EXHIBIT 10.25
SIXTH AMENDMENT
TO
AGREEMENT FOR
COMPUTERIZED CREDIT REPORTING SERVICES
AND
OPTIONS TO PURCHASE AND SELL ASSETS
This Sixth Amendment to Agreement for Computerized Credit Reporting Services and
Options to Purchase and Sell Assets (the "Sixth Amendment") dated as of the_____
day of ___________, 1994, is made by and among EQUIFAX CREDIT INFORMATION
SERVICES, INC., a Georgia corporation ("CBI" or "ECIS"), 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"), Johns 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 (the "Third Amendment"); 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 N set forth in this Sixth
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 Options to Purchase and Sell Assets, among ECIS,
Equifax, the Partnership, Accounts Management, CSC, and CB-Tulsa ("the Fourth
Amendment"); and
WHEREAS, the Original Agreement, as amended by the First Amendment, the Second
Amendment, the Third Amendment and the Fourth Amendment was further amended as
of the 7th day of September, 1993, by that certain Fifth Amendment to Agreement
for Computerized Credit Reporting Services and Options to Purchase and Sell
Assets, among ECIS, Equifax, the Partnership, Accounts Management, CSC, and CB-
Tulsa (the "Fifth Amendment," the Original Agreement, as amended by the First
Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment and
the Fifth Amendment being referred to herein as the "Agreement"); and
WHEREAS, the parties hereto desire to establish a procedure to define certain
payments under the Agreement in respect of certain products to certain large
volume customers; and
WHEREAS, the parties hereto have agreed to amend the Agreement in certain
respects as set forth herein;
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:
1. ADDITION OF EXHIBIT N TO THE AGREEMENT
The following new Exhibit N titled "Volume Customer Pricing" is hereby added to
the Agreement as follows:
1. The parties agree that this Exhibit N and a schedule in the form attached
hereto ("Schedule") shall be used to determine 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) (collectively, the "Affected
Payments") for those Affected Products listed on the Schedule accessed by each
customer to whom the parties agree Exhibit N will apply ("Customer"), whether
accessed directly by such Customer or for such Customer (using the Customer's
member number) by the Partnership, ECIS or its Affiliate Bureaus. "Affected
Products" are those products that will have adjusted Cost Allocation, billable
inquiry charges, and Royalty charges. The parties agree that the form of the
attached Schedule shall be completed as to each such Customer and signed by (a)
the President or a Vice President of CSC Enterprises, Inc. (in its capacity as
managing partner of the Partnership) and acting on behalf of the Partnership,
Accounts Management, CB-Tulsa and CSC and (b) the President or a Senior Vice
President of ECIS and acting on behalf of ECIS and Equifax. Upon execution and
delivery of any such Schedule by the corporate officers referred to above, no
further action shall be required by the parties to the Agreement in order to
make such Schedule effective.
2. The Schedule shall name the Customer as specifically as possible; the
Customer may be a division or divisions of a company or may be defined as only
including certain member numbers, as necessary.
3. The Schedule shall specify the Affected Products and a related billable
inquiry pricing code. Payments in respect of products not named as Affected
Products on the Schedule shall not be affected by this Exhibit N or the Schedule
for the Customer. A "Unit" means each unit of an Affected Product accessed by
or for such Customer. If necessary the Parties may agree to complete and
execute more than one schedule for any customer.
4. The Schedule shall specify or include a calculation of the monthly
payment, whether by calendar month or other monthly billing cycle, from the
Customer ("Customer's Monthly Payment"). The Schedule shall specify the total
amount(s) the Customer will pay monthly under the pricing agreement with the
Customer ("Total Monthly Payment"). The Schedule will list the adjustments
("Adjustments") to the Total Monthly Payment, if any, agreed upon by the parties
to this Amendment. The Customer's Monthly Payment shall be determined by
subtracting the Adjustments from the Total Monthly Payment. If necessary, the
Total Monthly Payment, the Adjustments, and the Customer's Monthly Payment may
be stated as a formula based on a price per Unit or another system of pricing,
or an attachment may be used if the Monthly Payments or Adjustments will vary
from month to month.
5. Affected Payments under this Exhibit N shall be determined as follows:
(a) Actual Customer File Price. A factor defined as the "Actual Customer File
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Price" will be calculated in respect of each month by (i) dividing the
Customer's Monthly Payment by (ii) the total number of Units accessed that month
by Customer from all ACROPAC bureau files. (Any reference to a "month" in this
Exhibit N shall be to a calendar month or other monthly billing cycle as
appropriate for Customer.) For example, if the Customer's Monthly Payment is
$500,000 and the number of Units accessed in a given month by the Customer is
1,000,000. then the Actual Customer File Price for that month would be $0.50:
Customer's Monthly / Units Accessed = Actual Customer
Payment ($500,000) (1,000,000) File Price ($0.50)
(b) Cost Allocation System. The Cost Allocation System in respect of Affected
----------------------
Products shall require a determination of three elements: (i) the Sellers'
Allocation, (ii) the Model Royalty Allocation and (iii) the Participating File
Owners' Allocation.
(i) The Sellers' Allocation, or a method of calculating the Sellers'
Allocation, will be determined by the parties and listed in the Schedule.
The Partnership will receive a portion (the "Partnership Share") of the
Sellers' Allocation each month; the remainder of the Sellers' Allocation,
if any, will be allocated by ECIS. The Partnership Share, or a method of
calculating the Partnership Share, will be determined by the parties and
listed in the Schedule. For example, if the Customer's Monthly Payment is
$500,000, and the parties agree that the Sellers' Allocation will be 5%
of the Customer's Monthly Payment, and the Partnership Share is agreed to
be 22% of the Seller's Allocation, then the Sellers' Allocation and the
Partnership Share will be determined as follows:
Customer's Monthly x Agreed = Sellers' Allocation
Payment ($500,000) x percentage (5%) ($25,000)
Sellers' Allocation x Agreed = Partnership Share
($25,000) percentage (22%) ($5,500)
(ii) The Model Royalty Allocation(s) will be paid to the party or parties
("Model Vendors") that provide the scoring model system or systems, if any, used
by the Customer in respect of Units accessed by the Customer. The Units to
which the Customer applies a particular scoring model system during a given
month are referred to as the "Scored Units". A Model Royalty Allocation will be
calculated in respect of each model system used by the customer for each month
by (x) multiplying the number of Scored Units applying the particular model by
(y) the Royalty paid to the Model Vendor as set forth in the contract between
ECIS and such Model Vendor for each such model unit ("Model Unit Cost"). For
example, if the number of Scored Units accessed in a given month by the Customer
is 550.000, and the Model Unit Cost for the model is $.05, then the Model
Royalty Allocation for that month for that model royalty system would be
$27,500:
Scored Units Accessed X Model Unit Cost = Model Royalty Allocation
(550,000) ($.05) ($27,500)
Each Model Vendor will receive all of the Model Royalty Allocation for each
month for the model system it provided.
(iii) The Participating File Owners' Allocation will be calculated in respect
of each month by subtracting from the Customer Monthly Payment (w) the File
Sellers' Allocation, (x) the Model Royalty Allocation(s), (y) amounts, if any,
paid to file owners who are not participating in the cost allocation adjustment
of revenue from the sale of Affected Products ("Non Participating File Owner
Amounts", or "NPFO Amounts"), and (z) other amounts ("Other Amounts"), if any,
the parties agree should be subtracted. A Participating File Owner (sometimes
referred to herein as a "PFO") is one who elects to participate in the cost
allocation adjustment of revenue from the sale of Affected Products to the
Customer. For example, if the File Sellers' Allocation and the Model Royalty
Allocation(s) for a given month are $25,000 and $27,500, respectively, and
there are no NPFO Amounts or Other Amounts to be subtracted, then the
Participating File Owners' Allocation for that month would be $447,500:
Customer's - File Model - NPFO - Other = PFO
Monthly Sellers' Royalty Amounts Amounts Allocation
Payment Allocation Allocation ($0) ($447,500)
($500,000) ($25,000) ($27,500)
The Participating File Owners' Allocation will be allocated among Participating
File Owners regardless of whether the Affected Products are otherwise
characterized as seller-based or owner-based products. Each Participating File
Owner will receive an allocation for a given month of a proportion of the
Participating File Owners' Allocation for that month based on the number of
Units accessed during that month from its file. For example, if for a given
month the Participating File Owners' Allocation is $447,500, the number of Units
accessed
by the Customer from PFO's ("PFO Units") is 1,000,000, and the number of Units
accessed from the file of Participating File Owner X is I 00,000, then
Participating File Owner X will receive $44,750 from the Participating File
Owners' Allocation:
PFO's / PFO Units x Units Accessed = PFO X
Allocation Accessed by from file of Share of PFO's
($447,500) Customer PFO X Allocation
(1,000,000) (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 will be calculated by (1)
dividing the Actual Customer File Price for that month by (ii) another price
agreed upon by the parties as the "Prior Customer File Price" (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 Customer File Price is $0.50, and
the Prior Customer File Price is $1.12, the charge for a billable inquiry for
that month will be $0.102679:
Actual / Prior $0.23 = billable inquiry
Customer Customer charge
File Price File Price ($0.102679)
($0.50) ($1.12)
(d) Royalty. The amount payable as Royalty under the Agreement per billable
-------
inquiry in respect of a Unit in respect of a given month will be calculated by
(i) dividing the Actual Customer File Price for that month by (ii) the Prior
Customer File Price (iii) 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 Customer File Price is $0.50. and the
Prior Customer File Price is $1.12, the Royalty per billable inquiry for that
month will be $0.03125:
Actual / Prior x Agreement = Royalty per
Customer Customer Royalty billable inquiry
File Price File Price ($0.07) ($0.03125)
($0.50) ($1.12)
6. This Exhibit N shall be effective as of August 1, 1993 and shall remain
effective throughout the term of the Agreement and any renewals thereto.
7. The Schedule shall include an effective term concurrent with the pricing
arrangement with the Customer.
8. If the Parties agree that a particular Schedule should be changed because
of factors not anticipated at the time the Schedule is originally prepared. they
may execute another Schedule and indicate that it supersedes the prior Schedule.
9. The Parties recognize that, from time to time, changes to the actual Cost
Allocation resulting from a particular Schedule may be required after the
allocation has been made.
Any such changes that are made on an ad hoc, non-recurring basis and that do not
result from or require a change in any portion of the completed Schedule may be
made by a letter agreement signed by (a) the President or a Vice President of
CSC Enterprises, Inc. (in its capacity as managing partner of the Partnership)
and acting on behalf of the Partnership, Accounts Management, CB-Tulsa and CSC
and (b) the President or a Senior Vice President of ECIS and acting on behalf of
ECIS and Equifax.
10. The Partnership shall have the right to audit ECIS's relevant records to
verify compliance with the terms of this Exhibit N and the Schedules. 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 N and the Schedules. 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 Sixth 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 Sixth
Amendment, to perform under the Agreement, as amended by this Sixth
Amendment, and to consummate the transactions contemplated by the
Agreement, as amended by this Sixth 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 Sixth 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 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 Sixth 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 Sixth 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 SIXTH AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
IN WITNESS WHEREOF, the parties hereto have duly executed this Sixth Amendment
as of the day and year first above written.
EQUIFAX CREDIT INFORMATION SERVICES, INC.
By:______________________________________
Its______________________________________
EQUIFAX INC.
By:______________________________________
Its______________________________________
CSC ENTERPRISES
By: CSC ENTERPRISES, INC.
Its Managing Partner
By:_________________________________
Its_________________________________
CSC ACCOUNTS MANAGEMENT, INC.
By:______________________________________
Its______________________________________
CREDIT BUREAU OF TULSA, INC.
By:______________________________________
Its______________________________________
COMPUTER SCIENCES CORPORATION
By:______________________________________
Its______________________________________
SCHEDULE TO EXHIBIT N
TO AGREEMENT FOR COMPUTERIZED CREDIT REPORTING SERVICES
AND OPTIONS TO PURCHASE AND SELL ASSETS
THIS SCHEDULE ("Schedule") dated _______________, 19___, is by and
between (i) CSC Enterprises, Inc. in its capacity as managing partner of CSC
Enterprises, a Delaware general partnership (the "Partnership"), on behalf of
the Partnership, Accounts Management, Inc., a Texas corporation ("Accounts
Management"), Credit Bureau of Tulsa, Inc., an Oklahoma corporation ("CB-Tulsa")
and Computer Sciences Corporation, a Nevada corporation ("CSC") and (ii) Equifax
Credit Information Services, Inc., a Georgia corporation ("ECIS") on behalf of
itself and Equifax, Inc., a Georgia corporation ("Equifax").
RECITALS:
WHEREAS, the Partnership, Accounts Management, CB-Tulsa, CSC, ECIS and
Equifax are parties to that certain Agreement for Computerized Credit Reporting
Services and Options to Purchase and Sell Assets dated as of August 1, 1988, as
amended (the "Agreement"); and
WHEREAS, pursuant to Exhibit N of the Agreement the parties have agreed
to establish a procedure to define certain payments under the Agreement in
respect of certain products sold to certain large volume customers; and
WHEREAS, the parties wish to execute this Schedule in respect of the
large volume customer (the "Customer") referred to herein:
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 hereby agree as follows:
1. All capitalized terms which are defined in Exhibit N and not
otherwise defined herein shall have the same meaning herein as in
Exhibit N.
2. This Schedule is issued pursuant to Exhibit N.
3. The Customer is: _________________________________________.
4. The Affected Products and their respective billable inquiry pricing
codes ("BIPC") are:
Affected Product BIPC Affected Product BIPC
____________________ _______ ___________________ ________
____________________ _______ ___________________ ________
____________________ _______ ___________________ ________
____________________ _______ ___________________ ________
____________________ _______ ___________________ ________
(Attach additional sheets if necessary)
5. The Customer's Monthly Payment calculation is:
a. The Total Monthly Payment: _______________
b. Adjustments: ______________________________ _______________
______________________________ _______________
______________________________ _______________
c. Customer's Monthly Payment (5a - 5b): _______________
(If Customer's Monthly Payment will not be the same
each month, an additional attachment may be added.)
(Attach additional sheets if necessary)
6. The Seller's Allocation is _______________________, (or) will be
determined as follows:______________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
7. The Partnership Share of the Sellers' Allocation is
_______________________, (or) will be determined as
follows:____________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
8. The Models which may be used by the Customer and their respective
Model Unit Costs are:
Model Unit Cost
____________________________________________ ___________
____________________________________________ ___________
____________________________________________ ___________
9. The Participating File Owners are:__________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
10. The Other Amounts are:
Description Amount
_____________________________________________ __________
_____________________________________________ __________
_____________________________________________ __________
11. The Prior Customer File Price is:_________________________
12. This Schedule shall apply to the Affected Payments resulting from
Customer's accessing Affected Products from _____________________
to ____________________________________; provided, however,
this schedule shall not extend beyond the term of the Agreement.
13. This Schedule supersedes a Schedule previously executed. [] yes
[] no
Superseded schedule __________________________ (Customer's Name)
______________________ (Date of Superseded Schedule)
IN WITNESS WHEREOF, the parties have executed this Schedule to be effective
as of the date and year first written above.
CSC ENTERPRISES. a Delaware general EQUIFAX CREDIT INFORMATION
partnership SERVICES, INC.
By: CSC ENTERPRISES, INC.
Its Managing Partner By:________________________________
By:________________________________ Its_____________________________________