CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
RESTATED SOFTWARE LICENSE AND SUPPORT
AND
HARDWARE PURCHASE
AGREEMENT
dated as of September 25, 2000
between
ADP, Inc.
and
Kronos Incorporated
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
1.Definitions .......................................................................... 7
2.Grant of Software License to ADP; Right to Sublicense; Restrictions on Kronos and ADP 15
3.Title, Ownership and Use of Kronos Software .......................................... 35
4.Software, Maintenance and Support Obligations; Training .............................. 38
For TKC Software and Lite Software ............................................... 38
For WFC Software ................................................................. 46
Training ......................................................................... 53
5.Payments to Kronos for Software and Support .......................................... 54
6.Agreements with Respect to Source Code ............................................... 62
7.Agreements with Respect to Custom Software ........................................... 67
8.Purchase and Sales of Hardware ....................................................... 69
9.Order of Hardware .................................................................... 70
10.Hardware Purchase Price; Payment; Taxes ............................................. 72
11.Hardware Maintenance ................................................................ 73
12.Hardware Warranty Coverage .......................................................... 75
13.Favored Customer .................................................................... 77
14.Term and Termination; Rights Upon Termination ....................................... 78
14A.Modifications by ADP ............................................................... 87
14B.Limitation Of Liability And Indemnification ........................................ 87
15.Additional Agreements ............................................................... 90
16.Representations, Warranties and Covenants of Kronos ................................. 91
16A.Representations, Warranties and Covenants of ADP ................................... 94
17.Patent, Trademark, Copyright and Proprietary Rights Indemnification ................. 94
18.Confidentiality ..................................................................... 98
19.Force Majeure ....................................................................... 100
20.Use of Name ......................................................................... 100
21.Relationship of the Parties ......................................................... 96
22.Restrictions Applicable to TRM ...................................................... 96
23.ADP WFC Software Pilot .............................................................. 99
24.Additional Provisions Applicable to Lite Software and ADP-ized Lite Software ........ 100
25. Miscellaneous ...................................................................... 101
</TABLE>
EXHIBITS
EXHIBIT A: Intentionally Omitted
EXHIBIT B: Description and Pricing for Hardware Used with
ADP-ized TKC Software
EXHIBIT B-1: Description and Pricing for Hardware Used with
ADP-ized Lite Software
EXHIBIT B-2: Description and Pricing for Millennium Hardware
EXHIBIT C: Description and Pricing for ADP-ized TKC Software
EXHIBIT C-1: Description and Pricing for ADP-ized Lite Software
EXHIBIT C-2: Description and Pricing for ADP WFC Software and Maintenance
EXHIBIT D: Intentionally Omitted
EXHIBIT E: Intentionally Omitted
EXHIBIT F-1: Hardware Maintenance Prices and Description of Services
EXHIBIT F-2: Maintenance Procedures
EXHIBIT G: Procedure for Return/Refurbishment of Certain Hardware
ANNEXES
ANNEX I: Form of Shrink Wrap License
ANNEX II: Intentionally Omitted
ANNEX III: ADP Employee Confidentiality Agreement
ANNEX IV: ADP Professional Services Agreement
<PAGE>
THIS RESTATED AGREEMENT, dated as of Sept. 25, 2000 is between
ADP, Inc., a Delaware corporation ("ADP"), with offices at One ADP
Boulevard, Roseland, New Jersey 07068, and Kronos Incorporated, a
Massachusetts corporation ("Kronos"), with offices at 297 Billerica
Road, Chelmsford, Massachusetts 01824.
WHEREAS, the parties previously entered a Software License and
Support and Hardware Purchase Agreement dated April 2, 1993, an
Amendment to that Agreement dated July 22, 1996, a Total Time 120
Amendment to that Agreement dated July 22, 1996, a Second Amendment to
the Agreement effective on February 11, 1998, a Third Amendment to that
Agreement dated February 17, 2000, a Development Agreement dated March
21, 1995, and various letters clarifying the parties' respective rights
and obligations under that Agreement and Amendments thereto, (that
April 2, 1993 Agreement and the above specified Amendments thereto, the
Development Agreement and letters shall hereafter be referred to as the
"Original Agreement");
WHEREAS, the parties have agreed to revise and replace the
Original Agreement with this Restated Agreement;
WHEREAS, Kronos(R) owns certain software which is designed to
provide time and attendance processing capabilities to businesses; and
WHEREAS, Kronos manufactures certain hardware which is
designed to record time and attendance of businesses' employees; and
WHEREAS, ADP is in the business of providing payroll, payroll
tax filing, human resources and employee benefits administration, and
other data processing services to businesses; and
WHEREAS, ADP desires to offer to ADP Clients an integrated
package of time and attendance processing services, which includes
hardware and software developed by Kronos; and
WHEREAS, ADP desires Kronos to provide, and Kronos desires to
provide to ADP, a license to use the ADP T & A Software or any part
thereof (including a license to use any and all modifications and
enhancements which are made to the software by Kronos at ADP's request
as contemplated herein and which are not otherwise owned by ADP as
contemplated herein), the right to sublicense the same to ADP Clients,
and certain other rights in connection therewith, all in accordance
with the terms and conditions set forth herein; and
WHEREAS, ADP also desires to purchase and Kronos desires to
sell to ADP, certain units of hardware manufactured by Kronos for the
purpose of providing such hardware to ADP Clients; and
WHEREAS, ADP also desires Kronos to provide, and Kronos
desires to provide to ADP, certain maintenance, support, training and
technical assistance with respect to the ADP T & A Software and
Hardware, all in accordance with the terms and conditions set forth
herein;
NOW, THEREFORE, the parties hereto agree as follows:
1. Definitions.
(a) "ADP Clients" shall mean all current and future clients and customers
of ADP and its Subsidiaries and Affiliates who are now or will be in
the future receiving any of the ADP Services.
(b) "ADP Features" shall have the meaning set forth in Section 6(b) hereof.
(c) "ADP Services" shall mean any or all of the payroll processing, payroll
tax filing, human resources and employee benefits administration and
other related services offered by ADP and its Subsidiaries and
Affiliates, now or in the future (including, without limitation, ADP T
& A).
(d) "ADP T & A" shall mean the time and attendance services, which includes
the Hardware and ADP T & A Software, provided by ADP to ADP Clients or
other ADP customers.
(e) "ADP T & A Software" shall mean the ADP-ized TKC Software, ADP-ized
Lite Software and the ADP WFC Software, all as defined herein.
(f) "ADP WFC Software" shall mean the WFC Software as enhanced or modified
pursuant to Section 4(n) or pursuant to other specifications agreed
upon by the parties under Section 7.
(g) ADP-ized Lite Software" shall mean the Lite Software as enhanced or
modified under the Original Agreement (previously called Total Time
120), or herein pursuant to Section 4(c) or pursuant to other
specifications agreed upon by the parties under Section 7.
(h) "ADP-ized TKC Software" shall mean the TKC Software as enhanced or
modified under the Original Agreement, or herein pursuant to Section
4(c) or pursuant to other specifications agreed upon by the parties
under Section 7.
(i) "Affiliate" shall mean, with respect to any entity, any other entity
that directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with, such
entity; provided however, that any Affiliate of ADP shall be required
to be within the ADP Employer Services Group.
(j) "Application Service Provider" shall mean a person or entity that
sells/licenses software applications/solutions and/or hardware to its
customers, and/or hosts software applications/solutions for its
customers, and processes such applications/solutions within data
centers or other facilities for such customers.
(k) "Bug" shall mean, when measured against the Kronos user guide
documentation applicable to the comparable (as to version and type)
Kronos Software, and against any additional specifications for
enhancements made by Kronos if such specifications are agreed upon in
writing by the parties, (i) a reproducible error which causes the ADP T
& A Software to (a) produce erroneous, distorted or misleading
information, (b) abnormally cease to operate or (c) interpret input in
an erroneous, distorted or misleading fashion or (ii) a malfunction in
the ADP T & A Software that has been reported and documented by three
or more independent users.
(l) "Delivery Period" shall have the meaning set forth in Section 10(c)
hereof.
(m) "End-Users" shall mean all current and future clients (including ADP)
of Kronos who are now or will be in the future sub-licensing the
Software or any part thereof.
(n) "Event of Default" shall have the meaning set forth in Section 14(b)
hereof.
(o) "Hardware" shall mean the units of hardware developed and manufactured
by Kronos, as more fully described on Exhibits B, B-1 and B-2 attached
hereto, as such Exhibits may be amended from time to time, and any
other hardware added to this Restated Agreement under Section 8.
(p) "Human Resources Processing Services" shall mean the provision of human
resources administration processing services in a service bureau
environment.
(q) "Kronos Software" shall mean the Workforce Central(TM) Software,
Timekeeper Central(R) Software and Lite Software, as such terms are
defined herein and software developed under Section 7 herein.
(r) "License Fee" shall have the meaning set forth in Section 5 hereof.
(s) "Lite Software" shall mean the software programs and modules developed by
or for, and owned by, Kronos, as more fully described in Exhibit C-1
attached hereto, formerly known as "Total Time 120" Software. "Lite
Software" shall also include (if any) software programs and/or modules
which are released by Kronos as a corrective or Bug-fix release during the
term of this Agreement, standard modifications, standard enhancements and
future versions of the Lite Software; provided, however, that software
developed/manufactured by third parties other than Kronos shall not
constitute "Lite Software" unless such third party software is embedded in
the Lite Software or is offered for resale/sublicensing by Kronos to ADP
under this Restated Agreement; and provided further that inclusion of
modifications, enhancements and future versions within this definition
shall not automatically imply that such items are free of charge.
(t) "Major Account Sales Force" shall have the meaning set forth in Section
22(a) hereof.
(u) "Materials" shall mean at any given time the then current version of
all standard documentation provided by Kronos with respect to the
Kronos Software or Hardware or any part thereof, including without
limitation, any product descriptions and specifications, users'
manuals, installation and training guides and informational and
marketing brochures and materials, distributed to its End-Users.
(v) "National Account Sales Force" shall have the meaning set forth in
Section 22(a) hereof.
(w) "No Start" shall have the meaning set forth in Section 5(b) hereof.
(x) "Object Code" shall mean computer programs in machine executable form
stored on magnetic or electronic recording media.
(y) "Order Acceptance Date" shall have the meaning set forth in
Section 9(a) hereof.
(z) "Payroll Processing Services" shall mean the provision of payroll
processing services in a service bureau environment.
(aa) "P.O." shall have the meaning set forth in Section 9(a) hereof.
(bb) "Reissue" or "Reissuance" shall have the meaning set forth in
Section 5(b) hereof
(cc) "Scheduling" shall mean specifying the times a person starts/stops
different work activities and/or the process of forecasting and planning a
schedule, as such schedule relates to the scheduling of people for work.
(dd) "Software" shall mean the Kronos Software and the ADP T & A Software.
Pursuant to Section 6(c), the ADP
Features, except for the Five Files, shall not be a part of the ADP T &
A Software or Kronos Software and, accordingly, are not a part of
Software.
(ee) "Source Code" shall mean, with respect to any software program or
module, a set of instructions written by computer programmers in a
higher level, human-readable programming language (including, if any,
systems and other documentation in existence on or after the date
hereof which are maintained by Kronos for purposes of maintaining and
supporting the Software) which will enable a user to direct computer
functions and maintain and support such software programs and modules.
(ff) "Sublicense" shall mean any re-licensing by ADP of the ADP T & A
Software or any part thereof to any ADP Client or other authorized
Sublicensee pursuant to a sublicense validly issued under this Restated
Agreement.
(gg) "Sublicensee" shall have the meaning set forth in Section 2(b) hereof.
(hh) "Subsidiary" shall mean any company or other legal entity, at least
fifty percent (50%) of whose outstanding stock or other ownership
interest entitled to vote for election of directors, or such other
control as may exist, is now or hereafter owned or controlled by an
entity, either directly or through one or more Subsidiaries or both.
(ii) "Termination Loss" shall have the meaning set forth in Section 5(b)
hereof.
(jj) "Time & Attendance" shall mean collecting worked and non-worked time
(which may include activity details as necessary); and/or applying work
policies/workrules, in either case, for use in calculating total time
(e.g. regular hours, overtime hours, sick time, etc.) to pay the
individual who worked; (it being understood that the absence of a work
policy/workrule can defacto be deemed a work policy/workrule).
(kk) "Timekeeper Central Software" or "TKC Software" shall mean the software
programs and modules developed by or for, and owned by, Kronos, as more
fully described on Exhibit C attached hereto each of which is designed for
use with the Microsoft MS-DOS(R)or Windows(R)operating system, and future
modules added pursuant to Section 5. "TKC Software" shall also include
additional software programs and/or modules which are developed for and/or
by Kronos and released by Kronos as part of a corrective or Bug-fix release
to its End-Users during the term of this Agreement; standard modifications
and standard enhancements made to the TKC Software by Kronos and future
versions of the TKC Software by Kronos, each of which is designed for use
with the Microsoft(R)MS-DOS(R)or Windows(R)operating system; provided,
however, that inclusion of future versions within this definition shall not
automatically imply that such items are free of charge. The following shall
not constitute "TKC Software": (i) software developed/manufactured by third
parties other than Kronos unless such third party software is embedded in
the TKC Software or is offered for resale/sublicensing by Kronos to ADP
under this Restated Agreement; (ii) Kronos' ShopTrac(R)software product
line; (iii) Kronos software designed for use with the AS/400; and (iv) any
other Kronos software.
(ll) "TRM" shall mean Time Resources Management, Inc.
(mm) "TRM Software" shall mean software originally obtained from TRM and all
software derived from such original software, including but not limited
to bug-fixes, corrections, modifications, enhancements, versions, and
releases, but excluding any other third party software acquired after
the date of acquisition by ADP of TRM.
(nn) "Warranty Period" shall have the meaning set forth in Section 12(a)(i)
hereof.
(oo) "Workforce Central(TM)Software" or "WFC Software" shall mean the software
programs and modules developed by or for, and owned by, Kronos, as more
fully described on Exhibit C-2 attached hereto and future modules added
pursuant to Section 5. "WFC Software" shall also include (if any) software
programs and/or modules which are released by Kronos as a corrective or
Bug-fix release to its End-Users during the term of this Agreement,
standard modifications and standard enhancements or new versions developed
by Kronos which are offered by Kronos to its End-Users during the term of
this Restated Agreement as part of the Work Force Central Suite product
line; provided, however, that inclusion of such Bug-fix releases,
modifications, enhancements and new versions within this definition of "WFC
Software" shall not automatically imply that such items are free of charge.
The following shall not constitute "WFC Software": (i) software
developed/manufactured by third parties other than Kronos unless such third
party software is embedded in the WFC Software or is offered for
resale/sublicensing by Kronos to ADP under this Restated Agreement; (ii)
Kronos' ShopTrac software product line; (iii) Kronos software designed for
use with the AS/400; and (iv) any other Kronos software.
2. Grant of Software License to ADP; Right to Sublicense; Restrictions on
Kronos and ADP.
(a) Subject to Sections 5 and 6 hereof and for the term of this Restated
Agreement, Kronos hereby grants to ADP a worldwide and non-exclusive
Object Code license to the ADP T & A Software; provided however, that
ADP recognizes and agrees that ADP's license to ADP T & A Software for
its own internal business and employees shall be subject to Kronos'
standard "shrink wrap" license agreement and Kronos shall receive
payments for such licenses and purchases of Hardware in accordance with
the prices set forth in Exhibits B, B-1, and B-2 and C, C-1 and C-2 for
each license of a copy of ADP T & A Software or purchase of Hardware.
(b) Subject to Sections 2, 5, 6, 14 and 15(a) hereof, Kronos hereby also grants
to ADP the right to provide, at any time during the term of this Restated
Agreement (and, subject to Section 14 herein, after the term of this
Restated Agreement), a Sublicense to any person or entity in accordance
with the provisions of this Restated Agreement. Such person or entity, when
so Sublicensed by ADP to use the ADP T & A Software, shall be considered a
"Sublicensee". Such Sublicenses may convey an Object Code license to the
Sublicensees, but in no event shall any such Sublicense convey a Source
Code license to a Sublicensee. In connection therewith, ADP shall deliver a
copy of the ADP T & A Software or any part thereof to any such Sublicensee
only pursuant to a "shrink wrap" license agreement substantially in the
form of Annex I attached hereto. ADP shall report in writing to Kronos any
breach of the terms of the shrink wrap license known by ADP. ADP agrees to
take all reasonable steps to enforce the terms of the shrink-wrap license
and shall cooperate with Kronos in enforcing its terms. If ADP itself uses
the ADP T & A Software on behalf of another person or entity, so such
person or entity receives the benefit of the use of such ADP T & A Software
without actually receiving a copy of such ADP T & A Software, each such
person or entity shall be a Sublicensee and ADP shall pay Kronos a separate
License Fee for each such person or entity, in the same manner as if such
Sublicensee received a copy, and any such use shall be subject to the Annex
I terms and conditions. As indicated in Section 14(i), in no event will any
termination of this Restated Agreement result in the termination of any
particular validly issued Sublicense which is already in existence at the
time of such termination. In no event shall ADP have the right to provide
the Kronos Software or Source Code (or any part thereof) to any Sublicensee
or to any other third party; provided however, that during the Pilot
described in Section 23 and until the completion of the items described in
Section 4(n), ADP shall have the right to sublicense WFC Software in
accordance with the terms of this Restated Agreement.
Subject to the terms and conditions of this Restated Agreement, Kronos
further grants to ADP: (i) the limited right to duplicate the ADP-ized TKC
Software and ADP-ized Lite Software (but not the ADP WFC
Software), provided that (a) any copy which results from
duplication, directly or indirectly through a third party, is
subject to the license fee requirements of Section 5; (b) all
costs of reproductions shall be borne by ADP; and (c) no later
than the tenth business day following the end of each month, ADP
shall submit to Kronos a report, certified and signed by the
comptroller of the ADP T & A division, which specifies all copies
shipped during such month of ADP-ized TKC Software, all copies
shipped of ADP-ized Lite Software, all copies of modules, all
version upgrades, all user upgrades, all platform upgrades and the
information required by Section 5 (b)(iii) and (iv); and
(ii) the right to copy, reproduce, modify and distribute the Materials
under ADP's name and service mark in connection with ADP's
marketing and/or support of Sublicensees, provided that copyright
notices are maintained in accordance with Section 3(b) herein; and
provided further that any modifications made by ADP are subject to
Section 14A. ADP may request, (and Kronos will reasonably consider
such request), to modify the Materials to ADP's specifications,
with any such modifications to be at ADP's expense.
(c) Kronos further grants to ADP for the term of this Restated Agreement a
worldwide, royalty-free and non-exclusive license (i) under any patents
owned or licensed by Kronos at any time during the term of this Restated
Agreement to the extent necessary to exercise any right or license granted
under this Restated Agreement and (ii) to combine the ADP T & A Software or
any part thereof with any data collection equipment or other Scheduling or
Time and Attendance software; provided however that ADP shall not combine
the ADP T & A Software with any non-Kronos data collection equipment
without the prior written consent of Kronos; and provided further that in
the event that ADP desires to combine the ADP T & A Software with
non-Kronos data collection equipment, which is materially different from,
and not competitive with, any data collection equipment then being sold by
Kronos, ADP shall first request that Kronos develop equipment equivalent to
such non-Kronos equipment; if Kronos declines to develop such equipment,
Kronos shall not unreasonably withhold its consent for ADP to combine ADP T
& A Software with the desired non-Kronos data collection equipment and sell
such equipment to ADP Sublicensees. Subject to the requirements of the
following four sentences, Kronos hereby grants to ADP the right to combine
ADP T & A Software with the following items: telephone data collection
devices (comparable to TALX's system), swipe readers in which the computer
the swipe reader is attached to records the swipe, point of sale systems,
palm readers, scanners, portable hand-held data collectors, and personal
computers (hereafter collectively "Devices"); provided however, that such
portable hand-held collectors must be used in a mobile-type of application
i.e., not secured to a stationary object for operation. If ADP Sublicenses
ADP T & A Software for use with any Device (including Devices for which
Kronos has no comparable product) ADP did not purchase from Kronos, except
as set forth in Section 24, ADP shall pay Kronos a fee of twenty-five
dollars ($25.00) for each copy of such ADP T & A Software combined with one
or more Devices which ADP did not purchase from Kronos. The fee required
under the preceding sentence shall not apply if the End-User purchasing
such a Device also purchase at least one unit of Hardware (i.e., clock)
which is connected to such ADP T & A Software. Within thirty (30) days
after the end of each quarter, ADP shall submit to Kronos a report,
certified and signed by the comptroller of the ADP T & A division, stating
for such quarter the total number of copies of ADP T & A Software combined
with one or more Devices and requiring such fee. The applicable fee for
such quarter will accompany the report.
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
(d) Except as provided in Section 2(k), Kronos hereby covenants and agrees
that, during the term of this Restated Agreement, it will not in
**************, grant a Source Code or Object Code license to use
and/or modify the WFC Software and/or TKC Software or any part thereof
to any third person or entity which ************** ******** ********
******** ******** ******** ******** ******** ********. In addition,
during the term of this Restated Agreement, Kronos shall not, for
***********************************************************************
*************************************************************
******** ******** ******** ******** ******** ******** ******** ********
In addition, Kronos agrees that, until April 2, 2001, the restrictions
specified in this Section 2(d) and in Section 2(e) shall apply to
****************** *************************After April 2, 2001, such
restrictions shall not apply to
************************** ************************* ******************
**** ******** ******** ******** ****.
Furthermore, the restrictions in this Section 2(d) shall not apply to:
(i) Application Services Providers, **************************; (ii)
sales/licenses to employers of ninety-nine (99) or fewer employees (it
being understood that an employer with 99 or fewer employees at the
time of the sale/license as described in (ii) and (iii) of this Section
may grow above 99 employees subsequently) and (iii) sales/licenses to a
single employer of ninety-nine (99) or fewer employees which may be
part of a legal entity employing more than 99 employees if such single
employer is in a separate and distinct worksite and has the authority
to make the decision for the purchase of employer related services
independently at such worksite (as opposed to the decision being
required to be made centrally by such legal entity). Notwithstanding
anything to the contrary in this Restated Agreement, in accordance with
Section 7, Kronos shall not grant a Source Code or Object Code license
to the ADP-ized TKC Software or ADP-ized Lite Software to any person or
entity other than ADP; provided however, that to the extent such Source
Code is the same as Kronos Source Code, Kronos has full rights to use,
license and market such Kronos Source Code and Kronos' rights in such
Kronos Source Code shall not be restricted by this Restated
Agreement. The foregoing restriction shall survive the termination of
this Restated Agreement. Notwithstanding the foregoing, ADP agrees to
permit Kronos to enter a joint marketing agreement with Pentamation
Enterprises, Inc. ("Pentamation") and a joint marketing agreement with
Shared Medical Systems Corporation ("SMS") under the following terms:
(i) Kronos will not provide Source Code to Pentamation or SMS;
(ii) Kronos will not private label Kronos Hardware or Software for
Pentamation or SMS;
(iii) Kronos will be solely responsible for delivery, installation, warranty
and support obligations to the customer
for Kronos products;
(iv) Kronos will not make system modifications in TKC Software to
integrate TKC Software with Pentamation's or SMS' software. Kronos
may continue to market Kronos' standard interface and develop
enhancements to that interface, as long as the interface uses
Kronos' standard import/export capabilities;
(v) Kronos may provide custom software services upon the request of an
individual customer; and (vi) the agreements with Pentamation and SMS will
not affect ADP's Favored Customer status, as described in
Section 13 of this Restated Agreement.
(e) Except as provided in Section 2(k), Kronos further agrees that, during the
term of this Restated Agreement, for the United States and Canada, it will
not utilize the Software or any part thereof to allow Kronos or any
Subsidiary or Affiliate of Kronos to act as a service bureau to provide to
third parties Payroll Processing Services which would be competitive with
ADP's Payroll Processing Services; provided, however, that except as
otherwise provided in Section 2(d) and this Section 2(e), nothing contained
in this Restated Agreement shall act to restrict Kronos' right to otherwise
market any product or service including the Kronos Software. Kronos may
freely license the Kronos Software on any basis, except as otherwise
specifically prohibited or restricted in this Restated Agreement. The
restrictions in this Section 2(e) shall not apply to: (i) Application
Service Providers, unless their primary business is Payroll Processing
Services; (ii) sales/licenses to employers of ninety-nine (99) or fewer
employees (it being understood that an employer with 99 or fewer employees
at the time of the sale/license, as described in (ii) and (iii) of this
Section, may grow above 99 employees subsequently); and (iii)
sales/licenses to a single employer of ninety-nine (99) or fewer employees
which may be part of a legal entity employing more than 99 employees if
such single employer is in a separate and distinct worksite and has the
authority to make the decision for the purchase of employer related
services independently at such worksite (as opposed to the decision being
required to be made centrally by such legal entity).
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
ADP agrees that the provisions of this Restated Agreement, including
Sections 2(d) and 2(e), shall not prohibit
***********************************************************************
***********************************************************************
**************************************************************
******** ******** ********* ********* ********* ******** ******** ****
***** ********* ********* ********
******** ********* ********* ********* ********************************
*************************
**************************** ************ ************** ************ *
************
******************************************* **** **** ************ ***
* ************ **** ************ ****
************ **** ************ **** ************ **** ************
**** ************ **** ************
**** ************ **** ************ **** ************ **** *********
*** **** ************ **** ************
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
(f) Beginning on January 2, 2002, Kronos agrees that if, during the preceding
one year period: (i) the sales of any Kronos Time and Attendance or
Scheduling Software product line not licensed to ADP under this Restated
Agreement (except the Kronos software designed for use with the AS/400)
exceed ******************* ****************and/or
(ii) the engineering research and development costs associated with any
Kronos Time and Attendance or Scheduling software product line not
licensed to ADP under this Restated Agreement exceed
************************* and/or
(iii) the sales of the Kronos software product designed for use with the
AS/400 exceed ****************** of
Kronos' total software sales;
Kronos will, within three (3) months thereafter, either offer the
product which meets the standard specified in Section 2(f)(i), (ii) or
(iii), as applicable, to ADP for Sublicensing under this Restated
Agreement (the pricing of such product to be within five percent (5%)
of the percentage discount applicable to ADP WFC Software hereunder and
any other terms and conditions comparable to those applicable to ADP
<PAGE>
WFC Software to be subject to good faith negotiation by both parties)
or refuse to offer such product to ADP. In the event Kronos refuses to
offer such product to ADP, ADP shall no longer be subject to the
requirements of Section 2(g) (except for the last three sentences) and
Kronos shall no longer be subject to the requirements of Section 2(d)
and 2(e) (except for the proviso contained in the first sentence of
Section 2(e) and except for the second sentence of 2(e)). Kronos agrees
to make the determination required hereunder beginning on January 2,
2002, and to make another similar determination every six months
thereafter (i.e. on July 2, 2002, January 2, 2003, etc.) during the
term of this Restated Agreement, for the applicable preceding one year
period.
In addition, Kronos agrees that if, by January 2002, WFC Software is
not Web-enabled (i.e. does not provide substantially equivalent user
functionality in the product via the Web) Kronos will offer the Kronos
software product designed for use with the AS/400 to ADP for
Sublicensing under this Restated Agreement (the pricing of such product
to be within five percent (5%) of the percentage discount applicable to
ADP WFC Software hereunder and any other terms and conditions
comparable to those applicable to WFC Software to be subject to good
faith negotiation by both parties).
(g) Except as provided in Section 2(k), Section 2(l) and except as provided in
the following sentence, ADP hereby covenants and agrees that during the
term of this Restated Agreement, it will not acquire or enter into any
joint venture or joint marketing agreement or similar arrangement with any
third party for the purpose of developing, marketing, and/or manufacturing
Time and Attendance or Scheduling software or hardware. Kronos agrees that
ADP may enter a joint venture or joint marketing agreement or similar
arrangement with, or acquire, a third party developing, marketing or
manufacturing Time and Attendance or Scheduling software or hardware, so
long as (i) such agreement or acquisition is limited to sales/licenses into
countries other than the United States or Canada; provided however, that
prior to entering any agreement or acquisition for sales/licenses in
Australia, Mexico and/or Brazil, ADP agrees to reasonably consider Kronos
Software and Hardware; or, (ii) such agreement or acquisition concerns Time
and Attendance or Scheduling software (not hardware) and such Time and
Attendance or Scheduling software does not compete with Kronos products; or
(iii) such agreement was for acquiring TRM; or (iv) such agreement or
acquisition is for Time and Attendance or Scheduling products or services
sold/marketed/licensed solely by the Emerging Business Services Division of
ADP, which Emerging Business Services Division and any successor division
or subdivision thereof, shall be limited to the sale of ADP Services to (a)
a single employer of ninety-nine (99) or fewer employees which may be part
of a legal entity employing more than 99 employees if such single employer
is in a separate and distinct worksite and has the authority to make the
decision for the purchase of employer related services independently at
such worksite (as opposed to the decision being required to be made
centrally by such legal entity), and (b) employers of ninety-nine (99) or
fewer employees ("the EBS Division") (it being understood, in either case,
that an employer of ninety-nine (99) or fewer employees may grow above
ninety-nine (99) employees and be transferred to another ADP division) and
not sold/marketed/licensed by any other division or part of ADP; or (v) an
acquisition by ADP of Time and Attendance and/or Scheduling
products/services was solely as part of another acquisition by ADP of which
neither Time and Attendance nor Scheduling was the primary business and ADP
sells/shuts down the Time and Attendance and Scheduling hardware, software
and other products, customer base, related services and all other parts of
such Time and Attendance and Scheduling business within one (1) year after
such acquisition; provided that within such one year period, ADP shall be
permitted to sell/sublicense such Time and Attendance and/or Scheduling
products or services only through the sales force of the acquired entity
(and no other ADP sales person shall sell/sublicense or receive any
compensation/credit for, such products or services), and after such one
year period, ADP shall be permitted to provide support to the Time and
Attendance and/or Scheduling customer base of the acquisition so long as
ADP makes best efforts to convert the installed base customers to ADP T & A
Software and Hardware. ADP further agrees that, during the term of this
Restated Agreement, it will not develop, other than pursuant to this
Restated Agreement, (which Restated Agreement shall be deemed to permit
internal ADP development of TRM Software or development of TRM Software by
its consultants; provided however, that such consultants shall not be in
the business of Time and Attendance or Scheduling), any Time and Attendance
or Scheduling software or hardware which shall compete with Kronos
products. The parties agree that, for purposes of the two preceding
sentences, the following shall not be deemed to compete with Kronos
products: (i) software which allows businesses to collect employees' time
worked by client/activity for the purpose of generating bills/invoices,
(ii) electronic capture of employees' time where processing is limited to
basic arithmetic (i.e., subtracting start/stop times and adding totals
across activities or days); provided however, that this exception shall not
include any if/then type logic, such as rounding, overtime calculations,
premium calculations, etc. and (iii) software or hardware
sold/marketed/licensed solely by the EBS Division for sale/licensing to
employers of ninety-nine (99) employees or fewer (as described above in
this Section 2(g)). If ADP believes that the exception in clause (i) or
(ii) of the preceding sentence applies, ADP shall provide Kronos with the
name of the product's vendor at least sixty (60) days in advance of the use
of such product. In addition, ADP will not combine Hardware with any
non-ADP T & A Software without the prior written consent of Kronos;
provided further that in the event that ADP desires to combine Hardware
with non-ADP T & A Software, which is materially different from, and not
competitive with, any software then being sold/licensed by Kronos, ADP
shall first request that Kronos develop software substantially equivalent
to such non-ADP T & A Software; if Kronos declines to develop such
software, Kronos shall not unreasonably withhold its consent for ADP to
combine the desired software with Hardware and sublicense such software.
Notwithstanding the foregoing sentence, Kronos agrees to permit ADP to
combine TRM Software with Hardware. For software which ADP licenses/markets
through the EBS Division to entities with ninety-nine (99) or fewer
employees, ADP agrees to reasonably consider selling Kronos Hardware for
use with such software, so long as such Hardware is at a price and with
features and functionality equivalent to what is otherwise commercially
available; provided however, that if ADP does not choose to sell Kronos
Hardware with such software, Kronos agrees that Kronos Hardware which was
purchased for use in conjunction with ADP-ized Lite Software may be used in
conjunction with such software.
(h) Subject to Sections 2(j), 2(m) and 15(a) hereof, ADP shall determine in
its sole discretion and from time to time hereafter the fees it will
charge for the ADP T & A Services and the degree of effort to be
expended by ADP in support, promotion and marketing of the ADP T & A
Software or any part thereof; provided however, that ADP agrees to make
a good faith effort to support, promote and market the ADP T & A
Software. Nothing in this Restated Agreement shall prevent ADP at any
time hereafter from re-pricing (for purposes of Sublicensing to ADP
Clients) the ADP T & A Software or any part thereof.
(i) The obligations and rights of Kronos specified in Section 2 of this
Restated Agreement shall be deemed to apply to each Kronos "Subsidiary"
and "Affiliate", as "Subsidiary" and "Affiliate" are defined in this
Restated Agreement. The obligations and rights of ADP shall be deemed
to apply to each ADP "Subsidiary" and "Affiliate", as "Subsidiary" and
"Affiliate" are defined in this Restated Agreement.
(j) ADP shall purchase a minimum of the following units of Kronos Hardware
and ADP T & A Software during the applicable time periods:
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
<TABLE>
<CAPTION>
Kronos Product Kronos' FY '98 Kronos' FY '99 Kronos' FY `00 Kronos' FY '01 Cumulative Unit
(10/1/97 to 9/30/98) (10/1/98 to 9/30/99) (10/1/99 to (10/1/00 to Purchase Total
9/30/00) 4/2/01)
----------------------- ----------------------- -------------------- ------------------- -----------------
<S> <C> <C> <C> <C> <C>
Hardware ............... ******** ******** ******** ******** ********
ADP T & A Software ...... ******** ******** ******** ******** ********
</TABLE>
It is understood and agreed that ADP shall be required to purchase the
applicable number of units of Hardware and ADP T & A Software during
the time periods specified above, until ADP has purchased the
applicable Cumulative Unit Purchase Total specified above. Once ADP has
purchased such Cumulative Unit Purchase Total, no further minimum
purchase requirements shall apply, except when Section 2(m) is
applicable. If ADP does not purchase the minimum specified above during
the applicable time periods, ADP shall be required to purchase the
difference between the minimum specified and its actual purchases,
within 30 days following the end of the applicable time period.
(k)
***********************************************************************
**************************
**************************. On or within ten (10) days following July
2, 2001, Kronos may notify ADP in writing that Kronos no longer desires
to permit the National Account Sales Force to Sublicense WFC Software
and ADP WFC Software. ************ **************************
**************
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
(i) the provisions of Section 2(d), 2(e) (except for the proviso
contained in the first sentence of Section 2(e) and except for the
second sentence of Section 2(e)), and Section 2 (g) (except for
the last three sentences) shall no longer be of any force and
effect;
(ii) the provisions of Section 2(m) shall go into effect, ******************
****** *************
(iii) the National Account Sales Force shall no longer be permitted to
Sublicense (i.e. shall not receive training or receive any payment for
Sublicensing) WFC Software and/or ADP WFC Software and accompanying
Hardware
and/or services;
(iv) ADP shall not provide or permit compensation/credit (including,
but not limited to, commissions and/or roll call or quota credit)
to any member of the National Account Sales Force for generating a
sales lead or sales referral for WFC Software and/or ADP WFC
Software and accompanying Hardware and services, unless such sales
lead/referral is for an employer of one thousand or fewer
employees; and
(v) Kronos will continue to license to ADP and permit the Sublicense
of, only ADP WFC Software for one thousand or fewer employees.
(l) Except as otherwise specifically prohibited or restricted in this Restated
Agreement, nothing in this Restated Agreement shall act to restrict Kronos'
right to market any product or service, including the Kronos Software, and
Kronos may freely license such Kronos Software on any basis. In addition,
Kronos shall at its sole discretion determine whether and under what terms
and conditions (including, but not limited to, requirements for minimums)
Kronos would be willing to license ADP WFC Software to ADP for Sublicensing
by the National Account Sales Force, on a non-exclusive basis, after July
2, 2001, but Kronos shall be under no obligation to do so. If, on or within
ten (10) days following July 2, 2001, neither party provides the other
party with the written notice described in the first two sentences of
Section 2(k), the provisions of Sections 2(d), (e) and (g) shall remain in
full force and effect. For TRM Software only, and only after April 3, 2001,
ADP shall be permitted to acquire or enter into a joint venture, joint
marketing agreement or similar arrangement with any third party developing,
marketing or manufacturing Scheduling software, so long as such third party
does not develop, market, and/or manufacture Time and Attendance software,
hardware or services; provided however, that if such third party does
develop, market and/or manufacture Time and Attendance software, hardware
or services, Kronos agrees to permit ADP to acquire such third party only
if Time and Attendance is not a primary part of its business and only if
ADP sells/shuts down the Time and Attendance products, customer base,
related services, and all other parts of such business within one (1) year
after such acquisition; and provided further that within such one year
period, ADP shall be permitted to sell/sublicense such third party Time and
Attendance products and/or services only through the sales force of the
acquired entity (and no other ADP sales person shall sell/sublicense or
receive any compensation/credit for, such products or services), and after
such one year period, ADP shall be permitted to support the Time and
Attendance customer base of the acquired third party so long as ADP makes
best efforts to convert such installed base customers to ADP T & A
Software. The preceding sentence does not alter any of ADP's obligations
concerning Hardware or Software under this Restated Agreement, including
Section 2(g).
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
(m) In the Event that ****************************************************,
************** ****************** ******** ADP shall, during the following
time periods ("Time Periods"), purchase from Kronos the following net
minimum amounts (with respect to a Time Period, a "Period Purchase Total"
and cumulatively, a "Cumulative Purchase Total") attributable to ADP T & A
Software (excluding ADP-ized Lite Software) and Hardware (excluding
Hardware used in conjunction with ADP-ized Lite Software):
PERIOD PURCHASE TOTAL CUMULATIVE PURCHASE TOTAL
TIME PERIOD
-------------------------------------- ----------------------- --------------
July 1, 2001 to September 30, 2002 ******** ********
October 1, 2002 to September 30, 2003 ******** ********
October 1, 2003 to April 2, 2004 ******** ********
Revenue obtained by Kronos from ADP attributable to any other items,
including, but not limited to, services, custom software, ADP-ization
pursuant to Section 4(n), or ADP's obligations under Section 4(b) and
4(j), shall not be counted toward the minimums specified above. All
credits (including Reissues) shall be subtracted prior to determining
the amount purchased/licensed. If the applicable revenue from ADP
attributable to ADP T & A Software (excluding ADP-ized Lite Software)
and Hardware (excluding Hardware used in conjunction with ADP-ized Lite
Software) in any Time Period is less than the amount of the Period
Purchase Total for such Time Period, within 30 days after the end of
such Time Period, ADP shall purchase ADP T & A Software (excluding
ADP-ized Lite Software) and/or Hardware (excluding Hardware used in
conjunction with ADP-ized Lite Software) in such amount as shall be
sufficient to make up the revenue shortfall for such Time Period and,
for purposes of measuring ADP's purchasing obligations under the
minimums set forth in this Section 2(m), such purchase shall be deemed
to have been made during such Time Period. If for any Time Period the
applicable revenue from ADP shall exceed the Period Purchase Total for
such Time Period, such excess revenue in an amount up to 25% of the
Period Purchase Total (i.e. not 25% of the actual amount purchased) for
such Time Period shall be deemed, for purposes of measuring ADP's
purchasing obligations under the minimums set forth in this Section
2(m), to have been made in the following Time Period. For example, if
the applicable revenue from ADP from July 1, 2001 to September 30, 2002
is ******** ADP will have satisfied its Period Purchase Total of
******** for that Time Period, and 25% of that ******** Period Purchase
Total (i.e. ********) may be counted toward the Period Purchase Total
for the next Time Period (i.e. October 1, 2002 to September 30, 2003).
<PAGE>
If ADP is subject to the minimums specified in this Section 2(m),
Kronos agrees that, beginning on April 3, 2004 and ending on April 2,
2005, to permit ADP to exchange units of ADP T & A Software for a later
version of such ADP T & A Software, subject to the following
requirements: (i) the number of units of ADP T & A Software Units
exchanged by ADP can be no greater than the number of the same type of
ADP T & A Software units purchased/licensed by ADP from Kronos and
shipped to an ADP Client within the 12 months preceding April 3, 2004;
and (ii) any unit exchanged can be exchanged only for a later
equivalent version of the same type of ADP T & A Software (e.g.,
ADP-ized TKC for ADP-ized TKC, ADP WFC for ADP WFC, etc.) and for the
same number of users and employees; (iii) the unit proposed to be
exchanged must have been ordered by ADP before May 2, 2004, and Kronos
must have been paid by ADP for it; (iv) the restrictions applicable to
the National Account Sales Force in Section 2(k)(iii) and (iv) shall
remain in effect as to the exchanged units; and (v) Kronos will provide
ADP with updates to the Materials and/or replacement documentation, if
any, for any exchanged unit, in each case to reflect changes which were
made by the incorporation of Bug-fixes; provided however that this
subsection shall not imply any obligation of Kronos to provide
Bug-fixes after the termination or expiration of this Restated
Agreement.
3. Title, Ownership and Use of Kronos Software.
(a) Title to and ownership of the Kronos Software shall at all times remain
with Kronos and Kronos may use the Kronos Software in any manner it
chooses without having to account to ADP, subject, however, to the
restrictions set forth in Sections 2(d) and 2(e).
(b) Notwithstanding anything to the contrary contained herein, ADP shall
include Kronos' copyright notice on the inside cover or title page of each
volume of the Materials and on the user's log-on screen. Except as
otherwise indicated in the preceding sentence, ADP shall not be required to
use or include Kronos' name, trademarks or service marks in connection with
ADP's use or sublicensing of the ADP T & A Software and/or the Materials,
although ADP shall have the right in its discretion to use such name or
marks; provided however, that any such use in written material distributed
outside of ADP shall be subject to the prior written consent of Kronos and
shall comply with legal requirements for proper trademark and service mark
usage and protection against mark dilution.
(c) Kronos shall use commercially reasonable standards in determining
whether to enforce its rights against all infringers of its copyrights
in the Software and/or the Materials. A failure of Kronos to so enforce
its rights against any infringer of such copyrights within a reasonable
period of time after appropriate notification, which failure results or
is likely to result in a material loss of value of the licenses and
rights granted to ADP herein, shall be deemed to be an Event of Default
for purposes of Section 14(b).
(d) Subject to Section 3(a), Kronos retains sole ownership, title, and
rights in the Kronos Software, as it presently exists or as it is
developed by Kronos in the future.
(e) In the event Kronos elects to provide any beta software releases to ADP,
such beta software will be provided for a limited test period only and is
subject to the Annex I terms and conditions, except that ADP shall not be
required to pay a licensing fee for such beta software. Any such beta
software is to be used for evaluation and testing purposes only and may be
Sublicensed to ADP Clients only for evaluation and testing purposes and
only if the Sublicensee acknowledges in writing that such beta software is
pre-release software and may contain bugs. In addition, ADP acknowledges,
and any Sublicensee must acknowledge in writing, the following: ADP AND ITS
THIRD PARTY LICENSORS (INCLUDING KRONOS) DO NOT PROVIDE ANY WARRANTY,
EXPRESS OR IMPLIED, ON SUCH BETA SOFTWARE. IN NO EVENT WILL ADP OR KRONOS
BE LIABLE FOR ANY DAMAGES, INCLUDING LOST PROFITS OR ANY SPECIAL, INDIRECT
, INCIDENTAL OR CONSEQUENTIAL DAMAGES, ARISING OUT OF THE USE OR THE
INABILITY TO USE THE BETA SOFTWARE, WHETHER CLAIMED UNDER THIS RESTATED
AGREEMENT OR OTHERWISE. In addition, at the end of the specified test
period, all beta software (and all copies thereof) will be returned to
Kronos by ADP or will be destroyed by ADP and ADP shall provide Kronos
written certification of such destruction, signed by an authorized officer
of ADP.
4. Software, Maintenance and Support Obligations; Training.
For TKC Software and Lite Software
(a) For as long as Kronos continues to license and support the comparable
(as to version and type) TKC Software and Lite Software, subject to
section 4(g), Kronos shall provide to ADP, at no further charge in
excess of the amounts specified on Exhibits C and C-1 and in Section
4(b), the following maintenance and support services for the ADP-ized
TKC Software and the ADP-ized Lite Software; provided however, that
support for the ADP Features shall be as specified in Section 4(d) and
support for new modules not listed on Exhibit C at the time of signing
of the Restated Agreement shall be as specified in Section 4(c)
("Software Maintenance Services"):
(i) diagnosing and correcting Bugs; provided however, that Kronos
reserves the right to correct any such Bug via a workaround and/or
to correct any Bug through an enhancement or update provided under
Section 4(a)(iii) and it shall be ADP's obligation to supply such
update or enhancement to its customers; and provided further, that
in diagnosing and correcting Bugs in the ADP-ized TKC Software and
ADP-ized Lite Software, Kronos shall provide such fixes or such
workarounds, enhancements or updates using the same criteria and
priorities with regard to diagnosing and correcting Bugs,
including the selection of the means of correction, as Kronos uses
for the comparable (as to version and type) TKC Software and Lite
Software;
(ii) providing ADP with updates to the Materials and/or providing ADP
with replacement documentation, in each case to reflect changes
which were made by the incorporation of Bug-fixes and/or other
corrections; provided however, that ADP may request, (and Kronos
will reasonably consider such request) to modify the Materials to
ADP's specifications, with any such modification to be at ADP's
expense; and
(iii) providing ADP with any enhancements or updates, to the extent such
enhancements or updates are released by Kronos as part of the
Timekeeper Central Software or Lite Software product line;
provided however, that for upgrades which increase the number of
users and/or the number of employees, the upgrade fees shall be as
specified in Exhibit C.
For two years after Kronos discontinues licensing the comparable
(as to version and type) TKC Software and Lite Software, or for as
long as Kronos continues to support the comparable (as to version
and type) TKC Software, whichever is longer, (but only during the
term of this Restated Agreement), Kronos' obligations under this
Section 4(a) will continue. Thereafter, Kronos shall have no
further license or support obligations.
(b) Beginning on April 1, 2001, ADP agrees to pay Kronos, at the end of each
quarter during the term of this Restated Agreement, the actual cost
(including salary and benefits) of the equivalent of two full-time Kronos
employees to provide dedicated phone support for the ADP-ized TKC Software
and ADP-ized Lite Software during that quarter. The parties agree that if
ADP's use of such support exceeds the level provided by such two employees,
ADP and Kronos will reasonably agree to add additional employees, at ADP's
expense. If ADP's use of such support decreases below a level requiring the
equivalent of two full-time employees dedicated to such support, ADP and
Kronos will reasonably agree to reduce the amount of such support and the
cost of such support shall be reduced accordingly. The support employees
shall be assigned to support telephone inquiries from a central ADP help
desk concerning ADP-ized TKC Software and ADP-ized Lite Software. Such
technical support team shall be available during Kronos' standard support
hours, exclusive of Kronos holidays. For Kronos holidays, Kronos' technical
support team shall be available in accordance with Kronos' standard holiday
coverage. The Kronos technical support team shall not respond to any
inquiries from ADP other than those received from ADP's central help desk.
(c) The parties recognize and agree that, during the term of the Original
Agreement, Kronos provided the following features and services for the
ADP-ized TKC Software:
(i) enabling ADP-ized TKC Software to communicate with ADP's blue
timeclocks/terminals; (ii) providing for automatic import of employees into the
ADP-ized TKC Software database from ADP payroll
processing products;
(iii) incorporating the payroll interface utility developed by ADP into ADP-ized
TKC Software; (iv) making changes in text for the TKC Software and DCM including
replacing "Kronos" with "ADP", replacing
"Timekeeper Central" with "e-Time", replacing "CardSaver(R)" with
"CardTracker", replacing "Database Poster" with "DataPoster";
replacing "Timekeeper(R) terminals" with "timeclocks"; and
removing "Kronos" before the words "Accruals", "Archiver",
"Scheduler" and "Messaging";
(v) modifying the DKPARM's (or any methodology which substitutes for
DKPARM's and is used to implement licensing
levels) to support only four licensing levels;
(vi) deleting certain items in the Kronos help menus;
(vii) adding a "click-wrap" software license in ADP-ized TKC Software
Version 4.0 to enable the Sublicensee to accept the software
license before using the software; and
(viii) conducting quality assurance testing on the ADP-ized TKC Software prior
to releasing it to ADP.
Kronos agrees that, for any future releases of ADP-ized TKC Software
provided to ADP under this Restated Agreement, Kronos will continue to
include the features and services described in this Section 4(c);
provided however, that for any new modules (i.e. modules other than
those listed on Exhibit C at the time of signing of the Restated
Agreement), Kronos will perform the services listed in Section 4(c)(i),
(ii), (iii), (v), (vii) and (viii) to enable such new module to work in
conjunction with the ADP-ized TKC Software but will not perform the
services listed in Section 4(c)(iv) and (vi) within the new module. If
the new module does not work with Kronos' non-ADP timeclocks, Kronos
shall not be required to perform the service listed in Section 4(c)(i)
for such new module.
(d) If Kronos makes a change in the TKC Software which makes an ADP Feature (as
defined in Section 6(b)) unable to perform the functions it performed prior
to such change, Kronos agrees to provide ADP with consulting assistance,
promptly upon ADP's written request, free of charge, to restore the prior
functionality. If ADP makes a change in an ADP Feature which makes it
unable to perform the functions it performed with ADP-ized TKC Software
prior to such change, and ADP requests assistance from Kronos to correct
such deficiency, or ADP adds a new Device or Interface, pursuant to Section
4(h), and requests Kronos' assistance to make such new Device or Interface
work in conjunction with the ADP-ized TKC Software, Kronos agrees to
provide such consulting assistance at Kronos' then effective rates,
promptly upon ADP's written request.
(e) If ADP requests new features or development for Software, such requests
shall be subject to the requirements of Section 7.
(f) ADP shall direct to the applicable third party all requests for
support, modification and/or enhancement of third party software used
in conjunction with the TKC Software, ADP-ized TKC Software or the Lite
Software and ADP-ized Lite Software, but not embedded within such
Software or resold/sublicensed to ADP by Kronos hereunder, and Kronos
shall not be responsible for such support.
(g) Notwithstanding the provisions of 4(a)-(f) or any other provision of
this Restated Agreement, if ADP pays Kronos for fewer than 2000 units
of ADP-ized Lite Software in any Kronos fiscal year, Kronos shall be
relieved of all its responsibilities under this Restated Agreement for
Lite Software, and for ADP-ized Lite Software, unless ADP pays Kronos
within thirty (30) days after the end of the applicable fiscal year, an
amount equal to the difference between $250,000 and the actual amounts
already paid to Kronos in that year for ADP-ized Lite Software.
ADP-ized Lite Software units which were Reissued pursuant to Section
5(b) shall not count toward the 2000 unit purchase requirement.
(h) To enable ADP: (i) to interface, for the purposes specified below,
ADP-ized TKC Software to "Devices" as defined in Section 2 of this
Restated Agreement; and (ii) to create interfaces between ADP-ized TKC
Software and any ADP or third party products or services ("TKC
Interfaces") , Kronos agrees to provide, within the ADP-ized TKC
Software, without requiring Sublicensees to manually invoke an ADP-ized
TKC import/export function the following:
a. the capability to import/export ADP-ized TKC employee
definition data to/from ADP-ized TKC Software to/from TKC
Interfaces by executing an import/export procedure which
validates and migrates such data to/from the ADP-ized TKC
Software; provided however, that this capability is subject to
the TKC Interface having saved/retrieved such data in a form
and location specified by Kronos in its standard TKC Software
product documentation;
b. the capability to import/export accruals balances data to/from
TKC Interfaces to ADP-ized TKC Software through an
import/export procedure which validates and migrates such data
to/from the ADP-ized TKC Software; provided however, that this
capability is subject to the TKC Interfaces having
saved/retrieved such data in a form and location specified by
Kronos in its standard TKC Software product documentation;
c. the capability to add through import from Devices and/or TKC
Interfaces, as applicable, punches and paycode edits to
current and previous pay periods which have not yet been
signed off or locked; provided however, that this capability
is subject to the Device and/or TKC Interface, as applicable,
having saved such punches and paycode edits in a form and
location specified by Kronos in its standard TKC Software
product documentation;
d. the employee payroll information consisting of totals by day, by week, by
pay period, by labor account, by pay code and by employee shall be
available for extraction from ADP-ized TKC Software by Devices or TKC
Interfaces, as applicable;
e. the employees' In and Out punches, actual and as interpreted/rounded by the
ADP-ized TKC Software, shall be available for extraction from ADP-ized TKC
Software by Devices or TKC Interfaces, as applicable;
f. the employees' Pay Code Edits, actual and as interpreted by the totalizer,
shall be available for extraction from ADP-ized TKC Software by Devices or
TKC Interfaces, as applicable;
g. the list of labor level entries, set-up information (e.g. descriptions,
lengths of fields, etc.) and validated accounts shall be available for
import/extraction by Devices or TKC Interfaces, as applicable, to/from the
ADP-ized TKC Software, with such lists to be capable of being
imported/extracted for a defined labor level, as specified by Kronos in its
standard TKC Software product documentation.
h. the capability to import/export schedule data, as specified by Kronos in
its standard TKC Software product documentation.
In addition, during the term of this Restated Agreement, if ADP
provides Kronos with written notice that, notwithstanding the
capabilities within the ADP-ized TKC Software in Section 4(h) a.-h.,
ADP is unable to proceed with interfacing ADP-ized TKC Software to a
Device (as defined in Section 2 of this Restated Agreement) or is
unable to create a TKC Interface to ADP's Payroll Processing or ADP's
Human Resources Processing Services (but not to any other product or
service), Kronos agrees to supply ADP with the additional information
Kronos reasonably believes is required to enable ADP to proceed in a
reasonable manner, subject to Section 4(d).
For WFC Software
(i) Kronos agrees to provide the following support/maintenance services for
the WFC Software until the completion of the items specified in Section
4(n), and thereafter, for the ADP WFC Software, subject to ADP's
payment of the fees specified in Sections 4(j) and 5(a)(iv), and for as
long as Kronos continues to license and support the comparable (as to
version and type) WFC Software:
a. diagnosing and correcting Bugs; provided however, that Kronos
reserves the right to correct any Bug via a workaround and/or
to correct any Bug through an enhancement or update provided
under Section 4(i)(c), and it shall be ADP's obligation to
supply such update or enhancement to its customers; and
provided further that in diagnosing and correcting Bugs in the
ADP WFC Software, Kronos shall provide such fixes or such
workarounds, enhancements or updates using the same criteria
and priorities with regard to diagnosing and correcting Bugs,
including the selection of the means of correction, as Kronos
uses for the comparable (as to version and type) WFC Software.
b. providing ADP with updates to the Materials and/or providing
ADP with replacement documentation in each case to reflect
changes which were made by the incorporation of Bug-fixes
and/or other corrections; provided however, that ADP may
request, (and Kronos will reasonably consider such request) to
modify the Materials to ADP's specifications, with any such
modifications to be at ADP's expense; and
c. providing ADP with any enhancements or updates to the extent
such enhancements or updates are released by Kronos as part of
the WorkForce Central Suite product line; provided however,
that for upgrades which increase the number of users and/or
the number of employees, ADP shall pay the difference as
specified on Exhibit C-2.
(j) ADP agrees to pay Kronos, at the end of each quarter during the term of
this Restated Agreement, the actual cost (including salary and benefits) of
the equivalent of up to a maximum of two full-time Kronos employees to
provide dedicated phone support for the ADP WFC Software during that
quarter. The parties agree that if ADP's use of such support exceeds the
level provided by such two employees, ADP and Kronos will reasonably agree
to add additional employees, at ADP's expense. If ADP's use of such support
decreases below a level requiring the equivalent of two full-time employees
dedicated to such support, ADP and Kronos will reasonably agree to reduce
the amount of such support and the cost of such support shall be reduced
accordingly. The support employees shall be assigned to support telephone
inquiries from a central ADP help desk concerning ADP WFC Software and
shall be subject to the same restrictions specified in the last three
sentences of Section 4(b).
(k) ADP shall direct to the applicable third party all requests for
support, modification and/or enhancement of third party software used
in conjunction with the WFC Software and the ADP WFC Software, but not
embedded within such WFC Software or ADP WFC Software or
resold/sublicensed to ADP by Kronos hereunder, and Kronos shall not be
responsible for such support.
(l) If ADP requests new features or development for Software, such requests
shall be subject to the requirements of Section 7.
(m) To enable ADP: (i) to interface, for the purposes specified below, ADP
WFC Software to "Devices" as defined in Section 2 of this Restated
Agreement; and (ii) to create interfaces between ADP WFC Software and
any ADP or third party products or services ("WFC Interfaces"), Kronos
agrees to provide, within the ADP WFC Software, without requiring
Sublicensees to manually invoke a WFC Software import/export function
(except in the case of Smart Scheduler (TM)), the following:
a. the capability to import WFC employee definition data to WFC
Software from WFC Interfaces by executing an import procedure
which validates and migrates such data to the WFC Software;
provided however, that this capability is subject to the WFC
Interface having saved such data in a form and location
specified by Kronos in its standard WFC Software product
documentation; and provided further that the WFC Software will
store such WFC employee definition data using standard SQL
accessible data mechanisms and the storage schema shall be as
specified in Kronos' standard WFC Software product
documentation.
b. the capability to import accruals balances data from WFC
Interfaces to WFC Software through an import procedure which
validates and migrates such data to the WFC Software; provided
however, that this capability is subject to the WFC Interface
having saved such data in a form and location specified by
Kronos in its standard WFC Software product documentation; and
provided further that the WFC Software will store such
accruals balances data using standard SQL accessible data
mechanisms and the storage schema shall be as specified in
Kronos' standard WFC Software product documentation and such
data will be stored at intervals as specified in Kronos'
standard WFC Software product documentation;
c. the capability to add through import from Devices and/or WFC
Interfaces, as applicable, punches and paycode edits to
current and previous pay periods which have not yet been
signed off or locked; provided however, that this capability
is subject to the Device and/or WFC Interface, as applicable,
having saved such punches and paycode edits in a form and
location specified by Kronos in its standard WFC Software
product documentation;
d. the employee payroll information consisting of totals by day,
by labor account, by pay code and by employee shall be
available for extraction from the WFC Software database by
Devices or WFC Interfaces, as applicable, by executing
standard SQL queries; and provided further, for summary data
(e.g. totals by week or by pay period), such summary data will
be available through standard SQL summing operations;
e. the employees' In and Out punches, actual and as interpreted/rounded by the
WFC Software, shall be available for extraction from the WFC Software
database by Devices or WFC Interfaces, as applicable;
f. the employees' Pay Code Edits, actual and as interpreted by the totalizer,
shall be available for extraction from the WFC Software database by Devices
or WFC Interfaces, as applicable;
g. the list of labor level entries shall be available for
extraction by Devices or WFC Interfaces, as applicable, from
the WFC Software database, with such lists to be capable of
being extracted for a defined labor level; and provided
further that labor level entries shall be capable of being
imported to WFC Software, as described in Kronos' standard WFC
Software product documentation;
h. the capability to extract schedule data, to the extent such
data is stored in the WFC Software database or the capability
to add through import from Devices and/or WFC Interfaces, as
applicable, schedules; provided however that this capability
is subject to the Device and/or WFC Interface, as applicable,
having saved such schedules in a form and location specified
by Kronos in its standard WFC Software product documentation.
In addition, during the term of this Restated Agreement, if ADP
provides Kronos with written notice that, notwithstanding the
capabilities within WFC Software in Section 4(m)a.-h., ADP is
unable to proceed with interfacing ADP WFC Software to a Device
(as defined in Section 2 of this Restated Agreement) or is unable
to create a WFC Interface to ADP's Payroll Processing or ADP's
Human Resources Processing Services, (but not to any other product
or service), Kronos agrees to supply ADP with the additional
information Kronos reasonably believes is required to enable ADP
to proceed in a reasonable manner and if ADP requests Kronos'
assistance to make such Device or Interface work in conjunction
with ADP WFC Software, Kronos agrees to provide such consulting
assistance at Kronos' then effective rates, promptly upon ADP's
written request.
(n) ADP has requested that Kronos make the following changes in the
Workforce Timekeeper, Workforce Accruals and Workforce Web modules of
WFC Software to "ADP-ize" it:
(i) enabling ADP WFC Software to communicate with ADP's blue
timeclocks/terminals;
(ii) for such modules of WFC Software and in the applicable
Documentation, replacing the Kronos company and product names and
logos with the ADP company and product names and logos, in the
text of the following: user interface, online help, dialog box
titles, error messages, pictures symbolizing the product, install
scripts, standard reports, Quick Tour and splash screens;
(iii) conducting quality assurance testing on such modules of the ADP WFC
Software prior to releasing it to ADP; and
(iv) for DCM, replacing the Kronos company and product names and logos, in
the text of the following: user
interface, online help, install scripts, and splash screens.
Kronos has agreed to provide the features and services described in
this Section 4(n); provided however, that such features and services
shall be completed on or before September 30, 2001 and shall be at
ADP's expense. Following the completion of the "ADP-ization" set forth
in this Section 4 (n), for any future releases of the Workforce
Timekeeper, Workforce Accruals and Workforce Web modules and DCM
provided to ADP under this Restated Agreement, Kronos will continue to
include the features and services described in clauses (i) to (iv) of
this Section 4 (n) at no additional cost to ADP; provided however, that
as to the name and logo changes in Documentation, ADP shall be required
to pay the cost of such changes for any such future releases. In
addition, if Kronos agrees to do any additional "ADP-ization" not
covered in clauses (i) to (iv) of this Section 4 (n), such additional
ADP-ization shall be at the expense of ADP. In addition, Kronos has
agreed that, for Version 3.3 of the Workforce Timekeeper module of WFC
Software, Kronos will make the following changes in Version 3.3 of the
Workforce Timekeeper module of WFC Software (including Accruals) to
"ADP-ize" it: replace the Kronos logo on the initial splash screen with
the ADP logo; in the logon screen, externalize the text and replace the
Kronos company and product names in the text with the ADP company and
product names and replace the Kronos logo bitmap graphic with the ADP
logo; in Help About, externalize the text and replace the Kronos
company and product names in the text with the ADP company and product
names and replace the Kronos logo bitmap graphic with the ADP logo;
enable Version 3.3 of Workforce Timekeeper module and DCM to
communicate with ADP blue timeclocks/terminals; and replace ADP company
and product names on the title/cover page of the WFC Software manuals
applicable to the Workforce Timekeeper, Workforce Accruals, and
Workforce Web modules. It is understood and agrees by the parties that
nothing in this Section 4 (n) shall require Kronos to "ADP-ize" the
following: WFC Software database names, tables, stored procedures data,
directory and filenames, error logs, audit trails, entity relationship
diagram (ERD), and Windows and NT registry keys. In addition, Kronos
has agreed to consider whether it is feasible to "ADP-ize" KDemo and,
if Kronos determines it is feasible, Kronos will provide ADP with a
cost to be paid by ADP and a timeframe for such ADP-ization.
Training
(o) Kronos shall provide ADP employees with access to standard Kronos
training classes on the Kronos Software and Hardware at rates
consistent with those charged by Kronos to other large customers. ADP
shall be responsible for all costs of such training, and of ADP
personnel during all training and technical assistance provided by
Kronos pursuant to this Restated Agreement, including, without
limitation, all wages, salaries and travel expenses.
(p) Kronos will cooperate with ADP's training department in the development
of training materials with respect to the Hardware and ADP T & A
Software, by providing to ADP, at no additional charge, one
camera-ready copy of all applicable Kronos prepared training materials
on TKC Software, WFC Software and Lite Software. Kronos shall also
supply ADP with one copy of such materials in electronic form, if
available. Alternatively, ADP may, at its option and its expense,
engage Kronos to modify the Kronos training materials to ADP's
specifications. The fee payable by ADP with respect to such
modifications shall be determined by the parties prior to the
commencement of any such modifications.
5. Payments to Kronos for Software and Support.
(a) In consideration of Kronos' (i) grant to ADP of the license and other
rights described in Section 2 herein, and (ii) as to ADP-ized TKC
Software and ADP-ized Lite Software, the provision of Software
Maintenance Services to ADP pursuant to Section 4(a) herein, and as to
the ADP WFC Software, the provision of the services pursuant to Section
4(i) herein, ADP shall pay to Kronos the following fees:
(i) For each Sublicense, subject to Sections 5(b) and 5(c), the
applicable per copy license fee set forth on Exhibits C, C-1 and
C-2 attached hereto ("License Fee") (such payments to be made by
the method described in Section 10(e) and orders to be placed for
ADP WFC Software by the same method described in Section 9(a)).
<PAGE>
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SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
(ii) The fees specified on Exhibit C for ADP-ized TKC Software shall remain in
effect for the applicable time periods specified therein, until April 2,
2002. Thereafter, such fees may increase by up to ********** annually, if
Kronos increases its list prices for TKC Software. The fees specified on
Exhibit C-2 shall remain in effect until July 1, 2001 but thereafter may be
increased by Kronos by up to ********** per year, if Kronos increases its
list prices for WFC Software. It is understood that if Kronos does not
increase the pricing for TKC Software in a certain year, or increases such
pricing by less than ********** in a certain year, Kronos may carry forward
the permitted increase to the following year(s), but in no event shall the
increase in any year exceed **********. For example, if Kronos does not
increase the pricing for TKC Software at all for the year from April 2,
2002 to April 1, 2003, Kronos shall be permitted to increase the pricing of
ADP-ized TKC Software by ********** in the year from April 2, 2003 to April
1, 2004, if Kronos increased its list prices for TKC Software by **********
or more in such year.
(iii)It is understood that although Teletime (Kronos software portion only),
Decisions(TM), Vision(TM), and Express(TM)modules are not currently listed
on Exhibit C, for any such modules and any future modules which are offered
by Kronos to its End-Users as part of the Timekeeper Central Software
Product line (except third party modules) and added to this Restated
Agreement in the future at ADP's request, the discount applicable to such
modules will be the same discount as the one reflected on Exhibit C-2. Any
future module not currently listed on Exhibit C-2 but released as part of
the WFC Software product suite (except third party modules) may be added to
Exhibit C-2 at ADP's request in the future and will be subject to the same
discount as modules currently listed on Exhibit C-2.
(iv) Six (6) months after Kronos ships to ADP the WFC Software or ADP WFC
Software, as applicable, ADP agrees to pay Kronos ************* of the
License Fee applicable to such WFC Software or ADP WFC Software for the
services described in Section 4(i); provided however, that such **********
shall be prorated to apply to the period beginning six (6) months after
shipment until the October 1 following such date. In addition, on October 1
of each year under this Restated Agreement, ADP agrees to pay Kronos an
annual maintenance fee equal to ********** of all ADP WFC Software License
Fees previously paid to Kronos and still in effect for the ADP WFC Software
installed base, regardless of when such Sublicenses were granted. For
purposes of the preceding sentence, any Sublicenses of WFC Software granted
by ADP prior to the completion of the items specified in Section 4(n) shall
be counted as ADP WFC Sublicenses.
(b) Reissuance
(i) Kronos has agreed to permit ADP to reissue certain Sublicenses,
without paying the additional License Fee required under Section
5(a)(i); provided, however, that any such Sublicensing is subject
to the limitations and restrictions in this Section 5(b). ADP
shall keep records to document each No Start and Termination Loss
to permit Kronos to verify, upon audit, that each Reissuance
corresponds to an actual No Start or Termination Loss for a
particular customer which occurred during the applicable period.
(ii) For purposes of this Section 5(b), the following terms shall have the
following meanings:
a. "No Start" shall mean a Sublicense to an ADP Client for which ADP has
already paid Kronos the
applicable License Fee but the Sublicensee has not paid ADP
any licensing fee applicable to the ADP T & A Software and the
ADP Sublicensee either:
1. Informs ADP that it will not permit the ADP T & A Software to be
installed; or
2. within six (6) months of the installation of the ADP WFC Software
(or in the case of the ADP-ized
TKC Software and the ADP-ized Lite Software, within three
(3) months of installation) the Sublicensee has not paid
ADP any licensing fee applicable to the ADP T & A Software,
and the Sublicensee notifies ADP that it is no longer using
the ADP T & A Software and all copies thereof. If ADP does
not receive this notice in writing from the Sublicensee,
ADP will provide written notification to the Sublicensee
that the Sublicensee no longer has rights to use the ADP T
& A Software and all copies thereof and will provide one
similar follow-up notification, if the Sublicensee does not
provide written notice to ADP that it is no longer using
the ADP T & A Software and all copies thereof in response
to the first notification.
b. "Termination Loss" shall mean that the Sublicensee had paid ADP a licensing
fee applicable to the ADP T & A Software, but has terminated its
arrangement with ADP to receive ADP T & A, is no longer paying ADP any
licensing fee applicable to the ADP T & A Software, and notifies ADP that
it is no longer using the ADP T & A Software and all copies thereof. If ADP
does not receive this notice in writing from the Sublicensee, ADP will
provide written notification to the Sublicensee that the Sublicensee no
longer has rights to use the ADP T & A Software and all copies thereof and
will provide one similar follow-up notification, if the Sublicensee does
not provide written notice to ADP that it is no longer using the ADP T & A
Software and all copies thereof in response to the first notification.
c. "Reissue" or "Reissuance" means ADP grants a Sublicense to a
new Sublicensee which corresponds to ADP T & A Software
constituting either a No Start or a Termination Loss. ADP is
entitled to receive a credit for certain Reissuances, subject
to the terms and conditions of this Section.
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
(iii)The provisions of this Section 5(b)(iii) apply only to ADP WFC Software.
During the period beginning upon the commencement of the Pilot described in
Section 23 and ending two (2) years later, ADP may Reissue Sublicenses and
Kronos shall grant ADP a credit against any applicable License Fees in an
amount equal to ************** *** *** *********************** occurring
during such period. In addition, for every No Start of ADP WFC Software
which occurs during such two year period, ADP may Reissue a Sublicense for,
and Kronos shall grant ADP a credit against any applicable License Fees for
the same dollar value contained in the original Sublicense. Within thirty
(30) days after the end of each quarter within the two year period, ADP
shall send a written report to Kronos certifying the number of Reissued
Sublicenses (specifying whether they are Termination Losses or No Starts)
and the corresponding dollar value of each such Reissued Sublicense and
original Sublicense during that quarter, including modules, employee and
user upgrades, and including information which separately identifies each
Termination Loss and No Start by an identifying number, such as an asset
number.
For each year after such two year period, ADP may Reissue
Sublicenses for Termination Losses up to ********** of the dollar
value of the new Sublicenses paid for within the preceding two
years, after subtracting all credits, and Kronos shall grant ADP a
credit against any applicable License Fees for that dollar value.
In addition, for every No Start which occurs within a year, ADP
may Reissue a Sublicense for, and Kronos shall grant ADP a credit
for, the same dollar value contained in the original Sublicense.
Within ten (10) business days after the end of each month, ADP
shall deliver a written report to Kronos certifying the number of
Reissued Sublicenses (specifying whether they are Termination
Losses or No Starts) and the corresponding dollar value of such
Reissued Sublicenses and original Sublicenses within that month,
including modules, employee and user upgrades, and including
information which separately identifies each Termination Loss and
No Start, by an identifying number, such as an asset number. In
addition, within thirty (30) days after the end of each year
during the term of this Restated Agreement, ADP agrees to deliver
to Kronos a report, certified and signed by an accounting officer
or controller of ADP, setting forth the information in the
preceding sentence, but instead covering that entire year.
Notwithstanding the foregoing, ADP agrees to pay Kronos for the
costs of duplication of any Reissued Sublicenses of ADP WFC
Software, since ADP is not permitted to duplicate the ADP WFC
Software.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
(iv) The provisions of this Section 5(b)(iv) apply only to ADP-ized TKC Software
and ADP-ized Lite Software, excluding modules. Modules of ADP-ized TKC
Software and ADP-ized Lite Software are not permitted to be Reissued. Until
April 1, 2001, the parties agree to follow their practice concerning
Reissuances which was in effect when this Restated Agreement was signed. On
April 1, 2001, the parties shall continue their practice concerning
Reissuances, as modified by this Section 5(b)(iv). ADP shall be entitled to
a prorated number of Reissuances for the period from April 1, 2001 until
October 1, 2001, based upon the Reissuances permitted under this Section
5(b)(iv). For each one (1) year period beginning on October 1, 2001, for
Termination Losses, ADP may Reissue and Kronos shall grant ADP a credit
against any applicable License Fees, for up to ********** ******* of the
total number of new Sublicenses to ADP Clients of ADP-ized TKC Software for
which ADP has paid Kronos the applicable License Fee during the preceding
two (2) years, after subtracting all credits. In addition, calculated
separately from ADP-ized TKC Software, for each one year period beginning
on October 1, 2001, for Termination Losses, ADP may Reissue, and Kronos
shall grant ADP a credit against any applicable License Fees, for up to
***************** of the total number of new Sublicenses to ADP Clients of
ADP-ized Lite Software for which ADP has paid Kronos the applicable License
Fee during the preceding two (2) years, after subtracting all credits. In
addition, for every No Start of ADP-ized TKC Software which occurs during
each one (1) year period beginning on October 1, 2001, ADP may Reissue a
Sublicense and Kronos shall grant ADP a credit against any applicable
License Fees, for such ADP-ized TKC Software. For every No Start of
ADP-ized Lite Software which occurs during each one (1) year period
beginning on October 1, 2001, ADP may Reissue a Sublicense for, and Kronos
shall grant ADP a credit against any applicable License Fees for such
ADP-ized Lite Software. Within ten (10) business days after the end of each
month, ADP shall deliver a written report to Kronos certifying the number
of Reissued Sublicenses and specifying (i) whether they are Termination
Losses or No Starts, (ii) information concerning each such Reissued
Sublicense, including version upgrades, employee and user upgrades and
information which separately identifies each Termination Loss and No Start
by an identifying number, such as an asset number, and (iii) separately
reporting ADP-ized TKC Software and ADP-ized Lite Software, for each item
herein. In addition, within thirty (30) days after the end of each year
during the term of this Restated Agreement, ADP agrees to deliver to Kronos
a report, certified and signed by an accounting officer or controller of
ADP, setting forth the information in the preceding sentence for that
entire year.
(c) If ADP wants to upgrade an existing ADP Sublicensee of the ADP-ized TKC
Software to ADP WFC Software, ADP shall pay Kronos the difference
between the prices then in effect for the TKC Software and the prices
then in effect for WFC Software, such payment to include both an
increase attributable to the number of users and an increase
attributable to the number of employees.
(d) If at any time during the term of this Restated Agreement Kronos shall
reduce the list price for WFC Software so that the price charged to ADP
for the ADP WFC Software is greater than the Kronos list price for the
comparable (as to version and type) WFC Software less the applicable
ADP discount in effect hereunder, then the prices charged to ADP for
the applicable ADP WFC Software shall be reduced to the reduced list
price for the comparable (as to version and type) WFC Software, less
the applicable ADP discount in effect hereunder.
6. Agreements with Respect to Source Code.
(a) The parties recognize and agree that, prior to the signing of the Second
Amendment to the April 2, 1993 Software License and Support and Hardware
Purchase Agreement, Kronos had licensed Source Code for the TKC Software
and Lite Software to ADP, subject to the terms and conditions of the
Original Agreement then in effect between the parties, and that Kronos
discontinued (except as provided in the following sentence) providing
/licensing additional Source Code after the signing of the Second
Amendment. The parties recognize and agree that Kronos has continued to
license to ADP the following Source Code files for the ADP-ized TKC
Software: (i) the install Source Code, the library (.lib) files, the header
(.h) files; and the visual studio project (.dsp) files (hereinafter,
collectively, "Continuing Source Code Files"); and (ii) the TKC Fix utility
for Version 3A, the header files from other parts of the system which are
referenced in the TKC Fix directory and the latest version of CHGNUM 8C
baseline (hereinafter, collectively, "TKC Fix Utility and Related Files").
Kronos agrees to continue to license to ADP such Continuing Source Code
Files( including updates thereto) and such TKC Fix Utility and Related
Files, during the term of this Restated Agreement. Kronos hereby grants to
ADP a license to use such Continuing Source Code Files and such TKC Fix
Utility and Related Files, internally and solely for purposes of supporting
existing Sublicensees of ADP-ized TKC Software and for new Sublicenses of
ADP-ized TKC Software under this Restated Agreement. Upon the expiration or
termination of this Restated Agreement, ADP shall continue to have a
limited license to use the Continuing Source Code Files and the TKC Fix
Utility and Related Files internally, solely for the purpose of supporting
Sublicenses in effect at the time of the expiration or termination of this
Restated Agreement, but ADP shall have no right to use the Continuing
Source Code Files or the TKC Fix Utility and Related Files for the purpose
of granting new Sublicenses. In no event shall ADP convey a Source Code
license to a Sublicensee. In addition, ADP agrees that the TKC Fix Utility
and Related Files shall be used by ADP solely for the purpose of allowing
ADP to do the development work to enable the CHGNUM Source to work with the
TKC Version 3A; provided however, that ADP agrees it will not modify the
TKC Fix Source Code and the Header Files Source Code in doing such
development; and provided further, that ADP shall immediately provide to
Kronos all Source Code and object code resulting from such development and
ADP grants Kronos a paid-up, royalty free license to use such resulting
Source Code and object code.
(b) ADP hereby warrants and represents that the only ADP-developed
additional features and/or improvements which resulted from the
licensing of TKC and Lite Software Source Code were the following:
(i) e-time payroll interface utility
(ii) hand punch interface to RSI utility and
(iii) punch detail utility;
such items constituting "ADP Features".
(c) The parties recognize and agree that the Original Agreement required that,
upon its termination, ADP provide to Kronos the Source Code for each ADP
Feature (as defined in such Original Agreement) to permit Kronos to
determine whether that ADP Feature was so closely integrated with Kronos
Source Code that it cannot be readily and practicably separated. In
compliance with this requirement, ADP has provided Kronos with the Source
Code for the ADP Features specified in Section 6(b) above, and Kronos has
determined that, except for the cf_cold.c, updates.c, updin1.c, updin2.c
and updu.c files contained therein ("Five Files"), they are not so closely
integrated with Kronos Source Code that they cannot be readily and
practicably separated. Kronos agrees that ADP owns such ADP Features
(including their Source Code), except for the Five Files (such ADP Features
and Source Code, excluding the Five Files, the "ADP Retained Features"),
and that Kronos has no right to use, modify, license or market the ADP
Retained Features or their Source Code; provided however, that Kronos shall
retain one copy of such ADP Retained Feature Source Code in escrow, so that
Kronos has a record of its content in the event of a dispute under this
Restated Agreement. Kronos hereby grants to ADP a license to use the Source
Code for the Five Files, subject to the restrictions set forth in the
following four sentences. During the term of this Restated Agreement, ADP
shall use the ADP Feature and Five Files Source Code solely for purposes of
supporting Sublicensees employing the ADP Features and for providing such
ADP Features to new Sublicensees under this Restated Agreement. The parties
agree that if ADP needs Kronos' assistance for purposes of supporting
Sublicensees using the ADP Features, ADP shall pay for such assistance at
Kronos' then effective rates. Upon the expiration or termination of this
Restated Agreement, ADP shall have a limited license to use the Five Files
internally, solely for the purpose of supporting Sublicensees using the ADP
Features at the time of the expiration or termination of this Restated
Agreement, but ADP shall have no right to grant new Sublicenses of the Five
Files. In no event shall ADP convey a Source Code license to a Sublicensee.
(d) Except as provided in Section 6(a) for use of the Continuing Source
Code Files and the TKC Fix Utility and Related Files and in Section
6(c) for use of the Five Files, ADP shall have no rights to use, modify
or enhance the Kronos Source Code (including all Source Code provided
by Kronos to ADP under the Original Agreement or otherwise). ADP hereby
warrants and certifies that it has destroyed all Kronos Source Code
provided by Kronos to ADP under the Original Agreement, or otherwise,
and all copies thereof, except for the Continuing Source Code Files,
the TKC Fix Utility and Related Files and the Five Files.
(e) ADP agrees to continue the following restrictions on the Continuing
Source Code Files, the TKC Fix Utility and Related Files and the Five
Files, during the term of this Restated Agreement, and thereafter:
(i) ADP shall provide access to Kronos Source Code only to its
employees who have signed the ADP standard confidentiality
agreement substantially similar to that attached as Annex III
and/or only to consultants who have signed the standard
Professional Services Agreement substantially similar to that
attached as Annex IV.
(ii) ADP shall mark Kronos Source Code as confidential at all times.
(iii) ADP agrees that remote access to Kronos Source Code via any data
communication device or password will not be permitted unless an
encryption device or password governs remote access.
(iv) ADP agrees that Kronos Source Code shall be treated by all ADP
employees and consultants as highly confidential and proprietary,
with the same degree of care, protection, restricted access and
limits on use and disclosure with which ADP treats trade secrets
of the most confidential nature.
(v) ADP agrees to implement periodic procedures and audits to confirm
that ADP employees and consultants with access to Kronos Source
Code are aware of their obligations upon initial access and upon
reassignment or termination by ADP.
(vi) ADP agrees not to make copies of Kronos Source Code (whether in
media or hard copy), except to the extent required for permitted
use.
(vii) ADP agrees to require the use of passwords and/or physical access
protection for log-in or data sets for on-line systems containing
the Kronos Source Code.
(viii) ADP agrees to instruct employees and consultants to erase or
destroy Kronos Source Code before disposal of the media; and
(ix) ADP shall abide by the restrictions in Section 22(b).
7. Agreements with Respect to Custom Software.
(a) The parties hereby agree that the Initial Custom Software and the Total
Time 120 Software, both as defined in the Original Agreement, and the
ADP-ized TKC Software, ADP-ized Lite Software and ADP WFC Software, all as
defined in this Restated Agreement, are so closely integrated with Kronos
Source Code that they cannot be practicably separated. Therefore, Kronos
grants ADP a continuing license to Sublicense such Initial Custom Software
, Total Time 120 Software, ADP-ized TKC Software, ADP WFC Software, and
ADP-ized Lite Software, all in accordance with the terms of this Restated
Agreement, but Kronos shall own all such software. Kronos agrees that it
shall not use, license or market such Initial Custom Software, Total Time
120 Software, ADP-ized TKC Software, and ADP-ized Lite Software or any
Source Code related thereto; provided however, that to the extent such
Source Code related thereto is the same as the Kronos Source Code, Kronos
has full rights to use, license and market such Source Code and Kronos'
rights in such Source Code shall not be restricted by this Restated
Agreement.
(b) ADP may request that Kronos develop custom software for ADP but Kronos
shall be under no obligation to do so. ADP may provide written
specifications for such custom software, or the parties may jointly
develop written specifications. If Kronos chooses to accept the request
to develop custom software, Kronos shall provide a price quotation for
the development of such custom software to ADP. If ADP agrees to the
quotation, Kronos shall develop the custom software for ADP for the
quoted price; provided, however, that any such custom software will be
subject to the terms and conditions of Kronos' standard custom software
license agreement then in effect.
(c) During the term of this Restated Agreement, and thereafter, Kronos
shall own any custom software developed hereunder. At all times during
the term of the Restated Agreement and thereafter, Kronos has the right
to independently develop all products, even those products with
functionality similar to ADP-requested custom software.
8. Purchase and Sales of Hardware.
Kronos agrees to sell and ADP agrees to purchase from time to time,
certain items of Hardware, all as more fully described in Exhibits B,
B-1 and B-2 attached hereto, subject to the terms and conditions of
this Restated Agreement. If, at any time during the term of this
Restated Agreement, Kronos shall discontinue any Hardware purchasable
hereunder and the only replacement for such Hardware offered by Kronos
is priced at a higher price than the original Hardware, Kronos agrees
that the purchase price of the replacement shall be the purchase price
of the original for six (6) months after the discontinuance.
Thereafter, the parties agree to negotiate in good faith concerning the
price for such replacement. In addition, for updates or enhancements to
Hardware which are offered by Kronos during the term of this Restated
Agreement when the original Hardware is not discontinued, the parties
agree to negotiate in good faith concerning the applicable prices and
terms. Notwithstanding the foregoing, the parties recognize and agree
that Kronos intends to release a new "millennium" terminal in the
future and when Kronos releases such millennium terminal for sale, the
parties agree that their obligation to negotiate in good faith on
pricing shall not apply, and Kronos' obligation to provide original
pricing on discontinued Hardware for six (6) months shall not apply,
and Kronos will make such millennium terminal available for sale to ADP
at prices specified on Exhibit B-2 hereto. Kronos reserves the right to
obsolete any item of Hardware sold hereunder, with six (6) months
advance written notice to ADP.
9. Order of Hardware.
(a) Any Hardware ordered by ADP and delivered by Kronos shall be pursuant to
the issuance of an agreed upon order form (a "P.O."). Each P.O. shall state
the quantities, Hardware description (including part number), applicable
prices, requested delivery date, delivery destination and delivery
instructions. On the date of receipt of a complete P.O. (the "Order
Acceptance Date"), such order shall be deemed to be a firm order and to
have been accepted by Kronos in the quantity stated in such order. If the
requested delivery date is less than 90 days after the Order Acceptance
Date with respect to any order of Hardware for use with Lite Software or
less than 30 days with respect to any other order, Kronos shall use its
best efforts to confirm such date, but if Kronos is unable to confirm such
date the confirmed scheduled delivery date shall not in any event be later
than 90 days after the Order Acceptance Date of such order for Hardware for
use with Lite Software or 30 days for any other order. ADP shall provide to
Kronos a twelve month rolling forecast of the expected monthly volume of
Hardware and Kronos Software orders and ADP shall update such rolling
forecasts quarterly. Notwithstanding the second preceding sentence, in the
event actual orders for any month exceed forecasted orders for such month
by up to 30% of such forecast, Kronos shall be required to deliver an
amount equal to 130% of such forecast within 90 days after receipt of the
P.O. for Hardware for use with Lite Software and within 30 days after
receipt of the P.O. for all other orders. Kronos shall not be obliged to
deliver an amount in excess of 130% of forecasted orders within 30 days
after Order Acceptance Date. Kronos agrees to deliver amounts in excess of
130% of forecasted orders up to and including 200% of forecasted orders
within 75 days following receipt of the applicable P.O., for all orders
other than for Hardware for use with Lite Software and within 120 days
after receipt of the applicable P.O. for all orders for Hardware for use
with Lite Software. For orders in excess of 200% of the forecasted order,
Kronos shall use its best efforts to deliver such excess amount as
expeditiously as possible. Kronos shall in any event confirm the delivery
dates with respect to all P.O.'s.
(b) ADP may cancel a P.O. for Hardware for use with Lite Software at no
charge if such cancellation notice is received at least 90 days prior
to the originally scheduled delivery date of such Hardware, and may
cancel a P.O. for all other Hardware at no charge if cancellation
notice is received at least 30 days prior to the originally scheduled
delivery date of such Hardware. ADP may not cancel any order for
Hardware received within four (4) months prior to the termination of
this Restated Agreement.
(c) Notice by ADP to Kronos changing the destination of a scheduled
delivery of Hardware shall not be considered to be a rescheduling or a
cancellation of a delivery. ADP may change the delivery destination for
any delivery provided that Kronos is given notice at least ten days
prior to the scheduled delivery date for Hardware for use with Lite
Software and three days prior to the scheduled delivery date for all
other Hardware.
(d) Shipment shall be F.O.B. Kronos' shipping dock upon transfer to either
a common carrier or ADP itself. Kronos shall select a common carrier on
behalf of ADP, which carrier shall not be construed to be the agent of
Kronos. Title to Hardware and all risk of loss shall pass to ADP upon
point of shipment.
(e) The parties have agreed to a Procedure for Return of Certain Hardware,
attached as Exhibit G ("Procedure"). Kronos reserves the right to
discontinue or modify such Procedure at any time upon six (6) months
advance written notice to ADP. If ADP is credited for the purchase of
any Hardware unit under the Procedure, all credits shall be subtracted
prior to determining the units/amounts purchased/licensed for purposes
of achieving minimums under this Restated Agreement.
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
10. Hardware Purchase Price; Payment; Taxes.
(a) The purchase prices for the Hardware purchased by ADP hereunder shall
be the prices listed on Exhibits B, B-1, and B-2 attached hereto.
(b) Unless otherwise specified in an Exhibit to this Restated Agreement,
Kronos will provide ADP with a ********* discount from list price on
all Kronos manufactured peripheral devices, and ********** discounts on
all peripherals and consumables not manufactured by Kronos. In
addition, ADP may purchase peripherals and consumables directly from
any commercial source, but Kronos shall have no responsibility for such
peripherals and consumables, or for their effects upon the Hardware.
(c) ADP shall be entitled to order Hardware pursuant to this Restated
Agreement by issuing P.O.s during the term hereof for delivery not
later than 90 days after the expiration of the term hereof (the
"Delivery Period").
(d) Unless otherwise expressly stated by Kronos, all prices are exclusive
of federal, state, local, excise, sales, use or similar taxes. ADP
shall be liable for all such taxes. ADP shall provide Kronos with a
properly executed resale or tax exemption certificate acceptable to the
taxing authorities, or in lieu thereof, shall remit to Kronos the full
amount of such tax as shall be separately stated on the face of the
invoice.
(e) Kronos shall issue one monthly invoice to ADP for ADP-ized TKC Software
and ADP-ized Lite Software and ADP shall pay such invoice seven (7)
business days from receipt. Kronos shall invoice ADP upon shipment, for
all other Kronos Software, Hardware, peripheral devices, and other
items, and ADP shall pay such invoices net 30 days. If partial
shipments are authorized by ADP, each shipment shall be paid for when
due without regard to other scheduled shipments.
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
11. Hardware Maintenance.
On a year to year basis, beginning on July 1, 2000, ADP has engaged
Kronos to perform maintenance services with respect to the Hardware.
Such services are described on Exhibit F-1 attached hereto and
incorporated by reference herein, which Exhibit also sets forth the
amounts payable by ADP for such services.
In addition, Kronos shall be subject to the obligations set forth on
Exhibit F-2 attached hereto during the term of this Restated Agreement.
Notwithstanding ADP's retention of Kronos to provide maintenance
services with respect to the Hardware, ADP may perform such maintenance
itself. In addition, ADP may also engage a third party to provide
on-site maintenance and/or installation to ADP T & A customers of the
Hardware and Software; provided however, that such third party shall
not be a direct competitor of Kronos. In addition, ADP may engage the
same, or a different, third party to perform depot exchange services;
provided however, that such third party shall not be a direct
competitor of Kronos. For so long as ADP continues to engage Kronos to
perform maintenance with respect to the Hardware, the revenue to Kronos
from ADP attributable to such maintenance shall equal or exceed
******** for every calendar quarter.
ADP also agrees to provide Kronos with an equivalent opportunity to bid
on the provision of on-site maintenance and/or installation services,
and depot exchange services.
In the event the Restated Agreement expires or is terminated and Kronos
is no longer providing Hardware maintenance services for ADP, the
parties agree that Kronos will comply with Section 2 of Exhibit F-2 in
order to allow ADP to maintain and support the Sublicenses then in
effect.
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
12. Hardware Warranty Coverage.
(a)
(i) Kronos warrants that the Kronos 420, 440, and 480 Hardware shipped
hereunder will be free from defects in material or workmanship and will
perform in accordance with its published specifications for a period of
******** days from the date of shipment by Kronos, and the ADP 140, 144,
150 and 154 Hardware shipped hereunder will be free from defects in
material or workmanship and will perform in accordance with its published
specifications for a period of ********months from the date of shipment by
Kronos, (such ******** day and such ******** month periods, as applicable,
hereafter shall be called "Warranty Period"). If the Hardware covered by
the warranty does not function in accordance with such specifications, ADP
or its designee may contact Kronos' Technical Support Department for
telephone assistance in attempting to isolate and correct the problem at no
charge to ADP; provided that if such problem is not the result of a
Hardware defect, such assistance shall be billed to ADP at Kronos'
customary rates.
(ii) Kronos shall repair or replace Hardware returned to it within ten
working days after the same has been received by Kronos' factory
or repair depot. ADP shall be responsible for one-way shipping
charges to Kronos' factory or repair depot and Kronos shall be
responsible for the return shipping charges to ADP.
(iii) The above warranty extends to ADP, and to Sublicensees who/which
receive ADP T & A Service. Warranty claims may be generated to
Kronos by ADP, or by Sublicensees. The repair or replacement of
parts or Hardware shall not extend the original Warranty Period,
but each item repaired or replaced shall have a warranty for 30
days from the date of ADP's receipt of shipment of a repaired or
replaced item.
(b) The foregoing warranty shall not apply in the following circumstances:
(i) accident, neglect or misuse;
(ii) alterations, which shall include, but not be limited to,
installation or removal of Kronos features or any other
modification, whenever any of the foregoing is performed by
entities or persons other than the maintenance provider designated
pursuant to Section 11; provided that, notwithstanding the
foregoing, installation of Hardware by Sublicensees and by any
person or entity which is an authorized purchaser of Hardware
under this Agreement in accordance with Kronos' installation
procedures shall not cause the warranty to be inapplicable;
(iii) failure to provide and maintain a suitable installation
environment, with all facilities prescribed by the appropriate
Kronos functional specifications (including, but not limited to,
failure of, or failure to provide, adequate electrical power, air
conditioning or humidity control) or from use of supplies or
materials not meeting Kronos specifications; and
(iv) the use of the Hardware for other than the purposes for which designed.
(c) EXCEPT FOR THE WARRANTIES SET FORTH IN THIS SECTION 12, SECTION 16 OR
PARAGRAPHS 3, 4 a) AND 4 c), 5, AND 6 OF EXHIBIT F-2, KRONOS DISCLAIMS
ALL WARRANTIES WITH REGARD TO THE HARDWARE, INCLUDING ALL IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE; AND
THE STATED EXPRESS WARRANTIES ARE IN LIEU OF ALL OBLIGATIONS OR
LIABILITIES ON THE PART OF KRONOS FOR DAMAGES, INCLUDING BUT NOT
LIMITED TO LOSS OF GOODWILL, LOSS OF DATA, OR OTHER ECONOMIC LOSS, OR
ANY COLLATERAL, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES (WHETHER
IN TORT, CONTRACT OR OTHERWISE) OF ANY KIND.
13. Favored Customer.
Kronos warrants to ADP that the Hardware Fees and Software License Fees
under this Agreement shall not exceed the average of those granted to
Kronos' three largest (in dollar volume of sales) United States and
Canadian dealers, measured annually at the commencement of each Kronos
fiscal year, for purchases/licenses of similar hardware and software,
excluding upgrades, in similar quantities and under similar terms and
conditions. Kronos agrees, while this Restated Agreement is in effect,
that if the Hardware Fees and Software License Fees paid by ADP
hereunder are more than such average, then ADP shall receive, from and
after that date, such average fees. In no event shall Kronos be subject
to any restrictions on pricing to End-Users. Within thirty (30) days
after the end of each Kronos fiscal year, Kronos shall confirm to ADP
in a written statement, certified by an officer of Kronos, whether ADP
is entitled to an adjustment of the Hardware Fees and/or Licensing
Fees. If any adjustment to such fees is required, Kronos shall set
forth in such statement the amount of such adjustment and the date from
which such adjustment shall take effect.
14. Term and Termination; Rights Upon Termination.
(a) The term of this Restated Agreement shall commence on the date hereof
and shall continue until April 2, 2004, unless earlier terminated in
accordance with this Restated Agreement. Thereafter, this Restated
Agreement shall automatically be renewed for successive two year
periods, unless terminated by either party upon notice to the other
party, such notice to be given in writing at least one year prior to
the commencement of any renewal term.
(b) Notwithstanding anything to the contrary contained herein, either party
hereto may terminate this Restated Agreement upon written notice upon the
occurrence of an Event of Default (as defined below) caused by the other
party. A party shall have committed an Event of Default under this Restated
Agreement upon the occurrence of any of the following events: (i) failure
to pay any sum of money due hereunder for more than fifteen (15) days after
the same has become due and payable and written notice to that effect has
been received, provided, in the event that such unpaid amounts are the
subject of a good faith dispute, an Event of Default shall not be deemed to
have occurred for so long as the party withholding such monies has
deposited such monies with a mutually agreed upon escrow agent, (ii) any
material breach of its representations, warranties or covenants contained
herein or failure to perform any of its other obligations hereunder for a
period of thirty (30) days after the giving of notice of such breach or
failure by the other party; provided however that a breach of Section 2(g)
shall be subject to Section 14(f) and provided further that a breach of
Section 2(d) or 2(e) shall be subject to section 14(e); (iii) commission of
an act of bankruptcy or becoming the subject of any proceeding under the
U.S. Bankruptcy Code or any state bankruptcy laws or becoming insolvent, or
the subjection of any substantial part of such party's property to any
levy, seizure, assignment, application or sale for or by any creditor or
governmental agency, which proceeding, levy, seizure, assignment or
application for sale shall not have been dismissed within sixty (60) days,
or (iv) failure to remain in the business or provide the products or
services contemplated hereby for a period of thirty (30) days after the
giving of notice of such failure by the other party.
(c) Upon the occurrence of an Event of Default, the non-defaulting party
may provide the other party with notice of termination setting forth
the nature of such Event of Default. Any such notice shall become
effective on the date thereof.
(d) In the event that either party shall terminate this Restated Agreement on
account of an Event of Default committed by the other party, ADP shall have
no further rights to duplicate ADP-ized TKC or ADP-ized Lite Software, or
to market and provide new Sublicenses of ADP T & A Software from and after
the effective date of such termination except as provided in Section 14(e).
ADP shall immediately provide to Kronos all copies of the ADP T & A
Software and Materials in its possession, other than copies of the ADP T &
A Software and Materials validly licensed by ADP for its own internal use
(which use shall be only as described in Annex I) or shall destroy all such
copies and shall provide to Kronos certification of such destruction.
However, notwithstanding the foregoing, ADP may retain copies of the ADP T
& A Software and Materials for the limited purpose of continuing to support
existing Sublicensees with valid Sublicenses issued during the term of the
Restated Agreement and for a sufficient period of time to allow fulfillment
of orders pursuant to Section 14(i). Subject to Section 14(h), upon any
such termination, (i) ADP shall pay any amounts which are then due and
owing to Kronos and (ii) any further or future payment obligations
hereunder shall be null and void; except that if the termination is on
account of an Event of Default by ADP, ADP shall be required to pay all
minimum amounts owed under Section 2 (j) and when applicable, Section 2(m)
and Section 14 (f).
(e) Except as provided in the third sentence of this Section 14(e), it is
understood and agreed that with respect to a breach of Section 2(d) or 2(e)
by Kronos, Kronos shall have one hundred twenty (120) days following the
receipt of written notice from ADP of such breach to cure such breach,
subject to the following: (i) during such cure period, Kronos shall be
required to cease any sales/licenses, services, implementation or
development activity giving rise to such breach within thirty (30) days of
Kronos' receipt of such notice, provided that concerning the provision by
Kronos of ongoing support to any installed client base giving rise to such
breach after such 30 day period, Kronos shall be required, as soon as
reasonably practicable, to:
a. discontinue all service/support to such
installed base; or
b. recommend the conversion of such installed base to ADP Payroll
Processing Services;
provided however, that after such initial 30 day period following notice, if
Kronos is unable to accomplish such discontinuance or conversion, Kronos
shall be required to pay ADP all revenue derived by Kronos if any, from
such installed base for the support giving rise to such breach at prices
equivalent to the prices charged by ADP for the comparable support; and
(ii) any cure shall be the ceasing of all activities giving rise to such
breach going forward (which shall include, but not be limited to, the
termination/cancellation of any contract/arrangement giving rise to such
breach) and the payment by Kronos to ADP of any actual damages resulting to
ADP during the period of such Section 2(d) or 2(e) breach; provided
however, that in the case of a bona fide dispute concerning the amount of
the actual damages owed, Kronos shall immediately pay ADP all actual
damages not in dispute and, within thirty (30) days after written notice
from ADP of the amount of the remaining actual damages, Kronos shall either
pay such damages or commence arbitration pursuant to Section 25(l)
concerning such damages; and provided further that until the arbitrator
rules concerning such remaining disputed actual damages, Kronos shall not
be deemed to have failed to cure such breach solely because of its failure
to pay such damages, but Kronos shall not be relieved of any of its other
obligations concerning cure. If Kronos pays ADP such actual damages
(whether prior to or after arbitration), but Kronos is still in breach of
its cure obligations hereunder and therefore ADP is permitted to reproduce
the ADP T & A Software for Sublicensing as specified in the third sentence
of this Section 14(e), ADP shall be required to refund to Kronos the amount
of such actual damages prior to reproducing and Sublicensing any such ADP T
& A Software. If such breach was committed with the knowledge of Kronos'
Chief Executive Officer, Chief Financial Officer, President or Vice
President, Worldwide Sales and Service or if Kronos fails to cure such
breach as specified herein, ADP shall terminate this Restated Agreement but
shall retain the right to continue to Sublicense the ADP T & A Software to
ADP Clients for a period equal to the remaining term of this Restated
Agreement had no termination notice been given (but in no event for a
period exceeding eighteen (18) months) and ADP shall be entitled to combine
such ADP T & A Software with any hardware; provided that, after termination
of this Restated Agreement as contemplated by this Section 14(e), no
License Fees shall be payable by ADP, and Kronos shall not be obligated to
provide ADP with copies of the ADP T & A Software or Materials, but ADP
shall be entitled to reproduce the same solely for Sublicensing to ADP
Clients for the remaining term of this Restated Agreement, (but in no event
for a period exceeding eighteen (18) months). Such rights shall be ADP's
exclusive remedies in the event of Events of Default described in the first
sentence of this Section 14(e). In addition, if the breach of Section 2(d)
or 2(e) was not committed with the knowledge of any individual specified in
the third sentence of this Section 14(e), but the breach subsequently comes
to the attention of any such individual, Kronos shall be required to notify
ADP in writing within ten (10) days (which notice shall be deemed to
constitute the written notice of ADP as specified in the first sentence of
this Section 14(e)) and Kronos shall have an opportunity to cure such
breach as specified in this Section 14(e), and if Kronos fails to cure such
breach, ADP shall have the right to Sublicense the ADP T & A Software,
subject to the requirements in the third sentence of this Section 14(e).
(f) Except as provided in the third sentence of this Section 14(f), it is
understood and agreed that with respect to a breach of Section 2(g) by ADP,
ADP shall have one hundred twenty (120) days following the receipt of
written notice from Kronos of such breach to cure such breach, subject to
the following: (i) during such cure period, ADP shall be required to cease
any sales/licenses, services, implementation and development activity
giving rise to such breach within thirty (30) days of ADP's receipt of such
notice, provided that concerning the provision of ongoing support to any
installed client base giving rise to such breach after such 30 day period
ADP shall be required, as soon as reasonably practicable, to:
a. discontinue all service/support to such installed client base; or
b. convert such installed base to ADP T & A Software and Hardware;
provided however, that after such initial 30 day period following
notice, if ADP is unable to accomplish such discontinuance or
conversion, ADP shall be required to pay Kronos all revenue derived by
ADP from such installed base for the support giving rise to such
breach, at prices which are equivalent to the prices charged by ADP for
a comparable Kronos product support; and (ii) any cure shall be the
ceasing of all activities giving rise to such breach going forward
(which shall include, but not be limited to, the
termination/cancellation of any contract/arrangement giving rise to
such breach) and the payment by ADP to Kronos of any actual damages
resulting to Kronos during the period of such Section 2(g) breach ;
provided however, that in the case of a bona fide dispute concerning
the amount of the actual damages owed, ADP shall immediately pay Kronos
all actual damages not in dispute and, within thirty (30) days after
written notice from Kronos of the amount of the remaining actual
damages, ADP shall either pay such damages or commence arbitration
pursuant to Section 25(l) concerning such damages; and provided further
that until the arbitrator rules concerning such remaining disputed
actual damages, ADP shall not be deemed to have failed to cure such
breach solely because of its failure to pay such damages, but ADP shall
not be relieved of any of its other obligations concerning cure. If ADP
pays Kronos such actual damages (whether prior to or after
arbitration), but ADP is still in breach of its cure obligations
hereunder and therefore required to pay the amount specified in the
third sentence of this Section 14(f), the amount of actual damages paid
by ADP to Kronos shall be credited toward such amount specified in the
third sentence of this Section 14(f). If such breach was committed with
the knowledge of the Chief Executive Officer of Automatic Data
Processing, Inc., the Chief Financial Officer of Automatic Data
Processing, Inc., the Chief Operating Officer of Automatic Data
Processing, Inc., the President of Employer Services--North America,
the President of the National Accounts Services Division, the President
of the Major Accounts Division, the National Account Services Division
Senior Vice President, Human Resources and Payroll, the General
Manager, Time and Labor (Major Accounts) or the General Manager, Time
and Labor (National Accounts), or if ADP fails to cure such breach as
required herein, Kronos shall have the right to receive from ADP an
amount equal to one million, five hundred thousand dollars
($1,500,000), multiplied by the number of months (or fractions thereof)
remaining in the term of this Restated Agreement, but in no event shall
such number of months exceed eighteen (18). It is agreed and understood
by the parties that Kronos shall have no obligation to supply ADP T & A
Software or Hardware, or services, and ADP shall have no rights to
duplicate any ADP T & A Software in exchange for Kronos' receipt of the
amount specified in the preceding sentence. After ADP has paid Kronos
such amount, the provisions of Section 2(g) (except for the last three
sentences) and Sections 2(d) and 2(e) shall no longer be in effect, and
either party may terminate this Restated Agreement, upon written notice
to the other party. In the event either party elects to terminate this
Restated Agreement, the provisions of Section 14(d) shall apply. In
addition, if the breach of Section 2(g) was not committed with the
knowledge of any individual specified in the third sentence of this
Section 14(f), but the breach subsequently comes to the attention of
any such individual, ADP shall be required to notify Kronos in writing
within ten (10) days (which notice shall be deemed to constitute the
written notice of Kronos specified in the first sentence of this
Section 14(f)) and ADP shall have an opportunity to cure such breach as
specified in this Section 14(f), and if ADP fails to cure such breach,
Kronos shall have a right to receive from ADP the amount specified in
the third sentence of this Section 14(f).
(g) The remedies described in Sections 14(e) and 14(f) for the Events of
Default described in each such section shall be the sole and exclusive
remedy for such Events of Defaults. All other remedies provided to ADP and
Kronos for Events of Defaults other than under Sections 14(e) and 14(f)
herein shall not be deemed exclusive but shall be cumulative and in
addition to all other remedies provided by law or in equity. Both parties
hereto acknowledge that the performance of their obligations hereunder and
the rights granted hereunder are of a unique character which gives them a
special value, the loss of which may not be adequately compensated in
damages in an action at law, that a breach of this Restated Agreement by
either party may cause the other party irreparable injury and, therefore,
that either party may be entitled to injunctive relief to prevent such
injury.
(h) Except as otherwise expressly provided in this Restated Agreement,
termination of this Restated Agreement shall in no way impair the
rights or obligations of the parties hereto under the last sentence of
Section 2(m) (but such last sentence shall not apply if the termination
is on account of an Event of Default by ADP), Sections 6, 7(c), 12, 14,
14A, 14B, 17, 18, 22 and Section 2 of Exhibit F-2 of this Restated
Agreement and such provisions shall survive any such termination.
(i) Notwithstanding anything to the contrary contained in this Restated
Agreement, it is hereby expressly agreed that upon the expiration or
termination of this Restated Agreement for any reason whatsoever, such
expiration or termination shall not terminate or diminish in any way the
right of those Sublicensees then using the Hardware or ADP T & A Software
or any part thereof under Sublicenses validly issued during the term of the
Restated Agreement to continue to use the Hardware or ADP T & A Software or
any part thereof. If this Restated Agreement is terminated by Kronos for
any reason other than ADP's default, ADP shall have the right to continue
to fulfill the terms of any outstanding agreements and/or proposals which
are in effect prior to the effective date of any such termination.
14A. Modifications by ADP.
If ADP modifies the ADP T & A Software, the Hardware or the Materials,
ADP shall be solely responsible for such modifications and to the
extent such modifications impair Kronos' ability to perform its
obligations under this Restated Agreement, ADP agrees that Kronos shall
be released from such obligations to the same extent.
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
14B. Limitation Of Liability And Indemnification.
EXCEPT AS PROVIDED IN SECTIONS 17 AND SECTION 14(e), IN NO EVENT SHALL
KRONOS OR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS BE LIABLE
TO ADP OR ITS SUBSIDIARIES, AFFILIATES OR ANY OF THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS FOR LOST DATA, LOST PROFITS OR
LOST REVENUES OR ANY SPECIAL, CONSEQUENTIAL, PUNITIVE OR INCIDENTAL
DAMAGES OF ANY KIND WHATSOEVER ARISING FROM KRONOS' TECHNOLOGY, LICENSE
OR SALE OF PRODUCTS OR SERVICES OR OTHERWISE IN CONNECTION WITH THE
ORIGINAL AGREEMENT OR IN CONNECTION WITH THIS RESTATED AGREEMENT OR ANY
OF THE ACTIVITIES THEREUNDER OR HEREUNDER. IN NO EVENT WHATSOEVER SHALL
KRONOS' LIABILITY UNDER THIS RESTATED AGREEMENT OR FROM ANY AND ALL
CAUSES OR OTHERWISE EXCEED IN GENERAL MONEY DAMAGES A TOTAL CUMULATIVE
MAXIMUM AMOUNT OF **************************** ***** ****** *****
******; PROVIDED HOWEVER, THAT IN THE EVENT THAT
******************************************** ***** ****** *****
****** ***** ****** ************************* *******************,
***************
**************** *************** ************ ***************
**************** ***************
************ SUBJECT TO THE PROVISIONS OF SECTION 17(a), INCLUDING
ADP'S COMPLIANCE WITH SECTION 17(a); AND PROVIDED FURTHER, THAT IN THE
EVENT SUCH AMOUNTS ACTUALLY PAID ARE LESS THAN THE ******** DOLLAR
LIMITATION SPECIFIED IN SECTION 17(b), KRONOS AGREES TO BE SUBJECT TO
SUCH ******** DOLLAR LIMITATION, SUBJECT TO THE PROVISIONS OF SECTION
17 (b), INCLUDING ADP'S COMPLIANCE WITH SECTION 17(b). IN NO EVENT
WHATSOEVER SHALL KRONOS' LIABILITY UNDER THE ORIGINAL AGREEMENT OR FROM
ANY AND ALL CAUSES OR OTHERWISE EXCEED IN GENERAL MONEY DAMAGES A TOTAL
CUMULATIVE MAXIMUM AMOUNT OF ************ ****** ****** ****** *******
****** ***** ***** **** ********* ******* ******
****** **** ***** **** ****** ***** ****** ******* ****** ********
***** ***** ****** *******
*********************; PROVIDED HOWEVER, THAT IN THE EVENT THAT SUCH
AMOUNTS ACTUALLY PAID ARE LESS THAN THE ******** DOLLAR LIMITATION
******** DOLLAR LIMITATION, SUBJECT TO THE PROVISIONS OF SECTION 17(a),
INCLUDING ADP'S COMPLIANCE WITH SECTION 17(a); AND PROVIDED FURTHER,
THAT IN THE EVENT SUCH AMOUNTS ACTUALLY PAID ARE LESS THAN THE ********
DOLLAR LIMITATION SPECIFIED IN SECTION 17(b), KRONOS AGREES TO BE
SUBJECT TO SUCH ******** DOLLAR LIMITATION, SUBJECT TO THE PROVISIONS
OF SECTION 17(b), INCLUDING ADP'S COMPLIANCE WITH SECTION 17(b). THE
EXISTENCE OF MORE THAN ONE CLAIM OR SUIT WILL NOT ENLARGE OR EXTEND
THESE LIMITS. THE LIMITATIONS IN THIS SECTION SHALL BE THE FULL EXTENT
OF KRONOS' LIABILITY UNDER THIS RESTATED AGREEMENT AND THE ORIGINAL
AGREEMENT WHETHER THE ACTION OR ACTIONS AGAINST KRONOS ARE BROUGHT BY
REASON OF ANY BREACH OF ANY REPRESENTATION OR WARRANTY UNDER THIS
RESTATED AGREEMENT OR THE ORIGINAL AGREEMENT OR ANY OTHER BREACH OF
THIS RESTATED AGREEMENT OR THE ORIGINAL AGREEMENT OR BY REASON OF
NEGLIGENCE, STRICT LIABILITY OR ANY OTHER TORT OR CAUSE OF ACTION.
15. Additional Agreements.
(a) ADP may provide ADP T & A Software to any Sublicensee provided such
Sublicensee shall pay on a recurring billing basis rather than on a one
time basis.
(b) ADP may Sublicense, but not sell, the ADP T & A Software to ADP
Clients. ADP may, however, sell the Hardware to ADP Clients, subject to
the restrictions specified in this Restated Agreement. The parties
recognize and agree that Kronos suggests that ADP not Sublicense ADP T
& A Software or sell Hardware at prices constituting predatory pricing
practices under applicable federal antitrust laws.
(c) Kronos shall not reveal the names or addresses of any ADP Clients or other
authorized customer of ADP under this Restated Agreement to any local
Kronos office, except as required to perform its responsibilities under
this Restated Agreement and provided that Kronos complies with the
requirements of Section 18 in connection with any such disclosure. Neither
party may provide the customer lists of the other to any third party,
except as required by Kronos to perform its maintenance responsibilities
under this Restated Agreement and provided that Kronos complies with the
requirements of Section 18 in connection with any third party disclosure.
It is understood and agreed that the confidentiality provisions of Kronos'
agreements with its dealers shall satisfy the obligation under Section 18
to obtain signed confidentiality agreements.
16. Representations, Warranties and Covenants of Kronos.
Kronos represents, warrants and covenants that:
(a) Kronos has, and will have at all times during the term of this Restated
Agreement, the right to enter into this Restated Agreement, and abide by
its terms, and no other person or entity shall have any rights to interfere
with or prohibit the activities under this Restated Agreement, in each case
other than as covered under Section 17(a), and if covered under Section
17(a), ADP'S SOLE REMEDY FOR BREACH OF ANY REPRESENTATION, WARRANTY OR
COVENANT CONTAINED IN THIS SECTION 16(a) SHALL BE PURSUANT TO SECTION 17(a)
AND SHALL BE SUBJECT TO THE DAMAGE LIMITATION THEREIN. The individual
signing this Restated Agreement on behalf of Kronos has the authority to
sign on behalf of Kronos Affiliates and Subsidiaries, as well as on behalf
of Kronos.
(b) Neither the rights granted to ADP hereunder nor the exercise of any such
rights will infringe upon or conflict with any rights held by any third
party under any copyright, patent, trademark or other proprietary right;
provided that Kronos makes no representation with respect to the Total Time
service mark or the ADP service mark or trademark. The Hardware to be
furnished pursuant to this Restated Agreement will be free from any claims
of infringement of any United States patent, copyright, trademark or
proprietary right. IT IS UNDERSTOOD AND AGREED THAT ADP'S SOLE REMEDY FOR
BREACH OF ANY REPRESENTATION, WARRANTY OR COVENANT CONTAINED IN THIS
SECTION 16(b) SHALL BE PURSUANT TO SECTION 17(a) AND SHALL BE SUBJECT TO
THE DAMAGE LIMITATION THEREIN.
(c) Kronos will have good and marketable title to the Hardware, free and
clear of all liens, claims, encumbrances and security interests of any
kind whatsoever, in each case, other than as covered under Section
17(a), and if covered under Section 17(a), ADP's SOLE REMEDY FOR BREACH
OF ANY REPRESENTATION, WARRANTY OR COVENANT CONTAINED IN THIS SECTION
16(c) SHALL BE PURSUANT TO SECTION 17(a) AND SHALL BE SUBJECT TO THE
DAMAGE LIMITATION THEREIN.
(d) The ADP-ized TKC Software will perform in accordance with the applicable
published user guides for the comparable (as to version and type) TKC
Software, as modified in accordance with Section 4(c). The ADP WFC Software
will perform in accordance with the applicable Kronos electronic on-line
documentation for the comparable (as to version and type) WFC Software,
and, upon completion of the ADP-ization of WFC Software as described in
Section 4(n), as modified in accordance with such Section. These warranties
shall not apply in the following circumstances: (i) accident, neglect or
misuse; (ii) alterations other than in accordance with Kronos' installation
procedures; and (iii) failure to provide and maintain a suitable
installation environment, including, but not limited to, failure to provide
adequate electrical power, air conditioning or humidity control. ADP's SOLE
REMEDY, AND THE SOLE LIABILITY OF KRONOS, FOR ANY BREACH BY KRONOS OF THIS
SECTION 16(d) SHALL BE PURSUANT TO SECTION 4(a) FOR THE ADP-IZED TKC
SOFTWARE AND PURSUANT TO SECTION 4(i) FOR THE WFC SOFTWARE AND ADP WFC
SOFTWARE.
(e) Kronos agrees to obtain Underwriters Laboratory ("UL") certification
for the Hardware and to provide ADP with evidence of such approval when
granted. The Hardware shall comply with all government and regulatory
requirements such as FCC and CSA. If and when changes are required to
be made to any Hardware in order to obtain UL certification or to
comply with other standards, Kronos agrees to make all changes to such
Hardware at Kronos' factory at no charge to ADP and to pay all expenses
associated with the retrofitting of all such changes to previously
delivered Hardware at no charge to ADP.
EXCEPT FOR THE WARRANTIES SET FORTH IN THIS RESTATED AGREEMENT, KRONOS
DISCLAIMS ALL WARRANTIES WITH RESPECT TO THE TKC SOFTWARE, THE ADP-IZED
TKC SOFTWARE, LITE SOFTWARE, ADP-IZED LITE SOFTWARE, WFC SOFTWARE, AND
ADP WFC SOFTWARE, INCLUDING ALL IMPLIED WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE.
16A. Representations, Warranties and Covenants of ADP.
ADP represents, warrants and covenants that ADP has, and will have at
all times during the term of this Restated Agreement, the right to
enter into this Restated Agreement, and abide by its terms, and no
other person or entity shall have any rights to interfere with or
prohibit the activities under this Restated Agreement, and that the
individual signing this Restated Agreement on behalf of ADP has the
authority to sign on behalf of ADP Affiliates and Subsidiaries, as well
as on behalf of ADP.
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
17. Patent, Trademark, Copyright and Proprietary Rights Indemnification.
(a) Kronos agrees to defend ADP and its Sublicensees, at Kronos' own cost and
expense, against any claim, suit or proceeding in connection with any
allegation that the Hardware or the ADP T & A Software or any part of
either thereof (or the Materials) infringes upon or interferes with any
patent, trademark, copyright or other proprietary right of a third party.
However, Kronos shall have no liability or obligation pursuant to this
Section 17(a) to the extent such allegation is based on modifications or
enhancements made by ADP (or by a third party or by Kronos, at ADP's
request or direction). Kronos will pay damages assessed against ADP and its
Sublicensees (whether by court award or by settlement) which are
attributable to any such claim, but only on the condition that (i) Kronos
is promptly notified in writing of any claim of infringement and furnished
with all papers received in connection therewith and (ii) Kronos shall have
sole direction and control of any negotiations or of any suit which may be
brought and ADP shall assist Kronos in any reasonable way required by
Kronos in its defense, and (iii) ADP takes all reasonable steps to mitigate
any potential damages which may result from such claim, suit or proceeding.
If ADP's or a Sublicensee's use of the Hardware or the ADP T & A Software
or any part of either thereof shall be prevented by an injunction based on
an alleged infringement, Kronos shall have the right to substitute for the
infringing Hardware or ADP T & A Software or part of either thereof another
suitable product substantially equivalent in performance, or, at Kronos'
option, obtain for ADP and its Sublicensees the right to continue the use
of the ADP T & A Software or part thereof. KRONOS' AGGREGATE DOLLAR
OBLIGATION FOR ALL CLAIMS, SUITS OR PROCEEDINGS INDEMNIFIED UNDER THIS
SECTION 17(a), INCLUDING EXPENSES FOR DEFENSE AND COSTS, SHALL BE LIMITED
TO ******** DOLLARS, NOTWITHSTANDING ANY OTHER PROVISION OF THIS RESTATED
AGREEMENT.
(b) Kronos further agrees to defend ADP, at Kronos' own cost and expense,
against any claim, suit or proceeding in connection with any allegation
that the Hardware sold to a Sublicensee with the ADP-ized TKC Software or
ADP-ized Lite Software, or the ADP-ized TKC Software or ADP-ized Lite
Software or any part of either thereof caused or causes damages to be
incurred by a Sublicensee and/or another third-party; provided however,
that this agreement is subject to ADP's having sublicensed the ADP-ized TKC
Software or ADP-ized Lite Software, as applicable, under provisions
substantially equivalent to those in Annex I. However, Kronos shall have no
liability or obligation pursuant to this Section 17(b) to the extent that
such allegation is based on or damage is caused by modifications or
enhancements made by ADP or its Sublicensees (or by another third party or
Kronos at ADP's request or direction) or installations not in accordance
with Kronos' installation procedures. Kronos will pay damages assessed
against ADP (whether by court award or by settlement) which are
attributable to any such claim, but only on the condition that (i) Kronos
is promptly notified in writing of any such claim, suit or proceeding and
furnished with all papers received in connection therewith and (ii) Kronos
shall have sole direction and control of any negotiations or of any suit
which may be brought and ADP shall assist Kronos in any reasonable way
required by Kronos in its defense, and (iii) ADP takes all reasonable steps
to mitigate any potential damages which may result from such claim, suit or
proceeding. KRONOS' AGGREGATE DOLLAR OBLIGATION FOR ALL CLAIMS, SUITS OR
PROCEEDINGS INDEMNIFIED UNDER THIS SECTION 17(b), INCLUDING EXPENSES FOR
DEFENSE AND COSTS, SHALL BE LIMITED TO ******** DOLLARS, NOTWITHSTANDING
ANY OTHER PROVISION OF THIS RESTATED AGREEMENT.
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
(c) ADP agrees to defend Kronos, at ADP's own cost and expense, against any
claim, suit or proceeding in connection with any allegation that the
Hardware or the ADP T & A Software or any part of either infringes upon or
interferes with any patent, trademark, copyright or other proprietary right
of a third party to the extent that the Hardware or ADP T & A Software
incorporates any modifications, enhancements, functions or features which
are made by ADP (or by a third party or Kronos at ADP's request or
direction) and such claim, suit or proceeding results from such
modifications, enhancements, functions or features. ADP will pay damages
assessed against Kronos (whether by court award or by settlement)
attributable to any such claim, but only on the condition that (i) ADP is
promptly notified in writing of any claim of infringement and furnished
with all papers received in connection therewith and (ii) ADP shall have
sole direction and control of any negotiations or of any suit which may be
brought and Kronos shall assist ADP in any reasonable way required by ADP
in its defense, and (iii) Kronos shall take all reasonable steps to
mitigate any damages which may result from such suit, claim or proceeding.
To the extent that Kronos has reason to believe or suspect that any present
or proposed modification, enhancement, function or feature made by ADP (or
by Kronos or a third party at ADP's request or direction) may or will
infringe upon or interfere with any patent, copyright, trademark or other
proprietary right of a third-party, Kronos will immediately notify ADP.
ADP's AGGREGATE DOLLAR OBLIGATION FOR ALL CLAIMS, SUITS AND PROCEEDINGS
INDEMNIFIED UNDER THIS SECTION 17(c), INCLUDING EXPENSES FOR DEFENSE AND
COSTS, SHALL BE LIMITED TO ******** DOLLARS.
(d) ADP further agrees to defend Kronos, at ADP's own cost and expense, against
any claim, suit or proceeding in connection with any allegation that the
Hardware sold to a Sublicensee with the ADP-ized TKC Software or ADP-ized
Lite Software, or the ADP-ized TKC Software or ADP-ized Lite Software or
any part of either thereof caused or causes damages to be incurred by a
Sublicensee and/or another third-party to the extent that such Hardware or
ADP T&A Software incorporates any modifications, enhancements, functions or
features which are made by ADP (or by a third-party or Kronos at ADP's
request or direction) and such claim, suit and proceeding results from such
modifications, enhancements, functions or features. ADP will pay damages
assessed against Kronos (whether by court award or by settlement) which are
attributable to any such claim, but only on the condition that (i) ADP is
promptly notified in writing of any claim, suit or proceeding and furnished
with all papers received in connection therewith and (ii) ADP shall have
sole direction and control of any negotiations or of any suit which may be
brought and Kronos shall assist ADP in any reasonable way required by ADP
in its defense, and (iii) Kronos shall take all reasonable steps to
mitigate any damages which may result from such suit, claim or proceeding.
ADP'S AGGREGATE DOLLAR OBLIGATION FOR ALL CLAIMS, SUITS AND PROCEEDINGS
INDEMNIFIED UNDER THIS SECTION 17(d), INCLUDING EXPENSES FOR DEFENSE AND
COSTS, SHALL BE LIMITED TO ******** DOLLARS.
18. Confidentiality.
(a) ADP and Kronos recognize that, in the performance of this Restated
Agreement, employees of ADP and Kronos may learn of or be exposed to trade
secrets or other confidential information (including, without limitation,
any information concerning the business, operations or clients of ADP or
Kronos which are the property of ADP or Kronos, respectively). In order to
provide the unrestricted basis of communication required for the successful
and expeditious performance of this Restated Agreement, Kronos and ADP
agree that they will take all reasonable efforts to prevent such trade
secrets or other confidential information from being used for any purpose
other than in connection with this Restated Agreement and from becoming
known to anyone except bona fide employees only on a need-to-know basis,
and such employees will be cautioned that such information is confidential.
In addition, Kronos and ADP each agree to obtain signed confidentiality
agreements from any third parties hired or otherwise engaged by it in
connection with this Restated Agreement prior to allowing access to any
such information and to deliver copies of the same to the other upon
request. Each party will cause its employees to be bound by the obligation
of confidentiality contained herein. Unless and until any such information
is (i) in or becomes part of the public domain other than by disclosure by
Kronos or ADP in violation of this Restated Agreement, (ii) demonstrably
known to Kronos or ADP previously, (iii) independently developed by Kronos
or ADP outside of this Restated Agreement or (iv) rightfully obtained by
Kronos or ADP from third parties, Kronos and ADP shall use the same degree
of care in the handling of such information as they would use with regard
to their own proprietary and/or confidential information in order to
prevent the disclosure thereof.
(b) ADP and Kronos shall each return to the other any confidential
information obtained from the other or provide proof of destruction of
such confidential information upon the expiration or sooner termination
of this Restated Agreement or upon request by the other party.
19. Force Majeure.
With respect to Hardware or Software, Kronos shall not be liable for
any loss, damage or penalty for delay in delivery or for failure to
give notice of delay when such delay is due to causes beyond the
reasonable control of Kronos; provided, however, that if ADP
demonstrates to Kronos that ADP has thereby lost an order, then ADP
may, upon written notice to Kronos cancel such order without any charge
therefor. The time for performance hereunder shall be extended by a
period of time equal to the time lost because of any such delay.
20. Use of Name.
(a) To permit Hardware to be used with ADP-ized TKC Software and ADP-ized
Lite Software only, Kronos hereby agrees to replace external Kronos
markings or other insignia, except serial numbers, patent notices and
safety agency approval plates, which are affixed to Hardware with ADP's
markings or other markings designed by ADP for such purpose, except as
provided in Exhibit B-2.
(b) Kronos hereby authorizes ADP representatives to make use of Kronos'
name, trademark or trade name in connection with marketing ADP T & A to
ADP Clients, prospective ADP Clients, and other authorized customers
and/or prospective authorized customers of ADP under this Restated
Agreement; provided however, that no such use will be made in any
written materials, distributed outside of ADP without Kronos' written
approval and any such use will be in proper legal form.
(c) Subject to Section 25(h), each party expressly prohibits the other
party from any direct or indirect use, reference to, or other
employment of its name, trademarks or trade names or of any name,
trademark or trade name exclusively licensed to such party, except as
specified in this Restated Agreement or as expressly authorized in
writing.
21. Relationship of the Parties.
(a) The parties acknowledge that the relationship between Kronos and ADP
shall be construed solely as that of licensor and licensee in the case
of Software and vendor and vendee in the case of Hardware. The parties
further acknowledge that any and all rights not expressly granted
pursuant to this Restated Agreement are reserved to the respective
party and that neither party shall have any right, power or authority
to in any way obligate the other to any contract, term or condition not
set forth herein.
(b) The parties hereto acknowledge that both parties hereto are independent
contractors. Neither party shall in any way represent itself as a
partner, joint-venturer, agent, employee or general representative of
the other party.
22. Restrictions Applicable to TRM
In addition to other provisions of this Restated Agreement applicable
to TRM and TRM Software, the following shall apply:
(a) ADP's sales force shall be permitted to sell TRM Software, subject to the
following restrictions: (such restrictions to remain in effect from
September 30, 1999 through April 1, 2001): (i) a total of only 300
salespeople derived from the ADP sales force dedicated to selling to
clients and prospects employing between 100 and 1000 employees (the "Major
Account Sales Force") and/or derived from the ADP sales force dedicated to
selling to clients and prospects employing under 100 employees (the "EBS
Sales Force") shall be permitted to sell TRM Software and the accompanying
hardware and/or services; and (ii) such 300 ADP salespeople derived from
the Major Account Sales Force and the EBS Sales Force shall be permitted to
sell TRM Software, accompanying hardware or Hardware and/or services only
to clients or prospects within the hotel industry having a SIC code
beginning with "70" as the first two digits; and (iii) ADP shall not
provide or permit compensation/credit (including, but not limited to,
commissions and/or roll call or quota credit) to any member of the Major
Account Sales Force or the EBS Sales Force, other than the 300 salespeople
described in subpart (i), for generating a sales lead or sales referral for
TRM Software, accompanying hardware or Hardware and/or services; provided
however, that ADP's breach of its obligations under this subpart (iii)
shall not be deemed material unless such breach occurs more than one
hundred times prior to the termination of this Section; and provided
further that the foregoing restrictions on the Major Account Sales Force
and the EBS Sales Force shall not apply to sales/sublicensing of the TRM
Software to End-Users in Puerto Rico and the Caribbean. Except as specified
above in this Section and in Section 2(g), the Major Account Sales Force
and EBS Sales Force shall not be permitted to sell (i.e., shall not receive
training or receive any payment for selling) any Time and Attendance or
Scheduling software, hardware or services, other than ADP-ized TKC
Software, ADP-ized Lite Software, ADP WFC Software, and Hardware and
related services. The ADP sales force dedicated to selling to clients and
prospects employing over 1000 employees (the "National Account Sales
Force") and the ADP Sales force dedicated in the case of time and
attendance and scheduling products, to selling TRM and ADP T & A Software
and Hardware which is now a part of the National Account Sales Force, (but
who may sell to clients and prospects employing fewer than 1000 employees)
shall not be subject to the restrictions stated in this Section.
(b) Notwithstanding anything to the contrary in this Restated Agreement any
individual, whether an ADP employee or contractor, working on the
engineering of the TRM product/technology shall be strictly prohibited from
having any access to the Kronos Source Code and any other Kronos
confidential information (as defined in Section 18) and ADP shall not use
the Kronos Source Code in any way with or for the TRM product(s). Any
employee or consultant working on the engineering of ADP-ized TKC Software,
ADP-ized Lite Software, ADP WFC Software, or Hardware, cannot be
transferred to work on any TRM product/technology. In addition,
notwithstanding anything to the contrary in this Restated Agreement any
individual, whether an ADP employee or contractor, working on the
development of the TRM product/technology shall be strictly prohibited
from: (i) having any access to the Kronos Source Code, and (ii) having
access to any other Kronos confidential information (as defined in Section
18); provided however, that the following individuals may be given access
to Kronos confidential information only to the extent required to perform
their responsibilities in connection with ADP's performance of this
Restated Agreement: (a) marketing/product management individuals; (b)
individuals developing an interface from a Kronos or TRM product to an
internally developed ADP module or to third party hardware or software; (c)
individuals installing and/or providing service support for ADP WFC
Software; and (d) one individual who has management responsibility for
development of both TRM product/technology and ADP T & A Software or
Hardware. ADP shall not use the confidential information in any way with or
for the TRM product(s). Any employee or consultant working on the
development of ADP T & A Software or Hardware, cannot be transferred to
work on any TRM product/technology (with the exception of marketing/product
management individuals, individuals developing an interface from a Kronos
or TRM product to an internally developed ADP module or to third party
hardware or software and individuals installing and/or providing service
support for ADP WFC Software). Kronos reserves the right to audit ADP's
compliance with this paragraph.
(c) Notwithstanding Section 2(g) of this Restated Agreement, Kronos agrees to
permit ADP to maintain its arrangement with Global Management Technologies
(GMT), which arrangement will work as follows. ADP shall be permitted to
refer orders to GMT for a scheduling software product to be used only with
TRM Software. GMT will provide such scheduling software product directly to
ADP's TRM Software customer. GMT will also provide implementation and
ongoing support for such scheduling product; provided however, that in the
case of Hilton and Starwood, ADP shall perform the installation
implementation and ongoing support. GMT may pay ADP a commission equal to
ten percent (10%) of the retail value of the scheduling product (including
software, installation and training fees) for each referral which results
in a sale/license by GMT to ADP's TRM Software customer.
23. ADP WFC Software Pilot
The parties agree that they began participating in a Pilot program for
ADP WFC Software upon the signing of this Restated Agreement and such
Pilot shall run until July 1, 2001. The Pilot shall initially include
only base WFC Software, Workforce Accruals, Workforce Web and will use
400 Hardware. ADP can request that additional modules be added during
the Pilot, and the parties agree to add such additional modules, if
mutually agreed in writing. During the Pilot, ADP will make diligent
efforts to market the ADP WFC Software and associated Hardware, and
Kronos will assist ADP in such ADP WFC Software implementations, such
assistance to be provided at agreed upon rates. In addition, Kronos
will provide ADP with certain information concerning its WFC Software
(which shall be deemed confidential under Section 18 of this Restated
Agreement) and shall provide training to ADP concerning WFC Software,
the content and pricing for which shall be mutually agreed by the
parties.
24. Additional Provisions Applicable to Lite Software and
ADP-ized Lite Software
Notwithstanding any provisions to the contrary in this Restated
Agreement, the following provisions apply to Lite Software and ADP-ized
Lite Software: (a) ADP shall have the right to Sublicense the ADP-ized
Lite Software: (i) only to any person or entity which has 120 or fewer
employees using the ADP-ized Lite Software at any individual location;
and (ii) only to any person using the ADP-ized Lite Software with
Hardware which is a 150 or 154, or using such Software independent of
any hardware, (not including Devices) unless Kronos has given ADP its
written consent to Sublicense such Software on different Hardware for a
particular person or entity. In addition, Kronos grants to ADP the
right to combine the ADP-ized Lite Software with Devices (as defined in
this Restated Agreement), and Kronos shall waive the $25.00 fees which
would otherwise apply to such combinations. In the event that ADP
desires to combine the ADP-ized Lite Software with any data collection
equipment other than Hardware which is a 150, 154 or a Device, ADP
shall be required to obtain Kronos' prior written consent; provided
that if such equipment, which is non-Kronos data collection equipment
is materially different from, and not competitive with, any data
collection equipment then being sold by Kronos, ADP shall first request
that Kronos develop equipment equivalent to such non-Kronos equipment;
if Kronos declines to develop such equipment, Kronos shall not
unreasonably withhold its consent for ADP to combine the ADP-ized Lite
Software with the desired non-Kronos data collection equipment.
25. Miscellaneous.
(a) This Restated Agreement and the Exhibits attached hereto and
incorporated herein contain the entire agreement of the parties with
respect to its subject matter and supersede all existing agreements,
including the Original Agreement, and all other oral, written or other
communications between them concerning its subject matter, including,
without limitation, any summaries of terms and conditions hereof. This
Restated Agreement shall not be modified in any way except by a writing
signed by authorized representatives of both parties.
(b) This Restated Agreement shall be binding upon and inure to the benefit of
ADP and Kronos and their respective successors and permitted assigns. This
Restated Agreement, and the rights and obligations conveyed hereby, shall
not be assigned or otherwise transferred, voluntarily, by operation of law,
or otherwise by either party without the prior written consent of the other
party, and any attempt to assign any rights, duties or obligations which
arise under this Restated Agreement without such consent will be void. In
the event of a "Change of Control" of one party, as defined in the
following sentence, the other party shall have the option to terminate this
Restated Agreement by providing written notice to the party affected by the
Change of Control, within thirty (30) days of the event causing the Change
of Control. "Change of Control" shall mean: (i) the acquisition of
"beneficial ownership" (as defined in Rule 13d-3 of the Securities Exchange
Act of 1934) of securities representing 50% or more of the combined voting
power of a company's then outstanding securities by any "person" (as
defined in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934;
(ii) the complete liquidation of a company; (iii) the sale of all or
substantially all of the assets of a company; or (iv) a merger or
consolidation which would result in the voting securities of a company
outstanding immediately prior thereto continuing to represent less than 50%
of the combined voting power of that company or the surviving or acquiring
entity outstanding immediately after such merger or consolidation. In the
event of a Change of Control of Kronos, the surviving or acquiring entity
shall be required to offer to ADP all hardware and software being
marketed/licensed by Kronos at the time of the Change in Control (e.g.
AS/400 product line, ShopTrac(R)) with pricing at discounts equal to the
discounts applicable to ADP WFC Software and Hardware under this Restated
Agreement.
(c) If any provision of this Restated Agreement shall be held to be
invalid, illegal or unenforceable, the validity, legality or
enforceability of the remainder of this Restated Agreement shall not in
any way be affected or impaired thereby.
(d) This Restated Agreement shall be governed in all respects by the laws
of the State of New Jersey without giving effect to principles of
conflicts of law.
(e) All notices, requests, demands and other communications provided for by
this Restated Agreement shall be in writing and shall be deemed to have
been given (i) on the date delivered, if by personal delivery, (ii) one
day after being sent by overnight courier service, or (iii) three days
after being mailed, by certified or registered mail, return receipt
requested, in any United States post office or box addressed to the
address of the parties stated below or to such changed address as such
party may have fixed by written notice:
If to Kronos:
297 Billerica Road
Chelmsford, MA 01824
Attention: President, Chief Operating Officer
with a copy to the General Counsel at the same address
If to ADP:
ADP, Inc.
One ADP Boulevard
Roseland, New Jersey 07068
Attention: President, Employer Services Group
with a copy to the General Counsel at the same address
provided, however, that any notice of change of address shall be
effective only upon receipt.
(f) A waiver of any Event of Default under this Restated Agreement shall
not be a waiver of any other
or subsequent Event of Default. Failure or delay by either party to
enforce compliance with any terms or conditions of this Restated
Agreement shall not constitute a waiver of such terms or conditions.
(g) The persons executing this Restated Agreement on behalf of Kronos and
ADP represent and warrant that they respectively have been and are on
the date of this Restated Agreement duly authorized by all necessary
and appropriate corporate action to enter into and execute this
Restated Agreement.
(h) The parties agree that promptly after the execution of this Restated
Agreement they will cooperate, in good faith, to develop a press release
concerning this Restated Agreement and they shall jointly issue that press
release. Except as otherwise specifically provided herein, or as required
by law, each of the parties agrees that it will not publicly release
(through a press release or otherwise) the fact that they have entered into
this Restated Agreement, or use other party's name, logo or service mark in
connection with any advertising, sales or promotional activities unless the
President of ADP's Employer Services Group or the President of Kronos as
applicable, gives prior written consent in each instance.
(i) ADP agrees to maintain adequate financial records of all transactions
contemplated by this Restated Agreement. Not more than four times in
any calendar year, Kronos shall be entitled to audit and examine the
records maintained by ADP in connection with the transactions
contemplated by this Restated Agreement. Any such audit shall be during
normal business hours and upon at least ten business days prior written
notice. The cost of any such audit shall be borne by Kronos; provided
however, that if such audit demonstrates that ADP has underpaid any
amounts owed to Kronos by more than 7 1/2 % for the audited period, the
cost of the audit shall be borne by ADP.
(j) The headings in this Restated Agreement are intended for convenience of
reference and this Restated Agreement shall not be affected or impaired
thereby.
(k) This Restated Agreement may be executed in any number of counterparts,
each of which shall be deemed an original and all of which, taken
together, shall constitute one agreement.
(l)
(i) Any dispute, controversy or claim arising out of or in connection with this
Restated Agreement shall be determined and settled by arbitration in
Hartford, Connecticut. Any award rendered shall be final and conclusive
upon the parties and a judgment thereon may be entered in a court having
competent jurisdiction. The party submitting such dispute shall request the
American Arbitration Association to: (i) appoint an arbitrator who is
knowledgeable in the microcomputer area and familiar with the personal
computer software industry and who will follow substantive rules of law;
(ii) allow for the parties to request discovery pursuant to the rules then
in effect upon the Federal Rules of Civil Procedure for a period not to
exceed sixty (60) days; (iii) require the testimony to be transcribed; and
(iv) require the award to be accompanied by findings of fact and a
statement of reasons for the decision. Each party shall bear its own costs
and expenses, including attorney's fees, in connection with such
arbitration.
(ii) The parties hereto further agree that the preceding clause (l)(i)
shall not prevent either party from seeking injunctive relief in a
judicial proceeding as provided further in Section 14(g).
(m) If there is any inconsistency between the terms set forth in this
Restated Agreement and the terms of any Exhibit or Annex attached
hereto, the terms of the Restated Agreement shall control, except in
the case of Exhibits B, B-1, B-2, C, C-1 and C-2, which Exhibits shall
control in the event of inconsistency.
IN WITNESS WHEREOF, the parties hereto have executed this Restated
Agreement as of the date first above written.
ADP, INC.
By: __/s/ Gary C. Butler______________
(Authorized Signature)
Name: ____Gary C. Butler______________
(please print)
Title: President and Chief Operating Officer
KRONOS INCORPORATED
By: ___ /s/ Mark S. Ain________________
(Authorized Signature)
Name: _Mark S. Ain_____________________
(please print)
Title: _Chief Executive Officer_____________
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
EXHIBIT B
Description and Pricing for Hardware Used With ADP-ized TKC Software
DESCRIPTION PRICE
Clocks
Timeclock 440 Basic 256K *****
Timeclock 420 256K Gate w\Relay *****
Timeclock 480 256K *****
eTIME Heavy 140 *****
eTIME Heavy w\Modem 144 *****
ADP 256K Alpha Numeric Clock *****
Options
Smart Convertor *****
14.4 Modem *****
Remote Reader RS485 Kit *****
Relay Kit *****
Gasket Kit *****
Wand Kit *****
Internal AC Surge Protector *****
External Surge Protector *****
485 PC Board *****
Wrenches for clocks *****
Battery Back Up Kit *****
Lithium Battery *****
Power Supply Cord for Clock *****
Screws *****
ADP CCD Scanner Kit *****
ADP I\O Board*need this for scanner *****
40 Column Thermal Printer *****
Key Pad Repl *****
Journal Paper *****
Rem Rdr Kit Mag *****
Auxillary Power *****
400 Terminal pack *****
Alt Reader Mag *****
256K upgrade *****
Ethernet kit *****
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
Connectors and Cables
I/O to Main *****
DB9-25 Adapter *****
Smart Converter Cable *****
6 Position Connectors *****
Total Time Lite 100 ft cable *****
Printer Clock Cable 25ft *****
Total Time Lite 250 ft cable *****
5 Position Connectors *****
7 Position Connectors *****
140,144 Power Cord *****
4 Pin bell relay connector *****
Badges & Accessories
New Style Employee Badges packs of 50 *****
New Style Supervisor Badges *****
New Style Maintenance Badges *****
Bar Code Stickers packs of 50 *****
Function Key Labels\set *****
Badge Racks *****
Insert Bar Code Stickers packs of 50 *****
NOTE: Should new versions of the 140, 144 and 400 Series firmware be
released by Kronos which contain features designed to work in
conjunction with newly released software features being used by ADP,
these firmware versions will be provided to ADP at no additional cost.
NOTE: Kronos will provide a ***** discount on all Kronos manufactured
peripheral devices, not listed above. In addition, Kronos will provide
standard dealer discount on all non-Kronos manufactured peripheral
devices, not listed above.
NOTE: ADP recognizes and agrees that the ADP 140 and the ADP 144 are
designed for use at locations with fifty (50) or fewer employees a day
and will only permit fifty (50) or fewer employees to punch during a
day.
NOTE: Beginning October 15, 2000, the pricing for the 480 Clocks will
be priced at *****.
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
EXHIBIT B-1
Description and Pricing for Hardware Used with ADP-ized Lite Software
The following represents the pricing for bulk shipments of the ADP 150 and 154
clocks. These clocks are to be used for the EBS/Lite market only, 120 employees
and under.
Price
ADP 150 ********
ADP 154 (Modem) ********
The prices specified above are F.O.B. Chelmsford, Massachusetts, exclude freight
and tax costs, and are valid only for shipments of a minimum of 200 units per
order to a single delivery point. The prices include the user
manual/installation guide.
ADP agrees to the following pricing for the ADP 100 Series Hardware. These
quantities can be any combination of 150/154 and 140/144 Series Clocks.
150/140 154/144
Annual Quantities of 2500 and above ******** ********
Annual Quantities of 1500-2499 ******** ********
Annual Quantities of 1000-1499 ******** ********
Under 1000 Konos reserves the right to no longer sell the 100
Series Clocks to ADP
NOTE: Beginning on October 1,2000, Kronos will invoice ADP for the 100 Series
Clocks at the 2500 and above quantity price at the time of shipment. At the end
of each Kronos fiscal year (starting on 9/30/2001), Kronos will determine ADP's
100 Series purchases for that fiscal year and Kronos will invoice, and ADP will
pay, the difference in pricing if specified quantities are not met.
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
EXHIBIT B-1 (Contd.)
Connectors and Cables:
RJ11 100 Foot Cable *******
Transformer *******
Mounting Wedge *******
Adaptor RJ11 to DB9 ******* ***** if less than 500
Adaptor RJ11 to DB25F ******* ***** if less than 500
Wall Anchor Plastic *******
Screw *******
Mtg Screw Height Gauge *******
Connector Cover *******
Cable Tele Cord 7ft *******
Cable Tele Cord 10.5in *******
Comm board test kit ******* For quantity of 500 or less;
tooling fee will apply
Manuals:
Manual kit 140\150 *******
100 series install manual *******
NOTE: For all components above, if quantities of less than 500 units are
ordered, pricing will be at Kronos' standard dealer discount or, for the Adaptor
RJ11 as stated above. For example, if ADP orders 800 units of the Connector
Cover, 500 of those units will be priced at the ******* price above, and the
remaining 300 units will be priced at Kronos' standard dealer discount.
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
Exhibit B-2
Description and Pricing for Millennium Hardware
While Kronos is still offering the 400 Series Hardware to its End-Users, there
is no limit on the price that ADP will pay Kronos for the Millennium Terminal,
except for the Millennium Terminal with Ethernet (see example below) provided
however, that in no case will the Millennium Terminal price be greater than the
standard Kronos dealer discounted price. When Kronos discontinues the
availability of the 400 Series Hardware to its End-Users, Kronos will price the
Millennium Terminal to ADP at a price which is equal to the 480 Clock, plus a
Millennium Cost of no more than ***** per unit for similar configurations. The
Millennium Cost will be the difference between the comparable 400 Series
Hardware standard manufacturing cost (i.e., the cost at the time the comparable
400 Series Hardware was discontinued) and the standard manufacturing cost of the
Millennium Terminal. Every six months after the discontinuance of the 400 Series
Hardware, Kronos will review and update the Millennium Cost for ADP to reflect
Kronos' then current standard manufacturing cost for the Millennium Terminal. If
the Millennium Cost is lower as a result of the review and update, Kronos will
reduce the Millennium Cost charged to ADP.
480 Clock With Ethernet Configuration Example
Prior to After
10/15/00 10/15/00
ADP 480 Clock ***** *****
ADP Ethernet Kit ***** *****
Maximum Additional Millennium Cost ***** *****
Maximum TOTAL Millennium Price ***** *****
Millennium Prices After the 400 Series Hardware Has Been Discontinued
Modem Example:
Prior to After
10/15/00 10/15/00
ADP 480 Clock ***** *****
ADP Modem ***** *****
Maximum Additional Millennium Cost ***** *****
Maximum TOTAL Millennium Price ***** *****
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
RS 232/485 Example:
Prior to After
10/15/00 10/15/00
ADP 480 Clock with 232/485 ***** *****
Maximum Additional Millennium Cost ***** *****
Maximum TOTAL Millennium Price ***** *****
NOTE: Kronos and ADP will split the cost to ADP'ize the Millennium and the price
charged to ADP will not exceed $10,000. In addition to the software changes as
specified in Section 4 of the Restated Agreement, Millennium ADP'izing will
include the following:
o ADP will use the standard Millennium enclosure with the ADP logo
o No additional custom or ADP specific features/functionality
o Kronos will make necessary changes to enable ADP clocks to
communicate to ADP WFC Software and ADP-ized TKC Software (this is
the same change that is used in the Series 400 Terminals today),
subject to Section 4 of the Restated Agreement.
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
EXHIBIT C
Description and Pricing for ADP-ized TKC Software
<TABLE>
<CAPTION>
A. ADP-ized TKC SOFTWARE PRICING PRIOR TO 4/01/01:
TKC 3A Base Pricing TKC 4.X Base Pricing *
<S> <C> <C> <C>
e-TIME Heavy Single User 1000** ***** e-TIME Heavy SU 1000** *****
e-TIME Heavy Single User 5000** ***** e-TIME Heavy SU 2000** *****
e-TIME Heavy Multi User 1000** ***** e-TIME Heavy MU 1000** *****
e-TIME Heavy Multi User 5000** ***** e-TIME Heavy MU 2000** *****
TKC 3A Modules:
e-TIME Heavy Single User Accruals ***** e-TIME Heavy Syb upg SU 1000 *****
e-TIME Heavy Multi User Accruals ***** e-TIME Heavy Syb upg MU 1000 *****
TKC 4.X Modules
e-TIME Heavy SU Accruals *****
e-TIME Heavy MU Accruals *****
e-TIME Messaging SU *****
e-TIME Messaging MU *****
</TABLE>
EXHIBIT C NOTES:
**NOTE: ADP-ized TKC Base Software (prior to 4/01/01) includes the following
TKC Modules: CardSaver,
DataPoster, Scheduler (KSM) and Archiver (KAP).
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
<TABLE>
<CAPTION>
B. ADP-ized TKC SOFTWARE PRICING AFTER 4/01/01:
TKC 3A Base Pricing **** TKC 4.X Base Pricing ****
<S> <C> <C> <C>
e-TIME Heavy Single User 1000 ***** e-TIME Heavy SU 1000 *****
e-TIME Heavy Single User 5000 ***** e-TIME Heavy SU 2000 *****
e-TIME Heavy Multi User 1000 ***** e-TIME Heavy MU 1000 *****
e-TIME Heavy Multi User 5000 ***** e-TIME Heavy MU 2000 *****
e-TIME Heavy Syb upg SU 1000 *****
e-TIME Heavy Syb upg MU 1000 *****
TKC 3A Modules TKC 4.X Modules
e-TIME Heavy Single User Accruals ***** e-TIME Heavy Single User Accruals *****
e-TIME Heavy Multi User Accruals ***** e-TIME Heavy Multi User Accruals *****
e-TIME Heavy Single User Messaging ***** e-TIME Heavy Single User Messaging *****
e-TIME Heavy Multi User Messaging ***** e-TIME Heavy Multi User Messaging *****
e-TIME Heavy Single User Scheduler ***** e-TIME Heavy Single User Scheduler *****
e-TIME Heavy Multi User Scheduler ***** e-TIME Heavy Multi User Scheduler *****
</TABLE>
EXHIBIT C NOTES:
****NOTE: ADP-ized TKC Base Software (after 4/01/01) includes the following
TKC Modules: CardSaver, DataPoster and Archiver (KAP).
NOTE: ADP's price for new TKC Software Modules will be ***** off Kronos' list
price for the comparable (as to version and type) TKC Software Module.
NOTE: Prices are valid up to 5000 employee counts.
NOTE: If ADP wants to upgrade a customer from Single User to Multi User ADP-ized
TKC Software and/or wishes to increase the number of employees authorized to use
the software, ADP shall pay the difference between the prices then in effect for
the ADP-ized TKC Software (for users and/or employee levels) and the new price
for the increased number of users and/or employees.
NOTE: If ADP wants to upgrade a customer from ADP-ized TKC Software to ADP WFC
Software, ADP shall pay Kronos the difference between the prices then in effect
for the ADP-ized TKC Software and the prices then in effect for ADP WFC Software
with payment to include both an increase attributable to the number of users
and/or employees.
NOTE: For purposes of upgrading an existing ADP Sublicensee of ADP'ized TKC
Software to ADP WFC Software under Section 5 (c) of the Restated Agreement, the
number of users calculated toward the upgrade price is the maximum number of
users that is supported in the version of ADP-ized TKC Software which is being
upgraded (e.g., the maximum number of users supported in TKC version 4.0 is 15
users).
NOTE: ADP and Kronos understand and agree that if in the future, Kronos utilizes
third party products with TKC, Kronos and APD will need to agree upon the
license fees paid to Kronos by ADP for the third party products. This will be
the same process we followed for determining the TKC Sybase license fees that
ADP pays to Kronos.
NOTE: ADP duplicates and ships ADP'ized TKC Software directly to their end
users. ADP'ized TKC software usage is reported to Kronos on a monthly basis for
invoicing purposes. ADP assumes all duplication and distribution costs.
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
EXHIBIT C-1
Description and Pricing for ADP'ized Lite Softare
ADP'ized Lite Software is limited to 120 employees or less. Pricing for the
ADP'ized Lite Software is the following:
ADP'ized Lite Software: ********
Cap Release Software:
In addition to the ADP'ized Lite Software package, ADP may purchase a 200
employee Cap Release package. The Cap Release allows customers to increase their
employee limit to 200. This package must be purchased in conjunction with the120
employees license as follows:
ADP'ized Lite 120 employee Software ********
ADP'ized Lite 200 Cap Release Software ********
TOTAL ********
ADP'ized Lite (DOS):
Pricing for the DOS version of ADP'ized Lite Software and the Cap Release is as
follows:
ADP'ized Lite 120 employee Software ********
ADP'ized Lite 1000 employee Cap Release Software ********
TOTAL ********
ADP Duplication:
ADP duplicates and ships the software directly to their end users. Software
usage is reported to Kronos monthly for billing purposes. ADP assumes all
duplication and distribution costs.
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
CONFIDENTIAL TREATMENT
EXHIBIT C-2
DESCRIPTION AND PRICING FOR ADP WFC SOFTWARE AND MAINTENANCE
8/25/00
WORKFORCE TIMEKEEPER SOFTWARE V3.2 & WFC SUITE MANAGER
<TABLE>
<CAPTION>
US ADP ADP 10%
Description Part Number Retail Discount % Price Maint.
-------------------------------------------------------------------------------------------
Workforce Timekeeper Software Module V3.2
<C> <S> <S> <S> <S> <S>
KDEMO for Workforce TK V3.2 8601621-001 $50.00 ***
Workforce Timekeeper Quick tour CD 3800116-001 $ 5 ***
Workforce TK V3.2, 250ee 8601622-001 $ 11,250 *** *** ***
Workforce TK V3.2, 500ee 8601622-002 $ 22,500 *** *** ***
Workforce TK V3.2, 1000ee 8601622-003 $ 45,000 *** *** ***
Workforce TK V3.2, 1500ee 8601622-004 $ 67,500 *** *** ***
Workforce TK V3.2, 2000ee 8601622-005 $ 90,000 *** *** ***
Workforce TK V3.2, 3000ee 8601622-006 $135,000 *** *** ***
Workforce TK V3.2, 4000ee 8601622-007 $180,000 *** *** ***
Workforce TK V3.2, 5000ee 8601622-008 $225,000 *** *** ***
Workforce TK V3.2, 6000ee 8601622-009 $270,000 *** *** ***
Workforce TK V3.2, 7500ee 8601622-010 $337,500 *** *** ***
Workforce TK V3.2, 10000ee 8601622-011 $450,000 *** *** ***
Workforce TK V3.2, 12000ee 8601622-012 $540,000 *** *** ***
Workforce TK V3.2, 15000ee 8601622-013 $675,000 *** *** ***
Workforce TK V3.2, 17500ee 8601622-014 $787,500 *** *** ***
Workforce TK V3.2, 20000ee 8601622-015 $900,000 *** *** ***
Workforce TK V3.2, 25000ee 8601622-016 $1,125,000 *** *** ***
Workforce TK V3.2, 30000ee 8601622-017 $1,350,000 *** *** ***
Workforce TK V3.2, 40000ee 8601622-018 $1,800,000 *** *** ***
Workforce TK V3.2, 50000ee 8601622-019 $2,250,000 *** *** ***
Workforce TK V3.2, 60000ee 8601622-020 $2,700,000 *** *** ***
Workforce TK V3.2, 70000ee 8601622-021 $3,150,000 *** *** ***
Workforce TK V3.2, 80000ee 8601622-022 $3,600,000 *** *** ***
Workforce TK V3.2, 90000ee 8601622-023 $4,050,000 *** *** ***
Workforce TK V3.2, 100000ee 8601622-024 $4,500,000 *** *** ***
</TABLE>
Workforce TK V3.2.2 CD & Documentatio8700339-001 $85 *** NOTE: Workforce TK CD
and Documentation are to be used for demo and sales aids only. They do not
include a software license.
DESCRIPTION: A Time and Attendance solution with a user-configurable rules
engine for consistent application of pay policies across
the enterprise.
<TABLE>
<CAPTION>
Workforce Central Suite Manager V3.2
<C> <S> <S> <S> <S> <S>
Managers up to: 5 8601623-001 $2,000 *** *** ***
Managers up to: 25 8601623-002 $10,000 *** *** ***
Managers up to: 50 8601623-003 $20,000 *** *** ***
Managers up to: 100 8601623-004 $40,000 *** *** ***
Managers up to: 150 8601623-005 $60,000 *** *** ***
Managers up to: 200 8601623-006 $80,000 *** *** ***
Managers up to: 250 8601623-007 $100,000 *** *** ***
Managers up to: 300 8601623-008 $120,000 *** *** ***
Managers up to: 350 8601623-009 $140,000 *** *** ***
Managers up to: 400 8601623-010 $160,000 *** *** ***
Managers up to: 450 8601623-011 $180,000 *** *** ***
Managers up to: 500 8601623-012 $200,000 *** *** ***
Managers up to: 600 8601623-013 $240,000 *** *** ***
Managers up to: 700 8601623-014 $280,000 *** *** ***
Managers up to: 800 8601623-015 $320,000 *** *** ***
Managers up to: 900 8601623-016 $360,000 *** *** ***
Managers up to: 1000 8601623-017 $400,000 *** *** ***
Managers up to: 1500 8601623-018 $600,000 *** *** ***
Managers up to: 2000 8601623-019 $800,000 *** *** ***
Managers up to: 2500 8601623-020 $1,000,000 *** *** ***
Managers up to: 3000 8601623-021 $1,200,000 *** *** ***
Managers up to: 4000 8601623-022 $1,600,000 *** *** ***
Managers up to: 5000 8601623-023 $2,000,000 *** *** ***
</TABLE>
DESCRIPTION: Provides access to the Workforce Central Suite modules for
licensed managers.
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
<TABLE>
<CAPTION>
US ADP ADP 10%
Description Part Number Retail Discount % Price Maint.
------------------------------------------------------------------------------------------------------------
<C> <S> <S> <S> <S> <S>
Workforce Timekeeper Manuals
Workforce Timekeeper Installation Guide 4702173-001 $35.00 *** ***
Workforce Timekeeper Database Ref Guide 4702174-001 $35.00 *** ***
Database Admin Guide for Workforce Ctrl Apps 4702179-001 $35.00 *** ***
Database Install Guide for Workforce Ctrl Apps 4702177-001 $35.00 *** ***
Database Reference Guide for Workforce Central Common Table 4702178-001 $35.00 *** ***
Import Guide-Workforce Ctrl Apps:Table format 4702181-001 $35.00 *** ***
Import Guide-Workforce Ctrl Apps:EDI format 4702180-001 $35.00 *** ***
Workforce Timekeeper v3.2 ERD Diagram 4702175-001 $10.00 *** ***
Series 400 Terminal Configuration Guid 4701181-001 $35.00 *** ***
Workforce Timekeeper User Guide 4702085-001 $35.00 *** ***
WORKFORCE CENTRAL MODULES V3 (WFC Modules numbered 1-9)
1. Workforce Smart Scheduler V3.1
Smart Scheduler V3.1 , 250ee 8601631-001 $11,250 *** *** ***
Smart Scheduler V3.1 , 500ee 8601631-002 $22,500 *** *** ***
Smart Scheduler V3.1 , 1000ee 8601631-003 $45,000 *** *** ***
Smart Scheduler V3.1 , 1500ee 8601631-004 $67,500 *** *** ***
Smart Scheduler V3.1 , 2000ee 8601631-005 $90,000 *** *** ***
Smart Scheduler V3.1 , 3000ee 8601631-006 $135,000 *** *** ***
Smart Scheduler V3.1 , 4000ee 8601631-007 $180,000 *** *** ***
Smart Scheduler V3.1 , 5000ee 8601631-008 $225,000 *** *** ***
Smart Scheduler V3.1 , 6000ee 8601631-009 $270,000 *** *** ***
Smart Scheduler V3.1 , 7500ee 8601631-010 $337,500 *** *** ***
Smart Scheduler V3.1 , 10000ee 8601631-011 $450,000 *** *** ***
Smart Scheduler V3.1 , 12000ee 8601631-012 $540,000 *** *** ***
Smart Scheduler V3.1 , 15000ee 8601631-013 $675,000 *** *** ***
Smart Scheduler V3.1, 17500ee 8601631-014 $787,500 *** *** ***
Smart Scheduler V3.1, 20000ee 8601631-015 $900,000 *** *** ***
Smart Scheduler V3.1, 25000ee 8601631-016 $1,125,000 *** *** ***
Smart Scheduler V3.1, 30000ee 8601631-017 $1,350,000 *** *** ***
Workforce Smart Scheduler Manuals
Database Install Guide for Workforce Ctrl Apps 4702177-001 $35.00 *** ***
Database Reference Guide for Workforce Central Common Table 4702178-001 $35.00 *** ***
Import Guide-Workforce Ctrl Apps:EDI format 4702180-001 $35.00 *** ***
Database Admin Guide for Workforce Ctr Apps 4702179-001 $35.00 *** ***
Workforce Smart Scheduler V3 Entity Relationship Diagram (ERD 4702176-001 $10.00 *** ***
Workforce Smart Scheduler Database Reference Guide 4702193-001 $35.00 *** ***
Workforce Smart Scheduler Installation Guide 4702191-001 $35.00 *** ***
Workforce Smart Scheduler User Guide 4702059-001 $35.00 *** ***
Workforce Smart Scheduler V3.1 CD & Documentation 8700336-001 $85 *** ***
Workforce Smart Scheduler V3.1 CD only 3800230-001 $10 ***
<FN>
NOTE: Workforce Smart Scheduler CD and Documentation are to be used for demo and sales aids only.
They do not include a software license.
DESCRIPTION: Forecasts business volume and workload requirements, and creates detailed employee schedules.
</FN>
</TABLE>
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
<TABLE>
<CAPTION>
US ADP ADP 10%
Description Part Number Retail Discount % Price Maint.
---------------------------------------------------------------------------------------------------
<C> <S> <S> <S> <S> <S>
2. Workforce Accruals V3.2
Workforce Accruals V3.2, 250ee 8601624-001 $5,000 *** *** ***
Workforce Accruals V3.2, 500ee 8601624-002 $10,000 *** *** ***
Workforce Accruals V3.2, 1000ee 8601624-003 $20,000 *** *** ***
Workforce Accruals V3.2, 1500ee 8601624-004 $30,000 *** *** ***
Workforce Accruals V3.2, 2000ee 8601624-005 $40,000 *** *** ***
Workforce Accruals V3.2, 3000ee 8601624-006 $60,000 *** *** ***
Workforce Accruals V3.2, 4000ee 8601624-007 $80,000 *** *** ***
Workforce Accruals V3.2, 5000ee 8601624-008 $100,000 *** *** ***
Workforce Accruals V3.2, 6000ee 8601624-009 $120,000 *** *** ***
Workforce Accruals V3.2, 7500ee 8601624-010 $150,000 *** *** ***
Workforce Accruals V3.2, 10000ee 8601624-011 $200,000 *** *** ***
Workforce Accruals V3.2, 12000ee 8601624-012 $240,000 *** *** ***
Workforce Accruals V3.2, 15000ee 8601624-013 $300,000 *** *** ***
Workforce Accruals V3.2, 17500ee 8601624-014 $350,000 *** *** ***
Workforce Accruals V3.2, 20000ee 8601624-015 $400,000 *** *** ***
Workforce Accruals V3.2, 25000ee 8601624-016 $500,000 *** *** ***
Workforce Accruals V3.2, 30000ee 8601624-017 $600,000 *** *** ***
Workforce Accruals V3.2, 40000ee 8601624-018 $800,000 *** *** ***
Workforce Accruals V3.2, 50000ee 8601624-019 $1,000,000 *** *** ***
Workforce Accruals V3.2, 60000ee 8601624-020 $1,200,000 *** *** ***
Workforce Accruals V3.2, 70000ee 8601624-021 $1,400,000 *** *** ***
Workforce Accruals V3.2, 80000ee 8601624-022 $1,600,000 *** *** ***
Workforce Accruals V3.2, 90000ee 8601624-023 $1,800,000 *** *** ***
Workforce Accruals V3.2, 100,000ee 8601624-024 $2,000,000 *** *** ***
<FN>
DESCRIPTION: A leave management solution for employee benefit time such as
personal, vacation, compensatory, medical and other
forms of leave.
</FN>
3. Workforce Web
Workforce Web V3.2 50 8601670-001 $2,500 *** *** ***
Workforce Web V3.2 100 8601670-002 $5,000 *** *** ***
Workforce Web V3.2 150 8601670-003 $7,500 *** *** ***
Workforce Web V3.2 250 8601670-004 $12,500 *** *** ***
Workforce Web V3.2 500 8601670-005 $25,000 *** *** ***
Workforce Web V3.2 1000 8601670-006 $50,000 *** *** ***
Workforce Web V3.2 1500 8601670-007 $75,000 *** *** ***
Workforce Web V3.2 2000 8601670-008 $100,000 *** *** ***
Workforce Web V3.2 3000 8601670-009 $150,000 *** *** ***
Workforce Web V3.2 4000 8601670-010 $200,000 *** *** ***
Workforce Web V3.2 5000 8601670-011 $250,000 *** *** ***
Workforce Web V3.2 6000 8601670-012 $300,000 *** *** ***
Workforce Web V3.2 7500 8601670-013 $375,000 *** *** ***
Workforce Web V3.2 10000 8601670-014 $500,000 *** *** ***
Workforce Web V3.2 12000 8601670-015 $600,000 *** *** ***
Workforce Web V3.2 15000 8601670-016 $750,000 *** *** ***
Workforce Web V3.2 17500 8601670-017 $875,000 *** *** ***
Workforce Web V3.2 20000 8601670-018 $1,000,000 *** *** ***
Workforce Web V3.2 25000 8601670-019 $1,250,000 *** *** ***
Workforce Web V3.2 30000 8601670-020 $1,500,000 *** *** ***
<FN>
NOTE: Workforce Web is an employee license only.
DESCRIPTION: A web deployed time entry module for hours and exceptions providing
the professional workforce with a self-service method to submit labor data from
diverse environments.
</FN>
Workforce Web Manuals
Workforce Web Install & Config Guide (English) 4702253-001 $35 *** ***
Workforce Web Database Reference Guide 4702777-001 $35 *** ***
Workforce Web CD only 3800241-001 $25 *** ***
Workforce Web Documentation and CD 8700342-001 $85 ***
Workforce Web Install & Config Guide (French) 4702253-031 $35 *** ***
Workforce Web Install & Config Guide (Spanish) 4702253-021 $35 *** ***
<FN>
NOTE: Workforce Web CD and Documentation are to be used for demo and sales aids
only. They do not include a software license.
</FN>
</TABLE>
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
<TABLE>
<CAPTION>
US ADP ADP 10%
Description Part Number Retail Discount % Price Maint.
--------------------------------------------------------------------------------------------------
<C> <S> <S> <S> <S> <S>
4. Workforce Activities
Workforce Activities V3.1, 250ee 8601644-001 $5,000 *** *** ***
Workforce Activities V3.1, 500ee 8601644-002 $10,000 *** *** ***
Workforce Activities V3.1, 1000ee 8601644-003 $20,000 *** *** ***
Workforce Activities V3.1, 1500ee 8601644-004 $30,000 *** *** ***
Workforce Activities V3.1, 2000ee 8601644-005 $40,000 *** *** ***
Workforce Activties V3.1, 3000ee 8601644-006 $60,000 *** *** ***
Workforce Activities V3.1, 4000ee 8601644-007 $80,000 *** *** ***
Workforce Activities V3.1, 5000ee 8601644-008 $100,000 *** *** ***
Workforce Activities V3.1, 6000ee 8601644-009 $120,000 *** *** ***
Workforce Activities V3.1, 7500ee 8601644-010 $150,000 *** *** ***
Workforce Activities V3.1, 10000ee 8601644-011 $200,000 *** *** ***
Workforce Activities V3.1, 12000ee 8601644-012 $240,000 *** *** ***
Workforce Activities V3.1, 15000ee 8601644-013 $300,000 *** *** ***
Workforce Activities V3.1, 17500ee 8601644-014 $350,000 *** *** ***
Workforce Activities V3.1, 20000ee 8601644-015 $400,000 *** *** ***
Workforce Activities V3.1, 25000ee 8601644-016 $500,000 *** *** ***
Workforce Activities V3.1, 30000ee 8601644-017 $600,000 *** *** ***
Workforce Activities Manuals
Workforce Activities V3.1 Install Guide 4702194-001 $35 *** ***
Workforce Activities V3.1 Config Guide 4702195-001 $35 *** ***
Workforce Activities V3.1 Database Refence Guide 4702196-001 $35 *** ***
Workforce Activities V3.1 Import Guide 4702197-001 $35 *** ***
Workforce Activities V3.1 Quick Reference Card 4702198-001 $10 *** ***
Workforce Activities V3.1 CD & Documentation 8700338-001 $85 ***
Workforce Activities V3.1 ERD Diagram 4702199-001 $10 *** ***
<FN>
NOTE: Workforce Activities Enterprise CD and Documentation are to be used for demo and sales aids only.
They do not include a software license.
DESCRIPTION: Compliments time and labor information by tracking the activities a worker performs during the workday.
</FN>
5. Workforce Express
Workforce Express 50 ee 8601531-001 $2,500 *** *** ***
Workforce Express 100ee 8601531-002 $5,000 *** *** ***
Workforce Express 150ee 8601531-003 $7,500 *** *** ***
Workforce Express 250ee 8601531-004 $12,500 *** *** ***
Workforce Express 500ee 8601531-005 $25,000 *** *** ***
Workforce Express 1000ee 8601531-006 $50,000 *** *** ***
Workforce Express 1500ee 8601531-007 $75,000 *** *** ***
Workforce Express 2000ee 8601531-008 $100,000 *** *** ***
Workforce Express 3000ee 8601531-009 $150,000 *** *** ***
Workforce Express 4000ee 8601531-010 $200,000 *** *** ***
Workforce Express 5000ee 8601531-011 $250,000 *** *** ***
Workforce Express 6000ee 8601531-012 $300,000 *** *** ***
Workforce Express 7500ee 8601531-013 $375,000 *** *** ***
Workforce Express 10000ee 8601531-014 $500,000 *** *** ***
Workforce Express 5 Supervisors 8601532-001 $1,000 *** *** ***
Workforce Express 10 Supervisors 8601532-002 $2,000 *** *** ***
Workforce Express 15 Supervisors 8601532-003 $3,000 *** *** ***
Workforce Express 25 Supervisors 8601532-004 $5,000 *** *** ***
Workforce Express 50 Supervisors 8601532-005 $10,000 *** *** ***
Workforce Express 100 Supervisors 8601532-006 $20,000 *** *** ***
Workforce Express 150 Supervisors 8601532-007 $30,000 *** *** ***
Workforce Express 200 Supervisors 8601532-008 $40,000 *** *** ***
Workforce Express 250 Supervisors 8601532-009 $50,000 *** *** ***
Workforce Express 300 Supervisors 8601532-010 $60,000 *** *** ***
Workforce Express 350 Supervisors 8601532-011 $70,000 *** *** ***
Workforce Express 400 Supervisors 8601532-012 $80,000 *** *** ***
Workforce Express 450 Supervisors 8601532-013 $90,000 *** *** ***
Workforce Express 500 Supervisors 8601532-014 $100,000 *** *** ***
Workforce Express 600 Supervisors 8601532-015 $120,000 *** *** ***
Workforce Express 700 Supervisors 8601532-016 $140,000 *** *** ***
Workforce Express 800 Supervisors 8601532-017 $160,000 *** *** ***
Workforce Express 900 Supervisors 8601532-018 $180,000 *** *** ***
Workforce Express 1000 Supervisors 8601532-019 $200,000 *** *** ***
Workforce Express 1500 Supervisors 8601532-020 $300,000 *** *** ***
Workforce Express 2000 Supervisors 8601532-021 $400,000 *** *** ***
Workforce Express 2500 Supervisors 8601532-022 $500,000 *** *** ***
</TABLE>
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
<TABLE>
<CAPTION>
US ADP ADP 10%
Description Part Number Retail Discount % Price Maint.
---------------------------------------------------------------------------------------
<C> <S> <S> <S> <S> <S>
Workforce Express Manuals
Quick Reference Card (Outlook) 4702034-001 $2.30 ***
Quick Reference Card (Windows) 4702035-001 $2.30 ***
Quick Reference Card (Approvers) 4702056-001 $2.30 ***
Workforce Express Doc kit (manuals) 8700310-001 $25.00 ***
this kit includes all of the above documentation
in addition to a sys admin & install manuals
Workforce Express Software only (CD) 3800208-001 $12.00 ***
Workforce Express Software and Doc kit 8700304-001 $65.00 ***
<FN>
NOTE: Workforce Express CD and Documentation are to be used for demo and sales aids only. They do not include a software license.
Workforce Express only applies for Outlook and Windows client. There is no web solution for Workforce Express.
DESCRIPTION: A solution for collecting and managing time and project information from workers with access to a networked PC.
</FN>
6. Decisions
Decisions SU 500 8601543-001 $ 4,000 *** *** ***
Decisions SU 1000 8601543-002 $ 8,000 *** *** ***
Decisions SU 1500 8601543-003 $ 12,000 *** *** ***
Decisions SU 2000 8601543-004 $ 16,000 *** *** ***
Decisions SU 3000 8601543-005 $ 24,000 *** *** ***
Decisions SU 4000 8601543-006 $ 32,000 *** *** ***
Decisions SU 5000 8601543-007 $ 40,000 *** *** ***
Decisions MU 500 8601544-001 $ 6,000 *** *** ***
Decisions MU 1000 8601544-002 $ 12,000 *** *** ***
Decisions MU 1500 8601544-003 $ 18,000 *** *** ***
Decisions MU 2000 8601544-004 $ 24,000 *** *** ***
Decisions MU 3000 8601544-005 $ 36,000 *** *** ***
Decisions MU 4000 8601544-006 $ 48,000 *** *** ***
Decisions MU 5000 8601544-007 $ 60,000 *** *** ***
<FN>
DESCRIPTION: Connects frontline labor data with business performance measures
relating to sales activity, production efficiency, service quality, and other
key business drivers.
</FN>
7. Vision
Vision SU 500 8601539-001 $ 10,000 *** *** ***
Vision SU 1000 8601539-002 $ 20,000 *** *** ***
Vision SU 1500 8601539-003 $ 30,000 *** *** ***
Vision SU 2000 8601539-004 $ 40,000 *** *** ***
Vision SU 3000 8601539-005 $ 60,000 *** *** ***
Vision SU 4000 8601539-006 $ 80,000 *** *** ***
Vision SU 5000 8601539-007 $ 100,000 *** *** ***
Vision SU 6000 8601539-008 $ 120,000 *** *** ***
Vision SU 7500 8601539-009 $ 150,000 *** *** ***
Vision SU 10000 8601539-010 $ 200,000 *** *** ***
Vision SU 12000 8601539-011 $ 240,000 *** *** ***
Vision SU 15000 8601539-012 $ 300,000 *** *** ***
Vision SU 17500 8601539-013 $ 350,000 *** *** ***
Vision SU 20000 8601539-014 $ 400,000 *** *** ***
Vision SU 25000 8601539-015 $ 500,000 *** *** ***
Vision SU 30000 8601539-016 $ 600,000 *** *** ***
Vision MU 500 8601540-001 $ 15,000 *** *** ***
Vision MU 1000 8601540-002 $ 30,000 *** *** ***
Vision MU 1500 8601540-003 $ 45,000 *** *** ***
Vision MU 2000 8601540-004 $ 60,000 *** *** ***
Vision MU 3000 8601540-005 $ 90,000 *** *** ***
Vision MU 4000 8601540-006 $ 120,000 *** *** ***
Vision MU 5000 8601540-007 $ 150,000 *** *** ***
Vision MU 6000 8601540-008 $ 180,000 *** *** ***
Vision MU 7500 8601540-009 $ 225,000 *** *** ***
Vision MU 10000 8601540-010 $ 300,000 *** *** ***
Vision MU 12000 8601540-011 $ 360,000 *** *** ***
Vision MU 15000 8601540-012 $ 450,000 *** *** ***
Vision MU 17500 8601540-013 $ 525,000 *** *** ***
Vision MU 20000 8601540-014 $ 600,000 *** *** ***
Vision MU 25000 8601540-015 $ 750,000 *** *** ***
Vision MU 30000 8601540-016 $ 900,000 *** *** ***
</TABLE>
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
<TABLE>
<CAPTION>
US ADP ADP 10%
Description Part Number Retail Discount % Price Maint.
---------------------------------------------------------------------------------------
<C> <S> <S> <S> <S> <S>
8. Vision Plus
VisionPlus SU 500 8601537-001 $ 15,000 *** *** ***
VisionPlus SU 1000 8601537-002 $ 30,000 *** *** ***
VisionPlus SU 1500 8601537-003 $ 45,000 *** *** ***
VisionPlus SU 2000 8601537-004 $ 60,000 *** *** ***
VisionPlus SU 3000 8601537-005 $ 90,000 *** *** ***
VisionPlus SU 4000 8601537-006 $ 120,000 *** *** ***
VisionPlus SU 5000 8601537-007 $ 150,000 *** *** ***
VisionPlus SU 6000 8601537-008 $ 180,000 *** *** ***
VisionPlus SU 7500 8601537-009 $ 225,000 *** *** ***
VisionPlus SU 10000 8601537-010 $ 300,000 *** *** ***
VisionPlus SU 12000 8601537-011 $ 360,000 *** *** ***
VisionPlus SU 15000 8601537-012 $ 450,000 *** *** ***
VisionPlus SU 17500 8601537-013 $ 525,000 *** *** ***
VisionPlus SU 20000 8601537-014 $ 600,000 *** *** ***
VisionPlus SU 25000 8601537-015 $ 750,000 *** *** ***
VisionPlus SU 30000 8601537-016 $ 900,000 *** *** ***
VisionPlus MU 500 8601538-001 $ 22,500 *** *** ***
VisionPlus MU 1000 8601538-002 $ 45,000 *** *** ***
VisionPlus MU 1500 8601538-003 $ 67,500 *** *** ***
VisionPlus MU 2000 8601538-004 $ 90,000 *** *** ***
VisionPlus MU 3000 8601538-005 $ 135,000 *** *** ***
VisionPlus MU 4000 8601538-006 $ 180,000 *** *** ***
VisionPlus MU 5000 8601538-007 $ 225,000 *** *** ***
VisionPlus MU 6000 8601538-008 $ 270,000 *** *** ***
VisionPlus MU 7500 8601538-009 $ 337,500 *** *** ***
VisionPlus MU 10000 8601538-010 $ 450,000 *** *** ***
VisionPlus MU 12000 8601538-011 $ 540,000 *** *** ***
VisionPlus MU 15000 8601538-012 $ 675,000 *** *** ***
VisionPlus MU 17500 8601538-013 $ 787,500 *** *** ***
VisionPlus MU 20000 8601538-014 $ 900,000 *** *** ***
VisionPlus MU 25000 8601538-015 $ 1,125,000 *** *** ***
VisionPlus MU 30000 8601538-016 $ 1,350,000 *** *** ***
Vision, VisionPlus and Decisions:
SuperUser Seat License* 9990013-065 $ 500 *** *** ***
Concurrent Session License* 9990013-066 $ 250 *** *** ***
Additional Client License Crystal Reports 9990013-041 $ 350 *** *** ***
<FN>
*Multi-user licenses come with one superuser seat and up to 5 concurrent sessions.
DESCRIPTION: Vision and Vision Plus (also called Visionware) is a labor decision
support solution that allows healthcare organizations to manage labor needs by
helping them with mix and usage, labor distribution, productivity monitoring and
flexible budgeting. The differences between Vision and Vision Plus are in the
reports offered.
</FN>
9. Teletime Software
WF TELETIME V3.0,ADP,4 PORTS 8601561-101 *** ***
WF TELETIME V3.0,ADP,8 PORTS 8601561-102 *** ***
WF TELETIME V3.0,ADP,12 PORTS 8601561-103 *** ***
WF TELETIME V3.0,ADP,16 PORTS 8601561-104 *** ***
WF TELETIME V3.0,ADP,20 PORTS 8601561-105 *** ***
WF TELETIME V3.0,ADP,24 PORTS 8601561-106 *** ***
WF TELETIME V3.0,ADP,36 PORTS 8601561-107 *** ***
WF TELETIME V3.0,ADP,48 PORTS 8601561-108 *** ***
</TABLE>
NOTE: There is no US Retail price for Teletime because Kronos prices Teletime as
a bundled offering with software and hardware. The Teletime ADP Price is for
software only. DESCRIPTION: An interactive voice response system using a
telephone that acts as an alternative data collection device for remote workers
who do not have access to a Timekeeper terminal.
EXHIBIT C-2 NOTES:
NOTE: If ADP wants to upgrade a customer to a higher user and employee level,
ADP shall pay the difference between the original price paid (for users and
employee levels) and the new price for the increased number of users and
employees.
NOTE: ADP and Kronos understand and agree that if in the future, Kronos utilizes
3rd party products within WFC, we will need to agree upon the license fees paid
to Kronos by ADP to cover the fees associated with the 3rd party products. This
will be the same process we followed for determining the TKC Sybase license fees
that ADP pays to Kronos.
NOTE: Any description of any product included herein is only for informational
purposes at the time of signing of the Restated Agreement, and does not imply
that future releases/modules will maintain the same description provided within
this Exhibit.
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
EXHIBIT F-1
Hardware Maintenance Prices and Description of Services
The prices in the Description of Services below reflect prices in effect until
July 1, 2000. The prices in price chart below shall be substituted, as and when
applicable, for the prices specified in the Description of Services below. The
parties agree to reasonably negotiate the applicable price increase to be
effective July 1, 2002, based upon prices then in effect. If either party does
not desire to have Kronos continue to perform the maintenance described herein,
that party shall give the other party ninety (90) days advance written notice
prior to July 1 of the applicable year. In addition, if at any time during a
year, ADP believes the Maintenance provided by Kronos fails to satisfy the
description herein, ADP agrees to provide Kronos with written notice of such
failure(s), and give Kronos ninety (90) days to correct such failure. If Kronos
fails to correct such failure(s) by the end of such ninety (90) day period, ADP
may terminate the engagement of Kronos to perform maintenance services, subject
to the requirements of Section 11 of the Restated Agreement.
ADP HARDWARE SERVICES PRICES
<TABLE>
<CAPTION>
Price Prices Prices
Until July 1, 2000 July 1, 2001
Service June 30, 2000 to to
June 30, 2001 June 30, 2002
------------------------------------------ -------------------------- ------------------------- -------------------------
<C> <S> <S> <S>
On-site Service Call ***** ***** *****
Repair and Replacement ***** ***** *****
Peripheral Part Replacement ***** ***** *****
Installation of First Clock ***** ***** *****
Each additional clock install per ***** ***** *****
location on same trip
De-Installation of First clock ***** ***** *****
Each additional clock de-install per ***** ***** *****
location on same trip
Move of First clock ***** ***** *****
Each additional clock move per location ***** ***** *****
on same trip
Dead Run ***** ***** *****
Depot Exchange per incident ***** ***** *****
</TABLE>
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
Terms
o Above service and pricing is for the 400 Clock Series. 100 Series Clocks
are serviced only though the Kronos Repair Center (Depot Exchange). The
pricing and services descriptions here do not apply to the Millennium
terminal.
o Penalty/Bonus clause for response times variations for on-site service
calls. All penalty/bonus provisions apply only to the one business day
within 150 mile radius described below:
o Kronos will pay ADP *****if the average response time falls below 80%
for a given quarter. If Kronos' average response time exceeds 85%, ADP
will pay $4,800 to Kronos for a given quarter.
o As of July 1, 2000, the Penalty/Bonus Clause changes to:
o for response times averaging less than 60%, Kronos pays ADP ***** for that
quarter o for response times averaging 60% to 69%, Kronos pays ADP *****for that
quarter o for response times averaging 70% to 79%, Kronos pays ADP ***** for
that quarter o for response times averaging 80% to 85%, there is no
penalty/bonus paid to Kronos or ADP o for response times averaging greater than
85%, ADP pays Kronos a bonus of $5,000 for that quarter o On-Site Service Call:
o Request must be received from ADP help desk between 8:00 A.M. to
8:00 P.M. EST, Monday-Friday, Kronos holidays excluded.
o Service Technician will respond in one business day within a 150 mile radius o
Beyond 150 miles, the service will be through the Kronos Repair Center (Depot
Exchange). If ADP
specifically requests on-site services outside the 150 mile
radius, Kronos will make reasonable efforts not to exceed five (5)
business days response time.
o Clock Installation:
o Request must be received from ADP help desk between 8:00 A.M. to
8:00 P.M. EST, Monday-Friday, Kronos holidays excluded.
o Clock De-Installation:
o Request must be received from ADP help desk between 8:00 A.M. to
8:00 P.M. EST, Monday-Friday, Kronos holidays excluded.
o Clock Move:
o Request must be received from ADP help desk between 8:00 A.M. to
8:00 P.M. EST, Monday-Friday, Kronos holidays excluded.
o Clock Dead Run:
o ADP will pay the associated fee if a Service Representative goes
on-site in response to a service call and the ADP customer refuses
the service for any reason.
o ADP must have initiated the service request.
o Clock Repair Center (Depot Exchange):
o Request must be received from ADP from 8:00 A.M. to 8:00 P.M. EST,
Monday-Friday, Kronos holidays excluded.
o Applies to clocks outside the 150 mile radius
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
o ADP is required to own the field inventory for replacement clocks and
spare parts but Kronos shall bear the risk of loss for such field
inventory, so long as it is in Kronos' custody. Based upon ADP's
installed base of approximately 16,000 clocks, Kronos recommended that
ADP have 360-400 clocks for adequate field inventory. ADP agrees to
notify Kronos in writing if the installed base of clocks goes up 20% or
greater, so that Kronos can appropriately adjust its field inventory
recommendation.
o ADP's services billings must equal or exceed ***** for any quarter. If
ADP does not pay Kronos at least ***** for actual services (as
described in this Exhibit F-1) in a quarter, ADP agrees to pay Kronos
an amount sufficient to bring the total paid for services to ***** for
that quarter. Kronos will invoice ADP for, and ADP will pay Kronos any
such amounts within 30 days after the end of the applicable quarter.
o The prices herein are only offered as a complete services package and
are not available as separately priced items.
o Kronos does not provide on-site support for the RSI hand punch devices.
o The services descriptions and pricing above is applicable only in the
continental United States. For Canada, only depot exchange is
applicable.
DESCRIPTION OF SERVICES - NOTE: PRICES STATED HEREIN ARE APPLICABLE ONLY
UNTIL JUNE 30, 2000. PRICES IN THE CHART ABOVE SHALL REPLACE THESE PRICES ON
THE APPLICABLE DATES.
On-Site Per Incident Pricing:
On-site service for Kronos TK 400's is priced on a per incident basis to ADP.
For every service call dispatched by ADP's help desk to a Kronos dealer or
district office there will be a fee of ***** to go on-site. If it is determined
at that call that a part needs to be replaced, a Field Replaceable Unit (FRU)
will be exchanged for an additional *****. This ********** will include the
repair, replacement, and refurbishment through the Kronos repair center. If it's
determined that the FRU is not defective in the Kronos Repair Center, the
*****charge to ADP for repair will be waived. If it is determined at that call
that a peripheral part needs to be replaced (i.e. internal modem, I/O board,
Bell Relay) a Field Replaceable Unit (FRU) will be exchanged for an additional
*****. This ***** will include the replacement through the Kronos Repair Center.
If it is determined that the peripheral part is not defective in the Kronos
Repair Center, the ***** charge to ADP for repair will be waived. The Kronos
dealer or district service representative will be expected to have the necessary
parts to repair the unit when they arrive for the service call. The Kronos
dealer or district service representative will give their best effort to
reprogram the clock to the state it was before the malfunction. The *****
on-site cost will be waived for any additional on-site call that is a result of
a service representative not having the correct part to resolve the original
service call.
On-Site Cost *****
Repair and Replacement Cost *****
Peripheral Part Replacement Cost *****
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
Clock Installation Pricing:
On-site installation for Kronos TK 400's is priced on a per installation basis
to ADP. For every installation dispatched by ADP to Kronos dealer or district
office there will be a fee of ***** for the first clock installed and ***** for
each additional clock installed in the same location on the same trip. If an
installation has remote locations they will be priced at ***** for the first
clock installed and ***** for each additional clock installed in that same
remote location on the same trip. If an additional install is requested in the
future which would require a separate trip, that installation would be charged
at ***** for the first clock installed and *****for each additional clock
installed.
Install of First Clock *****
Install of each additional clock (on the same trip) *****
De-Installation Pricing:
On-site de-installation for TK 400's is priced on a per de-installation basis to
ADP. For every de-installation dispatched by ADP to a Kronos dealer or district
office there will be an on-site fee of ***** for the first clock de-installed
and ***** for each additional de-install in the same location on the same trip.
If a de-installation has remote locations, they will be priced at ***** for the
first clock de-installed and ***** for each additional clock in that same remote
location on the same trip. If an additional de-install is requested in the
future which would require a separate trip, that de-installation would be
charged at ***** for the first clock de-installed and ***** for each additional
clock de-installed on the same trip. The clocks that are de-installed will be
shipped to the Kronos repair center to be refurbished for *****
De-installation of First Clock *****
De-installation of each additional Clock (on the same trip) *****
Clock Move Pricing:
On-site moves for TK 400's are priced on a per move basis to ADP. For every move
of a clock dispatched by ADP to a Kronos dealer or district office there will be
a fee of ***** for the first clock moved and ***** for each additional clock
moved in the same location on the same trip. The pricing is similar to an
install due to the same time and service requirements. The Kronos dealer or
district service representative will give their best effort to reprogram the
clock to its originate state before it was moved. If a clock move has remote
locations, they will be priced at ***** for the first clock moved and ***** for
each additional clock moved in that same remote location on the same trip. If an
additional clock move is requested in the future which would require a separate
trip, that clock move would be charged at ***** for the first clock moved and
***** for each additional clock moved on the same trip.
Move of First Clock *****
Move of each additional Clock (on the same trip) *****
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
Dead Run Pricing:
ADP will be billed ***** if a Kronos district or dealer service representative
goes on-site to a service call or an implementation and the customer refuses the
service for any reason. This service call or implementation must have been
initiated by ADP to go on-site.
Dead Run Cost *****
Depot Exchange:
Kronos will ship a replacement unit to a customer via next day service, for all
calls received prior to 3:30 P.M. Eastern Standard Time, Monday-Friday, Kronos
holidays excluded. All calls received after 3:30 P.M. Eastern Standard Time,
Monday-Friday, Kronos holidays excluded, will be shipped on the following
business day. ADP's help desk is required to validate the problem in question.
All Hardware shipped from the Depot Center is at the latest revision, and Kronos
pays freight both ways. A prepaid UPS shipping document is included with each
shipment. The ADP customer is required to return the failed clock to Kronos in
the same container and packaging in which the replacement was sent. Kronos will
give a 30 day timeframe for clocks to be returned from the ADP customers to the
Kronos repair center. After the 30 days, ADP will be invoiced for, and agrees to
pay, the full price of the clock. It will be ADP's responsibility to manage
clock returns after the 30 day timeframe.
Depot Exchange Cost *****
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
EXHIBIT F-2
1) Testing. All records of inspections and tests of Hardware will be made
available to ADP for review during regular business hours upon reasonable
prior notice. ADP or its designee shall also have the right to witness
Kronos' inspections and tests during regular business hours upon reasonable
prior notice.
2) Spare Parts.
a) For a period of ********* years after the date of the last shipment of
Hardware under the Restated Agreement, Kronos shall make commercially
obtainable spare parts for the Hardware available to ADP if available
through Kronos' suppliers, and if Kronos makes such spare parts
available to its own customers and dealers. During the term of the
Restated Agreement, spare parts shall be priced in accordance with
Kronos' ******** spare parts price list. Thereafter, spare parts shall
be priced at Kronos' then effective price.
b) (i) Orders for spare parts placed on a "rush" basis and received by
Kronos on or before 12:00 noon eastern standard time, Monday through
Friday, exclusive of Kronos holidays, will be shipped to ADP on the day
the order is received, so long as the spare part is in Kronos' stock at
the time the order is placed. Kronos will charge ADP $50.00 for each
rush order processed. (ii) Orders for in-stock spare parts not
designated as "rush" ordered by ADP will be shipped on the next
business day.
3. Installation, Acceptance and Quality Control
(a) Kronos shall assemble and test all Hardware at its own expense prior to
shipment to ADP or ADP Clients.
(b) If at any time ADP can document that a greater than 5% failure rate on
Hardware is experienced by ADP
or any ADP Client in any sequential 100 items of Hardware delivered or
in Hardware delivered during any consecutive three month period, Kronos
shall, at ADP's option and promptly after ADP's demand therefore:
(i) supply on-site technical support at ADP's designated locations to
repair all Hardware at no charge to ADP. If Kronos provides such
on-site support and it is determined that the Hardware is not
defective, ADP shall pay for the related service calls at the then
existing standard rate for such service; and/or
(ii) perform a quality audit at Kronos' factory; and/or
(iii) permit ADP to return all affected Hardware and all other Hardware
delivered during the period such problems were experienced to Kronos'
factory for either repair or replacement at no charge to ADP, and
Kronos shall pay all shipment costs both to and from Kronos' factory.
The date ADP and Kronos mutually agree that such quality problems have
been cured by Kronos shall be the date ADP executes an acceptance on a
written notice from Kronos notifying ADP of such cure, which acceptance
shall not be unreasonably withheld. The warranty period for all
Hardware of the same model designation delivered during a period of
quality problems shall be extended by an amount equal to any cure
period taken by Kronos pursuant to this Section 3(b).
(c) ADP will install or arrange for the installation of the Hardware at its
final destination at its cost and expense, if any.
4. Hardware Changes
a) Kronos, at no charge to ADP, reserves the right upon 30 days prior written
notice to ADP, at any time prior to delivery of any Hardware, to make
changes to the Hardware or any component modules (i) which do not affect
physical or functional interchangeability or compatibility or performance
at a higher level of assembly, or (ii) when required for purposes of
safety, or (iii) to meet Kronos' product specifications, provided, that in
the case of changes for purposes of safety or to meet Kronos' products
specifications, such changes shall not affect the Hardware's physical or
functional interchangeability or compatibility or performance at a higher
level of assembly, and provided further, that in each of the above
instances Kronos will supply ADP with engineering documentation with
respect to such changes. In no event shall such engineering documentation
be provided by ADP to any third party. All Hardware of the same model
designation purchased by ADP hereunder shall be interchangeable and
compatible or, if such Hardware is not interchangeable or compatible,
Kronos agrees that it will, at its option, either (i) provide supplemental
spare parts or subassemblies to ADP sufficient to maintain the new Hardware
at no charge to ADP, or (ii) make all such changes to the previously
delivered Hardware so as to retrofit such Hardware, at no charge to ADP.
b) Although Kronos shall be under no obligation to do so, ADP may request
that Kronos make changes in specifications, capabilities and/or
configuration to the Hardware provided that:
i) ADP requests such changes in writing not less than 90 days in advance;
and
ii) any reasonable delay in delivery of the Hardware resulting from the
implementation of such changes shall not constitute a breach hereunder;
and
iii) ADP pays the cost of any such changes.
c) Kronos agrees to advise ADP, as promptly as practicable after
announcement of any safety changes to any Hardware previously purchased
by ADP, and to deliver to ADP, without cost to ADP (so long as such
safety changes are generally made available by Kronos to its customers
on a no charge basis), all parts necessary to make such safety changes
so as to maintain the Hardware at its then most current safety level.
If ADP requests installation of a safety change by Kronos for which
Kronos charges its customers, Kronos reserves the right to charge ADP
for such services.
<PAGE>
5. Field Change Order
a) If any changes, other than changes for the purpose of safety which are
covered in Section 4 (c), are in Kronos' reasonable opinion, required
in order to make any Hardware sold hereunder operate correctly or meet
the agreed upon specifications or comply with the warranties set forth
in this Agreement, Kronos shall correct any such deficiency and provide
ADP with adequate notice of such change in accordance with its existing
dealer notification process. In the event of Kronos making such a
change, at its option, Kronos may direct the ADP Clients using the
Hardware to return the Hardware to Kronos, at Kronos' cost, so that
Kronos may install such change.
b) In addition, it is recognized by the parties that there may be other
changes which are designated to improve the efficiency of the Hardware
which are optional field change orders. Within 120 days after formal
issuance of any such change, Kronos shall make kits of materials and
documentation available to ADP. Such materials and documentation,
together with the cost of implementing any change, shall be invoiced by
Kronos to ADP at the then appropriate Kronos dealer price applicable to
the unit to which such change order applies.
6. Hardware Documentation
a) Kronos shall supply a set of Operating Manuals with each unit of
Hardware shipped hereunder at no charge to ADP. ADP may, at its option,
purchase additional sets of the Operating Manuals at the then current
standard dealer price.
b) Kronos shall provide ADP with up to six complete sets of the applicable
technical service documentation (including diagnostic software) each
year for the duration of this Agreement at no charge to ADP. Each
additional set will be at a cost to be agreed to by Kronos and ADP. ADP
may reproduce service documentation, at no charge. Kronos shall put ADP
on automatic distribution of all service documentation at no cost to
ADP. Kronos will also provide current information on any new or revised
course materials and provide copies of new materials or aids upon
request at Kronos' cost.
c) It is understood and agreed that all Hardware Documentation provided
under this Section 6 (including, but not limited to Operating Manuals,
technical service documentation, diagnostic software and new or revised
course materials) shall constitute the Confidential Information under
the Restated Agreement.
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
EXHIBIT G
Procedure for Return/Refurbishment of Certain Hardware
1. This Procedure only applies to the 400 series and 140's, and 144 Hardware.
The Procedure does not apply to the 150 series Hardware, the Millennium
terminal, or any other Hardware. In connection with the release of the
Millennium series Hardware, Kronos will negotiate in good faith with ADP to
develop a procedure for the refurbishment of such Hardware, or shall
develop with ADP an alternative method enabling ADP to refurbish such
Hardware.
2. This Procedure applies when ADP or an ADP Customer returns a Hardware
terminal to Kronos requesting refurbishment for any reason, except that
this Procedure does not apply when Hardware Maintenance is required under
Exhibit F-1.
3. Upon the return of a terminal to which this Procedure applies, Kronos
agrees to refurbish that terminal and place it into an inventory for ADP.
New Hardware orders from ADP will be filled through this inventory and will
be at the prices specified in Exhibit B of the Restated Agreement.
4. ADP will pay Kronos a refurbishing fee of *****for each 400 series terminal
and *****for each 140 series terminal. In addition, Kronos will issue a
credit to ADP of an amount equal to the then current selling price of the
applicable terminal.
5. Kronos will not refurbish, or grant ADP any credit for, any terminal on
which the main board has been damaged.
6. Kronos reserves the right to modify or discontinue this Procedure at any
time, upon six (6) months advance written notice to ADP.
7. When Kronos discontinues the sale of the 400 series Hardware, ADP shall
purchase within six (6) months all terminals which have been placed into
the inventory for ADP under Section 3 above, and Kronos reserves the right
to discontinue this Procedure for such discontinued Hardware.
<PAGE>
ANNEX I
ADP SOFTWARE LICENSE
CAREFULLY READ ALL OF THE TERMS AND CONDITIONS OF THIS LICENSE BEFORE BREAKING
THE SEAL OF THE MEDIA. OPENING THE MEDIA CONSTITUTES ACCEPTANCE OF ALL OF THE
TERMS AND CONDITIONS OF THIS LICENSE. If you do not agree to these terms and
conditions, you may return the media and the other components of this product to
the place from which you acquired it and obtain a refund. No refund will be
given if the seal has been broken on the media.
The Software is the licensed and/or owned property of, and embodies the
proprietary trade secret technology of ADP and/or its licensor. Unauthorized use
and copying of such Software is prohibited by law, including United States and
foreign copyright law. The price you pay to ADP for a copy of the program
constitutes a license fee that entitles you to use the program as set forth
below and if you discontinue paying ADP, the license is terminated and the
provisions of F. below shall apply.
License Terms. ADP grants to Customer a non-exclusive, nontransferable License
to use the Software included in this package (the "Software"). This License may
be terminated by ADP by written notice to Customer upon any material breach by
Customer. This License is subject to all of the terms of this Agreement,
including those set forth below:
A. Customer recognizes and agrees that the license to use the Software is
limited, based upon the amount of the license fee paid by Customer.
Limitations may include the number of employees, simultaneous or active
users, product modules, features, computer model and serial number and/or
the number of terminals to which the Software is permitted to be connected.
Customer agrees to: 1) use the Software only for the number of employees,
simultaneous or active users, computer model and serial number and/or
terminals permitted by the applicable license fee; 2) use only the product
modules and/or features permitted by the applicable license fee; and 3) use
the Software only in support of Customer's own business. Customer agrees
not to increase the number of employees, simultaneous or active users,
terminals, product modules, or features, or to upgrade the model, as
applicable, unless and until Customer pays the applicable fee for such
increase or upgrade. Customer may not relicense or sublicense the Software
to, or otherwise permit use of the Software (including timesharing or
networking use) by any third party. Customer may not provide service bureau
or other data processing services that make use of the Software without the
express prior written consent of ADP. Customer may use any embedded
database or remote support software only in conjunction with ADP products
and services.
B. Customer may use the computer programs included in the Software (the
"Programs") in object code form only, and shall not reverse compile,
disassemble or otherwise convert the Programs into uncompiled or
unassembled code.
C. Customer may copy the Programs only as reasonably necessary to load and
execute the Programs and for backup purposes. All copies of the
Programs or any part thereof, whether in printed or machine readable
form and whether on storage media or otherwise, are the licensed and/or
owned property of ADP and are subject to all the terms of this License,
and all copies of the Programs or any part of the Programs shall
include the copyright and proprietary rights notices contained in the
Programs as delivered to the Customer.
<PAGE>
D. Customer may not sell, assign, convey, or otherwise transfer the
Software to any third party without the prior written consent of ADP.
E. In the event that ADP supplies updates, corrections, modifications, new
versions or new releases of the Software, (collectively referred to as
"Updates"), such Updates shall be part of the Software and the
provisions of this License shall apply to such Updates and to the
Software as modified thereby. If an Update is provided, Customer may
utilize either the Update or prior version of the Software, but never
both at the same time.
F. Customer may terminate this License at any time by returning to ADP the
original copy of the Software and destroying all other copies of the
Software. Upon termination of this License by ADP, Customer will also
return the original Software to ADP and destroy all other copies of the
Software.
G. Customer shall be solely responsible for compliance with any laws,
rules and regulations governing the export of the Software outside the
U.S.. Customer shall not export or re-export the Software, directly or
indirectly, without first obtaining the written approval or required
license from the U.S. Department of Commerce or any other agency of the
U.S. Government having jurisdiction over such transaction. The
assurances in this Section shall survive termination of this License.
Limited Warranty. ADP warrants to Customer that the media on which the Programs
are recorded shall be free from defects in materials or manufacture under normal
use for a period of 90 days from the date of shipment of the media. Programs
found to have a defect in the media will be replaced at no charge to Customer if
returned to ADP within such 90 day period. If the defect results from accident,
abuse or mishandling or Customer's failure to provide a suitable installation
environment, ADP will have no responsibility to replace the media.
EXCEPT AS PROVIDED ABOVE, THE SOFTWARE, INCLUDING DOCUMENTATION, IS PROVIDED "AS
IS" AND NO WARRANTY OF ANY KIND, INCLUDING BUT NOT LIMITED TO ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, IS MADE BY OR AUTHORIZED TO
BE MADE ON BEHALF OF ADP. CUSTOMER ASSUMES THE ENTIRE RISK OF THE RESULTS OF
PERFORMANCE OF THE SOFTWARE OR OF THE FAILURE OF THE SOFTWARE TO PERFORM.
Limitation of Liability. ADP's entire liability to Customer and Customer's
exclusive remedy shall be replacement of defective media as provided above, or
if ADP is unable to deliver a replacement that is free of media defects,
Customer may terminate this Agreement and receive a refund of the License fee.
IN NO EVENT WILL ADP BE LIABLE FOR ANY DAMAGES, INCLUDING LOST PROFITS OR ANY
SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, ARISING OUT OF THIS
LICENSE OR THE USE OR INABILITY TO USE THE SOFTWARE, WHETHER CLAIMED UNDER THIS
LICENSE OR OTHERWISE.
<PAGE>
Nondisclosure. The Programs, terms, pricing and all information identified as
confidential under this Agreement are considered confidential information
("Confidential Information"). Confidential Information shall not include
information that: a) becomes part of the public domain without breach of this
Agreement by Customer; b) has been published or is generally known to the public
at the time of its disclosure to Customer; c) was at the time of receipt
otherwise lawfully known to Customer; or d) is disclosed with the written
approval of ADP. Customer agrees not to make Confidential Information available
in any form to any third party and not to use Confidential Information for any
purpose other than the implementation of this Agreement. Customer agrees to take
all reasonable steps to ensure that Confidential Information is not disclosed in
violation of the terms of this Agreement.
U. S. Government Restricted Rights. The Software and written materials
accompanying the Software are provided with RESTRICTED RIGHTS. Use, duplication,
or disclosure by the Government is subject to restrictions set forth in
subparagraph (c) (1) (ii) of the Rights in Technical Data and Computer Software
clause at DFARS 252.227-7013 or subparagraphs (c)(1) and (2) of the Commercial
Computer Software Restricted Rights 48 CFR 52.227-19, as applicable. Contractor
is ADP, Inc., 1 ADP Boulevard, Roseland, NJ 07643. Manufacturer is Kronos
Incorporated, 297 Billerica Road, Chelmsford, Massachusetts 01824. Kronos
reserves all rights under the copyright laws of the United States.
General. No action, regardless of form, may be brought by either party more than
one (1) year after the cause of action has arisen, except that an action for
non-payment may be brought by ADP within two (2) years after the last payment by
Customer.
This License Agreement shall be governed by the laws of the State of New Jersey.
<PAGE>
Annex III
Automatic Data Processing, Inc. TO BE
PREPARED AND
One ADP Boulevard SIGNED IN
DUPLICATE
Roseland, New Jersey 07868
For good and valuable consideration, the sufficiency and receipt of
which is hereby acknowledged, I agree with you that:
1. (a) During and at any time after my employment with Automatic Data
Processing, Inc. and/or any of its divisions, subsidiaries and affiliates
(collectively "ADP"), I shall not use, or disclose to any person, corporation,
partnership or other entity whatsoever any confidential information, trade
secrets, and proprietary information of ADP, its vendors, licensors, marketing
partners, or any of its clients (including, but not limited to, (i) ADP's
business methods, procedures, pricing and marketing structure and strategy which
are not publicly available and which I did not learn from a public source, (ii)
ADP's source and object codes, computer screens, programs and forms,
experimental or research work, methods, processes, formulas or drawings, and
(iii) the names, addresses and business activities of ADP's current, former and
prospective clients, and/or ADP's and ADP's current, former and prospective
clients' employees) learned by me at any time during my employment with ADP.
(b) Upon ceasing to be an ADP employee, I shall
immediately return all documents and notes (including
all copies thereof) of any and all information and
materials belonging or relating to ADP (whether or
not such materials were prepared by ADP, me or
another person) and which are in my possession or
over which I exercise any control.
(c) I agree that my violation of any provision of
Paragraph 1(a) above will cause irreparable injury to
ADP. Accordingly, ADP shall be entitled, in addition
to any other rights and remedies it may have at law
or in equity, to an injunction enjoining and
restraining me from violating, or continuing to
violate, any such provision.
2. I understand and agree that ADP shall have exclusive rights to
anything relating to ADP's actual or prospective business which I
conceive or work on while employed by ADP. Accordingly:
(a) I shall promptly and fully disclose all such items to
ADP and will not disclose such items to any other
person or entity (other than employees of ADP
authorized to review such information), without ADP's
prior consent;
(b) I shall maintain on ADP's behalf and surrender to ADP upon ceasing
to be an ADP employee all written records regarding all such items;
(c) I shall, but without personal expense, fully
cooperate with ADP and execute all papers and perform
all acts requested by ADP to establish, confirm or
protect its exclusive rights in such items or to
enable it to transfer legal title to such items,
together with any patents, copyrights, trademarks,
service marks and/or trade names that may be applied
for and/or issued;
(d) I shall, but without personal expense, provide such
information and true testimony as ADP may request
regarding such items including, without limitation,
items which I neither conceived nor worked on but
regarding which I have knowledge because of my
employment by ADP; and
(e) I hereby assign to ADP, its successors and assigns,
exclusive right, title and interest in and to all
such items including, without limitation, any
patents, copyrights, trademarks, service marks and/or
trade names which have been, or may be, issued.
3. I understand and agree that I am employed on an at-will basis. As an
at-will employee, I understand and agree that either ADP or I can terminate our
employment relationship at any time for any reason, with or without advance
notice and with or without cause. I understand and agree that, although over the
course of my employment, other terms and conditions of my employment may change,
the at-will term of my employment will not change. I understand that no one
other than the Chief Executive Officer of ADP may enter into any agreement with
me contrary to the foregoing and that any such contrary agreement must be in
writing and signed by the Chief Executive Officer.
4. All notices shall be sent to the parties by certified or registered
mail at the addresses set forth herein, Attention, in the case of ADP, Vice
President, Human Resources, or to any changed address which may be given in
writing hereafter. All notices to ADP shall also include a copy to ADP at One
ADP Boulevard, Roseland, New Jersey 07068, Attention: General Counsel.
5. If any provision of this Agreement is held to be invalid or
unenforceable, the balance of this Agreement shall remain in effect, and if any
provision is inapplicable to any person or circumstance it shall nevertheless
remain applicable to all other persons and circumstances.
Very truly yours,
------------------------------
(Signature of Employee)
ACCEPTED AND AGREED: Date: ______________________________
AUTOMATIC DATA PROCESSING, INC. (print or type)
Name of
Employee: ___________________________
(print or type)
By: /s/ Fred S. Lafer Address of
Fred S. Lafer, Senior Vice President Employee: ___________________________
(print or type)
9711 (6-92) Printed in U.S.A. (C) 1992 Automatic Data Processing, Inc.
<PAGE>
Annex IV
TO BE PREPARED AND
SIGNED IN DUPLICATE
PROFESSIONAL SERVICES AGREEMENT
Gentlemen:
This will confirm our agreements with respect to you ("Consultant")
furnishing us ("ADP") with the services of qualified personnel
("Personnel"), subject to the terms and conditions set forth below. ADP
and Consultant agrees as follows:
1. SERVICES.
(a) In accordance with the terms and conditions of this Agreement,
Exhibit A hereto and such supplements to this Agreement as may
from time to time be signed by ADP and Consultant (such
Exhibit A and supplements being hereinafter collectively
referred to as the "Supplements"). Consultant shall furnish
ADP with qualified Personnel who shall provide ADP with such
consulting services, systems analysis and design services
and/or programming services as may be agreed to by ADP and
Consultant, (the "Services").
(b) Each Supplement shall specify (i) the Services to be provided
to ADP, (ii) the names of the Personnel who will provide such
Services, (iii) the period of time during which such Personnel
will perform such Services, and (iv) the payments to be made
by ADP for such Services.
2. OWNERSHIP RIGHTS.
(a) (i) Consultant and the Personnel agree to assign, and hereby assign, to ADP
the entire right, title and interest for the entire world in and to all
data, programs, specifications, documentation and other information
including, without limitation, any and all patent, copyright, trade secret
or other proprietary rights relating thereto (the "Proprietary
Information"), made, prepared or created by Consultant and/or the Personnel
in connection with the performance of the Services under the applicable
Schedule. The Proprietary Information will become ADP's sole and absolute
property, and neither Consultant nor the Personnel shall have any rights
thereto. (ii) Consultant and the Personnel agree to sign, execute and
acknowledge or cause to be signed, executed and acknowledged, without cost
to Consultant and the Personnel but at the expense of ADP, any and all
documents and to perform such acts as may be necessary, useful or
convenient for the purpose of securing to ADP patent, copyright, trade
secret or other proprietary protection throughout the world relating to the
Proprietary Information.
(b) Title to all "ADP Information" (as defined in Paragraph 7(a)
below), which includes the Proprietary Information, shall
remain with ADP. Consultant and the Personnel shall not have
any rights to the ADP Information, except the right to use the
ADP Information in accordance with the terms and conditions of
this Agreement. Consultant and the Personnel shall hold the
ADP Information in confidence in accordance with Paragraph 7
below and shall promptly return any and all of the ADP
Information to ADP at ADP's request
3. WARRANTY: INDEMNIFICATION.
(a) Consultant represents and warrants that the performance of the
Services by Consultant and the Personnel will not violate any
proprietary rights of any third party (including, without
limitation, any third party confidential relationships,
patents, copyrights, trade secrets or other proprietary
rights).
(b) Consultant agrees to indemnify and save ADP harmless from any
loss, claim, damage, costs or expense of any kind (including,
without limitation, reasonable attorneys' fees) to which Buyer
may be subjected by virtue of a breach by Consultant or the
Personnel of the warranty set forth in Paragraph 3(a) above.
4. PERSONNEL.
(a) (i) The Personnel shall perform their assignments under the direction of,
and at the site specified by, ADP's Project Manager in charge of the
applicable project. Unless otherwise set forth in the applicable
Supplement, the Personnel shall devote their full knowledge, skill and time
to performing the applicable Services. (ii) While the Personnel are on
ADP's premises, they shall comply with all of ADP's rules, regulations and
policies concerning such matters as working hours (which will be
established by ADP's Project Manager), holidays and ADP security measures.
Prior to commencing any assignment, the Personnel may be issued ADP
identification cards which shall be returned to ADP's Project Manager on
the day on which the applicable assignment terminates. (iii) Consultant
shall inform ADP in writing, at the time each Supplement is signed, as to
how much vacation time the Personnel listed on such Supplement are entitled
to take during the period of service designated in such Supplement and when
such vacation will be taken.
(b) Upon ADP's request, Consultant and the applicable Personnel
shall furnish ADP's Project Manager periodic written reports
relating to their performance of the applicable Service, which
reports shall be at such intervals and in such form and shall
cover such matters as ADP's Project Manager may determine.
(c) ADP may, in its sole and absolute discretion, terminate the
services of any or all Personnel for unsatisfactory
performance at any time, in which event ADP shall have no
further obligations hereunder after any such termination
except to pay Consultant for the services performed by such
terminated Personnel prior to their termination.
(d) (i) Consultant shall use all reasonable means to insure the continued
employment by Consultant of the Personnel then performing Services for ADP.
If (x) the employment of any Personnel performing Services for ADP is
terminated by Consultant for any reason whatsoever, or (y) ADP shall
terminate the services of any Personnel pursuant to Paragraph 4(c) above,
Consultant shall, upon ADP's request promptly after the occurrence of any
of the foregoing events, furnish ADP with personnel of experience at least
equal to that of the Personnel affected by the occurrence of such event
(the "Replacement Personnel"). Consultant shall not withdraw any Personnel
from any assignment with ADP on which such Personnel are then working,
without ADP's prior written consent. (ii) ADP shall not be obligated to
make any payment on account of the Services of any Replacement Personnel
for the number of hours required to train the applicable Replacement
Personnel so that such Replacement Personnel is able to perform the
assigned work in a manner equal to the replaced Personnel at the particular
stage the assigned work had reached when the personnel change occurred.
(e) The Personnel are and shall be, notwithstanding anything to
the contrary contained herein, Consultant's employees and
shall not, for any purpose, be considered ADP's employees.
Consultant shall be solely responsible for the payment of the
salaries of such Personnel and all matters relating thereto
(including the withholding and/or payment of all federal,
state and local income and other payroll taxes), workmen's
compensation, disability benefits, medical and other
insurance-related benefits and all such additional legal
requirements applicable to employees of Consultant.
5. PAYMENT.
(a) ADP shall pay Consultant, upon being properly invoiced for
work actually performed under the applicable Schedules, for
the Services at rates specified in the applicable Supplement.
Each invoice submitted by Consultant to ADP shall be
accompanied by appropriate supporting documentation. No
payment shall be made in advance.
(b) ADP shall reimburse Consultant for all reasonable expenses
incurred by the Personnel in connection with the Services
performed by such Personnel under the applicable Supplement,
provided that: (i) Consultant shall obtain ADP's written
approval (unless ADP waives such approval) prior to incurring
such expenses; (ii) Consultant provides ADP with itemized
invoices with respect to such expenses; and (iii) Consultant
furnishes ADP with receipted bills evidencing such expenses.
6. TERM AND TERMINATION.
(a) The term of this Agreement shall commence as of the date
hereof and shall remain in full force and effect until
terminated by either ADP or Consultant as set forth below.
Either ADP or Consultant may terminate this Agreement at any
time by giving the other written notice of termination,
whereupon this Agreement shall terminate on the effective date
specified in such notice (which date shall, in the case of a
notice given by ADP, be the date set forth in such notice and
shall, in the case of notice given by Consultant, be not
earlier than the date on which all assignments under the
applicable Schedules shall, in ADP's sole discretion, have
been fully completed).
(b) After the termination of this Agreement, neither ADP nor
Consultant shall have any further obligations hereunder,
except for (i) their respective obligations under Paragraph 9
below and (ii) Consultant's obligations under Paragraphs 2, 3,
7, 10, 11, and 12 hereof. In addition, ADP shall be obligated
to pay Consultant of the Services performed and expenses
incurred by Consultant in accordance with the provisions of
Paragraph 5 above prior to the date this Agreement terminates,
provided that such Services have been performed.
7. CONFIDENTIALITY.
(a) Consultant and its officers, employees (including the Personnel) and
agents will treat as confidential (collectively the "ADP Information"):
(i) all information and data, of whatsoever nature, relating to ADP (including
but not limited to ADP's operations, policies, procedures, techniques,
accounts, personnel and customers) or used by ADP in carrying on its
business;
(ii) information and data which is proprietary to a third party and which ADP is
obligated to treat as confidential obtained by Consultant or its officers,
employees (including the Personnel) or agents, or disclosed by ADP, in
connection with the performance by Consultant of its obligations under this
Agreement;
(iii) the terms of this Agreement and any and all Schedules hereto; and
(iv) the Proprietary Information
(b) Consultant shall not disclose any of the ADP Information to
any third person or to any of Consultant's officers, employees
(including the Personnel) and agents except to the extent they
have a need to know in connection with the performance of
Consultant's obligations under this Agreement.
8. LIMITATION OF LIABILITY.
IN NO EVENT WILL CONSULTANT BE RESPONSIBLE FOR SPECIAL, INDIRECT,
INCIDENTAL OR CONSEQUENTIAL DAMAGES WHICH ADP MAY INCUR OR EXPERIENCE
ON ACCOUNT OF ENTERING INTO OR RELYING ON THIS AGREEMENT, EVEN IF
CONSULTANT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
9. NON-HIRE.
(a) During the term of this Agreement and for a period of one year thereafter:
(i) ADP shall not, without Consultant's prior written
approval, solicit for employment, nor employ, (either as an
employee, contractor, independent agent, or representative of
another vendor) any of Consultant's employees (including the
Personnel) involved in the performance of Consultant's
obligations under this Agreement; and (ii) Consultant shall
not, without ADP's prior written approval, solicit for
employment, nor employ, directly or indirectly, any of ADP's
employees connected with the subject matter of this Agreement.
(b) The restrictions contained in Paragraph 9(a) above shall also
be applicable to former employees of Consultant and ADP for a
period of one year after the date such former employees ceased
to be employed by ADP or Consultant, as the case may be.
10. INSURANCE AND INDEMNIFICATION.
(a) Consultant shall secure and maintain adequate Workman's
Compensation Insurance to cover all of the Personnel providing
services to ADP. Consultant shall maintain comprehensive and
vehicular liability insurance for claims for damages because
of bodily injury (including death) and property damage caused
by or arising out of, acts or failures to act by Consultant's
employees (including the Personnel) or agents, in such amounts
as ADP shall from time to time reasonably require. Consultant
shall, at Consultant's expense, carry all necessary and
appropriate personal accident insurance to cover the Personnel
if and when they are required by ADP to travel in order to
perform the Services contemplated by the applicable Schedule.
(b) At ADP's request, Consultant shall furnish ADP with
certificates of insurance from Consultant's insurance
carrier(s) relating to coverages set forth in Paragraph 10(a)
above, which certificates shall provide that the above
insurance shall not be cancelled without ADP having received
at least 30 days' prior written notice of any such
cancellation.
11. COMPLIANCE WITH LAWS AND REGULATIONS, PERMITS AND LICENSES.
Consultant shall comply with all applicable laws, codes, ordinances,
rules and regulations of the federal, state and local Governments, and
of any and all political subdivisions and regulatory authorities
thereof. All necessary permits and licenses required in connection with
the Services shall be obtained for ADP by Consultant, at Consultant's
expenses.
12. RIGHT TO AUDIT.
During and after the term hereof, ADP or its accountants shall have the
right at periodic intervals and during reasonable business hours on
Consultant's premises to examine and make copies of all books and
records of Consultant insofar as they relate to this Agreement.
13. NO GRATUITIES.
Consultant represents, warrants and covenants that it has not provided
or otherwise made available, and will not provide or otherwise make
available, either directly or indirectly, to any officer, director or
employee of ADP, its divisions and subsidiaries, any monies, gifts or
other benefits of any kind or nature.
14. USE OF NAME.
Consultant shall not use ADP's name, nor any adaptation or variation
thereof, in any manner whatsoever (including but not limited to,
advertising, promotion or sales literature), without ADP's prior
written consent in each instance.
15. RELATIONSHIP OF THE PARTIES.
The parties acknowledge that they are independent contractors. Neither
ADP nor Consultant shall in any way represent itself as a partner,
joint-venturer, agent, employee or general representative of the other.
16. NOTICES.
All notices, requests, consents, demands and other communications
provided for by this Agreement shall be in writing and shall (unless
otherwise specifically provided herein) be deemed given when mailed at
any general branch United States Post office enclosed in a registered
or certified postpaid envelope, addressed to the parties at the
addresses set forth below or to such changed address as each party may
designate by notice to the other:
If to ADP: If to Consultant:
-------------------------- ---------------------------
-------------------------- ---------------------------
Attention: ______________ Attention: ___________________________
provided, however, that any notice of change of address shall be
effective only upon receipt.
17. MISCELLANEOUS
(a) This Agreement and the Supplements hereto sets forth the
entire agreement and understanding between ADP and Consultant
as to the subject matter hereof and merge with and supersede
all prior discussions, agreements, and understandings of any
kind and every nature between them.
(b) This Agreement shall not be assigned by Consultant without the
prior written consent of ADP. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and
their successors and permitted assigns.
(c) This Agreement shall not be changed, modified or amended except by a
writing signed by the party to be charged.
(d) If any provision of this Agreement (or any portion thereof) is
determined to be invalid or unenforceable the remaining
provisions of this Agreement shall not be affected thereby and
shall be binding upon ADP and Consultant and shall be
enforceable as though said invalid or unenforceable provision
(or portion thereof) were not contained in this Agreement.
(e) The failure by either ADP or Consultant to insist upon strict
performance of any of the provisions contained in this
Agreement shall in no way constitute a waiver of its rights as
set forth in this Agreement, at law or in equity, or a waiver
of any other provisions or subsequent default by the other
party in the performance of or compliance with any the terms
and conditions set forth in this Agreement.
(f) This Agreement shall be governed in all respects by the laws
of the State of New Jersey, without giving effect to
principles of conflicts of law.
(g) The headings of this Agreement are intended solely for
convenience of reference and shall be given no effect in the
interpretation or construction of this Agreement.
If the foregoing correctly sets forth our understanding, please
sign the enclosed copy of this Agreement and return it to ADP,
whereupon (after ADP has signed this Agreement) it will become a
binding agreement between us enforceable in accordance with its
terms.
Very truly yours,
AUTOMATIC DATA PROCESSING, INC.
By: ___________________________________
(Signature - Authorized Officer)
Name and
Title: ________________________________
(type or print)
AGREED TO AND ACCEPTED:
Name of Consultant: __________________________________
By: ________________________________________________
(Signature - Authorized Representative)
Name and
Title: ______________________________________________
(type or print)
4073 (5-86) (C)1986 Automatic Data Processing, Inc.
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