EXHIBIT 10.21
FIFTH AMENDMENT
TO
AGREEMENT FOR
COMPUTERIZED CREDIT REPORTING SERVICES
AND
OPTIONS TO PURCHASE AND SELL ASSETS
This Fifth Amendment to Agreement for Computerized Credit Reporting Services and
Options to Purchase and Sell Assets (the "Fifth Amendment") dated as of the 7th
day of September, 1993, is made by and among Equifax Credit Information
Services, Inc. ("CBI" or "ECIS"), a Georgia corporation, Equifax Inc., a Georgia
corporation ("Equifax") and CSC Enterprises, a Delaware general partnership (the
"Partnership"), CSC Accounts Management, Inc., a Texas corporation ("Accounts
Management"), Credit Bureau of Tulsa, Inc., an Oklahoma corporation, and
Computer Sciences Corporation, a Nevada corporation ("CSC").
WITNESSETH:
WHEREAS, The Credit Bureau, Incorporated of Georgia, Equifax, CSC, CSC Credit
Services, Inc., a Texas corporation ("Credit Services"), CSC Credit Services of
Minnesota, Inc., a Texas corporation ("Minnesota"), Credit Bureau of Cincinnati,
Inc., an Ohio corporation ("Cincinnati"), Credit Bureau of Greater Kansas City,
Inc., a Missouri corporation ("Kansas City"), Xxxxx Holding Company, a Delaware
corporation ("JHC"), and Accounts Management entered into an Agreement for
Computerized Credit Reporting Services and Options to Purchase and Sell Assets,
dated as of August 1, 1988 ("the Original Agreement"); and
WHEREAS, Minnesota has been merged into Credit Services effective September 30,
1988; and
WHEREAS, as of December 28, 1990, Credit Services, CSC Enterprises, Inc., a
Nevada corporation ("CEI"), CSC Ventures, Inc., a Nevada corporation, CBI
Ventures Inc., a Georgia corporation, and Equifax Ventures Inc., a Georgia
corporation, entered into that certain Partnership Agreement (the "Partnership
Agreement") of the Partnership; and
WHEREAS, pursuant to that certain Assignment and Assumption Agreement, dated as
of December 28, 1990, by and among Credit Services, Cincinnati, Kansas City,
JHC, as assignors, and CEI, as assignee, CEI was assigned all of assignors'
right, title, and interest in and to the Original Agreement and CEI assumed all
of the assignors' obligations under the Original Agreement; and
WHEREAS, pursuant to that certain Assignment and Assumption Agreement, dated as
of December 28, 1990, by and between CEI and Credit Services, as assignors, and
the Partnership, as assignee, CEI assigned to the Partnership, among other
things, all of its right, title, and interest in and to the Original Agreement,
and the Partnership assumed all of CEI's obligations under the Original
Agreement; and
WHEREAS, the Original Agreement was amended as of December 28, 1990, by that
certain First Amendment to Agreement for Computerized Credit Reporting Services
and Options to Purchase and Sell Assets, among ECIS, Equifax, CSC, Credit
Services, Cincinnati, Kansas City, JHC, Accounts Management, CEI, and the
Partnership (the "First Amendment"); and
WHEREAS, the Original Agreement, as amended by the First Amendment, was further
amended as of the 27th day of September, 1991, by that certain Second Amendment
to Agreement for Computerized Credit Reporting Services and Options to Purchase
and Sell Assets, among ECIS, Equifax, the Partnership, Accounts Management, and
CSC (the "Second Amendment"); and
WHEREAS, the Original Agreement, as amended by the First Amendment and the
Second Amendment, was further amended as of the 27th day of September, 1991, by
that certain Third Amendment to Agreement for Computerized Credit Reporting
Services and Options to Purchase and Sell Assets, among ECIS, Equifax, the
Partnership, Accounts Management, and CSC; and
WHEREAS, CBI, as of December 23, 1991, changed its corporate name from The
Credit Bureau, Incorporated of Georgia to Equifax Credit Information Services,
Inc. and desires to use the acronym "ECIS" instead of "CBI" and any reference to
"CBI" or "ECIS" in the Original Agreement, as amended, or this Amendment refers
to Equifax Credit Information Services, Inc., a Georgia corporation; and
WHEREAS, Credit Bureau of Tulsa, Inc. ("CB-Tulsa") was added to the Original
Agreement, as amended, as a party via an Addendum effective as of the 17th day
of February, 1992, and for the purposes of Exhibit M set forth in this Fifth
Amendment CB-Tulsa will be included in any reference to the Partnership; and
WHEREAS, the Original Agreement, as amended by the First Amendment, the Second
Amendment, and the Third Amendment was further amended as of the 31st day of
December, 1992, by that certain Fourth Amendment to Agreement for Computerized
Credit Reporting Services and
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Options to Purchase and Sell Assets, among ECIS, Equifax, the Partnership,
Accounts Management, CSC, and CB-Tulsa (the "Fourth Amendment," the Original
Agreement, as amended by the First Amendment, the Second Amendment, the Third
Amendment and the Fourth Amendment being referred to herein as the "Agreement");
and
WHEREAS, ECIS has entered into an agreement with Sears, as defined herein,
regarding pricing of certain Special Products, as defined herein; and
WHEREAS, the Partnership, as owner of certain information in the ACROPAC(TM)
System, desires to consent to the method of pricing certain Special Products, as
herein defined, to Sears, as herein defined;
WHEREAS, the parties have previously consented that the products FINDERS and
DTEC shall be treated as seller- rather than owner-based products, but desire
that such policy shall not apply to FINDERS sales to Sears on the terms
described herein;
WHEREAS, the parties hereto have agreed to amend the Agreement in certain
respects as set forth herein; and
NOW THEREFORE, in consideration of the premises and of other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
I. ADDITION OF EXHIBIT M TO THE AGREEMENT
The following new Exhibit M titled "Sears Pricing" is hereby added to the
Agreement as follows:
1. The parties agree that the method of determining
payments in respect of the Cost Allocation System (as
defined in Paragraph 8(c) of the Agreement), billable
inquiries (as defined in Paragraph 8(a) of the
Agreement), and the Royalty (as defined in Paragraph
8(e) of the Agreement) for all Special Products (as
hereinafter defined) accessed by Sears (as hereinafter
defined), whether directly by Sears or for Sears (using
the Sears customer number) by the Partnership, ECIS or
its Affiliate Bureaus shall be determined pursuant to
this Exhibit M.
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2. "Special Products" is defined to mean the basic
ACROPACT(TM) credit reporting products known as
ACROFILE, ACROPLUS, ACRO SELECT, and FINDERS. A "Unit"
means each unit of a Special Product accessed by Sears
for its use. All other products, including without
limitation, PERSONA, DTEC, ON-LINE DIRECTORY, Canadian
files, Equipment Leasing, Handling or Surcharges for
messenger work, and special services such as "Mail
Return", are not included in Special Products and
payments in respect of all such other products shall not
be affected by this Exhibit M. SAFESCAN will be provided
to Sears at no charge and is not included in the
definition of "Special Products."
3. "Sears" is defined to mean only the Sears
Merchandising Group of Sears, Xxxxxxx and Company and
shall not include any other entity, affiliate or
division; therefore, for example, such affiliates as
Sears Payment Systems and Allstate shall not be included
in the definition of "Sears".
4. Payments in respect of the Cost Allocation System,
billable inquiries and the Royalty under this Exhibit M
shall be determined as follows:
(a) Actual Sears File Price. A factor defined as the
"Actual Sears File Price" will be calculated in
respect of each month by (i) dividing the constant
amount $500,000 ("Sears Monthly Payment") owed by
Sears each month in respect of the pricing agreement
between Sears and ECIS by (ii) the total number of
Units accessed that month by Sears from all ACROPAC
bureau files. (Any reference to a "month" in this
Exhibit M shall be to a calendar month.) For
example, if the number of Units accessed in a given
month by Sears equals 1,000,000, then the Actual
Sears File Price for that month would be $0.50:
Sears Monthly / Units = Actual Sears
Payment Accessed File Price
($500,000) (1,000,000) ($0.50)
(b) Cost Allocation System. The Cost Allocation
System in respect of Special Products shall require
a determination of three elements: (i) the Sellers'
Pool, (ii) the Model Royalty Pool and (iii) the File
Owners' Pool.
(i) The Sellers' Pool will equal a constant
5% of the Sears Monthly Payment. The Partnership
will receive a constant 22% of the Sellers' Pool
each month ("Partnership Share"); the remainder of
the Sellers' Pool will be allocated by ECIS. For
example:
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Sears Monthly X 5% = Sellers' Pool
Payment ($500,000) ($25,000)
Sellers' Pool X 22% = Partnership Share
($25,000) ($5,500)
(ii) The Model Royalty Pool will be paid to
the third parties ("Model Vendors") that developed
the scoring model system used by Sears in respect of
Units accessed by Sears. The Units to which Sears
applies scoring model systems during a given month
are referred to as the "Scored Units". The Model
Royalty Pool will be calculated in respect of each
month by (x) multiplying the number of Units
accessed by Sears that month by (y) the percentage
of such Units which are Scored Units by (z) a Model
Royalty equal to a constant number of $.05 for DAS
and $.06 for BEACON. For example, if the number of
Units accessed in a given month by Sears equals
1,000,000 and the percentage of such Units which are
Scored Units equals 55%, and the Model chosen by
Sears is DAS, then the Model Royalty Pool for that
month would be $27,500:
Units X Percentage X Model = Model
Accessed of Units Royalty Royalty Pool
(1,000,000) which are ($.05) ($27,500)
Scored
Units (55%)
The Model Vendor will receive all of the Model
Royalty Pool for each month.
(iii) The File Owners' Pool will be
calculated in respect of each month by (x)
subtracting from the Sears Monthly Payment (y) both
the File Sellers' Pool and the Model Royalty Pool.
For example, if the File Sellers' Pool and the Model
Royalty Pool for a given month are $25,000 and
$27,500, respectively, then the File Owners' Pool
for that month would be $447,500:
Sears - File - Model = File
Monthly Sellers' Royalty Owners'
Payment Pool Pool Pool
($500,000) ($25,000) ($27,500) ($447,500)
The File Owners' Pool will be allocated among file
owners regardless of whether the Special Product is
otherwise characterized as a seller-based or
owner-based product. Each file owner will receive
each month a proportion of the File Owners' Pool for
that month based on the number of Units accessed
from its file. For example, if for a given month the
File Owners' Pool is $447,500, the number of Units
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accessed by Sears is 1,000,000 and the number of
Units accessed from the file of file owner X is
100,000, then file owner X will receive $44,750 from
the File Owners' Pool:
File / Units x Units Accessed = File Owner X
Owners' Accessed from file of Share of File
Pool (1,000,000) File Owner X Owners' Pool
($447,500) (100,000) ($44,750)
(c) Billable Inquiry. The amount payable by the
Partnership for a given month for each billable
inquiry in respect of a Unit (including for purposes
of this Exhibit M, the product FINDERS) will be
calculated by (i) dividing the Actual Sears File
Price for that month by (ii) the national price per
ACRO file report paid by Sears prior to the Sears
Pricing Agreement ("Previous Sears File Price") (a
constant number equal to $1.12) (iii) multiplied by
a constant number equal to $0.23; provided, such
amount per billable inquiry shall in no event exceed
$0.23, or such lower amount provided by the
Agreement. For example, if for a given month, the
Actual Sears File Price is $0.50, the charge for a
billable inquiry for that month will be $0.102679:
Actual / Previous x $0.23 = billable inquiry
Sears Sears charge
File File ($0.102679)
($0.50) ($1.12)
(d) Royalty. The amount payable as Royalty under the
Agreement per billable inquiry in respect of a Unit
(including, for purposes of this Exhibit M, the
product FINDERS) in respect of a given month will be
calculated by (i) dividing the Actual Sears File
Price for that month by (ii) the Previous Sears File
Price ($1.12) multiplied by the Royalty otherwise
payable under the Agreement ($0.07); provided, such
amount shall in no event exceed $0.07. For example,
if for a given month the Actual Sears File Price is
$0.50, the Royalty per billable inquiry for that
month will be $0.03125:
Actual / Previous x Agreement = Royalty per
Sears Sears Royalty billable inquiry
File File ($0.07) ($0.03125)
Price Price
($0.50) ($1.12)
5. This Exhibit M shall be effective as of March 1,
1993, and shall continue in effect until September 1,
1994.
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6. The Partnership shall have the right to audit ECIS's
relevant records to verify compliance with the terms of
this Exhibit M. Such audit may be conducted after
reasonable notice, during normal business hours, using
reasonable procedures to assure an accurate audit. Each
party will reasonably cooperate with the other during
the conduct of any such audit, it being expressly
understood that in no event shall auditors be permitted
to access the confidential data, files, or information
belonging to a third party or not directly related to
this Exhibit M. Auditors will not be given free access
to facilities, documents, or files. Auditors will work
only in designated locations and will conduct their
business quietly without significant disruption of work
being done by others. Notwithstanding anything to the
contrary herein contained, ECIS will make available to
the Partnership appropriate personnel to answer the
Partnership's questions associated with the audit. All
expenses of the audit are the responsibility of the
Partnership.
2. REFERENCES TO THE AGREEMENT
All capitalized terms which are defined in the Agreement and not otherwise
defined herein shall have the same meaning herein as in the Agreement. On or
after the date hereof, each reference in the Agreement to "this Agreement",
"hereunder", "herein", or words of like import shall mean and be a reference to
the Agreement, as amended by this Fifth Amendment.
3. AUTHORITY
Each of the parties hereto represents to the other parties hereto that:
(a) it has the full corporate (or, in the case of the Partnership,
partnership) power and authority to execute and deliver this Fifth
Amendment, to perform under the Agreement, as amended by this Fifth
Amendment, and to consummate the transactions contemplated by the
Agreement, as amended by this Fifth Amendment, without the necessity of
any act, approval, or consent of any other person whomsoever, except such
as have been obtained; and
(b) the Agreement, as amended by this Fifth Amendment, has been approved
by its Board of Directors, or the Executive Committee thereof (or, in the
case of the Partnership, by the respective Boards of Directors, or the
Executive Committees thereof, of each of its partners), and constitutes
the valid and legally binding obligation of such party enforceable against
such party in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws from time to time
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in effect which affect the enforcement of creditors' rights generally, and
except as enforcement of remedies may be limited by general equitable
principles.
4. COUNTERPARTS
This Fifth Amendment may be executed in several counterparts, and each
counterpart, when so executed and delivered, shall constitute an original
instrument, and all such separate counterparts shall constitute but one and the
same instrument.
5. MERGER
This Fifth Amendment sets forth the entire understanding of the parties
regarding the subject matter hereof, and all prior such understandings, written
or oral, are merged herein.
6. GOVERNING LAW
THIS FIFTH AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS.
EQUIFAX CREDIT INFORMATION SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Xxxxxx X. Xxxxxx
Its Senior Vice President
-----------------------------------
EQUIFAX INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Xxxxxx X. Xxxxxx
Its Senior Vice President
-----------------------------------
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CSC ENTERPRISES
By: CSC ENTERPRISES, INC.
Its Managing Partner
By: /s/ Xxxx X. Xxxx
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Its Vice President
--------------------------------
CSC ACCOUNTS MANAGEMENT, INC.
By: /s/ Xxxx X. Xxxx
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Its President
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CREDIT BUREAU OF TULSA, INC.
By: /s/ Xxxx X. Xxxx
-----------------------------------
Its President
-----------------------------------
COMPUTER SCIENCES CORPORATION
By: /s/
-----------------------------------
Its President
-----------------------------------
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