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EXHIBIT 2.5
FORM OF SERVICES AGREEMENT
This SERVICES AGREEMENT (this "Agreement") is made and entered into
effective as of ________, 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
X. Xxxxx 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.
X. Xxxxx 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 closing of the Public Offering, HNC will own approximately
_______% of the outstanding shares of Retek's Common Stock (the "Retained
Shares") and, pursuant to the terms of a Separation Agreement dated as of
________, 1999 (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, during 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 will use good faith efforts to extend coverage to Retek and RIS under HNC's
insurance policies for those
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(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.
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 the amount of fees payable by Retek to HNC for
Services rendered and/or business insurance premiums. 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.
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.
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.
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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 ____________________
___________________ .
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 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, in its sole discretion, elect to discontinue providing any
Service or Services hereunder to Retek or discontinue any Insurance Coverage
hereunder, by providing Retek at least sixty (60) days' advance written notice
of HNC's election to discontinue providing such Services and/or Insurance
Coverage.
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
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foregoing, a non-defaulting party will have all other rights and remedies
available at law or equity.
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 Records of HNC. 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.
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.
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
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(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.
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.
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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 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
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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):
If to HNC, to: If to Retek or RIS, to:
HNC Software Inc. Retek Inc.
0000 Xxxxxxxxxxx Xxxxx Xxxx Xxxxxxx Plaza, 000 Xxxxxxxx Xxxx
Xxx Xxxxx, XX 00000-0000 11th Floor
Attention: Chief Financial Officer Xxxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000 Attention: Chief Financial Officer
Facsimile: (000) 000-0000
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 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
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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.
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.
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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.
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: By:
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Name: Name:
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Title: Title:
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RETEK INC.
By:
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Name:
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Title:
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