EXHIBIT 10.19
SERVICES AGREEMENT
This Services Agreement is entered into this 10th day of February, 2003 by and
between The Ultimate Software Group, Inc. (hereafter "Ultimate") and Ceridian
Corporation (hereafter "Ceridian").
Whereas, Ceridian has previously licensed certain products of Ultimate,
including that software product generally known as UltiPro; and
Whereas, Ceridian desires to have Ultimate perform, and Ultimate
desires to perform certain services ("Services") relating to Ultimate's products
during the calendar year 2003, as more fully set forth in this Services
Agreement.
Now, therefore, it is agreed as follows:
1. Ultimate will perform the following for Ceridian
commencing on the date of this Services Agreement and
terminating at 11:59 p.m. on December 31, 2003:
A. An employee of Ultimate will be selected by
Ultimate to work on a full-time basis
(approximately 40 hours per week) with Ceridian
at Ceridian's office in Atlanta, Georgia; the
employee will be appropriately familiar with
Ceridian's service bureau requirements and
dedicated to assisting Ceridian in the resolution
of issues or problems Ceridian has attendant to
the development, integration, troubleshooting or
other resolution of problems related to UltiPro
product functionality and Ceridian's service
bureau performance requirements. Ultimate will
bear all costs associated with its employee being
located in Atlanta, Georgia.
B. Ultimate will host and provide suitable work
space and support to a Ceridian employee, to be
designated by Ceridian, onsite at Ultimate's
headquarters for the purpose of ongoing
coordination and understanding of general and
technical product requirements, integration
requirements, and general communication of both
Ultimate and Ceridian development status and
issue resolution. Ceridian will bear all employee
related costs associated with its employee's
presence at Ultimate's headquarters.
C. Ultimate will make available to Ceridian
technical support relating to functionality and
design of Ultimate's products on a 24-hour, 7
days per week basis, including an appropriately
responsive escalation and issue resolution
process.
D. Ultimate will perform services based on
Ceridian's continued inclusion as a key
stakeholder in Ultimate's current and future
product functionality and performance activities
including:
(i) The solicitation, review, and delivery
of mutually agreed to functional or
performance requirements from Ceridian
for releases being developed for
Ultimate products during the period of
the Services Agreement.
(ii) Assistance with the identification and
timely resolution of emergent or
near-term development activity required
to address product functionality,
performance or service bureau activity
gaps affecting Ceridian's use of the
UltiPro product.
(iii) Consideration of Ceridian's feature or
function enhancement requests and
allowance of active participation by
Ceridian in the prioritization of such
requests for inclusion in future
releases.
(iv) Allowance of partner-level participation
by Ceridian in the product development
and release management processes, such
as method and timing of requirement and
specification reviews, prioritization of
one-off tools/utilities development,
market/customer feedback analysis and
prioritization, and strategic direction
planning.
(v) Allowance of Ceridian's elective
participation in release associated
activity such as Beta releases and
utility and tool evaluations.
(vi) Continued professional interchange and
creative discourse to further Ceridian's
understanding of Ultimate's product
functionality and its integration with
Ceridian's products, and to advance
product viability in the marketplace.
E. Ultimate will perform extended performance and
scalability testing of Ultimate products to meet
Ceridian's performance and capacity planning
objectives inclusive of industry standard web
performance parameters, a 250,000 employee
minimum site capability, and corresponding system
throughput capability to support the efficient
2
processing of the workflow generated therein.
Ultimate will exercise commercially reasonable
efforts to rectify any identified performance and
capacity gaps.
F. Ultimate will perform the Services in a diligent,
workmanlike manner conforming to industry quality
standards of persons skilled and experienced in
performing such services.
2. In consideration for the services outlined in Section 1
above of this Services Agreement, Ceridian will pay
Ultimate the sum of Two Million Two Hundred and Fifty
Thousand Dollars ($2,250,000), payable in four equal
quarterly installments of Five Hundred Sixty-Two
Thousand and Five Hundred Dollars ($562,500). Ceridian
shall pay the first quarterly installment to Ultimate
within ten (10) days of the date of this Services
Agreement as set forth above, and the second, third,
and fourth quarterly installments to Ultimate no later
than May 1, August 1, and November 1, 2003,
respectively. In addition, Ceridian will reimburse
Ultimate for any reasonable travel or other out of
pocket expenses associated with performance of this
Services Agreement. Said amounts will be invoiced on a
monthly basis and payment will be due within thirty
(30) days of invoice date.
3. The Services set forth in this Services Agreement are
independent of any other obligations of the parties as
provided for in other agreements between them, which
remain unchanged by this Services Agreement.
4. This Services Agreement does not make either party the
employee, agent or legal representative of the other
for any purpose whatsoever. Neither party is granted
any right or authority to assume or to create any
obligation or responsibility, express or implied, on
behalf of or in the name of the other party. Each party
is acting as an independent contractor.
5. This Services Agreement may not be assigned by Ceridian
or Ultimate except with the written consent of the
other party.
6. This Services Agreement may not be modified, amended,
rescinded, canceled or waived, in whole or in part,
except by written amendment signed by both parties
hereto.
7. GOVERNING LAW, LITIGATION EXPENSES AND ARBITRATION
(a) This Services Agreement shall be governed by and
interpreted under the laws of the State of
Delaware, without giving effect to its conflicts
3
of laws principles. In the event of litigation or
arbitration arising from this Services Agreement,
the prevailing party shall be entitled to recover
its reasonable costs and attorney's fees in said
claim, lawsuit, arbitration or action from the
non-prevailing party.
(b) (i) If a dispute other than a dispute with
respect to the ownership of intellectual property
(as distinguished from the use by Ceridian or one
or more Ceridian Customers of the Licensed
Software) is not resolved by the parties within
forty-five (45) days after the receipt of a
notice of dispute by either party to the other
party, such dispute will be submitted to
arbitration and finally settled by binding
arbitration conducted in accordance with the
Commercial Arbitration Rules (the "Rules") of the
American Arbitration Association then in effect.
Either party may give the other party notice, in
accordance with Section 13, of its submission of
such dispute to arbitration. Such notice shall
also be given in accordance with the Rules, to
the extent that the rules are inconsistent with
or supplement this notice requirement. Such
arbitration shall take place in Chicago,
Illinois, United States of America, before a
single arbitrator. The parties will agree upon
the selection of a particular arbitrator as soon
as reasonably practical after the notice
described in this Section 7(b) is given, but
failing such agreement within thirty (30) days of
such notices, the arbitrator will be selected in
accordance with the Rules. All issues in the
arbitration will be decided in accordance with
Delaware law and any applicable federal law.
The determinations of the arbitrator will be
final and binding upon the parties to the
arbitration, and judgment upon the award rendered
by the arbitrator may be entered in any court
having jurisdiction, or application may be made
to such court for a judicial acceptance of the
award and an order of enforcement, as the case
may be. The arbitrator shall be requested to set
forth the grounds for his or her decision in the
award.
All proceedings before the arbitrator shall be
conducted in the English language. All documents
and papers submitted to the arbitrator shall be
in the English language or accompanied by a
competent English language translation thereof.
4
With the exception of applications to courts of
competent jurisdiction for injunctive relief, the
parties stipulate the submission of disputes to
arbitration as provided in this Section 7, and
arbitration pursuant thereto, shall be a
condition precedent to any suit, action or
proceeding instituted in any court or before any
administrative tribunal with respect to such
dispute. The arbitration provisions hereof shall,
with respect to any dispute arising out of this
Services Agreement, survive the termination or
expiration of this Services Agreement.
Both parties agree to continue performing their
respective obligations under this Services
Agreement while any dispute is being resolved
unless and until such obligations are terminated
or expire in accordance with the provisions
hereof.
The parties shall use their best commercial
efforts to set the date of the arbitration with
sixty (60) days after selection of the arbitrator
but in no event shall the arbitration be set more
than ninety (90) days after selection of the
arbitrator. Discovery as permitted by the Federal
Rules of Civil Procedure then in effect will be
allowed in connection with the arbitration to the
extent consistent with the purpose of the
arbitration and as allowed by the arbitrator.
The decision or award of the arbitrator shall be
rendered within fifteen (15) days after the
conclusion of the presentation to and hearing by
the arbitrator. The decision or award of the
arbitrator shall be final, binding and
non-appealable by the parties.
Each party shall bear its own arbitration costs
and expenses and all other costs and expenses of
the arbitration shall be divided equally between
the parties; provided, however, the arbitrator
may modify the allocation of fees, costs and
expenses in the award in those cases where
fairness dictates.
Notwithstanding anything to the contrary in this
Section 7(b), the parties shall have the
authority to stay the time periods set forth in
this Section 7(b) upon mutual agreement.
5
(ii) Notwithstanding any other provision of this
Section 7(b), either party may resort to court
action for injunctive relief at any time if the
dispute resolution processes set forth in this
Section 7(b) would permit or cause irreparable
injury to such party or any third party claiming
against such party, due to delay arising out of
the dispute resolution process.
8. In the event of the bankruptcy of Ultimate pursuant to
the Bankruptcy Act and an attendant rejection of the
Services Agreement or any license or assignment granted
hereunder pursuant to Section 365 thereof, the parties
intend that the provisions of the Bankruptcy Act shall
apply and Ceridian shall be entitled to retain
possession of all embodiments of intellectual property
delivered to it by Ultimate under this Services
Agreement and to the extent permitted by law, retain
the license rights granted thereunder, subject to any
Ceridian obligation to pay royalties and fees.
9. If any provision of the Services Agreement is found
unenforceable under any of the laws or regulations
applicable thereto, such provision terms shall be
deemed stricken from this Services Agreement, but such
invalidity or unenforceability shall not invalidate any
of the other provisions of this Services Agreement.
10. This Services Agreement may be executed in two or more
counterparts and by facsimile in the English language,
and each such counterpart shall be deemed an original
hereof.
11. No failure by either party to take any action or assert
any right hereunder shall be deemed to be a waiver of
such right in the event of the continuation or
repetition of the circumstances giving rise to such
right.
12. This Services Agreement shall be binding on Ceridian
and Ultimate and their permitted assignees and all
successors in interest.
13. NOTICES. Notices permitted or required be given
hereunder shall be deemed sufficient if given by
registered or certified mail, postage prepaid, return
receipt requested, or by private courier service to the
respective addresses of the parties set forth in this
Section 13 or at such other addresses as the respective
parties may designate by like notice from time to time.
Notices so given shall be effective upon (a) receipt by
the party to which notice is given, or (b) on the fifth
6
(5th) day following domestic mailing or the tenth
(10th) day following international mailing, as may be
the case, whichever occurs first. The initial addresses
for purposes of this notice provision shall be:
Ceridian Corporation
0000 X. Xxx Xxxxxxxx Xxxx
Xxxxxxxxxxx, XX 00000-0000
Attention: President
With copy to:
Ceridian Corporation
0000 X. Xxx Xxxxxxxx Xxxx
Xxxxxxxxxxx, XX 00000-0000
Attention: General Counsel
The Ultimate Software Group, Inc.
0000 Xxxxxxxx Xxx
Xxxxxx, XX 00000
Attention: President
With copy to:
The Ultimate Software Group, Inc.
0000 Xxxxxxxx Xxx
Xxxxxx, XX 00000
Attention: General Counsel
14. Except with the consent of the other party, neither
party shall publicize, advertise, announce or describe
to any governmental authority or other third person,
the terms of this Services Agreement, except as
required by law or as required pursuant to this
Services Agreement.
THE ULTIMATE SOFTWARE GROUP, INC. CERDIAN CORPORATION
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxxxxxxx
------------------------- ---------------------------------
Name: Xxxx X. Xxxxxx Name: Xxxx X. Xxxxxxxxxx
----------------------- -------------------------------
Title: Vice Chairman Title: Chief Operating Officer
---------------------- ------------------------------
Human Resources Solutions
7
