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EXHIBIT 10.24
DATED 1999
ABACUS DIRECT INTERNATIONAL, INC. (1)
- AND -
VNU BUSINESS INFORMATION EUROPE B.V. (2)
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JOINT VENTURE AGREEMENT
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CONTENTS
1. Definitions and Interpretation
2. Scope of Agreement
3. Formation of the Company and the Subsidiaries
4. Key Issues, Fundamental Issues and Deadlock Provisions
5. Representations and Warranties of Claritas
6. Representations and Warranties of Abacus
7. Indemnity
8. Competition
9. Financial Management of the Group
10. Dividends and Distribution of Profits
11. Rights to Transfer Interests in the Company
12. Termination
13. Notices
14. Miscellaneous
15. Arbitration
SCHEDULES
Schedule 1 Part 1: Claritas Proprietary Data
Schedule 1 Part 2: The Transactional Database
Schedule 2: The Trade Marks
APPENDICES
Appendix 1: Articles of Association of the Company
Appendix 2: Abacus Licence
Appendix 3: Claritas Service Agreement
Appendix 4: Abacus Service Agreement
Appendix 5: Claritas Loan Agreement
Appendix 6: Abacus Loan Agreement
Appendix 7: Alliance Agreement
Appendix 8: Alliance Terms and Conditions
Appendix 9: Business Plan
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THIS AGREEMENT is dated the day of 1999
BETWEEN:
1. ABACUS DIRECT INTERNATIONAL, INC. a company incorporated under the laws
of Delaware in the United States of America and whose principal place
of business is at 0000 Xxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxx 00000 XXX
(hereinafter referred to as "Abacus"); and
2. VNU BUSINESS INFORMATION EUROPE B.V. a company incorporated with
limited liability under the laws of the Netherlands and whose principal
place of business is at Ceylonpoort 5-25, Postbus 4028, 2003 EA,
Haarlem, Amsterdam, the Netherlands (hereinafter referred to as
"Claritas");
(Abacus and Claritas being collectively referred to as the
"Shareholders").
WHEREAS:
Claritas and Abacus wish amongst other things to form the Company together in
time with the Subsidiaries in order to carry out the Business within the
Territory, subject to the terms and conditions of this Agreement and the
Schedules and Appendices attached hereto.
NOW IT IS HEREBY AGREED AS FOLLOWS:
1. DEFINITIONS AND INTERPRETATION
Definitions
1.1 In this Agreement, which term shall be construed as including the
Recital, the Schedules and Appendices attached hereto, the following
expressions shall, except where the context otherwise requires, have the
meanings respectively ascribed thereto:
"ABACUS ALLIANCE" means the co-operative arrangement
developed and operated by Abacus
US through which direct marketers
contribute customer purchasing
histories in exchange for access
to the products and services of
Abacus US;
"ABACUS DATABASE" means the proprietary database of
Abacus US comprised of data
contributed by the Abacus Alliance
members;
"ABACUS DIRECT TRADE XXXX" means that trade xxxx further
particulars of which are set out
in Part 1 of Schedule 2;
"ABACUS LICENCE" means that licence agreement for
the Trade Marks and in particular
for the Abacus Direct Trade Xxxx
in the form or substantially in
the form of Appendix 2, the Abacus
Licence to be completed on or
shortly after the Effective Date
along with the other Associated
Agreements;
"ABACUS PROPRIETARY PRODUCTS" means the proprietary data and
services of Abacus or its
Affiliates (the 'Abacus
Proprietary Data') including any
updates, improvements and other
such modifications as are made
available by Abacus from time to
time licensed to the Company and
the Subsidiaries in accordance
with the Abacus Service Agreement
and the Abacus Licence and used in
each Transactional Database;
"ABACUS US" means Abacus Direct Corporation, a
Delaware Corp.;
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"AFFILIATE" means a company directly
affiliated with either Claritas or
Abacus where either party is
beneficial owner of shares (or
their equivalent) controlling
greater than fifty per centum
(50.00%) of votes exercisable at a
general meeting (or its
equivalent) of such company. The
Company shall never for the
purposes of this definition
constitute an Affiliate under the
terms and conditions of this
Agreement;
"ALLIANCE AGREEMENT" means that agreement to be entered
into between an End-User and a
Subsidiary for the purpose of the
End-User placing its data in a
Transactional Database, such
agreement to be in the form or
substantially in the form of
Appendix 7;
"ALLIANCE TERMS AND CONDITIONS" means those terms and conditions
to be entered into between an
End-User and a Subsidiary for the
licence by the End-User of certain
data extracted from a
Transactional Database, such
licence to be in the form or
substantially in the form of
Appendix 8;
"APPENDIX" has the meaning given to it in
Clause 1.4 below;
"ARTICLES OF ASSOCIATION" means the articles of association
of the Company in the form or
substantially in the form set out
at Appendix 1;
"ASSOCIATED AGREEMENTS" means the Loan Agreements, the
Service Agreements, and the Abacus
Licence;
"BUSINESS" means the business of the Company
and the Subsidiaries as further
set out in Clause 2.2 below;
"BUSINESS DAYS" means a day other than a Saturday
or a Sunday on which banks in the
City of London are open for all
normal business;
"BUSINESS PLAN" means the business plan of the
Company and the Subsidiaries in
the form or substantially in the
form of Appendix 9;
"CLARITAS PROPRIETARY PRODUCTS" means, inter alia, that
proprietary data of Claritas or
its Affiliates (the 'Claritas
Proprietary Data') as further
described in Schedule 1 Part 1
(and including any updates,
improvements and other such
modifications as are made
available by Claritas from time to
time) together with other
proprietary products of Claritas
licensed to the Company and the
Subsidiaries in accordance with
the Claritas Service Agreement and
used in each Transactional
Database;
"COMPANY" means that company to be
incorporated by the Shareholders
pursuant to the terms of this
Agreement and in particular Clause
3 below and which will be the
parent company of the Subsidiaries
throughout the Territory;
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"COMPANY BOARD" means the board of directors of
the Company validly constituted in
accordance with Clause 3.7 below;
"COMPANY MANAGING DIRECTOR" means the managing director of the
Company validly appointed in
accordance with Clause 3.8 below;
"EFFECTIVE DATE" means 9th October 1998;
"END-USER" means a client of a Subsidiary
that provides its proprietary data
to a Subsidiary for the purpose of
inclusion in a Transactional
Database in accordance with an
Alliance Agreement and which
subsequently licences data from a
Transactional Database in
accordance with the Alliance Terms
and Conditions;
"EURO" means the proposed currency of the
European Union member states
(excluding the United Kingdom,
Sweden, Denmark and Greece) which
shall be adopted as legal currency
by those member states on 1
January 1999;
"GUILDERS" means the legal currency of the
Netherlands;
"LAWS" means the laws of the Netherlands;
"LOAN AGREEMENTS" means the loan agreements to be
completed on or shortly after the
Effective Date by each of Claritas
and Abacus in the form or
substantially in the form of
Appendix 5 and 6 respectively;
"POUNDS" means the legal currency of the
United Kingdom;
"SCHEDULE" has the meaning given to it in
Clause 1.3 below;
"SERVICE AGREEMENTS" means those service agreements to
be signed on or shortly after the
Effective Date by each of Claritas
and Abacus in the form or
substantially in the form of
Appendix 3 and 4 respectively;
"SUBSIDIARIES" means those wholly owned
subsidiaries of the Company which
shall be established throughout
the Territory from time to time in
accordance with the terms and
conditions of this Agreement and
"Subsidiary" shall be construed
accordingly;
"SUBSIDIARY BOARD" means the board of the Subsidiary
validly constituted in accordance
with Clause 3.10 below;
"SUBSIDIARY MANAGING DIRECTOR" means the managing director of the
Subsidiary validly appointed in
accordance with Clause 3.11 below;
"TERRITORY" means Switzerland, Poland, the
Czech Republic, Hungary and the
European Economic Area and such
other country or territory as the
Shareholders may from time to time
agree in writing;
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"TRADE MARKS" means as at the date of this
Agreement, those trade marks
detailed at Schedule 2, together
with such other trade marks as are
considered appropriate and
available for application and
registration by Abacus from time
to time throughout the Territory
for the term of this Agreement and
in accordance with the Abacus
Licence; and
"TRANSACTIONAL DATABASE(s)" means a transactional database
compiled from data of End Users
together with the Claritas
Proprietary Products and the
Abacus Proprietary Products drawn
from a country or region within
the Territory which shall be
created, maintained and owned by
each relevant Subsidiary, further
details of the scope of such
Transactional Database being set
forth in Schedule 1 Part 2.
1.2 Interpretation
1.2.1 Unless the context otherwise requires, reference herein to any
clauses and sub-clauses shall be to the Clauses and
Sub-Clauses of this Agreement.
1.2.2 In the event of any inconsistency between the main body of
this Agreement and any Schedule or Appendix, the provisions of
the Agreement shall prevail. In the event of any inconsistency
between the main body of the Schedules and the Appendices, the
provisions of the Appendices shall prevail.
1.2.3 The titles of Clauses and Sub-Clauses in this Agreement are
inserted for convenience of reference only and shall not be
construed to effect the meaning thereof.
1.2.4 References to singular shall include plural and vice-versa and
reference to any gender shall include reference to all
genders.
1.3 Schedules
The following Schedules, which are attached hereto, are incorporated
herein by reference:
Schedule 1 Part 1: Claritas Proprietary Data
Schedule 1 Part 2: Description of the Transactional Database
Schedule 2: Part 1: Abacus Direct Trade Xxxx
Schedule 2: Part 2: The Trade Marks
Wherever in this Agreement reference is made to a Schedule, it is to
the Schedule as attached hereto as the same may from time to time be
amended, revised and/or substituted by the written agreement of the
Shareholders.
1.4 Appendices
The following Appendices, which are attached hereto, are incorporated
herein by reference:
Appendix 1: Articles of Association of the Company
Appendix 2: ABACUS LICENCE
Appendix 3: Service Agreement (Claritas)
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Appendix 4: Service Agreement (Abacus)
Appendix 5: Loan Agreement (Claritas)
Appendix 6: Loan Agreement (Abacus)
Appendix 7: Alliance Agreement
Appendix 8: Alliance Terms and Conditions
Appendix 9: The Business Plan
Wherever in this Agreement reference is made to an Appendix, it is to the
Appendix as attached hereto as the same may from time to time be amended,
revised and/or substituted by the written agreement of the Shareholders.
2. SCOPE OF AGREEMENT
2.1 The Shareholders have entered into this Agreement to provide for the
incorporation of the Company and, in time, the Subsidiaries, for the
purposes of carrying out the Business described in the Business Plan
and as further set forth in Clause 2.2 below within the Territory and
in respect of such matters the rights, liabilities and obligations of
the Parties shall be governed by this Agreement. For the avoidance of
doubt, the Company and in time the Subsidiaries shall not be engaged in
activities involving the supply and delivery of Claritas Proprietary
Data or the Abacus Proprietary Data on a stand-alone basis or in any
manner other than as an enhancement to data which is proprietary to the
Company and the Subsidiaries.
2.2 Without prejudice to the generality of Clause 2.1, the scope of this
Agreement shall extend to:
(a) the formation of the Company as a holding company for the
Subsidiaries to be established throughout the Territory;
(b) the formation of a Transactional Database(s) for each
Subsidiary within the Territory;
(c) a Transactional Database(s) relevant to a Subsidiary will be
owned by each appropriate Subsidiary in accordance with Clause
3.5 below;
(d) Claritas and its Affiliates shall provide services and license
during the term of this Agreement to the Company and the
Subsidiaries in accordance with the terms of the Claritas
Service Agreement attached at Appendix 3 the Claritas
Proprietary Products for inclusion in each Transactional
Database. The amount of any royalties or fees for such licence
and services shall be subject to agreement between the boards
of the respective Shareholders unanimously;
(e) Abacus and its Affiliates shall provide for use by the
Business in the Territory those services to the Company and
its Subsidiaries as further set forth in the Abacus Service
Agreement attached at Appendix 4, and a licence to the Abacus
Direct Trademark in accordance with the Abacus Licence. The
Shareholders acknowledge that processing services for the
Transactional Database(s) shall be provided in the United
Kingdom;
(f) the Abacus Trade Xxxx and the Trade Marks shall be owned by
and licensed by Abacus US in accordance with Clause 3.5 below;
and
(g) the Shareholders shall induce the Company to complete as soon
as reasonably practicable the formation of an English company
as a Subsidiary (hereinafter referred to as the `UK
Subsidiary') as the first such Subsidiary to operate the
Business within the country of the United Kingdom within the
Territory.
The above together with the proposed business as set out in the Business
Plan shall constitute the "Business" of the Company and the Subsidiaries
for the purposes of this Agreement.
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2.3 The Shareholders agree and acknowledge that the Territory may be
extended by the written agreement of the Shareholders to include but
not be limited to certain markets in Asia PROVIDED THAT neither
Shareholder shall be prevented or delayed from entering such markets in
Asia of its own accord and outside the terms and conditions of this
Agreement. Upon agreement, such country shall become part of the
Territory, unless otherwise agreed upon. Each of the Shareholders also
agrees to exercise their interest in the Company to ensure that the
Company complies with its obligations under the Abacus Licence, the
Abacus Service Agreement and the Claritas Service Agreement.
2.4 This Agreement (together with the Recital, the Schedules and
Appendices) represents the entire understanding of the Shareholders in
relation to the matters dealt with herein as at the Effective Date. Any
extension of the Business of the Company and the Subsidiaries and/or
the scope of this Agreement will require the prior written agreement of
the Shareholders.
3. FORMATION OF THE COMPANY AND THE SUBSIDIARIES
3.1 FORMATION
The Shareholders hereby agree to incorporate the Company in the
Netherlands pursuant to the Laws, said Company to be called "Abacus
Direct Europe B.V." to be established at Haarlem PROVIDED THAT a
ministerial certificate of non-
objection ("the Certificate") is issued for it by the Ministry of
Justice in accordance with the Laws.
If the Certificate is refused by the Ministry of Justice or the
Certificate is not issued by the Ministry of Justice as a result of an
objection to the contents of the Articles of Association the
Shareholders will consult with each other immediately and in good faith
agree to replace the rejected or contested provisions of the Articles
of Association so that the replacement provisions deviate as little as
possible, having regard to the nature and content of the provisions of
this Agreement, from the original Articles of Association so that the
Certificate can be issued.
3.2 Articles of Association
The Articles of Association of the Company shall be in the form or
substantially in the form of Appendix 1.
3.3 Ownership of the Company by the Shareholders
3.3.1 The authorised share capital of the Company shall be two
hundred thousand two hundred Guilders (NLG 200,200) divided
into one thousand (1,000) class A shares of one hundred
Guilders (NGL 100) each, and one thousand (1,000) class B
shares of one hundred Guilders (NGL100) each and two (2) class
C five per centum (5%) preference shares of one hundred
Guilders (NGL 100) each.
3.3.2 The issued share capital of the Company shall be forty
thousand Guilders (NLG 40,000) consisting of two hundred (200)
A shares and two hundred (200) B shares.
3.3.3 The shares of the Company shall be held as follows:
o the class A shares shall be held by Claritas
absolutely;
o the class B shares shall be held by Abacus
absolutely; and
o the two class C shares shall be subject to two (2)
options to purchase; one option to purchase one (1)
class C share shall be exercisable at par by Claritas
immediately
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preceding the sale by Claritas of its interest in the
Company in accordance with the terms hereof and at
the sole discretion of Claritas and one option to
purchase one class C share shall be exercisable at
par by Abacus at any time and at the sole discretion
of Abacus.
3.3.4 All profits, losses, capital and income contributions shall be
made in accordance with the above percentages or as otherwise
as required under this Agreement. The class C 5% preference
shares shall, if issued, only be entitled to a yearly dividend
equal and not exceeding the amount of five per centum (5.00%)
of the nominal value of the respective shares(s), to the
extent that the Company has a positive cashflow in that given
year.
3.4 Application for Incorporation and Registration of the Company
3.4.1 As soon as reasonably practicable after the Effective Date
Claritas shall on behalf of the Shareholders incorporate and
register the Company at the Chamber of Commerce in the
Netherlands in accordance with the Laws. The civil law notary
for the Company shall effect the incorporation of the Company
on behalf of the Shareholders by notarial deed. Costs and
expenses of incorporation of the Company shall be met by the
Company. Prior to incorporation of the Company, the Company
shall operate as a "company in formation" in accordance with
the Laws.
3.4.2 Upon formation of the Company the Shareholders shall each
ensure and shall further ensure that the Company Managing
Director shall ensure as soon as possible after incorporation
that confirmation is given that all legal and other actions
entered into by the Company as a "company in formation" are
valid.
3.5 Ownership of the Transactional Databases, the Trade Marks, the Claritas
Proprietary Products and the Abacus Proprietary Products
3.5.1 Each Transactional Database(s) developed by and for the
Subsidiaries throughout any country or region within the
Territory shall be owned by such Subsidiary.
3.5.2 The Trade Marks shall be licensed in accordance with the
Abacus Licence.
3.5.3 All other Trade Marks required for the purposes of the
Business shall be applied for and shall be owned by Abacus US
and shall be licensed in accordance with the Abacus Licence on
an exclusive basis for use in the Territory by Abacus to the
Company together with the right to sub-license to the
Subsidiaries. Any costs incurred in this respect shall be
borne equally by Abacus US and the Company. The Shareholders
agree that on or before the Effective Date Abacus shall
pursuant to the Abacus Licence apply for a European Community
trade xxxx for "Abacus Direct" substantially similar to the
Abacus Direct Trade Xxxx.
3.5.4 Abacus acknowledges that the Claritas Proprietary Products are
proprietary to Claritas and/or its Affiliates and shall be
licensed by Claritas to the Company and the Subsidiaries in
accordance with the terms of the Claritas Service Agreement.
Abacus, the Company and the Subsidiaries undertake and warrant
to return the Claritas Proprietary Products upon termination
of this Agreement in accordance with Clause 11. On but subject
to the provisions of termination contained in this Agreement,
the Company Board, any Subsidiary Board which holds all or
part of the Claritas Proprietary Products and the board of
Abacus shall confirm in writing that they have returned the
Claritas Proprietary Products and that each no longer holds
any copies of the same, has ceased to use the same and has
deleted the same within five (5) Business Days of such
termination. At no time during the term of this Agreement will
the Claritas Proprietary Products be licensed or otherwise
sold directly to those clients or suppliers of Abacus detailed
at Clause 8.6.
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3.5.5 Claritas acknowledges that the Abacus Proprietary Products and
the Trade Marks are proprietary to Abacus and/or its
Affiliates and shall be licensed by Abacus to the Company and
the Subsidiaries in accordance with the terms of the Abacus
Service Agreement and the Abacus Licence. Claritas, the
Company and the Subsidiaries undertake and warrant to return
the Abacus Proprietary Products upon termination of this
Agreement in accordance with Clause 11. On but subject to the
provisions of termination contained in this Agreement, the
Company Board, any Subsidiary Board which holds all or part of
the Abacus Proprietary Products and the board of Claritas
shall confirm in writing that they have returned the Abacus
Proprietary Products and that each no longer holds any copies
of the same, has ceased to use the same and has deleted the
same within five (5) Business Days of such termination. At no
time during the term of this Agreement will the Abacus
Proprietary Products be licensed or otherwise sold directly to
those clients or suppliers of Claritas detailed at Clause 8.6.
3.6 Loans and Contributions to the Company and to the Subsidiaries by the
Shareholders
3.6.1 Each Shareholder or an Affiliate shall individually contribute
eight hundred thousand Guilders (NGL 800,000) which sum shall
each be paid by a Shareholder to the Company within ten (10)
Business Days from the written notification by the civil law
notary for the Company that the Company is able to conduct
business. The said sums shall be referred to as the "Primary
Capital" and shall be paid to the bank account of the Company
as the Company in formation shall direct at that time by
telegraphic transfer.
3.6.2 Each Shareholder or an Affiliate of the Shareholder shall
individually make available for loan to the UK Subsidiary the
sum of six hundred and fifty thousand Pounds ((pound)650,000).
The said sum shall be referred to as the "Primary Loan" and
shall be paid to the bank account of the UK Subsidiary within
ten (10) Business Days of receipt of a written request from
the Subsidiary Managing Director PROVIDED THAT one
representative of Abacus and/or Claritas present on the
Company Board shall have approved in writing such request
within five (5) Business Days from receipt of such request
from the Subsidiary Managing Director the approval of such
request not to be withheld if made in accordance with the
Business Plan. Once approved, the Primary Loan shall be
transferred to the bank account of the UK Subsidiary as the
Subsidiary Board shall direct at that time by telegraphic
transfer. The Primary Loan by Claritas to the UK Subsidiary
shall be in the form or substantially in the form of the Loan
Agreement attached at Appendix 6. The Primary Loan by Abacus
to the UK Subsidiary shall be in the form or substantially in
the form of the Loan Agreement attached at Appendix 7. Both
Loan Agreements shall then be signed and/or executed on or
shortly after the Effective Date. The Primary Loan shall be
applied and used in accordance with the Business Plan.
3.6.3 Subject to Clause 3.6.4 the Shareholders have sole discretion
as to whether they wish to make further Primary Loans to other
Subsidiaries on the same terms and conditions as set forth in
the Loan Agreements as and when the same are incorporated
throughout the Territory.
3.6.4 Should the UK Subsidiary have been loaned the Primary Loan by
each of the Shareholders (or an Affiliate as the case may be)
and should a Subsidiary Managing Director request a further
loan (said loan being referred to as the "Further Loan") and
one of the Shareholders declines to loan that Subsidiary its
portion of such Further Loan (being fifty per centum (50.00%)
of the Further Loan stated in the request) the other
Shareholder will be entitled to loan the entire Further Loan
amount to the UK Subsidiary. The Further Loan shall be up to a
maximum of four hundred thousand Pounds (L. 400,000) and
such Further Loan shall be loaned to the UK Subsidiary subject
to loan agreements to be entered into between the consenting
Shareholder (or its Affiliate as the case may be) and the UK
Subsidiary, such loan agreement to contain wording to the
effect that such Further Loan shall be secured against the
Subsidiary and its assets as a fixed and floating
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charge over the assets of such UK Subsidiary and registered
with the appropriate authorities. No Shareholder will be under
any obligation to grant any Further Loan to the UK Subsidiary.
3.6.5 For the avoidance of doubt, any Further Loan made to a
Subsidiary by a Shareholder shall not alter the share
ownership of the Company as set forth in Clause 3.3 above.
3.7 The Company Board
3.7.1 The Company Board will consist of six (6) representatives
appointed as a director, three (3) representatives being
nominated by each Shareholder after written notification to
the other Shareholder.
3.7.2 The Board shall be initially constituted as follows:
- by Abacus:
1. M. Xxxxxxx Xxxxx (the "Abacus Lead")
2. Xxxxxx X. Xxxxxx
3. Xxxxxx X. Xxxx
(together the `Abacus Representatives'); and
- by Claritas:
1. J Xxxxxxxx (the "Claritas Lead")
2. Xxxx Xxxxxx
3. Xxxxxxx Xxxxxxxx
(together the `Claritas Representatives');
and individually referred to as a `Representative').
3.7.3 A Shareholder may replace any of its Representatives by
another individual at any time either on a permanent or on a
temporary basis after due notification to the other
Shareholder and each Shareholder agrees to vote in a manner to
give effect to such replacement.
3.7.4 Either the Claritas Lead or the Abacus Lead shall be appointed
the Chairman of the Company from time to time. For the period
commencing from the Effective Date until the year ending 31
December 1999 the Chairman shall be the Abacus Lead. For the
next calendar year (being 1 January 2000 until 31 December
2000) the Chairman shall be the Claritas Lead. For each
subsequent calendar year the Chairman shall be rotated between
the Claritas Lead and the Abacus Lead. The Chairman shall not
have a casting vote and any Deadlock (as detailed in Clause
4.below) of the Company Board shall be resolved in accordance
with Clause 4. below.
3.7.5 The Chairman's duties shall be advised to the Chairman by the
Company Board in writing from time to time. The Company Board
shall be responsible for setting the remuneration of the
Company Managing Director.
3.7.6 Any further or replacement appointment to the Company Board
shall be carried out as soon as possible by the Shareholders
upon the written request to the Shareholders. If the Chairman
or a Representative of the Company Board is replaced or
removed, the Shareholder which had jurisdiction to appoint the
Chairman or such Representative during that particular
calendar year shall appoint the Chairman's or such
Representative's replacement.
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3.7.7 The Company shall be validly represented by one Representative
from Abacus and one Representative from Claritas or by the
Company Managing Director who has been given a proxy by one of
each of the said Abacus and Claritas Representatives.
3.7.8 Either Shareholder shall cause all directors nominated by them
to resign from office forthwith upon the sale of all the
shares in the Company owned by such Shareholder for whatever
reason.
3.8 The Company Managing Director
The first Company Managing Director shall be Xxxxx Xxxxxx Thereafter
appointment and removal of the Company Managing Director shall be in
accordance with Clause 4.3.1 below. For the avoidance of doubt, the
Company Managing Director shall at no time be a Representative of the
Company Board.
3.9 Meetings of the Company Board
The appropriate Shareholder shall bear the expenses for attendance of
its Representatives at a Company Board meeting. Company Board meetings
shall be held at least quarterly at the offices of the Company in
Haarlem and at the offices of Abacus in New York on an alternate basis
(or at such other place or at such other periodic times as the Company
Board shall agree) to review the results of operations and performance
against budgets provided for in Clause 8 and to discuss the Business of
the Company and the Subsidiaries.
At regular meetings scheduled by the Company Board the time and place
of the next regular meeting shall be set. Any such schedule may be
revised from time to time by the Company Board. Special Company Board
meetings may be called at any time by a director. Notice needs to be
given for regular meetings, but notice of the time, place and purpose
of any special Company Board meeting shall be given in writing or
orally (to be confirmed as soon as possible in writing) at least ten
(10) Business Days prior to the date of any special meeting. Failure to
give such timely notice may be waived before or after a meeting and
shall be deemed waived by participation in a meeting. A director will
be deemed to be present at a Company Board meeting if he is available
on the telephone.
In order to be voted upon, any matter requiring a vote of a director
(unless otherwise waived by all of the directors of the Company Board)
must appear on an agenda of any regular or special meeting thereof,
which agenda shall have been submitted to each director of the Company
Board in writing or by facsimile or other electronic transmission at
least ten (10) Business Days prior to the date of any such meeting.
At any regular or special meetings of the Company Board, the quorum of
an equal number of Representatives nominated by each Shareholder
consisting of at least two (2) Representatives nominated by each
Shareholder (in person or by proxy) shall be required for the carrying
out the day-to-day Business and the taking of any actions by or on
behalf of the Company.
All Company Board resolutions taken at a Board meeting shall require
the affirmative vote of at least one representative nominated by each
Shareholder and at least sixty seven per centum (67.00%) of the persons
present at the Board meeting (in person or by telephone).
Minutes shall be prepared in the English language and shall be regarded
as true and correct if signed by the Company Managing Director and the
company secretary of the Company. Minutes of the meeting shall be
circulated to the Company Board within ten (10) Business Days of the
meeting.
The Company Board shall form as soon as reasonably practicable an audit
committee (for accounting purposes) and a compensation committee (for
human resource purposes). Such
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committees shall consist of an equal number of persons nominated by
each of the Shareholders. Such committees shall advise the Company
Board of any matters regarding its designated tasks.
3.10 The Subsidiary Board
A Subsidiary Board will be represented (unless laws within the
Territory pertinent to the Subsidiary dictate otherwise) as set forth
in Clause 3.7 above, such that the provisions of Clause 3.7 shall apply
mutatis mutandis to the Subsidiary Board as they do to the Company
Board.
The Subsidiary Board will at all times comply with the requirements of
laws applicable to the local jurisdiction in which it was formed within
the Territory.
3.11 The Subsidiary Managing Director
The first Subsidiary Managing Director of the UK Subsidiary shall be
Xxxxx Xxxxxx. Appointment of all other Subsidiary Managing Directors
shall be subject to clause 4.3 below. Subject to Clause 4.3 below, the
day-to-day operations of each of the Subsidiaries shall be managed by a
Subsidiary Managing Director. The Subsidiary Managing Director shall
report to the Company Managing Director and shall have such specific
powers, duties and responsibilities as are designated to him by the
Company Managing Director. The Subsidiary Managing Director shall act
in accordance with any business or operating plan or budgets approved
by the Company Board and shall have no authority to take any action
with respect to any of those matters set forth in Clause 4. below. The
Subsidiary Managing Director or his designee shall attend Subsidiary
Board meetings. In performance of his duties, the Subsidiary Managing
Director's authority and responsibilities shall include, but not be
limited to, the following:
(a) the preparation and submission to the Subsidiary Board and the
Company Board of the annual operating and cash and capital
expenditure budgets and a three (3) year rolling budget and
profit plan for the Subsidiary to be submitted not later than
15 November each year;
(b) the preparation of operating plans for the Subsidiary; and
(c) keeping the Company and the Shareholders fully informed of the
activities and operations of the Subsidiary through the
preparation and submission of periodic reports, including the
monthly operating statements described in Clause 9 below.
3.12 Meetings of the Subsidiary Board
The appropriate Shareholder shall bear the expenses for attendance of
its Representatives at a Subsidiary Board meeting. Subsidiary Board
meetings shall be held at least quarterly at the principal offices of
the Subsidiary (or at such other place or at such other periodic times
as the Subsidiary Board shall agree) to review the results of
operations and performance against budgets provided for in Clause 9 and
to discuss general business matters of the Subsidiary.
At regular meetings scheduled by the Subsidiary Board the time and
place of the next regular meeting shall be set. Any such schedule may
be revised from time to time by the Subsidiary Board. Special
Subsidiary Board meetings may be called at any time by any director.
Notice needs to be given for regular meetings, but notice of the time,
place and purpose of any special meeting shall be given in writing or
orally (to be confirmed as soon as possible in writing) at least ten
(10) Business Days prior to the date of any special meeting. Failure to
give such timely notice may be waived before or after a meeting and
shall be deemed waived by participation in a meeting. A director will
be deemed to be present at a Subsidiary Board meeting if he is
available on the telephone.
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In order to be voted upon, any matter requiring a vote of a director
(unless otherwise waived by all of the directors of the Subsidiary
Board) must appear on an agenda of any regular or special meeting
thereof, which agenda shall have been submitted to each director of the
Subsidiary Board in writing or by facsimile or other electronic
transmission at least ten (10) Business Days prior to the date of any
such meeting.
At any regular or special meetings of the Subsidiary Board, the quorum
of an equal number of directors nominated by each Shareholder
consisting of at least two (2) directors nominated by each Shareholder
(in person or by proxy) shall be required for the carrying out of the
day-to-day Business and taking of any actions by or on behalf of a
Subsidiary .
All Subsidiary Board resolutions, taken at a Subsidiary Board meeting
shall require the affirmative vote of at least one representative
nominated by each Shareholder and at least sixty seven per centum
(67.00%) of the persons present at the Subsidiary Board meeting (in
person or by telephone).
Minutes shall be prepared in the English language and shall be regarded
as true and correct if signed by the Subsidiary Managing Director and
the company secretary of the Subsidiary. Minutes of the meeting shall
be circulated to the Subsidiary Board within ten (10) Business Days of
the meeting.
The Subsidiary Board shall form as soon as reasonably practicable an
audit committee (for accounting purposes) and a compensation committee
(for human resource purposes). Such committees shall consist of an
equal number of persons nominated by each of the Shareholders. Such
committees shall advise the Subsidiary Board of any matters regarding
its designated tasks.
4. FUNDAMENTAL ISSUES AND DEADLOCK PROVISIONS
4.1 Fundamental Issues concerning the Company and the Subsidiaries which
require unanimous approval by the Shareholders shall be an issue as set
forth below:
(a) a proposed material change in the strategy and general
policies of the Company or a Subsidiary;
(b) a proposal to adopt the budget of the Company or a Subsidiary
(as defined in Clause 4.3.2 subject to the provisions of
Clause 9);
(c) a proposal to adopt the bi-annual profit and cash flow
forecast of a Subsidiary or the Company if more than fifteen
per centum (15.00%) below the annual budget;
(d) a proposal for greater than ten per centum (10.00%) variance
in the aggregate of costs and expenses over budgeted amounts
on an annual basis with respect to a Subsidiary or the Company
except for increased data production costs, sales commissions
and/or cost of sales as a result of larger than budgeted
volumes of data traded;
(e) The proposed entry into any joint venture or partnership by a
Subsidiary or the Company;
(f) the proposed settlement of any action, suit or proceedings to
which the Company or a Subsidiary is a party if such
settlement involves the payment or receipt of more than the
equivalent in local currencies of seventy five thousand Euros
(Euro 75,000) or which relates to the Abacus Licence or the
Claritas Proprietary Products, or the Abacus Proprietary
Products or the start of any action, suit or proceedings to be
initiated by the Company or a Subsidiary involving an amount
in dispute of more than the equivalent in local currencies of
seventy five thousand Euros (Euro 75,000);
15
(g) the acquisition, sale or disposal of part or all of the stock
or other securities of any corporation or other entity, or the
acquisition, sale or disposal of assets with a fair market
value in excess of one hundred thousand pounds
(L. 100,000) or the equivalent thereof in Euros or all or
a portion of the assets of any corporation or other entity
owned by the Company or a Subsidiary constituting ten per
centum (10.00%) or more of the of the undertaking to be
disposed;
(h) the Company or a Subsidiary entering into loan agreements or
credit arrangements incurring any indebtedness for borrowed
money or pursuant to purchase money obligations, when such
agreements, arrangements or indebtedness (save as to those
Loan Agreements contemplated in this Agreement) which:
(i) are not in the ordinary course of the Business; or
(ii) exceed in any one year an aggregate amount of the
equivalent in local currencies of seventy five
thousand Euros (Euro 75,000);
(i) the Company or a Subsidiary granting any loans to officers
other than reasonable expense advances;
(j) the Company or a Subsidiary extending guarantees or
endorsements with respect to third party obligations other
than in the ordinary course of the Business;
(k) the Company or a Subsidiary entering into:
(i) any contract with a Shareholder or an Affiliate; or
(ii) any amendment modification or termination of any such
contract to the extent any such contract is not
required to be approved by the Shareholders or the
Company pursuant to this Agreement, any law or the
Laws;
(l) the Company or a Subsidiary purchasing, selling or granting
mortgages or any rights in real property or constructing
buildings or other facilities which are not included in the
Budget Plan or other budget contemplated under Clause 9 and
which are not in the ordinary course of the Business;
(m) granting any security, interest in, lien on, or pledge of, any
personal property of the Company or a Subsidiary except in the
case of the granting of the Further Loan by a Shareholder to a
Subsidiary in accordance with Clause 3.6.4 above;
(n) unless approved in the Budget Plan or any current budget or
budget of a previous year a change in accounting policy
(unless required by the relevant laws in the Territory),
adoption or amendment of pension, group compensation, profit
sharing or other incentive or employee benefit plans by the
Company or a Subsidiary;
(o) unless approved in the budget or any budget of a previous
year, during any one (1) year period, entering into any
contract or lease which commits the Company or a Subsidiary
for more than two (2) years or to an aggregate expenditure of
more than the equivalent in local currencies of one hundred
and seventy thousand Euros (Euro 170,000);
(p) unless approved in the budget by the Company or a Subsidiary
entering into any employment contract which provides for an
annual salary in excess of the equivalent in local currencies
of one hundred and seventy thousand Euros (Euro 170,000);
(q) any proposed business arrangement by the Company or a
Subsidiary with any Affiliate which has cost implications in
one transaction in excess of the equivalent in local
16
currencies of fifteen thousand Euros (Euro 15,000) other than
arrangements made pursuant to the Service Agreements or other
prior approved arrangements;
(r) a proposed material change in the Company's or Subsidiary's
stated purposes or the Business and any other changes in the
Articles of Association or the appropriate articles of
association of a Subsidiary;
(s) the approval of the annual accounts of the Company or a
Subsidiary;
(t) the distribution of dividends of the Company or a Subsidiary;
(u) the issuance of any security or debt instrument of the Company
or a Subsidiary save as contemplated by the Loan Agreements;
(v) any change in the capital structure of the Company or a
Subsidiary;
(w) the increase or reduction of the Primary Capital of the
Company;
(x) the Company or a Subsidiary seeking relief under any
bankruptcy, insolvency or similar statutes within the
Territory; or
(y) the Company deciding to incorporate a Subsidiary within the
Territory to engage in the Business.
Fundamental Issues shall be resolved by the Shareholders in accordance
with Clause 4.4 below (the `Deadlock Provisions').
4.2 Key Issues
The following issues (referred to as the "Key Issues or individually as
a "Key Issue") shall be an issue as set forth below:
(a) selection or discharge of the Company Managing
Director or a Subsidiary Managing Director; or
(b) approval of the budget of the Company or a Subsidiary
; or
(c) profit distributions of the Company or a Subsidiary
as provided in this Agreement.
Key Issues shall be decided upon as set forth in Clause 4.3 below,
failing which reference shall be made to the Deadlock Provisions set
forth at Clause 4.4.
4.3 Resolution of Key Issues Prior to the Deadlock Provisions;
4.3.1 Selection or discharge of the Company Managing Director or Subsidiary
Managing Director
The first Subsidiary Managing Director shall be proposed by Claritas
after consultation with Abacus. After Claritas submits it's selection
to Abacus, Abacus shall have ten (10) days to approve or disapprove the
selection. Should Abacus disapprove of the selection it shall
communicate its reasons orally or in writing to Claritas and thereafter
the Shareholders shall make a good faith effort to resolve the dispute.
If after forty-five (45) days from the date of Abacus' submission to
Claritas, there is still no agreement between the Shareholders, the
matter shall be submitted to the chief executive officers of the
Shareholders. The chief executive officers shall have ten (10) days
from the date of submission to attempt a resolution. If after such ten
(10) days the issue has not been resolved then Claritas' selection
shall prevail. The same procedure shall be
17
followed for the selection of the subsequent Subsidiary Managing
Director upon the resignation or dismissal of the first Subsidiary
Managing Director, it being understood that Abacus may then select an
individual and Abacus' selection will prevail (subject to notifying
Claritas).
For any subsequent selection of a Subsidiary Managing Director or a
Company Managing Director the same procedure shall be followed, it
being understood that each Shareholder on a rotating basis has the
right to select the Subsidiary Managing Director.
4.3.2 Approval of the Budget of a Subsidiary
If, after thirty (30) days from the submission to the Company Board by
the Subsidiary Managing Director of a proposed budget for the ensuing
year, the Company Board has not agreed to a final budget, then the
budget for such ensuing year shall be the prior year's budget for that
Subsidiary plus the average rate of inflation in the country in which
it operates within the Territory for the prior year plus five per
centum (5.00%) for the prior year's budget (hereinafter referred to as
the "Budget Formula"). If the budget for three (3) successive years has
resulted each year in resort to the Budget Formula and the Shareholders
again cannot agree on the budget for the ensuing year, a Shareholder
may revert to the Deadlock Provisions.
4.3.3 Profit Distributions
If for any year the Company or a Subsidiary has earned a profit and the
Shareholder or the Company cannot agree on an amount to be retained for
working capital and/or for capital investment from the distributions
provided for in Clause 10 below then any Shareholder shall have the
right to require in any year (but not the same Shareholder in a
successive year) the retention of a reasonable amount to be withheld
from distributable profit for working capital and any capital
investment approved by the Shareholders in the budget for the ensuing
year. Any Shareholder making such a demand shall not have the right to
do so in the next successive year. Notwithstanding anything to the
contrary contained herein or elsewhere in this Agreement, the Company
shall make a mandatory distribution to each of Abacus and Claritas in
an amount equal to any tax that is payable by Abacus or Abacus US or
Claritas by virtue of the Company's or the Subsidiaries operations
PROVIDED THAT such mandatory dividend shall not be payable if payment
of the same would contravene any local law or the Laws or if there is a
Further Loan outstanding in respect of which repayment to a
Shareholder, other than the Shareholder to whom the mandatory dividend
would be payable, is in arrears.
4.4 Deadlock Provisions
4.4.1 In the event the Company Board cannot agree with respect to a Key Issue
or a Fundamental Issue the matter shall be resolved as follows:
a. The Company Board shall set the Key Issue or the Fundamental
Issue aside for a period of forty-five (45) days. During that
period, the Representatives of the Company Board shall
consider in good faith ways of alleviating or avoiding the
Deadlock.
b. At the end of the said period, the Company Board shall again
meet to discuss the suggestions for alleviating and/or
avoiding the Deadlock. If no such resolution is achieved, the
Key Issue or the Fundamental Issue shall be referred to the
chief executive officers of the Shareholders for resolution by
such chief executive officers. If the matter has not been
resolved by such chief executive officers in writing at the
close of business on the forty-fifth (45th) day of such
referral (unless the chief executive officers agree to extend
such period), a Deadlock shall be deemed to have occurred in
relation to the Key Issue or Fundamental Issue which Deadlock
shall be notified in writing to each Shareholder within five
(5) Business Days from declaration of the Deadlock.
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4.4.2 In the event a Deadlock occurs, and neither Shareholder is willing to
sell or otherwise dispose of its interest in the Company to the other
Shareholder within forty-five (45) days after the notice of the
occurrence of the Deadlock, nor is willing to accept the interest of
the other Shareholder within such time frame, then the Shareholders
shall jointly select a qualified international financial institution
(the "Agent") for the purposes of disposal of the Company. If the
Shareholders cannot agree within thirty (30) days after the declaration
of the Deadlock on such appointment of an Agent then each Shareholder
shall select an agent who shall jointly select a third agent to act as
the Agent for the purposes of disposal of the Company. If disposal of
the Company cannot be completed to the point of signature of a sale and
purchase agreement relating to the Company within one (1) year from the
date of the notification of the Deadlock or a Shareholder has failed to
consent to the proposed purchaser (such consent not to be unreasonably
withheld or delayed), the Company shall be liquidated in accordance
with the provisions of its applicable law and the proceeds of such
liquidation distributed equally to each Shareholder after repayment of
all debts due and by the Company and in particular the Further Loan
referred to in Clause 3.6.4 above, and further subject to proprietary
rights belonging to either Shareholder and in particular the Claritas
Proprietary Products and the Abacus Proprietary Products.
Pending resolution of the disposal of the Company the Company Managing
Director shall operate the Company and a Subsidiary Managing Director
shall operate a Subsidiary in accordance with past and best practices
and shall not implement any material proposal or change.
4.4.3 Meeting of the Shareholders
Resolutions of the Shareholders shall require the affirmative vote of
sixty per centum (60.00%) of the issued share capital of the Company or
a Subsidiary. A vote may be given in person or by proxy and shall be
confirmed to the other Shareholder in writing within five (5) Business
Days of the vote.
4.5 Service Agreements
Upon receipt of a written request of a Subsidiary Managing Director to
a Shareholder the Shareholder shall use all reasonable endeavours to
enter into or shall use all reasonable endeavours to ensure that an
Affiliate shall enter into a Service Agreement in the form or
substantially in the form of Appendix 3 (in the case of Claritas) and
Appendix 4 (in the case of Abacus).
5. REPRESENTATIONS AND WARRANTIES OF CLARITAS
Claritas represents and warrants to Abacus that:
5.1 Existence and Power
It is a company, duly incorporated and existing under the Laws and has
the power to carry on its business as now being conducted and has full
power and authority to execute, deliver and perform this Agreement and
each ancillary document to which it is a party and perform and observe
the terms and provisions hereof and thereof.
5.2 Necessary Action
It has taken all actions necessary for the authorisation, execution,
delivery and performance of this Agreement and each ancillary document
to which it is a party and its officers executing this Agreement and
each ancillary document to which it is a party are duly and properly in
office and fully authorised to execute the same.
19
5.3 Consents
No consent, permission, authorisation, recording, filing or
registration with, or notice of any governmental agency or authority
are necessary in connection with the execution and delivery of this
Agreement and each ancillary document to which it is a party.
5.4 No conflicts
The execution and delivery of this Agreement and the consummation of
the transactions contemplated (in particular the Business) will not
violate any existing provisions of any order, writ, judgement,
injunction or decree of any court or any other governmental department,
commission, board, bureau, agency or instrumentality applicable to it
or conflict with or result in breach of any of the terms, conditions,
or provisions of the certificate of incorporation, articles of
association or other of its organisational documents or any material
agreement to which it is a party, or by which any of its properties are
bound, or constitute an event which might permit an early termination
of any such agreement.
5.5 Data Protection Legislation and European Community Laws
The Company and the Subsidiaries shall observe all appropriate national
and European Community data protection legislation at all times and
Claritas shall ensure that any services provided by Claritas, its
employees and agents as set out in the Service Agreements shall comply
with applicable data protection legislation as at the time of the
provision of the services.
6. REPRESENTATIONS AND WARRANTIES OF ABACUS
Abacus represents and warrants to Claritas that:
6.1 Existence and Power Existence and Power
It is a company, duly incorporated and existing under the laws of the
state of Delaware in the United States of America and has the power to
carry on its business as now being conducted and has full power and
authority to execute, deliver and perform this Agreement and each
ancillary document to which it is a party and perform and observe the
terms and provisions hereof and thereof.
6.2 Necessary Action
It has taken all actions necessary for the authorisation, execution,
delivery and performance of this Agreement and each ancillary document
to which it is a party and its officers executing this Agreement are
duly and properly in office and fully authorised to execute the same.
6.3 Consents
No consent, permission, authorisation, recording, filing or
registration with, or notice of any governmental agency or authority
are necessary in connection with the execution and delivery of this
Agreement and each ancillary document to which it is a party.
6.4 No conflicts
The execution and delivery of this Agreement and each ancillary
document to which it is a party and the consummation of the
transactions contemplated in particular the Business will not violate
any existing provisions of any order, writ, judgement, injunction or
decree of any court or any other governmental department, commission,
board, bureau, agency or instrumentality applicable to it or conflict
with or result in breach of any of the terms, conditions or provisions
of the
20
certificate of incorporation, articles of association or other of its
organisational documents or any material agreement to which it is a
party, or by which any of its properties are bound, or constitute an
event which might permit an early termination of any such agreement.
6.5 Data Protection Legislation and European Community Laws
The Company and the Subsidiaries shall observe all appropriate national
and European Community data protection legislation at all times and
shall use all reasonable endeavours to inform Abacus of its and its
affiliates obligations thereunder with respect to services provided by
it hereunder and subject to the foregoing Abacus shall use all
reasonable efforts to ensure that any services provided by Abacus, its
employees and agents as set out in the Service Agreements shall as at
the time of the provision of the services comply with applicable data
protection legislation and as specifically explained and described to
it in writing by the Company and the Subsidiaries in accordance with
such legislation. Notwithstanding the foregoing, Abacus shall not be
required to incur any additional costs or expenses in order to comply
with such data protection legislation without the prior mutual
agreement of the Shareholders as to who shall bear responsibility for
any such costs and expenses.
7. INDEMNITY
7.1 The Company shall indemnify and hold harmless each Representative, the
Subsidiary Board directors, the Company Managing Director, the Company
Chairman and the Subsidiary Managing Director (individually, in each
case an "Indemnitee") to the fullest extent permitted by law from and
against any and all losses, claims, demands, costs, damages,
liabilities joint or several), expenses of any nature (including
reasonable legal fees and disbursements), judgements, fines,
settlements and other amounts arising from any and all claims, demands,
actions, suits or proceedings, whether civil, criminal, administrative
or otherwise in which the Indemnitee may be involved or threatened to
be involved, as a party otherwise, arising out of or incidental to the
Business of the Company, regardless of whether the Indemnitee continues
to hold such office PROVIDED THAT this provision shall not eliminate or
limit the liability of any Indemnitee:
(a) for any breach of the Indemnitee's duty of loyalty to the
Company or its Subsidiaries;
(b) for acts or omissions which involve gross or wilful
misconduct, fraud or fraudulent misrepresentation; or
(c) for any transaction from which the Indemnitee received any
improper personal benefit.
7.2 The indemnity provided above shall be in addition to any other rights
to which an Indemnitee may be entitled under any agreement, vote of the
Company Board or a Subsidiary Board, as a matter of law or equity, or
otherwise, both as to an action in the Indemnitee's capacity as an
officer thereof, and as to an action in another capacity, and shall
continue as to an Indemnitee who has ceased to serve in such capacity
and shall inure to the benefit of the heirs, successors, assigns and
administrators of the Indemnitee;
7.3 The Company may purchase and maintain professional indemnity insurance
on behalf of the Business of the Company and its Subsidiaries against
any liability that may be asserted against or expense that may be
incurred by such persons in connection with the offering of interests
in the company or the Business of the Company.
7.4 An Indemnitee shall not be denied indemnity in whole or part under this
Clause 7 or otherwise by reason of the fact that the Indemnitee had an
interest in the transaction with respect to which the indemnity applies
if the transaction was otherwise permitted or not expressly prohibited
by the terms of this Agreement.
21
8. COMPETITION
8.1 The Shareholders on behalf of themselves and each of their Affiliates
covenant and undertake that (subject to the provisions mentioned
hereinafter) during the term of this Agreement and for a period of two
(2) years from the date of termination thereof neither of them or their
Affiliates shall:
(a) carry out the Business in the Territory other than through the
Company or a Subsidiary; or
(b) assist a third party (whether at arms-length or otherwise) to
carry out the Business in the Territory other than through the
Company or a Subsidiary (including, without limitation, the
provision of the Claritas proprietary Data or the Abacus
Proprietary Data to such third party); or
(c) have an interest in any business directly or indirectly in
competition with the Business other than through the Company
or a Subsidiary.
Nothing herein shall be construed to prevent Claritas and its
Affiliates from carrying out their existing activities which include
(but are not limited to) activities with respect to individual
transactional databases, co-operative transactional databases based on
data from retailers who do not publish mail order catalogues, bureau
activities, list rental, profiling and development and sale of micro
marketing products in the Territory and/or as otherwise carried on by
Claritas and its Affiliates as at the Effective Date (as the same may
change, modify and develop from time to time) nor from having an
interest in any venture which carries out any of these aforesaid
activities (hereinafter referred to as "Excluded Activities").
8.2.1 Without prejudice to the foregoing Clause 8.1, if a Shareholder or
Affiliate thereof (hereinafter referred to as the "Offeror") intends to
acquire any interest in any business which consists of more than thirty
per centum (30.00%) (of the total revenues of the business intended to
be acquired), of a competitive activity (as defined hereinafter and for
the purposes of this Sub-Clause to be referred to as the "Competitive
Activity") the Offeror shall inform the other Shareholder in writing as
soon as possible and in any event prior to its intended acquisition and
shall offer the Company (or its Subsidiary), as the Shareholder may
elect) (hereinafter referred to as the "Offeree") an option to purchase
the Competitive Activity. The Offeror shall not be entitled to vote in
such a decision regarding the option to purchase the Competitive
Activity. In such event the acquisition price for the Competitive
Activity shall be that percentage of the purchase price for the
business fairly attributable to the Competitive Activity in the opinion
of the auditors of the Offeree. The offer made by the Offeror shall be
submitted by registered letter to the Offeree, which letter shall
include full and sufficient financial statements relating to the
business to be acquired including a business plan prepared by the
Offeror for the business to be acquired, and full and sufficient
disclosures of all relevant documents with respect to the intended
acquisition.
8.2.2 The Offeree must respond to the Offeror's notification given under
Clause 8.3.1 above within thirty (30) days of the Offeree's receipt of
the registered letter containing the offer. If the Offeree's response
is to exercise the option to purchase from the Offeror the Offeror and
Offeree use all reasonable endeavours to complete the purchase
reflected in the option within sixty (60) days. If the Offeree:
(a) does not respond to the offer within the said thirty (30) day
period; or
(b) responds to the Offeror in writing within thirty (30) days of
receipt of the notice from the Offeror that it does not want
to participate in the purchase,
the Offeror shall be entitled to proceed with the acquisition even
though it may be a Competitive Activity.
22
The Offeror shall abstain from taking any decision of the Company as
Shareholder in the Company contrary to any decision taken by the other
party with respect to the offer made by the Offeror. The Offeror as
Shareholder of the Company shall fully co-operate with the other
Shareholders and the Offeree to implement and effectuate the decision
taken by the other party with respect to the offer made by the Offeror.
8.2.3 A Competitive Activity for the purposes of this Clause 8.3 is defined
to mean any activity which might compete with the Business but shall
exclude the "Excluded Activities".
8.3 The Shareholders hereby acknowledge and agree:
(a) that each of the covenants contained in this Clause
8. constitute an entirely separate and independent
covenant; and
(b) that the extent and application of each of the
restrictions are no greater than as necessary for the
protection of the interests of the Business.
8.4 Whilst the restrictions contained in this Clause 8. are considered by
the Shareholders to be reasonable in all the circumstances as at the
date of this Agreement it is acknowledged that restrictions of this
nature may be invalid because of changing circumstances or other
unforeseen reasons and accordingly it is hereby agreed and declared
that if any one or more of those restrictions is judged to be void as
going beyond what is reasonable in all the circumstances for the
protection of the interests of each of the Shareholders but would be
valid if part of the wording of the restriction was deleted or the
range of activities covered by it was reduced in scope then each
restriction(s) shall apply with such modification(s) as may be
necessary to make it valid and effective and any such modification
shall not thereby affect the validity of any other such restriction
contained in this Clause 8.
8.5 During the term of this Agreement, a Shareholder shall not (without the
prior written approval of the other Shareholder) permit the Company or
any of the Subsidiaries to contract within the Territory all or any
part of the Transactional Database to the following direct competitors
of the Shareholders:
a. Experian and its Affiliates;
b. Compudata and its Affiliates; or
c. Axciom and its Affiliates or any other individual or entity in
a business competitive with Abacus in the United States of
America.
8.6 During the term of this Agreement, Claritas undertakes not to purchase
any of the shares of Common Stock (or equivalent thereto) of Abacus
(US) issued on the NASDAQ National Market System or otherwise. If,
however, a third party which undertakes an activity which is
competitive with that of the Business or of Abacus US purchases more
than five per centum (5.00%) of the shares of Common Stock (or their
equivalent) in Abacus US, (which shall be notified through the delivery
of a "Form 13D" or any public announcement from Abacus (US), whichever
comes first) then Claritas shall be released from this undertaking and
shall be free to purchase any share (or equivalent thereto) in Abacus.
8.7 Abacus warrants that it shall not sell, dispose or otherwise licence
the Abacus Proprietary Products to a third party throughout the
Territory except as otherwise contemplated in this Agreement.
23
9. FINANCIAL AND ACCOUNTING MATTERS
9.1 Accounting periods and books of accounts
9.1.1 The Company and each Subsidiary shall keep true and accurate
books of account, (separate from those for any third party)
and financial and related records in accordance with generally
accepted accounting principles applied on a consistent basis
and in conformity with any mandatory requirements of the
respective laws governing the principal place of business or
the place of incorporation of a Subsidiary or the Company. If
requested by Abacus such books of account shall also be
maintained (for the convenience and at the cost of Abacus) in
accordance with generally accepted accounting principles in
the United States of America (hereinafter referred to as "US
GAAP"). If requested by Claritas such books of account shall
also be maintained (for the convenience and at the cost of
Claritas) in accordance with the generally accepted accounting
principles under the Laws (hereinafter referred to as "NL
GAAP").
9.1.2 The fiscal year of the Company and each Subsidiary shall run
from 1 January to 31 December. The first fiscal period for the
Company and each Subsidiary shall end 31 December 1998. The
books of account of the Company and each Subsidiary shall be
closed on an annual basis at the end of each fiscal year and
financial statements shall be drawn annually as of 31 December
and audited by a recognised firm of international standing.
9.1.3 Within thirty (30) days after the end of each calendar month
of operations, the Company and any Subsidiary shall prepare
and submit to each Shareholder (or its designee) financial
information indicating revenues and expenses and cash in bank
for each month and such other financial information as the
Shareholders shall reasonably request.
9.1.4 Within thirty (30) days after the end of each quarter of
operations, the Company and any Subsidiary shall prepare and
submit to each Shareholder (or its designee) an unaudited
statement of profits and losses resulting from the Business of
the Company and each Subsidiary for each such quarter. The
said unaudited statements of profits and losses shall be
prepared in accordance with US GAAP if so requested by Abacus
and with NL GAAP if so requested by Claritas.
9.1.5 Each Shareholder or its duly authorised representative shall
at its own cost and expense have access during regular
business hours upon three (3) Business Day's notice to the
Company Managing Director or the Subsidiary Managing Director
(as the case may be) to all books and records (including but
not limited to work papers) of the Company or a Subsidiary
containing information (statistical, financial or otherwise)
relating to the Business of the Company or a Subsidiary and
shall have the right, at its own expense, to make copies
thereof provided THAT any such information disclosed to or
obtained by any Shareholder or its duly authorised
representative will be treated as confidential and used solely
for the purposes stated in this Agreement.
9.2 Audit
Within one (1) month after the close of each fiscal year, the Company
shall cause the auditors of the Company and each Subsidiary
respectively to prepare and submit to each Shareholder an audited
statement of profit and loss from operations, an audited balance sheet
and a source and application of funds or equivalent thereto under the
relevant jurisdiction prepared in accordance with acceptable accounting
principles, and for the convenience of Abacus with US GAAP if so
requested by Abacus and for the convenience of Claritas with NL GAAP if
so requested by Claritas.
9.3 Deposits and Investments
The funds of the Company or a Subsidiary shall be deposited in accounts
opened in the name of the Company or a Subsidiary in banks or banking
institutions designated by the Shareholders in such manner as shall be
authorised jointly by them.
24
10. DIVIDENDS AND DISTRIBUTION OF PROFITS
10.1 Principles of Distribution
Unless otherwise agreed by the Shareholders, and subject to Clause
4.3.3 hereof, the annual profit of the Company shall be distributed in
equal amounts to each Shareholder less that amount as they shall agree
must be retained for working capital purposes or if they cannot agree
then less the amount provided for in Clause 4.3.3.
The annual profit of any Subsidiary shall be distributed to the Company
less that amount as the Shareholders shall agree must be retained for
working capital purposes or, if they cannot agree, then less the amount
provided for in Clause 4.3.3. No distribution of profits shall take
place so long as any Further Loan granted by one Shareholder (or its
Affiliate) to any Subsidiary is outstanding.
10.2 Payments of Dividends
All payments to be made by the Company to each Shareholder (or his
designee) shall initially be made in Guilders and transferred by
telegraphic transfer to such account as each Shareholder shall
designate in writing without any deduction therefrom which may be
required to be withheld under the Laws provided that the Company
obtains and sends to each Shareholder (or their designee) as soon as
practicable all original governmental tax receipts indicating who is
the payer of such taxes. Any blocked monies shall be deposited in trust
for a Shareholder who was to receive such payments in a commercial bank
in the Netherlands designated by each Shareholder subject to such
governmental rule, regulation or order.
11. RIGHTS OF TRANSFER OF AN INTEREST IN THE COMPANY
11.1 General Rule on Transfers
Except as provided in this Agreement no Shareholder shall sell, assign,
pledge or in any manner transfer or encumber any interest in the
Company without first complying with Sub-Clause 11.2 below.
11.2 Transfers
Transfer during the Restricted Period
11.2.1 During the five (5) year period commencing on the Effective
Date and ending five years thereafter (hereinafter referred to
as the `Restricted Period') any Shareholder may only offer all
or part of its interest in the Company for sale only to the
other Shareholder.
11.2.2 Any Shareholder so offering its interest in the Company for
sale shall notify the other Shareholder in writing and, for a
period of thirty (30) days after having given such notice, the
Shareholder (the "Selling Shareholder") shall negotiate in
good faith with respect to the sale of that Shareholder's
interest in the Company to the remaining Shareholder (the
"Remaining Shareholder").
Transfer after the Restricted Period
11.2.3 After the Restricted Period the Selling Shareholder shall have
the right to offer all or part of its interest to a third
party bona fide purchaser provided THAT upon the Selling
Shareholder receiving a bona fide third party offer the
Selling Shareholder shall notify the Remaining Shareholder of
the terms of such offer and the Remaining Shareholder shall
have a thirty (30) day period to decide whether or not it or
an Affiliate shall acquire
25
the Selling Shareholder's interest on terms which are, in all
material respects, identical to the terms of the bona fide
third party offer. In the event the other Shareholder
determines not to buy the Selling Shareholder's interest, the
latter may sell such interest to the bona fide third party
within thirty (30) days making such offer on the same terms as
set forth in the notice of such offer to the Remaining
Shareholder.
11.2.4 The Selling Shareholder may not sell its interest in the
Company to such bona fide third party unless said bona fide
third party shall have agreed to be bound by the terms and
conditions of the Articles of Association of the Company and
of this Agreement, assumes all the obligations of the selling
Shareholder and shall be in good financial standing and
reputation to effect the Business hereby contemplated.
11.2.5 In the case of such a transfer or sale of the shares of the
Company to a bona fide third party, both Shareholders shall
use all reasonable endeavours to co-operate with the transfer
of the shares of the Company to said third party (including
the continuance by the Shareholders where required by the new
shareholder(s) of any obligations under the terms of the
Service Agreements for a further minimum period of 12 months)
and shall do all such acts and execute all such agreements
necessary to complete the transaction. Any existing agreements
by way of Alliance Agreements and Alliance Terms and
Conditions shall remain in full force and effect until
termination in accordance with the provisions thereof.
11.3 Permitted Transfers to an Affiliate
All or part of the interest of a Shareholder in the Company may be
assigned or transferred, directly or indirectly, without compliance
with Sub Clause 11.2 above or 11.4 below to an Affiliate of a
Shareholder PROVIDED THAT:
(a) any such Affiliate assignee shall assume the liabilities and
obligations of the assignor in connection with this Agreement
and the Company and shall take such further and reasonable
steps in connection therewith as may be requested by any
Shareholder; and
(b) the ultimate corporate parent of such Affiliate assignee shall
give a guarantee as to the performance of its obligations
under this Agreement.
11.4 Meaning of the sale, transfer or assignment of an interest
As used in this Clause 11, all references to the sale, transfer or
assignment of an interest in the Company means:
(a) the sale of the Selling Shareholder's interest in the Company;
together with
(b) the transfer of all of the Selling Shareholder's rights and
obligations under any of the Selling Shareholder's loans made
to the Company.
11.5 The Selling Shareholder will only ask for the approval of the Remaining
Shareholder for a transfer of all or part of its interest as referred
to in the articles of association of the Company if it complies with
this Clause 11. The Remaining Shareholder will grant such approval and
shall do all such acts and execute all such agreements necessary in
that respect if the Selling Shareholder complies with this Clause. If
the Selling Shareholder does not comply with this Clause, the Remaining
Shareholder is allowed to designate itself as prospective purchaser as
referred to in the articles of association of the Company.
26
12. TERMINATION RIGHTS
12.1 Subject to Clause 12.2.3, this Agreement shall terminate upon the
mutual written agreement of the Shareholders or upon the occurrence of
any of the following events:
(a) if either Shareholder (either through itself or through an
Affiliate) acquires the entire interest of the other
Shareholder in the Company; or
(b) either Shareholder decides to terminate this Agreement, by
notice in writing to the other, upon the occurrence of any of
the following events:
(i) the other Shareholder materially breaches any of its
obligations of either this Agreement or any Appendix
attached hereto and after a period of thirty (30)
days the material breach has not been remedied or
rectified or the material breach is incapable of
remedy; or
(ii) any order is made by a competent court for the
winding up or dissolution or for the appointment of a
liquidator, receiver, trustee or similar officer of
the other Shareholder; or
(iii) a Shareholder ceases to carry on its principal
business carried on by it as at the Effective Date;
or
(iv) a Shareholder undergoes a Change of Control. For the
purposes of this Sub-Clause a 'Change of Control'
shall mean the purchase or other acquisition by a
person or entity, together with its affiliates, of at
least twenty four per centum (24.00%) of the shares
of common stock or other equity interest having
voting powers of such Shareholder. In such instance,
the Company shall be available for disposal to the
other Shareholder in accordance with Clause 11.
12.2 Effects of Termination
12.2.1 If a Shareholder gives notice to terminate this Agreement in
accordance with Sub-Clause 12.1 (b) (i), (ii), (iii) or (iv)
as a result of conduct by the other Shareholder, that
notifying Shareholder (without prejudice to any other right to
claim for damages that said Shareholder may have) may elect to
purchase the interest of the defaulting Shareholder in the
Company within thirty (30) days of such notice to terminate
this Agreement. If the notifying Shareholder elects to
purchase such interest the purchase price shall be equal to
the fair market value of the Company as such value is
determined by the auditors retained by both Shareholders in
accordance with the principles of valuation (hereinafter
referred to as the "Principles of Valuation") set out in
Clause 12.2.2 below. If both Shareholders cannot agree on such
auditors then they shall each select an auditor not being an
auditor of the Company, or a Subsidiary or either Shareholder,
to determine at each Shareholder's cost and expense the fair
market value of the Company taking into account the
determination made by both original auditors.
12.2.2 For the purposes of this Clause 12.2 the Principles of
Valuation shall be as follows:
(a) valuing the net assets of the Company (including
goodwill) and all other intangible assets on an arm's
length basis as between a willing vendor and a
willing purchaser;
(b) the Company shall continue the Business as a going
concern with its assets and profits being valued
accordingly;
27
(c) provisions and adjustments for bad and doubtful debts
and otherwise as the auditors may consider
appropriate but excluding any allowance or provision
for deferred taxation;
(d) the application on a consistent basis in all other
respects of generally accepted accounting principles;
(e) references to the Company as used in Sub-Clauses (a)
through (d) above shall mean the underlying value of
any unpaid principal amount of loans made by the
Shareholders to the Company and any remaining
interest thereon;
(f) any Service Agreements and/or Alliance Agreements or
Alliance Terms and Conditions continuing for the
period specified in such agreement after the
termination of this Agreement and any license
arrangements detailed in this Agreement between the
Subsidiary, a Shareholder (or Affiliate) and the
Company including, for the avoidance of doubt, the
Abacus Licence.
(g) the class C 5% preference shares shall have no value
in determining the purchase price.
12.2.3 The provisions of Clauses 7, 8, 12.4, 14 and 15 will survive
the termination of this Agreement.
12.3 Dissolution of the Company
In the event that this Agreement is terminated in accordance with
Clause 12.1 above and a Shareholder has not exercised its acquisition
rights pursuant to Clause 12.2, either Shareholder shall have the right
to require the dissolution of the Company, in which event, the
Shareholders shall procure and cause the dissolution of the Company
and:
(a) any outstanding liabilities to third parties shall be
satisfied from the assets of the Company after payment of the
Final Loans;
(b) any surplus remaining such as, but not limited to, cash or
assets convertible to cash) shall be divided pro rata amongst
the Shareholders in accordance with their percentage interests
in the Company, provided that if a buyer acceptable to the
Shareholders agrees to purchase the Company at a price
agreeable to them, and such payment is due no later than one
hundred and eighty (180) days after the Shareholders have
agreed to discontinue the Business and dissolve the Company,
then the proceeds from such purchase shall be divided pro-rata
to their shareholding in the Company.
12.4 The Shareholders agree that in case of a liquidation or dissolution of
the Company pursuant to this Clause 12 and/or Clause 4.4.2 the
Shareholders shall not within the Territory start or engage in the
Business or a Competitive Activity for a period of twenty four (24)
months from the date of cessation or liquidation of the Company's and
Subsidiaries activities and Business or use the proprietary products of
the other Shareholder at any time. In the event of a breach by one
Party of the provisions of this Clause 12.4, the non-breaching Party
shall in addition to any other remedy available to it at law or in
equity have the right to seek specific performance, injunctive relief
and other equitable remedies in order to prevent a breach hereof. The
breaching Party agrees that such relief is necessary to protect the
rights of the non-breaching Party and agrees that the non-breaching
Party need not post a bond in order to obtain any such relief.
13. NOTICES
13.1 Any notice under this Agreement shall be in writing and signed by or on
behalf of the Shareholders and may be served by leaving it or sending
it by facsimile, prepaid recorded delivery or registered
28
post to the address and for the attention of the relevant party set out
below (or as otherwise notified from time to time hereunder). Any
notice so served by facsimile or post shall be deemed to have been
received:
13.1.1 in the case of facsimile, the next Business Day;
13.1.2 in the case of recorded delivery or registered post,
forty-eight (48) hours from the date of posting.
13.2 the addresses of the Shareholders for the purpose of this Agreement are
as follows:
(a) For Claritas:
Xxxxx Xxxxxxx
Address for Claritas aforementioned
E-mail/telephone/facsimile
(b) For Abacus
Xxxxxx X Xxxx
Address for Abacus aforementioned
E-mail/telephone/facsimile
14. MISCELLANEOUS
14.1 Entire Agreement
This Agreement (together with the Recital, the Appendices, the
Schedules and the Associated Agreements) represents the entire
agreement of the Shareholders.
14.2 Fees and expenses
Each Shareholder shall bear all the expenses, costs and fees incurred
by it in connection with the preparation and execution of this
Agreement.
14.3 Governing Law
This Agreement and the rights and obligations of the Shareholders shall
be exclusively governed by and interpreted in accordance with the Laws
and the Shareholders submit to the exclusive jurisdiction of the Dutch
Courts unless otherwise specially provided for herein.
14.4 Amendment
This Agreement may be amended at any time, in whole or in part, by the
written agreement of the Shareholders.
14.5 Severability
If any provision of this Agreement is found (by a court of competent
jurisdiction) to be void or unenforceable, such provision shall be
deemed to be deleted from this Agreement and the remaining provisions
of this Agreement shall continue in full force and effect PROVIDED THAT
the Shareholders shall, in such event, meet to negotiate in good faith
and seek to agree a mutually
29
satisfactory valid and enforceable provision to be substituted for the
provision so found to be void or unenforceable.
14.6 Further Assurances
The Shareholders shall do all further things and execute all further
documents necessary to give full and complete effect to the provisions
of this Agreement including, but not limited to, Shareholder
Resolutions.
14.7 Announcements
Neither Shareholder nor the Company, a Subsidiary or any Affiliate
shall, without the prior written consent of the other Shareholder (such
consent not to be unreasonably withheld or delayed) issue or make any
public announcement or statement regarding this Agreement or any matter
the subject of this Agreement, unless it is necessary for the
Shareholder or such Affiliate to make such public announcement or
statement in order to comply in the Territory or elsewhere with a
statutory obligation, or with a competent government agency or other
regulatory body, or a recognised stock exchange on which a Shareholder
or such Affiliate has it shares listed or are on the unlisted
securities market in which its shares are dealt in which event a copy
of the same shall be furnished to the other shareholder as soon as
practicable prior to publication.
15. ARBITRATION
Should any disagreement arise between the Shareholders under this
Agreement which falls outside the scope of Clause 4. the Shareholders
agree that the disputed matter shall be settled in accordance with the
rules of the Netherlands Arbitration Institute ("NAI"), pursuant to the
rules and regulations of the NAI. Each Shareholder to bear its own
costs and expenses of such arbitration proceedings and the losing party
to bear the costs of the arbitration panel. The Arbitral Tribunal shall
be composed of three arbitrators. The place of arbitration shall be
Amsterdam. The Arbitration procedure shall be conducted in the English
language. If the Shareholders jointly submit an issue to be determined
by the NAI, they shall share the costs of the arbitration panel.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the day of 1999.
SIGNED for and on behalf of )
ABACUS DIRECT )
CORPORATION )
by: )
SIGNED for and on behalf of )
VNU BUSINESS )
INFORMATION EUROPE B.V. )
by: )
30
SCHEDULE 1
PART 1
CLARITAS PROPRIETARY DATA
That proprietary data owned by the Affiliate of Claritas known as Claritas Group
Limited, such proprietary data being
The Lifestyle Universe as more specifically described in the Claritas Services
Agreement to include all updates and enhancements thereto .
PART 2
The Transactional Database(s)
The formation of a transactional database from data supplied by End-Users
(together with the use of the Claritas Proprietary Products and Abacus
Proprietary Products) for a particular country or region within the Territory
specific to the mail order industry and retail industry which specifically
publishes mail order catalogues and applicable to a particular region or country
within the Territory enhanced by various demographic, lifestyle and promotional
responsive or purchase history data supplied and updated pursuant to the
Alliance Agreements and the Service Agreements.
The Transactional Database(s) defined above will be used to:
(i) sell selected modelled names and addresses from a Transactional
Database to End Users only for use in prospecting new clients for such
End-Users, enhancing End-User in-house databases and purchased lists
and for the provision of market tracking and analysis reports;
(ii) optimise and / or enhance lists or datasets that the End User may have
obtained from non Abacus sources for the purpose of gaining mailing
efficiencies;
(iii) derive segmentation datasets similar to the Claritas Proprietary Data
or other proprietary products of Claritas such as "Prizm" (R)(TM) or
"PSYCL(pound) (R)(TM) or Abacus US from a Transactional Database in
order to compare and contrast groups of consumers by End Users or
non-participating companies from market sectors other than the specific
mail order and merchandise retail industries relevant to a region;
(iv) simultaneously compile the Transactional Database(s) for the business
to business sector for the purposes envisaged in paragraphs (i) and
(ii) above.
The Transactional Database shall never constitute the Claritas Proprietary Data
or the Abacus Proprietary Data on its own. However, subject to the terms and
conditions of this Agreement and at the sole discretion of the Shareholders
Claritas (or its Affiliates) and Abacus (or its affiliates) may license Abacus
or Claritas as appropriate to license all or part of the Claritas Proprietary
Data or the Abacus Proprietary Data to potential licensed purchasers, on a basis
and at costs to be agreed between the Shareholders.
31
SCHEDULE 2
PART 1
THE ABACUS TRADE XXXX
----------------------------------------------------------------------------------------------------------------
XXXX NUMBER CLASS GOODS
----------------------------------------------------------------------------------------------------------------
ABACUS DIRECT 1536998 35 Business marketing Services relating to the
compilation, analysis and licensing of
consumer information, all included in Class
35.
----------------------------------------------------------------------------------------------------------------
PART 2
THE TRADE XXXX(s)
Application for a Community Xxxx for Abacus Direct
