Retek Inc. Contracts
Sample Business Contracts
Services Agreement - HNC Software Inc. and Retek Inc.
Services Forms
SERVICES AGREEMENT
This SERVICES AGREEMENT (this "Agreement") is made and entered into
effective as of November 23, 1999 (the "Effective Date") by and among HNC
Software Inc., a Delaware corporation ("HNC"), on the one hand, and Retek Inc.,
a Delaware corporation ("Retek") and Retek Information Systems, Inc., a Delaware
corporation ("RIS"), on the other hand.
RECITALS
A. Retek is currently a wholly-owned subsidiary of HNC and receives
administrative and other services from HNC. RIS is also a wholly-owned
subsidiary of HNC.
B. Retek is considering carrying out an initial public offering of
shares of its Common Stock pursuant to a registration statement filed under the
Securities Act of 1933 ("Public Offering").
C. After the final closing of the Public Offering, HNC will own
approximately 86.3% of the outstanding shares of Retek's Common Stock (the
"Retained Shares") and, pursuant to the terms of a Separation Agreement dated as
even date herewith (the "Separation Agreement") among HNC, Retek and RIS, HNC
will contribute to Retek all shares of RIS's outstanding stock held by HNC so
that RIS will become a wholly-owned subsidiary of Retek. Unless otherwise
defined herein, defined terms used in this Agreement shall have the meanings
ascribed to them in the Separation Agreement.
D. After the Public Offering, Retek and RIS desire to continue to
obtain administrative and other services from HNC, and HNC desires to continue
to provide such services, durings the term of this Agreement on the terms and
conditions set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, HNC and Retek, for
themselves, their successors and assigns, hereby agree as follows:
ARTICLE I: SERVICES
1.1 Services Provided. Subject to the terms and conditions of the
Agreement, during the term of this Agreement, HNC agrees to provide to Retek and
RIS the services described in Exhibit A to this Agreement (collectively, the
"Services").
1.2 Business Insurance Coverage. During the term of this Agreement,
HNC, as part of its Risk Management services, will use good faith efforts to
extend coverage to Retek and RIS
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under HNC's insurance policies for those (and only those) types of insurance
coverage that are expressly listed in Exhibit B to this Agreement (the
"Insurance Coverage") by adding (or maintaining) Retek and RIS as named insureds
under the policy or policies in question and advancing the applicable premiums
necessary to extend such insurance coverage to Retek and RIS. RIS will be solely
responsible for providing its own directors' and officers' liability insurance
coverage ("D&O Coverage"), which D&O coverage shall be in addition to the D&O
Coverage to be maintained by HNC under its Risk Management services hereunder as
provided above and shall be maintained at not less than the following minimum
coverage levels: $15,000,000.
1.3 Additional Services. In the event that Retek or RIS requires
services which exceed the scope or extent of the Services HNC has agreed to
provide to Retek under this Agreement, and if HNC in its sole discretion agrees
in writing to provide such services to Retek or RIS, then HNC and Retek, shall
negotiate in good faith an adjustment to the fee payable by Retek hereunder;
provided, however, that the fee or fees charged to Retek for such services shall
be no less favorable to Retek than the charges for comparable services from
unaffiliated third parties.
ARTICLE II: BILLING AND PAYMENT.
2.1 Fees for Services. Retek shall pay to HNC a fee for each of the
Services provided by HNC to Retek and/or RIS hereunder, the amount of which fee
shall be calculated in accordance with the applicable provisions of Part 2 of
Exhibit A ("Fees for Services") corresponding to such Services. In addition,
Retek shall pay to HNC a fee for the Insurance Coverage calculated in accordance
with the provisions of Exhibit B.
2.2 Billing. On a monthly basis, HNC shall submit to Retek for payment
a billing invoice setting forth HNC's good faith estimate of the amount of fees
payable by Retek to HNC for Services rendered during the preceding month and/or
business insurance premiums allocable to the preceding month (with such
estimates to be based on the methods used to compute such charges in Part 2 of
Exhibit A and in Exhibit B). HNC, at its option, may also invoice Retek for any
costs paid by HNC to third-parties in the course of providing any Services
("Third-Party Costs") or any premiums relating to the Insurance Coverage
immediately upon payment of such Third-Party Costs or premiums by HNC. Within
thirty (30) days after the close of each calendar quarter, HNC will compute and
reconcile the actual amounts of fees and premiums payable by Retek to HNC in
respect of such calendar quarter (the "Actual Quarter's Charge") against the sum
of the estimated amounts previously invoiced to Retek by HNC in respect of each
calendar month occurring within such calendar quarter (the "Estimated Quarter's
Charge") and will send Retek a statement of such computation and reconciliation
(the "Quarterly Statement"). The parties agree that if (a) the Actual Quarter's
Charge for such calendar quarter is greater than the Estimated Quarter's Charge
for such calendar quarter, then Retek shall pay such difference (the "Quarterly
Shortfall") to HNC within fifteen (15) days after HNC sends the Quarterly
Statement for such calendar quarter to Retek; and (b) if the Estimated Quarter's
Charge for such calendar quarter is greater than the Actual Quarter's Charge for
such calendar quarter, then HNC shall reimburse Retek for the amount of such
difference within fifteen (15) days after HNC sends the
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Quarterly Statement for such calendar quarter to Retek, subject to HNC's right
to offset as a credit any amounts previously invoiced by HNC to Retek under this
Section 2.2 and not yet paid to HNC.
2.3 Payment. Retek shall pay in full to HNC the amount due as stated on
each HNC invoice within thirty (30) days after the date of such invoice;
provided that Retek shall pay in full the amount of any Third-Party Costs or
premiums for Insurance Coverage billed to Retek on any HNC invoice within ten
(10) days of the date of such invoice; and provided further that Retek shall pay
any quarterly any Quarterly Shortfall to HNC within fifteen (15) days after HNC
issues Retek an invoice for such Quarterly Shortfall as provided in Section 2.2.
In addition, Retek agrees with HNC to promptly and timely pay any insurance
premiums for an HNC group insurance policy that are billed directly to Retek, in
time to avoid any default or breach of such policy and any late charges or other
penalties.
2.4 Taxes. In addition to the payments to be made by Retek under this
Article II, Retek will pay all taxes, including without limitation sales and use
taxes and value added taxes, if imposed by any government as a result of Retek's
payment to HNC of any of the fees and costs payable by Retek hereunder.
2.5 RIS Guarantee. Retek shall be primarily liable for the payment of
all amounts payable to HNC under this Agreement, but RIS hereby guarantees and
promises to pay HNC in full, upon HNC's demand, the full amount of any and all
payments that are due and payable by Retek to HNC under this Agreement that have
not been paid in full when due, without any right of offset or counterclaim.
ARTICLE III : TERM AND TERMINATION
3.1 Initial Term. The initial term of this Agreement shall commence on
the date hereof and shall continue for a period ending on the earlier of (a) one
(1) year after the Effective Date; (b) the last day of the first calendar month
during which HNC owns less than fifty percent (50%) of the outstanding voting
stock of Retek; or (c) the date on which this Agreement is terminated in
accordance with the provisions of Section 3.4.
3.2 No Voluntary Termination of Certain Services. Notwithstanding the
provisions of Section 3.1 or Section 3.4, all Services relating to the
preparation of consolidated financial statements and tracking of fixed assets
and inventory (a) may not be terminated by Retek so long as HNC is required to
consolidate its financial statements with Retek in accordance with generally
accepted accounting principles ("GAAP"), and (b) will terminate only when HNC is
no longer required to consolidate its financial statements with Retek in
accordance with GAAP.
3.3 Discontinuation of Services.
3.3.1 By Retek. Except as provided in Section 3.2, Retek may
elect (on behalf of itself and RIS) to discontinue receiving any Service
(including but not limited to any employee benefit) or any Insurance Coverage to
be provided by HNC hereunder by providing HNC at least thirty (30) days' advance
written notice of Retek's election to discontinue such
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Services or Insurance Coverage and paying HNC any accrued but unpaid sums for
any Service commenced or partially or fully performed by HNC, or any insurance
premium paid by HNC hereunder, for which Retek has not previously paid HNC in
full. Neither Retek nor RIS will not be entitled to any rebate or refund of sums
it previously paid to HNC under this Agreement as a result of any such
discontinuation by Retek.
3.3.2 By HNC. Without incurring any liability to Retek
whatsoever, HNC may, prior to the expiration or termination of this Agreement:
(a) discontinue providing Retek any Insurance Coverage
that HNC discontinues carrying for itself and does not replace with similar
Insurance Coverage for itself during the term of this Agreement, by providing
Retek at least sixty (60) days' advance written notice of the discontinuance of
such Insurance Coverage;
(b) discontinue providing any employee group insurance
or other employee benefit plan coverage that HNC is providing or extending to
Retek employees under this Agreement: (i) if such employee group insurance or
other employee benefit plan is substantially similar in nature, or is
substantially replaced or duplicated by, an employee group insurance plan or
plans or other employee benefit plan or plans adopted by Retek; (ii) if HNC is
no longer permitted, whether by applicable laws or regulations or by the terms
of such employee group insurance or employee benefit plan, to provide or extend
such employee group insurance or employee benefit plan to Retek employees; or
(iii) if Retek is required, by applicable laws or regulations, to adopt and
provide employee group insurance coverage or an employee benefit plan that is
substantially similar to such employee group insurance or other employee benefit
plan coverage; and/or
(c) change or modify any employee group insurance or
other employee benefit plan coverage that HNC is providing or extending to Retek
employees under this Agreement provided HNC makes such change or modification
generally with respect to its employees.
3.4 Default and Remedies; Termination.
3.4.1 Event of Default. A party to this Agreement will be in
default hereunder if (a) such party commits a material breach of any term or
condition of this Agreement and such breach continues uncured for thirty (30)
days (or ten (10) days in the case of a failure by Retek to pay HNC any sums
payable to HNC when due under this Agreement) following receipt of written
notice of such breach from the other party.
3.4.2 Remedies. In the event of a default by Retek hereunder,
HNC may exercise any or all of the following remedies: (a) declare immediately
due and payable all sums for which Retek and/or RIS is liable under this
Agreement; (b) decline to provide any Service or Services or Insurance Coverage
hereunder; and/or (c) terminate this Agreement. In the event of any default by
HNC hereunder, Retek may terminate this Agreement. In addition to the foregoing,
a non-defaulting party will have all other rights and remedies available at law
or equity.
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3.4.3 Termination on Notice. Except as provided in Section
3.2, this Agreement may be terminated (in addition to a termination pursuant to
Section 3.4.1 or Section 3.4.2) at any time at the option of either HNC or Retek
upon ninety (90) days' prior written notice of termination given to the other in
accordance with this Agreement.
3.4.4 Effect of Termination. Termination of this Agreement
will not effect or terminate the effectiveness of the provisions of Sections 3.2
or 4.2, which shall survive termination of this Agreement and remain in effect
thereafter.
ARTICLE IV: RECORDS AND ACCOUNTS
4.1 Record Retention.
(a) HNC shall maintain accurate records and accounts of all
transactions relating to its performance of the Services pursuant to this
Agreement. Such records and accounts shall reflect such information as would
normally and reasonably be examined by an independent accountant in performing a
complete audit in accordance with GAAP for the purpose of certifying financial
statements and shall be maintained by HNC in a manner that will enable an
independent accountant to complete an audit of Retek in accordance with GAAP.
Retek shall have the right to inspect and copy, at its expense upon reasonable
notice and at reasonable intervals during HNC's regular office hours, the
separate records and accounts maintained by HNC relating to the Services,
provided that such records shall be Confidential Information of HNC and shall be
held in confidence by Retek as provided in Section 8.2 hereof.
(b) Retek shall maintain, in accordance with HNC's record
retention policy, accurate records and accounts of all transactions relating to
the provision of Services under this Agreement and all records, books,
contracts, instruments, computer data and other data and information
(collectively, "Information") insofar as such Information may be reasonably
required by HNC to comply with all applicable federal, state, county and local
laws, administrative or court orders, ordinances, regulations and codes,
including but not limited to ERISA and securities laws. Without limiting the
foregoing, Information may be requested under this Section 4.1(b) for audit,
accounting, claims, regulatory, litigation and tax purposes, as well as for
purposes of fulfilling disclosure and reporting obligations and for performing
this Agreement and the transactions contemplated hereby.
4.2 HNC Oversight of Retek Accounting. So long as HNC is required to
consolidate its financial statements with Retek under GAAP, HNC shall have the
right to oversee and review Retek's accounting policies and practices and Retek
will not change its accounting policies or practices without the prior written
approval of HNC, which approval may be withheld in HNC's sole discretion, unless
Retek's independent accountants advise Retek that its accounting policies and
practices must be changed to conform with GAAP or are necessary in order to
improve Retek's internal accounting controls. Retek shall provide HNC with
Retek's financial accounting statements and other reports reasonably requested
for each month, quarter and annual fiscal period on a timely basis according to
the schedules announced by HNC for the completion of financial accounting
statements in order to enable HNC to timely produce its own consolidated
financial statements.
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ARTICLE V: OBLIGATIONS; LIMITATIONS; SERVICE PROVIDERS
5.1 Limitations on HNC's Obligations. Notwithstanding anything herein
to the contrary, HNC may, at its sole discretion, decline to provide any Service
hereunder if: (a) facilities or personnel of HNC are not reasonably available to
provide such Service; (b) providing such Service requested by Retek or RIS would
materially interfere with HNC's conduct of its business; or (c) in HNC's good
faith judgment based upon the advice of its tax advisors, HNC's providing such
Service could result in significant tax disadvantages for HNC, could conflict
with any applicable law, regulation or ordinance or could result in a conflict
of interest.
5.2 Service Providers. Services to be provided by HNC hereunder may, in
HNC's sole discretion, be provided by employees or service providers of HNC or
any of its subsidiaries (other than Retek), HNC shall remain responsible, in
accordance with the terms of this Agreement, for performance of any Service it
causes to be so provided.
5.3 Changes. Notwithstanding anything to the contrary herein, HNC may,
at any time and in its sole discretion, change in any reasonable respect the
manner, scheduling or timing of the Services to be rendered, provided that HNC
provides Retek at least thirty (30) days' prior written notice of such change.
5.4 Rights of HNC. Nothing in this Agreement shall limit or restrict
the right of HNC or any of HNC's directors, officers or employees, agents,
subsidiaries or affiliates to engage in any other business or devote their time
and attention in part to the management or other aspects of any other business,
whether of a similar nature, or to limit or restrict the right of HNC to engage
in any other business or to render services of any kind to any entity.
ARTICLE VI: DISCLAIMER; LIABILITY; INDEMNIFICATION
6.1 Disclaimer of Warranty. ALL SERVICES AND INSURANCE COVERAGE
PROVIDED HEREUNDER ARE PROVIDED TO RETEK AND RIS ON AN "AS IS" BASIS WITHOUT
WARRANTY OF ANY KIND. HNC HEREBY DISCLAIMS ANY EXPRESS OR IMPLIED WARRANTIES OF
ANY KIND, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTY OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE.
6.2 Limitation on Liability. HNC shall have no liability whatsoever to
Retek or RIS for any error, act or omission in connection with the Services to
be rendered by HNC to Retek hereunder unless any such error, act or omission is
attributable to HNC's willful misconduct or gross negligence.
6.3 Independent Contractors. The parties will operate as, and have the
status of, independent contractors and will not act as or be an agent, partner,
co-venturer or employee of the other party. Except as expressly provided in this
Agreement, neither party will have the right or authority to assume or create
any obligations on behalf of any other party, or to bind the other party in any
respect whatsoever. HNC shall be entitled to determine the means and manner by
which it performs the Services hereunder.
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ARTICLE VII: OTHER AGREEMENTS
7.1 Alternative Services. It is acknowledged that from time to time
Retek or RIS may find it necessary or desirable either to enter into agreements
covering services of the type contemplated by this Agreement to be provided by
parties other than HNC or to enter into other agreements with other parties
covering Services or functions to be performed by HNC hereunder. Except as
provided in Section 3.2, nothing in this Agreement shall be deemed to limit in
any way the right of Retek or RIS to acquire such Services from others or to
enter into such other agreements; provided that in no such event shall the fees
to be paid to HNC pursuant to Section 2 hereof be reduced on account thereof
unless this Agreement is terminated, or the applicable Services are discontinued
in accordance with Section 3.3 hereof.
ARTICLE VIII: CONFIDENTIALITY
8.1 Confidential Information. Each party acknowledges that, in
connection with the performance of this Agreement, it may receive certain
confidential or proprietary information and materials of the other party
("Confidential Information").
8.2 Confidentiality. Subject to Section 8.3, each party and each of its
subsidiaries shall hold and shall cause its respective directors, officers,
employees, agents, consultants and advisors to hold, in strict confidence,
unless compelled to disclose by judicial or administrative process or, in the
opinion of its counsel, by other requirements of law, all Confidential
Information (other than any such information relating solely to the business or
affairs of such party) concerning the other party (except to the extent that
such information can be shown to have been (i) in the public domain through no
fault of such party, (ii) later lawfully acquired on a non-confidential basis
from other sources by the party to which it was furnished, and without breach of
any obligation or duty by a third-party concerning confidentiality, (iii)
independently generated without reference to any proprietary or Confidential
Information of the other party, or (iv) information that may be disclosed
pursuant to any Ancillary Agreement). No party shall release or disclose any
such information to any other person, except its auditors, attorneys, financial
advisors, bankers and other consultants and advisors who shall be advised of and
agree to comply with the provisions of this Section 8.2.
8.3 Protective Arrangements. If any party hereto (or any of its
subsidiaries) either (a) determines on the advice of its counsel that it is
required to disclose any Confidential Information pursuant to applicable law
(including but not limited to disclosure required pursuant to the Code, the
Securities Act or the Exchange Act, including the disclosure of financial and
other information in filings or reports made under the Securities Act or the
Exchange Act) or (b) receives any demand under lawful process or from any
Governmental Authority, to disclose or provide information of any other party
hereto (or any of its subsidiaries) that is subject to the confidentiality
provisions hereof, such party shall (except with respect to filings in reports
under the Exchange Act that require such disclosure) notify the other party
prior to disclosing or providing such information and shall cooperate at the
expense of the requesting party in seeking any reasonable protective
arrangements requested by such other party. Subject to the foregoing, the Person
that received such request may thereafter disclose or provide Confidential
Information
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to the extent required by such law (as so advised by counsel) or by lawful
process or such Governmental Authority.
ARTICLE IX: MISCELLANEOUS
9.1 Assignment. This Agreement may not be transferred or assigned by
any party hereto, whether voluntarily or by operation of law, without the prior
written consent of the other; provided, however, that the rights and obligations
of HNC may be assigned, without the consent of Retek or RIS, pursuant to a
merger, exchange, recapitalization or other reorganization to which HNC is a
party or by operation of law. This Agreement will be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns. This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
9.2 Governing Law. This Agreement shall be governed by the internal
laws of the State of California (without regard to that state's laws regarding
conflict of laws) as to all matters, including, but not limited to, matters of
validity, construction, effect, performance and remedies.
9.3 Counterparts. This Agreement may be executed in counterparts, each
of which shall constitute an original and both of which together shall be deemed
to be one and the same instrument. This Agreement will become binding when one
or more counterparts hereof, individually or taken together, will bear the
signatures of all the parties reflected hereon as signatories.
9.4 Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given upon receipt if delivered
personally, by a national overnight delivery service or by facsimile
transmission, or upon deposit in the U.S. mail (certified or registered mail,
postage prepaid, return receipt requested):
<TABLE>
<CAPTION>
If to HNC, to: If to Retek or RIS, to:
<S> <C>
HNC Software Inc. Retek Inc.
5935 Cornerstone Court West Midwest Plaza, 801 Nicollet Mall
San Diego, CA 92121-3728 11th Floor
Attention: Chief Financial Officer Minneapolis, MN 55402
Facsimile: (858) 799-1501 Attention: Chief Financial Officer
Facsimile: (612) 630-5641
</TABLE>
or to such other person or address as any party shall specify by providing
notice in writing to the other party in the manner specified above. All such
notices, requests, demands, waivers and communications shall be deemed to have
been received on the date on which hand delivered, the business day following
deposit with a national overnight delivery service, one (1) business day
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after transmission of the facsimile transmission by the sender and issuance by
the transmitting machine of a confirmation slip confirming that the number of
pages constituting the notice have been transmitted without error, or on the
third business day following the date on which so mailed, except for a notice of
change of address, which shall be effective only upon receipt thereof.
9.5 Force Majeure. A party will not be deemed to have breached this
Agreement to the extent that performance of such party's obligations or attempts
to cure any breach are delayed or prevented by reason of any act of God, fire,
natural disaster, accident, act of government, shortage of materials or
supplies, labor unrest or other cause beyond the reasonable control of such
party (a "Force Majeure"); provided that the party whose performance is delayed
or prevented promptly notifies the other party of the Force Majeure preventing
or delaying performance; and provided further that if the prevention or delay of
performance continues for more than sixty (60) days, then the other party may
terminate this Agreement by providing written notice of termination.
9.6 Waiver; Amendment. This Agreement may be amended only by the
written agreement of the parties hereto. The observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively) only by a writing signed by the party to be
bound thereby. The waiver by a party of any breach hereof or default in the
performance hereof will not be deemed to constitute a waiver of any other
default or any succeeding breach or default. Failure by either party, at any
time, to require performance by the other party or to claim a breach of any
provision of this Agreement shall not be construed as a waiver of any right
accruing under this Agreement, nor shall it affect any subsequent breach or the
effectiveness of this Agreement or any part hereof, or prejudice either party
with respect to any subsequent action.
9.7 Entire Agreement. This Agreement and its Exhibits contains the
entire agreement and understanding of the parties hereto with respect to its
subject matter. This Agreement supersedes all prior agreements and
understandings, oral or written, with respect to its subject matter. This
Agreement is made and entered into pursuant to the Separation Agreement.
9.8 Limitation of Liability. NO PARTY HERETO WILL BE LIABLE TO ANY
OTHER PARTY FOR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES OF
ANY KIND OR NATURE, INCLUDING WITHOUT LIMITATION LOSS OF DATA, SERVICES,
PROFITS, REVENUE, BUSINESS OR SERVICE INTERRUPTION IN CONNECTION WITH, OR
RELATED TO, THE PERFORMANCE OF THIS AGREEMENT, OR ARISING OUT OF THE SERVICES
RENDERED HEREUNDER, WHETHER SUCH LIABILITY IS ASSERTED ON THE BASIS OF CONTRACT
(INCLUDING WITHOUT LIMITATION BREACH OF THIS AGREEMENT OR TERMINATION OF THIS
AGREEMENT), TORT (INCLUDING WITHOUT LIMITATION NEGLIGENCE OR STRICT LIABILITY)
OR OTHERWISE, EVEN IF ANY OTHER PARTY HAS BEEN WARNED OF THE POSSIBILITY OF ANY
SUCH LOSS OR DAMAGE IN ADVANCE.
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9.9 Survival. The provisions of Section 3.2, Article VI, Article VIII
and Article IX hereof shall survive any termination of this Agreement.
Termination of this Agreement will not terminate any obligation of Retek or RIS
to pay for any Services rendered, or any insurance provisions or other costs
paid by HNC, prior to the effective date of termination.
9.10 Severability. In the event any provision of this Agreement is
determined by a court of competent jurisdiction to be invalid, illegal or
otherwise unenforceable, then such provision will, to the extent permitted by
such court, not be voided but will instead be construed to give effect to its
intent to the maximum extent permissible under applicable law and the remainder
of this Agreement will remain in full force and effect according to its terms.
9.11 Construction. This Agreement will be interpreted in accordance
with its terms and without any strict construction in favor of or against either
of the parties.
9.12 Section Headings. The Section headings contained in this Agreement
are for reference only and shall not affect the meaning or interpretation of
this Agreement.
ARTICLE X: DISPUTE RESOLUTION.
10.1 Resolution. Any dispute, controversy or claim arising out of or
relating to this Agreement or the breach, termination or validity hereof, or any
transaction contemplated hereby shall be resolved in accordance with the
procedures set forth in Article VII of the Separation Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the Effective Date set forth above.
HNC SOFTWARE INC. RETEK INFORMATION SYSTEMS, INC.
By: /s/ R. V. Thomas By: /s/ Gregory A. Effertz
------------------------------ ---------------------------------
Name: R. V. Thomas Name: Gregory A. Effertz
------------------------------ ---------------------------------
Title: C. F. O. Title: V. P. Finance and Administration
------------------------------ ---------------------------------
RETEK INC.
By: /s/ Gregory A. Effertz
----------------------------------
Name: Gregory A. Effertz
----------------------------------
Title: V. P. Finance and Administration
----------------------------------
[SIGNATURE PAGE TO SERVICES AGREEMENT]
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EXHIBIT A
TO
SERVICES AGREEMENT
BETWEEN
HNC SOFTWARE INC.,
RETEK INC. AND RETEK INFORMATION SYSTEMS, INC.
SERVICES TO BE PROVIDED BY HNC TO RETEK
1. DESCRIPTION OF SERVICES. Subject to the terms and conditions of the
Services Agreement to which this Exhibit A is an exhibit, during the term of the
Agreement, HNC agrees to provide to Retek the following services (collectively,
the "Services").
(a) Corporate, General and Administrative Services.
(i) Finance and Accounting Services. The services of HNC's finance and
accounting departments, including general accounting, intra-corporate
billing between HNC and its affiliates and Retek and its affiliates,
preparation of HNC's consolidated financial statements (including SEC
and other regulatory reports required from time to time), state and
federal income tax return preparation and consultation, investor
services and those services currently provided by HNC to Retek. Without
limitation, the provisions of Sections 3.2 and 4.2 will apply to the
Services described in this Section 1(a)(i).
(ii) Risk Management Services. HNC shall continue to provide risk
management services, including the administration of Retek's property
and casualty insurance programs that are currently provided by HNC to
Retek.
(iii) Corporate G&A. HNC shall provide services of its general
corporate management.
(iv) Equity Plan Administration. HNC shall provide services to support
HNC's employee equity plans in which Retek's employees participate.
(v) Human Resources Administration Services. The services of HNC's
human resources department to administer employment, compensation and
employee benefits matters for Retek employees for so long as, and only
to the extent that, Retek employees participate in such HNC employment,
compensation and/or employee benefits programs.
(b) Corporate Communication Services. HNC shall provide Retek with corporate
communication services support during the term of this Agreement, which shall
include services similar to those provided currently that are in support of the
consolidated organization, such as general communications to the investment
community, trade shows, corporate media that
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incorporates Retek in its campaign, or communication that generally addresses
HNC as an organization.
(c) Employee Group Insurance. The extension to Retek's and RIS' employees
of those HNC employee group insurance benefits specifically listed in Part 1 of
Attachment II to this Exhibit A that are currently provided to HNC employees;
provided that HNC shall not be obligated to provide such group insurance to
Retek and RIS employees if (i) HNC ceases to provide such group insurance to HNC
employees; (ii) HNC is not permitted to extend such employee group insurance to
Retek or RIS employees by the providers of such group insurance; or (iii) the
extension of such group insurance to Retek employees is not permitted under the
agreements and documents governing such group insurance or is not permitted
under applicable law. No other employee group insurance shall be provided by HNC
to employees of Retek or RIS unless otherwise explicitly agreed to in writing by
HNC.
(d) Other Employee Benefits. The extension to Retek employees of
participation in the other HNC employee benefit plans listed in Part 2 of
Attachment II to this Exhibit A that are currently provided to HNC employees;
provided that HNC shall not be obligated to provide participation in such
employee benefit plans to Retek employees if (i) HNC ceases to provide such
benefit plans to HNC employees; (ii) HNC is not permitted to extend such benefit
plans to Retek employees by the providers of such benefit plans; or (iii) the
extension of such benefit plans to Retek employees is not permitted under the
agreements and documents governing such benefit plans or is not permitted under
applicable law. No benefits under any other HNC employee benefit plans shall be
extended to employees of Retek unless otherwise explicitly agreed to in writing
by HNC.
(e) Other Employee-Related Services. The extension of statutorily required
workers' compensation insurance for Retek employees.
(f) Other Services. HNC Financial Solutions shall continue to provide
office space in Japan to Retek that is currently provided by HNC Financial
Solutions to Retek and Retek shall pay its proportionate share of the costs of
such office space.
2. FEES FOR SERVICES.
(a) For the services described in subsections 1(a) and 1(b) of this
Exhibit A, Retek will pay HNC an amount equal to 100% of HNC's actual cost of
labor and associated overhead (and the amount of all fees charged by an
outsource supplier) to provide such services that is fairly allocable to Retek
and RIS under generally accepted cost accounting principles, taking into account
HNC's cost allocation policies and practices consistently applied given Retek's
and RIS's historic share of the use of such services. These amounts may be
adjusted by HNC from time to time upon thirty (30) days' advance notice to Retek
if Retek's or RIS's actual use of Services warrants a change in Retek's
allocable portion under generally accepted cost accounting principles. The
initial estimated monthly fees for the services described in this Exhibit A are
set forth on Attachment I to this Exhibit A and shall be adjusted when HNC's
actual expenditures are known for the covered period as provided in the
quarterly reconciliation provisions of Section 2.2 of this Agreement.
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<PAGE> 14
(b) For the services described in subsection 1(c) of this Exhibit A
("Employee Group Insurance"), Retek will pay HNC an amount per Retek or RIS
employee equal to HNC's actual cost for providing the employee group insurance
(including but not limited to all premiums paid by HNC for employee group
insurance, self-insurance claims and administrative fees for the administration
of these benefits). This amount may be adjusted by HNC from time to time to
reflect any changes in the cost of providing employee group insurance.
(c) For the services described in subsection 1(d) of this Exhibit A
("Other Employee Benefits"), Retek will pay HNC an amount per Retek or RIS
employee equal to the cost to HNC of providing the other employee benefit plans
(including but not limited to all plan administrative and audit fees incurred by
HNC in connection with such employee benefit plans). This amount may be adjusted
by HNC from time to time to reflect any changes in the cost of providing
employee benefits.
(d) For the services described in subsection 1(e) of this Exhibit A
("Other Employee-Related Services"), Retek will pay HNC (i) the direct charges
incurred by HNC to pay for worker's compensation insurance for Retek or RIS
employees, based on the actual insurance premium rate, plus (ii) the direct
charges incurred by HNC for payroll withholding items.
(e) For other services described in subsection 1(f) of this Exhibit A,
Retek will pay HNC Financial Solutions an amount per Retek or RIS employee equal
to HNC Financial Solutions' actual cost for providing the Japan office space.
This amount may be adjusted by HNC Financial Solutions from time to time to
reflect any changes in the cost of providing this office space.
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<PAGE> 15
ATTACHMENT I
TO
EXHIBIT A
TO SERVICES AGREEMENT BETWEEN
HNC SOFTWARE INC., RETEK INC. AND
RETEK INFORMATION SYSTEMS, INC.
INITIAL MONTHLY FEES FOR SERVICES
The fees to be charged to Retek for the following services are based
upon the forecasted actual costs expected to be incurred by HNC for such
services and are subject to adjustment for actual expenditures based on HNC's
cost accounting and changes in underlying facts and forecasts. Fees are
allocated to all HNC subsidiaries and business units based upon forecasted
headcount and revenues for the same period. All fees are due and payable from
Retek monthly based upon the final budget prepared by HNC staff, subject to
adjustment and reconciliation as provided in Section 2.2 of the Agreement. The
following represents a preliminary estimate of those fees for the first quarter
of 2000 and is subject to final HNC management approval. Estimates of monthly
fee charges for subsequent quarters will be communicated to Retek in advance of
any billing for time periods in that quarter.
<TABLE>
<CAPTION>
SERVICE CATEGORY INITIAL MONTHLY ESTIMATE
<S> <C>
Corporate, General and Administrative Services: $121,000 per month
Employee Group Insurance: Actual costs billed by the
insurance carrier or invoiced by
HNC
Corporate Communications: $36,000 per month
</TABLE>
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<PAGE> 16
ATTACHMENT II
TO EXHIBIT A TO
SERVICES AGREEMENT
BETWEEN
HNC SOFTWARE INC., RETEK INC. AND
RETEK INFORMATION SYSTEMS, INC.
EMPLOYEE GROUP INSURANCE AND EMPLOYEE BENEFIT PLANS
1. Employee Group Insurance
Group Insurance programs for which Retek or its subsidiaries
participate as a member of the HNC organization are as follows:
Medical
Dental
Basic Life
Optional Life
Vision
Short-Term Disability
Long-Term Disability
Employee Assistance Program
Business Travel Accident
Background Investigation Service
2. Other Employee Benefit Plans
Section 125
401(K)
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<PAGE> 17
EXHIBIT B
TO
SERVICES AGREEMENT
BETWEEN HNC SOFTWARE INC., RETEK, INC. AND
RETEK INFORMATION SYSTEMS, INC.
BUSINESS INSURANCE
1. DESCRIPTION OF BUSINESS INSURANCE COVERAGE PROVIDED.
General Liability
Errors and Omissions
Property Insurance
Directors' and Officers' *
Employee Dishonesty
Crime Insurance
Excess Umbrella
Auto
International
HNC shall in good faith determine the amount of the above coverages
based on historical past practices.
* Subject to the provisions of Section 1.2 of this Agreement regarding
Retek's obligation to maintain and pay for its own additional directors' and
officers' insurance coverage.
2. PAYMENT FOR BUSINESS INSURANCE COVERAGE.
Retek shall pay to HNC a fee equal to a prorated portion of the premium
paid by HNC for such Business Insurance Coverage - where the prorated amount of
such premium allocated to, and payable by Retek, shall be computed based upon
HNC's Corporate Allocation practices consistently applied; provided that HNC
will not be obligated to extend such Business Insurance Coverage if the insurer
is not willing to extend such Business Insurance Coverage to Retek or its
subsidiaries or the extension of coverage to Retek and/or its subsidiaries
results in any significant increase in the cost of the insurance premium paid
for HNC's portion of the coverage.
NOTE: Retek shall be responsible for purchasing and paying for its own
additional directors' and officers' insurance coverage as provided in Section
1.2 of the Agreement. Retek shall also be responsible for purchasing and paying
for its own Workers' Compensation Policies, which shall be purchased and paid
for by Retek and its subsidiaries for their benefit.
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