<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 8, 1999
REGISTRATION NO. 333-86841
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1 TO
FORM S-1
REGISTRATION STATEMENT
Under
The Securities Act of 1933
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RETEK INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 7372 51-0392671
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
</TABLE>
MIDWEST PLAZA, 801 NICOLLET MALL, 11TH FLOOR
MINNEAPOLIS, MN 55402
(612) 630-5700
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
---------------------------
JOHN BUCHANAN
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
RETEK INC.
MIDWEST PLAZA, 801 NICOLLET MALL
11TH FLOOR, MINNEAPOLIS, MN 55402
(612) 630-5700
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies to:
<TABLE>
<S> <C>
CHRISTOPHER D. DILLON JOHN A. FORE
SHEARMAN & STERLING KATHLEEN B. BLOCH
1550 EL CAMINO REAL, SUITE 100 WILSON SONSINI GOODRICH & ROSATI
MENLO PARK, CA 94025 PROFESSIONAL CORPORATION
(650) 330-2200 650 PAGE MILL ROAD
PALO ALTO, CA 94304
(650) 493-9300
</TABLE>
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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EXPLANATORY NOTE
This Amendment No. 1 (this "Amendment") is being filed solely for the
purpose of filing exhibits to the Registration Statement on Form S-1
(Registration No. 333-86841) (the "Registration Statement") filed with the
Securities and Exchange Commission by Retek Inc. This Amendment does not contain
a copy of the prospectus included in the Registration Statement, which is
unchanged.
<PAGE> 3
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by the registrant in connection
with the sale and distribution of the common stock being registered. All amounts
are estimated, except the Securities and Exchange Commission Registration Fee,
the NASD Filing Fee and the Nasdaq National Market Filing Fee:
<TABLE>
<CAPTION>
ITEM AMOUNT
- ---- --------
<S> <C>
Securities and Exchange Commission Registration Fee......... $ 25,896
NASD Filing Fee.............................................
Nasdaq National Market Filing Fee...........................
Blue Sky Fees and Expenses.................................. 0
Accounting Fees and Expenses................................
Legal Fees and Expenses.....................................
Transfer Agent and Registrar Fees...........................
Printing and Engraving...................................... 22?,000
Miscellaneous...............................................
--------
Total..................................................... $
========
</TABLE>
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* To be provided by amendment
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law (the "DGCL") empowers a
Delaware corporation to indemnify any persons who are, or are threatened to be
made, parties to any threatened, pending or completed legal action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of such corporation), by reason of the fact that
such person is or was an officer or director of such corporation or is or was
serving at the request of such corporation as a director, officer, employer or
agent of another corporation or enterprise. The indemnity may include expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding, provided that such officer or director acted in good faith
and in a manner he or she reasonably believed to be in, or not opposed to, the
best interests of the corporation, and, in the case of criminal proceedings, had
no reasonable cause to believe his or her conduct was illegal. A Delaware
corporation may indemnify officers and directors against expenses (including
attorneys' fees) in connection with the defense or settlement of an action by or
in the right of the corporation under the same conditions, except that no
indemnification is permitted without judicial approval if the officer or
director is adjudged to be liable to the corporation. Where an officer or
director is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify him or her against expenses
which such officer or director actually and reasonably incurred. The Certificate
of Incorporation of the Registrant provides for indemnification of the officers
and directors of the Registrant to the full extent permitted by applicable law.
In accordance with Delaware law, the Certificate of Incorporation of the
Registrant contains, and the Amended and Restated Certificate of Incorporation
of the Registrant will contain, a provision to limit the personal liability of
directors of the Registrant for violations of their fiduciary duty. This
provision eliminates each director's liability to the Registrant or its
stockholders for monetary damages except (i) for any breach of the director's
duty of loyalty to the Registrant or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law,
II-1
<PAGE> 4
(iii) under Section 174 of the DGCL, providing for liability of directors for
unlawful payment of dividends or unlawful stock purchases or redemptions or (iv)
for any transaction from which a director derived an improper personal benefit.
The effect of this provision is to eliminate the personal liability of directors
for monetary damages for actions involving a breach of their fiduciary duty of
care, including any such actions involving gross negligence.
Pursuant to the underwriting agreement between the Registrant and the
underwriters filed as an exhibit to this Registration Statement, the
underwriters, a party thereto, have agreed to indemnify each officer and
director of the Registrant and each person, if any, who controls the Registrant
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act"), against certain liabilities, including liabilities under said Act.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
In connection with the incorporation in Delaware of Retek Inc., the
Registrant issued shares of its common stock to HNC Software Inc. The
Registrant believes that this issuance was exempt from registration under
Section 4(2) of the Securities Act as a transaction not involving any public
offering.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(A) EXHIBITS
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<CAPTION>
EXHIBIT
NO. DESCRIPTION
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<C> <S>
1.1** Form of Underwriting Agreement.
2.1* Agreement and Plan of Merger and Reorganization between
Retek Logistics, Inc. and Registrant.
2.2 Form of Separation Agreement.
2.3 Form of Licensing Agreement.
2.4** Form of Tax Sharing Agreement.
2.5 Form of Services Agreement.
2.6 Form of Corporate Rights Agreement.
3.1* Certificate of Incorporation of the Registrant as currently
in effect.
3.2* Bylaws of the Registrant as currently in effect.
3.3** Form of Amended and Restated Certificate of Incorporation of
the Registrant as in effect immediately prior to the closing
of this offering.
3.4** Form of Amended and Restated Bylaws of the Registrant as in
effect immediately prior to the closing of this offering.
4.1** Specimen Common Stock Certificate.
5.1** Opinion of Shearman & Sterling.
10.1+ Industry Solutions Initiative Master Agreement between
Oracle Corporation and Retek Information Systems, Inc.
10.2* Employment Agreement of John Buchanan.
10.3** Assignment of Option Agreement relating to WebTrak Limited
between HNC Software Inc. and Retek Information Systems,
Inc.
10.4+ Option Agreement between HNC Software Inc., WebTrak Limited
and the shareholders of WebTrak Limited.
10.5** Retek 1999 Equity Incentive Plan.
10.6** Retek 1999 Employee Stock Purchase Plan.
10.7** Retek 1999 Director Stock Option Plan.
21.1** Schedule of Subsidiaries of Registrant.
23.1* Consent of PricewaterhouseCoopers LLP.
23.2* Consent of PricewaterhouseCoopers LLP.
23.3** Consent of Shearman & Sterling (included in Exhibit 5.1).
24.1* Power of Attorney (included on signature page).
27.1* Financial Data Schedule.
27.2* Financial Data Schedule.
27.3* Financial Data Schedule.
27.4* Financial Data Schedule.
</TABLE>
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* Filed previously.
** To be filed by amendment.
+ The Registrant intends to apply for confidential treatment of portions of
this Exhibit. Accordingly, portions thereof will be omitted and filed
separately.
II-2
<PAGE> 5
(B) FINANCIAL STATEMENT SCHEDULES
ITEM 17. UNDERTAKINGS
(a) The Registrant hereby undertakes to provide to the underwriters at the
closing specified in the underwriting agreement certificates in such
denominations and registered in such names as required by the
underwriters to permit prompt delivery to each purchaser.
(b) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions described in Item
14 or otherwise, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than payment by the
Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered,
the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification
by it is against public policy as expressed in the Securities Act and
will be governed by the final adjudication of such issue.
(c) The undersigned Registrant hereby undertakes that:
(1) for purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant
to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall
be deemed to be part of this registration statement as of the time
it was declared effective; and
(2) for purposes of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein and this offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
II-3
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 1 to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Minneapolis, State of Minnesota, on October 8, 1999.
RETEK INC.
By: *
--------------------------------------
Name: John Buchanan
Title: Chairman, Chief Executive
Officer
and Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
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<CAPTION>
SIGNATURE TITLE DATE
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<C> <S> <C>
* Chairman, Chief Executive Officer October 8, 1999
- --------------------------------------------- and Director (Principal Executive
John Buchanan Officer)
/s/ GREG EFFERTZ Vice President, Finance and October 8, 1999
- --------------------------------------------- Administration, Chief Financial
Gregory A. Effertz Officer, Treasurer, Secretary and
Director (Principal Financial and
Accounting Officer)
*By /s/ GREG EFFERTZ
---------------------------------------
Gregory A. Effertz
Attorney-in-fact
</TABLE>
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
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<C> <S> <C>
1.1* Form of Underwriting Agreement.
2.1* Agreement and Plan of Merger and Reorganization between
Retek Logistics, Inc. and Registrant.
2.2 Form of Separation Agreement.
2.3 Form of Licensing Agreement.
2.4** Form of Tax Sharing Agreement.
2.5 Form of Services Agreement.
2.6 Form of Corporate Rights Agreement.
3.1* Certificate of Incorporation of the Registrant as currently
in effect.
3.2* Bylaws of the Registrant as currently in effect.
3.3** Form of Amended and Restated Certificate of Incorporation of
the Registrant as in effect immediately prior to the closing
of this offering.
3.4** Form of Amended and Restated Bylaws of the Registrant as in
effect immediately prior to the closing of this offering.
4.1** Specimen Common Stock Certificate.
5.1** Opinion of Shearman & Sterling.
10.1* Employment Agreement of John Buchanan.
10.2+ Industry Solutions Initiative Master Agreement between
Oracle Corporation and Retek Information Systems, Inc.
10.3** Assignment of Option Agreement relating to Webtrak Limited
between HNC Software Inc. and Retek Information Systems,
Inc.
10.4+ Option Agreement between HNC Software Inc., WebTrak Limited
and the shareholders of WebTrak Limited.
10.5** Retek 1999 Equity Incentive Plan.
10.6** Retek 1999 Employee Stock Purchase Plan.
10.7** Retek 1999 Director Stock Option Plan.
21.1** Schedule of Subsidiaries of Registrant.
23.1* Consent of PricewaterhouseCoopers LLP.
23.2* Consent of PricewaterhouseCoopers LLP.
23.3** Consent of Shearman & Sterling (included in Exhibit 5.1).
24.1* Power of Attorney (included on signature page).
27.1* Financial Data Schedule.
27.2* Financial Data Schedule.
27.3* Financial Data Schedule.
27.4* Financial Data Schedule.
</TABLE>
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* Filed previously
** To be filed by amendment.
+ The Registrant intends to apply for confidential treatment of portions of
this Exhibit. Accordingly, portions thereof will be omitted and filed
separately.
<PAGE> 1
EXHIBIT 2.2
FORM OF SEPARATION AGREEMENT
This SEPARATION 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"), Retek Inc., a Delaware
corporation ("Retek") and Retek Information Systems, Inc., a Delaware
corporation ("RIS").
RECITALS
A. As of the Effective Date, Retek is a wholly-owned subsidiary of HNC,
and RIS is a wholly-owned subsidiary of HNC.
B. HNC's Board of Directors has determined that it is in the best
interests of HNC and its stockholders to separate the businesses of Retek and
RIS from HNC's other operations. In furtherance of that objective, HNC has also
determined that it is appropriate and desirable for HNC to contribute and
transfer to Retek all of the capital stock of RIS which HNC owns (so that RIS
will become a wholly-owned subsidiary of Retek) together with certain other
assets as provided herein and to cause Retek to assume the certain liabilities,
in accordance with this Agreement and the Ancillary Agreements (as defined
herein) (such contribution and transfer of assets by HNC and such assumption of
liabilities by Retek and RIS in accordance with this Agreement are collectively
hereinafter referred to as the "Separation").
C. The Board of Directors of HNC and Retek have determined that it is
appropriate and desirable, on the terms and conditions contemplated by this
Agreement, that Retek issue and sell shares of its Common Stock (as defined
herein) in an initial public offering registered under the Securities Act (the
"Initial Public Offering"), provided that the number of shares of such stock
issued and sold in the Initial Public Offering do not exceed % of Retek's
outstanding capital stock.
D. HNC's current intention is that after the closing of the Initial
Public Offering, HNC may in its sole discretion elect to distribute pro rata to
HNC's stockholders, as a dividend, the remaining shares of Common Stock of Retek
which it holds after the closing of the Initial Public Offering (the
"Distribution").
E. It is appropriate and desirable to set forth in this Agreement the
agreements of the parties regarding the Separation and the transactions required
to effect the Separation and the Initial Public Offering, and the relationship
of HNC, Retek and RIS following the Separation.
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual agreements, provisions and covenants contained in this Agreement, the
parties hereby agree as follows:
<PAGE> 2
ARTICLE I
CERTAIN DEFINITIONS
1.1 CERTAIN DEFINITIONS. As used herein, the following terms have the
following meanings:
"Action" means any claim, suit, arbitration, inquiry, proceeding or
investigation by or before any court, governmental, regulatory or administrative
agency or commission, any other tribunal or other Governmental Authority, or any
arbitrator or arbitration panel.
"Affiliate" of any specified Person means any other Person that,
directly or indirectly, controls, is controlled by or is under direct or
indirect common control with such specified Person. For purposes of this
definition, the term "control" (including, with correlative meanings, the terms,
"controls" "controlled by" or "under common control with") means the possession,
directly or indirectly, of the power to vote a majority of the securities having
voting power for the election of directors (or other Persons acting in similar
capacities) of such Person or otherwise to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.
"After Tax Basis" means a basis such that the Original Payment shall be
supplemented by a further payment to such Person so that the sum of the two
payments shall equal the Original Payment, after taking into account all Taxes
that would result from the receipt or accrual of such payments, if legally
required, with all payments hereunder being calculated on the assumption that
the payee is subject to Tax at the highest marginal rates of Tax applicable to
such class of taxpayer.
"Ancillary Agreements" means, collectively, the Corporate Rights
Agreement, the License Agreement, the Services Agreement, and the Tax Sharing
Agreement.
"Closing Date" has the meaning assigned to such term in Section 2.3.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the U.S. Securities and Exchange Commission.
"Common Stock" means the common stock, par value $0.01 per share, of
Retek.
"Consents" means any consents, waivers or approvals from, or
notification requirements to, any third parties.
"Covered Claims" means any claim that is of a type covered by insurance
or self insurance of HNC in effect on the Closing Date and is listed and
described as a "Covered Claim" on Schedule 3(k).
"Corporate Rights Agreement" means the Corporate Rights Agreement to be
entered into by and among HNC, Retek and RIS at the Closing in substantially the
form of Exhibit 1.
"Distribution" has the meaning assigned to such term in Recital D of
this Agreement.
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<PAGE> 3
"Effective Initial Public Offering Date" means the date on which the
Registration Statement is declared effective by the Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Assets" has the meaning assigned to such term in Section
2.1(b).
"Excluded Liabilities" has the meaning assigned to such term in Section
2.2(b).
"Governmental Authority" means any federal, state, local, foreign or
international court, government, department, commission, board, bureau, agency,
official or other regulatory, administrative or governmental authority.
"HNC Group" means HNC and each Person (other than Retek and RIS) that
is an Affiliate of HNC immediately after the Closing Date.
"Liabilities" means any and all losses, claims, charges, debts,
demands, Actions, causes of Action, suits, damages, obligations, payments, costs
and expenses, accounts, bonds, indemnities and similar obligations, covenants,
contracts, agreements, promises, guarantees and other liabilities, including all
contractual obligations, whether absolute or contingent, matured or not matured,
liquidated or unliquidated, accrued or not accrued, known or unknown, whenever
arising, in each case, whether or not recorded or reflected or required to be
recorded or reflected in the books and records or financial statements of any
Person, including, without limitation, those arising under (i) any law, rule or
regulation, (ii) any Action, threatened or contemplated Action (including the
costs and expenses of demands, assessments, judgments, arbitration awards,
settlements and compromises relating thereto and attorneys' fees and any and all
costs and expenses whatsoever (including without limitation allocated costs of
in-house counsel and other personnel), reasonably incurred in investigating,
preparing or defending against any such Actions or threatened or contemplated
Actions), (iii) any order or consent decree of any Governmental Authority or any
award of any arbitrator or mediator of any kind, and (iv) any contract,
commitment or undertaking, including those arising under this Agreement or any
Ancillary Agreement.
"License Agreement" means the Technology License Agreement to be
entered into between HNC and RIS at the Closing in substantially the form of
Exhibit 2.
"Lien" means any mortgage, security interest, pledge, encumbrance or
charge upon property of a Person to secure or obtain payment of a debt or
performance of an obligation, whether arising by contract, consent or by
operation of law.
"Original Payment" means the payment received or deemed to have been
received by a Person before any adjustments made to take into account that such
payment is Taxable to the payee.
"Person" means an individual, a general or limited partnership, a
corporation, a trust, a joint venture, an unincorporated organization, a limited
liability company, any other entity and any Governmental Authority.
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<PAGE> 4
"Policy" has the meaning assigned to such term in Section 3.1(k).
"Prospectus" means each preliminary, final or supplemental prospectus
forming a part of the Registration Statement.
"Registration Statement" means the registration statement on Form S-1
(or other appropriate form promulgated by the Commission) filed by Retek with
the Commission to effect the registration for issuance by Retek in the Initial
Public Offering of shares of its Common Stock pursuant to the Securities Act, as
such registration statement may be amended or supplemented from time to time.
"Retek Assets" has the meaning assigned to such term in Section 2.1(a).
"Retek Business" means the business and operations of Retek and RIS,
which consist of developing, marketing, selling, and supporting enterprise
software products that provide business solutions to retailers and their
suppliers.
"Retek Bylaws" means the amended and restated bylaws of Retek.
"Retek Certificate" means the amended and restated certificate of
incorporation of Retek which will be in effect immediately prior to the closing
of the Initial Public Offering and a form of which was in the form filed as an
exhibit to the Registration Statement.
"Retek Contracts" means the following contracts and agreements, to
which HNC or any of its Affiliates is a party or by which HNC or any of its
Affiliates or and of their respective assets is bound, except for any such
contract or agreement that is contemplated to be retained by HNC or any of its
Affiliates (other than Retek or RIS) pursuant to any provision of this Agreement
or any Ancillary Agreement:
(a) the contracts or agreements listed or described on
Schedule 1.1(a) (as such Schedule may be supplemented by mutual written
agreement signed by HNC and Retek after the Effective Date and prior to
the Closing Date);
(b) any contracts or agreements entered into by HNC in the
name of, or expressly on behalf of, Retek or RIS; and
(c) any guarantee, indemnity, representation, warranty or
other Liability of Retek or HNC in respect of any other Retek Contract,
any Retek Liability or the Retek Business.
"Retek Group" means Retek, RIS and each Person (other than HNC or any
member of the HNC Group) that is an Affiliate of either of Retek or RIS
immediately after the Closing Date.
"Retek Intercompany Payables" means all accounts payable and other
intercompany amounts payable by Retek, RIS or any other member of the Retek
Group to HNC or to any other member of the HNC group as set forth in Schedule
2.5 or reflected in the books and records of the parties or otherwise documented
in writing in accordance with the parties' past practices.
4
<PAGE> 5
"Retek Intercompany Receivables" means all accounts receivable and
other intercompany amounts payable by HNC or by any other member of the HNC
group to Retek, RIS or any other member of the Retek Group as set forth in
Schedule 2.5 or reflected in the books and records of the parties or otherwise
documented in writing in accordance with the parties' past practices.
"Retek Liabilities" has the meaning assigned to such term in Section
2.2.
"RIS Bylaws" means the bylaws of RIS, as amended.
"RIS Certificate" means the restated certificate of incorporation of
RIS.
"RIS Common Stock" means the shares of common stock of RIS, par value
$0.001 per share.
"Securities Act" means the Securities Act of 1933, as amended.
"Separation" has the meaning assigned to such term in Recital B of this
Agreement.
"Separation Date" means the date determined by the Board of Directors
of HNC as the date on which the Separation shall be effected, which is
contemplated to occur on the date of the closing of the Initial Public Offering.
"Services Agreement" means the Services Agreement to be entered into
between HNC, Retek and RIS at the Closing in substantially the form of Exhibit
3.
"Tax," "Taxes" or "Taxable" has meaning given to such term in the Tax
Sharing Agreement.
"Tax Sharing Agreement" means the Tax Sharing Agreement to be entered
into among HNC and Retek at the Closing providing for certain tax related
matters, in substantially the form of Exhibit 4.
"Underwriting Agreement" means the agreement executed between Retek and
the managing Underwriter with regard to the Initial Public Offering.
"Underwriter" means a Person who agrees to act as an underwriter in
connection with the Initial Public Offering.
Unless otherwise specified, any reference to any "subsidiary" or
"subsidiaries" of HNC shall not include either Retek or RIS.
5
<PAGE> 6
ARTICLE II
TRANSFER OF ASSETS AND
ASSUMPTION OF LIABILITIES
2.1 TRANSFER OF ASSETS.
(a) Assignment of Retek Assets. Effective upon the Closing, HNC will
assign, transfer, convey and deliver to Retek as of the Closing Date, and HNC
agrees to cause each of its subsidiaries (other than Retek and RIS) to assign,
transfer, convey and deliver to Retek as of the Closing Date, and Retek will
accept from HNC and such subsidiaries as of the Closing Date, all of HNC's and
such subsidiaries' respective right, title and interest in, to or under the
following assets and properties described in the following subparagraphs of this
Section 2.1(a) (collectively, the "Retek Assets"):
(i) all shares of RIS Common Stock owned directly or beneficially
by HNC as of the Closing Date.
(ii) all of the Retek Contracts;
(iii) tangible copies of any sales, marketing and promotional
literature, and other sales-related materials owned, used, associated
with or employed by HNC relating primarily to the Retek Business.
Notwithstanding the foregoing, Retek Assets shall not in any event
include any of the Excluded Assets referred to in Section 2.1(b) below.
(b) Excluded Assets. For the purposes of this Agreement, "Excluded
Assets" shall mean all assets, properties and rights owned or held by HNC or any
member of the HNC Group that are not expressly described in any of the
subparagraphs of Section 2.1(a).
2.2 ASSUMPTION OF RETEK LIABILITIES.
(a) Assumption. Effective upon the Closing, except as may be otherwise
expressly set forth in one or more of the Ancillary Agreements, from and after
the Closing Date, Retek and RIS hereby jointly and severally assume and agree to
faithfully and timely pay, perform, fulfill and satisfy all Retek Liabilities,
in accordance with their respective terms. As used herein, the term "Retek
Liabilities" means, collectively, all Liabilities (other than Taxes based on, or
measured by reference to, net income), including any employee-related
Liabilities, primarily relating to, arising out of or resulting from: (i) the
conduct or operation of the Retek Business at any time prior to, on or after the
Closing Date (including any Liability relating to, arising out of or resulting
from any act or failure to act by any director, officer, employee, agent or
representative of Retek or RIS (whether or not such act or failure to act is or
was within such Person's authority)); (ii) the conduct or operation of any
business conducted by Retek or RIS at any time after the Closing Date (including
any Liability relating to, arising out of or resulting from any act or failure
to act by any director, officer, employee, agent or representative or Retek or
RIS (whether or not such act or failure to act is or was within such Person's
authority)); and/or (iii) any Retek Assets.
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(b) Third-Party Releases. Except as provided in any Ancillary Agreement
or with regard to any obligations of HNC under this Agreement and such Ancillary
Agreements, from and after the execution of this Agreement, HNC, Retek and RIS
will cooperate in good faith and Retek and RIS will take such reasonable steps
(at the expense of HNC) as HNC may request so that HNC may obtain from third
parties (other than Retek or RIS) the release, discharge and exoneration of
HNC's obligations or Liabilities to any such third party (whether or not such
party's Consent is required to effect the transfer of any Retek Asset or the
assumption of any Retek Liability as contemplated herein) and the discharge of
any Lien on the property of HNC or any of its subsidiaries, arising from or
related to any of the Retek Assets or Retek Liabilities or the Retek Business,
to the end that Retek and/or RIS will become the sole obligors, debtors or
responsible parties on such Liabilities (the "HNC Releases").
(c) Retek Liabilities. Retek shall be responsible for all Retek
Liabilities, regardless of when or where such Liabilities arose or arise, or
whether the facts on which they are based occurred prior to or subsequent to the
Effective Date, regardless of where or against whom such Liabilities are
asserted or determined (including any Retek Liabilities arising out of claims
made by HNC's, Retek's or RIS's respective directors, officers, employees,
agents or Affiliates) or whether asserted or determined prior to the Effective
Date, and regardless of whether arising from or alleged to arise from
negligence, recklessness, violation of law, fraud or misrepresentation by HNC,
Retek or RIS or any of their respective directors, officers, employees, agents
or Affiliates.
2.3 TRANSFERS NOT EFFECTED ON OR PRIOR TO THE CLOSING DATE. To the extent
any transfers of assets contemplated by Section 2.1 shall not have been fully
effected on or prior to the Closing Date, HNC and Retek shall cooperate to
effect such transfers as promptly as possible following the Closing Date.
Nothing herein shall be deemed to require the transfer of any assets or the
assignment or assumption of any Liabilities that by their terms or by operation
of law cannot be so transferred, assigned or assumed; provided, however, that
any such asset shall be deemed a Retek Asset for purposes of determining whether
any Liability is a Retek Liability; and provided, further, that HNC and Retek
and their respective Affiliates shall cooperate in seeking to obtain any
necessary Consents for the transfer of all assets and the assignment or
assumption of all Liabilities as contemplated by this Article II. In the event
that any transfer of assets or assignment or assumption of Liabilities
contemplated by this Article II has not been consummated effective as of the
Closing Date, (i) the parties retaining such assets shall thereafter hold such
assets in trust for the use and benefit of the party entitled thereto (at the
expense of the party entitled thereto); and (ii) the party retaining such
Liabilities shall thereafter hold such Liabilities for the account of the party
assuming such Liability or to whom such Liability is to be assigned pursuant
hereto, and in each such case shall take such other actions as may be reasonably
required in order to place the parties, insofar as reasonably possible, in the
same position as would have existed had such asset been transferred, or such
Liability been assigned or assumed as contemplated hereby. As and when any such
asset or Liability become transferable, assignable or assumable, as the case may
be, such transfer, assignment or assumption, as the case may be, shall be
effected forthwith. HNC and Retek agree that, as of the Closing Date, each party
hereto shall be deemed to have acquired complete and sole beneficial ownership
over all of the assets, together with all of the rights, powers and privileges
incidental thereto, that such party is entitled to acquire pursuant to the terms
of this Agreement.
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2.4 CLOSING MATTERS. The closing of the Separation under this Agreement
will take place at the offices of Fenwick & West LLP, Two Palo Alto Square, Palo
Alto, California, at___ a.m. Pacific Time, concurrent with the consummation and
closing of the Initial Public Offering or at such other time and place as HNC,
Retek and RIS shall mutually agree upon in a writing signed by each of them. The
"Closing" and the date on which the Closing occurs is referred to herein as the
"Closing Date"), provided, however, that HNC's obligation to consummate the
Separation and to effect the Closing shall be subject to the satisfaction and
fulfillment of the conditions to HNC's obligations set forth in Section 3.3. At
the Closing, to the extent that they have not already done so, the parties will
take each of the following actions:
(a) HNC shall execute and deliver to Retek (or to RIS, in the case of
deliverables relevant to RIS) such bills of sale, stock powers, assignments of
contracts and other instruments or transfer, conveyance and assignment as and to
the extent necessary to evidence the transfer, conveyance and assignment of all
of HNC's or its subsidiaries' (other than Retek or RIS) right, title and
interest in and to Retek Assets to Retek or RIS, as the case may be;
(b) HNC shall execute and deliver each of the Ancillary Agreements to
Retek and RIS, as applicable;
(c) Retek shall execute and deliver to HNC (and, with regard to any
liabilities assumed for RIS, to RIS) such bills of sale, assumptions of
contracts and other instruments or assumption as may be necessary to evidence
the valid and effective assumption of Retek Liabilities by Retek and RIS;
(d) Retek shall execute and deliver each of the Ancillary Agreements to
HNC and RIS, as applicable;
(e) RIS shall execute and deliver to HNC and RIS such bills of sale,
assumptions of contracts and other instruments or assumption as may be necessary
to evidence the valid and effective assumption of any Retek Liabilities by RIS;
(f) RIS shall execute and deliver each of the Ancillary Agreements to
HNC and Retek, as applicable; and
(g) Either (i) Retek and RIS on the one hand, or (ii) HNC on the other
hand, as applicable under the provisions of Section 2.6, shall pay to the other
the amount payable by it under the provisions of Section 2.6 to settle all then
outstanding intercompany accounts in accordance with Section 2.6.
2.5 NO REPRESENTATIONS OR WARRANTIES; CONSENTS.
(a) Asset Status. Each of the parties hereto understands and agrees
that no party hereto is, in this Agreement, in any Ancillary Agreement or in any
other agreement or document contemplated by this Agreement, any Ancillary
Agreement or otherwise, making any representation or warranty whatsoever to any
other party as to the value of any assets of such party, and all such
representations and warranties are hereby disclaimed and negated. The parties
also agree and understand that there are no warranties whatsoever, whether
express or implied, given by any party
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to this Agreement, as to the condition, quality, merchantability or fitness for
a particular purpose of any of the assets, businesses or other rights
transferred or retained by the parties, as the case may be, and all such assets,
businesses and other rights shall be "as is, where is" and "with all faults"
(provided that the absence of warranties given by the parties shall not negate
the assumption of Liabilities under this Agreement and shall have no effect on
any manufacturers, sellers, or other third party warranties that are intended to
be transferred with such assets).
(b) Consents. Each party hereto understands and agrees that no party
hereto is, in this Agreement, in any Ancillary Agreement or in any other
agreement or document contemplated by this Agreement, any Ancillary Agreement or
otherwise, representing or warranting in any way that the obtaining of any
Consents, the execution and delivery of any amendatory agreements and the taking
of any filings or applications contemplated by this Agreement will satisfy the
provisions of any or all applicable laws or judgments or other instruments or
agreements relating to such assets. Notwithstanding the foregoing, the parties
shall use their reasonable good faith efforts to obtain all Consents (including
without limitation such Consents as may be required by any Governmental
Authorities), and to take all such further actions as shall be deemed reasonably
necessary to preserve for each of HNC, Retek and RIS, to the greatest extent
reasonably feasible (where the determination of feasibility shall take into
account the expense and time associated with preserving such benefits as
compared to the value of such benefits) to carry out the purposes and intent of
this Agreement. If at any time after the Closing Date any further action is
necessary or desirable to carry out the purposes of this Agreement, the proper
officers and directors of each party to this Agreement shall take all such
necessary or desirable action, provided that any financial cost shall be borne
by the party receiving the benefit of the action.
2.6 SETTLEMENT AND OFFSET OF INTERCOMPANY ACCOUNTS.
(a) Current Intercompany Accounts. The parties agree that, as of the
Effective Date: (i) the Retek Intercompany Payables consist entirely of those
payables designated as Retek Intercompany Payables in Part A of Schedule 2.6 in
the respective amounts set forth therein, and (ii) the Retek Intercompany
Receivables consist entirely of those accounts receivable designated as Retek
Intercompany Receivables in Part B of Schedule 2.6 in the respective amounts set
forth therein.
(b) Closing Update Certificates. At the Closing, Retek (on behalf of
itself and the Retek Group) and HNC (on behalf of itself and the HNC Group)
shall each deliver to the other a certificate (the "Intercompany Accounts
Certificate"), executed by its respective Chief Financial Officer, which shall
set forth in reasonable detail (and be accompanied by appropriate supporting
documentation): (i) a list of all Retek Intercompany Payables and Retek
Intercompany Receivables arising or accrued on and after the Effective Date and
(ii) a list of all payments of Retek Intercompany Receivables made after the
Effective Date and prior to the Closing Date.
(c) Closing Offset and Settlement Payment. At the Closing, Retek (on
behalf of itself, RIS and the Retek Group) and HNC (on behalf of itself and the
HNC Group), shall set-off, settle and pay all then outstanding Retek
Intercompany Payables and Retek Intercompany Receivables, as follows. The
parties shall examine Schedule 2.6, the HNC Intercompany Accounts Certificate
and the Retek Intercompany Accounts Certificate, and shall determine from such
documents: (i) the amount of Retek Intercompany Payables as of the Closing Date;
(ii) the amount of Retek
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Intercompany Receivables as of the Closing Date; (iii) the amount, if any, by
which the Retek Intercompany Payables as of the Closing Date exceeds the Retek
Intercompany Receivables as of the Closing Date (such excess amount if any,
being referred to as the "Net Retek Closing Payable"); and (iv) the amount, if
any, by which the total Retek Intercompany Receivables as of the Closing Date
exceed the Retek Intercompany Payables as of the Closing Date (such excess
amount, if any, being referred to as the "Net Retek Closing Receivable"). If
there is a Net Retek Closing Payable, then at the Closing Retek shall pay to HNC
an amount equal to the Net Retek Closing Payable. If there is a Net Retek
Closing Receivable, then at the Closing HNC shall pay to Retek an amount equal
to the Net Retek Closing Receivable. If there is no Net Retek Closing Payable
and no Net Retek Closing Receivable, then no payment shall be made by HNC or
Retek under this Section at the Closing. Any dispute between HNC and Retek
regarding the amount of Retek Intercompany Payables and/or Retek Intercompany
Receivables shall be resolved in accordance with Article VII.
ARTICLE III
THE SEPARATION AND THE INITIAL PUBLIC OFFERING
3.1 COOPERATION PRIOR TO THE SEPARATION. In addition to the matters set
forth in Section 3.2 concerning preparations for the Initial Public Offering and
in Article V (concerning preparations, if undertaken, for the Distribution), and
subject to the conditions set forth in Section 3.3, from and after the date of
this Agreement until the earlier of the Closing or the termination of this
Agreement pursuant to Section 8.1, HNC, Retek and RIS shall cooperate with each
other and use their diligent good faith efforts to prepare for the Separation,
including doing each of the following:
(a) Conduct Affairs in Ordinary Course. Except as set forth in this
Agreement and the Ancillary Agreements, Retek and RIS shall each continue to
conduct its affairs in the ordinary course of its business consistent with past
practices and shall operate its business for the sole benefit of HNC, its sole
stockholder; provided that Retek shall be entitled to exercise its option to
purchase certain assets and/or stock of WebTrak Limited;
(b) Equity Incentive Plans. Retek shall establish and maintain for the
benefit of its directors, officers, employees, consultants and advisors and
those of its subsidiaries, equity incentive, stock option and similar plans or
arrangements satisfactory and acceptable to HNC;
(c) Board of Directors. Each of Retek, RIS and HNC shall nominate (and
if necessary and permitted to be done by them, elect and appoint) such persons
to its Board of Directors and such officers as HNC may request in order to
effect the composition of the Board of Directors and officers of each of Retek
and RIS which must be in effect upon the Closing as provided in Section 3.3,
consistent with the provisions of the Corporate Rights Agreement, and to
establish such committees of their respective Boards as HNC may request in
preparation for the Initial Public Offering, consistent with the provisions of
the Corporate Rights Agreement;
(d) Charter Documents Amendments. HNC shall cause Retek and RIS to
adopt by all necessary board and stockholder actions any amendments to their
Certificates of Incorporation and Bylaws to effect changes necessary thereto so
that, upon the Closing, their Certificates of Incorporation and Bylaws conform,
in each case, to those required to be in effect upon the Closing as provided in
Section 3.3;
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(e) Remedial Actions. In addition to the actions set forth in the
preceding subparagraph (e), Retek and RIS shall consult with HNC in advance of
any remedial action therefor (unless delay in such consultation would create a
serious, present threat to the lives of HNC, Retek or RIS personnel or
third-parties present on their premises, or HNC's, Retek's or RIS's property)
when any event occurs which, in the judgment of Retek's or RIS's management
requires suspension or termination of any key Retek or RIS employee;
(f) Consents. Retek and RIS shall assist HNC in identifying each Retek
Asset or Retek Liability to be assigned at the Closing which requires an HNC
Release or Consent to assignment and co-operate with HNC to obtain such HNC
Releases and such Consents;
(g) Investigations. Retek and RIS shall notify HNC immediately (and in
no event more than 24 hours after the discovery thereof) of the receipt of any
correspondence or communications from any Governmental Authority revealing the
investigation of their affairs or any aspect thereof or correspondence or
communications from any Person revealing the commencement of any litigation
against either of them, and comply with HNC's reasonable requests in responding
to any such event;
(h) Material Adverse Effect. Retek and RIS shall inform HNC as promptly
as reasonably possible upon the occurrence of any other event the occurrence of
which may have a material adverse affect on the Retek Business, on the
Separation, the Initial Public Offering or the Distribution;
(i) Returns and Reports. Retek and RIS shall co-operate with HNC, in a
manner consistent with past practices, so that all tax returns filed jointly by
HNC with either or both of them shall be timely prepared and filed, any reports
(including HNC periodic reports under the Exchange Act) shall be timely prepared
and filed, and any other accounting or administrative matters between HNC and
Retek or HNC and RIS shall be handled in a reasonably prompt and prudent manner;
(j) Stock Options. Provision regarding Retek Options or HNC Options
held by Retek Personnel.
(k) Insurance Matters. HNC, Retek and RIS shall use reasonable efforts
to maintain in full force and effect at all times up to and including the
Closing Date all property and casualty insurance programs currently maintained
by HNC, Retek or RIS as of the Effective Date, including, without limitation,
primary and excess general liability, automobile, workers' compensation,
property and crime insurance policies (collectively, the "Policies" and
individually, a "Policy"). HNC and its subsidiaries shall retain, with respect
to any Covered Claims set forth on Schedule 3.1(k) relating to periods prior to
the Closing Date, all of their respective rights, benefits and privileges, if
any, under such Policies.
(i) Except to the extent otherwise expressly
provided in the Services Agreement, commencing on and as of
the Closing Date, Retek (for itself and for RIS) shall be
responsible for establishing and for maintaining its own
separate insurance programs (including, without limitation,
primary and excess general liability, automobile, workers'
compensation, property, director and officer liability, errors
and omissions, fire, crime, surety and other similar insurance
policies) for
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activities, losses and claims relating to any period on or
after the Closing Date involving Retek, RIS or any other
member of the Retek Group. Notwithstanding any other agreement
or understanding to the contrary, except as expressly
otherwise provided in the Services Agreement or in Section
3.1(k)(ii) with respect to claims administration and financial
administration of the Policies, neither HNC nor any of its
subsidiaries shall have any responsibility for or obligation
to Retek or its subsidiaries relating to liability and
casualty insurance matters for any period, whether prior to,
at or after the Closing Date;
(ii) HNC shall be responsible for the claims
administration and financial administration of all Policies
for Covered Claims relating to the assets, ownership or
operation of the Retek Business prior to the Closing Date.
Retek shall be responsible for all administrative and
financial matters relating to insurance policies established
and maintained by Retek and RIS for claims relating to any
period on or after the Closing Date involving Retek or RIS or
any other member of the Retek Group.
(iii) Retek shall promptly notify HNC of any claim
(including any Covered Claim) relating to Retek or RIS under
one or more of the Policies relating to a period prior to the
Closing Date, and Retek and RIS agree to cooperate and
coordinate with HNC concerning any strategy HNC may reasonably
elect to pursue to secure coverage and payment for such claim
by the appropriate insurance carrier. Notwithstanding anything
contained herein, in any other agreement or applicable Policy
or any understanding to the contrary, except to the extent
otherwise expressly provided in the Services Agreement, Retek
assumes responsibility for, and shall pay to the appropriate
insurance carriers or otherwise, any premiums,
retrospectively-rated premiums, defense costs, indemnity
payments, deductibles, retentions or other charges, as
appropriate (collectively, "Insurance Charges"), whenever
arising, which shall become due and payable under the terms
and conditions of any applicable Policy in respect of any
liabilities, losses, claims, actions or occurrences, whenever
arising or becoming known, involving or relating to any of the
assets, businesses, operations or liabilities of Retek or RIS
during the period after the Closing Date. To the extent that
the terms of any applicable Policy provide that HNC or a
subsidiary thereof, as appropriate, shall have an obligation
to pay or guarantee the payment of any Insurance Charges for
which Retek has assumed responsibility in the preceding
sentence, HNC or such subsidiary shall be entitled to demand
that Retek or RIS make such payment directly to the person or
entity entitled thereto. In connection with any such demand,
HNC shall submit to Retek or RIS a copy of any invoice
received by HNC or a subsidiary pertaining to such Insurance
Charges, together with appropriate supporting documentation,
if available. If Retek or its subsidiary fails to pay any such
Insurance Charges when due and payable, whether at the request
of the party entitled to payment or upon demand by HNC or a
subsidiary of HNC, HNC or a subsidiary of HNC may (but shall
not be required to) pay such Insurance Charges for and on
behalf of Retek or its subsidiary and, thereafter, Retek or
its subsidiary shall forthwith reimburse HNC or such
subsidiary of HNC for such payment; and
(l) HNC, Retek and RIS shall take any and all other steps reasonably
necessary to prepare for the Separation and to cause the satisfaction of the
closing conditions thereto.
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3.2 PREPARATIONS FOR THE INITIAL PUBLIC OFFERING.
(a) Efforts; Abandonment. Subject to the conditions specified in
Section 3.3, HNC, Retek and RIS shall use their good faith efforts to consummate
the Initial Public Offering; provided, however, that notwithstanding the
foregoing, HNC, in its sole and absolute discretion, may cause Retek to abandon
the Separation and the Initial Public Offering as provided in Section 8.1, in
which event the Separation shall not occur and Retek shall not consummate or
close the Initial Public Offering, and shall discontinue all efforts to
consummate the Initial Public Offering.
(b) Expenses. HNC and Retek shall pay the costs and expenses as
described in Section 8.2 as set forth therein.
(c) D&O Insurance. Retek shall diligently attempt to secure directors'
and officers' insurance on customary terms reasonably acceptable to HNC,
insuring the directors and officers of Retek.
(d) Proceeds of the Initial Public Offering. The Initial Public
Offering will include only a primary offering of Common Stock by Retek. Retek
will retain the net proceeds of the primary offering.
3.3 HNC BOARD ACTION; CONDITIONS PRECEDENT TO THE SEPARATION. HNC's Board
of Directors shall, in its discretion, establish any appropriate procedures, in
addition to those set forth in this Section 3, in connection with the
Separation. In no event shall the Separation occur unless each of the following
conditions, together with those established by HNC's Board of Directors, shall
have been satisfied, unless waived in writing by HNC in its sole discretion:
(a) All necessary regulatory approvals from Governmental Authorities
for the Separation, the Initial Public Offering and the performance of this
Agreement shall have been received;
(b) The Registration Statement shall have been filed with the
Commission, and Retek shall have been notified by the staff of the Commission
that it has no further comments on the Registration Statement and is prepared to
declare the Registration Statement effective upon Retek's request;
(c) All required actions and filings with regard to state securities
and blue sky laws of the United States (and any comparable laws under any
foreign jurisdictions) with respect to the Initial Public Offering shall have
been taken and no impediment other than the effectiveness of the Registration
Statement shall exist to the qualification under such securities laws of the
shares of Common Stock to be issued in the Initial Public Offering;
(d) Retek's Board of Directors and executive officers, as named in the
Registration Statement and agreed on between Retek and HNC, shall have been
elected by HNC, as sole stockholder of Retek, and the Retek Certificate and the
Retek Bylaws, in the form set forth as exhibits to the Registration Statement,
shall be in effect;
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(e) Retek shall have entered into indemnity agreements with, and for
the benefit of, each of its directors identified in subparagraph (d) of this
Section 3.3, in a form reasonably satisfactory to HNC and shall have obtained
directors' and officers' insurance covering such directors under a policy
reasonably satisfactory in substance and amount to HNC;
(f) RIS's Board of Directors, as agreed on between Retek and HNC, shall
have been elected by Retek as sole stockholder of RIS and RIS' officers, as
agreed between Retek and HNC;
(g) The RIS Certificate and the RIS Bylaws, in the form satisfactory to
HNC and Retek, shall be in effect;
(h) Retek shall have entered into an Underwriting Agreement with the
managing Underwriters for the Initial Public Offering which shall be reasonably
satisfactory to HNC;
(i) An application for quotation of the Common Stock on the National
Market System of the Nasdaq Stock Market shall have been filed in connection
with the Initial Public Offering, and Retek shall have been notified that,
subject to the effectiveness of the Registration Statement and official notice
of issuance, the Common Stock has been accepted for quotation thereon;
(j) HNC's Board of Directors, Retek's Board of Directors and RIS's
Board of Directors shall have formally approved the Separation, the Initial
Public Offering, the Ancillary Agreements and the related transactions
contemplated thereby and shall not have abandoned, deferred or modified the
Separation or the Initial Public Offering at any time prior to the Closing Date;
(k) No restraining order or injunction or other order, decree or ruling
issued by a court or by a government, regulatory or administrative agency or
commission, and no statute, rule, regulation or executive order promulgated or
enacted by any Governmental Authority shall be in effect preventing the
consummation of the Separation or the Initial Public Offering or any of the
other transactions contemplated by this Agreement or any Ancillary Agreement,
excluding the rules and regulations of such Governmental Authorities, the Nasdaq
Stock Market, the National Association of Securities Dealers and state
securities regulations which require that the Registration Statement be declared
effective before the consummation of the Initial Public Offering will be lawful;
(l) The HNC Releases shall have been obtained and HNC shall have been
released from any liabilities, guarantees or other obligations with respect to
any indebtedness or other obligations of Retek or its subsidiaries; provided,
that the satisfaction of such conditions shall not create any obligation on the
part of HNC to effect the Separation or in any way limit HNC's power of
termination set forth in Section 8.1 or alter the consequences of any such
termination from those specified in such Section;
(m) HNC shall be satisfied in its sole discretion that: (i) it will own
at least % of the outstanding Common Stock immediately following the
Initial Public Offering on a fully diluted basis (such percentage to be computed
after giving effect to the issuance of any shares of restricted stock or
employee stock options to any employees, officers, directors, consultants or
other service providers of Retek, and the possible exercise of any
over-allotment option by the Underwriters in the Initial Public Offering); and
(ii) all other conditions to permit any Distribution of the Common
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Stock held by HNC to HNC's stockholders after the closing of the Initial Public
Offering to qualify as a tax-free distribution to HNC, any member of the HNC
Group, Retek, and RIS and any member of the Retek Group and HNC's stockholders;
to the extent applicable as of the time of the Closing, can be satisfied and
there shall be no event or condition that is likely to cause any of such
conditions not to be satisfied thereafter;
(n) Retek (and/or RIS, as applicable) shall have executed and delivered
each of the Ancillary Agreements to which each is a party;
(o) Such other actions as the parties hereto may, based upon the advice
of counsel, reasonably request to be taken prior to the Separation in order to
assure the successful completion of the Separation and the Initial Public
Offering and the other transactions contemplated by this Agreement shall have
been taken; and
(p) This Agreement shall not have been terminated.
ARTICLE IV
INDEMNIFICATION
4.1 RELEASE OF CLAIMS.
(a) Release by Retek. Except as provided in Section 4.1(d), effective
as of the Closing Date, Retek does hereby, for itself and its Affiliates (other
than any member of the HNC Group), successors and assigns, and all Persons who
at any time prior to the Closing Date have been stockholders, directors,
officers, agents or employees of Retek or any of its Affiliates (other than any
member of the HNC Group) (in each case, in their respective capacities as such),
remise, release and forever discharge HNC and each member of the HNC Group,
their respective successors and assigns, and all Persons who at any time prior
to the Closing Date have been stockholders, directors, officers, agents or
employees of HNC or of any member of the HNC Group (in each case, in their
respective capacities as such), and their respective heirs, executors,
administrators, successors and assigns, from any and all Liabilities whatsoever,
whether at law or in equity (including any right of contribution), whether
arising under any contract or agreement, by operation of law or otherwise,
existing or arising from any facts or events occurring or failing to occur or
alleged to have occurred or to have failed to occur or any conditions existing
or alleged to have existed on or before the Closing Date, including in
connection with the transactions and all other activities to implement the
Separation and the Initial Public Offering.
(b) Release by RIS. Except as provided in Section 4.1(d), effective as
of the Closing Date, RIS does hereby, for itself and its Affiliates (other than
any member of the HNC Group), successors and assigns, and all Persons who at any
time prior to the Closing Date have been stockholders, directors, officers,
agents or employees of RIS or any of its Affiliates (other than any member of
the HNC Group) (in each case, in their respective capacities as such), remise,
release and forever discharge HNC and each member of the HNC Group, their
respective successors and assigns, and all Persons who at any time prior to the
Closing Date have been stockholders, directors, officers, agents or employees of
HNC or of any member of the HNC Group (in each case, in their respective
capacities as such), and their respective heirs, executors, administrators,
successors and
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assigns, from any and all Liabilities whatsoever, whether at law or in equity
(including any right of contribution), whether arising under any contract or
agreement, by operation of law or otherwise, existing or arising from any facts
or events occurring or failing to occur or alleged to have occurred or to have
failed to occur or any conditions existing or alleged to have existed on or
before the Closing Date, including in connection with the transactions and all
other activities to implement the Separation and the Initial Public Offering.
(c) Release by HNC. Except as provided in Section 4.1(d), effective as
of the Closing Date, HNC does hereby, for itself and each member of the HNC
Group, HNC's successors and assigns, and all Persons who at any time prior to
the Closing Date have been stockholders, directors, officers, agents or
employees of HNC or any member of the HNC Group (in each case, in their
respective capacities as such), remise, release and forever discharge Retek and
RIS, their respective successors and assigns, and all Persons who at any time
prior to the Closing Date have been stockholders, directors, officers, agents or
employees of Retek or RIS (in each case, in their respective capacities as
such), and their respective heirs, executors, administrators, successors and
assigns, from any and all Liabilities whatsoever, whether at law or in equity
(including any right of contribution), whether arising under any contract or
agreement, by operation of law or otherwise, existing or arising from any facts
or events occurring or failing to occur or alleged to have occurred or to have
failed to occur or any conditions existing or alleged to have existed on or
before the Closing Date, including in connection with the transactions and all
other activities to implement the Separation and the Initial Public Offering.
(d) Exclusions. Nothing contained in Section 4.1(a), 4.1(b) or 4.1(c)
shall impair any right of any Person to enforce this Agreement, any Ancillary
Agreement or any agreements, arrangements, commitments or understandings that
are specified in this Agreement as not to terminate as of the Closing Date, in
each case in accordance with its terms. In addition, nothing contained in
Section 4.1(a), 4.1(b) or 4.1(c) shall release any Person from:
(i) Any Liability provided in or resulting from any agreement
between Retek, and/or RIS, on the one hand, and any member of the HNC
Group, on the other hand, that is specified in this Agreement as not to
terminate as of the Closing Date, including but not limited to the
liability and obligation of Retek or HNC, as applicable, to make any
payment to the other required to be made by the provisions of Section
2.6;
(ii) Any Liability, contingent or otherwise, assumed, transferred
or assigned to such Person in accordance with this Agreement;
(iii) Any Liability of any Person under this Agreement (including
but not limited to indemnification obligations of such Person under
this Article IV) or under any Ancillary Agreement;
(iv) Any Liability for the sale, lease or receipt of goods,
property or services purchased, obtained or used in the ordinary course
of business by Retek or RIS from any member of the HNC Group or by any
member of the HNC Group from Retek or RIS;
(v) Any Liability that the parties may have with respect to
indemnification or contribution pursuant to this Agreement or any
Ancillary Agreement, including but not
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limited to indemnification or contribution for claims brought against
any of the parties by third Persons, which Liability shall be governed
by the provisions of this Article IV and, if applicable, the
appropriate provisions of the Ancillary Agreements; or
(vi) Any Liability the release of which would result in the
release of any Person other than a Person released pursuant to this
Section 4.1; provided that the parties agree not to bring suit or
permit any of their subsidiaries to bring suit against any Person with
respect to any Liability to the extent that such Person would be
released with respect to such Liability by this Section 4.1 but for the
provision of this clause (vi).
(e) Covenant Not to Make Claims on Released Matters. Retek shall not
make any claim or demand or bring or commence any Action asserting any claim or
demand, including any claim of contribution or indemnification, against HNC or
any member of the HNC Group or any other Person released pursuant to Section
4.1(a), with respect to any Liabilities released pursuant to Section 4.1(a). RIS
shall not make any claim or demand or bring or commence any Action asserting any
claim or demand, including any claim of contribution or indemnification, against
HNC or any member of the HNC Group or any other Person released pursuant to
Section 4.1(b), with respect to any Liabilities released pursuant to Section
4.1(b). HNC shall not make, and shall not permit any member of the HNC Group to
make, any claim or demand or bring or commence any Action asserting any claim or
demand, including any claim of contribution or indemnification, against Retek or
RIS or any other Person released pursuant to Section 4.1(c), with respect to any
Liabilities released pursuant to Section 4.1(c).
(f) Intent. It is the intention of each of HNC, Retek and RIS, by
virtue of the provisions of this Section 4.1, to provide for a full and complete
release and discharge of all Liabilities existing or arising from all acts and
events occurring or failing to occur or alleged to have occurred or failed to
occur and all conditions existing or alleged to have existed on or before the
Closing Date, between or among Retek or RIS or any of their Affiliates, on the
one hand, and HNC or any member of the HNC Group, on the other hand (including
any contractual agreements or arrangements existing or alleged to exist between
or among such Persons on or before the Closing Date), except as expressly set
forth in Section 4.1(d). At any time, at the request of any other party, each
party shall execute and deliver, confirmations or releases reflecting the
provisions hereof.
(g) Waiver. In connection with the releases granted by the parties
hereunder, each of Retek, RIS and HNC, on behalf of itself and each Person for
whom it granted a release pursuant to this Section 4.1, hereby expressly waives
any and all rights conferred upon it by the provisions of Section 1542 of the
California Civil Code and any similar law. Section 1542 of the California Civil
Code reads as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT
WITH THE DEBTOR." Each of the parties hereto hereby represents and warrants that
it has discussed the provisions of Section 1542 of the California Civil Code
with its respective counsel and has been advised of the effect of the waiver of
the provisions of that Section.
4.2 INDEMNIFICATION BY RETEK AND RIS. Except as provided in Section 4.5 and
except as otherwise expressly provided in any of the Ancillary Agreements, from
and after the Closing Date, Retek and RIS shall indemnify, defend and hold
harmless HNC, each member of the HNC Group
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and each of their respective directors, officers, agents and employees and each
of the heirs, executors, successors and assigns of any of the foregoing
(collectively, the "HNC Indemnitees") from and against any and all Liabilities
of the HNC Indemnitees relating to, arising out of or resulting from any of the
following items (without duplication):
(a) The failure of Retek or any other Person to pay, perform or
otherwise promptly discharge any Retek Liability or Retek Contract in accordance
with their respective terms, whether prior to or after the Closing Date or the
Effective Date hereof;
(b) the Retek Business, any Retek Liability or any Retek Contract;
(c) Any breach by Retek or RIS of this Agreement or any of the
Ancillary Agreements;
(d) Any untrue statement or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, with respect
to all information contained in the Registration Statement or the Prospectus
provided, however, that Retek and RIS shall not be liable to any HNC Indemnitee
in any such case to the extent that any such liability arising out of or
relating to any untrue statement or allegedly untrue statement or any omission,
if such statement or omission shall have been made in reliance upon and in
conformity with information relating to the HNC Indemnitees included in such
Registration Statement or Prospectus furnished in writing to Retek or RIS by or
on behalf of such HNC Indemnitee; and
(e) any violation by Retek or RIS of (i) the Securities Act, (ii) any
other federal law, rule or regulation regarding securities or (iii) any state or
other law, rule or regulation regarding securities in connection with the
Initial Public Offering or any subsequent offering or transaction involving
securities of Retek or RIS.
4.3 INDEMNIFICATION BY HNC. Except as provided in Section 4.5 and except as
otherwise expressly provided in any of the Ancillary Agreements, from and after
the Closing Date, HNC shall indemnify, defend and hold harmless Retek and each
of its subsidiaries and each of their respective directors, officers and
employees and each of the heirs, executors, successors and assigns of any of the
foregoing (collectively, the "Retek Indemnitees") from and against any and all
Liabilities of Retek Indemnitees relating to, arising out of or resulting from
any of the following items (without duplication):
(a) The failure of HNC or any other member of the HNC Group or any
other Person to pay, perform or otherwise promptly discharge any Liability of
the HNC Group (other than Retek Liabilities) in accordance with its terms,
whether prior to or after the Closing Date or the date hereof;
(b) Any Liability of any member of the HNC Group other than Retek
Liabilities; and
(c) Any breach by HNC or any member of the HNC Group of this Agreement
or any of the Ancillary Agreements.
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4.4 NOTICE AND PAYMENT OF CLAIMS. If any HNC Indemnitee or Retek Indemnitee
(the "Indemnified Party") determines that it is or may be entitled to
indemnification under this Article IV (other than in connection with any Action
subject to Section 4.5), then the Indemnified Party shall deliver to the person
from whom such indemnification is sought (the "Indemnifying Party"), a written
notice (a "Claim Notice") specifying, to the extent reasonably practicable, the
basis for its claim for indemnification and the amount for which the Indemnified
Party reasonably believes it is entitled to be indemnified. After the
Indemnifying Party shall have been notified of the amount for which the
Indemnified Party seeks indemnification, the Indemnifying Party shall, within
sixty (60) days after its receipt of such written notice, either (i) pay the
Indemnified Party such amount in cash or other immediately available funds (or
reach agreement with the Indemnified Party as to a mutually agreeable
alternative payment schedule) or (ii) object to the claim for indemnification or
the amount thereof by giving the Indemnified Party written notice setting forth
the grounds therefor. Any objection shall be resolved in accordance with the
provisions of Article VII. If the Indemnifying Party does not give such notice
within such sixty (60) day period, then the Indemnifying Party shall be deemed
to have acknowledged its liability for such claim to the extent that the amount
of such liability is specifically set forth in the Claim Notice and the
Indemnified Party may exercise any and all of its rights under applicable law to
collect such amount.
4.5 NOTICE AND DEFENSE OF THIRD-PARTY CLAIMS. Promptly following the
earlier of (A) receipt of written notice of the commencement by a third party of
any Action against or otherwise involving any Indemnified Party or (B) receipt
of written information from a third party alleging the existence of a claim
against an Indemnified Party, in either case, with respect to which
indemnification may be sought by an Indemnified Party pursuant to Article IV of
this Agreement (a "Third-Party Claim"), the Indemnified Party shall give the
Indemnifying Party prompt written notice thereof. Failure of the Indemnified
Party to give such written notice as provided in this Section 4.5 shall not
relieve the Indemnifying Party of its obligations under this Agreement, except
to the extent that the Indemnifying Party is prejudiced by such failure to give
notice. Such notice shall describe the Third-Party Claim in reasonable detail,
and attach any documentation received from the claimant (including, if
applicable, a copy of any complaint filed against the Indemnified Party)
asserting such Third-Party Claim.
(a) Within thirty (30) days after receipt of such notice, the
Indemnifying Party may, by giving written notice thereof to the Indemnified
Party, (i) elect to assume the defense of such Third-Party Claim at its sole
cost and expense or (ii) object to the claim of indemnification for such
Third-Party Claim setting forth the grounds for its objection. Any objection
shall be resolved in accordance with the provisions of Article VII. If the
Indemnifying Party does not within such thirty (30) day period give the
Indemnified Party such notice, then the Indemnifying Party shall be deemed to
have acknowledged its liability for such Third-Party Claim.
(b) Any defense of a Third-Party Claim as to which the Indemnifying
Party has elected to assume the defense shall be conducted by counsel employed
by the Indemnifying Party and reasonably satisfactory to HNC (in the case of HNC
Indemnitees) or Retek (in the case of Retek Indemnitees). The Indemnified Party
shall have the right to participate in such proceedings and to be represented by
counsel of its own choosing at the Indemnified Party's sole cost and expense;
provided that if the defendants or parties against which relief is sought in any
such claim include both the Indemnifying Party and one or more Indemnified
Parties and, in the reasonable judgment of HNC (in the case of HNC Indemnitees)
or Retek (in the case of Retek Indemnitees), an actual or potential
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conflict of interest between such Indemnified Parties and such Indemnifying
Party exists in respect of such claim or with regard to a defense thereto, such
Indemnified Parties shall have the right to employ one firm of counsel selected
by HNC (for HNC Indemnitees) or Retek (for Retek Indemnitees) and in that event
the reasonable fees and expenses of such separate counsel (but not more than one
separate counsel reasonably satisfactory to the Indemnifying Party) shall be
paid by such Indemnifying Party.
(c) If the Indemnifying Party assumes the defense of a Third-Party
Claim, then the Indemnifying Party may settle or compromise the claim without
the prior written consent of the Indemnified Party; provided that without the
prior written consent of HNC (in the case of HNC Indemnitees) and Retek (in the
case of Retek Indemnitees), the Indemnifying Party may not agree to any such
settlement unless as a condition to such settlement the Indemnified Party
receives a written release from any and all liability relating to such
Third-Party Claim and such settlement or compromise does not include any remedy
or relief to be applied to or against the Indemnified Party or its assets,
properties or business, other than monetary damages for which the Indemnifying
Party shall be fully responsible hereunder and which the Indemnifying Party pays
upon execution of the settlement.
(d) If the Indemnifying Party does not assume the defense of a
Third-Party Claim for which it has acknowledged liability for indemnification
under this Article IV, HNC (in the case of HNC Indemnitees) and Retek (in the
case of Retek Indemnitees) may pursue the defense of such Third-Party Claim and
choose one firm of counsel in connection therewith. The Indemnifying Party is
required to reimburse HNC or Retek, as the case may be, on a current basis for
its reasonable expenses of investigation, reasonable attorney's fees and
reasonable out-of-pocket expenses as incurred by HNC (in the case of HNC
Indemnitees) and Retek (in the case of Retek Indemnitees) in defending against
such Third-Party Claim and the Indemnifying Party shall be bound by the result
obtained with respect to such Third-Party Claim with respect to such
Indemnifying Party's indemnification obligations under this Article IV, provided
that the Indemnifying Party shall not be liable for any settlement effected
without the consent of the Indemnifying Party, which consent shall not be
unreasonably withheld, delayed or conditioned.
(e) The Indemnifying Party shall pay to the Indemnified Party in cash
the amount for which the Indemnified Party is entitled to be indemnified (if
any) no later than the later of (i) the date on which the Indemnified Party
makes any payment in satisfaction (partial or otherwise) of the Third-Party
Claim or (ii) the date on which such Indemnifying Party's objection, if any, to
its responsibility for indemnification under this Article IV has been resolved
pursuant to the provisions of Article VII or by settlement or compromise or the
final nonappealable judgment of a court of competent jurisdiction.
4.6 INSURANCE PROCEEDS. The amount that any Indemnifying Party is or may be
required to pay to any Indemnified Party pursuant to this Article IV shall be
reduced (including, without limitation, retroactively) by any insurance proceeds
or other amounts actually recovered by or on behalf of such Indemnified Parties
in reduction of the related Liability. If an Indemnified Party shall have
received the payment required by this Agreement from an Indemnifying Party in
respect of a Liability and shall subsequently actually receive insurance
proceeds, or other amounts in respect of such Liability as specified above, then
such Indemnified Party shall pay to such Indemnifying Party a sum equal to the
amount of such insurance proceeds or other amounts actually received in respect
of such Liability.
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4.7 CONTRIBUTION. If the indemnification provided for in this Article IV is
for any reason unavailable to an Indemnified Party in respect of any Liability
arising out of or related to information contained in or omitted from the
Registration Statement, then the Indemnifying Party, in lieu of indemnifying the
Indemnified Party shall contribute to the amount paid or payable by the
Indemnified Party as a result of such Liability in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party, on the one
hand, and the Indemnified Party, on the other hand, in connection with the
actions or omissions which resulted in such Liability. If the Liability in
question arises from statements or omissions that are untrue or are alleged to
be untrue, then the relative fault of the Indemnifying Party, on the one hand,
and of the Indemnified Party, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Indemnifying Party on the one hand or the
Indemnified Party on the other hand; the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such statement or omission, but not by reference to any Indemnified Party's
stock ownership in Retek. Notwithstanding the foregoing, no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
4.8 SUBROGATION. In the event of payment by an Indemnifying Party to any
Indemnified Party in connection with any Third-Party Claim, such Indemnifying
Party shall be subrogated to and shall stand in the first place of such
Indemnified Party as to any events or circumstances in respect of which such
Indemnified Party may have any right or claim relating to such Third-Party
Claim. Such Indemnified Party shall cooperate with such Indemnifying Party in a
reasonable manner, and at the cost and expense of such Indemnifying Party, in
prosecuting any subrogated right or claim, provided, however, that this right of
subrogation shall be construed in such a way so that it does not discharge any
insurance carrier for an Indemnifying Party for any obligation under any
insurance policy which provides coverage for such Indemnifying Party from any
loss asserted or involved in such Third-Party Claim.
4.9 NO THIRD-PARTY BENEFICIARIES. This Article IV shall inure to the
benefit of, and be enforceable by HNC, the HNC Indemnitees, Retek and Retek
Indemnitees and their respective successors and permitted assigns. The
indemnification provided for by this Article IV shall not inure to the benefit
of any other third party or parties, relieve any insurer who would otherwise be
obligated to pay any claim of the responsibility with respect thereto or, solely
by virtue of the indemnification provisions hereof or provide any subrogation
rights with respect thereto. Each party agrees to waive such subrogation rights
against the other to the fullest extent permitted.
4.10 REMEDIES CUMULATIVE. The remedies provided in this Article IV shall be
cumulative and shall not preclude assertion by any Indemnified Party of any
other rights or the seeking of any and all other remedies against an
Indemnifying Party. The procedures set forth in this Article IV, however, shall
be the exclusive procedures governing any indemnity action brought under this
Article IV or otherwise relating to Liabilities.
4.11 SURVIVAL OF INDEMNITIES. The rights and obligations of each of HNC and
Retek and their respective Indemnitees under this Article IV shall survive the
sale or other transfer by it of any assets or businesses or the assignment by it
of any Liabilities and shall, without limitation, survive the
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consummation and closing of the Separation, the Initial Public Offering and (if
it should ever occur) the Distribution.
ARTICLE V
THE DISTRIBUTION
5.1 POTENTIAL DISTRIBUTION. HNC currently intends (but HNC has not agreed
or committed that), following the consummation of the Initial Public Offering,
to complete the Distribution, subject to the satisfaction and fulfillment of
several conditions. These conditions would include, but not necessarily be
limited to, the following conditions: (a) HNC's receipt of a written ruling from
the Internal Revenue Service that the Distribution qualifies for tax-free
treatment under Section 355 of the Code such that HNC's stockholders and HNC and
its Affiliates will not recognize income for federal income tax purposes as a
result of the Distribution, (b) the approval and declaration of the Distribution
by HNC's Board of Directors, (c) the absence of any change in economic or market
conditions or other circumstances that would cause HNC's Board of Directors to
conclude that the Distribution was not in the best interests of HNC and its
stockholders, and (d) HNC being able to effect the Distribution in compliance
with applicable law and its contractual obligations. However, HNC shall not have
any obligation or commitment whatsoever so any Person (including but not limited
to Retek or RIS) to effect or consummate the Distribution. HNC shall, in its
sole and absolute discretion, determine when and whether to proceed with all or
part of the Distribution and all terms of the Distribution, including, without
limitation, the form, structure and terms of any transaction(s) and/or
offering(s) to effect the Distribution and the timing of and conditions to the
consummation of the Distribution. In addition, HNC may at any time and from time
to time until the completion of the Distribution abandon, modify or change any
or all of the terms of the Distribution, including without limitation, by
accelerating or delaying the timing of the consummation of all or part of the
Distribution. Retek shall cooperate with HNC in all commercially reasonable
respect to accomplish the Distribution (if HNC elects, in its sole and absolute
discretion, to effect the Distribution) and shall, at HNC's direction, promptly
take any and all actions necessary or desirable to effect the Distribution,
including, without limitation, the registration under the Securities Act of
Retek Common Stock on an appropriate registration form or forms to be designated
by HNC. HNC shall select any investment banker(s) and manager(s) in connection
with the Distribution, as well as any other institutions providing services in
connection with the Distribution.
5.2 CERTAIN MATTERS. If HNC elects, in its sole discretion, to effect the
Distribution, then from and after the distribution of Retek Common Stock in
connection with any transaction(s) included as part of the Distribution and
until such Retek Common Stock is duly transferred in accordance with applicable
law, Retek shall regard the Persons receiving Retek Common Stock in such
transaction(s) as record holders of Retek Common Stock in accordance with the
terms of such transaction(s) without requiring any action on the part of such
Persons. Retek agrees that, subject to any transfers of such stock, (a) each
such holder shall be entitled to receive all dividends payable on, and exercise
voting rights and all other rights and privileges with respect to, the shares of
Retek Common Stock then held by such holder and (b) each such holder shall be
entitled, without any action on the part of such holder, to receive one or more
certificates representing, or other evidence of ownership of, the shares of
Retek Common Stock then held by such holder. HNC shall cooperate, and shall
instruct the HNC stock transfer agent to cooperate, with Retek and the Retek
stock transfer agent, and Retek shall cooperate, and shall instruct the Retek
stock transfer agent to cooperate, with HNC and
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the HNC Transfer Agent, in connection with all aspects of the Distribution and
all other matters relating to the issuance and delivery of certificates
representing, or other evidence of ownership of, the shares of Retek Common
Stock distributed to the holders of HNC Common Stock in connection with any
transaction(s) included as part of the Distribution. Following the Distribution,
HNC shall promptly, but in no event no later than two business days thereafter,
instruct the HNC stock transfer agent to deliver to the Retek stock transfer
agent true, correct and complete copies of the stock and transfer records
reflecting the holders of HNC Common Stock receiving shares of Retek Common
Stock in connection with any transaction(s) included as part of the
Distribution.
5.3 FURTHER ASSURANCES REGARDING THE DISTRIBUTION.
(a) General. In addition to the actions specifically provided for
elsewhere in this Agreement, if HNC elects, in its sole discretion, to effect
the Distribution, then Retek shall, at HNC's direction, use all commercially
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, all things commercially reasonably necessary, proper or
expeditious under applicable laws, regulations and agreements in order to
consummate and make effective the Distribution as promptly as reasonably
practicable. Without limiting the generality of the foregoing, Retek shall, at
HNC's direction, cooperate with HNC, and execute and deliver, or use all
commercially reasonable efforts to cause to have executed and delivered, all
instruments, including instruments of conveyance, assignment and transfer, and
to make all filings with, and to obtain all consents, approvals or
authorizations of, any domestic or foreign governmental or regulatory authority
requested by HNC in order to consummate and make effective the Distribution.
(b) Assistance. After the Closing Date, Retek and RIS shall co-operate
with HNC and shall take such actions as HNC may reasonably request (including
without limitation providing all information, preparing and filing all
documentation as HNC may reasonably request and, if requested by HNC,
participating in any conferences with the Internal Revenue Service to seek a
ruling as to whether the Distribution can be accomplished after the closing of
the Initial Public Offering without recognition of taxable income by any of HNC,
HNC's stockholders, any Affiliate of HNC upon the closing of the Distribution)
to assist HNC in planning or effecting the Distribution and/or in determining
whether the Distribution can be effected without recognition of taxable income
as aforesaid. If the Internal Revenue Service provides HNC with a favorable
ruling that the Distribution will be tax-free under Section 355 of the Code,
then after the Closing Date, Retek and RIS shall take such actions and refrain
from taking such actions as necessary to insure, as nearly as reasonably
possible consistent with the fiduciary duties which HNC, Retek and RIS owe to
stockholders, that the conditions announced in any such ruling to the tax-free
nature of the Distribution are satisfied.
(c) Retek shall not issue any shares of its capital stock such that,
immediately following such issuance, HNC would be unable to effect the
Distribution on a tax-free basis as described in Section 5.1 and in Section
5.3(b).
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5.4 RETEK BOARD OF DIRECTORS. HNC and Retek shall each take all actions
which may be required to elect or otherwise appoint as directors of Retek,
effective as of the date on which the Distribution occurs, such individuals as
may be designated by Retek's Board of Directors (which designation shall be
approved by the majority of Retek's directors who are at such time neither
officers nor directors of HNC) as additional or substitute members of the Board
of Directors of Retek on the Distribution Date.
5.5 CERTAIN POST-DISTRIBUTION TRANSACTIONS.
(a) Actions Inconsistent with the Rulings. In the event that stock of
Retek (or any successor thereto) is ultimately distributed to any or all of
HNC's stockholders pursuant to transactions intended to qualify under Section
355 of the Code, Retek shall not take or fail to take, and shall not permit any
Affiliate of Retek to take or fail to take, any action if such act or failure to
act would be inconsistent with any representation, covenant or information in
any ruling, including for all purposes of this Agreement any supplemental
rulings (collectively, the "Rulings") issued by the Internal Revenue Service in
connection with the Distribution or any representation, covenant or any
information included in any submission to the Internal Revenue Service in
connection with the Rulings (together with the Rulings, the "Rulings and
Submissions").
(b) Liability. Notwithstanding anything to the contrary in this
Agreement or the Tax Sharing Agreement, Retek and the Affiliates of Retek shall
be jointly and severally liable for, and shall indemnify and hold harmless HNC
and each Affiliate of HNC (other than any member of the Retek Group) from and
against on an After-Tax Basis, any and all Taxes (including interest, penalties
and additions to Tax) resulting from the Distribution to the extent such Taxes
result in whole or in part from (i) any event or transaction occurring after the
Distribution that involves the stock, assets, or business of Retek or any of its
Affiliates, whether or not such event or transaction is the result of the direct
actions of, or within the control of, Retek or any of its Affiliates, (ii) any
act or failure to act on the part of Retek or any of its Affiliates after the
Distribution, (iii) the breach of any representation, covenant or information
regarding Retek or any of its Affiliates included in the Rulings and
Submissions, or (iv) any actions contemplated by Section 5.5(c) below,
regardless of whether HNC consents to such actions pursuant to Section 5.5(d)
below.
(c) Covenants Specific to Distribution Tax Matters. Retek agrees that
during the two (2) year period immediately following completion of the
Distribution (the "Restriction Period"), Retek will not, and will not permit any
Affiliates of Retek to:
(i) sell, exchange, distribute or otherwise transfer or agree
to sell, exchange, distribute or transfer, all or a
substantial portion of its assets (within the meaning of
Rev. Proc. 77-37), or any stock or equity interest in any
Affiliate of Retek, in a single transaction or a series of
transactions;
(ii) voluntarily dissolve or liquidate or enter into any merger,
consolidation or reorganization transaction;
(iii) (A) solicit any Person or Persons to make a tender offer
for the equity securities of Retek, (B) participate in or
support any unsolicited tender offer for the equity
securities of Retek, or (C) approve any proposed business
combination or any transaction which would result in any
Person or Persons acquiring directly or
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indirectly a 50% or greater interest (within the meaning of
Section 355(e) of the Code) in Retek;
(iv) whether before or subsequent to the expiration of the
Restriction Period, engage in any action described in
clause (iii) above if it is pursuant to an arrangement
negotiated (in whole or in part) prior to or subsequent to
the Distribution, even if at the time of the Distribution
it is subject to various conditions;
(v) liquidate, dispose of or otherwise discontinue or otherwise
fail to maintain the active conduct of the trade or
business relied upon in connection with the Rulings and
Submissions;
(vi) sell or otherwise issue to any Person or Persons, or redeem
or otherwise acquire from any Person or Persons, any of its
outstanding stock (other than stock purchases meeting the
requirements of section 4.05(1)(b) of Rev. Proc. 96-30)
that in the aggregate (including shares issued and sold in
the Initial Public Offering) would result in the
acquisition of a 50% or greater interest (within the
meaning of Section 355(e) of the Code) directly or
indirectly by any Person or Persons in Retek;
(vii) issue any stock or equity interests (except pursuant to the
exercise of employee stock options) that in the aggregate
(including shares issued and sold in the Initial Public
Offering) would result in the acquisition of a 50% or
greater interest (within the meaning of Section 355(e) of
the Code) directly or indirectly by any Person or Persons
in Retek;
(viii) enter into any agreement for the sale or other disposition
of its stock or equity interests;
(ix) take any action inconsistent with the representations,
covenants or information included in the Rulings and
Submissions or that would result in the Distribution being
Taxable in whole or part to HNC or any of its Affiliates or
HNC's stockholders; or
(x) engage in any agreement, understanding, arrangement or
negotiation, directly or indirectly, with any Person or
Persons with respect to any of the restricted actions
described in clauses (i) through (x) above.
(d) Exceptions to Covenants. Notwithstanding Section 5.5(c) above,
Retek or any Affiliate of Retek may take actions inconsistent with the covenants
contained in such Section 5.5(c), if (i) HNC expressly consents in writing to
such actions, such consent to be determined by HNC in its sole discretion taking
into account solely the preservation of the tax-free status of the Distribution
under Section 355 of the Code or HNC or (ii) Retek has obtained a ruling from
the Internal Revenue Service, in form and substance reasonably satisfactory to
HNC, to the effect that such proposed transaction will not adversely affect the
tax-free status of the Distribution under Section 355 of the Code. Retek agrees
that HNC is to have no liability for any Tax resulting from any restricted
action permitted pursuant to this Section 5.5(d) and agrees to indemnify and
hold harmless HNC against any such Tax notwithstanding the giving by HNC of its
consent to such restricted actions.
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ARTICLE VI
ACCESS TO INFORMATION
6.1 PROVISION OF CERTAIN CORPORATE DOCUMENTS. Each of HNC, Retek and RIS
shall arrange as soon as practicable following the Closing Date for the
provision to the other party of the other party's existing corporate governance
documents (e.g. certificate of incorporation, by laws, minute books, stock
registers, stock certificates, etc.) in its possession relating to the other
party. Each party may make and keep copies of all such documents as it is
required to provide to any other party hereunder.
6.2 ACCESS TO INFORMATION. From and after the Closing Date, each of HNC,
Retek and RIS shall afford the other, including its accountants, counsel and
other designated representatives, reasonable access (including using reasonable
efforts to give access to persons or firms possessing information) and
duplicating rights during normal business hours to all records, books,
contracts, instruments, computer data and other data and information in such
party's possession relating to the business and affairs of the other (other than
data and information subject to an attorney/client or other privilege), insofar
as such access is reasonably required by the other party including, without
limitation, for audit, accounting and litigation purposes, as well as for
purposes of fulfilling disclosure and reporting obligations. In particular, for
so long as HNC is required to include, incorporate or reflect financial
information, financial statements or operating results of Retek and/or any other
member of the Retek Group (a) in HNC's financial statements under generally
accepted accounting principles and/or (b) in any reports or filings required to
be made by HNC under the Securities Act, the Exchange Act or other applicable
law, then Retek shall (i) provide HNC in good faith with prompt and full access
to such information, including the right to duplicate and retain copies of such
information, (ii) cooperate promptly with HNC as necessary to enable HNC to
timely prepare and file or make any such financial statements, reports or
filings and (iii) provide all time, attention and effort of Retek personnel as
may be reasonably requested by HNC to assist HNC in preparing any such financial
statements, reports or filings.
6.3 LITIGATION COOPERATION. Each of HNC, Retek and RIS shall use reasonable
efforts to make available to the other(s), upon written request, its officers,
directors, employees and agents as witnesses to the extent that such persons may
reasonably be required in connection with any legal, administrative or other
proceedings arising out of the business of the other in which the requesting
party may from time to time be involved.
6.4 REIMBURSEMENT. Each party providing witnesses under Section 6.3 to the
other shall be entitled to receive from the party for whom the witness is
provided, upon the presentation of invoices therefor, payment for all
out-of-pocket costs and expenses as may be reasonably incurred in providing such
witnesses.
6.5 CONFIDENTIALITY. Subject to Section 6.6, 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, trade
secret or proprietary 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)
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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 6.5.
6.6 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 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 information to the extent required by such law
(as so advised by counsel) or by lawful process or such Governmental Authority.
6.7 MAIL. After the Closing Date, each of HNC, Retek and RIS may receive
mail, telegrams, packages and other communications properly belonging to the
other. Accordingly, at all times after the Closing Date, each of HNC, Retek and
RIS authorizes the other to receive and open all mail, telegrams, packages and
other communications received by it and not unambiguously addressed to or
intended for the other party or any of the other party's officers or directors
specifically in their capacities as such, and to retain the same to the extent
that they relate to the business of the receiving party or, to the extent that
they do not relate to the business of the receiving party and do relate to the
business of the other party, or to the extent that they relate to both
businesses, the receiving party shall promptly contact the other party by
telephone for delivery instructions and such mail, telegrams, packages or other
communications (or, in case the same relate to both businesses, copies thereof)
shall promptly be forwarded to the other party in accordance with its delivery
instructions. If any party receives mail, telegrams, packages and other
communications belonging to another party and unambiguously addressed to or
intended for such other party, then the party who receives such material shall
promptly contact the other party by telephone for delivery instructions and such
mail, telegrams, packages or other communications shall promptly be forwarded to
the other party in accordance with its delivery instructions. The foregoing
provisions of this Section 6.7 shall constitute full authorization to the postal
authorities, all telegraph and courier companies and all other persons to make
deliveries to HNC, Retek or RIS, as the case may be, addressed to either of them
or to any of their officers or directors specifically in their capacities as
such. The provisions of this Section 6.7 are not intended to and shall not be
deemed to constitute an authorization by either HNC, Retek or RIS to permit any
of the other to accept service of process on its behalf, and no party is or
shall be deemed to be the agent of the other for service of process purposes or
for any other purpose.
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6.8 RETENTION OF RECORDS. Except as otherwise required by law or agreed to
in writing, each party shall, and shall cause each of its respective
subsidiaries to, retain all information relating to the other party's business
in accordance with such party's written record retention policy or, if no such
policy exists, the past practice of such party. Notwithstanding the foregoing
and except as provided in any Ancillary Agreement, any party may destroy or
otherwise dispose of any such information at any time upon not less than thirty
(30) days prior written notice to the other party, specifying the information
proposed to be destroyed or disposed of; provided, however, that if the
recipient of such notice shall request in writing prior to the scheduled date
for such destruction or disposal that any of the information proposed to be
destroyed or disposed of be delivered to such requesting party, the party
proposing the destruction or disposal shall promptly arrange for the delivery of
such information as was requested at the expense of the requesting party. Except
as provided in the Tax Sharing Agreement or otherwise required by law or agreed
to in writing, either party shall have the right to destroy or otherwise dispose
of any such information at any time after the second anniversary of the
Effective Date.
ARTICLE VII
DISPUTE RESOLUTION
7.1 PROCEDURE. The parties shall attempt in good faith to resolve any
dispute arising out of or relating to this Agreement and shall attempt in good
faith to negotiate a settlement of any dispute pursuant to the following
process:
(a) Any party having a dispute or claim shall give the other party
written notice stating the nature of the dispute in reasonable detail. Within
twenty (20) business days after delivery of the notice, the receiving party
shall submit to the other a written response also in reasonable detail. Within
five (5) business days after delivery of the written response the Chief
Financial Officers (or other individual who has authority to settle the
controversy and who has direct responsibility for administration of the
relationships established pursuant to this Agreement) for each affected party
shall meet (in person or by telephone) at a mutually acceptable time and place
(including telephonic conference), and thereafter as often as they reasonably
deem necessary, to attempt to resolve the dispute. All reasonable requests for
information made by one party to the other shall be honored.
(b) If such matter has not been resolved within twenty (20) business
days of the referral of the dispute to the Chief Financial Officers, then the
parties may pursue litigation or, if mutually agreed, alternative dispute
resolution mechanisms; provided that a party may earlier pursue litigation if
reasonably necessary to prevent or enjoin any breach of this Agreement for which
money damages would be an inadequate remedy, or that would alter the status quo
or result in injury to such party that cannot readily be compensated for in
money damages.
ARTICLE VIII
MISCELLANEOUS
8.1 TERMINATION. This Agreement may be terminated and the Separation and
the Initial Public Offering may be deferred, modified or abandoned at any time
prior to the Closing Date by, and in the sole and absolute discretion of, the
Board of Directors of HNC without the need for any
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approval or consent of Retek or RIS. In the event of such termination, no party
hereto (or any of its respective directors or officers) shall have any liability
to any other party pursuant to this Agreement and the Initial Public Offering
shall be discontinued and terminated.
8.2. EXPENSES. Except for the fees and disbursements related to HNC's
counsel, accountants and other advisors, Retek shall pay or cause to be paid all
third party expenses relating to the IPO or any other primary offering by Retek
prior to a Distribution, including (i) the preparation, printing and filing of
the Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto or any other registration
statements, (ii) the preparation, printing and delivery to any underwriters of
any underwriting agreement, any agreement among underwriters and any other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Retek Common Stock or any other securities of Retek,
(iii) the preparation, issuance and delivery of the certificates for the Retek
Common Stock or any other securities of Retek to any underwriters or any other
purchasers, including any stock or other transfer taxes and any stamp or other
duties payable upon the sale, issuance or delivery of the Retek Common Stock or
any other securities of Retek to any underwriters or any other securities, (iv)
the qualification of the Retek Common Stock or any other securities of Retek
under the securities laws in accordance with any state (Blue Sky laws),
including filing fees and the reasonable fees and disbursements of counsel for
any underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (v) the printing and delivery
to any underwriters of copies of each preliminary prospectus, any term sheets
and of the final prospectus and any amendments or supplements thereto, (vi) the
preparation, printing and delivery to any underwriters of copies of the Blue Sky
Survey and any supplement thereto, (vii) the fees and expenses of any transfer
agent or registrar for the Retek Common Stock or any other securities of Retek,
(viii) the filing fees incident to, and the reasonable fees and disbursements of
counsel to any underwriters in connection with, the review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the Retek
Common Stock or any other securities of Retek and (ix) the fees and expenses
incurred in connection with the listing of the Retek Common Stock or any other
securities of Retek on the Nasdaq Stock Market, any national securities exchange
or any national over the counter quotation system.
8.3 NOTICES. All notices and communications under this Agreement shall be
in writing and any communication or delivery hereunder shall be deemed to have
been duly given when received addressed as follows:
If to HNC, to:
HNC Software Inc.
5935 Cornerstone Court West
San Diego, California 92121
Attn: Chief Financial Officer
Telecopy Number: (858) 452-3220
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If to Retek, to:
Retek Inc.
Midwest Plaza
801 Nicollet Mall, 11th Floor
Minneapolis, MN 55402
Attn: President
Telecopy Number: (612) 630-5641
If to RIS, to:
c/o Retek Inc.
Midwest Plaza
801 Nicollet Mall, 11th Floor
Minneapolis, MN 55402
Attn: President
Telecopy Number: (612) 630-5641
Any party may, by written notice so delivered to the other party,
change the address to which delivery of any notice shall thereafter be made.
8.4. AMENDMENT AND WAIVER. This Agreement may not be altered or amended,
nor may rights hereunder be waived, except by an instrument in writing executed
by the party or parties to be charged with such amendment or waiver. No waiver
of any terms, provision or condition of or failure to exercise or delay in
exercising any rights or remedies under this Agreement, in any one or more
instances shall be deemed to be, or construed as, a further or continuing waiver
of any such term, provision, condition, right or remedy or as a waiver of any
other term, provision or condition of this Agreement.
8.5 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original instrument, but all of
which together shall constitute but one and the same Agreement. 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.
8.6 GOVERNING LAW; JURISDICTION; FORUM. This Agreement shall be construed
in accordance with, and governed by, the internal laws of the State of
California, without regard to the conflicts of law rules of such state. Each
party hereto expressly submits and consents in advance to the non-exclusive
jurisdiction of the State and Federal courts sitting in the City of San Diego,
State of California, in any Action between the parties arising under this
Agreement or under any Ancillary Agreement, and hereby waives any claim that any
such state or federal court is an inconvenient or forum or improper venue.
8.7 ENTIRE AGREEMENT. This Agreement including the schedules and exhibits
hereto, together with the Ancillary Agreements, constitute the entire agreement
and understanding of the parties hereto with respect to the subject matter
hereof, superseding all negotiations, prior discussions and
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prior agreements and understandings relating to such subject matter. To the
extent that the provisions of this Agreement are inconsistent with the
provisions of any Ancillary Agreements, the provisions of such Ancillary
Agreement shall prevail.
8.8 PARTIES IN INTEREST. None of the parties hereto may assign its rights
or delegate any of its duties under this Agreement without the prior written
consent of each other party; 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 shall be binding upon, and shall
inure to the benefit of, the parties hereto and their respective successors and
permitted assigns. Nothing contained in this Agreement, express or implied, is
intended to confer any benefits, rights or remedies upon any person or entity
other than HNC and Retek, and HNC Indemnitees and Retek Indemnitees under
Article IV hereof.
8.9 FURTHER ASSURANCES AND CONSENTS. Subject to HNC's rights of termination
under Section 8.1, in addition to the actions specifically provided for
elsewhere in this Agreement, each of the parties hereto will use its reasonable
efforts to (i) execute and deliver such further instruments and documents and
take such other actions as any other party may reasonably request in order to
effectuate the purposes of this Agreement and to carry out the terms hereof and
(ii) take, or cause to be taken, all actions, and to do, or cause to be done,
all things, reasonably necessary, proper or advisable under applicable laws,
regulations and agreements or otherwise to consummate and make effective the
transactions contemplated by this Agreement, including, without limitation,
using its reasonable efforts to obtain any Consents and to make any filings and
applications necessary or desirable in order to consummate the transactions
contemplated by this Agreement; provided that no party hereto shall be obligated
to pay any consideration therefor (except for filing fees and other similar
charges) to any third party from whom such Consents and amendments are requested
or to take any action or omit to take any action if the taking of or the
omission to take such action would be unreasonably burdensome to the party or
its business.
8.10 EXHIBITS AND SCHEDULES. The Exhibits and Schedules shall be construed
with and as an integral part of this Agreement to the same extent as if the same
had been set forth verbatim herein.
8.11 LEGAL ENFORCEABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
enforceability in any jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction. Without prejudice to any rights or
remedies otherwise available to any party hereto, each party hereto acknowledges
that damages would be an inadequate remedy for any breach of the provisions of
this Agreement and agrees that the obligations of the parties hereunder shall be
specifically enforceable.
8.12 TITLES AND HEADINGS. Titles and headings to Sections herein are
inserted for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement on the day and year first above written.
HNC Software Inc.
By:
--------------------------------------
Name:
------------------------------
Title:
----------------------------------
RETEK INC.
--------------------------------------
Name:
------------------------------
Title:
----------------------------------
RETEK INFORMATION SYSTEMS, INC.
By:
-------------------------------------
Name:
------------------------------
Title:
----------------------------------
32
<PAGE> 1
EXHIBIT 2.3
FORM OF TECHNOLOGY LICENSE AGREEMENT
This Technology License Agreement (this "AGREEMENT") is made and
entered into as of __________, 1999 (the "EFFECTIVE DATE"), by and between HNC
Software Inc., a Delaware corporation having its principal place of business at
5935 Cornerstone Court West, San Diego, California 92121 ("HNC"), and Retek Inc.
("RETEK"), a Delaware corporation having its principal place of business at
Midwest Plaza, 801 Nicollet Mall, 11th Floor, Minneapolis, MN 55402.
RECITALS
Retek wishes to obtain a nonexclusive license from HNC to use the
Licensed Technology (as defined in Section 1.4 below) solely within the Field of
Use (as defined in Section 1.2 below). HNC is willing to grant such a license to
Retek, subject to the terms and conditions of this Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE 1: CERTAIN DEFINITIONS
For the purposes of this Agreement:
1.1 "IMPROVEMENT" OR "IMPROVEMENTS" mean any findings, discoveries,
inventions, additions, modifications, formulations, variations, enhancements,
refinements, derivative works, developments or changes based upon or
incorporating the Licensed Technology.
1.2 "FIELD OF USE" means the field of software-based products and/or
services designed specifically to provide, automate, manage and/or otherwise
facilitate any one or more of the following functions or applications for
Retailers (as defined below) and/or the members of their Retail Supply Chain:
the design, manufacture, assembly, shipment, import, storage, delivery,
tracking, merchandising, retail store shelf management, inventory planning,
management and/or pricing of consumer goods sold at retail, and any other
activity involved in the operation of a retail organization.
1.3 "INTELLECTUAL PROPERTY RIGHTS" means, collectively, all of the
following worldwide intangible legal rights, whether or not filed, perfected,
registered or recorded and whether now or hereafter existing, filed, issued or
acquired: (i) patents, patent applications, and patent rights, including any and
all continuations, divisions, reissues, reexaminations or extensions thereof;
(ii) rights associated with works of authorship, including but not limited to
copyrights, copyright applications and copyright registrations,; (iii) rights
relating to the protection of trade secrets, know-how and other confidential
information, including but not limited to rights in industrial property and all
associated information and other confidential or proprietary information; (iv)
industrial design rights; and (v) any rights analogous to those set
<PAGE> 2
forth in the preceding clauses and any other proprietary rights relating to
intangible property; but specifically excluding trademarks, service marks,
logos, trade dress, trade names and service names;
1.4 "LICENSED TECHNOLOGY" means the technology more fully described
in Exhibit A, and all Intellectual Property Rights therein.
1.5 "RETAILERS" means businesses whose primary business is the sale
of consumer goods at retail.
1.6 "RETAIL SUPPLY CHAIN" means wholesalers, suppliers, distributors,
manufacturers, brokers, bailors and transporters of consumer goods sold at
retail, and other entities involved in the provision of services to Retailers.
ARTICLE 2: LICENSE GRANT
2.1 LICENSE GRANT. Subject to the terms and conditions of this
Agreement, HNC hereby grants to Retek a non-exclusive, non-transferable,
worldwide, perpetual, royalty-free license under HNC's Intellectual Property
Rights in the Licensed Technology to use and reproduce the Licensed Technology
and to create Improvements of the Licensed Technology ("Permitted
Improvements"), in each case solely in connection with the marketing, sale,
licensing and distribution of products and services within the Field of Use.
2.3 RESERVATION OF RIGHTS. Retek's rights in the Licensed Technology
are hereby limited to those license rights expressly granted to Retek under
Section 2.1 of this Agreement and all rights not expressly granted to Retek
herein are expressly reserved and retained by HNC.
2.4 TRADEMARKS. Nothing herein shall be construed to grant any right
to Retek to use any of HNC's trademarks, service marks, logos, trade dress,
trade names or service names or goodwill associated therewith.
ARTICLE 3: OWNERSHIP
3.1 HNC OWNERSHIP. HNC and its suppliers own all worldwide right,
title and interest in and to the Licensed Technology and all worldwide
Intellectual Property Rights therein. Retek will not delete or in any manner
alter the copyright, trademark, and other proprietary rights notices of HNC
appearing on or in the Licensed Technology as delivered to Retek, unless Retek
shall have a good faith belief that such notices have become inapplicable. Retek
will reproduce such notices on all copies it makes of the Licensed Technology
(including Improvements of Licensed Technology), in whole or in part. In
addition, Retek will use its reasonable efforts to protect HNC's Intellectual
Property Rights in the Licensed Technology and will report promptly to HNC any
material infringement of such rights of which Retek
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<PAGE> 3
becomes aware. HNC reserves the right at its discretion to assert claims against
third parties for infringement or misappropriation of its Intellectual Property
Rights in the Licensed Technology and to retain all compensation, damages and
other amount payable to HNC with regard to such infringement or
misappropriation.
3.2 RETEK OWNERSHIP. Subject to the license grants set forth in
Section 2.1 and HNC's ownership rights described in Section 3.1, Retek will own
all worldwide right, title and interest in and to the Permitted Improvements
created by Retek pursuant to and in accordance with Section 2.1. Retek shall not
have or acquire any right, title or interest whatsoever in or to any of the
Licensed Technology or any Intellectual Property Rights therein. Notwithstanding
the provisions of this Section, Retek shall not exploit any Permitted
Improvements created by Retek in any manner other than the manner in which Retek
is expressly licensed to exploit the Licensed Technology or any Permitted
Improvements under Section 2.1.
ARTICLE 4: WARRANTY DISCLAIMER
THE LICENSED TECHNOLOGY IS PROVIDED ON AN "AS IS" BASIS WITHOUT
WARRANTY OF ANY KIND AND HNC AND ITS SUPPLIERS HEREBY DISCLAIM ALL WARRANTIES,
WHETHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED
WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENT AND FITNESS FOR PARTICULAR
PURPOSE. HNC DOES NOT WARRANT THAT THE LICENSED TECHNOLOGY IS ERROR-FREE OR THAT
IT WILL MEET RETEK'S REQUIREMENTS OR THAT THE OPERATION OF THE LICENSED
TECHNOLOGY WILL BE UNINTERRUPTED OR ERROR-FREE, OR THAT ERRORS IN THE LICENSED
TECHNOLOGY OR NONCONFORMITY TO ITS DOCUMENTATION CAN OR WILL BE
CORRECTED.
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ARTICLE 5: CONFIDENTIAL INFORMATION
5.1 DEFINITION. "CONFIDENTIAL INFORMATION" means confidential and
proprietary information of either party or its affiliates ("DISCLOSING PARTY")
that is disclosed to the other party or its affiliates ("RECEIVING PARTY")
which, in the case of written information, is marked "confidential" or
"proprietary" and which, in the case of information disclosed orally, is
identified at the time of the disclosure as confidential and proprietary and
will be summarized and confirmed in writing as such by the Disclosing Party
within thirty (30) calendar days of the disclosure. Confidential Information
shall not include information that: (i) is now or subsequently becomes generally
available to the public through no fault or breach of the Receiving Party; (ii)
is independently developed by the Receiving Party after the Effective Date
without the use of any Confidential Information of Disclosing Party; or (iii)
the Receiving Party rightfully obtains from a third party who has the right to
transfer or disclose it. Notwithstanding anything herein to the contrary, each
party acknowledges that the Licensed Technology (in any form) shall be deemed
"Confidential Information" of HNC for all purposes of this Agreement, whether or
not it is so marked or designated by HNC.
5.2 NONDISCLOSURE. The Receiving Party shall not disclose, publish,
or disseminate the Confidential Information of the Disclosing Party to anyone
other than those of such Receiving Party's employees and consultants with a need
to know, or as may by required by legal process, and the Receiving Party agrees
to use the same degree of care that it takes to hold in confidence its own most
valuable proprietary information, but not less than reasonable care, to prevent
any unauthorized use, disclosure, publication, or dissemination of the
Disclosing Party's Confidential Information. The Receiving Party agrees to
accept and use the Disclosing Party's Confidential Information only for the
purpose of carrying out its authorized activities under this Agreement. In the
event a Receiving Party is required to disclose Disclosing Party's Confidential
Information by an order of a court or governmental agency, then the Receiving
Party shall first give written notice to the Disclosing Party to allow the
Disclosing Party to make a reasonable effort to obtain a protective order or
other confidential treatment for the Confidential Information.
ARTICLE 6: INJUNCTIVE RELIEF
Retek acknowledges that any breach of its obligations under this
Agreement with respect to HNC's Licensed Technology, Intellectual Property
Rights or Confidential Information or any failure by Retek to use Licensed
Technology strictly in accordance with the license rights granted to Retek under
Section 2.1 of this Agreement will cause HNC irreparable injury for which there
are inadequate remedies at law, and therefore, HNC will be entitled to equitable
relief (including by not limited to injunctive relief and the remedy of specific
performance) in addition to all other rights and remedies provided by this
Agreement or available at law. Retek further agrees that HNC shall be entitled
to recover reasonable attorneys' fees and court costs expended in connection
with any litigation initiated to this Agreement.
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ARTICLE 7: INDEMNITY
Retek will be solely responsible for any commercial or legal liability
that may arise as a result of Retek's exercise of any of the license rights
granted by HNC to Retek under this Agreement, and Retek shall defend, indemnify,
and hold HNC harmless from and against any and all suits, claims, proceedings,
judgments, awards, damages, loss, liability, cost and expenses (including
without limitation reasonable attorney's fees and other related costs) that are
incurred or suffered by HNC or any of its affiliates, directors, officers,
employees, or agents to the extent arising from (i) Retek's exercise of any
license or other rights granted to Retek under this Agreement; or (ii) the
conduct of Retek's business directly or through any affiliate of Retek.
ARTICLE 8: EXCLUSION OF DAMAGES; LIMITATION OF LIABILITY
(a) IN NO EVENT SHALL HNC BE LIABLE TO RETEK OR TO ANY THIRD PARTY FOR
ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING WITHOUT
LIMITATION LOSS OF USE, DATA, BUSINESS OR PROFITS) ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT OR THE USE, OPERATION OR PERFORMANCE OF ANY OF
THE LICENSED TECHNOLOGY, WHETHER SUCH LIABILITY ARISES FROM ANY CLAIM BASED UPON
CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE), PRODUCT LIABILITY OR OTHERWISE,
AND WHETHER OR NOT HNC HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS OR
DAMAGE.
(b) IN NO EVENT SHALL HNC'S AGGREGATE CUMULATIVE TOTAL LIABILITY UNDER
THIS AGREEMENT EXCEED $10,000.
(c) THIS SECTION IS A MATERIAL INDUCEMENT AND CONDITION TO HNC FOR
ENTERING INTO THIS AGREEMENT.
ARTICLE 9: TERM AND TERMINATION
9.1 TERM. This Agreement will commence on the Effective Date and will
remain in full force and effect thereafter unless terminated in accordance with
the terms of this Agreement.
9.2 MATERIAL BREACH. HNC will have the right to terminate this
Agreement and all licenses granted by it hereunder upon notice to Retek if Retek
breaches any material term or condition of this Agreement and fails to cure that
breach within thirty (30) days after receiving written notice of the breach. In
the event of a breach of this Agreement by Retek, which breach is not cured
within such thirty (30) day time period, HNC shall be entitled to terminate this
Agreement immediately upon written notice to Retek.
9.3 INSOLVENCY. Either party will have the right to terminate this
Agreement immediately upon notice to the other party if the other party: (a)
becomes the subject of a
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voluntary petition in bankruptcy or any voluntary proceeding relating to
insolvency, receivership, liquidation, or composition for the benefit of
creditors; or (b) becomes the subject of an involuntary petition in bankruptcy
or any involuntary proceeding relating to insolvency, receivership, liquidation,
or composition for the benefit of creditors, if such petition or proceeding is
not dismissed within sixty (60) days of filing.
9.4 CERTAIN EVENTS OF TERMINATION. Upon the occurrence of (a) any
breach or violation by Retek of its obligations under Section 5.5 - CERTAIN
POST-DISTRIBUTION TRANSACTIONS of the Separation Agreement dated as of
_________, 1999 among HNC, Retek and Retek Information Systems, Inc. (the
"SEPARATION AGREEMENT"); or (b) the occurrence of any event that would trigger
an indemnification obligation of Retek under Section 5.5 of the Separation
Agreement, or (c) any Change of Control (as defined below) of Retek which
results in Retek directly or indirectly controlled by or under common control
with, any Prohibited Successor (as defined below), HNC shall be entitled to
terminate this Agreement and Retek's rights hereunder upon giving written notice
to Retek. As used herein, the term "CHANGE OF CONTROL" means: (a) a transaction
or series of related transactions that results in the sale or other disposition
of all or substantially all of Retek's assets; or (b) a merger or consolidation
in which Retek is not the surviving corporation or in which, if Retek is the
surviving corporation, the shareholders of Retek immediately prior to the
consummation of such merger or consolidation do not, immediately after
consummation of such merger or consolidation, own stock or other securities of
Retek that possess a majority of the voting power of all Retek's outstanding
stock and other securities and the power to elect a majority of the members of
Retek's board of directors; or (c) a transaction or series of related
transactions (which may include without limitation a tender offer for Retek's
stock or the issuance, sale or exchange of stock of Retek) if the shareholders
of Retek immediately prior to the initial such transaction do not, immediately
after consummation of such transaction or any of such related transactions, own
stock or other securities of Retek that possess a majority of the voting power
of all Retek's outstanding stock and other securities and the power to elect a
majority of the members of Retek's board of directors. "PROHIBITED SUCCESSOR"
means any of the entities listed in Exhibit B hereto. As used herein, the term
"CONTROL" (including, with correlative meanings, the terms, "CONTROLS"
"CONTROLLING", "CONTROLLED BY" or "UNDER COMMON CONTROL WITH") with respect to a
designated person means the possession, directly or indirectly, of the power to
vote a majority of the securities having voting power for the election of
directors (or other persons acting in similar capacities) of such person or
otherwise to direct or cause the direction of the management and policies of
such person, whether through the ownership of voting securities, by contract or
otherwise.
9.5 CESSATION OF BUSINESS. In the event Retek winds up, dissolves or
otherwise ceases doing business, HNC shall be entitled to terminate this
Agreement immediately upon written notice to Retek.
9.6 EFFECT OF TERMINATION. Upon termination of this Agreement: (a) the
rights and licenses granted to Retek pursuant to this Agreement will
automatically terminate, and (b) Retek shall, within thirty (30) days, ship to
HNC or destroy (including purging from any system or storage media) all items
all Licensed Technology and other Confidential Information
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in its possession or control, and an officer of Retek shall certify in writing
that Retek as complied with the provisions of this Section. However, termination
of this Agreement will not terminate customer software licenses validly granted
by Retek in accordance with this Agreement prior to the effective date of
termination of this Agreement.
9.7 NONEXCLUSIVE REMEDY. Termination of this Agreement by HNC will be a
nonexclusive remedy for breach and will be without prejudice to any other right
or remedy of such party.
9.8 NO DAMAGES FOR TERMINATION. NEITHER PARTY WILL BE LIABLE TO THE
OTHER FOR DAMAGES OF ANY KIND, INCLUDING WITHOUT LIMITATION INCIDENTAL OR
CONSEQUENTIAL DAMAGES, DAMAGES FOR THE LOSS OF GOODWILL, PROSPECTIVE PROFITS OR
ANTICIPATED INCOME, OR DAMAGES RESULTING FROM ANY EXPENDITURES, INVESTMENTS,
LEASES OR COMMITMENTS MADE BY EITHER PARTY ON ACCOUNT OF THE TERMINATION OR
EXPIRATION OF THIS AGREEMENT IN ACCORDANCE WITH ITS TERMS.
9.9 SURVIVAL. The rights and obligations of the parties under the
following Articles of this Agreement shall survive any termination of this
Agreement: Article 3 (Ownership), Article 4 (Warranty Disclaimer) 5
(Confidentiality), 6 (Injunctive Relief), 7 (Indemnity), 8 (Exclusion of
Damages), 9 (Term and Termination) and 10 (General Provisions).
ARTICLE 10: GENERAL PROVISIONS
10.1 GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the internal laws of the State of California, without reference
to its conflict of law rules.
10.2 COMPLIANCE WITH LAWS. Retek agrees to comply in all material
respects with all applicable laws, rules, and regulations in connection with its
activities under this Agreement, including without limitation, any applicable
export controls imposed by the U.S. Export Administration Act of 1978, as
amended (the "ACT") and the regulations promulgated under the Act.
10.3 ASSIGNMENT. Retek may not assign this Agreement or assign its
license rights hereunder in whole or in part without HNC's prior written
consent. Any attempt to assign this Agreement or assign or sublicense Retek's
license rights hereunder without such consent will be void and of no effect.
Subject to the terms of this Section 10.3, this Agreement will bind and inure to
the benefit of the parties and their respective successors and permitted
assigns.
10.4 ATTORNEYS' FEES. In the event that any action or proceeding is
brought in connection with this Agreement, the prevailing party shall be
entitled to recover its costs and reasonable attorneys' fees following a final
judgment.
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10.5 SEVERABILITY. If for any reason a court of competent jurisdiction
finds any provision of this Agreement invalid or unenforceable, then that
provision of the Agreement will not be voided, but rather will be enforced to
the maximum extent legally permissible and the other provisions of this
Agreement will remain in full force and effect.
10.6 INDEPENDENT CONTRACTOR. The parties to this Agreement are
independent contractors and this Agreement will not establish any relationship
of partnership, joint venture, employment, franchise, or agency between the
parties. Neither party will have the power to bind the other or incur
obligations on the other's behalf without the other's prior written consent.
10.7 NOTICES. All notices required or permitted under this Agreement
will be in writing and delivered by confirmed facsimile transmission, by courier
or overnight delivery service, or by certified mail, and in each instance will
be deemed given upon receipt. All communications to a party will be sent to the
address of the party set forth in the preamble above or to such other address as
may be specified by such party to the other in accordance with this Section.
Either party may change its address for notices under this Agreement by giving
written notice to the other party by the means specified in this Section.
10.8 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which will be deemed an original, but both of which together will constitute
one and the same instrument.
10.9 ENTIRE AGREEMENT. This Agreement constitutes the complete and
exclusive agreement between the parties with respect to the subject matter
hereof, superseding and replacing any and all prior and contemporaneous
agreements, communications, and understandings (both written and oral) regarding
such subject matter.
10.10 MODIFICATION. No modification to this Agreement, nor any waiver
of any rights, shall be effective unless consented to in writing and the waiver
of any breach or default shall not constitute a waiver of any other right or of
any subsequent breach or default.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the Effective Date by their duly authorized representatives.
HNC SOFTWARE INC. RETEK INC.
By:__________________________________ By:________________________________
Name:________________________________ Name:______________________________
Title:_______________________________ Title:_____________________________
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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
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 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.
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
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.
-8-
<PAGE> 9
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:
---------------------------------- --------------------------------
Name: Name:
---------------------------------- ------------------------------
Title: Title:
---------------------------------- -----------------------------
RETEK INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
-9-
<PAGE> 1
Exhibit 2.6
FORM OF CORPORATE RIGHTS AGREEMENT
This Corporate Rights Agreement (this "Agreement") is made and entered
into as of _______, 1999 (the "Effective Date") by and among HNC Software Inc.,
a Delaware corporation ("HNC"), and Retek, Inc., a Delaware corporation
("Retek") and Retek Information Systems, Inc., a Delaware corporation that is a
wholly-owned subsidiary of Retek ("RIS").
RECITALS
A. HNC owns all of the outstanding shares of Common Stock, par value
$0.01 per share ("Common Stock") of Retek.
B. The parties are contemplating the possibility that Retek may issue
shares of Common Stock in an initial public offering of such Common Stock
registered under the Securities Act of 1933, as amended (the "Initial Public
Offering").
C. The parties desire to enter into this Agreement pursuant to a
Separation Agreement among themselves dated as of ________, 1999 (the
"Separation Agreement") in order to set forth their agreement regarding (i)
HNC's rights to purchase additional shares of Common Stock upon any issuance of
Capital Stock to any Person in order to permit HNC to own at least the Minimum
Ownership Percentage of the Capital Stock of Retek, (ii) certain rights of HNC
with respect to the governance of Retek and RIS, (iii) the grant to HNC of
certain registration rights with respect to the Common Stock (and any other
securities issued in respect thereof or in exchange therefor) held by HNC, and
(iv) certain representations, warranties, covenants and agreements that will
continue in effect so long as Retek is a subsidiary of HNC.
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, Retek and
RIS, for themselves, their successors, and assigns, hereby agree as follows:
ARTICLE I: DEFINITIONS
1.1 Definitions. As used in this Agreement, the following terms will
have the following meanings, applicable both to the singular and the plural
forms of the terms described:
"Action" has the meaning ascribed thereto in Section 4.5(o).
"Additional Securities" has the meaning ascribed thereto in Section
3.1(d).
"Affiliate" means, with respect to a given Person, any Person
controlling, controlled by or under common control with such Person. For
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlled by" and "under common control with"), as applied to any
Person, means the possession, directly or indirectly, of the power to vote a
majority
<PAGE> 2
of the securities having voting power for the election of directors (or
other Persons acting in similar capacities) of such Person or otherwise to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities or by contract or otherwise.
"Agreement" has the meaning ascribed thereto in the preamble hereto, as
such agreement may be amended and supplemented from time to time in accordance
with its terms.
"Annual Business Plan and Budget" has the meaning ascribed thereto in
Section 4.8.
"Applicable Stock" means at any time the (i) shares of Common Stock
owned by the HNC Entities that were owned on the Effective Date, to the extent
then owned by any HNC Entity, plus (ii) shares of Common Stock purchased by the
HNC Entities pursuant to Article II of this Agreement, plus (iii) shares of
Common Stock that were issued to HNC Entities in respect of shares described in
either clause (i) or clause (ii) of this sentence in connection with any
conversion of such shares or any reclassification, share combination (including
any reverse stock split), share subdivision (including any stock split), share
dividend, share exchange, merger, consolidation or similar transaction or event.
"Capital Stock" means (i) in the case of a corporation, corporate stock
(including without limitation, common stock, preferred stock and rights,
options, warrants or any securities convertible into or ultimately exchangeable
or exercisable for common or preferred stock), (ii) in the case of an
association, limited liability company or other non-corporate business entity,
any and all shares, interests, memberships, participations, rights or other
equivalents (however designated) of corporate stock, (iii) in the case of a
partnership, partnership interests (whether general or limited) and (iv) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person.
"Common Stock" has the meaning ascribed thereto in the recitals.
"Disadvantageous Condition" has the meaning ascribed thereto in Section
3.1(a).
"Distribution" means the pro rata distribution by HNC to its
stockholders of the shares of Common Stock of Retek owned by HNC in one or more
transactions occurring after the Initial Public Offering, whenever (and if ever)
such transaction(s) shall occur, in HNC's sole discretion.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor statute.
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"HNC Entities" means HNC, its Subsidiaries and any Parent of HNC (other
than Subsidiaries that constitute Retek Entities), and "HNC Entity" shall mean
any of the HNC Entities.
"HNC Ownership Reduction" means any decrease at any time in the
Ownership Percentage to less than ____ percent (___%).
"Holder" means HNC, the other HNC Entities and any Transferee.
"Holder Securities" has the meaning ascribed thereto in Section 3.2(b).
"Initial Public Offering" has the meaning ascribed thereto in the
recitals to this Agreement.
"Initial Public Offering Date" means the date of completion of the
initial sale of Class A Common Stock by Retek in the Initial Public Offering.
"Issuance Event" has the meaning ascribed thereto in Section 2.2.
"Issuance Event Date" has the meaning ascribed thereto in Section 2.2.
"Market Price" of any shares of Common Stock (or other Capital Stock)
on any date means (i) the average of the last sale price of such shares on each
of the five (5) trading days immediately preceding such date on the Nasdaq
National Market or, if such shares are not listed or quoted thereon, on the
principal national securities exchange or automated interdealer quotation system
on which such shares are traded or (ii) if such sale prices are unavailable or
such shares are not so traded, the value of such shares on such date determined
in accordance with agreed-upon procedures reasonably satisfactory to Retek and
HNC.
"Minimum Ownership Percentage" means the ownership of such number of:
(i) shares of Capital Stock of Retek to the extent, and only to the extent,
necessary for HNC to maintain all of the following: (a) control of Retek (within
the meaning of Section 368(c) of the Internal Revenue Code of 1986, as amended
(the "Code")); (b) the status of Retek as a member of the affiliated group of
corporations (within the meaning of Section 1504 of the Code) of which HNC is
the common parent, provided such status has theretofore been maintained; and (c)
HNC's then-existing percentage of the total voting power and value of Retek,
whichever percentage is highest; and (ii) shares of any non-voting Capital Stock
of Retek to the extent, and only to the extent, necessary to own eighty percent
(80%) of each outstanding class of such stock.
"Option" has the meaning ascribed thereto in Section 2.1(a).
"Option Notice" has the meaning ascribed thereto in Section 2.2.
"Other Securities" has the meaning ascribed thereto in Section 3.2.
"Ownership Percentage" means, at any time, the fraction, expressed as a
percentage and rounded to the next highest thousandth of a percent, whose
numerator is the aggregate Value of the Applicable Stock and whose denominator
is the aggregate Value of all the then outstanding shares of Capital Stock of
Retek. For purposes of this definition, "Value" means, with respect to any
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<PAGE> 4
share of stock, the value of such share determined by HNC under principles
applicable for purposes of Section 1504 of the Internal Revenue Code of 1986, as
amended.
"Parent" means any corporation (other than HNC) in an unbroken chain of
corporations ending with HNC if each of such corporations other than HNC owns
stock representing fifty percent (50%) or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.
"Person" means any individual, partnership, limited liability company,
joint venture, corporation, trust, association, unincorporated organization,
government (and any department or agency thereof) or other entity.
"register", "registration" and "registered" means a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of effectiveness of such
registration statement.
"Registrable Securities" means shares of Common Stock and any stock or
other securities into which or for which such Common Stock may now or hereafter
be changed, converted or exchanged and any other shares or securities of Retek
issued to any Holder or any Holder's permitted successors and assigns (or such
shares or other securities into which or for which such shares are so changed,
converted or exchanged) upon any reclassification, share combination, share
subdivision, share dividend, share exchange, merger, consolidation or similar
transaction or event or pursuant to the exercise of the Option. As to any
particular Registrable Securities, such Registrable Securities shall cease to be
Registrable Securities when (i) a registration statement with respect to the
sale of Registrable Securities by the Holder thereof shall have been declared
effective under the Securities Act and such Registrable Securities shall have
been disposed of in accordance with such registration statement, (ii) such
Registrable Securities are sold by a person in a transaction in which the rights
under the provisions of this Agreement are not assigned, (iii) such Registrable
Securities are sold pursuant to Rule 144 promulgated under the Securities Act,
(iv) such Registrable Securities shall have been otherwise transferred, new
certificates for them not bearing a legend restricting further transfer shall
have been delivered by Retek and subsequent disposition of them shall not
require registration or qualification of them under the Securities Act or any
state securities or blue sky law then in effect or (v) such Registrable
Securities shall have ceased to be outstanding.
"Registration Expenses" means any and all expenses incident to
performance of or compliance with any registration of securities pursuant to
Article III, including, without limitation, (i) the fees, disbursements and
expenses of Retek's counsel and accountants; (ii) all expenses, including filing
fees, in connection with the preparation, printing and filing of the
registration statement, any preliminary prospectus or final prospectus, any
other offering document and amendments and supplements thereto and the mailing
and delivering of copies thereof to any underwriters and dealers; (iii) the cost
of printing or producing any agreements among underwriters, underwriting
agreements and blue sky or legal investment memoranda, any selling
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<PAGE> 5
agreements and any other documents in connection with the offering, sale or
delivery of the securities to be disposed of; (iv) all expenses in connection
with the qualification of the securities to be disposed of for offering and sale
under state securities laws, including the fees and disbursements of counsel for
the underwriters in connection with such qualification and in connection with
any blue sky and legal investment surveys; (v) the filing fees incident to
securing any required review by the National Association of Securities Dealers,
Inc. of the terms of the sale of the securities to be disposed of; (vi) transfer
agents', depositories' and registrars' fees and expenses and the fees and
expenses of any other agent or trustee appointed in connection with such
offering; (vii) all security engraving and security printing expenses; (viii)
all fees and expenses payable in connection with the listing of the securities
on any securities exchange or automated interdealer quotation system or the
rating of such securities; and (ix) any other fees and disbursements of
underwriters customarily paid by the sellers of securities, but excluding
underwriting discounts and commissions and transfer taxes, if any.
"Retek Entities" means Retek and its Subsidiaries, and "Retek Entity"
shall mean any of the Retek Entities.
"Retek Securities" has the meaning ascribed thereto in Section 3.2(b).
"Rule 144" means Rule 144 (or any successor rule to similar effect)
promulgated under the Securities Act.
"Rule 415 Offering" means an offering on a delayed or continuous basis
pursuant to Rule 415 (or any successor rule to similar effect) promulgated under
the Securities Act.
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor statute.
"Selling Holder" has the meaning ascribed thereto in Section 3.4(a).
"Special Transaction" has the meaning ascribed thereto in Section 4.5.
"Subsidiary" means, as to any Person, any partnership, limited
liability company, joint venture, corporation, trust, association,
unincorporated organization or other business entity of which more than fifty
percent (50%) of the voting capital stock or other voting ownership interests is
owned or controlled, directly or indirectly, by such Person or by one or more of
the Subsidiaries of such Person or by a combination thereof. "Subsidiary," when
used with respect to HNC or Retek, shall also include any other entity
affiliated with HNC or Retek, as the case may be, that HNC and Retek may
hereafter agree in writing shall be treated as a "Subsidiary" of HNC or Retek,
as the case may be, for the purposes of this Agreement.
"Transferee" has the meaning ascribed thereto in Section 3.8.
1.2. Internal References. Unless the context indicates otherwise,
references to Articles, Sections and paragraphs shall refer to the corresponding
articles, sections and paragraphs in this Agreement and references to the
parties shall mean the parties to this Agreement.
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<PAGE> 6
ARTICLE II: OPTIONS
2.1. Options.
(a) Retek hereby grants to HNC, on the terms and conditions
set forth herein, a continuing right (the "Option") to purchase from Retek from
time to time such number of shares of the Common Stock as is necessary to allow
the HNC Entities to maintain the Minimum Ownership Percentage of the Capital
Stock of Retek. The Option shall be assignable, in whole or in part and from
time to time, by HNC to any HNC Entity. The exercise price for the shares of
Common Stock purchased pursuant to the Option shall be the Market Price of the
Common Stock as of the date of first delivery of the applicable notice of
exercise of the Option by HNC (or its permitted assignee hereunder) to Retek.
The exercise price of the Option will be payable in cash as provided in Section
2.3.
(b) The provisions of Section 2.1(a) hereof notwithstanding,
the Option granted pursuant to Section 2.1 shall not apply and shall not be
exercisable in connection with the issuance by Retek of any shares of Common
Stock pursuant to any stock option or other executive or employee benefit or
compensation plan maintained by Retek, so long as, from and after the Effective
Date and prior to the issuance of such shares, Retek has repurchased from
stockholders and not subsequently reissued a number of shares equal or greater
to the number of shares to be issued in any such issuance.
2.2. Notice. At least twenty (20) business days prior to the
earlier of (a) the issuance of any shares of Capital Stock (other than in
connection with the Initial Public Offering, including the full exercise of all
underwriters' over-allotment options and other than issuances of Capital Stock
to any HNC Entity), or (b) the first date on which any event could occur that,
in the absence of a full or partial exercise of the Option, would result in an
HNC Ownership Reduction, Retek will notify HNC in writing (an "Option Notice")
of any plans it has to issue such shares and the date on which such event could
first occur. Each Option Notice must specify (a) the date on which Retek intends
to issue such additional shares or on which such event could first occur (such
issuance or event being referred to herein as an "Issuance Event" and the date
of such issuance or event as an "Issuance Event Date"), (b) the number of shares
Retek intends to issue or may issue and, (c) the other terms and conditions of
such Issuance Event.
2.3. Option Exercise and Payment. The Option may be exercised by
HNC (or any HNC Entity to which all or any part of the Option has been assigned)
for a number of shares equal to or less than the number of shares that are
necessary for the HNC Entities to maintain, in the aggregate, the Minimum
Ownership Percentage. Each Option may be exercised at any time after the
delivery of an Option Notice and prior to an Issuance Event Date by the delivery
to Retek by HNC or any HNC entity of a written notice (the "Exercise Notice") to
such effect specifying (i) the number of shares of Common Stock to be purchased
by HNC or any of the HNC Entities upon such exercise of the Option and (ii) a
calculation of the exercise price for such shares. Upon any such exercise of the
Option, Retek will, prior to the Issuance Event Date, deliver to HNC (or any HNC
Entity who is exercising the Option or who is designated by HNC), against
payment therefor, certificates (issued in the name of HNC or its permitted
assignee hereunder or as directed by HNC) representing the shares of Common
Stock being purchased upon such exercise. If after the receipt of an Option
Notice and prior to the corresponding Issuance Event
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Date, HNC delivers to Retek an Exercise Notice, Retek shall deliver the
certificates for the shares of Common Stock being purchased prior to the
applicable Issuance Event Date. Payment for such shares shall be made, on the
date of delivery of such certificates, by wire transfer or intrabank transfer of
immediately-available funds to such account as shall be specified by Retek, for
the full purchase price for such shares.
2.4. Effect of Failure to Exercise. Except as provided in Section
2.6, any failure by HNC to exercise the Option in full shall not affect HNC's
right to thereafter exercise the Option at any time in the future.
2.5. Initial Public Offering. Notwithstanding the foregoing, HNC
shall not be entitled to exercise the Option in connection with the Initial
Public Offering of the Common Stock by Retek if, upon the completion of the
Initial Public Offering, including the full exercise of all underwriters'
over-allotment options, HNC owns at least the Minimum Ownership Percentage
(without regard to clause (i)(c) of the definition of the Minimum Ownership
Percentage).
2.6. Termination of Option . The Option shall terminate upon the
occurrence of any Issuance Event that results in HNC's Ownership Percentage
being less than fifty percent (50%), other than any Issuance Event consummated
in violation of this Agreement. Any portion of the Option assigned to any HNC
Entity other than HNC, also shall terminate in the event that the Person to whom
such portion of the Option has been transferred, ceases to be a HNC Entity for
any reason whatsoever. If Retek fails to deliver any Option Notice on a timely
basis as required by Section 2.2, then the Option shall remain exercisable with
respect to the Issuance Event that triggered such right to exercise the Option
until such time as an Option Notice is provided to HNC and twenty (20) business
days elapse after HNC's receipt of such Option Notice without exercise of the
Option.
ARTICLE III: REGISTRATION RIGHTS
3.1. Demand Registration - Registrable Securities.
(a) Upon written notice provided to Retek at any time after
the Initial Public Offering Date from any Holder of Registrable Securities
requesting that Retek effect the registration under the Securities Act of any or
all of the Registrable Securities held by such Holder, which notice shall
specify the intended method or methods of disposition of such Registrable
Securities and whether the Holders wish such registration to be a Rule 415
Offering (the "Demand Notice"), Retek shall use its best efforts to promptly
effect the registration under the Securities Act and applicable state securities
laws of such Registrable Securities for disposition in accordance with the
intended method or methods of disposition stated in such Demand Notice
(including in a Rule 415 Offering, if Retek is then eligible to register such
Registrable Securities on Form S-3, or a successor form, for such offering);
provided that:
(i) with respect to any registration statement filed, or
to be filed, pursuant to this Section 3.1, if Retek shall furnish to the Holders
of Registrable Securities that have made such request (within three (3) business
days after Retek's receipt of the Demand Notice) a certified resolution of the
Board of Directors of Retek (adopted by the affirmative vote of a majority of
the directors not designated by the HNC Entities) stating that in the Board of
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<PAGE> 8
Directors' good faith judgment it would be significantly disadvantageous to
Retek, because of the existence of, or in anticipation of, any acquisition or
financing activity, or the unavailability, for reasons beyond Retek's reasonable
control, of any financial statements required to effect such requested
registration, or any other event or condition of similar significance to Retek
(a "Disadvantageous Condition"), for such a registration statement to be
maintained effective, or to be filed and become effective at such time, and
setting forth the general reasons for such judgment, then, (a) in the event no
registration statement has yet been filed, Retek shall be entitled not to file
any such registration statement, or (b) in the event a registration statement
covering the disposition of the Registrable Securities is then filed and
declared effective, the Holders will not sell Registrable Securities under such
registration statement until such Disadvantageous Condition no longer exists (at
which time Retek shall promptly deliver notice to such Holders that such
Disadvantageous Condition no longer exists). Upon receipt of any such notice of
a Disadvantageous Condition, such Holders shall forthwith discontinue use of the
prospectus contained in such registration statement and, if so directed by
Retek, each such Holder will deliver to Retek all copies (other than permanent
file copies then in such Holder's possession) of the prospectus then covering
such Registrable Securities that is current at the time of receipt of such
notice and Retek shall promptly amend such prospectus as necessary to enable the
Holders to sell their Registrable Securities under the registration statement at
any time that they are permitted to do so under the provisions of this
Agreement, provided, that notwithstanding the foregoing, the filing of any such
registration statement may not be delayed, nor may sales or other dispositions
of Registrable Securities by Holders under a registration statement be
prevented, for a period in excess of ninety (90) consecutive days (or until such
earlier time as the Disadvantageous Condition no longer exists) due to the
occurrence of any particular Disadvantageous Condition and no more than one
resolution regarding Disadvantageous Conditions may be made by the Board of
Directors of Retek in any twelve (12) month period; and
(ii) the Holders of Registrable Securities shall not have
the right to exercise registration rights pursuant to this Section 3.1 within
(A) the 180-day period following the effective date of the registration
statement for the Initial Public Offering or (B) the -day period following the
effective date of any subsequent registration pursuant to the exercise of the
registration rights provided in this Section 3.1 in which the Holders of
Registrable Securities were allowed to include ten percent (10%) of their
Registrable Securities;
(iii) the Holders of Registrable Securities shall have the
right to request that Retek effect a registration of their Registrable
Securities pursuant to this Section 3.1 on not more than two (2) separate
registrations during any twelve (12) month period, excluding any prior exercises
of such rights that are not deemed to have been effected pursuant to Section
3.1(b). The priority of exercise for such rights shall be allocated among the
Holders in such manner as the Holders may agree. If Registrable Securities
relating to different Request Notices delivered by more than one Holder are
registered under the same registration statement, such offering shall be deemed
to be a single exercise of demand rights by the first Holder to deliver a
Request Notice and the filing of only one registration statement for purposes of
this Section 3.1; and
(iv) the Registrable Securities requested by all Holders
to be registered pursuant to any Demand Notice must have an anticipated
aggregate public offering price (before any underwriters' discounts or
commissions) of at least $ ; and
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(v) after the reduction in HNC's Ownership Percentage to
less than percent ( %), the Holders of Registrable Securities may
collectively exercise their rights under this Section 3.1 (through notice
delivered by Holders owning in the aggregate a majority in economic interest of
the Registrable Securities then held by Holders) on not more than three (3)
occasions.
(b) Notwithstanding any other provision of this Agreement to
the contrary, a registration requested by a Holder of Registrable Securities
pursuant to this Section 3.1 shall not be deemed to have been effected (and,
therefore, not requested for purposes of paragraph (a) above), (i) unless it has
become effective, (ii) if after it has become effective such registration is
interfered with by any stop order, injunction or other order or requirement of
the SEC or other governmental agency or court for any reason other than a
misrepresentation or an omission by such Holder, or is withdrawn by Retek
pursuant to Section 3.1(a)(i) or otherwise, and, as a result thereof, the
Registrable Securities requested to be registered cannot be completely
distributed in accordance with the plan of distribution set forth in the related
registration statement or (iii) if the conditions to closing specified in the
purchase agreement or underwriting agreement entered into in connection with
such registration are not satisfied or waived other than by reason of some act
or omission by such Holder of Registrable Securities.
(c) In the event that any registration pursuant to this
Section 3.1 shall involve, in whole or in part, an underwritten offering, the
Holders of a majority of the Registrable Securities to be registered shall have
the right to designate an underwriter or underwriters reasonably acceptable to
Retek as the lead or managing underwriters of such underwritten offering and, in
connection with each registration pursuant to this Section 3.1, such Holders may
select one counsel reasonably acceptable to Retek to represent all such Holders
in connection with such offering.
(d) Retek shall have the right to cause the registration of
additional equity securities for sale for its account, the account of any Retek
Entity or any existing or former directors, officers or employees of the Retek
Entities (the "Additional Securities") in any registration of Registrable
Securities requested by the Holders pursuant to Section 3.1(a); provided,
however, that if the registration and sale of such Additional Securities would
require HNC or any HNC Entity to exercise the Option to maintain HNC's
then-current Ownership Percentage or ownership of percent
( %) of each class of outstanding non-voting Capital Stock, then the number
of such Additional Securities shall be reduced so that exercise of the Option
would not be necessary for HNC or any HNC Entity to maintain such ownership
levels and provided, further, that if such Holders are advised by a nationally
recognized investment banking or commercial banking firm selected by such
Holders and reasonably acceptable to Retek (which shall be the lead underwriter
or a managing underwriter in the case of an underwritten offering) that, in such
firm's good faith view, the inclusion of the Additional Securities in such
registration would be likely to have an adverse effect on the price, timing or
distribution of the offering and sale of the Registrable Securities then
proposed to be sold by any Holder, then all or part of the Additional Securities
shall be excluded from the registration. In the event that any Additional
Securities are included in the registration, the Holders of the Registrable
Securities to be offered may require that any Additional Securities be subject
to the same conditions as are applicable to the Registrable Securities being
sold in the offering. In the event that the number of Registrable Securities
requested to be included in a registration statement by
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the Holders thereof exceeds the number which, in the good faith view of such
lead or managing underwriter, can be sold without adversely affecting the price,
timing, distribution or sale of securities in the offering, the number of
Registrable Securities to be included in such offering shall be allocated pro
rata among the requesting Holders on the basis of the relative number of
Registrable Securities then held by each such Holder (provided that any number
of Registrable Securities in excess of a Holder's request may be reallocated
among the remaining requesting Holders in a like manner, or as may be otherwise
agreed in writing by the Holders).
Retek agrees that, if requested by a Selling Holder, it will
not effect any public sale or distribution of its securities of the same class
proposed to be registered by the Holders, or any securities convertible into the
same class, during the thirty (30) days before the commencement of, during, and
for a period of ninety (90) days after termination of, an offering effected by
the Holders pursuant to this Section 3.1, except: (i) as part of such offering
in accordance with this paragraph (d); (ii) in connection with any dividend
reinvestment plan, employee stock option, bonus, retirement or other
compensation plan or arrangement (other than secondary registrations for resales
pursuant to such plans or arrangements) of Retek; (iii) any public sale or
distribution, the registration statement for which was filed with the SEC before
the receipt of the notice from the requesting Holder or Holders pursuant to
Section 3.1 (otherwise than pursuant to a Rule 415 Offering); or (iv) upon
delivery by Retek of a written opinion addressed to the Selling Holder from a
nationally recognized investment banking firm jointly selected by Retek and the
Selling Holder, at Retek's expense, stating that, in the view of such firm, such
public sale and distribution by Retek could be effected without adversely
affecting the market price for the Registrable Securities.
3.2. Piggyback Registration.
In the event that Retek at any time after the Initial Public Offering
Date proposes to file a registration statement covering the issuance or sale of
any shares of Retek Common Stock, or any other equity securities or securities
convertible into or exchangeable for equity securities of Retek (collectively,
including Common Stock, "Other Securities") under the Securities Act, whether or
not for sale for Retek's account in a manner that would permit the Registrable
Securities to be sold for cash under the Securities Act, then Retek shall, at
least twenty (20) days prior to the filing of such registration statement,
provide written notice to each Holder of Registrable Securities of its intention
to file a registration statement. Subject to the terms and conditions hereof,
such notice shall offer each Holder the opportunity to include in such
registration statement such number of Registrable Securities as any Holder may
request. Upon the written request of any Holder made within fifteen (15) days
after the receipt of Retek's notice (which request shall specify the number of
Registrable Securities intended to be disposed of and the intended method of
distribution thereof), Retek shall use its best efforts to effect, in connection
with the registration of the Other Securities, the registration under the
Securities Act of all Registrable Securities that the Holders have requested to
have registered (to the extent required to permit the disposition (in accordance
with such intended method of disposition thereof) of the Registrable Securities
so requested to be registered); provided that:
(a) if, at any time after giving the Holders written notice of
Retek's intention to register any Other Securities and prior to the effective
date of the registration statement filed in connection therewith, the Board of
Directors of Retek shall determine for any reason not to register the Other
Securities, then Retek shall, after giving prompt written notice of such
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determination to the Holders, be relieved of its obligation to register such
Registrable Securities in connection with the registration of the Other
Securities. Any such termination of a registration shall not preclude the
Holders of Registrable Securities from immediately requesting that such
registration be effected as a registration under Section 3.1 to the extent
permitted thereunder;
(b) if the registration referred to in the first sentence of
this Section 3.2 is to be an underwritten registration on behalf of Retek, and a
nationally recognized investment banking or commercial banking firm selected by
Retek advises Retek in writing that, in such firm's good faith view, all or a
part of such Registrable Securities cannot be sold and the inclusion of all or a
part of such Registrable Securities in such registration would be likely to have
an adverse effect upon the price, timing or distribution of the offering and
sale of the Other Securities then contemplated, then Retek shall include in such
registration:
(i) first, all Other Securities Retek proposes to sell
for its own account ("Retek Securities");
(ii) second, up to the full number of Registrable
Securities held by Holders that have been requested by such
Holders to be included in such registration ("Holder
Securities") in excess of the number of Retek Securities to
be sold in such offering, which number of Holder Securities,
in the good faith view of such investment banking or
commercial banking firm, can be sold without adversely
affecting such offering of Retek Securities and (x) if such
number is less than the full number of such Holder
Securities, such number shall be allocated by HNC among such
Holders and (y) in the event that such investment banking or
commercial banking firm advises that less than all of such
Holder Securities may be included in such offering, the
Holders may withdraw their request for registration of their
Registrable Securities in such offering under this Section
3.2 and ninety (90) days subsequent to the effective date of
the registration statement relating to the Other Securities,
the Holders may request that a registration relating to the
Holder Securities be effected under Section 3.1 to the extent
permitted thereunder; and
(iii) third, up to the full number of the Other Securities
(other than Retek Securities), if any, in excess of the
number of Retek Securities and Registrable Securities to be
sold in such offering, which number of such Other Securities,
in the good faith view of such investment banking firm, can
be so sold without so adversely affecting such offering of
Retek Securities and Registrable Securities (and, if such
number is less than the full number of such Other Securities,
such number shall be allocated pro rata among the holders of
such Other Securities (other than Retek Securities) on the
basis of the number of securities requested to be included
therein by each such holder of such Other Securities);
(c) Retek shall not be required to effect any registration of
Registrable Securities under this Section 3.2 incidental to the registration of
any of its securities in connection with mergers, acquisitions, exchange offers,
subscription offers, dividend reinvestment plans or employee
benefit/compensation plans (other than secondary registrations for resales
pursuant to such plans); and
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(d) no registration of Registrable Securities effected under
this Section 3.2 shall relieve Retek of its obligation to effect any
registration of Registrable Securities pursuant to Section 3.1.
3.3. Expenses. Except as provided herein and except for
underwriting discounts and commissions attributable to the Registrable
Securities sold by the Holders, Retek shall pay all Registration Expenses with
respect to a particular offering (or proposed offering). Notwithstanding the
foregoing, each Holder and Retek shall be responsible for its own internal
administrative and similar costs, which shall not constitute Registration
Expenses.
3.4. Registration and Qualification. If and whenever Retek is
required to effect the registration of any Registrable Securities under the
Securities Act as provided in Sections 3.1 or 3.2, Retek shall as promptly as
practicable:
(a) prepare, file and use its best efforts to cause to become
effective a registration statement under the Securities Act relating to the
Registrable Securities proposed to be offered; provided, that before filing any
such registration statement, Retek will furnish to each Holder of Registrable
Securities included in such registration (each a "Selling Holder"), counsel
designated by the Selling Holders and the underwriters, if any, copies of any
such registration statement (which registration statement shall be subject to
review of such Selling Holders, counsel and underwriters) and Retek shall
consider in good faith incorporating such changes in the registration statement
as are reasonably requested by the Selling Holders, their counsel and
underwriters;
(b) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities until the earlier of (i) such time as
all of such Registrable Securities have been disposed of in accordance with the
intended methods of disposition set forth in such registration statement and
(ii) the expiration of six (6) months after such registration statement becomes
effective if the registration is effected on Form S-3 (or a comparable successor
form which permits the incorporation by reference of any subsequently filed
periodic reports under the Exchange Act or the expiration of the date that is
three (3) months after the date on which such registration statement becomes
effective on any other registration statement form; provided, that such
six-month or three-month period shall be extended for such number of days that
equals the number of days elapsing from (x) the date the written notice
contemplated by paragraph 3.4(g) below is given by Retek to (y) the date on
which Retek delivers to the Holders of Registrable Securities the supplement or
amendment contemplated by paragraph 3.4(g) below; and provided further, that
Retek may keep such registration statement effective for longer time periods if
desired by Retek;
(c) furnish to the Holders of Registrable Securities and to
any underwriter of such Registrable Securities such number of conformed or
original copies of such registration statement and of each such amendment and
supplement thereto (in each case including all exhibits), such number of copies
of the prospectus included in such registration statement (including each
preliminary prospectus and any summary or final prospectus), in conformity with
the requirements of the Securities Act, such documents incorporated by reference
in such
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<PAGE> 13
registration statement or prospectus, and such other documents, as the Holders
of Registrable Securities or such underwriter may reasonably request, and upon
request a copy of any and all transmittal letters or other correspondence to, or
received from, the SEC or any other governmental agency, stock exchange or
automated inter-dealer quotation system, self-regulatory body or other body
having jurisdiction (including any domestic or foreign securities exchange)
relating to such offering;
(d) use its diligent and reasonable best efforts to register
or qualify all Registrable Securities covered by such registration statement
under the securities or blue sky laws of such U.S. jurisdictions as the Holders
of such Registrable Securities or any underwriter to such Registrable Securities
shall request, and use its diligent and reasonable best efforts to obtain all
appropriate registrations, permits and consents in connection therewith, and do
any and all other acts and things which may be necessary or advisable to enable
the Holders of Registrable Securities or any such underwriter to consummate the
disposition in such jurisdictions of its Registrable Securities covered by such
registration statement; provided, that Retek shall not for any such purpose be
required to qualify generally to do business as a foreign corporation in any
such jurisdiction wherein it is not so qualified or to consent to general
service of process in any such jurisdiction;
(e) in any underwritten offering use its diligent and
reasonable best efforts to furnish to each Holder of Registrable Securities
included in such registration (each, a "Selling Holder") and to any underwriter
of such Registrable Securities an opinion of independent counsel for Retek
addressed to each Selling Holder and dated the date of the closing under the
underwriting agreement (if any) (or if such offering is not underwritten, dated
the effective date of the registration statement) covering such matters as are
customarily covered in opinions of issuer's counsel delivered to underwriters in
underwritten public offerings of securities and such other matters as the
Selling Holders may reasonably request;
(f) in any underwritten offering use its diligent and
reasonable best efforts to furnish to each Selling Holder a "cold comfort"
letter addressed to each Selling Holder and to any underwriter of such
Registrable Securities signed by the independent public accountants who have
audited the financial statements of Retek included in such registration
statement, in each such case covering substantially the same matters with
respect to such registration statement (and the prospectus included therein) as
are customarily covered in accountants' letters delivered to underwriters in
underwritten public offerings of securities and with respect to events
subsequent to the date of such financial statements;
(g) as promptly as practicable, notify the Selling Holders in
writing (i) at any time when a prospectus relating to a registration pursuant to
Section 3.1 or Section 3.2 is required to be delivered under the Securities Act
of the happening of any event as a result of which the prospectus included in
such registration statement, as then in effect, includes an untrue statement of
a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading and (ii) of any request
by the SEC or any other regulatory body or other body having jurisdiction for
any amendment of or supplement to any registration statement or other document
relating to such offering, and in either such case, at the request of the
Selling Holders prepare and furnish to the Selling Holders a reasonable number
of copies of a supplement to or an amendment
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<PAGE> 14
of such prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading;
(h) enter into customary agreements (including if the method
of distribution is by means of an underwriting, an underwriting agreement in
customary form) and take such other actions as are reasonably required in order
to expedite or facilitate the disposition of the Registrable Securities to be so
included in the registration statement;
(i) use its best efforts to list all such Registrable
Securities covered by such registration on each securities exchange and/or
automated inter- dealer quotation system on which a class of common equity
securities of Retek is then listed;
(j) to the extent reasonably requested by the lead or managing
underwriters, send appropriate officers of Retek to attend any "road shows"
scheduled in connection with any such registration, with all out-of-pocket costs
and expense incurred by Retek or such officers in connection with such
attendance to be paid by Retek;
(k) furnish for delivery in connection with the closing of any
offering of Registrable Securities pursuant to a registration effected pursuant
to Section 3.1 or Section 3.2 certificates bearing no legends and representing
ownership of the Registrable Securities being sold in such denominations as
shall be requested by the Selling Holders or the underwriters; and
(l) notify each Selling Holder in writing as soon as
practicable when any registration statement under which such Selling Holder may
sell any Registrable Securities has ceased to be effective.
3.5. Underwriting; Due Diligence.
(a) If requested by the underwriters for any underwritten
offering of Registrable Securities pursuant to a registration requested under
this Article III, Retek shall enter into an underwriting agreement with such
underwriters for such offering, which agreement will contain such
representations and warranties by Retek and such other terms and provisions as
are customarily contained in underwriting agreements of Retek to the extent
relevant and as are customarily contained in underwriting agreements generally
with respect to secondary distributions to the extent relevant, including,
without limitation, indemnification and contribution provisions substantially to
the effect and to the extent provided in Section 3.6 and agreements as to the
provision of opinions of counsel and accountants' letters to the effect and to
the extent provided in Section 3.4(e) and Section 3.4(f). The Selling Holders on
whose behalf the Registrable Securities are to be distributed by such
underwriters shall be parties to any such underwriting agreement and the
representations and warranties by, and the other agreements on the part of,
Retek to and for the benefit of such underwriters, shall also be made to and for
the benefit of such Selling Holders. Such underwriting agreement shall also
contain such representations and warranties by such Selling Holders and such
other terms and provisions as are customarily contained in underwriting
agreements with respect to secondary distributions, when relevant,
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<PAGE> 15
including, without limitation, indemnification and contribution provisions
substantially to the effect and to the extent provided in Section 3.6.
(b) In connection with the preparation and filing of each
registration statement registering Registrable Securities under the Securities
Act pursuant to this Article III, Retek shall give the Holders of such
Registrable Securities and the underwriters, if any, and their respective
counsel and accountants, such reasonable and customary access to its books and
records and such opportunities to discuss the business of Retek with its
officers and the independent public accountants who have certified the financial
statements of Retek as shall be necessary, in the opinion of such Holders and
such underwriters or their respective counsel, to conduct a reasonable
investigation within the meaning of the Securities Act.
3.6. Indemnification and Contribution.
(a) In the case of each offering of Registrable Securities
made pursuant to this Article III, Retek agrees to indemnify and hold harmless,
to the extent permitted by law, each Selling Holder, each underwriter of
Registrable Securities so offered and each Person, if any, who controls any of
the foregoing Persons within the meaning of the Securities Act and the officers,
directors, affiliates, employees and agents of each of the foregoing, jointly
and severally, from and against any and all losses, liabilities, costs
(including reasonable attorney's fees and disbursements), claims and damages,
each as incurred, to which they or any of them may become subject, under the
Securities Act or otherwise, including any amount paid in investigation, defense
or settlement of any litigation commenced or threatened, insofar as such losses,
liabilities, costs, claims and damages (or actions or proceedings in respect
thereof, whether or not such indemnified Person is a party thereto) arise out of
or are based upon any untrue statement or alleged untrue statement of a material
fact contained in the registration statement (or in any preliminary or final
prospectus included therein) or in any offering memorandum or other offering
document relating to the offering and sale of such Registrable Securities
prepared by Retek or at its direction, or in any amendment thereof or supplement
thereto, or in any document incorporated by reference therein, or any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or arising
from or relating to any violation or alleged violation of the Securities Act,
any blue sky laws, securities laws or other applicable laws of any state or
country in which the Registrable Securities are offered and relating to action
required of, or inaction by, Retek in connection with such offering; provided,
however that Retek shall not be liable to any Holder in any such case to the
extent that any such loss, liability, cost, claim or damage arises out of or
relates to any untrue statement or alleged untrue statement, or any omission, if
such statement or omission shall have been made in reliance upon and in
conformity with information that relates to such Selling Holder, if such
information was furnished in writing to Retek by or on behalf of such Selling
Holder specifically for use in the registration statement (or in any preliminary
or final prospectus included therein), offering memorandum or other offering
document, or in any amendment thereof or supplement thereto. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of any Selling Holder and shall survive the transfer of such
securities. The foregoing indemnity agreement is in addition to any liability
that Retek may otherwise have to each Selling Holder, other holder or
underwriter of the Registrable Securities or any controlling person of the
foregoing and the officers, directors, affiliates, employees and agents of each
of the foregoing; provided, further, that, in the case of an offering with
respect to which a Selling Holder has
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designated the lead or managing underwriters (or a Selling Holder is offering
Registrable Securities directly, without an underwriter), this indemnity does
not apply to any loss, liability, cost, claim or damage arising out of or
relating to any untrue statement or alleged untrue statement or omission or
alleged omission in any preliminary prospectus if a copy of a final prospectus
was not sent or given by or on behalf of any underwriter (or such Selling Holder
or other holder, as the case may be) legally required to deliver a final
prospectus to such Person asserting such loss, liability, cost, claim or damage
at or prior to the written confirmation of the sale of the Registrable
Securities as required by the Securities Act and such untrue statement or
omission had been corrected in such final prospectus.
(b) In the case of each registered offering made pursuant to
this Agreement, each Selling Holder, by exercising its registration rights
hereunder, agrees to indemnify and hold harmless Retek, each underwriter who
participates in such offering, each other Selling Holder or other holder with
securities included in such offering and each Person, if any, who controls
(within the meaning of the Securities Act) such underwriter, other Selling
Holder or other holder and the officers, directors, affiliates, employees and
agents of each of the foregoing, against any and all losses, liabilities, costs
(including reasonable attorney's fees and disbursements) reasonably incurred by
them, as incurred claims and damages to which they or any of them may become
subject, under the Securities Act or otherwise, including any amount paid in
investigation, defense or settlement of any litigation commenced or threatened,
insofar as such losses, liabilities, costs, claims and damages (or actions or
proceedings in respect thereof, whether or not such indemnified Person is a
party thereto) arise out of or are based upon any untrue statement or alleged
untrue statement by such Selling Holder of a material fact contained in the
registration statement (or in any preliminary or final prospectus included
therein) or in any offering memorandum or other offering document relating to
the offering and sale of such Registrable Securities prepared by Retek or at its
direction, or any amendment thereof or supplement thereto, or any omission by
such Selling Holder or alleged omission by such Selling Holder of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, but in each case only to the extent that such untrue statement
of a material fact is contained in, or such material fact is omitted from,
information relating to such Selling Holder furnished to Retek in writing by or
on behalf of such Selling Holder specifically for use in such registration
statement (or in any preliminary or final prospectus included therein), offering
memorandum or other offering document, or any amendment thereof or supplement
thereto; provided that the maximum liability of any Holder for any loss,
liability, cost, claim or damage pursuant to the foregoing indemnity shall not
exceed the amount of the net proceeds, if any, obtained by the Holder upon the
sale of such Holder's Registrable Securities pursuant to such offering. The
foregoing indemnity is in addition to any liability which such Selling Holder
may otherwise have to Retek, or controlling persons and the officers, directors,
affiliates, employees, and agents of each of the foregoing; provided, however,
that, in the case of an offering made pursuant to this Agreement with respect to
which Retek has designated the lead or managing underwriters (or Retek is
offering securities directly, without an underwriter), this indemnity does not
apply to any loss, liability, cost, claim, or damage arising out of or based
upon any untrue statement or alleged untrue statement or omission or alleged
omission in any preliminary prospectus if a copy of a final prospectus was not
sent or given by or on behalf of any underwriter (or Retek, as the case may be)
legally required to provide a final prospectus to such Person asserting such
loss, liability, cost, claim or damage at or prior to the written
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<PAGE> 17
confirmation of the sale of the Registrable Securities as required by the
Securities Act and such untrue statement or omission had been corrected in such
final prospectus.
(c) Each party indemnified under paragraph (a) or (b) above
(an "Indemnified Party") shall, promptly after receipt of notice of a claim or
action against such Indemnified Party in respect of which indemnity may be
sought hereunder, notify the party required to provide indemnification hereunder
(an "Indemnifying Party") in writing of the claim or action; provided, that the
failure to notify the Indemnifying Party shall not relieve it from any liability
that it may have to an Indemnified Party under this Section 3.6 (except that the
failure to notify an Indemnifying Party promptly of the commencement of any such
action, to the extent materially prejudicial to the Indemnifying Party's ability
to defend such action, shall relieve such Indemnifying Party of any liability
only to the extent the Indemnifying Party is prejudiced with respect to its
indemnification obligations under this Section 3.6). If any such claim or action
shall be brought against an Indemnified Party, and it shall have notified the
Indemnifying Party thereof, unless in such Indemnified Party's good faith
reasonable judgment a conflict of interest between such Indemnified Party and
Indemnifying Party may exist in respect of such claim, the Indemnifying Party
shall be entitled to participate therein, and, to the extent that it wishes,
jointly with any other similarly notified Indemnifying Party, to assume the
defense thereof with counsel reasonably acceptable to the Indemnified Party (who
shall not, except with the consent of the Indemnified Party, be counsel to the
Indemnifying Party). After notice from the Indemnifying Party to the Indemnified
Party of its election to assume the defense of such claim or action using
counsel reasonably acceptable to the Indemnified Party, the Indemnifying Party
shall not be liable to the Indemnified Party under this Section 3.6 for any
legal or other expenses subsequently incurred by the Indemnified Party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that, any Person entitled to indemnification
hereunder shall have the right to employ separate counsel and to participate in
the defense of any such claim or action, but the fees and expenses of such
counsel shall be at the expense of such Person, unless (i) the Indemnifying
Party has agreed to pay such fees or expenses, (ii) the Indemnifying Party shall
have failed to assume the defense of such claim and employ counsel reasonably
acceptable to such Person, or (iii) in the reasonable good faith judgment of any
such Person based on advice of its counsel, a conflict of interest may exist
between such Person and the Indemnifying Party with respect to such claims or
actions (in which case, if such Person notifies the Indemnifying Party in
writing that such Person elects to employ separate counsel at the expense of the
Indemnifying Party, the Indemnifying Party shall not have the right to assume
the defense of such claim or action on behalf of such Person). If the
Indemnifying Party is not entitled to or does not assume the defense of such
claim or action, it is understood that the Indemnifying Party shall not, in
connection with any one such claim or action or separate but substantially
similar or related claims or actions in the same jurisdiction arising out of the
same general allegations or circumstances, be liable for the fees and expenses
of more than one separate firm of attorneys (in addition to one separate firm of
local attorneys in each such jurisdiction) at any time for all such Indemnified
Parties. Any Indemnifying Party against whom indemnity may be sought under this
Section 3.6 shall not be liable to indemnify an Indemnified Party if such
Indemnified Party settles such claim or action without the consent of the
Indemnifying Party, which consent shall not be unreasonably withheld,
conditioned or delayed.
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(d) If the indemnification provided for in this Section 3.6
shall for any reason be unavailable (other than in accordance with its terms) to
an Indemnified Party in respect of any loss, liability, cost, claim or damage
referred to therein, then each Indemnifying Party shall, in lieu of indemnifying
such Indemnified Party, contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, cost, claim or damage in
such proportion as shall be appropriate to reflect (i) the relative benefits
received by the Indemnifying Party on the one hand and the Indemnified Party on
the other hand or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law or if the Indemnified Party failed to give the
notice required under paragraph 3.6(c) above, the relative benefits to and the
relative fault of the Indemnifying Party on the one hand and the Indemnified
Party on the other hand with respect to the statements or omissions which
resulted in such loss, liability, cost, claim or damage as well as any other
relevant equitable considerations. The relative benefits received by the
Indemnifying Party and the Indemnified Party shall be deemed to be in the same
respective proportion as the net proceeds (before deducting expenses) of the
offering received by such party (or, in the case of an underwriter, such
underwriter's discounts and commissions) bear to the aggregate offering price of
the Registrable Securities or Other Securities. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Indemnifying Party on the one hand or the
Indemnified Party on the other hand, the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission, but not by reference to any Indemnified Party's stock ownership in
Retek. The amount paid or payable by an Indemnified Party as a result of the
loss, cost, claim, damage or liability, or action in respect thereof, referred
to above in this paragraph 3.6(d) shall be deemed to include, for purposes of
this paragraph (d), any legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending any such action
or claim.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 3.6(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediate preceding paragraph.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(e) Indemnification and contribution similar to that specified
in the preceding paragraphs of this Section 3.6 (with appropriate modifications)
shall be given by Retek and the Selling Holders with respect to any required
registration or other qualification of securities under any state law or
regulation or governmental authority.
(f) The obligations of the parties under this Section 3.6
shall be in addition to any liability which any party may otherwise have to any
other party.
3.7. Rule 144 and Form S-3. Commencing ninety (90) days after the
Initial Public Offering Date, Retek shall use its best efforts to ensure that
the conditions to the availability of Rule 144 set forth in paragraph (c)
thereof shall be satisfied. Upon the request of any Holder of Registrable
Securities, Retek will deliver to such Holder a written statement as to whether
it has complied with such requirements. Retek further agrees to use its
reasonable efforts to cause all conditions to the availability of Form S-3 (or
any successor form) under the Securities Act of the
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<PAGE> 19
filing of registration statements under this Agreement to be met as soon as
practicable after the Initial Public Offering Date.
3.8. Transfer of Registration Rights. Any Holder may transfer all
or any portion of its rights under this Article III to any transferee of a
number of Registrable Securities owned by such Holder exceeding five percent
(5%) of the outstanding class or series of such securities at the time of
transfer (each transferee that receives such minimum number of Registrable
Securities, a "Transferee"); provided, that each Transferee of Registrable
Securities (other than HNC Entities) to which Registrable Securities are
transferred, sold or assigned directly by a HNC Entity (such Transferee, a "HNC
Transferee") together with any Affiliate of such HNC Transferee (and any
subsequent direct or indirect Transferees of Registrable Securities from such
HNC Transferee and any Affiliates thereof) shall be entitled to request the
registration of Registrable Securities pursuant to Section 3.1 only once prior
to a reduction in HNC's Ownership Percentage to less than fifty percent (50%)
and thereafter shall only be entitled to request the registration of Registrable
Securities pursuant to Section 3.2 and, provided, further, that no HNC
Transferee shall be entitled to request registration pursuant to Section 3.1 for
an amount of Registrable Securities equal to less than $ . Any transfer
of registration rights pursuant to this Section 3.8 shall be effective upon
receipt by Retek of (i) written notice from such Holder stating the name and
address of any Transferee and identifying the number of Registrable Securities
with respect to which the rights under this Agreement are being transferred and
the nature of the rights so transferred and (ii) a written agreement from such
Transferee to be bound by the terms of this Agreement. The Holders may exercise
their rights hereunder in such priority as they shall agree upon among
themselves.
3.9. Market Standoff Agreement. If any registration pursuant to
this Article III shall be in connection with an underwritten public offering of
Registrable Securities, each Selling Holder agrees not to effect any public sale
or distribution, including any sale under Rule 144, of any equity security of
Retek or any security convertible into or exchangeable or exercisable for any
equity security of Retek, in the case of Registrable Securities (otherwise than
through the registered public offering then being made), within seven (7) days
(after the receipt of satisfactory notice from Retek) prior to or ninety (90)
days (or such lesser period as the lead or managing underwriters may permit)
after the effective date of the registration statement (or the commencement of
the offering to the public of such Registrable Securities in the case of Rule
415 offerings), provided that each officer, director, employee and holder of one
percent (1%) of more of the outstanding shares of Capital Stock of Retek also
agrees to be similarly bound by this restriction.
3.10. Limitation on Subsequent Registration Rights. After the date
of this Agreement, Retek shall not, without the prior written consent of the
Holders of majority of the Registrable Securities then outstanding, enter into
any agreement with any holder or prospective holder of any securities of Retek
that would grant such holder registration rights that would prevent Retek from
honoring the registration rights of Holders described herein.
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ARTICLE IV: CORPORATE GOVERNANCE MATTERS AND
INFORMATION RIGHTS
4.1. Seats on Retek Board of Directors. At and after the Initial
Public Offering Date, the Board of Directors of Retek shall consist of not more
and not less than seven (7) members and shall be comprised of (a) the Chief
Executive Officer of Retek, (b) three (3) individuals, each of whom shall have
been nominated by HNC (each an "HNC Designee") and (c) three (3) independent
directors, each of whom shall have appropriate retail industry (or other
relevant industry) experience and shall have been nominated by the Chief
Executive Officer of Retek; provided, however, that HNC's right to nominate the
three (3) HNC Designees shall terminate once HNC and its Affiliates own less
than twenty-five percent (25%) of the outstanding Common Stock; and provided,
further, that the HNC Designee shall resign from the Retek Board of Directors
immediately once HNC and its Affiliates own less than twenty-five percent (25%)
of the outstanding Common Stock. The parties agree to take all necessary action
within their control as is necessary to implement the agreements set forth in
the immediately preceding sentence, including voting their shares of Common
Stock in favor of the Board nominees designated as provided above.
4.2. HNC Designees. For so long as HNC has the right to nominate
the HNC Designees, if a vacancy is caused by the death, disability, retirement,
resignation or removal for cause or otherwise of an HNC Designee, then HNC shall
have the sole right to nominate an individual to fill such vacancy. The parties
agree to take all necessary action within their control (including but not
limited to, entering into voting agreements or proxies with other Retek
stockholders regarding voting of shares of Capital Stock of Retek) as may be
required from time to time to cause the individuals nominated pursuant to this
Section 4.2 to become members of the Board of Directors of Retek, by election,
appointment or otherwise.
4.3. Removal. Any HNC Designee may be removed from office only (a)
for Cause (as defined below) by the vote of the stockholders representing not
less than a majority of the issued and outstanding shares of the Capital Stock
of Retek entitled to vote upon the election of directors; or (b) upon HNC's
determination that the HNC Designee should no longer serve as such. Upon any
such determination by HNC pursuant to part (b) of the immediately preceding
sentence, the parties agree to take all necessary action within their control to
cause such HNC Designee to be removed from the Board of Directors of Retek and a
successor HNC Designee designated by HNC to be immediately elected to the Board
of Directors of Retek to replace such removed HNC Designee.
For purposes of this Agreement, "Cause" means (i) the willful failure
by the HNC Designee to perform his or her lawful duties as a member of Retek's
Board of Directors consistent with such HNC Designee's position, (ii) such HNC
Designee's neglect of his or her duties on a general basis (other than as a
result of illness or disability), (iii) the commission by such HNC Designee of
any act of fraud, theft or criminal dishonesty with respect to Retek or any of
its Affiliates, or the conviction of HNC Designee of any crime involving a
felony, fraud,
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<PAGE> 21
embezzlement or the like, and (iv) the commission of any act involving moral
turpitude which (A) brings Retek or any of its Affiliates into public disrepute
or disgrace, or (B) causes material injury to the customer relations, operations
or the business prospects of Retek or any of its Affiliates.
4.4. Board Committees. The Board of Directors of Retek shall have a
Compensation Committee and an Audit Committee. The Compensation Committee will
be comprised of two (2) non-employee directors and will include at least one (1)
HNC Designee. The Audit Committee will be comprised of two (2) directors and
will include at least one (1) HNC Designee and one independent director.
4.5. Special Transactions. Retek and RIS covenant and agree with
HNC that neither Retek nor RIS shall take any action relating to a Special
Transaction (as defined below) unless (i) with respect to any such Special
Transaction, such Special Transaction is approved by at least two (2) of the HNC
Designees to the Board of Directors of Retek, and (ii) with respect to a Special
Transaction described in Sections 4.5(a), (c), (g), (h), (i), (k), (l) or (m),
such Special Transaction is approved by HNC as the majority stockholder of
Retek.
For the purposes of this Section 4.5, a "Special Transaction" shall
mean any of the following events:
(a) any merger, consolidation or other business combination by
Retek, RIS or any direct or indirect or indirect wholly-owned Subsidiary of
Retek or RIS with one or more Persons in which the outstanding shares of Retek,
RIS or such a wholly-owned Subsidiary of Retek or RIS are exchanged for
securities or other consideration, issued or caused to be issued by the
acquiring corporation or its Subsidiary (other than a mere reincorporation
transaction in which the relative interests of the securityholders of such
entity are not changed) in which the holders of Capital Stock of Retek, RIS or
such a wholly-owned Subsidiary of Retek or RIS immediately prior to such merger
or consolidation do not own a majority of the outstanding shares of the
surviving entity or such merger, consolidation or business combination;
(b) a sale of all, or substantially all of the assets of
Retek, RIS or any of their Subsidiaries;
(c) any material change in the scope of business of Retek, RIS
or any of their Subsidiaries as presently conducted;
(d) any liquidation, dissolution or winding up of Retek, RIS
or any of their Subsidiaries;
(e) any transaction or proposed transaction that would involve
the issuance of Capital Stock of Retek in an amount that would result in an HNC
Ownership Reduction;
(f) any commitment by Retek or RIS to incur annual capital
expenditures or to make investments or capital contributions on behalf of Retek
or RIS in excess of $________ in the
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aggregate; other than any such expenditures that were not otherwise identified
in any Annual Business Plan and Budget, (as described below) previously
submitted to and approved by HNC;
(g) any issuance, sale or exchange of shares of Capital Stock
of Retek or RIS, except the Initial Public Offering or pursuant to sales of
Common Stock to directors, employees or consultants of Retek or RIS pursuant
to stock option or stock purchase plans previously approved (including approval
of the number of shares reserved under such plan(s)) in writing by HNC;
(h) the creation, incurrance, assumption, or guarantee of any
obligation for borrowed money in an aggregate principal amount, in a single
transaction or a series of transactions, of more than $ _________ , or the
extension, refinancing, or modification in any material respect of such
obligation;
(i) any sale, purchase, lease, exchange, mortgage, pledge,
transfer or other acquisition or disposition (in one transaction or a series of
transaction) of assets or a business having a fair market value of more than
$___________;
(j) the formation, or the modification of the structure of,
any committees of the Board of Directors of Retek or RIS;
(k) any adoption or amendment of any employee benefit, stock
option, stock purchase or other equity incentive plan, program or arrangement
for Retek's employees;
(l) any material change in any Annual Business Plan and
Budget;
(m) any amendment to Retek's certificate of incorporation or
by-laws that would (i) authorize any new class or series of capital stock of
Retek or any preferred stock of Retek, (ii) affect or change the rights of the
Common Stock, (iii) change or alter any provision directly or indirectly
relating to the taking of action by stockholders or the Board of Directors of
Retek or the composition or election of Retek's Board of Directors, including,
but not limited to, the voting requirements of the stockholders and directors of
Retek;
(n) the commencement by Retek of any legal action, suit,
arbitration or other proceeding (each, an "Action"), other than any such
proceeding that (i) is in the ordinary course of Retek's business and not
material in amount or in the likely impact on Retek or (ii) where the aggregate
amount of (A) damages or other relief (including the reasonably anticipated
economic impact of any non-monetary relief, as determined by the Board of
Directors of Retek in its good faith judgment) sought by Retek in such Action,
(B) the amount of damages or other relief that would reasonably be expected to
be sought by the defendant or defendants in any counterclaim against Retek in
such Action and (C ) the amount of expenses Retek would reasonably expect to pay
to prosecute or defend such Action is not in the good faith judgment of the
Board of Directors of Retek reasonably anticipated to exceed $_________; and
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(o) the settlement of any Action against Retek of other than
(i) any Action that arises in the ordinary course of Retek's business and not
material in amount or in the likely impact on Retek or (ii) any such settlement
that would result in a cost to Retek (net of any amounts payable to Retek under
insurance policies or recoveries by Retek on any counterclaims) of not more than
$_________ (including the reasonably anticipated economic impact of any
non-monetary relief, as determined by the Board of Directors of Retek in its
good faith judgment).
4.6. Information Rights. Retek shall deliver to HNC in such format
and media as HNC may reasonably request:
(a) as soon as available, but in any event within twenty (20)
days after the end of each month and each quarter, a consolidated balance sheet
of Retek and its consolidated subsidiaries as of the end of such month or
quarter and the related consolidated statements of earnings, stockholders'
equity and statement of cash flows for such month or quarter, as the case may
be, and for the year to date, setting forth, in each case, in comparative form
the figures for the corresponding period of one year earlier, all in reasonable
detail and prepared in accordance with generally accepted accounting principles
("GAAP") (except for the omission of footnotes) applied on a consistent basis
throughout the periods represented;
(b) as soon as available, but in any event within ninety (90)
days after the end of each fiscal year of Retek, a consolidated audited balance
sheet of Retek and its consolidated subsidiaries as of the end of such fiscal
year and the related statements of earnings, stockholders' equity and statement
of cash flows for such fiscal year setting forth, in comparative form the
figures for the previous fiscal year, all in reasonable detail for audit
clearance within HNC. Retek will deliver to HNC within ninety (90) days after
the end of each fiscal year such materials accompanied by the report thereon of
Retek's independent auditors, which report shall state that such financial
statements present fairly the financial condition and results of operations of
Retek and its consolidated subsidiaries as of the close of such fiscal year in
conformity with GAAP consistently applied;
(c) at least three (3) business days prior to Retek's filing
thereof with the SEC, all reports, proxy statements, registration statements and
other filings made by Retek under the Securities Act or the Exchange Act;
(d) all written reports, analyses or studies relating to the
business or financial condition of Retek as Retek shall deliver to any other
holder of its Common Stock, simultaneously with its delivery to such holder;
(e) as soon as available, but in any event no later than five
(5) business days following receipt of a request by HNC, such other information
relating to Retek as HNC may reasonably request, in connection with the
reporting of its ownership interest in Retek under the "equity method" of
accounting in accordance with GAAP or as may otherwise be required by GAAP, to
prepare HNC's own financial statements and reports under the Exchange Act and in
accordance with GAAP; and
(f) as soon as practicable, but in any event no later than two
(2) business days prior to issuance, copies of substantially final drafts of all
press releases and other statements to be
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made available by Retek or any of its Subsidiaries or to the public concerning
material developments in the business, properties, earnings, results of
operations, financial condition or prospects of Retek or any of its Subsidiaries
or the relationship between (i) Retek or any of its Subsidiaries and (ii) HNC or
any of its Affiliates. In addition, within such two day period prior to the
issuance of any such press release or public statement, Retek shall actively
consult with HNC regarding any changes (other than typographical or other
similar minor changes) to such substantially final drafts. Retek further agrees
to review any proposed press release regarding its financial or operating
results for any period with the audit committee of Retek's Board of Directors
and Retek's independent auditors a reasonable amount of time prior to the
initial public release of such press release.
4.7. Annual Business Plan and Budget. Retek will (a) at least one
(1) month prior to the commencement of each fiscal year and at least thirty (30)
days prior to the Initial Public Offering Date, prepare and submit to the Board
of Directors of Retek and to HNC for approval and to HNC a budget and operating
plan for the upcoming fiscal year, including projections or forecasts of capital
and operating expenses, cash flow and profits and losses (the "Annual Business
Plan and Budget"), all itemized in reasonable detail; and (b) at least one month
prior to the commencement of each quarter, prepare and submit to the Board of
Directors of Retek for approval and to HNC projections or forecasts of capital
and operating expenses, cash flow and profits and losses for the remainder of
the fiscal year together with profit projections for the following fiscal year.
Before Retek takes any action that would materially deviate from the approved
Annual Business Plan and Budget, the Board of Directors of Retek and HNC must
first approve such action.
4.8. Inspection and Audit Rights. Retek agrees to permit authorized
representatives of HNC to visit and inspect any of the properties of Retek,
including its books of account, and to take extracts or copies thereof, and to
discuss Retek's affairs, finances and accounts with Retek's officers and
independent accountants, all at such times and as often as may be reasonably
requested, and to make such other inspections as may be necessary to permit HNC
to review any of the financial statements of Retek delivered to HNC pursuant to
this Agreement; provided however, that such representative shall agree to take
reasonable precautions to hold in confidence all non-public information so
provided and so designated by Retek (except that such representatives may
disclose such information to officers of HNC, to HNC's counsel and independent
auditors, to others and as required by law and regulations, including, without
limitation, any laws or regulations requiring HNC to report (or to incorporate
in any reports of HNC) such information regarding Retek). In addition, Retek
will allow the independent auditors of HNC to audit the working papers or, and
to assist in any review undertaken by, Retek's independent accountants.
4.9 Change in Fiscal Year. Retek shall, and shall cause each of
its Subsidiaries to, maintain a fiscal year which commences and ends on the same
dates as does HNC's fiscal year of each calendar year.
4.10 No Violations.
(a) Retek covenants and agrees that it will not take any
action or enter into any commitment or agreement which to Retek's knowledge may
reasonably be anticipated to result, with our without notice and with or without
lapse of time or otherwise, in a contravention or event
24
<PAGE> 25
of default by any of Affiliates of (i) any provision of HNC's certificate of
incorporation or by-laws, (ii) any credit agreement or other material agreements
(including agreements relating to covenants not to compete) binding upon HNC or
(iii) any judgment, order or decree of any governmental body, agency or court
having jurisdiction over HNC or any of its respective assets.
(b) Retek and HNC agree to provide to the other any
information and documentation requested by the other for the purpose of
evaluating and ensuring compliance with Section 4.10(a) hereof.
4.11 Automatic Option Share Increases. [TO FOLLOW].
4.12. Termination of Certain Rights. Except as provided in Section
4.1, the provisions of this Article IV shall terminate and be of no further
force or effect at such time as HNC (together with its Affiliates) ceases to own
at least fifty percent (50%) of the outstanding shares of the Capital Stock of
Retek.
ARTICLE V: MISCELLANEOUS
5.1. Limitation of Liability. Neither HNC nor Retek shall be liable
to the other for any special, indirect, incidental or consequential damages of
the other arising in connection with this Agreement.
5.2. Amendments; Waiver. This Agreement may not be amended or
terminated orally, but only by a writing duly executed by or on behalf of the
parties hereto. Any such amendment shall be validly and sufficiently authorized
for purposes of this Agreement if it is signed on behalf of HNC and Retek by any
of their respective presidents or vice presidents. 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.
5.3. Term. This Agreement shall remain in effect until all
Registrable Securities held by Holders have been transferred by them to Persons
other than Transferees; provided, that the provisions of Section 3.6 shall
survive any such expiration.
5.4. Severability. If any provision of this Agreement or the
application of any such provision to any party or circumstances shall be
determined by any court of competent jurisdiction to be invalid, illegal or
unenforceable to any extent, the remainder of this Agreement or such provision
of the application of such provision to such party or circumstances, other than
those to which it is so determined to be invalid, illegal or unenforceable,
shall remain in full force and effect to the fullest extent permitted by law and
shall not be affected thereby, unless such a construction would be unreasonable.
5.5. 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
25
<PAGE> 26
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
San Diego, CA 92121-3728 801 Nicollet Mall, 11th Floor
Attention: Chief Financial Officer Minneapolis, MN 55402
Facsimile: (858) 452-3220 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 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.
5.6. Further Assurances. HNC and Retek shall execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered, such
instruments and take such other action as may be necessary or advisable to carry
out their obligations under this Agreement and under any exhibit, document or
other instrument delivered pursuant hereto.
5.7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original instrument, but all of
which together shall constitute but one and the same agreement. 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.
5.8. Governing Law. This Agreement and the transactions
contemplated hereby shall be construed in accordance with, and governed by, the
laws of the State of Delaware, without regard to its principles of conflicts of
laws.
5.9. Entire Agreement. This Agreement constitutes the entire
agreement and understanding of the parties hereto with respect to the subject
matter hereof.
5.10. Successors. This Agreement shall be binding upon, and shall
inure to the benefit of, the parties hereto and their respective successors and
assigns. Nothing contained in this Agreement, express or implied, is intended to
confer upon any other person or entity any benefits, rights or remedies.
5.11. Specific Performance. The parties hereto acknowledge and agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed
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in accordance with their specific terms or were otherwise breached.
Accordingly, it is agreed that they shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically the terms and provisions hereof in any court of competent
jurisdiction in the United States or any state thereof, in addition to any other
remedy to which they may be entitled at law or equity.
5.12 Dispute 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.
5.13 Attorneys' Fees. Should suit be brought to enforce or
interpret any part of this Agreement, the prevailing party will be entitled to
recover, as an element of the costs of suit and not as damages, reasonable
attorneys' fees to be fixed by the court (including, without limitation, costs,
expenses and fees on any appeal). The prevailing party will be entitled to
recover its costs of suit, regardless of whether such suit proceeds to final
judgment.
5.14 Jurisdiction and Venue. The parties hereto irrevocably consent
to and agree that any litigation or other dispute resolution proceeding among
the parties relating to this Agreement will take place in San Diego, County,
California. The parties hereby irrevocably consent to the personal jurisdiction
or and the venue in the state and federal court within such county.
5.14 Construction of Agreement. A reference to a Section will mean
a Section in this Agreement unless otherwise explicitly set forth. The titles
and headings herein are for reference purposes only and will not in any manner
limit the construction of this Agreement which will be considered as a whole.
[THE REMAINDER OF THIS PAGE HAS INTENTIONALLY BEEN LEFT BLANK]
27
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.
<TABLE>
<CAPTION>
<S> <C>
HNC SOFTWARE INC. RETEK INC.
By: By:
------------------------------------------------- ----------------------
Name: Name:
----------------------------------------------- ---------------------
Title: Title:
---------------------------------------------- --------------------
Solely for purposes of Section 4.5 and Article V
RETEK INFORMATION SYSTEMS, INC.
By:
---------------------
Name:
---------------------
Title:
---------------------
</TABLE>
28
<PAGE> 1
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
EXHIBIT 10.1
SUBJECT TO ORACLE MANAGEMENT APPROVAL CONFIDENTIAL
ORACLE(R)
INDUSTRY SOLUTIONS INITIATIVE
MASTER AGREEMENT
<PAGE> 2
SUBJECT TO ORACLE MANAGEMENT APPROVAL
TABLE OF CONTENTS
TABLE OF CONTENTS.......................................................... 1
ARTICLE I -- DEFINITIONS................................................... 1
1.1 CUSTOMER............................................................... 1
1.2 DEVELOPER MATERIALS.................................................... 1
1.3 DISTRIBUTOR............................................................ 1
1.4 DOCUMENTATION.......................................................... 1
1.5 INTELLECTUAL PROPERTY RIGHTS........................................... 1
1.6 ISI CO-MEMBER.......................................................... 1
1.7 ISI CO-MEMBER PROGRAMS................................................. 1
1.8 ISI MEMBER............................................................. 1
1.9 ISI MEMBER PROGRAMS.................................................... 1
1.10 OBJECT MATERIALS...................................................... 2
1.11 ORACLE................................................................ 2
1.12 ORACLE PROGRAMS....................................................... 2
1.13 ORACLE SOLUTION SUITE................................................. 2
1.14 OTHER PARTY MATERIALS................................................. 2
1.15 POINT SOLUTION........................................................ 2
1.16 SOURCE MATERIALS...................................................... 2
1.17 SUPPORTED LICENSE..................................................... 2
1.18 TARGET MARKET......................................................... 2
1.19 TECHNICAL SUPPORT..................................................... 2
1.20 TERRITORY............................................................. 3
1.21 UPDATES............................................................... 3
ARTICLE II -- STRATEGIC ALLIANCE TERMS..................................... 3
2.1 TARGET MARKET ADDENDUM................................................. 3
2.2 RELATIONSHIP MANAGERS.................................................. 3
2.3 EXECUTIVE COMMITTEE.................................................... 3
2.4 PUBLICITY.............................................................. 4
2.5 DISPUTE RESOLUTION..................................................... 4
ARTICLE III -- ORACLE SOLUTION SUITE DEVELOPMENT........................... 5
3.1 GENERAL DEVELOPMENT RESPONSIBILITIES................................... 5
3.2 TECHNOLOGY AND ARCHITECTURE COMPLIANCE................................. 5
3.3 INTEGRATION WITH UPDATES; RELEASES.................................... 6
3.4 PROGRAM COMPETITIVENESS................................................ 6
3.5 NEW DEVELOPMENT COMMITMENTS............................................ 7
3.6 RIGHT TO ADD NEW ISI MEMBER PROGRAMS................................... 8
3.7 STATEMENTS OF WORK..................................................... 8
ARTICLE IV -- SALES COOPERATION............................................ 8
4.1 SALES MODEL............................................................ 8
4.2 ORACLE SOLE POINT OF CUSTOMER CONTACT.................................. 9
4.3 SALES FORCE QUOTA/COMPENSATION......................................... 9
4.4 RULES OF ENGAGEMENT.................................................... 9
ARTICLE V -- SERVICES AND TRAINING......................................... 10
5.1 SERVICES SUBCONTRACT AGREEMENT......................................... 10
5.2 METHODOLOGY............................................................ 10
5.3 TRAINING............................................................... 10
Page: i
<PAGE> 3
SUBJECT TO ORACLE MANAGEMENT APPROVAL
5.4 CONSULTING........................................................... 11
ARTICLE VI - TECHNICAL SUPPORT............................................. 11
6.1 TECHNICAL SUPPORT FOR ORACLE SOLUTION SUITE.......................... 11
6.2 TECHNICAL SUPPORT FOR ISI MEMBER PROGRAMS............................ 11
6.3 BUG FIXES............................................................ 11
6.4 INTERNAL DEVELOPER TECHNICAL SUPPORT................................. 12
6.5 EXTENDED SUPPORT..................................................... 12
ARTICLE VII - LICENSES GRANTED............................................. 12
7.1 LICENSE TO ISI MEMBER................................................ 12
7.2 DEVELOPMENT, TECHNICAL SUPPORT, TRAINING, DEMONSTRATION,
CONSULTING LICENSE TO ORACLE......................................... 12
7.3 SUBLICENSING LICENSE................................................. 13
7.4 TERMS FOR DIRECT LICENSES TO CUSTOMERS............................... 14
7.5 DISTRIBUTORS......................................................... 14
7.6 TRADEMARKS........................................................... 14
7.7 ARCHIVAL COPIES...................................................... 14
7.8 NO REVERSE ENGINEERING............................................... 14
7.9 OWNERSHIP............................................................ 14
7.10 THIRD PARTY MATERIALS................................................ 15
7.11 LICENSE OF INTELLECTUAL PROPERTY RIGHTS.............................. 16
7.12 NO SERVICE BUREAU USE................................................ 16
ARTICLE VIII - FEES........................................................ 16
8.1 SUBLICENSE FEES...................................................... 16
8.2 TECHNICAL SUPPORT FEES............................................... 17
8.3 EDUCATION/TRAINING FEES.............................................. 19
8.4 SUBLICENSE FEE LIMITATIONS........................................... 19
8.5 PAYMENT; REPORTING; RELICENSING...................................... 19
8.6 RECORDS; AUDIT....................................................... 19
8.7 CUSTOMER LICENSE FEE DISCOUNTS....................................... 20
8.8 FREEDOM.............................................................. 20
ARTICLE IX - TERM AND TERMINATION......................................... 20
9.1 INITIAL TERM......................................................... 20
9.2 TERMINATION.......................................................... 20
9.3 RIGHTS UPON TERMINATION.............................................. 22
9.4 EFFECT OF TERMINATION................................................ 23
ARTICLE X - LIMITED WARRANTY, INFRINGEMENT INDEMNITY, AND LIMITATION
OF LIABILITY................................................... 24
10.1 LIMITED WARRANTIES AND EXCLUSIVE REMEDIES............................ 24
10.2 INFRINGEMENT INDEMNITY............................................... 25
10.3 LIMITATION OF LIABILITY.............................................. 26
10.4 ORACLE INDEMNIFICATION............................................... 27
ARTICLE XI - GENERAL....................................................... 27
11.1 NONDISCLOSURE........................................................ 27
11.2 GOVERNING LAW........................................................ 29
11.3 NOTICE............................................................... 29
11.4 RELATIONSHIP BETWEEN THE PARTIES..................................... 29
11.5 INDEPENDENT DEVELOPMENT/FREEDOM OF ACTION............................ 29
11.6 EXPORT............................................................... 29
Page: ii
<PAGE> 4
SUBJECT TO ORACLE MANAGEMENT APPROVAL
11.7 SEVERABILITY; ASSIGNMENT; COUNTERPARTS; NO WAIVER; ENTIRE AGREEMENT.. 30
EXHIBIT LIST............................................................... 31
Page: iii
<PAGE> 5
SUBJECT TO ORACLE MANAGEMENT APPROVAL
This Industry Solutions Initiative Master Agreement (the "Agreement") is made
by and between Oracle Corporation, with its principal place of business at 500
Oracle Parkway, Redwood City, California 94065, and Retek Information Systems
with its principal of business at 801 Nicollet Mall, Minneapolis, Minnesota
55402.
ARTICLE I - DEFINITIONS
1.1 CUSTOMER
"Customer" shall mean an end-user to whom Oracle or a Distributor has
granted a license for an Oracle Solution Suite or has granted a
sublicense for an ISI Member Program under this Agreement.
1.2 DEVELOPER MATERIALS
"Developer Materials" shall mean Source Materials, internal technical
documentation, design documentation, help materials, tutorial programs,
and appropriate debug code. Developer Materials will not include any
Other Party Materials.
1.3 DISTRIBUTOR
"Distributor" shall mean a third party that is appointed by Oracle to
market and sublicense the Oracle Solution Suite and/or ISI Member
Programs under the terms of this Agreement. The term "Distributor"
shall include, but not be limited to, resellers, original equipment
manufacturers, value added relicensors, dealers, agents, and
subdistributors.
1.4 DOCUMENTATION
"Documentation" shall mean installation guides, user guides and
manuals.
1.5 INTELLECTUAL PROPERTY RIGHTS
"Intellectual Property Rights" shall mean patent rights, copyright
rights (including, but not limited to, rights in audiovisual works and
Moral Rights), trade secret rights, and any other intellectual property
rights recognized by the law of each applicable jurisdiction. "Moral
Rights" shall mean any rights to claim authorship of a work, to object
to or prevent the modification of a work, or to withdraw from
circulation or control the publication or distribution of a work, and
any similar right, existing under the law of any country in the world,
or under any treaty.
1.6 ISI CO-MEMBER
"ISI Co-Member" shall mean a third-party software developer which has
executed an Oracle ISI Master Agreement, and a Target Market Addendum
for the Target Market, with Oracle.
1.7 ISI CO-MEMBER PROGRAMS
"ISI Co-Member Programs" shall mean for each Target Market the
computer programs identified as ISI Co-Member Programs in the
applicable Target Market Addendum that are available in production
release for use on the applicable computer/operating system
combinations. "ISI Co-Member Programs" shall include the Documentation
for use of such ISI Co-Member software, and the ISI Member's Updates.
1.8 ISI MEMBER
"ISI Member" shall mean Retek Information Systems, and any other
corporation, partnership, firm, association or any other person in
which Retek Information Systems, directly or indirectly, holds a fifty
percent (50%) or more ownership interest.
1.9 ISI MEMBER PROGRAMS
"ISI Member Programs" shall mean, for each Target Market, the computer
programs identified as ISI Member Programs in the applicable Target
Market Addendum that are available in production release for use on the
applicable computer/operating system combinations. "ISI Member
Programs" shall include the Documentation for use of such ISI Member
software, and ISI Member's Updates.
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1.10 OBJECT MATERIALS
"Object Materials" shall mean materials, in machine-readable form,
necessary to run the Oracle Programs, ISI Member Programs, ISI
Co-Member Programs and/or other software products described in this
Agreement, as applicable, including computer programming code
substantially in binary form, which is directly executable by a
computer after suitable processing but without the interventing steps
of compilation or assembly. "Object Materials" shall include all help,
message, and overlay files. Each reference to Oracle Programs, ISI
Member Programs and/or ISI Co-Member Programs in this Agreement shall
mean only the Object Materials for such programs (not Source Materials
or Developer Materials) unless otherwise expressly specified.
1.11 ORACLE
"Oracle" shall mean Oracle Corporation; any other corporation,
partnership, firm, association or any other person in which Oracle
Corporation, directly or indirectly, holds a fifty percent (50%) or
more ownership interest; and any entity which is the exclusive
distributor of Oracle Programs within a country.
1.12 ORACLE PROGRAMS
"Oracle Programs" shall mean, for each Target Market, the computer
programs identified as Oracle Programs in the applicable Target Market
Addendum that are available in production release and listed in
Oracle's Global Price List for use on the applicable computer/operating
system combinations. "Oracle Programs" shall include Documentation and
Oracle's Updates.
1.13 ORACLE SOLUTION SUITE
"Oracle Solution Suite" shall mean, for each Target Market, a suite of
computer programs incorporating Oracle Programs, ISI Member Programs
and/or ISI Co-Member Programs released pursuant to the applicable
Development Plan or licensed by Oracle to a Customer in the Target
Market in accordance with the terms of this Agreement.
1.14 OTHER PARTY MATERIALS
"Other Party Materials" shall mean the two software modules licensed
to ISI Member from MicroStrategy, Inc. and Kenan Systems Corporation
and incorporated into the ISI Member Programs.
1.15 POINT SOLUTION
"Point Solution" shall mean any use of an ISI Member Program as a
stand-alone product or in combination with software products other than
the Oracle Solution Suite.
1.16 SOURCE MATERIALS
"Source Materials" shall mean uncommented, partially commented and
fully commented program source code from which the Oracle Programs, ISI
Member Program (except for Other Party Materials) and/or ISI Co-Member
Program Object Materials (as applicable) are compiled; and data models
for the Oracle Programs, ISI Member Program and/or ISI Co-Member
Programs (as applicable). "Source Materials" shall include the
foregoing in electronic and hard-copy form, whether created by or for a
party hereto.
1.17 SUPPORTED LICENSE
"Supported License" shall mean a license for an Oracle Program, ISI
Member Program or ISI Co-Member Program for which the licensee has
ordered Technical Support for the relevant time period.
1.18 TARGET MARKET
"Target Market" shall mean the industry(ies) defined in the applicable
Target Market Addendum.
1.19 "TECHNICAL SUPPORT" shall mean support for an Oracle Program, ISI
Member Program or ISI Co-Member Program (as applicable) provided,
respectively, under Oracle's, ISI Member's or an ISI Co-Member's
policies in effect on the date Technical Support is ordered. At a
minimum such support shall include telephone support, bug fixes and
Updates.
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1.20 TERRITORY
"Territory" shall mean the world.
1.21 UPDATES
"Updates" shall mean a subsequent release of an Oracle Program, an ISI
Member Program, or an ISI Co-Member Program, as applicable, which is
generally made available for Supported Licenses at no additional charge,
other than media and handling charges. Updates shall not include any
release, option or future product which Oracle, ISI Member or an ISI
Co-Member, as applicable, licences separately.
ARTICLE II - STRATEGIC ALLIANCE TERMS
2.1 TARGET MARKET ADDENDUM
Within sixty (60) days after the Effective Date of this Agreement, the
parties shall execute at least one completed Target Market Addendum, which
shall include, without limitation, a sales plan ("Sales Plan"), a
statement of direction ("Statement of Direction") and a development plan
("Development Plan").
2.1.1 Sales Plan. The Sales Plan will address, without limitation,
budgets, staffing levels, rules of engagement, and revenue
projections, and will be subject to modification from time to time
by written agreement of the parties.
2.1.2 Statement of Direction. The Statement of Direction shall address
without limitation the following:
(a) General product direction of the Oracle Solution Suite;
(b) Integration between Oracle and ISI Member Programs; and
(c) Integration to be developed in evolutionary phases.
2.1.3 Development Plan. The Development Plan shall address without
limitation the following:
(a) Integration phases;
(b) ISI Member Programs included in integration;
(c) Oracle Solution Suite release schedule;
(d) Common development procedures including certification, porting,
localization, installation;
(e) Development tasks and responsibilities; and
(f) Critical Deliverables (as defined in the Development Plan).
The development plan (and any changes thereto) shall not become
effective until approved in writing by the Oracle Senior Vice
President of Consumer Sector and ISI Member's Vice President for
Research and Development. The development plan may be modified from
time to time by mutual agreement of the parties in writing as set
forth above.
2.2 RELATIONSHIP MANAGERS
Each party shall designate a relationship manager who shall maintain
primary responsibility for the relationship between the parties. The
parties' initial relationship managers are Dan Leviten for Oracle and
David Tidmarsh for ISI Member.
2.3 EXECUTIVE COMMITTEE
2.3.1 Purpose. The parties shall create an executive committee (the
"Executive Committee") to oversee the cooperation among Oracle, ISI
Member, and ISI Co-Members with respect to the Oracle Solution
Suite(s).
2.3.2 Composition. The Executive Committee shall be composed of an Oracle
Vice President, ISI Member President (or his/her designee), and the
chief executive officer (or his/her designee) of each ISI
Co-Member. The Executive Committee shall be chaired by the Oracle
member and shall meet as the committee members may deem
appropriate.
2.3.3 Duties. The duties of the Executive Committee shall include,
without limitation:
a. Reviewing and recommending for approval the Sales Plan,
Development Plan, and other plans for the various functional
areas with respect to the Oracle Solution Suite.
b. Reviewing and recommending for approval budgets for each of the
foregoing plans.
c. Reviewing operational and performance reviews conducted by
appointed subcommittees.
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d. Reviewing status reports prepared by appointed subcommittees.
e. Resolving issues and disputes with respect to the Oracle
Solution Suite Committee pursuant to Section 2.5 (Dispute
Resolution).
f. Nominating, reviewing and recommending for approval or
disapproval candidates for membership in the Oracle ISI Program
for the Target Market.
2.3.4 Subcommittees of Executive Committee. Each party and ISI
Co-Member shall appoint a member to each sub-committee of the
Executive Committee. The sub-committees shall include but not be
limited to Sales, Consulting, Development, Marketing, Finance, and
Industry Strategy. Each sub-committee shall meet quarterly and
report to the Executive Committee. The purpose of the
sub-committees is to manage the operational relationship between
the parties (including ISI Co-Members), identifying and resolving
issues and conflicts with respect to the Oracle Solution Suite
and/or escalating disputes to the Executive Committee pursuant to
Section 2.5 (Dispute Resolution).
2.3.5 Customer Advisory Board Participation. ISI Member agrees that it
will invite Oracle's Senior Vice President for the applicable
Industry Sector specified in each signed Target Market Addendum (or
his/her designee) to all ISI Member Customer advisory board
meetings. ISI Member also agrees to make commercially reasonable
efforts to ensure that all public statements made to the ISI Member
Customer advisory board regarding the Oracle Solution Suite will be
consistent with Oracle public statements to Oracle's Customer
advisory board.
2.3.6 Attendance. ISI Member agrees that its President (or his/her
designee) shall attend (a) all meetings of the Executive Committee;
and (b) all Oracle Customer advisory board meetings.
2.3.7 Expenses. Each party shall bear its own costs incurred in the
performance of Executive Committee duties. The parties intend to
equitably distribute Executive Committee meetings geographically so
as not to burden ISI Member, Oracle, or any ISI Co-Member unduly
with travel-related expenses.
2.4 PUBLICITY
Neither Party shall disclose to any third party the pricing or
royalties or any other details of this Agreement without the specific
prior written approval of the other party, which approval shall not be
unreasonably withheld, except (i) for a mutually agreed-upon joint
press release to be issued by the parties relating to the subject
matter of this Agreement, (ii) as required by law in order to enforce
its rights under this Agreement, or (iii) to the Securities and
Exchange Commission (the "SEC") if, in the reasonable written opinion
of such party's counsel, such disclosure is required by statute or
rules and regulations of the SEC, provided that the disclosing party
shall make such written opinion available to the other party a
reasonable period of time before the disclosure and shall timely apply
to the SEC for a confidential treatment of the economic terms of this
Agreement and any other terms counsel for the other party reasonably
requests in writing to be a part of such application. Neither Party
shall issue any press release naming the other party without the other
party's prior approval, nor shall either party issue a formal public
statement using a Customer's name without the Customer's prior written
consent. ISI Member may not issue any formal public statement
concerning the Oracle Solution Suite or any transaction involving the
Oracle Solution Suite without Oracle's prior written consent.
Notwithstanding the foregoing or any provision of this Agreement to the
contrary, ISI Member shall have the right in the event of a potential
sale of a majority of ISI Member's outstanding voting shares and/or
substantially all of its assets to a third party to disclose the terms
of this Agreement to such third party (the "Receiver") without
obtaining Oracle's prior written approval, provided that the Receiver
shall, prior to receiving the disclosure from ISI Member, execute a
nondisclosure agreement with ISI Member containing provisions governing
nondisclosure at least as restrictive as those contained in this
Agreement (including but not limited to the provisions of this Section
2.4).
2.5 DISPUTE RESOLUTION
In the event of a dispute between the parties concerning the subject
matter of this Agreement, the matter shall be referred to the
Relationship Managers who shall meet for the purpose of endeavoring to
resolve such dispute or negotiate for an adjustment to such provision.
If they cannot resolve the dispute to the parties' mutual satisfaction
within 30 days after the dispute has been referred to them, then they
shall refer
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the matter to each party's applicable Vice President. If they cannot
resolve the dispute to the parties' mutual satisfaction within 30 days
after the dispute has been referred to them, then they shall refer the
matter to the Executive Committee, which shall render a decision on the
matter within 30 days. No formal proceedings for judicial resolution of
such dispute, except for the seeking of equitable relief, may begin
until the dispute resolution procedure has been elevated to the
Executive Committee, and the Executive Committee in good faith
concludes, after a good faith attempt to resolve the dispute, that
amicable resolution through continued negotiation does not appear
likely.
ARTICLE III - ORACLE SOLUTION SUITE DEVELOPMENT
3.1 GENERAL DEVELOPMENT RESPONSIBILITIES
3.1.1 Primary Commercial Releases. Each party shall provide the primary
commercial releases of its respective Programs for inclusion in the
Oracle Solution Suite.
3.1.2 Development-Related Costs. Each party shall bear all costs incurred by
it in the course of performing its development responsibilities
hereunder.
3.1.3 Development Cooperation Guidelines. The parties shall use commercially
reasonable efforts to comply with the guidelines set forth in Exhibit A
(Development Cooperation Guidelines) hereto.
3.1.4 Reasonable Efforts and Assistance. Each party shall at all times use
commercially reasonable efforts, and provide reasonable assistance to
the other (and ISI Co-Members), to accomplish the Oracle Solution Suite
development objectives described in this Agreement and the Target
Market Addendum (including the Development Plan).
3.1.5 Responsibilities Conditional On Other Party's Or ISI Co-Member's
Performance Or Assistance. Each party shall provide such assistance to
the other as may reasonably be required to enable the other to fulfill
its responsibilities hereunder. Neither party shall be liable for its
failure to perform any of its obligations hereunder to the extent that
failure was caused by the other party's or an ISI Co-Member's failure
to complete a development commitment or provide reasonably required
assistance on which the first party's performance was conditional.
3.1.6 Review of Future ISI Member Program / Oracle Solution Suite
Development. Notwithstanding anything to the contrary in this
Agreement, each party agrees (a) that it shall invite the other party
to its senior management meetings that relate to future development
with respect to such party's programs that are part of the Oracle
Solution Suite and only as such development relates to the relationship
between the parties' programs, pursuant to the Development Plan or
otherwise, and (b) that the invited party shall have the opportunity to
review and contribute suggestions to such development.
3.2 TECHNOLOGY AND ARCHITECTURE COMPLIANCE
3.2.1 ISI Member Responsibilities. Oracle is currently in the process of
developing standards related to internet computing, currently known as
Oracle's Network Computing Architecture ("NCA"), which involve the use
of CORBA interfaces.
a. ISI Member shall use commercially reasonable efforts to conform ISI
Member Programs (with the exception of (i) the Retek Demand
Forecasting module when such module is running on the Accumate
database product and (ii) the Retek Data Warehouse module when
such module is utilizing the MicroStrategy, Inc. "front-end")
and Critical Deliverables to Oracle's NCA standards.
b. ISI Member shall conform and thereafter maintain the ISI Member
Programs current with the look and feel and common data model of
the Oracle Programs (with the exception of (i) the Retek Demand
Forecasting module when such module is running on the Accumate
database product and (ii) the Retek Data Warehouse module when such
module is utilizing the MicroStrategy, Inc. "front-end").
c. ISI Member must adapt the user interfaces of the ISI Member
Programs to the Oracle and third party development tools specified
on Exhibit B (Acceptable Oracle and Third Party Tools) hereto, as
such exhibit may be amended in writing by the parties from time to
time. ISI Member may use any development tools it
chooses to develop back-ends of the
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ISI Member Programs, provided such tools shall be subject to
Oracle's approval if the tools being used by ISI Member are
resulting in performance degradation.
d. Oracle acknowledges that, as of the Effective Date, the Retek
Merchandising System product meets the requirements set forth
in subsections a and b of this Section 3.2.1. ISI Member agrees
that it shall continue to conform and maintain such product in
accordance with subsections a and b of this Section 3.2.1 and
Oracle acknowledges that ISI Member shall be free to market,
license and distribute such modified product during and after
the term of this Agreement.
3.2.2 Oracle Responsibilities. Oracle shall submit to the Development
Manager technology and architecture standards for the Oracle
Solution Suite.
3.3 INTEGRATION WITH UPDATES; RELEASES
3.3.1 ISI Member shall use commercially reasonable efforts to integrate
the ISI Member Programs (and Updates thereto) with any Updates to
the Oracle Programs so that the integrated version of the ISI
Member Programs are available in production release at the same
time as the Update to the Oracle Programs. Oracle shall provide
ISI Member with reasonable assistance to allow ISI Member to
complete the integration of Updates. In addition, Oracle shall
provide ISI Member with reasonable amounts of time to complete the
integration of Updates. ISI Member shall use commercially
reasonable efforts to make upgraded releases of the ISI Member
Programs, compatible with releases of Oracle Programs designated
in the Development Plan, commercially available within 90 days
after first commercial availability of such upgraded release of
the ISI Member Program. In addition, ISI Member shall use commer-
cially reasonable efforts to integrate the ISI Member Programs
with upgraded releases of Oracle Programs designated in the
Development Plan and make such commercially available within 90
days after commercial availability of the designated Oracle
Program releases (excluding Oracle Program releases consisting
solely of patches and fixes). Following the date one year from
the Effective Date of this Agreement, Oracle and ISI Member shall
meet to review that ISI Member has made substantial progress in
the integration of the ISI Member Programs towards (a) entry of
data by a Customer not more than once and (b) the ability of a
Customer to upgrade to the Oracle Solution Suite component by
component.
3.3.2 Notwithstanding anything to the contrary in this Agreement
(including the Development Plan attached to the Target Market
Addendum), the parties agree that they shall use commercially
reasonable efforts to adhere to the following: the parties shall
set forth in revised Development Plans (mutually agreed to by the
parties from time to time by written agreement) a product feature
summary outlining the functionality intended to be included in the
versions of the Oracle Solution Suite specified. Included with
such product feature summary shall be a schedule of estimated
dates for release of the versions of the Oracle Solution Suite
specified. If, at the time of preparation for any release of a
version of the Oracle Solution Suite (each, a "Pending Suite
Release"), ISI Member's version of the ISI Member Programs does
not meet the required specifications for such programs as set
forth in the product feature summary for the relevant Pending
Suite Release, then Oracle shall have the right to release the
Pending Suite Release with the previously released version of the
ISI Member Programs. When ISI Member's version of the ISI Member
Programs does meet the required specifications for such programs
as set forth in the product feature summary for the relevant
Pending Suite Release, then Oracle may thereafter release such
version of the ISI Member Programs in a "prime" release following
the relevant Pending Suite Release but prior to the next version
of the Oracle Solution Suite scheduled on the product feature
summary.
3.4 PROGRAM COMPETITIVENESS
If at any time Oracle believes that any ISI Member Program or ISI Member
believes that any Oracle Program is inferior in any material respect to
any competing third-party product, the party so believing may commission,
at its expense, a review of the other party's allegedly inferior program
by three (3) industry analysts, one of which will be selected by ISI
Member, one of which will be selected by Oracle, and one of which will be
selected by agreement of ISI Member and Oracle. If at least two (2) of
such three
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(3) industry analysts agree in writing that such program is inferior in
any material respect to a competing third-party product, the commissioning
party shall so notify the other party in writing and, within sixty (60)
days after such notice, the other party shall deliver to the commissioning
party a detailed written plan for correction of such deficiency(ies).
After agreement on such plan by the parties, the non-commissioning party
shall have one hundred eighty (180) days to correct the deficiency(ies)
pursuant to the plan, subject to acceptance by the commissioning party. In
the event the non-commissioning party objects to the terms of such written
plan for correction and fails to materially comply with its obligations
under such plan, the other party shall be entitled to terminate this
Agreement and the provisions of Section 9.3 will apply; provided that,
such failure shall not be deemed a material breach of this Agreement. Any
dispute arising under this Section 3.9, including any dispute over the
acceptability of a plan or deliverable required under this Section, shall
be referred to dispute resolution under Section 2.5 (Dispute Resolution).
3.5 NEW DEVELOPMENT COMMITMENTS
In the event Oracle believes that it is appropriate that a modification,
enhancement, localization or extension (which is not specified in the
Development Plan) be incorporated into the supported ISI Member Program,
then:
a. ISI Member shall have the right to undertake such development
commitment pursuant to an amendment to the Development Plan.
b. If ISI Member elects not to undertake such development
commitment, and such modification, enhancement, localization or
extension goes to the core ISI Member Program and cannot readily be
separated from such Program without requiring re-coding of any
portion of the Program, then Oracle, only with ISI Member's prior
written consent and subject to the provisions of this Agreement
related to ownership, may develop or fund development of such
modification, enhancement, localization or extension to ISI Member
Program and license it to existing and prospective Customers. In
the event ISI Member provides such consent and Oracle performs or
funds such development, Oracle shall be entitled to recover its
investment in such development [ * ]. Oracle shall have the right
to offset such amounts against the sublicense and technical support
fees payable to ISI Member hereunder; provided, however, that the
rate of such offset shall be as agreed to by the parties in a
schedule at the time ISI Member provides consent to Oracle for the
relevant development commitment.
c. If ISI Member elects not to undertake such development commitment,
and such development (i) is a "bolt-on" which can readily be
separated from the ISI Member Program and (ii) does not contain the
same functionality of the ISI Member Program(s) which it modifies,
localizes, enhances or extends, then Oracle, without ISI Member's
consent, (x) shall have the right to develop such development to
the ISI Member Program, (y) shall retain ownership of the
Intellectual Property Rights in such bolt-on, and (z) shall have
the right to license it to existing and prospective Customers. In
the event that the creation of the foregoing bolt-on by Oracle
requires the creation of an application programming interface
("API") or the creation of changes to an ISI Member Program, then
Oracle shall so notify ISI Member and ISI Member agrees at its own
expense to use commercially reasonable efforts to create the
necessary API or to create the changes to the applicable ISI Member
Program. ISI Member shall own all Intellectual Property Rights in
the API and the changes made to the ISI Member Program. If such
development (i) is a "bolt-on" which can readily be separated from
the ISI Member Program but (ii) contains the same functionality of
the ISI Member Program(s) which it modifies, localizes, enhances or
extends, then, prior to Oracle developing such bolt-on, Oracle
shall first offer to ISI Member the right to develop such
development to the ISI Member Program. If ISI Member undertakes
such development commitment, ISI Member shall retain ownership of
the Intellectual Property Rights in such bolt-on. If ISI Member
elects not to undertake such development commitment then Oracle
(x) shall have the right to develop, (y) shall retain ownership of
the Intellectual Property Rights in such bolt-on, and (z) shall
have the right to license it to existing and prospective Customers.
In the event that the creation of the foregoing bolt-on by Oracle
requires the creation of an API or the creation of changes to an
ISI Member Program, then Oracle shall so notify ISI Member and ISI
Member agrees at it own expense to use commercially reasonable
efforts to
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create the necessary API or to create the changes to the applicable
ISI Member Program. ISI Member shall own all Intellectual Property
Rights in the API and the changes made to the ISI Member Program.
In the event Oracle exercises its right in accordance with the
foregoing and ISI Member develops such development to the ISI
Member Program for Oracle at Oracle's expense, then Oracle shall be
entitled to recover its investment in such development [ * ].
Oracle shall have the right to offset such amounts against the
sublicense and technical support fees payable to ISI Member
hereunder; provided, however,that the rate of such offset shall be
as agreed to by the parties in a schedule at the time ISI Member
elects not to undertake such development commitment.
3.6 RIGHT TO ADD NEW ISI MEMBER PROGRAMS
If either party makes generally available after the Effective Date any
software which is not listed in a Target Market Addendum and which the
parties agree falls within the scope of business functionality or
requirements addressed under such Target Market Addendum, such software
shall be added to that Target Market Addendum unless the other party
objects. The addition of such software shall be subject to the sublicense
fee provisions of this Agreement. The party adding the software shall
promptly deliver to the other all materials required under Section 7.2
(Development, Technical Support, Training, Demonstration, Consulting
License To Oracle), and the parties shall promptly amend the Development
Plan and Sales Plan accordingly. Upon addition to the Target Market
Addendum of any such software, if such software is software of the ISI
Member, then such software shall be deemed "ISI Member Programs" for all
purposes of this Agreement and all provisions of this Agreement shall
automatically apply to such software, except that Exhibit J shall be
amended upon addition of the software to the target Market Addendum to
provide the applicable minimum sublicense fee for such software.
3.7 STATEMENTS OF WORK
In implementing the development activities contemplated by the parties
under the Development Plan set forth in the Target Market Addendum, the
parties agree to use statements of work. The parties shall specify in each
such statement of work provisions such as, but not limited to, the scope
of development activities for the relevant development project, the
parties' personnel who will manage the relevant development project and
the time frame for completion of the relevant development project. A form
of Statement of Work is attached hereto as Exhibit C.
ARTICLE IV - SALES COOPERATION
4.1 SALES MODEL
4.11 Definitions.
a. Joint Sale. A "Joint Sale" means a sale in which Oracle or a
Distributor provides an account manager, and ISI Member
provides an application sales representative and an application
sales consultant for the ISI Member Program. Oracle or its
Distributor will manage, lead and be the single point of
Customer contact for all Joint Sales.
b. Supported Sale. A "Supported Sale" means a sale in which Oracle
or a Distributor provides an account manager, an application
sales representative and an application sales consultant, and
ISI Member provides technical assistance for the ISI Member
Program. In the case of excessive Customer requests, the level
of technical assistance shall be determined jointly by the
parties. Oracle or its Distributor will manage, lead and be the
single point of Customer contact for all Supported Sales. The
parties intend that the Supported Sale model reflect Oracle's
attainment of the ability to sell licenses for and demonstrate
the Oracle Solution Suite in a self-sufficient manner.
4.1.2 Designation of Sales as Joint Sales or Supported Sales. All
sublicenses of an ISI member Program by Oracle or a Distributor
shall be deemed Joint Sales unless (a) the parties agree to move to
the Supported Sales model as such move is described below or (b)
the parties agree otherwise on a case by case basis in writing
(e.g., letter, email, etc.). At any time after the Effective Date
of this Agreement, ISI Member may notify Oracle in writing that ISI
Member
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desires to move to a Supported Sales model. If Oracle agrees in
writing to such a move, then on and after the "move" date specified
in Oracle's notice (a) all sublicenses of an ISI Member Program by
Oracle or a Distributor shall be deemed Supported Sales, (b) there
shall be no exceptions except by advance written agreement of the
parties and (c) ISI Member shall not be required to provide
application sales representatives or application sales consultants
for the ISI Member Program. If Oracle does not agree to such a
move, then all sublicenses of an ISI Member Program by Oracle or a
Distributor shall remain deemed Joint Sales. In the Supported Sales
model, unless the parties agree otherwise (including any agreement
on a different royalty payment for the applicable transaction) on
a case by case basis in writing (e.g., letter, email, etc.), ISI
Member shall not be required to provide application sales
representatives or application sales consultants for the ISI Member
Program.
4.2 ORACLE SOLE POINT OF CUSTOMER CONTACT
The parties agree that, in order to promote consistency and minimize the
number of sales calls on each Customer, Oracle shall be the sole point of
Customer contact during the initial sales process for all Oracle Solution
Suite licenses, including all ISI Member Program licenses for use with the
Oracle Solution Suite, in the Target Market. Oracle shall be the sole
point of Customer contact for all technical support, consulting and
training and education services in connection with such licenses. ISI
Member may contact a Customer after the initial sales process and may sell
any of ISI Member's products and services (including the ISI Member
Programs) directly to that Customer without the consent of, or liability
to, Oracle.
4.3 SALES FORCE QUOTA/COMPENSATION
Each party shall assign revenue quotas to its sales force. The
compensation plan used by each party for its sales force (for both
licences and the first year of Technical Support services) shall neither
favor nor disfavor sales by Oracle of the Oracle Solution Suite with
respect to other products sold or licensed by Oracle. ISI Member will
implement a compensation plan that complies with the foregoing sentence
within sixty (60) days of the Effective Date of this Agreement.
4.4 RULES OF ENGAGEMENT
Notwithstanding any provision to the contrary in this Agreement, the
parties agree to abide by the following rules of engagement:
a. Jointly Pursued Deals That End Up Being Licensed To a Customer by
ISI Member. If, after the parties have pursued a Customer as a
Joint Sale (including having performed a joint entry presentation
to the applicable Customer), the Customer decides to license the
ISI Member Program(s) from ISI Member, Oracle agrees that ISI
Member may license the applicable ISI Member Program(s) to such
Customer only after following the provisions of Section 4.4.b below
(Disengagement). After ISI Member has followed the provisions of
such section, and if the applicable Customer still wants to license
the ISI Member Program(s) from the ISI Member, then ISI Member
shall have the right to license the applicable ISI Member
Program(s) to such Customer provided that ISI Member pay to Oracle
a sublicense fee based upon the Joint Sales model [ * ] according
to the payment terms of the BAP Agreement (as defined below); or,
in lieu of payment, if the parties agree, Oracle may offset such
amount(s) against sublicense fees owed by Oracle to ISI Member
under this Agreement. For purposes of this Section, "net customer
license fees" means license fees actually received by ISI Member
from the customers described in this Section 4.4.a for licenses of
the ISI Member Programs, net of (i) any return adjustments (which
shall not include returns made by customers more than one year
following the date of the original license to the applicable
customer) and (ii) sales, use or other taxes paid.
b. Disengagement. If, after the parties have pursued a Customer with
Oracle in the managing/lead position during the potential
transaction, the Customer decides to license the ISI Member
Program(s) from the ISI Member, prior to ISI Member licensing the
applicable ISI Member
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Program(s) to such Customer, ISI Member agrees to make good faith
efforts to first set up a meeting among Oracle, ISI Member and the
Customer to discuss with the Customer the value of Oracle's
participation. If the Customer does not want to attend a meeting
with Oracle and ISI Member, or, if after the meeting the Customer
still wants to license the ISI Member Program(s) from the ISI
Member, then ISI Member shall have the right to license the
applicable ISI Member Program(s) to such Customer provided that ISI
Member pay to Oracle a sublicense fee based upon the Joint Sales
model [ * ] according to the payment terms of the BAP Agreement (as
defined below); or, in lieu of payment, if the parties agree, Oracle
may offset such amount(s) against sublicense fees owned by Oracle to
ISI Member under this Agreement. Notwithstanding any other provision
in this Section, in the event that Oracle is not providing Technical
Support services for the ISI Member Program(s) to such Customer,
then ISI Member shall pay to Oracle a sublicense fee based upon the
Joint Sales model [ * ] according to the payment terms of the BAP
Agreement or, in lieu of payment, if the parties agree, Oracle may
offset such amount(s) against sublicense fees owed by Oracle to ISI
Member under this Agreement. In the event the parties have pursued a
Customer as a Joint Sale and the sales cycle has not yet moved to
Step 4 or beyond as further described on Exhibit P hereto and the
parties have completed the disengagement process described above,
ISI Member shall not be obligated to pay to Oracle any sublicense
fee if the Customer licenses the ISI Member Program(s) from the ISI
Member.
c. Joint Planning and Communication. In addition to other meetings
between the parties as set forth in this Agreement and the relevant
Target Market Addendum, Oracle and ISI Member agree to a scheduled
sales planning calendar (i.e., at least bi-weekly) to ensure that
all opportunities are properly addressed and any issues are raised
and dealt with quickly. Oracle will provide detailed deal updates as
a part of the standard forecasting process. The heads of sales in
both parties' organizations will lead this effort. Oracle and ISI
Member intend to compensate their sales organizations in a manner
that will effectuate the intent of the provisions of this Section
4.4. The parties will mutually agree to a list of customers that ISI
Member may pursue without involvement of Oracle.
ARTICLE V -- SERVICES AND TRAINING
5.1. SERVICES SUBCONTRACT AGREEMENT
Any cooperative provision of implementation services by the parties shall
be subject to the Services Subcontract Agreement attached as Exhibit D
(Services Subcontract Agreement) hereto, except as otherwise agreed by the
parties in writing. Such Services Subcontract Agreement is deemed executed
by virtue of execution of this Agreement. The parties may agree to attach
addenda to such Services Subcontract Agreement to address local country
legal issues where services are to be performed outside the United States.
5.2 METHODOLOGY
Oracle shall provide ISI Member with access to its Application
Implementation Method ("AIM"). Oracle grants to ISI Member a worldwide,
nontransferable, nonexclusive, royalty-free license to use AIM for all ISI
Member products both inside and outside the Target Market. Oracle considers
AIM to be highly confidential and to contain proprietary and trade secret
information of Oracle. In addition to ISI Member's obligations under
Section 11.1 (Nondisclosure), ISI Member agrees that AIM software and
documentation will be kept and used only at ISI Member's facilities and at
locations where ISI Member is providing implementation services to its
customers (including Oracle Solution Suite Customers).
5.3 TRAINING
As part of the Target Market Addendum, the parties shall develop a training
plan addressing curriculum and revenue sharing. In addition, ISI Member and
Oracle agree to work together to create integrated demonstrations within
sixty (60) days of the Effective Date for the purposes of demonstrating the
ISI
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Member Programs and the Oracle Programs to potential Customers of the
Oracle Solution Suite in the Target Market.
5.4 CONSULTING
Oracle's profit margin on each consulting engagement entered into for
implementation services for the Oracle Solution Suite when acting as a
prime contractor pursuant to a signed subcontract order between the
parties shall be [ * ]
ARTICLE VI - TECHNICAL SUPPORT
6.1 TECHNICAL SUPPORT FOR ORACLE SOLUTION SUITE
ISI Member shall provide second-line support to Oracle for the ISI Member
Programs at the services levels described in the Service Level Agreement
attached hereto as Exhibit E (Service Level Agreement). Oracle shall (a)
provide first-line support (as further described on Exhibit E) to
Customers for the Oracle Solution Suite (including the ISI Member
Programs) in accordance with Oracle's then-current Technical Support
policies, and route problems concerning the ISI Member Programs or other
ISI Member products which Oracle is unable to resolve quickly to ISI
Member for resolution; and (b) provide ISI Member with access to Oracle's
support practices and systems.
6.2 TECHNICAL SUPPORT FOR ISI MEMBER PROGRAMS
ISI Member shall provide Technical Support services for the ISI Member
Programs to Customers who license the ISI Member Programs directly from
ISI Member, and to Customers who acquire sublicenses for the ISI Member
Programs from Oracle, who request such services. Oracle shall have no
obligation to provide Technical Support services for any ISI Member
products except the ISI Member Programs which are sublicensed to Customers
by Oracle and for which those Customers request Technical Support services
from Oracle.
6.3 BUG FIXES
ISI Member shall provide bug-fixes and patches for the ISI Member Programs
in a manner consistent with mutually agreed support practices and systems.
Oracle shall provide bug-fixes and patches for the Oracle components of
the Oracle Solution Suite in a manner consistent with Oracle's
then-current support practices and systems.
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6.4 INTERNAL DEVELOPER TECHNICAL SUPPORT
During the term of this Agreement, Oracle shall provide Silver Technical
Support services for the Oracle Programs to ISI Member internal
development personnel, and ISI Member shall provide Silver Technical
Support services (or ISI member equivalent support offering) for the ISI
Member Programs to Oracle internal development personnel, in connection
with Oracle Solution Suite development activities. ISI Member shall
designate one (1) support person and one (1) developer as its sole liaison
and Technical Support Contact. Oracle shall designate one (1) support
person and one (1) developer as its sole liaison and Technical Support
Contact. Each party shall notify the other whenever its designated
Technical Support Contact responsibilities are transferred to another
developer. For any Technical Support Updates to the Oracle Programs or ISI
Member Programs, each party shall ship to the other one Technical Support
Update copies for each operating system. Oracle's current Technical
Support Policies are attached hereto as Exhibit N (Oracle Technical
Support Policies).
6.5 EXTENDED SUPPORT
Each party shall provide Technical Support services for the release of its
respective programs included in the current release of the Oracle Solution
Suite as well as for the release just prior to the current release.
Technical Support for the prior release shall be provided for a minimum of
three years from the date that the current release is made available. For
example, the parties shall support product release number 2.2 at a minimum
for a period of three years following the release of product release
number 2.3. Nothing in this Section shall limit Oracle's right to provide
Technical Support services for the Oracle Solution Suite under the terms
of this Agreement.
ARTICLE VII - LICENSES GRANTED
7.1 LICENSE TO ISI MEMBER
Oracle shall license Oracle Programs to ISI Member for the purposes of
development and marketing support as specified in the Business Alliance
Program Agreement between the parties dated October 28, 1996 (the "BAP
Agreement"). Oracle grants to ISI Member a nontransferable license to
reproduce, install and use the Oracle Programs and the ISI Co-Member
Programs, including Updates for both of the foregoing, for the purpose of
enabling ISI Co-Member to perform its technical support responsibilities
under this Agreement.
7.2 DEVELOPMENT, TECHNICAL SUPPORT, TRAINING, DEMONSTRATION, CONSULTING
LICENSE TO ORACLE
ISI Member shall deliver to Oracle promptly after the Effective Date a
complete copy of the Object Materials, Source Materials, Developer
Materials and Documentation for ISI Member Programs to be used by Oracle
solely in accordance with the terms and conditions of this Agreement. ISI
Member shall use commercially reasonable efforts to deliver to Oracle a
complete copy of any Update of an ISI Member Program, including a complete
set of the Object Materials, Source Materials, Developer Materials and
Documentation for such Update, thirty (30) days before any beta release or
ninety (90) days before any production release to a third party of such
Update (whichever is earlier). Subject to Oracle's compliance with the
terms and conditions contained in Sections 7.2, 7.3 and Article VIII, ISI
Member grants to Oracle:
a. a worldwide, royalty-free, non-exclusive right and license to
execute, copy, reproduce, display, perform, modify, develop,
translate, create derivative works based on or otherwise use,
change and/or maintain the Source Materials and Developer Materials
solely for the purposes of (i) integrating and testing the ISI
Member Programs with the Oracle Programs to create the Oracle
Solution Suite, (ii) subject to the provisions of Section 7.9
below, creating customization for Customers under consulting
agreements, and (iii) providing Technical Support services in
accordance with the provisions of this Agreement; and
b. a worldwide, royalty-free, non-exclusive, nontransferable right and
license to execute, copy, reproduce, display and perform the Object
Materials solely for the purpose of enabling Oracle to perform
demonstrations (and allowing its Distributors to demonstrate) the
ISI Member Programs
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in conjunction with sales presentations for the Oracle Solution
Suite, to provide training in accordance with the Training Plan
contained in the Target Market Addendum and to provide education
services in accordance with Section 8.3.
7.3 SUBLICENSING LICENSE
7.3.1 Nonexclusive Right to Sublicense ISI Member Programs Throughout
Territory. Subject to Oracle's compliance with the terms and
conditions contained in Sections 7.2, 7.3 and Article VIII, ISI
Member grants to Oracle a worldwide, nonexclusive, nontransferable
license to market, reproduce and grant sublicenses for the ISI
Member Programs (Including Documentation therefor) solely (a) as
part of the Oracle Solution Suite or (b) as a Point Solution solely
in those instances where Oracle reasonably believes that the
Customer will purchase a license for more than one module of the
Oracle Solution Suite. If ISI Member believes at any time that
Oracle has sublicensed the ISI Member Programs as a Point Solution
to an entity that does not intend to license the Oracle Solution
Suite, the parties shall work diligently and in good faith to
resolve the dispute in accordance with Section 2.5 (Dispute
Resolution) (in no event shall ISI Member raise this Issue with a
Customer).
7.3.2 Nonexclusive Right to Sublicense Others ISI Member Products
Throughout Territory. If ISI Member approves in advance via written
document (e.g., letter, email, etc.), ISI Member grants to Oracle a
nonexclusive, nontransferable license to market, reproduce and
grant sublicenses for ISI Member products (including documentation
therefor) other than the ISI Member Programs throughout the
Territory for use in all operating environments for which such ISI
Member products are available, provided such sublicensing right
shall apply only in cases where a Customer or potential Customer
has specifically requested the right to acquire a license for such
ISI Member products directly from Oracle. Any such sublicenses
shall be subject to the terms of this Article and of Article VIII
(Fees) to the extent relevant for the purpose of Oracle's
sublicensing and provision of technical support services to the
applicable Non-Target Customer, unless otherwise agreed to by the
parties in writing.
7.3.3 Trial Sublicenses. ISI Member grants to Oracle non-exclusive,
nontransferable license to grant, at no charge, trial sublicenses
so that Oracle's prospective Customers may have the opportunity to
evaluate the ISI Member Programs, consistent with Oracle's policies
for granting trial licenses for its own applications programs.
Oracle's standard policy is to offer 30-day trial licenses under
Oracle's standard Trial License Agreement. Under such standard
agreement, at the end of the trial term the prospective Customer
must either purchase a license for the software or return the
software. If ISI Member is requested to provide consulting
services and/or technical support services for a trial license for
a Customer, ISI Member shall be compensated for such services
pursuant to the terms of this Agreement.
7.3.4 Shipment Right. Where Oracle or a Distributor grants a license to a
Customer for an ISI Member Program, Oracle or the Distributor shall
have the sole and exclusive right to ship copies of the ISI Member
Programs to such Customer pursuant to such license. ISI Member
retains all other rights to ship copies of ISI Member Programs.
Oracle shall be responsible for manufacturing all copies of ISI
Member Programs to be shipped by Oracle pursuant to this Section.
On an exception basis, ISI Member may ship copies of ISI Member
Programs to Customers pursuant to ISI Member Program licenses
granted by Oracle, subject to Oracle's prior written consent in
each instance; such consent shall not be unreasonably withheld
where Oracle is unable to ship copies of ISI Member Programs
quickly enough to meet a Customer's requirements.
7.3.5 Relicensing Right. If Oracle does not receive license fees from a
Customer (the "Defaulting Customer") due to the Defaulting
Customer's refund, Oracle shall have the right to sublicense the
same quantity of licenses to other Customers (the "Substitute
Customers") provided that (a) the total license fees payable by
such Substitute Customers is equal to the amount of the original
license fees due by the Defaulting Customer; (b) the Defaulting
Customer's license shall have been terminated by Oracle; and (c)
ISI Member is provided with information concerning such
relicensing. If Oracle sublicenses such Defaulting Customer
licenses to Substitute Customers for total license fees (the
"Actual Fees") greater than those fees would have been for the
Defaulting
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Customer (the "Original Fees"), then ISI Member shall receive the
applicable Sublicense Fee for the difference between the Actual
Fees and the Original Fees.
7.4 TERMS FOR DIRECT LICENSES TO CUSTOMERS
Each license by Oracle or its Distributions to a Customer for the Oracle
Solutions Suite or a Point Solution shall be governed by a written license
agreement conforming in all material respects with Oracle's then standard
Software License and Services Agreement and which agreement shall protect
ISI Member's proprietary rights to the same extent as the terms and
conditions of this Agreement.
7.5 DISTRIBUTORS
ISI Member grants Oracle the right to authorize Distributors to market,
sublicense and provide services in connection with the ISI Member Programs
in the Territory under the terms of this Agreement, including the right
to authorize their Distributors to exercise the same rights. Oracle agrees
to notify ISI Member when it authorizes Distributors to sublicense any of
the ISI Member Programs in the Territory under the terms of this Agreement
(including the name and territory of such Distributors) and ISI Member
shall be permitted to notify the owners of Other Party Materials of the
identities of the Distributors which Oracle authorizes to sublicense any
of the ISI Member Programs. In no case shall any Distributor have the
right to obtain Developer Materials for, or develop on, the ISI Member
Programs without ISI Member's prior written consent.
7.6 TRADEMARKS
Oracle and its Distributors are entitled to market, reproduce, distribute
and sublicense the ISI Member Programs under Oracle trademarks; provided,
however, that Oracle will, whenever the ISI Member Programs are
referenced, use those ISI Member trademarks and trade names relating to
the applicable ISI Member Programs in any advertising, marketing or
technical or other materials related to the ISI Member Programs. Such use
shall be in accordance with ISI Member's trademark guidelines, a current
copy of which is attached hereto as Exhibit M, and ISI Member shall
provide revised copies of such to Oracle when updated by ISI Member. ISI
Member grants to Oracle and its Distributors a nonexclusive, fully paid-up
license to use in connection with marketing, distributing, sublicensing
and providing training for the ISI Member Programs the product names and
trademarks used by ISI Member to identify the ISI Member Programs, and to
use such product names and trademarks with Oracle trademarks in a manner
that identifies such products as parts of the Oracle product set.
7.7 ARCHIVAL COPIES
Each party shall have the right to copy for archival or backup purposes
the software licensed to it under this Article VII (Licenses Granted);
no other copies shall be made without the licensing party's prior written
consent, except as expressly authorized herein. All titles, trademarks,
and copyright and restricted rights notices shall be reproduced in such
copies. All archival and backup copies of the software are subject to the
terms of this Agreement.
7.8 NO REVERSE ENGINEERING
Nether party shall cause or permit the reverse engineering, disassembly or
decompilation of any Object Materials licensed or sublicensed to it by the
other party under this Agreement.
7.9 OWNERSHIP
a. ISI Member shall retain all right, title and interest to the
Intellectual Property Rights in the ISI Member Programs. Oracle shall
retain all right, title and interest to the Intellectual Property
Rights in the Oracle Programs. Subject to the provisions of this
Section 7.9 and unless otherwise specified in this Agreement, the
parties intend that ISI Member shall own all right, title and
interest in and to any and all modifications, enhancement,
corrections or any other derivative works based on the ISI Member
Programs which are created by Oracle ("Oracle Enhancements").
Oracle hereby assigns all right, title and interest in and to any
Oracle Enhancements and the Intellectual Property Rights therein to
ISI Member.
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b. Notwithstanding any provision to the contrary in this Agreement,
the parties agree to the following: ISI Member agrees that, subject
to the terms and conditions of this Section, Oracle shall have the
right to assign to Customers all of ISI Member's right, title and
interest in and to all copyrights in the Contract Property (as
defined below) developed by ISI Member and/or Oracle under the
applicable subcontract order; (a) provided that, Customer shall be
expressly prohibited from distributing the Contract Property (in
its original form or as modified by Customer) and expressly limited
to using the Contract Property for internal purposes only; (b),
provided further that, ISI Member retain the irrevocable, worldwide
and freely transferable right to execute, copy, reproduce, display,
perform, modify, develop, translate, create derivative works and
distribute the Contract Property and works that are substantially
similar to the Contract Property, including similar in function,
structure, sequence, or organization of the Contract Property; and,
(c) provided further that, Oracle retain the worldwide,
non-transferable right to execute, copy, reproduce, display,
perform, modify, develop, translate, create derivative works and
distribute the Contract Property and works that are substantially
similar to the Contract Property, including similar in function,
structure, sequence, or organization of the Contract Property,
solely in context of providing customization services to individual
Customers. Oracle shall not be entitled to make the Contract
Property or substantially similar works generally commercially
available in the form of a product or otherwise. "Contract
Property" shall mean those deliverables developed solely for a
Customer by Oracle or ISI Member under a subcontract or other
order, except for any ISI Member Work(s) that may be developed or
that may be embodied in any deliverable under a subcontract or
other order. "ISI Member Work(s)" shall mean: (a) the ISI Member
Programs or any other software progam(s) and documentation owned or
distributed by ISI Member; (b) any ISI Member CASE-generated
subroutines that are used in developing or that are embodied in the
Contract Property (excluding any Customer confidential
information); and (c) any tools or utilities developed by or on
behalf of ISI Member. ISI Member shall retain all right, title and
interest, including all copyrights, in any ISI Member Work(s). ISI
Member agrees that Oracle shall have the right to grant to the
applicable Customer a non-exclusive, nontransferable, royalty free,
perpetual internal use license to use the specified ISI Member
Work(s) as incorporated into the Contract Property, and grants to
Oracle a worldwide, non-exclusive, non-transferable, royalty free,
perpetual license to use only internally and in the context of
providing customization and consulting services to Customers such
ISI Member Work(s) as incorporated into the Contract Property;
however nothing in this paragraph shall be construed to expand the
Customer's right to use Programs licensed to it under this
Agreement or another separate license agreement.
c. Oracle agrees that ISI Member shall have the right to access the
repository of Oracle Consulting Services ("OCS") for the purposes
of examining undocumented code related solely to the ISI Member
Programs and deposited therein by OCS consultants. In addition,
upon the request of ISI Member, Oracle shall make available to ISI
Member access to undocumented code created by OCS consultants for
specific Customers (which Customers shall be specified by ISI
Member to Oracle) even if such undocumented code has not been
placed in such repository.
7.10 THIRD PARTY MATERIALS
ISI Member shall have sole responsibility for payment of all royalties and
other charges with respect to third party materials (including without
limitation, Other Party Materials) included in the ISI Member Programs, if
any. Oracle shall have no obligation to pay or account for such royalties
or other charges. In the event Oracle creates a retail specific data
warehouse product as a substitute to the Retek Data Warehouse module
(utilizing the technology provided by MicroStrategy, Inc.) and offers such
substitute product to Customers in connection with any component or module
of the Oracle Solution Suite, Oracle shall promptly notify ISI Member.
Oracle acknowledges that in such case ISI Member may terminate by written
notice Oracle's right to grant sublicenses of the portion of the Retek
Data Warehouse module provided by MicroStrategy, Inc.
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7.11 LICENSE OF INTELLECTUAL PROPERTY RIGHTS
Each party grants to the other a nonexclusive, nontransferable and paid-up
license to all Intellectual Property Rights necessary to use the software,
documentation and other materials licensed by the granting party to the
other under this Agreement for the limited purposes stated herein; such
Intellectual Property Rights are included in the licenses granted under
this Agreement.
7.12 NO SERVICE BUREAU USE
Notwithstanding any provision to the contrary in this Agreement, Oracle
shall not have the right to use or sublicense the ISI Member Programs for
use in a service bureau without ISI Member's prior written consent. If
such consent is granted, the parties must also agree on the licensing
terms and pricing terms for such use.
ARTICLE VIII - FEES
8.1 SUBLICENSE FEES
8.1.1 Definition of Net Customer License Fees. "Net Customer License
Fees" shall mean license fees actually received by Oracle from its
Customers and from its Distributors for sublicenses of ISI Member
Programs, net of (i) any uplift charged by Oracle to cover its
warranty costs associated with the ISI Member Programs, (ii) any
return adjustments (which shall not include returns made by
Customers more than one year following the date of the original
sublicense to the applicable Customer) and (iii) sales, use or
other taxes paid. In the event that Oracle or its Distributor
grants sublicenses for ISI Member Programs with Oracle product
licenses for a single price, Net Customer License Fees shall equal
the total license fees actually received by Oracle for such
transaction (net of (i) any uplifts charged by Oracle to cover its
warranty costs associated with the ISI Member Programs, (ii) any
return adjustments and (iii) sales, use or other taxes paid)
multiplied by a fraction A/(A+B), where A equals the list price of
the ISI Member Programs sublicensed separately and B equals the
list price of the Oracle products. If license fees for the ISI
Member Programs are not distinguishable from the license fees for
Oracle products that are part of the deal, the Net Customer License
Fees for the ISI Member Programs shall be based on the fee
allocation agreed to by Oracle and the Customer for the products
specified in the deal or on the fee allocation made by Oracle's
internal procedures, provided such allocation reasonably reflects
the relative value of the ISI Member Programs and the Oracle
products. Oracle and ISI Member agree that (a) for the period
starting with the Effective Date and ending on the date one year
from the Effective Date, [*] of the license fees actually received
by Oracle from its Customers and from its Distributors for
sublicenses of ISI Member Programs unless otherwise agreed by the
parties in writing (e.g., letter, email, etc.) for a particular
transaction, and (b) for the period starting with the date one year
from date of the Effective Date and throughout the remainder of the
Term, [*] of the license fees actually received by Oracle from its
Customers and from its Distributors for sublicenses of ISI Member
Programs unless otherwise agreed by the parties in writing (e.g.,
letter, email, etc.) for a particular transaction.
8.1.2 Amount of Net Customer License Fees Payable
a. Joint Sales. For each sublicense by Oracle or a Distributor of
an ISI Member Program in the Target Market until the Supported
Model takes effect (if at all), which is deemed to be a Joint
Sale pursuant to Section 4.1 (Sales Model), (i) for the period
starting with the Effective Date and ending six months after
the Effective Date of this Agreement (the "Six-Month Period").
Oracle shall pay to ISI Member a Sublicense Fee equal to [*] of
the Net Customer License Fees Oracle receives for such
sublicense, (ii) for the period after the Six-Month Period,
Oracle shall pay to ISI Member a Sublicense Fee equal to [*] of
the Net Customer License Fees Oracle receives for such
sublicense. In no case, however, shall such Sublicense Fee be
less than the amount specified on Exhibit J (Minimum Sublicense
Fees), except as the parties may agree in writing (e.g.,
letter, email, etc. between Bob Tuttle or Gordon
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Masson for ISI Member and Jim Mattecheck or Mary-Lou Smulder
for Oracle) on a case-by-case basis.
b. Supported Sales. For each sublicense by Oracle or a Distributor
of an ISI Member Program after conversion to the Supported
Sales model pursuant to Section 4.1 (Sales Model), Oracle shall
pay to ISI Member a Sublicense Fee equal [*] of the Net
Customer License Fees Oracle receives for such sublicense. In
no case, however, shall such Sublicense Fee be less than the
amount specified on Exhibit J (Minimum Sublicense Fees), except
as the parties may agree in writing (e.g., letter, email, etc.
between Bob Tuttle or Gordon Masson for ISI Member and Jim
Mattecheck or Mary-Lou Smulder for Oracle) on a case-by-case
basis.
c. Pre-ISI Sales. Notwithstanding any other provision of this
Agreement (including without limitation Sections 8.1.2.a and b
above) for each sublicense by Oracle or a Distributor of an ISI
Member Program to the Pre-ISI Customers (defined below), Oracle
shall pay to ISI Member a Sublicense Fee equal to [*] of the
Net Customer License Fees and Net Customer Support Fees Oracle
receives for such sublicense. For purposes of this Section, the
"Pre-ISI Customers" are: (i) Family Dollar Stores, Inc., (ii)
British Petroleum, and (iii) NTUC. For purposes of this
Section, the term "Net Customer License Fees" shall not include
any uplift charge by Oracle.
d. Grandfathered Sales. During the period beginning with the
Effective Date and ending six (6) months from the Effective
Date (the "Grandfathered Period"), Oracle and its Distributors
shall not have the right to sublicense an ISI Member Program or
Program(s) to the Grandfathered Customers set forth on Exhibit
K (Grandfathered Customers). After the expiration of the
Grandfathered Period, Oracle shall have the right to sublicense
the ISI Member Programs to the Grandfathered Customers subject
to the terms of this Agreement. In the event that during the
Grandfathered Period a Grandfathered Customer or Customer(s)
wants to license the ISI Member Program(s) from Oracle instead
of from ISI Member, then Oracle shall have the right to
sublicense the applicable ISI Member Program(s) to such
Grandfathered Customer(s) pursuant to an Oracle license
agreement provided that Oracle pay to ISI Member a Sublicense
Fee equal [*] of the Net Customer License Fees Oracle receives
for such sublicense(s). Unless the parties agree otherwise on a
case by case basis in writing (e.g., letter, email, etc.), the
Sublicense Fee payable to ISI Member under this Section 8.1.2.d
shall be as specified above in this Section.
e. Change in Sublicense Fee. If ISI Member fails at any time after
the Effective Date of this Agreement to respond and provide to
Oracle any pre-sales assistance in response to a "qualified
lead request" (as such term is defined below) for such
assistance (including but not limited to the joint entry
presentation specified in Section 4.4) within one week of ISI
Member's receipt of the request, then notwithstanding any
provision of this Agreement to the contrary (including but not
limited to this Section 8.1), with respect to the transaction
for which ISI Member failed to provide the requested
assistance, Oracle shall pay to ISI Member a Sublicense Fee
equal [*] of the Net Customer License Fees Oracle receives for
the sublicense pursuant to that transaction. For the purpose of
this Section, "qualified lead request" shall mean the process
in the attached Exhibit P (Qualifying a Lead).
8.2 TECHNICAL SUPPORT FEES
8.2.1. Definition of Net Customer Support Fees. "Net Customer Support
Fees" shall mean fees actually received by Oracle from its
Customers and from its Distributors for Technical Support services
for ISI Member Programs, net of any cancellation adjustments and of
sales, use or other taxes paid. In the event that Oracle or its
Distributor sells Technical Support services for ISI Member
Programs together with Technical Support services for Oracle
products for a single price, Net Customer Support Fees shall equal
the total fees actually received by Oracle for Technical Support
for ISI Member Programs and Oracle products included in the
transaction (net of any cancellation adjustments and of sales, use
or other taxes paid) multiplied by a fraction A/(A+B),
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where A equals the list fee for the applicable level of Technical
Support for ISI Member Programs and B equals the list fee for the
applicable level of Technical Support services for the Oracle
products. If Technical Support fees for ISI Member Programs are not
distinguishable from Technical Support fees for the Oracle products
that are part of the deal, the Net Customer Support Fees for ISI
Member Programs shall be based on the Technical Support fee alloca-
tion agreed to by Oracle and the Customer for the products included
in the deal or on the Technical Support fee allocation made by
Oracle's internal procedures, provided such allocation reasonably
reflects the relative value of the Technical Support for ISI Member
Programs and the Technical Support for the Oracle products.
8.2.2 Amount of Net Customer Support Fees Payable. Oracle shall pay to
ISI Member an annual Technical Support Fee based on the Net
Customer Support Fees received by Oracle from such Customer for
such ISI Member Program(s). The amount of such Technical Support
fee shall be as follows:
a. Bronze. If the Customer purchases Bronze Technical Support
Services from Oracle for the ISI Member Program(s), then the
annual Technical Support Fee shall be [*] of the Net Customer
Support Fees received by Oracle in connection with such ISI
Member Program(s), but in no event less than [*] of the Minimum
Sublicense Fees specified on Exhibit J.
b. Silver. If the Customer purchases Silver Technical Support
Services from Oracle for the ISI Member Program(s), then the
annual Technical Support Fee shall be [*] of the Net Customer
Support Fees received by Oracle in connection with such ISI
Member Program(s) but in no event less than [*] of the Minimum
Sublicense Fees specified on Exhibit J.
c. Gold. If the Customer purchases Gold Technical Support Services
from Oracle for the ISI Member Program(s), then the annual
Technical Support Fee shall be [*] of the Net Customer Support
Fees received by Oracle in connection with such ISI Member
Program(s) but in no event less than [*] of the Minimum
Sublicense Fees specified on Exhibit J.
d. Other Packages. Where neither Bronze, Silver nor Gold Technical
Support services are available, and the Customer purchases a
different Technical Support package from Oracle for the ISI
Member Program(s), then the annual Technical Support Fee shall
be [*] of the Net Customer Support Fees received by Oracle in
connection with such ISI Member Program(s). Oracle's current
Technical Support Policies are attached hereto as Exhibit N
(Oracle Technical Support Policies).
e. Initial 180-Day Period. Notwithstanding anything to the
contrary in this Agreement, during the period beginning with
the Effective Date and ending six months from the Effective
Date (the "Initial Support Period"): if the Customer purchases
Technical Support Services from Oracle for the ISI Member
Program(s), then the annual Technical Support Fee shall be (i)
the applicable percentage specified above in this Section 8.2.2
(i.e., Sections 8.2.2.a and b) of the Net Customer Support Fees
received by Oracle in connection with such ISI Member
Program(s) plus [*] of the remaining percentage (for example,
with respect to Silver Technical Support Services, the annual
Technical Support Fee would be [*] of the Net Customer Support
Fees received by Oracle in connection with such ISI Member
Program(s) plus [*]. During the Initial Support Period the
parties may mutually agree upon a fee split for Technical
Support Services provided under Section 8.2.2 (c) and (d). At
the end of the Initial Support Period Oracle's and ISI Member's
Technical Support representatives (Randy Baker and Victor
Holysh, respectively, or their designates) shall meet to
determine whether or not the parties shall move to the payment
amounts set forth above in this Section 8.2.2 (i.e., Sections
8.2.2.a, b, c and d); provided, however, that if such
representatives (or their delegates) do not reach agreement
after good faith discussions, then starting on the day after
the end of the Initial Support Period, the amount of Technical
Support fee payable shall be as set forth above in this Section
(i.e., Sections 8.2.2.a, b, c and d).
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8.2.3 Ramping. Notwithstanding Section 8.2.2 (Amount of Net Customer
Support Fees Payable), where an agreement between Oracle and a
Customer permits the Customer to pay Technical Support Fees to
Oracle according to a ramped schedule, any Technical Support Fee
payable by Oracle to ISI Member for an applicable ISI Member
Program license shall be ramped accordingly. For purposes of this
Section, the term "ramped," as used to describe a payment schedule,
means that the amounts of such scheduled payments increased over
time.
8.2.4 Payment Terms. Each monthly payment under Section 8.5 (Payment,
Reporting, Relicensing) shall contain either all, one-half,
one-quarter, one-twelfth, or none of the annual Technical Support
Fee payable to ISI Member for each applicable the ISI Member
Program license, depending on whether the applicable Customer is
obligated to pay Oracle annually, semiannually, quarterly or
monthly for Oracle Technical Support services.
8.2.5 Bundled Sales. In the event that Oracle or its Distributor grants
sublicenses for ISI Member Programs with Oracle product licenses
and Technical Support Services for a single price, Oracle shall pay
ISI Member Technical Support Fees pursuant to this Section 8.2
unless otherwise agreed to in writing by the parties in advance.
8.3 EDUCATION/TRAINING FEES
a. ISI Member Training. For each ISI Member training class which
Oracle resells to a Customer, Oracle shall pay to ISI Member
eighty-five percent (85%) of the applicable fees for such class
as provided on Exhibit D hereto. Any ISI Member services hereunder
shall be subject to a subcontract order described in and the form
of which is attached to the Services Subcontract Agreement between
the parties (Exhibit D hereto).
8.4 SUBLICENSE FEE LIMITATIONS
No Sublicense Fee or other charge shall be payable by Oracle for any use
of the ISI Member Programs or other ISI Member products by Oracle for
product development or provision of consulting services, or for any use of
the ISI Member Programs or other ISI Member products by Oracle or its
Distributors for training; for demonstration licenses, trial licenses, or
marketing activities; or as back-up copies.
8.5 PAYMENT; REPORTING; RELICENSING
All fees payable described in this Article VIII shall be due and payable
within thirty (30) days after the last day of the month in which the
applicable Net Fees were received by Oracle. Within thirty (30) days of
the last day of each month, Oracle shall send ISI Member a report
detailing, for that month, the Sublicense Fees and Technical Support Fees
due to ISI Member under this Agreement as a result of Oracle's and its
Distributors' sublicensing activities under this Agreement.
8.6 RECORDS; AUDIT
Oracle shall keep accurate books of account and records pertaining to its
sublicense activities and revenues and the sublicense revenues from its
Distributors. No more than once during any twelve (12) month period, ISI
Member may, at its sole expense, employ an independent Certified Public
Accountant who is not compensated based on the results of the audit, and
who is acceptable to Oracle, to inspect such books of account and records
upon reasonable notice to Oracle, and at a reasonable time during normal
business hours for the purpose of verifying the Sublicense Fees and
Technical Support Fees payable to ISI Member pursuant to this Agreement.
Unless necessary to establish in a court of law the auditing party's
right to payment of Sublicense Fees or Technical Support Fees hereunder
(in which case the Certified Public Accountant shall request a protective
order), such Certified Public Accountant shall hold all information
obtained in strict confidence; shall not disclose such information to any
other person or entity (except ISI Member) without Oracle's prior written
consent; and shall not disclose to ISI Member any information regarding
Oracle's business other than any noncompliance by Oracle with the fee
payment provisions hereof.
If an audit reveals that Oracle has underpaid fees to ISI Member, Oracle
shall pay such underpaid fees to ISI Member within forty-five (45) days
after the end of the then-current month plus interest on such underpaid
fees at the then [*] for the period of time starting
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when such underpaid fees were owed to the time when such underpaid fees
are paid to ISI Member, if the underpaid fees exceed the greater of (a)
[*] of the Sublicense Fees and Technical Support Fees paid or (b) [*] then
Oracle shall also pay ISI Member's reasonable costs of conducting the
audit up to maximum of [*] notwithstanding anything to the contrary in
this Section.
8.7 CUSTOMER LICENSE FEE DISCOUNTS
Except with ISI Member's prior written consent, Oracle shall not agree
with a Customer in any transaction to a license fee discount that is
greater for ISI Member Programs than for Oracle Programs included in the
Oracle Solution Suite as part of the same transaction, where the discounts
are calculated as a percentage of Oracle's then-current list license fees
for the Oracle Solution Suite.
8.8 FREEDOM
This Article VIII (Fees) shall govern only the fees payable by Oracle to
ISI Member. Oracle and ISI Member shall each be free to determine
unilaterally the pricing of all products (including without limitation the
products described in this Agreement) and services that it provides
directly to its customers and distributors.
ARTICLE IX - TERM AND TERMINATION
9.1 INITIAL TERM
This Agreement shall become effective on the Effective Date and shall
remain in effect for three (3) years thereafter, unless sooner terminated
as specified below. This Agreement may be renewed by written agreement of
the parties for successive three (3) year terms. At the end of the second
year of each 3-year term, the parties shall jointly issue a memorandum of
intent indicating whether or not they intend to renew this Agreement for
an additional 3-year term. If a memorandum of intent is not jointly issued
by the parties at such time, the term of this Agreement shall end at the
end of the third year of the applicable term.
9.2 TERMINATION
9.2.1 Termination for Cause. If either party materially breaches its
obligations hereunder, then in addition to Oracle's termination
rights under the Target Market Addendum (including but not limited
to Section 6.d.iv.A (Failure to Deliver Critical Deliverables -
Termination)) and any other termination rights of the parties set
forth in this Agreement, the non-breaching party may terminate this
Agreement with written notice unless, within sixty (60) days from
the breaching party's receipt of written notice of such breach,
such breach has been cured, or in the case of a breach that cannot
with due diligence be cured within sixty (60) days, the breaching
party has commenced with curing the breach during such sixty (60)
day period and thereafter diligently prosecutes the same to
completion.
9.2.2 Causes. For purposes of this Section 9.2 only, "cause" shall
include but not be limited to:
a. Material breach of any material provision of this Agreement or
of any Target Market Addendum, including any exhibit thereto.
b. The filing of any voluntary or involuntary petition in
bankruptcy, or any similar law, by or against a party, which is
not dismissed within forty-five (45) days of filing.
c. An infringement by either party of a third-party intellectual
property right which impedes either party's ability to meet its
obligations under this Agreement with respect to the Oracle
Solution Suite or the ISI Member Programs, as specified in
Section 10.2 (Infringement Indemnity).
The parties shall endeavour to resolve any dispute over whether a
material breach or cause has occurred in accordance with Section
2.5 (Dispute Resolution).
9.2.3 Force Majeure. Neither party shall be liable to the other for
failure or delay in the performance of a required obligation if
such failure or delay is caused by a riot, fire, flood, explosion,
earthquake or other natural disaster, government regulation, or
other similar cause beyond such party's control, provided that such
party gives prompt written notice of such condition and resumes its
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performance as soon as possible, and provided further that the
other party may terminate this Agreement if such condition
continues for a period of one hundred eighty (180) days.
9.2.4 Other Right to Terminate. In addition to the other rights to
terminate set forth in this Agreement, either party shall have the
right to terminate this Agreement at the following times and under
the following conditions:
a. with respects to ISI Member:
i. if, at the end of the fourth calendar quarter following the
Effective Date, either (A) ISI Member's net license revenue
growth (as defined and calculated in accordance with the terms
and conditions set forth in Exhibit L (ISI Member Net Growth
and Profit Margin)) for such period has [*] as compared to ISI
Member's performance in the four calendar quarters immediately
prior to such period or (B) ISI Member's profit margin (as
defined and calculated in accordance with the terms and
conditions set forth in Exhibit L (ISI Member Net Growth and
Profit Margin)) for the four quarter period ending with the
fourth calendar quarter following the Effective Date [*];
ii. if, at the end of any calendar quarter after the fourth
calendar quarter following the Effective Date and prior to the
ninth calendar quarter following the Effective Date (the
"Second Termination Period"), either (A) ISI Member's net
license revenue growth for the applicable quarterly period has
not increased [*] as compared to ISI Member's performance in
the same calendar quarter of the previous year or (B) ISI
Member's profit margin for the applicable quarterly period is
less than [*]; provided, however, that with respect to the
termination right of ISI Member under this Section 9.2.4.a.ii.,
ISI Member shall only have the right to raise the issue of
termination based upon this Section with respect to two
quarters during the Second Termination Period;
b. with respect to Oracle:
i. if, at the end of one year period following the Effective Date
(A) the results of Oracle's 1999 fiscal year (ending May 1999,
"FY99") demonstrate that Oracle's FY99 reported net license
revenue received from Oracle's sublicenses of the ISI Programs
under this Agreement (net of sublicense fees paid to ISI Member
and other uplift charges specified in this Agreement) is less
than [*] license revenue received by Oracle from Customers); or
(B) the results of Oracle's FY99 demonstrate that Oracle's FY99
reported net license revenue received from Oracle's licenses of
Oracle Application program(s) to Customers who have purchased
prior to the applicable transaction or will purchase in the
applicable transaction the Oracle Retail Solution Suite is less
than [*]; or (C) Oracle's profit margin (as defined and
calculated in accordance with the terms and conditions set
forth in Exhibit O (Oracle Profit Margin)) for FY99 is less
than [*];
ii. if, at the end of any calendar quarter during the one year
period starting the date one year from the Effective Date and
ending the date two years from the Effective Date (the "Second
Year"), (A) the results of Oracle's 2000 fiscal year (ending
May 2000, "FY00") demonstrate that Oracle's FY00 reported net
license revenue received from Oracle's sublicenses of the ISI
Programs under this Agreement (net of sublicense fees paid to
ISI Member and other uplift charges specified in this
Agreement) is less than [*] in gross license revenue received
by Oracle from Customers); or (B) if the results of Oracle's
FY00 demonstrate that Oracle's FY00 reported net license
revenue received from Oracle's licenses of Oracle Application
program(s) to Customers who have purchased prior to the
applicable transaction or will purchase in the applicable
transaction the Oracle Retail Solution Suite is less than [*];
or (C) Oracle's profit margin (as defined and calculated in
accordance with the terms and conditions set forth in Exhibit O
(Oracle Profit Margin)) for FY00 is less than [*]; provided,
however, that with respect to the termination right of Oracle
under this Section 9.2.4.b.ii, Oracle shall only
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have the right to raise the issue of termination based upon
this Section with respect to two quarters during the Second
Year.
c. At the end of the Second Termination Period for ISI Member and
at the end of the Second Year for Oracle, the parties shall
decide on the standards for termination by each party under
this Section 9.2.4 for the remainder of the Term; provided,
however, that either party shall only have the right to
exercise its termination right under this Section with respect
to one quarter during the applicable termination period.
d. Upon termination by either party under this Section 9.2.4,
notwithstanding the provisions of Section 9.3.2, (x) Oracle
shall have the right to exercise the rights specified in
Section 9.3.2 for six (6) months after the termination date and
only with respect to a list of specified Customers (the
"Post-Termination List"), which list Oracle shall provide to
ISI Member within 45 days after the termination date; (y) the
parties shall share the sublicense fees for sublicenses of the
ISI Member Program(s) to Customers on the Post-Termination List
according to the revenue splits in effect at the time of the
applicable sublicense regardless of which party executes the
agreement with the applicable Customer during that six (6)
month period; and/or (Z) Oracle shall have the right to assign
any ISI Member Program warranties and/or ISI Member Program
technical support agreements outstanding with Customers to ISI
Member and ISI Member shall, in the event that Oracle takes the
foregoing action, fulfill the terms under Customer agreements
with respect to the ISI Member Programs.
9.2.5 Right to Terminate in Event of Merger or Acquisition. In addition
to the other rights of termination set forth in this Agreement,
Oracle shall have the right to terminate this Agreement in the
event that there is a transfer of ownership of a majority of the
outstanding voting shares and/or substantially all of the assets
of ISI Member to any third party.
9.2.6 Termination for Failure to Complete Target Market Addendum. In the
event the parties are not able, after good faith negotiations, to
agree on the terms and conditions of the Target Market Addendum
within ninety (90) days of the Effective Date, then either party
may terminate this Agreement without liability to the other party
by giving written notice of termination to such party. In such
event, the terms and conditions of Section 9.3 shall not apply.
9.3 RIGHTS UPON TERMINATION
In the event of termination or expiration of this Agreement:
9.3.1 Survival of Granted Sublicenses. All sublicenses of the ISI Member
Programs granted to Customers before termination by Oracle or its
Distributors shall survive and continue perpetually.
9.3.2 Continuing Right to Grant Sublicenses. Unless ISI Member
terminates this Agreement for cause, for a period of six (6) months
following the termination of this Agreement, Oracle shall continue
to have the right to sublicense the ISI Member Programs as part of
the Oracle Solution Suite, and shall continue to have all rights
hereunder reasonably necessary and ancillary to such sublicensing
rights. Such sublicensing by Oracle shall be subject to Oracle's
payment to ISI Member of the fee payable under the sales model
(Joint Sale or Support Sale) in effect at the time of termination.
9.3.3 Retention of ISI Member Object Materials for Customer Support.
Oracle shall retain indefinitely a license to use the ISI Member
Program Object Materials for the sole purpose of providing support
to Customers, subject to the terms of this Agreement as if it had
not been terminated.
9.3.4 ISI Member Provision of Technical Support Services. Until the
later of: (i) the third anniversary of termination, or (ii) the
expiration of all support commitments by Oracle for ISI Member
Programs undertaken prior to termination of this Agreement, ISI
Member shall continue to provide Technical Support services, as
specified in Article VIII (Technical Support), to Oracle customers
who have ordered Technical Support for the ISI Member Programs
directly from ISI Member, and shall continue to provide
second-line Technical Support services, as specified in Article
VIII (Technical Support), for Customers who have ordered Technical
Support for Oracle products directly from Oracle, subject to
Oracle's payment of Technical Support Fees to ISI Member as
provided in Section 8.2 (Technical Support Fees).
9.3.5 Retention of Developer Materials. If any condition described in
Section 9.3.5.a (Failure to Deliver Critical Deliverables), b
(Breach of Technical Support Obligations) or c (Dissolution,
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Receivership, Bankruptcy etc.) occurs and continues beyond the cure
periods (if any) described in such Subsections (or the Target
Market Addendum, as the case may be), Oracle may retain all of the
ISI Member Program Developer Materials then in Oracle's possession
for use solely for the purposes and duration and with respect to
those instances in which ISI Member has not fulfilled its
obligations, required to fulfill ISI Member's outstanding
development and/or technical support obligations, as applicable,
under this Agreement, subject to the terms and conditions of this
Agreement, including but not limited to Section 11.1
(Nondisclosure) and Section 4.9 (Ownership) and Section 9.4 (Effect
of Termination).
a. Failure to Deliver Critical Deliverables. If Oracle terminates
under Section 6.d.iv.A of the Target Market Addendum (Failure
to Deliver Critical Deliverables - Termination), Oracle may
retain and use such Developer Materials for the sole purpose of
completing any Critical Deliverables that have not been
delivered by ISI Member. Oracle shall return to ISI Member or
destroy the Developer Materials upon completion of all such
Critical Deliverables.
b. Breach of Technical Support Obligations. If ISI Member
breaches its obligation to provide Technical Support services
as described in Section 9.3.4 (ISI Member Provision of
Technical Support Services) in a manner consistent with Exhibit
E (Service Level Agreement) and Section 10.1.1.c (Services
Warranty), and such breach is not cured by ISI Member within
thirty (30) days of its receipt of notice of the breach, then
Oracle may retain and use such Developer Materials for the sole
purpose of providing support to Customers during the time
period specified in Section 9.3.4; provided, however, that with
respect to a breach by ISI Member with respect to a Severity
One Tar (as such term is defined in Exhibit E (Service Level
Agreement), Oracle shall have the right to take the actions
described above if such breach is not cured by ISI Member
within twenty-four (24) hours of its receipt of notice of the
breach. Oracle shall return to ISI Member or destroy the
Developer Materials at the end of such time period.
c. Dissolution, Receivership, Bankruptcy etc. Oracle may retain
such Developer Materials if any of the following events occur
and a reasonable person would conclude that such event would be
likely to cause ISI Member to materially breach this Agreement
or any Target Market Addendum; (i) any assignment of
substantially all of ISI Member's assets for the benefit of
creditors or the appointment of a receiver to take possession
of substantially all of ISI Member's assets, (ii) any
dissolution of or substantial attachment or execution of
judgment against ISI Member's assets, or (iii) the filing of
any voluntary or involuntary petition in bankruptcy, or any
similar law, by or against ISI Member which is not dismissed
within forty-five (45) days of filing. In such event, Oracle
may use such Developer Materials for the sole purpose of
completing any Critical Deliverables that have not been
delivered by ISI Member, and for providing support to Customers
during the time period specified in Section 9.3.4 (ISI Member
Provision of Technical Support Services). Oracle shall return
to the ISI Member or destroy the Developer Materials upon
completion of all such Critical Deliverables, or at the end of
the time period specified in Section 9.3.4, whichever is later.
9.4 EFFECT OF TERMINATION
Upon termination or expiration of this Agreement, all rights and
obligations of the parties under this Agreement shall cease, except as
provided in this Article. Termination of this Agreement shall not limit
either party from pursuing other remedies available to it, including
injunctive relief, nor shall such termination relieve either party of its
obligation to pay all fees that have accrued or are otherwise owed by it
to the other party under this Agreement prior to termination. The parties'
rights and obligations under Articles VIII (Fees), IX (Term and
Termination), X (Limited Warranty, Infringement Indemnity and Limitation
of Liability) and XI (General), and Sections 4.8 (No Reverse Engineering),
4.9 (Ownership) and 4.10 (Third Party Materials), as well as those other
Sections reasonably required to allow the parties to exercise their
post-termination rights hereunder, shall survive expiration or termination
of this Agreement.
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ARTICLE X - LIMITED WARRANTY, INFRINGEMENT INDEMNITY, AND LIMITATION OF
LIABILITY
10.1 LIMITED WARRANTIES AND EXCLUSIVE REMEDIES
10.1.1 Limited Warranties. Each party warrants its products and services
to the other as provided below:
a. Program Warranty. ISI Member warrants that each ISI Member
Licensed Program as delivered by ISI Member hereunder, and
Oracle warrants that each Oracle Program as delivered by Oracle
under the BAP Agreement, will perform the functions described
in the then current Documentation, and conform with all
relevant specifications in this Agreement and the addenda,
exhibits and attachments hereto, for the shorter of (i) three
(3) years or (ii) the warranty period Oracle provides to a
Customer under a license agreement.
b. Media Warranty. Each party warrants the tapes, diskettes or
other media to be free of defects in materials and workmanship
under normal use for 90 days from delivery to the other party.
c. Services Warranty. Each party warrants that its technical
support and consulting services will be performed consistent
with generally accepted industry standards. This warranty shall
be valid for 90 days from performance of service.
d. Millennium Warranty.
i. Without limiting any other warranty or obligations
specified in this Agreement, ISI Member warrants to
Oracle, and Customers as a third-party beneficiaries,
without time limitation, that the ISI Member Programs are
Millennium Compliant, as defined below,
ii. If any ISI Member Program is not Millennium Compliant,
Oracle shall have the right to replace, or allow a
Customer to replace, any non-compliant ISI Member Program
with a functionally equivalent Program that is Millennium
Compliant. If Oracle or a Customer elects to undertake the
foregoing option, ISI Member shall reimburse Oracle in
full for (a) the costs of any such substitute program
procured by Oracle, or procured by a Customer for which
Oracle must provide reimbursement, and (b) the costs
Oracle incurs in providing to or procuring for Customer
any and all consulting services required to fully install
and implement any such substitute program.
iii. "Millennium Compliant" means that at all times the ISI
Member Programs will fully comply with the following
definition of millennium compliance when configured and
used according to the then current documented
instructions. The definition of Millennium Compliance is
the ability to: (a) correctly handle date information
before, during and after 1 January 2000, accepting date
input, providing date output and performing calculation on
dates or portions of dates; (b) function according to the
then current Documentation, during and after 1 January
2000 without changes in operation resulting from the
advent of the new century, assuming correct configuration;
(c) where appropriate, respond to two digit date input in
a way that resolves the ambiguity as to century in a
disclosed, defined and predetermined manner; (d) store and
provide output of date information to in ways that are
unambiguous as to century; and (e) manage the leap year
occurring in the year 2000, following the quad-centennial
rule.
e. Authorship. ISI Member represents and warrants that the
certificate of authorship, attached hereto as Exhibit F is
complete and accurate.
f. Exceptions. The provisions of this Article X shall not apply to
any error or deficiency caused by (i) any party's modifications
to the ISI Member Programs (other than modification by ISI
Member or by a third party at ISI Member's request/direction);
(ii) operation of software other than the ISI Member Programs
(for example, operating system or database software) or any
hardware or other equipment; (iii) use of the ISI Member
Programs in conjunction with the user's data in a manner not
specified in the Documentation; or (iv) use of the ISI Member
Programs in a manner not specified in the Documentation.
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SUBJECT TO ORACLE MANAGEMENT APPROVAL
10.1.2 Disclaimer. THE WARRANTIES ABOVE ARE EXCLUSIVE AND IN LIEU OF ALL
OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
10.1.3 Exclusive Remedies. For any breach of the warranties contained in
Section 10.1.1 (Limited Warranties), the warranting party's
exclusive liability, and the other party's exclusive remedy, shall
be:
a. For Programs. ISI Member's correction of ISI Member Licensed
Program errors or deficiencies, or Oracle's correction of
Oracle Program errors or deficiencies, that cause breach of the
warranty, or if the warranting party is unable to make the
applicable program operate as warranted, the warranting party
shall have the right to replace the program with a program that
is functionally equivalent. If the other party cannot correct
or replace the applicable program, the parties' Development
Contacts (as defined in the Target Market Addendum) shall draft
a plan to address the Issues within five (5) days of the
warranting party's notice of non-replacement and the parties
shall thereafter together make commercially reasonable efforts
to implement the plan within a commercially reasonable amount
of time. If the parties cannot implement the plan within a
commercially reasonable amount of time, the non-warranting
party shall be entitled to recover the license or sublicense
fees paid to the warranting party for the program. In addition,
if a Customer notifies Oracle that the Oracle Solution Suite
fails to conform with a warranty provided by Oracle to the
Customer in accordance with Section 7.4 (Terms for Direct
Licenses to Customers), and the Development Contacts (as
defined in the Target Market Addendum) agree that the Oracle
Solution Suite fails to conform with such warranty and that
such failure is caused by an ISI Member Program's failure to
comply with the warranty contained in Section 10.1.1 (Limited
Warranties), the parties shall cooperate in correcting the
deficiencies in such ISI Member Program and Oracle shall be
entitled to recover any direct costs incurred by it assisting
with such correction. Any disagreements between the parties
arising under this paragraph shall be referred to dispute
resolution under Section 2.5 (Dispute Resolution).
b. For Media. The replacement of defective media.
c. For Services. The reperformance of the services, or if the
warranting party is unable to perform the services as
warranted, the parties' Development Contacts (as defined in the
Target Market Addendum) shall draft a plan to address the
issues within five (5) days of the warranting party's notice of
unsatisfactory services and the parties shall thereafter
together make commercially reasonable efforts to implement the
plan within a commercially reasonable amount of time. If the
parties cannot implement the plan within a commercially
reasonable amount of time, the non-warranting party shall be
entitled to recover the fees paid to the warranting party for
the unsatisfactory services. In addition, if a Customer
notifies Oracle that services performed in the course of an
Oracle Solution Suite fail to conform with a services warranty
provided by Oracle to the Customer (similar to the services
warranty stated in Section 10.1.1 (Limited Warranties)), and
Oracle and ISI Member agree that the services provided by
Oracle to the Customer fail to conform with such warranty and
that such failure is caused by the failure of services provided
by ISI Member to conform with the warranty stated in Section
10.1.1), the parties shall cooperate in reperforming the
services and Oracle shall be entitled to recover any direct
costs incurred by it in assisting with such reperformance
(including without limitation costs associated with Oracle's
performance of non-billable or only partially billable services
or reassignment of personnel). Any disagreements between the
parties arising under this paragraph shall be referred to
dispute resolution under Section 2.5 (Dispute Resolution).
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10.2 INFRINGEMENT INDEMNITY
a. Each party ("Provider") will defend and indemnify the other party
("Recipient ") against a claim that any information, design,
specification, instruction, software, data, or material furnished
by the Provider ("Material") and used by the Recipient hereunder
infringes a copyright or patent provided that: (a) the Recipient
notifies the Provider in writing within thirty (30) days after the
Recipient becomes aware of the claim; (b) the Provider has sole
control of the defense and all related settlement negotiations; and
(c) the Recipient furnishes the Provider with the assistance,
information, and authority reasonably necessary to perform the
above; reasonable out-of-pocket expenses incurred by the Recipient
in providing such assistance will be reimbursed by the Provider.
b. The Provider shall have no liability for any claim of infringement
resulting from: (a) the Recipient's use of a superseded or altered
release of some or all of the Material if infringement would have
been avoided by the use of a subsequent unaltered release of the
Material which is provided to the Recipient; or (b) any
information, design, specification, instruction, software, data, or
material not furnished by the Provider.
c. In the event that some or all of the Material is held or is
believed by the Provider to infringe, the Provider shall have the
option, at its expense, (a) to modify the Material to be
non-infringing; (b) to obtain for the Recipient a license to
continue using the Material; or (c) if neither (a) nor (b) can be
accomplished in a commercially reasonable manner, to terminate all
licenses for the infringing Material and require return of such
Material from the Recipient. If such termination and return
materially impede either party's ability to meet its obligations
under this Agreement with respect to the Oracle Solution Suite or
the ISI Member Programs, then the infringement shall be deemed a
material breach of this Agreement and the Recipient may terminate
this Agreement as set forth in Section 9.2 (Termination), subject
to the Provider's right to cure as specified in that Section. This
Section 10.2 states the parties' entire liability and exclusive
remedy for infringement.
10.3 LIMITATION OF LIABILITY
10.3.1 EXCEPT FOR LIABILITY UNDER SECTION 10.2 (INFRINGEMENT INDEMNITY),
NEITHER PARTY SHALL HAVE ANY LIABILITY FOR ANY INDIRECT,
INCIDENTAL, SPECIAL, OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT
LIMITED TO RELIANCE, COVER, OR LOSS OF ANTICIPATED PROFITS, EVEN IF
THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES;
10.3.2 EXCEPT FOR LIABILITY UNDER SECTION 10.2 (INFRINGEMENT INDEMNITY),
IN NO EVENT SHALL EITHER PARTY'S LIABILITY FOR DIRECT DAMAGES UNDER
THIS AGREEMENT EXCEED THREE MILLION DOLLARS ($3,000,000), SUBJECT
TO THE FOLLOWING: IF
(a) ORACLE'S FULFILLMENT OF ANY CONTRACTUAL OBLIGATION TO A
CUSTOMER IS CONDITIONAL WHOLLY OR PARTLY ON ISI MEMBER'S
DELIVERY OF A CRITICAL DELIVERABLE UNDER THIS AGREEMENT, OR
(b) ISI MEMBER MATERIALLY BREACHES THIS AGREEMENT OR A TARGET
MARKET ADDENDUM AND SUCH BREACH CAUSES ORACLE TO BREACH A
CONTRACTUAL OBLIGATION TO A CUSTOMER, THEN
THE LIMIT ON ISI MEMBER'S LIABILITY FOR DIRECT DAMAGES ARISING OUT
OF OR IN CONNECTION WITH SUCH OCCURRENCE(S) SHALL BE THE GREATER OF
(x) THREE MILLION DOLLARS ($3,000,000) OR (y) THE TOTAL FEES PAID
TO ISI MEMBER ALLOCABLE TO THE RELEVANT CUSTOMER TRANSACTION(S),
UNLESS IN THE RELEVANT CUSTOMER TRANSACTION(S) THE LIMITATION OF
LIABILITY CONTAINED IN THE AGREEMENT BETWEEN ORACLE AND THE
CUSTOMER IS TWO (2) TIMES THE FEES PAID TO ORACLE BY SUCH CUSTOMER,
IN WHICH CASE THE LIMIT ON ISI MEMBER'S LIABILITY SHALL BE THE
GREATER OF (x) THREE MILLION DOLLARS ($3,000,000) OR (y) TWO (2)
TIMES THE TOTAL FEES PAID TO ISI MEMBER ALLOCABLE TO THE RELEVANT
CUSTOMER TRANSACTION(S); PROVIDED THAT WITHIN THAT LIMIT ISI
MEMBER'S LIABILITY IN ANY SUCH CASE SHALL BE PROPORTIONAL TO ISI
MEMBER'S DEGREE OF FAULT (IF ANY) IN CAUSING
<PAGE> 31
SUBJECT TO ORACLE MANAGEMENT APPROVAL
ORACLE TO BREACH SUCH CONTRACTUAL OBLIGATION TO THE CUSTOMER (FOR
PURPOSES OF THIS AGREEMENT, ANY COMPENSATION PAYABLE BY ORACLE TO A
CUSTOMER FOR BREACH OF SUCH A CONTRACTUAL OBLIGATION SHALL BE
CONSIDERED "DIRECT DAMAGES" INCURRED BY ORACLE).
10.3.3 NOTWITHSTANDING THE FOREGOING, NO LIMIT SHALL APPLY TO DAMAGES FOR
TANGIBLE OR INTANGIBLE PROPERTY (INCLUDING SOFTWARE OR DATA) DAMAGE
OR LOSS INTENTIONALLY CAUSED BY A PARTY TO THIS AGREEMENT.
10.4 ORACLE INDEMNIFICATION
Oracle will defend and indemnify ISI Member against:
a. All claims and damages to ISI Member caused by Oracle's failure to
include the following contractual provisions in each Customer
agreement:
i. Restrict use of the ISI Member Programs to object code;
ii. Prohibit (a) transfer of the ISI Member Programs except for
temporary transfer in the event of computer malfunction; (b)
assignment, timesharing and rental of the ISI Member Programs;
and (c) title to the ISI Member Programs from passing to the
Customer or any other party;
iii. Prohibit the reverse engineering, disassembly or
decompilation of the ISI Member Programs and prohibit
duplication of the ISI Member Programs except for a single
backup or archival copy;
iv. Require the Customer, at the termination of the sublicense, to
discontinue use and destroy or return to Oracle all copies of
the ISI Member Programs and Documentation;
v. Prohibit publication of any results of benchmark tests run on
the ISI Member Programs; and
vi. Require the Customer to comply fully with all relevant export
laws and regulations of the United States to assure that
neither the ISI Member Programs, nor any direct product
thereof, are exported, directly or indirectly, in violation of
United States law.
b. All claims and damages to ISI Member caused by Customers' breach of
any of the foregoing provisions.
ARTICLE XI - GENERAL
11.1 NONDISCLOSURE
11.1.1 Scope. It is expected that the parties may disclose to each other
certain information which may be considered confidential and trade
secret information ("Confidential Information"). Confidential
Information shall include: (a) the ISI Member Programs, any other
ISI Member programs licensed to Oracle hereunder, the Oracle
Solution Suite, the Oracle Programs, the Oracle Method and AIM; (b)
product designs and specifications, release management and version
control standards, localization support requirements and Technical
Reference Manuals; (c) customer lists and marketing plans; (d)
Confidential Information disclosed by either party in writing that
is marked as confidential at the time of disclosure; (e) the terms
of this Agreement; and (f) Confidential Information disclosed by
either party in any other manner and is identified as confidential
at the time of disclosure and is also summarized and designated as
confidential in a written memorandum delivered to the receiving
party within thirty (30) days of the disclosure.
11.1.2 Exclusions. Notwithstanding the foregoing, Confidential Information
shall not include information which: (a) is or becomes a part of
the public domain through no act or omission of the other party;
(b) was in the receiving party's possession before receipt from the
party providing such Confidential Information; (c) is rightfully
received by the receiving party from a third party without any
duty of confidentiality; (d) is disclosed to a third party by the
party providing the Confidential Information without a duty of
confidentiality on the third party; (e) is independently developed
by the other party; (f) is disclosed under operation of law; or (g)
is disclosed with the prior written approval of the party providing
such Confidential Information.
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SUBJECT TO ORACLE MANAGEMENT APPROVAL
11.1.3 Rights and Obligations. All Confidential Information owned solely
by one party and disclosed to the other party shall remain solely
the property of the disclosing party. The parties agree, both
during the term of this Agreement and for a period of five (5)
years after termination or expiration of this Agreement (except
Object Materials and Source Materials, to which the obligations
stated in this Section 11.1 above shall apply perpetually) to hold
each other's Confidential Information in confidence and to protect
the disclosed Confidential Information by using the same degree of
care to prevent the unauthorized use, dissemination or publication
of the Confidential Information as they use to protect their own
confidential information of a like nature. The receiving party will
limit disclosure of the disclosing party's Confidential Information
to the receiving party's employees who have a need to know and who
have signed written agreements enabling the receiving party to
fully comply with its obligations hereunder (including without
limitation under Section 11.1.4 (Source Materials)). The receiving
party shall not make the disclosing party's Confidential
Information available in any form to any third party, except ISI
Co-Members with a need to know which have agreed in writing to the
Multi-Party Nondisclosure Agreement attached hereto as Exhibit G
(Industry Solutions Initiative Multi-Party Nondisclosure Agreement)
and contractors with a need to know and with which the receiving
party has written agreements in place enabling the receiving party
to fully comply with its obligations hereunder (including without
limitation this Section 11.1). Neither party will use the other's
Confidential Information for any purpose other than the
implementation of such party's obligations under this Agreement.
Notwithstanding the foregoing sentence, Oracle shall not disclose
any of ISI Member's Confidential Information to any ISI Co-Member
for any reason without ISI Member's prior written consent.
11.1.4 Source Materials. The terms in this Section 11.1.4 shall apply to
Source Materials in addition to the other terms of this Section
11.1 (Nondisclosure). The only employees or contractors of each
party authorized under this Agreement to have access to or to use
the Source Materials shall be those so designated in Exhibit H (Key
Personnel) hereto (collectively, "Authorized Personnel") for so
long as such persons are employed or contracted by the party
receiving the Source Materials. The Authorized Personnel may be
changed if mutually agreed in writing by the parties. ISI Member
Authorized Personnel shall only have access to or use the Oracle
Source Materials in a secure area located at the Oracle facility in
Redwood City, California, and such access or use shall be subject
to Oracle's standard Network Access Agreement, a copy of which is
attached hereto as Exhibit I (Oracle's Current Network Access
Agreement). Oracle Authorized Personnel shall only have access to
or use the ISI Member Source Materials in a secure area at such
Oracle facility or at ISI Member's facilities. The Source Materials
shall be protected by the following:
a. Physical Protection. Source Materials in electronic form shall
be placed on a single CPU located in the secure area ("Secure
Area") and sufficient security procedures to prohibit access to
those other than Authorized Personnel. Once loaded, the Source
Materials (and backup copy) shall be placed in a secure
cabinet. The Source Materials in electronic form must never be
moved from the Secure Area unless the party disclosing the
Source Materials consents in writing. All hard copy produced
from the Source Materials must be labeled as confidential
information of the party disclosing the Source Materials, and
must be stored in the secured area and returned to the
disclosing party or destroyed upon termination, subject to
Article IX (Term and Termination). All hard copies and backup
copies of the Source Materials must be labeled as confidential
information of the party disclosing the Source Materials, and
must be stored in a locked desk drawer in the Secure Area.
b. Electronic Protection. When loaded onto a disk, the Source
Materials must be loaded onto a file system with access
permissions restricted to Authorized Personnel. Network access
(telnet) to the machine containing the Source Materials must be
restricted to Authorized Personnel only.
11.1.5 Residuals. Notwithstanding the above, each party may use the
residuals from the other party's Confidential Information; provided
that, no Authorized Personnel who have had access to the Source
Materials of the other party shall be entitled to work on or
contribute to the development
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SUBJECT TO ORACLE MANAGEMENT APPROVAL
of any product similar to the product(s) derived from the other
party's Source Materials during the time period ending six (6)
months after the time the applicable Authorized Person(nel) last
had access to the Source Materials of the other party. The term
"residuals" as used in this paragraph shall mean the Confidential
Information in nontangible form (i.e., not in written or other
documentary form, including tape or disk) which may be retained by
those employees of ISI Member or Oracle who have had access to the
other's Confidential Information, including ideas, concepts,
know-how, or techniques contained therein. Neither party shall have
any obligation to pay royalties for any work resulting from the use
of residuals in accordance with this Section.
11.2 GOVERNING LAW
This Agreement, and all matters arising out of or relating to this
Agreement, shall be governed by the procedural and substantive laws of the
State of California and shall be deemed to be executed in Redwood City,
California.
11.3 NOTICE
All notices required to be given hereunder shall be in writing and shall
be deemed to have been given upon deposit in first class mail, sent
through a nationally recognized courier service, or transmission by
confirmed telefacsimile as follows, provided however that the parties may
agree notices may also be sent by electronic mail:
For ISI Member: Retek Information Systems
801 Nicollet Mall
Minneapolis, MN 55402
Attn: Legal Department
For Oracle: Oracle Corporation
500 Oracle Parkway
Redwood Shores, CA 94065
Attn: Legal Department
11.4 RELATIONSHIP BETWEEN THE PARTIES
In all matters relating to his Agreement, Oracle and ISI Member shall act
as independent contractors. Neither party will represent that it has any
authority to assume or create any obligation, expressed or implied, on
behalf of the other party, or to represent the other party as agent,
employee, or in any other capacity, except in the provision of first-line
technical support services pursuant to Article VIII. Neither party shall
have any obligation, expressed or implied, except as expressly set forth
herein.
11.5 INDEPENDENT DEVELOPMENT/FREEDOM OF ACTION
Each party acknowledges that the other party is in the software
development business. Subject to Section 3 of the Target Market Addendum
(Exclusivity), neither party shall be precluded from developing, using,
marketing, licensing, and/or selling any independently developed software
which has the same or similar functionality as any product owned or
distributed by the other, so long as such activities do not infringe the
Intellectual Property Rights of the other party.
11.6 EXPORT
The parties agree to comply fully with all relevant export laws and
regulations ("Export Laws") to assure that neither the ISI Member
Programs, any other ISI Member program, the Oracle Solution Suite, any
other Oracle Program, nor any direct product thereof is (1) exported,
directly or indirectly, in violation of Export Laws; or (2) is intended to
be used for any purposes prohibited by the Export Laws, including, without
limitation, nuclear, chemical, or biological weapons proliferation. ISI
Member shall provide Oracle with the U.S. Department of Commerce export
classification codes for the ISI Member Programs.
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SUBJECT TO ORACLE MANAGEMENT APPROVAL
11.7 SEVERABILITY; ASSIGNMENT; COUNTERPARTS; NO WAIVER; ENTIRE AGREEMENT
If any provision or provisions of this Agreement shall be held to be
invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby. Neither party may assign any rights, duties,
obligations or privileges under this Agreement without the prior written
consent of the other party, which consent shall not be unreasonably
withheld. This agreement may be executed in several counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument. The failure of any party to
enforce any of the provisions hereof shall not be construed to be a waiver
of the right of such party thereafter to enforce such provisions. This
Agreement sets forth the entire Agreement between the parties and
supersedes prior proposals, agreements, term sheets and representations
between them, whether written or oral, relating to the subject matter
contained herein. This Agreement may be changed only if agreed to in
writing and signed by an authorized signatory of each party.
RETEK INFORMATION SYSTEMS ORACLE CORPORATION
By: XXXXX By: XXXXX
Name: John Buchanan Name: Raymond Lane
Title: President Title: President
Effective Date of this Agreement: September 10, 1998
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SUBJECT TO ORACLE MANAGEMENT APPROVAL
11.7 SEVERABILITY; ASSIGNMENT; COUNTERPARTS; NO WAIVER; ENTIRE AGREEMENT
If any provision or provisions of this Agreement shall be held to be
invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby. Neither party may assign any rights, duties,
obligations or privileges under this Agreement without the prior written
consent of the other party, which consent shall not be unreasonably
withheld. This agreement may be executed in several counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument. The failure of any party to
enforce any of the provisions hereof shall not be construed to be a waiver
of the right of such party thereafter to enforce such provisions. This
Agreement sets forth the entire Agreement between the parties and
supersedes prior proposals, agreements, term sheets and representations
between them, whether written or oral, relating to the subject matter
contained herein. This Agreement may be changed only if agreed to in
writing and signed by an authorized signatory of each party.
RETEK INFORMATION SYSTEMS ORACLE CORPORATION
By: _____________________________________ By: xxxxx
Name: ___________________________________ Name: Raymond Lane
Title: __________________________________ Title: President
Effective Date of this Agreement: September 10, 1998
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SUBJECT TO ORACLE MANAGEMENT APPROVAL
EXHIBIT LIST
<TABLE>
<CAPTION>
<S> <C>
EXHIBIT A Development Cooperation Guidelines
EXHIBIT B Acceptable Oracle and Third Party Tools
EXHIBIT C Form of Statement of Work
EXHIBIT D Services Subcontract Agreement
EXHIBIT E Service Level Agreement
EXHIBIT F Certificate of Authorship
EXHIBIT G Industry Solutions Initiative Multi-Party Nondisclosure Agreement
EXHIBIT H Key Personnel
EXHIBIT I Oracle's Current Network Access Agreement
EXHIBIT J Minimum Sublicense Fees
EXHIBIT K Grandfathered Customers
EXHIBIT L ISI Member Net Growth and Profit Margin
EXHIBIT M ISI Member Trademark Guidelines
EXHIBIT N Oracle Technical Support Policies
EXHIBIT O Oracle Profit Margin
EXHIBIT P Qualifying a Lead
</TABLE>
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SUBJECT TO ORACLE MANAGEMENT APPROVAL
EXHIBIT A
DEVELOPMENT COOPERATION GUIDELINES
1. GENERAL DEVELOPMENT RESPONSIBILITIES. It is the parties' intent to
work together closely as a "virtual development team" in accordance with
the Development Plan.
a. ISI Member Responsibilities. ISI Member shall use commercially
reasonable efforts to:
i. Be responsible for ongoing development of the ISI Member
Programs and Integration of the ISI Member Programs with the
Oracle Solution Suite to the extent provided in the
Development Plan.
ii. Make available, upon Oracle's reasonable request, ISI
Member's domain expertise for the ISI Member's components of
the Oracle Solution Suite.
iii. Make available, upon Oracle's reasonable request, ISI
Member's personnel with expertise specific to the following
vertical markets within the Target Market: (1) fashion; (2)
department store; (3) mass merchant; (4) hard line specialties
(e.g. jewelry, hardware and electronics); (5)
grocery/convenience store; (6) other vertical markets ISI
Member formally establishes.
iv. Follow Oracle's application enhancement definition, as such
definition is mutually agreed upon in writing by the parties.
v. Continuously work toward the incorporation into its product
set of a common data model with the Oracle components of the
Oracle Solution Suite to enable the products in the Suite to
avoid duplication of data.
b. Oracle Responsibilities. Oracle shall use commercially reasonable
efforts to:
i. Be responsible for ongoing development of the Oracle Programs
and integration of the Oracle Programs with the Oracle
Solution Suite.
ii. Be generally responsible for coordinating the parties' and
the ISI Co-Members' integration efforts for the Oracle
Solution Suite.
iii. Provide personnel with expertise specific to the Oracle
product set;
iv. Certify the Oracle Solution Suite and integration of its
components against Oracle's certification standards.
2. Pre-Development and Installation.
a. ISI Member Responsibilities. ISI Member shall use commercially
reasonable efforts to:
i. Migrate the ISI Member Programs (with the exception of the
Retek Demand Forecasting product) to the Oracle database
environment as required to facilitate initial integration.
ii. Provide assistance as mutually agrees in writing by the
parties in set-up of a development lab for the Oracle
Solution Suite ("Development Lab") at one or more Oracle
and/or ISI Member facilities to be determined by the parties.
iii. Provide a senior-level DBA/Systems Administrator to assist in
the initial installation of the ISI Member Programs
(including initial installation of updates, patches, fixes,
etc.) in the Development Lab, and, in the course of such
installation, to allow a reasonable number of Oracle
development and database administration personnel to view and
ask questions with respect to such installation.
iv. Provide a senior-level applications consultant to assist in
set-up with the initial installation of the ISI Member
Programs (including initial installation of updates, patches,
fixes, etc.) in the Development Lab.
v. Ensure that its technical personnel working on Oracle
Solution Suite development have been properly trained in
using and developing on Oracle products.
vi. Ensure that its database administrators working on Oracle
Solution Suite development have been properly trained to
install and support the Oracle development environment.
b. Oracle Responsibilities. Oracle shall use commercially reasonable
efforts to:
i. Certify the proper functioning of the migrated ISI Member
Programs.
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SUBJECT TO ORACLE MANAGEMENT APPROVAL
ii. Assist in set-up of a Development Lab for the Oracle Solution
Suite at one or more Oracle and/or ISI Member facilities to be
determined by the parties.
iii. Provide a senior-level DBA/Systems Administrator to assist in
the initial installation of the Oracle Programs (including
initial installation of updates, patches, fixes, etc.) in the
Development Lab, and, in the course of such installation, to
allow a reasonable number of ISI Member development and
database administration personnel to view and ask questions
with respect to such installation.
iv. Provide a senior-level applications consultant to assist in
set-up with the initial installation of the Oracle Programs
(including initial installation of updates, patches, fixes,
etc.) in the Development Lab, and, in the course of such
installation, to allow a reasonable number of ISI Member
development and database administration personnel to view and
ask questions with respect to such installation.
v. Provide relevant application program interface standards to
the ISI Member.
vi. Provide compliance standards for the Oracle Programs and
Oracle database.
3. Future Enhancements. The parties are responsible for enhancing the
functionality of their respective components of the Oracle Solution Suite
and eliminating functional redundancy on an ongoing basis in accordance
with the Development Plan.
4. Documentation
a. ISI Member Responsibilities. Provide content to Oracle on the ISI
Member Programs for inclusion in Oracle product documentation,
using "pdf" format on CD-ROM and with Oracle prescribed cover
page.
b. Oracle Responsibilities. Provide access to Oracle product
documentation standards and formats to the ISI Member.
5. Quality Assurance.
a. ISI Member Responsibilities. ISI Member shall use commercially
reasonable efforts to:
i. Adhere to its quality assurance (QA) practices and standards
for the ISI Member Programs that ISI Member has provided
to Oracle on September 4, 1998. ISI Member may modify such
practices and standards at its discretion, but not below the
level in effect as of September 4, 1998.
ii. Adhere to its product testing procedures for the ISI Member
Programs that ISI Member has provided to Oracle on September
4, 1998. ISI Member may modify such procedures at its
discretion, but not below the level in effect as of September
4, 1998.
iii. Develop and execute regression test procedures for the ISI
Member Programs, using mutually agreed-upon testing tools.
iv. Assist Oracle in testing and validating the ISI Member
Programs at the Development Lab, in accordance with Section
2.1.3 of the ISI Master Agreement.
b. Oracle Responsibilities. Oracle shall use commercially reasonable
efforts to:
a. Provide Oracle's QA practices and standards to the ISI Member.
b. Conduct QA reviews of ISI Member Program development and
integration with Oracle Programs.
c. Perform testing of the Oracle Solution Suite integration,
including integration of the ISI Member Programs with the
applicable Oracle Programs.
6. Technology Upgrade.
a. ISI Member Responsibilities. ISI Member shall use commercially
reasonable efforts to provide migration paths from native ISI
Member Program versions to first production Oracle Solution Suite
for Customers current on technical support.
b. Mutual Responsibilities. Provide migration paths from each
version of its Oracle Solution Suite components to the next for
Customers current on technical support.
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7. Release Management
a. ISI Member Responsibilities. ISI Member shall use commercially
reasonable efforts to:
i. Adhere to its standards for ISI Member Program release
management and version control that ISI Member has provided to
Oracle on September 4, 1998. ISI Member may modify such
practices and standards at its discretion, but not below the
level in effect as of September 4, 1998.
ii. Not release the ISI Member Programs as Oracle products or
identify versions of the ISI Member Programs released by the
ISI Member as Oracle products.
b. Oracle Responsibilities. Oracle shall use commercially reasonable
efforts to:
i. Provide its release management and version control standards to
the ISI Member, and assist in coordination and synchronization
of releases of Oracle Programs and ISI Member Programs. Such
standards shall be considered confidential information of
Oracle.
ii. Be solely responsible for releasing the Oracle Solution Suite
to any Customers, and for releasing the ISI Member Programs for
inclusion in the Oracle Solution Suite.
8. Modular and Functional Redundancies. Oracle will be responsible for
identifying modular and functional redundancies among the various Oracle
Programs, ISI Member Programs and ISI Co-Member Programs and will make
recommendations to the Executive Committee as to which redundant
components will be included in the Oracle Solution Suite and which will be
excluded. The resolution of such modular and functional redundancies will
be mutually agreed by the parties and reflected in the Development Plan.
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EXHIBIT B
ACCEPTABLE ORACLE AND THIRD PARTY TOOLS
Required for user Interfaces
Developer/2000
Suggested Tools
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EXHIBIT C
FORM OF STATEMENT OF WORK
_____________________________________________________________________________
This Statement of Work ("SOW") shall be governed by the terms of the Industry
Solutions Initiative Agreement between Oracle Corporation ("Oracle") and
___________ ("ISI Member") dated ____________ ("Agreement"), as amended.
Capitalized terms used in this SOW and not otherwise defined shall have the
meanings ascribed to them in the Agreement.
A. SCOPE OF SERVICES; OBLIGATIONS
1. Scope of Services
2. Parties' Obligations
3. Project Management
3.1 Project Manager. Each party shall designate a Project Manager
who shall work together with the other party's Project Manager
to facilitate an efficient delivery of Services.
3.2 Change Orders. Any change in the specified Scope of Services
must be mutually agreed upon by the Parties in writing.
B. RATES AND PAYMENTS (if applicable)
1. Rates
2. Payment Type
3. Invoicing
C. ADDITIONAL TERMS
1. Rights to Developments
ISI MEMBER: ORACLE CORPORATION
Signature:__________________ Signature:__________________
Name: ______________________ Name: ______________________
Title: _____________________ Title: _____________________
Effective Date: ____________
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EXHIBIT D
ORACLE(R)
INDUSTRY SOLUTIONS INITIATIVE
SERVICES SUBCONTRACT AGREEMENT
_______________________________________________________________________________
This Service Subcontract Agreement ("SSA") is made as of ______________________
(the "Effective Date") between Oracle Corporation, 500 Oracle Parkway, Redwood
City, California 94065, U.S.A. ("Oracle"), and ________________________________
_______________________________________________________________ ("ISI Member").
The above parties have entered into an Industry Solutions Initiative Master
Agreement ("Master Agreement") for the development, marketing and distribution
of one or more Oracle Solution Suites. This SSA shall govern the parties'
cooperative provision of consulting and education services to Customers (as
"Customers" is defined in the Master Agreement) for implementation of the Oracle
Solution Suite(s). In each Consulting Subcontract Order executed by the parties
hereunder, one of the parties shall be designated the Prime Contractor and the
other shall be designated the Subcontractor for purposes of that Subcontract
Order. In each Education Subcontract Order executed by the parties hereunder,
Oracle shall be the Prime Contractor.
I. DEFINITIONS
1.1 "Services" shall mean Consulting Services and/or Education
Services, as applicable.
A. "Consulting Services" shall mean software-related consulting services
provided by Subcontractor to Prime Contractor for the benefit of a
Customer pursuant to a Subcontract Order signed by the parties under this
SSA.
B. "Education Services" shall mean software-related education or training
services provided by Subcontractor to Prime Contractor for the benefit of
a Customer pursuant to a Subcontract Order signed by the parties under
this SSA.
1.2 "Subcontract Order" shall mean the form which Prime Contractor uses to
order Consulting Services from Subcontractor or which Oracle uses to order
custom Education Services from the ISI Member. Each Subcontract Order
shall be governed by the terms of this SSA and will reference this SSA by
its Effective Date specified below. A form Subcontract Order is attached
hereto as Exhibit A.
A. "Consulting Subcontract Order" shall mean the form which Prime Contractor
uses to order Consulting Services from Subcontractor. The Consulting
Subcontract Order will identify (a) the scope of work for the Services,
(b) the labor rate at which each consultant level will be billed if the
Services are provided on a time and material ("T&M") basis, (c) the fees,
payment schedule, and deliverables if the Services are provided on a fixed
price basis, (d) any applicable terms regarding rights in developments as
specified in Article V (Rights in Developments) below, and (e) other
provisions applicable to the Consulting Services.
B. "Education Subcontract Order" shall mean the form which Prime Contractor
uses to order custom Education Services from Subcontractor. The Education
Subcontract Order will identify (a) the Education Services to be provided,
(b) the location where the Education Services are to be delivered, (c) the
total fee if the Education Services are provided on a fixed price basis,
(d) the labor rate at which each consultant level will be billed if the
Education Services are provided on a time and material ("T&M") basis, and
(e) other provisions applicable to the Education Services. Oracle may
order standard ISI Member Education Services, as listed on the attached
ISI Member Education Pricing Attachment, using an Oracle purchase order
which specifies (a) the Education Services to be provided, (b) the
location where the Education Services are to be delivered, and (c) the
total fee for the Education Services.
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1.3 "Prime Contract" shall mean the agreement between Prime Contractor and the
applicable Customer in connection with which Subcontractor is providing
the Services hereunder.
II. CHARGES, PAYMENTS, AND TAXES
2.1 FEES FOR CONSULTING SERVICES
Unless otherwise specified in the applicable Consulting Subcontract Order,
Consulting Services shall be provided on a T&M basis at Subcontractor's
T&M rates specified in the Consulting Rates Attachment to this SSA, as
applicable. Descriptions of the job titles used in the Consulting Rates
Attachment are set forth in the Job Descriptions Attachment to this SSA.
If a dollar limit is stated in the applicable Subcontract Order for T&M
Consulting Services, the limit shall be deemed an estimate for Prime
Contractor's budgeting and Subcontractor's resource scheduling purposes;
after the limit is expended, Subcontractor will continue to provide the
Consulting Services on a T&M basis, if a Subcontract Order for
continuation of the Consulting Services is signed by the parties.
2.2 FEES FOR EDUCATION SERVICES
Unless otherwise specified in the applicable Consulting Subcontract Order,
ISI Member Education Services shall be provided on a fixed-fee basis at
the fees specified on the ISI Member Education Pricing Attachment to this
SSA, as such attachment may be updated no more than once in a twelve month
period upon written notice from ISI Member to Oracle; provided, however,
that any increases in such prices are reasonable (reasonableness to be
determined in relation to the relevant market at the time of any increase)
and that any updates beyond one in a twelve month period shall be subject
to mutual agreement of the parties. The parties understand that custom ISI
Member Education Services that address particular Customer or Oracle
requirements may be provided on a T&M basis at the ISI Member's T&M rates
specified in the ISI Member Education Pricing Attachment to this SSA. If a
dollar limit is stated in the applicable Subcontract Order for T&M
Education Services, the limit shall be deemed an estimate for Oracle's
budgeting and the ISI Member's resource scheduling purposes; after the
limit is expended, the ISI Member will continue to provide the Education
Services on a T&M basis, if a Subcontract Order for continuation of the
Education Services is signed by the parties.
2.3 INVOICING AND PAYMENT
Subcontractor shall invoice Prime Contractor monthly, unless otherwise
specified in the applicable Subcontractor Order. Charges shall be payable
thirty (30) days from receipt of invoice. Prime Contractor shall issue a
purchase order, or alternative document acceptable to Subcontractor, on or
before commencement of Services under the applicable Subcontract Order.
2.4 INCIDENTAL EXPENSES
Prime Contractor shall reimburse Subcontractor for actual and reasonable
travel, communications, administrative, and out-of-pocket expenses
incurred in conjunction with the Services, subject to the Customer's
and/or Prime Contractor's reasonable expense reimbursement policies; Prime
Contractor shall make any such policies available to the Subcontractor
upon request.
2.5 PROPOSALS
Each party shall bear its own costs in evaluating and drafting proposals
for Customer implementation and education plans.
2.6 TAXES
The charges do not include taxes. If Subcontractor is required to pay any
federal, state, or local taxes based on the Services provided under this
SSA, the taxes shall be billed to and paid by Prime Contractor; this shall
not apply to taxes based on Subcontractor's income, employment-related or
corporate franchise taxes.
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2.7 AUDIT
Subcontractor shall keep accurate books of account and records pertaining
to the performance of Services hereunder. No more than once during any
twelve (12) month period, the Prime Contractor may, at its sole expense,
employ an Independent Certified Public Accountant who is not compensated
based on the results of the audit, and who is acceptable to Subcontractor,
to inspect such books of account and records upon reasonable notice to
Subcontractor, and at a reasonable time during normal business hours for
the purpose of verifying the fees charged to Prime Contractor under this
SSA. Unless necessary to establish in a court of law the Prime
Contractor's right to reimbursement of fees paid to Subcontractor
hereunder (in which case the Certified Public Accountant shall request a
protective order), such Certified Public Accountant shall hold all
information obtained in strict confidence; shall not disclose such
information to any other person or entity (except the Prime Contractor)
without Subcontractor's prior written consent; and shall not disclose to
Prime Contractor any information regarding Subcontractor's business other
than any noncompliance by Subcontractor with the fee payment provisions
hereof.
III. PROJECT MANAGEMENT
3.1 PROJECT MANAGEMENT
A. Each party shall appoint a project manager who shall be responsible for
coordinating its activities under a Subcontract Order ("PPM" for Prime
Contractor's project manager and "SPM" for Subcontractor's project
manager). Each party shall direct all inquiries concerning the Services to
the other party's project manager. The PPM shall have primary
responsibility for project management and delivery of Services to the
Customer. The SPM shall have primary responsibility for delivery of
Subcontractor's Services to the Prime Contractor. The PPM or his/her
designee shall have the right to monitor and attend the performance of
Services by Subcontractor for quality assurance purposes.
B. The PPM and SPM will meet, either in person or via telecommunications, at
times and places agreed upon by them to discuss the Services. Written
status reports and written replies thereto will be submitted at times
agreed upon by the PPM and SPM.
3.2 CUSTOMER CONTACT
In order to promote consistency and the appearance of unity to the
Customer, the Prime Contractor shall act as the primary point of contact
with the Customer, and Subcontractor personnel shall not make direct
contact with the Customer without the approval of the Prime Contractor.
Where Oracle is the Prime Contractor (and at all times in the case of
Education Services), the ISI Member shall not request to the Customer that
the ISI Member and Customer enter into a contractual relationship, either
directly or through a third party, for the provision of Services relating
to the Oracle Solution Suite or programs licensed or proposed to the
Customer as part of the Oracle Solution Suite in the Target Market,
without Oracle's prior written consent. The ISI Member shall not make any
representations, warranties, or guarantees concerning the ISI Member
Programs (as defined in the Master Agreement) or Services that are
inconsistent with those made in this SSA, in the Master Agreement or by
Oracle.
3.3 CUSTOMER REQUIREMENTS ASSESSMENT
The Subcontractor shall provide all reasonable cooperation to the Prime
Contractor in assessing Customer requirements for Consulting Services
and/or Education Services, including without limitation Services
specifically related to Subcontractor software programs. ISI Member shall
provide to Oracle, at no charge, copies of any tools or matrices owned and
used by ISI Member, if any, for Oracle's use in assessing Customer's
requirements and Oracle's and ISI Member's capabilities with respect to
Services related to the Oracle Solution Suite. The ISI Member hereby
grants to Oracles a worldwide, nonexclusive license to use such tools and
matrices during the term of the Master Agreement for the foregoing
purpose. Any tools or matrices provided to Oracle hereunder shall be
treated as Confidential Information in accordance with Section 8.1
(Nondisclosure).
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3.4 CUSTOMER EDUCATION CLASS REGISTRATION AND SCHEDULING
All registration and scheduling of Education Services for Customers under
this SSA, including ISI Member standard course offerings, shall be done
through Oracle Education's registration and scheduling system. If the
parties agree to a schedule of times and locations for Education
Services, ISI Member shall use reasonable efforts to provide qualified
personnel available to deliver such Education Services ordered by Oracle
at the scheduled times and locations. Oracle shall have no liability to
ISI Member if a Customer cancels scheduled Education Services, except in
the event that Oracle does not provide ISI Member with a cancellation
notice at least seven days prior to the date of the scheduled start of
Education Services for the applicable Customer; in that event, Oracle
shall pay ISI Member for any time and materials expended and any
reasonable travel expenses incurred by ISI Member prior to such
cancellation in accordance with this SSA.
3.5 EDUCATION MATERIALS
The ISI Member shall be solely responsible for the design development,
reproduction and distribution of materials to be provided by the ISI
Member as part of its delivery of Education Services (including software
and hard-copy materials), subject to Section 3.6 (Acceptance) below.
3.6 EDUCATION EVENT TECHNICAL SUPPORT
The ISI Member shall be solely responsible for all technical support
required for the delivery of Education Services hereunder. Upon request,
Oracle shall endeavor to provide reasonable assistance to the ISI Member
where Education Services are provided at an Oracle Education Center.
3.7 ACCEPTANCE
Any deliverables specified in a Subcontract Order shall be subject to
acceptance by Prime Contractor. Such acceptance shall be at Prime
Contractor's reasonable discretion, subject to any procedures and/or
criteria specified in the Subcontract Order.
3.8 CHANGES TO SCOPE
In order to change the scope of work in a Subcontract Order, the PPM will
submit the written request to the SPM. The SPM will submit to the PPM an
estimate of the revised charges and changes, if any, in the delivery
schedule. Subcontractor will, at the PPM's option, continue performing
the Services in accordance with the Subcontract Order until the parties
agree in writing on the change in scope of work, scheduling, and fees
therefor. Any change shall be agreed to by the parties in writing prior
to implementation. Any dispute concerning changes to a scope of work
shall be referred to dispute resolution under Section 3.12 (Dispute
Resolution) below.
3.9 PERSONNEL
A. The SPM shall provide the PPM with the resume of each person, including
any replacement personnel, which Subcontractor proposes to assign to
perform Services. The PPM shall have the opportunity, at its option, to
interview any such person. A person reasonably rejected by the PPM will
not be assigned to perform Services under the Subcontract Order; disputes
concerning the reasonableness of any such rejection shall be referred to
dispute resolution under Section 3.12 (Dispute Resolution) below. Any
person who the parties agree to assign to perform Services shall be
deemed to have been interviewed and accepted.
B. The PPM shall notify the SPM in writing if the PPM or Customer believes
that a person assigned by the Subcontractor to perform Services is not
performing the Services in an acceptable manner, and the SPM shall take
such reasonable corrective action as the SPM may deem appropriate to
address such concern (including, with the Customer's consent, meeting
with the Customer together with the PPM). If the SPM cannot resolve the
PPM's or Customer's reasonable concern without removing the person, the
SPM shall remove the person. If the parties believe it is necessary to
replace the person, the SPM will use commercially reasonable efforts to
replace the person as soon as possible. Except as may otherwise be
agreed in writing, Subcontractor shall bear the cost of familiarizing the
replacement person with the
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project; the parties agree that schedules and cost estimates, if any, may
require adjustment as a result of any replacement.
C. Subcontractor shall fully comply with any and all applicable federal,
state and local laws, codes, rules, regulations, California Wage Orders,
where applicable, and Executive Orders pertaining to immigration, foreign
nationals working in the United States, labor and employment.
Subcontractor shall not permit work to be performed under this SSA by
individuals who are nationals of countries to which the United States
government prohibits export of any technology or information to which such
individual may have access in performing the Services.
3.10 COOPERATION
A. Prime Contractor acknowledges that the timely provision of and access to
office accommodations, facilities, equipment, assistance, cooperation,
complete and accurate information and data from the officers, agents, and
employees of Prime Contractor and the Customer, and suitably configured
computer products may be essential to performance of the required Services
and that Subcontractor's ability to complete any Services may be dependent
upon same. If relevant requirement(s), project plan(s), schedule, scope,
specification(s), design(s), software, hardware product(s), or related
system environment(s) or architecture are changed by Prime Contractor, the
Customer or any other person, Subcontractor shall not be responsible for
the change unless Prime Contractor and Subcontractor specifically consent
to the change, scheduling, and additional charges, if any, in writing.
B. Subcontractor acknowledges that Prime Contractor's ability to complete its
obligations under the Prime Contract is dependent on Subcontractor's
provision, in a timely manner in accordance with the applicable
Subcontract Order, of (a) personnel with the education and skills
necessary to perform the Services, (b) assistance and cooperation of such
personnel, and (c) complete and accurate information, data, status
reports, and deliverables (if required under the Subcontract Order) by
Subcontractor and its personnel.
3.11 SUBCONTRACTING
If Subcontractor cannot provide the number of qualified Subcontractor
personnel required to perform the Services, or replacement personnel, the
SPM shall promptly so notify the PPM. Prime Contractor shall have the
right to provide personnel, whether employees or subcontractors, for the
unfilled positions prior to considering Subcontractor's use of third party
contractors. Subcontractor may use a third party contractor to perform
Services provided that Subcontractor obtains the prior written consent of
the PPM and that Subcontractor's agreement with the third party contractor
is not inconsistent with the terms of this SSA, including without
limitation the terms of Article V (Rights in Developments) and Section 8.1
(Nondisclosure) below.
3.12 DISPUTE RESOLUTION
Any dispute between the parties, whether with respect to interpretation of
this SSA or a Subcontract Order or concerning either party's performance
under this SSA or a Subcontract Order, or between the PPM and SPM, which
is not resolved by the PPM and SPM, will be promptly escalated to the
co-chairs of the Executive Committee for resolution. If the co-chairs of
the Services Task Force are unable to resolve the dispute within 10 days,
the parties shall proceed in accordance with Section 2.6 (Dispute
Resolution) of the Master Agreement. Neither party shall be compensated
for any time or expenses related to the dispute resolution process.
IV. TERM AND TERMINATION
4.1 Term
This SSA shall commence on its Effective Date and shall remain in effect
until terminated in accordance with this Article IV.
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4.2 TERMINATION OF SSA
Either party may terminate this SSA at any time by providing the other
party with written notice. Any Subcontract Order outstanding at the time
of termination shall continue to be governed by this SSA as if it had not
been terminated, unless the Subcontract Order is terminated in accordance
with Section 4.3 (Termination of Subcontract Order) below.
4.3 TERMINATION OF SUBCONTRACT ORDER
A. A party may terminate a Subcontract Order if the other party is in
material breach of the Subcontract Order and has not cured the breach
within thirty (30) days of written notice specifying the breach. Consent
to extend the cure period shall not be unreasonably withheld, so long as
the breaching party has commenced cure during the thirty day notice period
and pursues cure of the breach in good faith.
B. In addition, Prime Contractor may terminate a Subcontract Order without
opportunity for Subcontractor to cure if the Customer requests removal of
Subcontractor, or if the Prime Contract is amended such that
Subcontractor's Services are no longer required, or if the Prime Contract
is suspended, canceled or terminated. Prime Contractor shall give
Subcontractor notice of such termination as soon as commercially
reasonable.
4.4 EFFECT OF TERMINATION
If a Subcontract Order is terminated under this Article IV (Term and
Termination), both parties will use commercially reasonable efforts to
mitigate fees and expenses and Subcontractor shall promptly deliver copies
of all complete and incomplete deliverable to the Prime Contractor.
Subcontractor shall be paid (a) at the labor rate for Services provided
on a T&M basis and (b) on a percent of completion basis for Services
provided on a fixed price basis. Termination of this SSA and/or any
Subcontract Order shall not limit either party from pursuing any other
remedies available to it, including injunctive relief, nor shall
termination relieve Prime Contractor of its obligation to pay all charges
that accrued prior to such termination. The parties' rights and
obligations under Articles IV, V, VI, VII and VIII shall survive
termination of this SSA and/or any Subcontract Order.
V. RIGHTS IN DEVELOPMENTS
5.1 OPTIONS FOR SUBCONTRACT ORDERS
The parties may agree to include in a Subcontract Order one of the
following provisions, or a different provision, governing rights in
consulting developments, as may be necessary or appropriate under the
applicable Prime Contract and/or in light of other circumstances. When
included in a Subcontract Order, the applicable provision will govern
rights in consulting developments created within the scope of that
Subcontract Order only. If a Subcontract Order contains no terms
allocating rights in developments, then rights in consulting developments
created within the scope of that Subcontract Order shall be allocated
between the parties pursuant to Subsection A (Allocation of Rights per
Master Agreement) below.
A. ALLOCATION OF RIGHTS PER MASTER AGREEMENT
"Rights in any consulting developments created or developed within the
scope of this Subcontract Order shall be allocated as set forth in Article
VI (Ownership and Intellectual Property Rights) of the Master Agreement.
Subcontractor expressly authorizes Prime Contractor to grant to the
Customer a perpetual, non-exclusive, non-transferable, royalty-free
license to use anything developed by Subcontractor within the scope of
this Subcontract Order."
(If the parties wish to allocate rights in developments as set forth in
this Subsection A, but the Prime Contract requires Prime Contractor to
assign ownership rights in developments to the Customer, then
Subcontractor shall sign an agreement with Prime Contractor and Customer
clarifying that ownership rights in developments created by Subcontractor
shall not be assigned to the Customer.)
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B. Assignment to Customer of Copyright in Undefined Deliverables (Excluding
Subcontractor Programs and Modifications, CASE-Generated Subroutines, and
Tools and Utilities), with Right to Reuse and Distribute Substantially
Similar Deliverables
"Contract Property" shall mean those deliverables developed solely for
the Customer under this Subcontract Order except for any Subcontractor
Work(s) that may be developed or that may be embodied in any deliverable
under this Subcontract Order. Subcontractor hereby assigns to Customer all
of its right, title and interest in and to all copyrights in the Contract
Property developed by Subcontractor under this Subcontract Order, provided
Subcontractor and Prime Contractor retain the right to develop, use and
distribute works that are substantially similar to the Contract Property,
including similar in function, structure, sequence, or organization of the
Contract Property. "Subcontractor Work(s)" shall mean: (a) any software
program(s) and documentation owned or distributed by Subcontractor,
including modifications, derivatives and enhancements thereof
("Programs"); (b) any Subcontractor CASE-generated subroutines that are
used in developing or that are embodied in the Contract Property
(excluding any Customer Confidential Information); and (c) any tools or
utilities developed by or on behalf of Subcontractor. Subcontractor
retains all right, title and interest, including all copyrights, in any
Subcontractor Work(s). Subcontractor grants to Customer a non-exclusive,
non-transferable, royalty free, perpetual internal use license to use such
Subcontractor Work(s) that are incorporated into the Contract Property,
and grants to Prime Contractor a non-exclusive, non-transferable, royalty
free, perpetual license to use internally and in consulting engagements
such Subcontractor Work(s) that are incorporated into the Contract
Property; however nothing in this paragraph shall be construed to expand
the Customer's or Prime Contractor's right to use Programs licensed to it
under a separate license agreement.
C. Assignment to Customer of Copyright in Defined Deliverables (Excluding
Subcontractor Programs and Modifications, CASE-Generated Subroutines, and
Tools and Utilities), with No Right to Reuse Deliverables (but Right to
Reuse Intangible Knowledge)
"Contract Property" shall mean those deliverables developed solely for the
Customer under this Subcontract Order which are expressly identified in
this Subcontract Order as "Contract Property," excluding any Subcontractor
Work(s) that may be developed or that may be embodied in any deliverable
under this Subcontract Order. Subcontractor hereby assigns to Customer all
of its right, title and interest in and to all copyrights in the Contract
Property developed by Subcontractor under this Subcontract Order. Neither
Subcontractor nor Prime Contractor shall have any right to retain or reuse
copies of the Contract Property. "Subcontractor Work(s)" shall mean: (a)
any software program(s) and documentation owned or distributed by
Subcontractor, including modifications, derivatives and enhancements
thereof ("Programs"); (b) any Subcontractor CASE-generated subroutines
that are used in developing or that are embodied in the Contract Property
(excluding any Customer Confidential Information); and (c) any tools or
utilities developed by or on behalf of Subcontractor. Subcontractor
retains all right, title and interest, including all copyrights, in any
Subcontractor Work(s). Subcontractor grants to Customer a non-exclusive,
non-transferable, royalty free, perpetual license to use internally such
Subcontractor Work(s) that are incorporated into the Contract Property and
any materials other than Contract Property developed by Subcontractor
under this Subcontract Order, and grants to Prime Contractor a
non-exclusive, non-transferable, royalty free, perpetual license to use
such Subcontractor Works and other materials internally and in consulting
engagements; however nothing in this paragraph shall be construed to
expand the Customer's or Prime Contractor's right to use Programs licensed
to it under a separate license agreement.
Subcontractor and Prime Contractor may freely use the "residuals" from
the Contract Property, provided that they maintain the confidentiality of
Customer's confidential information as required in the Agreement. The term
"residuals" shall mean the ideas, know-how, concepts, and techniques in
intangible form arising from work performed by Subcontractor, which may be
retained by employees (including agents) of Subcontractor and Prime
Contractor who have had access to the Contract Property. Neither
Subcontractor nor Prime Contractor shall have no obligation to limit or
restrict the assignment of its employees, or to pay royalties to Customer
or to one another for any work resulting from the use of residuals.
Customer's copyrights in the Contract Property shall not be deemed to be
violated by: (i) Subcontractor's use of the
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residuals in the course of providing products or services to any other
party, even though the use of such residuals may result in delivery to
such third parties of software, documentation or other products, in whole
or in part, which are substantially similar to portions of the Contract
Property, or (ii) Subcontractor's use of any ideas, concepts, know-how, or
techniques that Subcontractor developed previously in the course of
performing services for other Subcontractor clients, even though the use
thereof may result in delivery to Customer of certain portions of
software, documentation or other products which are substantially similar
to portions of that owned by such Subcontractor clients.
5.2 DELIVERY OF COPIES
Subcontractor shall provide complete copies to Prime Contractor, for
delivery to the Customer, of everything created or developed by
Subcontractor within the scope of any Subcontract Order.
VI. INFRINGEMENT, WARRANTY, AND REMEDY
6.1 INFRINGEMENT INDEMNITY
A. Each party ("Provider") will defend and indemnify the other party
("Recipient") against a claim that any information, design, specification,
instruction, software, data, or material furnished by the Provider
("Material") and used by the Recipient for the Services infringes a
copyright or patent provided that: (a) the Recipient notifies the Provider
in writing within thirty (30) days of the claim; (b) the Provider has sole
control of the defense and all related settlement negotiations; and (c)
the Recipient provides the Provider with the assistance, information, and
authority reasonably necessary to perform the above; reasonable
out-of-pocket expenses incurred by the Recipient in providing such
assistance will be reimbursed by the Provider.
B. The Provider shall have no liability for any claim of infringement
resulting from: (a) the Recipient's use of a superseded or altered release
of some or all of the Material if infringement would have been avoided by
the use of a subsequent unaltered release of the Material which is
provided to the Recipient; or (b) any information, design, specification,
instruction, software, data, or material not furnished by the Provider.
C. In the event that some of all of the Material is held or is believed by
the Provider to infringe, the Provider shall have the option, at its
expense, (a) to modify the Material to be non-infringing; (b) to obtain
for the Recipient a license to continue using the Material; or (c) to
require return of the infringing Material and all rights thereto from the
Recipient. If Subcontractor is the Provider and such return materially
affects Prime Contractor's ability to meet its obligations under the Prime
Contract, then Prime Contractor may, at its option and upon thirty days
prior written notice to Subcontractor, terminate the Subcontract Order and
shall be entitled to recover the fees paid by Prime Contractor for that
portion of the Material prorated over a five year period from the
effective date of the applicable Subcontract Order. If Prime Contractor is
the Provider and such return materially affects Subcontractor's ability to
meet its obligations under the relevant Subcontract Order, then
Subcontractor may, at its option and upon thirty days prior written notice
to Prime Contractor, terminate the Subcontract Order and Prime Contractor
shall pay Subcontractor for the Services rendered through the date of
termination on a T&M or percent of completion basis as applicable. This
Section 6.1 states the parties' entire liability and exclusive remedy for
infringement.
6.2 WARRANTY AND DISCLAIMERS
A. Subcontractor warrants that the Services will be performed consistent with
generally accepted industry standards. Prime Contractor must report any
deficiencies in the Services to Subcontractor in writing within ninety
(90) days of performance of the Services in order to receive warranty
remedies.
B. THE WARRANTY HEREIN IS EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES
WHETHER EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
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6.3 EXCLUSIVE REMEDY
A. Subject to Subsection 6.3.B below, for any breach of the above warranty
Prime Contractor's exclusive remedy, and Subcontractor's entire liability,
shall be the re-performance of the Services. If Subcontractor is unable to
re-perform the Services as warranted. Prime Contractor shall be entitled
to recover the fees paid to Subcontractor for the deficient Services.
B. Notwithstanding the foregoing, if the Customer refuses to pay or seeks a
refund of some or all of an invoice and, in Prime Contractor's reasonable
judgment, resolution of the problem will require issuance of a refund or
credit to the Customer, the Prime Contractor and Subcontractor will in
good faith analyze the contributing factors (including without limitation
which party's consultants were involved, whether the work was timely
completed, and the quality of the work) and mutually agree on an
allocation of responsibility for the problem between them as applicable.
Subcontractor will refund or credit, at Subcontractor's option, (as Prime
Contractor and Subcontractor may agree) to the Customer an amount equal to
the total refund or credit granted to the Customer by the Prime Contractor
multiplied by the percentage of responsibility for the problem which the
parties agree to allocate to Subcontractor. Any dispute between Prime
Contractor and Subcontractor concerning this Section shall be referred to
dispute resolution under Section 3.12 (Dispute Resolution) above.
VII. LIMITATION OF LIABILITY, INDEMNITY, INSURANCE
7.1 LIMITATION OF LIABILITY
IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY INDIRECT, INCIDENTAL
SPECIAL OR CONSEQUENTIAL DAMAGES, OR DAMAGES FOR LOSS OF PROFITS, REVENUE,
DATA, OR USE, INCURRED BY EITHER PARTY OR ANY THIRD PARTY, WHETHER IN AN
ACTION IN CONTRACT OR TORT, EVEN IF THE OTHER PARTY OR ANY OTHER PERSON
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. NEITHER PARTY'S
LIABILITY FOR DIRECT DAMAGES HEREUNDER SHALL EXCEED THE AMOUNT OF FEES
PAID FOR SERVICES UNDER THE APPLICABLE SUBCONTRACT ORDER. ANY DAMAGES FOR
WHICH PRIME CONTRACTOR IS LIABLE TO A CUSTOMER AS A RESULT OF
SUBCONTRACTOR'S FAILURE TO COMPLY WITH THIS SSA, AND WHICH COULD NOT
REASONABLY BE MITIGATED BY PRIME CONTRACTOR, SHALL BE CONSIDERED DIRECT
DAMAGES FOR PURPOSES OF THIS SSA. NOTWITHSTANDING THE FOREGOING, NO LIMIT
SHALL APPLY TO DAMAGES FOR TANGIBLE OR INTANGIBLE PROPERTY (INCLUDING
SOFTWARE OR DATA) DAMAGE OR LOSS INTENTIONALLY CAUSED BY A PARTY HERETO.
7.2 INDEMNITY
Each party ("Indemnifying Party") shall defend and indemnify the other
party ("Indemnified Party") against any liability, damage, or expense
which the Indemnified Party may sustain, incur, or be required to pay,
arising out of or in connection with claims for personal bodily injury or
wrongful death or damage to real or tangible personal property resulting
from any negligent act or omission of the Indemnifying Party or a person
employed by the Indemnifying Party acting within the scope of his/her
employment in the performance of Services under this SSA while on a
party's or a Customer's premises; provided that:
(a) The Indemnifying Party is notified in writing of any claim promptly
after the Indemnified Party becomes aware of it;
(b) The Indemnifying Party has sole control of the defense of such
claim and of all negotiations for its settlement or compromise; and
(c) The Indemnified Party gives the Indemnifying Party information
reasonably available and assistance necessary to facilitate the
settlement or defense of such claim and, to the extent permitted by
law, the Indemnified Party makes any defenses available to it
available to the Indemnifying Party.
The Indemnifying Party's indemnity obligation under this Section shall be
reduced to the extent by which the liability, damage, or expense results
from the willful misconduct or the negligent act or omission of an
employee(s), or agent(s) of the Indemnified Party, or a third party(ies).
For the purpose of this Section,
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"tangible personal property" shall not include software, documentation,
data, or data files, nor shall the indemnity obligation stated in this
Section apply to damages incurred by use of any software. The
indemnifying Party's indemnity obligation, except that for personal bodily
injury or wrongful death, shall be limited to the amount of the
applicable Subcontract Order.
7.3 INSURANCE
Both parties shall provide the following insurance coverage during the
term of this SSA:
(a) Worker's Compensation Insurance as required by the law;
(b) Employer's Liability Insurance in such customary amounts carried
by employers in like business; and
(c) Comprehensive General Liability and Property Damage Insurance,
including Contractual Liability coverages, as follows:
General Liability $1,000,000 per occurrence
Automobile Liability $1,000,000 combined single limit
Upon written request, each party shall supply the other party with a
certificate(s) of insurance evidencing such coverages.
VIII. GENERAL
8.1 NONDISCLOSURE
Confidential information disclosed by either party and/or by Customers in
connection with this SSA or in connection with Services provided
hereunder shall be subject to the protections specified in Section 11.1
(Nondisclosure) of the Master Agreement.
8.2 FULL CONSULTING ENGAGEMENT LIFE CYCLE
Each party will endeavor to include the other party's consulting
personnel in the full life cycle of appropriate consulting engagements,
rather than using such personnel merely as low-cost resource providers.
However, the Prime Contractor in any consulting engagement shall retain
primary responsibility for project management and staffing for that
engagement.
8.3 SOFTWARE LICENSE
A. The Services provided under this SSA may be in support of a Customer's
license to use computer software programs, owned or distributed by Prime
Contractor or Subcontractor, under a separate software license agreement.
In addition each party may, in the course of providing services to a
Customer, use computer software programs licensed to it by the other
under the Master Agreement or a different software license agreement.
Such software license agreement and/or Master Agreement shall govern all
use by Prime Contractor, Subcontractor and/or the Customer of such
programs. Neither this SSA nor any Subcontract Order includes the grant
of any license or any other rights for such programs.
B. Any Services acquired from Subcontractor shall be bid separately from
such program licenses, and Prime Contractor may acquire either Services
or such program licenses without acquiring the other.
8.4 RELATIONSHIP BETWEEN THE PARTIES
Prime Contractor and Subcontractor are independent contractors; nothing
in this SSA shall be construed to create an employer/employee,
partnership, joint venture, or agency relationship between the parties.
Each party will be solely responsible for payment of all compensation
owned to its employees, as well as employment related taxes. Each party
will maintain appropriate worker's compensation for its employees as well
as general liability insurance.
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SUBJECT TO ORACLE MANAGEMENT APPROVAL
8.5 NO LIENS
All developments, deliverables and materials provided by Subcontractor
under this SSA shall be free of any liens. Subcontractor shall neither
file nor cause or permit to be filed any lien with respect to any such
developments, deliverables or materials, and Subcontractor hereby
expressly waives any right to file or cause to be filed any lien for
itself and for all other persons furnishing labor or materials to
Subcontractor for the Services.
8.6 SAFETY
Subcontractor, its employees, agents, and subcontractors shall comply with
the Customer's reasonable safety and security rules while at a Customer
location, provided such rules do not require drug, alcohol or
psychological testing or random security searches.
8.7 GOVERNING LAW
This SSA, and all matters arising out of or relating to this SSA, shall be
governed by the laws of the State of California, and shall be deemed to be
executed in Redwood City, California.
8.8 JURISDICTION
Any legal action or proceeding relating to this SSA shall be instituted in
any state or federal court in San Francisco or San Mateo County,
California. Subcontractor and Prime Contractor agree to submit to the
jurisdiction of, and agree that venue is proper in, the aforesaid courts
in any such legal action or proceeding.
8.9 NOTICE
All notices, including notices of address change, required to be sent
hereunder shall be in writing and shall be deemed to have been given when
mailed by first class mail to the first address listed in the applicable
Subcontract Order (if to Prime Contractor) or to the Subcontractor address
on the Subcontract Order (if to Subcontractor).
8.10 SEVERABILITY
In the event any provision of this SSA is held to be invalid or
unenforceable, the remaining provisions of this SSA will remain in full
force.
8.11 WAIVER
The waiver by either party of any default or breach of this SSA shall not
constitute a waiver of any other or subsequent default or breach. Except
for actions for nonpayment or breach of either party's intellectual
property rights, no action, regardless of form, arising out of this SSA
may be brought by either party more than one year after the cause of
action has accrued.
8.12 FORCE MAJEURE
Neither party shall be in default or otherwise liable for any delay in or
failure of its performance under this SSA or a Subcontract Order where
such delay or failure arises by reason of any Act of God, or any
government or any governmental body, acts of the common enemy, the
elements, strikes or labor disputes, or other similar or dissimilar cause
beyond the control of such party.
8.13 EXPORT ADMINISTRATION
Each party agrees to comply with all relevant export laws and regulations
of the United States ("Export Laws") to assure that neither any software
deliverable, if any, nor any direct product thereof is (1) exported,
directly or indirectly, in violation of Export Laws or (2) is intended to
be used for any purposes prohibited by the Export Laws, including without
limitation, nuclear, chemical, or biological weapons proliferation.
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8.14 ASSIGNMENT
Neither party may assign or otherwise transfer any of its rights or
obligations under this SSA without the other party's prior written
consent.
8.15 ENTIRE AGREEMENT
This SSA constitutes the complete agreement between the parties and,
except as provided in Section 8.3 (Software License) above and in any
provisions of the Master Agreement which expressly concern the provision
of consulting services to Customers, supersedes all previous and
contemporaneous agreements, proposals, or representations, written or
oral, concerning the subject matter of this SSA. Neither this SSA nor any
Subcontract Order may be modified or amended except in a writing signed by
a duly authorized representative of each party; no other act, document,
usage, or custom shall be deemed to amend or modify this SSA or an
Subcontract Order. It is expressly agreed that any terms and conditions of
Prime Contractor's purchase order shall be superseded by the terms and
conditions of this SSA and the applicable Subcontract Order.
ORACLE CORPORATION
Signature:_____________________ Signature:_____________________
Name:__________________________ Name:__________________________
Title:_________________________ Title:________________________
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ORACLE(R)
INDUSTRY SOLUTIONS INITIATIVE
EXHIBIT A to the SERVICES SUBCONTRACT AGREEMENT
CONSULTING SUBCONTRACT ORDER
____________________________________________________________________________
Date of Services Subcontractor Agreement: __________________________________
Date of this Subcontract Order: __________________________________
Prime Contractor: __________________________________
Subcontractor: __________________________________
Customer Name: __________________________________
Customer Address: __________________________________
__________________________________
__________________________________
A. FOR TIME & MATERIALS ENGAGEMENTS
1. SCOPE OF SERVICES:
2. FEES AND EXPENSES:
a. Time & Materials Rates:
Staffing Level Daily Rate
b. Estimated Total Time & Material Fees:
c. Estimated Total Expenses:
B. FIXED PRICE
1. DELIVERABLES, SCHEDULE AND FEES
Deliverable Delivery Date Payment
2. EXPENSES
C. RIGHTS IN DEVELOPMENTS:
The following shall govern the allocation of rights in consulting
developments created within the scope of this Subcontract Order (check
one):
___ SSA Section 5.1.A: Allocation of Rights per Master Agreement (If
the parties wish to allocate rights in developments as set forth
in SSA Section 5.1.A, but the Prime Contract requires Prime
Contractor to assign ownership rights in developments to the
Customer, then, at Prime Contractor's option, Subcontractor shall
sign an agreement with Prime Contractor and Customer clarifying
that ownership rights in developments created by Subcontractor
shall not be assigned to the Customer.)
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___ SSA Section 5.2.B: Assignment to Customer of Copyright in Undefined
Deliverables (Excluding Subcontractor Programs and Modifications,
CASE-Generated Subroutines, and Tools and Utilities), with Right to
Reuse and Distribute Substantially Similar Deliverables.
___ SSA Section 5.2.C: Assignment to Customer of Copyright in Defined
Deliverables (Excluding Subcontractor Programs and Modifications,
CASE-Generated Subroutines, and Tools and Utilities), with No Right
to Reuse Deliverables (but Right to Reuse Intangible Knowledge)
(Each deliverable subject to copyright assignment to Customer must
be clearly identified as "Contract Property" in this Subcontract
Order.)
D. OTHER TERMS:
This Consulting Subcontract Order is placed subject to the terms and
conditions herein and in the above-referenced Services Subcontract
Agreement.
ORACLE CORPORATION
Signature:___________________________ Signature:_________________________
Name:________________________________ Name:______________________________
Title:_______________________________ Title:_____________________________
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ORACLE(R)
INDUSTRY SOLUTIONS INITIATIVE
CONSULTING SUBCONTRACT ORDER
PROJECT IDENTIFICATION ATTACHMENT
Oracle Project ID No. _____________________
<TABLE>
<CAPTION>
<S> <C>
Prime Contractor Contract Administrator: Subcontractor Contract Administrator:
Name: Name:
Address: Address:
Telephone: Telephone:
Fax: Fax:
Prime Contractor Consulting or Education Contact: Subcontractor Consulting or Education Contract:
Name: Name:
Address: Address:
Telephone: Telephone:
Fax: Fax:
Prime Contractor Billing/Accounts Payable Contact: Subcontractor Billing/Accounts Receivable Contract:
Name: Name:
Address: Address:
Telephone: Telephone:
Fax: Fax:
</TABLE>
FOR ORACLE USE WHERE ORACLE IS PRIME CONTRACTOR:
Oracle Customer Agreement Name: ______________________ Date: _______________
ISI Agreement Date: _________________________
FOR ORACLE USE WHERE ORACLE IS SUBCONTRACTOR:
Purchase Order No. ________________________
or
Purchase Order Exemption Acknowledgment:
Prime Contractor does not issue Purchase Orders for Services, however, Prime
Contractor agrees to pay for Services performed under this Subcontract Order, as
specified in the Subcontract Order and/or SSA.
Prime Contractor Purchasing Agent
Signed: ______________________________
Name: ______________________________
Tax Information: ___ (1) Exempt (Attach Tax Exemption Form) ___ (2)
Non-exempt
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SERVICES SUBCONTRACT AGREEMENT
CONSULTING RATES ATTACHMENT
Oracle Consulting Rates (Subject to rates as in effect at the time services
are performed)
<TABLE>
<CAPTION>
Grade U.S. U.S. Global
Level Title Rates hourly Rates daily Rate Index
<S> <C> <C> <C> <C>
_ _ _ _ _ _
12 Senior VP | | | | | |
11 Area VP | | | | | |
10 Regional VP | | | | | |
9 Sr. Practice Dir. | | | | | |
8 Practice Dir. | | | | | |
7 Practice Mgr | | | | | |
6M Managing Prin. | * | | * | | * |
6T Sr. Prin. Consult. | | | | | |
5 Principal | | | | | |
4 Senior Consult. | | | | | |
3 Staff Consult. | | | | | |
2 Assoc. Consult. | | | | | |
1 Admin. |_ _| |_ _| |_ _|
Daily Rates = Global Rate Index x applicable Rate Multiplier
</TABLE>
<TABLE>
<CAPTION>
Country Rate Multiplier Country Rate Multiplier
<S> <C> <C> <C>
_ _
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| * |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
|_ _|
</TABLE>
[ * ] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
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ISI Member Consulting Rates
September 1, 1998 to August 31, 1999
<TABLE>
<CAPTION>
<S> <C>
Role Daily Rate
- ---- ----------
($US)
Associate Consultant [*]
Product Consultant [*]
Senior Product Consultant [*]
Business Consultant [*]
Senior Business Consultant [*]
Principal Consultant [*]
Service Director [*]
</TABLE>
ASSOCIATE CONSULTANT
- -- Provide basic technical support in a Retek systems environment under the
supervision of more experienced personnel.
- -- Program and test custom modifications using information and input from
product and/or business consultants, obtained during conference room pilot
and/or similar sessions.
SENIOR BUSINESS CONSULTANT/SENIOR PRODUCT CONSULTANT
- -- Make recommendations about the most appropriate way of implementing Retek
applications and of utilizing Retek resources using Retek's implementation
methodologies, while remaining sensitive to the customer's strategic business
drivers, project objectives, resource availability and timeframes.
- -- Work with the customer to develop a common understanding of the future
application architecture, to include business functions by system, and key
interface points between Retek and third party applications.
- -- Provide input to the development of a comprehensive time and action plan for
the implementation of Retek applications within the customer's business
within the desired timeframe
- -- Assess the need, and identify appropriately skilled Retek consultants, for
the project team
- -- Define and co-ordinate the involvement of all Retek consultants for the life
of the project, to include briefing them before each customer trip and
de-briefing regularly regarding status and open issues
- -- Facilitate analysis workshops and end user training sessions, as required, by
assisting the Business and Product Consultants to "map" Retek terminology and
procedures to the customer's business operating environment, agreeing
work-arounds or potential modifications, as required, or advising on
potential changes to current business practices
- -- Co-ordinate the involvement of Retek or integrator representatives to develop
detailed modification specifications and advising the customer on the status
of the modification development and on the delivery and testing of modified
functionality
- -- Identify, research and follow up on key issues identified during training and
consulting engagements and/or communicated directly, and own issues through
to resolution
- -- Produce structured customer follow-up documentation that identifies the key
topics covered, open issues (and their resolution, where possible), issues
for management attention and any next steps
[ * ] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
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- -- Communicate proactively with all appropriate parties regarding project status
and open issues
- -- Complete all administrative duties related to the project, including the
completion of status reports, as requested, billing reports etc.
- -- Maintain relationships with key individuals within the customer organizations
that the Project Leader is responsible for, to include the overall Retek IS
and business sponsors to identify needs for additional Retek products or
services
- -- Oversee the professional development of Application Consultants by conducting
formal performance evaluations and informal feedback and counseling sessions
- -- Contribute to the on-going development of Retek services methodologies and
toolkits.
BUSINESS CONSULTANT/PRODUCT CONSULTANT
- -- Prepare for visits to customer sites by identifying the objectives to be
achieved during the trip and researching relevant background information
about the customer's intended usage of our products, Retek release level,
planned modifications etc.
- -- Lead workshops, demonstrations and training courses by seeking to understand
the customer's business operating environment, delivering presentations in a
logical and structured manner, encouraging interaction and remaining flexible
to address changing priorities
- -- Identify, research and follow up on key issues identified during customer
trips and/or communicated directly, and own issues through to resolution
- -- Produce structured deliverables and follow-up documentation that identifies
the key topics covered, outstanding issues (and their resolutions, where
possible) and any next steps
- -- Work with the Relationship Manager to identify opportunities for further
Retek involvement and inform them of issues relevant to their customers
- -- Research customer issues as they arise and working with internal Retek
resources to provide a timely response
- -- Act as the customers' "champion" within Retek by identifying issues that may
impact customers and by communicating customer enhancement and modification
requests
- -- Follow department and company operating procedures and guidelines and
contributing to the on-going development of formalized department operating
policies, practices and procedures
- -- Maintain a detailed understanding of Retek product functionality as new
enhancements are added
- -- Support the on-going development of members of the Services team and other
departments by presenting in-house training and demos for Retek products, as
required
- -- Collate "best practice" information from our customers about the different
ways in which they use Retek applications to increase the value that we can
offer on consulting engagements
PRINCIPAL CONSULTANT
- -- In addition to being able to handle those responsibilities associated with
the senior consultant role, principal consultants possess additional
experience and expertise, with excellent functional and/or technical
knowledge of Retek systems and the retail industry. May possess knowledge
and/or experience in highly specialized areas. Should have exceptional
analytical skills, leadership ability and communications skills and interact
independently and appropriately with client and integrator personnel.
SENIOR DIRECTORS
- -- In addition to being able to handle those responsibilities associated with
the principal consultant role, service directors must have experience in
working with the highest levels of client management, exceptional ability to
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SUBJECT TO ORACLE MANAGEMENT APPROVAL
communicate and exceptional analytical and problem solving skills. Must be
capable of managing direct reports including hiring, performance evaluations
and problem resolution. Skilled at selling consulting services to clients.
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SERVICES SUBCONTRACT AGREEMENT
ORACLE CONSULTING JOB DESCRIPTIONS ATTACHMENT
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SUMMARY OF FUNCTIONAL TECHNICAL Management
JOB TITLES
Associate Consultant Associate Consultant
Staff Consultant Staff Consultant
Senior Consultant Senior Consultant
Principal Consultant Principal Consultant
Senior Principal Consultant Senior Principal Consultant
Managing Principal
Practice Manager
Practice Director
Senior Managers
</TABLE>
- --------------------------------------------------------------------------------
FUNCTIONAL ROLES
JOB TITLE: Associate Consultant (Functional)
QUALIFICATIONS: BS/BA/BBA degree preferred; at least 2 years of industry
experience in manufacturing, distribution or accounting or with
systems company supporting these industries; at least two weeks
of training on at least one of the following: Oracle
Applications and Tools, Datalogix GEMMS, IMI System ESS,
Manugistics, TSW Enterprise or Oracle CPG solution set.
Packaged application implementation, support or development
experience preferred. Should be able to perform independent
work under supervision of project management and interact
appropriately with client and vendor personnel.
JOB TITLE: Staff Consultant (Functional)
QUALIFICATIONS: BS/BA/BBA degree preferred; at least 4 years of industry
experience in manufacturing, distribution or accounting or with
systems company supporting these industries; at least two weeks
of training on at least one of the following packages: Oracle
Applications and Tools, Datalogix GEMMS, IMI System ESS,
Manugistics, TSW Enterprise or Oracle CPG solution set.
Packaged application implementation, support or development
experience preferred. Should be able to perform independent
work under supervision of project management and interact
appropriately with client and vendor personnel. Should have
experience in preparation and execution of project plans,
participation in requirements definition, gathering and
documentation of functional requirements, transformation of
functional requirements into detailed implementation plans.
JOB TITLE: Senior Consultant (Functional)
QUALIFICATIONS: BS/BA/BBA degree preferred; at least 5 years of industry
experience in manufacturing, distribution or accounting or with
systems company supporting these industries; at least four
weeks of training on at least one of the following packages:
Oracle Applications and Tools, Datalogix GEMMS, IMI System ESS,
Manugistics, TSW Enterprise or Oracle CPG solution set.
Packaged application implementation, support or development
experience required. Should be able to perform independent work
with minimal supervision of project management and interact
independently and appropriately with client and vendor
personnel. Should have experience in preparation and execution
of complex project plans, participation in requirements
definition, interviewing users to gather and document
functional requirements, transformation of functional
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requirements into detailed implementation plans. Should be
capable of lending small task oriented project teams,
instructing users and presenting concepts to audiences. Must
possess excellent written and Oracle communication skills.
JOB TITLE: Principal Consultant (Functional)
QUALIFICATIONS: BS/BA/BBA degree preferred, at least 5 years of industry
experience in manufacturing, distribution or accounting or
with systems company supporting these industries: at least
four weeks of training on at least one of the following
packages: Oracle Applications and Tools, Datalogix GEMMS, IMI
System ESS, Manugistics, TSW Enterprise or Oracle CPG
solution set. Packaged application implementation, support or
development experience required. Must have several years of
successful project leadership experience with excellent
functional and/or technical knowledge of systems and industry
served. Must be proficient at project estimating, risk
assessment and work planning. Should have exceptional
analytical skills, leadership ability and communications
skills and interact independently and appropriately with
client and vendor personnel. Should be capable of leading
complex project teams, instructing users and presenting
concepts to management level users.
JOB TITLE: Senior Principal Consultant (Functional with Technical
Expertise)
QUALIFICATIONS: BS/MS degree preferred, at least 5 years of industry
experience in manufacturing, distribution or accounting or
with systems company supporting these industries; at least
two weeks of training on at least one of the following
packages: Oracle Applications and Tools, Datalogix GEMMS, IMI
System ESS, Manugistics, TSW Enterprise or Oracle CPG solution
set. Packaged application implementation, support or
development experience required. Must have outstanding
technical knowledge and credentials which qualify this
individual as an expert in his or her field. Should have
exceptional analytical skills, leadership ability and
communication skills and interact independently and
appropriately with client and vendor personnel. Should be
capable of providing vital project technical assistance that
few consulting personnel are able to provide. This job title
is reserved for exceptional, top-flight technical consultants
who have chosen a technical excellence career track rather
than a management career track.
- -------------------------------------------------------------------------------
TECHNICAL ROLES
JOB TITLE: Associate Consultant (Technical)
QUALIFICATIONS: BS degree preferred plus 2 years programming experience in
open systems development environment. Proficient in one or
more CPG Vender development tools and at least one or more of
the following languages: C, C++, or Pro*C. Proficient in one
or more multi-user operating systems. Knowledgeable or
experienced in database design using Oracle RDBMS.
JOB TITLE: Staff Consultant (Technical)
QUALIFICATIONS: BS degree preferred, 4 years of experience in development of
applications designed around Oracle RDBMS with at least two
years experience in Full Life Cycle development. Proficient in
one or more Oracle or CPG Vendor development tools, plus
either C, C++, or Pro*C. Should have experience in preparation
of detailed relational database designs, participation in
requirements definition, transformation of functional
requirements into detailed designs, plus proficiency in one or
more multi-user operating systems. Should be capable of
interacting with clients independently.
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JOB TITLE: Senior Consultant (Technical)
QUALIFICATIONS: BS degree preferred, 6 years of experience in development of
applications designed around relational database systems with at
least 4 years of Oracle RDBMS. Should have at least three years
of Full Life Cycle development experience. Proficient in one or
more Oracle or CPG vendor development tools, plus either; C,
C++, or Pro*C, and proficient in one or more multi-user
operating systems. Should be able to assist in the preparation
of project test plans and able to manage complex project tasks.
Should have at least 2 years experience in preparing functional
and system specifications, and functional, system, acceptance
and usability test plans. Capable of conducting interviews with
user management and be able to transform client functional
requirements into detailed information databases and process
model specifications. Must possess excellent written and oral
communication skills.
JOB TITLE: Principal Consultant (Technical)
QUALIFICATIONS: BS degree preferred, 7 to 8 years of experience in development
of applications designed around relational database systems with
at least 5 years of Oracle RDBMS. Should have at least four
years of Full Life Cycle development experience. Must be
proficient in all of either Oracle CDE Tools or an appropriate
CPG vendor development tool with at least 5 years of experience
in either open systems/distributed systems design, networking.
CASE method/tool or RDMBS database administration. Must have
several years of successful project leadership experience with
excellent technical knowledge of open or distributed systems
environment. Must be proficient at project estimation, risk
assessment and work planning. Should have exceptional analytical
skills, leadership ability and communications skills.
JOB TITLE: Senior Principal Consultant (Technical)
QUALIFICATIONS: BS/MS/MBA degree preferred, 7 to 10 years of experience Full
Life Cycle development of applications designed around
relational database systems with 5+ years of Oracle RDMBS. Must
possess highest level of Oracle technical and application skills
and be acknowledged as an industry expert. Must possess in-depth
knowledge of all Oracle CDE Tools or a CPG vendor development
tool. Must have medium to large project management experience
and/or have served as the senior technical resource for
Oracle-based projects. Must be capable of managing multiple
projects. Must have expert knowledge of at least two technical
specialties such as CASE method, database design and
administration, open systems design or networking, experience in
working with senior client technical management, exceptional
ability to communicate and exceptional analytical and problem
solving skills.
- --------------------------------------------------------------------------------
MANAGEMENT ROLES
JOB TITLE: Managing Principal Consultant
QUALIFICATIONS: BS/BA/BBA/MS/MBA degree preferred; at least 5 years of industry
experience in manufacturing, distribution or accounting or with
systems company supporting these industries; at least two weeks
of training on at least one of the following packages: Oracle
Applications and Tools, Datalogix GEMMS, IMI System ESS,
Manugistics, TSW Enterprise or Oracle CPG solution set.
Management of medium to large packaged application
implementation, support or development projects required. Must
be capable of managing multiple projects. Must have expert
knowledge of business processes and practices in at least one
industry, experience in working highest levels of client
management, exceptional ability to communicate and exceptional
analytical and problem solving skills. Must be capable of
managing direct reports including hiring, performance
evaluations and problem resolution. Must be skilled at selling
consulting services to clients.
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JOB TITLE: Practice Manager
QUALIFICATIONS: BS/BA/BBA/MS/MBA degree preferred; at least 5 years of industry
experience in manufacturing, distribution or accounting or with
systems company supporting these industries. Management of
medium to large packaged application implementation, support or
development projects required. Must be capable of managing
multiple projects. Must have expert knowledge of business
processes and practices in at least one industry, experience in
working highest levels of client management, exceptional
ability to communicate and exceptional analytical and problem
solving skills. Must be capable of managing many direct reports
and intermediate managers including hiring, performance
evaluations, problem resolution, budgeting, training, etc. Must
be expert at selling consulting services and software licenses
to clients and coordinating multiple vendors and functional
departments (sales, services, marketing, etc.) to bring about
successful sales and post-sales client satisfaction.
JOB TITLE: Practice Director
QUALIFICATIONS: BS/BA/BBA/MS/MBA degree preferred; at least 5 years of
industry experience in manufacturing, distribution or
accounting or with systems company supporting these
industries. Management of medium to large packaged application
implementation, support or development projects required. Must
be capable of managing multiple projects. Must have expert
knowledge of business processes and practices in at least one
industry, experience in working highest levels of client
management, exceptional ability to communicate and exceptional
leadership and problem solving skills. Must be currently
managing many direct reports and intermediate managers
including hiring, performance evaluations, problem resolution,
budgeting, training, etc. Must be expert at selling consulting
services and software licenses to clients and coordinating
multiple vendors and functional departments (sales, services,
marketing, etc). to bring about successful sales and
post-sales client satisfaction. Must be capable of being
single point of leadership for large, world-wide client
implementation project.
JOB TITLE: Senior Practice Director, Regional Vice President, All Other
Senior Managers
QUALIFICATIONS: All personnel from Senior Practice Director and up the
management chain who intend to bill clients for services
rendered under an Oracle primed contract with a client must
have their billing level approved in advance and in writing by
the Vice President of Vertical Markets at Oracle or an Oracle
Area Vice-President.
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ORACLE(R)
INDUSTRY SOLUTIONS INITIATIVE
EXHIBIT A to the SERVICES SUBCONTRACT AGREEMENT
CUSTOM EDUCATION SERVICES SUBCONTRACT ORDER
______________________________________________________________________________
Date of Services Subcontractor Agreement: ___________________________________
Date of this Subcontract Order: ___________________________________
ISI Member Name: ___________________________________
Customer Name: ___________________________________
Customer Address: ___________________________________
A. DESCRIPTION OF EDUCATION SERVICES TO BE DELIVERED BY ISI MEMBER
B. FEES AND EXPENSES
C. OTHER TERMS:
This Education Subcontract Order is placed subject to the terms and conditions
herein and in the above-referenced Services Subcontract Agreement.
ORACLE CORPORATION
Signature: ___________________ Signature: ___________________
Name: ________________________ Name: ________________________
Title: _______________________ Title: _______________________
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ORACLE(R)
INDUSTRY SOLUTIONS INITIATIVE
CUSTOM EDUCATION SERVICES SUBCONTRACT ORDER
PROJECT IDENTIFICATION ATTACHMENT
Oracle Project ID No.__________
Oracle Customer Agreement Name:__________________________ Date:_____________
ISI Agreement Date:________________
<TABLE>
<CAPTION>
<S> <C>
Oracle Contract Administrator: ISI Member Contract Administrator:
Name: Name:
Address: Address:
Telephone: Telephone:
Fax: Fax:
Oracle Education Contact: ISI Member Education Contact:
Name: Name:
Address: Address:
Telephone: Telephone:
Fax: Fax:
Oracle Billing/Accounts Payable Contact ISI Member Billing/Accounts
Receivable Contact:
Name: Name:
Address: Address:
Telephone: Telephone:
Fax: Fax:
</TABLE>
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SERVICES SUBCONTRACT AGREEMENT
ISI MEMBER EDUCATION PRICING ATTACHMENT
FIXED-FEE COURSES
<TABLE>
<CAPTION>
Technical Training Length Price
<S> <C> <C>
Course
1. Batch Technical Development Course (1 week) 5 days $1750/person/week
2. Online (Forms) Technical Development Course (1 week) 5 days $1750/person/week
3. Technical and Functional Perspectives (1 week) 5 days $3500/person/week
Functional Training
Course
RMS Fundamentals 5 days $1750/person/week
</TABLE>
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EXHIBIT E
SERVICE LEVEL AGREEMENT
DESCRIPTION OF SERVICES AND MATERIAL
- - REAL TIME TELEPHONE TECHNICAL ASSISTANCE
ISI Member shall provide real time technical assistance to Oracle as
described below. ISI Member shall provide telephone access to its main
support organization through a telephone number dedicated to Oracle
WorldWide Support. Before contacting ISI Member support, knowledgeable
Oracle support specialists in the Oracle WorldWide Support Centers will
have made reasonable efforts to solve problems that are not product
defects. If unable to solve a problem, Oracle WorldWide Support will
deliver problems in a mutually agreed upon format which when appropriate
will contain the necessary information to allow the ISI Member's support
and development organization to recreate the problem for study and
resolution.
Telephone access shall include but not be limited to problem solving, bug
reporting, documentation clarification, and technical guidance from 8:30
AM to 5:30 PM in the time zone where ISI Member's main support
organization in the United States is located. From 7:00 AM to 8:30 AM and
from 5:30 PM to 7:00 PM in the time zone where ISI Member's main support
and development organization in the United States is located, ISI Member
shall provide pager access to a senior ISI Member support representative
familiar with ISI Member Programs and who has access to development
personnel for (but not limited to) problem solving, bug reporting,
documentation clarification and technical guidance. ISI Member will
respond to a page within 30 minutes to begin analysis of the problem.
Access to a senior ISI Member support representative familiar with ISI
Member Programs and who has access to development personnel who should be
available 24 hours a day 7 days a week by pager to respond to TARs of
Severity Level 1 as defined below. Pager access may also be used for the
escalation of existing TARs to Severity Level 1. In either case ISI Member
will respond to a page within 30 minutes to begin analysis of the problem.
- - DOCUMENTATION
ISI Member shall supply five complete sets of system level and user level
documentation to Oracle WorldWide Support in Redwood City, California for
distribution to Oracle's WorldWide Support Super Centers. Updates to this
documentation shall be supplied in a timely manner as they become
available and in the form available at such time, but no later than 30
days before shipment to any Oracle customer of a beta release of the
applicable software update (provided, however, that such 30 day
requirement shall not serve to delay ISI Member from shipping beta
software to an Oracle customer and ISI Member provides to Oracle such
documentation at the same time of the initial shipment to an Oracle
Customer), or 90 days before shipment to any Oracle customer of a
production release of the applicable software update (whichever is
earlier). Initial versions of the documentation may be draft releases.
- - PROGRAM TECHNICAL SUPPORT UPDATES
Patches and fixes
General maintenance releases
Functional releases
The ISI Member shall support the current release and the immediately prior
release of the ISI Member Programs. Back porting will be required for any
patch or fix that corrects a problem reported against any release of an
ISI Member Program which is not the then-current release (e.g., where the
current release of an ISI Member Program is a later release than the one
incorporated in the then-current Oracle Solution
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Suite version), where the reported problem has already been corrected in
the then-current release of the ISI Member Program.
- - SUPPORT SYSTEMS ACCESS
ISI Member shall provide reasonable access to the information contained in
ISI Member's support call tracking system as it relates to Oracle's
support of the ISI Member Programs. This information will be available to
Oracle through real time interface with any third party software or
translation and production costs borne by Oracle. Oracle and ISI Member
will work together to evaluate the scope of the effort and appropriate
timing of developing further interfaces between Oracle's and ISI Member's
support systems.
- - MAIL SERVER ACCESS
Electronic mail, via the internet, can serve as a means for Oracle
WorldWide Support to enter Severity 2 and 3 TARs after ISI Member's normal
business hours, to escalate incidents to ISI Member and to send status
updates.
TECHNICAL ASSISTANCE REQUEST (TAR) SEVERITY LEVELS
The chart below lists the standard Technical Assistance Request Severity Levels.
ISI member shall use commercially reasonable efforts to respond to Oracle's
requests with respect to the ISI Member Programs based on the Severity Levels
set forth below.
Severity Level
SEVERITY 1
Critical Business Impact
Customer's production environment is stopped or so severely impacted that
Customer cannot reasonably continue to work. If Oracle WorldWide Support find it
necessary to contact ISI Member either by phone during ISI Member normal
business hours (as specified above) or by pager after normal business hours ISI
Member shall respond within 30 minutes. ISI Member shall work around the clock
in providing a fix or acceptable work around to Oracle WorldWide Support for
Customer for a Severity 1 problem. Oracle shall provide ISI Member with
reasonable and continuous assistance until such a fix or acceptable work around
is provided or the TAR is downgraded.
ESCALATED SEVERITY 2
Escalated Severe business Impact
Customer's issue was originally designated as a Severity 2, Severe Business
Impact; however Customer's severity level is being escalated to this Escalated
Severity 2 by Customer. ISI Members shall use commercially reasonable efforts to
provide a fix or acceptable work around which Oracle WorldWide Support may
deliver to the Customer in less than or equal to 3 calendar days from the date
of escalation.
SEVERITY 2 BACKPORT
Severe Business Impact
A patch exists to resolve customer's issue but is not available for Customer's
platform and/or Customer's release of the products causing the impact. ISI
Member shall use commercially reasonable efforts to provide a fix or acceptable
work around which Oracle WorldWide Support may deliver to the Customer in less
than or equal to 3 calendar days of the request from Oracle WorldWide Support.
SEVERITY 2
Severe Business Impact
Customer's production environment is continuing (not stopped) however, there is
serious impact on the Customer's productivity and/or service levels. If Oracle
WorldWide Support finds it necessary to contact ISI Member by phone during the
above normal business hours ISI Member shall respond within 2 hours. In the
event Oracle
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SUBJECT TO ORACLE MANAGEMENT APPROVAL
WorldWide Support contacts ISI Member via electronic messaging outside normal
business hours ISI Member shall respond within 2 hours of the resumption of
normal business hours. ISI Member shall use commercially reasonable efforts to
provide a fix or acceptable work around with Oracle WorldWide Support may
deliver to Customer in less than equal to 3 calendar days of the request form
Oracle WorldWide Support.
SEVERITY 3
Minor Business Impact
Customer is in full working mode, there is no work being impeded at the time,
information or solutions are requested by the Customer as soon as possible to
answer the question or correct the problem. If Oracle WorldWide Support finds it
necessary to contact ISI Member by phone during the above normal business hours
ISI Member shall respond within 1 business day. In the event Oracle WorldWide
Support contacts ISI Member via electronic messaging outside normal business
hours ISI Member shall respond within 2 hours of the resumption of normal
business hours. ISI Member shall use commercially reasonable efforts to provide
a solution which Oracle WorldWide Support may deliver to Customer within 7 days
of the request from Oracle WorldWide Support. This solution may be in the form
of a patch, work around, or fix included in a subsequent or next release.
***
FIRST LINE SUPPORT BY ORACLE
The expectations for first line support by Oracle of ISI Member Programs are as
follows:
Technical support will be available through the Oracle WorldWide Support
Centers for ISI Member Programs including those that do not use the
Oracle technologies.
All communication with customers including initial recording of issues,
interim follow-up on issue resolution status, and final delivery of
fixes will be coordinated through Oracle WorldWide Support Centers.
Oracle WorldWide Support Centers will answer all functional and business
related questions concerning ISI Member Programs (e.g., not software
code related issues).
Oracle WorldWide Support Centers will answer all initial operations
related questions such as configuration options, database
setup/optimization, hardware configurations and other related
environment issues for Oracle Based Programs.
Oracle WorldWide Support Centres will answer all production operations
related questions such as abnormal job terminations related to
environment issues such as inadequate disk space, database
configuration and other related environment issues for Oracle based
Programs.
For software related issues, Oracle WorldWide Support Centers will
research the reported issue, recreate the Issue in their testing
environment, and research the potential causes of the issue.
Dial-in access to the Oracle WorldWide Support Centers test systems must
be available to ISI Member to allow visibility to any reproduced
problems as a transition step to ISI Member's support group.
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SUBJECT TO ORACLE MANAGEMENT APPROVAL
EXHIBIT F
CERTIFICATION FOR SOFTWARE
This questionnaire can cover one complete product, even if that product includes
multiple modules.
Please leave no questions blank. Write "not applicable" or "N/A" if a question
is not relevant to the furnished software material.
________________________________________________________________________________
1. Was my portion of the software material (including screen graphics)
written by anyone other than ISI Member or its employees (i.e. consultants
or independent contractors) within the scope of their employment?
YES NO X
------ ------
If YES, provide, here or as an attachment, the following information:
A) Identify the portion(s):
B) i. Specify for each portion the name, address, and citizenship of
each source:
ii. If the source is not the actual author, how did it acquire
title to the software material (e.g. software material was
written by company's employees within the scope of their
employment)?
iii. If the source is an individual, did he/she create the software
material while employed by or under contractual relationship
with another party?
YES NO
------ ------
If YES, provide the name and address of the other party and
explain the nature of the contractual relationship:
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
C) How did ISI Member acquire title to the software material written
by the other party?
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
2. Are or were any copyright, confidentiality, or proprietary notice(s)
present on the software material(s)?
YES X NO
------ ------
If YES, please describe such notice(s):
SECURED COPYRIGHT IMMEDIATELY ON EACH RELEASE OF SOFTWARE
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
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3. Was any portion of the software material derived from preexisting code
(either yours or a third party's), including any code from freeware,
shareware, electronic bulletin boards, or the Internet?
YES NO X
----- -----
If YES, please identify the material, author, owner, and copyright notice,
if any, for each of the preexisting materials:
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
4. Provide, as an attachment, an explanation of any other circumstance which
might affect Oracle's ability to reproduce, distribute, and market this
software material, including:
Whether your software material was prepared from any preexisting materials
which have any:
a) confidentiality or trade secret restrictions to others;
b) known or possible royalty obligations to others;
c) other preexisting materials developed for another party or customer
(including government) where ISI Member may not have retained full
rights to such other preexisting materials.
5. ISI Member recognizes that, for copyright registration or enforcement of
legal rights relating to the furnished software material, Oracle may need
ISI Member to produce additional information related to the software
material. ISI Member hereby agrees to cooperate with Oracle and provide
such information to Oracle at Oracle's request.
As an authorized representative of ISI Member, I hereby agree and certify the
above to be true, accurate, and complete.
By: signed
------------------------------
Signature
David Tidmarsh
------------------------------
Name (Type or Print)
Vice President
------------------------------
Title
5/15/98
------------------------------
Date
ORACLE CONFIDENTIAL WHEN COMPLETED
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SUBJECT TO ORACLE MANAGEMENT APPROVAL
EXHIBIT G
INDUSTRY SOLUTIONS INITIATIVE MULTI-PARTY NONDISCLOSURE AGREEMENT
ORACLE(R)
INDUSTRY SOLUTIONS INITIATIVE
MULTI-PARTY NONDISCLOSURE AGREEMENT
The parties whose representatives' signatures appear on the attached Signature
Page (the "Parties") are members of the Oracle Corporation Industry Solutions
Initiative for development and marketing of, and conduct of other activities
related to, application software suites targeted to specific industries. In the
course of such activities, the Parties anticipate that each of them will have
access to information that others consider proprietary and confidential. To
protect the confidentiality of such information, the Parties hereby agree that:
1. Definition Of "Confidential Information". For purposes of this Multi-Party
Nondisclosure Agreement ("MPNDA"), "Confidential Information" shall mean:
(a) computer software in object code (not source code) form; (b)
software-related documentation, designs and specifications, methods and
methodologies, release management and version control standards,
localization support requirements and technical reference manuals; (c)
software-related business and marketing information and information
related to a Party's customers and customer opportunities; (d) any other
information to which a Party ("Receiving Party") has access at the
premises or on a corporate computer network of another Party ("Disclosing
Party"); and (e) any information not described in (a)-(d) above which is
marked confidential, or is identified as confidential at the time of
disclosure and is also summarized and designated as confidential in a
written memorandum delivered to the Receiving Party within thirty (30)
days of the disclosure. The Parties shall not disclose source code to each
other under this MPNDA.
2. Authorized Use. A Receiving Party shall use Confidential Information of a
Disclosing Party only for the purposes of developing, marketing,
supporting and providing training and implementation services for
application software suites in connection with the Oracle Corporation
Industry Solutions Initiative, and other activities directly related to
the foregoing.
3. Duty Of Protection. A Receiving Party shall protect the disclosed
Confidential Information by using the same degree of care, but not less
than a reasonable degree of care, to prevent the unauthorized use,
dissemination or publication of the Confidential Information as the
Receiving Party uses to protect its own Confidential Information of a like
nature. The Parties agree not to make each other's Confidential
Information available in any form to any person or company which is not a
Party or an employee of a Party. Each Party agrees to permit disclosure of
the Confidential Information only to those of its employees who have a
"need to know", and to take all reasonable steps to ensure that
Confidential Information of other Parties is not disclosed or distributed
by its employees in violation of the provisions of this MPNDA.
4. Period Of Protection. A Receiving Party's duty to protect Confidential
Information disclosed under this MPNDA expires five (5) years after the
date of disclosure (except object code and any related technical
documentation, which obligations will remain in effect in perpetuity),
unless another agreement in effect between the Disclosing Party and the
Receiving Party provides a longer protection period for such Confidential
Information.
5. Exclusions From Duty Of Protection. This MPNDA imposes no obligation upon
a Receiving Party with respect to Confidential Information which (a) was
in the Receiving Party's possession before receipt from the Disclosing
Party; (b) is or becomes a matter of public knowledge through no fault of
the Receiving Party; (c) is rightfully received by the Receiving Party
from a third party without a duty of confidentiality; (d) is disclosed by
the Disclosing Party to a third party without a duty of confidentiaility
on the third party;
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(e) is independently developed by the Receiving Party; (f) is disclosed
under operation of law: or (g) is disclosed by the Receiving Party with
the Disclosing Party's prior written approval.
6. Title. All Confidential Information shall remain solely the property of
the Disclosing Party. A Receiving Party acquires no intellectual property
rights to the Confidential Information under this MPNDA except the limited
right to use set out in Paragraph 2 above.
7. No Obligation to Purchase. This MPNDA imposes no obligation on any Party
to purchase or otherwise acquire any service or item from another Party.
8. Independent Development/Freedom of Action. Each party acknowledges that
the other Parties are in the software development business. This MPNDA
shall not preclude any Party from developing, using, marketing, licensing,
and/or selling any independently developed software which has the same or
similar functionality as any product owned or distributed by another
Party, so long as such activities do not constitute breach of this MPNDA
or infringe the intellectual property rights of such other Party.
9. Period of Disclosure/Receipt. This MPNDA controls only Confidential
Information which is disclosed by or to a Party between the date such
Party signs this MPNDA (as indicated on the Signature Page) and the date
such Party withdraws from this MPNDA. A party may withdraw from this
MPNDA upon written notice to all other Parties hereto, delivered to such
other Parties at the addresses written on the Signature Page provided that
such Party's obligations hereunder shall survive such withdrawal.
10. Independent Contractors. The Parties are independent contractors, and do
not intend that any agency or partnership relationship be created among
them by this MPNDA.
11. Modifications: Addition/Deletion of Parties. All additions or
modifications to this MPNDA, including any additions to or deletions from
the Signature Page, must be made in writing and must be signed by all
Parties.
12. Governing Law. This MPNDA is made under and shall be construed according
to the laws of the State of California.
13. Order of Precedence. In the event of a conflict or inconsistency between
this Agreement and any Industry Solutions Initiative Master Agreement
between any two parties hereto, the Industry Solutions Initiative Master
Agreement shall control with respect to the rights and obligations of
those parties.
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ORACLE(R)
INDUSTRY SOLUTIONS INITIATIVE
MULTI-PARTY NONDISCLOSURE AGREEMENT
SIGNATURE PAGE
________________________________________________________________________________
NOTE: THIS SIGNATURE PAGE MUST BE RE-EXECUTED BY ALL PARTIES UPON ANY ADDITION
OF A PARTY TO, OR DELETION OF A PARTY FROM, THIS SIGNATURE PAGE.
<TABLE>
<CAPTION>
<S> <C>
Company: Oracle Corporation Company: _________________________
Address: 500 Oracle Parkway Address: _________________________
Redwood City, CA 94065 _________________________
U.S.A. _________________________
Signature: _________________________ Signature:_________________________
Name: _________________________ Name: _________________________
Title: _________________________ Title: _________________________
Date: _________________________ Date: _________________________
Company: _________________________ Company: _________________________
Address: _________________________ Address: _________________________
_________________________ _________________________
_________________________ _________________________
Signature: _________________________ Signature:_________________________
Name: _________________________ Name: _________________________
Title: _________________________ Title: _________________________
Date: _________________________ Date: _________________________
Company: _________________________ Company: _________________________
Address: _________________________ Address: _________________________
_________________________ _________________________
_________________________ _________________________
Signature: _________________________ Signature:_________________________
Name: _________________________ Name: _________________________
Title: _________________________ Title: _________________________
Date: _________________________ Date: _________________________
</TABLE>
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EXHIBIT H
KEY PERSONNEL
Relationship Managers
Oracle Relationship Manager:
ISI Member Relationship Manager:
Personnel Authorized to Have Access to Restricted Materials
<TABLE>
<CAPTION>
Company Name Location
------- ---- --------
<S> <C> <C>
Oracle [*] [*]
Oracle [*] [*]
Oracle [*] [*]
Oracle [*] [*]
Retek [*] [*]
Retek [*] [*]
Retek [*] [*]
Retek [*] [*]
Retek [*] [*]
Retek [*] [*]
Retek [*] [*]
Retek [*] [*]
Retek [*] [*]
Retek [*] [*]
Retek [*] [*]
Retek [*] [*]
</TABLE>
Development Lab Systems Administrator
<TABLE>
<CAPTION>
Name Title Location
---- ----- --------
<S> <C> <C>
</TABLE>
[ * ] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
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EXHIBIT I
ORACLE'S CURRENT ISI NETWORK ACCESS AGREEMENT
ORACLE(R)
INDUSTRY SOLUTIONS INITIATIVE
NETWORK ACCESS AGREEMENT
- --------------------------------------------------------------------------------
Effective Date: 5/15 1998
----------------, ----,
ISI Member: Retek Information Systems
--------------------------
Address: 801 Nicollet Mall, 11th Floor
-----------------------------
Minneapolis MN 55402
-----------------------------
-----------------------------
This Agreement is made by and between Oracle Corporation ("Oracle"), a
California corporation located at 500 Oracle Parkway, Redwood City, California,
94065 and the ISI Member identified above. Oracle and the ISI Member agree as
follows:
1. Network Usc, Oracle grants the ISI Member and its authorized personnel
listed in Exhibit B (Key Personnel) to the Industry Solutions Initiative
Master Agreement dated _______________ between the ISI Member and Oracle
(the "Master Agreement") the nonexclusive, revocable right, subject to the
terms of this Agreement, to obtain access to and use Oracle's Network (the
"Network"). (Such ISI Member personnel shall be referred to in this
Agreement as "Authorized Personnel.") The rights under this Agreement are
granted only for so long as such persons are employed by the ISI Member
and only after such Authorized Personnel have signed an agreement with the
ISI Member that enables the ISI Member to comply fully with this
Agreement. The Network is defined as any communication channels connecting
Oracle data devices to each other and may interface devices owned,
operated, administered, maintained, leased or otherwise controlled by
Oracle, that are used to connect those channels to other channels or are
used to provide a user interface to those channels that are necessary to
accomplish the Permitted Uses specified in Paragraph 2 below.
Additionally, the ISI Member shall provide a copy of this Agreement to the
Authorized Personnel before they are allowed access to the Network under
this Agreement. The list of Authorized Personnel may be modified as
provided in the Master Agreement. The ISI Member agrees to notify Oracle
within a reasonable time period when any of the Authorized Personnel cease
being employed by the ISI Member. For purposes of this Agreement, the term
"ISI Member" shall include both the ISI Member and its Authorized
Personnel.
The ISI Member agrees to comply with all instructions given by the Oracle
Data Centre.
2. Permitted Uses. The ISI Member's access to and use of the Network shall be
only for the purposes set out below.
a. Reason for access:
Integration of ISI Member Programs with Oracle Programs and ISI Co-Member
Programs for development of Oracle Solution Suite(s) as such terms are
defined in the Master Agreement.
b. Ultimate server and/or data device to be accessed:
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
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a. Type of Activity (e.g., email, read, transfer and/or edit files):
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
The above-listed purposes shall constitute the sole "Permitted Uses"; any
other use of the Network and any data devices attached thereto is strictly
prohibited and may subject the ISI Member to civil and criminal
prosecution. Such prohibited uses include, but are not limited to,
negligently or knowingly doing the following:
a. Using unauthorized resources;
b. Exhausting Network resources;
c. Modifying, viewing, copying or obtaining programs or data if not
authorized to do so;
d. Inserting any program or data except for the Permitted Uses;
e. Causing fees to Oracle;
f. Changing the topology of the Network.
3. Fees. Remote access to and use of the Network shall be at the ISI Member's
expense. Oracle shall not charge the ISI Member any fees for use of the
Network.
4. Equipment and Access Procedures. Oracle shall provide the ISI Member with
certain equipment and/or passwords to enable the Authorized Personnel to
access the Network (the "Equipment"). The ISI Member shall not share
Equipment located off Oracle's premises with any third party. The ISI
Member shall take reasonable steps to secure physical access to the
Equipment and shall use passwords in compliance with Oracle's password
policy. The ISI Member agrees to assume sole responsibility for the
Equipment and to pay Oracle replacement costs for any damage to or loss of
the Equipment, other than normal wear and tear, caused by the ISI Member
or while the Equipment is in the ISI Member's possession. The ISI Member
agrees to notify, and is solely responsible for notifying Oracle of the
loss, damage or theft of the Equipment by the most expeditious means
available. Oracle reserves the right to modify the procedures and hardware
needed to access the Network at any time.
5. Term. Either party may terminate this Agreement at any time. Oracle
reserves the right to disconnect the ISI Member from the Network at any
time, without warning of any kind. Upon termination, the ISI Member shall
immediately cease accessing and using the Network and shall immediately
return the Equipment to Oracle.
6. Nondisclosure and Ownership. The terms of Section 15.1 (Nondisclosure) of
the Master Agreement shall apply to this Agreement, as well as the
following terms.
Oracle shall use the same degree of care to protect the confidentiality of
ISI Member-Confidential Information placed on the Network that Oracle
uses to protect the confidentiality of its own Confidential Information
residing or travelling in the same environment on the Network.
The ISI Member acknowledges and agrees that Oracle is the owner of the
Network and all data contained therein. Nothing in this Agreement shall be
construed to transfer any proprietary rights of one party to the other. In
no event shall Oracle obtain any ownership rights in or to the ISI
Member's proprietary software or data as a result of such software or data
being placed on or transferred through the Network. The ISI Member agrees
that Oracle may offer use and access to the Network to other parties.
The ISI Member agrees that a breach of the confidentiality provisions of
this Agreement will breach the security of Oracle's Network and data
devices attached thereto and therefore would cause irreparable harm to
Oracle for which no adequate remedy at law exists, and the ISI Member
therefore agrees that, in addition to any other remedies available, Oracle
shall be entitled to injunctive relief to enforce the terms of this
Agreement.
7. Warranty Disclaimer/Limitation of Liability. THE ISI MEMBER ACCEPTS ACCESS
TO THE NETWORK ON AN
Page: I-2
<PAGE> 79
SUBJECT TO ORACLE MANAGEMENT APPROVAL
"AS IS" BASIS. ORACLE MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND
WITH RESPECT TO PERFORMANCE, DATA QUALITY, ACCESSIBILITY OR INTEGRITY OF
THE NETWORK, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF FITNESS FOR A
PARTICULAR PURPOSE OR MERCHANTABILITY. ORACLE ASSUMES NO RESPONSIBILITY
IN CONNECTION WITH THE ISI MEMBER'S ACCESS TO OR USE OF THE NETWORK.
8. Liability/Indemnification. EACH PARTY'S LIABILITY FOR DAMAGES ARISING OUT
OF OR IN CONNECTION WITH THIS AGREEMENT SHALL BE GOVERNED BY THE MASTER
AGREEMENT, INCLUDING WITHOUT LIMITATION SECTION 14.3 (LIMITATION OF
LIABILITY) THEREOF.
9. Assignment. Each party's right to assign its rights and delegate its
obligations hereunder shall be governed by the same terms as those
specified in the Master Agreement.
10. Governing Law. This Agreement is made and entered into by the parties in
the State of California and shall be construed according to the laws of
that state.
11. Export Administration. The ISI Member agrees to comply fully with all
relevant export laws and regulations of the United States ("Export
laws") and agrees that no Confidential Information or Equipment, or any
direct product thereof, is exported, directly or indirectly, in violation
of Export laws.
12. Severability and Entire Agreement. In the event any provision of this
Agreement is held to be invalid or unenforceable, the remaining
provisions of this Agreement will remain in full force.
This Agreement sets forth the entire agreement between the parties
concerning its subject matter and supersedes all prior or contemporaneous
agreements, whether written or oral. All additions or modifications in
this Agreement must be made in writing and must be signed by both
parties.
<TABLE>
<CAPTION>
<S> <C>
ORACLE CORPORATION ISI MEMBER
Authorized by: By:XXXXXXXXXXX
---------------------- ----------------
Name: Name: David Tidmarsh
---------------------- ---------------
Title: Title: Vice President
---------------------- ----------------
</TABLE>
Page: I-3
<PAGE> 80
SUBJECT TO ORACLE MANAGEMENT APPROVAL
EXHIBIT J
MINIMUM SUBLICENSE FEES
Page: J-1
<PAGE> 81
September 8, 1998
Retek Information Systems, Inc.
ISI Minimum Sublease Schedule
<TABLE>
<CAPTION>
Minimum License Fee due to Retek
--------------------------------------------------------
[ * ] Joint Model Supported Model
------------------- -------------------
Product Base Per User Base Per User Comments
- ------- ------ ---------- ------ ---------- --------
<S> <C> <C> <C> <C> <C>
RMS [*] [*] [*] [*] [*]
ARI [*] [*] [*] [*] [*]
Trade Mgmt [*] [*] [*] [*] [*]
Retek Warehouse Management [*] [*] [*] [*] [*]
RDF [*] [*] [*] [*] [*]
RDW [*] [*] [*] [*] [*]
RTBT [*] [*] [*] [*] [*]
</TABLE>
[*]
<TABLE>
<CAPTION>
Minimum License Fee due to Retek
--------------------------------------------------------
Joint Model Supported Model
------------------- -------------------
Product Base Per User Base Per User Comments
- ------- ------ ---------- ------ ---------- --------
<S> <C> <C> <C> <C> <C>
RMS [*] [*] [*] [*] [*]
ARI [*] [*] [*] [*] [*]
Trade Mgmt [*] [*] [*] [*] [*]
Retek Warehouse Management [*] [*] [*] [*] [*]
RDF [*] [*] [*] [*] [*]
RDW [*] [*] [*] [*] [*]
RTBT [*] [*] [*] [*] [*]
</TABLE>
[*]
<TABLE>
<CAPTION>
Minimum License Fee due to Retek
--------------------------------------------------------
Joint Model Supported Model
------------------- -------------------
Product Base Per User Base Per User Comments
- ------- ------ ---------- ------ ---------- --------
<S> <C> <C> <C> <C> <C>
RMS [*] [*] [*] [*] [*]
ARI [*] [*] [*] [*] [*]
Trade Mgmt [*] [*] [*] [*] [*]
Retek Warehouse Management [*] [*] [*] [*] [*]
RDF [*] [*] [*] [*] [*]
RDW [*] [*] [*] [*] [*]
RTBT [*] [*] [*] [*] [*]
</TABLE>
[*]
<TABLE>
<CAPTION>
Minimum License Fee due to Retek
--------------------------------------------------------
Joint Model Supported Model
------------------- -------------------
Product Base Per User Base Per User Comments
- ------- ------ ---------- ------ ---------- --------
<S> <C> <C> <C> <C> <C>
RMS [*] [*] [*] [*] [*]
ARI [*] [*] [*] [*] [*]
Trade Mgmt [*] [*] [*] [*] [*]
Retek Warehouse Management [*] [*] [*] [*] [*]
RDF [*] [*] [*] [*] [*]
RDW [*] [*] [*] [*] [*]
RTBT [*] [*] [*] [*] [*]
</TABLE>
[*]
<TABLE>
<CAPTION>
Minimum License Fee due to Retek
--------------------------------------------------------
Joint Model Supported Model
------------------- -------------------
Product Base Per User Base Per User Comments
- ------- ------ ---------- ------ ---------- --------
<S> <C> <C> <C> <C> <C>
RMS [*] [*] [*] [*] [*]
ARI [*] [*] [*] [*] [*]
Trade Mgmt [*] [*] [*] [*] [*]
Retek Warehouse Management [*] [*] [*] [*] [*]
RDF [*] [*] [*] [*] [*]
RDW [*] [*] [*] [*] [*]
RTBT [*] [*] [*] [*] [*]
</TABLE>
[ * ] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE> 82
SUBJECT TO ORACLE MANAGEMENT APPROVAL
EXHIBIT K
GRANDFATHERED CUSTOMERS
<TABLE>
<CAPTION>
US GERMANY
<S> <C>
- - [ * ] - [ * ]
- - Ames - [ * ]
- - [ * ] - [ * ]
- - [ * ] - Strauss Innovation
- - [ * ] - [ * ]
- - [ * ] - [ * ]
- - [ * ] - [ * ]
- - Cato - [ * ]
- - Eckerd Drug - [ * ]
- - Finlay
- - [ * ]
- - Kohl's SOUTH AFRICA
- - LL Bean - [ * ]
- - [ * ]
- - [ * ]
- - [ * ] HOLLAND
- - [ * ] - [ * ]
- - [ * ]
- - [ * ]
- - [ * ]
- - [ * ]
- - [ * ]
- - [ * ]
- - Sears Canada
- - [ * ]
- - [ * ]
- - Talbots
- - [ * ]
FRANCE
- - [ * ]
- - [ * ]
- - [ * ]
UK
- - [ * ]
- - New Look
- - [ * ]
- - [ * ]
- - [ * ]
- - C&A
PORTUGAL
- - Sonae
</TABLE>
[ * ] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE> 83
SUBJECT TO ORACLE MANAGEMENT APPROVAL
EXHIBIT L
ISI MEMBER NET GROWTH AND PROFIT MARGIN
<PAGE> 84
Retek Information Systems, Inc.
Consolidated Quarterly Income Statements
For the Period Ended
($000's/USA)
<TABLE>
<CAPTION>
<S> <C>
1996 YTD 1Q97 2Q97 3Q97 4Q97 1997YTD 1Q98 2Q98 2Q98YTD
-------- ---- ---- ---- ---- --------- -------- -------- ---------
$ $ $ $ $ $ %YOY $ Change $ %YOY $ %YOY
Change Change Change
Revenue [ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ]
Cost of Sale [ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ]
Gross Margin [ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ]
Operating Expenses [ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ]
Operating Income [ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ]
Operating Margin [ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ]
</TABLE>
NOTES:
1. The organization's Financial performance has been revenue growth in
excess [ * ] with an operating margin in excess [ * ].
2. However, quarterly performance have and will be fluctuated to facilitate HNC
overall financial performance in achieving the external financial Community's
expectations. For example,
(A) The first quarter of 1997 Retek's operating income performance [ * ]
well in excess of commitment or targeted levels [ * ].
(B) [ * ].
3. Retek's 1998 YTD performance [ * ].
[ * ] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE> 85
SUBJECT TO ORACLE MANAGEMENT APPROVAL
EXHIBIT M
ISI MEMBER TRADEMARK GUIDELINES
<PAGE> 86
SUBJECT TO ORACLE MANAGEMENT APPROVAL
TRADEMARK GUIDELINES
RETEK INFORMATION SYSTEMS
9/7/98
Oracle Retail Identity -- "Oracle Retail" and "Retek Enabled" should always be
used together on the same page except in Direct mail, in which case they
should both appear somewhere in the direct mail piece.
1. Offering Name: Oracle Retail
Tag Line: The Guaranteed Advantage
(See exhibit for layout)
2. Logo: Retek Enabled
Can be no smaller than 3/8" wide
Should be scaled no smaller than 75% of "Oracle Retail" identity
(See exhibit for layout)
* HNC
Corporate Identity
1. All collateral must include the following wording. "An HNC Software
company" after the name Retek Information Systems.
<PAGE> 87
"ORACLE RETAIL"
________________________________________________________________________________
[ORACLE RETAIL LOGO]
________________________________________________________________________________
"RETEK ENABLED"
[RETEK LOGO]
<PAGE> 88
SUBJECT TO CHANGE
ORACLE TECHNICAL SUPPORT SERVICES
TECHNICAL SUPPORT FEES
Technical Support fees are due and payable in advance of the term of Support.
REINSTATEMENT FEES
In the event Technical Support services lapse or were never originally procured,
a reinstatement fee shall be assessed upon commencement of Technical Support,
such fee shall be subject to Oracle's policies in effect when Technical Support
is ordered. Oracle currently calculates Reinstatement Fees from the date that
the Technical Support services lapse (or the license order date if the program
licenses were not previously supported) to the date that the technical support
services are renewed based on the list Bronze support fees in Oracle's US Price
List in effect at the time the Technical Support services are ordered.
SUPPORT PROGRAMS
Oracle Bronze Support
Oracle Bronze Support includes:
- -- Real Time Telephone Technical Assistance
-- 5:00 a.m. to 6:00 p.m. (Pacific Time), Monday through Friday
-- Problem solving, bug reporting, documentation clarification, technical
guidance
- -- Program updates
-- Patches and fixes
-- General maintenance releases
-- Documentation updates
- -- Support System dial-in access
- -- Quarterly Support newsletter
- -- Mail server access
-- Read/Write access to Electronic Mail over the Internet
-- Technical Assistance Requests can be opened, closed or updated
-- General Communication with Oracle Worldwide Support
-- SupportNotes(tm) -- Oracle Book based CD-ROM repository of technical
information
-- Oracle Electronic Support -- Read/Write access to Oracle's private Support
Forum on CompuServe(tm)
-- Customers will need to register with CompuServe to obtain CompuServe
access. This service will be offered in the United States only.
ORACLE SILVER SUPPORT
Oracle Silver Support includes Oracle Bronze Support plus the following:
- -- Real Time Telephone Technical Assistance
-- Toll-free 800 number
-- 24 hours a day/7 days a week
- -- SupportNotes(tm) -- Oracle Book based CD-ROM repository of technical
information
- -- Management reports -- Faxed upon request
- -- Proactive Alerts
-- Contain known problem and problem resolution information
-- Proactively faxed as applicable
ORACLE GOLD SUPPORT
Oracle Gold Support (for which a minimum fee applies) includes Oracle Silver
Support plus the following:
- -- Priority Reactive Support
- -- Account Management
-- Communication channels between Oracle and customer
-- Status reports to customer and management
-- Regular account reviews with customer
-- Conduct all proactive planning activities
-- Some first-line support
Foundation Proactive Services
-- Patch Planning
-- Version/Release Planning
-- Alerts
April 16, 1997 Page 1 of 4 Technical Support
tecsup.doc
<PAGE> 89
SUBJECT TO CHANGE
The following Basic, Standard, and Extended Support packages are no longer
available for new support contracts.
BASIC ANNUAL SUPPORT
Basic Annual Support includes:
- -- Telephone Technical Assistance
-- 5:00 a.m. to 6:00 p.m. (Pacific Time), Monday through Friday
-- Problem solving, bug reporting, documentation clarification, technical
guidance
- -- Program updates and associated documentation
- -- Support System dial-in access
-- Log/Update/Review TARs
-- Review Bugs
-- Access the Support Bulletin Board
- -- Quarterly Support newsletter
STANDARD SUPPORT
Standard Support includes Basic Support plus the following:
- -- Telephone Technical Assistance - 24 hours a day/7 days a week
EXTENDED SUPPORT
Extended Support includes Standard Support plus the following:
- -- Toll-free 800 number
INFORMATION CUSTOMERS NEED WHEN CALLING SUPPORT
Before Support can begin work on any problem, information about the nature and
location of the problem is required. Whenever a call is placed to the hotline,
the following information should be provided:
- -- The Customer Support Identification (CSI) number or PC registration number
- -- The area code and phone number listed under the CSI number
- -- Operating system (including version) on which Oracle Programs are installed
- -- The Oracle product component and its version number the call concerns.
Support questions involve product components -- that is, constituent parts of
an Oracle product. For example, with the ORACLE kernel, Customer receives
components such as RDBMS, IMP, EXP, SQL*Loader and SQL*Forms.
- -- The relevant Program version(s)
- -- Any Program error number that appeared
- -- Brief description of the problem
- -- Severity of the problem. Oracle Worldwide Support classifies problems
according to how they impact the Customer's business. See list below for
explanation of Technical Assistance Request (TAR) Severity Levels.
TECHNICAL ASSISTANCE REQUEST (TAR) SEVERITY LEVELS
The chart below lists standard Technical Assistance Request Severity Levels.
Oracle Worldwide Customer Support responds to TARs based on Severity Level.
Severity Level
SEVERITY 1
Critical Business Impact
Customer's work, regardless of the environment or product usage, is stopped or
so severely impacted that the customer cannot reasonably continue to work.
SEVERITY 2
Severe Business Impact
Customer's work is continuing (not stopped) however there is a serious impact on
the customer's productivity and/or service levels.
SEVERITY 3
Minor Business Impact
The customer's work regardless of the environment or product usage, has minor
loss of services or resources.
April 16, 1997 Page 2 of 4 Technical Support
tecsup.doc
<PAGE> 90
SUBJECT TO CHANGE
SEVERITY 4
No Business Impact
Customer is in full working mode - there is no work being impeded at the time -
information is requested but has no impact on the operation of the products.
TARs are logged and tracked in Support's Support System. Response will be given
to the Customer by telephone and logged directly into the problem-tracking
system. The Customer may dial-in to track the progress of their TAR at any time.
Support's response may include a written response, patch tape, supplementary
documentation, a temporary means of circumventing the problem pending a new
release, or other correctional aids.
CUSTOMER CPU SUPPORT IDENTIFICATION (CSI) NUMBER
Customers shall receive a CSI Number upon purchasing Oracle Technical Support
services.
The CSI number identifies the Customer with respect to the following
information:
- -- Company Name and Address
- -- Product Set and Version
- -- Support Level and Duration
- -- Operating System
- -- Technical Contact Information
Worldwide Customer Support uses the CSI number to identify the Customer's
Support contract when a Customer calls the Support Hotline or uses dials-in
access.
TECHNICAL SUPPORT LIAISON ("TECHNICAL CONTACT")
Customers shall designate one (1) primary and two (2) backup Customer employees
("Technical Contacts") to serve as liaisons with Oracle Worldwide Customer
Support. The designated "Technical Contact" is the sole liaison between
technical support and Customers for all product support and shall be based on
the Customer site. Customer may elect to add Technical Contacts for an
additional fee.
To assure uninterrupted Technical Support service, customers must notify Client
Relations at (415) 506-1500, option 9, whenever Technical Contact
responsibilities are transferred to another individual.
UPDATES
"Update" means a subsequent release of the Program which Oracle generally makes
available for Program licenses at no additional license fee other than media and
handling charges, provided Customer has ordered Technical Support for such
licenses for the relevant time period. Update shall not include any release,
option or future product which Oracle licenses separately.
TERMS OF SUPPORT
Oracle Worldwide Customer Support's technical assistance is limited to licenses,
products, and platforms that are fully supported and to problems which are
demonstrable in the current release of the licensed program, running unaltered
on the proper hardware configuration. Current release information is posted
on-line.
Technical Support for older versions of Oracle products or for non-Oracle
products is subject to additional fees.
These Technical Support policies are Oracle's current policies and are subject
to change at Oracle's discretion.
TERMINATION
Customer may terminate technical support at any time by notifying Oracle in
writing at least thirty (30) days before the desired date of termination.
Technical Support shall be terminated upon receipt of such notice. On
termination, Oracle shall refund the unused portion of technical support fees
paid by the Customer for the licenses for the allocable period for which
technical support is terminated.
April 16, 1997 Page 3 of 4 Technical Support
tecsup.doc
<PAGE> 91
SUBJECT TO CHANGE
PHONE NUMBERS AND ADDRESS
INFORMATION
CUSTOMER SUPPORT HOTLINE
(For Technical Support, Non-Technical Support,
and Support Sales Information)
415-506-1500
TECHNICAL SUPPORT DIAL-IN NUMBER
RTSS Dial-in 415-598-9350
TECHNICAL SUPPORT ADDRESS
Oracle Worldwide Technical Support
500 Oracle Parkway
Box 659313
Redwood Shores, CA 94065
Technical Support
tecsup.doc
April 18, 1997 Page 4 of 4
<PAGE> 92
SUBJECT TO ORACLE MANAGEMENT APPROVAL
EXHIBIT O
ORACLE PROFIT MARGIN
ORACLE RETAIL MARGIN CALCULATION
REVENUE:
[ * ]
EXPENSE:
[ * ]
[ * ] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE> 93
SUBJECT TO ORACLE MANAGEMENT APPROVAL
EXHIBIT P
QUALIFYING A LEAD
ACCOUNT NAME:
Sales Process Checklist
0 = SUSPECTED OPPORTUNITY
[ ] You have some reason or intelligence that causes you to suspect that this
account (&/or a Division therein) should need some product or service of
RETEK, or...
[ ] It is on a Targeted List in a Marketing or Sales Plan, or...
[ ] You have a Lead from Marketing, Partner, Customer, or Phone in for Info
from a Consultant (Reactive Oppty)
1 = INITIAL TARGETING AND RESEARCH
[ ] You have researched the Account and completed the basic Research needed
about the Company, its Organization, its use of IT, and Retail issues
[ ] You have completed the mandatory sections of the "Initial Discovery" Tool
and compared this to the Ideal Suspect Profile
[ ] You understand the possible reasons why this account should consider Retek,
and can define areas where Retek can be of compelling Value to this
Account, and, if possible, which of these will differentiate Retek from
competition
2 = 1ST MEETING(S) WITH HIGHEST APPROPRIATE LEVEL CUSTOMER PERSONNEL
[ ] You have called on some Customer Personnel to verify Research and identify
potential "Inside Coach or Sponsor"
[ ] From this you have established or confirmed "Retek's possible Value
Propositions against the Business Issues and Opportunities of the Customer
(based on other similar Customers) which make Compelling Business Reasons
why they should buy Retek
[ ] Although there may not be an Internal Project already tabled or in process,
you can define and elucidate clearly how the above should create compelling
reasons to talk with Retek
[ ] You can target Decision Makers who should see value in these, and why they
should meet with you
[ ] Next Steps clear & agreed with Customer + Feedback Documented back to
Customer
[ ] If Retek, COMMUNICATED WITH ORACLE ISR?
[ ] IF ORACLE, CONTACT RETEK SALESPERSON?
3 = STRATEGIC MEETING(S) WITH KEY DECISION MAKERS (CEO, COO, CIO &/OR VP
MERCHANDISING)
[ ] You have called on the likely Decision Makers for Retek's offerings
[ ] After reviewing their "Big Picture" Opportunities and Challenges compared
to Retek's Value Propositions, they agree that they have a Compelling Need
for Retek's Offering
[ ] You have Presented your Solution Overview to the likely Decision Makers for
Retek's offerings
Page: P-1
<PAGE> 94
SUBJECT TO ORACLE MANAGEMENT APPROVAL
[ ] They agree that they have a Compelling Business Need for your offerings
and agree to implement a Process to evaluate and move forward with a Retek
Proposal
[ ] Next Steps clear & agreed with Customer + Feedback Documented back to
Customer
4 = INITIALLY QUALIFIED OPPORTUNITY ["WTBD" TOOL] YES, NO, DEFERRED
[ ] This Account has a specific, compelling Business Needs for which Retek has
a Solution
[ ] You have met the Decision Makers who agree with this & see High Value in
your offerings
[ ] A Proposal is estimated to be financially & technically viable (even if
budgets are not in place)
- -------------------------------------------------------------------------------
[ ] The Decision Makers will actively support your making a Proposal
[ ] You understand the Political and Competitive situations and see no show
stoppers
[ ] You can identify and forecast the Type of Solution, rough $ and Timeframes
[ ] You have developed an Opportunity Strategy that suggests how you can win
the opportunity by positioning your Unique Selling Propositions to
differentiate Retek
[ ] The Customer has outlined their buying Process which you understand and
can meet
5 = NEEDS ANALYSIS DONE AND + (1-2 DAYS)
[ ] You have conducted a Needs Analysis using appropriate Technical Resources
with a positive conclusion
[ ] Based on the Needs Analysis you have developed an outline, optimal
Solution for which the Business Case is positive for both Customer and
Retek
[ ] You can identify your Unique Selling Propositions and hence position Retek
Solution well
[ ] You have presented/demonstrated your Outline Solution to the Decision
Makers with a positive outcome
[ ] Next Steps clear & agreed with Customer + Feedback Documented back to
Customer
6 = REASSESSMENT OF THE OPPORTUNITY
[ ] This account acknowledges their Need to buy from someone
[ ] This account has the funds budgeted
[ ] The Timeframe and decision making process is set
[ ] You are in contact with the Decision Makers who have the Authority to sign
7 = "IN DEPTH" PRESENTATION & DEMONSTRATION (2-3 DAYS)
[ ] You have presented/demonstrated your System and Solution
[ ] You have addressed the majority of the Customers' detailed requirements,
and shown how you can address the others
[ ] You have shown how Retek's Differentiators position well against the
Customer's Buying Critera, and have gained their agreement to these (or at
least a significant one of these)
[ ] You have noted and resolved all outstanding issues from the session to the
customer's satisfaction
[ ] The Customer agrees that you are the best fit and you have been selected
(subject to Reference Visits if needed)
[ ] Next Steps clear & agreed with Customer + Feedback Documented back to
Customer
8 = SERVICES -- ACCOUNT STRATEGY UNDERSTOOD AND RETEK POSITIONED
[ ] Retek Services understands expectations of client
[ ] Discussion determining account strategy has taken place with 3rd party
implementation firm/consultants.
Total investment of software license and all services discussed and
understood.
[ ] Prospect understands Retek's services offering and role of Retek and 3rd
party implementation firm/consultants.
Page: P-2
<PAGE> 95
SUBJECT TO ORACLE MANAGEMENT APPROVAL
9 - PROPOSAL LETTER SUBMITTED AND BEING CONSIDERED
[ ] You have submitted a Proposal Letter with all of the information needed by
the account to make a Decision
[ ] They are actively considering that Decision
10 - FINAL NEGOTIATION AND CONTRACT
[ ] All Customer concerns or objections are understood & handled (perhaps with
the exception of Price)
[ ] Everyone who needs to agree has agreed and approved your sale
[ ] Customer agrees to select Retek (subject only to Price)
[ ] Contract is Presented and Negotiated
- --------------------------------------------------------------------------------
[ ] Next Steps clear & agreed with Customer + Feedback Documented back
to Customer
Outcome of Sale Win - Lost - Deferred
Page: P-3
<PAGE> 96
AMENDMENT ONE
TO THE
INDUSTRY SOLUTIONS INITIATIVE MASTER AGREEMENT
BETWEEN
ORACLE CORPORATION
AND
RETEK INFORMATION SYSTEMS
This document ("Amendment One") shall serve to amend the Industry Solutions
Initiative Master Agreement between Oracle Corporation ("Oracle") and Retek
Information Systems ("ISI Member") dated September 10, 1998 (the "Agreement").
The parties agree to amend the Agreement as follows:
1. In Section 7.3.5 of the Agreement, in the second line, after the words
"Defaulting Customer's" insert the words "nonpayment or."
2. In Section 8.5 of the Master Agreement, delete the first sentence of that
Section in its entirety and replace with the following:
"All fees payable described in this Article VIII shall be due and payable
within forty-five (45) days after the last day of the month in which the
applicable fees were recognized as revenue by Oracle in accordance with
Oracle's internal revenue recognition procedures."
Other than the modification above, the Agreement shall remain in full force and
effect.
The Effective Date of this Amendment One shall be October 12, 1998.
RETEK INFORMATION SYSTEMS ORACLE CORPORATION
<TABLE>
<S> <C>
By: XXX By: XXX
------------------------------ ------------------------------
Name: Gregory A. Effertz Name: Charles P. Schneider
Title: VP, Finance and Administration Title: Senior Vice President
</TABLE>
Page: 1
<PAGE> 97
AMENDMENT TWO
TO THE
INDUSTRY SOLUTIONS INITIATIVE MASTER AGREEMENT
BETWEEN
RETEK INFORMATION SYSTEMS
AND
ORACLE CORPORATION
This document ("Amendment Two") shall serve to amend the Industry Solutions
Initiative Master Agreement between Oracle Corporation ("Oracle") and Retek
Information Systems ("ISI Member") dated September 10, 1998 (the "Agreement"),
as amended. Capitalized terms used in this Amendment Two and not otherwise
defined shall have the meanings ascribed to them in the Agreement. The parties
agree to amend the Agreement as follows:
1. The following new section 11.8 (Source Code Escrow for Customer's Benefit)
shall be added to the Agreement:
"11.8 Source Code Escrow for Customer's Benefit
During the term of this Agreement, ISI Member shall cooperate with
Oracle to ensure that complete copies of the Source Materials for
the ISI Member Programs, including Updates and code in the ISI
Member Programs which is owned by a third party, (collectively
referred to as "Escrowed Source Materials") are deposited in
escrow, under Oracle's escrow agreement, for the benefit of
Customers. Oracle may grant to Customers the right to obtain the
Escrowed Source Materials provided that (i) the Source Materials
for the Oracle Programs are deposited in the same escrow account
and (ii) the Escrowed Source Materials are subject to protections
that are equivalent to the contract provisions which Oracle has
used to protect the Source Materials for the Oracle Programs."
Other than the modification above, the Agreement shall remain in full force and
effect.
The Effective Date of this Amendment Two shall be January 29, 1999.
RETEK INFORMATION SYSTEMS ORACLE CORPORATION
<TABLE>
<S> <C>
By: XXX By:_____________________________
----------------------------------
Name: Gregory A. Effertz Name:___________________________
Title: Vice President, Title:__________________________
Finance and Administration
</TABLE>
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SUBJECT TO ORACLE MANAGEMENT APPROVAL
ORACLE(R)
INDUSTRY SOLUTIONS INITIATIVE
TARGET MARKET ADDENDUM
- ----------------------------------------------------------------------------
This Industry Solutions Initiative Target Market Addendum (this "Addendum")
between Oracle Corporation ("Oracle") and Retek Information Systems ("ISI
Member") shall be governed by the Industry Solutions Initiative Master Agreement
dated _________________ (the "Agreement").
1. ORACLE SOLUTIONS SUITE
For purposes of this Addendum, the Oracle Solution Suite shall be the
following suite of computer programs described more fully on EXHIBIT A
(Oracle Solution Suite Description) hereto. The ISI Member Programs are
those ISI Member software programs described more fully in EXHIBIT A. Such
Oracle Solution Suite is known as the: ORACLE RETAIL SOLUTION SUITE.
2. TARGET MARKET
a. For purposes of this Addendum, the Target Market shall be as defined in
EXHIBIT B (Target Market) hereto.
b. The relationship manager for Oracle shall work with ISI Member to gain
approval for ISI Member to become a reseller of Oracle Financials and
Oracle Human Resources/Payroll applications to companies with less than
$500 million in revenue with in the SIC codes defined in Exhibit B.
3. SALES PLAN
a. SALES PLAN. The parties shall mutually create a Sales Plan and
attach it hereto within sixty (60) days of the Effective Date of this
Addendum. The Sales Plan shall include, at a minimum, the items
specified in Section 2.1.1 (Sales Plan) of the Agreement. Attached
hereto as EXHIBIT C is a preliminary version. The Sales Plan shall
address at a minimum: a geographically-based account planning process,
processes for qualifying opportunities and engaging each other's
resources on a regional basis, and ongoing definition of optimal sales
resource and staffing levels. Each party's consulting organization
shall provide ongoing reasonable assistance to the other in
cooperative marketing programs, business development and cooperative
sales calls for implementations.
b. SALES MATERIALS. Within ninety (90) days of the Effective Date this
Addendum, and on an ongoing basis thereafter, ISI Member shall use
commercially reasonable efforts to provide the following materials to
Oracle to assist in sales of the Oracle Solution Suite: (i) integrated
sales demonstration software, documentation and integrated sales
prototype systems of the Oracle Solution Suite that demonstrate the
integration of the ISI Member Program with the Oracle Solution Suite
(such integrated products to be created with the reasonable assistance
of Oracle), (ii) integrated sales force training content materials,
sales situation survey outlining qualification criteria for sales
(EXHIBIT P (Qualifying a Lead) to the Agreement), and competitive sales
materials (such materials existing or created by ISI Member in the
normal of course of business).
c. MONTHLY SALES REPORTS. Each month, Oracle and ISI Member shall each
provide a written report to the other specifying:
i. SALES PIPELINE. All pending or prospective Oracle Solution Suite
and/or ISI Member Program sales in the 90-day pipeline, including
the names of the prospective Customers, the products and the
anticipated dollar amounts of the deals.
ii. EXISTING CUSTOMER STATUS. The status of all existing Oracle
Solution Suite or Oracle-licensed ISI Member Program licensee
accounts for which the reporting party is the primary contact,
including referenceability of the accounts and status of ISI
Member Program implementations.
SUBJECT TO ORACLE MANAGEMENT APPROVAL
d. Quarterly Sales Reviews. Each Quarter (as defined below), the Oracle
and ISI Member Relationship Managers shall meet to review the sales
reports described above. In addition to that meeting, Oracle and ISI
Member shall invite each other to attend the monthly internal strategy
meetings of their respective sales organizations to discuss the status
of ongoing sales campaigns. In addition, Oracle and ISI Member shall
invite each other to attend the monthly internal meetings of their
respective consulting organizations to review the status and progress
of ongoing consulting implementations and new proposals for
implementations.
4. STATEMENT OF DIRECTION
The parties, in concert with ISI Co-Members for the applicable Oracle
Solution Suite, shall develop and maintain a Statement of Direction for
each Oracle Solution Suite that defines the product direction, general
development goals and development phases for the Oracle Solution Suite. The
parties shall mutually agree to a Statement of Direction and attach it
hereto within sixty (60) days of the Effective Date of this Addendum. The
Statement of Direction shall include, at a minimum, the items specified in
Section 2.1.2 (Statement of Direction) of the Agreement. The parties intend
to modify the Statement of Direction from time to time. Attached hereto as
EXHIBIT D is a preliminary version.
5. DEVELOPMENT
a. Development Plan. The parties shall mutually be responsible for
creating and maintaining a Development Plan to guide ongoing
development of the applicable Oracle Solution Suite. The parties shall
mutually create a Development Plan and attach it hereto as EXHIBIT E
within ninety (90) days of the Effective Date of this Addendum. In
addition to the items specified in Section 2.1.3 (Development Plan) of
the Agreement, the Development Plan shall address the following issues,
without limitation:
-- Assignment of functional domains.
-- Elimination of functional redundancy.
-- Single point of data entry for any piece of data.
-- Oracle Solution Suite release schedule.
-- Technical architecture standards, including establishment of common
data models and tables.
-- Common development procedures, including procedures for
certification testing, porting, localization and national language
support.
-- Definition of development tasks, roles and schedules for execution
of Development Plan.
-- Definition of each party's Critical Deliverables (see Sections 5.c
(Acceptance of Specifications and Critical Deliverables) and 5.d
(Failure to Deliver Specifications or Critical Deliverables) below).
-- Identification of individuals who will be working on development
related to the Oracle Solution Suite. The individuals assigned to
such work as of the Effective Date of the Agreement are John Goedert
and Jeff Goke.
-- Milestones for managing the development process.
-- Oracle retail development obligation to design interfaces and other
key product specifications as input to the ISI Co-Members which the
ISI Co-Members are expected to deliver (with people to install at
Oracle) for QA before general release. Initial interfaces include
integration points with Oracle Financials and Oracle Energy
Downstream.
The Development Plan shall not become effective until it is approved in
writing by Oracle, ISI Member and all ISI Co-Members. The Development
Plan may be modified from time to time in writing by Agreement of the
parties subject to Section 2.5 (Dispute Resolution) of the Agreement.
b. Development Managers. Each party shall designate a development manager
who shall serve as the primary point of contact between the parties
concerning development activities. The parties' initial development
managers are Marian Szefler, Vice President for Oracle and John Goedert
for ISI Member. Duties of the development managers include the
following:
-- Determine designs and technology and architecture standards for the
integration of the ISI Members Programs with the Oracle Programs
-- Resolve functional and modular redundancies
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SUBJECT TO ORACLE MANAGEMENT APPROVAL
- Accept or reject Critical Deliverables as provided below
- Generate and review proposals for changes in the functionality and
technology of the ISI Member Programs
- Prioritize bugs for resolution
- Resolve issues and disputes or escalate them to appropriate levels
for dispute resolution in accordance with the terms of Section 2.5
of the Agreement
- Provide regular development status reports to the other party's
Development Manager
- Oversee appropriate staffing to meet applicable party's development
requirements based on development plan
c. Acceptance of Critical Deliverables
i. Critical Deliverables. ISI Member shall submit to Oracle each
Critical Deliverable that the ISI Member is obligated to
deliver under the Development Plan by the delivery date
specified in the Development Plan for such Critical Deliverable.
The Development Plan shall set forth a specified acceptance test
("Acceptance Test") for each Critical Deliverable. If any
Critical Deliverable does not pass its respective Acceptance
Test in any material respect, Oracle shall so notify ISI Member
in writing within ten (10) business days after submission of
such Critical Deliverable (or such other time period as agreed
in the Development Plan), describing in detail the errors which
need to be corrected. Within ten (10) business days after such
notice, ISI Member shall deliver to Oracle a revised version of
the Critical Deliverable. Oracle shall have ten (10) business
days to accept or reject the revised Critical Deliverable in
writing as set forth above.
ii. Default Acceptance: Disputes. Notwithstanding the foregoing, if
Oracle fails to reject any Critical Deliverable therefor within
the acceptance period and in the manner described above, such
Critical Deliverable shall be deemed accepted at the end of the
ten (10) business-day acceptance period. Any disagreement
arising under this Section 5 shall be referred to dispute
resolution under Section 2.5 (Dispute Resolution) of the
Agreement.
d. Failure to Deliver Critical Deliverables.
In the event any of the following occurs, Oracle shall have the
applicable remedy(ies) described in "Remedies" below:
i. Failure to Deliver Critical Deliverables. ISI Member fails to
submit to Oracle any Critical Deliverable by the delivery date
specified in the Development Plan for such Critical
Deliverables, and within forty-five (45) calendar days after the
missed delivery date fails to submit to Oracle and begin to
execute a plan to complete such Critical Deliverable; or
ii. Failure to Cure Deficiencies Within 45 Days. Oracle rejects ISI
Member's Critical Deliverable within the acceptance period and
in the manner described in Section 5.c.i. (Critical
Deliverables) above, and within forty-five (45) days after such
rejection ISI Member has not delivered to Oracle and begun to
execute a plan to cure the deficiencies specified by Oracle; or
iii. Nonacceptance After 180 Days. Oracle does not accept or is not
deemed to have accepted ISI Member's Critical Deliverable in
accordance with Subsection 5.c above within one hundred eighty
(180) calendar days after the delivery date specified in the
Development Plan for such Critical Deliverable.
iv. Remedies.
A. Termination. If any of the events specified in Section
5.d.i., ii., or iii., above occurs, then Oracle may
immediately terminate the Agreement for breach with no right
to cure, notwithstanding anything to the contrary in Section
9.2.1 (Termination for Cause) of the Agreement, subject,
however, to Section 2.5 (Dispute Resolution) of the
Agreement.
B. Assumption of ISI Member Development Obligation. If any of
the events specified in Sections 5.d.i., ii., or iii., above
occurs, Oracle may, as an alternative to or in addition to
terminating under Section 5.d.iv.A (Termination) above,
complete the applicable ISI Member specifications and/or
Critical Deliverable.
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SUBJECT TO ORACLE MANAGEMENT APPROVAL
All right, title and interest in and to the product of such
development shall be owned by ISI Member, and such product
shall be deemed to be an ISI Member Program or component
thereof for purposes of the Agreement. In the event Oracle
exercises this right, Oracle shall have the right to recover
its investment in such development as follows: Oracle shall
retain (i) [ * ] of all Sublicense Fees payable by
Oracle to ISI Member under Section 8.1 (Sublicense Fees) of
the Agreement; and (ii) [ * ] of all Technical Support
Fees related to the ISI Member Program(s) that embodied or
attached to the applicable Critical Deliverable payable by
Oracle to ISI Member under Section 8.2 (Technical Support
Fees) of the Agreement, all of which amounts Oracle shall
retain until those amounts retained by Oracle cumulatively
total an amount equal to the total cost incurred by Oracle
(including services, out-of-pocket expenses and materials).
in completing ISI Member Critical Deliverable plus an
additional [ * ] of such cost [ * ]).
C. Sharing of Compensation Payable to Customers. If the
occurrence of 5.d.i., ii., or iii. above causes Oracle to
breach a contractual delivery obligation to a Customer, and
Oracle compensates the Customer as a result thereof, ISI
Member shall bear such portion of that compensation that
the ISI Member and Oracle agree in writing is proportional
to the degree of fault, if any, on the part of ISI Member,
subject to Section 10.3 (Limitation of Liability) of the
Agreement. The parties may agree on an equitable means of
Oracle's recovery of such compensation against ISI Member
(for example, direct payment or a credit against future
sublicense and/or Technical Support Fees owed by Oracle to
ISI Member).
D. Remedies Cumulative and Nonexclusive. The remedies set
forth in this Section shall be cumulative rather than
alternative. In addition, such remedies shall be in
addition to any other legal or equitable remedies available
to Oracle.
e. Development Funds. ISI Member agrees to provide development funds for
its development activities under the Agreement and this Target Market
Addendum. ISI Member agrees to contribute a minimum of the amount
specified in the Development Plan for development activities to be
conducted for the period one year following the Effective Date of the
Agreement. The parties shall mutually agree upon the development funds
to be provided for subsequent years of the Agreement and this Target
Market Addendum. ISI Member shall be responsible for administering its
own development funds. Within 30 days of the end of each Quarter
during the Term of the Agreement, ISI Member shall generate a report
showing the development funds expended for its development activities
during such period. For purposes of the foregoing report, "Quarters"
shall be deemed to commence on the first day of June, September,
December and March of each year.
f. Solution Development. Specific ISI Member product requirements which
shall be included in the Development Plan shall be as follows:
i. ISI Member agrees to work in good faith with Oracle to mutually
examine and determine whether [ * ]. ISI Member agrees to
work in good faith with Oracle to mutually examine and determine
whether [ * ].
ii. ISI Member will develop grocery functionality in accordance
with EXHIBIT F attached hereto.
iii. [ * ] Requirements
A. [*] will need to receive summary category data from ISI
Member Program modules to provide both fuels, summary
merchandise and profitability analysis capabilities.
[ * ] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
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SUBJECT TO ORACLE MANAGEMENT APPROVAL
Drill-down (and drill-up) capabilities (from a users
perspective) may also be required from the [ * ] to ISI
Member Programs. The specific development requirements, work
plans, timing and resource requirements to provide data
warehouse integration will be developed in an equal and
joint effort between ISI Member and Oracle before March 31,
1999. This integration plan will define an initial
integration offering that will be ready for customers within
six months after completion of the development requirements
described in the preceding sentence. Data warehouse
integration planning and development will be led by Oracle
with appropriate ISI Member support and resources (not to
exceed Oracle's effort level) to complete agreed upon work
scope. ISI Member and Oracle will maintain data warehouse
functionality as part of their respective product offerings.
B. Additional integration between [ * ] and ISI Member
products will be jointly scoped with equal effort by ISI
Member and Oracle to determine customer and development
requirements, work plans, timing and resource requirements
within 90 days of a signed agreement. Potential integration
areas include (but are not limited to) price books, demand
forecasting, customer loyalty, and franchisee functionality.
C. Specific grocery store and convenience-gasoline store
market issues will be jointly reviewed by Oracle and ISI
Member as part of the annual planning process to ensure a
differentiated, market leading solution is maintained in
both the grocery and convenience-gasoline markets.
IV. ISI Member will support the latest release of any Oracle
product embedded in their application within 180 days of a
given release becoming generally available, by upgrading to
the latest version of the Oracle RDBMS and tools where
reasonable.
6. TRAINING PLAN
The parties shall mutually agree to a Training Plan and attach it hereto
within sixty (60) days of the Effective Date of this Addendum as
EXHIBIT G. At a minimum the Training Plan shall address the following:
a. The parties shall cooperate in developing a curriculum for training
each party's development, sales, consulting, technical support, and
education personnel on how to position and sell the Oracle Solution
Suite as well as on the relevant products of the other party.
b. ISI Member shall, according to this TMA or as otherwise provided in
the Training Plan (or subsequent versions thereof):
i. Provide and develop (i) training programs for the ISI Member
Programs and for the integration of the ISI Member Programs with
the other Oracle Solution Suite components, and provide copies
of such programs to Oracle and (ii) internal training curriculum
content for the ISI Member Programs using a commonly used
automated authoring tool.
ii. Adopt reasonable quality standards for such training programs.
iii. Provide a reasonable amount of training for ISI Member's product
line to Oracle sales, marketing, development, education and
consulting personnel at no charge for six (6) months from the
Effective Date; provided, however, that this shall not apply to
education and consulting "bootcamps"/intensive training.
Thereafter, and for other Oracle personnel Oracle may purchase
such training services from ISI Member at a discount of thirty
percent (30%) off ISI Member's rates for such services as
attached hereto as EXHIBIT H, as such Exhibit may be amended by
ISI Member from time to time, but in no event more than once in
a twelve month period.
iv. Provide technical support and consulting services training on
the ISI Member Programs and Updates (excluding patches and bug
fixes) of the ISI Member Programs. ISI Member shall use
commercially reasonable efforts to make such support and
training available to Oracle sixty (60) days prior to the
release of any Update, but in no case shall
[ * ] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
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SUBJECT TO ORACLE MANAGEMENT APPROVAL
such support and training be made available to Oracle later
than the time that such support and training become available
to ISI Member employees.
v. Provide Oracle a discount of thirty percent (30%) off ISI
Member's list rates for training services (as attached hereto as
Exhibit H) when Oracle enters into an engagement with a Customer
for training on the Oracle Solution Suite when Oracle is acting
as a prime contractor.
c. ISI Member and Oracle agree to work together to create integrated
training materials within sixty (60) days of the Effective Date for
the purposes of training Customers in the use of the ISI Member
Programs and versions thereof integrated in the Oracle Solution Suite.
7. STAFFING
Oracle and ISI Member shall each provide staffing to implement the
Agreement and this Target Market Addendum. ISI Member's individuals
assigned to such work as of the Effective Date of the Agreement are: Peter
Baskin, David Bagley, David Tidmarsh, Bob Tuttle, Gordon Masson, John
Goedert, and Jeff Goke. ISI Member shall bear its own expenses for such
staffing and any increases in staffing. ISI Member will dedicate sales
people to the retail market in the following roles: ten (10) application
sales consultants and an appropriate management structure.
8. MARKETING
The parties shall mutually agree to a Marketing Plan and attach it hereto
within sixty (60) days of the Effective Date of this Addendum. Attached
hereto as EXHIBIT I is a preliminary version.
a. At a minimum the Marketing Plan shall include the following:
-- ISI Member shall provide existing and new content for Oracle's
development of sales collateral for the Oracle Solution Suite.
-- ISI Member shall provide content for Oracle's development of a
sales tool kit for the Oracle Solution Suite.
-- ISI Member shall provide product marketing materials for the ISI
Member Programs.
-- Oracle shall have primary responsibility for executing seminars,
trade shows, public relations and communications, advertising,
direct mail, sales collateral creation and sales tool kit creation
for the Oracle Solution Suite in accordance with the provisions of
Section 8.b below.
-- The dollar amounts allocated to the Marketing Plan shall be subject
to mutual agreement, subject to Section 8.b. below.
Either party may spend a larger amount on marketing than the amount
designated in the Marketing Plan, provided that the content of all ISI
Member marketing materials for the Oracle Solution Suite shall be
subject to prior approval by Oracle. Except as mutually agreed and
budgeted for in the Marketing Plan, neither party shall have any
obligation to market the other's products or any product containing
the other's products, and each party shall have full freedom and
flexibility in the design and implementation of its marketing efforts,
and may discontinue any marketing efforts at any time. Subject to the
provisions of Section 7.6 of the Agreement, Oracle agrees to attribute
the ISI Member Programs to ISI Member, using ISI Member's logo or
similar credit (e.g. "Retek enabled"), in all of the advertising or
marketing materials for which ISI Member is required to contribute
financially pursuant to the Marketing Plan and in accordance with
Section 8.b.
b. Marketing Funds. ISI Member agrees to provide marketing funds for its
marketing activities under the Agreement and this Target Market
Addendum. In general, Oracle and ISI Member intend to jointly fund all
marketing activities [ * ] except funding for joint advertising,
which will be split Oracle [ * ] and ISI Member [ * ]. Each
party agrees to expend (either directly or through contributions for
joint marketing and advertising) [ * ] to effect the parties'
marketing and advertising activities in accordance with the Marketing
Plan in the one year period following the effective date of the
Marketing Plan. The parties shall mutually agree upon the marketing
funds to be provided for subsequent years of the Agreement and this
Target Market Addendum. The parties will jointly assess the
effectiveness of the marketing effort and adjust programs and funding
accordingly. ISI Member shall be responsible for administering its own
[ * ] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
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SUBJECT TO ORACLE MANAGEMENT APPROVAL
marketing funds. Within 30 days of the end of each Quarter (as defined
below) during the Term of the Agreement, each of Oracle and ISI Member
shall generate a report showing the marketing funds expended for its
marketing activities during such period. For purposes of the foregoing
report, "Quarters" shall be deemed to commence on the first day of
June, September, December and March of each year.
9. LOCALIZATION AND NATIONAL LANGUAGE SUPPORT
a. National Language Support is defined as translation of error messages,
database strings, help text, and screens.
i. Initial release language of the ISI Member programs shall be in
US/English language.
ii. within 90 days of initial release of the ISI Member Programs in
US/English, ISI Member will release at its own expense the ISI
Member Programs in European French, Latin American Spanish, and
Canadian French.
iii. Within 90 days of the Effective Date of the Agreement, ISI Member
will develop at its own expense Sales Demo in German.
iv. Upon license to the initial customer of the ISI Member Program(s)
in each of Germany and Spain, ISI Member will at its own expense
create German and European-Spanish versions of the ISI Member
Program(s).
v. For all other languages, upon request, ISI member will develop
translated version(s) of the ISI Member Program(s) with 90 days
lead-time; translation funding to be determined on a
case-by-case basis.
vi. User documentation will be created by ISI Member at ISI Member's
expense at Customer request for the following languages:
European French, Latin American Spanish and German. ISI Member
will create at its own expense under documentation for other
languages for countries the ISI Member views as representing
significant business opportunity for ISI Member. For all other
translations of user documentation, funding will be determined
on a case by case basis.
b. Localization
i. ISI Member will at its own expense comply with all legal
localization requirements within 90 days of notification or
self-discovery for the following countries: Australia, U.S.,
Canada, Mexico, and all countries in the European Union. ISI
member will at its own expense comply with all legal
localization requirements as requested by or for a Customer.
ii. It is ISI Member's intention to meet localization requirements for
standard retailer business practices.
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SUBJECT TO ORACLE MANAGEMENT APPROVAL
10. PORTING. Each party shall support its components of the Oracle Solution
Suite on, at a minimum, the platforms listed in the Development Plan. In
addition, ISI Member shall port the ISI Member Programs to the following
platforms within six (6) months after ISI Member first releases the
applicable ISI Member Program on any other platform: [ * ].
The Effective Date of this Addendum is September 10, 1998.
<TABLE>
<S> <C>
RETEK INFORMATION SYSTEMS ORACLE CORPORATION
By: XXXXX By: XXXXX
---------------------- ----------------------
Name: John Buchanan Name: Raymond Lane
Title: President Title: President
</TABLE>
[ * ] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
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EXHIBIT LIST
EXHIBIT A Oracle Solution Suite(s) Description
EXHIBIT B Target Market
EXHIBIT C Sales Plan
EXHIBIT D Statement of Direction
EXHIBIT E Development Plan
EXHIBIT F ISI Member Grocery Functionality
EXHIBIT G Training Plan
EXHIBIT H ISI Member Training Rates
EXHIBIT I Marketing Plan
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SUBJECT TO ORACLE MANAGEMENT APPROVAL
EXHIBIT A
ORACLE SOLUTION SUITE(S) DESCRIPTION
ORACLE RETAIL SOLUTION SUITE*
The Oracle Retail Solution Suite is a suite of application programs providing
enterprise-wide business system functionality for the retail industry. The
Oracle Retail Solution Suite will consist of the following components:
RETEK
Retek Data Warehouse
Active Intelligence
Retek Demand Forecasting
Merchandise Management
Trade Management
Warehouse Management
Retek Technology Based Training
ORACLE
Oracle Financial Applications
Oracle Human Resources
Oracle Payroll
Oracle Sales Analyzer & Call Center
Oracle Projects Connect
[ * ]
Oracle Internet Commerce Server
* Additional Oracle and Retek products may be added to this Exhibit A upon
written agreement of the parties.
[ * ] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
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EXHIBIT B
TARGET MARKET
KEY MARKET OPPORTUNITIES FOR THE ORACLE RETAIL SOLUTION SUITE:
- - Grocery/Drug/Food
- - Mass merchandisers and Department Stores
- - Specialty Hardlines
- - Convenience Stores/Gasoline Stores
- - Fashion
TARGET BUSINESS SIZE FOR THE ORACLE RETAIL SOLUTION SUITS:
Companies with >500 Million in revenue
SIC CODES INCLUDED IN THE TARGET MARKET:
56XX Apparel
5948 Luggage and Leather Stores
3942/3944 Toy Stores
Recreation Stores
Jewelry Stores
Book Stores
57XX/52XX Retail Home
Electronics
Appliances
Garden
5941-5947/5949/5995 Stationary Stores
Gift Stores
Sporting Goods Stores
Optical Goods Stores
5912/5921/5992/5994/54XX Food and Drug Stores
53XX/5932 Retail General Merchandise
Department Stores
5531-5541 Auto Stores
Tire Stores
Home Supply Stores
Convenience with Gasoline
Miscellaneous Retail Stores
5061 Catalog & Mail Order
5012-5199 Distributors and Wholesalers
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[RETEK LOGO]
PRODUCT STRATEGY WHITE PAPER
VERSION 1.1G
GROCERY AND CONVENIENCE STORE INDUSTRIES
AUGUST 1998
<PAGE> 109
[RETEK LOGO]
Grocery & Convenience Store white paper
- --------------------------------------------------------------------------------
INTRODUCTION
The grocery and convenience store industry is headed for continuous, overlapping
change for the foreseeable future.
Quite what form that change will take, or exactly how it will impact our
Industry only time will tell. However, we do know today that change, and our
ability to shape or react to it will be one of the key differentiators that will
sort tomorrow's winners from the losers.
Retek is particularly focused on how the coming changes will impact requirements
for grocery and convenience store business applications. Our ability to identify
the most important trends and stay ahead of the competition will determine the
future success of Retek and our customers.
There are a number of observable trends in today's marketplace that offer anchor
points for setting product strategy and development plans. This white paper
summarizes our analysis:
- - Section I provides an overview of our conclusions
- - Section II addresses the longer term trends, and their implications from
a business applications perspective
- - Section III details our current grocery solution and the near term
development plans that result from our analysis.
The material expressed below is our opinion, based on our experiences, study and
observation as well as considerable debate with our customers and partners. We
would like to thank all those who have contributed to this analysis, in
particular Andersen Consulting's SMART STORE centers in Chicago and Windsor UK.
- --------------------------------------------------------------------------------
Product Strategy White Pater 2 of 15 09/03/98
Version 1.0 g Retek Confidential
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SECTION I - OVERVIEW
We have four key conclusions from our analysis of industry trends:
- - Winning grocery solutions will include integrated transaction, decision
support and business intelligence applications, with competitive advantage
ultimately coming from applications that add business intelligence.
- - Customer understanding and interaction management will emerge as business
critical applications, with technical leadership providing a highly
defensible advantage.
- - The growth in network bandwidth and processing power will not slow,
additional scalability will support increasing business focus on customer
level data and its value across a broad range of business decisions.
- - The web will drive an information-based, collaborative approach to supplier
management. This will reshape many of today's business practices,
especially in the supply chain and new product development arenas.
We believe Retek's current position gives our grocery and convenience store
customers a critical advantage as we address these issues:
- - The Predictive, neural network based technology that Retek and our HNC
parent have patented will become ever more strategic. It already supports a
number of Business Intelligence applications such as the Replenishment
Optimizer and the Integrated Causal Forecasting, this number will increase
significantly as the focus shifts to exploiting the value of the complete
Retek transaction enterprise.
- - The customer centric developments to version 3.0 of the Retek Data
Warehouse form a strong platform for sharing customer understanding across
the retail organization. The profiling engine that drives the customer
understanding will prove to be a highly valuable weapon for our customers
as the focus shifts to the new rules of customer management.
- - Retek's close relationship with Oracle and 11 years of experience in
designing our applications to optimize each successive version of their
database gives us deep Oracle experience to exploit. This has consistently
allowed our customers to handle volumes of data that are orders of
magnitude ahead of their competition.
- - Retek modules take advantage of Oracle's network or thin client capability.
This gives our customers the option to deploy over the web and is driving
our store solution to remove the need for store based data and servers.
This is a critical advantage for our convenience and gas store customers,
changing the economics drastically in their favor.
- - Retek's experience in developing our fashion oriented Collaborative Supply
Chain Manager application positions us well to address collaborative
developments in grocery. In addition we have developed a tight partnership
with WebTrak, a development organization specializing in collaborative
systems.
The challenge is for Retek to retain this leadership position. To do this we
must keep moving at the same rapid pace, we must continue to bridge the gap
between technical opportunity and grocery business requirement and to ensure
this we must keep listening to our customers. The opportunity is there for Retek
and our customers.
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SECTION II - INDUSTRY TRENDS AND IMPLICATIONS FOR BUSINESS APPLICATIONS
[Flow Chart]
Consumer Demand
Competitive Grocery Changing
Environment business Technology
applications
Supplier
Relations
1. THE COMPETITIVE ENVIRONMENT WILL CONTINUE TO TIGHTEN
- - SATURATION OF THE MAJOR DEVELOPED MARKETS IS DRIVING GLOBALIZATION as
retail organizations seek to find opportunity overseas, seeking to exploit
national or locally driven expertise into different markets. Results have
been mixed to date, and the pace and effect of this trend are unclear.
- However, we expect to see the development of international best
practice, in many cases this will have business applications folded
into the concept. The supply chain, in particular, will be supported by
integrated applications that drive extreme operational efficiency.
- Local "features" such as US forward buying and European complex deal
structures and rebates will come under pressure as sources of
competitive advantage.
- Markets with less developed infrastructure will need to be supported,
telecommunications developments such as Iridium will have a major
impact on the technical implications of moving into new markets such as
China.
- - TRADITIONAL FORMATS WILL CONTINUE TO BLUR, non grocery retailers such as
the Wal-Mart and other mass merchants will continue to move into the market
and take share while grocery formats will continue to branch out into new
retail territory (e.g. Fuel, Staple clothing , books) and even new
industries (banking, investments, insurance, are all currently sold by
leading brand grocers).
- This will drive broader functional requirements at an operational level
to support all categories of product and service from one core system.
- Food service systems will need to be integrated into the core as more
prepared food continues to take a greater share of the consumer's
stomach.
- It will also drive the cross-fertilization of business practices across
product types, leading to the adoption of new tools in the grocery
business, and the transfer of grocery tools and operational excellence
to other retail segments.
- In turn this will re-enforce the increasing difficulty in forging
competitive advantage through operational or even decision support
systems, and the increased focus on business intelligence systems as a
source of competitive advantage.
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- These business intelligence systems will fully support Category
Management, embodying the principles of ECR, but will also move into
new ground, addressing customer interactions as well as organizational
alignment and learning.
- - SALES OF GROCERIES OVER THE INTERNET WILL INCREASE, estimates of the pace
of take up vary enormously and have proved wildly inaccurate to date.
However, it is clear that this channel will take a share of the existing
market and that growth will divert business from today's store-based
channel.
- This will put additional strains on the cost structure that can be
supported in the stores, we believe this will re-enforce the demand for
network based store systems that avoid many of the hardware and support
costs that are necessary for distributed store systems.
- This growth will also drive many grocers to recognize the Internet as a
distribution channel they cannot afford to ignore. Cost structures will
again dictate the necessity of using common backbone merchandising and
logistics systems to support both traditional store sales and Internet
sales.
- As this channel becomes more significant, an ability to support 24hr
operations will become a standard requirement for merchandising and
logistics systems. New expectations and requirements for round the
clock, multi-channel customer service will drive the development of
advanced customer support systems.
IMPLICATIONS FOR GROCERY SYSTEMS:
- - International best practice and international specialization will need to be
supported
- - International infrastructure developments such as Iridium will have
significant impact on the costs of supporting operations in developing
economies
- - All product types will need to be supported in one solution, regardless of
traditional segmentation
- - Adoption/development of non-traditional grocery tools and working practices
will broaden the scope of the total solution
- - It will be a requirement to be world class in all areas of operations and
decision support, highest value will be placed on business intelligence
systems that allow for the creation and implementation of competitive
advantage
- - Web-based store systems offer key cost advantage
- - Common backbone and decision support for store and web based business
- - Ability to support 24 hour operations will be a requirement
- - Customer service systems will need to span multiple channels
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OPERATIONAL SYSTEMS WILL TAKE ON AN INTERNATIONAL, INTER FORMAT PERSPECTIVE,
COMPETITIVE ADVANTAGE WILL COME FROM INTEGRATED BUSINESS INTELLIGENCE SYSTEMS.
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[flow chart]
Business
Intelligence
Transaction Decision
Support
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2. CONSUMER DEMAND WILL GROW EVER MORE SPECIALIZED AND SOPHISTICATED.
- - CUSTOMERS WILL EXPLOIT THE COMPETITIVE SITUATION described above,
demonstrating that real power is in their hands not retailers or
manufacturers.
- This will result in increasing focus on customer understanding, insight
into customer behavior and value will become a real competitive weapon.
- Customer "loyalty" will drive multiple marketing programs and a shift
of emphasis to the marketing groups in many retailers.
- Over time we expect to see a shift away from buying "loyalty" with
points and card programs, to a longer term approach based around
embedding customer understanding into product selection and focused
customer service.
- This will drive for increased access to customer and
micro-merchandising systems at all points of customer contact,
particularly the store.
- At the same time, customer power to cherry pick and resist price hikes
will re-enforce the need for systems of extreme operational efficiency.
- - CUSTOMERS' PERCEPTION OF VALUE WILL CONTINUE TO EVOLVE as growing
congestion on the roads drives many to think of "total cost" of shopping
including time and expense of travel. In some economies this equation and
growing green legislation is already driving a move back to smaller in town
formats.
- This trend will lead to renewed focus on convenience stores and
gas/service stations as access points into local markets. This will, in
turn, drive requirements for web based store solutions with access to
sophisticated micro-merchandising capabilities.
- "Total cost" thinking may drive multi-channel solutions - linking
internet based ordering with low cost customer pick up points at
convenience stores and gas stations or linking store customer service
with internet based home delivery services.
- These pressures will drive much greater focus on managing the
customers' overall shopping experience, tools will be required to
support qualitative metrics of customer reaction.
- - THE BROAD CUSTOMER BASE WILL CONTINUE TO POLARIZE - differentiating between
the "time rich, but money poor" and the "time poor, but money rich".
- Ability to segment, identify and target different customer groups in
different locations will become a key profit lever for leading grocers.
Combined micro-merchandising and customer segmentation systems will
differentiate the best.
- Quality management will need to be an integral part of the overall
system, as different quality strategies are applied to different
markets.
IMPLICATIONS FOR GROCERY SYSTEMS:
- - The understanding of customers, both individuals and groups, and the
ability to predict behavior will be a core competitive tool.
- - Micro-merchandising applications will grow more sophisticated, linking into
customer profiling applications. Stores will need access to these
applications.
- - Customer service applications will become pervasive - in the store, over
the phone, on the net. All will be integrated across customer touch points.
- - Quality management requirements will become more complex as sophisticated
customer interaction strategies are implemented.
- - Applications will be required to support the measurement and subsequent
management of the customers' shopping experience.
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COMMON CUSTOMER UNDERSTANDING AND INTERACTION MANAGEMENT WILL EMERGE AS KEY
APPLICATION REQUIREMENTS ACROSS MULTIPLE CHANNELS
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[Flow chart]
Point of Store
interaction POS Phone Mail Internet kiosk iTV
Common customer management -Inbound & Outbound
Customer
mgmt layer Common Common Common
customer product event
profile profile profile
Backbone
applications (Merchandising) Logistics
3. THE PACE OF TECHNOLOGICAL CHANGE WILL NOT SLOW
- - THE MOVE OFF MAINFRAMES TO CLIENT/SERVER WILL EVOLVE INTO A MOVE TO THIN
CLIENT COMPUTING, as the network becomes ever more powerful and ubiquitous
and processing power continues to follow Moore's law, doubling every 18
months.
- Web browsers will become the de facto standard interface for any remote
access to applications.
- Developments in parallel processing and clustering technology will
drive vastly increased scalability and processing power
- As extra power becomes available it will enable the drive towards the
customer, handling ever larger volumes that will never quite catch up
with inventive marketing departments.
- Consolidation and standardization will continue, particularly at the
platform and data base end of the marketplace, the risks of not
following the market leader will multiply.
- The next generation of data management and network computing will
continue to offer an incremental step change of opportunity, staying
close to that will be of huge value.
- - THE NETWORK WILL TRANSFORM THE ECONOMICS OF TECHNOLOGICAL COMPETITION.
- While the cost of application operations will remain relatively
constant, remote cost of access will fall dramatically.
- This will alter the technological balance of power away from the large
retailer with the significant in house IS group towards the smaller
operation who "signs up" for access to industry or market level
solutions.
- The competitive landscape will reshape rapidly, as new players with
little systems support today, seize opportunities to leapfrog
traditional grocers constrained by legacy applications and internal IS
skills
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- - THE USER INTERFACE WILL MOVE FORWARD INTO A NEW METAPHOR, as business
applications respond to charges of under-delivery.
- Visual process flows will drive business applications, taking advantage
of the web to link multiple applications and partners into a business
process driven workbench.
- - PACKAGED APPLICATIONS WILL SWEEP THE GROCERY MARKET as is happening in
other retail segments. The competitive situation will force closer focus on
return on investment and the cost of keeping current will continue to
increase for custom application development and support. Combined, these
forces will result in most grocery retailers making the transition to
packaged solutions at the next major investment point in their development
schedule.
IMPLICATIONS FOR GROCERY APPLICATIONS:
- - The network will be everywhere, web compatible applications are be an
obvious requirement
- - Database independence will be costly and slow access to latest
developments, we believe Oracle will dominate
- - Increased scalability will drive advanced modeling applications
- - The network architecture and cost structure will encourage a new model of
application deployment and usage
- - Visual process flows will redefine the user interface
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EXPLODING NETWORK AND PROCESSING CAPABILITIES WILL ENABLE NEW OPPORTUNITIES FOR
BUSINESS APPLICATIONS, THOSE CLOSEST TO THE DATA MANAGEMENT ADVANCES WILL TAKE
FIRST ADVANTAGE
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Applications are in transition..
From Mainframe to Client/server to Network
From Custom to Package to Enterprise
From Data processing to Analysis to Predictive
From Passive to Reactive to Proactive
80's 90's 00's
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4. SUPPLIER MANAGEMENT WILL BE REDEFINED
- - SUPPLIER COLLABORATION WILL DEVELOP AS A MAJOR FOCUS FOR THE INDUSTRY.
Scope will broaden to include: forecasting; replenishment; in store
merchandising; new product development (for both branded and private
label); packaging and reverse (or green) logistics.
- Forecasting applications will become key communication and cost control
tools for both grocer and manufacturer as detailed sales and promotion
forecasts drive both production and replenishment.
- Visual merchandising tools will be integrated into collaborative
Category Management solutions, driving a new requirement into the space
management arena.
- VMI will continue to play a part in the replenishment of specialist
product types or where the retailer chooses not to focus on the Supply
Chain as a core competency. In general this will be unusual.
- Product development lifecycles will be shortened through the
introduction of collaborative development tools. Most attention will
focus on potential impact on the success of new product introductions,
where collaborative sharing of customer understanding and targeting
data offers significant value.
- - DIRECT PRODUCT COSTING WILL BECOME AN OPERATIONAL REQUIREMENT. Increased
sharing of information will drive the adoption of direct product costing as
a core approach as collaboration moves beyond the initial gains in
inventory to address broader supply chain and promotional opportunities.
- Fact-based negotiation will put a premium on full understanding of cost
structures across the whole supply chain. The better the access to this
information, the greater the edge for the buyer.
- - THE WEB WILL CREATE NEW RULES OF BUSINESS, many existing work practices
will disappear, to be replaced by new structures and organizations.
- Manufacturers will seek to sell directly to the consumer over the web.
The battle for the consumer relationship will intensify.
- Branding and customer understanding will be key, further re-enforcing
the drive towards customer focused applications highlighted earlier.
- Business to business commerce and internal procurement will become web
based
- We may see the emergence of Industry Intranets and reference data
points such as the ANA service in the Auto Industry
IMPLICATIONS FOR GROCERY APPLICATIONS:
- - Sophisticated sales and promotion forecasting applications will become
key
- - We should expect the next generation of visual merchandising tools to
be web-based to allow for a collaborative approach
- - VMI will become part of a broader collaborative solution
- - Applications to support new product development will get integrated
into enterprise solutions
- - Supply chain and purchasing modules will need to support direct product
costing.
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COLLABORATION WILL OFFER REAL ADVANTAGES, EVEN MORE SO IF YOU UNDERSTAND YOUR
COMPLETE COST STRUCTURE
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SECTION III - THE RETEK GROCERY SOLUTION
1. TRANSACTION SYSTEMS
[Flow Chart]
PLAN BUY MOVE SELL PAY
Demand Product Warehouse Wireless Store Financials
Forecasting Maintenance Management Operations
Range Purchasing Virtual Store Human
Management Management Workbench Resource
Space Price & Trade Fuels Invoice
Management Promotions Management Management Matching
Product Inventory Web Store
Development Management
Collaborative Supply Chain Web Based Sales
Management Event Mgmt Audit
Promotional Direct Product
Planning Costing Mgmt
THE RETEK GROCERY SOLUTION CURRENTLY SUPPORTS:
- - DEMAND FORECASTING - Statistical and causal forecasting solution employing
state of art modeling techniques to produce extremely accurate forecasts
with minimal human intervention.
- - SPACE MANAGEMENT - MarketMax space management solution with support from
total store planning down to plannograms.
- - PRODUCT DEVELOPMENT - Buyer and supplier teams share a common web database
to conceptualize, develop, and finalize new products.
- - PRODUCT MAINTENANCE - Full core merchandizing set-up and maintenance
including products, suppliers and locations.
- - PRICE AND PROMOTIONS MANAGEMENT - Price management supports differential
pricing across stores by item. Advanced time based promotion management
includes support for threshold, mix `n' match, and loyalty card discounts.
- - INVENTORY MANAGEMENT - Store and warehouse replenishment (Computer Assisted
Ordering), features include sophisticated dynamic and time supply methods,
cross dock, flow-through, direct store deliveries, substitute products, and
closed loop inventory tracking functionality.
- - DIRECT PRODUCT COST MANAGEMENT - Understand the key direct product costs
associated with each product and category and use this information to
optimize category financial performance.
- - WAREHOUSE MANAGEMENT - supports entire distribution management needs, from
the single site to multiple facility management.
- - FINANCIALS - comprehensive financial management solution the dramatically
enhances financial controls, data collection, information access and
financial reporting.
- - H/R - proactive management tool that controls costs while developing and
supporting an effective workforce.
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ENTERPRISE 3.0 (DEC 31 1998) IS BEING ENHANCED TO SUPPORT:
The Enterprise 3.0 release will enhance the core foundation to provide support
for perishables (with unlimited units if measure) and will move the supplier
relationship to the product and store level (to allow for local suppliers).
- - WEB STORE - industry leading and rapidly deployable scalable Internet
commerce server with integrated shipment and taxation services.
- - TRADE MANAGEMENT - streamlines and automates the logistics process,
providing immediate visibility into the pipeline for the status of products
as they move through the distribution cycle.
- - INVOICE MATCHING - streamlines the invoice matching process by
automatically confirming receipt of merchandise and alerting the retailer
to unmatched or partially matched invoices.
- - SALES AUDIT - processes transaction data from the Point-of-Sale and moves
the sales and customer basket data through a series of processes that
culminate in "clean" data.
- - VIRTUAL STORE MANAGEMENT WORKBENCH 1.0 - Store Merchandise Management, &
Store Inventory Management via a low cost of ownership thin-client
architecture.
- - WIRELESS STORE OPERATIONS - RF enabled store operations support for
inventory management, customer ordering, ticketing and price look-up.
NEXT PHASE DEVELOPMENT PLANS INCLUDE:
Core merchandizing enhancements will include support for complex negotiations
(including brackets, deals, & allowances), Sales Based Ordering (for
replenishment), Product Transformation (receipts and Bill of Materials),
Location and Item level application security, support for shelf-life constrained
environments (e.g. ordering algorithms, receipt and dispatch thresholds, etc.),
wastage, 24 hour stock takes, food service, and many more grocery specific
features
- - RANGE MANAGEMENT - maintain, control and report on range. Including the
creation, monitoring and ongoing maintenance of product ranges, and support
for core range and multiple range variations based on customer and product
attributes to support stores groupings by socio-economic/ demographic
criteria. Will also provide the ability to rank products within ranges to
allow for available footage by product category within store groupings.
- - PROMOTIONAL PLANNING - Promotional planning and forecasting tool with
promotional calendar and automatic purchase order generation.
- - COLLABORATIVE SUPPLY CHAIN MANAGEMENT - integrates the retailer with their
supply chain partners via the Internet to facilitate the sharing of a
common plan, forecast, and production schedule.
- - VIRTUAL STORE MANAGEMENT WORKBENCH 2.0 - Store Cash Management, Store Fuels
Management, & Integrated Labor Scheduling, T&A, & H/R.
- - WEB BASED EVENT MANAGEMENT - enables buyers and suppliers to agree delivery
schedules then track progress from order to delivery. Manages by exception,
alerting buyers and managers only when targets are not met. Buyers can
track and control the delivery of tens of thousands of new product lines
concurrently.
- - FUELS MANAGEMENT - fully integrated fuel site management solution including
streamlined downstream activities such as inventory management, sales,
accounting and taxation.
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2. DECISION SUPPORT SYSTEMS [Flow Chart]
Targeted
Marketing
Customer Workbench Marketing
Management Workbench
Workbench
Category Logistics
Management Workbench
Workbench
Customer Balanced
Service Scorecard
Workbench Workbench
Data Warehouse
& Data Marts
Store DSS
Workbench Performance
& Analysis
Promotional Reports
Effectiveness
Workbench
THE RETEK GROCERY SOLUTION CURRENTLY SUPPORTS:
Over 1200 retail Key performance indicators and 500 pre-configured reports.
- - COMPANY PERFORMANCE - A high level overview of company performance,
including a comparison of actual sales, markdown, stock, and intake against
forecast and plan and last year.
- - MERCHANDISE PERFORMANCE - key performance indicators made available for
detailed analysis of product performance, including product history, top
and bottom performers, top season performers, style size ratio, sales and
profitability, detailed performance, replenishment, margin erosion, trading
performance, and forecast stock.
- - BUSINESS PERFORMANCE - Daily and weekly detailed business performance
reports. Daily performance level includes sales performance, profit
performance, markdown analysis, and new lines. Reports on a weekly
performance include performance summary, performance detail, replenishment,
and full and reduced price analysis.
- - ORGANIZATION PERFORMANCE - Provides analysis at store, region, and area
level. Includes sales and stock movement, stock inquiry by store and SKU,
and stock inquiry by SKU and store.
- - VENDOR COMPLIANCE - Provides information used to evaluate vendors based on
sales, intake margin, and compliance figures. Includes vendor profit and
turnover, vendor sales analysis, vendor ranking, vendor compliance, payment
terms, replenishment, and volume.
- - STOCK PERFORMANCE - Covers the broad area of contracts and availability and
orders. Includes balance of contract, scheduled delivery, availability,
presentation stock, purchase order cancellations, order receipt
discrepancies, customer orders, inter-store transfers, stock counts, stock
cost and sell value, obsolete stock, and loss making stock
- - PRICE/MARKDOWN ANALYSIS - Enables low-level analysis in the areas of
markdown, price, and VAT history. Reports include markdown uplift, markdown
spread, average selling price, selling price analysis, price point
analysis, and VAT history.
- - PROMOTION ANALYSIS - Analysis by event, performance by scheme type, sales
uplift by event, and sales uplift by scheme type.
- - PROCUREMENT PERFORMANCE - Monitor and analysis the cost effectiveness and
efficiency of the business procurement process across vendors, products,
and locations.
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ENTERPRISE 3.0 (DEC 31 1998) WILL BE ENHANCED TO SUPPORT:
- - CUSTOMER MANAGEMENT WORKBENCH - understand your customer with support for
customer segmentation (Recency, Frequency, Monetary, Profitability,
clustering, and socio-demographics) and relationship management (loyalty
rewards and incentives, defection analysis, and lifetime customer
valuations). Uses patented clustering technology to understand and segment
customers based on real behavior not just socio and geo-demographics.
- - TARGETED MARKETING WORKBENCH - Provides marketers with analysis tool to
increase customer acquisitions and customer spending. Analysis will support
one-to-one marketing, cross and up-selling, mass customization, and
customer prospecting based on the retailer's best customers.
- - STORE MANAGER'S DSS WORKBENCH 1.0 - Empowers the store manager by
leveraging a thin-client architecture and providing a full suite of
decision support performance and analysis reports.
NEXT PHASE DEVELOPMENT PLANS INCLUDE:
Next generation decision support tools will embed the Retek Navigator and Visual
Process Flow technology as they start to drive access to all elements of the
enterprise.
The Retek Navigator supports user context sensitive business navigation, that
allows users to organize and customize the Retek Enterprise functions into
folders and locations. Features include, a customizable start page, web links
(to competitor sites or Intranet URLs), favorites folder, customizable toolbar,
and links to third party systems.
The Visual Process Flow transforms the Enterprise into a process driven business
application. An inbox of tasks will seamlessly link to multiple modules in the
Enterprise. Processes can be extended to include partners through collaboration
via an Extranet.
- - FUELS PERFORMANCE - Integration to [ * ] data warehouse which is based on
an oil industry data model will provide support for all required fuel and
site performance and analysis.
- - STORE MANAGER'S DSS WORKBENCH 2.0 - Integrated fuels and merchandising
reporting and analysis will enable total site performance visibility.
Integrated labor and productivity analysis will also be included.
- - CATEGORY MANAGEMENT WORKBENCH - Allows the retailer to manage their
inventory from a customer perspective by managing objectives such as space
management, product range, and suggested price. Includes information on
competitor pricing, competitor product mix and new lines, market data and
detailed space information
- - MARKETING WORKBENCH - Builds on the targeted marketing workbench to include
integrated campaign management, communication tracking, complaint logging,
event-driven marketing, and customer satisfaction reporting.
- - BALANCED SCORECARD WORKBENCH - Balances external expectations - of
customers and shareholders - with internal capabilities. Supplements
traditional financial performance measures with operational measures in the
areas of customer satisfaction, internal business processes, and learning
and growth.
- - LOGISTICS WORKBENCH - Enables the management and optimization of supply
chain constraints while meeting customer demand and maintaining high
standards of service and availability.
- - PROMOTIONAL EFFECTIVENESS WORKBENCH - Monitor promotional effectiveness
with presentation of promotional effectiveness against expected forecast
and provide visibility to reasons for deviations from the norm e.g.
weather, other offers, short supply, and advertising type.
- - CUSTOMER SERVICE WORKBENCH - Provide access to customer information across
all points of contact with a customer (store, call center, customer service
desk). Includes the ability to track customer complaints at the item and
store level, which allows the retailer to increase product quality, improve
the in-store shopping experience, and to negotiate more effectively with
vendors.
[ * ] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
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3. BUSINESS INTELLIGENCE SYSTEMS
[FLOW CHARTS]
Active Retail Causal Replenishment
Intelligence Forecasting Optimizer
Fraud Market Basket Customer
Prevention Analyzer Personalization
Customer Product Store
Profiler Profiler Profiler
Range Price Deal
Optimizer Optimizer Optimizer
Promotional Costing Logistics
Optimizer Optimizer Optimizer
THE RETEK GROCERY SOLUTION CURRENTLY SUPPORTS:
- - ACTIVE RETAIL INTELLIGENCE - Enterprise wide exception management and
closed loop toolkit. This combines automated discovery with the dynamic
creation of event monitors and intelligent rule decision trees to
encapsulate expert/corporate knowledge. This knowledge is used to monitor
data for key occurrences, recommend a course of action, and route the
summary to the appropriate user for resolution/notification.
- - REPLENISHMENT OPTIMIZER - Utilizing our expertise in simulation,
optimization and prediction we have developed a multi-phase program which
helps organizations set up and maintain efficient replenishment systems,
optimizing replenishment algorithm settings.
- - CREDIT CARD FRAUD PREVENTION - HNC's Falcon Retail, the neural
network-based system that examines transaction, cardholder, and merchant
data to detect a wide range of bankcard fraud.
- - INTEGRATED CAUSAL FORECASTING - Compliments the statistical forecasting
models with a causal engine that incorporates the implications of events
that drive your consumers form the normal selling cycle (e.g., promotions,
Easter, weather, etc).
ENTERPRISE 3.0 (DEC 31 1998) IS BEING ENHANCED TO SUPPORT:
- - CUSTOMER PROFILER - Learns customer behavior based on shopping behavior by
using patented neural net context vectoring technology.
- - STORE PROFILER - Performs store clustering and grade modeling by using
patented neural net context vectoring technology.
- - PRODUCT PROFILER - Understands relationships between products by developing
product affinities thorough patented neural net context vectoring
technology. Mode product affinities to determine substitutes, compliments,
traffic builders, destination products, and in-store shelf location
optimization.
- - CUSTOMER PERSONALIZATION - intelligent software that uses sophisticated new
techniques to maximize online and direct mail response rates and
selectively targets behavioral audiences.
- - MARKET BASKET ANALYZER - Analysis tool to better manage product categories
and space allocation according to each store's local pattern of demand to
improve sales and customer service. Powered by Retek's patented predictive
neural net clustering technology.
- --------------------------------------------------------------------------------
Product Strategy White Paper 14 of 15 09/03/98
Version 1.0g Retek confidential
<PAGE> 122
[RETEK LOGO}
Grocery & Convenience Store white paper
- --------------------------------------------------------------------------------
NEXT PHASE DEVELOPMENT PLANS INCLUDE:
- - DEAL OPTIMIZER - Over riding discount `What If" Tool to model, confirm and
monitor deals progress. Will enable the modeling of Over Riding Discount
using previous sales and estimates of increased business. Business will be
able to monitor agreed ORD against actual performance during period of
agreement. Exception reporting, where under performing against plan.
- - PROMOTION OPTIMIZER - Ability to model and evaluate different promotion
scenarios, and perform what-if analysis. Ability to generate suggested
forecast based on historical performance. Ability to link victim lines to
promotional SKU and model detrimental effect on volume. Ability to model
overall category effect of proposed promotions (turnover, profit, margin,
volume). Will tie customer buying patterns to promotional activities
(market basket analysis on promotions.)
- - PRICE OPTIMIZER - Intelligent business rules can be configured on top of
competitor pricing, market data, margin plans, and the category strategies
to automatically trigger price changes as external or internal events
occur. It will also be possible to perform price elasticity modeling and to
assess the effectiveness of long term pricing strategies.
- - RANGE OPTIMIZER - Determine optimal categories and products for customer
base by location/grade. Includes neural net engine to score products and
categories based on free-form descriptions and attributes.
- - WEEKLY COSTING OPTIMIZER - Tool to model `what if' scenarios to model
changes to pricing, cost, supplier volume changes, and distribution changes
(e.g., number of stores stocking).
- - LOGISTICS OPTIMIZER - Enables the management and optimization of supply
chain constraints while meeting customer demand and maintaining high
standards of service and availability. "What if" capability to perform
optimal carrier and route selection will also be supported.
- --------------------------------------------------------------------------------
Product Strategy White Paper 15 of 15 09/03/98
Version 1.0g Retek confidential
<PAGE> 123
SUBJECT TO ORACLE MANAGEMENT APPROVAL
EXHIBIT H
ISI MEMBER EDUCATION AND TRAINING FEES
<TABLE>
<CAPTION>
TECHNICAL TRAINING LENGTH PRICE
<S> <C> <C>
Course
1. Batch Technical Development Course (1 week) 5 days $1,750/person/week
2. Online (Forms) Technical Development Course (1 week) 5 days $1,750/person/week
3. Technical and Functional Perspectives (1 week) 5 days $3,500/person/week
FUNCTIONAL TRAINING
Course
RMS Fundamentals 5 days $1,750/person/week
</TABLE>
Page: 4
<PAGE> 124
<PAGE> 125
SUBJECT TO ORACLE MANAGEMENT APPROVAL
AMENDMENT ONE
to the
INDUSTRY SOLUTIONS INITIATIVE TARGET MARKET ADDENDUM
to the
INDUSTRY SOLUTIONS INITIATIVE MASTER AGREEMENT
between
ORACLE CORPORATION
and
RETEK INFORMATION SYSTEMS
This document ("Amendment One") shall serve to amend the Industry Solutions
Initiative Target Market Addendum (the "TMA") to the Industry Solutions
Initiative Master Agreement between Oracle Corporation ("Oracle") and Retek
Information Systems ("ISI Member") dated September 10, 1998 (the "Agreement").
The parties agree to amend the TMA as follows:
1. In Section 10 of the TMA, in the fourth line, after the words "(d)[*]",
insert the words "and (e)[*]".
2. In Exhibit A to the TMA, add the following to the list of application
programs that will be included in the Oracle Retail Solution Suite under the
heading "Retek":
"Sales Audit
Invoice Matching
Store Operations"
3. The license fees for Customers for the programs listed in Section 2 above
shall be as agreed to by ISI Member and Oracle on a case by case basis with
the portion of such license fees to each of ISI Member and Oracle to be
based upon the sales model (as described in Section 4.1 of the Agreement)
in effect at the time when the applicable program is licensed.
Other than the modifications above, the TMA shall remain in full force and
effect.
The Effective Date of this Amendment One shall be November 30, 1998.
RETEK INFORMATION SYSTEMS ORACLE CORPORATION
By: [SIG] By: [SIG]
-------------------------- ---------------------------
Name: Gordon Masson Name: Charles P. Schneider
------------------------ ------------------------
Title: Senior Vice President Title: Senior Vice President
------------------------ ------------------------
[ * ] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE> 1
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION, CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
EXHIBIT 10.4
OPTION CONFIDENTIAL
THIS AGREEMENT made on 11 January 1999.
BETWEEN:
WEBTRAK LIMITED
51 Cambridge Place
Cambridge CB2 1NS UK
("WEBTRAK")
OF THE FIRST PART
AND:
THE PARTIES LISTED ON SCHEDULE "A"
TO THIS AGREEMENT, BEING ALL OF THE
SHAREHOLDERS OF WEBTRAK LIMITED
(individually the "Shareholder" and collectively the "Shareholders")
OF THE SECOND PART
AND:
HNC SOFTWARE INC.
5930 Cornerstone Court West
San Diego, California USA 92121
("HNC")
OF THE THIRD PART
IN CONSIDERATION for HNC agreeing to cause its subsidiary, Retek Information
Systems, Inc., to enter into a distribution agreement with WebTrak and for other
good and valuable consideration (the receipt and sufficiency of which is hereby
acknowledged) the parties hereto each covenant and agree with the other as
follows:
1. DEFINITIONS
The following terms when used in this Agreement shall have the following
definitions:
(1) "ASSETS" - means all assets owned by WebTrak including without limitation
all assets used by WebTrak in the Business and shall include the Software
and all agreements to which WebTrak is a party that HNC Software Inc.
agrees to acquire by exercising the option.
(2) "BUSINESS" - means the business carried on by WebTrak as at the date of
this Agreement and as may be expanded from time to time and shall include
the
<PAGE> 2
- 2 -
development, maintenance, licensing, promotion, marketing and distribution
of the Software.
(3) "GROSS REVENUE" - means the License Fees paid by third party end users for
the right to license or sublicense and use the WebTrak Software.
(4) "SHARES" - means all of the issued and outstanding shares in the capital of
WebTrak not already owned by HNC which, for purposes of clarity, shall
include all of the issued and outstanding shares of each class and kind of
share in the capital of WebTrak and any options, warrants or other
agreements, securities or arrangements issued or granted that include the
right to issue shares or otherwise acquire shares in the capital of
WebTrak.
(5) "SOFTWARE" - means all the computer programs developed by WebTrak or under
license from WebTrak including the WebTrak Software and all derivatives,
object code, source code, configuration, routines and algorithms,
alterations, modifications, reconfigurations (in all forms of expression)
and all user, design, development and program manuals and other
documentation no matter how stored, transmitted, read, utilized or related
thereto and all patents, copyrights, worldwide distribution rights, trade
secrets, inventions and other intellectual property rights related thereto.
(6) "WEBTRAK SOFTWARE" - means the computer programs listed on Schedule "B".
2. EXCLUSIVE OPTION TO PURCHASE
2.1 WebTrak and the Shareholders do hereby grant to HNC the irrevocable and
exclusive option (the "OPTION") to purchase (the "OPTION TRANSACTION")
either the Assets from WebTrak or the Shares from the Shareholders, free
and clear of all claims, liens, encumbrances and rights of third parties of
every kind and nature whatsoever. The purchase price:
(1) for the Assets shall be an amount equal to the greater of: [ * ] in either
case subject to adjustments commensurate with a transaction of this nature;
or
(2) for the Shares shall be an amount equal to the greater of: [ * ] and in
either case subject to adjustments commensurate with a transaction of this
nature.
[ * ] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE> 3
- 3 -
The decision to purchase either the Assets or the Shares shall be at the sole
option and discretion of HNC and HNC shall have no obligation to exercise the
Option or to enter into any transaction whatsoever with WebTrak and/or
Shareholders. The Option Transaction will be documented by an agreement prepared
by HNC and containing the warranties, representations, covenants and agreements
of WebTrak and the Shareholders and shall provide similar ancillary documents
and agreements all as set forth in the subscription agreement (the "SUBSCRIPTION
AGREEMENT") entered into between WebTrak, Picardy International Inc. (et al) and
dated 11 January 1999) and shall contain such other terms and conditions as HNC
may reasonably require in order to effect the Option Transaction. The Option
shall be irrevocable and open for exercise by written notice from HNC to WebTrak
(the "PURCHASE OPTION NOTICE") during the period commencing September 30th,
1999 and ending December 31st, 1999. The date on which HNC duly exercises the
Purchase Option by giving WebTrak the Purchase Option Notice is herein referred
to as the "PURCHASE OPTION NOTICE DATE". The closing of the Option Transaction
shall occur on a date as determined by HNC after completion of all necessary
documentation and in any event within one hundred twenty (120) days of the
Purchase Option Notice Date.
3. NON-SOLICITATION
3.1 ASSETS. WebTrak shall not solicit offers, agree to sell or grant any
exclusive options, licenses or similar rights with respect to all or any portion
of the Assets or the Business or agree to obtain new financing or increase
financing or loans or indebtedness of WebTrak or issue or sell, or agree to
issue or sell, any Shares after the date of this Agreement without the prior
written consent of HNC, which consent may be arbitrarily withheld unless HNC
does not duly exercise the Option in which event this clause 3.1 shall become
null and void after December 31st, 1999. WebTrak will immediately notify HNC
after receipt by WebTrak (or any of its officers, directors, employees,
affiliates, shareholders or agents) of any unsolicited proposal for or inquiry
respecting acquisition of any of the Assets or Shares or any request for
non-public information in connection with such proposal or inquiry or for access
to the properties, books or records of WebTrak by any person or entity. Such
notice to HNC will indicate in reasonable detail the identity of the person
making the proposal or inquiry and the terms and conditions of such proposal or
inquiry.
3.2 SHARES. The Shareholders shall not solicit offers or agree to sell,
encumber, hypothecate or pledge or mortgage all or any of the Shares without the
prior written consent of HNC, which consent may be arbitrarily withheld unless
HNC does not duly exercise the Option in which event this clause 3.2 shall
become null and void after December 31st, 1999. WebTrak and the Shareholders
will immediately notify HNC after receipt by WebTrak (or any of its officers,
directors, shareholders, employees, affiliates or agents) of any unsolicited
proposal for or inquiry respecting acquisition of any of the Shares or any
request for non-public information in connection with such proposal or inquiry
or for access to the properties, books or records of WebTrak by any person or
<PAGE> 4
- 4 -
entity. Such notice to HNC will indicate in reasonable detail the identity of
the person making the proposal or inquiry and the terms and conditions of such
proposals or inquiry.
3.3 CORPORATE SHAREHOLDER. If any Shareholder is a corporate shareholder,
control of such corporate Shareholder may not be changed, directly or
indirectly, whether by operation of law or otherwise, without the prior written
of the other Shareholders and HNC (which consent may be arbitrarily withheld)
unless HNC does not duly exercise the Option in which event this clause 3.3
shall become null and void after December 31st, 1999. In addition to any other
remedies available to HNC, if such prior written consent is not obtained, and
control of a corporate shareholder changes as aforesaid, then such Shareholder
shall be deemed to be a Defaulting Shareholder as that term is defined in the
Shareholders Agreement entered into between WebTrak and the Shareholders and
dated 11 January 1999.
4. FEES AND EXPENSES
4.1 In relation to this Agreement and the Option Transaction, each party
shall be responsible for their own legal, accounting and other third party
advisory fees and expenses.
5. CONFIDENTIALITY
5.1 Neither party (or any of their officers, directors, employees,
affiliates or agents) shall discuss or disclose the existence or terms of this
Agreement or the Option Transaction other than to such legal, accounting and
financial advisors as the parties may retain with respect to the Option
Transaction on a need-to-know basis; provided that HNC may disclose such
information about this Agreement and the Option Transaction as HNC in good faith
determines may be necessary for HNC to comply with applicable securities laws,
rules and regulations. Neither party shall use or disclose confidential or
proprietary information of the other, either during or following termination of
this Agreement, save and except for disclosure to employees and consultants on a
need-to-know basis. Confidential information shall include all information of a
party that is not available in the public domain. All parties to the Agreement,
including the officers, directors and employees of the parties to this Agreement
shall not make any public announcement concerning this Agreement or discussions
or any other memorandum, letters or agreements between the parties relating to
this Agreement unless such disclosure has first been approved in writing by all
parties; provided that HNC may disclose such information about this Agreement
and the Option Transaction as in good faith HNC determines may be necessary for
HNC to comply with applicable securities laws, rules and regulations.
6. ACCESS
6.1 Upon execution of this Agreement, WebTrak shall cause and permit HNC
and its representatives, accountants, lawyers and other consultants full access,
from time to time, to the information, books, records and premises of WebTrak
and shall provide HNC with monthly reports including: (i) financial status
(balance sheet and operating
<PAGE> 5
- 5 -
statement); (ii) sales figures; (iii) product development report; and (iv) a
report of any claims by or against WebTrak or of any off-balance sheet
liabilities of WebTrak.
7. MISCELLANEOUS
7.1 NOTICE. Any notice which may be or is required to be given pursuant to
this Agreement shall be sufficiently be given if served personally upon the
party for whom it is intended or hand delivered to the party at the address
first above written or as set forth in Schedule "A" as the case might be. The
date of receipt of any such notice shall be deemed to be the date of delivery.
7.2 ASSIGNMENT. HNC may assign all or any portion of its rights or interest
in this Agreement to any parent or subsidiary or affiliate of HNC or any company
that merges or consolidates with or into HNC. Neither WebTrak nor any of the
Shareholders may assign their rights or interest under this Agreement.
7.3 LAW. This Agreement shall be governed by and construed in accordance
with the laws of England and the parties hereto submit to the exclusive
jurisdiction of the English courts.
7.4 FURTHER ASSURANCES. Each of the parties hereto agree to execute and
deliver such further deeds and documents and give such further assurances as may
be required by the other party or parties hereto so as to give full effect to
this Agreement and its purpose.
7.5 COUNTERPARTS. This Agreement may be executed by the parties in
counterparts and when all parties have executed at least as many counterparts as
there are parties, all of such counterparts shall be deemed to be originals and
all such counterparts taken together shall constitute one and the same
agreement.
7.6 FACSIMILE EXECUTION. The parties hereto acknowledge and agree to accept
and be bound by facsimile transmitted copies of this Agreement and its
counterparts including facsimiled signatures of the parties hereto.
7.7 TIME OF THE ESSENCE. Time is of the essence of this Agreement.
7.8 ENUREMENT. This agreement shall enure to the benefit of and be binding
upon the parties hereto and their personal representatives.
AS WITNESS the hands of the parties the day and year first above written.
WEBTRAK LIMITED by its
<PAGE> 6
- 6 -
_________________________________________
authorized signatory )
)
)
Signature ) XXXXXX
)
Print Name ) XXXXXX
_________________________________________ __________________________________
Signed by JEREMY PETER MERIO THOMAS )
)
) XXXXXX
) JEREMY PETER MERION THOMAS
)
)
)
)
)
)
)
)
)
)
_________________________________________ ___________________________________
Signed by RICHARD EVANS )
)
) XXXXXX
)
)
) RICHARD EVANS
)
)
)
)
)
)
)
)
<PAGE> 7
- 7 -
_________________________________
PICARDY INTERNATIONAL INC. by it )
authorized signatory )
)
)
Signature XXXXX )
)
Print Name )
A. MACDONALD
- ---------------------------------
TTEE SANDERS LIVING TRUST U/A )
DTD 12/12/90 by its authorized )
signatory )
)
XXXXX )
Signature )
)
)
RW SANDERS )
Print Name )
- ---------------------------------
THE ROBERT W. WILMOT & MARY J )
WILMOT LIVING TRUST by its )
authorized signatory )
)
XXXXX XXXXX )
Signature )
)
)
R WILMOT M WILMOT )
Print Name )
- ---------------------------------
HNC SOFTWARE INC. by its )
authorized signatory )
)
Signature XXXXX )
)
)
R.V. THOMAS )
Print Name )
Page 7
<PAGE> 8
SCHEDULE "A"
SHAREHOLDERS OF WEBTRAK LIMITED
AS AT THE CLOSING
<TABLE>
<CAPTION>
SHAREHOLDER NUMBER OF
- ------------------------------------------------------ SHARES LEGALLY
AND BENEFICIALLY
NAMED ADDRESS OWNED
- ----------------------- ------------------------ -------------------
<S> <C> <C>
Mr. Jeremy Peter Merion Middlestead, Green Trees 77
Thomas Peppard Oxon, RG9 5EN UK Ordinary L.1 shares
Dr. Richard Evans 8, Springfield Road, 21
Cambridge CB4 1AD UK Ordinary L.1 shares
TTEE Sanders Living 1037 Casiano Road 1
Trust U/A DTD 12/12/90 Los Angeles, CA 90049 USA Ordinary L.1 share
The Robert W. Wilmot & 13333 la Cresta Drive 1
Mary J. Wilmot Living Los Altos, CA 94022 USA Ordinary L.1 share
Trust U/D/T
Dated April 18, 1995
Picardy International Inc. Jardine Building - 4th Floor 50
33-35 Reid Street Ordinary L.1 shares
Hamilton HM-11 CBS,
Bermuda
</TABLE>
<PAGE> 9
SCHEDULE "B"
SOFTWARE
The software comprises all current and future developments of and derivatives of
the following products:
WebTrak Pathway
WebTrak Portfolio
