term (as defined below). Customer will identify the candidates that it wishes Karat to assess via the Karat Platform (each, a “Candidate”). Customer will also perform any obligations of Customer that may be set forth in the Order Form. The “Karat Materials” include, without limitation, a report summarizing the results of a Candidate interview, quiz or other assessment, as calibrated for Customer (the “Interview Results”), interview notes, site content, selection criteria, derived data, data analytics, recorded interviews, instructional videos, instructional materials, interview methodologies, documentation, and other similar materials, data and/or information provided by Karat hereunder.
Subject to the terms and conditions of this Agreement, Karat hereby grants Customer:
(a) a limited, non-transferable, non-sublicensable, non-exclusive right to internally access and use the Karat Platform and Karat Materials provided hereunder during the Term solely for the purpose of Customer’s internal hiring decisions and internal hiring analytics with respect to Candidates; and
(b) a perpetual, worldwide, non-transferable, non-exclusive license to internally use the Interview Results, solely for the purpose of Customer’s internal hiring decisions and internal hiring analytics with respect to Candidates.
The Karat Materials and the Karat Platform (exclusive of all of Customer’s Confidential Information contained therein) are Karat’s Confidential Information, and Customer will not disclose any Karat Materials to any third party.
1.4 Services Ownership; Restrictions.
As between the parties, Karat owns and retains all right, title, and interest in and to the Karat Platform, the Karat Materials (exclusive of all Customer Data contained therein), Karat’s Confidential Information, and all software, products, works, and other intellectual property and moral rights related thereto or created or provided by Karat in connection this Agreement, including any copies and derivative works of the foregoing. Any software which is distributed or otherwise provided to Customer hereunder (including without limitation any software identified on an Order Form) shall be deemed a part of the Services and subject to all of the terms and conditions of this Agreement. No rights or licenses are granted except as expressly and unambiguously set forth in this Agreement. Except as expressly set forth in this Agreement, Customer shall not (and shall not permit any third party to), directly or indirectly: (a) reverse engineer, decompile, disassemble, or otherwise attempt to discover the source code, object code, or underlying structure, ideas, or algorithms of the Services (except to the extent applicable laws specifically prohibit such restriction); (b) modify, translate, or create derivative works based on the Services; (c) copy, rent, lease, distribute, pledge, assign, or otherwise transfer or encumber rights to the Services; (d) use the Services for the benefit of a third party; (e) remove or otherwise alter any proprietary notices or labels from the Services or any portion thereof; (f) use the Services to build an application or product that is competitive with any Karat product or service; (g) interfere or attempt to interfere with the proper working of the Services or any activities conducted on the Services; or (h) bypass any measures Karat may use to prevent or restrict access to the Services (or other accounts, computer systems or networks connected to the Services). Customer is solely responsible for all of Customer’s activity in connection with the Services, including but not limited to uploading Customer Data (as defined below) onto the Services. Each Customer employee who accesses the Services must establish their own account for such access. Customer (i) shall use the Services in compliance with all applicable local, state, national and foreign laws, treaties and regulations (including those related to data privacy, international communications, export laws and the transmission of technical or personal data laws), and (ii) shall not use the Services in a manner that violates any third-party intellectual property, contractual or other proprietary rights.
1.5 Beta Services.
Karat may provide Customer access to and use of certain features, products or services in a free or paid beta program, as further described in the Order Form (the “Beta Services”). Such Beta Services are provided on an early access, beta basis, and may contain bugs and errors. Customer assumes all risks and costs associated with Customer’s use of the Beta Services, and Customer understands that Karat may change or discontinue the Beta Services at any time in its sole discretion. Section 7.3 of this Agreement shall not apply to Customer’s use of the Beta Services. Notwithstanding Section 6.3 of this Agreement, Karat’s liability for any claims arising from Customer’s use of Beta Services shall not exceed $1000.
2. Payment Terms
Customer shall pay Karat the fees as set forth in the applicable Order Form (“Fees”). Fees will be due net 30 days after Customer’s receipt of the applicable invoice. Past due invoices are subject to interest on any outstanding balance of the lesser of 1.5% per month or the maximum amount permitted by law. Customer shall be responsible for all taxes associated with Services (excluding taxes based on Karat’s net income). All Fees invoiced are non-cancelable, non-refundable (except as expressly set forth in Section 3.2 below) and are not subject to set-off.
3. Term and Termination
3.1 Term. The term of this Agreement (the “Term”) shall commence as of the Effective Date set forth on the initial Order Form, and shall continue until terminated in accordance with this Agreement.
3.2 Termination. Either party may terminate this Agreement (a) at any time, with written notice, after the expiration or termination of all Order Forms, or (b) for cause if the other party has breached any of its material obligations under this Agreement and has failed to cure such material breach within thirty (30) days after receiving written notice of such material breach from the other party. Customer shall remain responsible for and, upon termination, shall promptly pay Karat for all Services performed as of the date of termination. If Karat terminates for Customer’s material breach, Customer shall remain responsible for the Fees, if any, due for the remainder of the Agreement. If Customer terminates for Karat’s material breach, Customer shall receive a refund of Fees for (i) any unused Karat Interviews (as set forth in an Order Form) and (ii) the Karat Platform Subscription (as set forth in an Order Form) prorated from the effective date of termination, less any applicable discounts. Any early termination of this Agreement shall result in immediate termination of all Order Forms.
3.3 Survival. Except as set forth herein, all obligations of each party hereunder, and all rights granted hereunder shall terminate upon the expiration or termination of this Agreement; provided that the following Sections of this Agreement will survive any expiration or termination of this Agreement: 1.3(b), 1.4, and 2-8.
During the Term, a party (“Recipient”) may be provided information of the other party (“Discloser”)n that the Discloser designates as confidential or the Recipient knows or reasonably should know is considered by the Discloser to be confidential or proprietary in nature (“Confidential Information”). The Recipient agrees, during and after the Term, not to use any of the Discloser’s Confidential Information except for the purposes of this Agreement and not to disclose such information to any third party or to assert an ownership interest in such information. Further the Recipient agrees to take all reasonable precautions to prevent unauthorized or inadvertent disclosure of such, and to be responsible for any breach of these obligations by its officers, directors, contractors, or employees hereunder. For clarification, the Karat Materials, the Karat Platform and all content therein constitute Karat’s Confidential Information. Notwithstanding anything to the contrary, Confidential Information does not include information available to the public without restriction on its use, information rightfully provided to the Recipient by a third party under no duty to the Discloser to maintain it in confidence, information rightfully in the Recipient’s possession without restriction on use or disclosure prior to disclosure by the Discloser, or information independently developed by the Recipient without use of or reference to the Discloser’s Confidential Information. Recipient may disclose any information that it is required to disclose in response to a court order, subpoena or other legally binding process; provided that, to the extent legally permissible, the Discloser is provided prior written notice of, and an opportunity to contest, such requirement. Neither party will disclose the terms and conditions of this Agreement to any third party, except to their bona fide prospective investors and/or acquirers.
5. Data Use
5.1 Use of Customer Data. Karat acknowledges that Customer owns all right, title, and interest (including all intellectual property rights) in C Customer’s Confidential Information and any data, content or materials transmitted to or via the Karat Platform (collectively, “Customer Data”). Notwithstanding anything to the contrary, Customer acknowledges and agrees that Karat may (a) internally access, use and modify Customer Data for the purposes of (i) providing the Services and any support or consultation services to Customer and (ii) generating Aggregated Anonymous Data (as defined below), and (b) freely use and make available Aggregated Anonymous Data for Karat’s business purposes. “Aggregated Anonymous Data” means any data that has been aggregated or otherwise anonymized and which cannot be linked specifically to Customer or any individual Candidate or otherwise reidentified. Notwithstanding anything to the contrary, information that Karat directly collects from Candidates (“Candidate Data”) will not be considered Customer Data.
5.2 Use of Customer Name. Notwithstanding anything to the contrary, Customer hereby grants Karat the limited right to use Customer’s name and logo (a) as necessary for Karat to identify Customer to Candidates and to perform the Services, and (b) to list Customer as a customer of Karat on its website, marketing materials and/or public presentations, and the right to use the Customer logo for these purposes; provided that (i) Customer is listed in substantially the same manner as other similarly situated customers of Karat; and (ii) Karat’s use of Customer’s name and logo is in compliance with Customer’s standard trademark usage guidelines as provided to Karat from time-to-time.
5.3 Data Processing Addendum. To the extent that, in connection with the Services, Customer provides any Customer Data that contains “Personal Data” from a European “Data Subject” that is subject to the European Union’s General Data Protection Regulation, Karat’s data processing addendum (“DPA”) available at https://karat.com/DPA/ shall apply. The DPA is hereby incorporated into this Agreement by reference. Any terms not defined in this paragraph will have the meanings given to them in the DPA.
6. Disclaimer and Limitation of Damage
6.1 Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, KARAT MAKES NO WARRANTIES OF ANY KIND WITH RESPECT TO THE SERVICES, ALL OF WHICH ARE PROVIDED “AS IS”. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, KARAT DOES NOT WARRANT THAT ANY OF THE ABOVE OR THE RESULTS OF THE SERVICES ARE ACCURATE OR WILL MEET CUSTOMER’S REQUIREMENTS OR WILL COMPLY WITH CUSTOMER’S POLICIES OR APPLICABLE LAW. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, KARAT HEREBY DISCLAIMS ALL WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, NON-INFRINGEMENT, ACCURACY, INTERFERENCE WITH QUIET ENJOYMENT AND ANY WARRANTIES ARISING FROM COURSE OF DEALING, USAGE OR TRADE PRACTICE.
6.2 No Consequential Damages. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, EXEMPLARY, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES OR LOSSES RELATING TO ANY OF THE SERVICES, WHETHER SUCH LIABILITY IS BASED ON CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE), PRODUCT LIABILITY OR OTHERWISE, EVEN IF SUCH DAMAGES WERE FORESEEABLE OR EITHER PARTY HAD BEEN ADVISED IN ADVANCE OF THE POSSIBILITY OF SUCH LOSS OR DAMAGE.
6.3 Limitation of Damages. IN NO EVENT SHALL THE LIABILITY OF EITHER PARTY FOR ALL CLAIMS OF ANY KIND ARISING FROM THIS AGREEMENT EXCEED, IN THE AGGREGATE, THE GREATER OF (I) TOTAL FEES PAID OR PAYABLE BY CUSTOMER TO KARAT PURSUANT TO THE ORDER FORM UNDER WHICH A CLAIM AROSE OR (II) $1,000. MULTIPLE CLAIMS SHALL NOT EXPAND THIS LIMITATION. THE LIMITATION OF DAMAGES CONTAINED HEREIN REFLECT THE ALLOCATION OF RISK AMONG THE PARTIES AND SHALL SURVIVE AND APPLY EVEN IF ANY LIMITED REMEDY SPECIFIED IN THIS AGREEMENT IS FOUND TO HAVE FAILED OF ITS ESSENTIAL PURPOSE.
6.4 Exceptions. The limitations contained in Sections 6.2 and 6.3 shall not apply to limit a party’s liability for claims resulting from such party’s breach of Section 4 or for each party’s indemnification obligations pursuant to Sections 7.2 or 7.3.
7. Relationship, Assumption of Risk and Indemnification
7.1 Independent Contractor. Karat is an independent contractor. Nothing herein shall be deemed or construed to create a relationship of principal and agent or of employer and employee between the parties, or to create a partnership, joint venture, or similar relationship between the parties. Customer acknowledges that Karat’s services are being retained only in connection with Customer’s own process of reviewing applicants for employment with Customer and that Karat’s Services will not be used by Customer to provide any type of assessment of any interviewed individual to any other entity or for the purpose of placing any interviewed individual in a job with any other entity.
7.2 Assumption of Risk. Customer is solely responsible for determining whether and how to use the Interview Results in its hiring decisions and for its hiring decisions. Customer assumes all risks arising from Customer’s hiring and employment activities and decisions. Customer releases and agrees to defend, indemnify, and hold Karat harmless from and against all third-party claims asserted against Karat, and any judgment or liability imposed against Karat pursuant to such claims, to the extent such claims arise out of Customer’s hiring and/or employment activities and/or decisions.
7.3 Karat Indemnity. Karat agrees to indemnify, defend and hold harmless Customer from and against all third party claims asserted against Customer, and any judgment or liability imposed against Customer pursuant to such claims, to the extent such claims allege that the Services or the Services infringe or violate any third party’s intellectual property rights; provided that the obligations of Karat do not apply to the extent such claims arise from (i) materials not created or provided by Karat (including without limitation any Customer Data), (ii) materials made in whole or in part in accordance to Customer specifications, (iii) materials modified after delivery by Karat, (iv) materials combined with other products, processes or materials not provided by Karat (where the alleged claim arises from or relates to such combination), (v) Customer continuing allegedly infringing activity after being notified thereof or after being informed of modifications that would have avoided the alleged infringement, or (vi) Customer’s use of the Services is not strictly in accordance herewith.
7.4 Procedures. Each party’s indemnification obligations hereunder shall be conditioned upon the indemnitee providing the indemnitor with: (a) prompt written notice of all indemnifiable claims (provided that a failure to provide such notice shall only relieve the indemnitor of its indemnity obligations if the indemnitor is materially prejudiced by such failure); (b) sole control over the defense and settlement of all indemnifiable claims (provided that the indemnitee may participate in such defense and settlement at its own expense); and (c) reasonable information and assistance in connection with such defense and settlement (at the indemnitor’s expense).
This Agreement shall be construed and interpreted in accordance with the internal laws of the State of Delaware, without regard to its conflict of laws principles. This Agreement represents the entire agreement between Customer and Karat with respect to the subject matter hereof, and supersedes all prior or contemporaneous agreements, communications, and proposals (whether oral, written or electronic) between Customer and Karat with respect thereto. All notices under this Agreement shall be sent via electronic mail to the contact for each party set forth on the most recent Order Form, and shall be deemed to have been duly given when receipt is electronically confirmed. Either party may update its address set forth above by giving notice in accordance with this section. Except as otherwise provided herein, this Agreement may be amended only by a writing executed by both parties. Except for payment obligations, neither party shall be liable for any failure to perform its obligations hereunder where such failure results from any cause beyond such party’s reasonable control, including, without limitation, the elements; fire; flood; severe weather; earthquake; denial of service attacks or similar attacks; Internet failure; acts of God and the public enemy; acts of war; acts of terrorism; riots; and civil or public disturbances. Neither party may assign any of its rights or obligations hereunder without the other party’s consent; provided that (a) each party may assign this Agreement without such consent to a successor-in-interest in connection with a sale of all or substantially all of such party’s business or assets relating to this Agreement, and (b) Karat may utilize subcontractors in the performance of its obligations hereunder. Karat will be directly responsible for performance of its obligations hereunder by its subcontractors. No agency, partnership, joint venture, or employment relationship is created as a result of this Agreement and neither party has any authority of any kind to bind the other in any respect. Each party acknowledges and agrees that due to the unique nature of the other party’s Confidential Information, there can be no adequate remedy at law for any breach of such party’s obligations under Section 4, which breach may result in irreparable harm to such other party, and therefore, that upon any such breach or any threat thereof, such other party shall be entitled to appropriate equitable relief, without the requirement of posting a bond, in addition to whatever remedies it might have at law. If any provision of this Agreement is held to be unenforceable for any reason, such provision shall be reformed only to the extent necessary to make it enforceable. The failure of either party to act with respect to a breach of this Agreement by the other party shall not constitute a waiver and shall not limit such party’s rights with respect to such breach or any subsequent breaches.
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