-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
DY8SN6l7wyAil+JAAUXDS7l1/bZ6Nu5WSMU7xQuAPkQIEXrvb8UKy8OJamY9oGR8
EZRX8m9NMq+8rRubVPshnA==
<SEC-DOCUMENT>0000931763-00-000781.txt : 20000403
<SEC-HEADER>0000931763-00-000781.hdr.sgml : 20000403
ACCESSION NUMBER: 0000931763-00-000781
CONFORMED SUBMISSION TYPE: 10-K405
PUBLIC DOCUMENT COUNT: 15
CONFORMED PERIOD OF REPORT: 19991231
FILED AS OF DATE: 20000330
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: EQUIFAX INC
CENTRAL INDEX KEY: 0000033185
STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-CONSUMER CREDIT REPORTING, COLLECTION AGENCIES [7320]
IRS NUMBER: 580401110
STATE OF INCORPORATION: GA
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-K405
SEC ACT:
SEC FILE NUMBER: 001-06605
FILM NUMBER: 589217
BUSINESS ADDRESS:
STREET 1: 1600 PEACHTREE ST NW
CITY: ATLANTA
STATE: GA
ZIP: 30302
BUSINESS PHONE: 4048858000
MAIL ADDRESS:
STREET 1: 1600 PEACHTREE ST NW
CITY: ATLANTA
STATE: GA
ZIP: 30309
FORMER COMPANY:
FORMER CONFORMED NAME: RETAIL CREDIT CO
DATE OF NAME CHANGE: 19760222
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K405
<SEQUENCE>1
<DESCRIPTION>1999 FORM 10-K405
<TEXT>
<PAGE>
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] Annual Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended
12-31-99 or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period
from _____________________ to _____________________
Commission file number 1-6605
----------------
EQUIFAX INC.
------------
(Exact name of Registrant as specified in its Charter)
<TABLE>
<CAPTION>
<S> <C>
GEORGIA 58-0401110
- ------------------------------------------------------------- ------------------------------------
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
1550 Peachtree St., N.W., Atlanta, GA 30309
- ------------------------------------------------------- --------------
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (404) 885-8000
--------------------------
</TABLE>
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
Common Stock
($1.25 Par Value) New York Stock Exchange
----------------- -----------------------
Securities registered pursuant to Section 12(g) of the Act:
None
----
(Title of class)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS
REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS. YES [X] NO [ ]
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405
OF REGULATION S-K (SECTION 229.405 OF THIS CHAPTER) IS NOT CONTAINED HEREIN, AND
WILL NOT BE CONTAINED, TO THE BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE
PROXY OR INFORMATION STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS
FORM 10-K OR ANY AMENDMENT TO THIS FORM 10-K. [X]
AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NON-AFFILIATES OF THE
REGISTRANT, COMPUTED BY REFERENCE TO THE CLOSING SALES PRICE ON THE NEW YORK
STOCK EXCHANGE ON FEBRUARY 25, 2000: $2,809,657,446.
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE REGISTRANT'S CLASSES OF
COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE.
Class Outstanding at February 25, 2000
----- --------------------------------
COMMON STOCK, $1.25 PAR VALUE 141,050,489
- ----------------------------------- --------------
DOCUMENTS INCORPORATED BY REFERENCE
THE PROXY STATEMENT FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL
27, 2000, IS INCORPORATED BY REFERENCE, TO THE EXTENT INDICATED UNDER ITEMS 10,
11, 12, 13 AND 14, INTO PARTS III AND IV OF THIS FORM 10-K.
THE ANNUAL REPORT TO SECURITY HOLDERS FOR THE FISCAL YEAR ENDED DECEMBER 31,
1999 IS INCORPORATED BY REFERENCE, TO THE EXTENT INDICATED UNDER ITEMS 3, 6, 7,
8 AND 14, INTO PARTS I, II AND IV.
<PAGE>
PART I
ITEM 1. BUSINESS
- ------- --------
Equifax is a leader in shaping global commerce by bringing buyers and sellers
together through information, transaction processing and knowledge-based
businesses. Global operations include consumer and commercial credit information
services, credit card processing, check guarantee and authorization, software,
modeling, database management, analytics, consulting and direct to consumer
services.
The Company was founded as a credit reporting agency under the name "Retail
Credit Company" in Atlanta, Georgia, in 1899. Over the next several years, the
Company established itself in the area of investigation of applicants for
insurance. The business grew, and by 1920, the Company had numerous branch
offices throughout the United States and Canada. Since that time, the Company
has continued to expand on its domestic and international basis and diversify by
means of internal development and strategic acquisitions. In late 1975, the
Company changed its name from "Retail Credit Company" to "Equifax Inc." In
mid-1997, the Company divested its insurance services operations which was
accomplished through the spinoff of a subsidiary company to shareholders.
Equifax Inc. is a holding company which conducts its business operations through
subsidiary companies. The Company's business areas are divided into separate
groups and are conducted on a "profit center" basis with self-contained
functional integrity, although Equifax Inc. supplies centralized overall
financial, legal, communications, media relations, tax and similar services. The
specific products and services presently offered by the Company are described
below under the respective Company segment headings.
In May 1999, at the Annual Shareholders' Meeting, the Company announced the
election of Thomas F. Chapman as Chairman of the Board, in addition to his
position of Chief Executive Officer.
In June 1999, the Company announced the election of Lee A. Kennedy as President
and Chief Operating Officer.
In June 1999, the Company commenced its card processing operations in the United
Kingdom in partnership with Groupe Cofinoga and Banque Nationale de Paris.
In July 1999, the Company entered into an agreement with EDS for the outsourcing
of its Payment Services data processing operations. EDS will manage the data
center for Equifax's 6,000 financial institution clients and 100,000 merchants.
In August 1999, the Company entered into a ten year agreement with Price
WaterhouseCoopers for the outsourcing of certain human resources, financial,
compensation and benefits administrative functions.
During 1999, the Company also acquired fourteen U.S. consumer reporting
affiliates and three in Canada.
In January 2000, the Company acquired Procard, the second largest credit card
processor in Chile.
-1-
<PAGE>
In February 2000, the Company announced its plans to acquire the Consumer
Information Solutions Group of R. L. Polk and Company for approximately $260
million in cash. This Group provides consumer marketing information services to
a wide range of industries. The transaction is expected to close April 30, 2000.
Since January 1993, the Company has had an open market share repurchase program.
During 1999, the Company repurchased 6,944,000 shares at a cost of $210.2
million.
Reference is made to acquisitions and investments in unconsolidated affiliates
reported in Note 3 and industry segment information reported in Note 11 of the
Notes to Consolidated Financial Statements, included as Exhibit 13.3 in Part IV,
Item 14 of this report, which are incorporated by reference.
A description of the Company's products or services by segment follows:
North American Information Services Segment
- -------------------------------------------
This segment includes Equifax Credit Information Services, Inc.; Credit
Northwest Corporation; Equifax-Rochester, Inc.; Acrofax Inc.; Equifax Consumer
Services, Inc.; Equifax Secure, Inc.; Equifax Knowledge Engineering, Inc.;
Equifax Canada Inc.; and Equifax Canada (AFX) Inc.
The Company's principal classes of service for this segment are informational
services for consumer credit reporting purposes and risk management services.
Customers include banks, financial institutions, retailers, credit card issuers,
utilities and telecommunications companies, transportation companies, mortgage
lenders, healthcare administration companies, consumers and government.
Informational services for consumer and commercial credit reporting purposes in
the U.S. and Canada accounted for 35% of the Company's 1999 total revenue, as
compared with 37% in 1998 and 40% in 1997. Risk management services in the U.S.
and Canada accounted for 8% of the Company's 1999 total revenue, as compared
with 9% in 1998 and 10% in 1997.
Businesses in this segment primarily furnish consumer credit reporting
information and decision support and credit management services designed to meet
specific customer needs. These services include consumer credit reporting
information, credit marketing services, risk management, account acquisition
services, notification services, locate services, fraud detection and prevention
services, mortgage information and collections outsourcing. In Canada, these
services also include commercial credit information. Distribution of information
to customers is made primarily through electronic data interfaces.
Additionally, emerging businesses in this segment include custom analytics and
database solutions for customer relationship management and, also, a variety of
e-commerce solutions including online identity verification services and digital
certificate products.
In the U.S., the Company's consumer credit services operations, including
non-owned affiliate bureaus, compete with two other automated credit reporting
companies -- Experian Corporation and Trans Union Corporation. Equifax Canada
Inc. is the leading provider of both consumer and commercial credit information
in Canada.
-2-
<PAGE>
Payment Services Segment
- ------------------------
This segment includes Equifax Payment Services, Inc.;Equifax Check Services,
Inc.; Equifax Card Services, Inc.; Equifax Card Services (Madison), Inc.; Credit
Union Card Services, Inc.; Light Signatures, Inc.; Financial Insurance Marketing
Group, Inc.; First Bankcard Systems, Inc.; Equifax Mauritius Private Limited;
Equifax Card Solutions, S.A.; Equifax E-Banking Solutions, Inc.; Equifax Ltd.;
Equifax Australia plc.; Equifax Card Solutions Limited; Equifax Pty Ltd.;
Equifax SNC; Equifax Venture Infotek Ltd. (50%); Telecredit Canada, Inc.;
Transax Plc; Transax France plc.; Partech S.A. (51%); Unnisa Solucoes en Meios
de Pagamento Ltda. (59%); and Transax (Ireland) Ltd.
The Company's principal classes of service for this segment are Card Solutions
and Check Solutions. Card Solutions provides a broad range of products and
services supporting every phase of the card payment industry, including credit
and debit card transaction processing, card processing software, portfolio
management services, portfolio analysis, cardholder customer service, marketing
services, risk management services and merchant processing. In 1999, Card
Solutions had operations in the U.S., U.K. and Brazil, and a joint venture in
India and, in January 2000 purchased Procard in Chile. Card Solutions customers
include banks, credit unions and savings institutions in the U.S. and leading
credit card issuers outside the U.S. Card software product customers are diverse
and include some of the world's largest financial institutions. This class of
service accounted for 25% of the Company's 1999 total operating revenue, as
compared with 22% in 1998 and 21% in 1997. Check Solutions in the U.S. supports
customers with check risk management solutions, including check guarantee and
authorization services, data file exchanges, risk management consulting, check
collections, and database marketing and fraud identification. Check Solutions
now includes international operations in the U.K., Canada, Ireland, France, New
Zealand and Australia. Check Solutions customers include national and regional
retail chains, online brokerages, hotels, automotive dealers, grocers and other
retailers. Check Solutions accounted for 13% of the Company's 1999 total
operating revenue, as compared with 13% in 1998 and 14% in 1997.
Companies in this segment are leading providers of their products and services
in the United States, although competition is considerable. In Brazil, Unnisa is
the largest third party processor.
Business in this segment is somewhat seasonal to some extent. The volume of
check and credit and debit card processing is highest during the holiday
shopping season and during other periods of increased consumer spending.
Equifax Europe Segment
- ----------------------
This segment includes Equifax Plc; UAPT-Infolink plc; The Infocheck Group Ltd.;
Credit Consultants International Ltd.; Credit Link (U.K.) Ltd.; Dicodi, S.A.;
Equifax Decision Systems B.V.; Information Tecnica Del Credito, S.L. (Incresa);
Infolink Ltd.; Messagegram Ltd.; Ultimate Business Services plc.; Ultimate Media
Concepts Ltd.; Via Ejectiva, S.A.; VIV Limited; Credinformacoes, Informacoes de
Credito, LDA; Precision Marketing Information Ltd. (49% owned); and The Equifax
Database Company Ltd. Also included in this segment are CCI Group plc., CCI
Trace and Investigation Services Ltd., The Database
-3-
<PAGE>
Company Ltd., Equifax Iberica, S.A. and ASNEF-Equifax Servicios de Informacion
Sobre Solvencia y Credito, S.L. (95% owned).
The Company's principal class of service is providing consumer and commercial
information and consumer marketing lists in the United Kingdom, Spain and
Portugal.
The businesses in this segment primarily provide consumer and commercial credit
services, but also provide other financial services, including credit
application processing, credit scoring, auto lien and other information,
marketing services, modeling and analytics, and risk management services.
Customers include banks, financial institutions, retailers, automobile
manufacturers, utilities and telecommunications companies, auto finance and
leasing firms, automobile dealers and rental companies and mortgage lenders.
Throughout the United Kingdom, Spain and Portugal, Equifax also supports small
and medium-size businesses operating in a variety of diverse markets.
Equifax Europe has operations in the United Kingdom, Spain, Portugal and
Ireland.
Latin America Segment
- ---------------------
This segment includes Equifax South America, Inc.; Equifax de Chile, S.A.;
Equifax de Mexico Sociedad de Informacion Crediticia, S.A.; DICOM S.A.;
Organizacion Veraz S.A. (66 2/3%); Equifax do Brasil, Ltda., which owns 80% of
the stock of Seguranca ao Credito e Informacoes (SCI); Equifax Peru Srl.;
Infocorp S.A. (51%); and Dicom CentroAmerica (51%).
The principal class of service for this segment is consumer and commercial
credit information services. In addition to credit information, DICOM provides
import/export data, legal trademark, stock market and other consumer
information. Customers include retailers, banks, financial institutions,
utilities, telecommunications companies, manufacturers and individual consumers.
SCI is a leading commercial credit information provider in Brazil, and also
provides consumer credit information, while DICOM and Veraz are the leading
providers of consumer and commercial credit information in Chile and Argentina
respectively. Equifax Latin America also has operations in Peru and El Salvador.
Other Segment
- -------------
This segment includes High Integrity Systems, Inc.
The Company's single class of service for this segment was lottery services. In
1996, the Company subcontracted many of its lottery obligations to GTECH
Corporation, and as a result, these operations are not material to a general
understanding of the Company's business. Other than this subcontract, which
extends until mid 2002, the Company is no longer in the lottery business.
-4-
<PAGE>
================================================================================
The principal methods of competition for the Company are price, scope, speed,
ease of use, and quality of the information and services provided.
None of the Company's segments is dependent on any single customer, and the
Company's largest customer provides less than 10% of the Company's total
revenues.
The Company had approximately 12,700 employees as of December 31, 1999.
ITEM 2. PROPERTIES
- ------- ----------
The Company is in a service industry and does not own any mines, extractive
properties or manufacturing plants. Consequently, an understanding of the
Company's property holdings is not deemed to be material to an understanding of
the Company's business taken as a whole.
The Company owns a total of three office buildings, one of which is located in
Wexford, Ireland; one in Salisbury, England; and one in Santiago, Chile. The
Company owns approximately 23.5 acres in Windward Office Park located in
Alpharetta, Georgia adjacent to office space currently under lease by the
Company.
The Company ordinarily leases office space of the general commercial type for
conducting its business and is obligated under approximately 261 leases and
other rental arrangements for its headquarters and field locations. The
Company's operating leases involve principally office space.
ITEM 3. LEGAL PROCEEDINGS
- ------- -----------------
Reference is made to Note 9 of the Notes to Consolidated Financial Statements,
included in Part IV, Item 14 of this report, which is incorporated by reference.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------- ---------------------------------------------------
No matters were submitted during the fourth quarter to a vote of security
holders.
-5-
<PAGE>
EXECUTIVE OFFICERS OF THE REGISTRANT
------------------------------------
The Company's executive officers, as of March 17, 2000, are listed below, with
certain information relating to each of them:
<TABLE>
<CAPTION>
Name and Position Officer
With Company Age Since
------------ --- -----
<S> <C> <C>
Thomas F. Chapman, Chairman and Chief Executive Officer* 56 1991
Lee A. Kennedy, President and Chief Operating Officer* 49 1997
William V. Catucci, Executive Vice President & Group Executive - 61 1999
North American Information Services
C. Richard Crutchfield, Executive Vice President & Group Executive - 52 1997
Europe
Philip J. Mazzilli, Executive Vice President & Chief Financial Officer 59 February 2000
William R. Phinney, Executive Vice President & Group Executive - 61 1997
Latin America
Larry J. Towe, Executive Vice President & Group Executive - 52 1999
Payment Services
John T. Chandler, Corporate Vice President & Chief Administrative 52 1995
Officer
Karen H. Gaston, Corporate Vice President, Human Resources 47 1998
& Community Relations
Bruce S. Richards, Corporate Vice President & General Counsel 45 1996
Michael T. Vollkommer, Corporate Vice President & Controller 41 1999
Marietta Edmunds Zakas, Corporate Vice President, 41 1995
Corporate Secretary and Director of Investor Relations
Michael G. Schirk, Vice President & Treasurer 50 1999
*Also serves as a Director
</TABLE>
-6-
<PAGE>
There are no family relationships among the officers of the Company, nor are
there any arrangements or understandings between any of the officers and any
other persons pursuant to which they were selected as officers. The Board of
Directors may elect an officer or officers at any meeting of the Board. Each
elected officer is selected to serve until their successors have been elected
and duly qualified subject to earlier termination in accordance with the
By-laws. Election of officers occurs each year at the Board of Directors meeting
held in conjunction with the Annual Meeting of the Shareholders.
Mr. Chapman, elected in May 1999, serves as Chairman and Chief Executive Officer
of the Company. Prior to this election, Mr. Chapman served as President and
Chief Executive Officer of the Company since January 1998. Previously, he served
as president and Chief Operating Officer of the Company. Before that, he was
Executive Vice President and Group Executive of the Company's former Financial
Services Group. He has served as an officer of the Company for at least five
years.
Mr. Kennedy, elected in June 1999, serves as President and Chief Operating
Officer. Prior to this election, Mr. Kennedy served as Executive Vice President
and Group Executive - Payment Services since 1997. Before that, he served as
Group Executive of the Company's Payment Services Group since 1995. From 1990 to
1995, he served as Senior Vice President and General Manager of the Company's
Card Services Division.
Mr. Catucci, elected in October 1999, serves as Executive Vice President and
Group Executive - North American Information Services. Prior to joining the
Company, Mr. Catucci served as President and Chief Executive Officer of
Unitel/AT&T Canada Long Distance Services from 1996 to 1999 and as a Vice
President of AT&T for more than five years.
Mr. Crutchfield, elected in October 1997, serves as Executive Vice President and
Group Executive - Europe. He also served as Chief Technology Officer of the
Company from October 1997 through March 2000. Mr. Crutchfield served as Senior
Vice President and Chief Information Officer since April 1997. Previously, he
served as Chief Technology Officer for the Company's Financial Services Group
for more than five years.
Mr. Mazzilli, elected February 2000, serves as Executive Vice President and
Chief Financial Officer. Prior to his election he served as Executive Vice
President and Chief Financial Officer of Nova Corporation which provides
transaction processing and related software application products to small
merchants. From 1992 through June 1999, he served as Corporate Vice President,
Treasurer and Controller of Equifax.
Mr. Phinney, elected October 1997, serves as Executive Vice President and Group
Executive - Latin America. Prior to this election, Mr. Phinney served as Vice
President and Area Manager, Latin America, since 1994. Before that, he served as
Vice President of Finance and Planning for the Insurance Services Group since
1991.
Mr. Towe, elected July 1999, serves as Executive Vice President and Group
Executive - Payment Services. Prior to his election Mr. Towe served as Senior
Vice President and General Manager, Equifax Card Solutions, International since
May 1997. Before that, since May 1996, he served as President, FBS Software
which the Company acquired in July 1994. Before that he was Executive Vice
President and head of sales and marketing of FBS Software.
Mr. Chandler, elected in October 1995, serves as Corporate Vice President and
Chief Administrative Officer of the Company. Prior to this election, Mr.
Chandler served as Vice President-Compensation and Benefits Administration upon
joining the Company in 1991.
Ms. Gaston, elected April 1998, serves as Corporate Vice President, Human
Resources and Community Relations for the Company. Prior to this election, Ms.
Gaston served as Senior Vice President of Human
-7-
<PAGE>
Resources Services, Communications and Administration since September 1995 for
the Company's Financial Services Group. Before that, she served as an Assistant
Vice President and then Vice President of Human Resources since 1992.
Mr. Richards, elected in October 1996, serves as Corporate Vice President and
General Counsel of the Company. Prior to this election, Mr. Richards served as
Senior Vice President and Group Counsel of the Company's Financial Services
Group since 1993.
Mr. Vollkommer, elected in December 1999, serves as Corporate Vice President and
Controller of the Company. Prior to joining the Company, Mr. Vollkommer served
as Vice President-Finance for Superior TeleCom Inc., from 1998 until 1999. From
1994-1998, he held executive officer positions with Alumax Inc., a producer of
primary aluminum and aluminum fabricated products.
Ms. Zakas, elected in October 1995, serves as Corporate Vice President,
Corporate Secretary and Director of Investor Relations of the Company. Prior to
this election, Ms. Zakas served as Corporate Vice President and Treasurer for
the period January 1996 through October 1996 and as Corporate Vice
President-Investor Relations for the period October 1995 through January 1996.
Prior to that, she served as Vice President and Director of Investor Relations
of the Company since September 1993.
Mr. Schirk, elected in June 1999, serves as Vice President and Treasurer of the
Company. Prior to his election, Mr. Schirk served as Vice President and
Assistant Treasurer - Treasury Services since January 1996. Before that, he
served as Assistant Vice President and Senior Financial Analyst - Capital
Finance Group since joining the Company in 1992.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
- ------- -----------------------------------------------------------------
MATTERS
-------
The Company's common stock is listed and traded on the New York Stock Exchange,
which is the principal market on which the stock is traded.
DIVIDENDS PER SHARE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Quarter 1993 1994 1995 1996 1997 1998 1999
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
First $0.070 $0.070 $0.078 $0.083 $0.083 $0.088 $0.090
Second 0.070 0.078 0.078 0.083 0.088 0.088 0.090
Third 0.070 0.078 0.078 0.083 0.088 0.088 0.090
Fourth 0.070 0.078 0.083 0.083 0.088 0.090 0.093
- ----------------------------------------------------------------------------------------------------------------------
Annual $0.280 $0.303 $0.315 $0.330 $0.345 $0.353 $0.363
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
-8-
<PAGE>
<TABLE>
<CAPTION>
STOCK PRICES
- ---------------------------------------------------------------------------------------------------------------------------
(In Dollars) 1995 1996 1997 1998 1999
- ---------------------------------------------------------------------------------------------------------------------------
High Low High Low High Low High Low High Low
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
First Quarter 15.219 11.297 20.141 15.891 30.094 23.938 37.625 31.750 39.875 31.375
Second Quarter 15.656 13.703 24.844 17.563 33.281 23.719 40.688 33.938 38.438 33.250
Third Quarter 18.844 14.594 24.500 21.594 33.000 27.750 44.125 29.750 36.938 26.750
Fourth Quarter 19.469 16.109 30.875 23.719 36.438 28.625 45.000 31.438 28.313 20.125
- ---------------------------------------------------------------------------------------------------------------------------
Year 19.469 11.297 30.875 15.891 36.438 23.719 45.000 29.750 39.875 20.125
</TABLE>
As of February 25, 2000, there were approximately 11,625 holders of record of
the Company's common stock.
ITEM 6. SELECTED FINANCIAL DATA
- ------- -----------------------
Reference is made to Exhibit 13.1, included in Part IV, Item 14 of this report,
which is incorporated by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
- ------- -----------------------------------------------------------------------
OF OPERATIONS
-------------
Reference is made to Exhibit 13.2, included in Part IV, Item 14 of this report,
which is incorporated by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
- -------- ---------------------------------------------------------
The Company does not have material market risk exposure from market risk
sensitive instruments.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- ------- -------------------------------------------
Reference is made to Exhibit 13.3, included in Part IV, Item 14 of this report,
which is incorporated by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
- ------- ---------------------------------------------------------------
FINANCIAL DISCLOSURE
--------------------
None.
-9-
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- -------- --------------------------------------------------
The Company's Proxy Statement for the Annual Meeting of Shareholders to be held
on April 27, 2000, contains, on pages 2 through 6 thereof, information relating
to the Company's Directors and persons nominated to become Directors, which is
incorporated by reference. Information relating to the Executive Officers at the
Company is included in Item 1 of this Report.
ITEM 11. EXECUTIVE COMPENSATION
- -------- ----------------------
The Company's Proxy Statement for the Annual Meeting of Shareholders to be held
on April 27, 2000, contains, on pages 10 through 16, 18 and 19 thereof,
information relating to Executive Officer compensation, which is incorporated by
reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- -------- --------------------------------------------------------------
The Company's Proxy Statement for the Annual Meeting of Shareholders to be held
on April 27, 2000, contains on page 9 thereof, information relating to security
ownership of certain beneficial owners and management, which is incorporated by
reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- -------- ----------------------------------------------
The Company's Proxy Statement for the Annual Meeting of Shareholders to be held
on April 27, 2000, contains, on page 10 thereof, information relating to certain
relationships and related transactions, which is incorporated by reference.
PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
- -------- ---------------------------------------------------------------
(A) The following documents are filed as part of this report:
(1) FINANCIAL STATEMENTS
o Consolidated Balance Sheets - December 31, 1999 and 1998
o Consolidated Statements of Income for the Years Ended December 31,
1999, 1998 and 1997
-10-
<PAGE>
o Consolidated Statements of Shareholders' Equity for the Years Ended
December 31, 1999, 1998 and 1997
o Consolidated Statements of Cash Flows for the Years Ended December
31, 1999, 1998 and 1997
o Notes to Consolidated Financial Statements
(2) FINANCIAL STATEMENT SCHEDULES
All schedules have been omitted because they are not applicable or
the required information is included in the consolidated financial
statements or notes to these statements.
(3) EXHIBITS
A list of exhibits included as part of this Annual Report is set
forth in the Exhibit Index appearing elsewhere in this Report and
is incorporated by reference.
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the fourth quarter
of the year ended December 31, 1999.
-11-
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned duly authorized officer.
EQUIFAX INC.
Date March 29, 2000 By /s/Marietta Edmunds Zakas
-- -------------------------
Marietta Edmunds Zakas,
Corporate Vice President, Corporate
Secretary and Director of Investor Relations
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
Date March 29, 2000 /s/Thomas F. Chapman
-- --------------------
Thomas F. Chapman, Chairman of the Board
and Chief Executive Officer
Date March 29, 2000 /s/Lee A. Kennedy
-- -----------------
Lee A. Kennedy, President and
Chief Operating Officer
Date March 29, 2000 /s/Philip J. Mazzilli
-- ---------------------
Philip J. Mazzilli, Executive Vice President
and Chief Financial Officer
(Principal Financial Officer)
Date March 29, 2000 /s/Michael T. Vollkommer
-- ------------------------
Michael T. Vollkommer, Corporate Vice
President and Controller
(Principal Accounting Officer)
-12-
<PAGE>
Date March 29, 2000 /s/Lee A. Ault
-- --------------
Lee A. Ault, III, Director
Date March 29, 2000 /s/John L. Clendenin
-- --------------------
John L. Clendenin, Director
Date March 15, 2000 /s/A. W. Dahlberg
-- -----------------
A. W. Dahlberg, Director
Date March 20, 2000 /s/Robert P. Forrestal
-- ----------------------
Robert P. Forrestal, Director
Date March 29, 2000 /s/L. Phillip Humann
-- --------------------
L. Phillip Humann, Director
Date March 15, 2000 /s/Larry L. Prince
-- ------------------
Larry L. Prince, Director
Date March 29, 2000 /s/D. Raymond Riddle
-- --------------------
D. Raymond Riddle, Director
Date March 29, 2000 /s/Betty L. Siegel
-- ------------------
Dr. Betty L. Siegel, Director
Date March 29, 2000 /s/Louis W. Sullivan
-- --------------------
Dr. Louis W. Sullivan, Director
Date March 17, 2000 /s/Jacquelyn M. Ward
-- --------------------
Jacquelyn M. Ward, Director
-13-
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER
- -------
Plan of Acquisition, Reorganization, Arrangement, Liquidation or
----------------------------------------------------------------
Succession
----------
2.1 Distribution Agreement, Plan of Reorganization and Distribution
(24 pages) (7)
Articles of Incorporation and Bylaws
------------------------------------
3.1 . Amended and Restated Articles of Incorporation (3 pages) (5)
3.2 . Bylaws (23 pages)
Instruments Defining the Rights of Security Holders, Including
--------------------------------------------------------------
Indentures
----------
4.1 . Loan Agreement (151 pages)(9)
4.2 . Portion of Prospectus and Trust Indenture (134 pages) (1)
4.3 . Rights Agreement, dated October 25, 1995, between Equifax Inc. and
SunTrust Bank, Atlanta with Form of Right Certificate attached as
Exhibit "A" (54 pages) (3)
4.4 . Indenture Relating to Debt Securities (98 pages) (11)
Material Contracts and Compensation Plans
-----------------------------------------
10.1 . Equifax Inc. 1988 Performance Share Plan for Officers, as amended
(13 pages) (9)(12)
10.2 . Equifax Inc. Executive Incentive Plan (6 pages) (9)(11)
10.3 . Deferred Compensation Plan (22 pages) (4)(12)
10.4 . Change in Control Agreement (11 pages) (9)(12)
10.5 . Equifax Inc. Omnibus Stock Incentive Plan, as amended (17 pages)
(9)(11)
10.6 . Form of 1999 Incentive and Non-Qualified Stock Option Agreements
(10 pages) (11)(12)
-14-
<PAGE>
10.7 . Form of 1999 Restricted Stock Award Agreement (3 pages) (11)(12)
10.8 . Form of 1998 Incentive and Non-Qualified Stock Option Agreements
(8 pages) (6)(12)
10.9 . Form of 1998 Restricted Stock Award Agreement (3 pages) (6)(12)
10.10 . Form of 1996 Incentive and Non-Qualified Stock Option Agreements
(8 pages) (2)(12)
10.11 . Form of 1996 Non-Qualified Stock Option Agreement (4 pages) (2)(12)
10.12 . Form of 1996 Restricted Stock Award Agreement (3 pages) (2)(12)
10.13 . Form of 1995 Incentive and Non-Qualified Stock Option Agreements
(8 pages) (2)(12)
10.14 . Form of 1995 Restricted Stock Award Agreement (4 pages) (2)(12)
10.15 . Equifax Inc. Non-Employee Director Stock Option Plan and Agreement
(10 pages)(11)(12)
10.16 . Equifax Inc. Supplemental Executive Retirement Plan (24 pages)
(2)(12)
10.17 . Equifax Inc. Supplemental Executive Retirement Plan Amendment
(2 pages)(6)(12)
10.18 . Agreement For Computerized Credit Reporting Services (205 pages)
10.19 . Amendments to Agreement for Computerized Credit Reporting Services
and related documents (66 pages) (6)
10.20 . Amendment to Agreement for Computerized Credit Reporting Services
(8 pages) (1)
10.21 . Amendment to Agreement for Computerized Credit Reporting Services
(9 pages)
10.22 . Amendment to Agreement for Computerized Credit Reporting Services
(14 pages) (2)
10.23 . Computer and network operations agreement (redacted version) (74
pages) (10)
10.24 . Lease Agreement (69 pages)
-15-
<PAGE>
10.25 . Lease Agreement (76 pages) (11)
10.26 . Transaction Document #1 ( 7 pages) (13)
10.27 . Master Agreement (62 pages) (13)
10.28 . Human Resources Business Process and Support Services Agreement
with First Amendment and schedule of omitted exhibits (72 pages)
10.29 . Finance & Accounting Business Process and Support Services
Agreement, with First amendment and schedule of omitted exhibits
(71 pages)
10.30 . Compensation of Directors - The Company's bylaws, which are filed
as an exhibit to this Form 10-K Annual Report, describe on page 7
and 8, under Article Two, "Compensation of Directors," the fees
paid to Directors of the Company. This information is incorporated
by reference.
Annual Report to Security Holders
---------------------------------
13.1 . Summary of Selected Financial Data (2 pages)
13.2 . Management's Discussion and Analysis of Financial Condition and
Results of Operations (11 pages)
13.3 . Financial Statements and Supplementary Data (29 pages)
21 Subsidiaries of the Registrant (4 pages)
------------------------------
23 Consent of Independent Public Accountants to incorporation
-----------------------------------------------------------
by reference (1 page)
------------
27 Financial Data Schedule (for SEC use only)
-----------------------
(1)Previously filed as pages 8 through 16 and Exhibit 4.1 on Amendment No. 1 to
Form S-3, Registration Statement No. 33-62820, filed June 17, 1993, and
incorporated by reference.
(2)Previously filed as an exhibit on Form 10-K, filed March 30, 1995, and
incorporated by reference.
(3)Previously filed as exhibits on Form 8-A, filed November 2, 1995, and
incorporated by reference.
(4)Previously filed as an exhibit on Form 10-K, filed April 1, 1996, as amended
on Form 10-K/A, filed April 4, 1996, and incorporated by reference.
(5)Previously filed as an exhibit on Schedule 14A, filed, March 26, 1996, and
incorporated by reference.
-16-
<PAGE>
(6)Previously filed as an exhibit on Form 10-K, filed March 31, 1997, and
incorporated by reference.
(7)Previously filed as an exhibit to Pre-effective Amendment No. 1 to
Registration Statement on Form S-1, Registration No. 333-30297, filed July 16,
1997, and incorporated by reference.
(8)Previously filed as pages 1 through 22 to the Company's Registration
Statement on Form
S-3, Registration No. 333-47599, filed March 9, 1998, and incorporated by
reference.
(9)Previously filed as an exhibit on Form 10-K, filed March 31, 1998, and
incorporated by reference.
(10)Previously filed as an exhibit on Form 10-Q, filed November 16, 1998, and
incorporated by reference.
(11)Previously filed as an exhibit on Form 10-K, filed March 31, 1999, and
incorporated by reference.
(12)Management Contract or Compensatory Plan
(13) Document omits information pursuant to a Request for Confidential Treatment
under Rule 406 of the Securities Act of 1933
-17-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.2
<SEQUENCE>2
<DESCRIPTION>EQUIFAX INC BYLAWS
<TEXT>
<PAGE>
EXHIBIT 3.2
___________________________________
EQUIFAX INC.
BYLAWS
___________________________________
Effective January 2000
<PAGE>
EQUIFAX INC.
=================
BYLAWS
=================
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE ONE MEETINGS OF THE SHAREHOLDERS................... 1
Section 1.1 Annual Meeting................................. 1
Section 1.2 Special Meetings............................... 1
Section 1.3 Notice of Meetings............................. 1
Section 1.4 Voting Groups.................................. 1
Section 1.5 Quorum......................................... 1
Section 1.6 Vote Required for Action....................... 2
Section 1.7 Adjournments................................... 2
Section 1.8 Presiding Officer.............................. 2
Section 1.9 Voting of Shares............................... 2
Section 1.10 Proxies........................................ 2
Section 1.11 Record Date.................................... 3
Section 1.12 Shareholder Proposals and Nominations.......... 3
ARTICLE TWO BOARD OF DIRECTORS............................. 5
Section 2.1 General........................................ 5
Section 2.2 Number of Directors and Term of Office......... 5
Section 2.3 Election of Directors.......................... 5
Section 2.4 Vacancies...................................... 5
Section 2.5 Term Limits.................................... 5
Section 2.6 Stock Ownership Requirement.................... 6
Section 2.7 Meetings....................................... 6
Section 2.8 Special Meetings............................... 6
Section 2.9 Notice of Meetings............................. 6
Section 2.10 Quorum; Adjournments........................... 6
Section 2.11 Vote Required for Action....................... 7
Section 2.12 Action by Directors Without a Meeting.......... 7
Section 2.13 Compensation of Directors...................... 7
</TABLE>
<PAGE>
ARTICLE THREE ELECTIONS OF OFFICERS AND COMMITTEES........... 7
Section 3.1 Election of Officers........................... 7
Section 3.2 Executive Committee............................ 8
Section 3.3 Other Committees............................... 8
ARTICLE FOUR OFFICERS....................................... 8
Section 4.1 Officers; Term Limits.......................... 8
Section 4.2 Compensation of Officers....................... 9
Section 4.3 Chairman of the Board.......................... 9
Section 4.4 Vice Chairman of the Board..................... 9
Section 4.5 Chief Executive Officer........................ 9
Section 4.6 President...................................... 9
Section 4.7 Executive Vice Presidents...................... 10
Section 4.8 Vice Presidents................................ 10
Section 4.9 Treasurer...................................... 10
Section 4.10 Secretary...................................... 10
Section 4.11 Voting of Stock................................ 10
ARTICLE FIVE INDEMNIFICATION................................ 11
Section 5.1 Definitions.................................... 11
Section 5.2 Basic Indemnification Arrangement.............. 12
Section 5.3 Advances for Expenses.......................... 12
Section 5.4 Court-Ordered Indemnification and Advances for
Expenses...................................... 13
Section 5.5 Determination of Reasonableness of Expenses.... 13
Section 5.6 Indemnification of Employees and Agents........ 14
Section 5.7 Liability Insurance............................ 14
Section 5.8 Witness Fees................................... 14
Section 5.9 Report to Shareholders......................... 14
Section 5.10 No Duplication of Payments..................... 14
Section 5.11 Subrogation.................................... 14
Section 5.12 Contract Rights................................ 15
Section 5.13 Amendments..................................... 15
ARTICLE SIX CAPITAL STOCK.................................. 15
Section 6.1 Direct Registration of Shares.................. 15
Section 6.2 Certificates for Shares........................ 15
Section 6.3 Transfer of Shares............................. 16
Section 6.4 Duty of Company to Register Transfer........... 16
Section 6.5 Lost, Stolen or Destroyed Certificates......... 16
Section 6.6 Authorization to Issue Shares and Regulations
Regarding Transfer and Registration............ 16
-ii-
<PAGE>
ARTICLE SEVEN DISTRIBUTIONS AND DIVIDENDS.................... 17
Section 7.1 Authorization or Declaration................... 17
Section 7.2 Record Date with Regard to Distributions
and Share Dividends............................ 17
ARTICLE EIGHT MISCELLANEOUS.................................. 17
Section 8.1 Corporate Seal................................. 17
Section 8.2 Inspection of Books and Records................ 17
Section 8.3 Conflict with Articles of Incorporation or Code 17
Section 8.4 Severability................................... 17
ARTICLE NINE AMENDMENTS..................................... 18
Section 9.1 Amendments..................................... 18
ARTICLE TEN FAIR PRICE REQUIREMENTS........................ 18
Section 10.1 Fair Price Requirements........................ 18
ARTICLE ELEVEN BUSINESS COMBINATIONS.......................... 18
Section 11.1 Business Combinations.......................... 18
-iii-
<PAGE>
BYLAWS OF EQUIFAX INC.
____________________
ARTICLE ONE
Meetings of the Shareholders
Section 1.1 Annual Meeting. The Annual Meeting of the Shareholders of the
Company shall be held during the first five months after the end of each fiscal
year of the Company at such time and place, within or without the State of
Georgia, as shall be fixed by the Board of Directors, for the purpose of
electing Directors and for the transaction of such other business as may be
properly brought before the meeting.
Section 1.2 Special Meetings. Special meetings of the Shareholders may be held
at the principal office of the Company in the State of Georgia or at such other
place, within or without the State of Georgia, as may be named in the call
therefor. Such special meetings may be called by the Chairman of the Board of
Directors, the Vice Chairman, the President, the Board of Directors by vote at a
meeting, a majority of the Directors in writing without a meeting, or by
unanimous call of the Shareholders.
Section 1.3 Notice of Meetings. Unless waived in accordance with the Georgia
Business Corporation Code (the "Code"), a notice of each meeting of Shareholders
stating the date, time and place of the meeting shall be given not less than 10
days nor more than 60 days before the date thereof to each Shareholder entitled
to vote at that meeting. In the case of an Annual Meeting, the notice need not
state the purpose or purposes of the meeting unless the Articles of
Incorporation or the Code requires the purpose or purposes to be stated in the
notice of the meeting. Any irregularity in such notice shall not affect the
validity of the Annual Meeting or any action taken at such meeting. In the case
of a special meeting of the Shareholders, the notice of meeting shall state the
purpose or purposes for which the meeting is called, and only business within
the purpose or purposes described in such notice may be conducted at the
meeting.
Section 1.4 Voting Groups. Voting group means all shares of one or more
classes or series that are entitled to vote and be counted together collectively
on a matter at a meeting of Shareholders. All shares entitled to vote generally
on the matter are for that purpose a single voting group.
Section 1.5 Quorum. With respect to shares entitled to vote as a separate
voting group on a matter at a meeting of Shareholders, the presence, in person
or by
<PAGE>
proxy, of a majority of the votes entitled to be cast on the matter by the
voting group shall constitute a quorum of that voting group for action on that
matter unless the Articles of Incorporation or the Code provides otherwise.
Once a share is represented for any purpose at a meeting, other than solely to
object to holding the meeting or to transacting business at the meeting, it is
deemed present for quorum purposes for the remainder of the meeting and for any
adjournment of the meeting unless a new record date is or must be set for the
adjourned meeting pursuant to Section 1.11 of these Bylaws.
Section 1.6 Vote Required for Action. If a quorum exists, action on a matter
(other than the election of Directors) is approved if the votes cast favoring
the action exceed the votes cast opposing the action, unless the Articles of
Incorporation, provisions of these Bylaws validly adopted by the Shareholders,
or the Code requires a greater number of affirmative votes. If the Articles of
Incorporation or the Code provide for voting by two or more voting groups on a
matter, action on that matter is taken only when voted upon by each of those
voting groups counted separately.
Section 1.7 Adjournments. Whether or not a quorum is present to organize a
meeting, any meeting of Shareholders (including an adjourned meeting) may be
adjourned by the holders of a majority of the voting shares represented at the
meeting to reconvene at a specific time and place, but no later than 120 days
after the date fixed for the original meeting unless the requirements of the
Code concerning the selection of a new record date have been met.
Section 1.8 Presiding Officer. The Chairman of the Board shall call the
meeting of the Shareholders to order and shall act as chairman of such meeting.
In the absence of the Chairman of the Board, the meeting shall be called to
order by any one of the following officers then present, in the following order:
the Vice Chairman of the Board, the Chief Executive Officer, the President, the
senior Executive Vice President, the next senior Executive Vice President, or
any one of the Vice Presidents, who shall act as chairman of the meeting. The
Secretary of the Company shall act as secretary of the meeting of the
Shareholders. In the absence of the Secretary, at any meeting of the
Shareholders, the presiding officer may appoint any person to act as secretary
of the meeting.
Section 1.9 Voting of Shares. Unless the Articles of Incorporation or the Code
provides otherwise, each outstanding share having voting rights shall be
entitled to one vote on each matter submitted to a vote at a meeting of
Shareholders.
Section 1.10 Proxies. A Shareholder entitled to vote pursuant to Section 1.9
may vote in person or by proxy pursuant to an appointment of proxy executed by
the Shareholder either in writing or pursuant to an electronic or telephonic
transmission, provided that the transmission contains or is accompanied by
information from which it can be determined that the Shareholder authorized the
-2-
<PAGE>
transmission. An appointment of proxy shall be valid for only one meeting to be
specified therein, and any adjournments of such meeting, but shall not be valid
for more than eleven months unless expressly provided therein. Appointments of
proxy shall be dated and filed with the records of the meeting to which they
relate. If the validity of any appointment of proxy is questioned, it must be
submitted for examination to the Secretary of the Company or to a proxy officer
or committee appointed by the Board of Directors. The Secretary or, if
appointed, the proxy officer or committee shall determine the validity or
invalidity of any appointment of proxy submitted, and reference by the Secretary
in the minutes of the meeting to the regularity of an appointment of proxy shall
be received as prima facie evidence of the facts stated for the purpose of
establishing the presence of a quorum at the meeting and for all other purposes.
Section 1.11 Record Date. For the purpose of determining Shareholders entitled
to notice of a meeting of the Shareholders, to demand a special meeting, to
vote, or to take any other action, the Board of Directors may fix a future date
as the record date, which date shall be not more than 70 days prior to the date
on which the particular action, requiring a determination of the Shareholders,
is to be taken. A determination of the Shareholders entitled to notice of or to
vote at a meeting of the Shareholders is effective for any adjournment of the
meeting unless the Board of Directors fixes a new record date, which it must do
if the meeting is adjourned to a date more than 120 days after the date fixed
for the original meeting. If no record date is fixed by the Board of Directors,
the 70th day preceding the date on which the particular action, requiring a
determination of the Shareholders, is to be taken shall be the record date for
that purpose.
Section 1.12 Shareholder Proposals and Nominations.
(a) No proposal for a Shareholder vote (other than a proposal that appears
in the Company's proxy statement after compliance with the procedures set forth
in Securities and Exchange Commission Rule 14a-8) shall be submitted by a
Shareholder (a "Shareholder Proposal") to the Company's Shareholders unless the
Shareholder submitting such proposal (the "Proponent") shall have filed a
written notice setting forth with particularity (i) the names and business
addresses of the Proponent and all natural persons, corporations, partnerships,
trusts or any other type of legal entity or recognized ownership vehicle
(collectively, a "Person") acting in concert with the Proponent; (ii) the name
and address of the Proponent and the Persons identified in clause (i), as they
appear on the Company's books (if they so appear); (iii) the class and number of
shares of the Company beneficially owned by the Proponent and by each Person
identified in clause (i); (iv) a description of the Shareholder Proposal
containing all material information relating thereto; and (v) such other
information as the Board of Directors reasonably determines is necessary or
appropriate to enable the Board of Directors and Shareholders of the Company to
consider the Shareholder Proposal. The presiding officer at any meeting of the
Shareholders may determine that any Shareholder Proposal was not made in
accordance with the procedures prescribed in these Bylaws or is otherwise not in
accordance with law, and if it is so determined, such
-3-
<PAGE>
officer shall so declare at the meeting and the Shareholder Proposal shall be
disregarded.
(b) Only persons who are selected and recommended by the Board of Directors
or the committee of the Board of Directors designated to make nominations, or
who are nominated by Shareholders in accordance with the procedures set forth in
this Section 1.12, shall be eligible for election, or qualified to serve, as
Directors. Nominations of individuals for election to the Board of Directors of
the Company at any Annual Meeting or any special meeting of Shareholders at
which Directors are to be elected may be made by any Shareholder of the Company
entitled to vote for the election of Directors at that meeting by compliance
with the procedures set forth in this Section 1.12. Nominations by Shareholders
shall be made by written notice (a "Nomination Notice"), which shall set forth
(i) as to each individual nominated, (A) the name, date of birth, business
address and residence address of such individual; (B) the business experience
during the past five years of such nominee, including his or her principal
occupations and employment during such period, the name and principal business
of any corporation or other organization in which such occupations and
employment were carried on, and such other information as to the nature of his
or her responsibilities and level of professional competence as may be
sufficient to permit assessment of such prior business experience; (C) whether
the nominee is or has ever been at any time a director, officer or owner of five
percent or more of any class of capital stock, partnership interests or other
equity interest of any corporation, partnership or other entity; (D) any
directorships held by such nominee in any company with a class of securities
registered pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended, or subject to the requirements of Section 15(d) of such Act or any
company registered as an investment company under the Investment Company Act of
1940, as amended; and (E) whether such nominee has ever been convicted in a
criminal proceeding or has ever been subject to a judgment, order, finding or
decree of any federal, state or other governmental entity, concerning any
violation of federal, state or other law, or any proceeding in bankruptcy, which
conviction, order, finding, decree or proceeding may be material to an
evaluation of the ability or integrity of the nominee; and (ii) as to the Person
submitting the Nomination Notice and any Person acting in concert with such
Person, (X) the name and business address of such Person, (Y) the name and
address of such Person as they appear on the Company's books (if they so
appear), and (Z) the class and number of shares of the Company that are
beneficially owned by such Person. A written consent to being named in a proxy
statement as a nominee, and to serve as a Director if elected, signed by the
nominee, shall be filed with any Nomination Notice. If the presiding officer at
any meeting of the Shareholders determines that a nomination was not made in
accordance with the procedures prescribed by these Bylaws, such officer shall so
declare to the meeting and the defective nomination shall be disregarded.
(c) If a Shareholder Proposal or Nomination Notice is to be submitted at an
Annual Meeting of the Shareholders, it shall be delivered to the Secretary of
the
-4-
<PAGE>
Company at the principal executive office of the Company within the time
period specified in Securities and Exchange Commission Rule 14a-8(a)(3)(i).
Subject to Section 1.3 as to matters that may be acted upon at a special meeting
of the Shareholders, if a Shareholder Proposal or Nomination Notice is to be
submitted at a special meeting of the Shareholders, it shall be delivered to the
Secretary of the Company at the principal executive office of the Company no
later than the close of business on the earlier of (i) the 30th day following
the public announcement that a matter will be submitted to a vote of the
Shareholders at a special meeting, or (ii) the 15th day following the day on
which notice of the special meeting was given.
ARTICLE TWO
Board of Directors
Section 2.1 General. Subject to the Articles of Incorporation, all corporate
powers shall be exercised by or under the authority of, and the business and
affairs of the Company shall be managed under the direction of, the Board of
Directors. In addition to the powers and authority expressly conferred upon it
by these Bylaws and the Articles of Incorporation, the Board of Directions may
exercise all such lawful acts and things as are not by law, by the Articles of
Incorporation or by these Bylaws directed or required to be exercised or done by
the Shareholders.
Section 2.2 Number of Directors and Term of Office. The number of Directors
shall be not less than nine, nor more than 20 Shareholders, and shall be fixed
within such range by the Board of Directors. The Directors shall be divided
into three classes, designated as Class I, Class II and Class III. Each class
shall consist, as nearly as may be possible, of one-third of the total number of
Directors constituting the entire Board of Directors. At each Annual Meeting of
the Shareholders, successors to the class of Directors whose term expires at
that Annual Meeting of Shareholders shall be elected for a three-year term. If
the number of Directors has changed, any increase or decrease shall be
apportioned among the classes so as to maintain the number of Directors in each
class as nearly equal as possible, and any additional Director of any class
elected to the Board of Directors to fill a vacancy resulting from an increase
in such a class shall hold office for a term that shall coincide with the
remaining term of that class, unless otherwise required by law, but in no case
shall a decrease in the number of Directors for a class shorten the term of an
incumbent Director. A Director shall hold office until the Annual Meeting of
Shareholders for the year in which such Director's term expires and until his or
her successor shall be elected and qualified, subject, however, to prior death,
resignation, retirement, disqualification or removal from office.
Section 2.3 Election of Directors. A Director shall be elected by a plurality
of the votes cast by the shares entitled to vote in the election at a meeting of
Shareholders at which a quorum is present.
-5-
<PAGE>
Section 2.4 Vacancies. Any vacancy on the Board of Directors that results from
an increase in the number of Directors or from prior death, resignation,
retirement, disqualification or removal from office of a Director shall be
filled by a majority of the Board of Directors then in office, though less than
a quorum, or by the sole remaining Director. Any Director elected to fill a
vacancy resulting from prior death, resignation, retirement, disqualification or
removal from office of a director, shall have the same remaining term as that of
his or her predecessor.
Section 2.5 Term Limits. A Director reaching 70 years of age (or 65 years of
age for Directors who are also employees of the Company) or ceasing to continue
a regular business relationship (as defined below) shall automatically retire
from the Board, except that a non-employee Director who ceases to continue a
regular business relationship may continue serving as a Director until the next
Annual Meeting of the Shareholders or 70 years of age, whichever first occurs.
Notwithstanding the preceding, a non-employee Director, or a retiring Chairman
of the Board and Chief Executive Officer (or either), may, at the request of the
Executive Committee and if ratified by the Board, continue to serve as a
Director until age 70 if he or she continues in a position or business activity
that the Board determines would be of substantial benefit to the Company. For
purposes of this Section 2.5, the expression "regular business relationship"
means a relationship as an employee, consultant or officer of a substantial
business, professional or educational organization, which requires exercise of
business judgment on a regular basis, and which is not lower in seniority than
the position with such organization occupied by the Director at the time of the
Director's first election to the Board of Directors of the Company.
Section 2.6 Stock Ownership Requirement. Every Director shall be a Shareholder
of the Company. Directors shall serve for the terms for which they are elected
and until their successors shall have been duly chosen, unless any such term is
sooner ended as herein permitted; provided, however, that if a Director ceases
to be a Shareholder, the disposition of the stock shall constitute a resignation
of the Director's office as a Director.
Section 2.7 Meetings. Regular meetings of the Board of Directors shall be held
on the last Wednesday in the months of January, April, July and October, if not
a legal holiday, or, if a legal holiday, then on the next succeeding day not a
legal holiday. When desirable to do so, the date of the meeting may be changed
on the approval of the Board of Directors or the Executive Committee.
Section 2.8 Special Meetings. Special meetings of the Board of Directors shall
be held whenever called by the direction of the Chairman of the Board, or in his
or her absence, by the Vice Chairman, or in his or her absence, by the
President. Special meetings of the Board may also be called by one-third of the
Directors then in office. Unless otherwise indicated in the notice thereof, any
and all business of the Company may be transacted at any special meeting of the
Board of Directors.
-6-
<PAGE>
Section 2.9 Notice of Meetings. Unless waived in accordance with the Code,
notice of each regular or special meeting of the Board of Directors, stating the
date, time and place of the meeting, shall be given not less than two days
before the date thereof to each Director.
Section 2.10 Quorum; Adjournments. A majority of the Board of Directors shall
constitute a quorum for the transaction of business. Whether or not a quorum is
present to organize a meeting, any meeting of Directors (including a reconvened
meeting) may be adjourned by a majority of the Directors present, to reconvene
at a specific time and place. At any adjourned meeting, any business may be
transacted that could have been transacted at the meeting prior to adjournment.
If notice of the original meeting was properly given, it shall not be necessary
to give any notice of the adjourned meeting or of the business to be transacted
if the date, time and place of the adjourned meeting are announced at the
meeting prior to adjournment.
Section 2.11 Vote Required for Action. If a quorum is present when a vote is
taken, the affirmative vote of a majority of Directors present is the act of the
Board of Directors unless the Code, the Articles of Incorporation, or these
Bylaws require the vote of a greater number of Directors.
Section 2.12 Action by Directors Without a Meeting. Any action required or
permitted to be taken at any meeting of the Board of Directors or any action
that may be taken at a meeting of a committee of the Board of Directors may be
taken without a meeting if the action is taken by all the members of the Board
of Directors or of the committee, as the case may be. The action must be
evidenced by one or more written consents describing the action taken, signed by
each Director or each Director serving on the committee, as the case may be, and
delivered to the Company for inclusion in the minutes or filing with the
corporate records.
Section 2.13 Compensation of Directors. Directors who are salaried officers or
employees of the Company shall receive no additional compensation for service as
a Director or as a member of a committee of the Board of Directors. Each
Director who is not a salaried officer or employee of the Company shall be
compensated as set forth below. A Director may also serve the Company in a
capacity other than that of Director or employee and receive compensation, as
determined by the Board of Directors, for services rendered in any other
capacity.
Subject to the above, (i) the Chairman of the Board shall receive a fee of
$7,500 per quarter, and each other Director shall receive a fee of $5,000 per
quarter, for services as a Director, (ii) the Chairman of the Executive
Committee shall receive an additional fee of $4,000 per quarter and any other
member of the Executive Committee shall receive an additional fee of $1,000 per
quarter, (iii) any Director who is chairman of any other committee elected or
appointed by the Board shall receive an additional fee of $1,000 per quarter,
and (iv) each Director shall also receive a fee of $1,000 for attendance at any
meeting of the Board or of a
-7-
<PAGE>
committee thereof. In addition, each Director who is not a salaried officer or
employee of the Company shall be entitled to receive stock option awards as
provided for under the Equifax Inc. Non-Employee Director Stock Option Plan, or
any successor plan or plans.
ARTICLE THREE
Elections of Officers and Committees
Section 3.1 Election of Officers. At the April meeting of the Board of
Directors in each year, or, if not done at that time, then at any subsequent
meeting, the Board of Directors shall proceed to the election of executive
officers of the Company, and of the Executive Committee, as hereinafter provided
for.
Section 3.2 Executive Committee. The Board of Directors may elect from their
members an Executive Committee which shall include the Chairman of the Board,
the Chief Executive Officer, and the President. The Executive Committee shall
consist of not less than three nor more than five members, the precise number to
be fixed by resolution of the Board of Directors from time to time.
Each member shall serve for one year and until his or her successor shall
have been elected, unless that term is sooner terminated by the Board of
Directors. The Board of Directors shall fill the vacancies in the Executive
Committee by election. The Chairman of the Board, if there is one, or, if not
the Chief Executive Officer, shall be the Chairman of the Executive Committee.
All action by the Executive Committee shall be reported to the Board of
Directors at its meeting next succeeding such action, and shall be subject to
revision or alteration by the Board of Directors, provided that no rights or
interests of third parties shall be affected by any such revision or alteration.
The Executive Committee shall fix its own rules and proceedings, and shall meet
where and as provided by such rules or by resolution of the Board of Directors.
In every case, the affirmative vote of a majority of all the members of the
Committee shall be necessary to its adoption of any resolution.
Except as prohibited by the Code, during the interval between the meetings
of the Board of Directors, the Executive Committee shall possess and may
exercise all the powers of the Board in the management of all the affairs of the
Company, including the making of contracts, the purchase and sale of property,
the execution of legal instruments, and all other matters in which specific
direction shall not have been given by the Board of Directors.
Section 3.3 Other Committees. The Board of Directors is authorized and
empowered to appoint from its own body or from the officers of the Company, or
both, such other committees as it may think best, and may delegate to or confer
upon such committees all or such part of its powers except as prohibited by the
Code, and may prescribe the exercise thereof as it may deem proper.
-8-
<PAGE>
ARTICLE FOUR
Officers
Section 4.1 Officers; Term Limits. The officers of the Company, unless
otherwise provided by the Board from time to time, shall consist of the
following: a Chairman of the Board, a Chief Executive Officer, a President, one
or more Vice Presidents (one or more of whom may be designated Executive Vice
President, one or more of whom may be designated Corporate Vice President and
one or more of whom may be designated Senior Vice President), a Treasurer, and a
Secretary, who shall be elected by the Board of Directors. The Board of
Directors may from time to time elect a Vice Chairman of the Board. The Board
of Directors, or any officer to whom the Board may delegate such authority, may
also appoint such other officers as it or they may see fit, and may prescribe
their respective duties. All officers, however elected or appointed, may be
removed with or without cause by the Board of Directors, and any officer
appointed by another officer may also be removed, with or without cause, by the
appointing officer or any officer senior to the appointing officer. Any two or
more of the offices may be filled by the same person. No person shall serve as
Chairman of the Board and Chief Executive Officer (or either), beyond his or her
65th birthday.
Section 4.2 Compensation of Officers. The Executive Committee shall approve
salaries of all elected officers and such other employees as may be designated
by the Executive Committee, except that salaries of members of the Executive
Committee shall be fixed by the Management Compensation Committee of the Board
of Directors or by the Board of Directors.
Section 4.3 Chairman of the Board. The Chairman of the Board of Directors
shall serve as Chief Executive Officer of the Company, unless determined
otherwise by the Board of Directors. The Chairman of the Board shall preside at
all meetings of the Shareholders, the Board of Directors, and the Executive
Committee. Except where by law the signature of the Chief Executive Officer or
President is required, the Chairman of the Board shall have the same power as
the Chief Executive Officer or President to sign all authorized certificates,
contracts, bonds, deeds, mortgages, and other instruments. The Chairman of the
Board shall have such other powers and duties as from time to time may be
assigned by the Board of Directors.
Section 4.4 Vice Chairman of the Board. If the Chairman of the Board is not
designated Chief Executive Officer by the Board of Directors, then, if so
designated by the Board of Directors, the Vice Chairman shall serve as Chief
Executive Officer. It shall be the duty of the Vice Chairman of the Board, in
the absence of the Chairman of the Board, to preside at meetings of the
Shareholders, at meetings of the Directors, and at meetings of the Executive
Committee. The Vice Chairman shall do and perform all acts incident to the
office of Vice Chairman and, if so designated, those of Chief Executive Officer,
subject to the approval and direction of the Board of Directors.
-9-
<PAGE>
Section 4.5 Chief Executive Officer. The Chief Executive Officer shall direct
the business and policies of the Company and shall have such other powers and
duties as from time to time may be assigned by the Board of Directors.
Section 4.6 President. The President shall be the Chief Operating Officer of
the Company and shall have general charge of the business of the Company subject
to the specific direction and approval of the Board of Directors or its Chairman
or Vice Chairman or the Executive Committee. If the Chairman or Vice Chairman
of the Board is not designated Chief Executive Officer by the Board of
Directors, the President shall also serve as Chief Executive Officer. In the
event of a vacancy in the office of Chairman and Vice Chairman of the Board or
during the absence or disability of both the Chairman and the Vice Chairman, the
President shall serve as Chief Executive Officer and shall have all of the
rights, powers and authority given hereunder to the Chairman of the Board. The
President may sign all authorized certificates, contracts, bonds, deeds,
mortgages and other instruments, except in cases in which the signing thereof
shall have been expressly delegated to some other officer or agent of the
Company. In general, the President shall have the usual powers and duties
incident to the office of a president of a corporation and such other powers and
duties as from time to time may be assigned by the Board or Chairman or Vice
Chairman of the Board.
Section 4.7 Executive Vice Presidents. Each shall have authority, on behalf of
the Company, to execute, approve, or accept agreements for service, bids, or
other contracts, and shall sign such other instruments as each is authorized or
directed to sign by the Board of Directors or its Committee or by the Chief
Executive Officer or the President. Each shall do and perform all acts incident
to the office of the Executive Vice President of the Company or as may be
directed by its Board of Directors or its Committee or the Chief Executive
Officer or the President.
Section 4.8 Vice Presidents. There shall be one or more Vice Presidents of the
Company, as the Board of Directors may from time to time elect. Each Vice
President shall have such power and perform such duties as may be assigned by or
under the authority of the Board of Directors.
Section 4.9 Treasurer. The Treasurer shall be responsible for the custody of
all funds and securities belonging to the Company and for the receipt, deposit
or disbursement of funds and securities under the direction of the Board of
Directors. The Treasurer shall cause to be maintained full and true accounts of
all receipts and disbursements and shall make reports of the same to the Board
of Directors, the Chief Executive Officer, and the President upon request. The
Treasurer shall perform all duties as may be assigned from time to time by the
Board of Directors.
Section 4.10 Secretary. The Secretary shall be responsible for preparing
minutes of the acts and proceedings of all meetings of the Shareholders and of
the Board of Directors and any committees thereof. The Secretary shall have
authority to give all notices required by law or these Bylaws, and shall be
-10-
<PAGE>
responsible for the custody of the corporate books, records, contracts and other
documents. The Secretary may affix the corporate seal to any lawfully executed
documents and shall sign any instruments as may require the Secretary's
signature. The Secretary shall authenticate records of the Company and shall
perform whatever additional duties and have whatever additional powers the Board
of Directors may from time to time assign. In the absence or disability of the
Secretary or at the direction of the Chief Executive Officer, any Assistant
Secretary may perform the duties and exercise the powers of the Secretary.
Section 4.11 Voting of Stock. Unless otherwise ordered by the Board of
Directors or Executive Committee, the Chairman of the Board, the Vice Chairman,
the President or any Executive Vice President of the Company shall have full
power and authority in behalf of the Company to attend and to act and to vote at
any meetings of shareholders of any corporation in which the Company may hold
stock, and at such meetings may possess and shall exercise any and all rights
and powers incident to the ownership of such stock which such owner thereof (the
Company) might have possessed and exercised if present. The Board of Directors
or Executive Committee, by resolution from time to time, may confer like powers
upon any other person or persons.
ARTICLE FIVE
Indemnification
Section 5.1 Definitions. As used in this Article, the term:
(a) "Company" includes any domestic or foreign predecessor entity of the
Company in a merger or other transaction in which the predecessor's
existence ceased upon consummation of the transaction.
(b) "Director" or "Officer" means an individual who is or was a member of
the Board of Directors or an officer elected by the Board of
Directors, respectively, or who, while a Director or Officer, is or
was serving at the Company's request as a director, officer, partner,
trustee, employee, or agent of another domestic or foreign
corporation, partnership, joint venture, trust, employee benefit plan,
or other entity. A Director or Officer is considered to be serving an
employee benefit plan at the Company's request if his or her duties to
the Company also impose duties on, or otherwise involve services by,
the Director or Officer to the plan or to participants in or
beneficiaries of the plan. "Director" or "Officer" includes, unless
the context otherwise requires, the estate or personal representative
of a Director or Officer.
(c) "Disinterested Director" or "Disinterested Officer" means a Director
or Officer, respectively who at the time of an evaluation referred to
in subsection 5.5(b) is not:
-11-
<PAGE>
(1) A Party to the Proceeding; or
(2) An individual having a familial, financial, professional, or
employment relationship with the person whose advance for
Expenses is the subject of the decision being made with respect
to the Proceeding, which relationship would, in the
circumstances, reasonably be expected to exert an influence on
the Director's or Officer's judgment when voting on the decision
being made.
(d) "Expenses" includes counsel fees.
(e) "Liability" means the obligation to pay a judgment, settlement,
penalty, fine (including an excise tax assessed with respect to an
employee benefit plan), or reasonable Expenses incurred with respect
to a Proceeding.
(g) "Party" includes an individual who was, is, or is threatened to be
made a named defendant or respondent in a Proceeding.
(h) "Proceeding" means any threatened, pending, or completed action, suit,
or proceeding, whether civil, criminal, administrative, arbitrative or
investigative and whether formal or informal.
(i) "Reviewing Party" shall mean the person or persons making the
determination as to reasonableness of Expenses pursuant to Section 5.5
of this Article, and shall not include a court making any
determination under this Article or otherwise.
Section 5.2 Basic Indemnification Arrangement.
(a) The Company shall indemnify an individual who is a Party to a
Proceeding because he or she is or was a Director or Officer against
Liability incurred in the Proceeding; provided, however, that the
Company shall not indemnify a Director or Officer under this Article
for any Liability incurred in a Proceeding in which the Director or
Officer is adjudged liable to the Company or is subjected to
injunctive relief in favor of the Company:
(1) For any appropriation, in violation of his or her duties, of any
business opportunity of the Company;
(2) For acts or omissions which involve intentional misconduct or a
knowing violation of law;
-12-
<PAGE>
(3) For the types of liability set forth in Section 14-2-832 of the
Code; or
(4) For any transaction from which he or she received an improper
personal benefit.
(b) If any person is entitled under any provision of this Article to
indemnification by the Company for some portion of Liability incurred,
but not the total amount thereof, the Company shall indemnify such
person for the portion of such Liability to which such person is
entitled.
Section 5.3 Advances for Expenses.
(a) The Company shall, before final disposition of a Proceeding, advance
funds to pay for or reimburse the reasonable Expenses incurred by a
Director or Officer who is a Party to a Proceeding because he or she
is a Director or Officer if he or she delivers to the Company:
(1) A written affirmation of his or her good faith belief that his or
her conduct does not constitute behavior of the kind described in
subsection 5.2(a) above; and
(2) His or her written undertaking (meeting the qualifications set
forth below in subsection 5.3(b)) to repay any funds advanced if
it is ultimately determined that he or she is not entitled to
indemnification under this Article or the Code.
(b) The undertaking required by subsection 5.3(a)(2) above must be an
unlimited general obligation of the proposed indemnitee but need not
be secured and shall be accepted without reference to the financial
ability of the proposed indemnitee to make repayment. If a Director
or Officer seeks to enforce his or her rights to indemnification in a
court pursuant to Section 5.4 below, such undertaking to repay shall
not be applicable or enforceable unless and until there is a final
court determination that he or she is not entitled to indemnification,
as to which all rights of appeal have been exhausted or have expired.
Section 5.4 Court-Ordered Indemnification and Advances for Expenses.
A Director or Officer who is a Party to a Proceeding shall have the rights to
court-ordered indemnification and advances for expenses as provided in the Code.
Section 5.5 Determination of Reasonableness of Expenses.
(a) The Company acknowledges that indemnification of a Director or Officer
under Section 5.2 has been pre-authorized by the Company
-13-
<PAGE>
as permitted by Section 14-2-859(a) of the Code, and that pursuant to
Section 14-2-856 of the Code, no determination need be made for a
specific Proceeding that indemnification of the Director or Officer is
permissible in the circumstances because he or she has met a
particular standard of conduct. Nevertheless, except as set forth in
subsection 5.5(b) below, evaluation as to reasonableness of Expenses
of a Director or Officer for a specific Proceeding shall be made as
follows:
(1) If there are two or more Disinterested Directors, by the Board of
Directors of the Company by a majority vote of all Disinterested
Directors (a majority of whom shall for such purpose constitute a
quorum) or by a majority of the members of a committee of two or
more Disinterested Directors appointed by such a vote; or
(2) If there are fewer than two Disinterested Directors, by the Board
of Directors (in which determination Directors who do not qualify
as Disinterested Directors may participate); or
(3) By the Shareholders, but shares owned by or voted under the
control of a Director or Officer who at the time does not qualify
as a Disinterested Director or Disinterested Officer may not be
voted on the determination.
(b) Notwithstanding the requirement under subsection 5.5(a) that the
Reviewing Party evaluate the reasonableness of Expenses claimed by the
proposed indemnitee, any Expenses claimed by the proposed indemnitee
shall be deemed reasonable if the Reviewing Party fails to make the
evaluation required by subsection 5.5(a) within sixty (60) days
following the proposed indemnitee's written request for
indemnification or advance for Expenses.
Section 5.6 Indemnification of Employees and Agents. The Company may indemnify
and advance Expenses under this Article to an employee or agent of the Company
who is not a Director or Officer to the same extent and subject to the same
conditions that a Georgia corporation could, without shareholder approval under
Section 14-2-856 of the Code, indemnify and advance Expenses to a Director, or
to any lesser extent (or greater extent if permitted by law) determined by the
Chief Executive Officer, in each case consistent with public policy.
Section 5.7 Liability Insurance. The Company may purchase and maintain
insurance on behalf of an individual who is a Director, Officer, employee or
agent of the Company or who, while a Director, Officer, employee or agent of the
Company, serves at the Company's request as a director, officer, partner,
trustee, employee or agent of another domestic or foreign corporation,
partnership, joint venture, trust, employee benefit plan, or other entity
against Liability asserted
-14-
<PAGE>
against or incurred by him or her in that capacity or arising from his or her
status as a Director, Officer, employee, or agent, whether or not the
corporation would have power to indemnify or advance Expenses to him or her
against the same Liability under this Article or the Code.
Section 5.8 Witness Fees. Nothing in this Article shall limit the Company's
power to pay or reimburse Expenses incurred by a person in connection with his
or her appearance as a witness in a Proceeding at a time when he or she is not a
Party.
Section 5.9 Report to Shareholders. To the extent and in the manner required
by the Code from time to time, if the Company indemnifies or advances Expenses
to a Director or Officer in connection with a Proceeding by or in the right of
the Company, the Company shall report the indemnification or advance to the
Shareholders.
Section 5.10 No Duplication of Payments. The Company shall not be liable under
this Article to make any payment to a person hereunder to the extent such person
has otherwise actually received payment (under any insurance policy, agreement
or otherwise) of the amounts otherwise payable hereunder.
Section 5.11 Subrogation. In the event of payment under this Article, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of the indemnitee, who shall execute all papers required and shall
do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable the Company effectively to bring
suit to enforce such rights.
Section 5.12 Contract Rights. The right to indemnification and advancement of
Expenses conferred hereunder to Directors and Officers shall be a contract right
and shall not be affected adversely to any Director or Officer by any amendment
of these Bylaws with respect to any action or inaction occurring prior to such
amendment; provided, however, that this provision shall not confer upon any
indemnitee or potential indemnitee (in his or her capacity as such) the right to
consent or object to any subsequent amendment of these Bylaws.
Section 5.13 Amendments. It is the intent of the Company to indemnify and
advance Expenses to its Directors and Officers to the full extent permitted by
the Code, as amended from time to time. To the extent that the Code is
hereafter amended to permit a Georgia business corporation to provide to its
directors greater rights to indemnification or advancement of Expenses than
those specifically set forth hereinabove, this Article shall be deemed amended
to require such greater indemnification or more liberal advancement of Expenses
to the Company's Directors and Officers, in each case consistent with the Code
as so amended from time to time. No amendment, modification or rescission of
this Article, or any provision hereof, the effect of which would diminish the
rights to indemnification or advancement of Expenses as set forth herein shall
be effective
-15-
<PAGE>
as to any person with respect to any action taken or omitted by such person
prior to such amendment, modification or rescission.
ARTICLE SIX
Capital Stock
Section 6.1 Direct Registration of Shares. The Company may, with the Board of
Directors' approval, participate in a direct registration system approved by the
Securities and Exchange Commission and by the New York Stock Exchange or any
securities exchange on which the stock of the Company may from time to time be
traded, whereby shares of capital stock of the Company may be registered in the
holder's name in uncertificated, book-entry form on the books of the Company.
Section 6.2 Certificates for Shares. Except for shares represented in book-
entry form under a direct registration system contemplated in Section 6.1, the
interest of each Shareholder in the Company shall be evidenced by a certificate
or certificates representing shares of the Company which shall be in such form
as the Board of Directors from time to time may adopt. Share certificates shall
be numbered consecutively, shall be in registered form, shall indicate the date
of issuance, the name of the Company and that it is organized under the laws of
the State of Georgia, the name of the Shareholder, and the number and class of
shares and the designation of the series, if any, represented by the
certificate. Each certificate shall be signed by the Chairman of the Board, the
President or other Chief Executive Officer or a Vice President and also by the
Secretary or may be signed with the facsimile signatures of the Chairman of the
Board, the President or other Chief Executive Officer or a Vice President and of
the Secretary, and in all cases a stock certificate must also be signed by the
transfer agent for the stock. The corporate seal need not be affixed.
Section 6.3 Transfer of Shares. The Board of Directors shall have authority to
appoint a transfer agent and/or a registrar for the shares of its capital stock,
and to empower them or either of them in such manner and to such extent as it
may deem best, and to remove such agent or agents from time to time, and to
appoint another agent or other agents. Transfers of shares shall be made upon
the transfer books of the Company, kept at the office of the transfer agent
designated to transfer the shares, only upon direction of the registered owner,
or by an attorney lawfully constituted in writing. With respect to certificated
shares, before a new certificate is issued, the old certificate shall be
surrendered for cancellation or, in the case of a certificate alleged to have
been lost, stolen, or destroyed, the requirements of Section 6.5 of these Bylaws
shall have been met. Transfer of shares shall be in accordance with such
reasonable rules and regulations as may be made from time to time by the Board
of Directors.
Section 6.4 Duty of Company to Register Transfer. Notwithstanding any of the
provisions of Section 6.3 of these Bylaws, the Company is under a duty to
register the transfer of its shares only if:
-16-
<PAGE>
(a) the certificate or transfer instruction is endorsed by the appropriate
person or persons; and
(b) reasonable assurance is given that the endorsement or affidavit is
genuine and effective; and
(c) the Company either has no duty to inquire into adverse claims or has
discharged that duty; and
(d) the requirements of any applicable law relating to the collection of
taxes have been met; and
(e) the transfer in fact is rightful or is to a bona fide purchaser.
Section 6.5 Lost, Stolen or Destroyed Certificates. Any person claiming a
share certificate to be lost, stolen or destroyed shall make an affidavit or
affirmation of the fact in the manner required by the Company and, if the
Company requires, shall give the Company a bond of indemnity in form and amount,
and with one or more sureties satisfactory to the Company, as the Company may
require, whereupon an appropriate new certificate may be issued in lieu of the
one alleged to have been lost, stolen or destroyed.
Section 6.6 Authorization to Issue Shares and Regulations Regarding Transfer
and Registration. The Board of Directors and the Executive Committee shall have
power and authority to issue shares of capital stock of the Company and to make
all such rules and regulations as, respectively, they may deem expedient
concerning the transfer and registration of shares of the capital stock of the
Company.
ARTICLE SEVEN
Distributions and Dividends
Section 7.1 Authorization or Declaration. Unless the Articles of Incorporation
provide otherwise, the Board of Directors from time to time in its discretion
may authorize or declare distributions or share dividends in accordance with the
Code.
Section 7.2 Record Date with Regard to Distributions and Share Dividends. For
the purpose of determining Shareholders entitled to a distribution (other than
one involving a purchase, redemption, or other reacquisition of the Company's
shares) or a share dividend, the Board of Directors may fix a date as the record
date. If no record date is fixed by the Board of Directors, the record date
shall be determined in accordance with the provisions of the Code.
-17-
<PAGE>
ARTICLE EIGHT
Miscellaneous
Section 8.1 Corporate Seal. If the Board of Directors determines that there
should be a corporate seal for the Company, it shall be in the form as the Board
of Directors may from time to time determine.
Section 8.2 Inspection of Books and Records. The Board of Directors shall have
power to determine which accounts, books and records of the Company shall be
opened to the inspection of Shareholders, except those as may by law
specifically be made open to inspection, and shall have power to fix reasonable
rules and regulations not in conflict with the applicable law for the inspection
of accounts, books and records which by law or by determination of the Board of
Directors shall be open to inspection. Without the prior approval of the Board
of Directors in its discretion, the right of inspection set forth in Section 14-
2-1602(c) of the Code shall not be available to any Shareholder owning two
percent or less of the shares outstanding.
Section 8.3 Conflict with Articles of Incorporation or Code. To the extent
that any provision of these Bylaws conflicts with any provision of the Articles
of Incorporation, such provision of the Articles of Incorporation shall govern.
To the extent that any provision of these Bylaws conflicts with any non-
discretionary provision of the Code, such provision of the Code shall govern.
Section 8.4 Severability. In the event that any of the provisions of these
Bylaws (including any provision within a single section, subsection, division or
sentence) is held by a court of competent jurisdiction to be invalid, void or
otherwise unenforceable, the remaining provisions of these Bylaws shall remain
enforceable to the fullest extent permitted by law.
ARTICLE NINE
Amendments
Section 9.1 Amendments. Subject, in each case, to the Articles of
Incorporation:
(a) the Board of Directors shall have power to alter, amend or repeal these
Bylaws or adopt new Bylaws; and
(b) any Bylaws adopted by the Board of Directors may be altered, amended or
repealed, and new Bylaws may be adopted, by the Shareholders, as
provided by the Code; and
(c) Articles Ten and Eleven of these Bylaws shall be amended only in the
manner provided by relevant provisions of the Code.
-18-
<PAGE>
ARTICLE TEN
Fair Price Requirements
Section 10.1 Fair Price Requirements. All of the requirements of Article 11,
Part 2, of the Code, included in Sections 14-2-1110 through 1113 (and any
successor provisions thereto), shall be applicable to the Company in connection
with any business combination, as defined therein, with any interested
shareholder, as defined therein.
ARTICLE ELEVEN
Business Combinations
Section 11.1 Business Combinations. All of the requirements of Article 11,
Part 3, of the Code, included in Sections 14-2-1131 through 1133 (and any
successor provisions thereto), shall be applicable to the Company in connection
with any business combination, as defined therein, with any interested
shareholder, as defined therein.
-19-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.18
<SEQUENCE>3
<DESCRIPTION>AGREE. FOR COMPUTERIZED CREDIT REPORTING
<TEXT>
<PAGE>
EXHIBIT 10.18
================================================================================
AGREEMENT FOR COMPUTERIZED
CREDIT REPORTING SERVICES AND
OPTIONS TO PURCHASE AND SELL
ASSETS
August 1, 1988
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
I. DEFINITIONS ................................................... 3
II. CONVERSION TO ACROPAC SYSTEM(TM) .............................. 15
1. Conversion Services ..................................... 15
2. Master Register system .................................. 17
3. Conversion Completion ................................... 18
III. ACROPAC(TM) SERVICES .......................................... 19
4. Services Description .................................... 19
5. Time of Performance ..................................... 25
6. Equipment ............................................... 25
7. Ownership of Data ....................................... 26
8. Charges for ACROPAC System(TM) Services ................. 28
IV. PUT AND CALL OF ASSETS ........................................ 32
9. Certain Calculations; Payment of Consideration .......... 32
10. Put of Accounts Management Assets and Liabilities........ 32
11. Put of Subsidiaries' Assets and Liabilities ............. 40
12. Call of Subsidiaries' Assets and Liabilities ............ 51
13. Conditional Right to Require Stock Sale and Price
Adjustment .............................................. 53
13A. Generally Accepted Accounting Principles;
Cooperation; Securities Laws ............................ 55
V. GUARANTEE OF OPERATING INCOME ................................. 55
14. Guarantee ............................................... 55
VI. DURATION OF THIS AGREEMENT .................................... 62
15. Duration ................................................ 62
VII. BREACH OF THIS AGREEMENT ...................................... 63
16. Breach ................................................. 63
17. Limitation ............................................. 65
18. Rights Upon Termination ................................ 65
(i)
<PAGE>
VIII. REPRESENTATIONS, WARRANTIES AND COVENANTS ..................... 68
19. Representations and Warranties of CSC, Bureaus and
Accounts Management ..................................... 68
20. Representations and Warranties of Equifax and CBI ....... 71
21. Covenants of CSC, Bureaus and Accounts Management
and CBI ................................................. 73
IX. MISCELLANEOUS TERMS AND PROVISIONS ............................ 75
22. Limitations Upon Liability of CBI ....................... 75
23. Release With Respect to Accuracy of Data ................ 76
24. Modifications to ACROPAC(TM)............................. 77
25. Compliance With Laws .................................... 78
26. Force Majeure ........................................... 78
27. Relationship of Parties ................................. 79
28. No Third-Party Benefits ................................. 79
29. Assignment .............................................. 80
30. Retention of Credit Data ................................ 81
31. Remote Terminals ........................................ 81
32. Purchase of Supplies .................................... 81
33. Sales of Reporting and Collection Businesses ............ 81
34. Exclusion of Naples ..................................... 82
35. CSC Guaranty of Performance ............................. 82
36. Equifax Guaranty of Performance ......................... 84
37. Notices ................................................. 86
38. Severability ............................................ 86
39. Exhibits ................................................ 87
40. Confidentiality of ACROPAC System(TM) ................... 87
41. Confidentiality of Information .......................... 88
42. Injunctive Relief ....................................... 88
43. Use of ACROPAC(TM) Services ............................. 89
44. CBI Affiliate System .................................... 89
45. No Limitation on Business ............................... 90
46. Conversion of Associates ................................ 91
47. Credit Bureau of Albuquerque ............................ 91
48. Special Provisions ...................................... 92
49. Survival ................................................ 95
50. Headings ................................................ 96
51. Governing Law ........................................... 96
52. Waiver of Rights ........................................ 96
53. Entire Agreement ........................................ 96
54. Counterparts ............................................ 96
(ii)
<PAGE>
EXHIBITS
Page of
Exhibits
--------
Exhibit A - The Automated Credit Reporting Online Package
(ACROPAC(TM)) System Description ........................... 1
Exhibit B - Purge Rules for ACROPAC System(TM).......................... 12
Exhibit C - Description of Online Services ............................. 16
Exhibit D - Equipment Required for Continuation of Bureau Operation
under ACROPAC System(TM).................................... 22
Exhibit E - Service Areas .............................................. 24
Exhibit F - Associates and Associates' Zip Codes ....................... 26
Exhibit G - License Agreement .......................................... 27
Exhibit H - Financial Statements ....................................... 40
Exhibit I - Leases to be Assigned ...................................... 41
Exhibit J - Zip Codes in New Mexico of Amarillo Credit Association
and Retail Merchant's Association, Inc. (in Lubbock) ....... 43
(iii)
<PAGE>
EXHIBIT 10.18
THIS AGREEMENT, made as of this 1st day of August, 1988, by and among THE
CREDIT BUREAU, INCORPORATED OF GEORGIA and EQUIFAX INC., both Georgia
corporations with their principal places of business at 1600 Peachtree Street,
N.W., Atlanta, Georgia 30309 ("CBI" and "Equifax," respectively), and COMPUTER
SCIENCES CORPORATION, a Nevada corporation with its principal place of business
at 2100 East Grand Avenue, El Segundo, California 90245 ("CSC"), CSC CREDIT
SERVICES, INC., a Texas corporation with its principal place of business at 652
E. North Belt, Suite 400, Houston, Texas 77060 ("Credit Services"), CREDIT
BUREAU OF CINCINNATI, INC., an Ohio corporation with its principal place of
business at 309 Vine Street, Suite 650, Cincinnati, Ohio 45202 ("Cincinnati"),
CREDIT BUREAU OF GREATER KANSAS CITY, INC., a Missouri corporation with its
principal place of business at 906 Grand Avenue, Suite 300, Kansas City,
Missouri 64106 ("Kansas City"), JOHNS HOLDING COMPANY, a Delaware corporation
with its principal place of business at 260 E. Wood Street, Decatur, Illinois
62523 ("JHC"), CSC CREDIT SERVICES OF MINNESOTA, INC., a Texas corporation with
its principal place of business at 652 E. North Belt, Suite 400, Houston, Texas
77060 ("Minnesota") (Credit Services, Cincinnati, Kansas City, JHC and Minnesota
being hereinafter referred to collectively as the "Bureaus" and sometimes
individually as a "Bureau"), and CSC ACCOUNTS MANAGEMENT, INC., a Texas
corporation with its principal
-1-
<PAGE>
place of business at 652 E. North Belt, Suite 400, Houston, Texas 77060
("Accounts Management");
W I T N E S S E T H :
WHEREAS, CBI has developed, owns and employs an automated credit reporting
system entitled "The Automated Credit Reporting Online Package"; and
WHEREAS, Bureaus desire to purchase and otherwise utilize, and CBI desires
to sell and otherwise provide, the services of CBI and the ACROPAC System(TM)
upon the terms and conditions hereinafter set forth; and
WHEREAS, CBI provides simultaneously ACROPAC System(TM) services to
various other credit reporting entities or bureaus and has developed systems and
methods by which such bureaus and CBI may exchange data, market credit services
or otherwise interact with respect to ACROPAC System(TM) services, and Bureaus
wish to participate therein; and
WHEREAS, Bureaus desire that their credit reporting operations be
converted by CBI as necessary for Bureaus to participate in the ACROPAC
System(TM) upon the terms and conditions hereinafter set forth; and
WHEREAS, Bureaus desire that the ACROPAC System(TM) services described by
this Agreement be provided by CBI to Bureaus; and
-2-
<PAGE>
WHEREAS, Bureaus, Accounts Management and CBI desire to provide for the
option to sell by Subsidiaries, as hereinafter defined, and the option to
purchase and assume by CBI of, the assets and liabilities of Subsidiaries upon
the terms set forth herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
I. DEFINITIONS
For purposes of this Agreement:
"Accounts Management" means CSC Accounts Management, Inc., a Texas
corporation;
"Accounts Management Acquired Corporations" shall have the meaning
ascribed thereto in Paragraph 10(c) of this Agreement;
"Accounts Management Assets and Liabilities" shall have the meaning
ascribed thereto in Paragraph 10(b) of this Agreement;
"Accounts Management Assets and Liabilities Price" shall have the meaning
ascribed thereto in Paragraph 10(a) of this Agreement;
"Accounts Management Current Assets Amount" shall have the meaning
ascribed thereto in Paragraph 10(a) (iii) of this Agreement;
-3-
<PAGE>
"Accounts Management Long-Term Debt Amount" shall have the meaning
ascribed thereto in Paragraph 10(a) (iii) of this Agreement;
"Accounts Management Net Worth Amount" shall have the meaning ascribed
thereto in Paragraph 10(a) (iii) of this Agreement;
"Accounts Management Underfunding Amount" shall have the meaning ascribed
thereto in Paragraph 10(a) (iii) of this Agreement;
"Acquired Corporations" shall have the meaning ascribed thereto in
Paragraph 11(c) of this Agreement.
"Acquired Product" means the sum of (i) the product of (A) 3.0, times (B)
the Reporting Revenues of the Acquired Corporations generated during the
Calculation Period, plus (ii) the product of (C) 1.0, times (D) the sum of the
Collection Revenues and the Other Business Revenues of the Acquired Corporations
generated during the Calculation Period (such Reporting Revenues, Collection
Revenues and Other Business Revenues of the Acquired Corporations to be
calculated taking into account the provisions of Paragraph 9 (a) of this
Agreement);
"acquisition date" shall have the meaning ascribed thereto in Paragraph 48
of this Agreement;
"Acquisition Debt" of any Person means any amounts owed by such Person
resulting, directly or indirectly, from the financing of the purchase price of
the outstanding shares of
-4-
<PAGE>
capital stock or assets of an entity acquired by such Person (which amounts in
no event shall include any liabilities of such entity at the time of acquisition
that are unrelated to any direct or indirect financing of the purchase price of
such entity);
"ACROPAC(TM)", "ACROPAC System(TM) ", "ACROPAC II(TM) " and "ACROPAC II
System(TM)" mean the CBI Automated Credit Reporting Online Package which, for
purposes of this Agreement, shall mean the reporting system described in Exhibit
A to this Agreement and shall include the automated credit reporting system
owned, utilized, offered and employed by CBI from time to time;
"Affiliate Bureaus" means those credit bureaus not owned by CBI, other
than the Bureaus, to which CBI provides ACROPAC(TM) services;
"Albuquerque" shall have the meaning ascribed thereto in Paragraph 47 of
this Agreement;
"Asset Sale' shall have the meaning ascribed thereto in Paragraph 13(a) of
this Agreement;
"Associates" shall have the meaning ascribed thereto in Paragraph 7(d) of
this Agreement;
"billable inquiry" shall have the meaning ascribed thereto in Paragraph
8(a) of this Agreement;
"Bureau" and "Bureaus" mean, respectively, Credit Services, Cincinnati,
Kansas City, JHC and Minnesota and such
-5-
<PAGE>
other entities as may be deemed to be Bureaus pursuant to Paragraph 48 hereof,
singly, and all of them, collectively;
"Calculation Period" means the twelve calendar months immediately
preceding the calendar month in which the Subsidiaries or CBI, as the case may
be, give(s) written notice pursuant to Paragraph 11 or 12, respectively, of
their or its intent to sell to CBI or purchase from the Subsidiaries, as the
case may be, the Subsidiaries' Assets and Liabilities;
"Cap" shall have the meaning ascribed thereto in Paragraph 14(d) of this
Agreement;
"CBDC" means Credit Bureau Data Centers, Inc., a Texas corporation and
wholly-owned subsidiary of Credit Services;
"CBI" means The Credit Bureau, Incorporated of Georgia, a Georgia
corporation;
"CBI Appraiser" means one of the largest fifteen (15) investment banking
firms (as measured by total revenues) in the United States as to which
information pertaining to revenues is publicly available, selected by CBI to
appraise the Subsidiaries' Assets and Liabilities;
"Change of Control" of an entity means the acquisition after the date of
this Agreement by any Person, or any number of Persons acting in concert with
one another, directly or indirectly, of shares of any and all classes of
outstanding capital stock of such entity sufficient in total combined voting
power to elect a majority of the board of directors
-6-
<PAGE>
of that entity (assuming, for this purpose, that all members are elected at the
same time, notwithstanding the existence of a classified board of directors);
"Cincinnati" means Credit Bureau of Cincinnati, Inc., an Ohio corporation;
"Collection Product" means the product of (A) 1.0, times (B) the sum of
the Collection Revenues of the Bureaus and Accounts Management generated during
the Calculation Period;
"Collection/Reporting Revenue Amount" shall have the meaning ascribed
thereto in Paragraph 10(c) of this Agreement;
"Collection Revenues of any entity means the revenues of such entity
generated from the performance by such entity of Collection Services;
"Collection Services" of any entity means services provided by such entity
relating to the collection of debt assigned to such entity or owned or held by a
customer of such entity, consisting of collection of delinquent accounts, check
verification services, check authorization services, check guarantee services,
billing services, services performed by accounts reCBIvable systems (including,
without limitation, billing, monitoring, scoring and control services), skip
tracing, sales or rentals of computer terminals, modems and other related
equipment and assets used in connection with collection of debt, and any other
types of services performed from time to time by CBI relating to collection of
debt;
-7-
<PAGE>
"Cost Allocation System" shall have the meaning ascribed thereto in
Paragraph 8(c) of this Agreement;
"Credit Services" means CSC Credit Services, Inc., a Texas corporation;
"CSC" means Computer Sciences Corporation, a Nevada corporation;
"CSC Consolidated Group" shall have the meaning ascribed thereto in
Paragraph 13(b) of this Agreement;
"demographic data" means identification information, including name,
address, previous address, date of birth, social security number, dependents,
employer, name of spouse and similar information;
"Designated Date" shall have the meaning ascribed thereto in Paragraph
11(a) (i) of this Agreement;
"Equifax" means Equifax Inc., a Georgia corporation;
"ERISA" shall have the meaning ascribed thereto in Paragraph 10(a) (iii)
of this Agreement;
"Exit Costs" shall have the meaning ascribed thereto in Paragraph 14(e) of
this Agreement;
"Federal Income Tax Law Amendment" shall have the meaning ascribed thereto
in Paragraph 13(a) of this Agreement;
"Financial Statements" shall have the meaning ascribed thereto in
Paragraph 19(e) of this Agreement;
"Flat Amount" shall have the meaning ascribed thereto in Paragraph 8(a) of
this Agreement;
-8-
<PAGE>
"Following Year" shall have the meaning ascribed thereto in Paragraph 8(a)
of this Agreement;
"Group" shall have the meaning ascribed thereto in Paragraph 14(a) of this
Agreement;
"Guaranteed Amount" shall have the meaning ascribed thereto in Paragraph
14(b) of this Agreement;
"Index" means the Consumer Price Index for All Urban Consumers: U.S. City
Average, All Items (1967=100), issued by the Bureau of Labor Statistics of the
U.S. Department of Labor, as the same from time to time may be modified,
supplemented or adjusted by the Bureau of Labor Statistics;
"Initial Term" shall have the meaning ascribed thereto in Paragraph 15 of
this Agreement;
"Initial Term Expiration Date" shall have the meaning ascribed thereto in
Paragraph 11(a) (i) of this Agreement;
"JHC" means Johns Holding Company, a Delaware corporation;
"Kansas City" means Credit Bureau of Greater Kansas City, Inc., a Missouri
corporation;
"Late Conversion Damages" shall have the meaning ascribed thereto in
Paragraph 3 of this Agreement;
"Master Register" or "Master Register System" shall have the meaning
ascribed thereto in Paragraph 2 of this Agreement;
-9-
<PAGE>
"Minnesota" means CSC Credit Services of Minnesota, Inc., a Texas
corporation;
"Most Favored Customer Rate" for any good or service provided by CBI
hereunder shall mean the lowest rate charged by CBI to an Affiliate Bureau for
such good or service;
"Naples" shall have the meaning ascribed thereto in Paragraph 34 of this
Agreement;
"Net CBI Liability" shall have the meaning ascribed thereto in Paragraph
14(d) of this Agreement;
"Net Payment Amount" shall have the meaning ascribed thereto in Paragraph
14(c) (v) of this Agreement;
"online" shall have the meaning ascribed thereto in Paragraph 4(c) of this
Agreement;
"Online Cut-Over Date" shall have the meaning ascribed thereto in
Paragraph 3 of this Agreement;
"Operating Assets" of any entity means tangible operating assets used in
the ordinary course of business of such entity, and shall include, but not be
limited to, plant, property and equipment, and land, buildings, leasehold
improvements, furniture and fixtures of such entity;
"Operating Income" shall have the meaning ascribed thereto in Paragraph
14(e) of this Agreement;
"Other Business Product" means the product of (A) 1.0, times (B) the sum
of the Other Business Revenues of the Bureaus
-10-
<PAGE>
and Accounts Management generated during the Calculation Period;
"Other Business Revenues" of any entity means revenues of such entity
other than Reporting Revenues and Collection Revenues;
"Owned Months" shall have the meaning ascribed thereto in Paragraph 9(a)
of this Agreement;
"Person" shall mean an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization and a governmental entity or any department, agency or political
subdivision thereof;
"Preceding Quarters" shall have the meaning ascribed thereto in Paragraph
14(c) (iii) of this Agreement;
"Renewal Term" shall have the meaning ascribed thereto in Paragraph 15 of
this Agreement;
"Reporting Product" means the product of (A) 3.0, times (B) the sum of the
Reporting Revenues of the Bureaus and Accounts Management generated during the
Calculation Period;
"Reporting Revenues" of an entity means the revenues (excluding any
Royalty) generated from the performance of Reporting Services by such entity;
"Reporting Services" of any entity means consumer credit reporting
services performed by such entity consisting of local, national or inter-bureau
sales of credit reports,
-11-
<PAGE>
property appraisals, property surveys, property title reports, mortgage credit
reports or other legal or public information, whether given verbally, in
writing, through access by a computer terminal or otherwise, sales or rentals of
computer terminals, modems and other related equipment and assets used in
connection with consumer credit reporting, pre-screening promotional sales,
account monitoring, scoring and control services, preparation and sales of
extracts, indexes, bulletins and lists, consumer interviews, any other sale of
products or services derived from a consumer credit reporting data base, and any
other types of services performed from time to time by CBI relating to consumer
credit reporting;
"Revenues" of a referenced entity means revenues of that entity, including
revenues of all subsidiaries of the referenced entity, unless such subsidiary is
selling assets to CBI pursuant to Paragraph 10, 11 or 12 hereof;
"Royalty" shall have the meaning ascribed thereto in Paragraph 8(e) of
this Agreement;
"Specified Months" shall have the meaning ascribed thereto in Paragraph
10(a) (i) of this Agreement;
"Stock Sale" shall have the meaning ascribed thereto in Paragraph 13(a) of
this Agreement;
"Subject Guaranteed Amount" shall have the meaning ascribed thereto in
Paragraph 14(c) (ii) of this Agreement;
-12-
<PAGE>
"Subject Operating Income" shall have the meaning ascribed thereto in
Paragraph 14(c) (i) of this Agreement;
"Subject Quarter" shall have the meaning ascribed thereto in Paragraph
14(c) of this Agreement;
"Subject Year" shall have the meaning ascribed thereto in Paragraph 14(c)
of this Agreement;
"Subsidiaries" means the Bureaus, Accounts Management and the Acquired
Corporations, collectively;
"Subsidiaries' Appraiser" means one of the largest fifteen (15) investment
banking firms (as measured by total revenues) in the United States as to which
information pertaining to revenues is publicly available, selected by
Subsidiaries to appraise the Subsidiaries' Assets and Liabilities;
"Subsidiaries' Assets and Liabilities" shall have the meaning ascribed
thereto in Paragraph 11(b) of this Agreement;
"Subsidiaries' Current Assets Amount" shall have the meaning ascribed
thereto in Paragraph 11(a) (v) of this Agreement;
"Subsidiaries' Long-Term Debt Amount" shall have the meaning ascribed
thereto in Paragraph 11(a) (v) of this Agreement;
"Subsidiaries' Net Worth Amount" shall have the meaning ascribed thereto
in Paragraph 11(a) (v) of this Agreement;
"Subsidiaries' Underfunding Amount" shall have the meaning ascribed
thereto in Paragraph 11(a) (v) of this Agreement;
-13-
<PAGE>
"Sunset Date" shall have the meaning ascribed thereto in Paragraph 13(a)
of this Agreement;
"Termination Notice" shall have the meaning ascribed thereto in Paragraph
12(a) of this Agreement;
"Test Statement" shall have the meaning ascribed thereto in Paragraph
14(c) of this Agreement;
"Third Appraiser" means one of the largest fifteen (15) investment banking
firms (as measured by total revenues) in the United States as to which
information pertaining to revenues is publicly available, selected by mutual
agreement of the CBI Appraiser and the Subsidiaries' Appraiser to appraise the
Subsidiaries' Assets and Liabilities;
"Total Revenue" shall have the meaning ascribed thereto in Paragraph 14(b)
of this Agreement;
"Total Revenue Amount" shall have the meaning ascribed thereto in
Paragraph 10(c) of this Agreement;
"Two-Month Period" shall have the meaning ascribed thereto in Paragraph
4(i) of this Agreement;
"Year-to-Date Guaranteed Amount" shall have the meaning ascribed thereto
in Paragraph 14 (c) (iv) of this Agreement; and
"Year-to-Date Operating Income" shall have the meaning ascribed thereto in
Paragraph 14(c) (iii) of this Agreement;
-14-
<PAGE>
II. CONVERSION TO ACROPAC SYSTEM(TM)
1. Conversion Services: (a) Certain automated credit reporting records and
other such files of Bureaus require conversion to permit utilization of the
ACROPAC System(TM) with respect thereto pursuant to this Agreement. CBI shall
convert such automated credit reporting records and other such files of Bureaus
for use on the ACROPAC System(TM) in accordance with the provisions of Paragraph
3 of this Agreement.
(b) Bureaus shall obtain from Bureaus' current provider of automated
credit reporting services the computer documentation, sample files on magnetic
tape, file copies and other pertinent data, information and documents necessary
to accomplish such file conversion by CBI. Any costs incurred by Bureaus'
current provider of automated credit reporting services for preparation and
delivery by such current provider of such data, documents, documentation, sample
files or complete copies, on magnetic tape, of the files and data of Bureaus
maintained or held by such current provider, including, but not limited to,
costs of copying, preparing and shipping of the necessary data, will be borne by
CBI. CBI shall pay for all costs of conversion, including such programming and
related tasks as are necessary to convert Bureaus' files and records from the
system of Bureaus' current provider to the ACROPAC System(TM) data format.
-15-
<PAGE>
(c) Bureaus will designate and make available to CBI a representative
qualified to assist in the resolution of issues arising during conversion,
including those involving missing data, incomplete data or data which is
incompatible with the ACROPAC System(TM). CBI shall provide data processing
personnel to accomplish necessary systems and conversion tasks and shall
designate a representative for liaison with Bureaus.
(d) Bureaus shall provide CBI at all reasonable times with access to all
files, records and other material necessary for the conversion of Bureaus' data
and shall permit CBI, or cause CBI to be permitted, to place such equipment on
the premises of Bureaus as is reasonably necessary to effect the conversion of
Bureaus' data to the ACROPAC System(TM).
(e) In preparing Bureaus' magnetic tapes, files and records for conversion
hereunder and in converting the same, CBI shall apply the purge rules as set
forth by Exhibit B hereto.
(f) Bureaus will cooperate with and reasonably assist CBI regarding
conversion of reporting records, files and other information of Bureaus to the
ACROPAC System(TM) as provided in this Paragraph 1.
-16-
<PAGE>
2. Master Register System:
(a) Prior to the commencement of conversion, Bureaus shall
reasonably assist CBI in preparing the Master Register System, as described in
Exhibit C attached hereto, for utilization of the ARAPAC II component of the
ACROPAC System(TM).
(b) Prior to the commencement of conversion, Bureaus shall provide
to CBI complete current lists of all customers of Bureaus, along with the
account numbers of each customer and such other information concerning each
customer as CBI shall reasonably request. Upon reCBIpt of said lists and
information, CBI shall assign to each customer of Bureaus new account numbers
compatible with the ACROPAC System(TM). CBI shall also provide Bureaus with a
table reflecting the conversion from the old account numbers to the new numbers.
(c) CBI also shall provide each Bureau from time to time at no
charge with a list of additional account numbers to be assigned to any future
customers of such Bureau in quantities sufficient for such purpose. Each Bureau
shall be responsible for assigning such additional account numbers to new
customers of such Bureau, and such Bureau shall maintain its customer Master
Register on the ACROPAC System(TM) through equipment of such Bureau.
-17-
<PAGE>
3. Conversion Completion: CBI warrants that conversion of all records and
files of Bureaus to the ACROPAC System(TM) shall be completed by, and the online
date with respect to all such converted data shall occur no later than, the date
which is eighteen (18) months from the date of this Agreement, at or prior to
7:00 a.m., Eastern Standard/Eastern Daylight Time (the "Online Cut-Over Date").
Bureaus agree to cooperate with CBI in order to complete such conversion by the
Online Cut-Over Date. Each Bureau shall, within thirty (30) days after reCBIpt
of a written request from CBI, provide to CBI the following: (i) a test tape
that consists of at least one percent (1%) of the records and files of such
Bureau to be converted to the ACROPAC System(TM); (ii) information concerning
the record layout, specifications and billing system related to the records and
files to be converted hereunder; and (iii) two (2) complete sets, on magnetic
tape or tapes, of the entire credit reporting file of such Bureau to be
converted hereunder. If CBI fails to convert all such records and files of
Bureaus to the ACROPAC System(TM) by the Online Cut-Over Date, then Bureaus
shall reCBIve monthly credits on invoices, commencing with the first month after
the Online Cut-Over Date, for any lost revenues, extraordinary expenses and
other damages sustained by Bureaus arising from CBI's late conversion of such
records and files (collectively, the "Late Conversion Damages"). Any such
credits for the Late
-18-
<PAGE>
Conversion Damages shall be given in addition to any amounts paid by CBI
pursuant to Paragraph 14 of this Agreement, and such credits shall in no event
be deemed a payment made by CBI pursuant to Paragraph 14 of this Agreement.
III. ACROPAC(TM) SERVICES
4. Services Description. Commencing with completion of conversion of all
records and files of any Bureau to the ACROPAC System(TM) or the Online Cut-Over
Date, whichever shall first occur, and for the term of this Agreement:
(a) (i) CBI shall furnish and provide to such Bureau ACROPAC(TM)
online services hereunder for all credit data and records owned or in the
possession of such Bureau, all of which data and records shall be included upon
the ACROPAC System(TM) and identified with respect to such Bureau in accordance
with Paragraph 7 hereof, as such data and records are updated, supplemented and
periodically purged in accordance herewith, and for all consumer credit
reporting and similar or related services based upon or utilizing such data and
records.
(ii) In the service areas listed on Exhibit E attached hereto, such
Bureau shall use, employ and participate in the ACROPAC System(TM), pursuant to
and in accordance with this Agreement exclusively (that is, to the exclusion of
all other automated credit reporting or credit information systems), for all
consumer credit data or records owned or law-
-19-
<PAGE>
fully possessed by such Bureau, including all credit reporting data and records
of such Bureau within the ACROPAC System(TM), as identified pursuant to
Paragraph 7 hereto and as updated, supplemented, and periodically purged in
accordance herewith, to the extent such Bureau uses such consumer credit data or
records to provide consumer credit reporting services. In the service areas
listed on Exhibit E attached hereto, CBI shall provide during the term of this
Agreement ACROPAC(TM) online services and other services described herein only
and exclusively to Bureaus, those credit bureaus reCBIving credit reporting
services from CBDC on the date hereof (limited, however, to those zip codes now
assigned to such credit bureaus and identified on Exhibit F), any credit bureaus
acquired in such service areas by CSC or any Bureau, and any customers of any of
the foregoing.
(b) CBI shall have no responsibility whatsoever for the cost,
operation, maintenance or other features of any telecommunication system or
network used by such Bureau or its customers in connection with services
provided under this Agreement from the front-end processor(s) outward to the
customer terminals; provided that CBI shall pay all costs relating to the
network management function and all such front-end processor(s), which are
located at the CBI data processing center in Atlanta, Georgia. CBI agrees to
provide host based network management software for use in isolat-
-20-
<PAGE>
ing and resolving communication systems problems and to cooperate fully with
such Bureau in using such software for such function.
(c) For purposes of this Agreement, the term "online" shall mean
direct access to credit information maintained in the ACROPAC System(TM) to
which any Bureau is entitled to access pursuant to, and for purposes or uses
permitted by, this Agreement by means of the appropriate inquiry through a
terminal maintained by such Bureau or by a customer of such Bureau. With respect
to each Bureau, credit reporting services hereunder shall commence on the Online
Cut-Over Date or the completion of conversion of all records and files of such
Bureau to the ACROPAC System(TM), whichever shall first occur.
(d) In accordance with the Autodata Input provisions of Exhibit C
hereto and subject to the provisions of Paragraph 4(i) of this Agreement, CBI
will, at its expense, update each Bureau's credit data subject to this Agreement
with such traditional credit record autodata input from credit grantor sources
which then supply the same to either CBI or such Bureau. Unless CBI specifically
directs to the contrary, such Bureau shall be responsible for obtaining such
automated record data and authorization for its use from suppliers that supply
to such Bureau. From time to time, CBI may obtain and add to each Bureau's
ACROPAC System(TM) files, other data (including that described by Paragraph 7(b)
herein below)
-21-
<PAGE>
generally not included within traditional credit grantor trade autodata input.
(e) CBI shall purge credit data on the ACROPAC system(TM) identified
as belonging to such Bureau pursuant to Paragraph 7 hereof in accordance with
the retention requirement of the Fair Credit Reporting Act (15 U.S.C.ss.1681, et
seq.) and the purge rules of CBI as set forth on Exhibit B hereto. Any other
purging of such Bureau's data shall be performed only by mutual consent of CBI
and such Bureau.
(f) Services under this Agreement shall not include the use or sale
of credit data of CBI, any credit bureau owned by CBI or of any Affiliate Bureau
for purposes not authorized by CBI (which purposes shall be authorized by CBI
during times when similar authorization is permitted to any Affiliate Bureau or
credit bureau owned by CBI), and no Bureau shall utilize or sell any such data,
or permit any customer of such Bureau to utilize or sell any such data, for
unauthorized purposes.
(g) CBI shall provide, at CBI's expense, all new product
developments, system enhancements, advertising and promotion of the ACROPAC
System(TM). In connection therewith, a representative of Bureaus shall be
appointed by CBI to the Change Control Board which shall be maintained by CBI
for the purpose of formulating, directing, prioritizing and mon-
-22-
<PAGE>
itoring such developments, enhancements, advertising and promotion.
(h) CSC and such Bureau shall be entitled to access all data,
features, functions, components, services, benefits and options of the ACROPAC
System(TM) and other credit reporting or collections systems offered to any
credit bureau owned by CBI or any Affiliate Bureau, at the Most Favored Customer
Rate.
(i) CBI agrees to use its best efforts to cause, during any
two-month period during the term of this Agreement (a "Two-Month Period"):
(1) The ACROPAC System(TM) to be fully operational and accessible
online by terminals of Bureaus and their customers for an average,
computed over the entire said Two-Month Period, of not less than
ninety-eight percent (98%) of the hours indicated in Paragraph 5 of this
Agreement; and
(2) CBI's ACROPAC(TM) average response time per response to Bureaus,
computed over the entire said Two-Month Period, to be not more than ten
(10) seconds; and
(3) Ninety percent (90%) of all non-malfunctioning automated record
data reCBIved by CBI from vendors or any Bureau during said Two-Month
Period to be updated within fourteen (14) days of reCBIpt by CBI, and one
hundred percent (100%) of all such non-malfunctioning automated record
data to be updated within twenty (20) days of reCBIpt by CBI; and new
supplier data reCBIved by CBI in the standard format to be updated within
thirty (30) days of reCBIpt by CBI, and malfunctioning record data that
remains within the control of CBI to be updated within thirty (30) days of
malfunction.
-23-
<PAGE>
Should CBI fail to perform to any of the above levels and should
such failure not be caused by the act of a third party outside the control of
CBI, Credit Services' sole remedy shall be to give notice of such failure to CBI
within fifteen (15) days after the end of such Two-Month Period. CBI's sole
obligation with respect to such notice shall be to respond in writing thereto
within fourteen (14) days after reCBIpt thereof as to what efforts will be
undertaken to correct any such failure.
(j) No pre-screening, credit promotions, marketing lists or similar
programs with respect to credit data of CBI, any credit bureau owned by CBI or
of any Affiliate Bureau shall be provided, performed, sold or marketed by any
Bureau except solely upon and pursuant to terms and conditions authorized and
agreed to by CBI (which terms in any event shall not provide for charges higher
than the Most Favored Customer Rate).
(k) Subject to the condition provided in the next sentence, such
Bureau shall be allowed and have the right to use the ACROPAC System(TM) to
obtain, at cost, name and address data of CBI, Bureaus and credit bureaus owned
by CBI for new movers services and to sell such data to customers of such
Bureau. Such right to use of the ACROPAC System(TM) to obtain such data is
conditoned upon CBI agreeing to the
-24-
<PAGE>
percentage of its share of revenues from sale of such data to such customers.
5. Time of Performance. CBI shall provide to Bureaus the online credit
reporting services described hereunder on Monday through Friday from 7:30 a.m.
until 1:00 a.m., Saturday from 7:00 a.m. until 10:00 p.m., and on Sunday from
12:30 p.m. until 10:00 p.m., all Eastern Standard Time/Eastern Daylight Time;
provided, however, that, notwithstanding anything hereinabove to the contrary,
no such services shall be provided on Christmas or New Year's Day, and such
services may be interrupted on Sundays for emergency maintenance purposes.
6. Equipment. Each Bureau, at its own expense, hereby agrees to acquire or
retain such data processing equipment compatible with ACROPAC(TM) and required
for such Bureau to operate and perform under this Agreement as shall be
specified by CBI in its reasonable judgment. Such equipment required as of the
date hereof is specified in Exhibit D attached hereto. CBI may specify such
additional or different types or quantities of data processing equipment as CBI
reasonably deems necessary to continue such Bureau's participation on
ACROPAC(TM) and said Bureau agrees to acquire and install the same. In the event
any such equipment is acquired from CBI, the terms, including warranties,
associ-
-25-
<PAGE>
ated with acquisition or use thereof shall be solely as set forth in a separate
agreement.
7. Ownership of Data. For all purposes of this Agreement, each Bureau
shall be the owner of all data and information in the ACROPAC System(TM), as
such may be purged, modified or enhanced from time to time, as set forth by the
following:
(a) From and after the Online Cut-Over Date or the completion of
conversion of all credit records and files of a Bureau, whichever shall first
occur, and notwithstanding CBI's failure to properly designate data as belonging
to such Bureau by coding within ACROPAC(TM), such Bureau shall be the owner of
all credit records and files, including credit account data and subject files,
(i) delivered to CBI by such Bureau and pertaining to those subjects residing in
those service areas set forth on Exhibit E which do not have zip codes listed on
Exhibit F, and (ii) delivered to CBI by suppliers of Bureaus, CBI, credit
bureaus owned by CBI or Affiliate Bureaus and pertaining to those subjects
residing in those service areas set forth on Exhibit E which do not have zip
codes listed on Exhibit F.
(b) Notwithstanding any other provisions of this Agreement, each
Bureau shall be deemed to own demographic data included within the ACROPAC(TM)
files identified pursuant to Paragraph 7(a).
-26-
<PAGE>
(c) Each Bureau agrees that it shall cease to own any ACROPAC(TM)
credit data described by Paragraphs 7(a) or 7(b) at the time the consumer
subject thereof transfers residence out of the service areas defined by Exhibit
E. Upon such transfer, the credit data for such consumer shall be owned by the
ACROPAC(TM) Affiliate Bureau, if any, which maintains credit data files for an
area encompassing the new residence of such consumer or, if there is no such
Affiliate Bureau, by CBI. CBI agrees that it shall cease to own any ACROPAC(TM)
credit data at the time the consumer subject thereof transfers residence into
the service areas defined by Exhibit E. Upon such transfer, the credit data for
such consumer shall be owned by the Bureau or the Associate, as the case may be,
which maintains credit data files for an area encompassing the new residence of
such consumer.
(d) CBI agrees and warrants that in the event any of the credit
bureaus (the "Associates") listed on Exhibit F attached hereto (all of which are
credit bureaus currently reCBIving credit reporting services from CBDC) cease
using the ACROPAC System(TM), if CBI has the right to deliver, CBI shall
deliver, to Bureaus upon such cessation a copy of the then current credit
records and files (including credit account data, demographic data and subject
files) of such credit bureau contained on the ACROPAC System(TM), together with
the
-27-
<PAGE>
right to use and sell information contained in such credit records and files.
8. Charges for ACROPAC System(TM) Services.
(a) Charges of CBI for the online services described in this
Agreement shall be as follows: Each Bureau shall pay to CBI the amount set forth
herein for each billable inquiry as to any credit file or data of such Bureau,
whether such inquiry is made by a customer of such Bureau or any other person or
party. For the purposes of this Agreement, a "billable inquiry" is defined as an
inquiry into the ACROPAC System(TM), by terminal or otherwise, for the purpose
of obtaining a credit report or credit data, whether oral, written or otherwise,
for sale, directly or indirectly, to a customer of such Bureau or any other
person or entity. Any of the following inquiries shall not constitute a billable
inquiry: (i) an inquiry from which it is determined that there is no file on an
individual, unless such inquiry results in a charge to a customer of such
Bureau, and (ii) any other inquiry as to which a report is not sent to a
customer of such Bureau, including, without limitation, an inquiry made by such
Bureau for purposes of performing maintenance on its credit files. Billable
inquiry charges shall be paid only by the Bureau which owns the ACROPAC(TM) file
accessed in all cases; no more than one billable inquiry shall be deemed to have
occurred within twenty-four (24) hours of the first
-28-
<PAGE>
inquiry in respect of a single credit report, if such inquiries were made from
the same inquiring account number. A record of all charges for billable
inquiries shall be kept daily by CBI, and CBI shall furnish to each Bureau a
report of such inquiries and the charges made therefor pursuant to Paragraph
8(b) hereof. Each Bureau shall pay to CBI for each billable inquiry the lesser
of (A) the Flat Amount (as hereinafter defined) or (B) the Most Favored Customer
Rate for a billable inquiry.
For purposes of this Agreement, the "Flat Amount" shall be equal to (i) during
the Initial Term, $0.230, (ii) during the first year of any Renewal Term, the
sum of (I) the Flat Amount for the immediately preceding year, plus (II) ten
percent (10%) of the Flat Amount for such immediately preceding year, and (iii)
during any year which is not part of the Initial Term or is not the first year
of any Renewal Term (a "Following Year"), the Flat Amount for the immediately
preceding year increased by the lesser of (X) the percentage increase of the
Most Favored Customer Rate applied by CBI at the beginning of such Following
Year for a billable inquiry or (Y) the percentage increase of the Index for the
month ending immediately prior to the first day of such Following Year over the
Index for the same calendar month occurring in the next preceding year.
-29-
<PAGE>
(b) Each Bureau shall be invoiced monthly for charges incurred
hereunder during the month preceding such invoice. Said monthly invoice amount
shall represent all monthly charges made under this Agreement, including,
without limitation, those pursuant to Paragraph 8(a), and including any excise,
use, privilege, or sales or other similar tax or assessment (but excluding any
tax on income or other similar tax) now or hereafter imposed upon such Bureau by
or under the authority of any federal, state or local law, rule or regulation
with respect to the services or materials furnished under this Agreement. All
invoices shall be due and payable by such Bureau within thirty (30) days from
date of reCBIpt of invoice.
(c) CBI and Bureaus shall comply with the procedures and terms of
the Cost Allocation System, as described on Exhibit A hereto or as such terms or
procedures may from time to time be modified or supplemented by CBI in its sole
discretion; provided, however, that in no event shall CBI so modify or
supplement the terms and procedures of the Cost Allocation System as it applies
to Bureaus without so modifying and supplementing the Cost Allocation System
relating to Affiliate Bureaus and credit bureaus owned by CBI. CBI and Bureaus
shall make such payments, charges or remittances as may be due thereunder.
Bureaus specifically acknowledge that such Cost Allocation System is of
significant impor-
-30-
<PAGE>
tance to the proper and efficient operation of the ACROPAC System(TM) for the
mutual benefit of CBI, its owned credit bureaus, Bureaus and Affiliate Bureaus.
Each Bureau covenants and agrees that it will refrain from any activities
inconsistent with, or contrary to, the terms or objectives of the Cost
Allocation System.
(d) CBI shall charge Bureaus for services in connection with special
marketing services or similar programs as described in Paragraph 4(j) above at
the Most Favored Customer Rate for such services or programs.
(e) CBI shall pay to Credit Services within thirty (30) days after
the end of each month during the term of this Agreement, $0.07 per billable
inquiry made during such month by any credit bureau or other entity (or customer
thereof), including Bureaus (the "Royalty") regarding a subject residing in a
service area set forth on Exhibit E attached hereto if the credit file on such
subject is not owned by CSC or a Bureau. CBI shall notify Credit Services in
writing as soon as practicable after the end of each month during the term of
this Agreement of the amount of Royalty due Credit Services for such month.
Credit Services shall have the right at reasonable times to inspect and review
the books and records of CBI to insure that all Royalty due Credit Services
hereunder is being paid by CBI to Credit Services in accordance with this
Agreement.
-31-
<PAGE>
IV. PUT AND CALL OF ASSETS
9. Certain Calculations; Payments of Consideration.
(a) If an Acquired Corporation has not been owned by CSC or any
Bureau for the entire Calculation Period, then for purposes of calculating the
Acquired Product, the amount of Reporting Revenues, Collection Revenues and
Other Business Revenues generated by such Acquired Corporation during the
Calculation Period shall be deemed to be equal to the respective amounts of
Reporting Revenues, Collection Revenues and Other Business Revenues generated
during the number of months (the "Owned Months") such Acquired Corporation has
been owned by CSC or a Bureau, multiplied by a fraction the numerator of which
is 12 and the denominator of which is the Owned Months,
(b) Any payment to be made by CBI or Equifax to CSC and/or the
Subsidiaries pursuant to the provisions of Article IV or Article V of this
Agreement shall be paid in cash at the offices of Credit Services by cashier's
check drawn on, or by federal funds immediately available at, a financial
institution designated by Credit Services from time to time.
10. Put of Accounts Management Assets and Liabilities.
(a) During the following periods or upon the occurrence of any of
the following events, Accounts Management
-32-
<PAGE>
and the Accounts Management Acquired Corporations shall have the right to sell
to CBI, and require CBI to purchase and assume, the Accounts Management Assets
and Liabilities on the terms hereinafter set forth:
1. At any time on or after March 25, 1991 during the term of this
Agreement, but in no event after August 1, 2013;
2. If a Change of Control of CBI or Equifax shall occur during the term
of this Agreement prior to March 25, 1991; or
3. If a Federal Income Tax Law Amendment (as defined in Paragraph 13(a)
hereof) is enacted during the term of this Agreement prior to March
25, 1991 and CBI notifies Accounts Management within three (3) days
after such Federal Income Tax Law Amendment becomes law that due to
such Federal Income Tax Law Amendment Accounts Management and the
Accounts Management Acquired Corporations shall have the right to
sell to CBI, and require CBI to purchase and assume, the Accounts
Management Assets and Liabilities.
CBI shall be bound and obligated to purchase and assume the Accounts Management
Assets and Liabilities from Accounts Management within one hundred eighty (180)
days after reCBIving written notice from Accounts Management and the Accounts
Management Acquired Corporations of their intention to sell the Accounts
Management Assets and Liabilities to CBI; provided, however, that if any federal
governmental department or administrative agency files a motion in any court for
a temporary restraining order restraining CBI's purchase of the Accounts
Management Assets and Liabilities,
-33-
<PAGE>
such 180-day period shall be extended by the number of days elapsed between the
filing of such motion and the ruling (including a dismissal) on such motion and
by the number of days, if any, any temporary restraining order granted by such
court is in effect. CBI must notify Accounts Management in writing at least
thirty (30) days prior to the closing of the sale of the Accounts Management
Assets and Liabilities of CBI's intended date of closing of such sale. Subject
to the provisions of Paragraph 10(a) (iii) below, the price which CBI shall pay
for the purchase of the Accounts Management Assets and Liabilities (the
"Accounts Management Assets and Liabilities Price") shall be as follows:
(i) An amount equal to the sum of (A) the product of (I) 3.0,
times (II) the Reporting Revenues of Accounts Management and
the Accounts Management Acquired Corporations generated during
the twelve calendar months immediately preceding the month in
which Accounts Management and the Accounts Management Acquired
Corporations give notice of their intent to sell the Accounts
Management Assets and Liabilities plus (B) the product of
(III) 1.0, times (IV) the Collection Revenues and Other
Business Revenues of Accounts Management and the Accounts
Management Acquired Corporations generated during the twelve
months immediately preceding the month in which Accounts
Management and the Accounts Management Acquired Corporations
give notice of their intent to sell the Accounts Management
Assets and Liabilities. If an Accounts Management Acquired
Corporation or a division of Accounts Management has been
owned by Accounts Management for less
-34-
<PAGE>
than the entire twelve calendar months preceding the month in
which Accounts Management gives such notice of its intent to
sell the Accounts Management Assets and Liabilities, then for
purposes of calculating the Reporting Revenues, Collection
Revenues and Other Business Revenues of Accounts Management
and the Accounts Management Acquired Corporations for such
twelve-month period, the Reporting Revenues, Collection
Revenues and Other Business Revenues shall be deemed to
include the respective amount of Reporting Revenues,
Collection Revenues and Other Business Revenues attributable
to each such division or Accounts Management Acquired
Corporation during the number of months (the "Specified
Months") such division or Accounts Management Acquired
Corporation has been owned by Accounts Management, multiplied
by a fraction the numerator of which is 12 and the denominator
of which is the Specified Months;
(ii) Notwithstanding the provisions of the immediately preceding
subparagraph (i), if Accounts Management and the Accounts
Management Acquired Corporations give notice of their intent
to sell the Accounts Management Assets and Liabilities to CBI
and CBI is unable to consummate such purchase of the Accounts
Management Assets and Liabilities within one hundred eighty
(180) days after reCBIving such notice by reason of a
statutory or regulatory provision or an injunction or other
administrative or judicial order prohibiting the consummation
of such purchase (which such provision, injunction or order
shall not be enacted or issued at the request of CBI),
Accounts Management and the Accounts Management Acquired
Corporations shall have the right to withdraw (but shall not
be required to withdraw) their notice of intent to sell and to
exercise their right to renotice their intent to sell and to
sell to CBI at a subsequent time, until such sale is
consummated;
-35-
<PAGE>
provided, however, that if such provision or order is enacted
or issued and Accounts Management and the Accounts Management
Acquired Corporations do not withdraw their notice, then if
such provision or order is rescinded or expires or is
otherwise modified or affected, thus enabling CBI to
consummate such purchase of the Accounts Management Assets and
Liabilities, CBI shall have one hundred eighty (180) days from
the date of such rescission, expiration, or other modification
to consummate such purchase. In the event Accounts Management
and the Accounts Management Acquired Corporations withdraw
their notice and exercise their right to renotice their intent
to sell to CBI at a subsequent time, the purchase price of the
Accounts Management Assets and Liabilities at such subsequent
time shall be determined in accordance with the procedure set
forth in Paragraph 10(a) (i) above.
(iii) Notwithstanding the provisions of the immediately preceding
subparagraphs (i) and (ii), the purchase price of the Accounts
Management Assets and Liabilities shall be reduced by any of
the Accounts Management Current Assets Amount, the Accounts
Management Long-Term Debt Amount, the Accounts Management Net
Worth Amount and the Accounts Management Underfunding Amount,
if any such Amount is greater than zero.
(I) "Accounts Management Current Assets Amount" shall be the
amount, if any, by which total current liabilities
(excluding income taxes payable) of Accounts Management
and the Accounts Management Acquired Corporations
exceeds total current assets (excluding cash and cash
equivalents) of Accounts Management and the Accounts
Management Acquired Corporations.
(II) "Accounts Management Long-Term Debt Amount" shall be
the amount, if
-36-
<PAGE>
any, by which long-term liabilities excluding current
maturities of Accounts Management and the Accounts
Management Acquired Corporations (excluding notes
payable to parent, other intercompany debt and
Acquisition Debt) exceeds the aggregate book value (net
of accumulated depreciation and amortization) of the
Operating Assets of Accounts Management and the Accounts
Management Acquired Corporations.
(III) "Accounts Management Net Worth Amount" shall be the
amount, if any, by which the total stockholder's equity
of Accounts Management and the Accounts Management
Acquired Corporations is less than zero.
(IV) "Accounts Management Underfunding Amount" shall be the
amount of any "accumulated funding deficiency" (as
defined in Section 302(a) (2) of the Employee Retirement
Income Security Act of 1974, as amended, or any
successor or similar law hereinafter enacted ("ERISA"))
for any employee pension benefit plan (as defined in
Section 3(2) of ERISA) subject to the funding
requirements of Title IV of ERISA sponsored by Accounts
Management or any Accounts Management Acquired
Corporation.
All calculations made pursuant to subparagraph I, II or
III of this subparagraph (iii) shall be made as of the last
day of the month ending on or immediately preceding the date
on which Accounts Management and the Accounts Management
Acquired Corporations give notice of their intention to sell
the Accounts Management Assets and Liabilities. All
calculations made pursuant to subparagraph IV of this
subparagraph (iii) shall be made as of the last day of the
plan year ending on or immediately preceding the date on which
Accounts Management and
-37-
<PAGE>
the Accounts Management Acquired Corporations give notice of
their intention to sell the Accounts Management Assets and
Liabilities.
(b) The "Accounts Management Assets and Liabilities" to be purchased and
assumed by CBI shall consist of the following:
(i) all of the assets (except cash and cash equivalents and stock
of any wholly-owned corporation) of Accounts Management;
(ii) all of the assets (except cash and cash equivalents) of the
Accounts Management Acquired Corporations; and
(iii) all commitments and all direct and contingent liabilities of
Accounts Management and the Accounts Management Acquired
Corporations incurred in the ordinary course of business of
Accounts Management or the Accounts Management Acquired
Corporations, as the case may be, including all contracts used
in the ordinary course of business of such entities
(including, for example, office leases, equipment and software
leases, bureau customer contracts and employment contracts),
but excluding the following:
(A) liabilities relating to income taxes accrued by Accounts
Management and the Accounts Management Acquired
Corporations, to other taxes of Accounts Management and
the Accounts Management Acquired Corporations past due
at the time of purchase of the Accounts Management
Assets and Liabilities and to such other taxes that have
not been accrued by Accounts Management and the Accounts
Management Acquired Corporations,
(B) aggregate liabilities relating to litigation of Accounts
Management and the Accounts Management Acquired
-38-
<PAGE>
Corporations in excess of $187,500 (it being expressly
agreed that up to $187,500 of liabilities relating to
such litigation shall be included in the Accounts
Management Assets and Liabilities). For purposes of this
subparagraph (b) (iii) (B), the selling entities shall
retain and defend all such litigation and shall have the
right, from time to time, to require CBI to reimburse
such entities for all damages, losses, judgments,
expenses and costs (including attorneys' fees and
expenses) up to an aggregate amount equal to $187,500,
(C) Acquisition Debt of Accounts Management and the Accounts
Management Acquired Corporations, and
(D) Notes payable to parent and other intercompany debt of
Accounts Management and the Accounts Management Acquired
Corporations.
(c) "Accounts Management Acquired Corporations" means those Acquired
Corporations (i) all of the stock or substantially all of the assets of which
are acquired by Accounts Management after the date hereof, and (ii) that at the
time of their respective acquisitions each meet the following test:
The Collection/Reporting Revenue Amount of such Acquired
Corporation shall be equal to or greater than 80% of the aggregate
Total Revenue Amount of such Acquired Corporation.
The "Collection/Reporting Revenue Amount" for any entity shall be
the amount equal to the sum of all Reporting Revenues and Collection Revenues of
such entity
-39-
<PAGE>
generated during the fiscal year immediately preceding the date on which such
entity was purchased by CSC and/or a Bureau and/or Accounts Management.
The "Total Revenue Amount" for any entity shall be the amount of all
revenues of such entity generated during the fiscal year immediately preceding
the date on which such entity was purchased by CSC and/or a Bureau and/or
Accounts Management.
(d) Accounts Management shall not purchase any Accounts Management
Acquired Corporation between the date on which Accounts Management and the
Accounts Management Acquired Corporations give CBI notice of their intention to
sell the Accounts Management Assets and Liabilities and the date such sale is
consummated; provided, however, that if such notice is withdrawn by Accounts
Management and the Accounts Management Acquired Corporations pursuant to
paragraph 10(a) (ii) hereof, Accounts Management may purchase any Accounts
Management Acquired Corporation after such withdrawal and prior to any
subsequent notice given by Accounts Management and the Accounts Management
Acquired Corporations to CBI of their intention to sell the Accounts Management
Assets and Liabilities.
11. Put of Subsidiaries' Assets and Liabilities. (a) During the following
periods or upon the occurrence of
-40-
<PAGE>
any of the following events, the Subsidiaries shall have the right to sell to
CBI, and require CBI to purchase and assume, the Subsidiaries' Assets and
Liabilities on the terms hereinafter set forth:
1. At any time on or after March 25, 1991 during the term of this
Agreement, but in no event after August 1, 2013;
2. If a Change of Control of CBI or Equifax shall occur during
the term of this Agreement prior to March 25, 1991; or
3. If a Federal Income Tax Law Amendment (as defined in Paragraph
13 (a) hereof) is enacted during the term of this Agreement
prior to March 25, 1991 and CBI notifies the Subsidiaries
within three (3) days after such Federal Income Tax Law
Amendment becomes law that due to such Federal Income Tax Law
Amendment the Subsidiaries shall have the right to sell to
CBI, and require CBI to purchase and assume, the Subsidiaries'
Assets and Liabilities.
CBI shall be bound and obligated to purchase and assume the Subsidiaries' Assets
and Liabilities from the Subsidiaries within one hundred eighty (180) days after
reCBIving a joint written notice from the Subsidiaries of their intention to
sell the Subsidiaries' Assets and Liabilities to CBI; provided, however, that if
any federal governmental department or agency files a motion in any court for a
temporary restraining order restraining CBI's purchase of the Subsidiaries'
Assets and Liabilities, such 180-day period shall be extended by the number of
days elapsed between the filing of such motion and the ruling (including a
dismissal) on such motion and by the
-41-
<PAGE>
number of days, if any, any temporary restraining order granted by such court is
in effect. CBI must notify the Subsidiaries in writing at least thirty (30) days
prior to the closing of the sale of the Subsidiaries' Assets and Liabilities of
CBI's intended date of closing of such sale. Subject to the provisions of
Paragraph 11(a) (v) below, the price which CBI shall pay for the purchase of the
Subsidiaries' Assets and Liabilities shall be as follows:
(i) If on or prior to the date ("Designated Date") which occurs
three (3) years prior to the expiration date of the Initial
Term ("Initial Term Expiration Date") the Subsidiaries give
CBI such written notice of their intention to sell the
Subsidiaries' Assets and Liabilities, the purchase price of
the Subsidiaries' Assets and Liabilities shall be (A) if CBI
shall have purchased the Accounts Management Assets and
Liabilities prior to the purchase of the Subsidiaries' Assets
and Liabilities, an amount equal to the greater of (I) Three
Hundred Sixty-Five Million Dollars ($365,000,000), minus the
Accounts Management Assets and Liabilities Price, plus the
Acquired Product (less any part thereof attributable to the
Accounts Management Acquired Corporations), or (II) the sum of
the Collection Product (less any part thereof attributable to
the Collection Revenues of Accounts Management), plus the
Reporting Product (less any part thereof attributable to the
Reporting Revenues of Accounts Management), plus the Acquired
Product (less any part thereof attributable to the Accounts
Management Acquired Corporations), plus the Other Business
Product (less any part thereof attributable to the Other
Business Revenues of Accounts Management), plus $21,716,000,
or (B) if CBI shall not have purchased the Accounts Management
Assets and Liabilities prior to such purchase of the
Subsidiaries' Assets and Liabilities, an amount equal to the
greater of (III) Three Hundred
-42-
<PAGE>
Sixty-Five Million Dollars ($365,000,000) plus the Acquired
Product, or (IV) the sum of the Collection Product, plus the
Reporting Product, plus the Acquired Product, plus the Other
Business Product, plus $21,716,000;
(ii) If on a date which occurs after the Designated Date and on or
before the Initial Term Expiration Date, the Subsidiaries give
CBI such written notice of their intention to sell the
Subsidiaries' Assets and Liabilities, the purchase price of
the Subsidiaries' Assets and Liabilities shall be an amount
equal to the sum of the Collection Product plus the Reporting
Product, plus the Acquired Product, plus the Other Business
Product, plus $21,716,000 (less, if CBI shall have purchased
the Accounts Management Assets and Liabilities prior to the
purchase of the Subsidiaries Assets and Liabilities, any part
of the Collection Product, Reporting Product, Acquired Product
and Other Business Product attributable to the Collection
Revenues, Reporting Revenues and Other Business Revenues of
Accounts Management or the Accounts Management Acquired
Corporations, as the case may be);
(iii) If after the Initial Term Expiration Date the Subsidiaries
give CBI such written notice of their intention to sell the
Subsidiaries' Assets and Liabilities, the purchase price of
the Subsidiaries' Assets and Liabilities shall be (a) equal to
an amount mutually agreed upon by CBI and the Subsidiaries as
such purchase price, or (b) if CBI and the Subsidiaries cannot
mutually agree upon such purchase price, determined by
appraisal (which appraisal, if the Accounts Management Assets
and Liabilities have previously been purchased by CBI, shall
not include any value respecting the Accounts Management
Assets and Liabilities) in accordance with the following
procedure:
The CBI Appraiser and the Subsidiaries' Appraiser shall
perform and submit within sixty (60) days after the
Subsidiaries give such written notice of their intention
to sell the Subsidiaries' Assets and Liabilities,
-43-
<PAGE>
their respective appraisals of the Subsidiaries' Assets
and Liabilities. If the difference between such
appraisals is an amount equal to or less than ten
percent (10%) of the higher of such appraisals, the
purchase price of the Subsidiaries' Assets and
Liabilities shall be equal to the average of such
appraisals. If the difference between the appraisals
submitted by the CBI Appraiser and the Subsidiaries'
Appraiser is an amount greater than ten percent (10%) of
the higher of such appraisals, then CBI and the
Subsidiaries shall endeavor to mutually agree upon a
purchase price that is equal to or greater than ninety
percent (90%) of the higher of such appraisals. If CBI
and the Subsidiaries cannot so mutually agree, the Third
Appraiser shall perform and submit its appraisal of the
Subsidiaries' Assets and Liabilities within sixty (60)
days after its selection by the CBI Appraiser and the
Subsidiaries' Appraiser. In such event, the CBI
Appraiser and the Subsidiaries' Appraiser shall instruct
the Third Appraiser that its appraisal must fall between
the respective appraisals submitted by the CBI Appraiser
and the Subsidiaries' Appraiser, and the purchase price
of the Subsidiaries' Assets and Liabilities shall then
be equal to the appraisal submitted by the Third
Appraiser.
(iv) Notwithstanding the provisions of the immediately preceding
subparagraphs (i), (ii) and (iii), if the Subsidiaries
initially give notice of their intent to sell the
Subsidiaries' Assets and Liabilities to CBI and CBI is unable
to consummate such purchase of the Subsidiaries' Assets and
Liabilities within one hundred eighty (180) days after
reCBIving such notice by reason of a statutory or regulatory
provision or an injunction or other administrative or judicial
order prohibiting
-44-
<PAGE>
the consummation of such purchase (which such provision,
injunction or order shall not be enacted or issued at the
request of CBI), the Subsidiaries shall have the right to
withdraw (but shall not be required to withdraw) their notice
of intent to sell and to exercise their right to renotice
their intent to sell and to sell to CBI at a subsequent time,
until such sale is consummated; provided, however, that if
such provision or order is enacted or issued and the
Subsidiaries do not withdraw their notice, then if such
provision or order is rescinded or expires or is otherwise
modified or affected, thus enabling CBI to consummate such
purchase of the Subsidiaries' Assets and Liabilities, CBI
shall have one hundred eighty (180) days from the date of such
rescission, expiration or other modification to consummate
such purchase. In the event the Subsidiaries withdraw their
notice and exercise their right to renotice their intent to
sell to CBI at a subsequent time, the purchase price of the
Subsidiaries' Assets and Liabilities at such subsequent time
shall be determined in accordance with Paragraph 11(a) (i),
(ii) or (iii), as the case may be, based upon the point in
time that such right to sell is subsequently exercised by
again giving written notice to CBI.
(v) Notwithstanding the provisions of the immediately preceding
subparagraphs (i), (ii), (iii) and (iv), the purchase price of
the Subsidiaries' Assets and Liabilities shall be reduced by
any of the Subsidiaries' Current Assets Amount, the
Subsidiaries' Long-Term Debt Amount, the Subsidiaries' Net
Worth Amount and the Subsidiaries' Underfunding Amount, if any
such Amount is greater than zero.
(I) "Subsidiaries' Current Assets Amount" shall be the
amount, if any, by which total current liabilities
(excluding income taxes payable) of the Subsidiaries
exceeds total current assets (excluding cash and cash
equivalents) of the Subsidiaries.
-45-
<PAGE>
(II) "Subsidiaries' Long-Term Debt Amount" shall be the
amount, if any, by which the long-term liabilities
excluding current maturities of the Subsidiaries
(excluding notes payable to parent, other intercompany
debt and Acquisition Debt) exceeds the aggregate book
value (net of accumulated depreciation and amortization)
of the Operating Assets of the Subsidiaries.
(III) "Subsidiaries' Net Worth Amount" shall be the amount, if
any, by which the total stockholder's equity of the
Subsidiaries is less than zero.
(IV) "Subsidiaries' Underfunding Amount" shall be the amount
of any "accumulated funding deficiency" (as defined in
Section 302(a) (2) of ERISA) for any employee pension
benefit plan (as defined in Section 3(2) of ERISA)
subject to the funding requirements of Title IV of ERISA
sponsored by any Subsidiary.
All calculations made pursuant to subparagraph I, II or III of
this subparagraph (v) shall be made as of the last day of the month
ending on or immediately preceding the date on which the
Subsidiaries or CBI, as the case may be, give(s) notice of their or
its intention to sell or purchase, as the case may be, the
Subsidiaries' Assets and Liabilities. All calculations made pursuant
to subparagraph IV of this subparagraph (v) shall be made as of the
last day of the plan year ending on or immediately preceding the
date on which the Subsidiaries or CBI, as the case may be, give(s)
notice of their or its intention to sell or purchase, as the case
may be, the Subsidiaries' Assets and Liabilities.
If CBI purchases the Accounts Management Assets and
Liabilities prior to purchasing the Subsidiaries' Assets and
Liabilities, the total current assets, total current liabilities,
total stockholder's equity, long-term liabilities excluding current
maturities, Operating Assets and employee pension benefit plans of
Accounts Management and the Accounts Management Acquired
Corporations shall
-46-
<PAGE>
not be included when making the calculations contemplated by this
subparagraph (v).
(b) The "Subsidiaries' Assets and Liabilities" to be purchased and
assumed by CBI shall consist of the following:
(i) all of the assets (except cash and cash equivalents) of the
Bureaus and, if CBI shall not have previously purchased the
Accounts Management Assets and Liabilities, of Accounts
Management;
(ii) all of the assets (except cash, cash equivalents and, if CBI
shall have previously purchased the Accounts Management Assets
and Liabilities, assets of the Accounts Management Acquired
Corporations) of the Acquired Corporations; and
(iii) all commitments and all direct and contingent liabilities of
the Bureaus, the Acquired Corporations (except, if CBI shall
have previously purchased the Accounts Management Assets and
Liabilities, liabilities of the Accounts Management Acquired
Corporations) and, if CBI shall not have previously purchased
the Accounts Management Assets and Liabilities, of Accounts
Management, incurred in the ordinary course of business of
Bureaus, such Acquired Corporations, or Accounts Management,
as the case may be, including all contracts used in the
ordinary course of business of such entities (including, for
example, office leases, equipment and software leases, bureau
customer contracts and employment contracts), but excluding
the following:
(A) liabilities relating to income taxes accrued by the
Subsidiaries, to other taxes of the Subsidiaries past
due at the time of purchase of the Subsidiaries' Assets
and Liabilities and to such other taxes that have not
been accrued by the Subsidiaries,
-47-
<PAGE>
(B) aggregate liabilities relating to litigation of the
Bureaus, the Acquired Corporations and, if CBI shall not
have previously purchased the Accounts Management Assets
and Liabilities, of Accounts Management in excess of
$750,000 (it being expressly agreed that up to $750,000
of liabilities relating to such litigation shall be
included in the Subsidiaries' Assets and Liabilities if
CBI shall not have previously purchased the Accounts
Management Assets and Liabilities, and up to $562,500 of
such liabilities shall be included in the Subsidiaries'
Assets and Liabilities if CBI shall have previously
purchased the Accounts Management Assets and
Liabilities). For purposes of this subparagraph (b)
(iii) (B), the selling entities shall retain and defend
all such litigation and shall have the right, from time
to time, to require CBI to reimburse such entities for
all damages, losses, judgments, expenses and costs
(including attorneys' fees and expenses) up to an
aggregate amount equal to $750,000 or $562,500, as the
case may be,
(C) Acquisition Debt of the Subsidiaries, and
(D) Notes payable to parent and other intercompany debt of
the Subsidiaries.
(c) "Acquired Corporations" means the corporations or other entities
(i) all of the stock or substantially all of the assets of which are acquired by
CSC and/or the Bureaus and/or Accounts Management after the date hereof, (ii)
that are wholly-owned by CSC, directly or through one or more of the Bureaus
and/or Accounts Management, as of the closing of any purchase and sale of the
Subsidiaries' Assets
-48-
<PAGE>
and Liabilities, (iii) that individually meet the following test:
TEST 1:
The Collection/Reporting Revenue Amount of any such
corporation or such other entity shall be equal to or greater than
80% of the aggregate Total Revenue Amount of such corporation or
other entity.
and (iv) that collectively meet the following test:
TEST 2:
The corporations and other entities shall have been purchased
by CSC and/or the Bureaus and/or Accounts Management in compliance
with the following schedule:
The aggregate Total Revenue Amounts
of all such corporations and such
other entities purchased by CSC
During the following year and/or the Bureaus and/or Accounts
of any Initial Term or Management during such year shall
Renewal Term: not exceed:
------------------------- ----------------------------------
1 $20,000,000
2 $20,000,000 less the aggregate
Total Revenue Amounts of all
corporations and other entities
purchased by CSC and/or the
Bureaus and/or Accounts
Management in year 1
3 $20,000,000 less the aggregate
Total Revenue Amounts of all
corporations and other entities
purchased by CSC and/or the
Bureaus and/or Accounts
Management in years 1
and 2
4 $25,000,000 less the aggregate
Total Revenue Amounts of all
corporations and other entities
purchased by CSC and/or the
Bureaus and/or Accounts
Management in years 1-3
-49-
<PAGE>
5 $30,000,000 less the aggregate
Total Revenue Amounts of all
corporations and other entities
purchased by CSC and/or the
Bureaus and/or Accounts
Management in years 1-4
6 $35,000,000 less the aggregate
Total Revenue Amounts of all
corporations and other entities
purchased by CSC and/or the
Bureaus and/or Accounts
Management in years 1-5
7 $40,000,000 less the aggregate
Total Revenue Amounts of all
corporations and other entities
purchased by CSC and/or the
Bureaus and/or Accounts
Management in years 1-6
8 $44,000,000 less the aggregate
Total Revenue Amounts of all
corporations and other entities
purchased by CSC and/or the
Bureaus and/or Accounts
Management in years 1-7
9 $48,000,000 less the aggregate
Total Revenue Amounts of all
corporations and other entities
purchased by CSC and/or the
Bureaus and/or Accounts
Management in years 1-8
10 $50,000,000 less the aggregate
Total Revenue Amounts of all
corporations and other entities
purchased by CSC and/or the
Bureaus and/or Accounts
Management in years 1-9
(d) The Bureaus and Accounts Management shall not purchase any
Acquired Corporation between the date on which the Subsidiaries give CBI notice
of their intention to sell the Subsidiaries' Assets and Liabilities and the date
such sale is consummated; provided, however, that if such notice is withdrawn by
the Subsidiaries pursuant to Paragraph 11 (a) (iv)
-50-
<PAGE>
hereof, the Bureaus and Accounts Management may purchase any Acquired
Corporation after such withdrawal and prior to any subsequent notice given by
the Subsidiaries to CBI of their intention to sell the Subsidiaries' Assets and
Liabilities.
12. Call of Subsidiaries' Assets and Liabilities. (a) Subject to the
provisions of Paragraph 13 of this Agreement, if on or prior to August 1, 2013
(i) a Change of Control of CSC shall occur while this Agreement is in effect, or
(ii) (A) CSC, Bureaus and, if CBI shall not have purchased the Accounts
Management Assets and Liabilities, Accounts Management give CBI written notice
("Termination Notice") at least six (6) months prior to the expiration of the
Initial Term or any Renewal Term of their intention to terminate this Agreement
at the end of such Initial Term or Renewal Term, as the case may be, and (B) on
or prior to the last day of such Initial Term or Renewal Term, as the case may
be, the Subsidiaries have not notified CBI of their intention to sell the
Subsidiaries' Assets and Liabilities to CBI, then CBI shall have the right to
purchase and assume, and require the Subsidiaries to sell, the Subsidiaries'
Assets and Liabilities to CBI at the applicable purchase price set forth in
Paragraph 11(a)(i), (ii) or (iii) of this Agreement, as the case may be,
depending on the date CBI gives written notice to the Subsidiaries of its
intention to purchase the Subsidiaries' Assets and Liabilities; provided,
however, that such right of CBI shall exist only if CBI gives
-51-
<PAGE>
written notice to Subsidiaries within sixty (60) days after such Change of
Control of CSC or the expiration of the Initial Term or Renewal Term, as the
case may be (this Agreement being deemed for such purposes to be in effect
during such sixty (60) days after the expiration of the Initial Term or Renewal
Term, as the case may be, and, if such notice is given, until such purchase is
consummated), of its intention to purchase the Subsidiaries' Assets and
Liabilities from the Subsidiaries. The Subsidiaries shall be bound and obligated
to sell the Subsidiaries' Assets and Liabilities to CBI within one hundred
eighty (180) days after receiving written notice from CBI of its intention to
purchase the Subsidiaries' Assets and Liabilities from the Subsidiaries.
(b) Notwithstanding the provisions of the immediately preceding
subparagraph (a), if CBI gives notice of its intent to purchase the
Subsidiaries' Assets and Liabilities pursuant to such subparagraph (a) and CBI
is unable to consummate such purchase of the Subsidiaries' Assets and
Liabilities within one hundred eighty (180) days after giving such notice by
reason of a statutory or regulatory provision or an injunction or other
administrative or judicial order prohibiting the consummation of such purchase
(which such provision, injunction or order shall not be enacted or issued at the
request of CSC or any Subsidiary), then CBI's right to purchase the
Subsidiaries' Assets and Liabilities shall termi-
-52-
<PAGE>
nate upon the expiration of such one hundred eighty (180) days; provided,
however, that CBI shall have the right to purchase, upon the terms set forth in
the immediately preceding subparagraph (a), the Subsidiaries' Assets and
Liabilities upon each new Change of Control of CSC occurring while this
Agreement is in effect and on or prior to August 1, 2013.
(c) If CSC, Bureaus and, if CBI shall not have purchased the
Accounts Management Assets and Liabilities, Accounts Management give CBI a
Termination Notice, then CBI shall provide the services of CBI and the ACROPAC
system(TM) described herein to the Subsidiaries on a month-to-month basis upon
the same terms and conditions contained herein until CBI consummates the
purchase of the Subsidiaries' Assets and Liabilities pursuant to this Paragraph
12 or until the Subsidiaries are able to begin receiving automated credit
reporting data processing services from a Person other than CBI.
13. Conditional Right to Require Stock Sale and Price Adjustment.
(a) If, as a result of an amendment to the federal income tax laws
that becomes law after the date of this Agreement, CBI would not be entitled to
depreciate the credit records and files included in any purchase and sale
described in Paragraphs 10, 11 and 12 ("Asset Sale") unless
-53-
<PAGE>
such Asset Sale is consummated by a date which occurs more than thirty (30) days
after the date that the Federal Income Tax Law Amendment becomes law ("Sunset
Date") (such amendment containing such Sunset Date being hereinafter referred to
as a "Federal Income Tax Law Amendment"), and if, without any default by CBI, an
Asset Sale is not consummated before the Sunset Date, the Asset Sale shall be
restructured as a sale of stock of Accounts Management, Credit Services,
Cincinnati and Kansas City ("Stock Sale"), as the case may be, and the price
shall be adjusted as provided in Paragraph 13(b). In connection with such Stock
Sale, the seller shall agree to indemnify CBI against any liabilities of the
entities covered by such Stock Sale which CBI would not have assumed pursuant to
such Asset Sale; provided, the seller shall receive a credit in respect of such
indemnity equal to the assets which would not have been transferred in such
Asset Sale.
(b) If an Asset Sale is converted into a Stock Sale in accordance
with Paragraph 13 (a), the purchase price for the Stock Sale shall be the price
that would have been paid pursuant to Paragraph 10, 11 or 12 in the Asset Sale,
reduced by an amount equal to the excess, if any, of
(1) the amount of federal income tax that the CSC Consolidated Group
would have incurred on an Asset Sale, over
-54-
<PAGE>
(2) the amount of federal income tax that the CSC Consolidated Group
incurs on the Stock Sale (determined without regard to any reduction in
tax liability resulting from the indemnity under Paragraph 13 (a) above).
The "CSC Consolidated Group" means the affiliated group of corporations that
file consolidated returns for federal income tax purposes of which CSC is the
common parent and of which the Subsidiaries are members and any successor to
such affiliated group.
13A. Generally Accepted Accounting Principles; Cooperation;
Securities Laws. Collection Revenues, Reporting Revenues and Other Business
Revenues shall be calculated in accordance with generally accepted accounting
principles consistently applied. The Subsidiaries, CSC and CBI agree to
cooperate and to act expeditiously with regard to any filings with government
agencies required in connection with the transactions contemplated by Paragraphs
10, 11, 12 and 13 hereof. CBI, the Subsidiaries and CSC agree that they will not
take any action or execute and deliver any undertakings that will cause any such
transaction not to be exempt under applicable federal and state securities laws.
V. GUARANTEE OF OPERATING INCOME
14. Guarantee. (a) CBI hereby agrees to guarantee during the fiscal
quarters of Credit Services' fiscal years 1989 (excluding all months in fiscal
year 1989 prior to August, 1988), 1990 and 1991, the aggregate operating income
-55-
<PAGE>
(the "Operating Income") of Cincinnati, Kansas City, Credit Services, and the
direct and indirect subsidiaries of Credit Services (excluding any Acquired
Corporation owned by any of the foregoing) (collectively, the "Group") upon the
terms and conditions hereinafter set forth.
(b) For purposes of this Agreement, the "Guaranteed Amount" for any
quarter shall mean:
(i) For fiscal months August and September, 1988 (which shall be
deemed a fiscal quarter for purposes of this Paragraph 14),
the greater of (A) $3,189,000 or (B) 16.98% of all revenue
(from any source whatsoever) generated by the Group ("Total
Revenue") during such two month period;
(ii) For each of the last two fiscal quarters of fiscal year 1989,
the greater of (A) $4,814,000 or (B) 16.99% of the Total
Revenue during such quarter;
(iii) For any fiscal quarter occurring during fiscal year 1990, the
greater of (A) $5,550,000 or (B) 18.38% of the Total Revenue
during such quarter; and
(iv) For any fiscal quarter occurring during fiscal year 1991, the
greater of (A) $6,050,000 or (B) 18.13% of the Total Revenue
during such quarter.
(c) Within thirty (30) days after the end of each such fiscal
quarter during Credit Services' fiscal years 1989, 1990 and 1991, Credit
Services shall deliver to CBI a statement (a "Test Statement") which sets forth
the following information in respect of such fiscal quarter (the "Subject
-56-
<PAGE>
Quarter") and the fiscal year (the "Subject Year") of which such Subject Quarter
is a part:
(i) the Operating Income of the Group for such Subject Quarter
(the "Subject Operating Income");
(ii) the Guaranteed Amount for such Subject Quarter (the "Subject
Guaranteed Amount");
(iii) the sum of (A) the Subject Operating Income, plus (B) the
aggregate Operating Income of the Group for all fiscal
quarters (the "Preceding Quarters") in such Subject Year
preceding such Subject Quarter (the "Year-to-Date Operating
Income"), excluding, in fiscal year 1989, all Operating Income
of the Group for months prior to August, 1988;
(iv) the sum of (A) the Subject Guaranteed Amount, plus (B) the sum
of all Guaranteed Amounts for the Preceding Quarters (the
"Year-to-Date Guaranteed Amount"), excluding, in fiscal year
1989, any Guaranteed Amounts for months prior to August, 1988;
(v) an amount (the "Net Payment Amount") equal to (A) the sum of
the amounts received under this Article V by Credit Services
from CBI in respect of the Preceding Quarters, reduced by (B)
the sum of the amounts paid by Credit Services to CBI under
this Article V in respect of the Preceding Quarters; and
(vi) the amount of Exit Costs incurred by the Group during such
Subject Quarter.
Payments to be made under this Article V shall be calculated and paid in
accordance with the following procedure:
If the Subject Quarter is the first fiscal quarter of the Subject Year (the
months of August and September, 1988 being deemed the first fiscal quarter of
fiscal year 1989), then:
(I) if the Subject Operating Income is less than the Subject Guaranteed
Amount, then CBI shall pay Credit
-57-
<PAGE>
Services within ten (10) days after delivery of the Test Statement
the amount by which such Subject Operating Income is less than such
Subject Guaranteed Amount.
(II) if the Subject Operating Income is equal to or greater than the
Subject Guaranteed Amount, then Credit Services shall not receive
from CBI, and shall not make to CBI, any payment under this Article
V in respect of such Subject Quarter.
If the Subject Quarter is the second, third or fourth fiscal quarter of the
Subject Year (for purposes of this Paragraph 14, fiscal year 1989 being deemed
to contain only three fiscal quarters, consisting of a first, third and fourth
quarters), then:
(I) if the Subject Operating Income is less than the Subject Guaranteed
Amount, then CBI shall pay Credit Services within ten (10) days
after delivery of the Test Statement an amount, if any, equal to the
lesser of (A) the amount by which the Subject Operating Income is
less than the Subject Guaranteed Amount, or (B) the amount by which
the Year-to-Date Guaranteed Amount exceeds the Year-to-Date
Operating Income.
(II) if the Subject Operating Income is greater than the Subject
Guaranteed Amount, then Credit Services shall pay CBI within ten
(10) days after delivery of the Test Statement an amount, if any,
equal to the lesser of (A) the amount by which the Subject Operating
Income exceeds the Subject Guaranteed Amount, or (B) the Net Payment
Amount.
(III) if the Subject Operating Income is equal to the Subject Guaranteed
Amount, then Credit Services shall not receive from CBI, and shall
not make to CBI, any payment in respect of such Subject Quarter.
The payments made under this subparagraph (c) in respect of a Subject Year shall
not be adjusted or affected in any manner by the amount of Operating Income of
the Group for any other
-58-
<PAGE>
fiscal year, and the net amount of payments received by Credit Services in
respect of a Subject Year shall never be adjusted after the adjustment
contemplated by this subparagraph (c) for the last fiscal quarter of such
Subject Year.
(d) "Net CBI Liability" shall mean the amount equal to the aggregate
payments made by CBI to Credit Services under this Paragraph 14, reduced by the
aggregate payments made by Credit Services to CBI under this Paragraph 14. The
Net CBI Liability shall not exceed the Cap in any event; provided, however, that
if the conversion of all records and files of Bureaus to the ACROPAC System(TM)
has not been completed by the date which is thirty-two (32) months from the date
of this Agreement, then there shall be no Cap and CBI shall be obligated and
liable for all amounts to be paid by it pursuant to the immediately preceding
subparagraphs (a)-(c) as if no limit on CBI's liability or obligations under
this Article V had been set forth in this subparagraph (d). "Cap" shall mean
(i) $20,000,000, if the conversion to the ACROPAC System(TM) of
all records and files of Bureaus and Associates is completed
on or prior to the date which is twelve (12) months from the
date of this Agreement;
(ii) $25,000,000, if the conversion to the ACROPAC System(TM) of
all records and files of Bureaus and Associates is completed
on or prior to the date which is eighteen (18) months from the
date of this Agreement but later than the date which is twelve
(12) months from the date of this Agreement;
-59-
<PAGE>
(iii) an amount equal to $30,000,000 minus the Late Conversion
Damages, if the conversion to the ACROPAC System(TM) of all
records and files of Bureaus and Associates is completed on or
prior to the date which is twenty-four (24) months from the
date of this Agreement but later than the date which is
eighteen (18) months from the date of this Agreement; and
(iv) an amount equal to $40,000,000 minus the Late Conversion
Damages, if the conversion to the ACROPAC System(TM) of all
records and files of Bureaus and Associates is completed on or
prior to the date which is thirty-two (32) months from the
date of this Agreement but later than the date which is
twenty-four (24) months from the date of this Agreement.
Once the Cap has been established and determined pursuant to this subparagraph
(d) and CBI has paid Credit Services a net amount (i.e., after crediting amounts
paid by Credit Services to CBI under this Article V) equal to the Cap, CBI shall
not be required to make any additional payments to Credit Services pursuant to
this Article V.
(e) Operating Income of the Group shall mean net income of the
Group, as calculated in accordance with generally accepted accounting principles
(except for the provisions for income taxes) consistently applied, before the
following: (1) estimated income taxes, (2) general and administrative costs
charged by parent, (3) investment and interest income, (4) interest expense and
(5) interest expense charged by parent. Operating Income of the Group shall be
calculated to reflect and include, but shall not be limited to, charges for
insurance and other personnel and third-party charges
-60-
<PAGE>
allocated to Credit Services by CSC, CSC Industry Service Group (or its
successor) general and administrative costs (which such general and
administrative costs shall not exceed in any one fiscal year one percent (1%) of
the Total Revenue generated during such fiscal year, those being 1989 (excluding
Total Revenue generated during any month prior to August, 1988), 1990 and 1991),
and the following costs (the "Exit Costs"): data communications expenses
incurred by the Group in exiting the data processing business, the write-off of
the ARIES System, the write-down of the building located at 2505 Fannin Street,
Houston, Texas 77002, any termination charges relating to leases to which any of
the Group is a party, severance pay paid to employees of the Group, bonuses paid
to retain employees knowledgeable about the credit reporting business, and other
costs to the Group of exiting the credit reporting data processing business;
provided, however, that the leases listed on Exhibit I attached hereto shall be
assigned (to the extent they may be assigned) by the appropriate member(s) of
the Group to CBI promptly after such member(s) decide(s) such leases are no
longer needed for the operation of its or their business(es), and after such
assignment, such leases shall not be included in the Exit Costs. For purposes of
this Agreement, the Exit Costs which may be charged in order to calculate
Operating Income shall not exceed an aggregate amount of $16,500,000 for fis-
-61-
<PAGE>
cal years 1989 (excluding any month in fiscal year 1989 occurring prior to
August, 1988), 1990 and 1991. Total Revenue shall be calculated in accordance
with generally accepted accounting principles consistently applied.
(f) For purposes of establishing CBI's liability for payments under
this Article V, each member of the Group agrees to operate in the ordinary
course of business (except to the extent that such member takes actions in
connection with entering into this Agreement and consummating the transactions
contemplated hereby, including incurring Exit Costs and other expenses arising
out of this Agreement).
(g) CBI shall have the right at reasonable times to inspect and
review the books and records of each member of the Group to insure that the
information contained in the Test Statements is accurate.
VI. DURATION OF THIS AGREEMENT
15. Duration. Subject to earlier termination pursuant to Paragraph 16(a)
hereof, this Agreement shall commence on the date hereof and shall continue for
an initial term of ten (10) years from August 1, 1988 (the "Initial Term").
Unless Accounts Management, Bureaus and CSC shall give written notice to CBI at
least six (6) months prior to the expiration of the Initial Term of Accounts
Management's, Bureaus' and CSC's intention to terminate this Agreement at the
end of such Initial Term, this Agreement, including all
-62-
<PAGE>
of its provisions, shall be automatically renewed for an additional term of ten
(10) years (a "Renewal Term") and such automatic renewal of this Agreement shall
continue for successive additional Renewal Terms unless such prior written
notice of desire to terminate shall be given by Accounts Management, CSC and
Bureaus at least six (6) months prior to the expiration of the then current
Renewal Term.
VII. BREACH OF THIS AGREEMENT
16. Breach. (a) Notwithstanding the provisions of Paragraph 15, this
Agreement may be terminated by Accounts Management, CSC and Bureaus or CBI at
any time upon the failure of the other party to pay any sum required to be paid
hereunder promptly when such sum shall become due (it being understood that to
the extent the due date of any payment to be made hereunder is not otherwise
specifically provided for herein, all payments shall be due within thirty (30)
days after receipt of invoice therefor) and the continuance of such failure for
a period of thirty (30) days after notice specifying such failure shall have
been given to such party. Any termination under or pursuant to this Paragraph
16(a) shall be effective one hundred eighty (180) days after the date upon which
the party terminating this Agreement shall have sent to the other party or
parties notice by certified mail of such failure.
-63-
<PAGE>
(b) Upon default (other than a default specified in Paragraph 16(a))
by the other party in the performance or breach of any provision, covenant or
warranty of this Agreement and the continuance of such default or breach for a
period of twenty (20) business days (or such longer period as such other party
may reasonably require to cure such default or breach) after notice specifying
such default shall have been given to such party, the non-defaulting party shall
have the right to bring suit for damages or equitable relief, but shall not have
the right to terminate this Agreement. The bringing of such suit shall be the
sole and exclusive remedy of the non-defaulting party for a breach or default
described by this Paragraph 16(b). Without limitation upon the foregoing, the
parties hereto specifically acknowledge that defaults or breaches subject to
this Paragraph 16(b) shall include: (i) the use by any Bureau, or any customer
thereof, of any data of the ACROPAC System(TM) owned by CBI, by any credit
bureau owned by CBI or by any Affiliate Bureau in a manner or for purposes not
authorized by CBI (which purposes shall be authorized by CBI during times when
similar authorization is permitted to any Affiliate Bureau or credit bureau
owned by CBI); (ii) the use by CBI, any credit bureau owned by CBI or any
Affiliate Bureau, or any customer thereof, of any data of the ACROPAC System(TM)
owned by any Bureau in a manner or for purposes not authorized by the Bureau;
(iii)
-64-
<PAGE>
failure to use or employ the ACROPAC System(TM) or provide consumer credit
reporting services exclusively (except as contemplated by Paragraph 45 hereof)
in accordance with Paragraph 4 hereof; (iv) assignment of ACROPAC System(TM)
account numbers contrary to the requirements of Paragraph 2 hereof; (v) failure
to comply with the procedures and terms of the Cost Allocation System pursuant
to Paragraph 8(c) hereof; or (vi) any assignment or transfer, or attempted
assignment or transfer, inconsistent with the provisions of Paragraph 29 of this
Agreement.
17. Limitation. Except as specifically provided herein, termination
pursuant to Paragraphs 15 or 16(a) above shall not limit, modify, or be in
substitution for, any of the rights of action or claims under this Agreement, at
law or in equity, which any aggrieved party may otherwise have.
18. Rights Upon Termination. (a) If after CBDC has ceased operating its
data processing center (i) this Agreement is terminated by CBI or Equifax acting
as a debtor in possession, by a trustee appointed to act for CBI or Equifax as a
debtor or by a bankruptcy court in a case filed under the Federal Bankruptcy
Code on behalf of CBI or Equifax, or (ii) any final and non-appealable
administrative or judicial order is issued prohibiting or limiting any provision
of this Agreement relating to the provision by CBI of ACROPAC(TM) services,
then, in the case of (i) above, within sixty (60) days after such
-65-
<PAGE>
termination, or in the case of (ii) above, within sixty (60) days after such
order is issued, CBI shall provide to the Bureaus (I) a complete workable
current copy on magnetic tape, as designated by the Bureaus, in CBI format, of
all credit data on the ACROPAC System(TM) belonging to the Bureaus, (II) a copy
of the latest version of the ACROPAC System(TM) and all programs, including
source code, software documentation, training manuals, and other appurtenances
related thereto or derived therefrom, together with the right to use the ACROPAC
System(TM) and all such related rights and properties (which right to use the
ACROPAC System(TM) and such related rights and properties shall be a license
granted by CBI to the Bureaus and shall be evidenced by a written License
Agreement executed by CBI in the form attached hereto as Exhibit G), and (III)
test tapes and assistance in conversion and training of personnel required to
effect such conversion. Said tape referred to in (I) above shall be furnished to
Bureaus at the then current cost to CBI of copying and preparing such complete
tape. Except as set forth herein, CBI shall have no further obligation to
recreate or convert the credit files and records of such Bureau after delivery
of said tape; provided, however, that CBI shall provide, immediately prior to
the commencement of Bureaus' independent operation of their copy of the ACROPAC
System(TM), an updated complete copy on magnetic tape, in CBI format, of all
credit data on the ACROPAC System(TM)
-66-
<PAGE>
belonging to the Bureaus. After providing to Bureaus such updated complete
current copy of all credit data on the ACROPAC System(TM) belonging to the
Bureaus and upon receipt of written directives from the Bureaus (and not before
receipt of such written directives), CBI shall purge all such credit data
belonging to the Bureaus from the ACROPAC System(TM). For a period of two (2)
years after Bureau's conversion of said updated complete current copy, CBI shall
not offer on a local level consumer credit reporting services relating to, and
Bureaus shall not offer on a local level consumer credit reporting services
other than those relating to, subjects residing in the areas set forth on
Exhibit E hereto. After Bureau's conversion of said updated complete current
copy, notwithstanding the provisions of Paragraph 8(e) hereof, Bureaus shall
continue to receive Royalty and shall be able to perform local and national
sales using said copy of the ACROPAC System(TM). Prior to the completion of such
conversion by Bureaus of said updated complete current copy, and until Bureaus
have notified CBI in writing that Bureaus are ready to commence their
independent operation of their copy of the ACROPAC System(TM), Bureaus shall
continue, at Bureaus' option, as contract customers of CBI on a month-to-month
basis upon the same terms and conditions contained in this Agreement. In the
case of (ii) above, this
-67-
<PAGE>
Agreement shall terminate upon such written notification by Bureaus.
(b) If this Agreement is terminated by any party hereto pursuant to
Paragraph 16 (a), following such termination CBI shall provide the services of
CBI and the ACROPAC System(TM) described herein to Bureaus, at Bureaus' option,
on a month-to-month basis upon the same terms and conditions contained in this
Agreement until the Bureaus are able to begin receiving automated credit
reporting data processing services from a Person other than CBI.
VIII. REPRESENTATIONS, WARRANTIES AND COVENANTS
19. Representations and Warranties of CSC, Bureaus and Accounts
Management. CSC, Bureaus and Accounts Management, jointly and severally,
represent and warrant to CBI as follows:
(a) Organization and Standing. Except as disclosed to CBI in writing
as of the date hereof, each of CSC, the Bureaus and Accounts Management is a
corporation duly organized, validly existing, and in good standing under the
laws of its state of incorporation, is qualified or licensed to transact
business as a foreign corporation in every jurisdiction where the character of
the property owned or leased by it and the nature of the business conducted by
it require it to be so qualified or licensed and where the failure to be so
qualified or licensed would have a material adverse effect on it.
-68-
<PAGE>
(b) Authority. Except as disclosed to CBI in writing as of the date
hereof, each of CSC, the Bureaus and Accounts Management has the full corporate
power and authority to execute and deliver this Agreement, to perform hereunder,
and to consummate the transactions contemplated hereby without the necessity of
any act, approval or consent of any other Person whomsoever, except such as have
been, or will be, obtained. This Agreement has been approved by the respective
Boards of Directors, or the Executive Committees thereof, of each of them, and
constitutes the valid and legally binding obligation of each of CSC, the Bureaus
and Accounts Management enforceable against each of them 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.
(c) Agreement Does Not Violate Other Instruments. Except as
disclosed to CBI in writing as of the date hereof, the execution and delivery of
this Agreement by each of CSC, the Bureaus and Accounts Management does not, and
the consummation of the transactions contemplated hereby will not, violate any
provisions of the respective Articles of Incorporation, as amended, or Bylaws,
as amended, of each of CSC, the Bureaus and Accounts Management or violate or
constitute an occurrence
-69-
<PAGE>
of default under any provision of, or conflict with, result in acceleration of
any obligation under, or give rise to a right by any party to terminate its
obligations under, any mortgage, deed of trust, conveyance to secure debt, note,
loan, lien, lease, agreement, instrument, or any order, judgment, decree or
other arrangement to which each is a respective party or by which each is
respectively bound or by which the respective assets of each are affected.
(d) Litigation. There is no suit, action, proceeding, claim or
investigation pending or threatened against or affecting any of CSC, the Bureaus
or Accounts Management that would impair the ability of any of CSC, the Bureaus
or Accounts Management to consummate the transactions contemplated by this
Agreement.
(e) Unaudited Combined Financial Statements of Credit Services.
Attached hereto as Exhibit H are copies of the unaudited combined balance sheets
of Cincinnati, Kansas City and Credit Services and Credit Services' direct and
indirect subsidiaries, as of March 31, 1988 and June 30, 1988 and the related
unaudited combining statements of earnings and the unaudited combined statements
of changes in stockholder's equity and cash flow for the year ended March 31,
1988 and for the three months ended June 30, 1988, together with related
footnote disclosures as of and for the year ended March 31, 1988 (the "Financial
Statements") and for the three months
-70-
<PAGE>
ended June 30, 1988 (for significant changes since March 31, 1988 only), all
prepared in accordance with generally accepted accounting principles
consistently applied, except for the method used by Credit Services in
estimating for income taxes. The Financial Statements have been prepared
internally by Credit Services and fairly present, except for income taxes, the
combined financial condition of Cincinnati, Kansas City, Credit Services and
Credit Services' direct and indirect subsidiaries and the results of their
operations for the periods presented. The amounts included in such Financial
Statements are included in the consolidated accounts of CSC. Any liabilities
incurred or accrued since June 30, 1988 to the date of this Agreement were
incurred or accrued in the ordinary course of business and do not, either
individually or in the aggregate, have a material adverse effect on the combined
assets of Cincinnati, Kansas City, Credit Services and Credit Services' direct
and indirect subsidiaries.
(f) On the date hereof, the Bureaus, Accounts Management and CBDC
own or lease all of the assets used in the Reporting Services and Collection
Services businesses of CSC.
20. Representations and Warranties of Equifax and CBI. Equifax and
CBI, jointly and severally, represent and warrant to CSC, the Bureaus and
Accounts Management as follows:
-71-
<PAGE>
(a) Organization and Standing. Each of Equifax and CBI is a duly
organized and validly existing corporation in good standing under the laws of
Georgia, and is qualified or licensed to transact business as a foreign
corporation in every jurisdiction where the character of the property owned or
leased by it and the nature of the business conducted by it require it to be
qualified or licensed, and where the failure to be so qualified or licensed
would have a material adverse effect on it.
(b) Corporate Power and Authority. Each of Equifax and CBI has the
full corporate power and authority to execute and deliver this Agreement, to
perform hereunder, and to consummate the transactions contemplated hereby
without the necessity of any act, approval or consent of any other Person
whomsoever, except such as have been, or will be, obtained. This Agreement has
been approved by the respective Boards of Directors of Equifax and CBI, or the
Executive Committees thereof, and constitutes the valid and binding obligation
of each of Equifax and CBI enforceable against it 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.
-72-
<PAGE>
(c) Agreement Does Not Violate Other Instruments. The execution and
delivery of this Agreement by Equifax and CBI does not, and the consummation of
the transactions contemplated hereby will not, violate any provisions of the
respective Articles of Incorporation, as amended, or Bylaws, as amended, of
Equifax and CBI or violate or constitute an occurrence of default under any
provision of, or conflict with, result in acceleration of any obligation under,
or give rise to a right by any party to terminate its obligations under, any
mortgage, deed of trust, conveyance to secure debt, note, loan, lien, lease,
agreement, instrument, or any order, judgment, decree or other arrangement to
which each is a respective party or by which each is bound or by which the
assets of each are affected.
(d) Litigation. There is no suit, action, proceeding, claim or
investigation pending or threatened against or affecting Equifax or CBI that
would impair the ability of Equifax or CBI to consummate the transactions
contemplated by this Agreement.
21. Covenants of CSC, Bureaus and Accounts Management and CBI. (a)
At the closing of any purchase and sale contemplated by Article IV of this
Agreement, the Subsidiaries, Accounts Management or CSC, as the case may be,
shall deliver to CBI good and marketable title to assets included in the
Subsidiaries' Assets and Liabilities, the Accounts Management
-73-
<PAGE>
Assets and Liabilities or to the stock of Credit Services, Cincinnati, Kansas
City or Accounts Management, as the case may be.
(b) CSC covenants that, so long as the provisions of Articles IV and
V of this Agreement remain in effect, it will prepare, or cause to be prepared,
and deliver, or cause to be delivered, to CBI, unaudited quarterly combined
financial statements of Cincinnati, Kansas City and Credit Services (and their
subsidiaries), as soon as available, accompanied by a certificate executed by an
officer of Credit Services certifying that such financial statements have been
prepared in accordance with generally accepted accounting principles (except for
the provisions for income taxes) consistently applied subject to the right, as
permitted by such principles, to choose alternative treatments of certain
matters.
(c) CBI covenants that so long as the provisions of Articles IV and
V of this Agreement remain in effect, it will prepare, or cause to be prepared,
and deliver, or cause to be delivered, to CSC, unaudited quarterly financial
statements of CBI and representative samples of financial statements of bureaus
owned by CBI (without identifying such bureaus), as soon as available,
accompanied by a certificate executed by an officer of CBI certifying that such
financial statements have been prepared in accordance with generally accepted
accounting principles consistently applied subject
-74-
<PAGE>
to the right, as permitted by such principles, to choose alternative treatments
of certain matters.
(d) Equifax covenants that so long as the provisions of Articles IV
and V of this Agreement remain in effect, it will prepare, or cause to be
prepared, and deliver, or cause to be delivered, to CSC, as soon as available,
audited annual financial statements of Equifax, certified by Arthur Anderson &
Co. that such financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied subject to the
right, as permitted by such principles, to choose alternative treatments of
certain matters.
IX. MISCELLANEOUS TERMS AND PROVISIONS
22. Limitations Upon Liability of CBI. Notwithstanding anything in
this Agreement to the contrary, CSC and Bureaus agree that the liability of CBI
shall be limited in respect of a breach or default of CBI's obligation to
provide services pursuant to and as described in Articles II and III and
Paragraphs 23 and 25 hereof as follows:
(a) in the event that the default or breach shall be the loss or
destruction of credit data of Bureaus on the ACROPAC System(TM) due to an act or
omission of CBI, CBI shall restore such files through utilization of back-up
load tapes;
(b) in the event that the default or breach shall be the loss or
destruction of equipment of the Bureaus on
-75-
<PAGE>
the ACROPAC System(TM) due to an act or omission of CBI, CBI shall replace such
equipment; and
(c) in any other event and as to any other default or breach by CBI,
CBI's liability shall be limited to actual direct damages and indirect
consequential damages suffered or incurred by CSC and Bureaus; provided,
however, that CBI shall not be required to pay in respect of such indirect
consequential damages an amount in excess of the actual insurance proceeds
received in respect of such indirect consequential damages as covered by
insurance, if any, of CBI. CSC and Bureaus shall not sue CBI in order to recover
proceeds of insurance against such indirect consequential damages unless and
until such proceeds have been paid to CBI and not paid to CSC and the Bureaus.
Nothing contained in this subparagraph (c) shall be interpreted to require CBI
to carry any such insurance covering such indirect consequential damages. No
limitation of liability of CBI shall apply in respect of any provision of this
Agreement other than those provisions of Articles II and III and Paragraphs 23
and 25 hereof which obligate CBI to provide services pursuant to and as
described in said Articles II and III and Paragraphs 23 and 25 hereof.
23. Release With Respect to Accuracy of Data. Bureaus hereby release CBI
and CBI hereby releases Bureaus from any and all claims, demands, actions,
causes of action, suits,
-76-
<PAGE>
costs, damages, expenses, compensation, penalties, liabilities and obligations
of any kind or nature whatsoever arising out of or relating in any way to
negligent actions concerning inaccurate or invalid information furnished by CBI
to Bureaus or by Bureaus to CBI, as the case may be, in connection herewith;
provided, however, that Bureaus do not hereby release CBI from any claims,
demands, actions, causes of action, suits, costs, damages, expenses,
compensation, penalties, liabilities, and obligations arising out of or relating
in any way to (i) any invalidity or inaccuracy of promotions or pre-screenings
performed by CBI for Bureaus or (ii) any violation by CBI of the Fair Credit
Reporting Act.
24. Modifications to ACROPAC(TM). During the term of this Agreement, CBI
may implement any and all modifications, changes or improvements to or within
the ACROPAC System(TM) or with respect to the procedures or regulations
governing the operations thereof as CBI shall deem necessary, in its sole
discretion after requesting and receiving within a reasonable time the input and
suggestions of Bureaus, to the continued successful operation of ACROPAC(TM) or
the CBI affiliate system, and Bureaus specifically agree to comply therewith.
Any such modifications or improvements as implemented by CBI shall apply equally
to all credit bureaus within the CBI affiliate system.
-77-
<PAGE>
25. Compliance With Laws. Subject to and as limited by the provisions of
Paragraph 23 hereinabove, CBI agrees that in the performance by it of services
under this Agreement, CBI will comply in good faith in all material respects
with any federal, state or local laws, ordinances, regulations or administrative
orders specifically pertaining to such services, including but not limited to,
the Fair Credit Reporting Act, as such laws, ordinances, regulations or orders
are presently constituted or as the same from time to time may be amended;
provided, however, that nothing herein shall in any manner or to any extent
alter, lessen, modify or substitute for the obligation of Bureaus to comply in
good faith in all material respects with all such laws, ordinances, regulations
or orders, and Bureaus specifically agree to so comply therewith. In the event
that CBI shall conclude that compliance with any such future or amended law,
ordinance, regulation or order will materially increase the cost of performing
the services of CBI provided for by this Agreement, Bureaus and CBI shall
undertake to agree upon a revised schedule of charges and fees under Paragraph 8
hereof.
26. Force Majeure. Notwithstanding any provisions to the contrary herein
contained, no party hereto shall be liable to the other party for any delay or
interruption in performance as to any obligation hereunder resulting from
governmental emergency orders, judicial or governmental action,
-78-
<PAGE>
emergency regulations, sabotage, riots, vandalism, labor strikes, or disputes,
acts of God, fires, electrical failure, major computer hardware or software
failures, equipment delivery delays, acts of third parties, or any other cause,
if such delay or interruption in performance is beyond its reasonable control.
27. Relationship of Parties. Nothing contained in this Agreement shall be
construed as creating a joint venture, partnership, licensor-licensee (except as
otherwise provided in Paragraph 18 of this Agreement), principal-agent or mutual
agency relationship between or among the parties hereto, and no party shall, by
virtue of this Agreement, have any right or power to create any obligation,
express or implied, on behalf of any other party. No party, nor any employee of
a party, shall be deemed to be an employee of another party by virtue of this
Agreement.
28. No Third-Party Benefits. CBI, Accounts Management, CSC and Bureaus
acknowledge, agree and intend that this Agreement is entered into solely for the
respective benefit of each of them, each Acquired Corporation, Naples and the
respective successors and permitted assigns of each, and nothing in this
Agreement shall be construed as giving any person, firm, corporation or other
entity (including, without limitation on the foregoing, any customer of
Bureaus), other than the parties hereto, the Acquired Corporations,
-79-
<PAGE>
Naples and the respective successors and permitted assigns of each, any right,
remedy or claim under or in respect of this Agreement or any provision hereof.
29. Assignment. The parties hereto acknowledge the special and unique
purposes of this Agreement and, therefore, agree that, notwithstanding any other
provisions to the contrary contained in this Agreement, neither this Agreement
nor any of the rights or obligations hereunder shall be assignable by any
Bureau, CSC or Accounts Management without the prior written consent of CBI and
Equifax or by CBI or Equifax without the prior written consent of Accounts
Management, CSC and Bureaus; provided, however, that CSC and any affiliate of
CSC shall be permitted to assign this Agreement and their respective rights and
obligations hereunder to any other affiliate of CSC without the prior written
consent of CBI; and provided further, that CBI shall be permitted to assign this
Agreement and its respective rights and obligations hereunder to Equifax or any
affiliate of Equifax without the prior written consent of CSC, the Bureaus and
Accounts Management; and provided further, that any assignment whatsoever shall
contain a provision to the effect that the assignee shall assume and be subject
to the terms of this Agreement and that in no event shall the assignor by such
assignment be relieved of any of its obligations hereunder.
-80-
<PAGE>
30. Retention of Credit Data. Except as may be necessary to effect an
orderly transition to a successor data processor, each Bureau specifically
covenants and agrees that during the term of this Agreement, or any renewal
thereof, such Bureau will not sell, transfer or otherwise provide to any other
Person (other than CBI or Equifax or affiliates of such Bureau) duplicates, in
whole or material part, of the consumer credit data and credit files of such
Bureau at any time subject to the ACROPAC System(TM).
31. Remote Terminals. There shall be no restrictions upon the source or
type of remote terminals used by any Bureau, or any of its customers, except
that such terminals shall be compatible with the ACROPAC System(TM).
32. Purchase of Supplies. Bureaus may purchase from CBI Credit Report
Blank Forms 2000-A, 250-WS, 250, as well as such other supplies as CBI may make
available for purchase. CBI will invoice Bureaus pursuant to Paragraph 8(b) of
this Agreement for such supplies purchased at prices equal to the cost incurred
by CBI in obtaining the same, plus handling and shipping expenses of CBI.
33. Sales of Reporting and Collections Businesses. CSC, Bureaus and
Accounts Management covenant that during the term of this Agreement they shall
not, except as contemplated herein, dispose of a material part of their
Collection Services and Reporting Services businesses (except for dispositions
-81-
<PAGE>
made in the ordinary course of business or which do not materially adversely
affect the revenues of the Group and the Acquired Corporations, in the
aggregate, or dispositions to another affiliate of CSC).
34. Exclusion of Naples. The parties hereto recognize and agree that the
Credit Bureau of Naples, a credit bureau owned by JHC ("Naples"), shall not
initially receive credit reporting data processing services from CBI pursuant to
this Agreement. If, however, in the future JHC wishes Naples to receive such
data processing services from CBI, CBI shall provide such services and shall
charge for such services upon the terms contained in this Agreement. The assets
and liabilities of Naples shall be included in the Subsidiaries' Assets and
Liabilities (as if Naples were a Bureau) in the sales contemplated by Paragraphs
11 and 12 of this Agreement.
35. CSC Guaranty of Performance. CSC hereby unconditionally guarantees to
CBI the prompt and full performance and payment when due of all obligations set
forth in this Agreement of the Bureaus and Accounts Management and the payment
of all costs and expenses incurred by CBI in enforcing CSC's guaranty, including
reasonable attorneys' fees. CSC's guaranty shall be unlimited as to amount and
shall be a continuing guaranty. CSC hereby waives notice of acceptance of its
guaranty and of any liability to which it applies or may apply. CSC's guaranty
is an absolute guaranty of performance
-82-
<PAGE>
and payment and not of collection, and CSC waives any right to require that any
action be brought by CBI against Bureaus and/or Accounts Management prior to
requesting CSC to perform under its guaranty. Should CBI seek to enforce the
obligations of CSC under this guaranty in any court, CSC waives any necessity,
substantive or procedural, that a judgment previously be rendered against
Bureaus and/or Accounts Management, or that any action be brought against
Bureaus and/or Accounts Management, or that Bureaus and/or Accounts Management
be joined in such cause. The obligations of CSC under this guaranty shall not be
affected in any way by receivership, insolvency, bankruptcy or other proceedings
affecting Bureaus and/or Accounts Management.
CBI may at any time, without the consent of or notice to CSC (unless
otherwise required herein), and without impairing or releasing the obligations
of CSC under this guaranty, upon or without any terms or conditions and in whole
or in part: (1) change the manner and terms or extend the time of performance or
payment of, or alter, any obligation of Bureaus and/or Accounts Management
hereby guaranteed, and CSC's guaranty shall apply to said obligations as such
may be changed, extended or altered in any manner; (2) exercise or refrain from
exercising any rights against Bureaus and/or Accounts Management; (3) settle or
compromise any obligations hereby guaranteed or hereby incurred; and (4) apply
any sums
-83-
<PAGE>
paid in respect of any obligation of Bureaus and/or Accounts Management
regardless of what other obligations of Bureaus and/or Accounts Management to
CBI remain unpaid.
Notwithstanding any payment made by CSC by reason of this guaranty,
CSC shall not be subrogated to the rights of CBI until all obligations
guaranteed hereunder have been paid or performed. No delay on the part of CBI in
exercising any right hereunder or failure to exercise the same shall operate as
a waiver of such right.
36. Equifax Guaranty of Performance. Equifax hereby unconditionally
guarantees to CSC, Bureaus and Accounts Management the prompt and full
performance and payment when due of all obligations set forth in this Agreement
of CBI and the payment of all costs and expenses incurred by CSC, Bureaus and
Accounts Management in enforcing Equifax's guaranty, including reasonable
attorneys' fees. Equifax's guaranty shall be unlimited as to amount and shall be
a continuing guaranty. Equifax hereby waives notice of acceptance of its
guaranty and of any liability to which it applies or may apply. Equifax's
guaranty is an absolute guaranty of performance and payment and not of
collection, and Equifax waives any right to require that any action be brought
by CSC, Bureaus and Accounts Management against CBI prior to requesting Equifax
to perform under its guaranty. Should CSC, Bureaus and Accounts Management seek
to enforce the obligations of Equifax under
-84-
<PAGE>
this guaranty in any court, Equifax waives any necessity, substantive or
procedural, that a judgment previously be rendered against CBI, or that any
action be brought against CBI, or that CBI be joined in such cause. The
obligations of Equifax under this guaranty shall not be affected in any way by
receivership, insolvency, bankruptcy or other proceedings affecting CBI.
CSC, Bureaus and Accounts Management may at any time, without the
consent of or notice to Equifax (unless otherwise required herein), and without
impairing or releasing the obligations of Equifax under this guaranty, upon or
without any terms or conditions and in whole or in part: (1) change the manner
and terms or extend the time of performance or payment of, or alter, any
obligation of CBI hereby guaranteed, and Equifax's guaranty shall apply to said
obligations as such may be changed, extended or altered in any manner; (2)
exercise or refrain from exercising any rights against CBI; (3) settle or
compromise any obligations hereby guaranteed or hereby incurred; and (4) apply
any sums paid in respect of any obligation of CBI regardless of what other
obligations of CBI to CSC, Bureaus or Accounts Management remain unpaid.
Notwithstanding any payment made by Equifax by reason of this
guaranty, Equifax shall not be subrogated to the rights of CSC, Bureaus or
Accounts Management until all obligations guaranteed hereunder have been paid or
performed.
-85-
<PAGE>
No delay on the part of CSC, Bureaus or Accounts Management in exercising any
right hereunder or failure to exercise the same shall operate as a waiver of
such right.
37. Notices. All notices, requests, demands, and other communications
hereunder shall be in writing except as expressly stated in this Agreement, and
shall be deemed to have been duly given when received upon delivery by hand or
by certified mail, return receipt requested, addressed as follows:
(a) If to Accounts Management, CSC or the Bureaus:
At the respective addresses set forth on Page 1 of this
Agreement, to the attention of the respective Presidents. A
copy of any notice to any Bureau or Accounts Management shall
also be sent to CSC, to the attention of the President of CSC.
(b) If to CBI or Equifax:
The Credit Bureau, Incorporated of Georgia
1600 Peachtree Street, N.W.
Post Office Box 4091
Atlanta, Georgia 30302
Attention: President
The parties hereto may, by notice given hereunder, designate any further or
different addresses to which such notices shall be sent.
38. Severability. In the event any provision of this Agreement shall be
held invalid or unenforceable by any court of competent jurisdiction, such
holding shall not invalidate or render unenforceable any other provision hereof.
-86-
<PAGE>
39. Exhibits. All Exhibits attached hereto are a part of this Agreement
and are expressly incorporated herein.
40. Confidentiality of ACROPAC System(TM). Accounts Management, CSC and
Bureaus acknowledge and agree that CBI is the owner of the ACROPAC System(TM)
and of all interests, programs, codes, software documentation or other
appurtenances related thereto or derived therefrom. Accounts Management, CSC and
Bureaus further acknowledge and agree that the ACROPAC System(TM) and any codes,
procedures or ACROPAC System(TM) documentation are confidential and proprietary
to CBI. Except as contemplated by Paragraph 18 hereof, during the term of this
Agreement and thereafter, Accounts Management, CSC and Bureaus agree to
maintain, and Accounts Management, CSC and Bureaus agree to cause their
respective directors, officers, employees and agents to maintain, in strict
confidence and not to disclose to any other person or entity, all such
information, materials and know-how as may be provided to Accounts Management,
Bureaus or CSC by CBI during the term of this Agreement and to take such actions
as are necessary to protect against disclosure thereof. Except as contemplated
by Paragraph 18 hereof, Accounts Management, CSC and Bureaus shall make no use
of any such information, materials and know-how whatsoever except solely for the
purpose of this Agreement, in accordance with the terms and during the existence
of this Agreement. Unless
-87-
<PAGE>
otherwise provided herein, upon the termination of this Agreement, Bureaus will
return to CBI all manuals, materials and documents pertaining to CBI or the
ACROPAC System(TM) obtained from CBI during the term hereof, and all copies and
partial copies thereof.
41. Confidentiality of Information. From time to time during this
Agreement, Accounts Management, CSC and Bureaus may receive from CBI and CBI may
receive from Accounts Management, CSC or any Bureau, confidential, competitive
or commercially sensitive information concerning the business of CBI or CSC or
such Bureau or Accounts Management, as the case may be, marketing, sales or
products of CBI, credit bureaus owned by CBI or of Affiliate Bureaus or of CSC
or such Bureau or Accounts Management, as the case may be, which, when provided
to CSC, Bureaus, Accounts Management or CBI, as the case may be, is not
generally known by the public. CSC, Bureaus, Accounts Management and CBI agree
to maintain and agree to cause their respective directors, officers, employees
and agents to maintain such information in strict confidence, to not disclose
the same to any other person or entity and to take all appropriate action to
protect against disclosure thereof.
42. Injunctive Relief. Accounts Management, CSC, Bureaus and CBI
acknowledge and agree that use or disclosure of the information described by
Paragraphs 40 and 41 of this
-88-
<PAGE>
Agreement in a manner inconsistent with this Agreement will give rise to
irreparable injury to CBI or Accounts Management, CSC and Bureaus, as the case
may be, which cannot be adequately compensated in damages and that CBI or
Accounts Management, CSC and Bureaus, as the case may be, may seek and obtain
equitable, injunctive relief to prevent or restrain such unauthorized use or
disclosure, together with any other remedies which may be available to CBI or
Accounts Management, CSC and Bureaus, as the case may be.
43. Use of ACROPAC(TM) Services. Except as provided in Paragraph 18 of
this Agreement, CBI does not convey or transfer, nor does any Bureau obtain any
right or interest in, any of the programs, systems, data or materials utilized
or provided by CBI in the performance of this Agreement. Under this Agreement,
CBI provides ACROPAC(TM) services solely to Bureaus and their customers
(including the credit bureaus located in Hopkinsville, Kentucky, Longview, Texas
and Wichita Falls, Texas) and Bureaus agree that they will not, except as
provided in Paragraph 46 of this Agreement, resell or subcontract such services
to other credit bureaus or to any other Person.
44. CBI Affiliate System. Bureaus specifically acknowledge that CBI
provides to Affiliate Bureaus and credit bureaus owned by CBI ACROPAC(TM)
services from CBI and that CBI maintains procedures for the efficient provision
of such services and coordination among credit bureaus owned by CBI,
-89-
<PAGE>
Affiliate Bureaus and CBI. Bureaus agree that they will comply with such
reasonable directives and reasonable guidelines with respect to operation of the
CBI affiliate system and cooperation among credit bureaus owned by CBI,
Affiliate Bureaus and Bureaus as CBI may promulgate from time to time. Except as
contemplated by Paragraph 45 hereof, (i) access by Bureaus, CBI, credit bureaus
owned by CBI and Affiliate Bureaus to the respective files of each shall be only
for obtaining credit data solely for purposes or uses authorized and permitted
by the ACROPAC System(TM) and the bureau so accessed and (ii) no access to, or
use of, credit data from such respective bureau files shall be permitted other
than in accordance with authorization by the accessed bureau and by CBI.
45. No Limitation on Business. Nothing contained in this Agreement shall
prevent, or be construed to prevent, Accounts Management, CSC, the Bureaus and
any direct or indirect subsidiary thereof from entering into or engaging in any
credit reporting, collection or other business of any kind or nature in any area
or locality. Nothing contained in this Agreement shall prevent Accounts
Management, CSC, the Bureaus and any such subsidiary from accessing any
information stored in the ACROPAC System(TM) and then processing and
incorporating such information into any of their products or services, so long
as such parties comply with all applicable laws when using such information. The
charge for each such
-90-
<PAGE>
access shall be determined in accordance with Paragraph 8(a) hereof.
46. Conversion of Associates. Credit Services shall use its best efforts
to cause CBDC to assign the service contracts between CBDC and credit bureaus
currently using the data processing services of CBDC to CBI as soon as
practicable after the date of this Agreement. If any such customer of CBDC
refuses to consent to such assignment to CBI, CBI, as a subcontractor of CBDC,
shall provide its services and the services of the ACROPAC System(TM) to such
customer, and Credit Services shall cause CBDC to remit to CBI for the provision
of such services any amounts received by CBDC from such customer for the
performance of services under such service contract of said customer.
47. Credit Bureau of Albuquerque. Credit Services hereby agrees that it
shall not, if both CBI and the Credit Bureau of Albuquerque ("Albuquerque")
have, on or before December 31, 1988, executed a definitive purchase agreement
(providing for the purchase by CBI of all of the assets or stock of Albuquerque)
or a data processing service contract (providing for the furnishing by CBI of
ACROPAC System(TM) services), receive any Royalty with respect to billable
inquiries made regarding subjects residing in New Mexico (except for subjects
residing in the zip codes set forth on Exhibit J attached hereto, which zip
codes are in the service areas of
-91-
<PAGE>
the Amarillo Credit Association and Retail Merchant's Association, Inc. located
in Lubbock, Texas). If CBI consummates such purchase of Albuquerque contemplated
by said definitive purchase agreement or provides such ACROPAC(TM) services
pursuant to said service contract, the State of New Mexico (except for the zip
codes set forth on Exhibit J attached hereto) shall be deleted from Exhibit E as
of the date of such definitive purchase agreement or service contract.
48. Special Provisions
(a) In the event that as of any time first occurring after the date
of its acquisition ("acquisition date") by CSC and/or the Bureaus and/or
Accounts Management, an Acquired Corporation (i) conducts a consumer credit
reporting business pertaining to subjects residing in those service areas set
forth in Exhibit E and (ii) either is provided ACROPAC(TM) services by CBI or is
not precluded by a contract between such Acquired Corporation and a third party
from being provided ACROPAC(TM) services by CBI, then the parties hereto and
said Acquired Corporation shall execute an addendum to this Agreement which adds
such Acquired Corporation as a party hereto and which provides that wherever the
term "Bureau" or "Bureaus" appears in the following Paragraphs of this
Agreement, such term shall be deemed to include such Acquired Corporation:
-92-
<PAGE>
(A) Paragraphs 1 through 3 (except such Paragraphs shall not apply
if the Acquired Corporation is already an Affiliate Bureau;
and further except that the Online Cut-Over Date shall occur
on a date mutually and reasonably agreeable to CBI and such
Acquired Corporation);
(B) Paragraphs 4 through 8 (except the exclusions as to Exhibit F
set forth in Paragraph 7(a) shall not apply to the extent such
Acquired Corporation owns files on subjects residing in zip
codes listed on Exhibit F)
(C) Paragraphs 16 through 18;
(D) Paragraphs 22 through 25;
(E) Paragraphs 29 through 33;
(F) Paragraphs 36 through 37; and
(G) Paragraphs 40 through 45.
(b) In the event that as of any time first occurring after its
acquisition date, an Acquired Corporation (i) conducts a consumer credit
reporting business pertaining to subjects residing in service areas other than
those set forth in Exhibit E, (ii) is provided ACROPAC(TM) services by CBI or is
not precluded by a contract between such Acquired Corporation and a third party
from being provided ACROPAC(TM) services by CBI, and (iii) if such services are
not being provided by CBI, receives permission from CBI to be served by CBI on
the ACROPAC System(TM) then the parties hereto and said Acquired Corporation
shall execute an addendum to this Agreement which adds such Acquired Corporation
as a party hereto and which provides that wherever the term "Bureau" or
"Bureaus" appears in the following Para-
-93-
<PAGE>
graphs of this Agreement, such term shall be deemed to include such Acquired
Corporation:
(A) Paragraphs 1 through 3 (except such Paragraphs shall not apply
if the Acquired Corporation is already an Affiliate Bureau;
and further except that the Online Cut-over Date shall occur
on a date mutually and reasonably agreeable to CBI and such
Acquired Corporation; and further except that the Acquired
Corporation shall pay all costs of conversion of its files);
(B) Paragraphs 4 (a) (i) and 4 (b) through (k);
(C) Paragraphs 5 through 8 (except that references to service
areas in Paragraph 7(a) shall be to service areas covered by
files owned by such Acquired Corporation; further except that
references in Paragraph 7(c) to service areas defined by
Exhibit E shall instead be deemed to be references to service
areas covered by files owned by such Acquired Corporation;
further except that Paragraph 7(d) shall not be applicable
under any circumstance; and further except that a charge for a
billable inquiry under Paragraph 8(a) shall be equal to the
Most Favored Customer Rate);
(D) Paragraphs 16 through 18 (except that the reference in
Paragraph 18 (a) to areas set forth in Exhibit E shall be
deemed to be a reference to the service areas of such Acquired
Corporation);
(E) Paragraphs 22 through 25;
(F) Paragraphs 29 through 33;
(C) Paragraphs 36 through 37; and
(H) Paragraphs 40 through 45.
(c) In the event an Acquired Corporation conducts a consumer credit
reporting business pertaining to subjects residing in service areas other than
those set forth in
-94-
<PAGE>
Exhibit E, CSC agrees that (i) if such Acquired Corporation is not provided
ACROPAC(TM) services by CBI, CSC, at CBI's request and to the extent not
prohibited by a contract between such Acquired Corporation and a third party,
will deliver to CBI a copy of the consumer credit reporting file owned by such
Acquired Corporation; (ii) CBI shall have an option to purchase the Acquired
Corporation at a price equal to the price paid by CSC for such Acquired
Corporation, which option shall terminate on the later to occur of (x) the first
anniversary of the acquisition date of such Acquired Corporation or (y) the date
on which conversion of the consumer credit reporting file owned by such Acquired
Corporation is no longer prohibited by a contract between such Acquired
Corporation and a third party; (iii) no such Acquired Corporation shall be
deemed to be an Acquired Corporation for purposes of Article IV hereof; (iv)
except to the extent permitted by CBI, employees of CSC and its affiliates shall
not attend any informational meetings of the Affiliate Bureaus; and (v) promptly
after such an acquisition CBI shall in writing be notified of such acquisition
and shall at its request be furnished with such information which shall be
reasonably adequate to inform CBI regarding its decision regarding its option to
acquire such Acquired Corporation.
49. Survival. Paragraphs 12(a), 12(c), 18(a), 18(b), 40 and 41 hereof
contain certain provisions which, to the extent expressly stated therein, shall
survive the termination hereof.
-95-
<PAGE>
50. Headings. The section and other headings in this Agreement are
inserted solely as a matter of convenience for reference and are not a part of
this Agreement.
51. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
52. Waiver of Rights. Failure of any party to enforce any of its
respective rights or remedies hereunder with respect to any specific act or
failure to act of any party shall not constitute a waiver of the rights of such
party to enforce such rights and remedies with respect to any other or
subsequent act or failure to act.
53. Entire Agreement. This Agreement, including the Exhibits hereto,
constitutes the entire Agreement between the parties and supersedes and cancels
any and all prior Agreements between the parties relating to the subject matter
hereof. Neither this Agreement nor any provision hereof may be changed, waived,
discharged or in any manner modified orally, but only by agreement in writing
signed by all parties to this Agreement.
54. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall take effect as an original, and all of which,
together, shall evidence one and the same Agreement.
-96-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
THE CREDIT BUREAU, INCORPORATED
OF GEORGIA
By: /s/ [ILLEGIBLE]
----------------------------------
Title: President
-------------------------------
"CBI"
EQUIFAX INC.
By: /s/ [ILLEGIBLE]
----------------------------------
Title: Senior Vice President
-------------------------------
"EQUIFAX"
COMPUTER SCIENCES CORPORATION
By: /s/ [ILLEGIBLE]
----------------------------------
Title: Vice President
-------------------------------
"CSC"
CSC CREDIT SERVICES, INC.
By: /s/ [ILLEGIBLE]
----------------------------------
Title: President
-------------------------------
"CREDIT SERVICES"
-97-
<PAGE>
EXHIBIT A
THE AUTOMATED CREDIT REPORTING ONLINE PACKAGE
(ACROPAC(TM))
SYSTEM DESCRIPTION
-1-
<PAGE>
GENERAL DESCRIPTION:
The CBI Automated Credit Reporting Online Package (ACROPAC(TM) or
ACROPAC II System(TM)) is a complete online reporting system designed to utilize
advanced computer systems to upgrade substantially the services and efficiency
of today's credit bureau operations. The system was developed to meet the
changing needs of the credit grantor and to meet the following objectives:
- To provide accuracy of information with speed.
- To provide more complete information required for credit
granting decisions.
- To update, online, existing reference files through automated
methods.
- To be expandable and flexible in order to incorporate new
bureau services as required.
The ACROPAC II SYSTEM(TM) of programs is based upon extensive
computer experience, as well as the analysis of bureau operations and credit
grantor requirements. All processing steps affecting the logic and the decisions
relating to services which the system can provide attempt to serve the desires
of the credit bureau and credit grantor for accuracy, content and usage. These
programs are designed to use contemporary data processing equipment and
communication
-2-
<PAGE>
networks. System software encompasses the following primary tasks:
- Conversion of manual records to the online system with edit
rules for accuracy and statistical reports for audit purposes.
- Conversion of automated credit files from other vendors of
computerized reporting services.
- Processing of credit grantor automated account history
information to update and create new files on a periodic
basis. ACROPAC II(TM) offers various programs to extract data
from a wide range of different computer systems and record
formats in order to process such data into the online system.
- Telecommunications software to control and distribute
inquiries and responses to and from the computer center. This
software is designed for reliability and use of low and high
speed communication lines.
- The online software is a combination of many individual
programs designed to provide EDP internal control functions
and also provide the information in correct formats necessary
for transmission and display. This software
-3-
<PAGE>
provides for terminal maintenance entry, billing data entry,
editing of input and assistance messages to guide terminal
operators.
- The System produces statistics for participating credit
bureaus to assist in work organization. It maintains control
of all records, including necessary purge functions.
The ACROPAC II System(TM) is designed to support many credit bureaus
from a single computer center location, with a primary objective of providing
required services at minimum operating cost. The concept provides for a
centralized programming and operating organization equipped to guide and develop
online system performance while increasing joint utilization of EDP hardware by
System bureaus.
COMPUTER CENTER HARDWARE
The System Center currently utilizes AMDAHL 5880 and 5890 computers.
Reference files are stored on random access disc units, providing large volume
storage and rapid access. The Center supports compatible teletypes for credit
grantor locations and Harris 9178 Series Video Display Stations with hardcopy
printers at bureau locations.
-4-
<PAGE>
ONLINE BUREAU OPERATIONS
Access and display of reference files for oral reports is
accomplished through Harris 9178 Video Display Stations by input of required
identifying information. The Bureau operator enters the following basic items
for file retrieval:
Customer Account Number
Display Type
Customer Name
Person Calling
Name of Subject
Address of Subject
Other items of identifying information can be entered, such as
previous address and social security number, to increase the probability of an
accurate determination concerning the existence of a record on the subject of
the inquiry. After the file has been read to the customer, a charge is
automatically captured by the System.
The procedure for retrieving a file for updating purposes is the
same as that for oral reporting; however, the file is printed by request of the
terminal operator and the billing for that update is entered by the terminal
operator. When the updated information has been obtained, a maintenance entry is
made by the operator to update the
-5-
<PAGE>
automated file and a printed report may be requested. The charge of the service
rendered is then entered.
Functions which can be performed by a Harris 9178 bureau terminal
operator include:
Request in--file displays
Order hardcopy of displayed file
Automatic capture of in-file and no--file charges
Specific billing entries for standard services
Add maintenance to existing files
Create new files
Delete files and specific items in a file
Instruct printer to start or stop printing
All terminal input information is captured by the online system and
is posted to the file by the ACROPAC II(TM) online update programs. All
transactions performed by the devices are recorded on magnetic tape as well as
disc recording devices for online back-up purposes statistical information
generation. Two level back-ups of the online file provide for file recovery, if
necessary. Such back-ups shall be created no less than once per week. At least
one copy of such back-up will be stored at an off-premises location.
-6-
<PAGE>
CUSTOMER (CREDIT GRANTOR) TERMINALS
The ACROPAC II System(TM) provides the necessary software and
communications facilities to support teletype compatible terminals at speeds of
10, 15, 30, 120 and 240 CPS terminals with tape capability at System bureau
customer locations. These terminals provide direct access to the ACROPAC(TM)
automated files. All in-file report charges are automatically captured by the
System at the time of request.
AUTOMATIC PURGING OF OLD INFORMATION
After a bureau is operational on the ACROPAC System(TM), an online
purge program deletes unwanted information, in accordance with legal guidelines,
from files when retrieved. Exhibit B to this Agreement reflects purge rules
currently in effect.
FORM DESTINATION
The System allows each participating bureau to send requests for
updated reports to other bureaus on the System via the terminal. Each bureau can
also return an updated report to an inquiring bureau via the terminal. The form
may then be printed by the bureau receiving the report.
-7-
<PAGE>
MARKETING SERVICE CENTER
This center is capable of running CBI's online and off-line system and all
support systems. This site, which is located in another part of the city, will
be used in the event the primary site, housed at 1600 Peachtree Street, in
Atlanta, Georgia, becomes unavailable.
COST ALLOCATION SYSTEM
The Cost Allocation System is designed to assist the bureau with more aggressive
sales of system files and to assure that all bureaus have an incentive to build
and maintain files with care and quality, thus allowing each bureau a fair
return as file owner. Outlined below is how the Cost Allocation System is
designed:
1. The file owner pays the Billable Inquiry charge regardless of how
the file is sold.
2. The file is billed at the file owner's rate.
3. The file owner receives 100% of the revenue.
4. On direct access terminal (customer) and system to system access -
when Bureau "A's" customer receives a file from Bureau "B" at "B's"
price, then Bureau "A" receives a twenty-five cents ($.25) cost
allocation from Bureau "B". On direct access terminal (customer) and
system to system access - when a CBI national customer receives a
file from
-8-
<PAGE>
Bureau "B" at "B's" price, then CBI National Sales receives a
twenty-five cents ($.25) cost allocation from Bureau "B".
5. On CRT (inhouse) access - when Bureau "A" receives a file from
Bureau "B" at "B's" price, then Bureau "A" receives a fifty cents
($.50) cost allocation from Bureau "B". On CRT (inhouse) access -
when a CBI national customer receives a file from Bureau "B" at
"B's" price, then CBI National Sales receives a fifty cents ($.50)
cost allocation from Bureau "B".
6. All system files are included in the Cost Allocation System.
7. Cost Allocation will occur on all in-file services.
CREDIT MARKETING SERVICE (CMS)
- CMS will represent the bureau at the national and regional
level on promotion program sales.
- CMS will also assist the bureau on any promotion program sold
by the bureau.
- CMS has a special unit in data processing dedicated to
promotions and Account Monitoring.
-9-
<PAGE>
Interface transaction sharing takes place on promotions after data processing
costs have been deducted:
1. CMS completes the sale - 75% of the net revenue goes to the
affiliated bureau as the file owner and CMS receives 25% as the
seller of the program.
2. Affiliated bureau completes the sale - CMS receives 6% of the net
revenue. If the program is confined to one bureau, that bureau
receives 94% of the net revenue.
If the revenue is between CBI or other affiliated bureaus, the owner
of the file receives 75% of the net revenue. The bureau making the
sale receives 25% of total net revenue.
Interface transaction sharing takes place on Account Monitoring after data
processing costs have been deducted:
1. CBI/CMS completes the sale - 75% of the net revenue goes to the
affiliated bureau as the file owner and CBI/CMS receives 25% as the
seller of the program.
2. Affiliated bureau completes the sale - CBI/CMS receives 6% of the
net revenue. If the program is
-10-
<PAGE>
confined to one bureau, that bureau receives 94% of the net revenue.
If the revenue is between CBI/CMS or other affiliated bureaus, the owner of the
file receives 75% of the net revenue. The bureau making the sale receives 25% of
total net revenue.
-11-
<PAGE>
EXHIBIT B
PURGE RULES FOR ACROPAC SYSTEM(TM)
-12-
<PAGE>
ONLINE PURGE RULES APRIL, 1983
TRADE AND NON-MEMBER TRADE----WHOLE LINE 6 YEARS 9 MONTHS FROM THE DATE OF
LAST ACTIVITY (DLA), OR FROM THE DATE OPENED IF NO DATE OF LAST ACTIVITY IS
PRESENT, IF THE CURRENT STATUS IS 2 OR HIGHER. IF NO DATE OF LAST ACTIVITY OR
DATE OPENED PRESENT, PURGE IMMEDIATELY IF CURRENT STATUS IS 2 OR HIGHER.
- ----WHOLE LINE 5 YEARS FROM DATE OF LAST ACTIVITY, OR FROM DATE REPORTED IF NO
DATE OF LAST ACTIVITY IS PRESENT, IF CURRENT STATUS IS 0, 1 OR BLANK.
- ----30/60/90 COUNTERS (ONLY) A) IF DATE OF LAST ACTIVITY IS BLANK AND DATE
OPENED IS BLANK OR OLDER THAN 6 YEARS 9 MONTHS AND CURRENT STATUS IS "0" or "1".
B) IF DATE OF LAST ACTIVITY IS PRESENT AND DATE OPENED IS BLANK OR OLDER THAN 6
YEARS 9 MONTHS AND CURRENT STATUS IS "0" or "1" AND MONTHS REVIEWED IS GREATER
THAN 83.
- ----PREVIOUS HIGH 5 YEARS FROM DATE OF PREVIOUS HIGH.
-13-
<PAGE>
- ----STATUS CODES (A, N, Q, T, U, & X) 6 MONTHS FROM DATE REPORTED. ALL OTHERS 5
YEARS FROM DATE REPORTED.
CHECKING AND SAVINGS----6 MONTHS FROM DATE REPORTED
SPECIAL SERVICE ITEMS----#1, 2, & 6----1 YEAR FROM DATE REPORTED
#5----2 YEARS FROM DATE REPORTED
#4 & 7----NO PURGE
INQUIRIES----2 YEARS FROM DATE OF INQUIRY (LOCAL AND FOREIGN)
NAME, ADDRESSES, EMPLOYMENTS, ID, FILE SINCE, NONRESPONSIBILITY, OTHER INCOME,
DEATH NOTICES, FORMER NAME, AND ALSO KNOWN AS----NO PURGE
COLLECTION ITEMS----6 YEARS 9 MONTHS FROM DATE OF LAST PAYMENT OR DATE ASSIGNED
IF NO DATE OF LAST PAYMENT, FOR BOTH PAID AND UNPAID
-14-
<PAGE>
FORECLOSURE, GARNISHMENT, LIEN, JUDGEMENT, DIVORCE, SECURED LOAN, SEPARATE
MAINTENANCE, WAGE EARNER, SUITS, AND FINANCIAL COUNSELOR----6 YEARS 9 MONTHS
FROM DATE FILED
BANKRUPTCY----9 YEARS 9 MONTHS FROM DATE FILED
FOREIGN BUREAU HEADING----1 YEAR FROM DATE REPORTED IF THERE ARE NO ITEMS UNDER
THE HEADING. ITEMS UNDER THE HEADING WILL PURGE ACCORDING TO THE RULES ABOVE FOR
EACH INDIVIDUAL ITEM. THE HEADING WILL NOT PURGE UNTIL THE LAST ITEM UNDER THE
HEADING HAS PURGED.
-15-
<PAGE>
EXHIBIT C
DESCRIPTION OF ONLINE SERVICES
-16-
<PAGE>
REMOTE BUREAU OPERATIONS
The CBI ACROPAC System(TM) stores and maintains credit bureau
records so that they are distinctively identified and immediately accessible to
bureau terminal operators for oral reporting and file maintenance. Both of these
activities may occur concurrently. Bureau customers with compatible terminals
may also access bureau records, but only to obtain in-file credit reports. Other
bureaus with appropriate telecommunication capabilities may also access ACROPAC
bureau records, but for reports only. In each of these instances, the ACROPAC
System(TM) will automatically note the requestor, the service rendered and the
assigned charge.
Additionally, the records of each bureau are purged in accordance
with the retention sections of the Fair Credit Reporting Act. The purge rules
followed by CBI as of the date of this Agreement are attached hereto as Exhibit
B. The purge program enhances effective reporting, efficient use of equipment
and economical bureau operations.
Transmissions which require written reports will be placed in
storage. On request from the bureau, those reports will be transmitted by
long-line facilities to the bureau processor/printer.
-17-
<PAGE>
AUTODATA INPUT
The ACROPAC System(TM) has the capability of merging credit pay
record information from customer accounts receivable magnetic tape into the
individual subject credit files of System bureaus. Subject to the provisions of
the Agreement to which this Exhibit is attached, this service is provided to
each bureau on the ACROPAC System(TM). Subject also to such Agreement, no charge
will be made for the periodic merging with a bureau file base of information
received from any company customer tapes which pertains to subjects residing in
the area described on Exhibit E to this Agreement.
SAFE-GUARDS
CBI employs reasonable methods and measures to safeguard against the
unauthorized use of the information contained in the credit files and records of
System bureaus. These safeguards include the following:
1. Operational procedures in the ACROPAC System(TM) which will validate
a customer's account number before a credit report issues.
2. Customer terminals are not capable of altering any vital information
in the subject files. The
-18-
<PAGE>
customer terminal is capable of adding only limited identifying
information to files.
MASTER REGISTER SYSTEM---ARAPAC II
Except as otherwise agreed, Bureaus will receive customer statements
each month in the same format as bureaus owned by CBI. Such statements encompass
the current charges to bureau customers for each month, excluding statements for
off-line billing to such customers as Associated Credit Bureau, Inc. and Credit
Bureau Reports, Inc. This monthly billing service includes accounts receivable
reports. Cycle billings may be required whereby billings may be prepared for
various bureaus on the System at different times each month.
The CBI ACROPAC System's(TM) Data Center will transmit a Daily
Record of Revenue to System bureaus, providing a record, by type of report, of
the number of reports produced and the dollar amount charged from the start of
each calendar month. This report offers bureau management a method of reviewing
allocation of manpower resources and of identifying primary sources of revenue
on a timely basis.
-19-
<PAGE>
OPERATIONAL AND TECHNICAL SUPPORT
CBI will provide to System bureaus copies of all ACROPAC(TM)
Operating Manuals used by CBI in the operation of CBI automated regional
centers, as the same are revised from time to time. CBI will furnish to each
System bureau the identity of CBI personnel who will act as coordinators between
such bureau and the ACROPAC System(TM) Data Center. Such personnel will inform
bureaus of changes and improvements to the ACROPAC System(TM) and provide
instructions for implementing these changes and improvements.
OTHER SERVICES
The System also forwards statistical reports periodically to
bureaus. These reports reflect individual terminal operator performance and
total credit reporting operations of the bureau. Primary statistical reports
produced include:
A. Daily
Operator Delete Report, on fiche
Terminal Audit Trail, on fiche
Daily Revenue Report, printed in bureau
Daily Transaction Listing, on fiche
-20-
<PAGE>
Terminal Department Daily Production Report, printed in bureau
Terminal Department Deletion Report, printed in bureau
B. Monthly
Customer Accounts Aging Schedule
Final Revenue Report
Statement Registers
Cost Allocation Details
Cost Allocation Statistics
Stats By Customer
Stats By Line Of Service
Zip Code Analysis Report (Available to Bureaus in 120 days
after the date of this Agreement or upon a revision of the
ARAPAC System(TM))
C. On Request
Printed Code Books of Masterfile
Masterfile Labels
Updated Masterfile
-21-
<PAGE>
EXHIBIT D
EQUIPMENT REQUIRED FOR CONTINUATION OF
BUREAU OPERATION UNDER ACROPAC SYSTEM(TM)
-22-
<PAGE>
EQUIPMENT
HARRIS DATA SYSTEMS
9126 - 44C PROCESSOR - 4x4
9126 - 88C PROCESSOR - 8x8
4 PORT 3270 ADAPTER
4 PORT ASYNC ADAPTER
CRTS AND KEYBOARDS
PRINTERS
TELEPHONE SUPPORT EQUIPMENT
9600 BAUD MODEMS
AT&T LONG LINES --------------- TO ATLANTA
DATA SETS AND LOCAL LINES
DIAL BACK-UP SYSTEM
-23-
<PAGE>
EXHIBIT E
SERVICE AREAS
-24-
<PAGE>
SERVICE AREAS
Arkansas Nebraska
Illinois (except for Cook, DeKalb, New Mexico
DuPage, Grundy, Kane, Kendall,
Lake, McHenry and Will Counties) North Dakota
Indiana Ohio
Iowa Oklahoma
Kansas South Dakota
Kentucky Texas
Bienville, Bossier, Caddo, Claiborne, Wisconsin
Desoto, Jackson, Lincoln, Natchitoches,
Red River, Sabine, Webster, Morehouse,
Oauchita, Richland, Union and West Carroll
Parishes, Louisiana
Minnesota
Missouri
-25-
<PAGE>
EXHIBIT F
ASSOCIATES AND ASSOCIATES' ZIP CODES
-26-
<PAGE>
EXHIBIT G
LICENSE AGREEMENT
This License Agreement ("Agreement") is made by and among The Credit
Bureau, Incorporated of Georgia ("CBI"), CSC Credit Services, Inc. ("CSC"),
Credit Bureau of Cincinnati, Inc. ("Cincinnati"), Credit Bureau of Greater
Kansas City, Inc. ("Kansas City"), Johns Holding Company ("JHC"), and CSC Credit
Services of Minnesota, Inc. ("Minnesota") (CSC, Cincinnati, Kansas City, JHC,
and Minnesota being each hereinafter referred to as a "Bureau" and all of them,
collectively, as "Bureaus") as of this day of ____________, 19___. In
consideration of the grants and mutual covenants made in this Agreement, Bureaus
and CBI agree as follows:
-27-
<PAGE>
I. Definitions
1.1 "Permitted Sublicensee" means a corporation, which at the relevant
time, qualifies as the following: An organization wholly owned by a Bureau.
There shall be no more than one Permitted Sublicensee at any one time.
1.2 "The Software" means the most current version (as of the date hereof)
of the CBI Automated Credit Reporting Online Package software system known as
the ACROPAC System(TM).
1.3 "The Software Package" means the Software together with all programs,
object code, source code, software documentation, training manuals and other
appurtenances related thereto or derived therefrom.
2. License Grants
2.1 Licenses. Subject to the terms and conditions of this Agreement, CBI
irrevocably grants to Bureaus:
A. A non-exclusive license to use the Software Package at the
normal respective places of business of each Bureau and
Permitted
-28-
<PAGE>
Sublicensee for the purpose of providing services to each
Bureau, Permitted Sub-licensee, and persons to whom credit
reporting or data processing services are provided by each
Bureau or Permitted Sub-licensee;
B. A non-exclusive license to copy the Software solely for
back-up purposes.
2.2 License Limitations: Bureaus shall use the Software Package only for
the purposes described in Paragraph 2.1(A). In addition, Bureaus shall not
market the services provided to others by them utilizing the Software Package
under or by reference to the name "ACROPAC," or any variation thereof, or in any
manner that could reasonably be viewed as indicating the involvement of CBI in
the provision of such services.
3. Delivery, Installation, Documentation, and Training
3.1 Software Installation: Two copies of the Software shall be delivered
in machine readable format on magnetic tape in a format useable at the time of
delivery. Until the system operated by Bureaus is fully operational, CBI shall
-29-
<PAGE>
assist Bureaus with the installation of the Software as and when reasonably
requested by Bureaus. During such period, and as and when reasonably requested,
CBI shall provide Bureaus assistance with testing the Software and shall provide
assistance with any other steps necessary to prepare the Software for use by
Bureaus and/or its customers.
3.2 Training: CBI shall provide 180 trainer-days of training to Bureaus
to be used as and when requested by Bureaus. One trainer-day means one day of
training by one qualified instructor. Bureaus may request Phase 1 training,
which means manager training at the offices of CBI in Atlanta, Georgia.
Additionally, Bureaus may request Phase 2 training, which means on-site training
at Bureaus' user locations. Phase 1 training requires one trainer for every
three trainees. Bureaus agree to pay reasonable travel, meals, and lodging
expenses for Phase 2 trainers.
3.3 Documentation: By not later than the completion of the initial
installation of the Software, CBI shall provide to each Bureau one copy of all
educational, training, operations, and user manuals and similar documentation
relating to the Software. Each Bureau may copy all or part of such manuals and
documentation solely for internal use by such Bureau and any Permitted
Sublicensee.
-30-
<PAGE>
3.4 Source Code: CBI shall provide to Bureaus upon completion of the
Software installation the most current source code for the Software and one copy
of the most current programmer documentation. Bureaus shall have a
non-exclusive license to enhance, modify, or change the source code or to merge
the source code with other software. Bureaus shall not provide the source code
to third parties other than a Permitted Sublicensee. CBI shall provide technical
training, by qualified instructors, when and as requested by Bureaus, to enable
Bureaus to bring their system online in a fully operational state.
4. License Fees: Bureaus shall not be required to pay CBI any fee for use of
the Software by Bureaus and any Permitted Sublicensee.
5. Confidential Information
5.1 Confidential Information: Bureaus acknowledge that CBI considers the
Software Package and source code to contain confidential information belonging
to CBI, and Bureaus agree and will cause a Permitted Sublicensee at all times to
keep the Software Package confidential and, except as expressly permitted
herein, shall not disclose or permit others to disclose the Software Package or
any portion
-31-
<PAGE>
thereof. Bureaus are permitted to disclose the Software Package to its employees
and independent contractors who are required to have knowledge of the Software
Package in the performance of their duties, provided that the Bureaus require
each such employee and independent contractor to keep the Software Package
confidential and enforce such requirement. CBI acknowledges that in the
performance of this Agreement it may have access to information which Bureaus
consider confidential. Each party acknowledges that this Agreement does not
convey title to any confidential information of the other party. CBI shall not
copy, use, disclose, or commercially exploit or allow anyone else to copy, use,
disclose, or commercially exploit the confidential information of the Bureaus
without the express written consent of the Bureaus. CBI shall exercise all
reasonable precautions to prevent access to, use of, or copying of the
confidential information belonging to the Bureaus.
5.2 Liens: Bureaus shall not suffer or permit any lien or encumbrance of
any nature or description to attach to all or any part of the Software Package
or source code.
5.3 Retention of Rights: All applicable rights to patents, copyrights,
trademarks and trade secrets in the Software Package shall remain the sole and
separate property
-32-
<PAGE>
of CBI. Any authorized copies of any part of the Software Package shall include
such copyright and other disclosures requested by CBI reasonably required in
connection with the protection of these rights.
6. Warranty of Rights CBI warrants:
(a) that the Software does not infringe any copyright, patent right,
trademark right, trade secret right, or other proprietary rights of any
third party;
(b) that CBI is the owner of the Software and that it has the right
and power to grant the licenses and other rights granted to Bureaus under
this Agreement;
(c) that this Agreement does not violate any other agreement by
which CBI may be bound;
(d) that the Software and other materials hereunder shall be
provided free of all liens, claims, encumbrances and other restrictions
which will interfere with the Bureaus' use and possession described in
this Agreement; and
-33-
<PAGE>
(e) that Bureaus' use and possession of the Software and other
materials will not be interrupted or otherwise disturbed by CBI or any
person, firm, or entity asserting a claim under or through CBI.
Subject to the limitations set forth elsewhere in this Section 6, CBI shall
indemnify Bureaus from any violation of the Warranties of Rights provided in
this Section 6 and shall, at its own expense, defend any action to the extent
that such action is a violation of such Warranties of Rights or is based on a
claim which if true would constitute a violation of such Warranties of Rights.
CBI shall have the right to control the defense of all such claims and Bureaus
may only settle such claims (1) with prior written approval from CBI or (2) if
CBI refuses to indemnify Bureaus or defend such claims.
EXCEPT FOR THE WARRANTIES EXPRESSED IN THIS SECTION 6, CBI MAKES NO
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AND ALL OTHER SUCH
REPRESENTATIONS AND WARRANTIES, EXPRESS AND IMPLIED, INCLUDING WITHOUT
LIMITATION, THOSE OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE,
ARISING FROM THE DELIVERY, PERFORMANCE OR USE OF THE SOFTWARE, ARE HEREBY
SPECIFICALLY EXCLUDED.
-34-
<PAGE>
EXCEPT WITH RESPECT TO A BREACH OF THE WARRANTY SET FORTH IN SECTION 6
(a), CBI SHALL BE LIABLE TO BUREAUS ONLY FOR DIRECT DAMAGES ARISING FROM A
BREACH OF THIS AGREEMENT AND SHALL NEVER BE OBLIGATED TO OR LIABLE TO BUREAUS
FOR ANY CONSEQUENTIAL DAMAGES ARISING FROM ANY SUCH BREACH.
7. Term and Termination
This Agreement shall be effective when signed by all parties. This
Agreement shall be perpetual, unless Bureaus, in their sole discretion,
terminate this Agreement.
8. Miscellaneous
8.1 Bureaus shall be responsible for compliance with all applicable laws,
rules, and regulations of any competent governmental authority in use and
application of the Software and related materials.
8.2 In the event either party violates any term of this Agreement, the
other party may obtain injunctive relief, specific performance, or any other
relief available at law or in equity. In any action between the parties relating
to this Agreement, the court may award all or any
-35-
<PAGE>
part of the costs and expenses relating to such action, including attorneys'
fees, as the court shall deem just.
8.3 This Agreement shall be binding upon the parties' respective
successors and permitted assignees. Neither party may assign this Agreement or
any rights or obligations under this Agreement without the prior written consent
of the other party, and any such attempted assignment shall be void except that
either party may assign its rights and obligations under this Agreement to any
entity controlled by, controlling, or under common control of such party,
provided that such assignee assumes and agrees to perform all of the liabilities
and obligations of the assigning party hereunder.
8.4 Each party shall be excused for any delay or failure to fulfill its
obligations under this Agreement due to causes beyond its control such as
natural disasters, acts of government, strikes of other entities, acts of war,
civil disturbances, court order, or other causes beyond its reasonable control.
8.5 If any clause or provision of this Agreement is deemed or declared
invalid or unenforceable, all other terms and provisions shall remain in full
force and effect.
-36-
<PAGE>
8.6 No delay or omission by either party to exercise any right or power
under this Agreement shall impair any such right or power or be construed as a
waiver thereof.
8.7 CBI has the sole right and obligation to supervise, manage, direct,
perform, or cause to be performed the work to be performed by CBI under this
Agreement.
8.8 Except to the extent provided in that certain Agreement for
Computerized Credit Reporting Services and Options to Purchase and Sell Assets,
dated as of August 1, 1988, among the parties thereto, this Agreement contains
the entire understanding of the parties and supercedes all prior written or
verbal agreements or representations regarding the subject hereof. No change or
waiver of any provision of this Agreement shall be valid unless in writing and
signed by the party against whom such change or waiver is sought to be enforced.
No employee, agent, or representative of either party has authority to bind such
party by any oral representation or warranty.
8.9 Wherever under this Agreement one party is required to give notice to
the other, such notice shall be sufficient if given in person, or if mailed by
United States mail, first class postage prepaid, and addressed as follows:
-37-
<PAGE>
To CBI:
The Credit Bureau, Incorporated of Georgia
1600 Peachtree Street, N.W.
Atlanta, Georgia 30309
Attn: Corporate Secretary
To Bureaus:
c/o CSC Credit Services, Inc.
652 E. North Belt, Suite 400
Houston, Texas 77060
Attn: President
THE CREDIT BUREAU, INCORPORATED
OF GEORGIA
By:______________________________
Name:____________________________
Title:___________________________
Date:____________________________
CSC CREDIT SERVICES, INC.
By:______________________________
Name:____________________________
Title:___________________________
Date:____________________________
-38-
<PAGE>
CREDIT BUREAU OF CINCINNATI, INC.
By:______________________________
Name:____________________________
Title:___________________________
Date:____________________________
CREDIT BUREAU OF GREATER KANSAS
CITY, INC.
By:______________________________
Name:____________________________
Title:___________________________
Date:____________________________
JOHNS HOLDING COMPANY
By:______________________________
Name:____________________________
Title:___________________________
Date:____________________________
CSC CREDIT SERVICES
OF MINNESOTA, INC.
By:______________________________
Name:____________________________
Title:___________________________
Date:____________________________
-39-
<PAGE>
EXHIBIT H
FINANCIAL STATEMENTS
-40-
<PAGE>
EXHIBIT I
LEASES TO BE ASSIGNED
DATE OF
LEASE OR
MASTER
LESSOR LEASEE AGREEMENT LEASE AGREEMENT NUMBER
------ ------ --------- ----------------------
1. Comdisco, Inc. CBDC 4/4/81 Master Lease with
Equipment Schedules
No. 15 (2/3/86) and
No. CE-3 (5/26/87)
2. Amdahl Credit 7/10/84 LA-2-84-012
Corporation Services (Master Agreement)
with Equipment
Schedules
No. 1 (7/10/84)
No. 3 (6/24/85)
No. 4 (8/15/85
No. 5 (5/23/86)
No. 6-R1 (7/17/87)
3. Memorex Credit 11/22/85 2432 (Master Lease) with
Finance Services Equipment Schedules
Company No. 1 (11/22/85)
No. 2 (11/22/85)
No. 4 (11/22/85)
No. 5 (5/27/86)
No. 6 (5/27/86)
No. 7 (5/27/86)
No. 8 (8/28/86)
No. 9 (9/18/86)
No. 10 (12/30/86)
No. 15 (12/31/87)
No. 15A (12/3/87)
No. 16 (1/19/88)
No. 17 (2/24/88)
No. 18 (2/24/88)
No. 19 (4/21/88)
No. 20 (6/24/88)
-41-
<PAGE>
4. IBM Credit CSC 6/8/84 2280122 (Master Agreement)
Corporation with Supplements
No.87-016(6/28/87) (CBDC)
No.028723-A(12/30/87) (CBDC)
No.87-045(12/2/87) (CBDC)
No.028723(12/30/87 (CBDC)
-42-
<PAGE>
EXHIBIT J
ZIP CODES IN NEW MEXICO OF
AMARILLO CREDIT ASSOCIATION AND
RETAIL MERCHANT'S ASSOCIATION, INC.
(IN LUBBOCK)
LUBBOCK AMARILLO
------- --------
88101 88101
88401
88415
-43-
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 131
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=002
ZIP RANGES TULSA, OK
67333-67333 KS
67337-67337 KS
71820-71820 AR
71822-71823 AR
71830-71830 AR
71832-71833 AR
71836-71836 AR
71841-71842 AR
71846-71846 AR
71851-71854 AR
71865-71866 AR
71927-71928 AR
71932-71932 AR
71936-71937 AR
71944-71945 AR
71953-71953 AR
71971-71973 AR
72701-72702 AR
72717-72717 AR
72727-72730 AR
72735-72735 AR
72741-72741 AR
72744-72744 AR
72753-72753 AR
72764-72764 AR
72769-72770 AR
72774-72774 AR
72821-72821 AR
72826-72826 AR
72835-72736 AR
72850-72850 AR
72855-72855 AR
72859-72859 AR
72863-72863 AR
72865-72865 AR
72901-72904 AR
72906-72906 AR
72913-72914 AR
72916-72916 AR
72920-72921 AR
72923-72924 AR
72926-72941 AR
72943-72951 AR
72955-72956 AR
72959-72959 AR
73027-73027
73061-73061
73077-73077
73449-73449
73701-73716
73718-73723
73725-73739
73740-73749
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 132
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=002
ZIP RANGES
73751-73761
73763-73769
73771-73771
73773-73773
73834-73834
74000-74099
74100-74199
74301-74330
74332-74334
74336-74338
74340-74342
74344-74353
74356-74357
74359-74359
74361-74362
74364-74369
74401-74404
74420-74472
74477-74477
74501-74502
74520-74529
74533-74533
74536-74536
74540-74543
74545-74555
74557-74569
74571-74578
74601-74661
74701-74724
74726-74766
74824-74825
74827-74830
74832-74833
74834-74834 *BEST*
74835-74835
74837-74839
74841-74841
74843-74847
74850-74850
74853-71853
74855-74856
74859-74862
74864-74864 *BEST*
74865-74867
74869-74872
74874-74877
74879-74880
74881-74881 *BEST*
74882-74882
74901-74966
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 135
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=007
ZIP RANGES LAKE CHARLES, LA
70532-70532
70546-70546
70549-70549
70591-70591
70601-70602
70605-70606
70609-70609
70611-70612
70615-70616
70630-70637
70639-70643
70645-70669
71223-71223
71403-71403
71437-71437
71439-71439
71443-71443
71446-71446
71459-71459
71461-71461
71463-71463
71474-71475
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 136
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=008
ZIP RANGES MARION, IN
46702-46702
46713-46713
46750-46750
46770-46770
46783-46783
46792-46792
46911-46911
46914-46914
46919-46919
46921-46921
46926-46926
46928-46928
46930-46930
46933-46933
46938-46938
46940-46941
46943-46944
46946-46946
46951-46954
46957-46959
46962-46962
46970-46971
46973-46974
46980-46980
46983-46984
46986-46987
46989-46992
47326-47326
47336-47336
47348-47348
47359-47359
47369-47369
47371-47371
47373-47373
47381-47381
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 137
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=010
ZIP RANGES AMARILLO, TX
73901-73951
79001-79020
79022-79029 *BEST*
79034-79036
79039-79040
79042-79042
79044-79051
79053-79063
79065-79071
79077-79098
79100-79188
79201-79220
79226-79226
79230-79230
79237-79237
79240-79240
79245-79245
79251-79251
79257-79257
79261-79261
88101-88101 NM
88401-88401 NM
88415-88415 NM
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 142
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=014
ZIP RANGES ELKHART, IN
46507-46507 *BEST*
46514-46517
46526-46526
46540-46540
46542-46543
46550-46550
46553-46553
46565-46565 *BEST*
46573-46573
49112-49112 MI
49130-49130 MI
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 144
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=016
ZIP RANGES SIOUX FALLS, SD
51230-51230 IA *BEST*
51235-51235 IA *BEST*
51237-51237 IA *BEST*
51240-51243 IA *BEST*
51246-51246 IA *BEST*
52749-52749 IA
56116-56116 MN *BEST*
56128-56128 MN *BEST*
56134-56134 MN *BEST*
56135-56135 MN *BEST*
56138-56138 MN
56139-56140 MN *BEST*
56144-56144 MN *BEST*
56147-56147 MN *BEST*
56156-56157 MN *BEST*
56164-56164 MN *BEST*
56170-56170 MN *BEST*
56173-56173 MN *BEST*
56177-56177 MN *BEST*
56186-56186 MN *BEST*
57001-57007
57010-57078
57100-57116
57118-57189
57191-57198
57201-57211
57212-57214 *BEST*
57215-57217
57218-57218 *BEST*
57219-57219
57220-57220 *BEST*
57221-57230
57231-57276
57278-57279
57300-57399
57401-57425
57426-57436
57437-57440
57441-57469
57470-57483
57501-57582
57584-57585
57601-57637
57639-57640
57643-57661
57701-57739
57741-57795
68718-68718 NE
67827-68727 NE
68730-68730 NE
68736-68736 NE
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 145
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=016
ZIP RANGES
68760-67860 NE
68774-68774 NE
68783-68783 NE
68786-68786 NE
68792-68792 NE
<PAGE>
AR918 88043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 147
TABLE NAME=88043 TABLE DATE=08/01/88
CENTER=000 BUREAU=019
ZIP RANGES FARGO, ND
56513 - 56514 MN
56520 - 56520 MN
56522 - 56522 MN
56525 - 56525 MN
56529 - 56530 MN
56534 - 56536 MN
56543 - 56543 MN * BEST *
56546 - 56547 MN
56549 - 56549 MN
56552 - 56553 MN
56560 - 56560 MN
56565 - 56565 MN
56579 - 56580 MN
56582 - 56582 MN
56585 - 56585 MN
56594 - 56594 MN
58001 - 58002
58003 - 58003 * BEST *
58004 - 58008
58009 - 58010
58011 - 58011 * BEST *
58012 - 58013
58014 - 58015
58016 - 58018
58020 - 58021
58023 - 58024
58027 - 58029
58030 - 58037
58038 - 58041
58042 - 58043
58047 - 58049
58051 - 58054
58057 - 58063
58064 - 58064 * BEST *
58065 - 58065
58067 - 58070
58071 - 58071 * BEST *
58072 - 58072
58075 - 58075
58077 - 58079
58081 - 58081
58102 - 58103
58105 - 58109
58152 - 58152
58429 - 58429
58432 - 58432
58436 - 58436
58439 - 58439
58441 - 58441
58447 - 58447
58461 - 58462
58469 - 58469
58471 - 58471
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 148
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=019
ZIP RANGES
58474-58474
58479-58480
58490-58490
58492-58492
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 151
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=023
ZIP RANGES ROCHESTER, MN
55009-55009
55018-55019
55021-55021
55026-55027
55041-55041
55046-55046
55049-55049
55052-55053
55058-55060
55066-55066
55081-55081
55086-55089
55310-55310
55314-55314
55332-55332
55333-55333 *BEST*
55335-55335
55342-55342
55901-55903
55904-55904 *BEST*
55905-55905
55909-55920
55921-55921 *BEST*
55922-55931
55932-55992
56001-56010
56013-56024
56025-56025 *BEST*
56026-56029
56030-56030 *BEST*
56031-56038
56039-56039 *BEST*
56040-56051
56052-56052 *BEST*
56053-56055
56056-56056 *BEST*
56057-56059
56060-56060 *BEST*
56061-56062
56063-56063 *BEST*
56064-56070
56072-56079
56080-56080 *BEST*
56081-56084
56085-56085 *BEST*
56087-56098
56101-56101
56110-56115
56117-56127
56129-56133
56136-56137
56141-56143
56145-56145
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 152
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=023
ZIP RANGES
56149-56155
56159-56162
56165-56169
56171-56171
56174-56176
56178-56181
56183-56185
56187-56187
56201-56201
56209-56209
56212-56214
56216-56216 *BEST*
56218-56218
56220-56220
56222-56224
56229-56230
56232-56232
56234-56234
56237-56239
56241-56242
56245-56245
56247-56247
56251-56251
[ILLEGIBLE]-56258
56260-56266
56270-56270
56272-56272
56275-56275
56277-56277
56279-56279 *BEST*
56280-56282
56283-56290
[ILLEGIBLE]-56295
56297-56297
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 153
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=024
ZIP RANGES LUBBOCK, TX
79009-79009 *BEST*
79021-79021 *BEST*
79027-79027
79031-79032
79041-79041 *BEST*
79043-79043 *BEST*
79052-79052 *BEST*
79063-79064 *BEST*
79072-79073
79082-79082 *BEST*
79088-79088 *BEST*
79220-79220 *BEST*
79222-79222
79229-79229 *BEST*
79231-79231 *BEST*
79235-79236 *BEST*
79241-79241 *BEST*
79242-79242
79243-79244 *BEST*
79248-79248 *BEST*
79249-79249
79250-79250 *BEST*
79256-79258 *BEST*
79301-79314
79315-79315 *BEST*
79316-79324
[ILLEGIBLE]-79325 *BEST*
79326-79341
79342-79342 *BEST*
79343-79354
79355-79355 *BEST*
79356-79358
79359-79360 *BEST*
79361-79399
79401-79499
88101-88101} NM *BEST*
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 155
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=026
ZIP RANGES WATERLOO, IA
50041-50041
50227-50227
50401-50401
50420-50420
50421-50421 *BEST*
50423-50423 *BEST*
50424-50426
50427-50428
50430-50432
50433-50433 *BEST*
50434-50436
50438-50441
50444-50446
50447-50447 *BEST*
50448-50450
50452-50454
50455-50455 *BEST*
50456-50461
50464-50469
50470-50470 *BEST*
50471-50473
50475-50479
50481-50482
50484-50484 *BEST*
50602-50607
50610-50611
50612-50612 *BEST*
50613-50614
50616-50616
50619-50621
50622-50626
50628-50629
50630-50631
50633-50634
50635-50636 *BEST*
50638-50638
50640-50645
50647-50648
50649-50649 *BEST*
50650-50653
50655-50655 *BEST*
50657-50662
50665-50671
50673-50674
50676-50677
50680-50682
50701-50707
52001-52001
52030-52033
52039-52040
52043-52049
52051-52056
52060-52060
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 156
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=026
ZIP RANGES
52064-52079
52101-52101
52130-52130 *BEST*
52132-52132 *BEST*
52133-52133
52135-52136
52139-52140
52141-52141 *BEST*
52142-52142
52144-52144
52146-52147
52150-52151
52154-52160
52l61-52161 *BEST*
52162-52172
52175-52175
52207-52207
52210-52210
52224-52224 *BEST*
52326-52326
52329-52329
52435-52435
53518-53518 WI
53554-53554 WI
53569-53569 WI
53573-53573 WI
53801-53818 WI
53820-53520 WI
53824 53825 WI
53827-53827 WI
61001-61001 IL
61025-61025 IL
61028-61028 IL
61036-61036 IL
61041-61041 IL
61059-61059 IL
61075-61075 IL
61086-61085 IL
61087-61087 IL
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 168
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=038
ZIP RANGES TERRE HAUTE, IN
42101-42102 KY
42120-42120 KY
42122-42123 KY
42127-42128 KY
42130-42131 KY
42134-42134 KY
42141-42141 KY
42150-42150 KY
42152-42153 KY
42156-42156 KY
42159-42160 KY
42163-42164 KY
42170-42171 KY
42201-42202 KY
42206-42207 KY
42209-42210 KY
42219-42219 KY
42235-42235 KY
42250-42252 KY
42256-42257 KY
42259-42259 KY
42261-42261 KY
42263-42265 KY
42267-42268 KY
42270-42276 KY
42283-42285 KY
42287-42288 KY
47438-47438
47441-47441 *BEST*
47443-47443 *BEST*
47445-47445 *BEST*
47449-47449 *BEST*
47453-47453 *BEST*
47465-47465 *BEST*
47471-47471 *BEST*
47596-47596
47801-47809
47830-47834
47836-47838
47840-47842
47845-47866
47868-47872
47874-47882
47884-[ILLEGIBLE]
47928-47928
47966-47966
47974-47974
47985-47985
61912-61912 IL *BEST*
61917-61917 IL *BEST*
61920-61920 IL *BEST*
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 169
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=038
ZIP RANGES
61938-61938 IL *BEST*
61940-61940 IL *BEST*
61943-61944 IL *BEST*
61948-61949 IL *BEST*
61955-61955 IL *BEST*
62413-62413 IL
62420-62420 IL
62423-62423 IL
62427-62427 IL
62433-62433 IL
62440-62441 IL *BEST*
[ILLEGIBLE]-62442 IL
62447-62447 IL *BEST*
62449-62449 IL
62451-62451 IL
62454-62454 IL
62464-62464 IL
62469-62469 IL *BEST*
62477-62478 IL
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 170
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=039
ZIP RANGES PETERSBURG, VA
23002-23002
23030-23030
23083-23083
23105-23105
23147-23147
23801-23805
23821-23899
23901-23975
24529-24529
24580-24580
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 174
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=045
ZIP RANGES JEFFERSON CITY, MO
63388-63388
65001-65001
65011-65038
65040-65055
65058-65067
65069-65085
65101-65102
65106-65106
65109-65109 *BEST*
65231-65231
65251-65251 *BEST*
65262-65262 *BEST*
65401-65401
65435-65436
65440-65441
65443-65443 *BEST*
65446-65446
65449-65449
65452-65452
65456-65459
65461-65463
65470-65470
65473-65473
65486-65486 *BEST*
65532-65532
65534-65536
65540-65542
65550-65550
65552-65552
65556-65556
65559-65560
65565-65565
65572-65572
65580-65580
65582-65582 *BEST*
65583-65583
65786-65786 *BEST*
66201-66204 KS
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 175
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=046
ZIP RANGES JOPLIN, MO
64748-64748
64752-64752
64755-64756
64759-64759
64762-64762
64766-64766
64769-64769
64801-64874
66701-66701 KS *BEST*
66702-66702 KS
66710-66714 KS *BEST*
66715-66715 KS
66716-66720 KS *BEST*
66721-66723 KS
66724-66725 KS *BEST*
66726-66726 KS
66727-66728 KS *BEST*
66730-66730 KS *BEST*
66731-60751 KS
66753-66759 KS
66761-66766 KS
66768-66799 KS
67330-67332 KS
67336-67336 KS
67341-67342 KS
67350-67350 KS
67354-67354 KS
67356-67357 KS
67365-67365 KS
72711-72714 AR
72718-72718 AR
72722-72722 AR
72732-72734 AR
72736-72736 AR
72739-72739 AR
72743-72743 AR
72745-72745 AR
72747-72747 AR
72751-72751 AR
72756-72756 AR
72761-72761 AR *BEST*
72767-72768 AR
72771-72771 AR
74331-74331 OK
74335-74335 OK
74339-74339 OK
74343-74343 OK
74354-74355 OK
74358-74358 OK
74360-74360 OK
74363-74363 OK
74370-74370 OK
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 176
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=047
ZIP RANGES MICHIGAN CITY, IN
46301-46301
46303-46303 *WIDE AREA 0001*
46304-46304
46307-46307 *WIDE AREA 0001*
46310-46310
46311-46311 *WIDE AREA 0001*
46319-46321 *WIDE AREA 0001*
46322-46322
46323-46327 *WIDE AREA 0001*
46340-46342
46345-46351
46355-46356 *WIDE AREA 0001*
46360-46360
46365-46365
46366-46366 * BEST *
46367-46368
46371-46373
46374-46374 * BEST *
46375-46377 *WIDE AREA 0001*
46379-46381
46382-46384
46390-46393
46394-46394 *WIDE AREA 0001*
46401-46404 *WIDE AREA 0001*
46405-46405
46406-46411 *WIDE AREA 0001*
46531-46531
46532-46532 * BEST *
46534-46534 [ILLEGIBLE]
46560-46560
46574-46574
46925-46925
46960-46960
46968-46968
46985-46985
46996-46996
47922-47922
47943-47943
47946-47946
47948-47948
47951-47951
47957-47957
47963-47964
47977-47978
49116-49117 MI * BEST *
49128-49128 MI * BEST *
49129-49129 MI
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 178
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=049
ZIP RANGES COLUMBIA, MO
63333-63334
63339-63339
63345-63345
63351-63353
63361-63361
63363-63364
63371-63371
63382-63382
63384-63384
63388-63388
63401-63402
63431-63431
63433-63439
63441-63441
63446-63448
63452-63452
63456-63465
63467-63471
63530-63530
63532-63534
63537-63538
63549-63549
63552-63552
63656-63656
65010-65010
65039-65039
65056-65056
65068-65068
65201-65230
65231-65231 * BEST*
65232-[ILLEIGIBLE]
65286-65286 * BEST*
65287-65299
65370-65370
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 180
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=053
ZIP RANGES CLEVELAND, OH
44001-44055
44057-44066
44068-44086
44088-44099
44101-44199
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 188
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=054
ZIP RANGES SOUTHEAST OHIO
41121 - 41121 KY * WIDE AREA 0001 *
41127 - 41127 KY * WIDE AREA 0001 *
41131 - 41131 KY * WIDE AREA 0001 *
41135 - 41135 KY * WIDE AREA 0001 *
41137 - 41137 KY * WIDE AREA 0001 *
41139 - 41139 KY * WIDE AREA 0001 *
41141 - 41141 KY * WIDE AREA 0001 *
41144 - 41145 KY * WIDE AREA 0001 *
41156 - 41156 KY * WIDE AREA 0001 *
41158 - 41158 KY * WIDE AREA 0001 *
41163 - 41163 KY * WIDE AREA 0001 *
41166 - 41166 KY * WIDE AREA 0001 *
41169 - 41170 KY * WIDE AREA 0001 *
41174 - 41175 KY * WIDE AREA 0001 *
41179 - 41179 KY * WIDE AREA 0001 *
41183 - 41184 KY * WIDE AREA 0001 *
41189 - 41189 KY * WIDE AREA 0001 *
41229 - 41229 KY * WIDE AREA 0001 *
43076 - 43076 * WIDE AREA 0001 *
43101 - 43101 * WIDE AREA 0001 *
43106 - 43106 * WIDE AREA 0001 *
43111 - 43111 * WIDE AREA 0001 *
43115 - 43115 * WIDE AREA 0001 *
43121 - 43121 * WIDE AREA 0001 *
43127 - 43128 * WIDE AREA 0001 *
43135 - 43135 * WIDE AREA 0001 *
43138 - 43138 * WIDE AREA 0001 *
43142 - 43142 * WIDE AREA 0001 *
43144 - 43145 * WIDE AREA 0001 *
43149 - 43149 * WIDE AREA 0001 *
43152 - 43152 * WIDE AREA 0001 *
43158 - 43158 * WIDE AREA 0001 *
43160 - 43160 * WIDE AREA 0001 *
43701 - 43720 * WIDE AREA 0001 *
43722 - 43799 * WIDE AREA 0001 *
43801 - 43803 * WIDE AREA 0001 *
43805 - 43830 * WIDE AREA 0001 *
43836 - 43836 * WIDE AREA 0001 *
43842 - 43845 * WIDE AREA 0001 *
43914 - 43915 * WIDE AREA 0001 *
43931 - 43931 * WIDE AREA 0001 *
43946 - 43946 * WIDE AREA 0001 *
45105 - 45105 * WIDE AREA 0001 *
45144 - 45144 * WIDE AREA 0001 *
45601 - 45601 * WIDE AREA 0001 *
45610 - 45631 * WIDE AREA 0001 *
45633 - 45636 * WIDE AREA 0001 *
45638 - 45638 * WIDE AREA 0001 *
45640 - 45640 * WIDE AREA 0001 *
45642 - 45662 * WIDE AREA 0001 *
45669 - 45698 * WIDE AREA 0001 *
45701 - 45701 * WIDE AREA 0001 *
<PAGE>
DATE 08/03/88 TIME 17.30.41 PAGE 188
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=054
ZIP RANGES
45719 - 45721 * WIDE AREA 0001 *
45723 - 45730 * WIDE AREA 0001 *
45732 - 45732 * WIDE AREA 0001 *
45734 - 45[ILLEGIBLE] * WIDE AREA 0001 *
45738 - 45746 * WIDE AREA 0001 *
45750 - 45750 * WIDE AREA 0001 *
45760 - 45761 * WIDE AREA 0001 *
45763 - 45764 * WIDE AREA 0001 *
45766 - 45789 * WIDE AREA 0001 *
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 203
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=061
ZIP RANGES COUNCIL BLUFFS, IA
50847 - 50847 * BEST *
50864 - 50864
51446 - 51447 * BEST *
51501 - 51503
51510 - 51510
51521 - 51521
51525 - 51527
51529 - 51534
51536 - 51537
51540 - 51542
51545 - 51546
51548 - 51551
51553 - 51557
51559 - 51566
51570 - 51571
51573 - 51579
51601 - 51601
51630 - 51632
51636 - 51641
51645 - 51645
51647 - 51647
51649 - 51650
51652 - 51653
51655 - 51656
68110 - 68110 NE
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 208
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=064
ZIP RANGES NACOGDOCHES, TX
71005 - 71005 LA * BEST *
71019 - 71019 LA * BEST *
71025 - 71025 LA * BEST *
71027 - 71027 LA * BEST *
71030 - 71030 LA * BEST *
71032 - 71032 LA * BEST *
71035 - 71036 LA * BEST *
71046 - 71046 LA * BEST *
71049 - 71050 LA * BEST *
71052 - 71052 LA * BEST *
71063 - 71063 LA * BEST *
71065 - 71065 LA * BEST *
71078 - 71078 LA * BEST *
71406 - 71406 LA * BEST *
71419 - 71419 LA * BEST *
71429 - 71429 LA * BEST *
71449 - 71449 LA * BEST *
71453 - 71453 LA * BEST *
71462 - 71462 LA * BEST *
71486 - 71486 LA * BEST *
75631 - 75631 * BEST *
75633 - 75633 * BEST *
75637 - 75637 * BEST *
75639 - 75639 * BEST *
75641 - 75641 * BEST *
75643 - 75643 * BEST *
75652 - 75652 * BEST *
75658 - 75658 * BEST *
75662 - 75662 * BEST *
75666 - 75667 * BEST *
75669 - 75669 * BEST *
75673 - 75673 * BEST *
75680 - 75682 * BEST *
75684 - 75685 * BEST *
75687 - 75687 * BEST *
75689 - 75689 * BEST *
75691 - 75691 * BEST *
75757 - 75757 * BEST *
75759 - 75761 * BEST *
75763 - 75764 * BEST *
75766 - 75766 * BEST *
75772 - 75772 * BEST *
75779 - 75780 * BEST *
75784 - 75788 * BEST *
75801 - 75802
75832 - 75832
75834 - 75835
75839 - 75839
75843 - 75845
75847 - 75847
75849 - 75849
75851 - 75851
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 209
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=064
ZIP RANGES
75856 - 75856
75858 - 75858
75861 - 75863
75865 - 75865
75901 - 75901
75925 - 75927
75929 - 75931
75934 - 75935
75937 - 75937
75939 - 75939
75941 - 75941
75943 - 75949
75954 - 75954 * BEST *
75958 - 75963
75968 - 75969
75972 - 75976 * BEST *
75978 - 75978
75980 - 75980
77326 - 77326
77332 - 77332
77335 - 77335
77350 - 77351
77360 - 77360
77370 - 77370
78961 - 78961 * BEST *
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 210
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=065
ZIP RANGES CAPE GIRARDEAU, MO
62274 - 62274 IL
62832 - 62832 IL
62888 - 62988 IL
62901 - 62901 IL
62905 - 62907 IL
62910 - 62910 IL
62913 - 62914 IL
62916 - 62916 IL
62918 - 62918 IL
62920 - 62927 IL
62929 - 62929 IL
62932 - 62932 IL
62936 - 62936 IL
62938 - 62939 IL
62941 - 62942 IL
62948 - 62948 IL
62951 - 62[ILLEGIBLE] IL
62957 - 62957 IL
62959 - 62964 IL
62966 - 62967 IL
62969 - 62976 IL
62979 - 62979 IL
62983 - 62983 IL
62985 - 62985 IL
62988 - 62990 IL
62992 - 62996 IL
62998 - 62999 IL
63620 - 63621
63623 - 63623
63625 - 63625
63629 - 63629
63632 - 63636
63638 - 63638
63645 - 63646
63650 - 63650
63654 - 63655
67658 - 63659
63662 - 63663
63665 - 63666
63669 - 63669
63673 - 63673
63675 - 63676
63701 - 63799
63801 - 63882
63901 - 63967
72310 - 72310 AR
72313 - 72313 AR
73215 - 72315 AR
73221 - 72321 AR
72329 - 72330 AR
72338 - 72339 AR
72350 - 72351 AR
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE [ILLEGIBLE]
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=065
ZIP RANGES
72370 - 72370
72381 - 72381
72388 - 72388
72391 - 72391
72395 - 72395
72412 - 72412
72422 - 72422
72425 - 72426
72428 - 72428 AR
72430 - 72430
72438 - 72438
72441 - 72443
72450 - 72450
72453 - 72454
72456 - 72456
72461 - 72461
72463 - 72464
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 213
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=067
ZIP RANGES CHARLESTON, WV
24710 - 24711
24716 - 24716
24719 - 24720
24726 - 24728
24818 - 24818
24822 - 24823
24827 - 24827
24834 - 24834
24839 - 24840
24845 - 24845
24847 - 24847
24849 - 24849
24854 - 24854
24857 - 24857
24859 - 24860
24867 - 24867
24869 - 24870
24874 - 24874
24880 - 24880
24882 - 24882
24896 - 24896
24898 - 24898
24901 - 24999
25002 - 25005
25007 - 25021
25023 - 25046
25048 - 25075
25077 - 25094
25101 - 25105
25107 - 25120
25122 - 25122
25124 - 25182
25184 - 25186
25188 - 25199
25201 - 25236
25238 - 25246
25248 - 25249
25251 - 25252
25256 - 25257
25259 - 25259
25261 - 25264
25266 - 25266
25268 - 25279
25281 - 25286
25300 - 25399
25501 - 25501
25506 - 25506
25513 - 25513
25516 - 25516
25518 - 25518
25521 - 25529
25536 - 25536
25540 - 25540
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 214
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=067
ZIP RANGES
25542 - 25544
25546 - 25546
25557 - 25557
25560 - 25561
25563 - 25569
25571 - 25599
25801 - 25814
25816 - 25818
25821 - 25882
25901 - 25921
25923 - 25970
25972 - 25999
26130 - 26130
26136 - 26137
26145 - 26145
26147 - 26147
26151 - 26151
26153 - 26153
26158 - 26158
26164 - 26164
26173 - 26173
26202 - 26209
26215 - 26217
26221 - 26223
26233 - 26233
26240 - 26240
26261 - 26262
26264 - 26266
26288 - 26288
26291 - 26291
26298 - 26299
26335 - 26335
26601 - 26610
26612 - 26633
26639 - 26635
26639 - 26699
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 215
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=068
ZIP RANGES SOUTHBEND, IN
46366 - 46366
46374 - 46374
46501 - 46501
46504 - 46504
46506 - 46506
46508 - 46513
46518 - 46525
46527 - 46530
46531 - 46531 * BEST *
46532 - 46533
46534 - 46534 * BEST *
46535 - 46539
46541 - 46541
46544 - 46545
46552 - 46552
46554 - 46559
46560 - 46560 * BEST *
46561 - 46564
46566 - 46572
46574 - 46574 * BEST *
46580 - 46595
46601 - 46637
46701 - 46701
46710 - 46710
46720 - 46720
46723 - 46725
46732 - 46732
46755 - 46755
46760 - 46760
46764 - 46764
46767 - 46767
46784 - 46784
46787 - 46787
46796 - 46796
46910 - 46910
46912 - 46912
46922 - 46922
46931 - 46931
46935 - 46935
46939 - 46939
46945 - 46945
46960 - 46960 * BEST *
46968 - 46968 * BEST *
46975 - 46975
46982 - 46982
49031 - 49031 MI
49045 - 49045 MI
49047 - 49047 MI
49057 - 49057 MI
49065 - 49065 MI
49067 - 49067 MI
49095 - 49095 MI
49102 - 49111 MI
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 216
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=068
ZIP RANGES
49112 - 49112 * BEST *
49113 - 49120
49125 - 49125
49128 - 49128
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 218
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=070
ZIP RANGES BURLINGTON, NC
27001 - 27012
27016 - 27016
27019 - 27019
27021 - 27021
27023 - 27023
27040 - 27040
27045 - 27045
27050 - 27051
27101 - 27199
27201 - 27213
27215 - 27217
27230 - 27231
27233 - 27235
27240 - 27241
27243 - 27246
27248 - 27250
27253 - 27255
27258 - 27258
27260 - 27280
27282 - 27284
27288 - 27292
27298 - 27298
27301 - 27310
27312 - 27322
27340 - 27344
27348 - 27350
27353 - 27355
27358 - 27370
27373 - 27373
27377 - 27399
27401 - 27410
27412 - 27413
27414 - 27417
27419 - 27499
28423 - 28424
28430 - 28432
28436 - 28439
28442 - 28442
28449 - 28450
28455 - 28456
28463 - 28463
28472 - 28472
<PAGE>
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=071
ZIP RANGES MANSFIELD, OH
43302 - 43302
43314 - 43317
43320 - 43323
43325 - 43[ILLEGIBLE]
43330 - 43330
43332 - 43332
43334 - 43335
43337 - 43338
43340 - 43342
43345 - 43346
[ILLEGIBLE]- 43351
43356 - 43356
43359 - 43359
43407 - 43407 * BEST *
43410 - 43410 * BEST *
43413 - 43413
43420 - 43420 * BEST *
43431 - 43431 * BEST *
43435 - 43435 * BEST *
43438 - 43438 * BEST *
43442 - 43442 * BEST *
43462 - 43462
43464 - 43464 * BEST *
43469 - 43469 * BEST *
44801 - 44805
44807 - 44807
44809 - 44809
44811 - 44811
44813 - 44818
44820 - 44820
44822 - 44830
44833 - 44833
44836 - 44851
44853 - 44857
44859 - 44867
44870 - 44870
44874 - 44875
44878 - 44878
44880 - 44883
44887 - 44887
44889 - 44890
44901 - 44907
45801 - 45810
45812 - 45812
45814 - 45817
45820 - 45820
45827 - 45827
45830 - 45833
45835 - 45841
45843 - 45844
45847 - 45848
45850 - 45850
45853 - 45854
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 220
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=071
ZIP RANGES
45856 - 45856
45858 - 45859
45863 - 45864
45867 - 45868
45872 - 45872
45874 - 45877
45881 - 45881
45886 - 45887
45889 - 45891
45893 - 45894
45897 - 45899
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 221
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=072
ZIP RANGES SPRINGFIELD, OH
43001 - 43001
43008 - 43010
43013 - 43013
43018 - 43018
43023 - 43023
43025 - 43025
43027 - 43027
43030 - 43031
43033 - 43033
43044 - 43044
43047 - 43047
43055 - 43056
43060 - 43060
43062 - 43062
43070 - 43073
43078 - 43078
43080 - 43080
43083 - 43084
43721 - 43721
45319 - 45319
45323 - 45323
45341 - 45341
45344 - 45344
45349 - 45349
45364 - 45364
45368 - 45369
45372 - 45372
45389 - 45389
45501 - 45506
45564 - 45564
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 222
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=073
ZIP RANGES CANTON, OH
43804 - 43804
43832 - 43832
43837 - 43837
43840 - 43840
43907 - 43907
43973 - 43974
43976 - 43976
43979 - 43979
43981 - 43981
43983 - 43984
43986 - 43986
43988 - 43989
44449 - 44449
44601 - 44609
44612 - 44616
44618 - 44627
44629 - 44632
44634 - 44636
44639 - 44653
44655 - 44659
44662 - 44675
44678 - 44684
44686 - 44686
44688 - 44689
44692 - 44699
44701 - 44795
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 223
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=074
ZIP RANGES AKRON, OH
44056 - 44056
44067 - 44067
44087 - 44087
44201 - 44288
44301 - 44321
44401 - 44406
44408 - 44408 * BEST *
44410 - 44412
44413 - 44413 * BEST *
44415 - 44418
44420 - 44420
44422 - 44423 * BEST *
44424 - 44425
44427 - 44427 * BEST *
44428 - 44428
44429 - 44429 * BEST *
44430 - 44430
44431 - 44432 * BEST *
44436 - 44436 * BEST *
44437 - 44440
44441 - 44443 * BEST *
44444 - 44444
44445 - 44445 * BEST *
44446 - 44446
44450 - 44450
44451 - 44452 * BEST *
44453 - 44453
44454 - 44455 * BEST *
44460 - 44460 * BEST *
44470 - 44470
44471 - 44471 * BEST *
44473 - 44473
44481 - 44486
44490 - 44490 * BEST *
44491 - 44491
44492 - 44493 * BEST *
44501 - 44515
44555 - 44555
44610 - 44611
44617 - 44617
44628 - 44628
44633 - 44633
44637 - 44638
44654 - 44654
44660 - 44661
44676 - 44677
44685 - 44685
44687 - 44687
44690 - 44691
<PAGE>
AR918 88043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 224
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=075
ZIP RANGES COLUMBUS, OH
43002 - 43007
43011 - 43012
43014 - 43017
43019 - 43019
43021 - 43022
43026 - 43026
43028 - 43029
43032 - 43032
43034 - 43010
43045 - 43046
43048 - 43048
43050 - 43050
43054 - 43054
43061 - 43061
43064 - 43068
43074 - 43074
43077 - 43077
43081 - 43081
43085 - 43085
43102 - 43105
43107 - 43110
43112 - 43114
43116 - 43119
43123 - 43126
43130 - 43130
43136 - 43137
43140 - 43141
43143 - 43143
43146 - 43148
43150 - 43151
43153 - 43157
43162 - 43164
43201 - 43299
43344 - 43344
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 232
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=081
ZIP RANGES OPELOUSAS, LA
70512 - 70512
70515 - 70515
70524 - 70525
70535 - 70535
70541 - 70541
70550 - 70551
70554 - 70554
70570 - 70571
70576 - 70577
70580 - 70580
70584 - 70586
70589 - 70589
70750 - 70750
71320 - 71320
71322 - 71322
71327 - 71327
71333 - 71333
71338 - 71338
71341 - 71341
71345 - 71345
71347 - 71347
71350 - 71351
71353 - 71353
71355 - 71356
71358 - 71358
71362 - 71362
71364 - 71364
71367 - 71367
71376 - 71376
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 233
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=082
ZIP RANGES DAYTON, OH
43310 - 43311
43318 - 43319
43324 - 43324
43331 - 43331
43333 - 43333
43336 - 43336
43343 - 43343
43347 - 43348
43357 - 43358
43360 - 43360
43370 - 43370
45003 - 45003 * BEST *
45070 - 45070 * BEST *
45301 - 45318
45320 - 45322
45324 - 45340
45342 - 45342
45345 - 45347
45350 - 45356
45358 - 45363
45365 - 45365
45370 - 45371
45373 - 45373
45377 - 45378
45380 - 45385
45387 - 45388
45390 - 45390 * BEST *
45401 - 45479
45822 - 45822
45828 - 45828
45845 - 45846
45860 - 45860
45862 - 45862
45865 - 45866
45869 - 45871
45882 - 45885
45888 - 45888
45895 - 45896
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 234
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=084
ZIP RANGES BISMARCK, ND
57638 - 57638 SD
57641 - 57642 SD
58381 - 58381 * BEST *
58384 - 58384 * BEST *
58401 - 58402 * BEST *
58412 - 58413 * BEST *
58420 - 58420 * BEST *
58423 - 58424 * BEST *
58426 - 58426 * BEST *
58428 - 58428 * BEST *
58430 - 58430 * BEST *
58434 - 58434 * BEST *
58444 - 58444 * BEST *
58455 - 58455 * BEST *
58460 - 58460 * BEST *
58463 - 58463 * BEST *
58467 - 58467 * BEST *
58475 - 58478 * BEST *
58481 - 58482 * BEST *
58487 - 58489 * BEST *
58494 - 58496 * BEST *
58500 - 58599 * BEST *
58600 - 58699 * BEST *
58701 - 58705 * BEST *
58712 - 58713 * BEST *
58716 - 58717 * BEST *
58719 - 58719 * BEST *
58722 - 58723 * BEST *
58725 - 58726 * BEST *
58730 - 58736 * BEST *
58740 - 58741 * BEST *
58744 - 58744 * BEST *
58746 - 58747 * BEST *
58757 - 58759 * BEST *
58761 - 58761 * BEST *
58763 - 58763 * BEST *
58765 - 58765 * BEST *
58770 - 58771 * BEST *
58778 - 58778 * BEST *
58780 - 58781 * BEST *
58784 - 58785 * BEST *
58789 - 58790 * BEST *
58792 - 58792 * BEST *
58794 - 58795 * BEST *
58800 - 58899 * BEST *
59217 - 59217 MT
59221 - 59221 MT
59243 - 59243 MT
59257 - 59257 MT
59262 - 59262 MT
59270 - 59271 MT
59315 - 59315 MT
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 235
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=084
ZIP RANGES
59339 - 59339 MT
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 236
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=085
ZIP RANGES CLEVELAND, TN
28781 - 28781 NC
28901 - 28801 NC
28905 - 28903 NC
30139 - 30139 GA
30143 - 30143 GA
30148 - 30148 GA
30175 - 30175 GA
30177 - 30177 GA
30186 - 30186 GA
30513 - 30515 GA
30522 - 30522 GA
30539 - 30541 GA
30555 - 30555 GA
30559 - 30561 GA
30700 - 30708 GA
30710 - 30720 GA
30722 - 30729 GA
30732 - 30746 GA
30749 - 30752 GA
30754 - 30757 GA
35700 - 35799 AL
37016 - 37018
37020 - 37020
37026 - 37026
37034 - 37034
37037 - 37037
37060 - 37060
37085 - 37086
37110 - 37110
37118 - 37118
37130 - 37132
37144 - 37144
37149 - 37149
37153 - 37153
37158 - 37160
37167 - 37167
37180 - 37180
37183 - 37183
37190 - 37190
37300 - 37399
37400 - 37499
37700 - 37704
37723 - 37723
37737 - 37737
37742 - 37742
37748 - 37748
37763 - 37763
37771 - 37772
37774 - 37774
37777 - 37777
37780 - 37799
37800 - 37805
37808 - 37808
37826 - 37826
37840 - 37840
37842 - 37842
37846 - 37846
37853 - 37854
37873 - 37873
37878 - 37878
37882 - 37882
37886 - 37886
37889 - 37889
38449 - 38449
38453 - 38453
38488 - 38488
38501 - 38506 * BEST *
38542 - 38545 * BEST *
38548 - 38549 * BEST *
38551 - 38551 * BEST *
38553 - 38556 * BEST *
38559 - 38559 * BEST *
38561 - 38562 * BEST *
38564 - 38565 * BEST *
38568 - 38568 * BEST *
38570 - 38570 * BEST *
38573 - 38575 * BEST *
38577 - 38585 * BEST *
38587 - 38587 * BEST *
38589 - 38589 * BEST *
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 238
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=088
ZIP RANGES CBC WEST VIRGINIA
25006 - 25006
25095 - 25099
25106 - 25106
25123 - 25123
25187 - 25187
25237 - 25237
25247 - 25247
25250 - 25250
25253 - 25255
25258 - 25258
25260 - 25260
25265 - 25265
25267 - 25267
25280 - 25280
25287 - 25299
25401 - 25499
25502 - 25504
25507 - 25507
25509 - 25512
25514 - 25515
25517 - 25517
25519 - 25520
25530 - 25535
25537 - 25539
25541 - 25541
25545 - 25545
25550 - 25556
25558 - 25559
25562 - 25562
25570 - 25570
25669 - 25669
25699 - 25699
25701 - 25799
26001 - 26099
26101 - 26129
26133 - 26135
26138 - 26144
26146 - 26146
26148 - 26150
26152 - 26152
26154 - 26157
26159 - 26163
26167 - 26172
26174 - 26199
26201 - 26201
26210 - 26214
26218 - 26219
26224 - 26232
26234 - 26238
26241 - 26250
26263 - 26263
26267 - 26287
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 239
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=088
ZIP RANGES
26292 - 26297
26301 - 26334
26336 - 26399
26401 - 26499
26501 - 26599
26611 - 26611
26634 - 26634
26636 - 26638
26700 - 26799
26800 - 26899
41101 - 41101 KY
41128 - 41129 KY
41132 - 41132 KY
41140 - 41140 KY
41142 - 41143 KY
41146 - 41146 KY
41150 - 41150 KY
41152 - 41153 KY
41164 - 41164 KY
41168 - 41168 KY
41172 - 41173 KY
41178 - 41178 KY
41181 - 41182 KY
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 243
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=091
ZIP RANGES WILLIAMSON, WV
24314 - 24315 VA
24366 - 24366 VA
24601 - 24606 VA
24609 - 24609 VA
24611 - 24614 VA
24616 - 24616 VA
24618 - 24620 VA
24622 - 24624 VA
24628 - 24628 VA
24631 - 24631 VA
24633 - 24633 VA
24635 - 24635 VA
24637 - 24637 VA
24639 - 24641 VA
24645 - 24645 VA
24647 - 24647 VA
24651 - 24651 VA
24655 - 24656 VA
24658 - 24659 VA
24701 - 24709
24712 - 24715
24717 - 24718
24721 - 24725
24729 - 24739
24740 - 24747
24750 - 24799
24801 - 24811
24813 - 24817
24819 - 24821
24824 - 24826
24828 - 24833
24835 - 24838
24841 - 24844
24846 - 24846
24848 - 24848
24850 - 24853
24855 - 24856
24858 - 24858
24861 - 24866
24868 - 24869
24871 - 24873
24877 - 24879
24881 - 24881
24883 - 24895
24897 - 24898
24899 - 24899
25022 - 25022
25047 - 25047
25076 - 25076
25121 - 25121
25183 - 25183
25505 - 25505
25508 - 25508
<PAGE>
AR918 BB043 ZIP TABLE PRINT DATE 08/03/88 TIME 17.30.41 PAGE 244
TABLE NAME=BB043 TABLE DATE=08/01/88
CENTER=000 BUREAU=091
ZIP RANGES
25547 - 25547
25601 - 25668
25670 - 25698
25820 - 25820
25922 - 25922
25971 - 25971
40981 - 40981 KY
41111 - 41111 KY
41124 - 41126 KY
41149 - 41149 KY
41155 - 41155 KY
41157 - 41157 KY
41159 - 41162 KY
41171 - 41171 KY
41176 - 41177 KY
41180 - 41180 KY
41201 - 41228 KY
41230 - 41299 KY
41301 - 41306 KY
41310 - 41310 KY
41313 - 41313 KY
41315 - 41321 KY
41326 - 41327 KY
41329 - 41333 KY
41334 - 41334 KY
41339 - 41342 KY
41346 - 41346 KY
41348 - 41350 KY
41353 - 41357 KY
41360 - 41360 KY
41363 - 41363 KY
41365 - 41367 KY
41369 - 41377 KY
41384 - 41385 KY
41390 - 41394 KY
41401 - 41499 KY
41501 - 41599 KY
41601 - 41631 KY
41633 - 41663 KY
41665 - 41699 KY
41701 - 41731 KY
41733 - 41757 KY
41760 - 41763 KY
41765 - 41799 KY
41801 - 41899 KY
<PAGE>
CSC CREDIT SERVICES, INC.
AND SUDSIDIARIES AND CERTAIN AFFILIATES
UNAUDITED COMBINED BALANCE SHEETS
(In thousands)
March 31, June 30,
1988 1988
--------- ---------
ASSETS
Current Assets:
Cash & Cash Equivalents $ 2,565 $ 3,284
Receivables, net of allowance for doubtful
accounts of $214 and $241 (Note 2) 14,508 14,677
Prepaid expenses & other current assets 1,427 1,486
--------- ---------
Total Current Assets 18,500 19,447
--------- ---------
Investments & Other Assets:
Purchased credit information files, net
of accumulated amortization of $10,574
and $11,190 42,053 41,743
Excess of cost of businesses acquired over
related net assets, net of accumulated
amortization of $863 and $964 15,953 15,552
Purchased software, net of accumulated
amortization of $504 and $574 1,109 1,039
Capitalized product development costs 3,365 4,271
Other assets 643 669
--------- ---------
Total Investment and Other Assets 63,123 63,274
--------- ---------
Property and Equipment--at cost (Note 3):
Computer and related equipment 18,016 18,656
Land, buildings and leasehold improvements 5,483 5,573
Furniture and other equipment 4,699 4,723
--------- ---------
28,198 28,952
Less accumulated depreciation & amortization (12,377) (13,405)
--------- ---------
Net Property and Equipment 15,821 15,547
--------- ---------
$ 97,444 $ 98,268
========= =========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
Current maturities of notes payable representing
withholds under acquisition agreements (Note 3) $ 816 $ 789
Current maturities of long-term liabilities (Note 3) 904 892
Accounts payable 2,793 2,163
Accrued payroll and related costs 3,800 4,245
Other accrued liabilities 2,387 2,551
Income taxes payable (Note 4) 4,573 6,120
--------- ---------
Total Current Liabilities 15,273 16,760
--------- ---------
Long-Term Liabilities, excluding current
maturities (Note 3) 627 368
Notes Payable Representing Withholds Under
Acquisition Agreements, excluding current maturities 231 231
Notes Payable to Parent (Note 7) 47,606 45,486
--------- ---------
48,464 46,085
--------- ---------
Commitments and Contingent Liabilities (Note 5)
Stockholder's Equity:
Common stock (Note 6) 94 94
Additional paid-in capital 26,992 26,992
Retained earnings 6,621 8,337
--------- ---------
Total Stockholder's Equity 33,707 35,423
--------- ---------
$ 97,444 $ 98,268
========= =========
See Notes to Combined Financial Statements.
<PAGE>
CSC CREDIT SERVICES, INC.
AND SUBSIDIARIES AND CERTAIN AFFILIATES
UNAUDITED COMBINED STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
(In thousands)
Three Months
Year Ended Ended
March 31, June 30,
1988 1988
-------- ----------
Common Stock $ 94 $ 94
Additional Paid-in Capital 26,992 26,992
Retained Earnings:
Beginning of Period 6,664 6,621
Net Earnings 9,202 1,716
Dividends Received from Affiliates 6,168
Dividends Paid to Parent (15,413)
-------- --------
End of Period 6,621 8,337
-------- --------
Total Stockholder's Equity $ 33,707 $ 35,423
======== ========
See Notes to Combined Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
Year Ended March 31, 1988
-----------------------------------------------------
Credit
Reporting Collections Other
Division Data Center Division Operations Combined
--------- ----------- -------- ---------- --------
<S> <C> <C> <C> <C> <C>
REVENUES
Credit Reports $ 47,957 $ 47,957
Business Promotion Services 7,358 7,358
Mortgage Reports 6,043 6,043
Data Processing Fees 7,047 7,047
Collection Commission Fees 28,563 28,563
Other 4,105 1,332 1,301 6,738
-------- -------- ----- ------ --------
TOTAL REVENUES 65,463 7,047 29,895 1,301 103,706
-------- -------- ----- ------ --------
OPERATING EXPENSES:
Payroll Expenses 15,341 5,846 16,207 554 37,948
Purchased Credit Information 7,237 57 7,294
Telephone and Communications Expense 2,763 3,201 2,165 83 8,212
Amortization of Goodwill and Credit File Information 2,823 314 (1) 3,136
Equipment Related Expenses 2,243 4,536 1,446 97 8,322
Occupancy Expenses 1,660 686 1,751 260 4,357
Postage, Printing & Office Supplies 1,211 362 1,972 99 3,644
Public Relations, Advertising & Travel 957 210 610 52 1,829
Commisssions Paid Other Agencies 956 956
General and Administrative Costs 3,288 987 1,431 100 5,806
CSC Industry Services Group Allocated
General and Administrative Costs 183 59 79 5 326
Other Expenses 2,332 783 1,920 143 5,178
-------- -------- ----- ------ --------
TOTAL OPERATING EXPENSES 40,038 16,670 28,908 1,392 87,008
-------- -------- ----- ------ --------
OPERATING INCOME 25,425 (9,623) 987 (91) 16,698
OTHER INCOME (EXPENSES):
Investment Income 29 2 31 17 79
Interest Expense (190) (203) (104) (59) (556)
Interest Expense Charged by Parent (1,670) (501) (726) (51) (2,948)
General and Administrative Costs Allocated by Parent (717) (230) (309) (21) (1,277)
-------- -------- ----- ------ --------
Earnings Before Taxes 22,877 (10,555) (121) (205) 11,996
Estimated Income Taxes 5,329 (2,459) (28) (48) 2,794
-------- -------- ----- ------ --------
Net Earnings $ 17,548 ($ 8,096) ($ 93) ($ 157) $ 9,202
======== ======== ===== ====== ========
<CAPTION>
Three Months Ended June 30, 1988
-----------------------------------------------------
Credit
Reporting Collections Other
Division Data Center Division Operations Combined
--------- ----------- -------- ---------- --------
<S> <C> <C> <C> <C> <C>
REVENUES
Credit Reports $ 12,853 $ 12,853
Busines Promotion Services 1,767 1,767
Mortgage Reports 2,250 2,250
Data Processing Fees 1,917 1,917
Collection Commission Fees 7,132 7,132
Other 1,058 482 249 1,789
-------- -------- ----- ----- --------
TOTAL REVENUES 17,928 1,917 7,614 249 27,708
-------- -------- ----- ----- --------
OPERATING EXPENSES:
Payroll Expenses 4,189 1,587 3,866 137 9,779
Purchased Credit Information 1,896 8 1,904
Telephone and Communications Expense 790 807 522 24 2,143
Amortization of Goodwill and Credit File Information 752 77 829
Equipment Related Expenses 576 1,332 388 14 2,310
Occupancy Expenses 437 183 436 50 1,106
Postage, Printing & Office Supplies 342 91 533 23 989
Public Relations, Advertising & Travel 309 55 165 11 540
Commisssions Paid Other Agencies 256 256
General and Administrative Costs 930 298 400 27 1,655
CSC Industry Services Group Allocated
General and Administrative Costs 54 17 23 2 96
Other Expenses 635 104 617 80 1,436
-------- -------- ----- ----- --------
TOTAL OPERATING EXPENSES 10,910 4,474 7,291 368 23,043
-------- -------- ----- ----- --------
OPERATING INCOME 7,018 (2,557) 323 (119) 4,665
OTHER INCOME (EXPENSES):
Investment Income 1 2 4 7
Interest Expense (15) (36) (8) (1) (60)
Interest Expense Charged by Parent (601) (193) (259) (18) (1,071)
General and Administrative Costs Allocated by Parent (217) (70) (93) (6) (386)
-------- -------- ----- ----- --------
Earnings Before Taxes 6,186 (2,856) (35) (140) 3,155
Estimated Income Taxes 2,822 (1,303) (16) (64) 1,439
-------- -------- ----- ----- --------
Net Earnings $ 3,364 ($ 1,553) ($ 19) ($ 76) $ 1,716
======== ======== ===== ===== =======
</TABLE>
See Notes to Combined Financial Statements.
<PAGE>
CSC CREDIT SERVICES, INC.
AND SUBSIDIARIES AND CERTAIN AFFILIATES
UNAUDITED COMBINED STATEMENT OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
Three Months
Year Ended Ended
March 31, June 30,
1988 1988
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 9,202 $ 1,716
Adjustments to reconcile net earnings to net
Cash provided:
Depreciation and amortization 7,063 1,923
Provision for losses on accounts receivable 672 69
Changes in assets and liabilities, net of effects of acquistions:
Increase in accounts receivable (2,537) (169)
Increase in prepaid expenses (574) (59)
Increase in accounts payable, accrued liabilities, and
current maturities of notes payable representing with- (3,519) (60)
holds under acquisition agreements and long-term liabilities
Decrease (increase) in income taxes payable (2,183) 1,547
Increase in capitalized development costs (3,365) (906)
Decrease (increase) in notes payable to parent 5,423 (2,184)
-------- --------
Net cash provided by operating activities 10,182 1,877
-------- --------
Cash flows from investing activities:
Purchases of property and equipment (3,702) (1,170)
Acquisitions, net of cash acquired (3,165) 0
Other investing cash flows 585 310
-------- --------
Net cash used in investing activities (6,282) (860)
-------- --------
Cash flows from financing activities:
Principal payments on long-term liabilities (1,079) (271)
Payments on notes payable representing withholds under
acquisition agreements (3,168) (27)
Notes payable representing withholds under acquisition
agreements incurred 852 0
-------- --------
Net cash used in financing activities (3,395) (298)
-------- --------
Net increase in cash and cash equivalents 505 719
Cash and cash equivalents at beginning of period 2,060 2,565
-------- --------
Cash and cash equivalents at end of period $ 2,565 $ 3,284
======== ========
</TABLE>
See Notes to Combined Financial Statement.
<PAGE>
CSC Credit Services, Inc.
and Subsidiaries and Certain Affiliates
Notes to Combined Financial Statements
March 31, 1988
Note 1 - Summary of Significant Accounting Policies
Principles of Combination
The accompanying combined financial statements include the accounts of CSC
Credit Services, Inc., its wholly-owned subsidiaries and two of its affiliates
(collectively referred to as the "Company"), as follows:
Wholly-Owned Subsidiaries:
Johns Holding Company
CSC Credit Services of Minnesota, Inc.
CSC Accounts Management, Inc.
Credit Bureau Data Centers, Inc.
Aircall Communications, Inc.
Affiliates (wholly-owned subsidiaries of Computer
Sciences Corporation):
Credit Bureau of Cincinnati, Inc. ("Cincinnati")
Credit Bureau of Greater Kansas City, Inc. ("Kansas City")
CSC Credit Services, Inc. is a wholly-owned subsidiary of Computer Sciences
Corporation ("CSC" or "Parent"). All material intercompany and interdivisional
transactions and balances have been eliminated. Certain costs have been
allocated by CSC to the Company predicated on various allocation methods
(directly chargeable, separately allocated and overall allocation of CSC
Corporate general and administrative costs) and multiple allocation bases
(primary usage, headcount or cost input). In addition, the Company's general and
administrative costs and intercompany interest charges have been allocated to
its Divisions based on a combination of revenue contribution and headcount.
Income Recognition
Revenues from credit reporting activities are recorded at the time the service
is utilized by the customer. The amount of revenue is determined by reference to
specific contractual agreements.
-1-
<PAGE>
Data processing fees are determined by reference to specific contractual
agreements and are recognized when the service is provided to the customer.
Revenues from the collection agency service are recorded at the time the funds
are collected by the agency. The amount of revenue recorded is determined by
reference to specific contractual agreements.
Depreciation and Amortization
The cost of property and equipment, less applicable residual values, is
generally depreciated on the straight-line method for financial accounting
purposes from the date the specific asset is complete, installed and ready for
normal use, as follows:
Buildings 20 to 40 years
Computers 5 years
Communications equipment 5 years
Furniture and other equipment 5 to 10 years
Leasehold improvements Shorter of lease term or
useful life
Software 5 to 10 years
Credit information files 20 years
Excess of cost of business
acquired over related net assets 40 years
Development Costs
Significant costs incurred in the internal development of computer software
which is to be sold, leased or otherwise marketed as a separate product or as
part of a product or process are accounted for in accordance with Statement of
Financial Accounting Standards No. 86. During fiscal l988, the Company
capitalized $3,365,O0O of software development costs. Capitalized development
costs are to be amortized over the expected useful life of the related program
or system.
Acquisitions
During fiscal 1988, the Company made several acquisitions. In conjunction with
these acquisitions the Company acquired assets with a fair value of $2,389,000
and assumed liabilities of $2,326,000. The excess cost of businesses acquired
over related net assets was $139,000.
-2-
<PAGE>
Retirement Plans
During 1988, the Company terminated its defined benefit plans and replaced them
with a defined contribution compensation deferred plan.
Note 2 - Receivables
Receivables, consist of the following (in thousands):
Billed trade accounts $13,055
Notes 401
Other 1,052
-------
$14,508
=======
All amounts shown above are expected to be collected during fiscal year 1989.
Note 3 - Debt
Notes payable representing withholds under acquisition agreements bear interest
ranging from 6% to 10.5% payable in monthly installments through fiscal year
1992.
Long-term liabilities at March 31, 1988 consisted of the following (in
thousands):
Long-
Current Term
Maturities Portion Total
---------- ------- -----
Capitalized lease liabilities, with
interest rates varying from 6.8% to
14.0%, payable in monthly installments
through fiscal year 1992 $ 789 $ 299 $1,088
Mortgages payable, collateralized
by real property, with interest rates
varying from 9.75% to 14.0%,
payable in monthly installments
through fiscal year 1993 87 320 407
Other 28 8 36
------ ------ ------
$ 904 $ 627 $1,531
====== ====== ======
-3-
<PAGE>
Maturities of notes payable representing withholds under acquisition agreements
and long-term liabilities are as follows (in thousands):
Due in Fiscal Year
----------------------------------------------
1989 1990 1991 1992 1993
------ ------ ------ ------ ------
Notes payable $ 816 $ 120 $ 92 $ 9 $ 10
Long-term liabilities 904 392 118 114 13
------ ------ ------ ------ ------
$1,720 $ 502 $ 210 $ 123 $ 23
====== ====== ====== ====== ======
Capitalized lease liabilities shown above represent amounts due under leases for
the use of computes and certain telephone equipment. Amounts which have been
capitalized as property and equipment relating to such leases aggregated
$3,064,000 less accumulated depreciation through March 31, 1988 of $2,138,000.
All of these leases conclude by May 1991.
Note 4 - Income Taxes
The Company's results of operations for tax purposes are includeable in CSC's
consolidated income tax returns. As such, CSC records all deferred taxes due to
timing differences between financial reporting and tax reporting on its
corporate books. Current income taxes are recorded by the Company based upon
statutory rates, adjusted for certain effects of the prior year CSC returns as
filed.
Note 5 - Commitments and Contingent Liabilities
Lease Commitments
Rental expenses under noncancelable operating leases for the use of property and
equipment amounted to $5,822,000. Substantially all operatiang leases are
noncancelable or cancelable only by the payment of penalties. All lease payments
are based on the lapse of time but include, in some cases, payments for
insurance, maintenance and property taxes. There are no purchase options on
operating leases at favorable terms, but most leases have one or more renewal
options. Certain leases on real property are subject to annual escalation for
increases in utilities and property
-4-
<PAGE>
taxes. Minimum fixed rentals required for the next five years and thereafter
under leases in effect at April, 1988 were as follows (in thousands):
Operating Leases
Fiscal Year Capital ------------------------
Equipment Leases Real Estate Equipment
- ----------- ------- ----------- ---------
1989 $ 877 $ 2,487 $ 3,304
1990 262 1,956 2,029
1991 21 1,580 1,554
1992 4 1,267 1,090
1993 1,141 344
Thereafter to 1998 2,885
------- ------- -------
1,164 $10,316 $ 8,321
Less Interest Included 97 ======= =======
-------
$ 1,067
=======
Contingent Liabilities - Legal Proceedings
The Company is currently a party to a number of disputes which involve or may
involve litigation. In the opinion of Company management, ultimate liability, if
any, with respect to these disputes will not be material to the Company's
financial position.
Note 6 - Stockholders Equity
Following are the details of the common stock of CSC Credit Services, Inc.,
Cincinnati and Kansas City:
Credit Bureau Credit Bureau of
CSC Credit of Cincinnati Greater Kansas
Services, Inc. Inc. City, Inc.
-------------- ---------------------- ---------------
Class A Class B
------- -------
Par Value $ 1.00 $ 1.00 No par $ 1.00
Authorized 10,000 250 2,000 1,000
Issued 1,000 16 1,125 1,000
Outstanding 1,000 16 1,125 1,000
Note 7 - Related Party Transactions
During the normal course of business, the Company enters into certain
transactions with CSC and INFONET, a division of CSC. During fiscal 1988, the
Company Utilized the INFONET communications network; accordingly, $2,485,000 was
charged
-5-
<PAGE>
to the Company's results of operations for such services. In addition, effective
April 1, 1998, the Company is contractually obligated to purchase such services
from INFONET in annual amounts not less than $1.9 million per fiscal year for
three years. The Company participates in the CSC health and life insurance
program and was charged $2,317,000 in fiscal 1988 for premiums related to these
programs.
The Company has a long-term revolving note payable with CSC, which bears
interest at 9%. Interest expense related to this note aggregated $2,948,000 in
fiscal year 1988.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.21
<SEQUENCE>4
<DESCRIPTION>5TH AMEND. TO AGREE. FOR COMPUTERIZED REPORTING
<TEXT>
<PAGE>
EXHIBIT 10.21
FIFTH AMENDMENT
TO
AGREEMENT FOR
COMPUTERIZED CREDIT REPORTING SERVICES
AND
OPTIONS TO PURCHASE AND SELL ASSETS
This Fifth Amendment to Agreement for Computerized Credit Reporting Services and
Options to Purchase and Sell Assets (the "Fifth Amendment") dated as of the 7th
day of September, 1993, is made by and among Equifax Credit Information
Services, Inc. ("CBI" or "ECIS"), a Georgia corporation, Equifax Inc., a Georgia
corporation ("Equifax") and CSC Enterprises, a Delaware general partnership (the
"Partnership"), CSC Accounts Management, Inc., a Texas corporation ("Accounts
Management"), Credit Bureau of Tulsa, Inc., an Oklahoma corporation, and
Computer Sciences Corporation, a Nevada corporation ("CSC").
WITNESSETH:
WHEREAS, The Credit Bureau, Incorporated of Georgia, Equifax, CSC, CSC Credit
Services, Inc., a Texas corporation ("Credit Services"), CSC Credit Services of
Minnesota, Inc., a Texas corporation ("Minnesota"), Credit Bureau of Cincinnati,
Inc., an Ohio corporation ("Cincinnati"), Credit Bureau of Greater Kansas City,
Inc., a Missouri corporation ("Kansas City"), 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
<PAGE>
WHEREAS, pursuant to that certain Assignment and Assumption Agreement, dated as
of December 28, 1990, by and between CEI and Credit Services, as assignors, and
the Partnership, as assignee, CEI assigned to the Partnership, among other
things, all of its right, title, and interest in and to the Original Agreement,
and the Partnership assumed all of CEI's obligations under the Original
Agreement; and
WHEREAS, the Original Agreement was amended as of December 28, 1990, by that
certain First Amendment to Agreement for Computerized Credit Reporting Services
and Options to Purchase and Sell Assets, among ECIS, Equifax, CSC, Credit
Services, Cincinnati, Kansas City, JHC, Accounts Management, CEI, and the
Partnership (the "First Amendment"); and
WHEREAS, the Original Agreement, as amended by the First Amendment, was further
amended as of the 27th day of September, 1991, by that certain Second Amendment
to Agreement for Computerized Credit Reporting Services and Options to Purchase
and Sell Assets, among ECIS, Equifax, the Partnership, Accounts Management, and
CSC (the "Second Amendment"); and
WHEREAS, the Original Agreement, as amended by the First Amendment and the
Second Amendment, was further amended as of the 27th day of September, 1991, by
that certain Third Amendment to Agreement for Computerized Credit Reporting
Services and Options to Purchase and Sell Assets, among ECIS, Equifax, the
Partnership, Accounts Management, and CSC; and
WHEREAS, CBI, as of December 23, 1991, changed its corporate name from The
Credit Bureau, Incorporated of Georgia to Equifax Credit Information Services,
Inc. and desires to use the acronym "ECIS" instead of "CBI" and any reference to
"CBI" or "ECIS" in the Original Agreement, as amended, or this Amendment refers
to Equifax Credit Information Services, Inc., a Georgia corporation; and
WHEREAS, Credit Bureau of Tulsa, Inc. ("CB-Tulsa") was added to the Original
Agreement, as amended, as a party via an Addendum effective as of the 17th day
of February, 1992, and for the purposes of Exhibit M set forth in this Fifth
Amendment CB-Tulsa will be included in any reference to the Partnership; and
WHEREAS, the Original Agreement, as amended by the First Amendment, the Second
Amendment, and the Third Amendment was further amended as of the 31st day of
December, 1992, by that certain Fourth Amendment to Agreement for Computerized
Credit Reporting Services and
-2-
<PAGE>
Options to Purchase and Sell Assets, among ECIS, Equifax, the Partnership,
Accounts Management, CSC, and CB-Tulsa (the "Fourth Amendment," the Original
Agreement, as amended by the First Amendment, the Second Amendment, the Third
Amendment and the Fourth Amendment being referred to herein as the "Agreement");
and
WHEREAS, ECIS has entered into an agreement with Sears, as defined herein,
regarding pricing of certain Special Products, as defined herein; and
WHEREAS, the Partnership, as owner of certain information in the ACROPAC(TM)
System, desires to consent to the method of pricing certain Special Products, as
herein defined, to Sears, as herein defined;
WHEREAS, the parties have previously consented that the products FINDERS and
DTEC shall be treated as seller- rather than owner-based products, but desire
that such policy shall not apply to FINDERS sales to Sears on the terms
described herein;
WHEREAS, the parties hereto have agreed to amend the Agreement in certain
respects as set forth herein; and
NOW THEREFORE, in consideration of the premises and of other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
I. ADDITION OF EXHIBIT M TO THE AGREEMENT
The following new Exhibit M titled "Sears Pricing" is hereby added to the
Agreement as follows:
1. The parties agree that the method of determining
payments in respect of the Cost Allocation System (as
defined in Paragraph 8(c) of the Agreement), billable
inquiries (as defined in Paragraph 8(a) of the
Agreement), and the Royalty (as defined in Paragraph
8(e) of the Agreement) for all Special Products (as
hereinafter defined) accessed by Sears (as hereinafter
defined), whether directly by Sears or for Sears (using
the Sears customer number) by the Partnership, ECIS or
its Affiliate Bureaus shall be determined pursuant to
this Exhibit M.
-3-
<PAGE>
2. "Special Products" is defined to mean the basic
ACROPACT(TM) credit reporting products known as
ACROFILE, ACROPLUS, ACRO SELECT, and FINDERS. A "Unit"
means each unit of a Special Product accessed by Sears
for its use. All other products, including without
limitation, PERSONA, DTEC, ON-LINE DIRECTORY, Canadian
files, Equipment Leasing, Handling or Surcharges for
messenger work, and special services such as "Mail
Return", are not included in Special Products and
payments in respect of all such other products shall not
be affected by this Exhibit M. SAFESCAN will be provided
to Sears at no charge and is not included in the
definition of "Special Products."
3. "Sears" is defined to mean only the Sears
Merchandising Group of Sears, Roebuck and Company and
shall not include any other entity, affiliate or
division; therefore, for example, such affiliates as
Sears Payment Systems and Allstate shall not be included
in the definition of "Sears".
4. Payments in respect of the Cost Allocation System,
billable inquiries and the Royalty under this Exhibit M
shall be determined as follows:
(a) Actual Sears File Price. A factor defined as the
"Actual Sears File Price" will be calculated in
respect of each month by (i) dividing the constant
amount $500,000 ("Sears Monthly Payment") owed by
Sears each month in respect of the pricing agreement
between Sears and ECIS by (ii) the total number of
Units accessed that month by Sears from all ACROPAC
bureau files. (Any reference to a "month" in this
Exhibit M shall be to a calendar month.) For
example, if the number of Units accessed in a given
month by Sears equals 1,000,000, then the Actual
Sears File Price for that month would be $0.50:
Sears Monthly / Units = Actual Sears
Payment Accessed File Price
($500,000) (1,000,000) ($0.50)
(b) Cost Allocation System. The Cost Allocation
System in respect of Special Products shall require
a determination of three elements: (i) the Sellers'
Pool, (ii) the Model Royalty Pool and (iii) the File
Owners' Pool.
(i) The Sellers' Pool will equal a constant
5% of the Sears Monthly Payment. The Partnership
will receive a constant 22% of the Sellers' Pool
each month ("Partnership Share"); the remainder of
the Sellers' Pool will be allocated by ECIS. For
example:
-4-
<PAGE>
Sears Monthly X 5% = Sellers' Pool
Payment ($500,000) ($25,000)
Sellers' Pool X 22% = Partnership Share
($25,000) ($5,500)
(ii) The Model Royalty Pool will be paid to
the third parties ("Model Vendors") that developed
the scoring model system used by Sears in respect of
Units accessed by Sears. The Units to which Sears
applies scoring model systems during a given month
are referred to as the "Scored Units". The Model
Royalty Pool will be calculated in respect of each
month by (x) multiplying the number of Units
accessed by Sears that month by (y) the percentage
of such Units which are Scored Units by (z) a Model
Royalty equal to a constant number of $.05 for DAS
and $.06 for BEACON. For example, if the number of
Units accessed in a given month by Sears equals
1,000,000 and the percentage of such Units which are
Scored Units equals 55%, and the Model chosen by
Sears is DAS, then the Model Royalty Pool for that
month would be $27,500:
Units X Percentage X Model = Model
Accessed of Units Royalty Royalty Pool
(1,000,000) which are ($.05) ($27,500)
Scored
Units (55%)
The Model Vendor will receive all of the Model
Royalty Pool for each month.
(iii) The File Owners' Pool will be
calculated in respect of each month by (x)
subtracting from the Sears Monthly Payment (y) both
the File Sellers' Pool and the Model Royalty Pool.
For example, if the File Sellers' Pool and the Model
Royalty Pool for a given month are $25,000 and
$27,500, respectively, then the File Owners' Pool
for that month would be $447,500:
Sears - File - Model = File
Monthly Sellers' Royalty Owners'
Payment Pool Pool Pool
($500,000) ($25,000) ($27,500) ($447,500)
The File Owners' Pool will be allocated among file
owners regardless of whether the Special Product is
otherwise characterized as a seller-based or
owner-based product. Each file owner will receive
each month a proportion of the File Owners' Pool for
that month based on the number of Units accessed
from its file. For example, if for a given month the
File Owners' Pool is $447,500, the number of Units
-5-
<PAGE>
accessed by Sears is 1,000,000 and the number of
Units accessed from the file of file owner X is
100,000, then file owner X will receive $44,750 from
the File Owners' Pool:
File / Units x Units Accessed = File Owner X
Owners' Accessed from file of Share of File
Pool (1,000,000) File Owner X Owners' Pool
($447,500) (100,000) ($44,750)
(c) Billable Inquiry. The amount payable by the
Partnership for a given month for each billable
inquiry in respect of a Unit (including for purposes
of this Exhibit M, the product FINDERS) will be
calculated by (i) dividing the Actual Sears File
Price for that month by (ii) the national price per
ACRO file report paid by Sears prior to the Sears
Pricing Agreement ("Previous Sears File Price") (a
constant number equal to $1.12) (iii) multiplied by
a constant number equal to $0.23; provided, such
amount per billable inquiry shall in no event exceed
$0.23, or such lower amount provided by the
Agreement. For example, if for a given month, the
Actual Sears File Price is $0.50, the charge for a
billable inquiry for that month will be $0.102679:
Actual / Previous x $0.23 = billable inquiry
Sears Sears charge
File File ($0.102679)
($0.50) ($1.12)
(d) Royalty. The amount payable as Royalty under the
Agreement per billable inquiry in respect of a Unit
(including, for purposes of this Exhibit M, the
product FINDERS) in respect of a given month will be
calculated by (i) dividing the Actual Sears File
Price for that month by (ii) the Previous Sears File
Price ($1.12) multiplied by the Royalty otherwise
payable under the Agreement ($0.07); provided, such
amount shall in no event exceed $0.07. For example,
if for a given month the Actual Sears File Price is
$0.50, the Royalty per billable inquiry for that
month will be $0.03125:
Actual / Previous x Agreement = Royalty per
Sears Sears Royalty billable inquiry
File File ($0.07) ($0.03125)
Price Price
($0.50) ($1.12)
5. This Exhibit M shall be effective as of March 1,
1993, and shall continue in effect until September 1,
1994.
-6-
<PAGE>
6. The Partnership shall have the right to audit ECIS's
relevant records to verify compliance with the terms of
this Exhibit M. Such audit may be conducted after
reasonable notice, during normal business hours, using
reasonable procedures to assure an accurate audit. Each
party will reasonably cooperate with the other during
the conduct of any such audit, it being expressly
understood that in no event shall auditors be permitted
to access the confidential data, files, or information
belonging to a third party or not directly related to
this Exhibit M. Auditors will not be given free access
to facilities, documents, or files. Auditors will work
only in designated locations and will conduct their
business quietly without significant disruption of work
being done by others. Notwithstanding anything to the
contrary herein contained, ECIS will make available to
the Partnership appropriate personnel to answer the
Partnership's questions associated with the audit. All
expenses of the audit are the responsibility of the
Partnership.
2. REFERENCES TO THE AGREEMENT
All capitalized terms which are defined in the Agreement and not otherwise
defined herein shall have the same meaning herein as in the Agreement. On or
after the date hereof, each reference in the Agreement to "this Agreement",
"hereunder", "herein", or words of like import shall mean and be a reference to
the Agreement, as amended by this Fifth Amendment.
3. AUTHORITY
Each of the parties hereto represents to the other parties hereto that:
(a) it has the full corporate (or, in the case of the Partnership,
partnership) power and authority to execute and deliver this Fifth
Amendment, to perform under the Agreement, as amended by this Fifth
Amendment, and to consummate the transactions contemplated by the
Agreement, as amended by this Fifth Amendment, without the necessity of
any act, approval, or consent of any other person whomsoever, except such
as have been obtained; and
(b) the Agreement, as amended by this Fifth Amendment, has been approved
by its Board of Directors, or the Executive Committee thereof (or, in the
case of the Partnership, by the respective Boards of Directors, or the
Executive Committees thereof, of each of its partners), and constitutes
the valid and legally binding obligation of such party enforceable against
such party in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws from time to time
-7-
<PAGE>
in effect which affect the enforcement of creditors' rights generally, and
except as enforcement of remedies may be limited by general equitable
principles.
4. COUNTERPARTS
This Fifth Amendment may be executed in several counterparts, and each
counterpart, when so executed and delivered, shall constitute an original
instrument, and all such separate counterparts shall constitute but one and the
same instrument.
5. MERGER
This Fifth Amendment sets forth the entire understanding of the parties
regarding the subject matter hereof, and all prior such understandings, written
or oral, are merged herein.
6. GOVERNING LAW
THIS FIFTH AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS.
EQUIFAX CREDIT INFORMATION SERVICES, INC.
By: /s/ Joseph E. Dawson
-----------------------------------
Joseph E. Dawson
Its Senior Vice President
-----------------------------------
EQUIFAX INC.
By: /s/ Joseph E. Dawson
-----------------------------------
Joseph E. Dawson
Its Senior Vice President
-----------------------------------
-8-
<PAGE>
CSC ENTERPRISES
By: CSC ENTERPRISES, INC.
Its Managing Partner
By: /s/ Dale B. Elam
-------------------------------
Its Vice President
--------------------------------
CSC ACCOUNTS MANAGEMENT, INC.
By: /s/ Dale B. Elam
-----------------------------------
Its President
-----------------------------------
CREDIT BUREAU OF TULSA, INC.
By: /s/ Dale B. Elam
-----------------------------------
Its President
-----------------------------------
COMPUTER SCIENCES CORPORATION
By: /s/
-----------------------------------
Its President
-----------------------------------
-9-
1
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.24
<SEQUENCE>5
<DESCRIPTION>LEASE AGREEMENT
<TEXT>
<PAGE>
EXHIBIT 10.24
================================================================================
LEASE AGREEMENT
dated as of March 18, 1994
between
William J. Wade,
not in his individual capacity but solely as the
Individual Owner Trustee of
Equifax Business Trust No. 1994-A,
as Lessor
and
EQUIFAX INC.,
as Lessee
Leveraged Lease of the J. V. White Technology Center
================================================================================
CERTAIN RIGHTS OF THE LESSOR UNDER THIS LEASE AGREEMENT HAVE BEEN ASSIGNED TO,
AND ARE SUBJECT TO A LIEN AND SECURITY INTEREST IN FAVOR OF, NATIONSBANK OF
GEORGIA, NATIONAL ASSOCIATION, AS INDENTURE TRUSTEE, UNDER THE TRUST INDENTURE
DATED AS OF MARCH 18, 1994, BETWEEN THE LESSOR AND THE INDENTURE TRUSTEE, UNDER
THE DEED TO SECURE DEBT AND SECURITY AGREEMENT DATED AS OF MARCH 18, 1994,
BETWEEN THE LESSOR AND THE INDENTURE TRUSTEE AND UNDER THE ASSIGNMENT OF RENTS
AND LEASES DATED AS OF MARCH 18, 1994 BETWEEN THE LESSOR AND THE INDENTURE
TRUSTEE, AS SUCH TRUST INDENTURE, DEED TO SECURE DEBT AND SECURITY AGREEMENT AND
ASSIGNMENT OF RENTS AND LEASES MAY BE AMENDED, MODIFIED OR SUPPLEMENTED FROM
TIME TO TIME IN ACCORDANCE WITH THE PROVISIONS THEREOF. THIS LEASE AGREEMENT HAS
BEEN EXECUTED IN SEVERAL COUNTERPARTS. TO THE EXTENT THAT THIS LEASE AGREEMENT
CONSTITUTES CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL
CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS
LEASE AGREEMENT MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY
COUNTERPART HEREOF OTHER THAN THE "ORIGINAL EXECUTED COUNTERPART", WHICH SHALL
BE IDENTIFIED AS THE COUNTERPART CONTAINING THE RECEIPT THEREFOR EXECUTED BY THE
INDENTURE TRUSTEE ON OR FOLLOWING THE SIGNATURE PAGE THEREOF. SEE SECTION 22(e)
FOR FURTHER INFORMATION CONCERNING THE RESPECTIVE RIGHTS OF THE INDENTURE
TRUSTEE AND THE NOTEHOLDERS.
THIS COUNTERPART [IS NOT] THE SOLE EXECUTED CHATTEL PAPER ORIGINAL.
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. Definitions................................................. -1-
SECTION 2. Lease; Lease Term........................................... -1-
(a) Lease..................................................... -1-
(b) Lease Term................................................ -2-
SECTION 3. Rent; Adjustments to Rent................................... -2-
(a) Interim Term.............................................. -2-
(b) Basic Rent................................................ -2-
(c) Supplemental Rent......................................... -3-
(d) Method of Payment......................................... -4-
(e) Adjustments to Rent....................................... -5-
(f) Computation of Adjustments................................ -6-
(g) Sufficiency of Basic Rent and Supplemental Rent........... -7-
SECTION 4. Net Lease................................................... -7-
SECTION 5. Return...................................................... -9-
SECTION 6. Warranty of the Lessor...................................... -11-
(a) Quiet Enjoyment........................................... -11-
(b) Disclaimer of Other Warranties............................ -12-
(c) Enforcement of Certain Warranties......................... -13-
(d) Title Insurance........................................... -13-
SECTION 7. Liens....................................................... -14-
SECTION 8. Operation and Maintenance; Modifications ................... -15-
(a) Operation and Maintenance................................. -15-
(b) Inspection................................................ -16-
(c) Modifications............................................. -17-
(d) Title to Modifications.................................... -18-
(e) Removal or Replacement of Property........................ -19-
(f) Trade and Other Fixtures.................................. -20-
(g) Contest of Taxes or Requirements of Law................... -21-
(h) Reports................................................... -22-
(i) Environmental Compliance.................................. -22-
SECTION 9. Event of Loss............................................... -24-
(a) Events of Loss; Notice.................................... -24-
(b) Repair.................................................... -25-
(c) Event of Loss During the Interim Term and Basic Term...... -26-
(d) Termination of Lease Term................................. -26-
(e) Event of Loss During any Renewal Term..................... -27-
(f) Application of Payments on an Event of Loss............... -27-
(g) Application of Payments Not Relating to an Event of
Loss ..................................................... -28-
(h) Application During Lease Event of Default ................ -30-
<PAGE>
Page
SECTION 10. Insurance.................................................. -31-
(a) Required Insurance........................................ -31-
(b) Other Insurance........................................... -34-
(c) Insurance to be Commercially Available.................... -34-
(d) Self Insurance............................................ -34-
SECTION 11. Rights To Assign or Sublease; Assignment as
Security; Attornment....................................... -35-
(a) Sublease by the Lessee..................................... -35-
(b) Assignment by the Lessee .................................. -36-
(c) Security for Lessor's Obligation to Noteholders............ -37-
(d) Assignments by the Lessor.................................. -37-
SECTION 12. Lease Renewal.............................................. -38-
(a) Option for Fixed-Rate Renewal.............................. -38-
(b) Fair Market Renewal Options................................ -38-
(c) Short-Term Lease Extensions................................ -38-
(d) Notice at Expiration of Lease Term......................... -39-
(e) Elections Irrevocable...................................... -39-
(f) Determination of Fair Market Rental Value.................. -39-
(g) Assistance with Disposition................................ -39-
SECTION 13. Burdensome Buyout Purchase Right........................... -40-
(a) Burdensome Buyout Purchase Right........................... -40-
(b) Notice..................................................... -41-
(c) Determination of Fair Market Sales Value................... -41-
SECTION 14. Early Termination; Obsolescence or Uneconomic
Usefulness Termination..................................... -42-
(a) Obsolescence or Uneconomic Usefulness Termination.......... -42-
(b) Early Termination.......................................... -46-
SECTION 15. Lease Events of Default.................................... -47-
SECTION 16. Remedies................................................... -49-
(a) Remedies................................................... -49-
(b) No Release................................................. -52-
(c) Remedies Cumulative........................................ -53-
SECTION 17. Notices.................................................... -53-
SECTION 18. Successors and Assigns..................................... -53-
SECTION 19. Right of First Offer....................................... -53-
(a) Grant of Right of First Offer.............................. -53-
(b) Savings Clause............................................. -55-
SECTION 20. Right To Perform for Lessee................................ -55-
-ii-
<PAGE>
Page
SECTION 21. Rejectable Offers.......................................... -56-
(a) Amendments in Writing...................................... -62-
(b) Survival................................................... -62-
(c) Severability of Provisions................................. -63-
(d) True Lease................................................. -63-
(e) Original Lease............................................. -63-
(f) Governing Law.............................................. -63-
(g) Headings................................................... -63-
(h) Estoppel Certificates...................................... -63-
(i) Concerning the Trust....................................... -64-
(j) Counterpart Execution...................................... -65-
(k) Time is of the Essence..................................... -65-
(l) Costs of Transfer.......................................... -65-
Schedule 1............................................................. -68-
Basic Rent Schedule............................................. -68-
Schedule 2............................................................. -69-
Stipulated Loss Value Schedules................................. -69-
2.1 Stipulated Loss Value Schedule During Basic Term . -69-
2.2 Stipulated Loss Value Schedule for Lessor
Designated Event Price and OP Designated
Event Price ...................................... -69-
2.3 Stipulated Loss Value Schedule for Burdensome Buyout
Purchase Price During Renewal Terms .............. -69-
Schedule 3............................................................. -70-
Pricing Assumptions............................................. -70-
Schedule 4............................................................. -71-
Trade Fixtures.................................................. -71-
Exhibit A Description of Project
Exhibit B Form of Lease Supplement
-iii-
<PAGE>
EXHIBIT 10.24
LEASE AGREEMENT
LEASE AGREEMENT (this "Lease"), dated as of March 18, 1994, between
WILLIAM J. WADE, not in his individual capacity, but solely as Individual Owner
Trustee of Equifax Business Trust No. 1994-A, a Delaware business trust (the
"Lessor") and EQUIFAX INC., a Georgia corporation (the "Lessee").
W I T N E S S E T H:
WHEREAS, the Lessor owns the Project; and
WHEREAS, the Lessee desires to lease from the Lessor the Project,
upon the terms and subject to the conditions set forth herein; and
WHEREAS, the Lessor is willing to lease the Project to the Lessee
upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. Definitions. For purposes of this Lease (including the
foregoing recitals), capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to them in Appendix A to the
Participation Agreement of even date herewith among Alphafax Properties Limited
Partnership, as a Seller, Equifax Inc., as a Seller and Lessee, Equifax
Properties, Inc., as General Partner, First Chicago Leasing Corporation, as
Owner Participant, Equifax Business Trust No. 1994-A, as the Trust, Wilmington
Trust Company, as Corporate Owner Trustee, William J. Wade, as Individual Owner
Trustee, NationsBank of Georgia, National Association, as Indenture Trustee, and
Trust Company Bank, as Lender, as such Appendix may be amended from time to time
in accordance with the terms of the Participation Agreement. Unless otherwise
indicated, references in this Lease to sections, paragraphs, clauses,
appendices, schedules and exhibits are to the same contained in or attached to
this Lease.
SECTION 2. Lease; Lease Term.
(a) Lease. Upon the terms and subject to the conditions of this
Lease and subject to the Permitted Exceptions and to the terms and conditions of
the other Transaction Documents, the Lessor hereby grants and leases to the
Lessee, and the Lessee hereby takes and leases from the Lessor, the Project. The
interest in the Project granted by Lessor to Lessee by this Lease is an estate
for years under Georgia law.
<PAGE>
(b) Lease Term. The term of this Lease shall be as follows:
(i) Interim Term. The interim term (the "Interim Term") shall
commence on the Closing Date and shall terminate at the end of
August 31, 1994, unless this Lease is earlier terminated in
accordance with its terms.
(ii) Basic Term. The basic term (the "Basic Term") shall
commence on September 1, 1994, and shall terminate at 11:59 p.m.
(Atlanta time) on March 1, 2012, unless this Lease is earlier
terminated in accordance with its terms.
(iii) Extension of Lease. The Lease Term is subject to further
extension pursuant to Section 12 hereof.
(c) Description. The Project to be leased on the Closing Date is
described on Exhibit A.
(d) Lease Supplement. On the Closing Date, the Lessee shall enter
into a Lease Supplement in the form of Exhibit B with the Lessor, which Lease
Supplement shall (i) state that the Lessee has had an opportunity to inspect and
has inspected the Project, (ii) describe the Project, (iii) set forth the
Purchase Price, and (iv) if appropriate, set out revised Schedules 1 and 2 if
and to the extent rental adjustments have been made on the Closing Date pursuant
to Section 3.
(e) Risk of Loss. Upon the execution and delivery of this Lease and
any Lease Supplement on the Closing Date, all risk of loss with respect to the
Project shall pass to the Lessee.
SECTION 3. Rent; Adjustments to Rent.
(a) Interim Term. No Rent, other than Supplemental Rent, if any,
shall be due and payable by the Lessee to the Lessor during the Interim Term.
(b) Basic Rent. The Lessee shall pay to the Corporate Owner Trustee
for the account of the Lessor, as basic rent (hereinafter referred to as "Basic
Rent"), the following amounts:
(i) on each Basic Rent Payment Date occurring during the Basic
Term, an amount equal to (A) the Purchase Price multiplied by (B)
the percentages set forth opposite such Basic Rent Payment Date on
Schedule 1 to this Lease in advance or arrears as set forth in such
Schedule 1, as such Schedule 1 may (subject always to Section 3(g)
hereof) be amended by any Lease Supplement, plus or minus the Basic
Rent Differential Amount;
-2-
<PAGE>
(ii) on each Basic Rent Payment Date occurring during any
Fixed-Rate Renewal Term, an amount determined in accordance with
Section 12(a);
(iii) on each Basic Rent Payment Date occurring during any
Fair Market Renewal Term, an amount determined in accordance with
Section 12(b); and
(iv) on each Basic Rent Payment Date occurring during any
Short-Term Renewal, an amount determined in accordance with Section
12(c).
(c) Supplemental Rent. The Lessee shall pay as supplemental rent
(herein referred to as "Supplemental Rent"), the following amounts:
(i) when due, any amount payable hereunder as Stipulated Loss
Value as herein provided;
(ii) when due, to or for the account of the Lessor (or any
trustee or co-trustee or additional trustee appointed pursuant to
the Trust Agreement) amounts equal to any amounts payable by the
Lessor in respect of the Make Whole Amount and any other amounts
(other than principal and interest) payable on the Notes or under
the Indenture (including without limitation amounts payable under
Section 2.9, 2.10 and 2.11 thereof);
(iii) when due, or if no due date is specified on demand
therefor, any amount (other than those sums described in clauses (i)
and (ii) above) that the Lessee is obliged to pay to, or for the
account of, the Lessor (or any trustee or co-trustee or additional
trustee appointed pursuant to the Trust Agreement), the Owner
Participant, the Indenture Trustee (or any note registrar, paying
agent, co-trustee or additional trustee appointed pursuant to the
Indenture), any Noteholder or any Indemnitee under this Lease or any
other Transaction Document;
(iv) on demand and in any event not later than the Basic Rent
Payment Date next succeeding the date such amounts shall be due and
payable hereunder, to the extent permitted by Applicable Law,
interest (computed on the basis of a 360-day year of twelve-30 day
months) on any Rent not paid when due at a rate per annum equal to
the Overdue Rate from and including the due date thereof to but
excluding the date of payment thereof (unless payment is made after
12:00 noon, Atlanta time, in which event such date of payment shall
be included);
(v) on each applicable Basic Rent Payment Date, such
additional amount as shall, after reducing the sum of the scheduled
amount of Basic Rent plus such additional amount by
-3-
<PAGE>
any applicable withholding Taxes, cause the amount remaining after
such reduction to equal the aggregate amount of principal and
accrued interest scheduled to be due and payable on all outstanding
Notes on the applicable Basic Rent Payment Date; and
(vi) contemporaneously with making any other payment of
Supplemental Rent (other than Stipulated Loss Value or payments
denominated as interest payable to the Lessor, the Owner Participant
or any Noteholder), such additional amount to the Owner Participant
as shall be sufficient to cause such other Supplemental Rent payment
to have been made on an After-Tax Basis to the Owner Participant.
(d) Method of Payment. Each payment of Rent shall be made in
immediately available funds no later than noon, Atlanta time, on the date such
payment shall be due and payable hereunder, and shall be paid either (i) in the
case of payments other than Excepted Payments, by wire transfer to the Indenture
Trustee to the account specified in Appendix B to the Participation Agreement
for application in accordance with the Indenture (unless the Lien of the
Security Documents shall have been discharged pursuant to Section 10.1 of the
Indenture, in which case such payment shall be paid to, and applied by, the
Corporate Owner Trustee on behalf of the Lessor) to the account specified in
Appendix B to the Participation Agreement or into such other account as the
Indenture Trustee may specify by notice in writing to the Lessee, or (ii) in the
case of Excepted Payments, to such Person as shall be entitled to receive such
payment at such address as such Person may specify by notice to the Lessee;
provided, however, that with respect to Excepted Payments due to the Owner
Participant, all such payments shall be made by wire transfer to the account
specified in Appendix B to the Participation Agreement or such other account as
the Owner Participant may specify in writing to the Lessee. If the date on which
any payment of Rent is due hereunder is not a Business Day, such payment shall
be made as aforesaid on the next succeeding Business Day, with the same force
and effect as if made on the nominal due date provided for in this Lease. Any
provision to this Lease to the contrary notwithstanding, all Basic Rent, all
Supplemental Rent constituting Stipulated Loss Value, proceeds payable pursuant
to Section 14 hereof, all amounts determined by reference to the Make Whole
Amount or other amounts payable to the Indenture Trustee or the Noteholders,
shall in each such case be paid to the Indenture Trustee on behalf of the Lessor
for application in accordance with the provisions of the Indenture (unless the
Lien of the Security Documents shall have been discharged pursuant to Section
10.1 of the Indenture, in which case each such payment shall be paid to, and
applied by, the Corporate Owner Trustee on behalf of the Lessor).
-4-
<PAGE>
(e) Adjustments to Rent.
(i) The percentages for Basic Rent and Stipulated Loss Value,
all as set forth in Schedules 1 and 2 hereto, have been calculated
on the basis of the Pricing Assumptions.
(ii) If (A) the Closing Date is different than March 21, 1994,
(B) on or prior to the Closing Date, the characterization of the
Project by depreciation category as set forth in the Appraisal is
different than that set forth in the Pricing Assumptions, (C) on or
subsequent to the Closing Date, the Debt Rate or the amortization
schedule of the Notes or the amount of Transaction Expenses is other
than as set forth in the Pricing Assumptions including, without
limitation, as a result of any change in the Debt Rate to a fixed or
variable rate of interest on the Reset Date pursuant to Article XIII
of the Participation Agreement and the terms of the Notes, (D) on
the Closing Date, the ratio of the Equity Portion of the Purchase
Price to the Purchase Price is different than as set forth in the
Pricing Assumptions as a result of any adjustments referred to in
clauses (A) through (C) above, in the aggregate, (E) on or prior to
the Closing Date, there is any Change in Tax Law, (F) subsequent to
the Closing Date, any refinancing of the Notes or any Supplemental
Financing is consummated pursuant to Section 9.01 of the
Participation Agreement,(G) subsequent to the Closing Date, the Tax
Indemnity Agreement provides for the readjustment of Stipulated Loss
Value, (H) subsequent to the Closing Date, in the event of a Partial
Taking and the payment of the proceeds thereof to the Indenture
Trustee for application in accordance with the Indenture (unless the
Lien of the Security Documents shall have been discharged in
accordance with Section 10.1 of the Indenture, in which case such
payment shall be paid to, and applied by, the Corporate Owner
Trustee on behalf of the Lessor) as contemplated by Section 9(g)(i)
hereof and Sections 4.5 and 5.1(c) of the Indenture, or (I) on the
Closing Date, any other Pricing Assumption set forth on Schedule 3
proves incorrect then, and in each such case, such percentages for
Basic Rent and Stipulated Loss Value, as applicable, shall (subject
always to Section 3(g) hereof) be adjusted (upward or downward) so
as to preserve the Owner Participant's Net Economic Return. Any such
adjustments shall (subject always to Section 3(g) hereof) be
reflected in a Lease Supplement.
(iii) Any adjustments pursuant to this Section 3(e): (A)
shall, to the extent consistent with preserving the Owner
Participant's Net Economic Return, minimize the net After-Tax
present value cost (utilizing the After-Tax Discount Rate) to the
Lessee (subject to the requirements of Section 3(f)) and minimize
(but not necessarily avoid) the risk that the transactions effected
pursuant to the Participation Agreement and this Lease will be
classified by the Lessee as other than
-5-
<PAGE>
an "operating lease," as such term is defined under then-current
GAAP, and (B) shall, in all events, satisfy the provisions of
Revenue Procedures 75-21 and 75-28, and avoid the application of
section 467(b)(2) of the Code to the same extent and in the same
manner as such provisions are satisfied or avoided, respectively,
under the Pricing Assumptions.
(f) Computation of Adjustments.
(i) Upon the occurrence of an event requiring adjustments
pursuant to Section 3(e), the Owner Participant shall make the
necessary computations on a basis consistent with that used by the
Owner Participant in the computation of the percentages for Basic
Rent and Stipulated Loss Value set forth in the Schedules hereto, as
theretofore adjusted, taking into account only the event giving rise
to the adjustments and the provisions of Section 3(e). Such
adjustments shall be effective (A) on the 30th day after the Owner
Participant shall have furnished to the Lessee an Officer's
Certificate confirming that such adjustments have been properly
computed in accordance with the provisions of this Lease (or on such
earlier day as the Lessee agrees in writing as to such adjustments)
or (B) if the Lessee shall have disputed any computation or amount
set forth in such certificate on or before such 30th day, on the
date on which such dispute is resolved in accordance with Section
3(f)(ii), and shall remain effective until changed in consequence
of any event occurring thereafter requiring further adjustment
pursuant to Section 3(e).
(ii) Within 30 days after the Owner Participant shall have
provided the Lessee with a certificate pursuant to Section 3(f)(i),
the Lessee may request that the Owner Participant furnish all
information necessary to permit the confirmation of the accuracy of
the Owner Participant's computation of the adjustments described in
such certificate to the Qualified Firm. Notwithstanding the
foregoing, the Qualified Firm shall only have access to such books
and records of the Owner Participant as may be necessary to verify
the computation of such adjustments and shall not have access to the
income tax returns of the Owner Participant. The Qualified Firm
shall be required to confirm to the Owner Participant in writing
that all information provided to the Qualified Firm shall remain the
property of the Owner Participant, shall be held in strict
confidence, shall not be duplicated or revealed to any other Person
except to the extent disclosure may be required by Applicable Law,
and shall be returned to the Owner Participant upon completion of
the confirmation process. Within 30 days after its receipt of such
information, the Qualified Firm either shall confirm the accuracy of
such computation or shall notify the Owner Participant that such
computation and the resulting
-6-
<PAGE>
adjustments proposed by the Owner Participant are inaccurate. In the
latter event, the Owner Participant shall consult with the Lessee
and such Qualified Firm as to the proper computation of the
adjustments, whereupon the Owner Participant shall recompute the
adjustments in such a manner as shall enable such Qualified Firm to
confirm their accuracy. The Lessee and the Owner Participant agree
that the sole responsibility of the Qualified Firm shall be to
verify the amount of an adjustment pursuant to this Section 3(f)
and that matters of interpretation are not within the scope of its
responsibilities. All expenses incurred by the Owner Participant and
the Lessee in connection with the verification procedures described
in this paragraph (ii) (including the fees and expenses of the
Qualified Firm) shall be paid by the Lessee, unless the present
value on an After-Tax Basis of Basic Rent (discounted at the
After-Tax Discount Rate) proposed by the Owner Participant shall
exceed the present value on an After-Tax Basis of Basic Rent
(discounted at the After-Tax Discount Rate), properly computed and
confirmed, by more than 10 basis points, in which case all such
expenses shall be paid by the Owner Participant. Each final or
verified adjustment pursuant to this Section 3(f) shall be evidenced
by the execution and delivery of a Lease Supplement in form and
substance satisfactory to the Lessee and the Owner Participant, and
shall be effective as provided herein without regard to the date, if
any, on which such Lease Supplement is so executed and delivered.
(g) Sufficiency of Basic Rent and Supplemental Rent. Notwithstanding
any other provision of this Lease or of any other Transaction Document, (i) the
amount of the installment of Basic Rent payable on each Basic Rent Payment Date
(or on such other date as any installment of Basic Rent is due and payable)
shall be at least equal to the aggregate amount of principal and accrued
interest scheduled to be due and payable on all outstanding Notes on such Basic
Rent Payment Date (or other such date) in respect of all Notes then outstanding
and (ii) each payment of Stipulated Loss Value (when added to all other amounts
required to be paid by the Lessee under this Lease in respect of any Event of
Loss or termination (in whole or in part) of this Lease (including amounts
determined by reference to the Make Whole Amount, if any) shall be at least
equal to an amount sufficient, as of the date of payment, to pay in full the
principal of and the Make Whole Amount, if any, and interest then due on all
outstanding Notes on and as of such date of payment.
SECTION 4. Net Lease. This Lease is a triple net lease and the
Lessee hereby acknowledges and agrees that the Lessee's obligation to pay all
Rent, and the rights of the Lessor in and to such Rent, shall be absolute,
unconditional and irrevocable and shall not be affected by any circumstance of
any character (except as may be expressly provided in this Section 4),
including, without
-7-
<PAGE>
limitation: (i) any set-off, abatement, counterclaim, suspension, recoupment,
reduction, rescission, defense or other right or claim that the Lessee may have
against the Lessor, the Owner Trustees, the Owner Participant, the Indenture
Trustee, any Noteholder, any vendor or manufacturer of or contractor or
subcontractor for the Improvements or any part of any thereof, or any other
Person for any reason whatsoever; (ii) any defect in or failure of the title,
merchantability, condition, design, compliance with specifications, operation or
fitness for use of all or any part of the Project; (iii) any damage to, or
removal, abandonment, dismantling, requisition, taking, condemnation, loss,
theft or destruction of all or any part of the Project or any interference,
interruption or cessation in the use or possession of the Project by the Lessee
or by any other Person for any reason whatsoever or of whatever duration; (iv)
any restriction, prevention or curtailment of or interference with any use of
all or any part of the Project; (v) to the maximum extent permitted